What Is Your Assessment of the New Process for Managing Priorities at Volkswagen of America? Are the Criticisms Justified? Is It an Improvement over the Old Process?

1. What is your assessment of the new process for managing priorities at

Volkswagen of America? Are the criticisms justified? Is it an improvement over

the old process?

As a new management system implemented, the productive of IT department was

increasing, which means the new system worked well in the certain condition,

especially in 1990’s, the year few companies have experiences in investing money

in IT department. With the new system, they cut part of the budget requirements

and finally made a decision to use the funds in a more fair and efficient way.

So, the criticisms of the new process are unjustified. The new process solved an

unstructured discussion within different ELT members who insisted that their own

department should be on the first priority and allocated the funds finally.

It’s really an improvement over the old process because it allocated the fund with

a methodology way, which means allocated the fund to the projects top needed.

Although what they did improved the profits in certain departments and projects,

they were lack of the perspective of the global market and slowed down the

globalization of VWAG. That’s what they can improve more in the case.

2. Who controls the budgets from which IT projects are funded at Volkswagen of

America? Who should control these budgets? Should the IT department have its

own budget?

First, VWAG, the parent company of VWoA capped $60 million budget which

funding the IT projects of VWoA so VWAG controls the amount of budget to IT

projects.

Second, in implement of how to set the portion of $60 million, there are several

teams involved, such as DBC, corporate strategy, PMO teams, BPTO, ITSC and

CIO Matulovic. In my opinion, Matulovic should be the one who make decisions

on how to use the budget, and finally approved by VWoA and VWAG.

Third, for IT department’s budget, I think they should have. With highly

development of IT technology, IT is more and more important in a company,