Pages: 33 (6266 words) Published: July 8, 2012
REV: JUNE 14, 2007


Volkswagen of America: Managing IT Priorities
Dr. Uwe Matulovic, chief information officer (CIO) of Volkswagen of America (VWoA), placed the telephone in its cradle and leaned back in his chair, replaying the just-completed conversation with one of his peers from the Executive Leadership Team (ELT). The call, Matulovic mused, had been similar to three others he had participated in that week, each with a different ELT member. The results of a new prioritization process—a list of IT projects that would be funded in 2004—had been unveiled only a few days earlier. But already a storm was gathering. The phone calls from other executives had common themes. All the callers had expressed concern that high priorities for their areas of the company had not been funded. Some had repeated views expressed during the prioritization process by people who worked for them about supposed categorization mistakes that penalized their business units. And each of the calls had concluded with an informal request to insert an unfunded project (or two) into the IT department’s work plans. “We don’t have to reopen the process,” the most recent caller had said, “but perhaps spare capacity might be applied to make some progress on this project in 2004—we’ve done this before, and it would mean a lot to our area and to the company’s growth plans.” The 10 business units that made up VWoA had proposed more than 40 projects, with funding requirements totaling $210 million (US). A budget of only $60 million (an amount capped by VWAG, the parent company of VWoA) made some degree of disappointment inevitable. But the intensity of pushback against the new process was surprising. The ELT had endorsed the idea of improving upon the old way these decisions were made, via unstructured debate among executive sponsors. The new process, it was agreed, would make trade-offs explicit and link projects and the core business processes they impacted with VWoA corporate goals. An orderly, rational process would replace what in the past had sometimes been haphazard. But now questions were being raised about whether the new process was right for VWoA. Some business units had seen none of their projects funded. Whispers throughout the company suggested that the process was “too theoretical” and noted that IT infrastructure projects had been treated separately, not forced through the same process, which many considered unfair. As Matulovic peered through the window into an overcast sky, he wondered whether he should order exceptions to the process. If a project was small and just below the line of funded projects, maybe IT should figure out a way to get it done. Or maybe he should stand his ground and defend the new process. Matulovic did not work for the other members of the ELT, but he did have to work with them. Whatever he decided could certainly affect working relationships, so he would need to consider his options carefully. ________________________________________________________________________________________________________________ Professor Robert D. Austin, Dr. Warren Ritchie, and Greggory Garrett prepared this case. HBS cases are developed solely as the basis for class discussion. Certain details have been disguised. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2005, 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.


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