Volkswagen of America: Managing IT Priorities
In today’s world, IS alignment is crucial for the operation and growth of businesses. Information systems allow businesses to deal with vast amounts of complex information and run more efficiently. Founded in 1930s, Volkswagen is the leading automotive vehicle manufacturer in Germany. However, its USA branch was facing problems with inadequate IT human resources due to excessive outsourcing and a reduction of internal IT staff. Additionally, an inadequate budget to cover the considerable cost of multiple IT projects was aggravating the issue. A prioritisation of IT and business activities and a strategic allocation of the budget are essential in resolving Volkswagen’s problems.
This paper will analyse Volkswagen’s business and IT strategies (based the case study), and identify various issues encountered by Volkswagen management. I will demonstrate how the company can solve these issues by allocating its limited funds to support its IT infrastructure development.
As its name suggests, Volkswagen’s objective is to design and manufacture quality fuel efficient and affordable cars.
Through constant evolution, Volkswagen has not only dominated the automotive market in terms of lower-priced cars, but has also gained industry recognition for their midsized and emerging vehicles. This has been achieved through their comprehensive competencies in business strategy and manufacturing capability, as well as their extension of product portfolio, i.e. the introduction of several new brands (e.g. AUDI, Bentley) and a wide range of models. Volkswagen still maintains its competiveness over most other auto brands (Interbrand 2014).
However, this was not always the case. After the 1960s sales dramatically decreased, fluctuated, and then remained at a fairly low level (Austin 2007). Although Volkswagen invested large amounts of money in an attempt to improve business, their revenue did not increase as expected. However, through various other improvements, one being
This paper will analyse Volkswagen’s business and IT strategies (based the case study), and identify various issues encountered by Volkswagen management. I will demonstrate how the company can solve these issues by allocating its limited funds to support its IT infrastructure development.
As its name suggests, Volkswagen’s objective is to design and manufacture quality fuel efficient and affordable cars.
Through constant evolution, Volkswagen has not only dominated the automotive market in terms of lower-priced cars, but has also gained industry recognition for their midsized and emerging vehicles. This has been achieved through their comprehensive competencies in business strategy and manufacturing capability, as well as their extension of product portfolio, i.e. the introduction of several new brands (e.g. AUDI, Bentley) and a wide range of models. Volkswagen still maintains its competiveness over most other auto brands (Interbrand 2014).
However, this was not always the case. After the 1960s sales dramatically decreased, fluctuated, and then remained at a fairly low level (Austin 2007). Although Volkswagen invested large amounts of money in an attempt to improve business, their revenue did not increase as expected. However, through various other improvements, one being