Volkswagen's U.S. subsidiary has launched a new pro-cess for allocating scarce IT budgets across a portfolio of project requests, in an effort to align IT activities better with corporate strategy. Now that they have used the process for the first time, though, and arrived at a list of approved projects, no one seems happy with the outcome. This case provides an opportunity to discuss the difficult governance issues that arise in making IT investment decisions. As you read the case, consider
these questions: What is your assessment of the new process for managing priorities at Volkswagen? Are the criticisms justified? Is it an improvement over the old process? Who controls the budgets from which IT proj¬ects are funded at Volkswagen of America? Who should control these budgets? How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority management system?
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 Copyright © 2005, 2007 President and Fellows of Harvard College. Harvard Business School Case 606-003. Professor Robert D. Austin, Dr. Warren Ritchie, and Greggory Garrett...
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