Vw of America Managing It Priorities
VW of America
Managing IT Priorities
Case Study
9/12/2011
Company Situation Over the past several decades, Volkswagen of America (VWoA) has struggled with finding and maintaining a steady growth rate. Instead, over the past 40 years the company has had large peaks and valleys in the number of vehicles sold.[1] One plan to smooth out the growth curve was to position the company into two main categories, classic and sport. This positioning led the company to plan for future growth throughout the brands, as well as define five clear goals for the company to manage its growth.[2] These five goals highlighted several areas of opportunity for the IT department in the company as well as within VWoA. The first issue faced to this company is clearly the model of the IT department. The company had six internal departments or groups that prioritized IT resources, headed up by the internal CIO. The decisions made by the IT department of the past were then transferred to Perot systems or gedasUSA, essentially leaving the company without any true IT resources. Both companies were seen as outsourcing for the projects even though gedasUSA clearly was an internal company, and costs even though billed at market value, were truly less expensive than market price if they were charged at cost to the company. This could have been a major deciding factor as the company estimated the cost of all business projects to be $210M and only had a budget of $60M. This type of outsourcing is also limiting the knowledge of the company’s past IT roadblocks as many or all of the long term associates have left the company during the transitions. This transitioning allowed each of the business units to begin to develop their own relationships with web developers over several years in an effort to bypass the companies used for IT development in an effort to get projects completed on a faster timeline. This fragmentation of the web developers could easily drive up costs as well as lose any
Managing IT Priorities
Case Study
9/12/2011
Company Situation Over the past several decades, Volkswagen of America (VWoA) has struggled with finding and maintaining a steady growth rate. Instead, over the past 40 years the company has had large peaks and valleys in the number of vehicles sold.[1] One plan to smooth out the growth curve was to position the company into two main categories, classic and sport. This positioning led the company to plan for future growth throughout the brands, as well as define five clear goals for the company to manage its growth.[2] These five goals highlighted several areas of opportunity for the IT department in the company as well as within VWoA. The first issue faced to this company is clearly the model of the IT department. The company had six internal departments or groups that prioritized IT resources, headed up by the internal CIO. The decisions made by the IT department of the past were then transferred to Perot systems or gedasUSA, essentially leaving the company without any true IT resources. Both companies were seen as outsourcing for the projects even though gedasUSA clearly was an internal company, and costs even though billed at market value, were truly less expensive than market price if they were charged at cost to the company. This could have been a major deciding factor as the company estimated the cost of all business projects to be $210M and only had a budget of $60M. This type of outsourcing is also limiting the knowledge of the company’s past IT roadblocks as many or all of the long term associates have left the company during the transitions. This transitioning allowed each of the business units to begin to develop their own relationships with web developers over several years in an effort to bypass the companies used for IT development in an effort to get projects completed on a faster timeline. This fragmentation of the web developers could easily drive up costs as well as lose any