Implementing A New Prioritization Process For IT Projects At Volkswagen Of America, An Essay.

The New Prioritization Process for IT Projects

Question:

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The chief information officer (CIO) of the Volkswagen of America (VMoA) placed the phone in its cradle and was relaxed. The call was directed towards one of his peers of the Executive Leadership team (ELT) (Fu et al. 2016) The result, which was obtained from the call, was the generation of a new prioritization process – a list of all the IT projects, which would be funded in the year 2004. The projects was revealed few days earlier. In this context, a new type of storm was being generated in the organization. The main conversation, which was done in the telephonic conversation, was the very much similar putting emphasis on the concern relating to the concerned areas within the organization, which were not funded. Some of the members had view, which were repetitive relating to the prioritization process by the people who worked for them about the categorization mistakes, which were done which resulted in penalty of the business units. The main factor, which can be stated here, is that most of the calls ended on a note of informal request of putting an unfunded project into the work plans of the IT department. The 10-business unit, which comprised of the Volkswagen of America (VMoA) had project proposed which were more than 40 with a total funding requirement of total $210 million (US). A budget ranging of an amount of $60(an amount which was capped by VWAG which is a parent company of VMoA). The pushback, which was generated relating to the new process, was very much surprising. The new system would make the tradeoff very much explicit and the project link and the core processes of business management it affected the organizations corporate goals (Cuenca and Boza 2015).

To implement the next round of growth the members of the organization and the strategy corporation group at the VMoA in collaboration with the gedesUSA, created a framework of business architecture, which was of high level. The architecture, which was involved into the concept explicitly, depicted the resources, which are key for the enterprise in order to answer the simple question relating to why, how, when, who, what, where and when. The architecture helped the strategy to clearly understand the relation, which can be applied to the different elements. In order to develop the business strategy taking into consideration the new system, the VMoA builder a new blueprint if the business. The business architecture included the following:

• A function model, which is hierarchical, that displayed all the major activities, which were involved in the corporation.
• A prioritized and hierarchical view of the major goals (56) across the working of the organization.
• A model of enterprise, which was mapped to the function.
• A enterprise inventory of information
• A current system of state inventory, which is mapped to all the major enterprise related functions management (Fu et al. 2016).

Developing a Framework of Business Architecture

Several entities of the organization would be playing a dominating role in the concept of managing and creating a new process for the managing aspect of the priorities at the VMoA. The ELT was very much responsible for the primary responsibility for the execution the NRG program that was related to the new IT Governance process. In order to guide and approve the process, which were related to the process of IT prioritization and project selection an IT steering committee (ITSC) was formed (Cuenca and Boza 2015). The PMO worked with the working with their team members who had developed the strategy to arrive at the process of detailed examination for the concept of moving through the process if prioritization and selection. The digital business council (DBC) which was composed of representative from the team of the e business unit would be involved in work, which was considered difficult. The difficult work mainly included the task of assessing the business impact, project categorization, making trade off decisions and discerning their alignment with the goal of the organization. A stage was reached where appropriate final list was prepared for the funding of the project. The entire process was accepted to be broken down into three parts whose tenure would be three months mainly in the month of July to September (Kloeckner et al. 2018).

To start the actual process of the project the PMO had put out a formal call for the projects with due date for the concept of approval. In the month of July before the business request were required to be made by the PMO, the corporate strategy team with the gedas strategy consultant facilitated a workshop with the members of the DBC. The main aim of the workshop was to convey the DBC members about the funding and the extent to which the increase in the number of the funding which would be increased. Each of the technology and business would be directly mapped against the architecture of the business to make explicit the business function, which would be directly affected and the major goals, which would be involved in the initiatives. In the meeting, the business body would be stating the basic need and the requirement of the funding and present their proper initiative action and functionality, which would be working for the betterment of the business working. Some of the units of the business were very much uncomfortable as they were associated with the project with goal of the enterprise. The leader of each of the business unit is an ELT member. When a project is associated with an enterprise goal, the main point, which would be taken into consideration, is that it would be weakening or strengthening the enterprise level case relating to the project. There are a concept of achieving a temptation of thinking about the different ways, which can be associated with the project so that it would be enhancing the sector of improved chances of funding. At the end of the thinking process, the group speculated about the amount relating to the budget of the IT Project. A rough amount of $60 million were available altogether, $16 million fund were kept aside in order maintain the concept of stay in business concept. Most of the infrastructure project, which were under the discretion of the CIO matulovuc another amount of $30 million, would be directly funding the project of the enterprise, this directly left around $14 million for the high priority unit of the business project (Fu et al. 2016). The calculations that can be considered back end envelope told the organization directly that the funding requirement for the entire top-level project exceeded the budget, which was estimated. There was no clear idea onto how the gap between the budget and the funding requirement. In order to provide the necessary recommendation the following points was stated to Matulovic and the ITSC.

• Should the organization drop the goals which are at a low ranked.
• Should the funding be equally distributed to each of the goals of the portfolio?
• Should the organization cut apart each of the portfolio and fund more projects which are associated with the most critical goals and fewer project, which are associated with the goals, which are less important.
• Should they recommend that the importance of the units of the business be revised relative to the enterprise priorities from the NRG (Kloeckner et al. 2018).

Entities Involved in the Process of Managing Priorities

Through the business architecture and the new process, it can be stated that there are several projects, which favored the units of the business, which was done so that the funding of the projects can be cut down. This directly gave an outcome towards the present business unit executives to present two options. The first option was to the organization could acknowledge that project from other areas which might be more important in order to achieve the goals of the enterprise and the second option could be that the organization could challenge the merit of the new methodology for the concept of prioritizing and selecting the project. In most of the cases, it was seen that option two was selected and the consideration of adopting the one option was neglected in the maximum time (Kloeckner et al. 2018). The main concept, which can be applied to the project not getting the appropriate funding, was the concept of the prioritization. Most of the value was recognized at the global level in the organization and was not included in the VWoA level of importer. It can be stated here that taking into consideration the local USA based business the value of the project was focused on the performance of the warehouse which could not be directly be related to the topmost ranked NRG related goals.

The new process was very much poorly served the project according to Matulovic. The option relating to this concept was very much few. He could directly try to find funding from other funding projects and involve more time into the concept of supply flow project. The solution in this aspect could have been that argument of the funding can be done in this context, which would be searching for alternative of options. He could have even used the project as a wedge to drive into the prioritization of the process in order to reopen it.

• Stay in business (SIB): This type of action is needed for the purpose of legislative directly to maintain continuity of business or can be overly mandated by the parent organization. Example of this type of investment may include customer privacy efforts (legislated) or the concept of disaster recovery (business continuity).
• Return on investment (ROI): This type of action predicted the concept of cost saving, gain in productivity and /or revenue generating result. This directly needs to sufficiently exceed the part of the investment, which included the initial step-up investment and the ongoing operation and maintenance. For example the user may install a new system due to the concept that the maintenance factor which is done annually and the cost relating to it would be around 50% lower as compared to the system which is preexisting.
• Option creating environment (OCI): similar to the ROI but compared to it very less certain about the cost saving and or revenue generation. The aspect can be considered very much risky taking into consideration the anticipation of discovering a new execution process or method that can lead to competitive advantage for the business. At this time this all would be prototype which when implemented would result in greater implementation which can be justified via ROI criteria.

On the other hand, it can be stated that there are three technological application types, which are majorly:

• Base enterprise IT platform: Infrastructure tools and services or common external applications which are developed and utilities that are used across different companies (internet based communication, data warehouse and desktop application tools).
• Enterprise application: Company system, which are specific that directly, provide broad functionality or the information, which is used throughout the enterprise.
• Customized point solution: The system and the solution are very much target application but not directly recognized as very much useful across the enterprise.

The application and the investment type would directly influence how particular investment under the consideration would be treated in the selection and prioritization process. One’s proposal were prepared for each if the business unit leadership ranks them according to the priority. Some of the business units were very much uncomfortable as the project, which are associated with priority (González-Ruiz, Duque and Botero 2017). The business unit manager assumed that as in the past years they would at a minimum gain approval for their most project, which are highly priority. Some of the business unit are very much uncomfortable as they associate the projects with the goals of the enterprise the leader of the business was an ELT member and thus realized that the assigning project to the NRG goals ranked implicit in their importance to VMoA. By means of associating a project to a goal of the enterprise. Initiatives that had been directly grouped in the phase 1 as having synergies, which are significant, were rolled out as potential project of enterprise. They remained in the unit of the business individual portfolios with the note of dictating removal from the business unit portfolio if the enterprise project was approved. Thus, another way to get the project approved was to gain its inclusion in an enterprise project that has a good chance of getting the approval (McGonigal, Giuliano and Hurren 2017).

The Funding of IT Projects

As the overall project list changed due to the dependencies and the creation of the enterprise projects, the DBC representative reshuffled the projects. It can be stated here that some of the business units’ most important projects were officially not viable until the year 2005 or later. Others would be considered as corporate projects. Therefore, business units representative needed to reprioritize needed to reprioritize their proposal for 2004. The group directly agreed that each of the business units would identify the most important aspect of the project, which are mainly stated according to three, points (González-Ruiz, Duque and Botero 2017). The group of the business agreed that each of the business units would be directly under the provison of the business bodies.

The decision of moving on with the IT projects was considered and the strategy, which would be involved into the concept, was very much clear. The main factoe, which mainly made the process lengthy, was one of the implementation of the strategy. Most of the people which are related to the concept agreed that the strategy should which would be driving the business was the IT strategy. The decision relating to the business IT needs was not involved into the working in the starting of the organization but later on the need of the IT infrastructure was taken into consideration (McGonigal, Giuliano and Hurren 2017). Taking into consideration about the ELT they were either not around when the concept had arrived or had forgotten to withhold the investment relating to the IT to support the market incentives. Matulovic knows that the problem would be affecting the condition of the peer to view IT as an approach, which is very much expensive and would be involving lots of research into the field.  The organization was not very much sure, of what the basic need from the implementation of the IT infrastructure would be doing to the overall working of the organization (González-Ruiz, Duque and Botero 2017). Matulovic had gathered some of the information regarding the concept from few of the phone calls which he made in order to get the overview of the system and how the implementation of the system would be done and the final outcome of the implementation. The situation, which was faced by Matulovic, was very much difficult as it brought into together many challenges (Bagci and Tekalp 2016).

The situation which was faced by the Matulovic was very much crucial as the concept of the setting of the proprieties can be considered very much a difficult task to take into consideration. Most of the people who was involved into the working of the business stated that they want to get highly involved in the decision making process. The main factor of emphasis was that the concept would be giving equal right to everyone and the right of putting forward individual suggestion could be given. In most of the situation, it is seen that the people tend to forget actually, why the decision of taking up a step is taken. This directly affect the overall working of the project due to the factor that the actual goal of the project would not be taken into consideration in this aspect. The concept of funding can be considered very much important so that proper working of the project can be executed. It can be considered as an obstacle funding in any type of project can be considered very much important as it directly involves the aspect of the proper working of the project. The main factor which could be taken into consideration in the aspect are the name of the IT infrastructure, changes it could impose on the overall working of the organization, the enterprise function that was being focused upon and the affected area which would be getting improved by the implementation (McGonigal, Giuliano and Hurren 2017).

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