Volkswagen of America is faced with challenges with the implementation of its IT funding priorities that are aligned with the company's goals and overall strategy. This case study looks at how the company can approach its efforts from another standpoint and propose other alternatives.
​Robert D. Austin, Warren Ritchie, Greggory Garrett
Harvard Business Review (606003-PDF-ENG)
October 05, 2005
Case questions answered:
- What is the role of IS in supporting Volkswagen’s mission, operations, strategies, and processes?
- How can IT alignment be achieved at Volkswagen?
- What are the challenges of IT alignment at Volkswagen? What would have been the best approach (briefly)?
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Volkswagen of America: Managing IT Priorities Case Answers
Executive summary – Volkswagen of America: Managing IT Priorities
Volkswagen, one of the world’s largest automobile manufacturers, has experienced bumping sales volume during the past decades. Through constant experimentation with market sales, the company underpins its core competency of radical innovation through long-term coordination and group learning within the company (Prahalad and Hamel,1990).
Such innovation has made Volkswagen capable of quickly fulfilling shifting global customer demands through various product ranges while maintaining its moderate affordability.
This soon led to unprecedented growth, and the company began to realize the importance of strategically aligning IT to its enterprise goals. However, the current alignment is yet insufficient, and problems start to surface from Volkswagen’s prioritization processes.
The rest of the report will explore the current prioritization hardships that fundamentally stem from improper business-IT alignment and the specific factors that lead to it.
Subsequently, we will also recommend these factors, such as the facilitation of informal structures and modification of current IT governance. Lastly, we will unravel the potential impacts of these recommendations.
Coordination in achieving business-IT alignment
Volkswagen’s current attempt at business-IT alignment is doing well in utilizing IT as a backbone to efficiently achieve business strategies derived from its core competency (Chan,2002).
Coordinating IT personnel (namely the BPTO), third-party expertise (gedas.US), and the corporate strategy groups for a centralized prioritizing process allows the filtering of projects to be best suited and aligned to the company’s goals while maintaining its technological practicality.
Problems surfaced from the prioritization process
However, dealing with the coexistence of business and IT projects, Volkswagen faces a trade-off with the…
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