VWoA Managing IT priorities
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Universidad Javeriana Cali + Fox Txt University Executive MBA What did VWoA did wrong about its Prioritization Model? And does it hamper innovation?
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VWoA Managing IT priorities
- 1. VWOA: MANAGING IT PRIORITIES MIS5801 – INFORMATION MANAGEMENT | PROF. RICHARD FLANNAGAN TEAM # 3 Arias, Humberto Chaves, Mario Salazar, Diego
- 2. Business Process of Technology & Organization Digital Business Council Categorize projects, assess in Business impact & goals alignment Program Management Office Administration of IT proposals IT Steering Committee Guide and approve IT project selection Next Round Generation IT project management program Executive Leadership Team Execute NRG program VWOA CONTEXT & IT TEAM NRG ELT ITSC PMO BPTO DBC Uwe Matulovic 1992 Perrot 10-year contract 1999 VW AG Group Creation GedasUSA Setting up: “eBusiness teams” 2002 Creation BPTO Department Cutting-back IT employess
- 3. VWOA IT PRIORIZATION SWIM LANE DIAGRAM VWoA: Managing IT Priorities BusinessUnitsPMODBC START Calling Projects Project presentation according to criteria Select TOP3 project FINISH Project Workshop Project Presentation Grouping by initiatives and define dependencies Categorize by investment type Categorize by application type Prioritize according goals Compile proposals TOP3? Regroup into 5 goals portfolio Goal accouracy YES NO Review Project NO Final Goals portfoliosYES Budget? Final Approval YES NO Lack of parallelism
- 4. WHAT DID VWOA DID WRONG REGARDING THEIR PRIORIZATION METHOD? HOW DOES IT HAMPER INNOVATION? • Too many people involved in the process • Mid-level managers were not involved • Process is NOT aligned with the available resources ($210MM > $170MM > $16MM) • Innovation need freely available resources • Funding requirement is unknown which impact on ROI calculations • Could deplete found from other projects • Complex+ • Bureaucratic • Lack of proper communication • Template did not sell well the project • Mid-level managers were not involved • Idea promoters did NOT participate in the discussions • Disorder on the project discussion • Not realistic deliverable time • Diificult to validate project strategic relevance • Too many stakeholders involved in the process • ELT members could hamper innovation process by imposing limits to people • Projects that may have global impact were not funded • Does NOT follow Next Round Growth (NRG) strategy • Global Supply is ignored RESOURCES Assets PROCESSES Way of working VALUES Criteria used to make decisions
- 5. QUESTIONS? MIS5801 – INFORMATION MANAGEMENT | PROF. RICHARD FLANNAGAN TEAM # 3 Arias, Humberto Chaves, Mario Salazar, Diego
Editor's Notes
- Keynotes: -Lack of governance before Matulovic’s arrival -VWOA outsourced IT function - Perot Systems -The company created gedasUSA to control the IT contractor. GedasUSA assumed responsibility for managing the outsourcing contract with Perot. -Matulovic was hired from other business unit because its experience of project management. Its business knowledge was a key criteria to hire him. New structure to rule the IT department to achieve the NRG big goals: •The BPTO (business process, technology and organization): IT Department •The ITSC committee was created to define and guide IT project selection with participation of IT executives of business units. •The PMO department was created to increase capabilities of project management, manage IT project – proposal and approval process. •The DBC (Digital business council) composed byrepresentatives from the e-business teams to categorize projects, asses the business impact, review alignment with goals and make trade-off decision to reach a final list of projects. It is clear that Matulovic organized processes and established a governance based on Monarchy but as Humberto will go explain in detail, a burocreatic process was created
- In Phase I during the calling for projects, communicating process & identifying dependencies we think that it enclosure ideas into certain parameters definitely limits the process of innovation. This enclosure is highlighted in the process when VWoA requires a template to be fulfilled in order to describe a project The whole process could create false expectations and frustration that limit participation and managers engagements One year fix horizon may not allow to identify signals of change and unit business requirements Reluctance to full commitment from managers as a consequence of resources competition If managers expectations are not met in short time, it can generate lack of persistence Remarks about the VWoA IT Priorization Swim Lane Diagram: Too many handoff between PMO and DBC Too much decision power concentrated on DBC Lack of opportunities to promote parallelism Quoting from the case “(…) in a flurry of real time cell-phone consultations with [mid-level] BU Managers not on the DBC to reduce TOP3 (...)” Several conclusions can be extracted based on our experience: Lack of preparation and knowledge about project details There were not structure discussion in order to priorize all filtered projects There were no formal parameters more than “multiple discussions to priorize projects” Projects discarded on PMO “Review Project” box that were poorly served have a high probability to be discarded. Even if a project could be very innovative a lack of proper presentation decreases its chances to be choose Difficult to validate project’s strategic relevance The process itself hampers innovation for being too bureaucratic DBC took too long to generate output Redundancy of categorization. It could be simplifies by having a categorization matrix (for example) Key participants were ignored in a process that typically were involved Link to next slide: This is how we believe a process could have a negative impact on innovation but Mario is going to give us a more complete scenario taking another approach based on Resources, Process & Values
- We just saw how the processes and governance were established but to answer the two questions on Innovation we need to take into account the RPV model and identify what was not working well to deliver innovation: (…)