9-606-003
REV: JUNE 14, 2007

ROBERT D. AUSTIN

Volkswagen of America: Managing IT Priorities
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 their business units. And each of the calls had concluded with an informal request to insert an unfunded project (or two) into the IT department’s work plans. “We don’t have to reopen the process,” the most recent caller had said, “but perhaps spare capacity might be applied to make some progress on this project in 2004—we’ve done this before, and it would mean a lot to our area and to the company’s growth plans.”
The 10 business units that made up VWoA had proposed more than 40 projects, with funding requirements totaling $210 million (US). A budget of only $60 million (an amount capped by VWAG, the parent company of VWoA) made some degree of disappointment inevitable. But the intensity of pushback against the new process was surprising. The ELT had endorsed the idea of improving upon the old way these decisions were made, via unstructured debate among executive sponsors. The new
process,