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Outsourcing to Perot Systems resulted in reducing the number of staff members and this deprived the company of its source of knowledge as it solely relied on Perot Systems. In fact, the company noticed that it had insufficient knowledge left within its IT department and resorted to hiring more employees within the department in the quest of making up for the damage caused. However, the IT function was still not at its optimum performance because the IT management was shared among several providers (Austin, 2007, p. 3).
The principal problems within the IT department were related to the maintenance, repair, and functioning as it was not operating as expected. This can be partly attributed to the company’s IT infrastructure being treated unfairly. In fact, the IT expenses were increasing while the projects were marked with budget overspending. Moreover, the present system could not support the growing number of VW brands and products. As a result, the company was constantly spending a significant amount of time and resources to consolidate the technical elements of the “eBusiness teams” (Austin, 2007, p. 4).
Projects started to be delivered on time after Matulovic took an initiative of entrusting the management office with management of all the IT projects. Moreover, he hired a project manager to check that all projects adhered to the project management standards and to ensure that more time is spent on planning (Austin, 2007, p. 4). For this reason, the projects were submitted to monthly budget reviews as well as weekly reports which ensured that the projects were delivered within the specified deadline. In fact, on-budget projects became the norm after the implementation of Matulovic’s strategy.
The final chosen option was separating every portfolio and financing projects that were more critical in the quest of prioritizing the most basic needs. Therefore, business units were funded in accordance with the goal portfolio which was approved by the ITSC (Austin, 2007, p.8). As a result, projects that were associated with less important goals were still considered, but not at the same level of seriousness. However, the decision also had its negative ramifications because projects pertinent to the company’s global supply chain were partially funded, whereas some projects were not funded at all. Similarly, the management became more cooperative because it attempted to explain some of its decisions as well as how they would impact major facets of the company. For instance, the business unit executive for supply flow understood why some projects were not funded. However, Matulovic acknowledged that the loss of funding would be a major setback for the globalization initiatives that were based in different countries such as Germany. All the same, minor setbacks did not impede the success of the chosen decision.
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The system used in the prioritization of the IT expenditure was good because all projects cannot be given the same attention. After all, other projects are vital because they pertain to major functions of the company and should always be given the first priority (Austin, 2007, p. 9). Besides, handling major projects can give higher returns that can also be used in funding minor projects which give lower returns. Moreover, not all managers are efficient in setting priorities because most of them focus on involving several projects in one so as to prove their prowess in handling their respective departments. Therefore, it is commendable that the management opted to prioritize expenditure. However, the system could be improved by ensuring that the prioritized projects deliver the projected results. In fact, if a project’s returns fall short of what is expected, then it is the prerogative of the management to look for alternatives even if it involves funding small projects as long as they are promising. The bottom line is that the management should come up with a system that ensures that the prioritized projects give the expected results.