MIS 5202 – IT Governance

Sukhi Bedi – Chenyu GongFola Oyediran – Joelle Quiapo – Greg Swenson

CASE SUMMARY / IT SUMMARY

• 1000 Info Systems; 400 handle Financial Data

• Lack of centralized documentation

• IT Governance Model – 7 yrs old; no review

• Annual Costs (including hidden costs; $100M)

• Decentralized corporate IT function (5 sectors, 136 resources, 12 sites)

• Heavy outsourcing (80% - total annual budget)

• Lack of defined roles, lack of management structure

• Autonomy; uncoordinated projects and initiatives (3 SAP Projects- $500M)

WEILL AND ROSS MATRIX

IT Decision Business Monarchy

IT Monarchy

Feudal Federal Duopoly Anarchy

Principles

Architecture

Infrastructure

Business Applications

Investment

WEILL AND ROSS MATRIX

IT Decision Business Monarchy

IT Monarchy

Feudal Federal Duopoly Anarchy

Principles X

Architecture X

Infrastructure X

Business Applications

X

Investment X

STRENGTHS & CHALLENGESSTRENGTHS

• Global market / strong business focus

• Large employee base- 68,000 in 61 countries

• Annual revenue US $23.6 billion in 2006

• Wide variety of products: ie bauxite, smelter-grade alumina, sheet ingot, extrusion billet, wire ingot, forging stock, beverage sheet, automobile iron…

CHALLENGES

• Over 1000 Info Systems; 400 handle Financial Data

• Lack of centralized documentation and centralized IT management system

• Financial and managerial information- manually inputted

• IT Governance Model – 7 yrs old; no review

• Annual Costs (including hidden costs; $100M)

• Decentralized corporate IT function (5 sectors, 136 resources, 12 sites)

• Heavy outsourcing (80% - total annual budget)

• Lack of defined roles, lack of management structure (vacant corporate IT position; 1 yr)

• Autonomy; uncoordinated projects and initiatives (3 SAP Projects- $500M)

• Desire to manage IT as a coordinated function across the entire company

• Desire to initiate integration; fired 5 employees

• Desire method(s) to track “real cost”= return on investments

• Previous IT consultant / First-name basis

CONTRIBUTING FACTORS

• Lack of governance

• Lack of leadership

• Lack of centralized IT systems

• Lack of enterprise vision

• Rapid Growth / Acquisitions

NEW IT ORGANIZATION

Goals of the new IT Organization?• Global Strategy

• Centralized Vision of IT

• What (should) stay decentralized?

• Decreased Outsourcing

• Unified Project Management team

• Needs vs. Resources

• Financial Accountability / Overall Cost

NEW GOVERNANCE MODEL

Strengths:

• Senior management now had IT on their priorities

• Engineered product & packaging groups now on SAP (to reduce diversity)

• Progress in standardizing & consolidation of IT infrastructure

Recommendations:

• IT governance should be reviewed more frequently and according to audit charter

• Ex. Quarterly or Annually

• Save costs on outsourcing / reduce outsourcing

• Implement an Enterprise Architecture Practice

• Multiple acquisitions; Alcan should consider divesting off some business areas

FUTURE OF IT AT ALCANGovernance

• A clear structure and governance model

• Defined Role of VP & Others

• Centralized management

IT Strategy

• Overall architecture

• Managed as a coordinated function

• Reduce system diversity

• Financial

IT Management

• Human resource

• Sourcing

• Quality Management

CONCLUSION

• What really happened to Alcan…

• Questions ?