Taking on challenges in IT management within global business contexts

Alcan IT Management Structure

What are the pros and cons of the current Alcan IT management system?

Alcan is perhaps the single most successful global enterprise in the IT industry today. But, despite its success and penetration, it has its own set of pros and cons. Perhaps the biggest negative aspect of Alcan is the level of decentralization in the company. With each sector of the business being an individual unit, with its own IT structure, diversities, management structure, there was little to no communication amongst the business units which was not something that the new director -- Robert Ouellette -- much appreciated. This leads us to the most significant move in the Alcan Corporation i.e. The appointment of Robert Ouellette as the new Director. His first move was to analyze the costs and financial investments of the company in the IT sector. It was here that the most significant weakness of the Alcan Corporation surfaced.

The overall perception of the expenses by the CFO was that the total investments were up to $200 million annually. Even though, this was way off base, the actual spending was nearly $295 billion annually but the expenses were being recorded wrong as the operating expenses of the groups were included in the costs of goods sold. This oversight and misrepresentation was one of the biggest cons of the company. Furthermore, with each individual business unit investing in different SAP projects, the overall complete investment amounted to over $500 million which was adding more pressure on the resources and capital of the company. An even bigger downside with the Alcan management system was that there little or no coordination between the IT initiatives and projects that different departments chose to work on. This lack of coordination made internal management much more difficult as well.

Like it was aforementioned, the appointment of Robert Ouellette was the biggest advantage of the Alcan Group as it led to the following advantages:

- The division of entire corporate structure into five distinct groups, each with its own set of responsibilities (corporate applications group, architecture planning group, information system solutions group, infrastructure planning group, shared infrastructure services group)

- After a few months, Ouellette noticed that the shared services sector became one of the top priorities for the management

- The ROI on IT investments was brought to light in a more efficient and thorough perspective

- The overall analysis of IT investments became more thorough which helped in smarter outsourcing

- Ouellette hired 7 skilled experts within the existent team to analyze and recognize the common IT goals and building priorities for the entire corporation. This helped in achieving uniformity across the different business units.

Q.2. What are the pros and cons of the new Alcan IT enterprise architecture proposed by Robert Ouellette?

Robert Ouellette's first move to improve the Alcan IT Enterprise Architecture was to initiate coordination and communication in the enterprise architecture unit. He did this by hiring a new Director for the Enterprise Architecture Unit. The new director then analyzed the skills sets of all enterprise architects working for the company and added 7 new experts to help them in the accomplishment of their tasks. The advantages of this were:

- The common goals were recognized in the initial stages across the company

- Priority blocks were structured keeping in mind the common aims

- Uniformity was attained across all business units of the company

- Prices analysis and responsibilities were delegated with respect to the experience and expertise

- Appropriate technological solutions were provided in a timely manner

The cons of the approach were not many but included:

- The new team was set up in the Montreal region which meant only the employees on site and from Voreppe (France) could work in close quarters with the new team

- The operational strategy was not forwarded to all franchises but one of two shared-services outlets based on the domain that the strategy was most effective in. This meant that strategies that could potentially work in different business units would not always or necessarily be communicated to them based on the perception and conclusions of the new Director and team experts.

Q.3. Would you support staying with the current IT system or moving to the new enterprise architecture?