491 M2 CASE 6
The case is a description of the progression of IT management atAlcan from 2006-2007. It follows the appointment of Robert Ouelletteas Vice-President of Corporate Information Technologies in thecompany from the period of his appointment and his endeavor totransform Alcan’s IT management. Part A is a presentation of themajor aspects and problems of IT management up to mid 2006. Part Bprogresses with the major ideas and factors of the CIO’s adventstrategic plan for altering IT administration. Alcan is an aluminummanufacturing company headquartered in Montreal, Canada. Theiraluminum products target global clients in manufacture, aerospace andautomation. Alcan faces pressure in enhancing IT management corporateleadership resulting in the hiring of Ouellette. The paper confers onthe company’s existing IT infrastructure, merits and demerits ofadvent IT infrastructure as suggested by Ouellette, and possibleadditional infrastructure improvements.
Merits/Demerit of the existing Alcan IT
Pros derive from the fact that Alcan employs a greatly decentralizedIT management structure. As a result, each business segment wasself-governing (Dube, Bernier & Roy, 2009). A decentralized ITarchitecture has the capability of gaining more closure, as well asintelligence to the performance of specific company sectors throughmetrics, analytics as well as key performance indicators (KPIs).These are customized to the particular procedures, approaches andstructure of every business division. It avails the business unitmore closure and capability to react to market opportunities andpressures. The benefit to the company involves more authority overpurchase, procurement and supply chain tactics, resulting ineffective and goal oriented production, which may not have beenachieved via centralized IT.
Cons involve excessive spending on unwarranted SAP on licenses,immense workflow duplication on pricing structures, as there are 400simultaneous structures operating in combination with one another(Dube, Bernier & Roy, 2009). The absence of collective ownershipof intricate, incorporated business plans and approaches at Alcanbecause of the decentralized IT architecture. Althoughdecentralization is attributed to the merits of the ITinfrastructure, it minimizes the capability of the whole enterpriseto share information, knowhow or intelligence efficiently, in allcompany sections. The absence of a central IT system was reducingAlcan’s capability to participate as a central body. Benefits thatarise from decentralization are preciseness, speed and dataapplication to the particular business division operations. However,such benefits do not consider the long-run objectives of the company.Strategically, Alcan faces the possibility of being unable to competewith competitors that have a central IT, due to inability to marketfast and having reduced competitive agility linked todecentralization.
Merits/Demerits of new Alcan IT suggested by Ouellette
Introduced IT infrastructure suggested by the new CIO, Ouellette,results in a number of merits for Alcan. Ouellette introduceddistributed collaboration to replace decentralization. The newmanagement structure facilitates the storing of huge amounts ofinformation electronically, which can be accessed in all companydivisions, thus facilitating communication amid the different companysegments (Dube, Bernier & Roy, 2009). The availability ofelectronic databases allows a fast and effective communication amidbusiness partners from diverse nations, internationally. Byintroducing VoIP, Ouellette ensures that the services operate faster.The advent IT management structure permits the minimization of theoperation period of diverse duties, availing better feedback andenhancing company profits. In addition, an improved IT organizationstructure permits the budget regulation and classification, viadedicated processes of performance regions. Last is the reduction ofexpenses incurred by Alcan in hiring third party services.
Ouellette’s IT management system does not just benefit the companybut has associated demerits. The company will incur major expensesdue to the massive investments required in the acquisition andimplementation of the IT system to all nations where Alcan hasbranches (Dube, Bernier & Roy, 2009). The system will alsorequire to be maintained to avoid system breakdowns. Maintaining thesystem is pricey, and any cases of breakdown results long maintenanceperiods. There is the possibility of emerging software mistakes thatcould result in the communication of incorrect information. Since thesystem is no longer decentralized, the wrong information may reachmany employees in different company segments. The suggested ITmanagement structure results in loss of employment because ofminimized diversity within the technological park, buying of softwarepackages, managing infrastructure and economies of scale (Dube,Bernier & Roy, 2009). The principles were incorporated intostrategic planning where lesser individuals would be in charge of thenew created strategic planning position.
One of the disadvantages is that any possibility of software errorwill result in incorrect information. Alcan should work towardsensuring the safety and effective operation of the new ITinfrastructure. This implies working more on IT security to minimizeerrors as much as possible. Considering that the infrastructureserves all branches, any errors will cost the company heavily. Sincecost reduction is a major reason for IT management change, softwaresecurity should take precedence (Buchta, Eul &Schulte-Croonenberg, H, 2010).
IT management is important to any company. An effectively managed ITinfrastructure enhances business communication, functioning ofdifferent divisions and reduces company expenses. The case Alcon is aperfect illustration of strategies companies can employ in changingtheir IT administration. It begins by hiring an individual competentin the area, to come up with IT infrastructure, which transforms theentire company.
Buchta, D., Eul, M., & Schulte-Croonenberg, H. (2010). StrategicIT management: Increase value, control performance, reduce costs.Wiesbaden: Gabler.
Dube, L., Bernier, C. & Roy, V. (2009). Taking on the Challengeof IT Management in a Global Business Context: The Alcan Case PartA. International Journal of Case Studies in Management, 7(2), May. HEC020.Dube, L., Bernier, C. & Roy, V. (2009).Taking on the Challenge of IT Management in a Global BusinessContext: The Alcan Case Part B. International Journal of CaseStudies in Management, 7(2), May. HEC021.