1. Sukhi Bedi – Chenyu Gong Fola Oyediran – Joelle Quiapo – Greg Swenson
MIS 5202 – IT Governance 
Sukhi Bedi – Chenyu Gong Fola Oyediran – Joelle Quiapo – Greg Swenson

2. Agenda Case Summary / IT Summary Weill and Ross Matrix
Strengths and Challenges
Contributing Factors
New IT Organization and Governance Model
New Governance Model
Action Items

3. 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)

4. Weill and Ross Matrix IT Decision Principles Architecture
Business Monarchy
IT Monarchy
Feudal
Federal
Duopoly
Anarchy
Principles
Architecture
Infrastructure
Business Applications
Investment

5. Weill and Ross Matrix IT Decision Principles X Architecture
Business Monarchy
IT Monarchy
Feudal
Federal
Duopoly
Anarchy
Principles X
Architecture
Infrastructure
Business Applications
Investment

6. Strengths & Challenges
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…
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
Every business group was completely independent w/ on strategic plan. Infrastructure choices based on its specific needs and IT applications and services
Met specific needs of their own business group

7. Contributing Factors Lack of governance Lack of leadership
Lack of centralized IT systems
Lack of enterprise vision
Rapid Growth / Acquisitions
Contributing Factors:
The position of Director – Corporate IT has been vacant for almost a year (since April 2005).
Alcan had abdicated its leadership responsibility – and control – of its IT resources
The role of CIO hadn’t really been clearly defined
Alcan’s IT management system was highly decentralized
Every business group was completely independent, with its own strategic IT plan, infrastructure choices based on its specific needs, and IT applications and services. Each group had its own IT organization that pursued its objectives based on the group’s needs and orientation.
Impossible given the lack of a global cost overview.
The company’s multiple acquisitions had created a diversified, fragmented IT environment that had had a negative effect on the effectiveness and efficiency of business processes.
IT projects and initiatives that affected processes that were common to the four business groups (finance and procurement, for example) were inadequately coordinated.
There also seemed to be a problem with respect to internally available skills, which were sometimes insufficient and poorly, aligned with needs. IT competencies were not identified, evaluated or compensated in the same way by the various business groups, and competency deficiencies were palliated by outside resources, consultants or contract workers.
Projects had been delivered late or over budget.

8. 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
Goals:
Global Strategy: Turn fragmented, distributed groups from several acquisitions with no strategy into units moving towards a single, unified goal. Coordinate leadership and architecture between Montreal, Paris, Singen, and Zurich.
More centralized vision of IT’s role throughout the organization – rather than IT for every business unit, centralize it on a higher level of the organizational chart.
Decreased outsourcing: The company can not be dependent on its managed service providers to make strategic IT decisions for the company.
Unified PM team to approve and keep track of major projects such as the
Needs vs. Resources: Alcan grew through acquisition, and kept much of the staff as they grew. Eliminating redundant resources (both people and systems and machines) will be necessary in the new organization.
Financial Accountability: Accurate accounting of all IT costs, enabling management to better handle costs and determine value. This true picture will allow Alcan to reduce their overall costs while increasing value.

9. New Governance Model Strengths: Recommendations:
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

10. Future of IT at Alcan Governance
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

11. Conclusion
What really happened to Alcan…
Questions ?