Alcan Case Study Essay Example | Topics and Well Written Essays - 1250 words

Alcan Case Study - Essay Example In this era of computerization, IT is playing a key role in the management and reporting of exceptions so that pertinent issues could be highlighted and addressed before assuming alarming proportions. In the present case, Robert Ouelette the new CIO has three main concerns: (1) how to co-ordinate the IT functions across different countries and continents; (2) converting the IT governance function into a centralized one; and (3) monitoring the cost of IT, controlling wasteful expenditure and overseeing the usefulness of output produced by the IT function in the enterprise. The Accenture IT Governance Model Weill and Ross in their book ‘IT Governance’ define the term as â€Å"specifying the decision rights and accountability framework to encourage desirable behavior in the use of IT.† (Weill & Ross, 2004, 7 ). Some IT professionals and laymen at large seem to confuse the IT governance model with the way that IT is implemented and managed in an organization. We need to establish at the outset that IT governance does not give us the means to manage the IT department- rather it is the model through which the business manages its use of IT. Accenture has developed an IT governance model framework in which they classify industries based on (1) the pace of technology changes that they face and (2) their basis for competitive advantage, this being either product differentiation or cost. Accordingly they have identified four business classifications: (A) Efficient Predictable Operators (B) Information Integrators (3) Responsive Solution Providers and (4) New Capability Enablers. Which Quadrant Does Alcan Fall In & Why In the above stated framework, Accenture define an efficient predictable operator as one whose industry experiences a slow rate of change and competes on the basis of its operational efficiency. This is a common picture of the aluminum and allied industry where there is vertical integration among the top firms in order to take advantage of lower production costs based on volumes produced of various outputs, and very high production capacities are used to break-even point. Secondly, with the high costs of running electrolytic processes, there is a dire need for constant and reliable sources of cheaply available power. Alcan has managed to set up factories, refineries and mines at various places along the globe so that the cost of production is minimized or can be controlled to some extent, while supply of various outputs such as cans, sheets, ingots etc. is maintained. Now that the industry has overcome the lean period of the worldwide recession of the 1990s and the Russian oversupply shock that sent the price careening in a downward spiral, the price of aluminum per ounce has been increasing steadily and stands at $2,520 per tonne in 2007. I would put Alcan in the quadrant reserved for an Efficient Predictable Operator. Weill & Ross Model of IT Governance Weill and Ross have identified three questions that must be answered in order to achieve effective IT governance (Weill & Ross, 2004, 10). These are as follows: (1) What are the decisions that need to be made in order to ensure effective management and use of IT? (2) Who will need to make these decisions? (3) How will these decisions be made and monitored? In the course of their