The Pros and Cons of Alcan’s Proposed Technology Infrastructure

The current technology infrastructure of Alcan

The current technology infrastructure of Alcan poses certain pros as well as cons to the company. For the pros, the decentralized systems allow for independence and autonomy within each business unit, thereby encouraging the implementation of their respective strategic plans relating to IT. For instance, since the current infrastructure is based on specific needs and requirements of each business group, it provides the opportunity for the establishment of IT system that caters specifically to the objectives and orientation of the respective groups. This enhances group-level productivity (Dube, Bernier & Roy, 2009).

On the cons side, the current technology infrastructure of Alcan is less efficient, in terms of both labor and financial resources. The company was spending about 80% of its annual IT budget outsourcing additional services. This was greatly contributed by the decentralization of the various business groups. Each business group identified, evaluated and compensated IT competencies differently from the other groups, and this made it really hard to align the internally available skills with Alcan’s needs.

Additionally, due to separate management of IT services, funds allocated to IT were usually undervalued. This led to a lack of indication of Alcan’s business value, which in turn made it difficult for the management to make informed decisions on the outsourcing of certain services. (Dube, Bernier & Roy, 2009).

Pros and cons of the new Alcan technology infrastructure proposed by Robert Ouellette

The new technology infrastructure proposed by the Vice President and Chief Information Officer (CIO) of Alcan; Robert Ouellette, brings with it several cons and pros. It involved centralization of shared activities, an act which would promote economies of scale, shared competencies, consolidation, standardization, reuse, and low-cost access to expertise. Corporate strategies were also to be used in the integration of IT services so as to repatriate the management of Alcan’s IT services and obtain the necessary tools to manage them on a global basis.

On one hand, the new infrastructure had the capacity to enhance the efficiency and effectiveness of the various business functions. For instance, the electronic databases of the new management system provide a sufficient storage facility for the huge amounts of data the company handles. This system also allows for the centralization of business functions by providing a quick and efficient means of communication across all business divisions of Alcan.

The new IT management system came to introduce shared service centres for the services used by the various business groups. By doing so, the senior management would be able to regain control over Alcan’s outsourcing strategy. This would in turn help cut down the hefty costs incurred by decentralized outsourcing activities. At the same time, the shared service centres would support individual and ongoing development of the business groups without disrupting their activities. (Dube, Bernier & Roy, 2009).

Moreover, since the IT directors of each group, responsible for IT management, now responded to both their head of department and the CIO, there was greater integration in the company as the IT directors were now directly responsible for achievement of the company’s global objectives. This was driven by the fact that they also responded to the Chief Information Officer, who was ensured that global objectives were met by all business groups. To further boost integration amongst the various business groups, Robert also created the IT Leadership Committee, where the IT directors of each business group were able to strategize on current and future projects. The result of these integration efforts was a more effective company working together for the achievement of its global objectives.

Under the reorganization of IT infrastructure, greater IT management was to be initiated by setting up a strategic office to closely monitor all IT projects valued at $2 million and above. By setting up of these offices, all major projects would be closely monitored by not only the responsible business group, but also the project office. As a result, there would be more efficiency in project management as well as transparency in the undertakings of various business groups so as to ensure conformity of the project details to the company’s overall visions and objectives.

Despite all the advantages accrued from the new infrastructure, it poses some disadvantages and risks. The technology infrastructure is likely to cause major unwanted organizational changes and risks to the company.

Once installed, the new system would involve the creation of shared service centres for shared business groups’ functions. This brings about great dependency of the delivery of various business groups on the service centres. As a result, operational performance of various business groups would be affected since their activities are dependent on the provisions available in the respective service centres.

The system will also require special changes to the general structure of the company, which needs a lot of time and resources to facilitate. Besides, since the new system does not encourage autonomy of business units, a software change or breakdown of the system could result into serious implications for the company (Dube, Bernier & Roy, 2009).

Additional improvements of infrastructure for this case

The other possible improvements in the infrastructure include developing cost-efficient designs and heightening security levels (Whitman & Mattord, 2012). Due to the extensive nature of the new IT infrastructure system, it is important that the company develops a design that is able to facilitate all the various functions, without attracting additional costs. This would be done by brainstorming on more effective ways of carrying out various functions. The ways identified as the most effective would then be adopted as designs to be used for various types of future projects to ensure efficiency and cost-saving.

Moreover, with the establishment of shared service centres comes a greater vulnerability of the company’s internal processes. Therefore, a high-security system is vital to enhance the safety of both shared and stored information.

References

Dube, L., Bernier, C. and Roy, V. (2009) Taking on the Challenge of IT Management in a Global Business Context: The Alcan Case - Part A. International Journal of Case Studies in Management. 7(2):May. HEC020.

Dube, L., Bernier, C. and Roy, V. (2009) Taking on the Challenge of IT Management in a Global Business Context: The Alcan Case - Part B. International Journal of Case Studies in Management. 7(2):May. HEC021.

Whitman, M. E., & Mattord, H. J. (2012). Roadmap to information security: For IT and infosec managers. Cengage Learning.