Monday, September 22, 2014

How to Structure a Business-Friendly IT Organization

IT must be more business-friendly. Start with the structure.

Due to the changing nature of technology, IT organization also has to continue to re-imagine, reinvent and reshuffle itself to adapt to the changes. But the goal for changes or IT transformation is ultimately for achieving business goals. So the point is what are the fair reasons to do IT reorganization and  how to structure a business-friendly IT organization?

The organization needs to be realigned to ensure the people are in the right positions: They have better focus to execute what is needed of them. The focus of duties makes it much simpler to hire and scale the organization as business rapidly grow. Other than that scenario, you realign when the business strategy changes. The structure has to allow for agility and change, as the business grows and evolves. You need to also ensure, technology is providing a new innovation function or service, to look at new areas and new ideas.

It has been to build for the future: In one case it was to make the organization more fiscally responsible and increase technical capabilities via utilization of managed services. In the other case, it was simply to introduce a structure that could support scalability for a fast growing company. However, in many cases, reorganizations of any type are highly overrated. Introducing wholesale change into any organization will create disruption, communication challenges, and performance impacts no matter how well planned and communicated. So well planning is the prerequisite, and better leverage the talent within the organization to meet the current year goals for the organization and to position for the 5-year plan.

Breakdown silos and enforce cross-functional collaboration: The digital business objective is to begin to break down silo walls and utilize the human potential of continuous improvement for a more grass-roots, by-the-people reorganization. These wins achieved by the cross-functional teams have a positive impact on business-side perceptions of IT as well as providing a sense of success often missing in many IT organizations. However, the main objective is to lay the foundation for service-oriented, non-siloed teams closely aligned with the business model and strategies.

Another driver is simply about performance: It's important to remember that reorganization solves some problems - but not all. It's important to get the right people on the bus and then make sure those people are in the right seat on the bus. IT teams are being driven to deliver a cohesive catalog of technology services which puts an even greater emphasis on cross-functional coordination. Measuring and tuning the organization to achieve this is sometimes necessary over time. This may also include IT reporting relationship to the business in some cases. Here are some fair reasons to re-tune the organizational structure:
(   1)   Change in strategy that requires realignment of resources and future road-map.
(   2)   Disappointing customer satisfaction results. 
    3)   The adoption of new technologies. So there’s the need for an omni-channel presence with customers (mobile apps, social media, etc.)
(  4)   The chemistry that has a significant impact on performance and productivity. 
The observation of the broken processes by the team is critical: A more gentle approach, particularly for an executive in a new position, is to spend the majority of on boarding time evaluating and understanding the business model and services. Identify technology-related processes and tools that appear to be the most 'broken', regularly challenging the business on efficiency and customer service delivery. Then come back to your teams and facilitate the brainstorming. They need to see what the business experiences objectively before collecting ideas and approaches. From those ideas and findings, take volunteers from across the IT organization and run an efficiency pilot working directly with the business. To ensure success, start with a 'solvable without huge capital investments' problem. As we all know, there are more than enough of those to go around any business. Problem-solving in teams, particularly teams that don't normally work together in a siloed IT environment is empowering. Repeat this process but instead of business efficiency, have the teams observe a waste related effort within IT. 

There are two keys to successful Business-Technology integration: The first is having CXOs and Board that understands that technology is not a separate entity which exists just to keep the lights on. The second is to have a CIO who understands both technology and business and is given the authority of a true C-level to interact with the rest of the business. You need to focus on the practical side, that where the rubber hits the road to ensure internal collaboration - you can structure any way you want - the key to success is to ensure internal discussion, communication, agreement and collaboration to deliver on the common goal - value to and enabling the business. This is how to breaking down the silos; understanding the inter-dependencies and start talking. It is also important to formalize those rules of the engagement part of clear roles and responsibilities.

Always keep the end in mind, change is not for its own sake, any restructure effort has to be well planned, experiment, empower and engage, with the goals to improve IT performance and overall corporate maturity.


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