Wednesday, November 28, 2012

Three Considerations in Reinventing IT Organizational Structure

IT can be a "pioneering" division to walk the talk and lead the change within an organization.

Many IT organizations or enterprise as a whole intend to reinvent their “stale” working environment with 20th culture such as bureaucracy, the inertia to change, reward mediocrity, homogeneous leadership & talent team, over-complex business processes, inefficient communication pipelines, etc. However, reinventing organizational structure is not an easy task, it takes both strategic planning and operational alignment to make it work and improve organizational maturity. Below is some collective insight on how to reinvent IT organizational structure and build a highly creative and productive working environment. 

1. Clarify Business Goals and Key Problems need to be solved

The main reason corporations need to create new structure schemes and organizational designs in IT is because business goals are not being met with current design and structure. As IT becomes less about “operate” and more about “generate differentiation for the business,” the link between IT and line-of-business peers can only increase.

  • Get feedback from business partners on what kind of IT department they want: Try to get involved in board meetings, even if irregularly and partially. All helps to promote IT within the corporation and get an overview of what the 'business' wants. You may get a lot of different answers and most of the time, very little insight into what should be the IT department mission or vision. Keep in mind that the IT department's mission should complement and add value to the company's mission. What are the goals of the organization as a whole and therefore what are the subgoals of technology required to achieve them? Once you solved this equation, it will become straightforward how you should organize putting together a set of processes and resources to execute them. You'll be aligned with the organization and best of all you'll get support from your top management to manage change.
  • A business architecture approach provides a unified structure and context for further analysis: (1). to understand the high-level functions of your IT organization, and (2). to ultimately guide decision making. The output would be an Operating Model, which is a representation of how IT operates across process, organization and technology domains in order to accomplish its function. An operating model describes the way your IT organization does business. Moreover, a gap analysis, skills assessment, efficiency study, workflow analysis, and knowledge of trends and models that work best to meet the business goals are needed before new schemes and designs are created and agreed upon across the business and all shared services.

2. The design factors to consider when building or restructuring IT

In learning about the drivers behind the design of the IT department, if you redesigned IT department, what factors drove the restructuring? How is the structure of your IT department aligned with the organization?

(1) Invite Related Parties to Brainstorm

Designing the organization is a co-responsibility that the related parties such as the senior leadership team, business committees, Enterprise Architecture team, HR, finance. etc. need be invited to bring up different perspectives, as any business reinvention effort should have clear business goals,  never be delegated from top management since they are the architects of the organization. This only means that in the end, you must have organizational-wide understanding and support for the new IT department's organization.

Any IT restructure effort should well align with its IT strategy, and IT strategy is always integral component of overall business strategy, that said, beginning the end in mind:  How to design an IT structure to optimize business processes, improve productivity, also encourage employees to be innovative and enforce cross-functional collaboration, and embrace Agile mindset & methodology? 

(2) Not just align with organizational culture, but how to cultivate the culture of innovation

Before you could create a new IT structure, you have to make sure it’s not just in alignment with the organizational "culture," but also, help to cultivate the culture of innovation, as that plays a critical role in how you structure your department, services, the underlying rules. IT department is not a silo by itself and it draws its energy from within the organization. 

In addition, innovation is the light IT should persistently pursue, shall you create a new team to experiment fresh ideas, or shall you embed such process into the existing structure and tuning it to do more/better with less, and do more with innovation

(3) The structure should have a larger business interest forged in via a partnership model. 

One of the key principles of assigning responsibilities is to reduce as far as possible (while maintaining good governance) the number of people who have to be involved in each task since all the additional communication/consensus seeking dramatically increase the time required to get even simple tasks done. So there needs to be the real delegation of responsibility with well-defined boundaries and clear accountability. 

Create a culture where IT staff talked regularly to their users rather than just using email. This built up a relationship of trust between IT and the users which meant that when urgent action was needed by users or IT there was the appropriate timely response. A project department within Corporate IT - you can offer PM skills through the corporation and support (or lead) numerous projects. This way, you can get closer to real 'business' of your corporation and other departments will see that IT is more than just the tech geeks.

(4)  Improve IT Maturity and overall Organizational Maturity

And like any other organization design effort, structuring IT group to leverage its core and distinctive competencies is an important consideration. The focus on realignment needs to value addition and speed with proper governance in place. With the way the world is changing, IT organization will always have internal and external resource components. When the structure is created, it needs to reflect both.

  • How to climb up IT maturity; Manage the teams to more focus on strategic & innovative projects & efforts, besides competitive necessary to keep the light on.  
  • Governance, Security and Risk Management: How to embed GRC well into IT strategic decision-making processes & daily business activities, it needs well alignment of people, process, and technology.
(5) IT & Business unit’s KPIs

Take time to review various business unit’s KPIs. Find ways, on how the design will play a calculated factor into the KPIs. Create a spreadsheet into Profit & Loss calculation factors and how to become a true partner: “It could burn or flourish for either party, but it’s’ the most desirable alignment” 

Whatever the structure be, there are benefits to treating IT as a Profit Center instead of a typical cost center. You set it up in such a way you could charge resource units back to various BUs. At the end of the year,  you are indeed successful if you show that the department is profitable while managing a high-quality team.

(6) Allow room for adjustments, keeping it dynamic

As you receive new insight & vision from various business units do the needful adjustments without fear & hesitation. Setup growth opportunities via a dynamic approach based on skill set & experience to meet new demands.

  • Build up the business's digital capability (a unified digital platform, solution-driven deliverable, analytics, and IT/Business integration)     
  • Agile Mindset: Amplify Agile methodology to manage IT more holistically, to enforce communication and customer satisfaction.
  • Innovation Management: Is innovation serendipitous, innovation capabilities can be cultivated:
(7)  Strategic Workforce Planning

  • Forecast knowledge and skills required to ensure you have the right people, in the right place, at the right time, and for the right cost. Forecasting demand for specific skills and roles helps reduce project delays: 
  • Continue developing relationships between IT and the business to understand emerging needs sooner. Forecasting the skills and roles you need to navigate the changes driven by mobile, cloud, big data, social media, and security trends. 
  • Statistically, 52% of IT professionals who don’t forecast demand for skills state project work is delayed, compared to only 31% for those who do forecast demand for skills. 
  • To get the most value for the least effort, continue to take a demand-oriented approach by default; remember the three “T’s” to keep the planning process organized: targets, tools, and talent:
    a) Start by identifying your goals in the organization (especially those affected by trends) – targets.
    b) Then, assess the responsibilities and skills required to achieve those goals – tools.
    c) Finally, define who you need to have those responsibilities and skills – talent.       

3. Define Structural Components 

Either organizational pyramid or business lattice, the structure may not be so flat yet, but multi-device support, multichannel communication, and multi-cultural cognizance can all make IT more effective.

  • The role-based structure (Business Planning and Support Branch, Solution Delivery Branch, and IT Service and Operations Management Branch). The idea is to put all the people together to Plan, Build, and Operate into respective branches and work across all technologies. The idea behind this change was to create communities of practice within those areas with people doing similar jobs being able to work together and leverage each other more effectively while focusing on doing things using more repeatable processes.
  • Case Study: (1) In one instance (a large multi-national), the problem - "a lack of productivity with technology" - turned out to be four regional teams all building the same software because that's what the regional business heads demanded. Re-align responsibilities on a functional rather than a regional basis and eliminating redundant work. (2) In another case, the technologists were "so busy keeping the existing systems running and responding to fire drills" that they couldn't "stay in the zone." So re-aligned to have a help desk, production support, tactical development, and strategic development as separate teams. Hence, rather than ask "what factors drove your restructuring," ask "what are the problems we're having meeting our goals," and go from there.
  • Virtual Team Mixed with Physical group: The physical team adjustment or reporting structure change may need to consider business culture and varies factors as described above, but social platforms and tools provide more convenient ways to enforce cross-functional communication, well-mixed business, and IT staff team will help IT talent understand business process and end customer thoroughly, to deliver end-to-end solution, also educate business staff with IT and risk concerns. And the emerging trends such as Agile, DevOps, etc may drive more organizations to do necessary adjustment either in organizational structure or through virtual cross-functional collaboration.       

  • Create a Life Cycle Framework for all Structural Components
    (1) Strategic - Create R&D / Enterprise Architecture / Systems Engineering Organization
    Tactical Create Operations Organization (Add, Start, Stop, Retire, Modify Technology); This will have many teams (Server, Storage, Network, Security, Application)

    (2) Build Security and Quality Organization
    Security report directly to CIOs and CEOs
    Quality report directly to CIO

    (3) Execute New Initiatives - PMO Organization

    (4) Process and Governance Organization
    Integrate processes across organization.
    Improve quality + productivity across concept to deploy value chain.

    (5) Extended organization - Exception Management
    SME / Consultant Rolodex for Emergency Mgmt (M&A, Unplanned Projects)
    It helps to reuse the same consultants from vendors/partners

    (6). Matrix Team to Align IT and Business
    Members from Business, IT, CFO to approve portfolio and plan new initiatives.

  • IT Design Practices:
IT design exercise with and decided to create a new Partnership/Account Management function to help IT better align with and seek innovation through the combined efforts of IT and users. So at the macro level level a) Support, b) Partnership, and c) Tech Development, which is a merge of applications & infrastructure (since so many systems are a combo of the web, mobile, cloud, and apps these days).

Also, by focusing on outcomes (running all production apps and infrastructure and keeping them all up and available for example) we were looking to improve service levels and responsiveness to clients as everyone had a common goal in mind. The Business Planning and Support Branch was intended to work outwardly with our clients to help them plan for meeting their business objectives while also doing internal IT planning and setting of Enterprise Architecture standards to ensure alignment with the organization's goals. Solution delivery would build to the standards put forth by the Plan area and eventually migrate it to IT Service and Operations Management to keep it up and running. The intention was also to create more cross-functional teams to break down the older technology based silos and increase collaboration. 

Thus, any organizational restructure effort should re-invent talent management from micromanagement to macro-management;  from monochrome to multi-dimensional visions and multi-faceted team building, and from monitor based to a motivational style performance management. IT can be a "pioneering" division to walk the talk and lead the change within the organization,  because IT is like the business's "nervous system," with sense and sensitivity, and usually, IT talent may also be more learning Agile, less political, though, change takes agile mentality, iterative step, and cross-functional communication and support.


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