Making IT Work in Your Company, Part 3

Organizational Structure

  • As we re-organize, there needs to be:
  • — An emphasis on services.

    — Consulting support for each of the service areas.

    — A Program Office (PO) to manage the percentage of work that is outsourced, the

    account executive structure, and the central IT organization/lines of business

    prioritization of work; the PO is comprised of representatives from central IT

    organization and the divisions.

    — A technology Council that links the services and management of the central IT

    organization to the lines of business and divisions.


  • It’s naive to believe that behavior will change by redrawing organizational

    boundaries or by codifying new responsibilities. In order to make the proposed

    technology organization effective several things must be true:

  • — Skillsets must be re-examined: skillsets that supported mainframe-based

    applications, data center operations, and related activities are less valuable today

    — and will certainly be less so in the future — than architecture design, systems

    integration, distributed applications (so-called network centric applications),

    project management and program management skillsets.

    — Incentives must be re-examined: we must revisit the reward structure to make

    certain that the skills, talent and activities that mean the most to the company are

    generously rewarded, while those of less importance are rewarded accordingly. It is

    essential that the “right” message be sent here: employees must believe that (a) there

    is a clear vision for the business/technology relationship and (b) they will be

    rewarded for their dedication to this relationship.

    — A new breed of business/IT professionals must be fielded, professionals with an

    understanding of broad and specific technology trends, business trends, and how to

    convert the intersection into system requirements and system specifications. Such

    professionals will work directly with the businesses to understand how technology can

    be cost-effectively aligned with business strategies.

    And Away We Go

    There’s obviously lots to do. And it won’t all happen overnight. The reality of our

    profession is that they will still be brush fires to extinguish, vendor crises to

    manage, and financial disasters to avoid. But while all this chaos continues to swirl

    around us, we nevertheless need to think about how to make our business/technology

    organization less contentious and more efficient. A series of discussions will begin

    immediately to decide how to implement the kinds of changes described here. Thanks.

    (End of open letter.)

    This generic organizational structure can be implemented – complete with embedded

    biases – in your organization.

    Organization Effectiveness Metrics

    It’s critical that you measure the effectiveness of the organizations you create.

    Annual surveys, interviews and other instruments should be used to determine if things

    are working – or not. It’s best to have the assessments made by consultants with no

    vested interest in the results.

    Depending on what you choose to outsource, you should also develop a set of metrics

    that will permit you to (a) first compare what you!&ve got now to what was the case

    before outsourcing and (b) if the outsourcer’s performance is up to snuff. Of course

    there should also be metrics to determine if in-house professional are performing

    adequately, should you decide not to outsource.

    Future Modeling

    Organizational structures should be volatile as they adapt to new business models, new

    technologies, and new corporate structures. Prepare for changes long before they need

    to be implemented!

    Click here to read Part 1 of this column.

    Click here to read Part 2.

    Steve Andriole is the Thomas G. Labrecque Professor of Business at Villanova

    University where he conducts applied research in business and technology alignment. He

    is also the founder & CTO of TechVestCo, a new-economy consortium that focuses on

    optimizing investments in information technology. He can be reached at

    [email protected].