No discussion of the IT organisation would be complete without reference to Heraclitus, an ancient Greek philosopher best known for coining the phrase “change is the only constant”. Although he was applying it to the universe as a whole, it applies equally well to IT departments. On average, IT departments undergo a major reorganisation every four years just to keep people on their toes. Some change even faster than this, going through a reorganisation annually. So change, it seems, is a constant for IT.
What a pity it is, though, that a cursory review of most reorganisations highlights a disturbing reality: the vast majority of IT leaders embark on reorganisation with little more than their own instincts to guide them. Few, it seems, have the benefit of any academic training in organisational design, and corporate HR is either unwilling or unable to help.
The extraordinary thing is that, despite these shortfalls, most reorganisations do some good — just not as much and at a higher cost than if they were done more expertly. So what does it mean to be an expert at reorganisation? A good place to start is determining what job IT needs to do, since this tends to drive different organisational competencies and often a different organisation to support it.
Determine IT’s role in designing the new organisation
In most enterprises, IT plays one or more of four roles. At the lowest rung of the value ladder, IT is a transactional organisation — an “order-taker”. The business dictates needs, and IT fulfils them. IT is focused on technology and operational efficiencies.
While this may describe the role of IT for some parts of the enterprise, in others, IT may be operating a little further up the ladder as a business partner. Here, IT partners with the business to understand and document business needs and requirements. IT also may recommend alternate solutions.
The next rung up the ladder is for IT to serve as a consultant to the business. Here, IT understands both business and technology issues and trends and is proactive in recommending solutions to the business that help drive competitive advantage and success.
Finally, at the top of the value ladder is IT as the strategic leader. Here, IT leads the development and execution of enterprise business strategy and planning.
Once IT’s role is determined, the second question is: What is the scope of change that’s needed? You want to get the expected benefits with the least amount of change. Therefore, it’s important to understand the impacts, costs and risks of reorganisation. As one CIO put it, “If your house is a mess and you can never find anything, taking a sledge hammer to it isn’t going to solve the problem. It will only make it worse.”