Redesign Your IT Organizational Structure

Structure follows strategy: Design your IT organization for the future

Our understanding of the problem

This Research Is Designed For:

• CIOs

This Research Will Help You:

• Restructure the IT organizational design to be optimized to the IT strategy.
• Select an appropriate operating model and organizational structure, and customize it to fit your unique organization.
• Determine future-state roles and responsibilities.
• Develop an effective communications plan to get buy-in from business and IT stakeholders.

This Research Will Also Assist:

• IT Leaders

This Research Will Help Them:

• Become champions of the change, helping to promote the change to other employees.
• Anticipate employee concerns and plan to mitigate them and gain buy-in.
• Understand their new roles and responsibilities in the organization.

Executive summary

Situation

• Organizational design is the alignment of organizational structure, roles, and processes to execute on business strategy – the better aligned the organization is, the more effective it is.
• For optimal results, the structure of the IT organization must match its strategy, but often IT organizations grow to meet needs of the day and not by strategic design.

Complication

• Redesigning your IT organization can be highly disruptive, emotional, and politically charged. Effective reorganization efforts need to start with identifying future direction, defining a future operating model, and making difficult decisions about how you will deliver IT services in the future.
• For organizations that have attempted a reorganization in the last two years, 77% of those have failed (Aronowitz, et al.).

Resolution

This blueprint will walk you through the organizational redesign process, providing a strategic methodology to customize your future-state structure to specific organizational nuances and strategic imperatives, while remaining flexible to future change.

1. Define a set of organizational design principles that will help to ensure the structure aligns with strategy.
2. Visualize IT’s structure with a customized operating model, clearly demonstrating how IT creates value and how work flows in and out of the department.
3. Define future-state work units, roles, and responsibilities that will enable the IT organization to complete the work that needs to be done.
4. Craft a communications plan that will address key stakeholder concerns and maintain ongoing buy-in for the new structure.

Info-Tech Insight

1. Structure follows strategy – how your organization is designed will dictate how it behaves. It is the key enabler of your strategic direction.
2. Focus first on capabilities. Build a forward-looking operating model first – then look to people and roles.
3. Change in practice, not just on paper. Redesign requires constant caring and feeding to see it through to the finish line.

IT organization design is the means to enabling IT’s strategic direction

What is IT organizational design?

IT organizational design refers to the process of aligning the organization’s structure, processes, metrics, and talent to the organization’s strategic plan to drive efficiency and effectiveness. If your IT strategy is your map, your IT organizational design represents the optimal path to get there.

Organizational design is the mechanism for how you enable your strategy and priorities

The organization’s choice of strategy and the tactics to realize that strategy will have a direct impact on how the internal organization should be organized. This means that you need an iterative process to reassess organizational design at regular intervals. As governance decisions lead to changes in strategic direction, the supporting structures need to be reassessed to ensure they are still aligned.

ORGANIZATIONAL DESIGN

The operating model and architecture for how IT is organized to deliver on business needs and strategies.

IT STRATEGY

The identification of organizational objectives, principles, and tactics necessary to drive business value.

IT GOVERNANCE

A body that has the responsibility and authority for approving strategic direction and monitoring performance.

Many organizations are going through organizational redesigns, but few are getting it right

60% Of companies have attempted an organizational redesign in the last 2 years YET… 77% Of those org designs FAIL.

Source: Aronowitz, et al.

Why is it so difficult to succeed at IT organizational redesign?

1. Many organizations change the structure on paper, but not in practice. Organizational design efforts are not complete without long-term dedication to creating a shift in culture and practice.
2. Organizations look to force fit a “trendy” structure. Many organizations attempt to force fit an organizational structure they want to work with rather than picking a structure that enables its strengths and goals or truly will work for their culture.
3. Restructuring IT impacts much more than IT. Without the right strategic approach, managing the diverse and complex opinions from business stakeholders can prove cumbersome. The redesign process must be as inclusive as possible to parties affected by the change.

86% of IT leaders believe organization and leadership processes are critical, yet the majority struggle to be effective

Note: Importance and effectiveness were determined by identifying the percentage of individuals who responded with 8-10/10 to the questions:

• “How important is this process to the organization’s ability to achieve business and IT goals?”
• “How effective is this process at helping the organization to achieve business and IT goals?”

Source: Info-Tech Research Group Management and Governance Diagnostic

N=22,800 IT Professionals

The way your organization is built dictates how it will perform. Are you set up for success?

52% of IT organizations self-identify as being in firefighter mode. This means they are focused on resolving urgent or recurring IT issues to achieve short-term gains, rather than spending time on strategic goals.

As a result of this firefighting mentality, most structures today are not consciously built – they’ve arisen organically, unguided by a long-term vision. These Band-Aid solutions can work temporarily, but ultimately organizations end up with structures that are ill equipped to meet the strategic needs of the future.

The design of your IT organization has a significant impact on how it performs. Where you invest in staffing, the level of hierarchy, and the way you manage your relationships with the business have a significant impact on what gets done, when it gets done, how it gets done, and what the business thinks about it.

Every structure decision you make should be based on an identified need, not on a trend. Build your IT organization to enable the priorities of the organization.

Effective organizational design is a competitive advantage. By designing the structure with your business and IT goals in mind, you can build a department that enables these goals – and ensure that you are spending money and resources on the most important things.

Use Info-Tech’s methodology to set yourself up for success

Source: The Boston Consulting Group

The following organizational design challenges can be avoided through structured planning

This research is designed to help small to medium-sized organizations across different market segments successfully transform their organizational structure. Assess your fit for this blueprint by considering if the below statements sound familiar:

• You haven’t actively planned your structure – it just “happened.”
• Your structure is outdated and the business strategy or goals have changed since the last time a redesign initiative occurred.
• Your organization is growing and IT cannot keep up.
• Your CEO is mandating a change in IT.
• You are experiencing work duplication, role conflict between members of the IT team, and/or inefficiencies.
• You have noticed that there are high levels of redundancies that are causing delays and a lack of accountability.
• Your business complains that IT doesn’t understand their needs.
• You need to add new capabilities into the IT organization.
• Your business units have highly divergent needs and IT can’t keep up.
• Your staff is being asked to do work outside of what is in their job descriptions, wasting time on activities that shouldn't be their responsibility.
• You’re spending too much time on the wrong things.
• You’re ready to make a transformational change to the way IT functions and performs.

Track the success of your redesign using business metrics

How do I measure the success of my redesign?

The purpose of your IT organizational design is to enable IT to meet its strategic objectives, which are aligned with the larger enterprise’s vision and direction. It is imperative to adapt the key performance indicators (KPIs) that the business is using to track its success and demonstrate how IT can assist the business and improve its ability to reach those targets.

Examples of metrics specific to IT:

• Percentage of resources dedicated to key capabilities
• Percentage of resources dedicated to strategic priorities and initiatives
• Overall business satisfaction with IT

Questions to ask

1. What are the leading indicators of IT effectively supporting the business’ strategic direction?
2. How are success metrics aligned with the objectives of other functional groups?

Are your metrics achievable?

S pecific

M easurable

A chievable

R ealistic

T ime-bound

While org design involves the art of the possible, it must be grounded in achievable outcomes. Ensure that the metrics your redesign is measured against reflect realistic and tangible business expectations. Overpromising the impact the organizational design will have can lead to long-term implementation challenges.

Follow Info-Tech’s four-phase approach to building an IT structure that will enable your strategic goals

This blueprint is part one of a three-phased approach to organizational transformation

CIO consolidates disparate IT departments (LoB) into a single outcome-focused organization

CASE STUDY

Industry: Manufacturing

Source: IBM, “A new era begins”

Problem

A Global Fortune 1000 company was seeing an increased need for product innovation, customer service, and speed to market, but they felt they were hindered by IT’s inability to keep up with the pace of change.

Solution

The new CIO established a company-wide operating model for consolidating the disparate IT departments into a single organization focused on outcomes instead of a lines of business organization. 11,000 IT staff were organized into 140 delivery communities, each focused on a specific service area. Communities were led by both the business and IT with shared ownership and responsibility for the results.

Results

When measured three years later, the improvements were considerable. This was largely attributed to the enabling of IT teams to see how their individual roles supported business goals. While challenges were isolated to their service delivery communities, a formalized process that kept IT and the business aligned resulted in high levels of collective innovation, spurring the improvements identified.

30% Reduction in project cycle times

20% Reduction in defect rates

33% Reduction in overall delivery costs

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”

Guided Implementation

“Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.”

Workshop

“We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.”

Consulting

“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”

Diagnostics and consistent frameworks used throughout all four options

Redesign Your IT Organizational Structure

Workshop overview

Contact your account representative or email Workshops@InfoTech.com for more information.

Phase 1

Craft Organizational Design Principles and Select an IT Operating Model

Phase 1: Craft Organizational Design Principles and Select an IT Operating Model

ACTIVITIES:

• 1.1 Brainstorm the implications of your IT strategy on your organizational structure
• 1.2 Use your collected data to conduct an analysis of current pain points and opportunities
• 1.3 Create your finalized list of design principles
• 1.4 Weigh your design principles against the list of operating models
• 1.5 Finalize your operating model selection

OUTCOMES:

• Collect key data that will inform the way you should structure your future state organization.
• Create a set of design principles to inform your future decision making around organizational structure changes.
• Select a baseline operating model that best reflects the way you plan to design your organization.

Any operating model can work – but not every operating model will work for you. Select a future state operating model based on the capabilities you need to deliver as an organization.

An effective organizational design aligns structure with strategy

All aspects of your IT organization’s structure should be designed with the business’ strategic direction in mind. Use the following set of slides to extract the key components of your strategic direction, as well as assess your current organizational pains and opportunities to land on a future structure that aligns with the larger strategic direction.

1. Review Your IT Strategy: Assess the IT strategy and understand the ways in which IT needs to align with the business objectives for the future.
2. Design Your Organization: Determine the operating model and organizational chart structure that best suits your needs, then customize it to your specific needs.
3. Structure Your Organization: Define work roles for your work units and translate role descriptions into jobs with specific competency requirements.
4. Implement Your Organization Design: Form an implementation team and develop a transition plan (this is a separate research blueprint).

Articulate how IT will support the strategic priorities of the business with a set of organizational design principles

WHAT ARE ORGANIZATIONAL DESIGN PRINCIPLES?

Your organizational design principles should define a set of loose rules that can be used to design your organizational structure to the specific needs of the work that needs to be done. These rules will guide you through the selection of the appropriate operating model that will meet your business needs. There are multiple ways you can hypothetically organize yourself to meet these needs, and the design principles will point you in the direction of which solution is the most appropriate, as well as explain to your stakeholders the rationale behind organizing in a specific way. Data collection on the front end is critical here – one of the number one reasons for organizational design failure is a lack of requisite time spent on the front end understanding what is the best fit.

How to determine your design principles:

1. Review your IT strategy and digest the organization’s goals, its subsequent implications for the IT organization, and the organization’s target state maturity level.
2. Conduct an organizational effectiveness assessment to understand what is working and isn’t working in today’s reality with a focus on the future.
3. Use benchmarking data from Info-Tech’s diagnostic program to gain additional nuance around areas for improvement.

Identify the implications of your IT strategy on your organizational structure

Your IT strategy is a critical input into your future organizational design. Extract critical components of your IT strategy and convert them into a set of actionable design principles that will guide the selection of your IT operating model.

Info-Tech Related Research: Rapidly Develop a Visual IT Strategy

Vision, Mission & Principles

• Leverage your vision and mission statements that communicate IT’s aspirations and purpose for key information that can be turned into design principles.
• Review your key IT principles, or if you don’t have any, leverage the IT Vision, Mission, and Guiding Principles Guide to review a set of common IT principles.

Business Goal Implications

• IT implications are derived from your business goals and will provide important context about the way IT needs to change to meet its overarching objectives.
• Understand how those implications will change the way that work needs to be done – new capabilities, new roles, new modes of delivery, etc.

Target State IT Maturity

• Determine your target state IT maturity for your organization using the IT goals that have been uncovered.
• Refer to the following slide for Info-Tech’s maturity ladder if you have not completed this exercise through the IT strategy blueprint.

Determine the organization’s desired maturity level

DETERMINE:

Where are we today?

Use the following exercise to determine the current overall maturity level of the IT organization.

Where do we want to be as an organization?

Using the inputs from Info-Tech’s diagnostic data to determine where the organization should be after its reorganization.

Activity: Brainstorm the implications of your IT strategy on your organizational structure

1.1

Estimated Time: 1 hour

1. Convene a group meeting with all the key stakeholders involved in your organizational design initiative to review key inputs from your IT strategy.
2. Review the organizational vision, mission, and principles and extract any important pieces of the organization’s aspirations that need to be highlighted in the organization’s structure. Pay careful attention to issues around customer responsiveness, organizational agility, and core capabilities / competitive differentiators.
3. Review the organization’s business goals and contextualize their implications for the organizational structure. For example, if an organizational goal is to provide 24/7 support for customers, how does IT need to change to enable this capability?
• These should directly translate to actionable strategic initiatives for the IT organization to structure around. Document these key strategic initiatives in a list.
• If you have completed Info-Tech’s IT strategy blueprint, import the results of your IT implications and goals from your finalized IT strategy.
4. Determine what the necessary organizational maturity level is to deliver your IT goals based on Info-Tech’s Maturity Ladder on the previous slide.
• Based on your selected maturity level, contextualize what this means in terms of an impact on your organization structure (e.g. What does it mean to be a business partner at XYZ Company?)
• Create a list of the implications for change that arise from reaching your desired maturity level. These will form critical inputs for your finalized organizational design.

INPUT

• IT strategy

OUTPUT

• Implications of IT strategy on future-state organization
• Target-state maturity level

Document your results in the Organizational Design Communications Deck

Use Info-Tech’s diagnostic program to diagnose specific areas that demand attention

Each of the following Info-Tech diagnostics can provide useful context in outlining what needs to be included in your future organizational structure. Follow the guidance below to extract critical information around your current state, stakeholder needs, and future opportunities for improvement.

Leverage the following Info-Tech Diagnostics:

Activity: Use your collected data to conduct an analysis of current pain points and opportunities

1.2

1. Convene a group meeting with all the key stakeholders involved in your organizational design initiative. Review the results of your strategic implications exercise to understand some of the identified pains and opportunities.
2. Provide each participant with a marker and stack of sticky notes. Have them openly brainstorm a list of current pain points or inhibitors in the current organizational structure, along with a set of opportunities that can be realized during your restructuring.
3. As a group, review the sticky notes and group similar topics and themes. Create a high-level label for each of the groupings that can be used for consideration during the crafting of your organizational design principles.

INPUT

• Stakeholder feedback
• Current pain points
• Identified opportunities

OUTPUT

• Pain point and opportunity themes

Activity: Create your finalized list of design principles

1.3

1. As a group, review the key outputs from your data collection exercises and their implications. Group sets of implications that are similar/redundant together.
2. Prioritize the various implications and build as the starting point for your design principles. Make the list as inclusive as possible to account for all future capabilities and opportunities and to address any existing organizational pains. Translate the implications into design principles by building sentences from the implications – each principle should include the phrase “we will.”
3. Vote on a finalized list of 8-10 design principles that will guide the selection of your operating model. Have everyone leave the meeting with these design principles so they can review them in more detail with their work units or functional areas and elicit any necessary feedback.
4. Reconvene the group that was originally gathered to create the list of design principles and make any final amendments to the list as necessary. Use this opportunity to define exactly what each design principle means in the context of your organization so that everyone has the same understanding of what this means moving forward to choosing the right operating model.

INPUT

• Activity 1.1
• Activity 1.2

OUTPUT

• Organizational design principles

Document your results in the Organizational Design Communications Deck

Example Design Principles

Ensure consistency in application of your design principles with a coherent operating model

WHAT IS AN OPERATING MODEL?

An operating model is an abstract visualization, used like an architect’s blueprint, that depicts how structures and resources are aligned and integrated to deliver on the organization’s strategy. It ensures consistency of all elements in the organizational structure through a clear and coherent blueprint before embarking on detailed organizational design. The visual should highlight which capabilities are critical to attaining strategic goals and clearly show the flow of work so that key stakeholders can understand where inputs flow in and outputs flow out of the IT organization.

Info-Tech Insight

Investing time in the front end getting the operating model right is critical. This will give you a framework to rationalize future organizational changes, allowing you to be more iterative and your model to change as the business changes.

Weigh the pros and cons between a common set of IT operating models

Use Info-Tech’s set of common operating models to compare and contrast against your organizational design principles. This will allow you to land on a general model that best suits your design principles that you can then customize to support the nuances of your specific IT operating environment.

Each IT operating model is characterized by a variety of advantages and disadvantages

Decentralization can take many forms – define what it means to your organization

Decentralization can take a few different forms depending on the products that the organization supports and how the organization is geographically distributed. Use the following set of explanations to understand the different types of decentralization possible and when they may make sense for supporting your organizational objectives.

Centralized Operating Model #1: Plan-Build-Run

Centralized Operating Model #2: Demand-Develop-Service

Decentralized Operating Model: Line of Business, Product, or Geographically Functionally Aligned

Hybrid Operating Model #1: Functional/Product Aligned

Hybrid Operating Model #2: Product-Aligned Operating Model

Hybrid Operating Model #2.5: Service-Aligned Operating Model

Activity: Weigh your design principles against the list of operating models

1.4

1. Import your list of design principles and list them in the first column of a matrix as demonstrated below.

Design Principle	Plan-Build-Run Model	Demand-Develop-Supply	LoB/Product Aligned	Hybrid Functional Model	Hybrid Service Model
Design principle 1
Design principle 2
Design principle n

2. Score each of the operating models on a scale of 1-5 in terms of their ability to accommodate your design principle (1 = Low, 3 = Medium, 5 = High).

Design Principle	Plan-Build-Run Model	Demand-Develop-Supply	LoB/Product Aligned	Hybrid Functional Model	Hybrid Service Model
Design principle 1	5	5	3	1	3
Design principle 2	3	3	1	5	3
Design principle 3	3	1	1	5	3
Total Score	11	9	5	11	9

3. Create a shortlist of your top scored models.

Activity: Finalize your operating model selection

1.5

1. Convene a meeting of your key stakeholders and discuss your shortlisted operating models.
• Generally discuss the two models and their overall merits and shortcomings. Although the previous quantitative exercise is helpful to remove some of the gut feeling and bias certain stakeholders may have, providing additional qualitative context is critical to making the right decision.
• Focus on areas where the models differ in their scores respective to your design principles. Gauge the significance of the score difference, considering (a) how critical that design principle is, and (b) what the key structural differences are that account for the difference in score.
2. Have each stakeholder rank the shortlisted models based on what they consider to be best for the future-state of the organization, taking into consideration the previous group discussion around the shortlisted models.
3. Use the finalized tally of rank-choice votes to decide on your finalized operating model.
4. In the Organizational Design Communications Deck, record the chosen operating model and the rationale for choosing that model.

INPUT

• Organizational design principles
• Operating model weightings

OUTPUT

• Finalized operating model selection

Document your results in the Organizational Design Communications Deck

A church’s IT reorganization enabled its continued growth without blowing out infrastructure spending

CASE STUDY

Industry: Not for Profit

Source: The Center for Organizational Design, Area Consolidation project

Problem

• A church with a rapidly growing membership base aimed to manage its growth without having to massively increase its infrastructure spending.
• IT planned to combine two proximate area offices into one, consolidating resources, standardizing processes and structure, and reducing costs, while increasing flexibility and customer service to local leaders.

Solution

• Both offices were combined in a single location, with country service centers created in different countries for support services to be close to local leaders. Departments were also consolidated into functional groups.
• Core process became streamlined and consolidated where possible and a self-service electronic portal was developed to offer tech support to IT and administrative personnel.
• The church chose a centralized operating model to meet its needs.

Results

• Headcount was reduced by 35% and operating costs by $4 million per year.
• More in-person support to local leaders and flexibility to grow as a result of a more simple and distributed organization.
• Travel was reduced by 50% due to upgrades in technology services.
• A better and more responsive service was reported by the local leaders.

Checkpoint: Are you ready to customize your operating model?

Self-Auditing Guidelines

• Do you have a solid understanding of the implications of the business goals on the IT organizational structure?
• Have you landed on a desired organizational maturity level and contextualized what its implications are for organizational change?
• Do you have a solid understanding of your current organizational inhibitors and the new opportunities presented via reorganization?
• Have you crafted a set of broad organizational design principles and narrowed them to a finalized list based on stakeholder consensus?
• Have you scored the alignment between your design principles and the standardized operating models to shortlist which ones best fit your future-state design?
• Have you conducted a final qualitative analysis of your shortlisted operating models to land on your future-state model?
• Have you documented your results in the Organizational Design Communications Deck?

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

Brainstorm the implications of your IT strategy on your organizational structure

Our analyst team will help you analyze your current strategic direction and brainstorm the implications of what this means in terms of impacts on your organizational structure.

Use your collected data to conduct an analysis of current pain points and opportunities

Using Info-Tech’s diagnostic data, as well as any other inputs provided, we will help you pinpoint key pains in the current organizational structure and opportunities beyond the current state.

Create your finalized list of design principles

Our analysts will help you finalize a list of design principles that will be used as a manifesto going forward to ensure that the future-state organizational structure meets the organization’s strategic needs.

Weigh your design principles against the list of operating models

Our analyst team will walk you through creating an analysis matrix to shortlist a set of operating models that best fit your organizational design principles and other organizational nuances/needs.

Finalize your operating model selection

We will assist you in conducting one final analysis of the shortlisted operating models to choose the best-fit model to move forward with and customize to the needs of your organization.

Phase 2

Customize the IT Operating Model

Phase 2: Customize the IT Operating Model

ACTIVITIES:

• 2.1 Augment your capability overlay to reflect the core capabilities of the IT organization
• 2.2 Determine the level of centralization in each of your key function areas
• 2.3 Identify the target state of sourcing for your IT capabilities
• 2.4 Alter your operating model to reflect your sourcing decisions
• 2.5 Alter your operating model to reflect your customer-facing capabilities
• 2.6 Heat map your customized IT operating model

OUTCOMES:

• Customize your operating model to reflect your core IT capabilities, key decisions around levels of centralization, sourcing strategy, and customer interaction points.
• Heat map your customized operating model to determine what areas need attention first to reach the target state organizational structure.

Organizational design doesn’t start with people – it starts with capabilities. Know what you need to deliver, how you want to deliver it, and how you want to govern before looking at team structures.

Customize your operating model to visualize how work is done inside your organization

This phase will walk you through the steps needed to customize your operating model so that it reflects how work flows through the IT organization.

Use Info-Tech’s list of core IT capabilities listed on the following slide as a starting point. Augment the capabilities and their illustrations as necessary and overlay them onto your chosen operating model.

Once customized, heat map the IT capabilities inside the operating model to indicate which capabilities are actionable in their current state to enable the target state organizational structure, as well as where critical attention needs to be placed for change.

Steps to customize your operating model

1. Review Info-Tech’s IT capability overlay and remove capabilities that your organization doesn’t deliver or add capabilities that are missing.
2. Rationalize the centralization and decentralization of each of your IT capabilities.
3. Determine the sourcing strategy (insourced/co-sourced/outsourced) for each of your IT capabilities.
4. Determine which capabilities are customer facing and illustrate their proximity to the customer.
5. Heat map your IT capabilities based on the ability to act on those capabilities, and their criticality to success.

Refer to the Operating Models and Capability Definition List for descriptions of each of the IT capabilities.

Use the baseline capability overlays as a starting point for your customization efforts

In the Organizational Design Communications Deck, select the baseline capability overlay of the operating model that you chose in Phase 1.

While following the next set of exercises, you will work within the Organizational Design Communications Deck to customize the baseline operating model overlay provided to reflect the nuances of your organization and its strategic direction.

Remember while customizing to consistently refer back to your organizational design principles – these should function as a manifesto going forward that all structural decisions should reference and align with.

Download Info-Tech’s Operating Models and Capability Definition List to use while customizing your operating model.

The IT capability overlays are grouped into nine distinct categories

The baseline overlays use the following set of categorized capabilities as a starting point

Activity: Augment your capability overlay to reflect the core capabilities of your IT organization

2.1

1. Open the Organizational Design Communications Deck, and select the operating model overlay connected with the operating model baseline selected in Phase 1. Delete the other models from the communication deck.
2. Using the baseline operating model overlay, walk through each of the IT capabilities and remove any capabilities for which your IT organization is not responsible and/or accountable. Refer to the Operating Model and Capability Definition List for descriptions of each of the IT capabilities.
3. Augment the language of specific capabilities that you feel are not directly reflective of what is being done within your organizational context, or that you feel need to be changed to reflect more specifically how work is being done in your organization.
• For example, some organizations may refer to their service desk capability as help desk or regional support. Use a descriptive term that most accurately reflects the terminology used inside the organization today.
4. Add any core capabilities from your organization that are missing from the provided IT capability list.
• For example, organizations that leverage DevOps capabilities for their product development may desire to designate this in their operating model.
5. Document the rationale for decisions made for future reference.

INPUT

• Baseline list of IT capabilities

OUTPUT

• Customized list of IT capabilities

Make changes to the operating model in the Organizational Design Communications Deck

Begin to think about how you want to delegate authority in your future-state organization

Info-Tech Insight

Think of impersonal relationships from a role-to-role, not a person-to-person perspective. You will run the risk of biases in your structure by current competency levels if you take an individual-centric approach.

Rationalize the level of centralization in your different work units

Your departmental level of centralization/decentralization is largely guided by your chosen operating model in Phase 1, but it is still important to rationalize specific work units/functional areas of your IT organization to see if it would better suit the organization to treat them as centralized or decentralized entities.

Ultimately, there is no right answer for how to structure each of these areas. Weigh the benefits and disadvantages and land on what fits the larger organizational structure and culture of the organization.

From there, make the necessary changes to the operating model so the degree of centralization is reflected in the visualization. Decentralized capabilities will be visualized as redundancies across function areas, whereas centralized capabilities will only be visualized once.

For more context around specific functional areas, please refer to Appendix A: Centralization / Decentralization Models.

Rationalize the level of centralization in your different work units (continued)

Strike the right balance between responsiveness and cost effectiveness by weighing the following key considerations for centralization and decentralization.

Activity: Determine the level of centralization in each of your key function areas

2.2

Estimated Time: 2 hours

1. Using your operating model, rationalize how much centralization or decentralization is necessary in each of your functional areas and the factors you would decentralize around. Consider the following:
• What does decentralization mean in your organization? Is it geographic, by functional area, or by product/product family?
• How much autonomy and flexibility does that group need to complete their day-to-day tasks? The more autonomy needed by a group, the higher degree of decentralization is necessary for decision making.
• How complex are the tasks being completed? The more complex, the higher degree of centralization is necessary for coordination.
• Determine and document what the decentralized grouping areas will be (i.e. geographic groupings).
2. Alter your operating model where necessary to reflect changes to your desired levels of centralization/decentralization.
• Review each capability and definition and alter where certain capabilities sit within the operating model to reflect their level of centralization or decentralization.
• Centralized functions should move toward depiction as a single capability placed in a centralized functional area.
• Decentralized capabilities should be depicted as redundant across multiple decentralized functional areas to reflect their existence in multiple areas.
3. Document the rationale for decisions made for future reference.

INPUT

• List of customized IT capabilities

OUTPUT

• Centralization/ decentralization determination for each IT capability

Make changes to the operating model in the Organizational Design Communications Deck

Weigh which sourcing model(s) will best align with the needed capabilities to deliver effectively

Evaluate your IT capabilities using the following sourcing criteria

Leverage the following criteria to rationalize the sourcing strategy for each of your future state organizational design capabilities. Ensure that while you are rationalizing each capability, you maintain a holistic perspective of what will work best as a collective effort in realizing IT’s strategic direction.

*The first three factors to consider will be applied to each of the components of the focus areas. The other factors will be used to evaluate the appropriateness of each sourcing model.

Activity: Identify the target state of sourcing for your IT capabilities

2.3

Estimated Time: 3 hours

1. Apply the sourcing model selection criteria to the IT capabilities within your operating model.
• On a scale of 1–5, determine each capability from your IT operating model’s business criticality, readiness to outsource, and the in-house capabilities.

IT Capability	Business Criticality	Readiness to Outsource	In-House Capabilities
Requirements Gathering	5	2	2
Project Management	3	4	2
Planning	1	2	5

2. Using the sourcing criteria from the previous slide, evaluate each specific sourcing model on a scale of 1-5.

IT Capability	Sourcing Models	Cost (25%)	Flexibility (20%)	Quality (55%)	Total (100%)	Best-Fit Model
Requirements Gathering	Insource/Co-source/Outsource	3/2/4	5/3/1	3/4/2	3.4/3.3/2.3	Insource
Project Management	Insource/Co-source/Outsource	2/3/5	5/3/1	2/3/5	2.6/3/4.2	Outsource
Disaster Recovery Planning	Insource/Co-source/Outsource	4/4/1	5/4/3	1/2/5	2.55/2.9/3.6	Outsource

3. Weigh your sourcing model options against each other and decide what best fits the organization’s future state.

INPUT

• Customized IT capabilities

OUTPUT

• Sourcing strategy for each IT capability

Activity: Identify the target state of sourcing for your IT capabilities (continued)

Activity: Alter your operating model to reflect your sourcing decisions

2.4

1. Based on the results of your identification of target state sourcing, move the capabilities that you have decided to outsource to a new box in the operating model located under the input arrow for “External Service Providers.”
2. Sub-divide the external service providers box as necessary to reflect lines of division for who will manage the external providers.
• For instance, in the example below, the applications-related capabilities are delineated with a dotted line and an arrow that would point to the functional area of the organization that would be responsible for the management of those capabilities.

INPUT

• Sourcing strategy for each IT capability

OUTPUT

• Altered operating model to reflect sourcing strategy

Make changes to the operating model in the Organizational Design Communications Deck

Designate the capabilities that will interface with the customer

Finish customizing your IT operating model by delineating a line between the IT capabilities that interface with the customer and the IT capabilities that do not. This helps to visualize the points of collaboration between IT and the business and communicate which capabilities within each functional area/work unit of the organization are responsible for eliciting the business’ opinions/feedback in the process of solution/service delivery.

While certain work units will interface with the business, not all the underlying capabilities will be a part of this interaction. It is important to visualize which capabilities will be customer facing, so that when socialized with the business, they are clear in terms of where they communicate to provide feedback and illicit end-user services.

Activity: (optional) Alter your operating model to reflect your customer-facing capabilities

2.5

Estimated Time: 2 hours

1. Start by determining which of your IT capabilities are customer/end-user facing. Typical capabilities that are considered customer facing include stakeholder relations, service desk, requirements gathering, project management, etc. Ensure you consider your customized or altered capabilities from Exercise 2.1.
2. Move the capabilities that are customer facing nearest to the customer input arrow.
3. Separate your customer-facing capabilities from your non-customer-facing capabilities with a dotted line. Refer to the previous slide for an example of what this looks like.
4. Review the output of this exercise and consider if there is enough customer-facing functionality within IT to make it accessible for both planning purposes and product/service feedback. If not, rationalize which capabilities should be considered customer facing to elicit the appropriate amount of information from the business.

INPUT

• In progress customized operating model

OUTPUT

• Finalized operating model

Activity: Heat map your customized IT operating model

2.6

1. At this point, you should have a completed capability view of your operating model in terms of what capabilities you need to have, the degree of centralization, and sourcing planning.
2. Convene a group of the key stakeholders involved in the IT organizational design initiative.
3. Review your operating model overlaid with IT capabilities and color each capability according to the organization’s ability to act upon that capability now, creating a heat map. Green indicates current ability to act, yellow indicates desired future state, and red indicates that there are no desired capabilities for that specific intersection.
4. Review your heat map and highlight the capabilities that are deemed most critical to enable the new organizational structure. Mark these with a black circle to indicate their importance moving forward.

INPUT

• Customized operating model

OUTPUT

• Heat mapped operating model

Make changes to the operating model in the Organizational Design Communications Deck

Heat Mapped Operating Model Example

University of Alabama at Birmingham saved $2-3M annually by centralizing infrastructure to reduce redundancies

CASE STUDY

Industry: Higher Ed

Source: Higher Ed Increasing IT Organizational Effectiveness, University of Alabama at Birmingham

Problem

• The ad hoc growth of the IT department and the highly distributed IT service delivery and management environment have led to many duplications of services and a lack of both standardized processes and visibility into enterprise-wide IT activity.
• University leadership perceived this environment as both high risk and inefficient. They set out to improve IT operations and better align the IT organization to the strategic aims of the university.

Solution

• They interviewed IT leadership and staff, as well as distributed an IT skills and activity survey to all 400 IT staff in order to develop an accurate understanding of the current state and to identify areas for enhancement (i.e. future state).
• They then developed a model, and a central IT organizational structure based on that model, that centralized resources for commodity IT services while preserving mission-specific services in local units.
• A 90-day transition plan was developed and implemented.

Results

• $2-3 million in annual savings due to a centralized infrastructure environment that reduces redundancy and management complexities.
• The current state assessment gave insight into the challenges and gaps that existed while the future state design leveraged the organization’s strengths in developing a model that balanced high-quality services with operating securely and efficiently.

Checkpoint: Are you ready to create your organizational sketch?

Self-Auditing Guidelines

• Have you augmented your list of IT capabilities to accurately reflect your future-state organizational structure?
• Have you rationalized the level of centralization for each of your IT capabilities and edited your operating model accordingly?
• Have you decided the sourcing strategy for each of your IT capabilities and migrated any outsourced capabilities below external service providers?
• Have you delineated between your customer-facing and non-customer-facing capabilities to clarify points of interaction with the customer?
• Have you heat mapped your operating model based on your ability to deliver on each IT capability in the target state organizational structure?
• Have you shortlisted the highest priority capabilities on your heat map that need the most immediate attention?
• Have you documented your results in the Organizational Design Communications Deck?

If you want additional support, have our analyst guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

Augment your capability overlay to reflect the core capabilities of your IT organization

Our analyst team will help you customize Info-Tech’s list of baseline IT capabilities to ensure that your new organizational structure has full coverage over the work IT needs to complete.

Determine the level of centralization in each of your key function areas

Our analyst team will assist you in determining which capabilities need to be centralized/decentralized in your IT department and help you alter your operating model to reflect this decision-making process.

Identify the target state of sourcing for your IT capabilities

Our analysts will walk you through a cost-benefit calculation of centralizing/decentralizing your IT capabilities to land on whether they are best insourced, outsourced, or co-sourced.

Alter your operating model to reflect your sourcing decisions

Our analyst team will help you alter your operating model to reflect your sourcing decisions, moving outsourced and co-sourced functions to their own area of the operating model.

Alter your operating model to reflect your customer-facing capabilities

Our analyst team will help you determine which IT capabilities need to be customer-facing and alter the operating model to ensure these relationships are clear to any business stakeholders who view the IT operating model.

Heat map your customized IT operating model

With your customized IT operating model in hand, our analyst team will walk you through a heat-mapping exercise that will identify current gaps in capability and the highest priority items for your organization going forward.

Phase 3

Architect the Target-State IT Organizational Structure

Phase 3: Architect the Target-State IT Organizational Structure

ACTIVITIES:

• 3.1 Categorize your IT capabilities within your defined work units
• 3.2 Delineate accountabilities and responsibilities for each of your IT capability sub-practices
• 3.3 Use the Organizational Design Capability RACI Chart to delineate responsibilities for each of your IT capability sub-practices
• 3.4 Create a mandate statement for each work unit
• 3.5 Finalize your organizational structure

OUTCOMES:

• Conduct a RACI to determine the accountabilities and responsibilities for delivering on IT’s capabilities
• Define the role(s) within each work unit
• Create work unit mandates that communicate the intended function of each work unit
• Finalize your organizational structure

Make change in practice, not just on paper, by clearly defining how you will execute on key activities across the organization. How you want to operate should help you define what roles you will need as a result.

Use a top-down approach to build your target state IT organizational sketch

The organizational sketch is the outline of the organization that encompasses the work units and depicts the relationships among them. It’s important that you create the structure that’s right for your organization, not one that simply fits with your current staff’s skills and knowledge. This is why Info-Tech encourages you to use your operating model as a mode of guidance for structuring your future-state organizational sketch.

The organizational sketch is made up of unique work units. Work units are the foundational building blocks on which you will define the work that IT needs to get done. To build your work units, use the baseline organizational sketches provided as a starting point and customize as necessary. This will not match your operating model one to one, as certain functional areas will need to be broken down into smaller work units to ensure appropriate leadership and span of control.

Once you have completed the organizational sketch, defined key roles, and gotten initial approval, you can then staff the positions and complete an additional review of the design to ensure a cultural and political fit, including that the span of control is right for the organization.

Use your customized operating model to build your work units

WHAT ARE WORK UNITS?

A work unit is a functional group or division that has a discrete set of processes or capabilities that it is responsible for, which don’t overlap with any others. Your customized list of IT capabilities will form the building blocks of your work units. Step one in the process of building your structure is grouping IT capabilities together that are similar, or that need to be done in concert in the case of more complex work products. The second step is to iterate on these work units based on the organizational design principles from Phase 1 to ensure that the future-state structure is aligned with enablement of the organization’s objectives.

Example Work Units

Here is a list of typical work units you can use to brainstorm what your organization’s should look like. Some of these overlap in functionality but should provide a strong starting point and hint at some potential alternatives to your current way of organizing.

• Office of the CIO
• Strategy and Architecture
• Architecture and Design
• Business Relationship Management
• Projection and Portfolio Management
• Solution Development
• Solution Delivery
• DevOps
• Infrastructure and Operations
• Enterprise Information Security
• Security, Risk & Compliance
• Data and Analytics

Download Info-Tech’s Work Unit Reference Structures to use while defining your work units.

Iterate initial work unit groupings by considering how they address the following criteria

The following criteria are a common set of guidelines by which a structure takes shape. These principles determine, among other things, the levels of hierarchy in your structure, the level of focus you give to processes, and where power is dispersed within your organizational design. Use this as a basis to complete your first iteration of the work units.

Activity: Categorize your IT capabilities within your defined work units

3.1

Estimated Time: 1 hour

1. Using a whiteboard or large tabletop, list each capability from your operating model on a sticky note and recreate your operating model. Use one color for centralized activities and a second color for decentralized activities.
2. With the group of key IT stakeholders, review the operating model and any important definitions and rationale for decisions made.
3. Starting with your centralized capabilities, review each in turn and begin to form logical groups of compatible capabilities. Review the decentralized capabilities and repeat the process, writing additional sticky notes for capabilities that will be repeated in decentralized units.

Note: Not all capabilities need to be grouped. If you believe that a capability is a high enough priority, has a lot of work, or is significantly divergent from others, put this capability by itself.

4. Define a working title for each new work unit, and discuss the pros and cons of the model. Ensure the work units still align with the operating model and make any changes to the operating model needed.
5. Review your design principles and ensure that they are aligned with your new work units.

INPUT

• Organizational business objectives
• Operating model

OUTPUT

• Defined work units

Document in the Organizational Design Communications Deck and the Organizational Design Capability RACI Chart

Work Unit Example

3.1 Example

Use the Org Design Capability RACI Chart to delineate responsibilities for each of your IT capability sub-practices

3.2 Organizational Design Capability RACI Chart

Purpose

Define the accountabilities and responsibilities for your defined work units.

Steps

1. Open the Organizational Design Capability RACI Chart, and begin by entering the names of your newly identified work units on the Data Entry tab.
2. On the Capability Analysis tab, review the definitions and document the decisions made around the level of priority of the capabilities, and which work unit owns the capability from your previous exercise.
3. On the Wk. Unit Capability Ownership tab, review all of the activities listed, and remove any activities that your organization will not complete.
4. For each work unit, identify at the activity level which work unit is accountable and/or responsible for each activity by entering an A, A/R, or R. Remember only one work unit can be accountable for an activity; this is the group that is ultimately accountable for its success. Multiple work units can be responsible, this means that multiple groups may actively be executing the work related to that responsibility.

INFO-TECH DELIVERABLE

Create mandates for each of your identified work units

WHAT ARE WORK UNIT MANDATES?

The work unit mandate should provide a quick overview of the work unit and be clear enough that any reader can understand why the work unit exists, what it does, and what it is accountable for. Each mandate should be distinguishable enough from your other work units to make it clear why the work is grouped in this specific way, rather than an alternative option.

Each work unit will have a unique mandate. The mandate will vary by organization based on the agreed upon work units, design archetype, and priorities. Don’t just adopt an example mandate from another organization or continue use of the organization’s pre-existing mandate – take the time to ensure it accurately depicts what that group is doing so that its value-added activities are clear to the larger organization.

Example Work Unit Mandates

• The Office of the CIO will be a strategic enabler of the IT organization, driving IT organizational performance through improved IT management and governance. A central priority of the Office of the CIO is to ensure that IT is able to respond to evolving environments and challenges through strategic foresight and a centralized view of what is best for the organization.
• The Project Management Office will provide standardized and effective project management practices across the IT landscape, including an identified project management methodology, tools and resources, project prioritization, and all steps from project initiation through to evaluation, as well as education and development for project managers across IT.
• The Solutions Development Group will be responsible for the high-quality development and delivery of new solutions and improvements, and production of customized business reports. Through this function, IT will have improved agility to respond to new initiatives and will be able to deliver high-quality services and insights in a consistent manner.

Create a mandate statement for each work unit

3.3

Estimated Time: 4 hours

1. Assign each team an equal or close to equal number of work units.
2. As a team, review the work unit’s responsibilities and brainstorm keywords to describe the unique role that the working unit will play. (Consider value, responsibility, decisions, and authority.)
3. Using these keywords, come up with a set of statements that describe the overall purpose of that working group. Have each group present their work unit mandates and make changes wherever necessary.

INPUT

• List of work units
• RACI
• Defined roles

OUTPUT

• Work unit mandates

Document in the Organizational Design Communications Deck

Identify the key roles and responsibilities for the target IT organization

Now that you have identified the main units of work in the target IT organization, it is time to identify the roles that will perform that work. At the end of this step, the key roles will be identified, the purpose statement will be built, and accountability and responsibility for roles will be clearly defined. Make sure that accountability for each task is assigned to one role only. If there are challenges with a role, change the role to address them (e.g. split roles or shift responsibilities).

Info-Tech Insight

Do not bias your role design by focusing on your existing staff’s competencies. Remove the individuals from the roles and design them in a way that will best enable the organization’s objectives to be met. If you begin to focus on your existing team members, you run the risk of artificially narrowing the scope of work or skewing the responsibilities of individuals based on the way it is, rather than the way it should be.

Activity: Define the roles inside your work units

3.4

1. Select a work unit from the organizational sketch.
2. Print a copy of the responsibilities and accountabilities of each work unit, from the Organizational Design Capability RACI Chart. Review each of the IT capability activities and responsibilities for which the work unit is responsible and:
• Describe the most senior role in that work unit by asking, “what would the leader of this group be responsible for?” Create a purpose statement for the leader to describe this.
• Review the list of accountabilities and responsibilities, and begin to start grouping like activities together by designing one role at a time, and tagging like responsibilities that you believe could be successfully grouped into one job.
• Continue until key roles are identified and role profiles have been completed.
3. Fill a role profile (template on the following slide) for each of your organizational roles to summarize each role’s working name, purpose, accountabilities, and responsibilities.

INPUT

• Work unit accountabilities and responsibilities

OUTPUT

• Target-state roles

Sample role profile (partially complete)

Activity: Finalize your organizational structure

3.5

1. Import each of your work units and the target-state roles that were identified for each.
2. In the place of the name of each work unit in your organizational sketch, replace the work unit name with the prospective role name for the leader of that group.

3. Under each of the leadership roles, import the names of team members that were part of each respective work unit.

4. Validate the final structure as a group to ensure each of the work units includes all the necessary roles and responsibilities and that there is clear delineation of accountabilities between the work units.

INPUT

• Activity 3.1 to 3.5

OUTPUT

• Finalized organizational structure/sketch

Document in the Organizational Design Communications Deck

A government agency put RACI-driven accountability at the forefront of its organizational restructuring initiative

CASE STUDY

Industry: Government

Source: Master the Matrix Blog

Challenge

A government agency was presented with the challenge of overseeing the operations of over 200 organizations with a staff of 50 employees.

They were presented with several key challenges:

• Many longstanding employees may have been resistant to change
• Need to streamline reporting structures
• Need for adaptability to strategic planning revisions every 2-4 years in line with changes in government policy

Solution

The agency undertook an organizational redesign process that would meet government directives while streamlining organizational performance and its information systems.

The organization realized that a top-down reorganization of roles was necessary not only to meet needs, but also to overcome any internal resistance to change that may come from the initiative.

Part of their methodology was to conduct a detailed RACI matrix to account for all actions and processes and promote a culture of transparency and inclusion.

Results

By approaching this challenge with role design and responsibility clarity front-and-center in the organizational redesign strategy, they were able to provide a solid foundation that enables the long-term changes to implement their strategic direction.

Key success highlights included:

• RACI matrix driving new job descriptions
• Buy-in from all levels of the organization due to the transparency of the process
• Team members begin to feel like they are part of the solution, not part of the problem

Checkpoint: Are you ready to develop a communications plan for your future-state organizational structure?

Self-Auditing Guidelines

• Have you altered the baseline work units to reflect your customized operating model?
• Have you taken your customized list of IT capabilities from Phase 2 and categorized them within your selected work units?
• Have you determined the key accountabilities and responsibilities by work unit for each of your subdivided IT capabilities?
• Have you defined the roles within each of the work units that will perform the accountabilities and responsibilities delineated during your RACI exercise?
• Have you created a set of work unit mandates that communicate the value that each unit provides and that differentiate from IT’s other functionalities?
• Have you documented your results in the Organizational Design Communications Deck?

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Ifo-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

Categorize your IT capabilities within your defined work units

Our analyst team will assist you in distributing your IT capabilities into the defined work units to ensure full coverage and that each work unit has a rational amount of work to complete.

Delineate accountabilities and responsibilities for your IT capabilities

Our analysts will walk you through a RACI exercise that will determine the work unit-based accountabilities and responsibilities for each of your IT capabilities.

Define the roles inside your work units

Our analyst team will help you define the roles within your work units and distribute the accountabilities and responsibilities from your RACI across the roles within each work unit.

Create a mandate statement for each work unit

Our analyst team will help you craft a mandate statement for each work unit that will communicate how each unit creates value and how it is differentiated from IT’s other value-creating areas. This will provide clarity in business terms of how IT completes its work.

Finalize your organizational structure

Our analyst team will help you translate your new work units and target-state roles and responsibilities into a sketch of the organization’s hierarchy. This will provide a visual look at how work will be delegated in the new structure.

Phase 4

Communicate the Benefits of the New Organizational Structure

Phase 4: Communicate the Benefits of the New Organization Structure

ACTIVITIES:

• 4.1 Conduct a stakeholder analysis to identify the impact and level of resistance from all stakeholders
• 4.2 Create a communications plan tailored to the interests of each of your respective stakeholders
• 4.3 Create an FAQ to address common questions and concerns around your restructuring
• 4.4 Finalize your Organizational Design Communications Deck by summarizing your vision and key design principles

OUTCOMES:

• A communication strategy tailored to all relevant stakeholders
• A frequently asked questions list that will allow proactive addressing of concerns and address common questions from impacted stakeholders.
• A finalized organizational design deliverable that includes all activities completed in this blueprint.

Don’t wait to get buy-in. Now that you have your target organizational structure, involve your IT team in refining the model for optimal results, and answer questions openly and honestly whenever possible.

Make a plan to effectively manage and communicate the change

Success of your new organizational structure hinges on adequate preparation and effective communication. The top challenge facing organizations in completing the organizational redesign is their organizational culture and acceptance of change. Effective planning for the implementation and communication throughout the change is pivotal. Make sure you understand how the change will impact staff and create tailored plans for communication.

Activity: Conduct a stakeholder analysis to identify the impact and level of resistance from all stakeholders

4.1

1. Through discussion, generate a complete list of stakeholders for requirements gathering and record the names on the whiteboard / flip chart. Group related stakeholders together.
2. Using the template on the right, draw the stakeholder power map.
3. Evaluate each stakeholder on the list based on:
• Influence: To what degree can this stakeholder impact progress?
• Involvement: How involved is the stakeholder in this already?
• Support: Label supporters with green sticky notes, resisters with red notes, and the rest with a third color.
4. Based on the assessment, write the stakeholder’s name on a green, red, or other colored sticky note, and place the sticky note in the appropriate place on the power map.

Stakeholders with high influence who are not as involved in the project or are heavily impacted by the project are less likely to give feedback throughout the project lifecycle and need to be engaged. They are not as involved, but can impact project success, so stay one step ahead. Do not limit your engagement to kick-off and close – you need to continue seeking input and support at all stages of the project.

Key players have high influence but are also more involved with the project or impacted by its outcomes and are thus easier to engage. Stakeholders who are heavily impacted by project outcomes will be essential to your organizational change management strategy. Do not wait until implementation to engage them in preparing the organization to accept the project – make them change champions.

Stakeholders with low influence who are not impacted by the project do not pose a significant risk, but you need to keep them consistently informed of the project and involve them at the appropriate control points to collect feedback and approval.

Communicate reasons for organizational structure changes and how they will be implemented

Leaders of successful change spend considerable time developing a powerful change message, i.e. a compelling narrative that articulates the desired end state, and that makes the change concrete and meaningful to staff.

The organizational change message should:

• Explain why the change is needed.
• Summarize what will stay the same.
• Highlight what will be left behind.
• Emphasize what is being changed.
• Explain how change will be implemented.
• Address how change will affect various roles in the organization.
• Discuss the staff’s role in making the change successful.

Source: The Qualities of Leadership: Leading Change

Hold key meetings with staff to explain the changes and reasoning behind them

It’s important to level set the change and initiatives through a kick-off meeting with your staff. During this meeting, use Info-Tech’s Organizational Design Communications Deck to communicate the changes.

It’s important to set the mood appropriately. If the change involves lay-offs, don’t throw a party. Know your staff and the message you are trying to convey first.

For the kick-off, Info-Tech recommends that you meet one-on-one with key stakeholders prior to the kick-off. Those stakeholders will be the management team, roles that are being significantly changed, and anyone who you identified as a dissenter in your stakeholder analysis. Don’t have these individuals hear this information for the first time in a group setting.

Apply the following communication principles to make your IT organization redesign changes relevant to stakeholders

Be Consistent

• The core message must be consistent regardless of audience, channel, or medium.
• Test your communication with your team or colleagues to obtain feedback before delivering to a broader audience.
• A lack of consistency can be interpreted as an attempt at deception. This can hurt credibility and trust.

Be Clear

• Say what you mean and mean what you say.
• Choice of language is important: “Do you think this is a good idea? I think we could really benefit from your insights and experience here.” Or do you mean: “I think we should do this. I need you to do this to make it happen.”
• Don’t use jargon.

Be Relevant

• Talk about what matters to the stakeholder.
• Talk about what matters to the initiative.
• Tailor the details of the message to each stakeholder’s specific concerns.
• IT thinks in processes but stakeholders only care about results: talk in terms of results.
• IT wants to be understood but this does not matter to stakeholders. Think: “what’s in it for them?”
• Communicate truthfully; do not make false promises or hide bad news.

Be Concise

• Keep communication short and to the point so key messages are not lost in the noise.
• There is a risk of diluting your key message if you include too many other details.

"We tend to use a lot of jargon in our discussions, and that is a sure-fire way to turn people away. We realized the message wasn’t getting out because the audience wasn’t speaking the same language. You have to take it down to the next level and help them understand where the needs are."

– Jeremy Clement, Director of Finance, College of Charleston

Communication Mediums – Traditional

Use the following guidelines to help determine the appropriate medium for your communications.

Communication Methods – Multimedia

Activity: Create a communications plan tailored to the interests of each of your respective stakeholders

4.2

1. List all the affected stakeholders in order of importance in the first column.
• Business stakeholders, end users, IT department, etc.
2. Identify the frequency with which you will communicate to that group.
3. Determine the scope of the communication:
• What key information needs to be included in the message to ensure they are informed and on board?
• Which medium(s) will you use to communicate to that specific group?
4. Develop a concrete timeline that will be followed to ensure that support is maintained from the key stakeholders.

INPUT

• Prioritized list of Stakeholders

OUTPUT

• Communication plan

Document in the Organizational Design Communications Deck

Activity: Create an FAQ to address common questions and concerns around your restructuring

4.3

1. Once you have completed the communications plans for each of your stakeholders/stakeholder groups, review the scope of the communications to identify key similarities in themes or message.
2. Beyond the completed communications plans, brainstorm a list of answers to the key “what’s” of your organizational design initiative:
• What is the objective of the IT organization?
• What are the primary changes to the IT organization?
• What does the new organizational structure look like?
• What are the benefits to our IT staff and to our business partners?
3. Think about any key questions that may rise around the transition:
• How will the IT management team share new information with me?
• What is my role during the transition?
• What impact is there to my reporting relationship within my department?
• What are the key dates I should know about?
4. Determine the best means of socializing this information. If you have an internal wiki or knowledge-sharing platform, this would be a useful place to host the information.

INPUT

• Prioritized list of stakeholders

OUTPUT

• Communication plan

Document in the Organizational Design Communications Deck

FAQ Examples

Finalize your Organizational Design Communications Deck by summarizing your vision and key design principles

4.4 Organizational Design Communications Deck

Purpose

The organizational effectiveness questionnaire provides a set of probative questions designed to help facilitate some high-level thinking around how IT is currently successful and where it is missing the mark. Use these to inform the following exercise around current inhibitors and future opportunities for the organization.

Steps

1. Distribute the effectiveness questionnaire to key leadership within IT.
2. Have each participant use the questions contained in the questionnaire to reflect on and self-analyze IT’s current structure and capabilities from the lens of their current role, as well as of the larger organization.
3. Summarize the key findings and socialize them with the group prior to conducting an analysis of the current organizational pain points and opportunities.

Continue your momentum toward implementation by following Info-Tech’s methodology

Actively manage and assess the structure to ensure the entire redesign process isn’t required again

Facilitating the new structure implementation requires long- and short-term planning. Manage the implementation process using these steps.

Short term:

• Set up skills and development plans for employees whose roles are changing.
• Conduct multiple check-ins with function heads over the first three to six months of the project to get feedback and address any challenges that arise.
• Be prepared to listen to employee feedback and complaints. Expect some pushback and be creative and compassionate in dealing with it.

Long term:

• Continually assess the success of your structure.
• Adopt your new department structure choices to inform succession planning, professional development, training opportunities, and hiring. These steps will ensure that you are continually addressing potential gaps and shortages.
• Get business input continually to ensure that your structure is suited toward accommodating future goals; the business is bound to keep changing, and your department must change with it.

"You don’t have to see things through. You can make a plan, you can start to implement the plan, you can have a few bumps in the road, and you can re-evaluate. Sometimes the best thing to do is just say you know what? That wasn’t the right move to make; let’s figure out a new one."

– Avi Singer, Training and Organizational Development Consultant

A manufacturing organization overcame inexperience with organizational redesign through effective communications

CASE STUDY

Industry: Manufacturing

Source: CIO Testimonial

Challenge

The IT department had not undergone a major reorganization in several years. When they last reorganized, they experienced high turnover and decreased business satisfaction with IT. Many of the managers were new to their roles and only one of them had been around for the earlier reorganization. They lacked experience in leading their staff through major organizational changes. One of the major problems they faced was addressing the concerns, fears, and resistance of their staff properly.

Solution

The implementation team ran a workshop for all the managers in the department to train them on the change and how to communicate the impending changes to their staff. The workshop included information on resistance and conflict resolution. The workshop was conducted early in the planning phases of the reorganization so that any rumors or gossip could be addressed properly.

Results

The reorganization was well accepted by the staff due to the positive reinforcement from their managers. Rumors and gossip about the reorganization were under control and the staff adopted the new organizational structure quickly. Engagement levels of the staff were maintained and improved by 5% immediately after the reorganization. Voluntary turnover was minimal throughout the change as opposed to the previous reorganization where they lost 10% of their staff. There was an estimated cost savings of $250,000–$300,000.

Checkpoint: Are you ready to communicate your new structure to the rest of the organization?

Self-Auditing Guidelines

• Have you identified the key stakeholders that must be communicated with about the upcoming changes to the organizational structure?
• Have you conducted an analysis of those stakeholders to identify the most effective means and type of communication?
• Have you tailored a communication plan that pinpoints the frequency and scope of communications for specific stakeholder groups?
• Have you conducted a final review of your operating model and new organizational structure and feel prepared to communicate it to the rest of the organization?
• Have you prepared to address any questions or concerns that may arise from the change necessary to meet the new organizational structure?
• Have you fully completed your Organizational Design Communications Deck?

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

Conduct a stakeholder analysis to identify the impact and level of resistance from all stakeholders

Our analyst team will help you conduct a holistic analysis of the stakeholders impacted by your organizational restructuring and categorize them in terms of interest levels and hypothesized impact.

Create a communications plan tailored to the interests of each of your respective stakeholders

Our analyst team will assist you in creating a communications plan to address each stakeholder and their respective interests.

Create an FAQ to address common questions and concerns around your restructuring

Our analyst team will help you craft a set of frequently asked questions that stakeholders can leverage through the organizational restructuring process to quell concerns and maintain buy-in.

Finalize your Organizational Design Communications Deck by summarizing your vision and key design principles

We will assist you in finalizing your communications deck for stakeholders, highlighting the major themes and vision for the future direction of the IT organization.

Centralized service desks integrate the resources, processes, and technology of your support ecosystem

A successful consolidation can significantly reduce cost per transaction, speed up service delivery, and improve the customer experience through:

• Single point of contact for end users.
• Integrated ITSM solution where it makes sense.
• Standardized processes.
• Staffing integration.

Centralization Outcome	Expected Benefit
Integrated information	The capacity to produce quick, accurate, and segmented reports of service levels across the organization.
Integrated staffing	Flexible management of resources that better respond to organizational needs.
Integrated technology	Reduced tool procurement costs, improved data integration, and increased information security.
Standardized processes	Efficient and timely customer service and a more consistent customer experience.

Decentralized application teams allow for strong vertical expertise and flexibility to delivery on localized demand

When to Use:

• Services are naturally partitioned (e.g. production lines).
• Skills required for each vertical are different.
• Innovation for each vertical is independent.

Pros:

• Allocates strong vertical expertise.
• Creates competing priorities and runs independently to determine best options in the future.
• Clarifies accountability for each vertical.

Cons:

• Difficult to scale out across two dimensions (e.g. product and region).
• Lack of knowledge sharing that could apply across verticals.
• Specialization fragmentation makes program management difficult.

Federated application teams enable a balance between responsiveness and centralized control

When to Use:

• Verticals have common processes or expertise.
• Greater control is required over specific area(s) while others can be delegated.
• Services are outsourced to third parties.

Pros:

• Allows some autonomy in verticals to reduce bottlenecks.
• Emphasizes consistency in some area(s) across the board.
• Shared resource pool could help lower overall cost.

Cons:

• Interaction between verticals can be difficult if the centralized vertical is receiving information in different ways from the other verticals.
• If the centralized vertical is of a support nature, it may become the bottleneck in servicing the other verticals.
• Sharing between verticals can still be difficult because of specialist resource fragmentation.

Centralized application teams allow for higher efficiency and scales of economy by leveraging a shared resource pool

When to Use:

• Global rollout is necessary.
• Consistency is essential to execution.
• Innovation should immediately benefit everyone.

Pros:

• Shares common resource pool, which lowers costs.
• Reduces specialization of resources.
• Potentially lowers communication overhead for larger teams.

Cons:

• Prioritization of resources may prevent projects from moving faster.
• Deep expertise in a single domain may be diluted, leading to longer than normal cycles times for development.
• Still does not address the possibility of verticals not communicating.