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IT Organization Position and
Structure: Getting It Right
J ohn Mahoney
IT Organization Position and Structure: Getting It Right
Page 1
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
IT organizations are in transition. Their role within leading enterprises is moving from a technology focus to a
focus on business processes and relationships. There are five major dimensions of IT organization transition to
2010. Focus of the IT organization: IT will shift its focus away from being a technology provider and toward
managing sourcing and delivery of IT services, or creating and exploiting a framework of business processes
and relationships. Source of IT infrastructure: IT will increasingly manage infrastructure sourcing,
regardless of whether the source of the infrastructure is internal or external. IT organization competencies: IT
will be expected to build capabilities in the areas of business processes, sourcing and relationships.
Complexity re-engineering: IT will be expected to reduce technology complexity that inhibits business
flexibility and efficiency, particularly in the areas of legacy hardware, applications and sourcing. This will
mean preparing for service-oriented architecture (SOA), business process management (BPM) frameworks and
utility computing. Partnership sourcing: IT will be called on to improve partnership sourcing by exploiting
outsourcing outcomes and incentives defined in business terms.
Overall, these build towards the business imperative for an agile, efficient and effective enterprise.
All Change: Role, Structure and
Position of IT
At least, 75 percent of IT organizations will change
their role by 2012.
At least 60%, of large IT organizations will divide into
at least two organizations by 2012, one working on
sourcing and delivery of infrastructure, another on
architecture and change.
37% of IT professionals say most traditional IT
organizations to be closed by 2012 (debate result
from Symposium/ITxpo April 2007).
50% of business leaders expect significant mergers
or equivalent restructuring by the end of 2008.
IT Organization Position and Structure: Getting It Right
Page 2
J ohn Mahoney
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use external trends and
business context to shortlist
IT organization types
use drivers of business
goals to shortlist positions
and structures
use business priorities to
choose IT organization
style and finalize the rest
review
refine
Route Map for Selecting the Position and
Structure of the IT Organization
IT Organization Position and Structure: Getting It Right
Page 3
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
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An IT organization's enterprise position and structure define where it reports, who owns it, how many IT units
it has, and the division between central and business unit position. As IT'srole transforms, making these
decisions gets even more difficult.
Like most other aspects of the business structure, an IT organization's position experiences periodic change in
most enterprises. Selecting and implementing the right position frequently are difficult for CIOs and other IT
leaders because they need to meet the needs and expectations of a wide range of stakeholders in the business
and in their IT organizations. The difficulty is compounded whenthe enterprise has several BUs or when it
operates in several markets or geographical areas, although complexity is the underlying driver, rather than just
size or geographical spread.
This presentation examines the options, the drivers for change and the ways the solutions vary between
industries and types of enterprise. It gives principles and actionable advice to solve the problem.
Key Issues
What main factors determine the structure
and position of IT?
What drivers are changing the position
of IT?
How do the best positions for IT
vary between organization types
and industries?
Key Issues
IT Organization Position and Structure: Getting It Right
Page 4
J ohn Mahoney
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proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
Use Evolving Types of IT Organization to
Select Strategic Target Role
Type Z
Community
Type 4
Pervasive
Type 1
Heritage
Type 2
Aligned
Type 3
Engaged
IT Dispersed in Business IT Dispersed in Business
Business unit line management fully owns IT/OT sourcing & Business unit line management fully owns IT/OT sourcing &
execution with few or no IT execution with few or no IT- -specific roles specific roles
Tactical Technology Management Tactical Technology Management
Deliver on promises; Deliver on promises;
IT efficiency dominates IT efficiency dominates
Information and Process Leadership Information and Process Leadership
Transform business inside and out Transform business inside and out
Information & processes strategic assets drive Information & processes strategic assets drive
Strategic Technology Management Strategic Technology Management
Align IT & business; Align IT & business;
IT strategic support drives IT strategic support drives
Business Systems Leadership Business Systems Leadership
Enhance business; Enhance business;
agility and business value drive agility and business value drive
IT organizational types are developing in response to the maturation of traditional applications of technology,
the growing role of outsourcing and the greater penetration of technology into all aspects of business. Types 1
and 2 have been familiar for several years. Type 3 typifies manyleading IT organizations in 2006. A new
organization type is emerging one that will take the lead on information and process. While it will grow
from an IT base, its primary focus will be business transformation and strategic assets of information, process
and relationships. When mature, it may no longer be identified as an IT organization. This parallels the
evolving roles of IT leadership that Gartner has previously outlined, in which the strategic IT leadership role
will split into business technology and business network leaders. An alternative evolutionary path (which
Gartner calls Type Z because it's not part of the same evolutionary path as types 1 to 4) is for IT to be
embedded in business as a dispersed commodity that is managed bybusiness executives as part of their regular
roles. In this case, IT will typically be sourced as part of a broader business process.
Action Item: IT leaders Identify your present and future organizational type and create personal and
organizational development plans accordingly.
Key Issue: What main factors determine the structure and position of IT?
IT Organization Position and Structure: Getting It Right
Page 5
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
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written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
Tactical Guideline: Select IT organization structure to maximize the most important business
asset and in relation to the IT organization type.
The structure of an IT organization determines which assets of technology, people, service and process are
developed and exploited. Almost all original IT organizations from the 1960s onward used technology as their
primary structure. They had sections dealing with hardware and software, communications, security, and
other areas. That allowed the expensive and scarce assets of equipment, software and technical skills to be
consolidated and exploited to the fullest extent. This remains the most common structural choice, but it is
lessening, and will be the least used by 2011 because of drivers for greater business alignment, service
excellence and process focus. It is often augmented by a second structural dimension, which is a matrix
management arrangement, bringing together all the resources related to particular business units.
Business-unit structure is the second most popular. It is sometimes implemented by locating IT within each
part of the business, sometimes by having separate sections for each unit in a central organization and
sometimes as a mixture. Typically, there is a second, matrix dimension for technology. The strongest growth,
particularly in leading organizations, will be in structures based on IT service (see Gartner research on the
ISCo model) and on assets of business process and information (that is, organization types 3 and 4).
Action Item: IT executives should select IT organization structure to maximize the most important business
asset and in relation to the IT organization type.
Maximized Asset
IT Org.
Type
Matrix
Mgmt.
Primary
Structure
Choose the Most Important Business
Asset to Drive Structure of IT
D
business information,
processes &
relationships
4 and
possibly Z
C, B, A
business
process or
information
A
economy of scale in
IT assets and skills
1 or 2 B
technology
silo
B business alignment
2 or 3
and/or Z
A business unit
C
service quality and
effectiveness
2 or 3 B, A IT service
IT Organization Position and Structure: Getting It Right
Page 6
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
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written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
Pressures for
Corporate
Integration
High
Low
Pressures for
Local Responsiveness
High Low
Centralized Centralized Federated Federated
Parent-led Parent-led Multilocal Multilocal
Emphasizes consistent product and
customer experience
Maximizes synergies
Emphasizes global efficiency,
flexibility and learning capacity
Maximizes synergies that relate to
competitive strategy
Emphasizes worldwide diffusion of
parent practices
Identifies specific product, process
and customer synergies
Emphasizes strong local bases and
local autonomy
Foregoes synergies
Strategic focus
Business configuration
Decentralizes assets, aiming for local
self-sufficiency
Centralizes strategic assets;
decentralizes others
Centralizes assets and capabilities
Decentralizes most assets, with core
capabilities led centrally
Use Distribution of Enterprise Activities
to Drive Position and Engagement of IT
There are four predominant business and IT global governance orientations, each with distinctive
characteristics.
Centralized businessesstrive to provide consistent product and customer experiences globally, and seek to
maximize synergies by centralizing assets and capabilities.
Federated businesses aim for global efficiency as well as flexibility to adapt products and services locally,
where possible. They maximize synergies relating to their competitive strategy, centralizing strategic
assets and decentralizing the others.
Parent-led businesses seek to adapt parent business policies and practices across the local businesses when
they can achieve specific synergies for certain products, processes or customers. Most assets are
decentralized though.
Multilocal businesses build strong local bases and emphasize local self-sufficiency.
Of the four, the two that appear most similar at first sight arefederated and parent-led.
The key distinction between these two is that in federated, more assets are centrally coordinated; in
parent-led, assets are mostly decentralized, except for those associated with specific core capabilities.
Parent-led is used very little. The majority of enterprises are or aim toward the Federated orientation
although there are many variations of how that's implemented.
IT Organization Position and Structure: Getting It Right
Page 7
J ohn Mahoney
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proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
federated or
multilocal
Growth Goals Drive Business Context & Asset Focus Growth Goals Drive Business Context & Asset Focus
position position function function 1 1
st st
focus focus 2nd focus 2nd focus
process &
information
transformation,
architecture &
service
management
business
alignment
Response to Global Competition Drives Efficiency Response to Global Competition Drives Efficiency
centralized
technology
efficiency
governance &
service
management
IT service
federated or
multilocal
business
change
business
alignment
IT service
Changing Business Goals Affect IT Position
Enterprises seeking growth usually aim to generate innovation close to customers and markets by using
federated or multilocal orientations. Their goal for IT is creating transformation and agility and they use
architecture and service management to do that. Their primary focus is on business process and
information and their secondary focus is on business alignment. In some leading companies, this
primary/secondary order is reversed to use business alignment todrive agility and innovation close to
markets.
In contrast, enterprises responding to global competition typically drive for economies of scale. That, in
turn, drives IT to centralize governance and service management around technology and IT service assets
to create efficiencies and economies of scale. However, the typical enterprise response to global
competition is also to devolve business change to federated or multilocal orientations. The consequence
for IT organizations is that they use federated or multilocal business alignment as the primary focus for
business change, combined with centralized IT service delivery.
It's not unusual of course for a large or complex enterprise to combine growth goals with a global
competitive strategy. In those cases, the IT organization needs to use multilayered structural and position
solutions. Excellent coordinative governance is required in suchsituations.
Key Issue: What drivers are changing the position of IT?
IT Organization Position and Structure: Getting It Right
Page 8
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
centralized or
federated
Regulation and Risk Drive Governance for Control Regulation and Risk Drive Governance for Control
position position function function 1 1
st st
focus focus 2nd focus 2nd focus
business
alignment
governance &
service
management
service
management
Markets and Communities Drive Agility & Customization Markets and Communities Drive Agility & Customization
centralized or
federated
transformation
& architecture
business
alignment
process &
information
Changing External Drivers Affect IT Focus
When regulation and risk management are dominant enterprise drivers, the response is typically a
centralized or strongly-linked federated orientation. That drives the IT organization toconcentrate on
governance for control of risk and assurance of compliance. Typically, it uses business alignment as it
main focus and service management as its second focus.
Turbulence of markets and power of communities (particularly of consumers) drive enterprises to
strategies of agility and customization. Typically, they use centralized or federated orientations, either
preferring to have all their responses created in one corporate position or, in more complex and responsive
enterprises, aiming to combine benefits of co-ordination with those of closeness to business-unit insights
into markets and customers by using the federated style. This drives the IT organization to use whichever
is the dominant enterprise orientation, centralized or federated, for its transformation management and
architecture because those are the two most important functions for delivering agility and customization
goals. Business alignment and process/information are the two top focus issues for such IT organizations.
As with combined business goals, it's not unusual for a large or complex enterprise to combine regulatory
concerns with market goals. The IT organization needs multilayered structural and position solutions,
possibly combined with multilayered business goal responses. Such complexity demands very clear
leadership and well-coordinated governance.
IT Organization Position and Structure: Getting It Right
Page 9
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
The effectiveness and ease of formation of partnerships between business units and increasingly between
enterprises will be a critical enterprise differentiator for surviving tough times, finding a way through the global
economy and achieving growth. This is one of the major forces reshaping the context for IT organizations away
from internally oriented value sources such as efficiency and control or technology asset optimization, toward
externally-oriented, IT-enabled business models and processes. These value sources are themselves more
complex for the IT organization, because they engage processes, stakeholders and activities over which the IT
organization has little or no direct control. This requires new leadership behaviors and skills for ensuring
coordinated visions, strategies and tactics between the IT organization and the wider enterprise and the
business environment beyond.
All this drives change in IT organization structure and position. The effect is to position IT more strategically
and to focus it externally, meaning its structure gives greater prominence to architecture for the value chain
beyond enterprise boundaries.
Changing Partnership Drivers Affect IT
Boundaries and Influencing Styles
federated or
multilocal
Internal Partnerships Drive Value of IT Internal Partnerships Drive Value of IT
position position function function 1 1
st st
focus focus 2nd focus 2nd focus
process &
information
governance &
service
management
service
management
External Partnerships Drive Value of Transformation External Partnerships Drive Value of Transformation
centralized or
federated
transformation,
architecture &
governance
(by influence not
control)
business
alignment
process &
information
IT Organization Position and Structure: Getting It Right
Page 10
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
Expected
IT Role
Tactical
and
Utility
Expected
IT Role
Strategy and
Transformation
The Entrepreneur The Entrepreneur
Business/IT Alignment Drives IT Style,
Value Proposition and Structure
Business Market Follower/
Risk Averse/Mature
Business Market Leader/
Risk Taker/High Growth
The Grinder The Grinder The Team Player The Team Player
The Butler The Butler
process &
information
value
creator
process &
information
value
creator
technology
contractor
technology
contractor
technology
service
partner
IT Org
Type
1 or 2
2 or 3
4 +2
IT leaders should connect their organizational and personal value contributions with the style and market
position of the business as a whole, combined with the expected contribution from IT. They should use
multilayered value propositions where required by the size or complexity of the business. The Grinder-
dominant choice of value proposition is technology contractor, if the business is strongly technology-oriented
and the IT contribution is strongly cost-driven. An alternative choice is technology service provider when the
Grinder alignment style also contains elements of the Butler or the Team Player. The Butler-dominant choice
of value proposition is technology service provider, unless the contribution of IT is very strongly cost-oriented.
In that case, the technology contractor is more appropriate. The Team Player-dominant choice of value
proposition is technology service provider. Most Team Player situations also
require basic services delivered by Grinder alignment. In some enterprises, both Contractor and Partner value
propositions exist, one each in separate IT organization. The Entrepreneur-dominant choice of value
proposition is process and information value creator, because inthe Entrepreneur situation, those assets must be
synthesized across the business and exploited. Most Entrepreneur situations also require Team Player, Grinder
and sometimes Butler approaches. These are usually delivered by an IT organization with the technology
service provider value proposition. The two value propositions will increasingly be delivered by separate
organizations in the enterprise, one Type 4 and one Type 2.
Key Issue: How do the best positions for IT vary between organization types and industries?
IT Organization Position and Structure: Getting It Right
Page 11
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
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written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
The Entrepreneur The Entrepreneur
The Grinder The Grinder
The Team Player The Team Player
The Butler The Butler
best
good
just ok
poor
Your Priorities Are Efficiency and Security?
Use Service Management and Centralization
For enterprises or parts of enterprises where efficiency and security are dominant issues, the Grinder style
of IT organization is typically the best. Regulated utilities such as electricity generation and distribution
are examples.
The Butler style is also appropriate if the enterprise also has substantial growth ambitions combined with
its concerns for efficiency and security.
The Team Player style is much less effective. The Entrepreneur style is a poor match, and likely to be an
impediment to efficiency and security goals.
IT Organization Position and Structure: Getting It Right
Page 12
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
The Entrepreneur The Entrepreneur
The Grinder The Grinder
The Team Player The Team Player
The Butler The Butler
best
good
just ok
poor
Your Priorities Are Mergers and Coherence?
Use Governance and Federation
For enterprises or parts of enterprises where mergers are important and the need for coherent activities
throughout the whole business is significant, the Team Player isthe best style. Major financial institutions
are typical examples. They need synergies of products and services to cross-sell and up-sell across their
customer bases, and the leaders use architecture of processes, information and technology to facilitate that
in a Team Player IT organization that is very well connected to business activities.
In some utility organizations, an Entrepreneur IT organization acts to facilitate business transformation
around the physical business infrastructure as well as creating centers of excellence that can assimilate and
exploit assets acquired in mergers.
Many global corporations that operate in emerging markets use Butler-style IT organizations in those
countries and regions to ensure technology does not impede business growth or flexibility.
The Grinder style is the least effective for these business goals, although once a merger is completed, some
of the IT work in the new steady state may transfer to a Grinder-style organization.
IT Organization Position and Structure: Getting It Right
Page 13
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
The Entrepreneur The Entrepreneur
The Grinder The Grinder
The Team Player The Team Player
The Butler The Butler
best
good
just ok
poor
Your Priorities Are Agility and Customization?
Use Architecture, Alignment and Partnerships
Leading enterprises with goals for agility and customization typically develop Entrepreneur-style IT
organizations. Several major pharmaceutical corporations are examples, using business process
transformation fused with IT to create new source of business insight and value.
The Butler style is a good choice, too. For example, some natural resources companies such as oil and gas
exploration and processing invest proactively in IT linked with their operational engineering capabilities to
identify novel ways to find resources or to exploit exiting ones.
The Team Player style is used to good effect for customization goals by other enterprises. Major retailers,
for example, embed technology capabilities in their product and service design teams with initiatives such
as loyalty cards and product cross-selling facilitated by well-aligned and responsive IT organizations.
The Grinder style, inherently more monolithic and less flexible than the others, is a poor solution to agility
and customization goals.
IT Organization Position and Structure: Getting It Right
Page 14
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
use external trends and
business context to shortlist
IT organization types
use drivers of business
goals to shortlist positions
and structures
use business priorities to
choose IT organization
style and finalize the rest
review
refine
Route Map for Selecting the Position and
Structure of the IT Organization
IT Organization Position and Structure: Getting It Right
Page 15
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
alignment
type
strategic effectiveness
technology contribution
tactical efficiency
technology contribution
federated
business
structure
centralized
business
structure
multilocal
business
structure
Summary: Selecting the Position and
Structure of the IT Organization
coordinated, IT support
service, multisourced
Type 2, 3 and/or Z
shared strategy and
infrastructure; multilocal
development and support
Type 3 or 4 +2 and/or Z
multiple IT orgs owned by
BUs or multi-outsourced
Type 2, 3 and/or Z
multiple BU-based
strategy, infrastructure
and applications
Type 2, 3, 4 +2 and/or Z
single in-house or
outsourced support
service
Type 2 or 3
central strategy,
infrastructure and
applications
Type 3 or 4 +2
grinder
butler
team player
entrepreneur
The table shows the typical choices for positioning the IT organization within an enterprise structure in
relation to the two key factors of business orientation and intended IT contribution. These are extremes.
Actual situations often require a blend of choices, but it's important to understand the components of that
blend and to make explicit, managed choices, which should be reviewed as circumstances change.
Action Items: IT leaders should use the table to identify the best choices for position and structure of IT within
their enterprise.
Recommended Gartner research: "Answers to the Perennial Question of How to Organize IT"
(G00136667); "Consolidating IT: How to Score the Benefits and Barriers" (G00113894); "Global IT Leaders
Must Choose From Multiple Organization Styles" (G00144038); "Howto Assess Your IT Organization's
Structure" (G00142041); "How to Determine Whether the Matrix Organizational Structure Is Right for Your
Organization" (G00129237); "The Reality of IS Lite" (G00117022); "There's No Single, Right Answer for
Organizing IT" (G00129886); "Adopt Multisourcing as a New Management Discipline" (G00141763); "The
Six Myths of IT Service Management" (G00141173); "Shared Services Differ From Centralization"
(G00127212); "How to Best Position the IT Organization in Your Enterprise" (G00147374); and "The Period
to 2012 Will Be Years of Transition for IT Organizations and IT Management" (G00137063).
IT Organization Position and Structure: Getting It Right
Page 16
J ohn Mahoney
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the
intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential,
proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express
written permission of Gartner, Inc. or its affiliates. 2008 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommendations: Use Seven Guiding
Principles for IT Position and Structure
Short term
1. Create strategic goals for IT that follow choice of value
contribution and business asset focus.
Midterm
2. Use strategic goals to create IT processes.
3. Use IT processes to identify relationships, competencies,
resource needs and sourcing options.
4. Design pattern of IT position to follow enterprise structure (such
as central or federated).
5. Then develop the organization chart.
Long term
6. Use the goals, assets and processes, not the organization chart,
as your ongoing management tools.
7. Review and adjust regularly: There is no single right answer and
the right answer changes.
Action Item: IT leaders should use these principles to design, implement, manage and review the position and
structure of their IT organizations.