Info-Tech Research Group Inc. is a global leader in providing IT research and advice.

Info-Tech’s products and services combine actionable insight and relevant advice with
ready-to-use tools and templates that cover the full spectrum of IT concerns.
© 1997-2018 Info-Tech Research Group Inc. Info-Tech Research Group 1
Our understanding of the problem

This Research Is
is Designed For: This Research Will Help You:
 CIOs  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:
Assist: This Research Will Help You:
Them:
 IT Leaders  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.

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Executive summary

Situation
• Organizational design is the alignment of organizational structure, roles, 1. Structure follows strategy – how
and processes to execute on business strategy – the better aligned the your organization is designed will
organization is, the more effective it is. dictate how it behaves. It is the key
• For optimal results, the structure of the IT organization must match its enabler of your strategic direction.
strategy, but often IT organizations grow to meet needs of the day and
not by strategic design. 2. Focus first on capabilities. Build a
forward-looking operating model first –
Complication then look to people and roles.
• Redesigning your IT organization can be highly disruptive, emotional, and 3. Change in practice, not just on
politically charged. Effective reorganization efforts need to start with paper. Redesign requires constant
identifying future direction, defining a future operating model, and making caring and feeding to see it through to
difficult decisions about how you will deliver IT services in the future. the finish line.
• 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 Research Group 3
 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 in order to drive efficiency
and effectiveness.

If your IT strategy is your map, your IT organizational

design represents the optimal path to get there.

Why is the right IT organizational design so critical to success today?

Adaptability is at the core of Structure is not just an Organizational design is a never-
staying competitive today organizational chart ending process
Digital technology and information The design of your organization Organization design is not a one-
transparency are driving dictates how roles function. If not time project, but a continuous,
organizations to reorganize aligned to the strategic direction, dynamic process of organizational
around customer the structure will act as a bungee self-learning and continuous
responsiveness. To remain cord and pull the organization improvement. Landing on the right
relevant and competitive, your back toward its old strategic operating model will provide a
organizational design must be direction (Morales Pedraza). solid foundation to build upon as
forward looking and ready to adapt Structure supports strategy, the organization adapts to new
to rapid pivots in technology or but strategy also follows challenges and opportunities.
customer demand. structure.
Info-Tech Research Group 4
Organizational design is the mechanism for how you enable
your strategy and priorities

The organization’s choice of IT

IT
strategy and the tactics to GOVERNANCE
realize that strategy will have STRATEGY
The identification of A body that has the
a direct impact on how the responsibility and
organizational
internal organization should objectives, principles, authority for approving
be organized. and tactics necessary strategic direction and
to drive business value. monitoring
performance.
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 ORGANIZATIONAL
supporting structures need to DESIGN
be reassessed to ensure they The operating model and
are still aligned. architecture for how IT is organized
to deliver on business needs and
strategies.

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 Many organizations are going through organizational
redesigns, but few are getting it right
Why is it so difficult to succeed at

60%
IT organizational redesign?
Many organizations change the structure

Of companies have attempted an

1 on paper, but not in practice.
Organizational design efforts are not
complete without long-term dedication to
organizational redesign in the last 2 creating a shift in culture and practice.
years
Organizations look to force fit a “trendy”
YET… 2 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

77%
Of those org designs FAIL.
3
work for their culture.
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.
Source: Aronowitz et al.

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 86% of IT leaders believe organization and leadership
processes are critical, yet the majority struggle to be effective
PERCENTAGE OF IT LEADERS WHO BELIEVE THEIR GAP BETWEEN
ORGANIZATION AND LEADERSHIP PROCESSES ARE HIGHLY IMPORTANCE AND
IMPORTANT AND HIGHLY EFFECTIVE EFFECTIVENESS

Organizational Design 45%

Human Resources Management 61%

Organizational Change Management

55%
0% 20% 40% 60% 80% 100%
High Importance High Effectiveness
Note: Importance and effectiveness were determined by identifying the percentage of individuals who Source: Info-Tech Research Group
responded with 8-10/10 to the questions: Management and Governance Diagnostic
• “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?” N=22,800 IT Professionals

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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.

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

Top factors of
Increased odds How Info-Tech’s methodology
organizational design
of success addresses these factors:
success

Your IT strategy will serve as one of the key inputs

Synchronize design with into crafting a set of organizational design principles
1
1 strategy 5x that will guide the design of your future-state
organizational structure.

Conduct a comprehensive RACI chart that will clarify

which roles are accountable and responsible for each
Clarify roles and
2
2 responsibilities 6x of your IT capabilities. This will ensure clarity over
the way in which work is done, and who needs to
collaborate with who.

Start with an operating model, overlay your core IT

4
3 Design layer by layer 4x capabilities, and then structure your organizational
sketch based on groupings of those IT capabilities
and on the work that needs to be done.

By using targeted design principles to craft a

baseline operating model for the IT organization, it
4
6 Don’t wait for a crisis 21x enables you to be proactive and integrative in
rationalizing upcoming change and integrating it into
your IT organization structure.
Source: The Boston Consulting Group

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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  Your business complains that IT doesn’t
just “happened.” understand their needs.
 Your structure is outdated and the business  You need to add new capabilities into the IT
strategy or goals have changed since the last organization.
time a redesign initiative occurred.
 Your organization is growing and IT cannot keep  Your business units have highly divergent needs
up. and IT can’t keep up.

 Your CEO is mandating a change in IT.  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 are experiencing work duplication, role  You’re spending too much time on the wrong
conflict between members of the IT team, and/or things.
inefficiencies.
 You have noticed that there are high levels of  You’re ready to make a transformational change
redundancies that are causing delays and a lack to the way IT functions and performs.
of accountability.

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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 • Percentage of resources dedicated to key capabilities

• Percentage of resources dedicated to strategic priorities and initiatives
specific to IT:
• Overall business satisfaction with IT

Questions to ask Are your metrics achievable?

1. What are the leading S pecific While org design involves the art of
indicators of IT effectively the possible, it must be grounded in
supporting the business’ M easurable achievable outcomes.
strategic direction? Ensure that the metrics your redesign is
A chievable
measured against reflect realistic and
2. How are success metrics R ealistic tangible business expectations.
aligned with the objectives of Overpromising the impact the
other functional groups? T ime-bound organizational design will have can lead
to long-term implementation challenges.

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Follow Info-Tech’s four-phase approach to building an IT
structure that will enable your strategic goals
PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 2 3 4
Craft Organizational Design Architect the Target-State Communicate the
Customize the IT
Principles and Select an IT IT Organizational Benefits of the New
Operating Model
Operating Model Structure Organizational Structure

• Finalize design • Customize your • Build your • Finalize the new

principles and operating model to organizational organizational
goals. reflect needs structure. structure.
• Clearly articulate around • Define roles and • Build the
rationale for the capabilities, work unit communication
change. centralization, responsibilities plan.
• Select the outsourcing, and and • Action plan for
operating model priorities. accountabilities. next steps.
that will allow you • Define your new • Build work unit
to best meet your organizational mandates and
goals. work units. define success
metrics.

Info-Tech Research Group 12

This blueprint is part one of a three-phased approach to
organizational transformation
PART 1: DESIGN PART 2: STRUCTURE PART 3: IMPLEMENT

IT Organizational Organizational Organizational Organizational Transition Implement

Architecture Sketch Structure Chart Strategy Structure

1. Define the 6. Assign work to 11. Validate 15. Determine 19. Form an OD 24. Train managers
organizational work units organizational number of implementation to lead through
design (accountabilities sketch. positions per team. change.
objectives. and 12. Analyze job. 20. Develop change 25. Define and
2. Develop responsibilities). workforce 16. Conduct vision. implement
strategically 7. Define roles by utilization. competency 21. Build stakeholder
aligned capability work unit. 13. Define assessment. communication engagement
map. 8. Turn roles into competency 17. Assign staff to presentation. plan.
3. Build future IT jobs. framework. jobs. 22. Identify and plan 26. Develop
operating model 9. Define reporting 14. Identify 18. Build a change projects. individual
4. Define the future relationships competencies workforce and 23. Develop transition plans.
state work units. between jobs. required for staffing plan. organizational 27. Implement
5. Create future 10. Assess options jobs. transition plan. transition plans.
state work unit and select go-
mandates. forward
organizational Risk Management: Create, implement, and monitor risk management plan.
sketch.
HR Management: Develop job descriptions, conduct job evaluation, develop compensation
packages.

Monitor & Sustain Stakeholder Engagement

Info-Tech Research Group 13

 CIO consolidates disparate IT departments (LoB) into a single
outcome-focused organization
Industry Manufacturing
CASE STUDY Source IBM, “A new era begins”

Problem

30%
A Global Fortune 1000 company was seeing an increased need for Reduction in
product innovation, customer service, and speed to market, but they felt project cycle
they were hindered by IT’s inability to keep up with the pace of change. times
Solution
The new CIO established a company-wide operating model for
consolidating the disparate IT departments into a single organization

20% Reduction in
focused around outcomes instead of a lines of business organization.
11,000 IT staff were organized into 140 delivery communities, each defect rates
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.
33% Reduction in
overall
delivery costs

Info-Tech Research Group 14

Use these icons to help direct you as you navigate this
research
Use these icons to help guide you through each step of the blueprint and direct you to content related to
the recommended activities.

This icon denotes a slide where a supporting Info-Tech tool or template will help you perform
the activity or step associated with the slide. Refer to the supporting tool or template to get
the best results and proceed to the next step of the project.

This icon denotes a slide with an associated activity. The activity can be performed either as
part of your project or with the support of Info-Tech team members, who will come onsite to
facilitate a workshop for your organization.

Info-Tech Research Group 15

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

Guided
DIY Toolkit Implementation Workshop Consulting

“Our team has already “Our team knows that “We need to hit the “Our team does not
made this critical we need to fix a ground running and have the time or the
project a priority, and process, but we need get this project kicked knowledge to take this
we have the time and assistance to off immediately. Our project on. We need
capability, but some determine where to team has the ability to assistance through the
guidance along the focus. Some check-ins take this over once we entirety of this project.”
way would be helpful.” along the way would get a framework and
help keep us on track.” strategy in place.”

Diagnostics and consistent frameworks used throughout all four options

Info-Tech Research Group 16

 Redesign Your IT Organizational Structure
1. Build Design Principles 2. Customize the Operating 3. Define Roles and Work 4. Communicate to
and Operating Model Model Units Stakeholders
1.1 Brainstorm the implications 2.1 Augment your capability 3.1 Customize baseline work 4.1 Conduct a stakeholder
of your IT strategy on your overlay to reflect the core units to fit your organization’s analysis to identify the impact
organizational structure capabilities of your IT future state and level of resistance from all
organization stakeholders
1.2 Use your collected data to 3.2 Categorize your IT
conduct an analysis of current 2.2 Determine the level of capabilities within your defined 4.2 Create a communications
pain points and opportunities centralization in each of your work units plan tailored to the interests of
key function areas each of your respective
1.3 Create your finalized list of 3.3 Delineate accountabilities
stakeholders
design principles 2.3 Identify the target state of and responsibilities for your IT
sourcing for your IT capabilities capabilities 4.3 Create an FAQ to address
1.4 Weigh your design
common questions and
principles against the list of 2.4 Alter your operating model 3.4 Define the roles inside your
concerns around your
operating models to reflect your sourcing work units
restructuring
decisions
1.5 Finalize your operating 3.5 Create a mandate
4.4 Finalize your
model selection 2.5 Alter your operating model statement for each work unit
Organizational Design
to reflect your customer-facing
Best-Practice 3.6 Finalize your organizational Communications Deck by
capabilities
Toolkit structure summarizing your vision and
2.6 Heat map your customized key design principles
IT operating model
Craft a set of Determine target-state Define target-state work Stakeholder
organizational design sourcing and centralization units communication planning
principles
Customize and heat map Define roles and
Select a baseline operating the IT operating model responsibilities within new
Guided model work units
Implementations
Module 1: Decide on Design Module 2: Customize the IT Module 3: Define Roles and Module 4: Build Your
Principles and Operating Operating Model Work Units Communication Plan
Model
Onsite
Workshop

Info-Tech Research Group 17

Workshop overview
Contact your account representative or email [email protected] for more information.
Workshop Day 1 Workshop Day 2 Workshop Day 3 Workshop Day 4 Workshop Day 5
Decide on Design Select Operating Model Customize Define Roles and Build Your
Principles and Structure Organizational Structure Finalize Work Units Communication Plan

1.1 Brainstorm the 2.1 Finalize your 3.1 Customize baseline 4.1 Define the roles 5.1 Conduct a stakeholder
implications of your IT operating model selection work units to fit your inside your work units analysis to identify the
strategy on your organization’s future impact and level of
2.2 Customize the IT 4.2 Create a mandate
organizational structure state resistance from all
operating model statement for each work
Activities

3.2 Categorize your IT stakeholders

1.2 Use your collected unit
2.3 Decide on a baseline capabilities within your
data to conduct an 5.2 Create a
organizational structure defined work units 4.3 Finalize your
analysis of current pain communications plan
3.3 Delineate organizational structure
points and opportunities tailored to the interests of
accountabilities and
each of your respective
1.3 Create your finalized responsibilities for
stakeholders
list of design principles your IT capabilities
5.3 Create an FAQ to
address common
questions and concerns
around your restructuring
1. List of points and 1. Customized IT 1. Future-state work unit 1. Future-state role 1. Stakeholder map
opportunities for new operating model structure design 2. Communications plan
organizational 2. Heat mapped (for gap 2. Categorized IT 2. Work unit mandates 3. Organizational
Deliverables

structure analysis) IT operating capabilities by work unit 3. Finalized restructuring FAQ

2. Review of Info-Tech model 3. Capability-based RACI organizational
diagnostic data chart structure
3. List of custom-fit
organizational design
principles

Info-Tech Research Group 18

PHASE 1
Craft Organizational Design Principles and
Select an IT Operating Model

Redesign Your IT Organizational Structure

Info-Tech Research Group Inc. is a global leader in providing IT research and advice.
Info-Tech’s products and services combine actionable insight and relevant advice with
ready-to-use tools and templates that cover the full spectrum of IT concerns.
© 1997-2018 Info-Tech Research Group Inc. Info-Tech Research Group 19
Phase 1: Craft Organizational Design Principles and Select an
IT Operating Model
PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 2 3 4
Craft Organizational Design Architect the Target-State Communicate the
Customize the IT
Principles and Select an IT IT Organizational Benefits of the New
Operating Model
Operating Model Structure Organizational Structure

ACTIVITIES: OUTCOMES:
• 1.1 Brainstorm the implications of your IT strategy on your • Collect key data that will inform the way you
organizational structure should structure your future state
• 1.2 Use your collected data to conduct an analysis of current organization.
pain points and opportunities • Create a set of design principles to inform
• 1.3 Create your finalized list of design principles your future decision making around
• 1.4 Weigh your design principles against the list of operating organizational structure changes.
models • Select a baseline operating model that best
• 1.5 Finalize your operating model selection 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.

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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 conduct an assessment of your current organizational pains and opportunities to land on a future
structure that aligns with the larger strategic direction.

1 Review Your IT Strategy 2 Design Your Organization

Assess the IT strategy and understand Determine the operating model and
the ways in which IT needs to align with organizational chart structure that best
the business objectives for the future. suits your needs, then customize it to
your specific needs.

4 Implement Your Organization 3 Structure Your Organization

Design Define work roles for your work units
Form an implementation team and and translate role descriptions into
develop a transition plan (this is a jobs with specific competency
separate research blueprint). requirements.

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

WHAT ARE ORGANIZATIONAL How to determine your design principles:

DESIGN PRINCIPLES?
Review your IT strategy and
1 digest the organization’s goals, its
Your organizational design principles should define
a set of loose rules that can be used to design subsequent implications for the IT
your organizational structure to the specific needs organization, and the
of the work that needs to be done. organization’s target state
maturity level.
These rules will guide you through the selection of
the appropriate operating model that will meet your Conduct an organizational
business needs. There are multiple ways you can
2 effectiveness assessment to
hypothetically organize yourself to meet these understand what is working and
needs, and the design principles will point you in isn’t working in today’s reality with
the direction of which solution is the most a focus on the future.
appropriate, as well as explain to your
stakeholders the rationale behind organizing in a
Use benchmarking data from Info-
specific way. 3 Tech’s diagnostic program to gain
Data collection on the front end is critical here – additional nuance around areas
one of the number one reasons for organizational for improvement.
design failure is a lack of requisite time spent on
the front end understanding what is the best fit.

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Identify the implications of your IT strategy on your
organizational structure

Your IT strategy is a critical input into your future Info-Tech Related

organizational design. Extract critical components of Research: Rapidly
your IT strategy and convert them into a set of actionable Develop a Visual IT
design principles that will guide the selection of your IT Strategy
operating model.

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

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

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

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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.

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Activity: Brainstorm the implications of your IT strategy on
your organizational structure
1.1 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. INPUT
2. Review the organizational vision, mission, and principles and extract any important pieces of • IT strategy
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 OUTPUT
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? • Implications of IT
strategy on future-
• These should directly translate to actionable strategic initiatives for the IT organization state organization
to structure around. Document these key strategic initiatives in a list. • Target-state maturity
• If you have completed Info-Tech’s IT strategy blueprint, import the results of your IT level
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.

Document your results in the Organizational Design Communications Deck

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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:

• Compare CIO and CEO views of IT performance and target role.

CIO-CEO
• Review the CEO’s priorities and understand how they align with IT’s
Alignment
goals.

• Review the organization’s satisfaction with IT’s core services to

CIO Business
identify what is important to the business and what areas need
Vision
improvement.

Management & • Identify key processes that need to be improved in the target state
Governance organizational structure from the process capability landscape.

• Review your IT staff allocation to identify gaps in coverage.

IT Staffing
• Review the function effectiveness key drivers to assess current
Assessment
performance across the department.

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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 INPUT
some of the identified pains and opportunities.
• Stakeholder feedback
2. Provide each participant with a marker and stack of sticky notes. Have them openly • Current pain points
brainstorm a list of current pain points or inhibitors in the current organizational structure, • Identified
along with a set of opportunities that can be realized during your restructuring. opportunities

3. As a group, review the sticky notes and group similar topics and themes. Create a high- OUTPUT
level label for each of the groupings that can be used for consideration during the crafting
of your organizational design principles. • Pain point and
opportunity themes

Pain Points/Inhibitors Opportunities

Lack of role clarity
Cloud enablement Customer
responsiveness
No portfolio view
of projects

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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. INPUT
2. Prioritize the various implications and build as the starting point for your design principles. • Activity 1.1
Make the list as inclusive as possible to account for all future capabilities and opportunities • Activity 1.2
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.”
OUTPUT
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 • Organizational design
them in more detail with their work units or functional areas and elicit any necessary principles
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.

Document your results in the Organizational Design Communications Deck

Info-Tech Research Group 28

Example Design Principles

Design Principle Description

We will centralize decision making around the prioritization of projects to ensure that
Decision making
the initiatives driving the most value for the organization as a whole are executed.
We will build and maintain fit-for-purpose solutions based on business units’ unique
Fit for purpose
needs.
We will reduce role and application duplication through centralized management of
Reduction of
assets and clearly differentiated roles that allow individuals to focus within key
duplication
capability areas.
Managed We will manage security enterprise-wide and implement compliance and security
security governance policies.
Reuse > buy > We will maximize reuse of existing assets by developing a centralized application
build portfolio management function and approach.
We will create a specialized data office to provide data initiatives with the focus they
Managed data
need to enable our strategy.

Info-Tech Research Group 29

Example Design Principles (continued)

Design Principle Description

Controlled
We will control the variety of technology platforms we use to allow for increased
technical
operability and reduction of costs.
diversity
R&D and innovation are critical – we will build an innovation team into our structure
Innovation
in order to help us meet our digital agenda.
We will separate our project and maintenance activities to ensure each are given the
Resourcing
dedicated support they need for success and to reduce the firefighting mentality.
The new structure will be directly aligned with customer needs – we will have
Customer
dedicated roles around relationship management, requirements, and strategic road
centricity
mapping for business units.
We will strengthen our enterprise architecture practices in order to best prepare for
Interoperability
future mergers and acquisitions.
We will move toward hosted vs. on-premises infrastructure solutions, retrain our data
Cloud services center team in cloud best practices, and build roles around effective vendor
management, cloud provisioning, and architecture.

Info-Tech Research Group 30

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 CUSTOMER
resources are aligned and integrated to deliver on the
FUNCTIONAL AREA n
organization’s strategy. It ensures consistency of all
IT
elements in the organizational structure through a clear and CAPABILITY

coherent blueprint before embarking on detailed IT

CAPABILITY
organizational design.

SOLUTIONS
INITIATIVES
IT
CAPABILITY
The visual should highlight which capabilities are critical to
IT
attaining strategic goals and clearly show the flow of work CAPABILITY

so that key stakeholders can understand where inputs flow IT

CAPABILITY
in and outputs flow out of the IT organization.
IT
CAPABILITY

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.

Info-Tech Research Group 31

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 in order to support the nuances of your specific IT operating environment.

Model High-Level Description

Plan-Build-Run A highly-typical IT operating model that focuses on centralized strategic

Model control and oversight in delivering cost-optimized and effective solutions.

Demand- A centralized IT operating model that lends well to more mature operating
Develop-Supply environments. Aimed at leveraging economies of scale in an end-to-end
Model services delivery model.
A decentralized IT operating model that embeds specific functions within
LoB/Product
Lines of Business/Product teams and provides cross-organizational support
Aligned Model
for their initiatives.
Hybrid A best of both worlds model, balancing the benefits of centralized and
Functional decentralized approaches to achieve both customer responsiveness and
Model economies of scale.
A model that supports what is commonly referred to as a matrix
Hybrid Service
organization, organizing by “tribal” service categories and introducing the
Model
role of the service owner.

Info-Tech Research Group 32

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

• Maximum flexibility to allocate IT • Centralizes processes and • Goals are aligned to the distinct
resources across business units. services that require consistency business units or functions.
• Low-cost delivery model and across the organization. • Greater flexibility and more timely
• Decentralizes processes and
Advantages

greatest economies of scale. delivery of services.

• Control and consistency offers services that need to be • Development resources are highly
opportunity for technological responsive to local market knowledgeable about business-
rationalization and conditions. unit-specific applications.
standardization, and volume • Eliminates duplication and • Business unit has greatest control
purchasing at the highest degree. redundancy by allowing effective over IT resources and can set and
use of common resources (e.g. change priorities as needed.
shared services, standardization).
• Less able to respond quickly to • Requires the most disciplined • Redundancies, conflicts, and
local requirements with flexibility. governance structure and the incompatible technologies can
• IT can be resistant to change and unwavering commitment of the result from business units having
Disadvantages

unwilling to address the unique business; therefore, it can be the differentiated services and
needs of end users. most difficult to maintain. applications – increasing cost.
• Business units can be frustrated • Requires new processes as • Ability to share IT resources is low
by perception of lack of control pooled resources must be staffed due to lack of common
over resources. to approved projects. approaches.
• Development of special business • Lack of integration limits the
knowledge can be limited. communication of data between
businesses and reduces common
reporting.

Info-Tech Research Group 33

Decentralization can take many forms – define what it means
to your organization
Decentralization can take a number of 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.

Line of Business Product Line Geographical

Decentralization by line of Decentralization by product line Geographical decentralization

business (LoB) means that decision- allows for a more centralized approach reflects a shift from centralized
making authority is shared or pushed to decentralization, whereby related decision making to regional decision
toward the line of business, reducing products (similar in technical expertise, making based on physical distance.
the amount of decision making being technology platform, end-user base,
made by the CIO or IT leadership etc.) can be grouped together as a When teams are in different locations,
team. single product line. they can experience a number of
roadblocks to effective communication
This form of decentralization is By adopting this approach, you can (e.g. time zones, regulatory
beneficial in settings where each line avoid some of the more extreme differences in different countries, etc.)
of business has a distinctive set of pitfalls of decentralization and package that may necessitate separating those
products or services that they offer groups of products in a single product groups in the organizational structure
that requires either a specific line to find the right balance between so they have the autonomy needed to
expertise or where resourcing and flexibility and resource sharing. make critical decisions.
strategic direction is retained by that
business unit.

Info-Tech Research Group 34

 Centralized Operating Model #1: Plan-Build-Run
GOVERNANCE: Provides oversight and direction to all IT initiatives and solutions.

PORTFOLIO STEERING

PLAN: Focuses on business BUILD: Suite of activities necessary RUN: Keep the lights on through
priorities and demand management. to deliver solutions. support and maintenance activities.
CUSTOMER

END USER
SOLUTIONS
INITIATIVES
• IT Strategy • Project and Portfolio • Service Management
• Innovation Management • Application Maintenance
• Enterprise Architecture • Business Analysis • Change & Release
• Security & Risk Management • Solution Development Management
• Vendor Management • Deployment • Service Desk
• Availability & Capacity

Performance Measurement & Continuous Improvement

BENEFITS DRAWBACKS

• Effective at implementing long-term plans efficiently, separates • Not optimized for unpredictable/shifting project demands as decision
maintenance and projects to allow each to have the appropriate making is centralized in the plan function.
focus. • Less agility to deliver new features or solutions to the customer in
• More oversight over financials; better suited for fixed budgets. comparison to decentralized models.
• Works across centralized technology domains to better align with • Build (developers) and run (operations staff) are far removed from the
the business’ strategic objectives – allows for a top-down approach business, resulting in lower understanding of business needs (as well
to decision making. as “passing the buck” – from development to operations).
• Allows for economies of scale and expertise pooling to improve IT’s • Requires strong hand-off processes to be defined and strong
efficiency. knowledge transfer from build to run functions in order to be
• Well suited for a project-driven environment that employs Waterfall successful.
or a hybrid project management methodology that is less iterative.

Info-Tech Research Group 35

Centralized Operating Model #2: Demand-Develop-Service

DEMAND: Prioritize and consolidate business needs SERVICE: Leverage scope of IT services and enable business
CUSTOMER

END USER
• Business Relationship Management efficiency
• Business Analysis • Service Management
• Benefits Realization • Service Desk
• BI Analytics & Reporting

INITIATIVES ENHANCEMENTS

STRATEGY & GOVERNANCE: Provides IT strategy, governance, and performance measurement initiatives.
PORTFOLIO STEERING

DEVELOP: Develop and support solutions based on prioritized

initiatives and changes • Infrastructure Management
• Project & Portfolio Management • Security
• Development and Maintenance
SOURCING & VENDOR MANAGEMENT

BENEFITS DRAWBACKS

• Aligns well with an end-to-end services model; constant attention • Can be less responsive to business needs than decentralized
to customer demand and service supply. models due to the need for portfolio steering to prioritize initiatives
• Centralizes service operations under one functional area to serve and solutions.
shared needs across lines of business. • Requires a higher level of operational maturity to succeed; stable
• Allows for economies of scale and expertise pooling to improve supply functions (service mgmt., operations mgmt., service desk,
IT’s efficiency. security, data) are critical to maintaining business satisfaction.
• Elevates sourcing and vendor management as its own strategic • Requires highly effective governance around project portfolio,
function; lends well to managed service and digital initiatives. services, and integration capabilities.
• Development and operations housed together; lends well to • Effective feedback loop highly dependent on accurate performance
DevOps-related initiatives. measures.

Info-Tech Research Group 36

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

CUSTOMER

PLAN DECENTRALIZED FUNCTION 1 DECENTRALIZED FXN 2 DECENTRALIZED FXN X

SOLUTIONS
DESIGN Contains all the capabilities necessary to plan,
design, build, and operate solutions/services for
BUILD the specific LoB. Business units control priorities
and retain control of what is completed.
OPERATE

SHARED SUPPORT SERVICES

CROSS-ORGANIZATIONAL SUPPORT: Engages with LoB to support their strategic priorities.

• Infrastructure
• Service Desk
• Architecture
• Security

EXTERNAL SERVICE PROVIDERS

BENEFITS DRAWBACKS
• Organization around functions (FXN) allows for diversity in approach in • Less synergy and integration across what different lines of business
how areas are run to best serve specific business unit’s needs. are doing can result in redundancies and unnecessary complexity.
• Each functional line exists largely independently, with full capacity and • Higher overall cost to the IT group due to role and technology
control to deliver service at the committed SLAs. duplication across different FXN.
• Highly responsive to shifting needs and demands with direct connection • Inexperience becomes an issue; requires more competent people to
to customers and all stages of the solution development lifecycle. be distributed across the FXN.
• Accelerates decision making by delegating authority lower into the • Loss of sight of the big picture – difficult to enforce standards around
FXN. people/process/technology with solution ownership within the FXN.
• Promotes a flatter organization with less hierarchy and more direct
communication with the CIO.

Info-Tech Research Group 37

 Hybrid Operating Model #1: Functional/Product Aligned
CUSTOMER

DECENTRALIZED FUNCTION 1 DECENTRALIZED FXN 2 Shared Services: Centralized IT

SOLUTIONS
Contains core functionally-aligned technology services, such as: services to serve shared needs
• Business Relationship Management across lines of business
• Business Analysis
• UAT & Change Management • Application Development &
• BI Analytics & Reporting Integration
• Project Management
NEEDS/REQUIREMENTS
• Infrastructure Management
• Operations Management
• Service Management
STRATEGIC SERVICES: Provides IT strategy and planning functions.
•

PRIORITIES
Managed Services
• Strategic Planning • Risk & Security Management
• Enterprise Architecture • Vendor Management
• Portfolio Steering • Sourcing Strategy
• Governance

BENEFITS DRAWBACKS

• Best of both worlds of centralization and decentralization; attempts • May result in excessive cost through role and system redundancies
to channel benefits from both centralized and decentralized models. across different functions.
• Embeds key IT functions that require business knowledge within • Business units can have variable levels of IT competence; may result in
functional areas allowing for critical feedback. different levels of effectiveness.
• Balances a holistic IT strategy and architecture with responsiveness • No guaranteed synergy and integration across functions; requires strong
to needs of the organization. communication, collaboration, and steering.
• Achieves economies of scale where necessary through the delivery • Cannot meet every business unit’s needs – can cause tension from
of shared services that can be requested by the function. varying effectiveness of the IT functions placed within the functions.

Info-Tech Research Group 38

 Hybrid Operating Model #2: Product-Aligned Operating
Model
Enterprise Services & Governance
PORTFOLIO STEERING

Product Governance Product Governance Product Governance

Product Family A: Product Family B: Product Family C:

Full service technology delivery aligned with Full service technology delivery aligned with Full service technology delivery aligned with
organizational value streams and capabilities. organizational value streams and capabilities. organizational value streams and capabilities.

SERVICE MANAGEMENT: Provide ongoing customer service to end users.

STRATEGY & STANDARDS

IT STRATEGY, ARCHITECTURE & SECURITY: Ensures that product roadmaps are aligned and integrated, that new solutions are built in
accordance with architecture and security standards to ensure interoperability, reduce risk, and limit technology redundancy, and ensures that the
resources are aligned with priority products.

BENEFITS DRAWBACKS

• Focus is on the full lifecycle of a product – takes a strategic view of how • Significant business involvement is required for success within this
technology enables the organization. model with business stakeholders taking an active role in product
• Promotes centralized backlog around a specific value creator, rather governance, and potentially product management as well.
than traditional project focus, which is more transactional. • Strong architecture standards and practices are required to make this
• Dedicated teams around the product family ensures that you have all of successful as you need to ensure that product families are building in a
the resources required to deliver on your product roadmap. consistent manner, and limiting application sprawl.
• Reduces barriers between IT and business stakeholders and focuses on • Introduces the need for practice standards to drive consistency in
technology as a key strategic enabler. quality of delivered services.
• Delivery is largely done through a DevOps methodology. • May result in increased cost through role redundancies across different
squads/tribes.

Info-Tech Research Group 39

 Hybrid Operating Model #2.5: Service-Aligned Operating
Model
CUSTOMER

UTILITY SERVICES COMMON ENTERPRISE SERVICES BESPOKE SERVICES

Full dedicated teams (squads) that handle IT’s Full dedicated teams (squads) that handle Full dedicated teams (squads) dedicated to
commoditized services would be located common services for business operations would business services that are dedicated to
within this tribe (service desk, email, be located here (e.g. HRIS, payroll systems, particular business units (e.g. business reports,
SharePoint, etc.) ERP, etc.) BI, etc.)

PORTFOLIO STEERING

STRATEGY, PORTFOLIO & GOVERNANCE: Provides oversight, IT strategy, and planning functions.
• Strategic Planning • Risk & Security Management
• Enterprise Architecture • Vendor Management
• Portfolio Steering • Sourcing Strategy
• Governance

BENEFITS DRAWBACKS

• Strong enabler of agility. • Requires a high level of maturity to begin; you need sound processes,
• Dedicates teams (“squads”) to each specific service that would be led technology standards, and governance to ensure things do not become
either by a service owner or a business relationship manager, providing siloed.
agility around each service offering. • May result in excessive cost through role redundancies across different
• Individuals in similar roles that are decentralized across squads are squads/tribes.
given coaching to provide common direction. • Squad members can have variable levels of role competence; may
• Allows teams to efficiently scale with service demand. result in different levels of effectiveness in specific services.
• This is a structurally baseline DevOps model. Each tribe will have • Strong communication and willingness to cross-learn is essential to
services built within that have their own dedicated teams that will handle ensure localized innovations benefit the entirety of the IT organization.
the full gambit of responsibilities, from new features to enhancements
and maintenance.

Info-Tech Research Group 40

 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- Demand-Develop- LoB/Product Hybrid Functional Hybrid Service

Run Model Supply Aligned Model 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- Demand-Develop- LoB/Product Hybrid Functional Hybrid Service

Run Model Supply Aligned Model 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.

Info-Tech Research Group 41

Activity: Finalize your operating model selection

1.5

1. Convene a meeting of your key stakeholders and discuss your shortlisted operating
models. INPUT
• Generally discuss the two models and their overall merits and shortcomings.
• Organizational design
Although the previous quantitative exercise is helpful to remove some of the gut principles
feeling and bias certain stakeholders may have, providing additional qualitative • Operating model
context is critical to making the right decision. weightings
• 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 OUTPUT
critical that design principle is, and (b) what the key structural differences are that
account for the difference in score. • Finalized operating
model selection
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.

Document your results in the Organizational Design Communications Deck

Info-Tech Research Group 42

A church’s IT reorganization enabled its continued growth
without blowing out infrastructure spending
Industry Not for Profit
CASE STUDY Source The Center for Organizational Design, Area Consolidation project

Problem Solution Results

• A church with a rapidly growing • Both offices were combined in a • Headcount was reduced by
membership base aimed to single location, with country 35% and operating costs by $4
manage its growth without service centers created in million per year.
having to massively increase its different countries for support
• More in-person support to local
infrastructure spending. services to be close to local
leaders and flexibility to grow as
leaders. Departments were also
• IT planned to combine two a result of a more simple and
consolidated into functional
proximate area offices into one, distributed organization.
groups.
consolidating resources,
• Travel was reduced by 50% due
standardizing processes and • Core process became
to upgrades in technology
structure, and reducing costs, streamlined and consolidated
services.
while increasing flexibility and where possible and a self-
customer service to local service electronic portal was • A better and more responsive
leaders. developed to offer tech support service was reported by the
to IT and administrative local leaders.
personnel.
• The church chose a centralized
operating model to meet its
needs.

Info-Tech Research Group 43

Checkpoint: Are you ready to customize your operating
model?

PHASE 1 PHASE 2

1 2
Craft Organizational Design
Customize the IT Operating
Principles and Select an IT
Model
Operating Model

Self-Auditing Guidelines
 Do you have a solid understanding of the  Have you crafted a set of broad organizational design
implications of the business goals on the IT principles and narrowed them to a finalized list based on
organizational structure? stakeholder consensus?

 Have you landed on a desired organizational  Have you scored the alignment between your design
maturity level and contextualized what its principles and the standardized operating models to
implications are for organizational change? shortlist which ones best fit your future-state design?

 Do you have a solid understanding of your current  Have you conducted a final qualitative analysis of your
organizational inhibitors and the new opportunities shortlisted operating models to land on your future-state
presented via reorganization? model?

 Have you documented your results in the Organizational Design Communications Deck?

Info-Tech Research Group 44

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
[email protected] 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
1.1 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
1.2 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.

Info-Tech Research Group 45

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:

Create your finalized list of design principles

Our analysts will help you finalize a list of design principles that will be used as a
1.3 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
1.4 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
1.5 to choose the best-fit model to move forward with and customize to the needs of your
organization.

Info-Tech Research Group 46

PHASE 2
Customize the IT Operating Model

Redesign Your IT Organizational Structure

Info-Tech Research Group Inc. is a global leader in providing IT research and advice.
Info-Tech’s products and services combine actionable insight and relevant advice with
ready-to-use tools and templates that cover the full spectrum of IT concerns.
© 1997-2018 Info-Tech Research Group Inc. Info-Tech Research Group 47
Phase 2: Customize the IT Operating Model

PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 2 3 4
Craft Organizational Design Architect the Target-State Communicate the
Customize the IT
Principles and Select an IT IT Organizational Benefits of the New
Operating Model
Operating Model Structure Organizational Structure

ACTIVITIES: OUTCOMES:
• 2.1 Augment your capability overlay to reflect the core • Customize your operating model to reflect
capabilities of the IT organization your core IT capabilities, key decisions
• 2.2 Determine the level of centralization in each of your key around levels of centralization, sourcing
function areas strategy, and customer interaction points.
• 2.3 Identify the target state of sourcing for your IT capabilities • Heat map your customized operating model
• 2.4 Alter your operating model to reflect your sourcing to determine what areas need attention first
decisions to reach the target state organizational
• 2.5 Alter your operating model to reflect your customer-facing structure.
capabilities
• 2.6 Heat map your customized IT operating model

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.

Info-Tech Research Group 48

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

This phase will walk you through the steps Steps to customize your operating model
needed to customize your operating model so
that it reflects how work flows through the IT
Review Info-Tech’s IT capability
organization. 1 overlay and remove capabilities that
your organization doesn’t deliver or
Use Info-Tech’s list of core IT capabilities listed on
add capabilities that are missing.
the following slide as a starting point. Augment the
capabilities and their illustrations as necessary and Rationalize the centralization and
overlay them onto your chosen operating model. 2 decentralization of each of your IT
capabilities.
Once customized, heat map the IT capabilities
inside the operating model to indicate which Determine the sourcing strategy
capabilities are actionable in their current state to 3 (insourced/co-sourced/outsourced)
enable the target state organizational structure, as for each of your IT capabilities.
well as where critical attention needs to be placed
for change. Determine which capabilities are
4 customer facing and illustrate their
proximity to the customer.

Refer to the Operating Models and Capability Heat map your IT capabilities based
Definition List for descriptions of each of the 5 on the ability to act on those
IT capabilities. capabilities, and their criticality to
success.

Info-Tech Research Group 49

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.

Info-Tech Research Group 50

The IT capability overlays are grouped into nine distinct
categories

Info-Tech Research Group 51

The baseline overlays use the following set of categorized
capabilities as a starting point
IT Performance Quality
Strategy Policies Innovation
Governance Measurement Management

Vendor
Vendor Strategic Organizational
Stakeholder Resource Financial Selection & Workforce
Portfolio Communicati Change
Management Management Management Contract Strategy
Management ons Enablement
Management

Service Service Desk

Operations Release Problem Change Demand
Portfolio & Incident
Management Management Management Management Management
Management Management

Infrastructure Availability & Network &

Asset Configuration
Portfolio Capacity Infrastructure
Management Management
Management Management Management

Compliance,
Security Risk Security Response & Security
Audit &
Strategy Management Detection Recovery Prevention
Review

Application
Systems Application Quality Application
Lifecycle User Testing
Integration Development Assurance Maintenance
Management

Portfolio Requirements Project

Management Analysis Management

Data Quality Enterprise

Data BI & Database
& Content
Architecture Reporting Operations
Governance Management

Enterprise Solution
Architecture Architecture

Info-Tech Research Group 52

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 INPUT
models from the communication deck.
• Baseline list of IT
2. Using the baseline operating model overlay, walk through each of the IT capabilities and capabilities
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 OUTPUT
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. • Customized list of IT
capabilities
• 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.

Make changes to the operating model in the Organizational Design

Communications Deck

Info-Tech Research Group 53

Begin to think about how you want to delegate authority in
your future-state organization
Decision-Making Authority Span of Control

Decision-making authority refers to the ability to make Span of control refers to the individuals that need to be
localized decisions. When work units have localized under oversight by a particular governance group. It
decision-making power, they can configure resources largely depends on the complexity of tasks being
based on their specific needs. When decision making is performed and the amount of front-line superior
left to the top of the hierarchy, the groups will inherently interaction that is required to effectively manage those
be less responsive but more aligned to central tasks.
organizational vision and policies.
There is no general rule or optimal number for span of
Where decision-making power lies is largely related to control. This is largely dependent on the work that needs
organizational agility. Independence in decision making to be completed and the interrelatedness of tasks
leads to faster response times to customer demands and between groups or functions.
trends, as those in contact with the end customer can
make decisions without feedback from the CIO/Office of When determining the span of control of specific
the CIO. governance functions, think about the nature of work (the
more difficult, the more narrow the span of control needs
You need to find the balance that is right for your to be) and the organizational structures around
organization that will keep the business satisfied without collaboration (face-to-face means narrow span of control,
resulting in undue complexity or unnavigable siloed whereas effective communication platforms and
decision making. structures permit a wider span of control).

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.

Info-Tech Research Group 54

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 Example

structure each of these areas. Weigh the
benefits and disadvantages and land on what Centralized FXN

Centralized
fits the larger organizational structure and (e.g. Shared Services)

culture of the organization. PROJECT

MANAGEMENT

From there, make the necessary changes to

the operating model so the degree of
centralization is reflected in the visualization. IT Capability: PROJECT
MANAGEMENT
Decentralized capabilities will be visualized as
redundancies across function areas, whereas
centralized capabilities will only be visualized
Decentralized

once.
Decentralized FXN Decentralized FXN Decentralized FXN
For more context around specific functional PROJECT PROJECT PROJECT
MANAGEMENT MANAGEMENT MANAGEMENT
areas, please refer to Appendix A:
Centralization / Decentralization Models.

Info-Tech Research Group 55

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.

Centralization Decentralization

Key Points of Consideration: Key Points of Consideration:

• Centralization gives better oversight over resource • Decentralization provides autonomy to work within
allocation and distribution and can make routine tasks organizational standards and boundaries to be
easier. innovative in the way tasks are completed.
• Centralization offers opportunities for cost savings by • Decentralization can increase the agility and
avoiding the need for redundancies in skills and responsiveness to customer demands, allowing groups
technology across different groups. to be in tune with the business and more tightly aligned
• Centralized groups can produce economies of scale for with their goals and objectives.
highly in-demand services. • Decentralization encourages a sense of ownership and
• Centralization can assist with providing better security cooperative management, driving trust and
and data governance by providing a central oversight accountability in employees.
over data on the organization’s servers and networks. • Decentralization can lead to information silos as
• Centralization can slow things down by creating knowledge sharing and tasks are conducted at a local
bottlenecks or dependencies within larger group level and are not guided by department-wide structures
settings. and policies.

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Activity: Determine the level of centralization in each of your
key function areas
2.2 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. INPUT
Consider the following:
• What does decentralization mean in your organization? Is it geographic, by functional area, or • List of customized IT
by product/product family? capabilities
• 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.
OUTPUT
• How complex are the tasks being completed? The more complex, the higher degree of
centralization is necessary for coordination. • Centralization/
• Determine and document what the decentralized grouping areas will be (i.e. geographic decentralization
groupings). determination for
each IT capability
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.
o Centralized functions should move toward depiction as a single capability placed in a
centralized functional area.
o 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.

Make changes to the operating model in the Organizational Design

Communications Deck

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 Weigh which sourcing model(s) will best align with the needed
capabilities to deliver effectively
Insourcing Co-Sourcing Outsourcing
Organization’s level of internal staffing and direct management

Organization Vendor Organization Vendor Organization Vendor

Vendor’s level of staffing and direct management

The organization maintains full Vendor provides specialized skills and Vendor completely manages the delivery
responsibility for the management and enables the IT capability or service of value for the IT capability or service.
Description

delivery of the IT capability or service. together with the organization.

• Retains in-house control over • Provision of unique skills. • Improves effectiveness due to narrow
proprietary knowledge and assets • Addresses variation in demand for specialization.
Benefits

that provide competitive or resources. • Labor cost savings.

operational advantage. • Labor cost savings.
• Gains efficiency due to integration • Improves use of internal resources.
into the organization’s processes.

• Quality of services/capabilities might • Potential conflicts in management or • Negative impact on staff morale.
not be as high due to lack of delivery of IT services and capabilities. • Limited control over
Drawbacks

specialization. services/capabilities.
• No labor cost savings. • Limited integration into organization’s
• Potentially inefficient distribution of processes.
labor for the delivery of
services/capabilities.

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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.

Sourcing Criteria Description

Determine whether the component to be sourced is critical to your organization or if it is a
1. Critical or commodity* commodity. Commodity components, which are either not strategic in nature or related to
planning functions, are likely candidates for outsourcing.
Identify how easy it would be to outsource a particular IT component. Consider factors such as
2. Readiness to outsource* knowledge transfer, workforce reassignment or reduction, and level of integration with other
components.
Determine if you have the capability to deliver the IT solutions in-house. This will help you
3. In-house capabilities*
establish how easy it would be to insource an IT component.
Consider the total cost (investment and ongoing costs) of the delivery of the IT component for
4. Cost
each of the potential sourcing models for a component.
Define the potential impact on the quality of the IT component being sourced by the possible
5. Quality
sourcing models.
Determine whether the sourcing model would fit with regulations in your industry. For example,
6. Compliance
a healthcare provider would only go for a cloud option if that provider is HIPAA compliant.
Identify the extent to which each sourcing option would leave your organization open to security
7. Security
threats.
Determine the extent to which the sourcing model will allow your organization to scale up or
8. Flexibility
down as demand changes.
*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.

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 Activity: Identify the target state of sourcing for your IT
capabilities
2.3 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 INPUT
criticality, readiness to outsource, and the in-house capabilities.
• Customized IT
capabilities
IT Capability Business Readiness to In-House
Criticality Outsource Capabilities
Requirements Gathering 5 2 2
Project Management 3 4 2
OUTPUT
Disaster Recovery • Sourcing strategy for
1 2 5 each IT capability
Planning

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 Flexibility Quality Total Best-Fit
(25%) (20%) (55%) (100%) Model
Requirements Insource/Co-source/Outsource
3/2/4 5/3/1 3/4/2 3.4/3.3/2.3 Insource
Gathering
Project Management Insource/Co-source/Outsource 2/3/5 5/3/1 2/3/5 2.6/3/4.2 Outsource
Disaster Recovery Insource/Co-source/Outsource
4/4/1 5/4/3 1/2/5 2.55/2.9/3.6 Outsource
Planning
3. Weigh your sourcing model options against each other and decide what best fits the
organization’s future state.

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Activity: Identify the target state of sourcing for your IT
capabilities (continued)
IT Performance Quality
Strategy Policies Innovation
Governance Measurement Management

Vendor
Vendor Organizational
Stakeholder Resource Financial Selection & Workforce Strategic
Portfolio Change
Management Management Management Contract Strategy Communications
Management Enablement
Management

Service Service Desk

Operations Release Problem Change Demand
Portfolio & Incident
Management Management Management Management Management
Management Management

Infrastructure Availability & Network &

Asset Configuration
Portfolio Capacity Infrastructure
Management Management
Management Management Management

Compliance,
Security Risk Security Response & Security
Audit &
Strategy Management Detection Recovery Prevention
Review

Application
Systems Application Quality Application
Lifecycle User Testing
Integration Development Assurance Maintenance
Management

Portfolio Requirements Project

Management Analysis Management
Sourcing Legend

Insource
Data Quality Enterprise
Data BI & Database
& Content
Architecture Reporting Operations
Governance Management Outsource

Co-Source
Enterprise Solution
Architecture Architecture

Info-Tech Research Group 61

 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 INPUT
arrow for “External Service Providers.”
• Sourcing strategy for
2. Sub-divide the external service providers box as necessary to reflect lines of division for who each IT capability
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 OUTPUT
that would be responsible for the management of those capabilities.
• Altered operating
model to reflect
sourcing strategy

EXTERNAL SERVICE PROVIDERS

RESPONSIBLE FUNCTIONAL AREA

QUALITY SERVICE DESK & APPLICATION QUALITY

MANAGEMENT INCIDENT MGMT DEVELOPMENT ASSURANCE

OPERATIONS
MANAGEMENT

Make changes to the operating model in the Organizational Design

Communications Deck

Info-Tech Research Group 62

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.

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

SOLUTIONS
INITIATIVES
FACING

services.
NON-CUSTOMER
FACING

NON-CUSTOMER
FACING

NON-CUSTOMER
FACING

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Activity: (optional) Alter your operating model to reflect your
customer-facing capabilities
2.5 2 hours

1. Start by determining which of your IT capabilities are customer/end-user facing. Typical INPUT
capabilities that are considered customer facing include stakeholder relations, service
desk, requirements gathering, project management, etc. Ensure you consider your • In progress
customized or altered capabilities from Exercise 2.1. customized operating
model
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 OUTPUT

with a dotted line. Refer to the previous slide for an example of what this looks like.
• Finalized operating
4. Review the output of this exercise and consider if there is enough customer-facing model
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.

Info-Tech Research Group 64

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 INPUT
terms of what capabilities you need to have, the degree of centralization, and sourcing
planning. • Customized operating
model
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 OUTPUT
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 • Heat mapped
indicates that there are no desired capabilities for that specific intersection. operating model

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.

Refer to the following slide for an example.

Make changes to the operating model in the Organizational Design

Communications Deck

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 Heat Mapped Operating Model Example

GOVERNANCE
IT POLICY DATA QUALITY RISK CHANGE GOVERNANCE
GOVERNANCE MANAGEMENT GOVERNANCE GOVERNANCE (CAB)

PORTFOLIO STEERING

PLAN BUILD RUN

IT STRATEGY ENTERPRISE PORTFOLIO SERVICE DESK & OPERATIONS
ARCHITECTURE MANAGEMENT INCIDENT MGMT MANAGEMENT

INNOVATION APPLICATION PROJECT PROBLEM SERVICE

PORTFOLIO MGMT MANAGEMENT MANAGEMENT PORTFOLIO MGMT

RISK DATA REQUIREMENTS CHANGE DEMAND

MANAGEMENT ARCHITECTURE GATHERING MANAGEMENT MANAGEMENT
CUSTOMER

END USER
SECURITY SOLUTION RELEASE SECURITY

SOLUTIONS
RESOURCE
INITIATIVES

STRATEGY MANAGEMENT ARCHITECTURE MANAGEMENT DETECTION

STRATEGIC DATA & SYSTEM APPLICATION RESPONSE &

STAKEHOLDER
COMMUNICATION INTEGRATION MAINTENANCE RECOVERY
MANAGEMENT
APPLICATION INFRASTRUCTURE SECURITY
FINANCIAL WORKFORCE
DEVELOPMENT MANAGEMENT PREVENTION
MANAGEMENT STRATEGY

CONTRACT TESTING & QUALITY AVAILABILITY & ENTERPRISE

VENDOR
MANAGEMENT ASSURANCE CAPACITY MGMT CONTENT MGMT
PORTFOLIO MGMT

BI REPORTING & ASSET DATA

COMPLIANCE, MANAGEMENT
ANALYTICS OPERATIONS
AUDIT & REVIEW
ORGANIZATIONAL CHANGE INFRASTRUCTURE CONFIGURATION
ENABLEMENT PORTFOLIO MGMT MANAGEMENT

QUALITY MANAGEMENT

PERFORMANCE MEASUREMENT

LEGEND High Gap Medium Gap Low Gap

Info-Tech Research Group 66

University of Alabama at Birmingham saved $2-3M annually
by centralizing infrastructure in order to reduce redundancies
Industry Higher Ed
CASE STUDY Source Increasing IT Organizational Effectiveness, University of Alabama at
Birmingham

Problem Solution Results

• The ad hoc growth of the IT • They interviewed IT leadership • $2-3 million in annual savings
department and the highly and staff, as well as distributed due to a centralized
distributed IT service delivery an IT skills and activity survey to infrastructure environment that
and management environment all 400 IT staff in order to reduces redundancy and
have led to many duplications of develop an accurate management complexities.
services and a lack of both understanding of the current
• The current state assessment
standardized processes and state and to identify areas for
gave insight into the challenges
visibility into enterprise-wide IT enhancement (i.e. future state).
and gaps that existed while the
activity.
• They then developed a model, future state design leveraged
• University leadership perceived and a central IT organizational the organization’s strengths in
this environment as both high structure based on that model, developing a model that
risk and inefficient. They set out that centralized resources for balanced high-quality services
to improve IT operations and commodity IT services while with operating securely and
better align the IT organization preserving mission-specific efficiently.
to the strategic aims of the services in local units.
university.
• A 90-day transition plan was
developed and implemented.

Info-Tech Research Group 67

Checkpoint: Are you ready to create your organizational
sketch?

PHASE 2 PHASE 3

2 3
Customize the IT Operating Architect the Target-State IT
Model Organizational Structure

Self-Auditing Guidelines
 Have you augmented your list of IT capabilities to  Have you delineated between your customer-facing and
accurately reflect your future-state organizational non-customer-facing capabilities to clarify points of
structure? interaction with the customer?

 Have you rationalized the level of centralization for  Have you heat mapped your operating model based on
each of your IT capabilities and edited your your ability to deliver on each IT capability in the target
operating model accordingly? state organizational structure?

 Have you decided the sourcing strategy for each of  Have you shortlisted the highest priority capabilities on
your IT capabilities and migrated any outsourced your heat map that need the most immediate attention?
capabilities below external service providers?

 Have you documented your results in the Organizational Design Communications Deck?

Info-Tech Research Group 68

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
[email protected] 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
2.1 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
2.2 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.

Info-Tech Research Group 69

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:

Identify the target state of sourcing for your IT capabilities

Our analysts will walk you through a cost-benefit calculation of
2.3 centralizing/decentralizing your IT capabilities to land on whether or not 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
2.4 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
2.5 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.

Info-Tech Research Group 70

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:

Heat map your customized IT operating model

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

Info-Tech Research Group 71

PHASE 3
Architect the Target-State IT Organizational
Structure

Redesign Your IT Organizational Structure

Info-Tech Research Group Inc. is a global leader in providing IT research and advice.
Info-Tech’s products and services combine actionable insight and relevant advice with
ready-to-use tools and templates that cover the full spectrum of IT concerns.
© 1997-2018 Info-Tech Research Group Inc. Info-Tech Research Group 72
Phase 3: Architect the Target-State IT Organizational
Structure
PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 2 3 4
Craft Organizational Design Architect the Target-State Communicate the
Customize the IT
Principles and Select an IT IT Organizational Benefits of the New
Operating Model
Operating Model Structure Organizational Structure

ACTIVITIES: OUTCOMES:
• 3.1 Categorize your IT capabilities within your defined work • Conduct a RACI to determine the
units accountabilities and responsibilities for
• 3.2 Delineate accountabilities and responsibilities for each of delivering on IT’s capabilities
your IT capability sub-practices • Define the role(s) within each work unit
• 3.3 Use the Organizational Design Capability RACI Chart to • Create work unit mandates that
delineate responsibilities for each of your IT capability sub- communicate the intended function of each
practices work unit
• 3.4 Create a mandate statement for each work unit • Finalize your organizational structure
• 3.5 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.

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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.

Info-Tech Research Group 74

Use your customized operating model to build your work units

Example Work Units

WHAT ARE WORK UNITS?
A work unit is a functional group or division that Here is a list of typical work units you can use to
has a discrete set of processes or capabilities brainstorm what your organization’s should look
that it is responsible for, which don’t overlap with like. Some of these overlap in functionality, but
any others. Your customized list of IT capabilities should provide a strong starting point and hint at
will form the building blocks of your work units. some potential alternatives to your current way of
organizing.
Step one in the process of building your structure
is grouping IT capabilities together that are
• Office of the CIO
similar, or that need to be done in concert in the
• Strategy and Architecture
case of more complex work products.
• Architecture and Design
The second step is to iterate on these work units • Business Relationship Management
based on the organizational design principles • Projection and Portfolio Management
from Phase 1 to ensure that the future-state • Solution Development
structure is aligned with enablement of the • Solution Delivery
organization’s objectives. • DevOps
• Infrastructure and Operations
• Enterprise Information Security
• Security, Risk & Compliance
Download Info-Tech’s Work Unit
• Data and Analytics
Reference Structures to use while defining
your work units.

Info-Tech Research Group 75

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.

Criteria Description of Impact

High-priority processes often require more attention, have more work, or

are more visible. When you have multiple high-priority capabilities in one
Prioritization
work unit, do a sanity check to determine whether it’s realistic for one
work unit to be responsible for all of those capabilities.

Review each work unit and consider the level of effectiveness of each
process. Having multiple low effectiveness processes isn’t necessarily an
Effectiveness
issue, unless they are coupled with multiple high priority processes. If this
is the case, you may want to consider separating the work units.

The degree of specialization determines the scope of the roles within your
organization. If a work unit requires a significant amount of specialized
Specialization
knowledge, determine whether you’ll be able to find a director with that
level of specialization in all of the areas and consider redistributing.

Info-Tech Research Group 76

Activity: Categorize your IT capabilities within your defined
work units
3.1 1 hour

1. Using a whiteboard or large table top, list each capability from your operating model on a INPUT
sticky note and recreate your operating model. Use one color for centralized activities
and a second color for decentralized activities. • Organizational
business objectives
2. With the group of key IT stakeholders, review the operating model and any important • Operating model
definitions and rationale for decisions made.

3. Starting with your centralized capabilities, review each in turn and begin to form logical OUTPUT
groups of compatible capabilities. Review the decentralized capabilities and repeat the
process, writing additional sticky notes for capabilities that will be repeated in • Defined work units
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.

Document in the Organizational Design Communications Deck and the

Organizational Design Capability RACI Chart

Info-Tech Research Group 77

Work Unit Example

3.1 Example

Example of work unit capability distribution:

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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
INFO-TECH DELIVERABLE
Define the accountabilities and responsibilities for your
defined work units. Organizational Design Capability RACI Chart

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.

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Create mandates for each of your identified work units

WHAT ARE WORK UNIT Example Work Unit Mandates

MANDATES? • The Office of the CIO will be a strategic enabler of the IT

organization, driving IT organizational performance
The work unit mandate should provide a quick through improved IT management and governance. A
overview of the work unit, and be clear enough central priority of the Office of the CIO is to ensure that IT
that any reader can understand why the work unit is able to respond to evolving environments and
exists, what it does, and what it is accountable challenges through strategic foresight and a centralized
view of what is best for the organization.
for. Each mandate should be distinguishable
enough from your other work units to make it • The Project Management Office will provide standardized
clear why the work is grouped in this specific and effective project management practices across the IT
way, rather than an alternative option. landscape, including an identified project management
methodology, tools and resources, project prioritization,
Each work unit will have a unique mandate. The and all steps from project initiation through to evaluation,
mandate will vary by organization based on the as well as education and development for project
managers across IT.
agreed upon work units, design archetype, and
priorities. Don’t just adopt an example mandate • The Solutions Development Group will be responsible for
from another organization or continue use of the the high-quality development and delivery of new
organization’s pre-existing mandate – take the solutions and improvements, and production of
time to ensure it accurately depicts what that customized business reports. Through this function, IT
will have improved agility to respond to new initiatives
group is doing so that its value-added activities
and will be able to deliver high-quality services and
are clear to the larger organization. insights in a consistent manner.

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Create a mandate statement for each work unit

3.3 4 hours

1. Assign each team an equal or close to equal number of work units. INPUT
2. As a team, review the work unit’s responsibilities and brainstorm keywords to describe the • List of work units
unique role that the working unit will play. (Consider value, responsibility, decisions, and • RACI
authority.) • Defined roles

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 OUTPUT
changes wherever necessary.
• Work unit mandates

Document in the Organizational Design Communications Deck

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Identify the key roles and responsibilities for the target
IT organization

Now that you have identified the main units

WORK UNIT
of work in the target IT organization, it is time
to identify the roles that will perform that
Enterprise
work. PMO
Architecture
At the end of this step, the key roles will be
identified, the purpose statement will be ROLES
built, and accountability and responsibility for
Chief Enterprise Project Portfolio
roles will be clearly defined. Architect Manager
Make sure that accountability for each task
is assigned to one role only. If there are Enterprise Architect Program Manager
challenges with a role, change the role to
address them (e.g. split roles or shift
Data Architect Project Manager
responsibilities).

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.

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Activity: Define the roles inside your work units

3.4

1. Select a work unit from the organizational sketch. INPUT

2. Print a copy of the responsibilities and accountabilities of each work unit, from the • Work unit
Organizational Design Capability RACI Chart. Review each of the IT capability activities accountabilities and
and responsibilities for which the work unit is responsible and: responsibilities

• 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 OUTPUT
describe this.
• Target-state roles
• 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.

Info-Tech Research Group 83

Sample role profile (partially complete)

Work Unit Name: Infrastructure & Operations Role Name: Business Continuity Manager

Purpose Critical Competencies (Competence Level)

• Critical business functions will be available to key • Competency (competence level) TBD
stakeholders such as customers, suppliers, regulators,
and other entities that must have access to those
functions.

Accountabilities Key Responsibilities

• DSS04.03: Develop and implement a business • AI08.01: Nurture and facilitate a knowledge-sharing culture
continuity response • BAI08.05: Evaluate and retire information
• DSS04.04: Exercise, test, and review the BCP • DSS04.01: Define the business continuity policy, objectives,
• DSS04.06: Conduct continuity plan training and scope
• DSS04.08: Conduct post-resumption review • DSS04.02: Maintain a continuity strategy
• DSS04.05: Review, maintain, and improve the continuity plan
• DSS04.07: Manage backup arrangements
• MEA02.01: Monitor internal controls
• MEA02.03: Perform control self-assessments
• MEA02.04: Identify and report control deficiencies
• MEA03.02: Optimise response to external requirements

Info-Tech Research Group 84

 Activity: Finalize your organizational structure

3.5

1. Import each of your work units and the target-state roles that were identified for each. INPUT
2. In the place of the name of each work unit in your organizational sketch, replace the work unit • Activity 3.1 to 3.5
name with the prospective role name for the leader of that group.

CIO

OUTPUT
Enterprise Solution
Architecture
PMO
Development & BI
Infrastructure Operations Security & Risk
• Finalized
organizational
structure/sketch

CIO

Chief Enterprise Data & Analytics Infrastructure Operations

Director, PMO CISO
Architect Manager Manager Manager

3. Under each of the leadership roles, import the names of team members that were part of each
respective work unit. (Continued on next slide)

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 Activity: Finalize your organizational structure (continued)

3.5

CIO
INPUT

Chief Enterprise Data & Analytics Infrastructure Operations

• Activity 3.1 to 3.5
Director, PMO CISO
Architect Manager Manager Manager

CIO OUTPUT
• Finalized
Chief Enterprise
Director, PMO
Data & Analytics Infrastructure Operations
CISO organizational
Architect Manager Manager Manager
structure/sketch
Enterprise Service Desk
Project Manager DBA Network Engineer Risk Analyst
Architect Manager

Systems Service Desk

Solutions Architect Business Analyst Data Steward
Adminstrator Technician

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.

Document in the Organizational Design Communications Deck

Info-Tech Research Group 86

A government agency put RACI-driven accountability at the
forefront of its organizational restructuring initiative
Industry Government
CASE STUDY Source Master the Matrix Blog

Challenge Solution Results

A government agency was The agency undertook an By approaching this challenge with
presented with the challenge of organizational redesign process that role design and responsibility clarity
overseeing the operations of over would meet government directives front-and-center in the
200 organizations with a staff of 50 while streamlining organizational organizational redesign strategy,
employees. performance and its information they were able to provide a solid
systems. foundation that enables the long-
They were presented with a number term changes to implement their
of key challenges: The organization realized that a top- strategic direction.
down reorganization of roles was
• Many longstanding employees
necessary not only to meet needs, Key success highlights included:
may have been resistant to
but also to overcome any internal
change • RACI matrix driving new job
resistance to change that may come
• Need to streamline reporting descriptions
from the initiative.
structures • Buy-in from all levels of the
• Need for adaptability to strategic organization due to the
Part of their methodology was to
planning revisions every 2-4 transparency of the process
conduct a detailed RACI matrix to
years in line with changes in • Team members begin to feel like
account for all actions and
government policy they are part of the solution, not
processes and promote a culture of
part of the problem
transparency and inclusion.

Info-Tech Research Group 87

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

PHASE 3 PHASE 4

3 4
Communicate the Benefits of
Architect the Target-State IT
the New Organizational
Organizational Structure
Structure

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

 Have you documented your results in the Organizational Design Communications Deck?

Info-Tech Research Group 88

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
[email protected] 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

3.1 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
3.2
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.

Info-Tech Research Group 89

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:

Define the roles inside your work units

Our analyst team will help you define the roles within your work units and distribute
3.3 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
3.4 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

3.5 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.

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PHASE 4
Communicate the Benefits of the New
Organizational Structure

Redesign Your IT Organizational Structure

Info-Tech Research Group Inc. is a global leader in providing IT research and advice.
Info-Tech’s products and services combine actionable insight and relevant advice with
ready-to-use tools and templates that cover the full spectrum of IT concerns.
© 1997-2018 Info-Tech Research Group Inc. Info-Tech Research Group 91
Phase 4: Communicate the Benefits of the New Organization
Structure
PHASE 1 PHASE 2 PHASE 3 PHASE 4

1 2 3 4
Craft Organizational Design Architect the Target-State Communicate the
Customize the IT
Principles and Select an IT IT Organizational Benefits of the New
Operating Model
Operating Model Structure Organizational Structure

ACTIVITIES: OUTCOMES:
• 4.1 Conduct a stakeholder analysis to identify the impact and • A communication strategy tailored to all
level of resistance from all stakeholders relevant stakeholders
• 4.2 Create a communications plan tailored to the interests of • A frequently asked questions list that will
each of your respective stakeholders allow proactive addressing of concerns and
• 4.3 Create an FAQ to address common questions and address common questions from impacted
concerns around your restructuring stakeholders.
• 4.4 Finalize your Organizational Design Communications Deck • A finalized organizational design deliverable
by summarizing your vision and key design principles 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.
Info-Tech Research Group 92
Make a plan to effectively manage and communicate the
change
Success of your new Key challenges for CIOs completing organizational design
organizational structure hinges
on adequate preparation and 2% 3%
effective communication.
8%
23%
The top challenge facing
organizations in completing the 9%
organizational redesign is their
organizational culture and
acceptance of change. Effective 15%
planning for the implementation
and communication throughout the
change is pivotal. 40%

Make sure you understand how the

change will impact staff and create
Skill assessment/alignment
tailored plans for communication.
Organizational culture (acceptance for change)
Length of implementation (benefits realization)
Lack of strategic direction
Misalignment of business needs to IT services
Formal protection against change (union/contract, other)
Other
Info-Tech Research Group Webinar Survey, 2014; N=87

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Activity: Conduct a stakeholder analysis to identify the impact
and level of resistance from all stakeholders
4.1

1. Through discussion, generate a complete

Supporter
list of stakeholders for requirements
gathering and record the names on the Neutral
whiteboard / flip chart. Group related Focused Engagement Key Players Resister
stakeholders together.

Influence over others

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
Minimal Engagement Keep Informed
stakeholder impact progress?
• Involvement: How involved is the
stakeholder in this already?
• Support: Label supporters with
green sticky notes, resisters with
Impact by changes
red notes, and the rest with a third
color. High involvement with
4. Based on the assessment, write the High influence with low lower influence? Make
stakeholder’s name on a green, red, or involvement? You need sure to keep these
other colored sticky note, and place the a strategy to increase stakeholders informed at
engagement. regular intervals and
sticky note in the appropriate place on the
monitor engagement.
power map.
Info-Tech Research Group 94
Activity: Conduct a stakeholder analysis to identify the impact
and level of resistance from all stakeholders (continued)
4.1

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 have the
ability to 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
RISK

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.

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

Five elements of communicating change

Leaders of successful change spend considerable
time developing a powerful change message, i.e. a
compelling narrative that articulates the desired end
What is the
state, and that makes the change concrete and change?
meaningful to staff.
What will the
The organizational change message should: role be for
each Why are we
• Explain why the change is needed. department doing it?
• Summarize what will stay the same. and
individual?
• Highlight what will be left behind. COMMUNICATING
THE CHANGE
• Emphasize what is being changed.
• Explain how change will be implemented.
• Address how change will affect various roles in
the organization.
How long will How are we
• Discuss the staff’s role in making the change it take us to going to go
successful. do it? about it?

Source: The Qualities of Leadership: Leading Change

Info-Tech Research Group 96

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.

One-on-ones with key stakeholders Reorganization kick-off meeting Work unit meetings

Reasoning: Don’t blindside Reasoning: Make sure everyone is Reasoning: Allow team members to
employees with the changes in the given the same information and get to know each other and their
group meetings. understands how it fits together. new manager and level set
• High-level explanation of the change • Detailed explanation of the change expectations.
and the reasons behind it. – covering full communication • Detailed explanation of the change
• Detailed explanation of their role details. to the specific work unit.
within the organization – and • Detailed explanation of the • Detailed explanation of the work
detailed explanation of the changes structure. unit mandate, responsibilities, and
in their role. • Detailed explanation of the work roles.
• Question and answer period. unit responsibilities and reporting • Detailed explanation of the work
• Detailed explanation of their work structure. unit reporting structure and metrics.
unit structure. • Question and answer period. • Question and answer period.

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

• The core message must be consistent regardless of • Say what you mean and mean what you say.
audience, channel, or medium. • Choice of language is important: “Do you think this is
• Test your communication with your team or a good idea? I think we could really benefit from your
colleagues to obtain feedback before delivering to a insights and experience here.” Or do you mean: “I
broader audience. think we should do this. I need you to do this in order
• A lack of consistency can be interpreted as an attempt to make it happen.”
at deception. This can hurt credibility and trust. • Don’t use jargon.

Be Relevant Be Concise

• Talk about what matters to the stakeholder. • Keep communication short and to the point so key
• Talk about what matters to the initiative. messages are not lost in the noise.
• Tailor the details of the message to each • There is a risk of diluting your key message if you
stakeholder’s specific concerns. include too many other details.
• IT thinks in processes but stakeholders only care
about results: talk in terms of results. We tend to use a lot of jargon in our discussions,
• IT wants to be understood but this does not matter to
stakeholders. Think: “what’s in it for them?”
and that is a sure fire way to turn people away. We
• Communicate truthfully; do not make false promises realized the message wasn’t getting out because the
or hide bad news. 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

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Communication Mediums – Traditional

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

Email Email announcements are necessary for every organizational change initiative but are
never sufficient. Treat email as a formalizing medium, not a medium of effective
communication when organizational change is concerned. Use email to invite people to
in-person meetings, make announcements across teams and geographical areas at the
same time, and share formal details.
Team Meeting Team meetings help sell change. Body language and other in-person cues are
invaluable when trying to influence people. Team meetings also provide an opportunity
to gauge a group’s response to an announcement and gives the audience an
opportunity to ask questions and get clarification.
One-on-One One-on-ones are more effective than team meetings in their power to influence and
gauge individual responses, but they aren’t feasible for large numbers of stakeholders.
Use one-on-ones selectively: identify key stakeholders and influencers who are most
able to either advocate change on your behalf or provide feedback (or both).
Internal Site / Internal sites and repositories help sustain change by making knowledge available after
Repository the implementation. People don’t retain information very well when it isn’t relevant to
them. Much of their training will be forgotten if they don’t apply that knowledge for
several weeks or months. Use internal sites and repositories for how-to guides and
standard operating procedures.

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Communication Methods – Multimedia

Method Best Practices

User Interface User interface (UI) design is overlooked as a communication method. Often a simple UI
Design refinement with the clearer prompts or warnings is more effective and efficient than
additional training and repeated email reminders.
Social Media Social media is widely and deeply embraced by people publicly, and is increasingly
useful within organizations. Look for ways to leverage existing internal social tools.
Avoid trying to introduce new social channels to communicate change unless social
transformation is within the scope of the core project’s goals; the social tool itself might
become as much of an organizational change management challenge as the original
project.
Posters & Posters and other marketing collateral are common communication tools in retail and
Marketing hospitality industries that change managers in other industries often don’t think of.
Collateral Making key messages a vivid, visual part of people’s everyday environment is a very
effective way to communicate. On the down side, marketing collateral requires
professional design skills and can be costly to create. Professional copywriting is also
advisable to ensure your message resonates.
Video Videos are well worth the cost to produce when the change is transformational in nature.
Videos are useful for both communicating the vision and as part of the training plan.

Info-Tech Research Group 100

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.
INPUT
• Business stakeholders, end users, IT department, etc.
• Prioritized list of
2. Identify the frequency with which you will communicate to that group. Stakeholders

3. Determine the scope of the communication:

• What key information needs to be included in the message to ensure OUTPUT
they are informed and on board?
• Communication plan
• 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.

Audience Purpose Communication Type Communicator Timing

All IT Staff • Introduce and explain • Team Meeting CIO • Sept 1 – Introduce new
operating model structure
• Communicate structural • Sept 15 – TBD
changes • Sept 29 – TBD

Document in the Organizational Design Communications Deck

Info-Tech Research Group 101

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
INPUT
stakeholders/stakeholder groups, review the scope of the communications to
identify key similarities in themes or message. • Prioritized list of
stakeholders
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? OUTPUT
• What does the new organizational structure look like? • Communication plan
• 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.

Document in the Organizational Design Communications Deck

Info-Tech Research Group 102

FAQ Examples

Question Response
IT employees have always been committed to providing excellent solutions and support to the
organization. However, the demands of the business have resulted in an ever-increasing project
workload, and our ability to prioritize and meet business demands from a time and cost perspective has
been stretched. We have a tremendous amount of skills and expertise on our team, but we need to find
a way to leverage these as well as our tools and resources more effectively to meet this growth.
What is the Additionally, with each implementation, our environment has become increasingly complex and in order
objective of the IT to meet service levels and sustain a stable production environment, teams have been realigned.
organization?
One of our primary objectives for the new organization is to create new and better ways to measure our
performance in terms of how we operate and deliver services to the business. We will be looking at how
we execute and deliver projects, the quality of our operations, and how we integrate new products and
services. We are documenting an end-to-end software development lifecycle (SDLC) and will be
preparing an IT services catalog and identifying service levels for our services.
A high-level overview of the organizational structure has been attached for your reference; however, not
all of the organizational layers have been finalized. We can tell you that some groups will have little or
What does the new no change in reporting relationships or job responsibilities, while others may have new management
team members or additional or different responsibilities assigned. We will continue to share details of
organizational
structure look like? the plan with you as they develop.
(Note: Everyone should at least receive a copy of the high-level framework in addition to the director-
level org chart; however, it would be great if the entire presentation was made available to employees.)
What are the We believe that this reorganization will increase opportunities for IT-led innovation, introduce
benefits to our IT opportunities to grow the IT organization, increase career growth opportunities and transparency
staff? around development, and help with capacity planning and constraints within the IT organization.

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FAQ Examples

Question Response
How will the IT
management team As the organization structure evolves, we will continue to keep you informed. There will be team
share new meetings to discuss roles and responsibilities and plan the transition, and we will continue to update
information with you accordingly.
me?
To keep up with the demands of technology and the business, we must grow and change. We
understand that people react to and deal with change differently, and we will work to make the transition
What is my role
as smooth and as successful as possible. There will be times when you have questions that we are not
during this
able to answer at that particular moment; we ask for your patience and understanding during the
transition?
process. As a valued member of the IT team, we ask for your support and commitment to building a
strong IT organization.
What impact is There may be changes at various levels depending on job function. The VPs have their new
there to reporting assignments, as do the directors. As we work through the reporting relationships for the senior
relationships within managers/managers and their work groups, directors will be holding meetings with you to discuss any
my department? changes.
We expect that all reporting relationships will be defined by mid-September.

At this point, please continue to perform your role as usual unless your manager indicates differently.
When will I know
Our top priority over the next two months is to continue to meet our project and operational
whether my role
deliverables, while implementing the transition.
and responsibilities
will change? Your manager will communicate any changes in your role and responsibilities as soon as they are
defined, and if you are transitioning to another manager or a new job, they will support you in your
transition.

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

Purpose
INFO-TECH DELIVERABLE
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.

Info-Tech Research Group 105

Continue your momentum toward implementation by
following Info-Tech’s methodology
PART 1: DESIGN PART 2: STRUCTURE PART 3: IMPLEMENT

IT Organizational Organizational Organizational Organizational Transition Implement

Architecture Sketch Structure Chart Strategy Structure

 Define the  Assign work to • Validate • Determine • Form an OD • Train managers

organizational work units organizational number of implementation to lead through
design (accountabilities sketch. positions per team. change.
objectives. and • Analyze job. • Develop change • Define and
 Develop responsibilities). workforce • Conduct vision. implement
strategically  Define roles by utilization. competency • Build stakeholder
aligned capability work unit. • Define assessment. communication engagement
map.  Turn roles into competency • Assign staff to presentation. plan.
 Build future IT jobs. framework. jobs. • Identify and plan • Develop
operating model.  Define reporting • Identify • Build a change projects. individual
 Define the future relationships competencies workforce and • Develop transition plans.
state work units. between jobs. required for staffing plan. organizational • Implement
 Create future  Assess options jobs. transition plan. transition plans.
state work unit and select go-
mandates. forward
organizational Risk Management: Create, implement, and monitor risk management plan.
sketch.
HR Management: Develop job descriptions, conduct job evaluation, develop compensation
packages.

Monitor & Sustain Stakeholder Engagement

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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: Long term:

• Set up skills and development plans for • Continually assess the success of your
employees whose roles are changing. structure.
• Conduct multiple check-ins with function heads • Adopt your new department structure choices
over the first three to six months of the project to inform succession planning, professional
to get feedback and address any challenges development, training opportunities, and
that arise. hiring. These steps will ensure that you are
continually addressing potential gaps and
• Be prepared to listen to employee feedback and shortages.
complaints. Expect some pushback, and be • Get business input continually to ensure that
creative and compassionate in dealing with it. your structure is suited toward accommodating
future goals; the business is bound to keep
changing, and your department has to 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

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A manufacturing organization overcame inexperience with
organizational redesign through effective communications
Industry Manufacturing
CASE STUDY Source CIO Testimonial

Challenge Solution Results

The IT department had not The implementation team ran a The reorganization was well
undergone a major reorganization in workshop for all of the managers in accepted by the staff due to the
several years. When they last the department to train them on the positive reinforcement from their
reorganized, they experienced high change and how to communicate managers. Rumors and gossip
turnover and decreased business the impending changes to their staff. about the reorganization were under
satisfaction with IT. The workshop included information control and the staff adopted the
on resistance and conflict resolution. new organizational structure quickly.
Many of the managers were new to
their roles and only one of them had The workshop was conducted early Engagement levels of the staff
been around for the earlier on in the planning phases of the were maintained and actually
reorganization. They lacked reorganization so that any rumors or improved by 5% immediately after
experience in leading their staff gossip could be addressed properly. the reorganization.
through major organizational
changes. Voluntary turnover was minimal
throughout the change as opposed
One of the major problems they to the previous reorganization where
faced was addressing the concerns, they lost 10% of their staff. There
fears, and resistance of their staff was an estimated cost savings of
properly. $250,000–$300,000.

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

PHASE 4

4
Communicate the Benefits of
the New Organizational
Structure

Self-Auditing Guidelines
 Have you identified the key stakeholders that must  Have you conducted a final review of your operating
be communicated with about the upcoming changes model and new organizational structure and feel prepared
to the organizational structure? to communicate it to the rest of the organization?

 Have you conducted an analysis of those  Have you prepared to address any questions or concerns
stakeholders to identify the most effective means that may arise from the change necessary to meet the
and type of communication? new organizational structure?

 Have you tailored a communication plan that

pinpoints the frequency and scope of
communications for specific stakeholder groups?

 Have you fully completed your Organizational Design Communications Deck?

Info-Tech Research Group 109

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
[email protected] 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
4.1 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
4.2 Our analyst team will assist you in creating a communications plan to address each
stakeholder and their respective interests.

Info-Tech Research Group 110

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:

Create an FAQ to address common questions and concerns around

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

Finalize your Organizational Design Communications Deck by

summarizing your vision and key design principles
4.4 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.

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Summary of accomplishment

Knowledge Gained Deliverables Completed

• An understanding of what organizational redesign constitutes at its practical core, and how to effectively
succeed in designing your future-state organization.
• The importance of design principles and operating models in remaining strategic and adaptive as an
organization.
• The importance of separating role design from individuals to ensure that the organization is aligned to
its future-state capabilities rather than its current-state competencies.
• The significance of effective communications in seeing the new structure from paper into practice.

Deliverables Completed

• A list of organizational design principles customized to the strategic needs and desires of the
organization.
• A customized operating model that can be used to visualize the way IT creates value to the business and
as a baseline framework of analysis for future organizational change decision making.
• An operating model heat map that will provide a foundational analysis for where IT needs to place its
efforts to reach its future-state structure.
• A new organizational structure that includes work units, work unit mandates, strategically-aligned role
design, and clear accountabilities and responsibilities for the organizational roles.
• An overarching Organizational Design Communications Deck that can walk key stakeholders through
key data inputs, decision-making points, and the strategic rationale for buying-in to the IT organizational
redesign process.

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Select Bibliography
Aronowitz, S. et al. “Getting organizational redesign right: Companies will better integrate their people, processes, and structures by
following nine golden rules.” McKinsey Quarterly. June 2015.
Blenko, M. et al. “Winning Operating Models That Convert Strategy to Results.” Bain and Company. 10 December 2014.
Cable, Steve. “Design Principles - a guide.” cxpartners. 18 June 2015.
Cornelius & Associates. “The Qualities of Leadership: Leading Change.” 2010.
Deloitte. “Global Human Capital Trends 2016 – The new organization: different by design.” Deloitte University Press. 2016. Accessed 10
June 2017.
Fisher, Wayne and Katie Kinnemeyer. “Organizational Design for Innovation: Applying the Creative Solving Process to Drive Innovation
Effectiveness.” Rockdale Innovation. 2015.
Hanover Research. “Best Practices in Matrix Organizational Structures.” Hanover Research. December 2013.
IT4Business. “IT Standard for Business – A model for business-driven IT management.” Accessed 12 May 2017.
Master The Matrix blog. “Putting role clarity at the forefront of organizational restructuring paves the way to success.” Role Clarity Case
Study. Nov. 2012.
McKinsey & Company. “McKinsey On Organization: Agility and Organization Design.” Accessed May 2017.
Morales Pedraza, Jorge. Answer to posting, “What is the relationship between structure and strategy?” ResearchGate.net.
Nielson, et al. “10 Guiding Principles Of Organization Design.” Forbes Magazine. 1 April 2015.
Reiser, Stephen, and Andy Short. “A new era begins: Redesigning the IT organization for a period of exponential change.” IBM Institute
for Business Value. April 2013.
Roy, Somak. “Plan-Build-Run: the Divide-and-Conquer Style of IT.” iSG Insights. Accessed 12 May 2017.
Shapiro, Don. “Strategy follows structure, structure supports strategy.” First Concepts Consultants, Inc. 31 October 2012.
Stephenson, Richard N. “Effective Organizational Design: Best Practices To Grow By.” RichardStep. 10 May 2013.
Toma, Andrew, Fabrice Roghe, Brad Noakes, Rainer Strack, Julie Kilmann, and Ralf Dicke. “Flipping the Odds for Successful
Reorganization.” The Boston Consulting Group. April 2012.
Zia-ur-Rehman, Azhar. “Using COBIT for IT Organizational Design.” ISACA. 19 December 2016.

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APPENDIX
Centralization and Decentralization Models

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

Benefits of a centralized service desk: A successful consolidation can significantly reduce cost per
transaction, speed up service delivery, and improve the
End- customer experience through:
user • Single point of contact for end users.
group • Integrated ITSM solution where it makes sense.
#1
• Standardized processes.
• Staffing integration.

Centralization Outcome Expected Benefit

End- End- Integrated information The capacity to produce quick,

user Consolidated user accurate, and segmented reports
group Service Desk group of service levels across the
#4 #2
organization.
Integrated staffing Flexible management of
resources that better respond to
organizational needs.
End- Integrated technology Reduced tool procurement costs,
user improved data integration, and
group
#3 increased information security.
Standardized processes Efficient and timely customer
service and a more consistent
customer experience.

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

1. Decentralized When to Use:

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

Example: Apps Manager

Global CRM Global ERP Global Reporting

Designers Designers Designers

Developers Developers Developers

Testers Testers Testers

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Federated application teams enable a balance between
responsiveness and centralized control
When to Use:
1. Decentralized
• Verticals have common processes or expertise.
• Greater control is required over specific area(s) while others can be delegated.
2. Federated
• Services are outsourced to third parties.
3. Centralized 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.

Example: Apps Manager

Global Reporting Americas EMEA ASPAC

Designers Designers Designers

Developers Developers Developers

Testers Testers Testers

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Centralized application teams allow for higher efficiency and
scales of economy by leveraging a shared resource pool
When to Use:
1. Decentralized
• Global rollout is necessary.
2. Federated
• Consistency is essential to execution.
• Innovation should immediately benefit everyone.
3. Centralized 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.

Example:

Apps Manager

Global Designers Global Developers Global Testers

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