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Is your IT operating model making your firm less competitive?

Gordon Barnett

Is Your IT Operating Model A Speed Bump In Waiting?

One of the biggest lessons learned during the pandemic was that being adaptive to change is extremely valuable in all areas of the enterprise. When a firm has to quickly pivot to meet a new need, no one wants to be the speed bump that slows down the pace of transformation.

If you’re a technology executive, you might know what I’m going to say next: Traditional technology models are not adaptive. They’re based on resource pools of skills (enterprise architects, application developers, project managers, etc.) when they should be built around a network of work-based operating units (products, services, customers, or platforms). As a result, CIOs have struggled to meet business needs and expectations in times of volatility and change. In other words, the technology organization has become the speed bump.

What’s the benefit of organizing your IT organization around work-based operating units? When the overall company adapts its models to meet new customer needs, the IT organization can pivot more easily to meet the new needs.

To help CIOs develop the adaptive IT structure, we recently developed five design principles to keep in mind:

  1. Adaptivity rather than scalability. The IT org design should enable reconfiguration and organizational learning to allow adaptation rather than focusing purely on scaling capability for growth.
  2. Networked activities over individual jobs. Your IT organization structure provides a network of activities making up the whole rather than a collection of individual jobs, roles, or functions.
  3. Autonomous over directed control. Having work boundaries that are self-governing rather than supervisor-governed increases innovation, employee loyalty, and customer satisfaction and decreases misconduct.
  4. Multiskilling over single skilling. The design should focus on redundancy of functions and overlap rather than on the redundancy of parts. For example, producer operating units may be designed to incorporate and develop competencies across the unit, rather than depend on a centralized team or function to deliver the competency.
  5. Evolution over target state. The IT organization design process should be continuous to enable the structure to adapt to the organization’s evolution, rather than being a project with a fixed timeline and a rigid end state.

Given the continuing nature of change in business today, spending time on fixed IT organizational structures is a mistake. Instead of developing your technology organization structure based on your current needs, design it to be adaptive and support the innovation your business requires.

Because no one wants to be the speed bump.