Redesign Your IT

Organizational Structure
Designing an IT structure that will enable your strategic vision
is not about an org chart – it’s about how you work.

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Table of
Contents
3 Executive Brief Organizational Structure

4 Analyst Perspective 98 Phase 4: Plan for Implementation &

Change
5 Executive Summary
115 Concluding Slides
25 Phase 1: Establish the Organizational
Redesign Foundation 117 Bibliography

45 Phase 2: Create the Operating Model 120 Appendix

Sketch

77 Phase 3: Formalize the

Info-Tech Research Group | 2

Redesign Your IT
Organizational Structure
Designing an IT structure that will enable your strategic vision
is not about an org chart – it’s about how you work.

EXECUTIVE BRIEF
Analyst
Perspective
Structure enables strategy.
An organizational structure is much more than a chart with titles and names. It defines the
way that the organization operates on a day-to-day basis to enable the successful
delivery of the organization’s information and technology objectives. Moreover,
organizational design sees beyond the people that might be performing a specific role.
People and role titles will and often do change frequently. Those are the dynamic elements
of organizational design that allow your organization to scale and meet specific objectives at
defined points of time. Capabilities, on the other hand, are focused and related to specific IT
processes.
Redesigning an IT organizational structure can be a small or large change transformation for
Allison Straker​ Brittany Lutes your organization. Create a structure that is equally mindful of the opportunities and
Research Director, Organizational Senior Research Analyst, Organizational the constraints that might exist and ensure it will drive the organization towards its vision
Transformation Transformation
with a successful implementation. If everyone understands why the IT organization needs to
be structured that way, they are more likely to support and adopt the behaviors required to
operate in the new structure.

Info-Tech Research Group | 4

Executive Summary
Your Challenge Common Obstacles Info-Tech’s Approach
Your organization needs to reorganize itself Many organizations struggle when it comes Successful IT organization redesign includes:
because: redesigning their IT organizational structure
• Understanding the drivers, context, and
because they:
• The current IT structure does not align to the strategies that will inform the structure.
strategic objectives of the organization. • Jump right into creating the new organizational
• Remaining objective by focusing on capabilities
chart.
• There are inefficiencies in how the IT function over people or roles.
is currently operating. • Do not include the members of the IT leadership
• Identifying gaps in delivery, sourcing strategies,
team in the changes.
• IT employees are unclear about their role and customers, and degrees of centralization.
responsibilities, leading to inconsistencies. • Do not include the business in the changes.
• Remembering that organizational design is a
• New capabilities or a change in how the • Consider the context in which the change will change initiative and will require buy-in.
capabilities are organized is required to support take place and how to enable successful
the transformation. adoption.

Info-Tech Insight
A successful redesign requires a strong foundation and a plan to ensure successful adoption. Without these, the organizational chart has little meaning
or value.

Info-Tech Research Group | 5

 Organizational design is a challenge for
Your challenge many
IT and digital executives
This research is designed to help organizations
who are looking to:

• Redesign the IT structure to align to the strategic objectives of

the enterprise.
69%
of digital executives surveyed
• Increase the effectiveness in how the IT function is operating in indicated challenges related to
the organization. structure, team silos, business-IT
alignment, and required roles when
• Provide clarity to employees around their roles and executing on a digital strategy.
responsibilities.
• Ensure there is an ability to support new IT capabilities and/or Source: MIT Sloan, 2020

align capabilities to better support the direction of the

organization.
• Align the IT organization to support a business transformation
such as becoming digitally enabled or engaging in M&A
activities. Info-Tech Research Group | 6
Common obstacles Succeed in Organizational Redesign
These barriers make IT organizational redesign
difficult to address for many organizations:

The percentage of change efforts

• Confuse organizational design and organizational charts as the same that fail.
thing. 75%
Source: TLNT, 2019
• Start with the organizational chart, not taking into consideration the
foundational elements that will make that chart successful.
• Fail to treat organizational redesign as a change management
initiative and follow through with the change.
• Exclude impacted or influential IT leaders and/or business
The percentage of practitioners who
stakeholders from the redesign process.
identify how information flows
• Leverage an operating model because it is trending. between work units as a challenge for 55%
their organization.
To overcome these barriers:
Source: Journal of Organizational Design, 2019

• Understand the context in which the changes will take place.

• Communicate the changes to those impacted to enable successful

adoption and implementation of a new organizational structure.
Info-Tech Research Group | 7
• Understand that organizational design is for more than just HR leaders
Organizational IT organizational design refers to the process of aligning the
design defined organization’s structure, processes, metrics, and talent to the
organization’s strategic plan to drive efficiency and effectiveness.
If your IT strategy is your map, your IT
organizational design represents the optimal path to
Why is the right IT organizational design so critical to success?
get there.
Adaptability is at the core of Structure is not just an Organizational design is a
staying competitive today organizational chart never-ending process

Digital technology and The design of your Organization design is not a

information transparency are organization dictates how one-time project but a
driving organizations to roles function. If not continuous, dynamic process
reorganize around aligned to the strategic of organizational self-learning
customer responsiveness. To direction, the structure will and continuous improvement.
remain relevant and act as a bungee cord and Landing on the right
competitive, your pull the organization back operating model will provide
organizational design must toward its old strategic a solid foundation to build
be forward looking and ready direction upon as the organization
to adapt to rapid pivots in (ResearchGate.net, 2014). adapts to new challenges and
technology or customer Structure supports opportunities.
demand. strategy, but strategy also
follows structure.

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Understand the organizational differences
Organizational Organizational
Operating Model Organizational Chart
Design Structure

Organizational design the process Operating models provide an The organizational structure is the The capstone of this change
in which you intentionally align architectural blueprint of how IT chosen way of aligning the core initiative is an easy-to-read chart
the organizational structure to the capabilities are organized to processes to deliver. This can be that visualizes the roles and
strategy. It considers the way in deliver value. The placement of strategic, or it can be ad hoc. We reporting structure. Most
which the organization should the capabilities can alter the recommend you take a strategic organizations use this to depict
operate and purposely aligns to culture, delivery of the strategic approach unless ad hoc aligns to where individuals fit into the
the enterprise vision. vision, governance model, team your culture and delivery method. organization and if there are
focus, role responsibility, and vacancies.
This process often considers A good organizational structure
more.
centralization, sourcing, span of will include: “someone with While this should be informed by
control, specialization, authority, Operating model sketches should authority to make the decisions, a the structure it does not
and how those all impact or are be foundational to the division of labor and a set of rules necessarily depict workflows that
impacted by the strategic goals. organizational design process, by which the organization will take place. Moreover, this is
providing consistency through org operates” (Bizfluent, 2019). the output of the organizational
chart changes. design process.
Sources:
Bizfluent, 2019; Strategy & Business, 2015; SHRM, 2021
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The Technology Value All three elements of the Technology Value Trinity work in harmony

Trinity to delivery business value and achieve strategic needs. As one

changes, the others need to change as well.

How do these three elements relate?

• Digital and IT strategy tells you what you need to achieve to be
Delivery of successful.
Business DIGITAL & TECHNOLOGY STRATEGY • Operating model and organizational design align resources to
Value & The identification of objectives deliver on your strategy and priorities. This is done by
and initiatives necessary to
Strategic achieve business goals.
strategically structuring IT capabilities in a way that enables the
Needs organizations vision and considers the context in which the
structure will operate.
• I&T governance is the confirmation of IT’s goals and strategy,
which ensures the alignment of IT and business strategy and is
IT OPERATING MODEL I&T GOVERNANCE the mechanism by which you continuously prioritize work to
The model for how IT is Ensures the organization ensure that what is delivered is in line with the strategy.
organized to deliver on and its customers extract
business needs and maximum value from the
strategies. use of information and
technology. Too often strategy, organizational design, and governance are
considered separate practices – strategies are defined without teams
and resources to support. Structure must follow strategy.

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Info-Tech’s approach to organizational design

Like a story, a strategy without a structure to deliver on it is simply words on paper.

Conclude your story through

Books begin by setting the
change management and
foundation of the story.
communication.
Introduce your story by: Good stories don’t end without referencing
• Defining the need(s) that are driving what happened before.
this initiative forward. Use the literary technique of
• Introducing the business context in foreshadowing – your change
which the organizational redesign must management must be embedded
take place. throughout the organizational redesign
• Outlining what’s needed in the redesign process.
to support the organization in reaching This will increase the likelihood that the
its strategic IT goals. organizational structure can be
communicated, implemented, and
reinforced by stakeholders.
The plot cannot thicken without the foundation. Your organizational structure and
chart should not exist without one either.
The steps to establish your organizational chart - with functional teams, reporting structure, roles, and
responsibilities defined – cannot occur without a clear definition of goals, need, and context.
An organizational chart alone won’t provide the insight required to obtain buy-in or realize the necessary
changes. Info-Tech Research Group | 11
Info-Tech Research Group | 12
Info-Tech uses a
capability-based
approach to help
you design your
organizational
structure

Financial
Management

Once your IT strategy is defined, it is

critical to identify the capabilities that are
required to deliver on those strategic
initiatives.

Each initiative will require a combination of

these capabilities that are only supported
through the appropriate organization of
Info-Tech Research Group | 13
roles, skills, and team structures.
Embed change management into organizational
design
Change management practices are needed from the onset to ensure the implementation of
an organizational structure.

For each phase of this blueprint, its important to consider change management. These are the points when you need to communicate the structure
changes:
• Phase 1: Begin to socialize the idea of new organizational structure with executive leadership and explain how it might be impactful to the
context of the organization. For example, a new control, governance model, or sourcing approach could be considered.
• Phase 2: The chosen operating model will influence your relationships with the business and can create/eliminate silos. Ensure IT and business
leaders have insight into these possible changes and a willingness to move forward.
• Phase 3: The new organizational structure could create or eliminate teams, reduce or increase role responsibilities, and create different reporting
structures than before. It’s time to communicate these changes with those most impacted and be able to highlight the positive outcomes of the
various changes.
• Phase 4: Should consider the change management practices holistically. This includes the type of change and length of time to reach the end
state, communication, addressing active resistors, acquiring the right skills, and measuring the success of the new structure and its adoption.
Info-Tech Insight
Do not undertake an organizational redesign initiative if you will not engage in change management practices that are required to ensure its successful
adoption.

Info-Tech Research Group | 14

Measure the value of the IT
organizational redesign
Given that the organizational redesign is intended to align with the overall vision and objectives of the business, many of the metrics that support its
success will be tied to the business. Adapt the key performance indicators (KPIs) that the business is using to track its success and demonstrate how IT can
enable the business and improve its ability to reach those targets.

The percentage of resources dedicated to strategic priorities and initiatives supported by IT operating model. While
operational resources are necessary, ensuring people are allocating time to strategic initiatives as well will drive the
Strategic Resources business towards its goal state. Leverage Info-Tech’s IT Staffing Assessment diagnostic to benchmark your IT
resource allocation.

Assess the improvement in business satisfaction overall with IT year over year to ensure the new structure continues
Business Satisfaction to drive satisfaction across all business functions.
Leverage Info-Tech’s CIO Business Vision diagnostic to see how your IT organization is perceived.

The degree of clarity that IT employees have around their role and its core responsibilities can lead to employee
Role Clarity engagement and retention.
Consider measuring this core job driver by leveraging Info-Tech’s Employee Engagement Program.

Measure customer satisfaction with technology-enabled business services or products and improvements in technology-
Customer & User Satisfaction enabled client acquisition or retention processes. Assess the percentage of users satisfied with the quality of IT service
delivery and leverage Info-Tech’s End-User Satisfaction Survey to determine improvements.

Info-Tech Research Group | 15

Info-Tech’s methodology for Redesigning Your IT
Organization

1. Establish the 3. Formalize the 4. Plan for

2. Create the Operating
Phase Organizational Design Organizational Implementation and
Model Sketch
Foundation Structure Change

Select and customize an

operating model sketch that
Lay the foundation for your Translate the operating Ensure the successful
will accurately reflect the
organizational redesign by model sketch into a implementation of the
future state your
Phase establishing a set of formal structure with new organizational
organization is striving
Outcomes organizational design
towards. Consider how
defined functional teams, structure by strategically
principles that will guide the roles, reporting structure, communicating and
capabilities will be sourced,
redesign process. and responsibilities. involving stakeholders.
gaps in delivery, and
alignment.

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Insight Overarching insight
summary Organizational redesign processes focus on defining the ways in which you want to operate and deliver on your
strategy – something an organizational chart will never be able to convey.

Phase 1 insight Phase 2 insight Phase 3 insight Phase 4 insight

Focus on your An operating model If you follow the steps Throughout the creation
organization, not sketch that is outlined in the first three of a new organizational
someone else's’. customized to your phases, creating your design structure, it is
Benchmarking your organization’s specific new organizational chart critical to involve the
organizational redesign situation and objectives should be one of the individuals and teams
to other organizations will significantly fastest activities. that will be impacted.
will not work. Other increase the chances of
organizations have creating a purposeful
different strategies, organizational structure.
drivers, and context.

Tactical insight
You could have the best IT employees in the world, but if they aren’t structured well your organization will still
fail in reaching its vision.

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Key deliverable: Blueprint deliverables
Each step of this blueprint is accompanied by supporting deliverables to help
you accomplish your goals:

Executive
Presentation
Communication Deck Workbook
Leverage this presentation deck to gain
executive buy-in for your new As you work through each
organizational structure. Communicate the
of the activities, use this
changes to other key
workbook as a place to
stakeholders such as
document decisions and
peers, managers, and
rationale.
staff.

Job Descriptions
Reference Deck
Definitions for every capability,
base operating model sketches,
and sample organizational
charts aligned to those operating
models.

Info-Tech Research Group | 18

Blueprint benefits
• Create an organizational structure that aligns to the
strategic goals of IT and the business.
• Provide IT employees with clarity on their roles and
responsibilities to ensure the successful delivery of IT
IT Benefits capabilities.
• Highlight and sufficiently staff IT capabilities that are
critical to the organization.
• Define a sourcing strategy for IT capabilities.
• Increase employee morale and empowerment.

• IT can carry out the organization’s strategic mission and

vision of all technical and digital initiatives.
Business • Business has clarity on who and where to direct concerns
Benefits or questions.
• Reduce the likelihood of turnover costs as IT employees
understand their roles and its importance.
• Create a method to communicate how the organizational
structure aligns with the strategic initiatives of IT.
• Increase ability to innovate the organization.

Info-Tech Research Group | 19

Executive Brief Case
Study
INDUSTRY SOURCE
Government Analyst Interviews and Working
Sessions
IT design needs to support organizational and business
objectives, not just IT needs.

Situation
Outcome
IT was tasked with providing equality to the different business
functions through the delivery of shared IT services. As a result, the new organizational structure for IT
did not ensure adequate meeting of business needs.
The government created a new IT organizational structure with a
focus on two areas in particular: strategic and operational support Only the operational support structure was
capabilities. successfully adopted by the organization as it
aligned to the individual business objectives. The
strategic capabilities aspect was not aligned to how
Challenge the various business lines viewed themselves and
When creating the new IT structure, an understanding of the
their objectives, causing some partners to feel
complex and differing needs of the business functions was not
reflected in the shared services model. neglected.

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

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

Diagnostics and consistent frameworks are used throughout all four options.

Info-Tech Research Group | 21

Guided Implementation A Guided
What does a typical GI on this topic look like? Implementation (GI) is a
series
of calls with an Info-
Tech analyst to help
Phase 1 Phase 2 Phase 3 Phase 4
implement our best
practices in your
organization.
Call #1: Call #2: Call #4: Call #6: Call #8: Consider
Define the Define org. Customize, Establish risks and
process, design analyze gaps, functional mitigation tactics A typical GI is 8 to 12
understand the drivers and
need, and business
and define work units and associated with the calls over the course of
sourcing strategy their new structure and
create a plan context. for IT mandates. select a transition 4 to 6 months.
of action. Call #3: capabilities. plan.
Call #5: Call #7: Call #9: Create
Understand Select and Translate the your change
strategic customize the functional message,
influences IT operating organizational FAQs, and
and create model chart to an metrics to
customized sketch. operational support the
design organizational implementatio
principles. chart with n plan.
defined roles. Info-Tech
Info-Tech Research
Research Group| 22
Group | 22
 Workshop Overview
Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Day 1 Day 2 Day 3 Day 4 Day 5

Establish the Organizational Create the Operating Model Formalize the Organizational Plan for Implementation and Next Steps and
Redesign Foundation Sketch Structure Change Wrap-Up (offsite)

1.1 Define the org. design 2.1 Augment list of IT 3.1 Categorize your IT 4.1 Identify and mitigate key 5.1 Complete in-progress
drivers. capabilities. capabilities within your org. design risks. deliverables from previous
defined functional work four days.
Activities

1.2 Document and define the 2.2 Analyze capability gaps. 4.2 Define the transition plan.
units.
implications of the business 2.3 Identify capabilities for 4.3 Create the change 5.2 Set up review time for
context. outsourcing. 3.2 Create a mandate statement communication message. workshop deliverables and
for each work unit. to discuss next steps.
1.3 Align the structure to
2.4 Select a base operating 4.4 Create a standard set of
support the strategy. model sketch. 3.3 Define roles inside the FAQs.
work units and assign
1.4 Establish guidelines to
2.5 Customize the IT operating accountability and 4.5 Align sustainment metrics
direct the organizational model sketch. back to core drivers.
responsibility.
design process.
3.4 Finalize your
organizational structure.

1. Foundational components 1. Heat mapped IT 1. Capabilities organized into 1. Risk mitigation plan 1. Completed organizational
to the organizational design capabilities functional groups design communications
2. Change communication
Deliverables

2. Customized design 2. Defined outsourcing 2. Functional work unit message deck

principles strategy mandates
3. Standard FAQs
3. Customized operating 3. Organizational chart 4. Implementation and
model sustainment metrics

Info-Tech Research Group | 23

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

Implement
IT Organizational Architecture Organizational Sketch Organizational Structure Organizational Chart Transition Strategy
Structure

1. Define the organizational 6. Define roles by work unit. 11. Validate organizational 15. Determine number of 19. Form an OD 24. Train managers to lead
design drivers, business 7. Turn roles into jobs with sketch. positions per job. implementation team. through change.
context, and strategic clear capability 12. Analyze workforce 16. Conduct competency 20. Develop change vision. 25. Define and implement
alignment. accountabilities and utilization. assessment. 21. Build communication stakeholder engagement
2. Create customized design responsibilities. 13. Define competency 17. Assign staff to jobs. presentation. plan.
principles. 8. Define reporting framework. 18. Build a workforce and 22. Identify and plan change 26. Develop individual
3. Develop and customize a relationships between 14. Identify competencies staffing plan. projects. transition plans.
strategically aligned jobs. required for jobs. 23. Develop organizational 27. Implement transition
operating model sketch. 9. Assess options and select transition plan. plans.
4. Define the future-state go-forward organizational
work units. sketch.
5. Create future-state work
unit mandates.

Risk Management: Create, implement, and monitor risk management plan.

HR Management: Develop job descriptions, conduct job evaluation, and develop compensation packages.

Monitor and Sustain Stakeholder Engagement

Phase 1 This phase will walk you through the
following activities:

1.1 Define the organizational redesign

Establish the Organizational Redesign Foundation driver(s)

1.2 Create design principles based on the

business context

1.3a (Optional Exercise) Identify the

capabilities from your value stream
Phase 1 Phase 2 1.3b Identify the capabilities required to
Establish the Organizational Create the Operating Model deliver on your strategies
Redesign Foundation Sketch
1.4 Finalize your list of design principles

This phase involves the following

participants:

• CIO

• IT Leadership
Phase 3 Phase 4
Formalize the Organizational Plan for Implementation & • Business Leadership
Structure Change

Redesign Your IT
Organizational Structure

Info-Tech Research Group | 25

 Embed change management into the
organizational design process

Employees who understand the Articulate the Why

rationale behind decisions made
by executive leaders are 3.6 Changes are most successful when leaders clearly articulate the reason for the
change – the rationale for the organizational redesign of the IT function.
times more likely to be engaged.
Providing both staff and executive leaders with an understanding for this
change is imperative to its success. Despite the potential benefits to a
redesign, they can be disruptive. If you are unable to answer the reason why,
a redesign might not be the right initiative for your organization.
McLean & Company Engagement Survey Database, 2021;
N=123,188
Info-Tech Insight
Successful adoption of the new organizational design requires change
management from the beginning. Start considering how you will convey the need
for organizational change within your IT organization.

Info-Tech Research Group | 26

 Driver(s) can originate from within

The foundation of your the IT organization or externally.

REDESIGN DRIVERS
Ensuring the driver(s) are easy to

organizational design understand and articulate will

increase the successful adoption of
the new organizational structure.

brings together drivers,

context, and strategic
Defines the interactions that occur
throughout the organization and
between the organization and

implications
BUSINESS CONTEXTexternal stakeholders.

The context provides insight into

the environment by both defining
the purpose of the organization
and the values that frame how it
operates.

The IT strategy should be

All aspects of your IT organization’s STRATEGY aligned to the overall business
structure should be designed with the IMPLICATIONS strategy, providing insight into
the types of capabilities
business’ context and strategic direction required to deliver on key IT
in mind. initiatives.

Use the following set of slides to extract the

key components of your drivers, business
context, and strategic direction to land on a
future structure that aligns with the larger
Info-Tech Research Group | 27
strategic direction.
 Leverage Info-Tech’s diagnostics to provide an understanding of
critical areas your redesign can support:
Understand IT’s
desired maturity level,
alignment with
business expectations, CIO Business Vision
Diagnostic
Management &
Governance
IT Staffing Diagnostic

and capabilities of IT Diagnostic

Where are we today?

Determine the current overall maturity level of the IT
organization.

Where do we want to be as an organization?

Use the inputs from Info-Tech’s diagnostic data to
determine where the organization should be after its
reorganization.
How can you leverage these results?
The result of these diagnostics will inform the design
principles that you’ll create in this phase.
Info-Tech Research Group | 28
Consider the organizational design drivers
Consider organizational These are not good enough
redesign if … reasons …
Effectiveness is a concern:
• Insufficient resources to meet demand • New IT leader looking to make a change for the
• Misalignment to IT (and business) strategies sake of change or looking to make their legacy
• Lack of clarity around role responsibility or accountability known
• IT functions operating in silos • To work with specific/hand-picked leaders over
others
New capabilities are needed: • To “shake things up” to see what happens
• Organization is taking on new capabilities (digital, transformation,
• To force the organization to see IT differently
M&A)
• Limited innovation
• Gaps in the capabilities/services of IT
• Other external environmental influences or changes in strategic
Info-Tech Insight
direction
Avoid change for change’s sake. Restructuring
Lack of business understanding
• Misalignment between business and IT or how the organization does could completely miss the root cause of the
business problem and merely create a series of new ones.
• Unhappy customers (internal or external)
Workforce challenges
• Frequent turnover or inability to attract new skills
• Low morale or employee empowerment Info-Tech Research Group | 29
1.1 Define the organizational
redesign driver(s)
1-2 hours Input Output
1. As a group, brainstorm a list of current pain points or inhibitors in the current
organizational structure, along with a set of opportunities that can be realized
during your restructuring. Group these pain points and opportunities into themes. • Knowledge of the current • Pain point and opportunity
organization themes
2. Leverage the pain points and opportunities to help further define why this • Defined drivers of the
initiative is something you’re driving towards. Consider how you would justify initiative
this initiative to different stakeholders in the organization.

3. Questions to consider:
Materials Participants
a) Who is asking for this initiative?
b) What are the primary benefits this is intended to produce?
• Whiteboard/flip charts • CIO
c) What are you optimizing for?
(physical or electronic)
• IT Leadership
d) What are we capable of achieving as an IT organization?
e) Are the drivers coming from inside or outside the IT organization? • Business Leadership

4. Once you’ve determined the drivers for redesigning the IT organization, prioritize
those drivers to ensure there is clarity when communicating why this is something
you are focusing time and effort on.
Record the results in the Organizational
Design Communications Deck Info-Tech Research Group | 30
 Business Context Consideration IT Org. Design Implication

Frame the Culture:

Culture, "the way we do things here,” has huge
Consider whether your organization’s culture can
accept the operating model and organizational

organizational
implications for executing strategy, driving structure changes that make sense on paper.
engagement, and providing a guiding force that
ensures organizations can work together toward Certain cultures may lean toward particular
design within the common goals. operating models. For example, the demand-
develop-service operating model may be supported

context of the
• What is the culture of your organization? Is it by a cooperative culture. A traditional organization
cooperative, traditional, competitive, or may lean towards the plan-build-run operating
innovative? (See appendix for details.) model.

business • Is this the target culture or a stepping-stone to

the ideal culture? Ensure you have considered your current culture
• How do the attitudes and behaviors of senior and added exercises to support it.
leaders in the organization reinforce this
culture?
Workforce Considerations:
• How does your organization view its people If more capacity is required to accomplish the
resources? Does it have the capacity to goals of the organization, you’ll want to prepare
increase the number of resources? the leaders and explain the need in your design
• Do you currently have sufficient staff to meet principles (to reflect training, upskilling, or
the demands of the organization? Are you able outsourcing).
to outsource resources when demand requires Unionized environments require additional
it? consideration. They may necessitate less structural
• Are the members of your IT organization changes, and so your principles will need to reflect
unionized? other alternatives (hiring additional resources,
• Is your workforce distributed? Do time zones creative options) to support organizational needs.
impact how your team can collaborate? Hybrid or fully remote workforces may impact
how your organization interacts.
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Business context Business Context Consideration IT Org. Design Implication

considerations Control & Governance:

It is important to consider how your organization
Organizations that require more controls
may lean toward more centralized
is governed, how decisions are made, and who governance. Organizations that are looking
has authority to make decisions. to better enable and empower their divisions
Strategy tells what you do, governance validates (products, groups, regions, etc.) may look to
you’re doing the right things, and structure is embed governance in these parts of the
how you execute on what’s been approved. organization.
• How do decisions get considered and
approved in your organization? Are there For enterprise organizations, consider where
specific influences that impact the priorities IT has authority to make decisions (at the
of the organization? global, local, or system level).
• Are those in the organization willing to Appropriate governance needs to be built
release decision-making authority around into the appropriate levels.
specific IT components?
• Should the organization take on greater
accountability for specific IT components?

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Business context Business Context Consideration

Financial Constraints:
IT Org. Design Implication

Determine if you can move forward with a new

considerations Follow the money: You may need to align your IT
organization according to the funding model.
model or if you can adjust your existing one to
suit the financial constraints.

• Do partners come to IT with their budgets, or If you have no say over your funding, pre-work
does IT have a central pool that they use to fund may be required to build a business case to
initiatives from all partners? change your funding model before you look at
• Are you able to request finances to support key your organizational structure – without this, you
initiatives/roles prioritized by the organization? might have to rule out centralized and focus on
• How is funding aligned: technology, data, digital, hybrid/centralized. If you don’t control the
etc.? Is your organization business-line funded? budget (funding comes from your partners), it
Pooled? will be difficult to move to a more centralized
• Are there special products or digital model.
transformation initiatives with resources outside
IT? Product ownership funding? A federated business organization may require
• How are regulatory changes funded? additional IT governance to help prioritize
• Do you have the flexibility to adjust your budget across the different areas.
throughout the fiscal year?
• Are chargebacks in place? Are certain services Budgets for digital transformation might come
charged back to business units? from specific areas of the business, so resources
may need to be aligned to support that. You’ll
have to consider how you will work with those
areas. This may also impact the roles that are
going to exist within your IT organization –
product owners or division owners might have
more say.

Info-Tech Research Group | 33

 Business Context Consideration IT Org. Design Implication
Business context Business Perspective of IT: If IT needs to become more of a business
considerations How the business perceives IT and how IT perceives
itself are sometimes not aligned. Make sure the
partner, you’ll want to define what that
means to your organization and focus on the
business’ goals for IT are well understood. capabilities to enable this. Educating your
• Are your business partners satisfied if IT is an order partners might also be required if you’re not
taker? Do they agree with the need for IT to become aligned.
a business partner? Is IT expected to innovate and For many organizations, this will include
transform the organization? stakeholder management, innovation, and
• Is what the business needs from IT the same as product/project management.
what IT is providing currently? If IT and its business partners are satisfied
with an order-taker relationship, be prepared
for the consequences of that.

Business Organization Structure and Growth: A global organization will require different
• How is the overall organization structured: IT needs than a single location. Specifically,
Centralized/decentralized? Functionally aligned? site reliability engineering (SRE) or IT
Divided by regions? support services might be deployed in each
• In what areas does the organization prioritize region.
investments? Organizations growing through mergers and
• Is the organization located across a diverse acquisitions can be structured differently
geography? depending on what the organization needs
• How big is the organization? from the transaction. A more centralized
• How is the organization growing and changing – by organization may be appropriate if the driver
mergers and acquisitions? is reuse for a more holistic approach, or the
organization may need a more decentralized
organization if the acquisitions need to be
handled uniquely.
Info-Tech Research Group | 34
Business context Business Context Consideration

Sourcing Strategy:
IT Org. Design Implication

Your sourcing strategy affects your

considerations • What are the drivers for sourcing? Staff
augmentation, best practices, time zone
organizational structure, including what
capabilities you group together. Since
support, or another reason? managing outsourced capabilities also
• What is your strategy for sourcing? includes the need for vendor management,
• Does IT do all of your technology work, or you’ll need to ensure there aren’t too many
are parts being done by business or other capabilities required per leader.
units? Look closely at what can be achieved
• Are we willing/able to outsource, and will through your operating model if IT is done
that place us into non-compliance through other groups. Even though these
(regulations)? groups may not be in scope of your
• Do you have vendor management organization changes, you need to ensure
capabilities in areas that you might your IT team works with them effectively.
outsource?
• How cloud-driven is your organization?
• Do you have global operations?

Change Tolerance: If your organization is going to push back if

• What’s your organization’s tolerance to there are big structural changes, consider
make changes around organizational whether the changes are truly necessary. It
design? may be preferred to take baby steps – use an
• What's the appetite and threshold for risk? incremental versus big-bang approach.

A need for incremental change might mean

not making a major operating model change.

Info-Tech Research Group | 35

Business context Business Context Consideration

Stakeholder Engagement & Focus:

IT Org Design. Implication

For a customer or user focus, ensure

considerations Identify who your customers and stakeholders are;
clarify their needs and engagement model.
capabilities related to understanding
needs (stakeholder, UX, etc.) are
prioritized. Hybrid, decentralized, or
• Who is the customer for IT products and demand-develop-service models often
services? have more of a focus on customer
• Is your customer internal? External? Both? needs.
• How much of a priority is customer focus for
your organization? Outsourcing the service desk might be a
• How will IT interact with customers, end users, consideration if there’s a high demand
and partners? What is the engagement model for the service. A differentiation
desired? between these users might mean there’s
a different demand for services.
Business Vision, Services, and Products: Think broadly in terms of your
Articulate what your organization was built to do. organizational vision, not just the
tactical (widget creation). You might
• What does the organization create or provide? need to choose an operating model that
• Are these products and services changing? supports vision.
• What are the most critical capabilities to your
organization? Do you need to align your organization
• What makes your organization a success? What with your value stream?
are critical success factors of the organization Do you need to decentralize specific
and how are they measuring this to determine capabilities to enable prioritization of
success? the key capabilities?

Info-Tech Research Group | 36

1.2 Create design principles
based on the business context
Input Output
1-3 hours
1. Discuss the business context in which the IT organizational redesign will be taking • Business context • Design principles
place. Consider the following standard components of the business context; reflecting how the
business context
include other relevant components specific to your organization: influences the
• Culture organizational redesign for
• Workforce Considerations IT
• Control and Governance
• Financial Constraints
• Business Perspective of IT
• Business Organization Structure and Growth
Materials Participants
• Sourcing Strategy
• Change Tolerance
• Stakeholder Engagement and Focus • Whiteboard/flip charts • CIO
• Business Vision, Services, and Products (physical or electronic)
• IT Leadership
• List of Context Questions
2. Different stakeholders can have different perspectives on these questions. Be sure • Business Leadership
to consider a holistic approach and engage these individuals.

3. Capture your findings and use them to create initial design principles.

Record the results in the Organizational Design Communications Deck Info-Tech Research Group | 37
How your IT organization is
structured needs to reflect what it
must be built to do
Structure follows strategy – the way you design will
impact what your organization can produce.
Designing your IT organization requires an assessment of what it
needs to be built to do:
• What are the most critical capabilities that you need to deliver, and
what does success look like in those different areas?
• What are the most important things that you deliver overall in your
organization?

The IT organization must reflect your business needs:

• Understand your value stream and/or your prioritized business
goals.
• Understand the impact of your strategies – these can include your
overall digital strategy and/or your IT strategy.

Info-Tech Research Group | 38

 1.3a (Optional Exercise) Identify
the capabilities from your value
stream Input Output
1 hour
1. Identify your organization’s value stream – what your overall organization needs
to do from supplier to consumer to provide value. Leverage Info-Tech’s industry • Organization’s value • List of IT capabilities
stream required to support the IT
reference architectures if you haven’t identified your value stream, or use the
strategy
Document Your Business Architecture blueprint to create yours.

2. For each item in your value stream, list capabilities that are critical to your
organizational strategy and IT needs to further invest in to enable growth.
Materials Participants
3. Also, list those that need further support, e.g. those that lead to long wait times,
rework time, re-tooling, down-time, unnecessary processes, unvaluable
processes.* • Whiteboard/flip charts • CIO
(physical or electronic)
4. Capture the IT capabilities required to enable your business in your draft • IT Leadership
principles. • Business Leadership

Record the results in the Organizational Design Communications Deck

Info-Tech Research Group | 39

Source: Six Sigma Study Guide, 2014
Your strategy will help you decide on your structure
Ensure that you have a clear view of the goals and initiatives that are
needed in your organization.

Your IT, digital, business, and/or other strategies will surface the IT
capabilities your organization needs to develop. Sample initiatives and capabilities from an organization’s strategies

Identify the goals of your organization and the initiatives that are
required to deliver on them. What capabilities are required to enable
these? These capabilities will need to be reflected in your design
principles.

Info-Tech Research Group | 40

1.3b Identify the capabilities
required to deliver on your
strategies Input Output
1 hour
• IT goals • List of IT capabilities
1. For each IT goal, there may be one or more initiatives that your required to support the IT
• IT initiatives
organization will need to complete in order to be successful. strategy
• IT, digital, and business
2. Document those goals and infinitives. For each initiative, consider which strategies
core IT capabilities will be required to deliver on that goal. There might
be one IT capability or there might be several.
Materials Participants
3. Identify which capabilities are being repeated across the different
initiatives. Consider whether you are currently investing in those
capabilities in your current organizational structure. • Whiteboard/flip charts • CIO
(physical or electronic)
4. Highlight the capabilities that require IT investment in your design • IT Leadership
principles. • Business Leadership

Record the results in the Organizational Design Communications Deck

Info-Tech Research Group | 41
 Your organizational design principles should define a set of loose

Create your organizational rules that can be used to design your organizational structure to the
specific needs of the work that needs to be done.

design principles These rules will guide you through the selection of the appropriate
operating model that will meet your business needs. There are
multiple ways you can hypothetically organize yourself to meet these
needs, and the design principles will point you in the direction of
which solution is the most appropriate as well as explain to your
stakeholders the rationale behind organizing in a specific way.
This foundational step is critical: one of the key reasons for
organizational design failure is a lack of requisite time spent on the
front-end understanding what is the best fit.

Business Organization, Structure & Growth

Business Perspective of IT
Change Initiative Drivers Business Vision, Services & Projects
Control & Governance
Business Context Culture
Change Tolerance Design Principles
Strategies Financial Constraints
Sourcing Strategy
Stakeholder Engagement & Focus
Workforce Considerations

Info-Tech Research Group | 42

1.4 Finalize your list of design
principles
1-3 hours Input Output
1. As a group, review the key outputs from your data collection exercises and
their implications. • Organizational redesign • Organizational design
drivers principles to help inform
2. Consider each of the previous exercises – where does your organization
the selection of the right
stand from a maturity perspective, what is driving the redesign, what is the • Business context
operating model sketch
business context, and what are the key IT capabilities requiring support. • IT strategy capabilities
Identify how each will have an implication on your organizational redesign.
Leverage this conversation to generate design principles.

3. Vote on a finalized list of eight to ten design principles that will guide the
Materials Participants
selection of your operating model. Have everyone leave the meeting with
these design principles so they can review them in more detail with their
• Whiteboard/flip charts • CIO
work units or functional areas and elicit any necessary feedback. (physical or electronic)
• IT Leadership
4. Reconvene the group that was originally gathered to create the list of
• Business Leadership
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 everyone has the same understanding of
what this means moving forward.

Record the results in the Organizational Design Communications Deck Info-Tech Research Group | 43
Example design principles
Your eight to ten design principles will be those that are most relevant to
YOUR organization. Below are samples that other organizations have created,
but yours will not be the same.
Design Description Design Description
Principle Principle
We will centralize decision making around the prioritization of Controlled
Decision We will control the variety of technology platforms we use to allow
projects to ensure that the initiatives driving the most value for the technical
making for increased operability and reduction of costs.
organization as a whole are executed. diversity
Fit for We will build and maintain fit-for-purpose solutions based on business R&D and innovation are critical – we will build an innovation team
Innovation
purpose units’ unique needs. into our structure to help us meet our digital agenda.
We will reduce role and application duplication through centralized We will separate our project and maintenance activities to ensure each
Reduction of
management of assets and clearly differentiated roles that allow Resourcing are given the dedicated support they need for success and to reduce
duplication
individuals to focus within key capability areas. the firefighting mentality.
Managed We will manage security enterprise-wide and implement compliance The new structure will be directly aligned with customer needs – we
Customer
security and security governance policies. will have dedicated roles around relationship management,
centricity
requirements, and strategic roadmapping for business units.
Reuse > buy We will maximize reuse of existing assets by developing a centralized
> build application portfolio management function and approach. Interoperabil We will strengthen our enterprise architecture practices to best prepare
ity for future mergers and acquisitions.
Managed We will create a specialized data office to provide data initiatives with
data the focus they need to enable our strategy. We will move toward hosted versus on-premises infrastructure
Cloud solutions, retrain our data center team in cloud best practices, and
services build roles around effective vendor management, cloud provisioning,
and architecture.
Info-Tech Research Group | 44
Phase 2 This phase will walk you through the
following activities:

2.1 Augment the capability list

Create the Operating Model Sketch
2.2 Heatmap capabilities to determine
gaps in service

2.3 Identify the target state of sourcing

for your IT capabilities

2.4 Review and select a base operating

Phase 1 Phase 2 model sketch
Establish the Organizational Create the Operating Model
Redesign Foundation Sketch 2.5 Customize the selected overlay to
reflect the desired future state

This phase involves the following

participants:

CIO

IT Leadership
Phase 3 Phase 4
Formalize the Organizational Plan for Implementation &
Structure Change
Redesign Your IT
Organizational Structure

Info-Tech Research Group | 45

 Embed change management into the
organizational design process

“You’re more likely to get buy- Gain Buy-In

in if you have good reason for Obtain desire from stakeholders to move forward with organizational
redesign initiative by involving them in the process to gain interest. This will
the proposed changes – and the
provide the stakeholders with assurance that their concerns are being heard
key is to emphasize the benefits and will help them to understand the benefits that can be anticipated from the
of an organizational redesign.” new organizational structure.

Source: Lucid Chart Info-Tech Insight

Just because people are aware does not mean they agree. Help different
stakeholders understand how the change in the organizational structure is a
benefit by specifically stating the benefit to them.

Info-Tech Research Group | 46

Info-Tech uses capabilities in your
organizational design
We differentiate between capabilities and competencies.

Capabilities Competencies
• Capabilities are focused on the entire system that would be in place to • Competencies on the other hand are
satisfy a particular need. This includes the people who are competent to specific to an individual. It determines if
the individual poses the skills or ability to
complete a specific task and also the technology, processes, and
perform.
resources to deliver.
• Competencies are rooted in the term
• Capabilities work in a systematic way to deliver on specific need(s).
competent, which looks to understand if
• A functional area is often made up of one or more capabilities that you are proficient enough to complete the
support its ability to deliver on that function. specific task at hand.

• Focusing on capabilities rather then the individuals in organizational

redesign enables a more objective and holistic view of what your
organization is striving toward.

Info-Tech Research Group | 47

Source: The People Development Magazine, 2020
STRATEGY &
GOVERNANCE
Use our IT capabilities to APPS
DATA

establish your IT organization Application

& BI
Database

design
IT Portfolio and Operations
Governance Lifecycle
Management
BI &
Solution
Reporting
Architecture
IT Strategy

Systems Data
IT Management Security Integration
Goals, Metrics
and
& Policies
PEOPLE & RESOURCES SECURITY Strategy
Architecture

Measurement & RISK Application

Development Knowledge
Management
R&D and
Organizational Innovation People User
External
Quality Resource Experience
Compliance Data Quality
Management Management INFRASTRUCTURE & &
Quality
Strategic
OPERATIONS Assurance &
Management

Communication Testing
s Availability & Operational
Stakeholder
Capacity Change Risk Application
Relations Controls and
Enterprise Management Enablement Management Maintenance Portfolio
Internal Audit
Architecture Management
Division*
Workforce Asset Governance
Financial Strategy Service Desk
Financial Management
Management Division*
Management
Strategy &
Organizational Network & Security Roadmap
Knowledge Incident Release
Change Service Infrastructure Management Management Project
Management Management Division*
Management Management Management Management
Portfolio
Management
Infrastructure
Portfolio Problem
Automation
Strategy Management Security
Vendor
Vendor Response &
Selection & Service
Portfolio Recovery Demand Business
Contract Enhancements
Management Configuration Operations Management Analysis
Management
Management Management

FINANCIAL SERVICE PLANNING & PPM & PROJECTS

Info-Tech Research Group | 48
MANAGEMENT ARCHITECTURE
2.1 Augment the
capability list Input Output

1-3 hours
1. Using the capability list on the previous slide, go through each of the IT capabilities and • Baseline list of IT • Customized list of IT
capabilities 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 • IT capabilities required to
capabilities. support IT strategy

2. Augment the language of specific capabilities that you feel are not directly reflective of what
is being done within your organizational context or that you feel need to be changed to reflect
more specifically how work is being done in your organization.
• For example, some organizations may refer to their service desk capability as help Materials Participants
desk or regional support. Use a descriptive term that most accurately reflects the
terminology used inside the organization today.

3. Add any core capabilities from your organization that are missing from the provided IT • Whiteboard/Flip Charts • CIO
capability list. • IT Leadership
• For example, organizations that leverage DevOps capabilities for their product
development may desire to designate this in their operating model.

4. Document the rationale for decisions made for future reference.

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 49

Gaps in delivery
Identify areas that require greater focus
and attention.
Assess the gaps between where you currently are and where you need to be.
Evaluate how critical and how effective your capabilities are:
• Criticality = Importance
There is little to no effectiveness (high
o Try to focus on those which are highly critical to the High Gap gap) and the capability is highly
important to your organization.
organization.
o These may be capabilities that have been identified in your
Current ability is medium in effectiveness
strategies as areas to focus on. Medium Gap (medium gap) and there might be some
priority for that capability in your
• Effectiveness = Performance organization.
o Identify those where the process or system is broken or
Current ability is highly effective (low
ineffective, preventing the team from delivering on the Low Gap gap) and the capability is not
capability. necessarily a priority for your
organization.
o Effectiveness could take into consideration how scalable,
adaptable, or sustainable each capability is.
o Focus on the capabilities that are low or medium in effectiveness
but highly critical. Addressing the delivery of these capabilities
will lead to the most positive outcomes in your organization.
Remember to identify what allows the highly effective capabilities to perform Info-Tech Research Group | 50

at the capacity they are. Leverage this when increasing effectiveness elsewhere.
2.2 Heatmap capabilities to
determine gaps in delivery
Input Output

1-3 hours • Selected capabilities from • Gap analysis in delivery

activity 2.1 of capabilities currently
1. At this point, you should have identified what capabilities you need to have to
deliver on your organization's goals and initiatives.

2. Convene a group of the key stakeholders involved in the IT organizational design

initiative.

3. Review your IT capabilities and color each capability border according to the Materials Participants
effectiveness and criticality of that capability, creating a heat map.
• Green indicates current ability is highly effective (low gap) and the
• Whiteboard/Flip Charts • CIO
capability is not necessarily a priority for your organization.
• • IT Leadership
Yellow indicates current ability is medium in effectiveness (medium gap)
and there might be some priority for that capability in your organization.
• Red indicates that there is little to no effectiveness (high gap) and the
capability is highly important to your organization.
Record the results in the Organizational Design Workbook
Info-Tech Research Group | 51
Don’t forget the why: why are you
considering outsourcing?

There are a few different “types” of outsourcing:

1. Competitive Advantage – Working with a third-party
organization for the knowledge, insights, and best practices
they can bring to your organization.
2. Managed Service– The third party manages a capability or
function for your organization.
3. Staff Augmentation – Your organization brings in contractors
and third-party organizations to fill specific skills gaps.
Weigh which sourcing model(s) will best align with the needed
capabilities to deliver effectively
Competitive
Insourcing Staff Augmentation Managed Service
Advantage
Description

The organization maintains full Vendor provides specialized skills Vendor has unique skills, insights,
Vendor completely manages the
responsibility for the management and enables the IT capability or and best practices that can be taught
delivery of value for the IT
and delivery of the IT capability or service together with the to staff to enable insourced
capability, product or service.
service. organization to meet demand. capability and competency.

• Retains in-house control over • Provision of unique skills. • Improves effectiveness due to • Gain insights into aspects that
proprietary knowledge and • Addresses variation in demand for narrow specialization. could provide your organization
assets that provide competitive resources. • Labor cost savings. with advantages over competitors.
Benefits

or operational advantage. • Labor cost savings. • Long-term labor cost savings.

• Gains efficiency due to • Improves use of internal resources. • Short-term outsourcing required.
integration into the • Increase in-house competencies.
organization’s processes.

• Quality of services/capabilities • Potential conflicts in management • Negative impact on staff morale. • Short-term labor expenses.
might not be as high due to lack or delivery of IT services and • Limited control over • Requires a culture of continuous
Drawbacks

of specialization. capabilities. services/capabilities. learning and improvement.

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

Info-Tech Research Group | 53

 Your strategy for outsourcing will vary with capability and
capacity
High
Capacity Capability Capacity Outsourcing Model
Low Low Your solutions may be with you for a long time, so it doesn’t
matter whether it is a strategic decision to outsource
development or if you are not able to attract the talent required
Outsource to
Develop Outsource to Expand to deliver in your market. Look for a studio, agency, or
Capability Short-Term Capacity development shop that has a proven reputation for long-term
partnership with its clients.
Low High Your team has capacity but needs to develop new skills to be
successful. Look for a studio, agency, or development shop that
has a track record of developing its customers and delivering
Develop Vendor
Low High solutions.
Management
Capability Capability High Low Your organization knows what it is doing but is strapped for
Capabilities
people. Look at “body shops” and recruiting agencies that will
support short-term development contracts that can be
converted to full-time staff or even a wholesale development
shop acquisition.
Build a Strategic
Outsourcing Outsource to High High You have capability and capacity for delivering on your everyday
Relationship Develop Capacity demands but need to rise to the challenge of a significant,
short-term rise in demand on a critical initiative. Look for a
major system integrator or development shop with the specific
expertise in the appropriate technology.
Low Capacity

Modified from Are You In or Out? How to Source Application Development Info-Tech Research Group | 54
 Sourcing Criteria Description
Determine whether the component to be sourced is critical to your
Use these 1. Critical or
organization or if it is a commodity. Commodity components, which are
either not strategic in nature or related to planning functions, are likely

criteria to commodity candidates for outsourcing. Will you need to own the intellectual
property created by the third party? Are you ok if they reuse that for their
other clients?
inform your Identify how easy it would be to outsource a particular IT component.

right Determine whether Consider factors such as knowledge transfer, workforce reassignment or
2. Readiness to
you’ll outsource reduction, and level of integration with other components.
outsource
using these criteria Vendor management readiness – ensuring that you have sufficient
sourcing capabilities to manage vendors – should also be considered here.
Determine if you have the capability to deliver the IT solutions in-house.
strategy 3. In-house
capabilities
This will help you establish how easy it would be to insource an IT
component.
4. Ability to attract Determine if the capability is one that is easily sourced with full-time,
resources (internal internal staff or if it is a specialty skill that is best left for a third-party to
vs. outsourced) source.
Consider the total cost (investment and ongoing costs) of the delivery of
4. Cost the IT component for each of the potential sourcing models for a
component.
Define the potential impact on the quality of the IT component being
5. Quality
sourced by the possible sourcing models.
Determine your Determine whether the sourcing model would fit with regulations in your
sourcing model 6. Compliance industry. For example, a healthcare provider would only go for a cloud
using these criteria option if that provider is HIPAA compliant.
Identify the extent to which each sourcing option would leave your
7. Security
organization open to security threats. Info-Tech Research Group | 55
2.3 Identify capabilities that
could be outsourced Input Output

• Customized IT capabilities • Sourcing strategy for each

1-3 hours IT capability
1. For each of the capabilities that will be in your future-state operating model,
determine if it could be outsourced. Review the sourcing criteria available on the
previous slide to help inform which sourcing strategy you will use for each
capability.

2. When looking to outsource or co-source capabilities, consider why that capability

would be outsourced: Materials Participants
• Competitive Advantage – Work with a third-party organization for the
knowledge, insights, and best practices they can bring to your organization.
• Managed Service – The third party manages a capability or function for • Whiteboard/Flip Charts • CIO
your organization.
• Staff Augmentation – Your organization brings in contractors and third- • IT Leadership
party organizations to fill specific skills gaps.

3. Place an asterisk (*) around the capabilities that will be leveraging one of the three
previous sourcing options.

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 56
What is an operating model?
Leverage a cohesive operating model throughout the organizational design process.
CUSTOMER
An IT operating model sketch is a visual representation of the way your
IT organization needs to be designed and the capabilities it requires to FUNCTIONAL AREA n
deliver on the business mission, strategic objectives, and technological IT
ambitions. It ensures consistency of all elements in the organizational CAPABILITY

structure through a clear and coherent blueprint. IT

CAPABILITY

The visual should be the optimization and alignment of the IT

SOLUTIONS
INITIATIVES
IT
organization’s structure to deliver the capabilities required to achieve CAPABILITY

business goals. Additionally, it should clearly show the flow of work so IT

that key stakeholders can understand where inputs flow in and outputs CAPABILITY

flow out of the IT organization. Investing time in the front end getting the IT
operating model right is critical. This will give you a framework to CAPABILITY

rationalize future organizational changes, allowing you to be more IT

iterative and your model to change as the business changes. CAPABILITY

Info-Tech Insight
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.

Info-Tech Research Group | 57

Each IT operating model is characterized by a variety of advantages and
disadvantages
Centralized Hybrid Decentralized
• Maximum flexibility to allocate IT • Centralizes processes and services that • Goals are aligned to the distinct business
resources across business units. require consistency across the units or functions.
• Low-cost delivery model and greatest organization. • Greater flexibility and more timely delivery
Advantages

economies of scale. • Decentralizes processes and services that of services.

• Control and consistency offers opportunity need to be responsive to local market • Development resources are highly
for technological rationalization and conditions. knowledgeable about business-unit-specific
standardization and volume purchasing at • Eliminates duplication and redundancy by applications.
the highest degree. allowing effective use of common • Business unit has greatest control over IT
resources (e.g. shared services, resources and can set and change priorities as
standardization). needed.

• Less able to respond quickly to local • Requires the most disciplined governance • Redundancies, conflicts, and incompatible
requirements with flexibility. structure and the unwavering commitment technologies can result from business units
Disadvantages

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

Info-Tech Research Group | 58

Decentralization can take many forms – define what it means to your
organization
Decentralization can take a number of different forms depending on the products 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 Functional

Decentralization by lines of Decentralization by product line Geographical decentralization Functional decentralization allows
business (LoB) aligns decision organizes your team into reflects a shift from centralized to the IT organization to be separated
making with business operating operationally aligned product regional influences. by specialty areas.
units based on related functions or families to improve delivery
When teams are in different Organizations structured by
value streams. Localized priorities throughput, quality, and resource
locations, they can experience a functional specialization can often
focus the decision making from the flexibility within the family.
number of roadblocks to effective be organized into shared service
CIO or IT leadership team.
By adopting this approach, you communication (e.g. time zones, teams or centers of excellence
This form of decentralization is create stable product teams with regulatory differences in different whereby people are grouped based
beneficial in settings where each the right balance between countries) that may necessitate on their technical, domain, or
line of business has a unique set flexibility and resource sharing. separating those groups in the functional area within IT
of products or services that require This reinforces value delivery and organizational structure, so they (Applications, Data, Infrastructure,
specific expertise or flexible alignment to enterprise goals within have the autonomy needed to Security, etc.). This allows people
resourcing staffing between the the product lines. make critical decisions. to develop specialized knowledge
teams. and skills but can also reinforce
silos between teams.
Info-Tech Research Group | 59
2.4 Review and select a base
operating model sketch Input Output

• Organizational design • Selected operating model

1 hour principles sketch
1. Review the set of base operating model sketches available on the following • Customized list of IT
slides. capabilities

2. For each operating model sketch, there are benefits and risks to be considered. • Operating model sketch
examples
Make an informed selection by understanding the risks that your organization
might be taking on by adopting that particular operating model.

3. If at any point in the selection process the group is unsure about which operating Materials Participants
model will be the right fit, refer back to your design principles established in
activity 1.4. These should guide you in the selection of the right operating model
and eliminate those which will not serve the organization. • Whiteboard/Flip Charts • CIO
• IT Leadership

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 60

Centralized Operating Model #1: Plan-
Build-Run
I want to…
• Establish a formalized governance process that takes direction from the organization on which initiatives should be prioritized by IT.
• Ensure there is a clear separation between teams that are involved in strategic planning, building solutions, and delivering operational
support.
• Be able to plan long term by understanding the initiatives that are coming down the pipeline and aligning to an infrequent budgeting
BENEFITS
plan. RISKS
• Effective at implementing long-term plans efficiently; separates • Creates artificial silos between the build (developers) and run
maintenance and projects to allow each to have the appropriate (operations staff) teams, as both teams focus on their own
focus. responsibilities and often fail to see the bigger picture.
• More oversight over financials; better suited for fixed budgets. • Miss opportunities to deliver value to the organization or
• Works across centralized technology domains to better align innovate due to an inability to support unpredictable/shifting
with the business’ strategic objectives – allows for a top-down project demands as decision making is centralized in the plan
approach to decision making. function.
• Allows for economies of scale and expertise pooling to • The portfolio of initiatives being pursued is often determined
improve IT’s efficiency. before requirements analysis takes place, meaning the initiative
• Well-suited for a project-driven environment that employs might be solving the wrong need or problem.
waterfall or a hybrid project management methodology that is • Depends on strong hand-off processes to be defined and strong
less iterative. knowledge transfer from build to run functions in order to be
successful.
Info-Tech Research Group | 61
Centralized Operating Model #1: Plan-
Build-Run
GOVERNANCE
Organizational Change
IT Governance IT Management & Policies Data Quality & Governance
Management

PORTFOLIO STEERING

PLAN BUILD RUN

Security
Database Service
Response &
Enterprise Portfolio Project Operations Enhancements
IT Strategy Security Strategy Recovery
Architecture Management Management
Enterprise
Security Service Portfolio
Content
R&D and External Requirements Management Management
Data Architecture BI & Reporting Management
Innovation Compliance Analysis

Application Operations Infrastructure

Quality Automation
Stakeholder Workforce Management Portfolio Strategy
CUSTOMER

Controls & Portfolio & Assurance &

SOLUTIONS
Strategy

INITIATIVES
Relations

END USER
Internal Audit Lifecycle User Testing
Management
Problem Asset
Service Desk
Financial People Resource Risk Solution Management Management
Management Management User Experience
Management Architecture
Network &
Release Incident
Vendor Selection Infrastructure
Strategic Demand Systems Application Management Management
& Contract Management
Communications Management Integration Development
Management
Operational Availability &
Configuration
Change Capacity
Vendor Portfolio Knowledge Management
Management Management
Management Management

Application
Maintenance

Goals, Metrics and Measurement

Info-Tech Research Group | 62

Organizational Quality Management
Centralized Operating Model #2:
Demand-Develop-Service
I want to…
• Listen to the business to understand new initiatives or service enhancements being requested.
• Enable development and operations to work together to seamlessly deliver in a DevOps culture.
• Govern and confirm that initiatives being requested by the business are still aligned to IT’s overarching strategy and roadmap before
prioritizing those initiatives.

BENEFITS RISKS
• Aligns well with an end-to-end services model; constant • IT prioritizes the initiatives it thinks are a priority to the
attention to customer demand and service supply. business based on how well it establishes good stakeholder
• Centralizes service operations under one functional area to relations and communications.
serve shared needs across lines of business. • Depends on good governance to prevent enhancements and
• Allows for economies of scale and expertise pooling to demands from being prioritized without approval from those
improve IT’s efficiency. with accountability and authority.
• Elevates sourcing and vendor management as its own strategic • This model thrives in a DevOps culture but does not mean it
function; lends well to managed service and digital initiatives. ensures your organization is a “DevOps” organization. Be sure
• Development and operations housed together; lends well to you're encouraging the right behaviors and attitudes.
DevOps-related initiatives and reduces the silos between these
two core groups.

Info-Tech Research Group | 63

 Centralized Model 2:
Demand-Develop-Service
CUSTOMER END USERS

DEMAND SERVICE
Goals, Metrics Quality
Stakeholder R&D and Incident Problem Asset
and Assurance & Service Desk BI & Reporting
Relations Innovation Management Management Management
Measurement User Testing

Organizational Security
Strategic Knowledge Demand Service Portfolio Service Security Database
Change Response &
Communications Management Management Management Enhancements Management Operations
Management Recovery

INITIATIVES ENHANCEMENTS

PORTFOLIO GOVERNANCE
STRATEGY & GOVERNANCE

SOLUTIONS
Organizational Vendor Selection
SOLUTIONS

IT Management & Data Quality & Financial Workforce Controls & Risk
IT Strategy Quality & Contract
Policies Governance Management Strategy Internal Audit Management
Management Management
Application
Goals, Metrics
Enterprise Vendor Portfolio Portfolio & People Resource External
IT Governance and Data Architecture Security Strategy
Architecture Management Lifecycle Management Compliance
Measurement
Management

PRIORITIZATION

DEVELOP

Portfolio Requirements Systems Application Availability & Network &

Configuration
Management Analysis Integration Maintenance Automation Capacity Infrastructure
Management Enterprise
Management Management
Content
Management
Project Solution Operational
Application Infrastructure Operations Release
Management User Experience Change
Architecture Development Portfolio Strategy Management Management
Management
Info-Tech Research Group | 64
Hybrid Operating Model #1:
LOB/Functional Aligned
I want to…
• Better understand the various needs of the organization to align IT priorities and ensure the right services can be delivered.
• Keep all IT decisions centralized to ensure they align with the overarching strategy and roadmap that IT has set.
• Organize your shared services in a strategic manner that enables delivery of those services in a way that fits the culture of the organization and
the desired method of operating.

BENEFITS RISKS
• Best of both worlds of centralization and decentralization; attempts to • Different business units may bypass governance to get their specific
channel benefits from both centralized and decentralized models. needs met by functions – to alleviate this, IT must have strong
• Embeds key IT functions that require business knowledge within governance and prioritize amongst demand.
functional areas, allowing for critical feedback and the ability to • Decentralized role can be viewed as an order taker by the business if
understand those business needs. not properly embedded and matured.
• Places IT in a position to not just be “order takers” but to be more • No guaranteed synergy and integration across functions; requires strong
involved with the different business units and promote the value of communication, collaboration, and steering.
IT. • Cannot meet every business unit’s needs – can cause tension from
• Achieves economies of scale where necessary through the delivery of varying effectiveness of the IT functions.
shared services that can be requested by the function.
• Shared services can be organized to deliver in the best way that suits
the organization.
Info-Tech Research Group | 65
Hybrid Operating Model #1: LOB/Functional
Aligned
DECENTRALIZED FUNCTIONS
SHARED SERVICES
Quality
Stakeholder Demand Database

SOLUTIONS & SERVICES

Assurance &
Relations Management Operations Organizational
User Testing R&D and Service Portfolio Service
Quality
Innovation Management Enhancements
Management
Organizational
Project Application
Change BI & Reporting
Management Maintenance
Management Operational
Asset
Change Service Desk Automation
Management
Vendor Selection Management
Knowledge Requirements Data Quality &
& Contract
Management Analysis Governance
Management
Incident Problem Operations Release
Management Management Management Management

NEEDS/REQUIREMENTS
Availability & Network &
Configuration Infrastructure
Capacity Infrastructure
Management Portfolio Strategy
Management Management

STRATEGIC SERVICES
Security Enterprise
Security
Response & Data Architecture Content
Goals, Metrics Management
IT Management & Recovery Management
IT Strategy IT Governance and
Policies

INITIATIVES & STANDARDS

Measurement
Application
Portfolio & Solution Systems Application
Lifecycle Architecture Integration Development
Enterprise Financial Vendor Portfolio
Management
Architecture Management Management

User Experience
People Resource Workforce Strategic Portfolio
Management Strategy Communications Management

External Controls & Risk

Security Strategy
Compliance Internal Audit Management

Info-Tech Research Group | 66

Hybrid Model #2:
Product-Aligned Operating Model
I want to…
• Align my IT organization into core products (services) that IT provides to the organization and establish a relationship with those in the
organization that have alignment to that product.
• Have roles dedicated to the lifecycle of their product and ensure the product can continuously deliver value to the organization.
• Maintain centralized set of standards as it applies to overall IT strategy, security, and architecture to ensure consistency across products and
reduce silos.

BENEFITS RISKS
• Focus is on the full lifecycle of a product – takes a strategic view of • If there is little or no business involvement, it could prevent IT from
how technology enables the organization. truly understanding business demand and prioritizing the wrong work.
• Promotes centralized backlog around a specific value creator, rather • A lack of formal governance can create silos between the IT products,
than a traditional project focus that is more transactional. causing duplication of efforts, missed opportunities for collaboration,
• Dedicated teams around the product family ensure you have all of the and redundancies in application or vendor contracts.
resources required to deliver on your product roadmap. • Members of each product can interpret the definition of standards (e.g.
• Reduces barriers between IT and business stakeholders; focuses on architecture, security) differently.
technology as a key strategic enabler.
• Delivery is largely done through frequent releases that can deliver
value.

Info-Tech Research Group | 67

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

PORTFOLIO STEERING

Product Governance A Product Governance: Repeat of

Division Division Portfolio People Resource Demand capabilities in Product Governance A for
Governance Management Management Management every additional product family.

Product Prioritization
Product Prioritization

Product Family A: Infrastructure Enterprise Product Family B:

Division Strategy Stakeholder R&D and Release Operations
Portfolio Content Repeat of capabilities in Product
& Roadmap Relations Innovation Management Management
Strategy* Management*
Family A for every additional
Network &
product family.
Application Systems Requirements Knowledge Configuration
User Experience Infrastructure BI & Reporting*
Maintenance Integration Analysis Management Management
Management*

Quality Organizational Availability &

Solution Application Project Data Quality & Database
Assurance & Change Capacity
Architecture Development Management Governance* Operations*
User Testing Management Management*

Service Operational Security Service

Incident Problem Asset
Change Service Desk Automation Response &
Management: Management Management Management
Recovery
Enhancements
Management

STRATEGY & STANDARDS

Application
ENTERPRISE Vendor Selection
Enterprise Vendor Portfolio Portfolio & Service Portfolio
ARCHITECTURE Data Architecture & Contract
Architecture Management Lifecycle Management
Management
Management

SECURITY
Security External Controls & Risk
Security Strategy
Management Compliance Internal Audit Management

STRATEGY &
GOVERNANCE Goals, Metrics Organizational
IT Management & Financial Workforce Strategic Portfolio
IT Strategy IT Governance and Quality
Policies Management Strategy Communications Management
Measurement Management
Info-Tech Research Group | 68

* Capabilities that can be moved into a service management function

Hybrid Operating Model #3:
Service-Aligned Operating Model
I want to…
• Decentralize the IT organization by the various IT services it offers to the organization while remaining centralized with IT strategy, governance,
security and operational services.
• Ensure IT services are defined and people resources are aligned to deliver on those services.
• Enable each of IT’s services to have the autonomy to understand the business needs and be able to manage the operational and new project
initiatives with a dedicated service owner or business relationship manager.

BENEFITS RISKS
• Strong enabler of agility as each service has the autonomy to make • Service owners require a method to collaborate to avoid duplication of
decisions around operational work versus project work based on their efforts or projects that conflict with the efforts of other IT services.
understanding of the business demand. • May result in excessive cost through role redundancies across different
• Individuals in similar roles that are decentralized across services are services, as each will focus on components like integration, stakeholder
given coaching to provide common direction. management, project management, and user experiences.
• Allows teams to efficiently scale with service demand. • Silos cause a high degree of specialization, making it more difficult for
• This is a structurally baseline DevOps model. Each group will have team members to imagine moving to another defined service group,
services built within that have their own dedicated teams that will limiting potential career advancement opportunities.
handle the full gambit of responsibilities, from new features to • The level of complex knowledge required by shared services (e.g. help
enhancements and maintenance. desk) is often beyond what they can provide, causing them to rely on
and escalate to defined service groups more than with other operating
models.
Info-Tech Research Group | 69
Hybrid Operating Model #3:
Service-Aligned Operating Model
CUSTOMER

SERVICE #1 SERVICE #2
INFRASTRUCTURE SERVICES

Availability &
Application Service Stakeholder Application Service Stakeholder Service Stakeholder
Capacity
Maintenance Enhancements Relations Maintenance Enhancements Relations Enhancements Relations
Management

Application Quality Vendor Selection

Quality Vendor Selection Quality Vendor Selection Configuration
Portfolio & Application Assurance & & Contract
Assurance & & Contract Assurance & & Contract Management
Lifecycle Development User Testing Management
User Testing Management User Testing Management
Management
Network &
Application Systems Demand Systems Demand Systems Demand
BI & Reporting Infrastructure
Development Integration Management Integration Management Integration Management
Management

Enterprise Solution Requirements

Solution Requirements Database Solution Requirements Infrastructure
Content Architecture Analysis
Architecture Analysis Operations Architecture Analysis Portfolio Strategy
Management

Data Quality & Knowledge Project Asset Knowledge Project

Knowledge Project
Governance Management Management Automation Management Management Management
Management Management

Service Operational Incident Problem

Change Service Desk
Management:
SERVICES

Management Management
SHARED

Management

Security Security
Security Risk
Response & Security Strategy
Management Management
Recovery

PORTFOLIO STEERING, INITIATIVES & STANDARDS

Goals, Metrics
IT Management & Service Portfolio Financial People Resource Strategic Operations External
IT Strategy and Data Architecture
Policies Management Management Management Communications Management Compliance
Measurement

Organizational Organizational Info-Tech Research Group | 70

R&D and Enterprise Vendor Portfolio Workforce Release Controls & Portfolio
IT Governance Quality Change
Innovation Architecture Management Strategy Management Internal Audit Management
Management Management
Decentralized Model:
Division Decentralization (LoB, Geography, Function, Product)
I want to…
• Decentralize the IT organization to enable greater autonomy within specific groups that have differing customer demands and levels of support.
• Maintain a standard level of service that can be provided by IT for all divisions.
• Ensure each division has access to critical data and reports that supports informed decision making.

BENEFITS RISKS
• Organization around functions allows for diversity in approach in • Requires risk and security to be centralized and have oversight of
how areas are run to best serve a specific business unit’s needs. each division to prevent the decisions of one division from negatively
• Each functional line exists largely independently, with full capacity impacting other divisions or the enterprise.
and control to deliver service at the committed SLAs. • Less synergy and integration across what different lines of business
• Highly responsive to shifting needs and demands with direct are doing can result in redundancies and unnecessary complexity.
connection to customers and all stages of the solution development • Higher overall cost to the IT group due to role and technology
lifecycle. duplication across different divisions.
• Accelerates decision making by delegating authority lower into the • It will be difficult to centralize aspects of IT in the future, as divisions
function. adopt to a culture of IT autonomy.
• Promotes a flatter organization with less hierarchy and more direct
communication with the CIO.

Info-Tech Research Group | 71

Decentralized Model:
Division Decentralization (LoB, Geography, Function, Product)
DECENTRALIZED IT DIVISIONS (REPEATED FOR EACH DIVISION)

Organizational
Stakeholder Division Division Strategy Division Portfolio Demand Vendor Portfolio Release
PLAN Change
Relations Governance & Roadmap Management Management Management Management
Management

Application
Organizational Solution Portfolio &
R&D and Project Requirements Knowledge Data Architecture
DESIGN Quality Architecture

SOLUTIONS
Innovation Management Analysis Management Lifecycle
Management Management

Quality
BUILD Application Systems Application
User Experience Assurance & BI & Reporting
Maintenance Integration Development
User Testing

Goals, Metrics Enterprise Vendor Selection

Security Service Database Data Quality &
OPERATE Management and Content & Contract
Enhancements Operations Governance
Measurement Management Management

SHARED SUPPORT SERVICES

CROSS-ORGANIZATIONAL SUPPORT

IT Management & Portfolio Financial Workforce Strategic Enterprise Service Portfolio

IT Strategy IT Governance Management
Policies Management Management Strategy Communications Architecture

Security
External Controls & Risk Operations Problem
Security Strategy Response & Automation
Compliance Internal Audit Management Management Management
Recovery

Availability & Network & Operational Incident

Configuration Infrastructure Asset
Capacity Infrastructure Change Service Desk Management
Management Portfolio Strategy Management
Management Management Management

Info-Tech Research Group | 72

EXTERNAL SERVICE PROVIDERS
Enterprise Model:
Multi-Modal
I want to…
• Have an organizational structure that leverages several different operating models based on the needs and requirements of the different
divisions.
• Provide autonomy and authority to the different divisions so they can make informed and necessary changes as they see fit without seeking
approval from a centralized IT group.
• Support the different initiatives the enterprise is focused on delivering and ensure the right model is adopted based on those initiatives.

BENEFITS RISKS
• Allows for the organization to work in ways that best support • Inconsistency across the organization can lead to confusion on how
individual areas; for example, areas that support legacy systems can the organization should operate.
be supported through traditional operating models while areas that • Parts of the organization that work in more traditional operating
support digital transformations may be supported through more models may feel limited in career growth and innovation.
flexible operating models. • Cross-division initiatives may require greater oversight and a method
• Enables a specialization of knowledge related to each division. to enable operations between the different focus areas.

Info-Tech Research Group | 73

Enterprise Model:
Multi-Modal
GOVERNANCE
Organizational Change
IT Governance IT Management & Policies IT Strategy Financial Management Data Quality & Governance
Management

GOVERNANCE & STANDARDS

Different operating
models may be needed
by each division to
deliver on specific goals.

OPERATING OPERATING … OPERATING

MODEL A MODEL B MODEL N

SHARED SERVICES
Availability & Network &
Infrastructure Incident Asset Problem
Capacity Infrastructure Service Desk
Portfolio Strategy Management Management Management Info-Tech Research Group | 74
Management Management
Create enabling teams that bridge
your divisions
The following bridges might be necessary to augment your divisions:
• Specialized augmentation: There might not be a sufficient number of resources
to support each division. These teams will be leveraged across the divisions; this
means that the capabilities needed for each division will exist in this bridge team,
Governance
rather than in the division.
• Centers of Excellence: Capabilities that exist within divisions can benefit from
shared knowledge across the enterprise. Your organization might set up centers of Division 1
excellence to support best practices in capabilities organization wide. These are
Forums in the unfix model, or communities of practice and support capability Division 2

development rather than deliveries of each division.

Bridge

Bridge
Division 3
• Facilitation teams might be required to support divisions through coaching.
This might include Agile or other coaches who can help teams adopt practices …
and embed learnings.
• Holistic teams provide an enterprise view as they work with various divisions. Division n

This can include capabilities like user experience, which can benefit from the
holistic perspective rather than a siloed one. People with these capabilities Infrastructure
augment the divisions on an as-needed basis.
Info-Tech Research Group | 75
Source: Agility Scales
2.5 Customize the selected sketch
to reflect the desired future state
Input Output

1-3 hours
• Selected base operating • Customized operating
model sketch model sketch
1. Using the baseline operating model sketch, walk through each of the IT capabilities. Based on the
• Customized list of IT
outputs from activity 2.1:
capabilities
a) Remove any capabilities for which your IT organization is not responsible and/or accountable.
• Understanding of
b) Augment the language of specific capabilities that you feel are not directly reflective of what outsourcing and gaps
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.
c) Add any core capabilities from your organization that are missing from the provided IT
capability list.
Materials Participants
2. Move capabilities to the right places in the operating model to reflect how each of the core IT
processes should interact with one another.
• Whiteboard/flip charts • CIO
3. Add bridges as needed to support the divisions in your organization. Identify which capabilities will
• Operating model sketch • IT Leadership
sit in these bridges and define how they will enable the operating model sketch to deliver.
examples
Record the results in the Organizational Design Workbook

Document the final operating model sketch in the Communications

Deck Info-Tech Research Group | 76
Phase 3 This phase will walk you through the
following activities:

3.1 Create work units

Formalize the Organizational Structure
3.2 Create work unit mandates

3.3 Define roles inside the work units

3.4 Finalize the organizational chart

3.5 Identify and mitigate key risks

Phase 1 Phase 2
Establish the Organizational Create the Operating Model
This phase involves the following
Redesign Foundation Sketch
participants:

CIO

IT Leadership

Business Leadership

Phase 3 Phase 4
Redesign Your IT
Formalize the Organizational Plan for Implementation &
Structure Change Organizational Structure

Info-Tech Research Group | 77

 Embed change management into the
organizational design process

“Transformational change can Enable adoption of the new structure.

be invigorating for some You don’t have to make the change in one big bang. You can adopt alternative
transition plans such as increments or pilots. This allows people to see the
employees but also highly
benefits of why you are undergoing the change, allows the change message to
disruptive and stressful for be repeated and applied to the individuals impacted, and provides people with
others.” time to understand their role in making the new organizational structure
successful.

Source: OpenStax, 2019

Info-Tech Insight
Without considering the individual impact of the new organizational structure on
each of your employees, the change will undoubtedly fail in meeting its intended
goals and your organization will likely fall back into old structured habits.

Info-Tech Research Group | 78

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. The number of work units you require and their
names will not match your operating model one to one.
Certain functional areas will need to be broken down into
smaller work units to ensure appropriate leadership and
span of control.

Info-Tech Research Group | 79

Use your customized operating model to build
your work units
Work Unit Examples
WHAT ARE WORK UNITS? Here is a list of example work units you can use to brainstorm
A work unit is a functional group or division that has a discrete what your organization’s could look like. Some of these
set of processes or capabilities that it is responsible for, which overlap in functionality but should provide a strong starting
don’t overlap with any others. Your customized list of IT point and hint at some potential alternatives to your current
capabilities will form the building blocks of your work units. way of organizing.
Step one in the process of building your structure is grouping IT • Office of the CIO
capabilities together that are similar or that need to be done • Strategy and Architecture
in concert in the case of more complex work products. • Architecture and Design
The second step is to iterate on these work units based on the • Business Relationship Management
organizational design principles from Phase 1 to ensure that the • Projection and Portfolio Management
future-state structure is aligned with enablement of the • Solution Development
organization’s objectives. • Solution Delivery
• DevOps
• Infrastructure and Operations
• Enterprise Information Security
• Security, Risk & Compliance
• Data and Analytics Info-Tech Research Group | 80
Example of work units

Info-Tech Research Group | 81

3.1 Create functional work
units Input Output
1-3 hours
1. Using a whiteboard or large tabletop, list each capability from your operating model on • Organizational business • Defined work units
a sticky note and recreate your operating model. Use one color for centralized activities objectives
and a second color for decentralized activities. • Customized operating
model
2. With the group of key IT stakeholders, review the operating model and any important
definitions and rationale for decisions made.

3. Starting with your centralized capabilities, review each in turn and begin to form
logical groups of compatible capabilities. Review the decentralized capabilities and Materials Participants
repeat the process, writing additional sticky notes for capabilities that will be repeated
in decentralized units.
• Whiteboard/Flip Charts • CIO
4. Note: Not all capabilities need to be grouped. If you believe that a capability has a high
• IT Leadership
enough priority, has a lot of work, or is significantly divergent from others put this
capability by itself. • Business Leadership

5. 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.

6. Review your design principles Record

and ensure that in
the results they
the are aligned with
Organizational yourWorkbook
Design new work
Info-Tech Research Group | 82
units.
Group formation
Understand the impact of the functional groups you create.

A group consists of two or more individuals who are working toward a common goal. Group formation is how those individuals are
organized to deliver on that common goal. It should take into consideration the levels of hierarchy in your structure, the level of
focus you give to processes, and where power is dispersed within your organizational design.

Balance highly important capabilities with lower Group capabilities that increase their
priority capabilities efficacy

Importance Effectiveness
Span of
Specialization
Control

The scope of each role will be influenced by Identify the right number of
specialized knowledge and a dedicated leader employees reporting to a single
leader
Info-Tech Research Group | 83
Choose the degree of
specialization required
Be mindful of the number of hats you’re placing on any one role.

• Specialization exists when individuals in an organization are dedicated to performing

specific tasks associated with a common goal and requiring a particular skill set. Aligning
the competencies required to carry out the specific tasks based on the degree of
complexity associated with those tasks ensures the right people and number of people can
be assigned.
• When people are organized by their specialties, it reduces the likelihood of task switching,
reduces the time spent training or cross-training, and increases the focus employees can
provide to their dedicated area of specialty.
• There are disadvantages associated with aligning teams by their specialization, such as
becoming bored and seeing the tasks they are performing as monotonous.
• Specialization doesn’t come without its problems. Monitor employee motivation when it
comes to being focused
Info-Tech Insighton a specific task or goal for too long to prevent the employee
from feeling
Smaller organizations will require less specialization simply out of necessity. To function and deliver on critical
processes, some people might be asked to wear several hats.

Info-Tech Research Group | 84

 Avoid overloading the cognitive capacity of
employees
Cognitive load refers to the number of responsibilities that one can
successfully take on.
• When employees are assigned an appropriate number of responsibilities this leads to:
o Engaged employees
o Less task switching Info-Tech Insight
o Increased effectiveness on assigned responsibilities When you say you are looking for
o Reduced bottlenecks a team that is a “jack of all trades,”
you are likely exceeding
• While this cognitive load can differ from employee to employee, when assigning role appropriate cognitive loads for
responsibilities, ensure each role isn’t being overburdened and spreading their focus thin. your staff and losing productivity
• Moreover, capable does not equal successful. Just because someone has the capability to take on to task switching.
more responsibilities doesn’t mean they will be successful.
• Leverage the cognitive load being placed on your team to help create boundaries between teams
and demonstrate clear role expectations.

Info-Tech Research Group | 85

Source: IT Revolution, 2021
Factors to consider for span of control
Too many and too few direct reports have negative impacts on the organization.

Complexity Demand Competency Level Purpose

More complex work should have Dynamic shifts in demand require Skilled employees should require Strategic leaders are less involved
fewer direct reports. This often more managerial involvement and less hands-on assistance and will in the day-to-day operations of
means the leader will need to therefore should have a smaller be in a better position to support their teams, while operational
provide lots of support, even span of control. Especially if this the business as a member of a leaders tend to provide hands-on
engaging in the work directly at demand is to support a 24/7 larger team than those who are support, specifically when short-
times. operation. new to the role. staffed.

Info-Tech Research Group | 86

Group formation will influence
communication structure
Pick your poison…

It’s important to understand the impacts that team design

has on your services and products.
The solutions that a team is capable of producing is highly
dependent on how teams are structured. For example,
Conway’s Law tells us that small distributed software Small Distributed Modular Service
delivery teams are more likely to produce modular service Teams Architecture
architecture, where large collocated teams are better able to
create monolithic architecture. This doesn’t just apply to
software delivery but also other products and services that
IT creates.
Note that small distributed teams are not the only way to
produce quality products as they can create their own silos.

Large Co-Located Monolithic

Teams Architecture

Info-Tech Research Group | 87

Sources: Forbes, 2017
Create mandates for each of your
identified work units
WHAT ARE WORK UNIT MANDATES?
Examples of Work Unit Mandates
The work unit mandate should provide a quick overview of the The Office of the CIO will be a strategic enabler of the IT organization,
work unit and be clear enough that any reader can understand driving IT organizational performance through improved IT
why the work unit exists, what it does, and what it is management and governance. A central priority of the Office of the CIO
accountable for. is to ensure that IT is able to respond to evolving environments and
challenges through strategic foresight and a centralized view of what is
Each work unit will have a unique mandate. Each mandate best for the organization.
should be distinguishable enough from your other work units to
make it clear why the work is grouped in this specific way, The Project Management Office will provide standardized and
rather than an alternative option. The mandate will vary by effective project management practices across the IT landscape,
organization based on the agreed upon work units, design including an identified project management methodology, tools and
archetype, and priorities. resources, project prioritization, and all steps from project initiation
through to evaluation, as well as education and development for project
Don’t just adopt an example mandate from another organization
managers across IT.
or continue use of the organization’s pre-existing mandate –
take the time to ensure it accurately depicts what that group
The Solutions Development Group will be responsible for the high-
is doing so that its value-added activities are clear to the larger
quality development and delivery of new solutions and improvements
organization.
and the production of customized business reports. Through this
function, IT will have improved agility to respond to new initiatives and
will be able to deliver high-quality services and insights in a consistent
manner. Info-Tech Research Group | 88
 Input Output

3.2 Create work unit • Work units • Work unit mandates

mandates
1-3 hours
1. Break into teams of three to four people and assign an equal number of work units to
each team.

2. Have each team create a set of statements that describe the overall purpose of that
working group. Each mandate statement should:
• Be clear enough that any reader can understand.
• Explain why the work unit exists, what it does, and what it is accountable for.
Materials Participants
• Be distinguishable enough from your other work units to make it clear why the
work is grouped in this specific way, rather than an alternative option.

3. Have each group present their work unit mandates and make changes wherever • Whiteboard/Flip Charts • CIO
necessary. • IT Leadership
• Business Leadership

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 89
Identify the key roles and responsibilities for the target
IT organization
Now that you have identified the main units of WORK UNIT
work in the target IT organization, it is time to
Enterprise
identify the roles that will perform that work. PMO
Architecture
At the end of this step, the key roles will be
identified, the purpose statement will be built, ROLES
and accountability and responsibility for roles
will be clearly defined. Chief Enterprise Architect Project Portfolio Manager

Make sure that accountability for each task is

Enterprise Architect Program Manager
assigned to one role only. If there are challenges
with a role, change the role to address them (e.g.
split roles or shift responsibilities). Data Architect Project Manager

Info-Tech Insight
Do not bias your role design by focusing on your existing staff’s competencies. 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. Info-Tech Research Group | 90
3.3 Define roles inside the
work units Input Output
1-3 hours
1. Select a work unit from the organizational sketch. • Work units • Roles with clarified
responsibilities and
• Work unit mandates
2. Describe the most senior role in that work unit by asking, “what would the leader of accountabilities
this group be accountable or responsible for?” Define this role and move the • Responsibilities
capabilities they will be accountable for under that leader. Repeat this activity for the • Accountabilities
capabilities this leader would be responsible for.

3. Continue to define each role that will be required in that work unit to deliver or provide
oversight related to those capabilities.

4. Continue until key roles are identified and the capabilities each role will be accountable
Materials Participants
or responsible for are clarified.

5. Remember, only one role can have accountability for each capability but several can • Whiteboard/Flip Charts • CIO
have responsibility.
• IT Leadership
6. For each role, use the list of capabilities that the position will be accountable, • Business Leadership
responsible, or accountable and responsible for to create a job description. Leverage
your own internal job descriptions or visit our Job Descriptions page.

Record the results in the Organizational Design Workbook Info-Tech Research Group | 91
 Delivery model for product or solution
development
Can add additional complexity or clarity
• Certain organizational structures will require a specific type of resourcing model to meet expectations and deliver on the development or sustainment
of core products and solutions.
• There are four common methods that we see in IT organizations:
o Functional Roles: Completed work is handed off from functional team to functional team sequentially as outlined in the organization’s SDLC.
o Shared Service & Resource Pools (Matrix): Resources are pulled whenever the work requires specific skills or pushed to areas where product
demand is high.
o Product or System: Work is directly sent to the teams who are directly managing the product or directly supporting the requestor.
o Skills & Competencies: Work is directly sent to the teams who have the IT and business skills and competencies to complete the work.

• Each of these will lead to a difference in how the functional team is skilled. They could have a great understanding of their customer, the product, the
solution, or their service.

Info-Tech Insight
Despite popular belief, there is no such thing as the Spotify model, and organizations that structured themselves based on the original Spotify
drawing might be missing out on key opportunities to obtain productivity from employees.

Sources:
Indeed, 2020; Agility Scales Info-Tech Research Group | 92
There can be different patterns to structure and
resource your product delivery teams
The primary goal of any product delivery team is to improve the delivery of value for customers and the business based on your product
definition and each product’s demand. Each organization will have different priorities and constraints, so your team structure may take
on a combination of patterns or may take on one pattern and then transform into another.
How Are Resources and Work
Delivery Team Structure Patterns
Allocated?
Functional • Teams are divided by functional responsibilities (e.g. developers, testers,
business analysts, operations, help desk) and arranged according to their
Completed work is handed off from team to
team sequentially as outlined in the
Roles placement in the software development lifecycle (SDLC). organization’s SDLC.

Shared Service Resources are pulled whenever the work

• Teams are created by pulling the necessary resources from pools (e.g.
and Resource developers, testers, business analysts, operations, help desk). requires specific skills or pushed to areas
where product demand is high.
Pools

Product or • Teams are dedicated to the development, support, and management of specific Work is directly sent to the teams who are
directly managing the product or directly
System products or systems.
supporting the requester.

Skills and • Teams are grouped based on skills and competencies related to technology
(e.g. Java, mobile, web) or familiarity with business capabilities (e.g. HR,
Work is directly sent to the teams who have
the IT and business skills and competencies
Competencies Finance). to complete the work.

Info-Tech Research Group | 93

Delivery teams will be structured according to resource and
development needs
Functional Roles Shared Service and
Product or System Skills and Competencies
Resource Pools
Leveraged when specialists When you have people with
When your people are When you have a significant
such as Security or Operations cross-functional skills who can
specialists versus having cross- investment in a specific
will not have full-time work on self-organize around a product’s
functional skills technology stack
the product needs
Intake Business Intake Intake
Analysis

Business Analysis Product Team: Java

Product Team: Website
Development Applications

Development Testing
Product Release Product Release
Operations
Resourced as
needed
Testing
Intake

Product Team
Operations
For more information about delivering in a product operating model,
refer to our Deliver Digital Products at Scale blueprint.
Info-Tech Research Group | 94
Product Release Product Release
3.4 Finalize the
organizational chart Input Output
1-3 hours
1. Import each of your work units and the target-state roles that were identified for each. • Work units • Finalized organizational
chart
• Work unit mandates
2. In the place of the name of each work unit in your organizational sketch, replace the
work unit name with the prospective role name for the leader of that group. • Roles with accountabilities
and responsibilities
3. Under each of the leadership roles, import the names of team members that were part of
each respective work unit.

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

• Whiteboard/Flip Charts • CIO

• IT Leadership

• Business Leadership

Record the results in the Organizational Design Workbook &

Executive Communications Deck

Info-Tech Research Group | 95

Proactively consider and mitigate
redesign risks

Risk Financial or
Likelihood
Severity Reputational Impact

Every organizational structure will include certain risks that should have been
considered and accepted when choosing the base operating model sketch. Now that
the final organizational structure has been created, consider if those risks were
mitigated by the final organizational structure that was created. For those risks that
weren’t mitigated, have a tactic to control risks that remain present.

Info-Tech Research Group | 96

3.5 Identify and mitigate
key risks Input Output
1-3 hours
1. For each of the operating model sketch options, there are specific risks that should have • Final organizational • Redesign risk mitigation
been considered when selecting that model. structure plan

• Operating model sketch

2. Take those risks and transfer them into the correct slide of the Organizational Design
benefits and risks
Workbook.

3. Consider if there are additional risks that need to be considered with the new
organizational structure based on the customizations made.

4. For each risk, rank the severity of that risk on a scale of low, medium, or high. Materials Participants
5. Determine one or more mitigation tactic(s) for each of the risks identified. This tactic
should reduce the likelihood or impact of the risk event happening.
• Whiteboard/Flip Charts • CIO

• IT Leadership

• Business Leadership

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 97
Phase 4 This phase will walk you through the
following activities:

4.1 Select a transition plan

Plan for Implementation & Change
4.2 Establish the change communication
messages

4.3 Be consistent with a standard set of

FAQs

4.4 Define org. redesign resistors

Phase 1 Phase 2 4.5 Create a sustainment plan
Establish the Organizational Create the Operating Model
Redesign Foundation Sketch This phase involves the following
participants:

CIO

IT Leadership

Business Leadership

Phase 3 Phase 4 HR Business Partners

Formalize the Organizational Plan for Implementation &
Structure Change Redesign Your IT
organizational structure

Info-Tech Research Group | 98

All changes require change management
Change management is:

Managing a change that requires replanning and reorganizing and that causes
people to feel like they have lost control over aspects of their jobs.
– Padar et al., 2017

People Process Technology

Info-Tech Research Group | 99

Embedding change management into organizational design

A Awareness: Establish the need for organizational redesign and ensure

this is communicated well.

This
PREPARE
blueprint is

D Desire: Ensure the new structure is something people are seeking and
will lead to individual benefits for all.
mostly
focused on
the prepare
and

K Knowledge: Provide stakeholders with the tools and resources to function in transition
components.
their new roles and reporting structure.
TRANSITION

A Ability: Support employees through the implementation and into new

roles or teams.

R
FUTURE
Reinforcement: Emphasize and reward positive behaviors and attitudes
related to the new organizational structure.

Info-Tech Research Group | 100

Implementing the new organizational structure
Implementing the organizational structure can be the most difficult part of the process.

• To succeed in the process, consider creating an implementation plan that adequately considers these five components.
• Each of these are critical to supporting the final organizational structure that was established during the redesign process.

Transition Plan: Identify the appropriate approach to making the transition, and ensure the transition plan
works within the context of the business.
Implementation Plan

Communication Strategy: Create a method to ensure consistent, clear, and concise information can be
provided to all relevant stakeholders.
Plan to Address Resistance: Given that not everyone will be happy to move forward with the new
organizational changes, ensure you have a method to hear feedback and demonstrate concerns have been
heard.
Employee Development Plan: Provide employees with tools, resources, and the ability to demonstrate these
new competencies as they adjust to their new roles.

Monitor and Sustain the Change: Establish metrics that inform if the implementation of the new
organizational structure was successful and reinforce positive behaviors.
Info-Tech Research Group | 101
Define the type of change the organizational Transition Plan

structure will be
As a result, your organization must adopt OCM practices to better support the acceptance and longevity of the changes
being pursued.
Incremental Transformational
Change Change
Organizational change management is highly Organizational change management is required
recommended and beneficial for projects that for projects that require people to:
require people to:  Move into different roles, reporting structures,
 Adopt new tools and workflows. and career paths.
 Learn new skills.  Embrace new responsibilities, goals, reward
 Comply with new policies and procedures. systems, and values.
 Stop using old tools and workflows.  Grow out of old habits, ideas, and behaviors.
 Lose stature in the organization.

Info-Tech Insight
How you transition to the new organizational structure can be heavily influenced by HR. This is the time to be
including them and leveraging their expertise to support the transition “how.”
Info-Tech Research Group | 102
 Transition Plan
Transition Plan Options
Description Pros Cons Example
• More risky. A tsunami in Japan
• People may not buy into stopped all imports and
Change that needs to
exports. Auto
Big Bang happen immediately – • It puts an immediate stop to the current way of operating. the change immediately.
• Occurs quickly. • May not receive the manufacturers were unable
Change “ripping the bandage
training needed to adjust to get parts shipped and
off.”
to the change. had to immediately find an
alternative supplier.

• It can be a timely process.

A change in technology,
• If the change is dragged on such as HRIS, might be
• Can ensure that people are bought in along the way through for too long (over several
The change can be the change process, allowing time to adjust and align with the rolled out one application
Incremental years) the environment
rolled out slower, in change. at a time to ensure that
Change phases. may change and the people have time to learn
• There is time to ensure training takes place. rationale and desired and adjust to the new
outcome for the change system.
may no longer be relevant.

• Able to test the success of the change initiative and the

implementation process.
The change is rolled A retail store is
out for only a select • Able to make corrections before rolling it out wider, to aid a implementing a new
smooth change. • Lengthy process.
group, to test and incentive plan to increase
Pilot Change determine if it is • Use the pilot group as an example of successful change. • Takes time to ensure the product sales. They will
suitable to roll out to change has been fully pilot the new incentive
• Able to gain buy-in and create change champions from the worked through.
all impacted pilot group who have experienced it and see the benefits. plan at select stores, before
stakeholders. rolling it out broadly.
• Able to prevent an inappropriate change from impacting the
entire organization. Info-Tech Research Group | 103
4.1 Select a transition plan
approach Input Output
1-3 hours
1. List each of the changes required to move from your current structure to the new • Customized operating • Transition plan to support
structure. Consider: model sketch changes
a) Changes in reporting structure • New org. chart
b) Hiring new members • Current org. chart
c) Eliminating positions • List of changes to move
d) Developing key competencies for staff from current to future state

2. Once you’ve defined all the changes required, consider the three different transition
plan approaches: big bang, incremental, and pilot. Each of the transition plan
approaches will have drawbacks and benefits. Use the list of changes to inform the best
approach.
Materials Participants

3. If you are proceeding with the incremental or the pilot, determine the order in which
you will proceed with the changes or the groups that will pilot the new structure first. • Whiteboard/Flip Charts • CIO

• IT Leadership

• HR Business Partners
Record the results in the Organizational Design Workbook
Info-Tech Research Group | 104
 Communication
Make a plan to effectively manage and Strategy

communicate the change

Success of your new organizational
structure hinges on adequate preparation
and effective communication.
The top challenge facing organizations in
completing the organizational redesign is
their organizational culture and acceptance
of change. Effective planning for the
65%
implementation and communication
throughout the change is pivotal.
Make sure you understand how the change
will impact staff and create tailored plans
for communication.

65% of managers believe the organizational change is effective when provided

with frequent and clear communication.
Source: SHRM, 2021

Info-Tech Research Group | 105

 Communication

Communicate reasons for organizational Strategy

structure changes and how they will be

implemented
Leaders of successful change spend considerable time Five elements of communicating What is the
developing a powerful change message, i.e. a compelling change change?
narrative that articulates the desired end state, and that
makes the change concrete and 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 and doing it?
individual?
• Summarize what will stay the same. COMMUNICA
TING THE
• Highlight what will be left behind. CHANGE
• Emphasize what is being changed.
• Explain how change will be implemented.
• Address how change will affect various roles in the How long will How are we
organization. it take us to do going to go
it? about it?
• Discuss the staff’s role in making the change
successful.
Source: Cornelius & Associates, 2010 Info-Tech Research Group | 106
4.2 Establish the change
communication messages Input Output

• Customized operating • Change communication

model sketch message for new
2 hours
organizational structure
• New org. chart
1. The purpose of this activity is to establish a change communication message you can
• Current org. chart
leverage when talking to stakeholders about the new organizational structure.
• List of changes
2. Review the questions in the Organizational Design Workbook.
• Transition plan
3. Establish a clear message around the expected changes that will have to take place to
help realize the new organizational structure.
Materials Participants

• Whiteboard/Flip Charts • CIO

• IT Leadership

• Business Leadership

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 107
Apply the following communication principles to make your IT organization Communication
redesign changes relevant to stakeholders Strategy

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

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

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

Be Relevant
• Talk about what matters to the stakeholder.
• Talk about what matters to the initiative.
• Tailor the details of the message to each stakeholder’s specific concerns.
• IT thinks in processes but stakeholders only care about results: talk in terms of results.
• IT wants to be understood but this does not matter to stakeholders. Think: “what’s in it for them?”
• Communicate truthfully; do not make false promises or hide bad news.
Info-Tech Research Group | 108
Frequently asked questions (FAQs) provide a Communication
Strategy

chance to anticipate concerns and address

them
Questions to consider answering:
As a starting point for building an IT • What is the objective of the IT organization?
organizational design implementation, look at • What are the primary changes to the IT organization?
implementing an FAQ that will address the • What does the new organizational structure look like?
following: • What are the benefits to our IT staff and to our
• The what, who, when, why, and business partners?
• How will the IT management team share new
where information with me?
• The transition process • What is my role during the transition?
• What discussions should be held • What impact is there to my reporting relationship
with clients in business units within my department?
• HR-centric questions • What are the key dates I should know about?

Info-Tech Research Group | 109

4.3 Be consistent with a
standard set of FAQs Input Output
1 hour
1. Beyond the completed communications plans, brainstorm a list of answers to the key • Driver(s) for the new • FAQs to provide to staff
“whats” of your organizational design initiative: organizational structure about the organizational
design changes
• What is the objective of the IT organization? • List of changes to move
• What are the primary changes to the IT organization? from current to future state

• What does the new organizational structure look like? • Change communication
message
• What are the benefits to our IT staff and to our business partners?

2. Think about any key questions that may rise around the transition:
• How will the IT management team share new information with me?
Materials Participants
• What is my role during the transition?
• What impact is there to my reporting relationship within my department? • Whiteboard/Flip Charts • CIO
• What are the key dates I should know about? • IT Leadership

3. Determine the best means of socializing this information. If you have an internal wiki • Business Leadership
or knowledge-sharing platform, this would be a useful place to host the information.

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 110
 Plan to Address
Resistance

The change reaction model

Active
Detachment Questioning Acceptance
Resistance

(Adapted from Cynthia Wittig)

Info-Tech Insight
People resist changes for many reasons. When it comes to organizational redesign changes, some of the most
common reasons people resist change include a lack of understanding, a lack of involvement in the process, and
fear.
Info-Tech Research Group | 111
Include employees in the employee Employee
Development Plan
development planning process

Prioritize Draft Select Check In

Assess employee to Employee drafts Manager helps with Manager provides

determine development goals; selection of ongoing check-ins,
competency levels manager reviews. development coaching, and
and interests. activities. feedback. Info-Tech Research Group | 112
Consider core and supplementary components Monitor & Sustain
the Change
that will sustain the new organizational structure

Skills Work Environment

Structure Tasks

Leadership

Measurement
Communication

Tools &
Disincentives
Resources
Sustainment
Empowerment Incentives
Plan

Sustain the change by following through with stakeholders, gathering feedback, and ensuring that the change rationale and impacts
are clearly understood. Failure to so increases the potential that the change initiative will fail or be a painful experience and cost
the organization in terms of loss of productivity or increase in turnover rates.
Info-Tech Research Group | 113
 Monitor & Sustain
Support sustainment with clear the Change

measurements
• Measurement is one of the most important components
Every measurement should be rooted to a goal. Many
of monitoring and sustaining the new organizational
of the goals related to organizational design will be
structure as it provides insight into where the change is
founded in the driver of this change initiative
succeeding and where further support should be added.
• There should be two different types of measurements:
Once the goals have been defined, create one or more
1. Standard Change Management Metrics
measurements that determines if the goal was
2. Organizational Redesign Metrics
successful.
• When gathering data around metrics, consider other
forms of measurement (qualitative) that can provide
Use specific key performance indicators (KPIs) that
insights on opportunities to enhance the success of the
contain a metric that is being measured and the
organizational redesign change.
frequency of that measurement.

Info-Tech Insight
Obtaining qualitative feedback from employees, customers, and business partners can provide insight into where the new
organizational structure is operating optimally versus where there are further adjustments that could be made to support the
change.
Info-Tech Research Group | 114
 Monitor & Sustain
4.4 Consider sustainment the Change

metrics Input Output

1 hour
1. Establish metrics that bring the entire process together and that will ensure the new
• Driver(s) for the new • Sustainment metrics
organizational design is a success.
organizational structure
2. Go back to your driver(s) for the organizational redesign. Use these drivers to help • List of changes to move
inform a particular measurement that can be used to determine if the new from current to future state
organizational design will be successful. Each measurement should be related to the • Change communication
positive benefits of the organization, an individual, or the change itself. message

3. Once you have a list of measurements, use these to determine the specific KPI that can
be qualified through a metric. Often you are looking for an increase or decrease of a
particular measurement by a dollar or percentage within a set time frame. Materials Participants
4. Use the example metrics in the workbook and update them to reflect your
organization’s drivers. • Whiteboard/Flip Charts • CIO
• IT Leadership

• Business Leadership

Record the results in the Organizational Design Workbook

Info-Tech Research Group | 115
Related Build a Strategic IT Workforce Plan

Info-Tech
• Continue into the second phase of the organizational redesign process by defining the
required workforce to deliver.

Research
• Leveraging trends, data, and feedback from your employees, define the competencies
needed to deliver on the defined roles.

Implement a New IT Organizational

Structure
• Organizational design implementations can be highly disruptive for IT staff and
business partners.

• Without a structured approach, IT leaders may experience high turnover, decreased

productivity, and resistance to the change.

Define the Role of Project Management in

Agile and Product-Centric Delivery
• There are many voices with different opinions on the role of project management.
This causes confusion and unnecessary churn.

• Project management and product management naturally align to different time

horizons. Harmonizing their viewpoints can take significant work.

Info-Tech Research Group | 116

Research Contributors and Experts
Jardena London Shan Pretheshan Dean Meyer
Transformation Catalyst, Rosetta Director President N. Dean Meyer and
Technology Group SUPA-IT Consulting Associates Inc.

Jodie Goulden Chris Briley Jimmy Williams

CIO, Manning & Napier CIO, Chocktaw Nation of
Consultant | Founder
Oklahoma
OrgDesign Works

Info-Tech Research Group

Cole Cioran Managing Partner Dana Daher Research Director Hans Eckman Principal Research
Director

Ugbad Farah Research Director Ari Glaizel Practice Lead Valence Howden Principal Research
Director

Youssef Kamar Senior Manager, Carlene McCubbin Practice Lead Baird Miller Executive Counsellor
Consulting

Josh Mori Research Director Rajesh Parab Research Director Gary Rietz Executive Counsellor

Info-Tech Research Group | 117

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Appendix
IT Culture Framework
This framework leverages McLean & Company’s
adaptation of Quinn and Rohrbaugh’s Competing Values
Approach.

Competitive Innovative

• Autonomy • Adaptable
expectations
• Confront conflict • • Innovative
Aggressive
• • Quick to take advantage of opportunities
directly High pay for good
• Decisive • Risk taking
performance
• Competitive • • Opportunities for professional growth
Working long hours
• Achievement • • Not constrained by rules
Having a good
• Tolerant
oriented reputation
• Results oriented • • Informal
Being
• High performance • Enthusiastic
distinctive/different

• Stability • Clear guiding • Team oriented

• Reflective philosophy • Fair
• Rule oriented • Security of • Praise for good
• Analytical employment performance
• High attention to • Emphasis on quality • Supportive
detail • Focus on safety • Calm
• Organized • Developing friends at work
• Socially responsible
Traditional Cooperative

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