Time to reorganize IT?

Organizing IT to mirror lines of business is a concession to company politics, not an intrinsically good idea. Now is a great time to change direction.

Dear Bob ...

Like everyone else, we've had to lay off a lot of our IT staff -- a third, in our case.

We had been organized around the company's lines of business. With the layoffs, each team is stretched pretty thin.

My question is, should we ride it out, or should I think about a different organizational chart?

- Not quite emaciated, but getting close

Dear Dieter ...

I've never been a fan of the business-mirror approach to organizing IT in the first place, so you might be asking the wrong guy. In most situations I favor a more basic approach: Applications and Operations are the two big IT divisions; depending on the specific circumstances think about adding separate architecture and business-office functions, and possibly, if you're of an advanced-thinking bent, a separate business process engineering team.

This is a perfect time to switch to this sort of organization, assuming I can persuade you it's a good idea.

Most companies that follow the business-mirror model of IT do so because the rest of the enterprise is heavily siloed and seriously political, with dysfunctional IT governance. Organizing as a business mirror gets IT out of the line of fire: Each business unit makes its own decisions about what projects are funded, and staffing for each IT business-unit-mirror is established by formula.

The good news is, the arguments go away. The bad news is, IT reinforces the corporate dysfunction instead of serving as an integrative force.

Here's the good news about the economic bad news: In times of serious adversity, the only alternative to working together to achieve common ends is going bankrupt together.

As CIO, your first step is to restructure IT around functional groupings, as outlined above. Applications, by the way, should organize around major applications or applications modules. You should create a Business Analyst or Business Process Engineering team and assign specific analysts to each business unit, so they don't feel like you don't love them anymore.

And then, wearing your leader-of-the-entire-enterprise hat, you'll take on the more difficult challenge of helping the company create an IT governance process that funds what's most important to the company's survival and future success, and not just what each business unit wants separately.

That can be a lot of fun. (And if you decide you need outside help, I trust you know who your friends are.)

- Bob