Reorganizing your IT department

CEDRIC PACKHAM

Globe and Mail Update

Front Lines is a guest viewpoint section offering perspectives on current issues and events from people working on the front lines of Canada's technology industry.

For Chief Information Officers, it's as inevitable as the change of seasons or the Toronto Maple Leafs exiting the Stanley Cup playoffs: the need to reorganize the way the IT department is structured and performs. Most often triggered by a significant change from within the organization, perhaps a recent merger or acquisition, the bringing of a new product or service to market, or a change in leadership — whenever one of these events occurs it's imperative for CIOs to revisit how the IT department operates and determine whether it's structured appropriately to meet the demands of the business moving forward.

With today's businesses in a near-constant state of change, the need to reorganize the IT department is inevitable. Doing it successfully, with a minimal amount of stress and upheaval within the organization, is where the challenge lies. After all, business must continue to operate effectively and efficiently throughout such changes.

Effective IT departments have, at their core, the right combination of people working within the right structure.

Understanding the strengths and weaknesses of individuals is key when you look to reorganize the department. Within most organizations there's a pattern to how people perform: the top 5 per cent, the "star performers"; the 20 per cent who have a significant influence on the organization's success; and the large group in the middle, your worker bees. Then there are those at the bottom — the 10 per cent whose absence would not impede the organization's movement forward.

When you reorganize you need to make the most of your existing IT talent. You need to rock the boat enough that those who no longer fit shake loose and the boat steers into the right direction, but you don't want to rock it to the point that everyone falls overboard.

From within an organization this is not an easy thing to do. Most companies have developed all kinds of coping mechanisms to deal with problems in their structure. When things don't quite work or don't quite flow, the organization will find a way to compensate. Unfortunately, in a large enterprise, those coping mechanisms eat up people's time and energy — up to 10 per cent of its work force.

Choosing to work with a third party can offer a fresh perspective. Without the clutter of personal bias, an outside partner can assess what is working, what needs to change and can objectively identify the strengths of key individuals within the department.

Overarching the individuals is the structure of the IT department itself. From a governance perspective, department functions that can influence each other's performance should operate and report to management independently. For example, within an IT department, Quality Assurance should operate separately from Systems Development, but we often see them intertwined. We've also seen the person responsible for development also responsible for the project management office, risking a conflict of interest. If you are the director of the project management office and your VP is responsible for development and one of his projects is off-side — are you going to put up a red flag? This is akin to putting the elephant in charge of the peanuts. Putting the right organizational structure in place can preclude these types of incidents.

Instituting a series of structural changes — and having them adopted — can be difficult and can lead to resistance from those who will be affected by the changes. One of the keys to successfully reorganizing an IT department is involvement and ownership of the outcome. When the new or existing management team has had the opportunity to offer input and participate, rather than having change thrust upon them, they'll better understand the rationale for the decisions being made and consequently better buy in and execute the necessary changes.

But be advised against attempting to change too much too quickly. If the structural changes are going to be significant you should consider implementing them in multiple phases. After all, while in the throes of reorganizing, which can eat up a significant percentage of the department's time and resources, it's also charged with keeping the business up and running. Remember: Business must continue to operate effectively and efficiently through change.

By phasing changes in over time, you give people an opportunity to adjust and better understand their new roles.

Once complete, the benefits of reorganizing the IT department begin to manifest themselves, and they are often threefold: costs go down because you're operating more efficiently; the department is perceived as more service-oriented by the business community; and people within the department have a clear understanding of their roles and responsibilities so can work effectively to serve the business's overall goals and objectives.

Cedric Packham is CEO of Stratix Consulting, a provider of IT consulting services for the financial services industry.

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