Marc Dowd (Principal, European Client Advisory)
Chris Weston (Principal, European Client Advisory)

Businesses restructure frequently. Often this is down to a business need — perhaps the customer environment is changing, the business is evolving the way it adds value or it is simply growing beyond the limits of an existing structure.

IT also restructures periodically and sometimes it feels as if that is based on fashion, as defined by analysts and consultants. Being a bit more charitable I would say that it is more often based on a reaction to what isn’t working. Plan, build, run and “bimodal IT” are, to my mind, exactly that — reactions to IT organisations that had problems in execution.

Essentially the major roles in IT don’t change that much no matter how much you redesign. Looking at worldwide data for the roles in the IDC Job Role Taxonomy (IDC’s Worldwide ICT Job Role Taxonomy, 2021) we see all the usual suspects, and most of them have been with us for years if not decades. Yes, the IoT designer role is fairly new and I am certain there are hundreds of roles that are fairly niche. “Software wizard” is one I used to enjoy and has strangely fallen out of use!

In practice roles support the jobs to be done … you may have agile coaches and scrum masters, you may have a “cloud wrangler” or a “head of AI ethics”. These are often roles created as the technologies of the day bring up novel issues that need to be managed in new ways. Or, in the case of a scrum master, it’s a response to a new process necessitated by the need for higher quality and faster delivery.

I would say that having roles to fit organisational structure is not a problem as long as it works. But how do you know which structure brings actual benefit? Is a business relationship manager a role that always has value or is it a sign that there are communication and process issues between IT and the line of business (LOB) that need to be addressed at source?

Like all fashions there are older ways of organising that look “wrong”. Functional organisation shouts “beware of the stovepipes”, just as embroidered bell-bottom jeans shout “beware of the hippy”. Is it a ratchet process where we learn what works better and so make progress in a virtuous spiral, or is it a circle of waste?

Sometimes it is difficult to tell if you are going to gain the “benefits” of a reorganisation before you do it. We come across IT product organisations as a structure that overcomes a lot of the issues commonly associated with a project-based philosophy and structure. However, the devolution of IT in the business may mean that IT product ownership in IT rather than the line of business may cause other issues as IT changes yet again from delivering technology to being an orchestrator of the enterprisewide elements of resources, governance and security.

I am a great believer in form following function. At the moment, we are involved in helping a number of clients perfect their digital transformation. This, we believe, should start with value. Value to the customer, and also to the enterprise. Value is notoriously difficult to quantify and is often seen very differently by the various stakeholders involved. One thing I am seeing right now is organisations reacting badly to what they might see as IT-led limitations. The value of a reorganisation must be carefully and consciously communicated to the stakeholders. Or better still they must see the business value that is delivered to them very clearly and help develop the structure to attain it.

In situations where IT reorganises itself without reference or communication to the LOB stakeholders — even if this is done with the best will in the world — it inevitably feels like an additional pain point that the LOB won’t appreciate.

So is reorganising valuable? Yes, in many cases it is. If you have a problem, or you suspect there is a better way of being organised, it is always worth investigating. I would suggest that you don’t head down the path of a reorganisation without defining what the value is you hope to obtain and checking with your advisors/peers that the value makes sense. After that, check the value and the change management with your business peers and the people you are considering changing — in fact all your stakeholders.

It’s worth bearing in mind that some changes are best done bit by bit and some have to be done as a big bang. There are situations that call for both approaches.

Our next meeting of the IDC Digital Leadership Community will take place on September 2, 2021, and will discuss the different organisational models, the pitfalls of each of these, and how to avoid them. We will be hearing from Martin Sadler, a leading CIO in the UK National Health Service, as he sets out his approach to restructuring.

It’s free to join, so please contact me at mdowd@idc.com or my colleague Chris Weston at cweston@idc.com if you are a digital leader and you’re interested in taking part.

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