For a lot of enterprises, frequent IT reorganizations are a fact of life. Revamping hardware, applications, processes and staff has become a hallmark of the technology function at some organizations.
The IT shuffle is likely to continue into 2012, as organizations look to get maximum benefit from their technology investments in a constantly changing business world. A key consideration for any reorganization, though, is whether it's a knee-jerk reaction to a temporary development in the market or a well-thought-out strategy to truly help the business meet its goals -- with minimum disruption to operations.
Ready to Reorg
Has your IT department undergone a reorganization in the past 12 months, or does it have one planned?
Don't know: 3%
Source: Computerworld's exclusive Forecast 2012 survey, June 2011. Base: 353 IT executives
Computerworld's Forecast 2012 survey shows a high level of IT reorganizations, with 39% of the 353 IT executives surveyed saying that their IT departments either had undergone reorganizations in the past 12 months or had planned one.
The most common feature of the reorganizations undertaken by the survey respondents was an effort to boost IT's flexibility to meet changing business needs: 47% of those polled said their restructurings included such initiatives. Meanwhile, 35% said their shake-ups involved IT department downsizing or layoffs, another 35% said centralizing IT operations was part of the process, 25% cited a desire to create teams of subject-matter experts, 21% said they were creating a project management office, 21% mentioned boosting the role of enterprise architects, and 18% cited outsourcing.
In the past, IT reorganizations focused on optimizing the IT unit's service delivery, says Bart Perkins, managing partner at Leverage Partners, a Washington-based IT consulting firm. Perkins says those change-ups addressed questions such as how much independence should be given to business unit IT teams, which applications IT should be allowed to develop, whether there should be a single applications organization or separate organizations for development and maintenance, and whether there should be a single infrastructure team or multiple ones organized by technology.
"Today, reorgs focus more on the integration between IT and the business," says Perkins, who is a Computerworld columnist. "A different organization is needed when IT is responsible for activities that are not traditionally IT functions."
Do IT reorganizations get the results that management hopes for? "IT reorgs are no different from any other type of reorg. You don't always get the results you [want]," Perkins says. "The odds are improved if the reorg is carefully planned and executed. The staff has to be told quickly, people have to be handled with dignity, particularly anyone being laid off, [and] the rationale for the new organization has to be compelling."
Paul Glen, CEO of Leading Geeks, an IT education and consulting firm in Los Angeles, says reorganizations are one of the first tools managers think of when confronting a problem. "Unfortunately, I think that the benefits are often overestimated and the costs underestimated," says Glen, who also is a Computerworld columnist. "If they were more accurately understood, I'm not sure that reorgs would be done so frequently."
IT executives who have lived through more than one reorganization say the experience can be challenging but add that it has its rewards if done for the right reasons.
About two years ago, the Franklin, Tenn., municipal government reorganized its IT department along application lines, to ensure that the applications the city was deploying were implemented and used effectively. "We created enterprise, public safety, [Microsoft] Office and financial manager positions to aid in the implementation and update of the various software platforms we use," says Fred Banner, IT director.
Previously, people in IT worked with a variety of applications, regardless of their specialty. As a result, there was a lack of structure and no one took ownership of and accountability for projects, Banner says.
In each application area, the city appointed application managers who are responsible for making any needed upgrades to better support end users in some 14 city departments, including municipal government, public safety, police, fire, parks and water. The managers also train others in their area on how to fully leverage the applications they work with.
By giving people more responsibility for the success of a system rollout or upgrade, the city is "making them a part of the solution," Banner says. "We're letting them make some decisions about how the hardware and software should function in their area."
The reorganization is nearly at an end, and management has deemed the strategy a success, Banner says. The next step, to be launched in July 2012, is a reorganization of IT people along business lines such as public safety and financial management. The effort involves "redefining the application managers into business units, to work with users in defining future opportunities for the city," Banner says.
The details as to who will do what under the reorganization haven't been finalized, Banner says. But the goal is to continue to support the shifting IT needs of a growing city. Franklin's population has increased from 25,000 12 years ago to 63,000 today, and it's projected to reach about 80,000 in five years.
"We're trying to keep abreast of the changes occurring in the community and address what the [businesses that relocate there] are looking for, especially as to what kinds of services we can provide for them," Banner says.
A key to success with any reorganization is letting people know why changes are being made, he says. "Early on in the reorganization, we brought the city departments together and said, 'Life as you know it is not going to be the same as yesterday, and we need your help,' " Banner says. Widespread support is important. "You must find people who are going to be the project managers, the doers and the thinkers, and you've got to get that group on board," he says.
Some IT reorganizations reflect ongoing changes in the marketplace. For example, ACP Interactive, a San Francisco-based marketing services firm, has seen its business model shift during the past 20 years as new communications technologies have been introduced.
ACP uses various technologies in the services it offers its clients, and as the technologies change, "different skill sets come into play," says Ed Skokowski, director of IT. Those changes have led to multiple IT staff shake-ups.
ACP undertook its most recent IT reorganization in response to a decrease in revenue, Skokowski says. The IT department, which once had up to 30 people in addition to part-time support staffers, has been scaled down to just two.
Skokowski has taken other steps to reduce costs, including consolidating servers, adding Linux wherever possible and migrating some functions to the cloud.
In some cases, IT reorganizations take place over extended periods of time, making them less of a jolt to those involved.
"We have been going through a gradual reorganization to make the IT organization function as a single unit," says Kim Tracy, CIO and executive director of University Technology Services at Northeastern Illinois University in Chicago. "As part of that, we created a strategy and planning department, an integrated service-delivery organization, and are working to create ITIL-like processes to help the organizations work together to deliver value to the university."
Tracy says the reorganization of the university's IT department has been much slower than other reorganizations he has been involved in. He says he thinks it's "better thought-out and hopefully more considerate of individual members of the organization." He says other reorganizations he has experienced have been due to merger and acquisition activity, divestiture or "drastic budget cuts."
Looking at the big picture, IT executives say it's likely that IT reorganizations will always be a possibility, particularly with the constant changes in technology and business. "I really don't see an end in sight to IT reorganizations," Tracy says.
The best approach, Skokowski says, might be "more frequent reviews and adjustments to players and roles, similar to a football team changing personnel many times during a game. Companies that reorganize without a predetermined plan or just to shake things up are really gambling their future success."