CIO — Spend enough years as a CIO, and odds are good that you will preside over the reorganization of an IT department or two. When you sign on with a new company, "overhaul dysfunctional IT organization" may be at the top of your to-do list. Or perhaps a need to slash the IT budget, digest a spate of acquisitions or respond more nimbly to market demands will spur a departmental shake-up.
Whatever the reason, a reorg’s success hinges on the same best practices that underlie any IT-business endeavor. We asked CIO Executive Council members for tips on how to reap the most gain for the least pain from an IT reorganization. Here’s what they advised.
1) Make sure business strategy drives the reorganization. Too often, a reorg is a knee-jerk response to some fleeting external pressure, such as a call to cut costs or better cater to a cranky group of internal customers, rather than a well-thought-out and well-aligned move. "Don’t reorganize just because you’re the newbie, or because it’s been a year since the last reorg," says Brent Stahlheber, executive VP and CIO of The Auto Club Group (AAA). "Make a change where change is truly needed."
During Stahlheber’s interviews for the CIO post at The Auto Club, for example, he learned about problems with the decentralized IT organization. "It was clear that it wasn’t working around applications and infrastructure," he says. "They weren’t rowing in the same direction." Once Stahlheber took the job, though, he did not rush to reorganize: He spent six months on reconnaissance, talking with business leaders and IT staff to understand the company’s product lines, market environment and business strategy. Only then did he embark on a centralization initiative.
At other companies, the link between an IT reorg and business strategy may be more overt. Cardinal Health’s IT centralization effort, for example, is part of a companywide global integration plan called One Cardinal Health. "[The plan] is about making it easier for customers to do business with us by partnering across our internal business boundaries to offer them integrated services," says Jody Davids, Cardinal Health’s executive VP and CIO. The first step of the plan was the recently completed IT reorganization, which combined a decentralized IT staff of 1,700, spread across all of Cardinal Health’s business units, into a single, global enterprise IT organization. Over the next five to seven years, Cardinal Health will be moving to a single ERP platform and ultimately to common technologies across the globe.
