Imagine you’re the CIO of a very mature, sophisticated global organization. The company uses outsourced resources in India, Eastern Europe and Asia as well as shared-service captive units in the U.S. Your company has a wide variety of digital products, some of which have been in the marketplace for two decades and others that are new but quickly gaining market share. The company is experiencing increased demand for all its products but also demand for more new products. To top it all, a new CEO is on board to drive growth, and it’s clear that explosive growth is on the way.
The mandate from your CEO is to enable the organization so it can run faster and create better products while continually scaling to handle the growth coming down the pipeline. You see that the IT group definitely is not positioned from a talent perspective to meet this mandate.
What would you do to transform the company’s existing IT talent to support the new objectives? Where would you start this transformation?
I’m familiar with a company that faced this actual situation. Here are the steps they took in developing their talent strategy to address the growth objectives.
Analyze the constraints to being able to scale quickly
The company had realized a lot of benefit over the years from running individual IT projects in the outsourced and captive locations around the world. But the location distance was a challenge. For example, some of the business analysts in the Midwest were supported by engineers in Eastern Europe and India, and this impacted productivity. Basically, the company had a lot of working pieces that worked individually but didn’t work together. This hindered scaling and also developing new products at the necessary speed.
In the analysis, they also noted that the sourcing and captive services were organized by IT functions. For instance, application developers were in one location and infrastructure maintenance teams were in another location.
Determine the talent constraints
They began this task by assessing the effort necessary to support each product. They had products that had been in the marketplace for many years and were now in maintenance mode, not requiring much effort. There were also new products with big markets, requiring a lot of effort.
The company’s one-size-fits-all approach wasn’t appropriate. The well-established products brought in a lot of revenue, but the future success of the company depended on some of the nascent new products, which required more attention. Further, some workloads were managed in agile and some in waterfall, according to a product’s maturity in the market. As with the apps, not all workloads needed equal support.
The assessment showed them they needed to match the IT talent against the differing application and workload needs.
In assessing the IT talent and expertise, they realized the company faced a big risk from talent close to retirement age, especially those with knowledge of the older products. It became clear that in five years the entire engineering team would retire. Yet the life of the products would go on for another 10 or 15 years.
To ensure sustainability, the company needed to match its talent life cycle against its product life cycle.
Reorganize the IT group to address the constraints
It was apparent that the way to solve all the constraints and challenges was to reorganize the IT group by service and product type rather than functional expertise. Instead of structuring by functions, they structured IT by product clusters and according to the products’ importance to company success and the support effort. A different picture emerged in the new structure, which allowed them to evaluate the required trade-offs between the mandated objectives and the constraints.
By better clustering the IT talent in this new structure, they could see how the company could gain productivity improvements. They also created a data cube and ran sophisticated analytics against it. This revealed:
- Where the IT skills were by location and in proximity to one another,
- Which people would soon retire,
- Who needed training for new skills,
- Whether or not there was sufficient new talent coming into a particular product group to replace the talent that was leaving,
- Whether they were overbalanced with senior vs. junior talent or vice versa.
The data cube and analysis allowed them to deeply understand the talent environment and then rethink it so it was sustainable and could support the anticipated growth and improve productivity. It also uncovered opportunities that allowed them to design the new talent environment to work around the challenges of proximity and depth of expertise. These opportunities were not apparent when looking at the challenges from the perspective of IT being organized by functional skills.
This reorganization enabled the company to transform its talent base to support the anticipated growth. Paradoxically, it also enabled the company to save a substantial amount of money (18 percent) even though savings weren’t the objective. The savings were a result of better alignment by product clusters and the increased productivity that came from that alignment.
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