IT reorganizations are costly both in terms of resources and productivity. To minimize those costs, CIOs and IT leaders should understand the nature of the problems they are looking to solve, have a solid strategy and be sure that business strategy is at the heart of the reorganization efforts.
Know the Problem
Before going down the reorganization path consider other ways to fix what is ailing your organization. It all starts with having a grasp of what the actual problems are. Once you have that knowledge, you can decide what your next actions should be. “IT leaders should first ask themselves what they hope to accomplish,” says Julie Stansbury, CIO of GE Capital Treasury.
Determine Where to Start
Communications with key stakeholders, IT teams and C-level management is a must to find out where your organization is falling short and what you are doing right. How you decide to approach the conversation may be different, but getting the real scoop from all parties involved is paramount.
“I began by having conversations with my business partners. I gathered input from them on their experience working with the IT group, particularly around pain points or areas of potential improvement. I also gathered input from my IT leadership team around the same sorts of questions. I had a lot of roundtable, small-group discussions, and found that a frank dialogue was the key to determining the course of the reorg,” says Stansbury.
Common Reasons a Reorg Might Be Needed
According to Bryan Kirschner, director of the Apigee Institute, IT leaders need to ask themselves three questions when considering a reorg: “
1. Are we outside-in?
2. Are we cloud-first?
3. Are we mobile-centric?”
A “no” to any of these questions is a major warning sign. In today’s era of mobile and the cloud, having an insular IT department isn’t enough to survive and succeed,” says Kirschner. Organizations need to always beware of the changing landscape. Sometimes that means breaking down silos and making sure you are delivering a great customer experience or product, whether it’s to a paying customer or a company employee using an IT solution.
Let’s look at common reasons an IT department gets reorganized.
1. IT isn’t delivering results
Is your IT department regularly missing deadlines and going over-budget? This is a real reason to consider a reorg, but leaders should again ask themselves, “Is there another way to fix these issues?”
According to a recent survey from the Apigee Institute nearly half of all companies fail to meet expectations when developing mobile apps. “These companies are seeing a key warning sign: failure to meet expectations deploying something that’s becoming a necessity for any enterprise. IT, at a minimum, should do no evil—in this case, not be the obstacle to something essential to competing in the new mobile-centric market context,” says Kirschner.
2. New leadership on board
Many times new leadership will bring about sweeping changes. Experts warn, however, that this isn’t always a necessary or prudent path. “Reorgs should have a strategic rationale behind them, not just a sense, for example, that it’s been awhile since the last reorg,” says Stansbury.
3. New technology changes company mission
The world of technology has become firmly entrenched in most of today’s businesses. It’s forcing some companies to rethink the way they do business and that could mean big changes for IT.
“We’re seeing demands to deliver modern digital experiences and capabilities for the business as a growing force. Let’s take the retail sector as an example: Walgreens has found that customers who shop in-person, online, and using their mobile app spend six times as much as single- channel customers. The upside of delivering great omnichannel experiences and the downside of failing to do so is going to swamp traditional reasons to reorg like shaving costs a few percent,” says Kirschner.
Do You Have C-Level Buy-In?
C-Level buy-in can make or break most any initiative and reorganizations are no different. “To gain their buy-in (C-level executives) it is important to get their input up front as to what’s working or not working in the current environment, and to share your objectives of what you intend to accomplish with a reorganization. Following up with your C-level peers after the reorg changes are made, to get feedback is also a good approach to sustaining their buy-in,” says Stansbury.
Be Aware of Team Morale
Once it’s underway there will be a lot of questions and perhaps anxiety. It’s hard to get things done in an atmosphere where people are worried about the unknown. Experts agree that communications is the key. Getting your IT workers involved and onboard with your strategy is an important part of keeping morale high and workers engaged.
“Reorganizations can be stressful for employees – they’re waiting to see how things change and what that means for their day-to-day work. It’s critical to keep your IT teams and IT leadership involved in the entire process. That way, they have a stake in the reorg rather than feeling like changes are being put upon them. In our own reorg, I made sure to keep the entire business informed of our changes and the strategy behind them, using a variety of communication mediums including roundtable discussions, blogs and Web chats. The sooner you can bring clarity around those questions, the better,” says Stansbury. The bottom-line is that leaders need to be upfront and transparent in regards to what the reorg means to their workers and the business as a whole.