V. Sambamurthy on IT Function

V. Sambamurthy is the director of MBA consulting and associate professor of decision and information technologies at the Robert H. Smith School of Business at the University of Maryland. His expertise lies in the strategic deployment and use of IT in organizations and leveraging IT value. He spoke with CIO about the interim findings of his recent study, “Organizing the IT Function in the 21st Century.”

CIO: What trends do you see in how companies are organizing the IT function now?

Sambamurthy: We found successful companies were not thinking about centralized, decentralized or federal structures, or about insourcing versus outsourcing. They were more sophisticated, using what we call modular logic. They recognize that while structure is a convenient way to think about IT organization, it must be organic and flexible. When a new challenge or business need arises, you don’t have to change organizing structure or create a completely new organization; just add a modular patch to respond?a new process or a task force, for example.

Explain the modular logic of organizing IT.

Modular logic says the best way to organize IT for infrastructure may not be the best way to organize for solutions delivery. It identifies different sets of organizing options for each key activity by which an IT department creates value for the business. Options may include insourcing, outsourcing, account managers, steering committees and certain governance structures. Take solutions delivery: At some companies, this is provided by the corporate IT group. In others, it is handled by divisions, or it’s provided in part by corporate IT, divisions and third-party providers. In each case, the IT organization identifies strategic applications and determines how to deliver high-quality solutions as fast and as cost-effectively as possible. This can look very different from company to company, depending on culture, business priorities and the maturity of its IT. The CIO must create a coherent IT organization, selecting a primary architecture or integrating option and then adding modular pieces of other integrating options where necessary.

What new skills do CIOs need then?

CIOs need to integrate legacy applications with off-the-shelf, Web-based and other applications. The IT function must have a portfolio of different skills to build IT across different platforms and environments. Also, the CIO needs partnering skills. CIOs used to keep vendors at arm’s length. Today, technology needs are not always clear, and vendors may be the ones educating you about your needs. But above all, the CIO must recognize that changes to the IT organization can be made without radically altering the underlying structure.