More on Organizational Realignments and How They Affect CIOs

IT leaders are well-positioned to benefit from and facilitate organizational changes inside their companies, according to one executive recruiter.

In May, three CIOs earned promotions amidst management realignments at their companies:

• At AmerisourceBergen, senior VP and CIO Tom Murphy was given additional responsibility for the pharmaceutical company’s multi-year process improvement project, which includes the design of an ERP system.
• Flower Foods, a manufacturer of supermarket baked goods, made its CIO, Vyto Rasminas, a senior vice president.
• Don Nelson was promoted from vice president of capabilities development to CIO at graphic design services provider VistaPrint.

The realignments or restructurings of these companies were effected to position each company for growth, and in AmerisourceBergen’s case, to also streamline its organizational structure.

Paul Groce, the leader of executive search firm CTPartners’ CIO practice, says he hasn’t noticed a sudden uptick in organizational realignments, but he adds, weak economic conditions can pressure organizations (especially those that have been through mergers or acquisitions, for example) to achieve the efficiencies and economies of scale those mergers and acquisitions promised. And that may explain why CIO.com noticed three announcements about such realignments in May.

“In many cases, it takes senior management a certain period of time to realign internal structures to facilitate the merger and integration of companies they may have acquired,” says Groce. “Stakeholders in the company are going to be more insistent on these changes and of efficiencies occurring when they’re concerned returns might not be as great as they would be in good [economic] times.”

Groce says CIOs are well-positioned to benefit from organizational realignments. Because they oversee technology for all functions inside the company, he says, CIOs have a first-hand view of how their organizations can “drive huge efficiencies” by aggregating and consolidating disparate finance, HR and supply chain systems. Such changes can be the catalyst for new organizational structures.

“Never assume that your technology solutions have to fit the existing [organizational] structure,” Groce advises CIOs who wish to benefit from organizational realignments. In fact, he says, CIOs can be the ones who spark the realignment.

“If the CIO of a multinational, multi-divisional company can convince everyone that compliance, HR and financial systems can run on a single platform, the CEO may decide to consolidate and run the company as one,” he says. “The CIO can say, We really can do this.”

Groce notes that it wasn’t possible to achieve such efficiencies 10 years ago because technology wasn’t mature enough to support such realignments or companies’ reporting requirements. “10 years ago such a move would have just created confusion, but today you can truly supplant the layers, the redundancies in management and in geographies with technology, he says. “Hence the reason other people move out and the CIO remains and moves up.”