System Transformation Portal

VII. Design New Organizational Structure

Designing a new IT organization involves the initial design process, followed by the creation of various hub structures. This task outlines the infrastructure design process along with a sample purpose and guiding principles for the hub structure.

The Design Process
While the IT infrastructure is anchored by a defined purpose and principles, the organizational design model creates a framework to facilitate deployment of that infrastructure. Figure VII.A depicts a sample IT infrastructure with eight major information management hubs. This figure and the model of the existing IT organization created in a prior task are the basis for the new organizational design.

Figure VII.A

The following guidelines outline a process for creating the hub-based IT infrastructure.

1. Establish a process to keep all design participants across the infrastructure informed so that other areas may adjust their designs as needed.
2. Modify the model in figure VII.A as needed to incorporate other major functional IT categories.
3. Assemble representatives to form a hub for each major functional category shown in figure VII.A as follows:
   • Identify various sub-functions using the as-is information management model.
   • Add or refine these as required.
   • Associate (i.e. link) these sub-functions with each major functional hub.
   • Have each sub-functional area place a representative on the associated design team of each major functional hub.
4. Have each design team create a statement of purpose for their hub (i. e. each IT council satellite creates a statement of purpose for their hub).
5. Have each representative to each major hub organize a design team within their sub-function.
6. Each sub-function design team reviews the statement of purpose and creates a purpose for their sub-function.
7. Use each sub-functional statement of purpose to create a set of guiding principles for each major functional hub.
8. The core design team and IT council meet and review statements of purpose and principles for each major functional hub.
9. IT council and design team should resolve overlap, redundancies and discrepancies in the overall hub design.
10. Each sub-functional hub creates peripheral satellites as needed to further decompose sub-functions into more effective working units as needed.
11. As peripheral satellites emerge, those satellites can create their own satellites as they see fit.
12. The core design team should ensure that all peripheral satellites are in touch with the purpose and principles of IT and major applicable hubs.

Figure VII.B summarizes the process flow outlined in steps 1-12 above.

Primary and Secondary Hub Design Process

Figure VII.B

Numerous design teams, based on the participative approach, will need to be deployed. If, for example, eight hubs link to the IT council and each of these has eight satellites, there will be 64 hub design teams. If additional design teams are needed based on information infrastructure complexity, the process above can be extended to peripheral satellites. Central hubs never dictate to satellites during this process.

Note that this design strategy brings individuals together that may not know each other and this may require significant facilitation as designs evolve. Guidelines for creating a purpose and principles for functional hubs directly.

Environmental Management Hub
Figure VII.C identifies major functions linked to the environmental management hub, including network, facilities, data center, communications, production, security, system software and the help desk. The environmental hub unifies centralized and distributed management of all facilities, communications and other elements essential to keeping the information infrastructure functioning. This does not mean that management of all of these elements is being centralized, but it does mean that the management of these elements will be coordinated under a common strategy.

Figure VII.C

Representatives from each environmental sub-function category should draft a common statement of purpose for the environmental management hub. A sample purpose is shown below.

"Ensure the continuity, performance and integrity of all hardware, network, communications, production and system software operating environments across the enterprise."

Each principle below is derived from the statement of purpose of each environmental management hub satellite. This translates into a set of environmental management principles as follows.

1. Ensure that central and distributed networks function in an optimal, standardized and integrated fashion.
2. Verify that facility service functions support all other environmental requirements.
3. Confirm the continuity and performance levels of enterprise-wide data center operations.
4. Ensure that communication-related functions work effectively across the enterprise.
5. Maintain production control procedures to delineate development, test and production environments.
6. Maintain enterprise-wide security across all hardware, software, network and e-business environments.
7. Ensure the currentness and consistency of all system software and hardware across the enterprise.
8. Verify that internal and external help desk requirements are met in an effective, efficient and courteous manner.

Environmental hub sub-functions are likely to be regionally distributed and each of these regions may form more peripheral hubs.

Architecture Team Hub
The architecture team has input to and veto power over the deployment of certain hardware, network and systems design architectures. They work as a team with designers and architects across the enterprise. If major conflicts arise, they can notify the IT council that there may be redundant or conflicting strategies being deployed. The IT council can then make the appropriate decisions.

The architectural hub is a critical element in the overall IT infrastructure. A lack of standards, methods, measurement and knowledge of architecture issues undermine efforts to deploy information-related projects. The systems knowledge base, a repository defining how systems support business functions, is a fundamental component in an e-business and back-end systems integration strategy. The tactical elements of architecture management, particularly methods and standards, are also critical.

Figure VII.D depicts key functions defining the architectural team hub. These functions include management of methodologies, strategic planning, standards and measurement, the systems knowledge base, integration planning, data architectures and transition planning.

Figure VII.D

The architecture team is responsible for coordinating and overseeing efforts to make all systems work more effectively as a whole. They are additionally tasked with finding ways to integrate data architectures, back-end system and emerging technologies from an enterprise perspective. A sample statement follows.

"Ensure that all projects adhere to reasonable standards while enabling the deployment and preservation of a consistent, integrated information architecture across the enterprise."

Sample architecture team principles supporting this statement of purpose include the following.

1. Serve as a knowledge center for architecture management.
2. Verify that an information integration strategy is in place and a priority.
3. Bring applicable methodologies, standards and measurement criteria to the forefront of information-based projects.
4. Ensure that there is a knowledge base available that provides information on how business functions, workflow and information systems interrelate.
5. Develop and track progress towards a transition plan for outdated or non-standard technologies.

Architecture management is typically a centralized organizational structure, with support or representation scattered across regional and functional business units. The architecture hub must have the authority to sit at the table with other IT council participants to ensure that architecture issues are given priority during project planning and deployment. The architecture hub may also initiate projects dealing with data structures, creation of a systems knowledge base or other requirements.

Business Systems Management Hub
This hub is comprised primarily of individuals distributed among business units, responsible for planning, deploying and maintaining application systems within and for those business units. The number of hubs depends largely on the number of business units. These hubs may be internal support functions, outsourced teams or interfaces to Application Service Providers (ASP). Figure VII.E shows the sub-functions linked to the business systems management hub.

Figure VII.E

The cross-functional application management hub is a coordinating body outside of a given business unit responsible for assessing and recommending cross-functional applications management, outsourcing and ASP strategies. A sample statement of purpose for the business systems management hub is shown below.

"Ensure that application systems apply timely and effective solutions to further the overall betterment of information management throughout the enterprise."

Sample principles for the business systems management hub follow below.

1. Work diligently to provide application services to your business unit.
2. Adhere to the standards and methods set forth by the architecture team.
3. Strive to achieve integration with other business units as appropriate.
4. Reuse, migrate, integrate and document where applicable.
5. Include legacy analysis, migration, integration and deactivation in every replacement plan.
6. Avoid quick fixes when long-term quality and maintainability is sacrificed.
7. Provide representation to the cross-functional application management hub.
8. Coordinate with e-business, environmental management and other hubs as needed.

Organizationally, each business unit forms business systems management hub that includes individuals responsible for any system not covered by e-business, environmental management, supplier / customer management or other hub structures. Business units are free to self-organize spin-off hubs as long as they place a representative on the business systems management hub.

Supplier / Customer Management Hub
Figure VII.F depicts sub-functions on the supplier / customer management hub. These elements include internal functions such as marketing, sales, purchasing and inventory management, as well as external customer, supplier and partner-related activities.

Business and IT analysts participate on various satellites within this functional area. This may be accomplished by linking satellites to various sub-functions representing functional or regional business units. At the periphery of this structure are the suppliers, customers and related consortiums. Individuals working at these peripheral levels deal with external entities and provide input back to the central hub to ensure that a cohesive supplier / customer strategy is deployed by the enterprise. A sample purpose for the supplier / customer management hub is shown below.

"Maintain a strategy that fosters cooperation and competition, integrates internal business units and incorporates customers, distributors, suppliers and business partners."

A sample set of principles for a supplier / customer management chain hub might include the following items.

1. Synchronize all factions relating to internal and external customer, partner and supply chain management.
2. Present a singular information management strategy to external entities.
3. Create and maintain a common view of the entire supply chain including suppliers, partners, distributors and customers.
4. Ensure that customer relationship management (CRM) strategies are crafted with all relevant and affected parties and deployed equitably across the enterprise.
5. Participate in and become a force behind industry consortiums where it simplifies overall supply chain management.
6. Strive to ensure that any external supply chain initiative fosters cooperation and competition, is inclusive rather than exclusive, and is based on chaordic principles.

Project Office Hub
Projects should adhere to the same collaborative model as the IT organization and the project office instills this philosophy on the enterprise. The project office hub is shown in Figure VII.G. Sub-functions include resource integration, planning support, methods, measurement and reporting, tools and project team outreach.

Figure VII.G

A sample statement of purpose for the project office hub is shown below.

"Foster an environment where projects are routinely delivered on time, within budget and within the level of quality required for that project and business unit."

Sample principles that further this purpose include the following.

1. Raise the level of customer satisfaction, based on objective and subjective criteria, for each and every project.
2. Verify that internal and outsourced projects live up to predetermined quality levels.
3. Provide resources to support any project at any stage of its lifecycle.
4. Ensure that the enterprise has current data regarding resource and skill availability for internal and external resources.
5. Track and report on project progress and success in a fully open manner.
6. Create a feedback loop for future projects based on past project successes and failures
7. Offer outreach services to help head off projects in trouble.

Planning support, coupled with methods and measurement, ensure that realistic expectations are applied to projects in the origination stage. A resource integration hub addresses the allotment of skills and resources where shortages exist. Tracking, reporting and outreach functions ensure that project progress is reported openly and that projects that get off track are rescued before they spin out of control.

Consulting Hub
The consulting hub provides or procures services to IT. Figure VII.H depicts sub-functions within this hub, including facilitation, training and skill transfer.

Figure VII.H

A sample statement of purpose for the consulting hub is shown below.

"Provide state-of-the-art knowledge and skills to all information technology functions within the enterprise."

A sample set of principles for the consulting team includes the following items.

1. Provide as-needed information technology skills to the enterprise.
2. Retain knowledge on emerging technologies relevant to the enterprise.
3. Deliver or support the procurement of consulting services to internal information management functions.
4. Eliminate redundant, inefficient and ineffective use of external resources.
5. Serve as a resource and vendor management point for outsourcing requirements.

Consulting procurement activities are centralized through this hub to determine if internal skills exist to fulfill requirements while consolidating consulting vendor management. The consulting hub also sanctions and coordinates outsourcing and application service provider (ASP) relationships and agreements. An outsourcing vendor, ASP or other external entity serving in the capacity of an information management function would be transformed into one or more hubs within the IT infrastructure.

The e-Business Center Hub
The e-business center unifies marketing, sales, distribution, warehouse, procurement and related business unit workflow, data and systems under a common e-business strategy. The e-business center also integrates the use of vendors, suppliers, distributors, design teams and customers that lie beyond the control of internal chains of command. This hub incorporates flexibility, diversity, openness and dynamics. Figure VII.I depicts sub-functions linked to the e-business hub.

Figure VII.I

A sample statement of purpose might read as follows.

"Ensure that the enterprise has an effective, flexible e-business function that serves the best interests of customers, suppliers, distributors, business partners and the enterprise itself."

A sample set of e-business principles might include the following statements.

1. Synchronize e-business requirements across enterprise business units.
2. Maintain state-of-the art knowledge of potential e-business solutions.
3. Establish preeminent e-commerce site as required by enterprise marketing and sales.
4. Ensure that supply chain management is adequately supported under an e-business strategy.
5. Standardize electronic data interchange with external entities in cooperation with the supply chain hub.
6. Ensure that external partner and related consortium requirements related to the e-business strategy are effectively coordinated and accommodated.

The e-business center is a virtual organization, physically distributed across the enterprise. Having "resident" e-business workers distributed across the enterprise ensures that each business unit has input to the e-business strategy. Remote personnel report to an e-business hub, but physically reside at various business unit locations. Because much of the activity, interactions and coordination among these groups have historically been replicated to the determent of customers, business partners and the company, this may be a difficult hub to establish.

IT Administration & Finance Hub
With information being the lifeblood of organizations, the information management function and the financing of information management activities need to be synchronized. Figure VII.J defines various sub-functions within the IT administration and finance hub.

Figure VII.J

Hub sub-functions include finance, procurement, budget, personnel, vendor management, financial planning, contract and legal functions. A sample statement of purpose is shown below.

"Maintain consistent, effective and realistic financial and administrative support and oversight for all information management functions throughout the enterprise."

A sample set of principles for the administration and financing hub includes the following items.

1. Ensure that funding is effectively assessed and provided for critical information management functions.
2. Ensure that localized funding and administrative requirements are addressed by regional representation.
3. Standardize and, to the degree possible, centralize contract, vendor and legal infrastructures as these items relate to IT.
4. Assess and refine cross-functional budgetary requirements, particularly as it relates to waste, runaway projects and consolidation of certain functions.

The infrastructure needed to pursue these principles places IT personnel into each of the sub-functions shown in figure VII.J. This means that finance, legal, budget, personnel, contracting and other relevant areas would place a person on the administration and finance hub. Special satellites could also be created as determined by the central hub.

Design Review & Finalization
Each major hub linked to the IT council submits its purpose, principles and peripheral hub design to the IT council and core design team upon completion of their design work. The IT council and core design team review the design structure for adherence to core purpose and principles, redundancy with other hub functions and continuity in approach. The IT council and core design team should not needlessly fine tune peripheral designs because the people that created them are the people that will have to live with them � or change them.

Because the organization has been created with the built-in capacity to self-organize through the ad hoc creation of new hubs, under the purpose and principles established herein, the initial design need not and will not be perfect. However, the IT council and core design team should ensure that conflicting designs and cross-functional communications are streamlined to facilitate future improvements.