1. Info-Tech Research Group1 1 Info-Tech Research Group, Inc. Is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns. © 1997-2014 Info-Tech Research Group Inc. Transform IT Through Strategic Organizational Design Improve performance though a fit-for-purpose organizational design. Info-Tech's products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns.© 1997 - 2014 Info-Tech Research Group

2. Info-Tech Research Group2 2 This Research is Designed For:This Research Will Help You: This Research Will Assist:This Research Will Help You: This Research Is Designed For:This Research Will Help You: This Research Will Also Assist:This Research Will Help Them: Our Understanding of the Problem CIOs Identify the best organizational structure to meet your business priorities. Determine capabilities needed within the IT organization to address the business strategy. Create an organizational structure to align the objectives of the business and IT. Develop a transition plan to implement the organizational structure changes. IT Managers Understand what capabilities and work units are needed for your departments to flourish.

3. Info-Tech Research Group3 3 Resolution Situation ! Complication ? Info-Tech Insight Executive Summary Organizational design is the alignment of organizational structure, roles, and processes to execute on business strategy – the better aligned the organization is, the more effective it is. For optimal results, the structure of the IT organization must match its strategy, but often IT organizations grow to meet needs of the day and not by strategic design. Misaligned organizational structures are inefficient and cause delayed decision making, resulting in decreased performance and quality. However, completing a full IT organizational redesign is highly disruptive – and needs planning and clear vision. Too often organizations make small adjustments that work as a Band-Aid solution – but don’t enable strategic growth. Use Info-Tech’s five step process to help redesign your IT organizational design. Our client-tested methodology and processes support the enablement of IT/business alignment, decrease decision-making cycle times, and allow you to focus your time and efforts on the capabilities important to your organization. Successful completion of the IT Organizational Design project will result in the following outcomes: 1.Buy-in for the IT organizational design project obtained. 2.Prioritization of IT capabilities completed. 3.New IT organizational structure completed. 4.IT organizational leadership team selected. 5.IT organizational design implementation roadmap implemented. 1.Structure follows strategy. Build your organizational design to enable the key capabilities that are important to your organization. 2.Treat organizational design like a project. Make sure you get a strong project team of IT leaders to build the program. 3.Leverage COBIT 5 as the building blocks to build your ideal target state organizational design. 4.Iterate for organizational design success. Trust your instincts, but don’t expect to get it right the first time. Encourage iteration as the path to success.

4. Info-Tech Research Group4 4 Section 1: Structure the Project Discuss CIO Business Vision assessment, review project team list, identify opportunities to address pain points. Review the project charter. Section 2: Prioritize IT Capabilities Assess your current IT organizational chart. Discuss current capabilities and prioritize them. Review the capabilities assessment tool. Section 3: Build the IT Organizational Sketch Create the IT organizational sketch: group capabilities into work units and create a mandate for each work unit. Determine the role of business relationship management (BRM). Section 4: Build the Target Structure Identify key jobs and roles for the target organization. Define the span of control and reporting relationships. Define needed competencies. Section 5: Implement Changes Define approach to change, complete stakeholder analysis, create communication plan, and create implementation plan. Info-Tech is ready to assist. Book a free guided implementation today! Book a Guided Implementation Today: Info-Tech is just a phone call away and can assist you with your project. Our expert Analysts can guide you to successful project completion. For most members, this service is available at no additional cost.* * Guided Implementations are included in most advisory membership seats. Here are the suggested Guided Implementation points in the IT Organizational Design project:

5. Info-Tech Research Group5 5 Establish baseline metrics Metric DescriptionCurrent MetricFuture Goal Business satisfaction with IT (CIO Business Vision) % of FTEs assigned to high priority capabilities 1.Increased organizational structure effectiveness. Through training of personnel and increased efficiency of processes. 2.Focus on high priority activities. Baseline metrics will improve through: How to measure business satisfaction with IT: 1.Take the CIO Business Vision survey before starting the IT organizational design project. 2.After implementing the new organizational structure, retake the survey 6-12 months later. 3.Compare the results to the first time. % of FTEs assigned to high priority IT capabilities 1.When completing the capabilities assessment tool, review how many employees are focused on high priority tasks. 2.Create a percentage of these employees.

6. Info-Tech Research Group6 6 What’s in this Section:Sections: Make the Case Structure the Project Prioritize IT Capabilities Build the IT Organizational Sketch Build the Target Structure Implement Changes The value of IT organizational design Keys to successful organizational design Assess the value of IT organizational design for your organization Info-Tech’s approach to optimizing your IT organizational design

7. Info-Tech Research Group7 7 The way your organization is built dictates how it will perform. Are you set up for success? 52% of IT organizations self-identify as being in Firefighter mode. This means they are focused on resolving urgent or recurring IT issues to achieve short-tem gains, rather than spending time on strategic goals. As a result of this firefighting mentality, most structures today are not consciously built – they’ve arisen organically, unguided by a long- term vision. These Band-Aid solutions can work temporarily, but ultimately organizations end up with structures that are ill equipped to meet the strategic needs of the future. The design of your IT organization has a significant impact on how it performs. Where you invest in staffing, the level of hierarchy, and the way you manage your relationships with the business have a significant impact on what gets done, when it gets done, how it gets done, and what the business thinks about it. Effective organizational design is a competitive advantage. By designing the structure with your business and IT goals in mind, you can build a department that enables these goals – and ensure that you are spending money and resources on the most important things. Lex Sisney, author of Organizational Physics, humorously explains the relationship between structure and success in his article, “The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way.” He says: “If I were to ask you a random and seemingly strange question, ‘Why does a rocket behave the way it does and how is it different from a parachute that behaves the way it does?’ You’d probably say something like, ‘Well, duh, they’re designed differently. One is designed to go fast and far and the other is designed to cause drag and slow an objection in motion. Because they’re designed differently, they behave differently.’ And you’d be correct. How something is designed controls how it behaves. […] But if I were to ask you a similar question about your business, ‘Why does your business behave the way it does and how can you make it behave differently?’ would you answer ‘design?’ Very few people — even management experts — would.” But the fact is that how your organization is designed determines how it performs.” Source: The 5 Classic Mistakes in Organizational Structure: Or,The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way Lex Sisney, author of Organizational Physics, humorously explains the relationship between structure and success in his article, “The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way.” He says: “If I were to ask you a random and seemingly strange question, ‘Why does a rocket behave the way it does and how is it different from a parachute that behaves the way it does?’ You’d probably say something like, ‘Well, duh, they’re designed differently. One is designed to go fast and far and the other is designed to cause drag and slow an objection in motion. Because they’re designed differently, they behave differently.’ And you’d be correct. How something is designed controls how it behaves. […] But if I were to ask you a similar question about your business, ‘Why does your business behave the way it does and how can you make it behave differently?’ would you answer ‘design?’ Very few people — even management experts — would.” But the fact is that how your organization is designed determines how it performs.” Source: The 5 Classic Mistakes in Organizational Structure: Or,The 5 Classic Mistakes in Organizational Structure: Or, How to Design Your Organization the Right Way This blueprint will take you through the process of transforming your organizational design to enable business and IT strategy and designed “behaviors.”

8. Info-Tech Research Group8 8 Harness the benefits of effective organizational design, and avoid costs of structural misalignment Improved Service Delivery: Strategic design aligns the organization with the needs of end users, not functionally aligned around technology area. Increased Business/IT Alignment: IT organizations need to be built in order to effectively serve the business. As the business changes, IT must change as well. Increased Efficiency and Productivity: When compatible work activities are grouped together or when appropriate decision making enables timely decision making. Benefits of Effective IT Organizational Design Wasted effort and opportunity when a design distracts attention from value-added work or does not support the sources of competitive advantage. Increased overhead expenses when a structure is too broad, complex, or duplicates work activities performed in another function. Confusion and delays due to lack of clarity of responsibility and accountability for different work activities. Lost revenue opportunities when employees with the necessary expertise and/or decision-making authority are too far removed from the client. (Adapted in part from Goold and Campbell, 2002) Costs of a Misaligned Structure: 1 Info-Tech Research Group Webinar Survey. 2014; N=87

9. Info-Tech Research Group9 9 Strategic shifts, and a redefinition of work are the most common drivers for an IT organizational design review IT organizational design review is being prompted by the following reasons 1 : Structure follows strategy. With the growing complexity of business needs, IT needs to be structured in such a way that it is able to support the business. Increasingly the business is the one driving IT organizational change with 37% of organizational redesigns mandated by the business. 1 This is a reflection of the increasing strategic opportunities that IT provides the business, and the changing role of IT as a driver of competitive advantage. Redefinitions of work are increasingly common as IT organizations move from operational to strategic functions. Key trends such as outsourcing are having huge impacts on the definition of IT work. Over the next five years, there is an expected increase in outsourcing from 78% of organizations outsourcing less than 24% 1 of their services today, to 67% outsourcing more than 25% five years from now. This shift will fundamentally change the role of IT, requiring different structural designs to accommodate the changing needs - for example, the vendor management or service level management of the organization. Expected change in the percentage of IT outsourced over 5 years 1 1 Info-Tech Research Group Webinar Survey. 2014; N=87

10. Info-Tech Research Group10Info-Tech Research Group10 There is no one right IT organizational structure: create one that is right for your organization’s needs Every structure decision you make should be based on an identified need, not because it is trendy or sounds like a good idea. Build your IT organization to enable the priorities of the organization. Be sure to understand how the IT structure relates to and links with the various components of the organization to choose the structure that offers the best support. The IT organizational structure can make a difference to how the IT department performs – be mindful that emulating another’s structure in a different organization won’t work. There are a number of common IT organizational structures that are appropriate in different circumstances. None of them are ideal for every organization, and they don’t take into account the reality of what exists for different kinds of organizations. It is common for IT to have a combination or hybrid organization structural type. When considering your organizational structure, consider your priorities and efficiencies – and then make sure your structure is a good fit with business strategy and environment.

11. Info-Tech Research Group11Info-Tech Research Group11 While there is no “correct” organizational structure, there are effective and ineffective ones Allow IT to strengthen its relationship with the business, improving the business’ confidence in IT. Bring the right degree of control over process execution. Facilitate communications and information exchange vertically, laterally, and diagonally. Give an organization’s employees identity and a sense of belonging. Provide employees with a big-picture context for the work they do. Improve IT service delivery. Adapt well to the changes in the external environment, and allow for quick responsiveness. Increase IT effectiveness and efficiency by providing role and accountability clarity to employees. ×Do not support IT having a strong relationship with the business, or being closely tied to business goals. IT does not have a “seat” at the executive table. ×Do not allow IT to be visibly involved with the organization. Decreased visibility means IT is less likely to work closely with employees to understand their needs. ×Do not define lines of accountability, causing confusion over roles and responsibilities. ×Do not allow proper support or delivery to the business. Ineffective IT Structures:Effective IT Structures:

12. Info-Tech Research Group12Info-Tech Research Group12 Info-Tech Research Group Helps IT Professionals To: Sign up for free trial membership to get practical solutions for your IT challenges www.infotech.com Quickly get up to speed with new technologies Make the right technology purchasing decisions – fast Deliver critical IT projects, on time and within budget Manage business expectations Justify IT spending and prove the value of IT Train IT staff and effectively manage an IT department “Info-Tech helps me to be proactive instead of reactive – a cardinal rule in a stable and leading edge IT environment. - ARCS Commercial Mortgage Co., LP Toll Free: 1-888-670-8889