Historically, IT departments tended to be organized in layers. “That model doesn’t much exist anymore,” says Colleen Young, vice president/distinguished analyst at industry analyst Gartner, in Stamford, Conn., mainly because the layers typically were top-heavy, suffocating the workers beneath.
Young advises mid-sized businesses to have no more than three to five people reporting directly to the CIO; large or global businesses should cap the number at five to eight direct reports. Each of those reports can optimally supervise between 15 to 20 workers, or up to 35 workers per supervisor in multi-disciplinary teams. “Beyond the 1:35 ratio, you are in danger of imploding,” she says.
Flattening the layers may not weed out every obstacle IT has to trudge through, but a streamlined structure leads to fewer snarls. “The flatter the organization, the better. And smaller teams work better as well,” says Bobby Cameron, vice president and principal, IT Management, at Forrester Research in Boston, Mass.
That’s because smaller IT teams often take a more entrepreneurial approach to problem solving. The IT department of Jason’s Deli, a multi-million dollar, multi-state chain of restaurants headquartered in Dallas, Texas, is composed of a CIO and 11 staff members. “Each person is essential to the business and the group is very much on its game,” says Lee Greer, marketing director. “For example, when one of our delis loses its Internet connection and can’t get customers’ online orders for delivery, our IT staff is immediately aware of the problem, and will either send the orders to the affected deli’s fax machine or call them in. They make sure nothing interrupts our business.”
Young says this is the ultimate advantage of the newer management structures. “A flat but multi-disciplinary structure allows you to have line-of-sight to results. It means fewer managers, self-empowered teams and more seamless operations.”
The New World Is Flat
There are three basic structures in this new IT world: centralized, decentralized and federated. Each has its own set of advantages and disadvantages. The solely centralized model runs the risk that new developments can disappear into the black hole of a functional silo, while the typical decentralized model often spawns repetitive functions and concomitant costs. “The federated model tends to have the new development function spread out across the firm with infrastructure operations increasingly becoming a central/shared service and with a line from local-to-central IT for strategic functions like the CTO and the office of the CIO,” explains Cameron.
IT managers needn’t be bound to one specific structure. There is an infinite number of combinations blending characteristics from all three.
What is the ideal management structure for your organization? Young, Cameron and Greer agree that the best IT management structure parallels the business structure. “The management model defines what is optimized, what innovation is emphasized and where the revenue will be optimized,” notes Young.
No matter which structure you choose, it should encompass five fundamental IT practices: infrastructure operations; new technology development; IT relationship management; architecture, planning and strategy; and the responsibilities of the office of the CIO — human resources, finance and training.
Don’t fall into the trap of making management structural decisions based on personalities. “The tendency in small-to-medium firms is to organize based on personalities instead of by role or IT process,” warns Cameron. “Placing all architecture under the infrastructure operations manager makes it so that development has to come to ops for direction. This results in strange accumulations of responsibilities that create poor flow of work.”
Five Measurements That Matter
There are five measurements that management can use to evaluate and plan IT staffing, regardless of the model:
- Employee time worked
- Staff turnover rates, both compared as a trend over time and against local HR trends
- Annual SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, as analyzed by the IT and business staff
- Performance against specific objectives for quality and expense improvement
- Calculation of work done per dollar spent per user
In the end, good IT management boils down to adopting a structure that enables the entire department to distinguish busywork from profitable production. “You must be flexible enough to be able to react quickly to situations, but structured enough that nothing falls through the cracks,” says Greer.