Decentralized IT organization

In the decentralized IT, there is clear management and assignment of orders to IT. In short, each unit has its own IT (see figure). The advantage is that these are close to the line and therefore often have a higher orientation to the department. However, the department is then disciplinary responsible for IT, which reduces the importance of this. There is also the risk of redundancy and silo thinking.

Central IT organization

The central IT is an IT department for the entire company. In this way, the departments transmit requirements to the IT. IT has its own staff and resources. She also implements her own strategy and plans the overall architecture. As a rule, there is no silo thinking and IT comes from a single source. Cross-divisional solutions could also be found. However, greater effort is required for coordination in order to prevent IT blindness and solutions that are too general, i.e. not perfectly tailored to the specialist area, but rather compromise solutions. In this model, however, IT is also very “powerful” in the company.

Hybrid IT organization

As central as necessary and as decentralized as possible partially applies to the hybrid IT organizational form. IT admins are deployed for each area to adapt the IT to the department. This means that at least the IT can be designed more individually without being directly decentralized. The advantages are the proximity to the line and the fact that the admins can talk to the IT technically on an equal footing, which is often more difficult for the department if there are no IT switchers employed there. The dangers are of course political effects such as power struggles and renewed silo thinking.

IT organization project

In this approach, IT is retained as the implementer and each department has individual IT admins. However, there is also an IT office which, as a cross-sectional department, plans IT in the company together with the specialist departments. IT is independent, but has the IT office as the “advocate” for the departments. In this way, silo thinking can be avoided, but the IT office will tend to establish itself as a place of power struggles, as it has to represent the departments. Opportunities in this model are definitely cross-departmental solutions and synergies.

IT organizational forms – selection process

In order to decide on a model, you should only consider the importance of IT for the company’s business model. Of course, almost nothing works in a digital world without IT, but it still doesn’t always play the decisive role. Let’s think of cat food, which is primarily controlled by production and logistics and supported by IT. It is different with Apple, which is a software company.
Reading tip: What is an IT organization
Example 1: High importance for day-to-day business and low for strategy
A strongly software-oriented production or a company that provides products or services with the help of software could be used here. A decentralized or hybrid IT organization is worthwhile here.
Example 2: Great importance for day-to-day business and strategy
This is usually an IT company such as a software house with a software product. IT is the central point here. A central or hybrid IT organization is recommended here.
Example 3: Low importance for day-to-day business and low for strategy
This can be a logistics or food factory, for example, which manufactures products and supports IT with small, less noticeable functions. A decentralized or hybrid IT organization is recommended here.
Example 4: Low importance for day-to-day business and high importance for strategy
If this should occur, it could be an IT consulting company with knowledge products, i.e. advice. Project IT organization and central IT can be particularly worthwhile here.
Reading tip: IT organization 2020
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Classic IT organizational model

A classic IT organizational model is often equated with ITIL (IT Infrastructure Library). This is constantly being expanded and redefined. The idea of ITIL is the continuous improvement of the service. IT sees itself as a service provider. ITIL basically consists of four processes:

• Incident Management
• Problem management
• Change management
• Release management

Incident Management corrects the disruption of a service and prevents a service from being impaired. This is usually covered by a help desk with first, second and third level support. The aim of problem management is to find the cause of incidents and to remedy them sustainably or to address them proactively before they even occur. Change management makes changes to the existing IT and implements new functions. Release management is responsible for ensuring that these changes are also integrated into the system. Of course there is a lot more to say about ITIL and I will only give a small overview. For more, you should visit an ITIL training course or take a look at YouTube.

Agile IT organizational model

In the agile organization, Scrum is often preferred in IT. However, Scrum was only designed for one team. So this paragraph does not explain Scrum, but the scaling of Scrum. For this I would like to explain a best practice, i.e. Scrum of Scrums. If you want to learn about other models as well, then read my article on Scaling Scrum.
Reading tip: Scaling Scrum
The idea is that you form numerous Scrum Teams in your IT that have a Scrum Master. Each Scrum Master forms another Scrum of Scrums Team with another Scrum Master as the Scrum Master. Depending on the number of teams, this has different levels. The level after Scrum of Scums would then be Scrum of Scrums of Scrums. You can also introduce roles such as a Chief Scrum Master for this purpose.

Of course, there is also the possibility of scaling this via the product owner, such as in the LeSS framework. To do this, you can appoint a Chief Product Owner, who heads a board of product owners who make holistic decisions about the limits of the individual software components. It’s actually up to you, because how you cut the teams’ tasks is decided. You can cut these according to skills (e.g. frontend / backend) or the individual software components (product A and product B).
Reading tip: What is an IT organization

Bimodal IT organizational model

In the end, you could also establish bimodal IT. Agile change is taking place especially in large organizations and this inevitably results in bimodal IT. This means that some areas are highly agile and other areas are less agile to classic.
Gartner has also examined this approach and believes that such bimdodal IT can even bring significant advantages. ITIL-driven IT can be used for stable areas and more agile IT for other, more complex areas. According to Gartner, both areas exist side by side. I have already explained his exact idea in another article.
Reading tip: BiModal IT

Conclusion

No matter how you organize your IT, there are numerous models and these three are certainly not the only ones. Most companies will probably have bimodal IT, as each area of a company is very individual. Thus, there are faster and more complex areas that are more agile and stable areas for, for example, accounting or operations, which is more easily mapped with ITIL. I have never experienced a direct separation as Gartner describes it and such a separation is also heavily criticized. It seems like always: the best of both worlds leads to the greatest success.
Reading tip: IT organization 2020
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• Reading tip: IT organizational models
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Background of the approach

The term process digitization is on everyone’s lips and every step in the digital transformation should be supported by a tool or, ideally, automated directly. For this reason I think it makes sense to take a specific process and assign a tool to each step. I would like to show this on a typical project that is received by an SME.
Reading tip: What is an IT organization

IT organization example

This section gives an example of an IT organization for a typical SME. In this case, even an input from a customer project. In the following figure I have broken down the process into individual steps and assigned a tool to each and given a concrete example.

Lead generation or presales are often necessary before a project. A CRM tool like MS Dynamics can help here. Then it continues with the incoming order, which can be supported with an ERP tool. It continues with the creation of an offer for the customer, which can be supported by templates from, for example, Sharepoint. It is clear to me that these two steps can also swap depending on the definition. The offer can also be made before the order is received. In this case I assume that Presales writes a kind of preliminary offer and the actual offer process is only initiated as soon as the customer says: Yes, I want to buy.
Then the project is started with the help of templates from MS Office and the implementation is supported by Jira or Trello, among others. SAP can be used for billing. Every step can be supported concretely by a tool and the task of a CIO is to design this tool chain and to connect it to one another so that it is synchronized. For example, the data of the Sharepoint could be integrated directly into the MS Office templates using macros.
Reading tip: IT organization 2020

Conclusion: building an IT organization

This example shows a typical process digitization and the support of each step by a tool. I often find this approach in SMEs and also make sure that these tools are linked and implemented on the job. I’m really getting on with this approach. Of course there are many more and you can certainly make it more agile, but it’s a good approach. For more information, read my article on agile service providers.
Reading tip: Agile IT service providers
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The drivers: organization, teams and individuals

But why should IT change so? I see three drivers for this: people, teams and organizations. In the following I would like to explain these new framework conditions for IT. The new IT requirements can then be derived from these.

organization

Organizations were traditionally organized up to now, with a focus on controllability and control. Due to increasing complexity, this has changed to project orientation and agile methods. Networking and a flat hierarchy shape the organizations and thus also change the demands on IT.

Teams

While teams and departments were stable for a long time and often little networked or worked across departmental boundaries, networked teams and constantly changing roles can now be found more and more frequently in companies. IT is therefore required to provide flexible hardware and software for this permanent change and to support cross-functional teams.

Employee

While employees have usually been with a company for a long time and also on one job, things are different now. Frequent company and role changes are state-of-the-art. This can already be felt today. For this reason, IT is required to provide flexible workplaces that can cope with these constant changes.

The IT organization 2020 – infrastructure and applications

People, teams and organizations are becoming more flexible and are demanding new tools from IT that support these processes. This is noticeable in applications and infrastructure, which I would like to explain in more detail below.
While IT development often developed the backend and frontend separately and infrastructures should run stably and efficiently, the weighting is now changing. The IT should meet the new flexibility requirements of employees. So I find the term IT platform more and more. By the way, I mention the word ubiquitous in the graphic. The adjective ubiquitous comes from Latin, where ubique means “everywhere” (Source: New word ).
Urbach and Ahlemann write on the topic of the IT platform: New platform strategies are required to support any end device for ubiquitous access to information. The user expects from the knowledge workplace of the future that the company’s central applications and services can be used with all end devices used – regardless of the hardware manufacturer and the operating system used.
For this reason the authors propose a flexible platform. Thus, different modules are to be created on the platform, which enable the work from any end device and whereby the change of the end device does not have a negative effect on the work. So Urbach and Ahlemann recommend that The development platforms guarantee the security of the systems regardless of the underlying hardware and should offer universal functionality for access to the backend systems. As current examples of such platforms, the authors name: Xamarin1, PhoneGap2, Kony3 or 5App4,

Conclusion: more agile, faster and more flexible – IT Organization 2020

In conclusion, the IT organization will be faster, more agile and more flexible in 2020. Thus, agile teams and DevOps methods will establish themselves. According to a study by Cobalt blue Therefore, by 2020 40% of all employees will work agile and 25% of them in so-called DevOps teams. This means that 40% of all applications are developed in an agile manner and then also have to be supported in DevOps mode. By then, 50% of all applications should also be built on cloud infrastructures and designed according to the latest best practices. It is therefore evident that the changes in the illustration by Urbach and Ahlemann (2016) could occur and that agile methods will probably be more and more necessary in the IT organization in 2020.

• Reading tip: IT organizational models
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composition

If you take a closer look at the organization of information technology, you can divide it into the following main groups, which are related to IT in different ways. Your influence on and your requirements for information technology result in different areas of responsibility, the fulfillment of which is the main task of every IT organization and thus justifies the splitting of the categories.

Areas of responsibility

Figure 1 describes the relationship between IT itself on the one hand and the overall organization and its customers on the other. In addition, external partners can also play a role here, who can also influence the IT organization. Between every type of relationship between the company and third parties there is the striving for an optimal negotiation process and an intact value chain. This endeavor is usually fulfilled on the basis of efficient IT management, the success of which becomes visible when all sub-areas of the IT organization, despite their interactions, are harmonized and / or prioritized with one another. In order to make this possible, it is important to know the functions and tasks of the individual categories, the relationship between which is shown in Figure 2.

IT controlling represents the focus of the individual core areas and is used to analyze company-relevant key figures from which future changes and processes can then be focused and planned with the help of the IT strategy. These two categories ultimately result in the positions enabling and alignment, which are intended to show that the IT organization does not have a specific goal of its own, but opens up various business opportunities for entrepreneurial management through the right application. Embedded in it are four specific IT functions that are directly related to the IT users. The IT service management serves to serve the wishes and requirements of the customer in the best possible way.
The opposite is the IT resource management, which is responsible for business issues. With the help of this category, relevant resources such as hardware or software, the workforce and information processing can be controlled.
IT governance, risk and compliance management deals with risk factors by trying to identify and counteract them at an early stage, as well as compliance with legal aspects.
Because IT portfolio management can only be used and support the company in evaluating performance ideas if compliance with the law is guaranteed.
All four areas are connected with each other and influence each other, so that an equally balanced strategic focus on all areas is extremely important for the success of an IT organization. This is expressed by the term Enterprise Architecture Management. The whole concept is finally framed by the cybersecurity category, the function of which is to meet security and data protection requirements.

Instruments

In order to implement IT in their own company and to continuously optimize it later, many companies use various software solutions. Well-known programs for IT administration include ARIS and ALFABET from FIRMA Software AG, ADOit from BOC or Mega Suite from the manufacturer of the same name, as well as Troux Technologie’s Troux Enterprise Suite and rimacon omniSuite from rimacon.

Implementation in practice

When implementing their IT organization, companies often use so-called best practice examples. These are particularly characterized by their adaptability and flexible transmission method. Many companies therefore take on the experience of other companies when dealing with IT management and optimize it for their own purposes. This has the advantage that the error rate is often significantly lower, the implementation time is significantly reduced and employees can be trained more quickly.
Well-known best practice examples for IT organization are ITIL (Information Technology Infrastructure Library) and COBIT (Control Objectives for IT), which are made publicly available at regular intervals as sample versions by central organizations and are constantly optimized in line with the times.

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