Redefining the IT organization structure to meet the changing demands of the various stakeholders
Context and Challenge
The IT division of one of the large cement manufacturers was facing a huge demand from the Operations and Sales departments to provide significantly higher and wider set of services. The company was using SAP for all its operations, Sales, HR and Finance functions for all transactions. The IT division embarking on a big initiative of making lot of transactions available on mobile phones and tabs.
The IT division head (CTO of IT Division) reported to the Corporate CTO. There were a lot of complaints regarding delays in providing IT support and upgrades. The quality of the work done was often rejected and there were many occasions where the IT staff was required to re-do the projects.
The IT division head and the corporate CTO’s diagnosis of the situation was that the IT division was not structured appropriately and the headcount was inadequate. In addition, they found that on many projects they did not have the people with the right skills. Therefore, they decided to restructure the IT division
Adept Global documented the current as-is structure and the roles and responsibilities of the various positions in the IT division. A survey of the user departments was conducted to gather their perspective on the various issues and their expectations from the IT division. Subsequently, the team defined the principles of design on which the new structure would be defined.
Based on the demands of the user departments, the cement dealers and stockists, customers and the corporate a TOM (To-be-Operating Model) was defined based on the design principles. Design thinking was applied extensively in the program to come up with the initial solutions.
The TOM was modified to incorporate future changes in the operations and anew layer of IT governance was incorporated.
Based on the TOM and design principles, a new organization structure was defined which included new roles of Program Head for a new Program Management Office, a team of application specialist for new projects, a team of specialist to maintain and upgrade the existing applications and team for Infrastructure Management & Services. Existing dual roles of application development and Infrastructure services were eliminated as they often resulted in project delays. A program of role-rotation was designed so that the IT staff could move to newer areas for personal growth and development.
A new IT division structure has been implemented along with the changes in the projected headcount for the next three years. The headcount change was done based on the norms for SAP headcount for a given number of expected users and for program management team and Infrastructure the headcount was based on the activity drivers. The new structure would require reskilling of some existing staff and also hiring from outside for those skills that were currently not available in the company or corporate.
The new structure has an increased ratio of the IT staff to overall headcount of the company from 3.5% currently to 5% in the future and this increase was necessitated due to increased demand of digitalization from various stakeholders.
The team has been able to report an improved relation between IT and various departments with the project time frames reducing to almost 50% of the original time (before re-structuring the IT division).