Organization Structure to Support Digital Business – What to Consider

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By John Dick

Central to the changing landscape of IT and business is the proliferation of devices and Internet of Things; by 2020, more than seven billion people and businesses, and at least 30 billion devices, will be connected to the Internet. This interaction leads to the evolution of digital business, and with that evolution is the need for companies to think about how to organize their most important asset – people – in a way that best supports the delivery of their products and services in this new digital business structure.

We have been giving advice to companies on how to thoroughly think about the role of people and organization structure within this evolving and complex equation of people, process, and technology. I have captured some of our leading points around structural questions to consider and critical success factors related to the organization of a company’s technology engineering and delivery groups below. In turn, this blog will lead to a future post outlining digital business organization structure, and guidelines around your company’s infrastructure readiness.

First, there are some questions to consider in thinking about digital business, technical engineering and delivery organization structure.

The first deals with how your company is organized, because it is probably organized the way it is for a reason, such as to most optimally support effective product sales and delivery.  Also, that structure is the eco-system in which you will need to co-exist.

Important Company Structural Questions and Considerations

  • What is your company’s approach to centralization vs. decentralization of responsibilities and structure?
  • Does your company impose structure through traditional functions, product, process functions, or technical expertise?
  • How does your company think about direct line vs. dotted line reporting and to whom?
  • Do you fit the technology organization to the business requirements or to the people?
  • How do you handle regional | international units?

Understanding the relationship of your organization within its larger context is critical to how you organize your group. For example, if your company is decentralized, it will probably be important to understand why your organization is also decentralized. What are the key reasons your business is decentralized? How will you provide digital support to the decentralized units in a meaningful, personal manner? How will you understand unique customer regional requirements? What if it has aspects of both? A carefully crafted hybrid solution may then become necessary.

From here, we offer key initial points to consider toward optimizing your organization structure for success.

Once you’ve thought through and understand how your company is organized for success around its products and services, you’ll want to transition to what are the critical success factors for your technology associated group. That, once aligned with the rest of the company structure, will assist in developing success criteria.

Critical Success Factors

  • Aligning organization with business strategy and function
  • Allowing organization to keep pace with company growth and changing business dynamics
  • Providing effective decision support and related performance | scorecard tracking
  • Integrate organization approaches within company culture

While the first three points are a common theme and well accepted, I believe the last point is often overlooked. All companies have some aspect of company culture in their environments. If your organization is not organized or motivated within that context, success could be difficult. A good way to support this is to subtly develop success criteria that is natural to your environment.

With new roles other supporting or catalyst roles will emerge, and CXOs will need to develop digital leadership capabilities in order to execute an effective digital strategy.

In the next post I will delve further into what this means and how to think about your company’s infrastructure readiness to complete the picture.

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