InformationWeek
Defining The Business Value Of Technology
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July 31, 2000 |
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The Changing Face Of IT
As IT becomes even more integral to success, companies are rethinking how the organization looks, functions, and interacts with the rest of the business
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olly Greenwood is a CIO with an $800,000 budget and no full-time IT staff.
That doesn't mean her role isn't crucial to IT-far from it. As deputy CIO of external affairs, she leads IT-intensive customer projects at Mitre Corp. The Bedford, Mass., contractor develops government projects that have ranged from a deep-space surveillance system for the Air Force to an intranet for the CIA. When a job comes in, Greenwood draws the technical workers most appropriate for it from any number of business units within the company to create a staff of as many as 12 people. "I'm the focal point," she says. "They don't report to me; they report to our lines of business."
Because Greenwood relies on business units to provide her with staff, she must work with other managers to coordinate those employees' time. "It gets interesting when I have a crisis and they have a crisis," Greenwood says. "But it's a good culture at Mitre-we work it out."
This type of flexibility is more the rule than the exception in today's IT organizations. As IT has become increasingly im portant and integral to a successful business, companies are rethinking the structure of the IT organization-what it looks like, how it functions, and how it interacts with the rest of the business.
In almost every case, the goal is the same: To closely align at least part of the IT organization with a company's overall business goals while continuing to provide support and strategy for the infrastructure that runs the business.
The structure and function of the IT organization vary by company. The recent trend to decentralize and disperse IT management and workers throughout an organization is countered by an even stronger tendency to centralize and focus IT efforts. As IT becomes more associated with business goals and as IT staff works more closely with business managers, the lines of reporting become confused and confusing. And the imperative toward E-commerce and Internet initiatives may be creating two separate-and unequal-IT factions: one charged with leading the E-business push, and the other left holding the maintenance and support bag.
Despite increasing interest in alternative ways of handling various IT functions, such as third-party contractors, application service providers, and traditional outsourcing, the internal IT organization won't disappear. But it may become harder to define. "IT isn't going away anytime soon," says consultant Jill McPherson of Semeron Corp., an IT outsourcing firm. "Two years ago, marketing drove E-business, and IT drove Y2K and enterprise resource planning. Now IT is undergoing a rebirth-it's more focused on undertaking business requirements."
Certainly, IT staffs at most companies are growing. According to an InformationWeek Research survey of 228 IT professionals conducted in June, a majority of companies large and small have increased their IT staffs within the past few years because of company growth, E-business initiatives, and generally increased business demands.
But there seems to be no strong consensus on how an IT staff should be organized. According to the survey, 38% of companies with $50 million or more in revenue are working toward decentralizing their IT departments; the other 62% are sticking with a centralized structure.
Rob Carter, executive VP and CIO of FedEx Corp., is in the throes of an effort to centralize what until recently has been a decentralized IT organization spread out over several subsidiary businesses. After acquiring a number of companies over the last several years (its RPS Ground Service, for example), FedEx began a rebranding effort to bring all the business units under one corporate IT services umbrella. At the heart of the strategy was the decision to allocate as many resources as possible into customer-driven Internet initiatives. 
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