Effective ICT Organizations Design – In-Depth Study by IFGICT’s CTO

An effective ICT organization structure should serve the purpose of the ICT department depending on its strategy. The company must select the most appropriate structure based on sound justification and based on explicit coverage of its needs. If the structure does not fit the purpose, problems will begin to arise in performance, roles, communications and many other aspects.

 As the Information Technology field is continuously changing and emerging, the company should periodically review the structure of the ICT department and adjust it according to any changes in the strategy or any input that contributes to the current structure. The ICT Organization structure should not be a mere chart of units and positions. It is actually a design produced by a systematic and well thought process based on facts, standards and experience.

The process of designing the ICT department organization starts by validating the need for re-design. It is important to make sure that the ICT department has problems related or caused by the structure. The process then moves to collection of facts, and making strategic decisions about how the ICT department wishes to proceed with the process. The ICT department can adopt a comprehensive design, and then tune it according to their need, or it can build the design progressively following a series of logical steps. This study  also describes how to use the facts to action the design, by staffing it, then adapt it to the existing situation of an ICT department, and finally implementing it.

 As there are so many options and variations of the ICT organization design, the approach of this process strives to make it as generic as possible in terms of fitting to any company’s  ICT Organizations/Departmental needs. Nevertheless, the process produces a very specific and custom structure that aligns with and complies to the company’s ICT department strategy, needs, and situation.

Towards ICT Organizational Design

ICT Organization Design is a broader and more comprehensive concept than mere organizational chart or structure. The following table summarizes the main differences:

Table 1 – Comparison between Organization Chart Vs Organization Design

In designing an organization, it is very tempting to move into charting the required sections, assigning managers, and distributing of the current staff or planned staff over the identified sections. However, we have to keep in mind that the ICT organization design process is systematic, well thought and logical. It moves from high-level requirements that emerge from the objectives and goals, into clear factors that affect the design, and then carries on to build the design itself incrementally with multiple iterations of designing and validating until the process reaches an appropriate design.

This article provides a detailed process with  justifications. This approach will:

Allow the ICT departments to quickly adapt a ready design

Clarify process steps as it is applied

Encourage customization and tuning according to specific ICT department needs

 ICT Organization Design Goals

 The ICT management conducts the ICT organization design process at strategic and tactical levels. It aims to achieve the following objectives:

Alignment to new strategic directions of the company

Solve problems resulting from structure inefficiencies

Eliminate job conflicts

Minimize errors and deficiency resulting from human behavior

Clarify uncertainty regarding the hierarchy and distribution of work and responsibilities

Enable the ability of predicting results by minimizing the personal behavior options

ICT Organization Design Activities

The purpose of this process is to change any ICT department structure into a structure that fits the purpose {being vision, strategy, goals, etc…}. The input to this process is a management decision to initiate it. The output of it is an actionable plan to implement the change or the decision to abort this exercise. The following table summarizes the process:

Table 2 – ICT Organization Design Process

 The following diagram depicts the main process steps and their activities:

Figure 1 – Process Flow Chart for Organization Structure Design

Overview of the ICT Organization

 ICT Vision and Mission

The purpose of the ICT department represented by its vision and mission statements has direct influence on the recommended ICT organization design activities

ICT  Vision (Example)

 “The ICT Department works with a vision to transform the Company into a sustainable knowledge organization by leveraging Information and Communication Technologies to enhance company services enrich businesses and empower individuals”

The ICT department vision must be in-line with the  Company Vision.

Company Vision (Example)

“Building on our location, resource and talent and aware of our societal responsibility we provide high quality market oriented and innovative infrastructure and service solutions to create ever increasing and sustainable value for our customer, partner, employee and shareholder.”

ICT Mission (Example)

The ICT Department mission statement encourages and directs the daily actions of the ICT Department staff toward the achievement of the most important and aspired objectives. It is focused, specific, simple and easy to remember.

 “The Information and Communication Technology Department (ICT) has operational, strategic and fiscal responsibility for the innovation, implementation and advancement of technology at the Company. Divided into three main areas,

Network Administration & End-User Support,

Consultancy Services and

Information Systems,

ICT Department is customer-centered and driven by its commitment to internal and external customers.

  The IT Department will continue to pursue:

The use of information technology to enable a time and location-independent, customer centered environment where customers will be able to access online content, request a service and follow up on a request and access customer services using a variety of methods,  including those mediated by information technology;

A network-centered computing environment, where all information  services will be seen as standard network services originating from a single source; and

The continued deployment of mobile and cloud computing environment, where all members of the company community will be able to access network services from anywhere, at any time, both in office and out of office”

ICT Strategy, Goals and Objectives

 The ICT strategy summarizes the long-term goals and direction. It affects the design of the ICT department directly. Moving from generic to specific, the planning focus moves chronologically in the following order:

Vision and Mission

IT strategy Plan

Goals and Objectives

Detailed plans for

Budget

Projects

Work (Tasks per resources)

ICT Model

This following model is a simplification of the generic ICT elements in any company’s ICT Department. This model establishes the main concepts addressed in this document:

Figure 2 – ICT Model

It is important to emphasize that the customers are not very much interested in the ICT department internals or work procedures. They only see and make use of the provided services.

ICT Customers

The majority of ICT department customers are the internal employees and end users in any partner entities. However, it is expected that the ICT department will extend services to external customers like:

Other ICT departments in the partner entities

Vendors and suppliers

Citizens and customers with problems, issues or suggestions, especially customers of e-Services

The ICT staff itself is an internal customer. Especially if human resources development, training, recognition and reward systems exist and is properly managed.

ICT Services

The ICT department exists to provide services to its customers. These services vary in nature and importance, and they require different skill sets from its providers. The ICT services are critical because they:

Form the relation between the ICT departments and its customers

Shape the structure of the ICT department

Coupled with scale and demand, they justify the budget

Drive resource requirement and ICT staff development

Some services do not have direct and visible value to the customers; however, these services contribute to the stability and reliability of intrinsic infrastructure benefits. They also prevent problems or loss of data.

The following summarizes the possible services from a customer perspective:

 ICT Functions

The purpose of this section is to define the functions carried out to develop, deliver and support the services defined in the section ICT Services

The ICT Organization functions form the basis of the ICT organization design. They are the building blocks of the department sections and processes performed by the ICT staff.

The focus on functions is important because functions provide specialization and visibility to ICT work. Unlike processes, they provide the how-to, and they span multiple functions, sections and ICT staff members.

 The following table summarized the differences:

The design process maps each supported function explicitly to an organization structure role that fulfills it. The design process also groups the ICT functions according to similarity of work, specialization and domain experience. It does not however, link, map, or group the ICT Functions to the recommended structure.

The design process can simply list the ICT functions. However, listing them without a solid reference and categorization will lead to duplication and redundancy, along with confusion and difficulty to manage, grasp and update them.

The solution to the listing issue is framing. If we frame the dimensions and the aspects of the IT functions, we can then use a solid reference. A reference that capture and categorize systematically and clearly any ICT function. In light of the above, the process depend on a few concepts/aspects and we can use them to create this frame:

Engineering: The concept of engineering relies on technology. It uses the technology to produce technical solutions using design, development, testing, etc…

Management: The ICT department as any organization (or part of an organization) needs management effort. In fact, it requires mature and keen management because it depends on people, the most valuable asset. These functions are the basic management functions: Organizing, Planning, Controlling, etc…

Generic Business Support: These functions support running any organization, they relate to the regular, well-known and applied functions, like accounting, procurement, customer service, recruitment, training, etc…

ICT Specific Elements: There are elements that are specific to the Information and Communication Technology domain. The previous three aspects actually act on these elements, producing variations and shapes that suit the ICT needs. These elements include Computer Hardware, software, operating systems, networking, applications, etc…

Work Nature: Recently, the industry put huge focus on projects and there difference from regular day-to-day operations. The project is unique in nature and has time requirement and an end result/product. However, operations are continuous and long term with requirements on productivity and efficiency. There is also a mix between the two, some work functions take place several times and each time, there is a time allocated for it, we call it recurring work.

The following table depicts the described aspects:

Table 3 – ICT Functions Aspects / Dimensions

The following table represents all the possible IT functions. In this table, the IT specific elements are represented as columns, while different functional categories apply on these elements in different ways as follows:

As Project: The function is applied under a project context, the project is a unique and temporary effort conducted to achieve a specific objective.

As Operation: The function is applied as an operation; the operation is a continuous nature of work.

As Recurring Function: The function is applied periodically, but it is not continuous, and at the same time not temporary, it has time line, but it recurs every week, month, or sometimes yearly.

Each entry in the table below represents a possible ICT function. Each filled entry with (P: Project, O: Operation, R: Recurring) represents a known ICT function that can be later on managed, assigned, and organized under the responsibility of a section, or a person in the organization structure

Table 4 – ICT Functions Frame (Legend: P= Project Type , O= Operation Type , R= Recurring)

ICT Organization Design Activities

Step 1 – Validate the Need for Change

Before spending time and effort in collecting data, and creating organizational design, it is important to validate that the ICT department needs this exercise. That is why this step is vital at the beginning.

Following are the steps taken by the ICT department to validate the need for department restructuring or re-design:

Conduct a self-assessment of the ICT organization using the “The ICT Diagnosis Template”

Record all problems, issues, unmet objectives and slippage

Conduct a customer satisfaction assessment by letting customers anonymously answer the questions in the customer satisfaction assessment template below:

Table 5 – Customer Satisfaction Assessment Template

  1. Conduct a cause-effect analysis, were problems are analyzed to find the real causes

  1. There are real causes related to the organization structure, the following checklist is used to decide whether the problems caused are due to the organization    structure:

Table 6 – Checklist for Problems caused by Organization Structure

 The output of this step is a decision that the ICT department needs redesign  or not.

Step 2 – Collection of Critical Design Factors

The purpose of this step is to gather the information/factors affecting the organization design in order to base the ICT department design on solid grounds. For that, the ICT department collects this information based on facts. Step three (3) and Step four (4) depend on these facts to construct the organization structure design.

These factors are quantitative or qualitative according to their nature, which affect the activities as follows:

 Quantitative Factors

Define different locations and their categories

Headquarters (One location)

Large Location(City Branches)

Small Location (s) (Town / District)

Identify the services required at each location and specify if the ICT department is currently providing these services or planning to provide them in the future. This helps in determining the requirements to provide the planned services.

Prioritize and assess the services in terms of:

Importance : High, medium or low, taking into account the customer opinion on it and the ICT perspective as well because some customers may not fully understand the importance of a service until they lose it!

Remote :  Can the service be provided remotely or not

Demand :  The expected number of service requests per day

 The ICT Services definition template below facilitates this assessment:

Table 7 – Services Definition Template

  1. Estimate the average time for providing the service based on the associated roles. This step covers the activities of the “Operation” and “Recurring” nature. However, The ICT department handles the activities of “Project” nature on case-by-case basis, because they depend on the scope of the project.

The template for Service Effort Estimation is shown below. This (with the information collected in the previous point) helps in quantifying the expected workload per role, and hence assists in identifying the needed manpower per role and section. This is also a major input in identifying the recommended size of the ICT team as a whole. The following table is used to estimate the effort needed to provide ICT services:

Table 8-Service Effort Estimation

  1. Identify the estimated workloads of the roles required to provide the services.

Note that this step covers both existing and planned IT services.

Qualitative Factors

Determine the planned management style (Autocratic, Consultative, Participation, or Empowering/Delegating). This helps in determining the level of supervision and section levels

Identify the stage in the life cycle of the ICT department (Starting, building, Stabilizing, mature). This in combination with the management style will determine the basic characteristics of the ICT organization structure:

Starting: The IT organization is very young or very small (2-3 people)

Building: The IT organization is at the beginning of its first expansion, It is being established, and there is a considerable demand on systems, infrastructure services and IT people

Stabilizing: IT Processes are being applied, most of the infrastructure systems have been created, and the IT department is looking for a structure that best suits the maintenance and support demand together with the demand for project and new systems

Mature: Processes are optimized, stability achieved, minor problems and issues are

  1. Identify constraints of time, money, and people

Step – 3 Construct a Candidate Design

The organization structure consists of sections, positions, roles, and ICT functions all are linked together as shown in the following hierarchical view:

Figure 3 – Organization Structure Components

As the diagram above clarifies, the structure and sections depend on logical interpretation of the qualitative factors. However, how we staff the ICT department with Titles and Roles depend on the estimated workload for each role. On the other hand, the responsibilities per role depend on similarities and the structure of proven methodologies.

 Coverage

Depending on the strategy for the implementation, this step can cover:

The existing services only, if there is no immediate plan for expansion

The existing and planned services together, where implementation will be done immediately in one shot for both existing and new services

If the ICT department wishes to implement the appropriate structure for the current services, and then move as to a second implementation phase to implement the structure changes for the new/planned services altogether, the ICT department should cover point-1 and point-2 above.

The recommended approach is to cover both because this will allow looking at a comprehensive view of the three structures and find the appropriate implementation strategy accordingly.

The following diagram clarifies the recommendation:

Figure 4 – Strategy According to Structure Gaps

If the difference between recommended structure for existing services and the one covering all services (existing and new), then the implementation can be divided into two stages.

Project Management

The design approach focuses on the activities of “Operation” and “Recurring” nature. However, Project management by nature is a temporary effort, which means the size of its team and its structure is totally dependent on the number and duration of current and planned projects. It is also flexible and driven by project needs.

Most of the ICT department standards do not concentrate on the projects, due to their temporary and highly flexible and varying nature. Nevertheless, there are specific standards that focus on project management as a practice regardless of being part of an ICT department or not.

Recently, organizations are recognizing the need for dedicated project management unit as “Special Projects Department”. This department has a manager as a project director, and project manager and team for each project.

 Figure 5 – Special Projects Department

The main concern in the special projects department is staffing projects. It is difficult to determine whether the team member is dedicated to a project/s, or supporting them by the required percentage of his time. This issue depends actually on the situation. However, staffing project should never depend on people who are fully dedicated to operations work. The ICT department allocates the project team from the special projects department or from other departments that have recurring work nature and can afford to contribute to the project and carry the assigned project responsibilities.

Allocating a dedicated unit for projects is actually a form of realizing a strong matrix organization structure. Instead of classifying how the organization prioritizes all of its projects (and how it allocates and authorizes project managers on an organization level), the process recommends handling each project alone.

Some projects may have higher priorities than everything else in the ICT department, while others can work simultaneously with supporting operations depending on the availability of the teams. The project management best practices methodology by PMI elaborates on the methodology and the processes of project management.

 Alternatives

There are several approaches to conduct this step. Each approach can combine any of the quantitative structure decisions with the qualitative ones as follows:

Structure and sections (qualitative)

Apply the guidelines to build the structure incrementally in top-down mechanism

Alternatively, adapt the initial proposed comprehensive design and tune it according to the management style, organization state, constraints to reach a strong structure candidate. The initial comprehensive design is outlined in comprehensive ICT Structure

Job titles and roles (quantitative)

Applying the workload estimates in man-days to divide the work and estimate the size of each section

Alternatively, apply standard recommendations to staff the ICT department. These estimates can be applied independently of the estimated workload

The following diagram represents the available options:

Figure 6 – Strategic Options

 The following section clarifies each option.

 Structure and Sections

Structure and sections define the layout, communication direction, and level. The two options are:

Top Down Approach

The top down approach to design the organization depend on the qualitative design factors. It also moves from top sections to lower level sections as follows:

 Identify the Generic Structure Layout

The generic structure layout depends on the management style of the ICT department as follows:

The horizontal layout applies to autocratic and consultative management, it looks like a flat or semi-flat layout that exposes the manager to a large set of ICT staff. See the sample chart below:

Figure 7 – Horizontal Layout

  1. The vertical layout applies to the empowering management The manager empowers lower sections, and he is less involved in details or visibility of work of the lowest level. See the sample below:

Figure 8 – Vertical Layout

  1. The balanced layout suits the democratic management, it is not too broad horizontally neither deep vertically. The sample below gives an example:

 Figure 9 – Balanced Layout

The generic structure also depends on the lifecycle state of the organization, since the priorities differ depending on the stage as follows:

Table 9 – Priorities at Different Stages

 The following table summarizes the recommended layouts per stage:

Table 10 – Recommended IT Structure Layout

The main sections fall in level-one and level-two hierarchical ranks. Level-one sections report directly to the ICT manager, while level-two sections report to level-one sections.

The following table summarizes the main sections:

Table 11 – ICT Department Main Sections

Chart the ICT department – High Level

Based on the identified sections and the recommended pattern, below is a chart of the main sections. There is no problem in adding more sections or combining the main ones. But this will be systematically performed later. An example of such a structure can look like the following chart:

Figure 10 – ICT Department Main Sections

Customizing a Predefined Organization Structure

The second approach is to start with a comprehensive and complex organization chart. Then, customize it by removing sections, combining them, or renaming them to a more used and common name. The output of this option is a customized chart that is more suitable for the ICT department performing the re-design.

The comprehensive chart contains the section roles. It includes roles in order to leave staffing and grouping of roles into job titles until the actual staffing exercise takes place inside each section as described in step-4.

The following depicts a comprehensive chart:

 Figure 11 – Comprehensive Chart with Roles

 Staffing Requirement for Sections

In this activity, the ICT department identifies the required jobs and the associated roles. There are two ways to conduct that:

 Using Estimated Workloads

According to the estimated workloads for each role, the manpower needed in each section is assigned. This will give a view about the number of the ICT staff.

Within each section, the distribution of roles on formal job titles can be performed now, or it can be left to the section manager (if exists).

There is a difference though, between identifying the needed job position per section, and what roles the job position will fulfill. The following table summarizes an example:

Table 12 – Input to Job Design Example

Assuming that the average workload per day is 6 hours, hence we have two options.

Option 1:

Table 13 – Option 1 for Job Design Example

Option 2:

Table 14 – Option 2 for Job Design Example

It is important as well, to take into consideration the training time, and the expected yearly vacations.

Using Recommended Quantitative Standards

ICT assessment studies  performed on a variety of ICT departments around the world are showing that there are some trends in identifying the resource requirement depending on the number of service users.

These standards vary from one research to another, but there is a consensus that the ratio of serviced users per ICT support person is not less than 40:1. In addition, it grows linearly as the number of users increases. This ratio excludes product and application development. Hence the ICT department can include a lot more than that if they are in- sourcing some of the development or implementation projects work.

Other statistics include:

Help desk phone calls average time from five to seven (5-7) minutes

Problems start  to arise  when  the  number  of  directly  supervised people  by  a manager or a supervisor exceed eleven (11) persons

The recommended number of hierarchical vertical levels is seven (7) levels

The effective working hours for a person attending to work for eight (8) hours a day are six (6) At least 2 hour goes for other activities.

Step 4 – Transform into an Actual Design

In this step, the regulations and rules of the company are applied. In addition to any constrains or risks that have an impact on the structure are reflected on the candidate design. The result of this might be consolidation of jobs or sections, or further breakdown of them.

The following table summarizes some of the guidelines, with their justification. These guidelines apply on the candidate design to produce an actual and implementable one.

Table 15 – Guidelines and Justifications

Step – 5 Plan for Implementation

The purpose of this step is to plan to achieve the actual design. The planning covers each of the following:

Recruiting Vs Firing

Time table

Current staff changes in roles and positions

Logistics and formal approvals

Documenting, communicating and formalizing the new design

Establishing the reporting of the ICT department to the upper level of management

Each action item in the plan should have a time line and a committed owner. The ICT manager should track this plan as any regular work plan.

The implementation does not stop here. The ICT manager follows it through until it is completed. After that, the ICT manager assesses the situation and by evaluating the new design and making sure the problems that were caused by the structure are resolved or minimized.

If the problems persist, the ICT manager takes the appropriate corrective action accordingly. He might also consult other ICT departments about possible solutions. However, the one thing the ICT manager should avoid is to leave the problems as is without response or action.

Conclusion

The organization structure of the ICT department is the visible representation of the ICT department ‘Organization’. By looking at it, it describes the functions and to a certain degree the services provided by the ICT department. It also gives an idea about the size and the nature of work being performed.

The more the ICT organization structure is aligned with the ICT vision, mission and objectives, the more it will serve its purpose, and facilitate the implementation of needed changes.

The design process in this document is based on few principles and lessons learned in organizational design/re-design. The application of these principles is actually more important than the “how-to” and the mythological representation of it (However, the design process inherently applies all of them). The following list summarizes these principles as lessons learned or general design recommendations:

Base management decisions on facts and adequate understanding of the situation

Align the organization structure with the ICT strategy

Keep the customers in mind and seek the state of being “Customer Centric”

Address real causes of problems , not just the symptoms

Design the organization based on required services, functions, and the estimated workload

Keep the end results in mind, the end results of the ICT department are its services to the customers

Take into consideration the environment, the stage at which the ICT department is at, and the planned management style that will be applied in managing the ICT department

Dedicate the suitable setup for project management as it is one of the major functions of the ICT department

In re-designing the organization structure, ignore the current design and apply the concept of re-engineering (the current design with its problems can affect the design process) seeking a “radical” change rather than an enhancement or minor improvement

Apply international standards

The change process is one of the most challenging endeavors, it requires careful and comprehensive planning, execution, tracking, and corrective action when deviation occurs

The organization design process is a systematic process, based on facts and experience in the ICT. If done well, the organization structure can be one of the strongest and most helpful tools in implementing strategy, change and improvement in general

It is recommended to make the ICT Department reporting directly to the top management of the organization

 

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