Life in a Matrix

Many of our clients are currently focusing on creating more integrated IT functions. This tends to create a more complex IT organization and requires different skills if we are not to create delay, cost and dissatisfaction.

There are three main drivers for this

1. Cost savings – companies are pursuing cost savings in all areas but this is also about making sure we get the best return from our current and historic IT investments in productivity and workflow improvements. In tough times all functions are expected to deliver more for less.
2. Sharing of scarce IT resources, A less integrated structure can lead to valuable IT resources and skills being “locked up” within a single business unit or geography silo. In an integrated structure, they are more accessible to the whole organisation.
3. Control and security. Centralisation is a common response to tough economic times as organizations try to exercise more control and to create a greater feeling of security, real or imagined, at the centre.

Driven by these and other factors, IT functions are becoming more complex.

Local IT resources are coming increasingly under the control of central functions but at the same time often retain local reporting lines in a matrix structure. Global projects and priorities may compete or even conflict with local requirements and IT people are working with colleagues in different locations, timezones and cultures, often with limited face to face contact.

In 16 years of working with organizations in this area, we have identified a number of factors that make this a particular challenge for IT.

1. IT are often exposed to these challenges of integration faster and earlier than other functions. For example, IT people may be tasked with introducing a common CRM system or a particular business process before other functions are ready to operate in such an integrated way. Internal cost savings from common systems can even take precedence over the local need expressed by other functions. In many cases IT have to fight the integration battle when more local functions, particularly sales, are resistant.
2. The IT organisation does tend to focus quite strongly on the technology and the technical skills and sometimes forget the “soft skills” that makes complex organizations and projects work.
3. A lot of the value of IT comes from consistency and introducing local variability adds cost. IT investments look good when they create consistency around the world. However, the world often resists uniformity, sometimes for good reasons, sometimes because of local politics or resistance to the centre. Other functions, particularly sales, can be much less integrated and require more local variability.

The increasing complexity and integration of IT happens at three levels

• Within the IT function itself.
• More complex customers.
• More complex projects involving more third parties.

Future posts will focus on each of these in turn.

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