IT has a big role in a virtual world

Information technology, through desktop systems, networks and the Internet, has penetrated every corner of the enterprise. Business units are building e-commerce sites, launching supply-chain alliances and spinning off e-businesses.

In this virtual world, the old-guard IT department, with its Industrial Age hierarchical management structure, resembles a relic of a bygone era. Is the IT department as we know it becoming irrelevant?

That idea might seem ludicrous at first, but the symptoms are there. Technology is emerging that facilitates Web-based access to legacy data and business rules, ultimately allowing business units to bypass IT operating environments. Vendors are targeting their sales pitches at business units because they have larger budgets. Business units have taken over many application management tasks, and a variety of IT core competencies are being outsourced. Most of all, the Internet and intranets have subverted the hierarchical IT management model. Informal communication among entities is replacing formal chains of command and side-stepping old lines of authority.

Management breakdown

According to The Cluetrain Manifesto (Perseus Books, 2000), today’s organizational chart is “hyperlinked, not hierarchical.” Management hierarchies are breaking down just as IT functions are being taken over by vendors and non-IT business units. A few of my colleagues believe that IT as we know it will fade into obscurity. But I’m not ready to accept that: IT still has much to offer, whether businesses realize it or not.

IT still owns the data, computing power, operational systems, technical know-how and disciplines critical to the effective management of information on a large scale. But change is coming, and I believe IT must spearhead efforts to redeploy information management across the enterprise. IT must reinvent itself so that the information management skills that have matured during the past few decades are not relearned through trial-and-error processes that end up costing companies money, people and their futures. As IT reinvents itself, these disciplines should be preserved and applied to the new organizations.

Out with the old

Change will be painful. The management hierarchy chart needs to be tossed aside so that IT can reinvent itself by creating an organization that can collaborate and adapt to business dynamics and technical innovation.

The concept requires modelling information management functions after the way they really work and making the transition from the old hierarchy to this new model. For example, the business units responsible for supporting applications should be organized into an application hub (or working group) structure that clearly delineates responsibilities. Each application hub could make enhancement or replacement decisions, restricted only by the impact they might have on related applications or architectures.

Under this model, working groups can implement decisions free from the command-and-control hierarchies that tend to stifle collaboration and adaptability. Each area sends representatives up to the next-level hub to collaborate on decisions that can’t be made at a more granular level. Centralized hubs set strategy, make cross-functional decisions and verify that IT disciplines are being deployed throughout the infrastructure.

At the centre of this is the IT advisory council, comprising representatives from internal and external groups responsible for information management across the enterprise.

We can either fight this evolutionary shift to a collaborative, adaptive management structure, or formalize a working model that reflects the new reality of information management.

Ulrich is a management consultant and president of Tactical Strategy Group Inc. Contact him at