Principles and Models for Organizing the IT Function

In finding the best organizational model for structuring and organizing information technology (IT) activities in firms, three guiding principles are uncovered: encourage co-evolution of IT and the business, nurture relationship networks, and organize by value-creating process.

Abstract

Today, as new information technologies emerge as strategic differentiators, there is renewed interest in finding the best organizational model for structuring and organizing information technology (IT) activities in firms. In our two-year study of how leading-edge firms have designed their IT function to nurture innovation and sustain superior business performance, we uncovered three guiding principles. One, encourage co-evolution of IT and the business. Two, nurture relationship networks. Finally, organize by value-creating process. We also found three organizational models. The Partner Model focuses on making IT an active partner in business innovation. The Platform Model emphasizes providing IT resources for innovation and global reach. And the Scalable Model seeks flexibility by leveraging sourcing to tap innovation outside the firm. All three models embrace the three organizing principles, but each model is appropriate for a specific organizational view of the role of the IT function