How to Organize Information Technology (IT) & Digitization Roles

An excerpt from the forthcoming book “Organizing and Managing Insanely Great Products” by David Fradin with RN Prasad

Digital teams are responsible for developing, testing, and implementing a strategy to reach and engage target audiences through digital channels like web, mobile, and social.

Organizational Structure

To operate more effectively, organizations should be structured like a network, not a chain of command.  The structure has to be diffused to enhance rapid decision making.

Decision Making

For intelligent decision making to occur, it should be to delegate to those closest to the customer.  Speed in decision making is essential. They can be done in multiple, small, iterative processes.

As the founder and president of Amazon, Jeff Bezos, in his April 2017 letter to Amazon shareholders, highlights making not just “high-quality” decisions but “high-velocity” decisions. They go hand in hand. “Most decisions,” writes Bezos, “should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases you’re probably being slow.” Choosing not to fail fast comes at a price. “If you’re good at course correcting,” Bezos continues, “being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”

McKinsey and Company argue that decision making should be done at four levels.  The first level is “how to decide.” It is strategic, not tactical in nature. It leaves the tactics for lower levels of the organization that is closer to the customer. The second level is big decisions. The third level is decisions cutting across multiple functions like pricing, multi-product sales, operations, product launches, and portfolio management.  The fourth level is delegated decisions that are high frequency and low risk. Some of these could be delegated to AI algorithms like Amazon’s product recommendations. A good product manager can play a vital role at each of these levels.

Roles

Leadership can come from anyone in the organization.  It is earned, not appointed. The organization should strive towards alignment around universal principles and goals.

Agility

IT should form teams to address problems, sprint toward solutions, and then reconstitute to work on new challenges.

Appoint a Transformation Manager

A Business Transformation Manager is often responsible for overseeing all areas of a business, implementing any operational changes and delivering measurable improvements. This involves playing a vital role in the decision-making process regarding technology and recruitment.

Digital transformation is the profound transformation of business and organizational activities, processes, competencies, and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way, with present and future.

The Role of IT

As digitization continues to grow, IT’s role will become even more important strategically.  Things like automation, new technology adoption like cloud/ analytics/ IoT will drive fact-based decision making in the entire organization and will be lead by IT.

Additional Reading

https://en.wikipedia.org/wiki/Digitization

https://www.mckinsey.com/business-functions/organization/our-insights/rethinking-work-in-the-digital-age

https://www.managementkits.com/blog/2017/7/27/five-reasons-why-new-forms-of-organizing-and-digitalization-go-hand-in-hand

https://sloanreview.mit.edu/projects/aligning-for-digital-future/

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