AQUA Company Reorganization of IT Function
Background
The AQUA Company - a real government water utility, for whom we have given a fictitious name - delivers water over an aqueduct to millions of municipal customers. This agency also provides dam safety enforcement, flood control information and service, coordinates with fish and game agencies and ensures that a number of fish and fowl species are protected.
The work of the agency is a combination of government protection of a resource that needs to last for hundreds of years, and the rapid delivery of water at affordable prices from a series of dams that covers hundreds of miles of farmland. Information Technology is used in many of the agency's departments, including the all-important water delivery system. The biggest user is in Operations and Maintenance, which carries the water from a number of dams, into power plants, through the aqueduct and over mountains for final delivery to municipalities. Elaborate monitoring and control systems (called SCADA) requiring IT support are key parts of the business. This work requires close monitoring and coordination of water supplies with another agency that buys and sells electricity. Over time, a LAN, a WAN, a telephone and mobile radio service, video surveillance and now, SAP had been developed to support the work.
Over the years, the IT department became more and more isolated from the operational units, so that the O&M department had its own software laboratory, data center, and programmers. Centralized IT supported the LAN, the WAN, and the communications systems, while SAP was all decentralized.
The agency was content to "let sleeping dogs lie" until its chief customers determined the proliferation of services to be expensive and inefficient. They were tired of paying for services that did not meet their needs.
An IT governance committee had been appointed as a result of an earlier study. This committee decided that it needed to examine the organizational structure. They put out a Request for Proposal, appointed a project manager, and initiated a study.
Organizational Profile
Industry: Government Agency
Key product: Affordable water
Context: There were 250 employees in various IT functions, with titles and pay that varied widely. Many employees were of long service. Morale was moderate; people knew changes were coming, but did not have a vision of what it might be.
Industry Profile
This organization can best be compared with the Tennessee Valley Authority. It is both a state agency and a water utility, in a state that gets relatively little rainfall. Water is needed for the agriculture of the state and some residential areas.
The number and types of people required to support a water utility include many entry level types, people who have "grown up" in the business serving as supervisors; engineers, programmers and data management types, and general staff to support the employees.
Key Players
History of Key Relationships
The PI consultants worked closely with the IT Governance Board - making bi-weekly progress reports, and asking advice as needed. Most relationships among the department heads were cordial, although some tension was reported privately. The installation of SAP had not been smooth, and was changing the way the organization did its work. The current director of the centralized IT function was reassigned during the project, leaving his slot open for a new appointee. An internal project manager for the organizational study was appointed to coordinate all consultant activities and meetings with the oversight committee.
Overview: Reorganization Project Steps
(See Flow Diagram next two pages)
Description of the Initiative
The project involved the following deliverables:
• New To-Be IT Processes
• To-Be Jobs, including appropriate staff levels and skill assessment of current staff
• New Organizational Structure, including reporting relationships, and roles and responsibilities
• Short-term Implementation Plan
• Five-Year Strategic Implementation Plan
The client was intrigued with the possibility of building a new IT organization structure using a systematic process that examined the work of the agency in order to determine the proposed structure, and which included elements of change management. The client also desired a small consulting organization, rather than a big-six firm, in order to optimize experience of the facilitators and methodology, while containing costs.
The proposal by PI suggested initial development of process maps (using PI's Language of Work Model) for the various (As Is) existing IT functions throughout the organization. Then business unit maps would be developed with all the clients or users of the IT processes delivered. Clients would cross-reference their use of IT products and services to their processes to ensure an alignment between the work and the IT processes. Finally, customers would be invited to "vent" their frustrations and needs by telling the facilitators of their expectations of IT. These comments would identify the "work support" needed for the IT To Be core processes, jobs and organization structure that would emerge from the project. See "Aligning Performance: Improving People, Systems and Organizations" (Langdon, John Wiley & Sons, 2000) for a description of alignment and work support.
The Oversight Committee selected the consultants from the proposals submitted. They chose Performance International (PI), through its strategic partner, New Millennia Ltd. The two firms married the technical expertise in IT and change management with the systematic processes included in Danny Langdon's book mentioned above. Langdon is a founding partner in Performance International.
Key Issues and Events
This re-organization report had to be completed in a 120-day time frame. Thus, the key events were:
Project Process Description
Once each group had met with the consulting team to develop a process, business unit, or job model map, and the maps and models had been revised at least once, the results were posted onto an internal web-site for reference and discussion. This allowed everyone in the organization to participate in the work and to check on the progress to date.
The consulting team had promised the Oversight Committee that the Committee would be making their organizing decisions, not the consultants. However, the consultant's job was to develop, through facilitated sessions, the information in such a way that they would indeed be able to reveal and make the decisions. This direct involvement, posting of the maps, and bi-weekly up-date meetings allowed the Oversight Committee of busy executives to experience and understand the process and see the data as it accumulated.
In order to define the business of the agency, and to describe the core IT Processes, each facilitated meeting covered the following:
• Determination of the key outputs of the Core IT Processes and each business unit.
• Identification of the consequences of each output, coming to understand the purposes of the business or core process and how IT supported those purposes.
• Identification of the inputs required to produce each output of the business or core process, helping to create an understanding of a highly technical subject by lay people.
• Description of the key process steps needed to get the outputs that would allow the business to efficiently function. These added to the understanding of both the business and the technical support it needed.
• Articulation of the conditions under which the business is run. Because the utility is also a state government agency, the number of conditions that needed to be known and attended to was quite astounding.
• The feedback that would tell the business unit and the IT process it was doing a good job, and how to correct what needed correcting.
With the AS-IS Core IT Processes mapped and the business units mapped, and a correlation between the two established, the Consulting Team determined the 8 core IT processes that the business required in the necessary TO-BE state. They were:
• End-User Service
• IT Support Services
• Network and Communication Support
• IT Business Systems
• IT Consulting Services
• Flood Control IT
• Applications Development
• O&M IT
These TO-BE Core IT Processes were then modeled, using employee experts from various units. Then the current jobs being used to fulfill the processes were identified and linked to the TO-BE Processes. After review, the consulting team determined that 11 generic jobs were needed to fulfill the work of the TO-BE Core IT Process. They were:
• Business analyst
• Data administrator
• Data center operator
• Help desk
• IT analyst
• IT administrator
• IT Professional
• IT Specialist
• Programmer
• Systems analyst
• Technician
Over a six-day period, 11 jobs were modeled. For each job, the participants built a list of skills and knowledge needed to perform the job. This list was then supplemented by research that added some 5% to the generated list of skills and knowledge.
Progressive Disclosure
It should be noted there was a progressive disclosure throughout the project. First, understanding the key IT processes and how they linked to the work of the agency created clarity and consensus of purpose for the lay managers. These findings were summarized and posted on the internal web site, as well as presented and discussed with the Oversight Committee, meaning that the whole agency was getting a vivid picture and agreement on its IT investment. When the 11 core processes were subsequently identified, they again provided insight and consensus. Administration is a core process, as is application development. The fact that different things are being administered (systems, data bases, etc.) or different software is being developed (causing different names for similar processes) is not very relevant. When the typical job names were linked to the parts of the core process each job performs, new insights and consensus again emerged. Often the proliferation of names in the IT job world confuses others. Condensing the job names to the core 11 allowed them to be seen more clearly by incumbents and others. This progressive revelation (from business units to core processes to job to the organization structure and work group map) of information, in a systematic and orderly way, allows the focus of attention to move away from the differences toward the similarities and consensus within the work. When these similarities were seen, it became easier to think in terms of needed performance improvements and to reduce the silos separating each group from the others. The new organization structure emerged with great clarity; staff had indicated a great commitment to a more business-like approach to technology work within a short period of time. Indeed this form of revelation became not only a means for determining the best new organization, but also served as an intervention for bringing about the change and commitment needed.
Models and Techniques
The model used for the re-organization effort was The New Language of Work as described in Langdon's book, Aligning Performance: Improving People, Systems and Organizations.
The techniques for the data gathering included the use of a "10-minute Teach" which taught the model to the participants, a job aid for reference during facilitation sessions, two facilitators—one for process and one for IT content—and the use of proprietary software. All material developed in the 60 data gathering workshops was printed (immediately) and handed out at the end of each session and then posted to the internal web-site for others to view (within two to three days).
The maps that were developed accomplished two key goals:
1. The work of the agency was concisely but completely described.
2. The IT work needed to support the agency in meeting its IT needs was linked graphically through the models. "Organizational scanning" data was also collected.
These goals were able to be met because a single model (The Language of WorkTM) was used consistently for mapping agency work and IT work; business unit maps contained the same elements as the core process (and later) the job models and IT work group model. This allowed the participants, the consultants and the Oversight Committee to see the whole picture in very concrete terms.
Before the final organizational structuring meeting, the consulting team met with the Oversight Committee members (all of whom had participated in other business, process, and/or job mapping) in small groups to orient them to the data, review the findings, and to prepare them to work together to develop the new organization structure. The techniques included group facilitation, establishing criteria for centralization and decentralization, sharing of Best Practices, conflict resolution methods and graphic measurement of levels of agreement.
Results
The Oversight Committee was able to construct a new organization structure for the IT functions of the agency. The new structure added new features that were needed, but had not been identified prior to the mapping. Specifically, the business of IT—that is, investigating new technologies and new needs, planning, budgeting, and coordinating efforts had not been done in any organized fashion. The new structure created a unit that approached IT from a business perspective. This group also served as a project management office, so that new initiatives could be managed centrally after approval. This eliminated a number of "skunk works" and "cowboy" projects. Another change that was desperately needed included providing consulting services to the various scientific and engineering offices within the agency. Until the reorganization, the centralized IT group provided little support to the line departments. They therefore staffed a unit themselves, or alternately used very expensive talent to replace paper, order and install new software and hardware, and repair broken servers. The new unit provided support for all the IT related needs an operating unit might have. If the equipment was technically-based, the scientists would serve as technicians. In addition to these new units, the new structure provided a coherent clustering of units completing the core process work of IT.
When the Oversight Committee met, they were quickly able to determine that the criterion for centralization was serving multiple units within the agency. The criterion for decentralization was serving a single unit. The business reason for consolidating several units was made clear. Resistance rested with only one person, who recognized that he did not want to tell his staff that they would no longer report to a line department. The reorganization was completed in 3 four-hour sessions. Separating the CIO (Chief Information Officer) job from that of the CTO (Chief Technology Officer) was easily agreed on, based on the complexity of each aspect of these jobs. Job models for both jobs were developed after the Implementation Plan was written so that the new CIO could participate. The following presents the new IT organization structure:
The Implementation Plan was developed off-sight by the consulting team and reviewed by the Oversight Committee. A new CIO was named; he was selected on the basis of his philosophical agreement with the new direction and structure. It is his work to implement the new structure. A number of non-IT business changes occurred while the Implementation Plan was being developed, which add to the importance of installing the new structure—in order to support new business initiatives.