The Architectural CIO
There's both good and bad news in the stories of ChemCo1 and ChemCo2. The good news is that it is possible to break away from traditional thinking about designing the IT organization and recognize that there are effective organizing options for different IT activities. A company can be both centralized and decentralized, insourced and outsourced. The bad news is that each organizational design is unique, idiosyncratic and customized, and if a CIO simply takes an existing design and emulates it, the chances of success are poor.
Modular logic offers value in many ways. Each capability and value stream can be custom-designed, and because the focus is on modular units, the process of making changes to the design of the IT organization is not as onerous as it might seem. As new opportunities and constraints present themselvese-business, for exampleeach value stream and capability architecture can be changed as needed, without significantly affecting the rest of the organization. The key, of course, is to ensure that the organizing structure and the logic underlying it remain viable through a continual and recurrent process of reassessment and evaluation.
Most significantly, modular logic reinforces the view that CIOs and senior IT executives must develop their skills as organizational architects in order to position their units to support and shape their firms' business agility and creativity. Modular logic provides a sound basis for initiating thinking and communicating about how IT functions should evolve.
RITU AGARWAL and V. SAMBAMURTHY are associate professors of Information Systems at the Robert H. Smith School of Business at the University of Maryland who specialize in the strategic issues associated with the deployment and use of information technologies in organizations. Comments on this story can be sent to firstname.lastname@example.org.