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Suggest to the CEO how you think DMC should restructure the organisation to best close the Alignment Gap

Home, - How you think DMC should restructure the organisation

Question - Case Study - DMC - You have just joined DMC (formerly trading as DataMine Consultants) as the new CIO. Your CEO has given you six (6) weeks to develop an initial draft strategy document (3 Year Plan) with the requirement to reorganise the business so that IT supports the company's business needs going forward for the company itself to be more effective and efficient. It is the CEO's vision for DMC to be restructured so that IT will be the driver and enabler of DMC future.

A) Carry out anevaluation of DMC against the Strategic Alignment Maturity Model and evaluate where DMC sits in this model. Here you need to do a brief Alignment Gap analysis from where DMC is now and where it should be in your opinion.

Answer -

Strategic alignment is a method for understanding the nature of a business through the co-relation of business process and strategies. It specifically refers to the coordination of an organization's external business, IT goals, internal resources, and IT organizational infrastructures. This concept can be easily related to strategic fit which helps in determining competitiveness of any organization.

However, every organization has their own responsibilities and goals that could be achieved by every team member in the working environment. It is the core duty of every employee to follow the policies leading to the successful growth of that organization.

Brief Alignment Gap Analysis:

1. Communication: DMC is having issues with the communication problems as they have monthly meetings between all the heads of the divisions. They should have weekly meeting so that they can get involved in the company work.

2. Value: There is not any code of ethics for good working environment. And also, there are many a smaller number of service level agreements in the DMC. It is the necessity to have specific service level agreement for each unit. And the code of ethics is also important for company, because by using this, the workers and employees can easily know about do's and don'ts for the company.

3. Governance: DMC is relying on the bank as their financial stability is dependent on bank employees. Here, it is necessary to have al the financial control on Head of department of financial or budget.

4. Partnership: In the DMC, there is little social contact with sub-divisions. It may impact on the internal working and the organization. There could be risk for confidentiality of the company. All the employees and heads need to have meeting so that they came to know about others contribution also.

5. Scope and architecture: There are no IT strategy Plan in DMC, so it is very necessary to have IT strategy plan for the accomplishment of all the tasks on time.

6. Skills: However, the DMC has number of staff member who are skills proficient, but they are retained and retrained. So the company should resist them back in the company for the best working.

However, every organization has their own responsibilities and goals that could be achieved by every team member in the working environment. It is the core duty of every employee to follow the policies leading to the successful growth of that organization.

B) Determine what the current structure of the organisation as an organisational structure (stovepipe etc) and suggest to the CEO how you think DMC should restructure the organisation to best close the Alignment Gap giving justifications for your recommendations.

Answer -

The current structure of the organization is the vertical stovepipe structure. As there is a Company Manager that oversees the research and Development, Sales and Marketing, IT services and Customer Services operations. In this each stove pipe represents a function of the organization.

The benefits of vertical functional stovepipe are as follows:

1. The career paths are clear

2. Staff performance evaluation can be conducted by the managers.

3. There is backup of skills due to redundancy

On the other hand, there are several disadvantages of this organizational structure that are follows:

1. Each stove pipe focuses on a unit particularly.

2. There are high chance that the units may fail due to the lack of communication.

To improve the structure of the organization, DMC should be restructured in the form of horizontal process tunnel form. By following this DM would be able to focus on different business areas. This structure will also help DMC to prioritize the units according to the need. According to the case study, the communication in between is not very great. Following the horizontal organization structure will improve the communication in the organization as well. This structure also allows the employees to make suggestions. This can improve the environment of the workplace to a great extent that will lead to overall increase in the quality of service.

C) Recommend to the CEO a revised management structure at the executive level and justify why this should be considered.

Answer -

To revise the management, the following management structure should be followed.

The organization should have three levels of management.

First-level

Second-level

Third level

1. The First level: The first-level managers will act as the strategic thinkers of the organization. This level will take care of the long-term decisions, large financial decisions and the decisions that are related to the stakeholder. The role in the top level will be played by CCO,CFO,CMO. they will act as the top-level management.

2. The second level: The second the middle level will be the managers that will report the first level regarding the functionality of their department. The second level management will be the sales department head, the IT Service head, the Research and Development head. They will act as the mentors of the level underneath and provide them advice when needed. This level will be also responsible to report the first level regarding the work going on.

3. The third level: Last but not the least will be the bottom layer. This layer will be directly linked to the workers. They will communicate with the staff directly and will monitor their needs and performance. All the technical expertise and the frontline workers come under this level.

D) Advise the CEO on how you see ITS in the new structure, highlighting the benefits to DMC if this recommendation is accepted.

Answer -

According to me, the new ITS will be horizontal process tunnels.

As per the new structure of the DMC the new structure will look lie as follows:

1. Better communication: as per the current situation of the DMC the communication in between the organizations divisions is not that good. According to the new structure, the communication will get better and this will increase the overall quality of service.

2. Proper code of ethics: the current DMC organization lacks the proper code of ethics and there is no code of professional Practice in place. As per the new structure the organization needs to follow the benchmarks of the code of ethics.

3. Service level agreements: there are only a few service level agreements within DMC.

4. Financial status: currently the financial status of DMC is understood by the bank accounting system but as per the new structure the financial head to the organization should be fully aware of what is happening and he should be able to understand the financial system fully.

E) Advise the CEO of the resistance that there will likely be in the reorganisation process and advise the CEO of a strategy to retain and retrain as many displaced staff as possible. You should also describe the change management philosophy that you believe will be the most successful in the amalgamation process. Also, in your answer discuss how the introduction of new technologies or systems can be a catalyst for organisational change.

Answer -

It plays an important role in successful organizational transitions. It is a process that helps employees to understand, accept, commit, and embrace change in current business. It can occur in very different ways in an organization. According to Connor (1992), people can go in both positive and negative cycle for accomplishment of the change. When the company will retain and retrain the whole staff, it will help the company in many ways:

a. Saves of organization time and resources: It will save the time to meet the milestones as possible as they can. And also, the older staff knows everything about different units or business area they were working. However, it will save the resources that could be arrange from outside areas.

b. Ease the tension and create a smooth process: When the staff working is well known to every specific area on which they are working, it will ease the tension of the CEO by creating a smooth process by easing all the problems. The technological development can also help them to do all the tasks as easy as they can.

c. Create more adaptable and innovative workplace: Change management will help in creating innovative workplace by creating more adaptable environment to all the employees. With the cutting-edge technologies, the new large company will invest more and earn more with smooth workplace.

d. Minimum resistance: When the retained and retrained staff will be there, then the company and the end-users can also get involved in the whole process with profit. The new technologies will help the workers to think about new ideas for advancement of the company.

e. Improves performance: When the staff will be well known to all the working environment and they will use new high-tech innovations, it improves the performance of the whole system including staff.

Overcoming resistance to change:

1. Benefits to the user: By changing the organization to higher level, they will help the users by providing more information.

2. Use of incentives: There can also incentive for changing the organizations. On the opposite side, they can also los their old rewards for the new reward system. When the incentive will be given to the workers, they will be become active to do work more and more.

3. Using intervention techniques: Involvement of every employee and whole team is very compulsory for improving the system for a change at large extent. When the user will find themselves involved in the change, they will feel more commitment to do more and more.

F) Advise the CEO of at least 8 different areas of DMC operations where outsourcing may be appropriate indicating the risks associated with each of the areas you select.

Answer -

There are many risks according to different areas where the outsourcing can be proved wrong. Some of them are as follows:

Transaction costs: Considerable cost is involved in outsourcing. Ongoing supervision and contract management comes out to be very high cost.

Hidden / additional costs (loss of staff skills): Hidden cost are potential disadvantage of outsourcing. Erosion of staff skills is one of the hidden costs in outsourcing. When IT staff is outsourced, a staff with knowledge is provided to the organization for guaranteed period but the staff only works as per the time of contract. However, over the time the contract may finish, and the cost may pressurize organization, so they must hire less trained staff that consequently leads to lower quality of service.

Loss of control: It may happen that while outsourcing, the organization may lose control over the information resources. So, this should always be considered while outsourcing resources.

Human resource problems: It is very necessary to handle the human resource management if it is outsourced. Otherwise, the organization will fail to absorb the advantages. An early strategic plan should be made regarding handling the outsourced human resource.

Privacy and confidentiality: The outsource resources may impact the confidentiality of the organization very adversely. An outsourced resource deals with the private data of the organization on daily basis. And there are chances that the organization may lose confidential data.

Lack of flexibility: If the CEO will outsource anyone for long-term contract, it may prove to be very disadvantage for the company. Because while changing any business or technological circumstances, there will be needed to arrange a alternative solution.

Lock-in, vulnerability and dependence: There could also be chances that it may lead users to kind of vendor dependence. The company employee may start depending on tall the outsources There can also be cases of backout and failure scenarios that would be costed and it may become costly or expensive to the company.

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