Draft an organization chart with the following information (can use other organizations for help) in getting out while the getting good,hought.digital procIn an effort to regroup both financially and strategically, his company, World Heliographics (WH), had begun to sell off its assets. Unfortunately, Ray's division, medical film,was among the first to go. As the CEO had just informed him, it had been sold to a successful private equity firm that would hold 100% of its assets and take an active role in itsfuture activities. It would now become a separate business, Global Digital Imaging (GDI), and Ray would be expected to deliver significant value for its new owner-investor, VEInvestments. "They have an experienced management team and a proven ability to build businesses," the CEO told him. "If you can give them the returns they want, they willkeep you on as President."As he stepped on to the elevator, Ray felt both exhilarated and apprehensive about this new opportunity. Mentally, he started an inventory of the new company's assets. Withoperations in more than 150 companies, revenues of about billion, and 12,000 staff, it was a substantial company in its own right. But operating independently of a much largerparent company created headaches in a number of areas, requiring the development of separate functions in HR, finance, facilities, and IT. The thought of this last issue struckhim hard. "What are we going to do with all the systems?" he asked himself. It would be relatively easy to hire good people to manage the other corporate entities, but IT was adifferent kettle of fish. And the last thing he wanted was to worry about IT... not when so much was riding on how well GDI performed as a freestanding company.There was a lot to do in very little time, and soon GDI was a legal entity. On day one, Ray called his senior people together. "Our first priority is to run as a companyindependent from WH as quickly as possible," he said. "We need to think like a young, agile company and not like a large, entrenched bureaucratic organization. Fortunately,we've got the transition team from VE Investments to help us." And indeed, it was only a few months before complete separation was accomplished, that is, everywhere exceptIT."Why is this so difficult?" Ray grumbled to the temporary CIO, Fred Gamble. "We have a number of problems," Fred said cautiously, observing the fire in Ray's eyes."Because legally, GDI didn't officially exist until the actual divestiture took place, no contracts could be signed or service-level agreements established until then. As a result,GDI has inherited a 'mini WH' IT function with all its flaws, so we now have a smorgasbord of technology." Fred explained that all applications, data, and infrastructure had beenpurchased and replicated to create a parallel organizational structure just to keep the business running during divestment. "So this means that not only are our systems notintegrated, but they are also not designed for our type of company," Ray concluded bluntly.The search for a new CIO began in earnest the next day. "I need an experienced and proven CIO to formulate a vision for a transformed IT function," he told the search firm hehired to help him. "You understand IT much better than I do so find me someone who is able to undertake a challenging transformation on multiple fronts at once."• The winning candidate was Ben Perry, a career IT executive, who joined GDI one year after it was created. "I knew I had a mandate to transform IT," recalled Ben later. "And Iknew we had to make some big changes, but I underestimated just how big these changes were going to be. There were a number of things we had to fix. We were still tethered toWH through some technology. The plans to disconnect had slipped four or five times and there was now a major lack of confidence about this separation. Our systems wereoutdated and not designed for a company dealing with healthcare products for medical practitioners. Our costs were too high and unpredictable. We needed to get our costs undercontrol in order to free up funds for new investments. We had 700 core applications and needed 200 to 300 at the most. We had multiple financial and email systems, noarchitecture or standards, and exact copies of every type of infrastructure and application that WH had. It was like the Wild West!""Ben walked into a mess," agreed Henderson. "IT was an obstacle to our being able to operate effectively and efficiently. I knew that IT was the key to our future so we neededto both clean up our act and find how to better balance technology and business strategy to move us forward. We needed basic competencies so we could use IT to differentiateour company and get us better information." He left it up to Ben to oversee the transformation and bring GDI's business leaders on board. "Ben understood both leadership andtechnology. That combination is hard to find. That's why he got the job. He had my support but, if I had to sell these changes myself, I wouldn't have needed him," explainedRay. Ben explained that "this is in keeping with what our executives want us to accomplish. Each component links IT activities directly to business concerns. It is important that wehold ourselves accountable to our new mission. But more on this later."Next up was the new organizational chart. Ben started with the appointment of Teresa Danton as Director of IT Strategy & Planning, the Project Management Office (PMO)and Governance. As Ben explained, her job was to support the new organizational design by bolstering the existing, ineffective PMO and introducing new governance practicesthat would eventually result in a comprehensive governance framework. "We need execution discipline to deliver business value through our IT programs and portfolios," Benstated. "We need to develop the standards and best practices to do this and acquire the tools and methodologies to streamline project delivery and enhance quality. In addition,Teresa will be responsible for time tracking and billing, project planning and reporting and financial planning and tracking. She will also measure everything so we can report onour progress to the business. Governance is a critical success factor for our transformation."Next, the rest of the IT leadership team was revealed: a Director of Operations, whose goal was to run the key business systems as efficiently as possible by streamliningresources and reducing costs; a Director of Relationship Management, whose job was to move the IT culture from being order-takers to solution providers and eventually strategicpartners; a Director of Enterprise Architecture responsible for developing a technology roadmap and a transition plan to move the organization from its current technology state toits planned future state; a Director of Data Security & Privacy whose job was to organize, safeguard, and ensure the availability of all data assets in a manner that protected theprivacy of individuals; and finally a Director of Application Development whose job was to acquire new systems through purchase or development to support the businessthrough automation. Ben kept talent management - critical to IT transformation for himself. "Spin-offs are dirty work when it comes to people," Ben told his team. You'vealready seen that not everyone at the senior management level was able to handle the changes involved and this is true for the rest of our staff as well. "Some of our people willneed to move to our outsourcers as we realign our contracts, but others simply do not have the right skills."For the next hour and a half, Ben dealt with questions and invited his leadership team to discuss their issues and concerns with their new assignments. “I want us all inagreement here," he told them, "because my next job is convincing the business that we will be able to accomplish this mission." All heads nodded in unison. Then he dropped thebomb! "And the first way we're going to do this is to cut the cord with WH!" he proclaimed, holding up a mouse with a dangling tail."I needed to find a way to bring together our new directors as a team," recalled Ben later. "Our culture was highly risk averse. We had tried and failed to do this separationseveral times and there was a sense of hopelessness about it. We needed to focus on this first because nothing else could be done until we were able to operate as a separate entityfree from the old WH culture. I challenged our directors to rally and work together to achieve this key goal. It took several months, but we did it, and we learned that we couldpush ourselves to accomplish a goal successfully. It was a first step in changing our culture."While the whole IT organization was engaged in the "cutting the cord" project, Ben started communicating his vision of IT's mission and the new organizational structure to hisbusiness partners and to IT staff through a series of town hall meetings. But to really sell the business on the benefits of the IT transformation and obtain their cooperation, Benneeded something more concrete. At the next weekly directors' meeting, he declared, "It is time to start delivering on our mission. We need to develop a plan of action." Not onlywould the plan have to align with the overall mission but it would have to address issues at three levels: strategic, tactical, and operational. Calling them "buckets." Benexplained, "Bucket number one is building the basics. We have to stabilize and simplify our systems and operations. Bucket number two is table stakes; that is, we have to makesure we have the right strategic platform that will enable us to do business and match what our competition is doing. Bucket number three is building differentiators and targetingstrategic innovation. I know that most of you can't even begin to think about buckets two and three because you're so busy dealing with day-to-day problems, but we need tomake time to do some work in this area, so we are not just fighting fires."

Designing an organizational structure may be extremely advantageous for an organization. The…

to go. As the CEO had just informed him, it had been sold to a successful private equity firm that would hold 100% of its assets and take an active role in its would now become a separate business, Global Digital Imaging (GDI), and Ray would be expected to deliver significant value for its new owner-investor, VE have an experienced management team and a proven ability to build businesses," the CEO told him. "If you can give them the returns they want, they will ident." to the elevator, Ray felt both exhilarated and apprehensive about this new opportunity. Mentally, he started an inventory of the new company's assets. With than 150 companies, revenues of about $3 billion, and 12,000 staff, it was a substantial company in its own right. But operating independently of a much larger ated headaches in a number of areas, requiring the development of separate functions in HR, finance, facilities, and IT. The thought of this last issue struck e we going to do with all the systems?" he asked himself. It would be relatively easy to hire good people to manage the other corporate entities, but IT was a sh. And the last thing he wanted was to worry about IT... not when so much was riding on how well GDI performed as a freestanding company. to do in very little time, and soon GDI was a legal entity. On day one, Ray called his senior people together. "Our first priority is to run as a company VH as quickly as possible," he said. "We need to think like a young, agile company and not like a large, entrenched bureaucratic organization. Fortunately, ition team from VE Investments to help us." And indeed, it was only a few months before complete separation was accomplished, that is, everywhere except

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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