Archive for April, 2011

Finding the Maturity of an Organization by its Design

April 21, 2011

It is very interesting to see how IT services organizations are designed, especially the ones that are present offshore. They are divided by technologies, verticals, geographies serviced, locations, etc. The parameter that determines how the organization is divided, also shows the maturity of an organization.

The small organizations typically run projects as they receive them from their customers. They do not worry about any other dimensions. Resources are moved from one project to other based on project requirements and gaps in projects. They do not spend time investing on improving the expertise of their people. Projects of new technologies are very risky since they mostly do not have adequate resources with the knowledge.

The next level of mature organizations are those who focus on technologies. They might focus on very specific technologies (mobile, Oracle ERP, iPhone Apps, etc) and build teams that become experts in these technologies. They will also have a team (minuscule though) that looks at the emerging technologies and ensure that they are in line with market trends.

The third level of organization will have focus on verticals (like Supply Chain Management, Financial Services, etc). These organizations are again very niche – focusing on a very specific part of domain. They mostly have products built in-house that they support for their customers. They are not more mature than the previous organization but their focus is very clear.

The more mature organization will have a mix of horizontals (technologies), verticals (domains) and geographies serviced. The organization is divided into groups based on either of these parameters which will decide which Business Unit will finally service the customer. The strength of these parameters are at a high level, which means that they can service almost any customer. Example of such an organization is any of the 2nd tier IT organizations of India.

Once the organizations have achieved great maturity in the 3 parameters mentioned above, they are usually large enough to have small organizations on their own, in a location. For example, in Bangalore or Chennai, the organization (usually the 1st tier IT organization of India) will have the capability to service any domain or technology or geography. This is the most mature model right now. One does not know what other dimension gets added to an organization in the coming future.

Thus, when one looks at the design of any organization, one can make out the maturity of the organization to a large extent. Of course, the project contracts that each organization gets into with their customer shows their maturity levels as well (whether they do a Time & Material or a Fixed Bid or an Outcome-based model).

Which level is your organization?


%d bloggers like this: