MIT Sloan Management Review

Management of Technology and Innovation

Market Management to Transform the IT Organization

By Michael J. Earl and Jeffrey L. Sampler

July 15, 1998

A four-stage model helps companies balance supply and demand in managing IT.

In recent years, there have been calls and prescriptions for business transformation.1 There has also been growing pressure for radical change in how the IT function is organized and managed. Rockart et al. captured the consequences of an agenda for reform in the IT function, and Cross et al. proposed a possible model of a transformed IT organization.2 However, there have been no robust models or frameworks developed to guide executives in the process of transformation, that is, how to do it. We suggest that this is an important practical omission, not only because transformation of the IT organization is on many business agendas, but because it is an area that is probably always undergoing change.

Another reason for developing a process model for transformation is that organizations often seem to recognize crises in IT management, but their responses frequently only worsen the crisis or achieve little until the next crisis. Consider the scenario we witnessed in a well-known multinational manufacturing corporation:

In the 1980s, a large corporate IT department built a group infrastructure with common transaction processing systems for the company worldwide. In terms of best practice, technical robustness, and economies of scale, there was little to criticize. However, not unusually, the business units claimed that the IT department was not... To read the complete article, login or sign-up using the form below.

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