Agile IT Organization Design: For Digital Transformation and Continuous Delivery

by Sriram Narayan

Overview

Aspiring digital businesses need overall IT agility, not just development team agility. In Agile IT Organization Design, IT management consultant and ThoughtWorks veteran Sriram Narayan shows how to infuse agility throughout your organisation. Drawing on more than fifteen years’ experience working with enterprise clients in IT-intensive industries, he introduces an agile approach to “Business–IT Effectiveness” that is as practical as it is valuable.

The author shows how structural, political, operational, and cultural facets of organisation design influence overall IT agility—and how you can promote better collaboration across diverse functions, from sales and marketing to product development, and engineering to IT operations. Through real examples, he helps you evaluate and improve organisation designs that enhance autonomy, mastery, and purpose: the key ingredients for a highly motivated workforce.

You’ll find “close range” coverage of team design, accountability, alignment, project finance, tooling, metrics, organisational norms, communication, and culture. For each, you’ll gain a deeper understanding of where your organisation stands, and clear direction for making improvements. Ready to optimise the performance of your IT organisation or digital business? Here are practical solutions for the long term, and for right now.

• Govern for value over predictability
• Organise for responsiveness, not lowest cost
• Clarify accountability for outcomes and for decisions along the way
• Strengthen the alignment of autonomous teams
• Move beyond project teams to capability teams
• Break down tool-induced silos
• Choose financial practices that are free of harmful side effects
• Create and retain great teams despite today’s “talent crunch”
• Reform metrics to promote (not prevent) agility
• Evolve culture through improvements to structure, practices, and leadership—and careful, deliberate interventions

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Product Details

ISBN-13:	9780133904246
Publisher:	Pearson Education
Publication date:	06/11/2015
Sold by:	Barnes & Noble
Format:	eBook
Pages:	304
File size:	6 MB
Age Range:	18 Years

About the Author

Sriram Narayan, an IT management consultant with ThoughtWorks, has provided IT agility guidance to clients in telecom, financial services, energy, retail, and Internet businesses. He has also served as a leadership coach and a director of innovation. He was a founding member of the ThoughtWorks technology advisory board–the group that now authors Technology Radar. During a two-year stint at the products division of ThoughtWorks, he helped with product innovation and advocacy on Go–a tool that helps with continuous delivery. He has also worn the hats of a developer, open-source contributor, manager, product owner, tester, SOA architect, trainer, and Agile coach. An occasional blogger and speaker at conferences, his writings, talks, and contact information are available from sriramnarayan.com. The opinions in this book are his own.

Table of Contents

Preface xix

Acknowledgments xxiii

About the Author xxv

Glossary xxvii

 

Chapter 1: Context 1

1.1 Focus 2

1.2 Business, IT, and Shadow IT 3

1.3 Business-IT Effectiveness 5

1.4 Digital Transformation 7

1.5 Bimodal IT and Dual Operating Systems 10

1.6 Angles of Coverage 10

1.7 Summary 11

 

Chapter 2: The Agile Credo 13

2.1 Understanding the Agile Manifesto 14

2.2 Continuous Delivery and DevOps 15

2.3 Agile Culture 16

2.4 Common Themes 18

2.5 Isn’t Agile Dead? 21

2.6 Summary 22

 

Chapter 3: Key Themes 25

3.1 Software Development Reconsidered 26

3.2 Govern for Value over Predictability 28

3.3 Organize for Responsiveness over Cost-efficiency 30

3.4 Design for Intrinsic Motivation and Unscripted Collaboration 33

3.5 Summary 35

 

Chapter 4: Superstructure 37

4.1 Business Activities and Outcomes 37

4.2 Centralization and Decentralization 41

4.3 Silos 42

4.4 Summary of Insights 45

4.5 Summary of Actions 46

 

Chapter 5: Team Design 47

5.1 Framing the Problem 47

5.2 Activity-oriented Teams 48

5.3 Shared Services 54

5.4 Cross-functional Teams 56

5.5 Cross-functionality in Other Domains 61

5.6 Migrating to Cross-functional Teams 63

5.7 Communities of Practice 65

5.8 Maintenance Teams 65

5.9 Outsourcing 66

5.10 The Matrix: Solve It or Dissolve It 68

5.11 Summary of Insights 72

5.12 Summary of Actions 73

 

Chapter 6: Accountability 75

6.1 Power and Hierarchy 75

6.2 Balance Autonomy with Accountability 77

6.3 Assign Accountability 78

6.4 Minimize Power Struggles 82

6.5 Decide on an Outcome Owner 85

6.6 Migration 86

6.7 Decision Accountability 86

6.8 Planning and Execution 92

6.9 Org Chart Debt 97

6.10 Summary of Insights 98

6.11 Summary of Actions 98

 

Chapter 7: Alignment 99

7.1 Articulate Strategy for General Alignment 99

7.2 Aligning IT with Business 101

7.3 Structural Alignment 105

7.4 Making Business Play Its Part 107

7.5 Summary of Insights 108

7.6 Summary of Actions 108

 

Chapter 8: Projects 109

8.1 What Is Wrong with Plan-driven Software Projects? 109

8.2 Budget for Capacity, Not for Projects 110

8.3 Business-capability-centric IT 112

8.4 Project Business Cases 115

8.5 Value-driven Projects 117

8.6 Project Managers 119

8.7 Governance 120

8.8 Change Programs and Initiatives 121

8.9 Summary of Insights 123

8.10 Summary of Actions 123

 

Chapter 9: Finance 125

9.1 Relevance 125

9.2 Cost Center or Profit Center 126

9.3 Chargebacks 126

9.4 CapEx and OpEx 127

9.5 Conventional Budgeting 130

9.6 Agile Budgeting 132

9.7 Summary of Insights 134

9.8 Summary of Actions 135

 

Chapter 10: Staffing 137

10.1 Dealing with the Talent Crunch 137

10.2 Go Beyond Project Teams 139

10.3 Better Staffing 141

10.4 Summary of Insights 146

10.5 Summary of Actions 147

 

Chapter 11: Tooling 149

11.1 Access Control for Unscripted Collaboration 149

11.2 Subtle Effects of the Toolchain 151

11.3 Technology Isn’t Value Neutral 154

11.4 Tool Evaluation 157

11.5 Summary of Insights 158

11.6 Summary of Actions 158

 

Chapter 12: Metrics 159

12.1 Metrics Don’t Tell the Whole Story 159

12.2 Dashboards Promote Ignorance 162

12.3 The Problem with Targets and Incentives 163

12.4 Reforming the Metrics Regime 171

12.5 Designing Better Metrics 175

12.6 Objections to Metrics Reform 178

12.7 Migration 179

12.8 Summary of Insights 180

12.9 Summary of Actions 181

 

Chapter 13: Norms 183

13.1 What Are Norms? 183

13.2 Reinforcing Norms 184

13.3 Cooperation over Competition 186

13.4 Living Policies 187

13.5 Consistency over Uniformity 189

13.6 Ask for Forgiveness, Not for Permission 192

13.7 Confidential Surveys 193

13.8 Balance Theory and Practice 193

13.9 Summary of Insights 195

13.10 Summary of Actions 195

 

Chapter 14: Communications 197

14.1 Intrinsic Motivation 197

14.2 Interpersonal Communications: Problems 198

14.3 Interpersonal Communications: Mitigation 203

14.4 Scaling Employee Engagement through Internal Communications 204

14.5 Deliberating in Writing 208

14.6 The Use and Misuse of Visual Aids 211

14.7 Documents, Reports, and Templates 216

14.8 Summary of Insights 217

14.9 Summary of Actions 217

 

Chapter 15: The Office 219

15.1 Open-plan Layouts 219

15.2 Ergonomics 222

15.3 Remote Working 224

15.4 Summary of Insights 225

15.5 Summary of Actions 225

 

Chapter 16: Wrap-up 227

16.1 Summary of Effects 227

16.2 Order of Adoption 233

16.3 Information Radiators 234

16.4 Sample Exercise 235

16.5 IT Services 236

16.6 GICs 240

16.7 Beyond IT 243

 

Bibliography 245

Index 247

Editorial Reviews

Praise for Agile IT Organization Design

“Continuous delivery is often described from the perspective of the technicians. This is understandable because that is where it started, but it does the process a disservice. Continuous delivery is a holistic approach. It requires change across the organization and it encourages such change, to the betterment of the groups that practice it. This book addresses that problem and looks at CD from an organizational perspective. It starts from Dan Pink’s ideas of intrinsic and extrinsic motivators and describes how to structure an organization for success—how to encourage a focus on autonomy, mastery, and purpose that will motivate your teams and produce high-quality results. This book takes a look at all aspects of organizational design that impact the ability to deliver regular, small, high quality changes. If you follow the advice in this book, your organization will be the better for it.”

—Dave Farley, author of Continuous Delivery

“A number of years ago, Silicon Valley marketing guru Geoffrey Moore quipped, ‘A bank is just a computer with a marketing department.’ Today, technologies—cloud, social, big data, the Internet of Things, and mobile—continue to drive this unprecedented digital transformation in organizations. As such, the need for agility has moved from software development to corporate boardrooms. Sriram’s book makes the case that to thrive in these fast and uncertain times, enterprise leaders need to rethink how IT, not just software development, is organized, structured, and measured. His book provides guidelines, not prescriptions, which enable innovation, adaptability, and responsiveness at scale.”

—Jim Highsmith, Executive Consultant, ThoughtWorks, Author of Adaptive Leadership

“Very hands-on and operational book for management of Agile-based development. Provides valuable insight for IT practitioners. A must read for IT professionals.”

—A.V. Sridhar, Founder, President & CEO Digite, Inc.

“Agile IT Organization Design is an engaging, enlightening, and immensely practical book. While many authors have addressed Agile software development, very few have tackled the wider topic of the more systemic changes necessary to move from Agile software to an agile organization, and onwards to ‘digital transformation.’ Even fewer have done so at more than a very theoretical level. Drawing heavily upon his substantial practical experience, Sriram Narayan’s book explores the pitfalls of many of our current ‘organizational wisdoms’ and gently, but convincingly, suggests appropriate and relevant alternatives to try in their place—all the time backed up by real-world examples. I highly recommend the book to anyone interested in, or struggling with, the challenges and opportunities of achieving organizational agility.”

—Chris Murphy, President and Chief Strategy Officer, ThoughtWorks

“Agile and continuous delivery transformations require changes in technology, process, and people. This book is the first to tackle the people aspect in depth, and it does this very well. A must read for those taking the journey!”

—Anders Wallgren, CTO, Electric Cloud

“Agile IT Organization Design tackles all the problems that we just want to ignore. Relying heavily on hands-on experience rather than theoretical exercises, Sriram provides concrete actions to address the issues with Agile software development and continuous delivery at a structural and organizational level. He clearly addresses issues of finance, accountability, and metrics, not just team structure and team processes, and gives many examples and scenarios to help understand how these issues manifest and how the proposed steps work to resolve the issues. Organizational transformations to Agile often fail, not because the individual processes and practices break down, but because the organization itself—its power structure, its organizational norms, and its culture—fight against the gains that Agile has the potential to bring. Sriram focuses our attention on the systemic problems, but then provides action steps to allow us to address these problems in our context. This book presents no silver bullet, as those don’t exist. However, Sriram provides for organizations a way to start facing reality and moving towards an organization that supports not only Agile software development but organizational and business agility.”

—Rebecca Parsons, Director at Agile Alliance & CTO at ThoughtWorks

“Sriram’s book addresses the rarely-approached topic of Agile organization design in a very pragmatic and thorough manner. It does a great job of explaining the value brought by Agile and DevOps approaches in enterprise-scale organizations, and gives strong details on the ‘how’ to get there. It also paints a very practical picture of how the different processes of the company (budgeting, staffing, metrics, etc.) will be affected by the Agile organizational choices. I see it as the perfect companion book for a large-scale Agile transformation effort.”

—Regis Allegre, VP Software Engineering, Cloudwatt

“Businesses today are discovering that if they are to build ‘digital first’ experiences for their customers, they need to rethink how their product, marketing, and technology teams work together. Sriram’s book pulls aside the curtain to reveal that the best-kept secrets of the world’s top performing digital organizations are actually very accessible to all. It serves as a pattern language for management of the modern digital enterprise.”

—Adam Monago, VP Digital Strategy, ThoughtWorks, @adammonago

“Agility is so much more than stand-ups and test driven development. Even the best practices won’t yield results unless backed by the right leadership. Sriram’s book is an important contribution to the all-too-bare bookshelf on leadership of IT organizations. He mixes theory and practical insights in the right measures and the result is as readable as it is full of usable insights.”

—Nagarjun Kandukuru, VP Global South Strategy, ThoughtWorks

“Sriram covers everything the Scrum coach didn’t tell you. Most books on Agile stop at a team and project level, and that’s exactly where the organizations tend to get lost in the real world of pre-existing organization structures and procedures—which in turn become blockers to achieving ultimate business agility. If you ever wonder why your attempt at Agile is floundering, this is one book where you’ll find some answers for sure.”

—Puneet Kataria, Vice President Global Sales, Kayako

“The field of Agile is an evolving, moving target and there is little in terms of guidance for managers and staff that are trying to implement it within an enterprise context. This book provides a complete guide to all of the organizational aspects of implementing Agile within the enterprise context, as well as providing extremely useful examples and cogent advice. I would recommend this book to anyone with a general interest in Agile through to senior managers looking to reenergize their enterprise organizations using the principles and practices of Agile.”

—Ken Robson, Global Head of Trading Technology, Danske Bank

“Sriram has pulled off an audacious attempt at a unified theory of IT. This work led me through the incredible range of issues that I recognize, slotting each one into context and building a vision of how things can and should be. If you want to be elevated above the trenches of Agile and DevOps—to get a better view of where they fit in the digital world that includes sales, finance, governance, resourcing, delivery, and most importantly, people—then read this book. A compelling read that I’m already referring back to.”

—Duncan Freke, Development Director, thetrainline.com

“Sriram makes a convincing case that digital transformation efforts need IT agility. He also does a great job of explaining how IT agility is more than just engineering and process. This book is a valuable read for those on the digital transformation journey.”

—Shashank Saxena, Director, Digital and eCommerce Technology, The Kroger Co.

“Adopting Agile software development practices is not just an IT change, it is an organization-wide change. Sriram goes through every aspect of what this means to an organization and gives options for how to bring changes in, including hard-to-change areas like project funding. This book is thought provoking, an easy read, and includes great examples.”

—Jeff Nicholas, Director, PB & WM IT Digital Banking APAC, Credit Suisse

“This book is for anyone who is looking for clear and focused guidance in the pursuit of modern product delivery. Any transformational leader will find this book a great tool that provides answers to many of the problems of Agile transformation at scale. A great jump start for those looking to improve their effectiveness and responsiveness to business, Sriram’s book recognises that people leadership is the DNA of any Agile transformation.”

—Marcus Campbell, Delivery Director, Semantico

“Entrepreneurial organizations thrive on continuously adding value, rapidly innovating, and staying close to their customers. Similarly, Agile software development emphasizes continuous, incremental improvements, quick response to change, and close collaboration. Sriram makes a compelling case for Agile design of IT organizations in large enterprises. He goes well beyond describing how an IT organization can adopt Agile development methodologies to explain how any successful digital transformation within a large enterprise must encompass strategy alignment, project portfolios, IT staffing, budgeting, and more. This book is a great read for those who want a digital transformation to have impact both within and beyond their enterprise IT organization.”

—Ron Pankiewicz, Technology Director, VillageReach

“Organizational structure is a key enabler for a company to achieve its raison d’être. This book lays out the rationale for organizing IT organizations around Agile software development concepts. It provides practical guidance on wide-ranging success factors including tangible org elements such as structure, team design, and accountability, and intangible cultural elements such as alignments and norms. These concepts will certainly help IT companies turn the tide on huge cost and time overruns that are typical on large IT projects.”

—Paul Kagoo, Engagement Manager at McKinsey & Co.

“Outcomes matter in an increasingly ‘winner takes all’ digital arena. A true digital transformation undertaking, driven by the need to build competitive advantage, is marked by an increase in responsiveness, insights, and engagement, not just cost effectiveness. IT organization is a key partner in this transformation but is seldom structured to succeed in most enterprises. This book makes a case for how IT organization needs to be weaved within outcome-based teams, not activity-based teams, to drive agility and competitive advantage. In general, organizational design is very expensive to engineer in real world situations but this book takes on this tough problem by providing some frameworks and considerations for the reader to evaluate the validity of outcome-based structure in their organization.”

—Vijay Iyer, Sr. Product Manager, NetApp

“I found Agile IT Organization Design to be well organized with an in-depth knowledge of challenges that IT organizations face, while providing possible ways to address those challenges. Moreover, it was eminently readable and I found myself readily recognizing the problems described within. It may seem odd to describe a business-oriented book as such, but I found this to be an enjoyable read!”

—Randy R. Gore, Program Manager, IBM

“As enterprises try to ramp up their digital transformation initiatives, there will be an ever-increasing need for better collaboration between IT and business. New org structures will fuel this collaboration. Sriram’s book is a timely elaboration of the importance of org structures for the success of digital initiatives large and small.”

—Dinesh Tantri, Digital Strategist, @dineshtantri

From the Publisher