IT-OT Organizational Design Theory and Practice February 8-11, 2016 Renaissance Hotel at SeaWorld Orlando, FL Mike Williams ARC Associate ARC Advisory Group
Introduction MISSION: Managing people, work process and technology is the collective responsibility of an IT organization focused on manufacturing information and control systems.
As time marches onward
technology, culture and the people who support it must inevitably adapt and change. Managing change can be very difficult for an organization and its people. This is because change challenges the very fiber of an organizations reason to exist and the livelihood of its members. This presentation addresses the issues of how to detect and address the need for organizational design change within your company.
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Reason for Organizational Change in IT-OT • It should be clear from this simplified analysis that if an organization cannot
adapt to change the overall effectiveness to service its customers declines. This results in client dissatisfaction and potentially disintegration of the organizations existence.
• To prevent an organization’s declining performance one must assess its maturity
or ability to evolve and change due to the situation and terrain. The situational change could be for technology, economic, strategic, geo-political or for yet to be revealed reasons in the future.
• Whatever the cause, organizations need to periodically refresh their thinking and modify their organization design to adapt and thrive
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Summary of Organization Design Attributes • Mission – The prime directive of an IT organization which supports manufacturing is serving the information technology needs of Operations. A secondary but highly important mission is to provide reliable information flow to and from the real-time environment to support other Enterprise stakeholders
• Activities- To be effective the organization must efficiently Identify, Implement,
Operate, Maintain, and Improve OT-IT tasks collaboratively. The determination of who should manage and perform these activities is driven by the organizations unique strengths, value system and culture.
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Summary of Organization Design Attributes • Capabilities –an effective IT-OT organization must possess the basic capabilities of : Know-How, Human Element, Relationship Management, Work Process Discipline, and Geographical Presence. The degree of self-determinant capabilities depends on the organization’s maturity and value systems. • Competitive Advantage- in IT-OT organizations people, their skills, experience and associated work processes, are viewed as the unique value proposition of an effective organization. True competitive advantage differentiates an organization’s performance over the alternative.
“Attracting, rewarding and retaining scarce IT-OT talent is therefore a key part of any organizational redesign.”
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Summary of Organization Design Attributes Common Metrics for Success: •An organization must measure and benchmark its performance against reference targets to determine if they are successful in achieving their mission objectives.
•Measurements should be a collection of both internal efficiency and external effectiveness with the primary emphasis on the client.
•Performance measurement against recognized benchmarks determines where you are Today and gives you insight into what it will take to be more competitive Tomorrow..
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Where do I start? • There is not a generic organizational design which is universally compatible with requirements of an effective IT-OT organizational. Where you are on the organizational maturity curve and where you want to eventually be must be determined.
• Each individual company must address the unique culture and value systems
or situation and terrain which drives their company. One should avoid jumping into an organizational design solution by simply “filling the names in the box” of an org chart.
• To be successful an effective organization serving the real-time computing
environment of a manufacturing client, one must first reassess client needs, then prioritize needs based on situation and terrain, and finally assign roles and responsibilities to people into a structure. VISION, EXPERIENCE, ANSWERS FOR INDUSTRY
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Organizational Maturity
- Determine the current state and future destination Level 1 Very Low
Level 2 Low
Level 3 Moderate
Level 4 High
Level 5 Very High
People 35%
Individual Metrics
Individual Metrics, Management Reports
Teams Work Together ‐ integrated unit
Collaboration, Delegation of Responsiibility internally, externally
Strong Sense of Teamwork across org and partners
Blank
Adversarial Siloed
Goals Understood, Highly Supervised
Success Measured Collectively
People Self‐directed
People feel empowered
Work Process 20%
Adhoc Process, no governance
Documented Process, Full Compliance Lacking
Work Process Followed Autocratically
Integrated Management Systems Deplouted X‐Functionally
Continuous improvement of work process
Technology 30%
Maintenance, Weak Technology
Stable but introduction of technology is risky
New Technology Evaluated Adhoc
New Tech Prioritized By Value
Leading edge technology deployed as competitive advantage
Measurement 15%
No Performance Metric other than cost
Internal metrics collected reviewed adhoc
Internal Metrics collected ‐ used by managment rule
Internal Metrics Mapped To Customer Satisfaction
Collaboration metrics, aggregated internal and external
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Organizational Design Options • • • • •
The structure can be aligned by Functional, Geographical, Program, Business or a Matrix combination of two or more. Regardless of the chosen design, a RACI diagram is required to clearly delineate lines of Accountability and Responsibility. Shared Accountability is the hallmark of a high effective organizational design where all members understand the overall mission and execute seamlessly across functional boundaries to deliver high performance to the customer. In the domain of Manufacturing IT, the most valued metric is rapid and reliable response to “realtime” IT/OT issues. Such a capability will generate trust, confidence, customer loyalty and superior customer satisfaction. Building an organization to address this key metric is the objective.
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Exploiting IT-OT Alignment Options Objective
Metrics
Capabilities
24/7 Break Fix
Activity
Organizational Alignment
Support and Sustain Technology
Geographical
Software Support
Geographical
HW Support & Sustain
Geographical
Response Time Acquire Talent Natural Language support
Skilled Human Resources in Geography
Functional
Train Talent Functional
Low Cost to Serve
Leverage Knowledge and People
Allocate & Supervise Talent
IT DEPENDS
Manage OT & IT services Effectively
Predictable Project Delivery
Execute Project Flawlessly
Build and Configure Manufacturing IT Projects
Project
Reliable Systems
Proven in use, Hig Availability
Secure systems
Tech fit for use
Protect Process IP
Dependencies Size of the Company Supported Geographical Breadth Technology Deployed Unique Skills Retquired
Quality & Timely Workmanship
Identify & Validated New Technology
Investigate Most Effective Technology
Manage New Technology Globally by Discipline
Packaged Most Effective Technology
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Functional
Business
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Seek Optimize Align – Accountability and Responsibility Organizational Design RACI Matrix Organization Criteria
Manage Productivity
Lead People
Support Technology
Deliver Solutions
Performance Measurements
People utilization IP Utilization Cost to Serve Cost to Implement Recruit & Retain Reward & Recognition Train Cyber security Corporate Level Business Level Facility Level Defect Free On Time On Budget Leveraged
Client Operations
OT Support
IT Support
Third Party Support
Biz Tech Ctr.
Project Program Office
Functional Mgmt
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Responsible Those who do the work to achieve the task. There is at least one role with a participation type of responsible, although others can be delegated SHARED Responsibility Shared Responsibility as an attribute of a High Performance Team and indicative of a Matrix organizational design. Accountable (also approver or final approving authority ) The singular person ultimately answerable for the correct and thorough completion of the deliverable or task, and the one who delegates the work to those responsible . Consulted (sometimes counsel ) Those whose opinions are sought, typically subject matter experts; and with whom there is two-way communication. Informed Those who are kept up-to-date on progress, often only on completion of the task or deliverable; and with whom there is just one-way communication.
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Shared Responsibility: At Point of Delivery Organizational Design RACI Matrix Organization Criteria
Manage Productivity
Lead People
Support Technology
Deliver Solutions
Performance Measurements
People utilization IP Utilization Cost to Serve Cost to Implement Recruit & Retain Reward & Recognition Train Cyber security Corporate Level Business Level Facility Level Defect Free On Time On Budget Leveraged
Client Operations
OT Support
IT Support
Third Party Support
Biz Tech Ctr.
Project Program Office
Functional Mgmt
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Responsible Those who do the work to achieve the task. There is at least one role with a participation type of responsible, although others can be delegated SHARED Responsibility Shared Responsibility as an attribute of a High Performance Team and indicative of a Matrix organizational design. Accountable (also approver or final approving authority ) The singular person ultimately answerable for the correct and thorough completion of the deliverable or task, and the one who delegates the work to those responsible . Consulted (sometimes counsel ) Those whose opinions are sought, typically subject matter experts; and with whom there is two-way communication. Informed Those who are kept up-to-date on progress, often only on completion of the task or deliverable; and with whom there is just one-way communication. VISION, EXPERIENCE, ANSWERS FOR INDUSTRY
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Highly Effective Organization: Multi-Disciplined Shared Responsibility Organizational Design RACI Matrix Organization Criteria
Manage Productivity
Lead People
Support Technology
Deliver Solutions
Performance Measurements
People utilization IP Utilization Cost to Serve Cost to Implement Recruit & Retain Reward & Recognition Train Cyber security Corporate Level Business Level Facility Level Defect Free On Time On Budget Leveraged
Client Operations I
OT Support IT Support
Third Party Support
Biz Tech Ctr.
Project Program Office
Functional Mgmt
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Responsible Those who do the work to achieve the task. There is at least one role with a participation type of responsible, although others can be delegated SHARED RESPONSIBILITY Shared Responsibility as an attribute of a High Performance Team and indicative of a Matrix organizational design. Accountable (also approver or final approving authority ) The singular person ultimately answerable for the correct and thorough completion of the deliverable or task, and the one who delegates the work to those responsible . Consulted (sometimes counsel ) Those whose opinions are sought, typically subject matter experts; and with whom there is two-way communication. Informed Those who are kept up-to-date on progress, often only on completion of the task or deliverable; and with whom there is just one-way communication.
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SUMMARY • Defining the most effective and efficient organizational design for IT/OT is collaborative process.
• High Performance Teams composed of multi-discipline members tend to perform better than traditional vertically aligned organizations
• Success IT / OT organizations must address changing roles and responsibilities • To achieve
multi-discipline alignment, one should consider a matrix design structure to accommodate multiple stakeholder groups
• Structural design needs to fit your own situation, there is not one best answer VISION, EXPERIENCE, ANSWERS FOR INDUSTRY
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Call to Action • The 2015 ARC Forum mini-workshop explored the topic of Organizational
Change within IT-OT. Output of the group workshop was a list of key organizational design elements which were deemed key to the future success of an IT organization supporting manufacturing.
• It is hoped that ARC attendees with participate in an upcoming 2016
Organizational Design Survey , which is a follow through from the workshop, to benchmark current trends in organizational structures which support changing IT/OT client needs.
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Questions & Answers VISION, EXPERIENCE, ANSWERS FOR INDUSTRY
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