Bird’s-Eye View of Organization Structures

Organizations come in various shapes, structures, and volumes. We have oceanic companies like the IBMs and Wipros that are spread across the continents and have hundreds and thousands of employees working for them and for their customers. And then we have startup companies where the entire strength of the company could be in single digits and, if lucky, double. Between the startups and global corporations, you have a wide gamut of organizations varying in size and structure.

Every organization chooses a structure that works for it. There is no right or wrong structure. In fact, almost all the organizations change their structure based on changing atmosphere and circumstances.

The toast of the current trend is for a horizontal structure where an organization does not build a lasagna type layered organization. Rather, it builds a flat organization that has minimal layers and the bottom-placed employee has unhindered access to the top man. This is common in most startup organizations and has become synonymous with organizations that practice Agile principles.

As I mentioned earlier, nothing is simple and straightforward. While this flat structure might work in an organization that has tens of employees on its payroll, for a giant like IBM it is practically not possible. A 350,000 people company cannot have a flat organization. It simply isn’t feasible. They opt for several layers to ensure that the structure caters to effective and efficient delivery of services. The vertically structured organizations build layers based on the leadership, management, and delivery responsibilities.

Flat organizations are simple, and the structure does its job in transparent communication; in essence, everybody in the organization will have a pretty good idea of what everybody else is doing.

Vertical organizations are siloed. Every silo has its own set of responsibilities and deliveries, and people within a silo are expected to practice transparent communication. However, the challenge arises from the exact placement of the structure. How will the organization be structured? Will people with similar skills be placed in silos? So, during service delivery or product development, do they come together under a matrix organized structure? These are some of the tough questions that leaders must find answers for before determining the structural complexes.

As we touched base on in Chapter 2, a DevOps structure tries to break the silos as we know them and it brings people around the product that is being developed and managed. In essence, bringing people connected with products into a team is a silo in itself, a silo that houses various skill sets rather than a specialty. While silos in themselves aren’t bad, the DevOps structure gives the maximum opportunity to create value through team structures. In fact, most organizations today are moving away from their traditional structures and into a DevOps structure.

Not Just Structures, Culture Too!

It’s reasonable and necessary to change an organization’s structures to ensure maximum effectiveness and efficiency and minimize conflicts. But that alone cannot do the magic. The underlying culture that an organization imbues matters a whole lot more than the structure.

Culture is about the organization’s psychology. Is the organization intolerant about flouting ethics? Is the organization respectful of the wishes and desires of employees from a career perspective? Is the organization transparent in its decision making? Does the organization promote open communication? These are some of the questions that could determine the culture of an organization, and this eventually is going to determine the value that it generates for its customers. Because you are not going to have happy and fulfilled employees with a culture that doesn’t support them and their aspirations, to put it simply.

How is a culture formed? It is not something like structure where I could change it overnight using a Visio program. Culture trickles from the top into the various parts of the organization. The leaders have to imbue the cultural aspects of an organization, start promoting it with their subordinates, and expect their subordinates to take the message down to their subordinates. The leaders have to share the vision and the goals with the rest of the organization. There is no easier way to build desired culture in an organization. It is tough and arduous work that requires preaching through following. The area of organizational change management delves into these aspects of culture building .

People Roles and their Responsibilities

Without a doubt, we must acknowledge that people make services happen. Without people, no matter how many activities we automate, it does not match up to what people can do. The people resource therefore must be preserved, protected, and nurtured. The organizational structures and cultures are the foundations that are to be in place before making people responsible for certain areas of activity.

“People” includes those in leadership positions as well as the employees in lower rungs of management and individual contribution. It includes administrative functions that enable employees working for services such as human resources, procurement, and administration among others.

Choosing the right people is a tough nut to crack. I haven’t known an organization that has got all its ducks in a row. They are always hunting for the right person and trying to chop, change, and experiment with options.

Organizations must get their leaders right, sooner rather than later. These leaders will be entrusted to start choosing the people in their teams, the people who deliver and the people who can make a difference in this game of value generation. Choosing leaders is absolutely critical!

After leaders pick their teams, they need to spell out their roles and responsibilities. They need to ensure that the person’s aspirations, skills, and interests are considered while drawing the roles and the activities the person is made responsible for. In flat organizations, roles don’t mean too much because of the reduced competition, and responsibilities too are generally not restricted to a single area of study. For example, a technical head may also be expected to manage procurements and sales. So, roles may not matter too much in flatter organizations, but they definitely do in vertical organizations. The level of competition is significantly higher, and the span of responsibilities will be quite narrow. A Unix administrator may not do much other than Unix administration in a global corporation. Therefore, it is quite likely that this employee looks for avenues that promise more action.

Managing career aspirations is a tough ask, and it must be managed without an excuse. People who work in a particular field will get bored with what they do, and their boredom will become visible in their work products at one point or another. Before getting to this point, an employee’s aspirations must be understood and supporting actions must be taken. For example, continuous learning is one of the key items for most people who work in IT. Almost everybody likes to learn new skills and take their career forward, so the organization’s culture must be built to support its employees in their future endeavors.

When we talk about people in this dimension, the scope is all people who are involved in the service delivery and value creation. It could be people from the customer organization who are playing the role of a product owner; it could be the engineers from a supplier organization; or it could even be the person involved in the sales area. We carry everyone along on the journey.

I started my career in the ITIL area, with operations first and then as a consultant. My interest in the subject led me to higher positions, more responsibilities, and a chance to develop frameworks based on the customer’s requirements. While I did more of it, I became adept at seeing the world beyond ITIL. Through a bit of luck, I moved into the Agile and DevOps field, and have discharged several roles including a scrum master, Agile project manager, program manager, DevOps consultant, and DevOps architect. Although I am an accomplished DevOps architect in my organization, I have not stopped learning. I have been studying newer technologies and adapting methodologies to fit the DevOps scheme for COTS (Commercial Off The Shelf) products. By keeping myself busy in learning and growing in my field, I have always felt that I am in the career of choice where the horizon for growing and learning is expanding by the day .

Leadership Matters

They say that a leader is as good as the team is. This is true, but it’s a two-way street. An inspired leader can turn the fortunes of a team, an organization, or even a nation. It is paramount that the person leading people knows true north—the objectives of value creation.

There are several styles of leadership and all the ways take us to a common destination. It is not important which style a leader embodies, but it is important that a leader is in place to lead the team. The objective of this section is not to go into the details of leadership. There are several texts available on the topic. I used this section specifically to make aware the importance of leadership in the organization and people dimension of service management.

All Roads Lead to Value

So far in this book, no matter what I have touched upon, I have landed in one form or another on the importance of value. With the delivery of services, a service provider delivers value. It is this that drives a service provider in creating the product, the service, and everything built around it. Without value, there is nothing.

So it is absolutely imperative that everybody involved is oriented toward true north—the value that is being created. This can be made possible by percolating a clear understanding of which actions lead to value delivery for the customer, and how everybody involved can work in a collaborative manner aimed with a single objective. It could be through the team coming around the service in a DevOps team fashion or through a focused approach of delivery. There is no particular way of achieving value; but whatever the identified way, it needs to be accomplished as a single unit.

IT for Actual Services

Information and technology are leveraged to deliver IT services to customers. The dimension goes into the depths of information used during the course of creating, using, and managing IT services. This can be done both at the side of a service provider and a service consumer.

In the Netflix video streaming service, the IT of this service includes the servers, the content delivery network, and the video streaming technology. These are the various IT components that directly have a bearing on the IT service.

IT for Service Management

Information and technology for service management are those sets of informational and technological components that support the service provider and the service consumer to enable the IT for their users.

Continuing with the Netflix example, the company manages an inventory of video titles, an inventory of the software and hardware that is used to host the IT service, along with relationships. Furthermore, the service provider will leverage workflow management for obtaining approvals (as in service requests and change requests) or it could be a ticketing system to record incidents. All these systems and the service management information that resides on them are not used by the user. This information is used to improve the service, to ensure that the service runs unimpeded and the user gets the best of experience. Imagine how a user feels if the movie buffers every couple of minutes. Although the CDN provides the data to the user, there could be a problem that is raised on the service management to identify the root cause of the buffering. The solution coming out of it when deployed is value added for the user, because it aims to fix the buffering issue. This is a simplistic example of how IT for service management aids/supports/enables an IT service.

Considerations for Information

Information is power. In the hands of a wrong entity, it has the consequences of completely wiping out businesses and competition. It is therefore of utmost importance that information be handled with care and with a framework that ringfences it from misuses.

Considerations for Technology

Differentiating Partners and Suppliers

When I started my study on service management through ITIL V2, we understood who a supplier is. The roles and responsibilities were clear, and we knew how to deal with them. Then organizations started to tie up with others and started calling it a partnership. Through the prism of ITIL V2’s supplier management process, the partnership between companies was nothing but a glorified customer enrolling for services/products from a supplier. So why call them a partner?

As I mentioned earlier, the relationship between companies is critical, and in this century of fast-paced growth, companies need to tie in thick relationships if they want to survive and thrive. Partnership, in essence, is essentially a customer-supplier relationship. However, a partner is given more privileges than a supplier, is trusted, and often gets a seat at the table during some level of decision making. Value is truly getting co-created between partners, and such companies often tend to share goals, culture, and business environment.

The strategy of organizations is to build partnerships with other companies that are responsible for the delivery of critical services and products. Companies sign generic agreements rather than specific ones, come up with goals together, and often try to be as flexible as possible with the other.

Most organizations today have a partnership with Microsoft because several laptops and servers they run are powered by Windows and other Microsoft software. These companies often get to install as many licenses of software as they want and retrospectively let Microsoft know of the numbers; and because of the partnership, they are entitled to a heavily discounted price. For Microsoft, the partnership brings in more business and can influence the organization into moving the non-Microsoft services and products toward their realm. For the organization, priority support, quick enablement of licenses, and a reasonable cost for the services and products is very much acceptable. This is a win-win situation.

What about a supplier? How do we differentiate them? The same organization relies on a stationery mart for all its stationery supplies. They provide the order based on their needs, and the goods get supplied. The transaction ends with the payment and delivery cycle. There is no need for a partnership, as there are a hundred other merchants willing to provide the same stationery sets and at a similar price. So this goods supplier is just a supplier and nothing more.

This applies even in our daily lives. For example, I buy heavily from Amazon. To me, I pick what I need and pay for it. When the item is delivered to my doorstep, the transaction ends. Amazon is not critical, as I can get a similar service from at least half a dozen vendors. However, their Prime membership changes the sense of it from being a supplier to a partnership, not in the true sense but in spirit. Being a Prime member, I get access to their deals 30 minutes before others. Although this is trivial, it gives me a sense of privilege and importance that through this Prime membership, I can possibly count them as a partner.

Organization Strategy for Opting for Partners and Suppliers

Introducing Service Integration and Management

In the area of service management, the popularity of Service Integration and Management (SIAM) is second to ITIL. This is a framework that’s been in vogue for a couple of decades and is recently making waves in the IT industry.

I mentioned earlier that organizations tend to have several partners and suppliers who are tied up with them for various goods and services. Managing the suppliers and partners requires finesse and management skills that are an expertise of their own. Organizations get into a partnership agreement with partners who can act as service integrators. A service integration acts as an interface between a customer organization and partners and suppliers. All strategic, tactical, and transactions activities pass through the service integrator layer. This layer can either be a third party (partner) or it can be an internal division within the customer organization. No matter where they sit, their role is to ensure that all partners and suppliers are effectively managed.

SIAM is a framework built on the foundation of service integration and service integrators. It goes into the various processes, practices, and best practices in dealing with partners and suppliers from the perspective of a service integrator. I encourage you to take this course up after you complete the ITIL 4 Foundation certification .

Deciphering Value Streams

Consider a set of activities that you could possibly perform in an organization. These activities will be performed in a certain pattern, and there are several patterns that could be drawn. These patterns are service value chains. The key patterns that can be identified to deliver value are called value streams.

As an example, if you were to visit a barber on a Saturday morning, the rush is generally high so you might have to wait a while for your turn. After the queue in front of you subsides, the barber asks for your preference and, based on that, cuts your hair. After the cut, he removes the cape and the hair and gives you a light brush before you make your way to the counter to pay for the service. All the steps that you took, you did so for value creation. With the barber who is the service provider, you were able to create value by getting a smart haircut. These activities that led to the value generation are a value stream. There are several wastes that we can identify in this value stream, such as the wait time and the vacuuming that the barber must do after you leave. The objective is to do more of the activities that deliver value and less of those that don’t. So, to generate more value, reducing wait time or eliminating it is a definite way of doing that, and perhaps an automated vacuum cleaner can eliminate the manual cleaning activities.

In essence, generating value is a two-step process. First, we identify the opportunities to optimize the value stream. Then we automate wherever possible—generally activities that do not involve human cognizance. An illustration is provided in Figure 4-2. The activities in red are the waste generating activities that need to be reduced or if possible eliminated.

An organization consists of several such value streams. The objective of value streams is to identify them—especially the activities that generate waste—and minimize or eliminate them. By reducing waste efficiently, we have effectively performed continuous improvement for the product/service that is in play. The second way to generate more value or to perform continuous improvement is to make the value generating activities more efficient and effective. This can be done using automation that decreases the turnaround time and the defect rate owing to human error.

Simplifying Processes

Processes are buttressed with procedures, templates, and other similar artifacts.

You could envision a process as a set of activities that you need to perform, one after another, to achieve something. Each activity that you perform sets the precedent for the next one, and then the next. The objective of a process is to achieve an output that is along the expected lines and as desired.

Here’s an example to make the concept simple and digestible. A process is very similar to a recipe for cooking a dish. In a recipe, you have several steps that you need to follow, as instructed, to get the dish you desire.

You need to follow the steps to the tee to get a good egg omelet. You cannot interchange any two steps to get the same output. In IT language, this is the process to make an egg omelet.

The main aspect of a process is the interconnectivity between the individual steps, and all the steps work collectively toward a common goal, a common objective that is desired.

When we use processes in ITIL effectively for products and services, we can find answers to a number of questions. These include identifying the delivery model of a service, identifying how a service works, identifying the value streams, and defining the roles and responsibilities of various parties.

Political Factors

Products and services are not immune to political actions of the organization or the state. A change in leadership and changes in legislation will affect how a service or a product is designed and run. Take, for example, the situation of Covid-19, where the crisis has led to a lockdown across multiple countries. This is a legislation that must be followed by all parties. The services that are offered go through changes to adapt to the changing conditions. I bank with HSBC and when I reach their call center, they announce that their agents are working from home and I could possibly hear pet dogs and kids in the background. Then they continue by saying that digital encryption is in place for agents to access sensitive information from their homes.

This is not normal. The external political factor has forced organizations to make alternative arrangements. This situation of an oncoming disaster would not have been a surprise entity, but rather service organizations are well prepared for such situations and even do a trial regularly.

Economical Factors

The economy is the lifeblood of running services, as they theoretically run perpetually. A certain amount is budgeted based on various factors and the political and economic conditions determine if the budgeted amount is sufficient or not.

Continuing with the same example, economy has fallen to unprecedented levels. This will force organizations to effect cost cuts across various segments of the services. With a smaller budget, the services are still expected to run, perhaps with lower efficiency. Staying with HSBC, normally the call I place will be picked up in less than a minute; the last time I called them, I hung up after waiting for more than ten minutes. I am certain that the agent strength has been culled since the Covid-19 inception.

Social Factors

They say that every ten years the generation changes. Where that matters in products and services is in the area of necessaries, needs, and wants. As the social climate changes, services and products must change with the times—without exceptions. Organizations that do not change wither away over a period of time, as their products and services would generally be treated as obsolete and people would look for shiny new things. Nokia is a classic example of missing the train multiple times when the cell phone boom involving touch screens came into vogue.

Technological Factors

Advancements in technology positively impact products and services. So it is imperative that organizations build an appetite for technical upgrades, which translates to budgeting more funds. In some cases they affect negatively if organizations don’t travel in sync with the technology.

Consider the example of Blockbuster, the company that championed the movie and TV show rental business. Come streaming, they didn’t keep up and now they are closed forever.

Legal Factors

Products and services are delivered within the ambit of legal boundaries. The law of the land has to be implemented without exceptions, and the rules change from time to time. That’s the beauty of legality. Organizations must be flexible and adaptable enough to change with it.

Introduction of the GDPR in 2018 impacted all web channels that stored user data, which is a good majority. All digital channels had to make changes to websites to meet the regulation’s demands.

Environmental Factors

Who would have imagined that environment can be a factor influencing services and products? Yes, they play a role. As environments change, the demands from users change too.

Users are respectful of nature these days and prefer to purchase services and products that are organic and serve toward the greater good. This will make companies rethink the way their products are produced and serviced.