IT and Organizational Structure Alignment

Information technology has become a vital aspect to any large corporation. Managing information to effectively balance control and coordination is a challenge to business leaders. Correctly aligning structure with information technology can save valuable time and resources. Understanding the relationships between the flow of information and how it relates the chain of command is important to utilize information. Businesses use a variety of structures to align information technology with the organizational structure.
In order to effectively align information technology with an organization’s structure, the goals of the company and the goals of the information system must be determined. The development of a new structure to accommodate technology is becoming commonplace in business. For example, USAA an insurance provider decided they needed to increase customer satisfaction by providing faster and more effective service. Prior to the change departments were independent from each other and control was highly centralized.
The old organization was preventing quick responses in a company where response time is the single most important criteria for the customer. The company flattened its structure and coordinated departments with information systems. This gave employees decision-making power and allowed for quicker response times to the customer. (Garreth, 379) In a production-based company, the information requirements are different. Hewlett-Packard underwent serious change in organizational structure in 1989. The high-tech company was struggling to provide new products at the rate of its competitors.

The CEO traced the problem to the product development process. The process was sequential and was wasting time in a highly competitive industry. He redesigned the hierarchical structure of the company and improved the process. He reduced the time-consuming committee based decision-making process and flattened the structure by eliminating two levels of management. The result was interdependent departments that communicated using information technology. This new structure has dramatically reduced the time it takes to introduce new products to the market (Garreth, 382).
Business is constantly changing and an organization must be ready to adapt. In today’s constantly changing business world, organizational structure and information systems must constantly be evaluated. An organization must be willing to redesign the structure and determine how IT can streamline the process. The coordination between IT and organizational structure can be directly traced to customer satisfaction and profit. Taking advantage of information technologies can greatly improve the performance of a business.