For as long as I remember, most of the “progressive” IT world has been talking about “removing siloes” as the way to improve the results of all IT endeavors. The debate is largely about what counts as “good results” and this definition has gradually shifted from a focus on efficiency and optimisation to a focus on value and effectiveness which is a welcome change. In terms of siloes, however, it only means moving from siloes of technology / expertise to siloes of functional value.
There is no way to remove all siloes. In fact, we will not be able to function in a world without siloes just as we wouldn’t be able to function in a world without hierarchies. The focus should really be on dynamic siloes and dynamic hierarchies but that’s perhaps a topic for another time. As far as static siloes go, those focused on functional value are definitely better than technical ones.
I recently did some org design work for a telecom company which gave me the opportunity to bring together multiple concepts that have been brewing in my mind over the last few years. This is a quick view at the common models of technology team employed by businesses.
The Siloed model
We’ve all seen this model in traditional IT setups but it is surprising how many organisations still follow some version of this model. The appeal of this model is in the convenience of functional hierarchies. However, functional hierarchies are always pitted against each other and this cascades throughout these hierarchies. This means that internal departments are competing against each other and optimising locally rather than collaborating with each other and optimising globally.
The Cross Functional Model
Much more widely accepted, this model breaks the siloes within the IT function. The downside is that there still is an IT function. Business still throws requirements over the wall and expects IT to deal with them. IT focuses on output and leaves the question of value to business.
The Product Team Model
The product team model achieves the vision of a truly empowered team that is accountable for business outcomes. This is made possible by integrating business into the IT team (or the other way around). The team is now capable of achieving direct business outcomes and accountable for them. This has been the holy grail that a lot of businesses / consultants go after when they think of adopting agile. However, this model works only for small setups (1 – 2 product teams). It struggles to scale for enterprises that (should) have multiple digital initiatives at different levels of maturity running in parallel.
The Enterprise Team Model
Large enterprises typically have several digital initiatives running in parallel. Some mature products, some internal projects, some experiments, etc. All these initiatives utilise and build on some core capabilities that a business has. For example a mobile application, a website and a sales tool for an enterprise retailer will all utilise the product catalog and the dynamic pricing engine. The product catalog and the pricing engine become core capabilities of the business. So an enterprise team model will have empowered product teams responsible for end-user experience and empowered shared-service teams responsible for making the core capabilities of the business available to the product teams.
This kind of a platform model is gaining popularity in modern digital businesses and brings several benefits to the organisation. But there are several nuances to consider when implementing such an organisation structure which we’ll cover in future posts.