Redesigning Your Applications Organization

Redesigning the applications organization is the next major target for IT restructuring and is particularly attractive when cost reduction is needed. Infrastructure organizations have already gone through several stages of consolidation and standardization. Applications groups, however, have experienced less change and are more fragmented and complex. From a review of 76 IT shops, we've found that large apps groups tend to be business-unit-aligned, have a median of five groups per IT shop, and are evenly split between federated and centralized in overall structure. Apps groups in medium-sized shops cross business silos, have a median of two apps groups, and are overwhelmingly centralized. Apps groups of the future, however, will consist of one global group with significant outsourcing and a process-based structure.