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Taking IT reorgs to the extreme

Kim S. Nash | March 31, 2015
IT departments are constantly reorganizing, but a few companies have gone so far as to break the traditional IT department into pieces.

GTI works with IBM, Texas A&M University and 24 other outside organizations. These partners help GameStop assess the economy, emerging technologies, customer behaviors and other criteria for weak signals about coming change.

Donaldson declines to name his other external partners, but says they cover important territory too wide for any one IT leader to tackle. There's a partner to delve into changing notions about privacy. A partner to look for nascent shifts in customer expectations, and one for exploring augmented reality. The list goes on, including a partner to help interpret all the incoming information from other partners. Getting help like this means "you're not spreading the peanut butter too thin," he says.

The goal of the reorganization is to keep GameStop on top. Its main business is selling new and used, physical and digital video games for Xbox, PlayStation and Wii consoles. GameStop lists key competitors as Wal-Mart, Target and Amazon--not exactly a retiring bunch.

But they all face digital demons as gaming goes online at a fast clip. Knowing that people shop tethered to their smartphones, GameStop, through GTI, is working on integrating new technology, such as interactive marketing using beacons, in its stores. Donaldson wants to meld the online and in-person experience.

All of GameStop's C-level executives were involved in hatching the plan to split IT and all have been involved in educating employees about it. One early obstacle was convincing the rest of the company that four separate IT groups could work well together, he says.

"People want to know what the processes are, but some of those will be invented during the change and tweaked along the way," he says. "People have to be willing to go down that path with you."

GameStop rented a local movie theater for the initial discussion with employees. The CEO was there, and that made a difference. "If he stands in front of us and says, 'This is something important to me and for our future,' then 85 percent to 90 percent of the organization will immediately support the change," Donaldson says.

Even a year later, GameStop isn't done figuring out its future. Stores in Austin, Texas, are testing beacons and other interactive customer services. The company plans to bring the same technologies to three more markets later this year.

Everyone has to be able to work with ambiguity. "You're doing something new, and there's not a lot of prior art to look at," Donaldson says.

Relentless March
AccuWeather has spent the past few years reworking its structure, bit by bit. In 2012, the company spun out an innovation group of engineers, mainly from IT, to do advanced research for customers, especially in predicting severe weather and improving forecast accuracy. In 2013, it reordered its executive ranks, formalizing digital work that was already going on. CIO Steve Smith became chief digital officer, working with a new chief strategy officer who had been in charge of digital media.


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