Enterprise IT leaders are under relentless pressure. Budgets are shrinking, headcount is leaner and the demand for sustained agility is not letting up. At the same time, new technologies, from AI platforms to high-performance compute, keep raising expectations from every corner of the business.
In this climate, it can feel tempting to treat your organization’s design and operating model as a task to hand off to HR. Or worse, you might assume that a polished org chart and a clear corporate strategy signal sufficient maturity.
In practice, those shortcuts leave a massive opportunity on the table. Three fundamental considerations play a large role in determining the efficacy of a large organization:
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Capabilities: The value or services delivered by each organization.
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Structure: How organizations are structured for accountability.
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Operating model: The daily roles and routines that add up to progress.
Defining capabilities that deliver value
The first definitional element for a team is its capabilities. This isn’t about an org chart; it’s about the value the IT organization brings to customers, whether those are internal business units, employees, developers or all three. Defining the capabilities your team requires to deliver value sets the stage for being able to organize them.
Defining capability starts with strategy and value. It’s important to first think about the value your organization needs to bring. These are not just tasks, nor boxes in an org chart; they are the vectors of value.
Leaders who forecast capabilities, such as agentic AI features or advanced integration across platforms, can use capability definition to position their teams ahead of demand. In this case, capability definition is not an HR exercise, but a critical and strategic lever for leaders to add novel value for customers.
When capabilities are ill-defined, IT teams often miss strategic goals or deliver outputs that business partners see as low value. This creates a perception of ineffectiveness. Growth and investment conversations stall because leaders can’t tie existing headcount investment back to real customer outcomes. These organizations often rely heavily on “hero” employees rather than scalable, repeatable capabilities.
Creating structure that supports people and goals
Once capabilities are clear, organizational structure may define how people are grouped and managed to deliver them. This is the familiar domain of org charts, but effective structure goes beyond boxes and lines.
Naturally, this step should be a partnership between the functional IT leader, who is an expert in value creation, strategy and capabilities, and the HR business partner, who brings expertise in organizational effectiveness and corporate talent strategy.
When the org structure is broken, accountability gets fuzzy and execution is stymied. Decision-making slows, bottlenecks appear and political maneuvering can crowd out collaboration. Employees disengage when expectations are unclear or reporting lines conflict with how work actually flows. In IT, that can lead directly to outages, missed deadlines, decision paralysis and low morale.
Establish an operating model that actually works
If capabilities define the “what” and structure defines the “who,” then the operating model covers the “how.” It ties together core business processes, routine ways of working, and responsibility by role so capabilities are delivered consistently and efficiently. A client once described the operating model as the “handshakes between teams,” which I found very apt.
A software engineering team might define handoffs between developers, QA and release managers. A project management office may establish quarterly reviews to monitor program health. An enterprise IT function might set standard cadences for agile delivery, with clear roles and decision rights for product owners, architects, security leads and program managers.
When the operating model is weak, leaders see the fallout immediately: inconsistent practices across teams, unclear ownership, ineffective meetings, conflict and a lack of general rhythm for delivering work. These breakdowns can get misdiagnosed as cultural problems, when the real issue is operational immaturity. Without defined delivery patterns and expectations between groups, even well-structured organizations can struggle to execute.
Why these foundations matter now
It may sound old-fashioned to focus on basics when AI platforms, automation tools and digital ecosystems dominate the conversation. But fundamentals are what keep technology organizations from collapsing under the weight of constant change.
The truth is that companies have always been people, processes and tools working in concert to create value. That was true a century ago, it’s true today, and it will be true as far into the future as we can see. Of course, the balance of human contributions versus tech-powered automation is constantly changing. New technologies will shift the mix of work, but they won’t eliminate the value of using capabilities, organizational structure and operating models as the way work is designed to maximize value. In fact, using these tools can help companies more effectively accommodate automation in concert with human contributions.
The truth is that companies have always been people, processes and tools working in concert to create value.
Moving forward with intention
For IT leaders, the message is straightforward: Don’t assume that a sharp-looking org chart means the fundamentals are covered. Step back and examine the three elements — capabilities, structure and operating model — through the lens of your current challenges. They are actually hidden levers of performance. Where do customers feel the most pain? Where does work stall? Where do teams depend on individual heroics?
Revisiting these questions amid tight budgets and rapid change might feel like a luxury, but it’s the fastest path to resilience. By designing these elements with intent, IT leaders can position their organizations to scale with demand, adopt new technologies with confidence and deliver reliable value to the business.
That’s the real foundation of the tech organization of the future.
