Problem: The Triad Insurance Company of Indianapolis, Indiana experienced a meteoric rise since its inception in 2005. It has grown from a mom-and-pop operation to a sizeable enterprise: the number of employees has grown from two to 584 in under five years. This rapid growth has brought significant success for TICI, but it has also brought some troublesome problems. In particular, internal information management has suffered due to increased complexity and rising expectations. Some specific problems are:
- Insurance policies used to be generated using desktop software. Now, policies are so varied that various versions of forms are warehoused in databanks and selected automatically based upon variables such as the type of claim being generated, the geographical area of the United States that the customer lives in, et cetera.
- Triad's original owners used to keep their own financial books.
- Customer claims were handled over the phone.
- The national headquarters wants more comparative data from the regional offices.
Each of four regional offices has its own Information Technology staff and manager that reports to the regional manager. TICI's IT director (at the same organizational level as the directors of human resources and customer relationship management divisions) manages a separate IT operation at the headquarters and reports to the Chief of Operations (COO).
Last month, the Chief Financial Officer (CFO) complained that not enough reliable and consistent information is being received from regional offices. Moreover, both he and the information management division chief believed that the organization has grown so complex that it now needs a Chief Information Officer (CIO) at the same level of organization as the COO. The regional IT staffs would then report to the new CIO, not to regional managers. But the Chief Executive Officer (CEO) is not sure that a company-wide reorganization is in order. He thinks Triad should outsource the information systems function entirely to a third-party provider located in India.
What type of IT organizational structure would you recommend for this firm? Why?
- Be sure to address organizational purpose and structural design elements through appropriate technology, structure, and process.
- Analyze the challenges facing management in adapting to the changes imposed by growth and technology.
- Identify any assumptions you make prior to beginning your response.