Rise and Fall of an Information Technology Outsourcing Program: a qualitative Analysis of a Troubled Corporate Initiative

Icarus Information Technology Department in the Phoenix Era 
The year before Project Phoenix, and two years prior to launching the Strategic Staffing 
Program (SSP), the CIO and IT executives implemented a major department-wide 
reorganization. The reorganization, which took roughly one year to complete, revealed evidence 
of some jockeying for power and status among IT executives and transformed how IT employees 
worked across teams. Preceding this IT reorganization, executives laid off ten percent of Icarus’ 
corporate employees, including over one hundred IT employees. 
The IT organizational structure prior to its reorganization is shown below in Figure 5.1.
Figure 5.1.
Phoenix Era Icarus IT Executive Organizational Chart - Pre-Reorganization 
As suggested in the figure, all of the vice presidents reported directly to the CIO. However, 
those positions on the top row were generally viewed as the more prestigious or powerful 
positions. The Marketing and eCommerce, Supply Chain and Merchandising, Stores, and 
Corporate Headquarters (HQ) Systems team each aligned with and supported business functions 
outside of the IT team. The bottom row positions supported the more IT-centric (and less status-

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laden) functions such as IT Security and Operations, Infrastructure and Application Support, 
India Engineering, and IT Strategy. The four software development functions in the top row 
essentially operated as independent businesses. Each competed with the others for budget dollars 
and resources from the bottom-row groups. Still, all of these functions were led by a vice 
president, each of whom reported directly to the CIO. 
Prior to the reorganization, the “top-row” software development teams had been a 
prestigious place to work. Executives rewarded technical architects, engineers, project managers, 
and business analysts for their ability to manage projects and quickly implement solutions to 
business requirements. Cost management was secondary to the speed at which IT implemented 
new applications and infrastructure (i.e. servers, data storage, and networks) during this time of 
high business growth. 
The reorganized IT structure is depicted below in Figure 5.2. The CIO made three
Figure 5.2.
Phoenix Era Icarus IT Executive Organizational Chart - Post-Reorganization 
significant shifts in the operating model and thus the organization’s power structure. The first 
and most obvious shift was the division of the former “top-row” teams into Business Strategy 

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Teams (BST) and Project Delivery Teams (PDT).
1
The newly created Business Strategy Teams 
acted as the primary liaison with business teams and owned the majority of the software 
development budget. They established application development priorities, roadmaps, and 
financial analysis to support the corresponding business units they continued to support, and thus 
remained “top-row” teams. 
The Project Delivery Teams were comprised of a U.S. based project management team 
and engineering teams in both the U.S. and India for specific technologies or functions (i.e. 
Application Testing, Mainframe, and SAP). In contrast with the Business Strategy Teams, the 
Project Delivery Teams had fewer direct interactions with the business units, and primarily 
worked across the other IT teams to perform project management and engineering work for 
existing and new applications. Additionally, most of the “staff aug” contractors from TechStaff 
and other vendors remained down in the new Project Delivery Teams with very few 
representatives up in the Business Strategy Teams. 
Said differently, the first shift of the IT reorganization created a ritualized schism 
(Lincoln, 1989), in which the former teams performing “end-to-end” software development were 
separated into teams of “thinkers” and “doers.” Although the vice presidents for each of these 
units still reported to the CIO, the new categories of Business Strategy and Project Delivery 
Teams formally connoted the two organizational tiers in a new way. 
The second shift of the reorganization was the consolidation of the most senior technical 
architects from the former “top-row” teams into the former IT Strategy team, which became a 
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Business Analysts from the former top-row teams of: Marketing and eCommerce, Supply Chain and 
Merchandising, Stores, and Corporate Headquarters (see p. 73) remained “up” in the new top-row Business Strategy 
teams (see p. 74). Project Managers and Engineers from these former top-row teams moved “down” into the new 
bottom-row Project Delivery teams (see p. 74). 

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new “top-row” team—IT Strategy, Architecture, and Operations.
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The third, and least obvious, 
shift included breaking up the former Security and IT Operations team.
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The security employees 
were combined into the new IT Security, Infrastructure, and Application Support team. My 
Vendor Management team, which had previously been in the IT Security and Operations group 
moved to the new IT Strategy, Architecture, and Operations Team.