IT Organisation

How is your IT organization looks like? Is there an ideal way to build up an IT organization, or is it culture or market dependent? I think that's a crucial question but not discussed deeply enough. There is a practice of linear/functional IT organization set up, but is it ideal?

Drivers 

• Customers of IT (internal or external) would like to see IT as an appliance with a single user interface which doesn't annoys them and fulfill wishes immediately.
• Product/process development requires support in IT development, clear requirements, low cost, deadlines...
• Finance requires strong cost control, transparency and efficiency
• Company leadership expects IT to be innovative and come out with new ideas
• Everybody wants to have a "personal" IT
• IT employees expect predictability, professional challenges and growth.

This requires utter flexibility and discipline and IT organization must also fit into the company organization structure. 

Option 1: Linear-functional

This is a nice top down structure where a CIO has control over everything and all direct reports report to him. Like in companies it works fine still the complexity is low (not equal with the number of IT employees) and the head of IT is able to overview everything and be the single point of contacts to every department. This is effective and clear but the CIO may soon be exhausted and the best IT employees will miss responsibility. The IT organization may "open up" (e.g. by allowing internal customer to talk with IT departments like back office directly. It relieves the CIO but puts more strain on other participants because most IT project affects several IT organizations and coordination and information interchange get difficult. This is almost a natural development because customers will try to find other ways to solve their problems if the CIO is overloaded or not "flexible" enough from their point of view. 

Option 2: Project office

The it can open a project office which reports to the CIO and coordinates all efforts as a Single Point of Contact towards the customers.  It may work well but needs capable people and accommodation from everybody. Project office is often done on company level, so it's not easy to understand why IT needs another one. You may find a better name for it (I haven't found it yet) and explain that it's only for the IT parts of the project.  Logically IT may send a representative to the project office, but it then it looses control over the projects, because the project office reports to someone else.

Option 3: IT as a division

IT could work as a division e.g. a company within the company. The make the division run requires extra people (like controllers, project managers, analysts...) but a CIO could make good use of these resources in a different structure too. This is usually a step towards carving out the whole IT as an independent service company which was popular in the ITs.  IT was replaced by outsourcing but some internal IT is still needed.

Option 4: Matrix

In this structure IT has project managers or senior programmers who are working directly with customers and organize people in IT to run the project. This is very flexible and effective but puts an enormous strain on the IT organization.

Option 5: No IT

Maybe we don't need an IT at all, save the CIO and put the IT people under different organizations like finance, operations, product development... It makes things simple but coordination will disappear and different units will build their own IT.  Als see: http://itgeneral.blogspot.hu/2012/02/do-we-need-cios.html

There is no optimal solution, what works the best depends on the company it's market, culture, style but also on IT and CIO itself.