While organizations get prepared for digitalization, so must their IT departments. This means they have to increase their agility to respond to varying requests from different groups of users, increase infrastructure flexibility, and improve the utilization of the current resources. To answer these needs, traditional approaches and modes of IT management are often insufficient. We consequently propose a process model for public sector IT departments so that they can adjust their operations as a response to digitalization efforts, for example, smart cities and digital transformation. Our focus is especially on improving the IT development process within the organization, i.e., how the IT department can better respond to the needs of business units. Our findings show that the adjustments require changes both in management and daily operations. Moreover, changes should not be done only internally within the IT department, but also the whole organization should be involved.