This paper mainly analyzes how a firm assimilates information technology (IT) into organization work processes by restructuring the IT functions. Knowledge integration and organization coordination theory are used to build a conceptual research model to investigate the IT organizational transformation in Digital China as a case study. Then results indicate that the firm can integrate the individual knowledge of the senior executives, business managers/users, and IT professionals across the firm into the organizational knowledge through the IT organizational transformation, to effectively assimilate the information technology into the organizational business and decision-making processes.