You must check existing OOB Web Parts and Features before creating custom work and waste very long time on something that already exist.
In SharePoint 2007 making a custom Organization Chart was the correct choice because there was no OOB Organization Chart but now you shouldn't go for that immediatly since it does exist in SharePoint 2010:
However like any other component in SharePoint it needs some configuration.But unlike many other components some of these configurations should be done first in the Active Directoy.For example to make several employees belongs to the same department (as colleagues) under one manager you should go to the properties for that user in the Active Directory and set in the Organization tab who is the manager for that user and what is the department he works in.
If this OOB Organization chart does not cover the customer requirements then you will need to use a custom Organization Chart webpart like the following:
http://orgchartpart.codeplex.com/
Good Luck!
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