It is absolutely an argument for better management. Moreover it is an argument to see what improves the overall flow of value to customers. How long does it currently take us to deliver value and what can we do to reduce that?

It could be small teams, could be large. I am not very familiar with your context, but based on the little information I have, I would probably push you towards towards trying two teams of about 15 people each. Where each team has at least two experts from every vertical.