Leadership

Is the best IT model the centralized or decentralized approach?


Over the years I have had the opportunity to experience IT

in the organization as it has transformed itself from the "glass

house" through the PC "revolution;" client servers; web-centric

computing; and now the amalgamation of all of these evolutions as IT strives to

be a true "business partner".

Interestingly, I find that for those in several of the

government organizations that I have come into contact with in the last couple

of years, the concept of IT as a "business partner" is more of a

figment of the imagination than a reality.

If you asked people in the departments that IT was serving

what the relationship between them and IT was like, they would say that their

IT was a business partner in the same vein that the Soviet Union was a business

partner to Poland, East Germany, or Czechoslovakia during the Cold War.

One characteristic view that users in these organizations

have about their IT department is that IT operations of any kind can not exist

outside the IT department's control. And should such "rogue"

activities arise, they are to be squashed or consumed.

Another common view of users was that IT departments were

monolithic and unresponsive - filled to capacity with bureaucratic "goodness"

to insure that each project progressed at glacial speeds.

Of course, these two views led to a lot of user frustration.

From their perspective, if the IT organization were nimble and responsive to

customer needs, they wouldn't need to engage in rogue activities; and to make

matters worse, they felt that taking matters into their own hands was the only

way to get around the bureaucratic bottleneck blocking progress on their

various projects.

The end result of these competing views is an angry customer

base that is frustrated by IT's lack of response and its attempts at squashing

the users' attempts at helping themselves.

Why does this happen? I speculate that the above situation

arises when IT remains stuck in its legacy as a "glass house"

mainframe shop, or from IT's reaction to a decentralized computing environment

that seems to have gotten out of control.

In either case, the end result is a heavy-handed,

centralized IT shop that rules with an iron fist. This kind of IT department is

likely to struggle in building a true partner relationship with its end-user

departments.

We all know the benefits of centralized IT units:

Procurement of hardware and software is possible on the broadest scale within

the organization and centralized operations generally produce substantial

economies of scale. Additionally, a centralized staff eliminates redundant

functions, and there is a greater adherence to standards and a unified vision.

Conversely, in a highly centralized IT department, there are

problems like the ones mentioned above. Some of these are: tendencies towards

bureaucracy, lack of responsiveness, and decision-making in a vacuum.

The alternative to this is a completely decentralized IT unit--agile and responsive, in tune with the needs

of the business, and more tightly integrated with business goals and

objectives.

Yet purely decentralized IT structures also have drawbacks,

such as duplication of effort, lack of standards across the organization,

islands of excellence at the expense of other departments, higher total

procurement and operational costs, lack of integration, etc.

I have always been a big believer that a balance can be

struck between completely centralized IT and completely decentralized

IT--hopefully deriving the benefits of both.

In my opinion this balanced IT structure has

"enterprise" functions being performed by central IT such as: data

center, network and infrastructure operations, e-mail, procurement, standards

architecture, and cross-departmental application development.

While department-level functions include help desk

operations, departmental application development (up to a certain size), and IT

strategy and planning for the department. All of these activities coinciding

with standards which they help develop along with central IT and a strong governance

committee.

In order for this hybrid approach to work though, there has

to be a strong sense of cooperative and collaborative management at the level

of the CIO and with the departmental IT management. I like to view this

approach as a representative government model where the departments actually

have a say-so in their IT operations.

Ultimately, there is no "right" answer to how IT

should be structured in every organization. There are success stories for each

model (which I am sure many readers of this blog will point out). And we have

to take into consideration the influence of the culture and structure of the

organization as a whole when determining the optimal IT configuration.

Yet I am willing to bet that at the end of the day, those

organizations which choose a model which is more democratic in its structure

and processes are more likely to end up as true business partners to the

organization.

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7 comments
California
California

Well nice written then now i need to know from you that Which best describes department within your organization? A. Part of central IT B. Part of decentralized IT C. Part of Line of Business D. Other (Pls. Specify)

BudgieSoft
BudgieSoft

It all comes down to who is paying the bills. If there is a belief in the company that a particular application is strategic, it will usually be centralized and an investment in the proper staff will be made for that strategic need. Unfortunately, over time, the Wall Street desire that all stocks should have double digit growth leads to internal cost cutting instead of investment in growth by sales expansion through new customers or new markets.

Tony Hopkinson
Tony Hopkinson

Argument for centralisation. Currently decentralised. Argument for decentralisation. Currently centralised Common argument for either, new manager / management team wants to make it's mark. There are a few justifications, but I worked at one place for fourteen years I left as they were just decentralising for the second time. As far as I can make out, it's all bollux.

m0a0t7rix
m0a0t7rix

Other issues on whether to centralize or decentralize include whether the organization's business depts have equal footing, or if they tend to pull rank on the IT department. Do these other departments have a full understanding of what is really involved in decentralization? At my place of employment, the IT department and computers are seen as a nuisance to the general consumer since we are not an IT company. The customer tends to oversimplify from their poor vantage point and lack of background knowledge, exactly what *is* involved. Due to our IT department being in more of a support role, albeit with our work we have a very up-to-date and modern system, we are looked at as the wind beneath the wings. However without the organization supporting the infrastructure of the same IT department that has revolutionized the entire healthcare facility's existence, we will be in trouble. It is simply too much work for too few employees. And in lean times, things are easier when streamlined. This may be one of the main reasons that IT departments force a certain way of doing things. Speaking for myself and my experience, without user cooperation and mutual respect, no one is going to get anywhere very fast. We need to ask why these things are happening and get at the root cause instead of pointing fingers. That said, from a security standpoint, centralization is better, however it is a complex subject. It depends on whether security is affected negatively, and whether the IT system infrastructure itself supports very fine delineation in users' access rights. Still it can be an issue...

nooly77
nooly77

Tony, you.ve pretty much summed it up!! Over 22 years I've been inthe cntralize-decentralize loop at least 3 times...always same crap...actually like most things in life it would seem a blend of the two works the best... gerry

mjd420nova
mjd420nova

Decentralization is the only way to go. It allows managers to set priorities within their own areas and not be a hog of resources. Support would come from his own areas and support just his areas. This prevents projects from forcing concentration at the cost of limited support in other areas. It also gives the IT manager to move personell around to fit specific projects and cross train others. It also allows for sub performance personell to be assigned non-critical tasks and for new personell to be in a position to observed and guided into better positions.

AndyB-UK
AndyB-UK

I have 30 years experience in IT and found the same. Some functions of IT such as Security and Communications infrastructure centralise well however there is always a buy in for decentralised developement and support to enable faster response to the clients needs

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