Leadership

Sanity check: Five reasons to centralize your IT department

Centralization vs. decentralization is a constant struggle in most IT departments and many typically go in cycles where they tend toward one extreme or the other. Here are five of the most common arguments for centralization.

The centralization vs. decentralization argument regularly rears its head in most IT organizations. Some of them fall into a cyclical pattern while others are more like a pendulum that swings back and forth from one extreme to the other.

In order to uncover the issues involved in this dichotomy, TechRepublic will provide a series of articles aimed at IT leaders. The first is this look at the top five arguments for centralization.

5. Avoid duplication of effort

One of the distinguishing features of decentralization is that there are various IT groups scattered throughout the organization, each tied to separate departments or business units. While this can allow for rapid deployment, rapid changes, and rapid troubleshooting, it often results in IT groups that do not communicate well with each other, do not share best practices, and do not share resources. Those factors can lead IT to centralize in order to avoid this major duplication of effort.

4. Improve security

Security is most effective when you can quickly account for all of your digital assets. In a centralized model, IT has much closer control over all of those assets and so has a much better shot at securing them. In a decentralized model, it's difficult to get a good picture of what assets you have and where there are located, and so security becomes far more challenging and less accurate.

3. Standardize operations

Centralization provides the opportunity to standardize IT operations across the company, establish best practices, and implement guidelines for IT governance. One of the most popular methods of doing this is with ITIL, but in order to do ITIL or almost any other standardization, you have to undertake some centralization as part of the process.

2. Allow for more specialization

When you centralize the professionals of the IT department, you give yourself the opportunity to hire or train highly-specialized IT workers, such as Oracle database engineers, information security specialists, and programmers in niche areas. Centralization makes this affordable because you can share these resources across multiple departments and business units.

1. Cut costs

Decreasing worker duplication and standardizing IT operations are a means to the end of cutting costs and running a more efficient IT department. Centralization is almost always done by companies that are looking to save money by reducing the IT budget. By contrast, decentralization is usually undertaken by companies that need to move faster and be more responsive to customers, even if it means spending more money on IT.

Final word

The number one point (cutting costs with centralization) brings us to the one big drawback of centralization: response times. Whenever you centralize, the response time of the IT department almost always increases.

This is part of the natural balance you have to weigh. When you centralize resources, you create bottlenecks. It's an unavoidable trade-off in most cases, and these bottlenecks will sometimes cause IT services to be delivered more slowly than if they were decentralized. You have to be willing to accept that if you are going to centralize.

Next week, look for "Five reasons to de-centralize your IT department." And for more on this subject, check out these resources:

Also, please take our poll to let us know where your IT department stands:

Poll: Is your IT department centralized or decentralized?

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

59 comments
viswanadh.nudurupati
viswanadh.nudurupati

According to me the decision of IT to be centralized or decentralized is dependent on many factors. Few of them, the type of organization, type of products or services that an organization sells or offers, business processes and their dependence on IT. I prefer that organization should adopt a mixed structure for reaping the benefits of both the centralized and de centralized IT. The organization has to balance the extent of centralization and decentralization of IT in their Business process. At the strategic level, business processes such as development of IT strategy, IT Budgeting, Best practices development, IT resources plan etc., should be centralized and at the operational level, execution of projects, requirement capturing, resolving issues/complaints, implementation of Best practices etc., should be decentralized. This helps both the ends (Top and lower level management) meet together for achieving the goals of an organization such as Low Costs and High response times. The IT department has to find the processes which can be Centralized and which needs to be Decentralized in view of the Business Goals and Objectives. IT has to align with the Business to meet the stakeholder's expectations. Note: The Views and opinions are those of the Author and do not necessarily represent the Views and opinions of Wipro technologies.

hendrikvw
hendrikvw

Thank you for putting your thoughts out there. However, I think you need to take into account the fact that an effective IT organization consist of various organizational structures aligned with specific services. You have to discriminate between the need for close proximity to the business and decentralization for functions like Minor Modifications and Step Change / Programs, and that which can operate away from business in a centralized structure like Operations and Support Services. Minor Modification and Step Change services are executed by projects, which are driven through Project Organizations - which typically benefits from close proximity to the client. Therefore decentralizing your Projects makes sense as long as there is a central Portfolio and Project Management Office laying down common practices across these Project Teams. Operations services are better suited for centralization, requires less customer proximity and practices are more standardized because it is more routine driven. One last factor to consider: The cycle time in your business (not your IT department) determines how central or decentralized your IT Services should be. If you have years to deliver projects, then you can do this from a central place - assuming away from the receiving client. If you need to deliver something in short cycles, it is better to be decentralized and close to the short term drivers of the business. Hendrik van Wyk http://www.profileditpeople.com

kcmcginnis
kcmcginnis

Let's add some more wood to the fire shall we? Let's talk about international companies... How about trying to Centralize the IT Dept. in one country while having offices all around the world?(This includes all members of the IT Dept.)(Some of the offices are subsidiaries of the parent company and other offices are completely independent of the parent company, on paper that is...) There are 3 major factors that are ignored: 1. Culture Think about it, what is acceptable in one country is completely taboo in another. A "harmless" email written by the IT dept. in the IT country could be considered absolutely insulting and degrading in another country. Talking about a political nightmare... 2. Licensing Laws When was the last time you could buy an Enterprise license and just share it with all your child companies including the "independent ones"? Last time I looked, that was considered a big "no no" by companies like Microsoft. Say goodbye to any profits since you will have some pretty hefty fines to pay. 3. Business Culture Let's use the example of a window office. In some countries, this means "You've made it buddy!!!" in other countries it means "One more screw up pal, and you are history!!!". A simple mistake could cause the person to quit and go somewhere else. I think Centralization is good IF your company is completely based in one country or one region. I think a Regionalized Central IT Dept. is best. There is still a Centralized IT Dept. but the "Central IT Dept." is virtual. It is actually an IT Board that is comprised of IT managers from all the regions that the company has set up camp in. Let them create the IT "shell" that provides guidance and basic policies to the Regional departments. The Regional Departments should make the majority of IT decisions in terms of support, communications, etc. The regional IT Managers would be much more in tune with their local offices than just having 1 IT dept. based out of 1 country...

mike_patburgess
mike_patburgess

Being from the mainframe era '69 and up, the most annoying issue "we" heard from the user community was that the centralized IT department was unresponsive to business and user needs. I look at the data centers of today trying to make the same mistakes that were made during those formative IT years. I laugh at those people that say, "to cut costs". Think about it... you most likely will need the same infrastructure to support the applications you have now and, you just might need a DR site because all of your IT is just in one basket. The underlying question "you" should ask yourselves is, " what is our core business". You won't be surprised to find out that it is not IT. Businesses too often get trapped into glitzy new IT gagets and spend half of their profits implementing, upgrading and then supporting them. Seriously does everyone need email at your finger tips when a simple phone call will do. There is a whole new move afoot to move to outsourced IT services and treat IT like a utility. After all, we ask the utility companies to provide us those services. There will be those doomsayers without current substantiation, that say that outsourced IT is too costly. I almost fell off my chair when someone mentioned ITIL. Get serious ITSM reared it's ugly head in about 1980 and was buried just as quickly. This stuff is just a set of manuals written by the British. They do not tell you how to implement a solution so guess what? Everyone will be going there separate ways and implementing how they interpret what the manuals say. Two things that you must have with ITIL or it goes no-where; Executive buy in at the CEO level and financing. Do you honestly think that a CEO would take his profits and sink it into something that will cost him a load of money.. oh yeah, we're back to that saving money thing again.. NOTTT>..

aachour
aachour

You mention ITIL in one of the 5 reasons to centralise. This IT infrustructure is in itself decentralised based on the given frameworks and correpsonding processes withing each framework. How can you centralise an organisation applying ITIL?

mshear
mshear

I think we are leaving out the issues of survivability and redundancy. These are significant aspects of deployment. Centralization CAN present a level of vulnerability with unacceptable consequesnces.

g01d4
g01d4

And the one size fits all, i.e. you can use any OS as long as it's XP SP2, or you can solve that finite element problem in Excel - a grid's a grid after all. I think I'll "stay tuned" and wait for a hybrid approach that's more practical.

ed.everidge
ed.everidge

The fundamental principles of information security are confidentiality, integrity, and availability. How is my information made more confidential by placing it in the hands of a centralized IT structure without the need to know? How is the information more available if I have to jump through hoops to get access for my team members who do need to know. How does the information have more integrity if the people in charge of it are not subject matter experts like my team, and have not the judgement to supply corrections to the data?

reisen55
reisen55

Most American businesses think that you can outsource your IT group to Bangalore and thus achieve a centralized group. Certainly one you are not paying those high American salaries and health care benefits too anymore. IT? Those guys just browse the web all day long, nothing ever breaks does it???? So why do we need to centralize them? There is always Computer Sciences Corporation waiting to centralize everything their own way. American Management doesn't care about it.

oldemusicke
oldemusicke

As I've been saying for many years, if the people involved can get the job done effectively, the org chart isn't a problem. If they can't get the job done effectively, the org chart probably isn't the root cause. Also, there's more on the spectrum than just "centralize everything" and "centralize nothing," but people often talk like it's one or the other. The results aren't so black and white either. A highly centralized model might or might not achieve the five results. A highly decentralized model might still deliver those five results anyway, in the right environment. The planning and execution matter a lot more than any one-size-fits-all "best" approach.

jmcawthon
jmcawthon

Something else that you lose with IT centralization is desktop software support. After my department centralized IT, the support for Microsoft Office was minimal and the support for non-Microsoft software disappeared. The expertise of the central IT tech support staff is in desktop hardware, not desktop software (with the exception of email).

trtjj
trtjj

In our organization, Infrastructure IT is under me and Web/New Media development is under the publising department. We have had many issues regarding miscommunications, security breaches, resources misappropriation, redundant and wasted efforts etc. If the technical aspects of the web were under IT management and only content under Publishing this would all be avoided. The IT department is here to service them as well as look at the strategic overall well being of the organization. To resolve some of the issues, we had to put in place organizational wide policies, where I have now sign off on all projects. These policies helped on some level. There is still redundant and unnecessary effort done on the web side of things. From a PMP view, it does impact the costs of the projects.

domerhp
domerhp

Governance and Compliance issues, force any sizeable organization to centralize IT in order to be able to near compliance. ITIL, COBIT and all the other four letter words, force you in that direction. So long as the IT Alignment Comitee has representatives of the main business areas and Customer Service and goal meeting is tops in tghe agenda, you can successfully centralize and not loose service at the same time. Incidental project groups are an essential part of a well planned centralization to bring IT service to the front lines without decentralizing.

ksady
ksady

It seems apparent there is a lot to say about continuing decentralized efforts, most probably due to the fact that there are so few effective centralized IT companies. Decentralized efforts from my experience take much longer to respond since the first effort seems to be who gets the issue. The only key to efficient centralization is a solid PMO environment.

hamm_x_s
hamm_x_s

The current method of managing problems is using small efficient teams. With all the communcation technologies availble over networks, it would be unserious for decentralised IT teams to fail to communicate. The way forward is decentralisation

angelman99
angelman99

Big red alert light flashing. Any director given this business case "Centralize and save money, service times will be longer" would be an idiot to say no. Trouble is down the track it is only then when potentially 100's of staff have left the organisation (through frustration)that they realise "yes we saved a few bucks (which got spent else where anyway), but the productivity of 3,000+ staff was reduced by the lag in service times and IT resources (especially access to professional IT advice and knowledge)". Which if anyone did and analysis - which management won't because they know the answer will make them look stupid, the descision will have cost the organisation thousands, if not hundred of thousands of dollars.

onzemeelbox
onzemeelbox

The problem is that IT-departments forget they are part of an organisation which is never totally centralized. Thus, so long you create IT-systems that do not support the need for decentralisation in the rest of the organisation it will be impossible to centralize your IT-department. So you first have to create a projectgroup that implements such an IT structure before you can centralize the IT-department. And be sure to have the companies clients and suppliers at the table before any decision is made about what this structure should look like. Before topmanagement puts his foot down and destroys every way to service people properly at the production level of the organisation.

Jaqui
Jaqui

centralize the servers, software deployment, administration, but keep a decentralized support system. This way you get most of the benefits for both methods, as well as counter most of the drawbacks of both.

dallas_dc
dallas_dc

A little negativity can be a good balance sometimes. A lot of negativity, just causes blood pressure problems. Our core business is Wholesale Distribution, but we cannot ship, and we cannot even pick parts from the shelves, if our systems are down. We cannot even do things on paper anymore, as a work around. So IT is extremely critical to our core business. We have a centralized IT dept because it is more efficient for us. We don't have it that way because IT Management grew up in a glass house with a bunch of mainframes around. We are responsive to the business, because our IT dept has a service oriented attitude. (Hey - I should create an acronym for that. SOA - No one is using that are they? he he) ITSM is what you make of it. To disregard it because you didn't think it up, is not helpful. You know, I bet you have a set of manuals on your bookshelf that are valuable to you, but a waste of space to me. So should I recommend to you that you trash them? No - That would be inappropriate. There is a lot of compliance stuff that is going around which is (in my opinion only) 90% BS. It is up to me to determine what 10% to use to help our IT dept improve our service level. I do think that ITIL offers some good direction, that used with common sense, can help us get the job done. Side note - I am fervently against outsourcing in most cases, particularly with regard to IT Operations. And don't even mention the idiot who tries to get everyone stirred up every couple of years by saying "IT Doesn't Matter", etc. He is in the business of getting his name in the mags. Stop being so crotchity, and loosen up, will ya? (By the way, I am not one of those 26 yr old wonderkids. 52) Thanks for listening

wb4alm
wb4alm

Centralization does not mean "all of the eggs in one basket" and that you can only have "ONE basket". Centralized support does mean that somebody should be worried on concerned about the possible failure of hardware/sofware and that "Disaster Recovery Plans" should have been planned for. With Centralized physical hardware, it might be a little easier to buy a spare server for use "just in case" and to share that cost across mutiple systems. But you still have to have a plan of who has more priority when multiple failures occur. And the procedures to implemet that plan have to be written so that ANYBODY (including an outside service) or the junior programmer in podunk can assist in the implementation. But DRP (Disaster Recovery and Planning) is a whole 'nuther topic - and almost impossible to do unless there is centralized support (or control)...

wb4alm
wb4alm

Compromize is the issue here. The folks providing support have to understand that "One size does NOT fit all". But maybe most problems can be solved with a choice of, say, 5 different sizes. That's the approach we used. There were some standard "software loads" on desktops and a number of optional or alternative packages that could be chosen. Some departments were all the same, and in other departments the machines were customized to meet the needs of the person occuping that desk. (One of the software choices was "local support only".) Centralized support supported the "4 normal choices" and only provided general assistance to the "local support choice". Physical local desktop hardware support was outsourced at some locations, and the vender(s) were required to reload (when necessary)with an prebuilt (read "Authorized") supported software load. "unsupported" software could be loaded onto certain machines on a machine by machine basis, but the software had to be identified in the support database first. (No software allowed on machines without being listed in the database first.) Random checks were automatically made against machines to enforce this restriction. It wasn't a perfect solution, but it did work. It just took a little longer to fix some problems when that machine contained unsupported software...

dallas_dc
dallas_dc

Security can be enhanced through centralization in many ways, but I won't get into them all. However, take this example - Company has 6 locations with IT security at each location. They have Internet access from each location and WAN connectivity between each (either VPN or private network, it doesn't matter). How does each location demonstrate that they are secure? Could they possibly know? Of course not.

riotsquirrl
riotsquirrl

I've worked in a number of environments, especially on government contracts, in which departments within organizations had special security needs, often ones they felt weren't adequately recognized by the larger organization. It does tend to make the staff in the higher-security sub-entity, hmmmm, as William Conrad used to say in the opening of the old radio "Gunsmoke," "watchful, and little . . . lonely." ;-) Anyway, having usually been on the side of the centralized IT department, I know it's a really bad idea to allow an office to operate like a fully independent organization within another organization and not keep it tied into the larger working environment. That's because there's almost always some overlap between the larger organization and the sub-entity's applications, the data they're required to access, etc. The office with special requirements needs to be following as much as possible to the standards and procedures of the larger organization or everyone's going to be in for a rude awakening when their environments diverge so much that access to some shared program or data is impaired -- and you better hope in a way that's fixable. And the central IT department needs to be cognizant and respectful of the higher-security department's needs when it plans changes to the network, applications, etc. Myself, I think Jared Diamond's observations about centralization and governments in "Guns, Germs, and Steel" probably also apply to IT. Too much, and the effect is stifling; too little, and efficiency and collaboration go by the wayside. It takes a certain amount of discipline to keep semi-autonomous IT groups working together, and it especially requires that management make sure that connections stay intact during organizational changes, but the alternative is a bureaucratic computing quagmire that folks sink into up to their armpits every time they have to touch it.

wb4alm
wb4alm

Good questions. I have provided "some" answers after each of your qustions. Q1: In what way does centralization improve security? A1: Physical security can be more easily enforced. I have seen many cases of "rebooting" local servers to get console access to be able to access "confidential" information. Software security systems can be implemented/improved/enforced when there are no "get around" mechanisms. Q2: The fundamental principles of information security are confidentiality, integrity, and availability. A2: absolutely. But who enforces these issues? and Who watches the watchers? Q3: How is my information made more confidential by placing it in the hands of a centralized IT structure without the need to know? A3: A competent centeralized structure will have implemented a "need to know" mechanism, and will enforce this in their own organization as well as requiring that users of the data follow the same rules. Some of the compaines that I have worked with established "data ownership" on a "file by file" basis and the owner of the data has to signoff on allowing additional accesses. The "security" team is responsible for insuring that the security mechanisms are in place, working, and administered correctly. Yes there has to be "unrestricted" access at some level to handle emergencies - I was one of several with that authority, and damn near everything I did was automatically Logged. Remember you do not have to PREVENT every access for every piece of data, but you should be able to track who did what, and when and why. Q4: How is the information more available if I have to jump through hoops to get access for my team members who do need to know. A4: Compentency issue again. It might take a day or two to get a new hire fully authorized, and that can be in place before they show up on the job, if necessary. New requests for "new files/processes" were generally handled in an hour or so. "Level of Service" agreements for most areas were 2 to 4 hours. New applications were require to include security planing as part of the implementation process. Q5: How does the information have more integrity if the people in charge of it are not subject matter experts like my team, and have not the judgement to supply corrections to the data? A5: NOTHING SHOULD BE INSTALLED OR MODIFIED WITHOUT "Change Record" APPROVAL. Properly implemented, change record approval processes has representation from all departments. Likewise the "Data Owner" should have security procedures in place to allow their staff the authority to fix/correct the data with appropiate audit trails. Applications should NEVER be designed that require ROOT authority to function, so Application support people should NEVER require ROOT authority to fix the application. And yes, that last statement is hard to implement, but easy to control in a "centralized" environment. - - - Centralized development: Yes. Centralized control over the hardware: Yes. Centralized installation of the hardware: where possible, but decentralized deployment of servers should be done where necessary - and physical access should be restricted and tightly controlled. Easy to do? Sometimes. Sometimes not. Depends on the overall management of the company and their desire to do it "right".

john.jelks
john.jelks

Excuse me, but that paragraph sounded like it was right out of a Dilbert management meeting (Wally's buzzword bingo, to be specific). JJelks

ben
ben

"Any director given this business case "Centralize and save money, service times will be longer" would be an idiot to say no. " Quite the contrary, assuming your "director" is concerned with the entire company?s profitability. All the points you make are valid, and are exactly what one would consider. I would ask you, show me how longer service times affect our business. Sometimes the BoD will deal with near term issues and accept the farther out costs. That's the reality in our share-price driven economy. In deed, in some cases it may be required to survive (but not thrive). But many times the case is just not presented well, and the true cost not made clear. What we often see are concrete $/month cost comparisons on one side, and vague, unsupported (note I did not say "unsupportable") statements which seem like "comfort factors" on the other. In fact, usually BOTH sides claim their approach provides greater efficiency. Offer numbers against vague emotional claims and which do you think is more compelling? I totally agree that the "good of the many" argument should be an immediate red alert, as it usually signals a logical argument based on a flawed premise. However, the "good of the entire business" is the foundation of good business decisions - just like good technical decisions consider the entire system being designed.

jasonhiner
jasonhiner

I'm also going to talk about some hybrid models over the next few weeks. The ultimate questions are what to centralize and what not to centralize and how to manage and administer the two different approaches.

mrprugh
mrprugh

We have recently centralized a bunch of our servers to HQ and our mgmt is trying to do this with the remaining file shares. My site is not at HQ and we are going to spend way more on bandwidth and acceleration devices than we ever have on servers and personnel. Our main server support personnel are at HQ but work with the local PC support group to maintain those (mostly via RDP.) The performance opening files over a shared OC3 connection shared by 600 users vs a switched GB network is PITIFUL. This cost of productivity cannot be easily mesaured. The perceived savings of centralized servers also does not take into account the cost to the business of a WAN connection going down. 600 users sitting at their desks who cannot work costs about $15,000 per hour. Users will be thinking about how easy life would be if all their data was on their C: drive ... until it crashes - seen that twice in the last 6 months.

dlporter
dlporter

This is the best method. You can still have a cohesive decentralized IT team. It may take a little more effort to keep the lines of communication open between the units, but it can be done. One of the best ways is to institute a rotation so that one Technician is never in the same place to long.

ksady
ksady

The decentralized labor environment is what falls into disfunctional on the level of communication, knowledge sharing, and effectiveness. Cost or additional cost, I should say is the result. Hardware envirnoments by nature should be centralized that's just common sense. In practice however I think the only place centralized IT workforce is accomplished successfully is in a PMO. Without that level of accountabilitiy IT management can't seem to achieve centralization. That's why it works so well.

onzemeelbox
onzemeelbox

I totally agree with you. Centralize what you can without ignoring the need for decentralization in the rest of the organization. As specially software that aides central control over the amount of decentralization of powers can be very useful. As long as the production level, especially clients and suppliers, keep a say in the kind of decentralization that is needed to keep the organization working at its optimum. And as long as it can also totally decentralize certain powers when needed.

willjurgens
willjurgens

I am a "Small Business" owner in a manufacturing & distribution environment (not computing), ex consultant, ex Sytems Engineer and ex Systems Engineering manager (all in IT and computing). The reason for the title to this post is that I believe that these are factors to consider when developing your IT structures to fit the business you are servicing. Not the reason for doing whatever it is you chose to do. Thats why there is so much debate and conflict over the matter. The size of the business, the operating philosophies of the the business and the operational needs of the business will determine your structure. External environmental factors (such as people availability) etc. will also influence decisions on what to centralise or decentralise. Given the above and a sufficient size of the business I suspect that the optimal final outcome will almost always be a blend of both centralised and decentralised. Perhaps the only fixed centralised function in all businesses will be policy development for IT operations, hardware, software tools, consultative processes for application software acquisition (both ways), "connection ware", etc. Acquisition of resources would benefit from centralisation so could be added (the power of the combined purchasing.) Servicing the needs of central management would also by definition need to be centralised. The rest is, as they say, negotiable. This is my opinion for what it is worth.

dallas_dc
dallas_dc

As demonstrated by the responses, there is no single way that will work for everyone, nor should there be. In some companies, a centralized IT dept works well, and provides efficiency with high levels of service. For others, the culture, or the structure of the business, or any number of other reasons, a decentralized environment works better. Many of the posts reflect very personal emotions surounding their past or current experiences. Many of the posts are very specific to their own experiences, and do not reflect the perspective of the original post. And that is (I think), if you have a corporate IT department, with a business that is in multiple locations, and perhaps countries, is it generally a good idea to centralize the IT dept? The premise is that in most companies as described above(and it may be only 51%), it is more efficient to centralize your dept. The question is, does he have the top five reasons correct? I think he does. However, I would reverse the order of priority, with cost savings being #5,and avoiding duplication of effort being #1. With ITIL or ITSM being more important for most corporate IT depts these days, #3 is a very important factor, as well. Thanks for listening.

david.shane
david.shane

History is filled with examples of how centralization destroyed cultures. Corporations are bound to the same natural social laws that the rest of civilization is. Overly efficient governments fail utterly, and so will overly efficient organizations. History shows that efficency destroys personal initiative. If the purpose of your IT department is to provide service and you centralize with that in mind then you might be OK. But usually folks get the idea in their head that once they get all these people moving in one direction, they can now prove something to themselves and the world. The support staff understands their customer's needs better than the CIO. If the organization is large enough the customer population will be very diverse. The support staff needs to be able to exercise initiative. While centralization may save the IT department some money, this can cause the rest of the orginazation no small amount of productivity. And most organizations have no way to measure the loss of productivity caused by IT taking control. When this happens the support staff becomes temporary, while they spend their spare time looking for another job.

Tony Hopkinson
Tony Hopkinson

The last winner of the board room game of musical chairs, decentralised.....

Fyrewerx
Fyrewerx

Centralization is the worst move Siemens ever made. Technicians in other sectors have no clue about what the various operating companies (over 50 diverse companies in the U.S.) need, or how they operate. Response times have slowed between 50 and 2000%, and costs have risen fourfold. Shear stupidity.

Lordan
Lordan

Each company needs to look at the issue of centalization from the standpoint of how will it work for them. Centralization for one company makes a lot of sense, but does not for a different company. Many considerations; WAN availability, space, how to ship hardware from central site to satelite sites, how to provide support to satelite offices, etc, etc. Important to keep in mind that the decision that may be most supported by the IT dept., may not be the best for the business in general. I personaly like centralization from the simple fact that it creates a better atmosphere for communication for the members of the IT staff.

tnpich
tnpich

Reducing worker duplication is a factor, however this does not necessarily translate into fewer workers. I have seen a couple of server centralization/consolidation projects. And in most cases there was not a great reduction in staff. What did occur was that Joe the developer who also took care of the application servers had to decide if he's a developer or a server tech. He'd be transfered to the appropriate department. This also addresses security/audit concerns. Duplication may be reduced for some people, like those who take care of backups, etc. But if you have a reasonable resource utilization model you know you can't always cut staff.

onzemeelbox
onzemeelbox

Yes, but that is often the wrong reason to do it. Cutting cost of a department is stupid when its total effect is higher cost or less effectiveness in the rest of the organization and thus less effectiveness of the IT department. However, good thought trough centralization can have a positive cost effect on the rest of the organization. But than it should never ignore the needs for decentralization at the production level of the company.

ksady
ksady

In order for centralization to be effective you need management with talent, you need leadership and you need centralized direction. Once you have that centralization is the smartest and most cost effective way to go. I don't need 24 year old gurus to provide my customers what they need, I need a team. Like the commercail says you don't need a nip and a tuck you need a plan. kc not 20 - 50 seen it work better than anything you call decentralized today.

Jaqui
Jaqui

since my comment has drawn so much attention it would be silly not to ;)

bigbigboss
bigbigboss

Why didn't they put some servers at locations with large demand, and administer them remotely ? Did they do a thorough study about traffic patterns and demand ? They may have to do studies about file replications too.

WiseITOne
WiseITOne

Yup, we currently have a RiverbB@D WAN Accelerator that is SUPPOSED to speed up traffic and let us transfer files and such from our office in Houston to our office in Norway. It is not working very well. Any ideas would be great. We are finally getting a file server here with backup. It is well worth the small amount of money to increase response times. I agree with the previous poster, centralized servers is not the best way to go. Keep stuff local as well and you won't have lag and access issues.

gaitrosd
gaitrosd

I would agree that a centralized IT support staff can, in many cases, produce the same results of a decentralized staff but it requires that the staff be organized and managed better and that they take advantage of modern tools that are available to do much of the work remotely. This is tough to accomplish. If you don't have someone in your organization that's capable of organizing and manager a centralized support staff..don't do it.

dfolwell
dfolwell

Centralizing is only one part of the puzzle. Data types/applications and how they function over the WAN plays an important role. Even more important is the end-users perception of performance. WAN optimization products play a very important role when it comes to centralizing your IT environment. Latency can cause problems with applications. If you have a high return trip time, it doesn't matter how large your pipe is, your application will be slow. Windows application are very "chatty". By removing the "chattiness" and referencing common data, the end user will experience an environment the feels like it is local. The ROI for optimization products will pay for itself in short order. Great for the Bean counters.

Jaqui
Jaqui

WAN issues are very different than lan issues for data transfer. with a wan, the centralization cannot be as complete as my original post suggested, without seriously slowing down productivity. I would never suggest to put file / folder shared into a central server only in a wan, but have it replicated both ways keeping files in sync. keep a "master" copy of everything on the central office servers, and have local copies that update to it at days end, or more frequently if needed. that way the centralization benefit for them is there, without that huge reduction in effectiveness on the staff in the remote offices. [ much like database replication for enterprise use, one master with multiple slaves that handle the majority of calls to it. ]

bigbigboss
bigbigboss

One problem with most centralized IT organization is that it is very difficult to decide where to invest. Funding is always in shortage in a centralized servicing organization, whether is is for IT services, mail room, office space provision and management, legal services, transportation, etc. IT is more difficult than others because it typically combines a utility service (servers, network vs mail room, office space, logistics), a consulting (IT advices, software development, etc. vs legal services), standards development and control (IT standards vs legal, record management, media management, HR). Total cost recovery ensures that those using the service will pay for, and therefore justify through normal budgeting process, the expenses. Those requiring special considerations can have a channel to obtain the required service through paying for the additional cost. People can op out of a service if it is not required. However, business units must be allowed to find alternate source of service at lower cost. This ensure that the internal service providers are cost competitive, and also makes outsourcing a very gradual tried and true cost saving. In short, when centralized, run it like an outsourcer for internal business units. It's even better if you can have your internal IT service unit compete with external IT service unit for business outside your own operation.

giff
giff

IT has to acknowledge that they are not a cost center but a service provider (albeit one generally with a monopoly). If customer service (e. g. user productivity) suffers as a result of IT's cost savings, where is the benefit?

martyn.watts
martyn.watts

Whilst I agree that is often a poor reason, in these days of tightening margins and shrinking financial resources, it's often the accountants who have a greater influence on direction than heads of IT depts. As for the knock-on effects, well everyone else has had their budgets cut as well, so no one that matters (in the financial sense) notices. They just see the overall reduction that they wanted. Inconvenience, down time, etc etc, are just unfortunate by-products.

mike_patburgess
mike_patburgess

You hit the nail right on the head. I have do doubt that there is a genuine need to have compliance tools in place to control the out of control senior management in today's society. This is something drastically wrong with a society that thinks that it is ok to pay off a fired CEO $25 million when the worker in the same company who is let go because of downsizing (ok yeah another new word; righsizing), only gets a token amount of money. We need change in how we conduct our business and our business affairs, and a rack full of legacy books ITSM (ITIL), are not going to help us. Oh yeah old guy who responded to my earlier post, you're still young by my standards. Enjoy the koolaid while you can... you never know...

Tony Hopkinson
Tony Hopkinson

After the next round of musical chairs, some new broom will come in and want to put his mark on the business. He'll look at the complaints abut one size fit's all, too much paper work, no oocal knowledge and lack of responsiveness and he'll recomend. Decentralisation..... Then there will be a thread on TR, something like "5 Reasons to Decentralise". I've been through five swings of the pendulum up to press, basically it's all bollocks.

WiseITOne
WiseITOne

I just started here so I am not sure what they did to decide the WAN accelerator was the best idea. I am going to be putting in the new setup with file server and replication. It won't be any spanned applications, mostly storage with the apps run locally. I think there is something wrong with our steelhead though b/c the folks in India can xfer 10GB files no problem, mine always drop. Got alot of RCU traffic and the HD says its at 100%. I told the folks in corporate so they might be able to see what is going on when we try to access the domain.

dallas_dc
dallas_dc

It is easy to have file servers at remote sites, but if you have an application where the data is shared across the enterprise, and everyone must see live data, you almost have to have the server and data at a central location. There are as many answers to this question as there are companies.

F4A6Pilot
F4A6Pilot

Once again you seem to forget that IT should be looked at as business. If the IT dept has bad connectivity they get hammered at performance evaluation time. Weather they are running the latest CISCO 6509 or old BAY networks under Banyan Vines. The management is always looking for scapegoats, not solutions. Unless they can find their solution by replacing Higher paid US employees with lower cost H1Bs It seems that the management doesn't care that many of the imported people can not understand English well enough to do the job...

bigbigboss
bigbigboss

If the corporation requires WAN to function, WAN's main function is to support business operation, not just IT administration. If it is needed for IT service delivery, you will need that whether these services are centrally provided, or distributed. So, you will need WAN optimization anyway. However, WAN optimization is better run centralized.

Tony Hopkinson
Tony Hopkinson

You've obviously bought into this idea of IT as a service to business in a big and very wrong way. IT isn't a server or a cable, or a piece of software, it's people. What if your business unit chooses a more expensive, but more responsive local provider, instead of the central thing that costs you so much. What if you stop them doing that. What if your IT service can make more money providing for buinesses other than your own. What does it do to satellite unit's investments plans when by treating internal IT as external their costs's treble? Most of all now you've just labelled me as a replaceable part with a limited value to the overall business, why would I stay. What do I get out of adding value to the business that I'm servicing? The only way to manage that is for me to shift my 'loyalty' to the service business, that means I'm going to make a profit out of you. If that doesn't happen and I leave, what goes with me. I'm not going for the indispensible malarky, but an experienced internal IT person with some longevity in the business is way more than their skills. If you consider IT as an overhead of doing business, instead of a way of adding value to the business, you will get what you wished for.......

F4A6Pilot
F4A6Pilot

It always seems like internal will be more expensive until you factor in Scope creep. If there is never scope creep the internal will normally be slightly more informed of the environment. They will cost things accordingly, and much more accurately. The external wants business and anything outside the assumptions will cost ++. Gues what? It always costs more than the internal estimates and usually doesn't work as well as if locally implemented. And then, Can you guess who gets to maintain the POS system and make it work... I have seen outsourcing and insourcing across the last 30 years. Management usually is Goofus MacDuff. They get all the info, and make the exact wrong decision. Mr. Bigbig, I take it you are upper management, and screw up accordingly.

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