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Centralizing IT

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I am in a division with about 3 major departments. The
executive director of these departments has proposed a re-org
with centralization of IT being a major component of this. Has
anyone here gone through this? What are some good resources
(books, websites, etc) on implementing this as best as possible?
What are your opinions of centralized vs decentralized IT?

Topic

Reorg ….BAD

In reply to Centralizing IT

Basically ,they are looking to fire people and cut costs.
I have been around quite a few and it ain’t pretty.

What he said

In reply to Reorg ….BAD

Reorgs are almost always to try to justify the position of the one doing the reorg, by “eliminating job duplication”. The problem is, the way you have it set up now is probably working fine. I’d bet money that there was no investigation on the part of the manager to see if there really was bloat in the organization.

For example, we had a great setup at HP with the calculator development team sitting just across the aisle from the calculator support team. We had great interaction and quick feedback from customers to the actual engineers. It was one of the best environments I’ve ever been in. Of course that couldn’t go unpunished.

The cuts came as the dot-com bubbles were popping all over the country. The engineering went to Singapore. Support stayed for a while as we learned that the Chinese don’t like to be questioned by underlings, since it implies they didn’t do their job and inform you ahead of time. Manuals were printed on paper so thin you could see through 4 pages. But it allegedly saved money. Eventually support went away also. No one knows how many millions were spent to move operations and outsource, but it allegedly saved money. We lost the top engineers to other companies, but it must have been worth it. We produced absurd interim products that didn’t work. Our customer base dumped us for TI, but dammit we saved money.

Have seen it both ways…

In reply to Centralizing IT

I’ve previously been at a mid-sized employer that decided to go ahead and bring in all the IS/IT functions into one umberlla. I am currently at a large-sized employer that still has different functions underneath relatively autonomous silos.

From being in both situations, I can tell you that whether or not centralizing IT is a positive move really depends on why it is being done. Is it the precursor to ‘right-sizing’ IT (hey, Bob and Joe both do the same job…why not let go Joe, and save some coin)? Is it to leverage better vendor deals and standardize the company’s infrastructure? Or, is it just some guy’s way to make himself look more important on the org chart by having more people underneath his little box?

At my previous employer, they had good reason/intent in centralizing It, and it really did help the firm. Here, they have good reasons not to integrate, and things are working out very well.

So, in short, I’d say it isn’t so much the setup that is important, but the motive and thought behind the setup that really counts.

If you guys do decide to re-org, hope it goes well for you!

You’re so right

In reply to Have seen it both ways…

I have been involved in several reorg’s, they really do fail or succeed based on;
1. People, you need to see it from both sides of the table
2. The motive and benefits to be achieved fully expressed to the organisation
3. Pace of change, tempo makes a difference, if it is a stop/start without clear planning it just frustrates and limits buy-in and commitment
4. Communication, fear can hinder many a good reorg, it is crucial to let everyone know, why, when and how

In my experience

In reply to Centralizing IT

the motives behind this are cost based, not quality. There can be improvements, but thaye are almost an accident, and there will be as many inefficiencies created as efficiencies.
Last firm I worked for that did this centralized, streamlined and then outsourced the entire thing. While this may have had some benefits, one thing that was very noticeable was the rise of DIY IT, a proliferation of internal data islands maintained by super users in order to save ‘paying’ the centralized IT function to do it properly.
In theory centralized IT should be more efficient and de-centralized more reactive, as far as I can see the net gain on a business level is zero minus the cost of switching, whichever way you go.

To centralise or not to centralise……. ?

In reply to Centralizing IT

Consolidation & centralisation are current trends coupled primarily to cost savings, fact. When negotiating centralisation with the 3 divisions make sure that the process is structured in such as way that they are clear and comfortable with what they should let go of and why. Gartner has some guidelines to assist with structuring the decision process. ?Consolidating IT: How to Score the Benefits and Barriers?
Losing focus is not the idea; duplicating infrastructure however is expensive, particularly in a company with no guiding standards or architecture.
Ensure that the division targeted to handle centralised IT is properly staffed, skilled and has the required tools and defined metrics to provide a measured and managed service. Lastly make sure the ?English and Money? add up, that there is indeed a return on investment.

Centralize IT resources and Geographyically distrubute the IS

In reply to Centralizing IT

Centralize on your IT applications and all other functional aspects to draw the maximum (make highly available env.) out of all the available resources. (Looks like Sun is doing a great Job in this regard by providing $100 per employee kind of approach.) – Sun could be one place to look for along with the hard & soft resources.

And distribute the infrastructure geographically so that your DR plan will be in place.

-Usuf

Good and Bad

In reply to Centralize IT resources and Geographyically distrubute the IS

I have seen it done very poorly and it took years to kind of make it right – I left long before it got nearly right, so did a lot of other good people. HOWEVER, as was mentioned earlier, Sun did a great job at this. Look at http://www.harriskern.com – There are lots of books written by him and others to do just what they did. Harris Kern and Randy Johnson were the architects of that process. They did it right and I have learned lots of lessons from those books.

The other major issue is who is at the top of the reorganization. In the failed one that I went through the new “leader” did not want to be there but did not want to job hunt. So he took the job. Needless to say There was no help there when the problems developed. Leadership at the top is a big factor in whether or not it will succeed in the long term.

My opinions of Centralized vs Decentralized IT?

In reply to Centralizing IT

Actually, Centralization is better apply in any IT environment as this allow maximization of both computer and human resources. Apart from the above, security-wise it allow good and proper monitoring of users of the system, it also reduces wastages of reources while in operations.Further more, users in this environment will have no alternative than to be computer literate. while in a distributed environment, too much of resources human-wise and other-wise will be involved. Although we should not forget that in any centralized IT environment, it also involved an element of distributed processing.

Centralized vs De-centralized

In reply to My opinions of Centralized vs Decentralized IT?

I worked at one place (very large) for 19 years, I left when they centralizing for the third time.

They hadn’t officially de-centralized, what had happened is either they’d acquired other units with their own IT function, or units had created their own IT function to combat the biggest problem with centralized IT.

Centralized IT’s justification is cost reduction, in order to achieve this without a serious impact on the service, it gets micro-managed. This makes it very slow to react to business needs.

So evey five years or so, centralized IT reels in the distriubuted functionality, absorbing duplication and providing some extra services that the business now requires.

Centralizing means average results

In reply to Centralizing IT

If you have a large number of semi-independent IT organizations, you also have different levels of performance.

If you centralize, networks or IT, you get an average result. Those user groups who had nothing or poor IT will be happy – they had nothing before,now they have something. Those users who had great IT will now have worse IT, perhaps no longer responsive to them, but to some central management.

So, if you have below average results, go ahead and centralize. If you currently have good or great IT, anything you do will make it worse.

Reply To: Centralizing IT

In reply to Centralizing IT

Been through few times. The results of centralized reorg depends on how well the process has been executed to address people and process issues. Key to success is planning, execution and mode of communication.

As per pure number stand point centralization always gives costs less compared to decintralized IT. However IT is a services org, always numbers does not add up. It depends on the strength of your business case.

nihar

More to the point

In reply to Reply To: Centralizing IT

I think that ‘Nihar’ is closest to the truth. When centralizing is done with an objective business case you can see improvement and results. Trouble is, many organizations build in a ‘rating’ behind the number of things you can centralize, rather than studying and looking for ROI. IT was set up as a ‘service’ first. In today’s world this concept should not be lost as a factor in your decision making. Look at the president’s management agenda and you’ll see examples of ‘good’ centralization mixed with ‘thoughtless’ centralization.

CIO Article

In reply to Reply To: Centralizing IT

Read the article in CIO magazine about the new CIO of Dana Corporation. He makes a good case for the need to centralize the IT department. Keep in mind that because it worked for one company, it doesn’t mean it will work for yours. There are a lot of issues to be addressed before a case for centralization is made, such as corporate culture, management styles, etc.

Different idea of Centralization.

In reply to Centralizing IT

I don?t necessarily see Centralization of IT as, gathering all the IT or IS functions onto one floor or one building. IT is the centralization of IT management.

What does that mean? I see centralization as a person or group that set standards, co-ordinate activity, and basically make the decisions for how IT is used with in the organization.

It may be the management style I am used to but it is important for the people doing the work to have access to the users and the operations they are maintaining. If you dont know the process how well can you resolve the issue.

With the centralized management decisions you have a knowledgebase, and common decisions being made. This is where you get the majority of the cost saving. Plus the ability to connect resources as needed.

That is my vision of centralization, central group managing and dispersed integrated individuals or groups that work with the departments, developing the relationships and the operational knowledge.

The central office becoming the collective mind taking information from the different areas and developing strategies that benefit everyone.

Idealist or what…

But as for resources I would look at
http://www.dcc.buffalo.edu/about/history/gartner.html to start.

Hope it helps

Centralizing IT

In reply to Centralizing IT

This is exactly the reason why we at Basilica Software Corporation have developed a centralized, single-platform, web-based IT management solution designed to centralize and organize the activities of the entire IT department whether its operation is centralized or located at various sites, and, therefore, save cost. We intend to help CIOs and IT executives so that they are always informed and in control at all times.

The system, called “CIOAdvisor”, facilitates asset inventory at all locations, incident and problem reporting, system change management, vendor and license management, time reporting, project tracking, audit report tracking and so on. All the activities performed by IT departments at all its locations are tracked and all information about its issues, problems, accomplishments and activities are consolidated. With one click of your mouse, you are graphically shown the workload of all your IT staff, how much money your company has spent on your IT assets and which vendors you have spent this money on, graphically show IT asset cost allocation by business units or locations. It does the same with incident reports, system changes, projects, etc.

Just by implementing it, your company automatically enforces industry best practices. The CIO is always aware at any one time of what’s happening and is always in control. That’s why we chose the slogan, “The CIO’s Best Friend”.

If you want more info, please visit us at http://www.basilicasoftware.com. Our focus is to help IT managers and IT executives help their companies save IT operational cost by being more organized and efficient.

Thanks.

Manny R. Masongsong
Chairman and CEO
Basilica Software Corporation
“The CIO’s Best Friend”
Scottsdale Square Business Centre
7164-120th Street
Surrey, BC CANADA V3W 3M8
Website: http://www.basilicasoftware.com
Telephone: 604.592-8338
Mobile Phone: 778.838.3777

And less responsive

In reply to Centralizing IT

and with a higher beaurocracy burden
and less rewarding
and agreed, very easy to justify to bean counters.

Centralized is Better – & Worse

In reply to Centralizing IT

Like all IT projects, there is a good side and a bad side to centralizing. For our customers, the employees of our firm, the answer is resoundingly better. For the IT staff in the field, the answer is a loss of higher end support functions.

We have been centralizing IT over the last 4 years, and the result is better up time, a much higher unified standard of service to our customers, and very quick updating.

We first implemented a centralized Help Desk, which forced each regional office to adopt firmwide standards for support. At that time, we were running at about 60 customers per IT tech in the field. Then we moved our mail servers are all in the corporate data center, and we also have Corporate control of all the Domain Controllers. We have very sound national WAN contracts, as well as direct purchase agreements with the major vendors. We are now supporting 100 customers per field IT tech.

Regional offices hold over 90% of all staff, and the field techs used to manage the e-mail servers, domain controllers, and do their own SMS pushes. Sadly, the field tech role has diminished due to centralization, and techs eager to grow their tech skills have no place outside of corporate to expand that knowledge.

But the service results far outweigh the negatives. It has forced us to work diligently with the field IT techs on their career goals, and assist them in migrating to other departments if they are technically driven.

All in all, a very successful migration, thanks to careful planning, budgeting, and lots of communication from our Corporate IT group.

Get the reasons right

In reply to Centralizing IT

Essentially all IT departments go through a cyclic process of centralisation and decentralisation. The usual suspects for such re-orgs are cost or streamlining processes. If you take a company which is geographically dispersed with multiple IT departments to server those locations you will ultimately end up with a level of duplication and worse still incompatible systems.

If you are to centralise IT then I suggest that you do it for the right reasons and these reasons need to be visible and obtain buy in form everyone. A good starting point is to look at their ITIL framework and see how you organisation stacks up against its best practices. If you can improve what you do in the process of reorganising then this can only be a good thing.

I have organised and completed many such reorganisations and each one has delivered a better service to the organisation.

[Author]

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