For decades there has been an ongoing debate within IT as to whether or not something should be centralized or decentralized. And every few years the pendulum swings one way or another forcing people to constantly change how their organization works. So I’m here to settle the debate as to whether or not you should be centralized or decentralized.
The answer: both.
No, it’s not a cop-out, it’s reality. The idea that there is a definitive answer is a false idea. In a large organization, there are certain functions that should be centralized (ex. license acquisition, hardware acquisition) as they are more cost-effective for the organization. However, there are certain functions that should be done much closer to the business area that needs the service. Custom application development is best done close to the business.
So what about applications that all parts of an organization need? Those become services that the central IT area provides. Services. A separate ERP system for every different part of the organization? That makes no sense, so instead, it is a centralized service provided to all parts of the organization. It is these types of services that should be centralized.
However, it takes a special skill to centralize a service and make it work well. The CBC covered this recently:
Shared Services Canada (SSC) is a federal department created in 2011 to take over the delivery of email, data centres and network services for 43 government departments and agencies. But since its inception, those departments and agencies have complained of shoddy service.
The latest budget from the Liberal government in Ottawa allows ministries to not use SSC for certain services.
The reason for the changes, said department spokesperson Adam Blondin, is to “improve the timeliness and ease of service delivery to departments and agencies.”
Shared services can work and there are many examples where a shared service provides significant benefit to the organization. There are also just as many examples where someone tried to centralize/decentralize too much and the resultant effort has failed.
It takes skill to ensure that the right pieces are in the right part of the organization. It also requires an understanding that neither extreme is the correct answer. Hopping on the pendulum just because all of the other kids are doing it, is not the right solution.