{"id":81,"date":"2005-07-15T09:26:53","date_gmt":"2005-07-15T15:26:53","guid":{"rendered":"https:\/\/www.roughtype.com\/wp\/?p=81"},"modified":"2005-07-15T09:26:53","modified_gmt":"2005-07-15T15:26:53","slug":"the_centralizat","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=81","title":{"rendered":"Good governance"},"content":{"rendered":"<p>How much freedom should business-unit managers have in deciding which information systems to buy? It goes against my anti-bureaucratic grain, but I&#8217;m afraid my answer to that question is: Not much. The benefits of consolidating and standardizing a company&#8217;s IT assets have grown so great &#8211; and the penalties of incompatible systems so onerous &#8211; that most companies should be moving toward a centralized governance structure if they don&#8217;t already have one.<\/p>\n<p>Nevertheless, the central vs. decentral question is always a tough one to wrestle with. A good overview of the relative merits of different governance models is provided by Peter Weill, director of MIT&#8217;s <a href=\"http:\/\/mitsloan.mit.edu\/cisr\/r-main.php\">Center for Information Systems Research<\/a>, in <a href=\"http:\/\/mitsloan.mit.edu\/cisr\/pdf\/Weill-Ross%20-%20Effective%20IT%20Governance-final.pdf\">this brief research paper<\/a>. It reports on the results of a study of 300 companies, which found that the IT governance structures of top-performing firms vary widely depending on their corporate goals. Companies focused on profits exhibited greater centralization, those focused on innovation and sales growth were more decentralized, and those seeking to maximize asset utilization had hybrid models. The findings are summed up in the following chart from the report:<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/www.nicholasgcarr.com\/images\/MITchart.jpg?w=625\"\/><\/p>\n<p>The choice of a governance structure has, as the chart implies, always entailed painful tradeoffs. You couldn&#8217;t minimize costs, maximize asset utilization and spur innovation all at the same time. But I think those tradeoffs are becoming less severe. As IT infrastructure becomes more flexible, business units will increasingly be able to cede control over IT assets without sacrificing their freedom in applying those assets to their particular business challenges and processes. Standardization no longer means a loss of flexibility.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Decisions about centralizing or decentralizing IT management have always involved tough tradeoffs. Now, though, the tradeoffs are becoming less severe.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-81","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/81","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=81"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/81\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=81"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=81"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=81"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}