CIO’s can help streamline processes, improve responsiveness and help to reduce costs during these trying economic times?
If your IT organization is distributed and not centralized, then revisit your strategy. If you do not offer a common set of shareable services then revisit your strategy. If you are global and fully centralized then you also need to revisit your strategy. In short if you still have a monolithic IT organization built around a mainframe and/or a set of giant UNIX boxes serving the entire organization spread nationally or globally then you also need to revisit your strategy.
Centralization is back in vogue as it was in the immediate aftermath of the skyrocketing gas prices of the 1970s. The 80s and the beginning of the 90s gave rise to the distributed computing environments. And as Erik Berkman wrote here in CIO in 2001, that during the 80s and the 90s, “IT departments also became distributed, with IT employees organized to support specific business units at different geographic locations”.
Yes, centralization may still connote and conjure up batch processing of the mainframe world, but fortunately for you and me times have evolved whereby we have the Web, SOA, ASP, on-demand services, etc … in essence the times have changed in the way we conduct business and process transactions but the way we organize our selves and our teams have to be kept fluid, flexible and dynamic.
To-date our IT teams may be organized in such a way whereby they support a specific business function, a business process (encompassing multiple functions), a specific project or even the entire enterprise.
Again I bring up Erik Berkman’s excellent article …
Companies are centralizing now because it is more cost-effective than having a distributed environment; it allows them to create consistent technology standards across the enterprise; and it cuts down on "reinventions of the wheel" that occur when separate business units devise identical solutions to the same problems.
But doing it and doing it right are two different things. Centralization can be a disaster if CIOs don’t address cultural issues and if they don’t have processes in place to determine funding and staffing priorities across business units.
In order to reduce costs and not just for cost reduction but also for increasing efficiencies, the CIO’s of small to medium sized organizations and especially the non-profit organizations must organize their staff by business process, potentially spanning multiple business functions or lines, or by region if globally dispersed, and also in specific instances spanning the entire enterprise.
Granted some specific IT functions must remain distributed and closer to the business line, for example the break-fix work of PC’s, printers, etc and local LAN Admin type of work.
Such reorganization can offer positive advantages beyond just cost reductions, it improves team morale, staff retention, improves project performance and responsiveness, and also offers closer alignment and greater flexibility to understanding local business needs.
In essence one needs to have a not a rigid centralized model, but a flexible “centralized” model whereby some functions can be centralized to either a greater or lesser degree based on one’s span of presence geographically.
For example, we are geographically spread globally, but not within the
Such reorganizations are fraught with challenges both political and cultural, and are not easy to implement. The saving grace in the CIO’s favour is the external economic environment. I would strongly recommend that you leverage this to work in close alignment with the CFO, to nurture and generate an awareness of how such an reorganization can help the organization to streamline processes, improve responsiveness, and with cost reductions.
Pls note that there is no one answer, but that this is an answer. However inaction is not a response that will endear you to the CFO, so do not wait, jump to help bring about effective change to your organization.
Life is full of challenges, it is how one handles and confronts these challenges that either makes us or breaks us.
One further point ...
ReplyDeleteAlong with centralization efforts as stated, one must also consolidate and centralize IT infrastructure, i.e. data centers from many to closer to one, or if having global operations, and data centers in each country to having data centers to one per region, and either one for disaster recovery on a global basis or on a per regional basis.
For non-profit organization like ours, centralizing data centers to one per region allows us to staff IT expertise in one place in the region versus having to look for IT expertise in each of the countries where one operates, and the latter can be this can be a huge challenge given the dearth of IT expertise in the poor countries, and it reduces staffing costs and retention issues.