review post 1
Read the “To centralize or not to centralize?” article (Links to an external site.). A centralized IT shared services organization can add value, but a decentralized IT organization can be integrated into business units to better serve their unique needs. Argue either for or against a centralized, shared services organization. Then, respond to at least one student who took the opposite point of view, and one who took the same point of view as yours.
now choose anyone from two post below
1. I am in favor of a centralized, shared services organization.â€œCentralizedâ€ and â€œdecentralizedâ€ are two ends of a spectrum, and most organizations are somewhere in the middle. Originally, all communications networks were centralized. Centralized IT structures typically offer larger cost-savingsâ€”especially for larger organizations. Centralization makes it possible for entire organizations to act in unison. All departments can migrate to new and cheaper technologies and can negotiate contracts with more leverage. One good example of this benefit in action: federal agencies have saved $52.5 million federal agencies to date by centralizing IT with cloud services.Centralized IT organizational structures offer better IT and data security. Such structures allow users to maintain better control and oversight over the data on the organizationâ€™s servers, computers and networks. Organizations and agencies in the healthcare and financial services sectors commonly use centralized IT for these reasons.A centralized IT organization can:
- Lower hardware expenses. Most companies can reduce hardware costs when their servers and other networking equipment are in one location. When distributed across several locations, extra or duplicate equipment is often needed. In other words: Increasing redundancy also increases costs.
- Improve productivity for IT staff. A centralized structure gives IT staff better oversight and can make routine tasks easier. For example, new software installations, updates and security patches can all be addressed from one location. In companies with decentralized IT structures, completing these types of tasks may require staff to manage each separate location, which can drive up costs and decrease productivity.
- Increase purchasing power. Negotiating software licenses and support contracts for an entire company gives the purchaser more power than buying for each department individually. This can lead to better contract terms and can offer additional integrations or support services.
- Help meet industry regulations. Industry-specific regulations, such as HIPAA for healthcare providers and the Sarbanes-Oxley Act for financial services, require varying degrees of IT and database centralization (usually for data-security reasons). Companies that store and process credit card information also tend to find it easier to meet legal requirements for data security with centralized IT systems.
- Improve the flow of information. Decentralized IT structures often lead to information silos: collections of data and information that cannot be easily shared across departments. Centralized IT structures help prevent these silos, leading to better knowledge-sharing and cooperation between departments. For example, using one central, cloud-based CRM system makes it possible for any employee in a company to access customer information from anywhere.
ReferencesBorowski, C. (2016, January 20). Your IT Organizational Structure: To Centralize/Decentralize? Retrieved from
2. I currently work in an organization that has a decentralized management structure and this is the structure that is my personal preference. This type of structure allows daily operations and decision making responsibilities to occur and be handled by middle and lower level managers. Below is an example of a decentralized IT organizational structure. If you compare this illustration to the one that Sharon put in her post (she has a great argument for centralized), you can see the differences between the two.
Benefits of Decentralized IT Structures
Redundancy is just one of the many reasons to adopt a less centralized IT structure. Decentralization is a practical approach when each department within an organization has different IT needs and strategies. This allows each department to select the best software and hardware needs for their specialty. Within the hospital setting in which I work, each area required different IT resources, software, and hardware needs (Emergency Department, Radiology, Oncology, Womenâ€™s Health, Pharmacy, Nutritional Services, etc.).
Decentralized IT organizational structures, such as the one in this example, provide several benefits, including:
- The ability to tailor IT selection and configuration. When individual departments have IT decision-making power, they can choose and configure IT resources based on their own specific needs. Each department has its own server optimized to run its own software platforms. If these departments shared a centralized IT structure, theyâ€™d likely need to make some compromises.
- More fail-safes and organizational redundancy. Decentralizing makes telephone networks more resilientâ€”and it can do the same for IT networks, too. Following our example, if each department maintains its own server, one can function as the backup server in case another server fails.
- Respond faster to new IT trends. Since departments in decentralized organizations can make independent decisions, itâ€™s easier for them to take advantage of new technology.
An example of this would be the customer service department wanting to improve service with online live chat. In a decentralized model, it can do so independently. In a centralized model, thereâ€™d be many more barriers to purchase, beginning with getting buy-in from each department within the organization and from the IT department. A slow response to implementing emerging technology trends can be a competitive disadvantage and cause an organization to fail behind it competitors and thus failing in the long run.
Borowski, C. (2016, January 20). Your IT Organizational Structure: Should You Centralize or Decentralize? Retrieved from Software Advice: https://www.softwareadvice.com/resources/it-org-structure-centralize-vs-decentralize/ (Links to an external site.)
Campbell, A., Kunisch, S., & MÃ¼ller-Stewens, G. (2011, June). To centralize or not to centralize? Retrieved from McKinsey & Company: https://www.mckinsey.com/business-functions/organization/our-insights/to-centralize-or-not-to-centralize