The benefits of minimizing the centralization of IT

One of the lesser known ideas and practices behind what has come to known as SOA was the physical organization of teams into service areas. The basic idea is that there shouldn’t be a centralized “IT-Department” that manages the systems they need, but every department should have their own dedicated IT that help them conduct their business as effective as possible.

At a first glimpse this seems like someone didn’t think this through. After all, why should the finance department handle it’s own IT? They should focus on finances! This is true, but digging past the first shallow glimpse there is actually really interesting benefits here, none of the technical in nature.

It’s all about understanding the core

Centralized IT-departments are often very good at performing their core-business; IT. But if IT isn’t the organizations core business there is a lot to be learned, there is a gap to be bridged and you really need dedicated IT-staff that understands exactly what your departments function is in the the whole. This often leads to IT-departments dividing into subgroups with staff specialized in servicing a separate department. The collective knowledge collected over years a group like this will often represent a full understanding of what the department actually does. This leads to shorter cycles, quicker feedback loops and more to-the-point implementations.

If you understand the finance department, it will be a lot quicker to understand new requirements. This is a first step into making IT part of the business and not only a cost of performing it. It also comes a long way to becoming more cost effective then general development departments ever can be.

It’s all about money streams

As business has evolved, a lot of organizations today can’t conduct it without IT-support. Often you hear that cost of IT is the cost of doing business. In a sense it is (though I’d say that cost of IT is an investment that will pay it’s own weight done right, but that’s another discussion).

Add to this that all head of departments have their own budget that they need to maintain and fulfill. All IT-projects with a centralized IT-department will quickly come to the same discussion, who will pay for this? If there is an investment that need to be done that the finance department will reap the benefits of, should the cost end up on the IT-departments bottom line?

A lot of organizations try to solve this by charging the departments for new projects and taking a fixed fee for maintenance. This solves part of the problem but creates new grounds for discussions.

When is the project done and when do we go into maintenance mode? Is maintenance just about bug-fixes and what if that is the case, what is a bug? Endless discussions. All based on the fact that the managers of each department have to report their budgets.

Much like some discussions between clients and consultants.

If managing the budget was entirely up to the department itself, this would not be an issue. It would be up to the department to do investments that bring their business forward. All costs associated with their IT-support would be visible in their own budgets. Manageable in their own budgets. There will never be a discussion about investing X to get benefit Y, it will all boil down to the same bottom line and ROI will be the responsibility of the same manager.

There are some IT functions that might not be feasible for this, like desktop maintenance. Maybe the BizTalk server should be maintained centralized for all departments, etc. But for the system support you need, for any customization or development you need. This is a smooth way to go.

 

Conclusion

Organizing your development into areas of service might not be for everyone. But there are great benefits for those who does. Shorter feedback loops for requirements, shorter decision paths and visualization of actual cost / benefits in the right place; the bottom line for the department actually using the service.

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