Bob Lewis
Columnist

Distribute IT, or centralize it?

analysis
Aug 27, 20042 mins

Dear Bob ... When I started working at my present position seven years ago, our IT structure consisted of about a dozen people keeping 100 computers, three servers, and a telephone exchange working, and they did a good job. However, the company expanded. We are up to 100 servers, close to 1,000 desktops, and a room of telephone equipment (our production is a telephone-intensive environment). I periodi

Dear Bob …

When I started working at my present position seven years ago, our IT structure consisted of about a dozen people keeping 100 computers, three servers, and a telephone exchange working, and they did a good job. However, the company expanded. We are up to 100 servers, close to 1,000 desktops, and a room of telephone equipment (our production is a telephone-intensive environment).

I periodically read of large companies that actually function better without a separate IT department: Tthe IT functions are taken care of by groups within the Production department. Have you experienced this anywhere? Does it actually work, or are these stories urban legends?

– Curious

Dear Curious …

I’ve known of companies that have gone this route, or a modified version, where the IT core infrastructure is managed centrally and the rest of IT is distributed out to the business units. Some have been clients, in fact.

Form follows function. This approach works well in an enterprise that’s composed of independent business units, such as a holding company that owns a bunch of business that have little or nothing to do with each other. Think, for example, about General Electric. It wouldn’t make a lot of sense to have a single centralized IT organization supporting its jet engine business, its capital leasing business, and its light bulb business. It would be a mess.

I’ve also seen functionally organized companies try this approach, and it’s generally a mess. When marketing, manufacturing, accounting and design all have their own IT groups, it’s generally a reflection of a company that lacks leadership. The result is high walls and strong competition between departments that should be collaborating – in a word, silos. IT is simply a mirror of this larger trend, and the lack of a coherent architecture reinforces the divisions by preventing the flow of business through the (dis)organization.

That, at least, has been my experience.

– Bob

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