Balancing Lopsided IT Governancepost by Chris Curran on November 15, 2011
It’s happening again. Corporations are decentralizing IT and calling the role of the CIO into question.
Between social networking, cloud computing and digital mobility, business units are demanding more than ever from IT. IT is struggling to keep pace with rapid innovation and business units are growing increasingly comfortable purchasing and deploying outside systems on their own. Conditions are ripe for restructuring the relationship between business and IT.
According to a PwC white paper, “Why Fixing the Business/IT Divide Now is the Key to Survival,” the financial services industry is following the lead of several large investment banks and is breaking up their IT departments and dispersing talent throughout individual business units to speed the rollout of new products and services. In extreme cases, companies have even removed the CIO or replaced it with an executive responsible for “tech and ops.”
Complete decentralization without a CIO is a lopsided approach to IT governance. To effectively align business and technology to drive innovation, mitigate risk and manage costs, companies need to strike the right balance between centralization and decentralization.
Too little centralization breeds redundancy and complex IT environments that give rise to risk and unclear responsibilities and objectives. This costs time and money. On the flipside, too many restrictions from command-and-control can stifle innovation and speed and prompt business units to seek outside help without involving IT at all.
As C-Suite executives reassess and re-balance the power between business and IT, they shouldn’t waste their time questioning the value of their CIO, as long as they recognize the dual roles of the CIO. The CIO is the linchpin of effective business/IT alignment. In this next iteration of decentralization, CIOs should select vendors, set standards and drive decisions about what is decentralized and what is not – all linked to the objectives and capabilities driven by the business. In short, they should be empowered, not eliminated.
What do you think? Should we finally put an end to the costly centralization/decentralization cycle and maintain a balance between the two extremes?
Image shared by John Joh