With the economic downturn, businesses will be looking for ways to control costs. Will that mean more centralization? How will more centralization conflict with the web2.0 trend towards lighter more de-centralized apps. Will the lighter and more niche software/hosted products find that funds from business units are drying up?
Popular Knowledge Management expert David Gurteen spoke about this tension even before the financial crisis on his blog. Larry Hawes has a recent blog post discussing Autonomy in Collaboration.
I have had several discussions in the last few days with a VA-based firm currently struggling with the issue of centralization. Historically, their business has been run as autonomous business units free to operate in the way that best meets their customers’ needs.
While I am sure this firm has always struggled between centralization and de-centralization, the web has exacerbated the problem and web2.0 has taken it to yet another level. With the advent of the web, each unit began developing a channel to interact with their customers. A few years ago when the company wanted to upgrade to a more web2.0 approach which allowed their customers to contribute more in the online environment, they sought to build a common platform.
However, the autonomous business units lived on. Because they are quite independent, they are constantly seeking to diverge in order to meet the specific needs of their customers. At the same time IT continues to work towards increased centralization. As you can imagine, this is creating some tension.
A service oriented architecture (SOA) with shared web services and appropriate SOA governance might be their salvation. If IT can control the main architecture and help facilitate the sharing of approved web services, this firm may be able to get the centralization they need while allowing for business units to meet their own customer needs.
Is SOA the way that this increasing tension might be relieved in many organizations? I doubt IT is going to give up working towards standardization and cost savings and I know that if business units feel their customers are not being served by what IT is providing, they are going to continue pushing for autonomy. If not SOA, how is this tension going to be resolved?
3 responses so far ↓
brenda michelson // November 17, 2008 at 5:44 pm
Hi Robert,
I’ve added my 2 cents here: http://tinyurl.com/63a9uh
-brenda
Todd Biske: Outside the Box » Blog Archive » Centralization and SOA // November 20, 2008 at 12:30 am
[...] This post, by Robert Swanwick, was brought to my attention by Brenda Michelson courtesy of her followup post. In the first post, Robert describes a situation of a company that has historically operated as autonomous business units, each doing what was best for their own customers, including each building their own web channel. As they tried to incorporate more customer contributions into those web channels, he states that “they sought to build a common platform.” He didn’t provide additional details on what common means, whether it was shared customer presence across all of the web channels, or if all of the web channels were consolidated into one. He goes on: However, the autonomous business units lived on. Because they are quite independent, they are constantly seeking to diverge in order to meet the specific needs of their customers. At the same time IT continues to work towards increased centralization. As you can imagine, this is creating some tension. A service oriented architecture (SOA) with shared web services and appropriate SOA governance might be their salvation. If IT can control the main architecture and help facilitate the sharing of approved web services, this firm may be able to get the centralization they need while allowing for business units to meet their own customer needs. [...]
Service-Oriented Architecture mobile edition // November 21, 2008 at 6:59 pm
[...] Robert Swanwick posted by Joe McKendrick November 21, 2008 @ 2:59 [...]