Article at a glance:
Large companies face a quandary in managing their IT infrastructure—the hardware, operating systems, and networks that account for 40 to 60 percent of their total IT costs. They know that a centralized IT infrastructure serving all of a company's business units delivers huge economies of scale and higher performance but can be inflexible and unresponsive to local needs. Yet a decentralized infrastructure, though more flexible, is not only 20 to 30 percent more expensive than a centralized one but also less reliable. Although decentralized models now prevail, the pendulum is swinging back toward centralized control. A new model of IT governance may capture the best of both worlds.
The take-away
To capture the efficiencies of consolidation while providing for flexibility and accountability, IT managers should prepare a menu of available products, with clearly specified costs and service levels. Business managers can select the products and services they need—and are willing to pay for.