Models for Global IT Governance
You need a governance model for managing a global IT organization that supports clear decision making, oversight and visibility into what's happening across time zones and continents.
CIO — When CIOs think about the global expansion of their enterprises, the G-word quickly comes to mind: governance. Their fear is that without carefully constructed governance, decision making, oversight and even simple visibility into the IT organization will quickly become muddled. When CIO Executive Council members last year created the Globalization Playbook, governance was a significant section. (Managing global teams was another aspect of the playbook; go here for an excerpt.)
Central Versus Local Versus Distributed
The fundamental consideration in global governance is the control model. Should IT authority reside centrally, locally or incombination? There's no perfect model; one that works at one stage in a company's lifecycle may be a poor fit in another. However, most of the CIOs interviewed for the Council's playbook use a centralized model. That means the corporate CIO and the senior leadership team are responsible for decisions such as IT strategy, project prioritization, system selection and application development methodologies.
- You see costs rise due to duplication of effort.
- The time and money required to maintain any particular local system exceed what it would cost to maintain a global one.
- You discover "surprise" systems running in remote locations.
- Local business units are not following governance processes or guidelines when initiating projects.
- Your local business partners grow dissatisfied and stay dissatisfied.
- You have consistent difficulty hiring top talent in remote locations.
- High employee turnover or low morale exits in the remote locations.
- Staff complain that they can't get things done or that they feel caught up in bureaucracy and constantly changing priorities.
When significant local control is granted, the model becomes a hybrid in which enterprise standards and global systems are controlled centrally, but local IT management is responsible for selecting and managing some systems. A distributed model places nearly all authority at the local level, perhaps with some financial support systems or e-mail provided by headquarters. Purely local, decentralized control was the least-used governance model among the Council sources, although it gains traction as companies grow into diverse regions.
How to Choose
One simple way to think about your governance model is "centralize for efficiency, decentralize for effectiveness," says Michael Pilkington, former CIO of Brussels-based Euroclear. When considering a governance model, it's important to understand the operating mode of the business you're supporting. For example, does the company care about alignment across regions? At Motorola, alignment is critical, says Cathie Kozik, corporate vice president of supply chain IT. Given that, Motorola has gravitated toward centralized IT governance.
