Structural
elements
IT Shared
Services
objective organization
To achieve global/regional
scale for cost efficiency
while allowing some local
choices via
global scale/scope ˲
global sourcing ˲
of IT resources
global common ˲
platform
heavily resource-intensive
By major IT functions,
IT or business process
services:
catalog of services ˲
offered, for example,
application and
infrastructural services
typically located in ˲
lower cost regions
some services ˲
outsourced to external
vendors.
Approach
Drive scale via:
active service ˲
management and
transparency
standardization ˲
consolidation ˲
process improvement ˲
service quality ˲
sourcing ˲
KPIs: service level
agreement, unit cost,
simplicity
IT Centers
of Excellence
To innovate and develop
best practices via
global coordination ˲
of capabilities
global pooling ˲
of IT expertise
heavily knowledge-
intensive
By innovative technologies
or strategic capabilities:
centrally coordinated ˲
may be located ˲
outside hQ
can be virtual by ˲
pooling distributed
experts
Drive innovation via:
pooling deep ˲
internal knowledge
and expertise
investment into ˲
experimentation
and innovation
applying and sharing ˲
best practices
enterprisewide
IT Value
Managers
KPIs: of new global
solutions developed, time to
market for new application,
reuse of best practice
across firm, business
process performance, and
so on.
To maximize the value
of IT for specific groups
in the firm via
being responsive to ˲
local needs through
a single face of IT
advocating for ˲
customer units
to central IT
helping implement ˲
enterprisewide
initiatives locally
By major business
dimensions:
strategic lines ˲
of business
important business ˲
functions
large or fast growing ˲
geographical markets
major external ˲
customers
Push for responsiveness
via:
proximity to customer ˲
units to capture voice
of the customer
simultaneous proximity ˲
to central IT
constructive negotiation ˲
and facilitation of
conflict resolution
heavily relationship-
intensive
KPIs: customer
satisfaction, business-I T
alignment, partnership
maturity, among others.
centrally initiated enterprisewide
programs are global ERP implemen-
tations, collaboration tools, and cost-
cutting efforts. One CIO put it well:
“Without the second objective of im-
plementing enterprisewide initiatives
those folks (VMs) go feral and have loy-
alty only to the local units.”
Microsoft has an extended field IT
structure that covers its geographical
market across 106 countries. Field IT
is overseen by an International IT VP
reporting to the Global CIO. Below the
International IT VP are the IT manag-
ers for three regions: North America,
Europe/Middle East/Latin America,
and Asia. The Asia region, for example,
further cascades down to 13 regional
clusters. These IT managers play a
brokering role, such as in represent-
ing Central IT to influence and nego-
tiate with the regional business own-
ers, as well as the customer advocates
in championing the interests of these
business units and ensuring they de-
rive adequate value from IT.
