In the old versions of centralization, IT infrastructure costs were simply allocated among business units, which had little control over the system and few incentives to manage its usage effectively. The new model strikes a balance between the simplicity of central control and the transparency and accountability of local control.
At the center of this new arrangement are service managers, who usually have technical backgrounds but later graduated to management. Service managers work for IT organizations and support specific technologies, such as servers or mainframes. They gather requirements from their client organizations and develop price guides (for instance, a choice between high- or low-end servers and laptops), much as they would for hardware companies or systems integration companies.
Central IT departments manage the supply of products and services–data lines, servers, technical support, and so on. The business units, in turn, base their requests for services on how much data they transmit as well as on the number of servers and the level of help-desk support they feel they must have. Businesses get the service they require and pay for it. They therefore have more incentive to buy only what they need, while the IT group must hold to the previously agreed cost and service levels–an arrangement that alleviates the suspicions of managers that IT departments are either overcharging or underserving them.
This service-based approach has helped both to improve the reliability of corporate IT infrastructures and to reduce spending on them by as much as 30 percent; the more a decentralized infrastructure is consolidated, the more savings a company can expect.
This bodes well for many of the things we are working on – like Emergic Freedom, which centralises computing and storage for SMEs on a Linux server.