Centralized-vs-Decentralized IT - Is there a Middle Ground?

Centralized-vs-Decentralized IT - Is there a Middle Ground?

Ed Toner, CIO, State of Nebraska

Ed Toner, CIO, State of Nebraska

Organizational Options

State CIO’s are obligated to provide IT services in a cost effective and efficient manner. This was made clear to me during my appointment process as CIO of Nebraska. With that goal in mind I began research on business approaches that exist across State government. Through my investigation which included internet searches and speaking to other CIOs across the country, I found that the majority of State government IT organizational structures consist of two basic approaches: centralized and decentralized. All services are provided by a central organization in the centralized model, while the decentralized approach is characterized by State agencies managing their IT functions as independent departments within the agencies. Both approaches have pros and cons, with advocates writing a multitude of articles basically supporting one approach or the other with only a few supporting a hybrid model.  

“Both the decentralized and centralized models offer advantages”


The centralized approach is what I have known throughout my private career, so I was excited about the opportunity to apply established practices to the State of Nebraska decentralized structure. The decentralized structure has created duplication of tools and resources over time. Even more concerning, it has created an unhealthy competition among IT operations which interferes with achieving our common goal of a seamless, efficient, customer-centric IT environment.

Centralization is a very popular topic on the discussion boards of NASCIO (National Association of State CIOs), and has been for at least 10 years. A common theme appeared which indicated that the effort to centralize was confronted by challenges in a variety of forms including cultural issues and restrictions based on specific Agency needs (whether valid or not). I found that I needed to begin my journey by understanding the culture of the Agencies that are affected. Working individually and presenting a thorough plan which addressed their individual concerns along with a compelling case for risk containment, efficiencies and cost improvements.

Middle Ground – Apply the Advantages of Both

I knew from my multiple meetings and personal conversations that I had to find a middle ground to make any progress towards my goal of enhanced efficiencies. Both the decentralized and centralized models offer advantages. Decentralized IT is reported to be more agile and responsive to the needs of agencies, and more tightly integrated with business goals and objectives. Centralized IT reduces the Enterprise technology footprint, lowering storage, networks, power use and cooling costs. Secondly, this model also reduces hardware and software licensing costs and improves staff utilization. Lastly, centralizing functions reduces overall risk through a greater adherence to defined policies and a unified vision.  

Many of the models that attempt to find a middle ground propose complex governance models and organizational structures in an effort to gain some local Agency control.

The hybrid model I proposed includes yielding all agency-specific IT functions to the agencies while moving all Enterprise functions such as infrastructure and Enterprise applications to the central IT group.  

Enterprise functions to be performed by Central IT include:  

• Consolidated data center management

• Network and infrastructure operations management  

• IT procurement reviews and standards

• Enterprise help desk and desktop support

• Enterprise application support

Agency IT departments maintain authority over agency-specific activities and functions which include:

• Agency-specific help desk support

• Agency-specific application development

• Agency-specific application support

• Agency IT strategy and planning  

This model offers a balance between autonomy, cost efficiency and risk. Agencies are allowed to focus on supporting applications that address their customers’ goals, while being agnostic to the underlying infrastructure. Focus is centered on what matters to their customers, including bringing new products to market or enhancing existing products.

Journey Begins

The journey has begun with centralizing the core Enterprise IT Service Management Suite (Incident, Problem, Service Request, Asset and Change Management). A single solution reduced IT costs, consolidated processes and reporting, reduced complexity and improved efficiencies. All help desks can create incident records and assign them directly within the tool set versus copying to email and entering in an agency’s standalone solution. Standardizing on one Service Management Suite allowed the State to consolidate three disparate Service Management suites, multiple Enterprise agreements entered into by separate agencies along with hardware and maintenance costs related to each system.

This basic framework is the foundation needed to standardize the delivery and support of IT services. The next goal is to define and achieve predictable service levels so that each Agency can hold us accountable for our services. The final challenge is consolidation and virtualization of all servers into two State data centers which will address the concerns of the decentralized model.

Having a solid roadmap to share with each Agency, a detailed plan of action containing the benefits of the approach along with a defined governance model helped to build the case for change. The process of moving Agency servers to a centralized location has started with one Agency successfully relocating their servers into the State data centers. The consolidation of additional Agency servers continues, and the backing remains among the Agencies we support.   

There was no definite starting point in my plan but rather multiple parallel efforts. No legislative changes needed to make the change as is common in several other States. Simply a dialogue between myself and each Agency to explain the benefits to the taxpayer of the State of Nebraska.  

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