Swinging Toward Centralization

The pendulum is moving toward IT consolidation as CIOs try to save money and gain efficiencies. But it's possible to go too far.

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Constant Upkeep

Mike Twohig, CIO at Clean Harbors Inc., an environmental services company in Norwell, Mass., is a true believer in centralization, but he says it requires constant vigilance to make sure the field locations get the service they deserve.

At Clean Harbors, a central IT group develops, maintains, supports and runs a Web-based application infrastructure for the company's 175 locations worldwide. The IT staff is based at headquarters, save for six or seven PC technicians who work in the larger field offices primarily to ensure coverage across different time zones. IT uses remote access technology to perform phone, network, PC and help desk support.

The setup has many benefits, says Twohig. For one, it makes it easier to integrate newly acquired companies. Clean Harbors' last acquisition was a $500 million company with 4,000 users in 50 locations, and everyone was up and running within 24 hours. "You couldn't do that without a centralized model," he says. "We put them on a Web browser and managed everything from here."

In addition, it allows IT staff and management to quickly assess problems and find solutions. With all the data and most of the staff in one place, "we can quickly interact with a variety of people and data in a minute's notice," Twohig says.

Costs are definitely lower with a centralized model, he notes. Through virtualization efforts in the past five years, the need for additional servers has been completely eliminated, he says. Disaster recovery costs less, as does regulatory compliance. These savings more than offset the increase in bandwidth and infrastructure spending.

Twohig acknowledges that he revisits the centralized approach from time to time, especially as the company grows. "There are valid arguments for where centralization can hurt you," he notes. For example, a centralized operation can't take advantage of lower-cost geographic areas or low-cost labor markets.

But he counters that there are plenty of savings to be had in reducing travel, securing and maintaining just one data center, simplifying procurement, having fewer shipping locations and reducing redundant staff positions, processes and systems.

Like White, Twohig does get pushback from the field, which, he says, is never 100% comfortable with the centralized model. "There are people who still say, 'What's the ivory tower going to do next?' " he adds. To offset the isolation and frustration that business users may experience, Twohig encourages staffers to use the phone or instant messaging rather than e-mail. He has also enabled instant Web meetings, integrated with Microsoft Outlook. To stay on top of business requirements, project managers are linked with business people throughout the organization to get feedback on their technology needs.

There are still some outliers that Twohig wants to rein in. Clean Harbors still has three payroll companies, in the U.S., Canada and the U.K. And it has two groups that manage cell phones. In both cases, he's looking to consolidate. "When you start down this path, you have to pursue it with hunger," he says.

Twohig says he regularly reassesses IT processes, policies and service quality to make sure they're appropriate for the entire organization, including remote offices. The key, he says, is two-way communication between central IT and local managers, including frequent checks to see whether an IT policy or service still makes sense. "What is good today may not work a year from now when processes change or volume is added, or users in the field turn over and need to be trained."

Is centralization for everyone? According to Twohig, the answer is yes. "I would argue that it should be a goal," he says. "But it requires deliberate action, from the top down."

Brandel is a Computerworld contributing writer. You can contact her at marybrandel@verizon.net.

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Copyright © 2010 IDG Communications, Inc.

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