EPISOD 4 - CONTROLLING APPROACHES

CONSTELLATION BY PRIMAFRANCE

“Choreography is the art of designing sequences of movements in which motion, form, or both are specified.” (http://en.wikipedia.org/wiki/Choreography)

The elements of the constellation shall move together according to a well defined choreography, this choreography is defined in the project schedule by the sequence of the activities. In the scenario that we are examining, the actors are located in the different continents, different countries and, moreover, in different time zones. The Project Manager, who is acting as a choreographer, is tasked to create a “show”, casting the different actors.

Nevertheless, the audience – the Client – should only see a world class performance, lead by the ballerina, supported by the other actors. How to achieve this?

There is no question about the necessity of centralization in controlling complex projects with many actors; however we shall differentiate and apply only the necessary amount of centralization to the project. We are going to analyze briefly the two approaches in the following paragraphs.

Centralized Management

While the title used might be misleading, as a certain degree of centralization is essential in each corporation and project, the Centralized Management Approach and De-centralized Management Approach titles are used to illustrate the differences between the two.

In the Centralized Management Approach, the corporate, via the HQ dictates and enforces heavily the usage of processes, procedures and tools.

As organizations mature, their processes and tools are become more and more effective and tuned. This maturity brings increased level of centralization. While centralization has several advantages over a de-centralized model, we would like to discuss briefly only the following points.

As corporations are changing, changes in the processes, workflows and tools should follow the evolution. All these change requests are expressed by the users at various units, but the final decision is taken by the central team, usually managed at HQ level. While this team is composed from subject matter experts and all units are represented, the decision making process can take long time from identifying the need to the final decision. Since decisions are taken away from the site, the units are somehow obliged to find “shortcuts” to answer their needs while decision is being taken.

Examples, like Google Inc. show, that encouraged innovation can bring benefits to the company. The example used is called the 20 percent time project rule. This rule allows programmers and other Google employees to spend one of their five work days per week working on something of their own design.

The centralized management approach can also discourage employees to take up initiatives on their own. Having a team, located far away from the units, to take all decisions will project unnecessary bureaucracy towards the units. They will have the impression, which is sometimes false, that their voice is not heard and that no matter what they do, the decision will be taken above them.

Such belief can also take away the feeling of responsibility. People might question why they should feel responsible for decisions they were not part of it.

Some key points to consider while considering the Centralized Management model:

· Centralized control using defined processes.
· Centralized systems entail a high initial cost disadvantage.
· System inflexibility causes costs escalation.
· Might be slow, due to one central system carrying out all the requested tasks.
· Local independent processing is not allowed and system is dependent on the one CPU.
· Centralized information systems are isolated from real business priorities and concerns.
· Centralization and bureaucratic system can reduce innovation and feeling of responsibility.
· Cost increase and extended time to integrate newly acquired companies into the structure.

De-centralized Management

When an organization enjoys a greater level of independence, it can respond to business needs faster and more effectively. It also increases the capability of innovation, not only the individuals but also the unit as a whole.

Even the De-centralized Management depends on a certain level of centralization. While policies and procedures are created and managed locally, it is inevitable, that certain level of co-ordination should be implemented to ensure reporting at higher level. Unfortunately, this leads to have as many policies and procedures as many units are in the organization.

As each unit acts in an independent way, unit based organizations have to be built to answer all needs of the unit in question. Resource duplication not only occurs in supporting roles, but each organization should build their resource pool of specialized skills.

Key points to consider while considering the De-centralized Management model:

· Start-up cost relatively low (compared to the Centralized Management model).
· Tailoring and scaling to individual needs is possible.
· Increased organizational flexibility and responsiveness due to autonomy.
· System reliability increased.
· Lack of centralized control.
· Clashes in policy lead to delay and inefficiency.
· Different vendors for different system components.
· High degree of duplication of resources, efforts and expertise causing cost increase.