In many large corporations, service-provider groups (such as IT) exist both at the corporate level and within business units. There's often confusion about who does what, and about how corporatewide governance issues such as standards, policies, and plans are decided.

The best way to sort this out is to rephrase the question in the context of the business-within-a-business paradigm: Which products and services are exclusively sold by the corporate shared-services provider, and which are sold by decentralized groups?

Monopolies: Some products and services may be sold exclusively by the corporate provider, such as those based on large infrastructure investments. This "short list" is driven by clear economies of scale and synergies, as well as the degree to which the corporate group is customer focused and trusted.

This may lead to a consensus on some limited staff consolidations.

Outsourcing vendor of choice: The remainder of the product line is provided by decentralized groups, who may in turn choose to outsource to the corporate group if it's in their interests to do so. In this way, economies of scale and synergies are gained where appropriate without any loss of business-unit autonomy.

Instead of forced consolidations, this is an evolutionary process where services migrate to corporate staff where local staff are willing to buy from them.

Corporate clients: Generally, the corporate group is also a full-service provider to clients in corporate headquarters.

Note that, for the above two reasons, the corporate group should never be "boxed in" to supplying only corporatewide solutions and services. It's a full-service provide to decentralized groups when asked, and to corporate clients all the time.

Governance decisions: Some governance decisions (such as standards, policies, and plans) apply to all providers, corporate and decentralized. These decisions should be made by a consensus of stakeholders, not just by corporate leaders. However, the corporate group can be designated the sole provider of facilitation services, even though they are just one of the stakeholders and just one of the votes in the decision.

Local policies: Within those bounds, other standards, policies, and plans can be decided individually by each business unit. Even in these cases, the corporate group may be invited to provide facilitation services (not decisions). For example, Corporate staff may include experts in business continuity planning and security.

In this two-day workshop for leaders of internal service-provider groups, the various stakeholders (leaders of the corporate and of decentralized groups) can come to agreement on the business-within-a-business approach, exactly which products and services are on the corporate "short list," and which governance decisions are to be made by the community at the corporate level.

"NDMA provided a well-thought-out philosophy of organizational structure, and a practical process for implementing that vision."

David A. Hall CIO, Computing and Information Systems, Corning Telecommunications Products Division

It may also lead to decisions, made by consensus, to consolidate some specific functions.

Agenda....

Benefits include:

• Clarity of roles to reduce tensions and provide a framework for deciding who does what on an ongoing basis.

• Corporatewide economies of scale and synergies without any loss of business-unit autonomy.

• Dynamic processes for maximizing economies of scale and synergies over time, adjusting boundaries automatically as conditions change.

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