Fordness Product Book

1
Improving the Decision-Making process in
Institutions Global-Local Dilemma
Bob Hawkins IT Strategy Manager Ford of Europe
Paul Stevens Vice President of IT GSK UK
Pharmaceuticals
Eve Mitleton-Kelly SOL-UK Complexity Group, LSE
2
Improving the Decision-Making Process in
Institutions Global-Local Dilemma Workshop
"In my mind organizational learning is about
taking decisions, which is the expression of a
process that can only ever be completed by an
action. Decision-taking is a frequently misused
concept that we never stop to define. This is
where further research is necessary. I am
increasingly intrigued by the role of language
and emotions in learning, and so in the
subsequent decisions. At the moment of idea
crystallisation, language-invention occurs,
either through the creation of new words, or
through imbuing pre-existing terms with a
revitalised, shared meaning. These shared
meanings allow the group to act together". Arie
de Geus, President of SOL-UK and ex-Senior
Planner, Shell
3
Improving the Decision-Making Process in
Institutions
Over-arching Question How can IT operate
successfully within a global enterprise? Decisio
n-taking at all levels of the organisation
requires trade-offs between staying focused on
local business units whilst maintaining a global
direction. The workshop focus on addressing the
question of how people resolve global versus
local trade-offs when taking decisions within an
IT Organisation
4
Improving the Decision-Making Process in
Institutions
The Situation

• Most IT departments operate as functions within
  their organisations in order to
• better manage work within the group,
• nurture technical expertise,
• attract and develop experts, and
• reduce labour costs by balancing workload with
  demand.

5
Improving the Decision-Making Process in
Institutions
Operating Models
Business Units
Business Units
A
B
C
A
B
C
IT
IT A
IT B
IT C
Centralised IT Services
Localised IT Services

• Operational Efficency
• Reducing costs
• Standardisation

• Customer Service
• Entrepreneurial
• Innovation

Within companies that operate with multiple
business units the IT Function can operate as a
centralised function, localised function or a
hybrid.
6
Improving the Decision-Making Process in
Institutions
Typical Hybrid Operating Model
Business Units
A
B
C
IT A
IT B
IT C
IT
Local IT Services
Central IT
Increasingly global enterprises are centralising
control over IT to make better use of expensive
scarce resource and drive the use of common
processes within IT and the Business Functions
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Improving the Decision-Making Process in
Institutions
Decision Taking Challenges in a Hybrid
Organisation
Key Challenges

• What roles and responsibilities can be
  centralised and what should be left at the local
  business unit level?
• What governance structures need to be in place?
  And will these create too much bureaucracy?
• What is an appropriate funding model -- should
  all IT people stay in the brands?
• How will people resolve Central versus Local
  conflicts? What are the guiding operating
  principles that need to be encouraged at the
  individual level?

Typical Hybrid Operating Model
8
Improving the Decision-Making Process in
Institutions

• The focal question for the project
• What roles and responsibilities can be
  centralised and what should be left at the local
  business unit level?
• Subsidiary questions include
• What are the generic guiding principles that can
  be used to help companies make the best decision
  when answering this focal question?
• What best practise exists today, and how can it
  be adapted?
• What is the impact of different governance
  structures?
• What is the impact of acquisitions (and
  divestitures)?
• Where does innovation occur and how is it managed?