- Technology strategy begins with understanding your processes, models and frameworks
- Centralization allows organizations to achieve improved standardization, but can limit the types of technology available to various business units
- Centralizing sales and marketing technology makes data more visible and easier to find
As the marketing and sales technology stacks at large organizations continue to expand, the question of whether to centralize the technology stack – or part of it – moves front and center. There’s no right or wrong answer. In fact, the case can be made for centralization or decentralization.
The first step to deciding on your technology strategy should be understanding the processes and the models, frameworks and concepts that form them (e.g. relative targeting, buyer’s journey, route-to-market). Looking at processes uncovers the what, why, when and the who. Examining your technology stack and how it is architected answers the “how” question.
The pros of centralization are typically the “inverse cons” of decentralization and, likewise, the cons of centralization are the “inverse pros” of decentralization. For example, if centralization saves money (a pro), then a con of decentralization is increased costs. (Virtual centralization – a topic for another day – offers some of the benefits of both approaches, while having its own challenges.)
Pros of centralization:
- Cost. Generally, the centralization of technology provides economies of scale and lowers technology infrastructure costs and related costs (e.g. storage, vendor-negotiated rates, training, resources and efficiencies).
- Standardization. Centralization allows organizations to achieve improved standardization on several fronts, including technology, process and strategy. In turn, this lowers the learning curve for the organization and can drive efficiencies in the production of assets and the ability to leverage them with little or no alteration.
- Data and reporting. Centralized systems provide higher visibility into data and data architecture. Additionally, data is typically “buried” in fewer systems, making it much more findable and accessible.
- Training. Systems that are shared enterprise-wide (or at least organizationally) allow for simplified training. Typically, there are fewer systems, or if not, at least everyone is on the same systems.
- Customer experience. For Web properties in particular, centralized systems and technologies tend to provide a more consistent experience for buyers and appear less disjointed.
Cons of centralization:
- Technology selection. Centralization (and the standards it imposes) can limit the types of technology that various business units can select. Selected technologies must meet the standards set by the centralized group and fit into both the current architecture and future strategic technology vision.
- Technology implementation. When new technologies are selected and implemented, rollout typically takes longer because the projects themselves are larger, include more stakeholders and must cater to multiple schedules and the availability of resources within different business units.
- Responsiveness. With more project considerations and higher-level standards and strategic vision to take into account, some business units might feel that their needs are not being addressed wholly or quickly enough due to the prioritization of business cases.
- Agility. Established governance mechanisms can impact a business unit’s ability to rapidly deploy a technology to capitalize on an opportunity. Instead of having the autonomy to choose and deploy technology at will, the business unit must build a case not only for their needs, but also to satisfy the needs of the larger enterprise in order to get what they want.
- Magnified impact. Within a centralized organization, the impacts (positive and negative) are magnified across the enterprise or organization. Delayed projects, substandard data and reporting or technologies that fail to live up to expectations affect all business units, not just one.