One Ring to Bind Them - Page 2

Aug 6, 2007

Ted Stephens

6. Who defines the nomenclature? For example, what is a “customer”? Is it an individual, an organization, or the building to which the product or service is delivered (e.g., a condominium or office complex)? Utility companies often define a customer as a household. Within a complex organization, there might be more than one definition; billing might define a customer as the person who receives the bill, whereas delivery might define it as the address to which a product is delivered. A landlord might receive a utility bill, but the service is delivered to a property across town.

SO Organization

There are two basic models for service-oriented governance. Some companies, especially those that deal in a single product and are accustomed to a top-down authority structure, might prefer a centralized system, with an enterprise-wide team setting the rules and making all major policy decisions.

Others, particularly companies offering many different services, might prefer the opposite: a distributed governance system organized along the Internet model, with self-enforced standards that all groups across the enterprise agree upon. In the latter case, it is nonetheless important to have a central team or committee to maintain and update company standards, drawing input from all divisions.

The advantages of the distributed model are that it is driven by division experts who are close to product lines and the workings of their enterprise units, and who are able to respond to customer or user input. The downside is that making changes to the standards and processes can be slow, as buy-in is needed by all significant players throughout the company.

The top-down approach has the advantage of efficiency; change can be made quickly and enforced effectively. Moreover, a centralized governance team can usually see the “big picture” of a company’s interests and that of its customers more clearly than division managers can.

The downside is that, lacking sufficient input from the various departments, governance actions may not always be optimum for all groups within the enterprise. It’s a balancing act. Perhaps the best model is a two-tiered approach that:

  • Establishes a set of mandatory service-oriented standards to meet the overall needs of the business for addressing the needs of the customer; and
  • Allows divisions to extend those standards according to the needs of their particular business lines—as long as all such divisional standards are cleared with the central governance and communicated across the enterprise.
  • Ted Stephens is an associate principal at Intellilink, a management consulting firm that improves the productivity of knowledge worker automation. His areas of expertise include; IT governance, project management and IT portfolio management. He can be reached at

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