Page 547 - Handbook of Modern Telecommunications

4-78 CRC Handbook of Modern Telecommunications, Second Edition

As a way of assisting CIOs in establishing a proactive diagnosis and assessment of the level of busi-
ness/IT governance alignment, we recommend breaking down governance model practices into one or
more of the following fundamental governance patterns:

• “Hard” management
• Centralizing models
• Centrifugal models
• Loosely coupled organizations
• Laissez-faire approaches
Although each enterprise governance model ultimately will be unique, analysts believe these models
can be decomposed into a combination of the patterns listed above.

4.5.2.1.1 “Hard” Management Governance Pattern
Through 2010/2012, the global economy will follow a more irresolute and longer path to recovery than
initially anticipated. During this period, Fortune 2000 enterprises will continue to embark on merger,
acquisition, and divestiture operations as fundamental strategies for survival through economies of
scale, risk distribution, and financial strength in a volatile global economy. Analysts believe CMA activ-
ity will be as strong in economic contraction cycles as it will be during growth periods. Indeed, while
CMA action will tend to accelerate during economic growth periods as an instrument for swift corpo-
rate expansion, CMA activity in less favorable periods will center on one of the following:
• Protective CMA maneuvers: In this context, struggling or challenged organizations join forces
to improve economies of scale, market synergies, financial strength, and global reach, and to be
in a better position to face stronger competitors (e.g., Telia’s purchase of Sonera in a challenging
European Telco market, Allianz-Dresdner, HP’s acquisition of Compaq).
• Consolidating CMA movements: In these cases, stronger and bigger players in specific markets
leverage their size and force to take over or outdistance weaker competitors. Usually the parent com-
pany (i.e., the acquirer) maintains an overwhelming (or at least preponderant) financial and opera-
tional weight in the resulting entity (e.g., IBM’s acquisitions of PwC, Rational Software, CrossWorlds,
and Informix’s database business; Wal-Mart’s relentless expansion in the retail sector).
Analysts expect protective and consolidating CMA maneuvers to call for extremely strong gover-
nance models, with highly centralized management processes as a prerequisite to attain the established
CMA goals. The prevailing governance patterns in such settings will be characterized by an uncompro-
mising drive to rapidly unify operations, establish a common enterprise process, and efface “local” or
individual specificities.
In hard management (e.g., monarchic, colonial) governance patterns, there is little tolerance for local
operational specificities or cultural idiosyncrasies across geographies (e.g., national and regional sub-
sidiaries) or lines of business (LOBs). Such peculiarities are perceived as impediments to the ultimate
CMA goals of consistency, economies of scale and time, global flexibility, and productivity. Therefore,
in hard management governance models, local geography and LOB autonomy will be associated with
inefficiency and ultimate failure.
The hard management governance pattern describes an organizational culture that will “instinc-
tively” prefer and advocate common, strictly defined business processes and metrics across a large
organization. In this pattern, the consensual general wisdom among enterprise executives is that cen-
tralization will always be the best approach, even when the context is fuzzy and the information avail-
able is incomplete. Therefore, this governance pattern describes not just a purely Cartesian, rational,
metrics-based decision framework for CMA implementation, but also a model of sociopsychological
management behavior in such circumstances.
From an IT perspective, this governance pattern will typically translate into a strong drive to adopt
common corporate applications, e.g., an enterprise resource planning (ERP) backbone along with