Information Management: Centralized or Decentralized?
- Omer Ben Yehuda
- Sep 1, 2005
- 6 min read
The Challenge in Organizations with Multiple Customers!
All large companies offering services or products to hundreds of thousands of customers, such as fixed telecommunications companies, insurance companies, mobile/international communications companies, credit companies, and more, have several things in common:
They face fierce competition with rival companies offering similar products at similar prices.
They rely on a workforce of non-professional employees to provide customer service and sales.
In an era of tough and transparent competition and similar products and services, the difference for customers lies in service. It has been proven that customers won't hesitate to pay a little more (but only a little more) for a higher level of service. So, what constitutes good service when it comes to customer service in companies of the above type?
Speed - quick response to inquiries and execution of actions, lack of bureaucracy, One Stop Shop
Professionalism - error-free service, providing added value to customers, consistency in responses between representatives and in different situations, reliability
Courtesy - but that's not our focus this time...
Looking at organizational behavior, we see that most do excellent work in terms of technology and marketing. But many fail precisely in service areas. Why?
Another commonality among the companies we mentioned is that they are built with a branched organizational structure - senior management, marketing, sales, human resources, regulation, customer service, legal, logistics, etc. Many bodies speak different languages and deal with different topics, all of which affect customer service.
The "service interface" population, meaning sales and service representatives facing customers, find themselves in a dual challenge:
Dealing with customers.
Dealing with the many, often incomprehensible and contradictory demands from different organizational bodies.
The customer suffers. When customers are hurt, they don't take offense (like they used to); they simply switch to another company.
So what can be done? The common solution, which more organizations are turning to daily, is establishing an information/knowledge management team (depending on the organization).
Information Management - A Winning Team in a Winning Organization!
An information management team perfectly combines technology and the human mind. On the one hand, it's a technological information system that includes the knowledge repository service interfaces needed. The management system contains product and service archives, work processes, two-way feedback mechanisms, structured content templates, personal areas, various search engines, and more. On the other hand, it's a team of employees responsible for the system's content, design, maintenance, user adaptation, and operational strategy.
The human team uses the system to reach the last representative, and the technological tool allows the team to do this while using creative solutions to adapt the system to users.
The tools the team uses to achieve the goal of knowledge dissemination are, surprisingly, familiar: effective, concise, and marketing-oriented writing, use of templates, navigation tree characterization, and integration of effective characterization tools and search engines. But thanks to the skills and capabilities of the technological system, the results are amazing:
Reduced information retrieval time
Shortened response time to customers and handling time per inquiry
Increased number of inquiries answered at the first level of support
Uniformity in information creates reliability and trustworthiness
Management of uniform processes
Improvement and streamlining of training processes for service representatives
Providing tools for proper information management and control
In other words, customer satisfaction with service quality!
The True Power of Management is its Organizational Positioning
The management team sits at the seam between the service interface population and the headquarters professionals: marketers, engineers, project managers, product managers, etc. The management team "speaks" the language of both populations; it knows the professional terminology of the professionals and communicates with users in the language in which the product should be presented to customers. This ability is power! Just like the power of a translator in a billion-dollar deal between Western and Chinese businessmen, the translation is not automatic but follows interpretation. Therefore, like the translator, the management team is an ambassador, both from service interfaces to professionals and from professionals to service interfaces.
Besides updating information in the organizational system, the management team has other important roles that match its "diplomatic" positioning:
It serves as a two-way distribution gate: publishing top-down information (from management to employees) and acting as a monitor for management on employee and customer sentiments (bottom-up).
It serves as a liaison body between departments. As a unit controlling both field and headquarters language, it integrates information from all departments, transforms it into a single information item, and alerts about contradictions and malfunctions created by a lack of coordination.
It serves as a population ambassador in planning processes. Since the management team has contact with almost every unit in the organization, it can be a body representing knowledge consumers to headquarters, headquarters to field staff, or lateral units.
It supports training processes: as an information distributor, the management team knows best what the field knows and doesn't know.
Internal marketing in the organization: The management team becomes the main body for publishing information to consumers. Therefore, many bodies rely on it to publish guidelines, campaigns, and internal organizational announcements.
The Question - Decentralized or Centralized Information Management?
An information management team that successfully positions itself properly and performs all the classic and diplomatic roles described finds itself overloaded with work. The multiplicity of "diplomatic" mediation roles consumes time and energy. Usually, it comes at the expense of classic work (pouring content into the system according to concise writing rules and after listening to users). In this way, the quality of information decreases, and a recurring cycle of information irrelevance to users may be created due to the inability to use it.
Since no organization likes to resort to increasing positions, the common solution is to start distributing the management team's roles among other people in the organization. That is, some information management teams begin to allow other entities in the organization access to the updated interface of the information system and give them "ownership" of distributing some of the content. For example, the management team allows the legal department to update their opinions on certain issues or enables marketing to write sales scripts for product sales and enter them into the system.
This distribution of responsibility creates two types of information management in organizations:
Centralized Information Management - The only body to receive information from all sources and the only one to process and distribute information to all consumers.
Decentralized Information Management - A management that distributes the most important core information but involves other bodies in publishing local and/or non-professional information, serving as a guiding and supervising body.
What's Better, Decentralized or Centralized Information Management?
Each type has its advantages and disadvantages:
Advantages and Disadvantages of Centralized Information Management:
Advantages:
The skilled, homogeneous team managed together.
Information is processed only through it.
There is familiarity with the field and no "blind spots."
No issues with information responsibility - the management team is responsible.
No "falling between the cracks" of topics.
No duplication/contradiction of information due to multiple information feeders.
There is language uniformity and consumer and supplier confidence in the information.
There is field security - fewer hands, more security.
Disadvantages:
A body that may become too powerful, rigid, and disconnected from consumers.
No backup for the management team when needed.
The management team suffers from work overload.
Training management team members are complex.
Advantages and Disadvantages of Decentralized Information Management:
Advantages:
Less information overload for the management team.
More bodies in the organization engaged in knowledge management.
Power is distributed more appropriately in the organization.
The fear of thought fixation is lower.
There is a backup for the management team when needed.
A good way to identify candidates for work in the management team.
Simple and specific training - learning only what is needed.
Disadvantages:
There is concern for the "broken telephone" effect due to too many hands.
There are "blind spots," and the management team doesn't always know what's happening in the field/isn't updated on changes.
There may be duplications/contradictions in the information.
There may be field security issues.
Information distributors are heterogeneous with different styles.
Information may "fall between the cracks."
Information may reach consumers unprocessed.
Language inconsistency may appear.
So, Which Should Be Chosen?
Psychology has a saying: "If you're completely convinced of what you're saying, you're probably wrong..." The intention is that the world of psychology knows it deals with the hidden and complex, and any theory that arises and is agreed upon is correct only until someone manages to refute it. A theory is never a truth carved in stone or a definitive determination but a hypothesis (educated and based on findings) that may prove to be a mistake in the future. Therefore, we won't risk being "completely convinced," and our answer to this question is "It depends."...
We can say that the larger and more complex the organization, the more unavoidable decentralized management becomes.
Reality will dictate this, and it's better not to fight it but to recognize the advantages and disadvantages and know how to deal with them. In relatively small organizations or organizations where the scope of activity is not large, it is recommended that management be maintained in a more centralized manner to maximize the organization's capabilities.
In any case, it's important to remember that:
The management must match the organization's structure, not just its size.
Management must always adapt to reality. When the organization changes, the management must change as well.
There is no dichotomy - the management can be centralized in one area and decentralized in others.
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