Centralization Challenge Aspects
Finding a balance between centralization and decentralization is an important aspect of digital transformation for multinationals as well as businesses with a multiregional presence. For such corporations, the digital transformation process must take into account the additional complexities associated with different cultures and economic characteristics, including the level of competition and other local specifics.
The development of IT solutions for a regional organization forces companies to develop its ecommerce presence using a variety of legacy software systems, which requires significant time and budget investments for customization and integration.
Since customers focused on online platforms as the main channel for ordering during the pandemic, time-to-market has become more important than ever. Multiregional organizations need to act as quickly as local competitors. A large role will be assigned to centralized digital assets that can be reused at the regional level.
When attempting to accelerate online market penetration in different regions, multinational corporations often run into additional digital transformation tasks by selecting the wrong level of centralization for managing and using digital assets.
Determining the optimal level of centralization and decentralization for businesses during digital transformation has to be solved by each multiregional company. This process often depends on many objective – and even subjective – factors, such as the background of top management, the age of people on the board of directors, and even things like the gender of decision-makers.
Therefore, situations are not uncommon in which teams tend to go toward one extreme or the other, which can slow down the process of digital transformation. Let's look at these problems and how to solve them.