Managing scale and agility in digital platforms

Have we set up the right internal governance to enable operational agility and scale in execution?

This article is part of the Digital Platforms hub

Platform organizations need to set up governance mechanisms that enable distributed innovation at scale while ensuring centralized strategic coordination. While leveraging shared services and internal platforms, governance mechanisms may be structured based on the division of rights and responsibilities (as well as negotiating leverage) between the services sponsors and the individual business units.

These governance structures may fall into three broad categories:

DISTRIBUTED GOVERNANCE

The individual business units retain decision-making power and the shared service sponsor is largely responsible for supporting evolution of the shared service. Distributed governance may lead to redundancy and lower cross-Leverage.

CENTRALIZED GOVERNANCE

Decision-making oversight is the prerogative of the shared services sponsor. Future roadmap guiding the evolution of the service is managed centrally. Individual business

units craft their execution plans based on the direction and strategy set by the shared service sponsor. Centralized governance maximizes coordination, standardization,

automation, economies of scale, and funding continuity, but may reduce organizational agility.