Compare centralized vs distributed IT governance models and discuss when to use each.

• A. Distributed delegates decisions to business units
• B. Centralized helps ensure consistency and risk management
• C. Centralized concentrates decision rights in IT
• D. Centralized is best when speed and domain expertise are needed

Answer: (C)

Centralized IT governance concentrates decision rights in IT, meaning the central IT authority makes the key policy, architecture, and investment decisions that guide the whole organization. This setup creates a single, coherent direction with consistent standards, easier governance and control, and stronger alignment with enterprise risk management and regulatory requirements. Use this approach when you need enterprise-wide consistency, standardized platforms, coordinated risk and compliance, and predictable budgeting across many units or projects.

In contrast, distributed governance pushes decision-making authority down to business units, which is advantageous when speed, agility, and deep domain knowledge at the local level are essential. That helps with rapid responses and tailoring solutions to specific units, but can lead to fragmentation, competing standards, and uneven risk controls.

The statement about centralized governance focusing on consistency and risk management reflects real outcomes of centralization, but the defining feature is where the decision rights reside. The notion that centralized is best when speed and domain expertise are needed runs counter to how centralized governance typically operates, which prioritizes control and uniformity over rapid, localized decision-making.