ITIL SS Exam Failed

Andre72

Hello,
I'm complete now with my exams to Intermediate except the strategy exam I failed.
I plan to retry it and refresh my knownledge but unfortunately there's a question regarding adavantages of centralization /decentralization I still can't find useful hints for the right answer.
I remempber about economies of scale if they're negative for decentralization or positive for centralization.
Maybe somebody can provide me some information about this?


In total I was weak in Service strategy principles and poor in Implementing service strategy - every support here would be welcome.

Thank you in advance,
Andre

Claire Agutter

Hi Andre

Economies of scale refers to the money that you save by consolidating services into one area and reducing duplication and increasing opportunities to bargain with suppliers. A simple exam is an organisation that has a central facilities department - they can bargain for better prices on items like lightbulbs and cleaning products because they buy in volume, and 2 staff might serve 10 locations. If facilities is decentralised, those 10 locations will need 10 staff, and each will be buying their own supplies so the chances of volume discounts are less. I hope that's helpful, kind regards Claire

kaiju

This is what I can pull from my ITIL studies from many moons ago and recent CISSP/CISM studying.

Centralization reduces overall IT costs and sometimes provides better staffing to support the overall organizational needs. In other words, better economics.

Decentralization is more beneficial for meeting the goals of specific business units that cannot be properly supported by a centralized methodology(R&D is usually an example).

Andre72

Hi Claire,

thank you for very good explanation.
If I get it economies of scale can't be negativ, can it?

Claire Agutter

Hi Andre72 saving money isn't usually negative, but look out for what the business actually wants. If the business wants (for example) all facilities calls resolved very quickly, it might accept the higher costs that come with decentralisation to get that level of service. Good luck! Claire