The Centralization Paradox: Centralized Expertise and Decentralized Chaos in Business Analysis Centers of Excellence

By Gianni Fracchia | Written: January 17, 2024 | Posted: April 30, 2026

Business analysis centers of excellence (BACoEs) promise to standardize practices, scale expertise, and drive enterprise-wide improvement, yet many produce the opposite: fragmentation, shadow capabilities, and dissolution. This study examines the mechanisms underlying this paradox through a comparative case study of 18 BACoEs, drawing on 64 semi-structured interviews, 285 documents, and 24 months of observation. Three failure patterns emerged: the Ivory Tower pattern (33%), prioritizing methodological purity over operational pragmatism; the Bottleneck pattern (28%), generating shadow capabilities averaging $2.3 million in annual redundant spending; and the Orphan pattern (11%), in which executive sponsor departure led to dissolution. Successful BACoEs maintained executive sponsorship continuity (4.8 versus 2.3 years), proactive demand management, scalable operating models, and outcome-based metrics. This study extends paradox theory by demonstrating how structural choices amplify or resolve centralization-decentralization tensions, introduces the construct of stable undesirable equilibria to explain intransigent failure cycles, and quantifies paradox costs to enable economic analysis of resolution strategies.

The study produced the following findings:

• Three distinct failure patterns accounted for the overwhelming majority of BACoE failures. The Ivory Tower pattern (33% of cases) emerged when BACoEs prioritized methodological purity over operational pragmatism, becoming disconnected from business unit needs. The Bottleneck pattern (28% of cases) arose when demand exceeded capacity, creating wait times that consistently produced shadow capability development. The Orphan pattern (11% of cases) followed executive sponsor departure, leading to resource starvation and dissolution.
• Shadow capabilities were expensive and predictable. Shadow capabilities were detected in 12 of 13 failed and struggling cases, with costs quantifiable in 11 of those 12, averaging $2.3 million in annual redundant spending. This was a direct and quantifiable cost of BACoE design failures that most organizations never measured.
• Successful BACoEs shared four characteristics that failed cases consistently lacked: executive sponsorship continuity averaging 4.8 years versus 2.3 years for failed cases, proactive demand management preventing bottlenecks, platform operating models enabling self-service, and outcome-based rather than utilization-based metrics.
• Operating model selection proved more determinative than model sophistication. Matching hub-and-spoke, federated, embedded-rotational, and platform models to organizational context predicted success more reliably than the technical sophistication of the model chosen.
• Political factors outweighed technical factors. Sustained sponsorship and stakeholder satisfaction associated more strongly with BACoE survival than methodology sophistication or certification levels.

These findings have direct implications for practice:

• The three failure patterns were predictable and preventable. Organizations that recognize early warning signs (practitioner complaints about wait times, informal shadow analysis emerging in business units, and declining executive engagement) can intervene before failure becomes irreversible.
• Shadow capability detection enables early intervention before duplicate spending becomes entrenched. BACoE leaders should treat shadow capability emergence as a diagnostic signal requiring operating model adjustment, not a political threat requiring suppression.
• Executive sponsorship continuity was the single most controllable success factor available to BACoE leaders. Succession planning for executive sponsors deserves the same attention as operational succession planning: sponsor departure without a prepared successor was the most common precursor to BACoE dissolution.

This paper is part of an ongoing empirical research series on BACoEs available on the Research and Findings page.

The findings and frameworks in this research inform The Business of Analysis: How to Build, Launch, and Sustain a High-Performance Business Analysis Capability.

For consulting or speaking engagements informed by this research, visit the Contact page.