Feb, 2021 - By CMI
A centralized system is the most reliable working model for the small businesses, as the single owner can supervise the business operations.
A centralized system is a process, in which the actions of a working body or an organization become restricted within a specific region or market. All the work done in these bodies can be controlled by a central computer. All processes are controlled by a centralized authority from the user’s social media activity to his/her bank transactions. All the users are connected to a single central server in this system. The server contains user data such as documents related to real estate, crypto-currency or content which can be accessed by users, whenever required. In the centralized system, the administrators create a backup for encrypted data. The centralized system can be deployed easily in the banks or in a company with quick development. This system is affordable to maintain and is advantageous when controlling the data centrally.
- Centralized business model
Every business start-up requires a specific business model. This model involves a framework that highlights the goals and the management of the organization. Each business has a distinct working model or structure. The scale and management of the business signifies the protocols or the regulations in the market. The organizational model also defines whether the company is a freeholder, alliance, or an association.
In a centralized business models, the entire system relies on a single individual for making decisions and for the execution of the operations. The owners can develop the company’s objectives and goals, and set the target for the employees and supervisors, in order to meet these goals.
The centralized businesses are impacted negatively when they have to go through the multiple stages of government authorities. These centralized organizations usually have several management stages extending from the employees up to the owners. This management procedure of the government is time-consuming for the business owners because they are responsible for making every decision in the company.
The centralized organizational structures are meant to distribute the authority to all managers of different departments in the business organization. This distribution gives a clear representation of management to the company. The organization is divided into various sections, and the employees with the highest expertise from those sections are allotted to lead that department. This gives the management under the control of most qualified person in each division.
Choosing the organizational structure is the most crucial task for the business owners. Selecting the centralized working model can be beneficial for the small businesses, as the owner will always remain in the frontline of all operations. Whereas for large businesses, the decentralized structure is more suitable because such companies have various departments. Depending on the expansion and growth of the company, the owners may consider on switching to the other business models.
- Types of organizational structures
In the business world, there are two main organizational structures, centralized and decentralized structures. The decentralized organizational structure may give the liberty to its employees and managers to volunteer in the decision-making of the company. In the centralized structures, the decision-making is fully dependent upon the single individual owner of the company.
- Functions of the centralized business system
Greater internal control and co-ordination is achieved on implementing the centralized organizational structure. This internal control helps the company to secure several tasks and the data generated from each division. The centralized system maintains authority distribution among the managers and their departments, and ensure that neither of the department is given excess of control. In this organizational structure, the companies can develop an ordered procedure for the employees and the divisions that is operating from the remote location.
- Centralized system in Banking
All the centralized systems use the server-client architecture, where multiple nodes (computer and mobile devices) of the clients are connected to the central network. This central network that co-ordinates all the nodes of the system is called as server node and the remaining nodes are referred as client nodes. This is the most common system deployed by many organizations in which the client sends a request to the server of organization and the company responds back to the client.
Example of the system: - Wikipedia is a giant server, which receives numerous requests and the server responds back to the requested data. The server also suggests an additional content that is relevant to the requested data. Here, the user searching for data is on the client node and the Wikipedia acts as the central server.
Unfortunately, this system has a major drawback. In case the server gets crashed, the system will not respond correctly and the data of the users cannot be accessed. Because the centralized system requires a central server to connect to all the devices of users. In this process, the network provider will act as the third-part interference. This gives rise to the privacy concerns when the network owners come in-between the system and its users. This is the reason for the organizations are no longer consider the centralized systems as their top priority.
At the time of high traffic on the server, the system is at the risk of Denial of Service (DoS) attack, as the system has only few ports opened for connection to the client side. In DoS attack, the system is crashed and the users are not able to access to the server.
When using a centralized system, the user must be aware of the factors such as the system has the total control over the user’s data, crash of the main server will put the data on risk and the whole trust is on the system. Moreover, the system takes longer time to access data for the users residing far from the server.
- Building blocks of a centralized system
The main elements of this system include:
A central server
Node (smartphone, desktop)
Network connection (Internet, Wi-Fi)
- Properties of a Centralized System
A single control unit: - All the connections are controlled by a single unit that co-ordinates all the systems.
Scaling: - Scalability is an ability of a system to manage increasing volume of operations by introducing new resources to the system. In economic terms, a business with scalable working model can raise its sales along with increase in its resources. For example, a food delivery service can be considered as a scalable business, if more deliveries are made by adding number of mopeds. But, if all the food is to be delivered from a single restaurant, then this system cannot be considered as scalable as a single restaurant can only produce a limited number of food packages.
In the centralized systems, the process and storage of the data can be done from a single location. Although this system has the commendable benefits on the performance of the system, the scale of the system is limited to a single node. Due to this reason, only vertical scaling can be done on the central server.
Availability of central node clock: - The centralized system comprises of a central node, which acts as a server and multiple client nodes that are the computers. These client nodes or the computers can be synced up with a central node clock.
Fate of the components: - The failure of the central node can shut down the whole system. No data transmission is possible as the user cannot receive or send the information, when the system is down.
1. Single update from the central network will update all the nodes on the client side
2. Less initial set-up cost
3. Reliable resources such as the server and the cores of CPU
4. Suitable custom requirements. The organization will use the same system as that of the user
5. On the basis of location, the user can easily secure the server and the nodes on client side
6. Easy node detachment from the client side
7. The company can focus more on producing quality products and services rather than spending time on working for internal issues of the company
8. With a secured internal management structure, the company can work on maximizing the profits and expanding the business
9. As each of the manager and employee have a clear role of their task, the organization will improve the inborn work flow and the communication within the company
1. Heavy dependency on the connectivity of the network. In case, the nodes loose the connection, the entire system will fail due to single central server.
2. Hard maintenance of the server. As the whole system is dependent on a single server node, its maintenance will curb the data transmission for some period of time.
3. If the data is not backed-up and the system fails, the data will be lost forever
1. Servers such as Django and express have deployed a centralized system to test their servers in default
2. Simulation, debugging, deployment
3. In centralized databases where the whole data can be stored for use
4. For solo gamers to store all the games in one system
5. In analysing the data
6. Used by IBM and National Informatics Center (NIC)
The centralized system is getting popular among the small-scale businesses due to its benefits. While in banking sector, the security concerns can hamper its expansion. Software and tech giants such as Microsoft, Amazon are encouraging other companies to develop a centralized organizational structure in their business.