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What is centralized planning

Definition: Centralized planning is a project management method in which a central authority (project manager, board of directors, client) is responsible for deciding the project specifics (budget, scope, resources).

This approach is used by organizations with a hierarchical structure, where the central authority can make decisions that impact the whole project. 

It provides a clear focus and direction for the project because key decisions aren’t scattered throughout the organization.

Example of centralized planning

A company plans to launch a new product with a project manager in charge of the project.

The project manager plays the central role and is responsible for creating a detailed project plan outlining the objectives and scope of the project. 

They talk with their team (or resource manager) about what resources are needed to finish the project which will help them decide on the budget. Before starting the project, the project manager communicates the deadline to the team and establishes a timeline of tasks together.

Once the project manager has all the information needed, they create a plan for the project and communicate it with the team, and the work can start.

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Article FAQs

Who is responsible for centralized planning?
In a centralized planning system, all key decisions are made by the centralized authority, determined by the organization or group responsible for the project. The centralized authority can be a single individual (CEO, project manager, team leader…), a group (board of directors, agency, project team…), or a department that can include sponsors, stakeholders, and project managers...
Centralized vs. decentralized planning
In centralized planning, all decisions are made by a centralized authority, while decentralized planning is a method where individuals make decisions in an open market (customers, end-users…). Decentralized planning offers a lot of flexibility and adaptivity to the market, but it can result in a loss of coordination and efficiency, which is offered by centralized planning.

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