The digital economy is all about fast innovation and getting new products to market more quickly than competitors. IT needs to step up its game to help drive innovation, without sacrificing top priorities such as compliance, cost control and maintaining availability.
The stakes are high even for massive, successful businesses. Today, 50 percent of the Fortune 500 from the year 2000 no longer exist. Businesses understand the need for agility and innovation, with 64 percent stating that innovation and operational effectiveness are equally important for the success of their company. However, they may not actually be prioritizing their IT functions to be as innovative as possible.
"I've seen companies where (keeping the lights on) is 80 percent or 90 percent of the IT budget," says Columbia Business School professor Rita Gunther McGrath. "I think it should be no more than 50 percent," she adds.
How can organizations create a more innovative, agile IT environment, while enabling IT to continue to excel in its traditional responsibilities?
Bimodal IT Balances the Old and New
A bimodal IT strategy can help organizations drive innovation while maintaining core IT priorities, when it's closely aligned with business strategy.
Many companies are already embracing the concept of bimodal IT, or operating at two speeds. According to Gartner, in addition to traditional IT operations at the current speed of business (Mode 1), 45 percent of CIOs say they currently have a second fast mode of operation (Mode 2). Gartner also predicted that 75 percent of IT organizations will have bimodal capability in place this year.
"CIOs can't transform their old IT organization into a digital startup, but they can turn it into a bimodal IT organization."
Peter Sondergaard, Gartner
A Bimodal Approach Pays Off
We're seeing examples of bimodal successes in a variety of industries.
For example, Switzerland's Schindler Group, a manufacturer of elevators, escalators and moving walkways, needed to bring more innovation to the business, so the company created a business unit called Schindler Digital Business AG. The startup-like group enables a faster approach that allows more risk taking and applies IoT and mobility solutions to make its equipment smarter — and the company better connected and more responsive to customers.
Another firm, Hunter Douglas North America, employs a more nuanced approach, mixing operational and innovative tasks without a hard separation between organizations. Making innovation a part of operations work helps inspire workers to keep current and can help enhance employee morale.
How to Pay for IT?
Funding is an important part of driving a successful bimodal IT initiative. CIOs need to do it in a way that isn't always dependent on traditional business case processes.
To minimize risks, Gartner suggests starting with small, low-cost projects for Mode 2. Keeping projects to a manageable size gives the CIO an opportunity to explore different funding options faster. And business decision-makers are more likely to understand projects that are smaller in scope — and approve them faster.
Measuring success for innovative Mode 2 projects isn't always the same as for more traditional Mode 1 projects. Instead of evaluating an initiative on its profitability alone, consider factors such as:
- What new strategic opportunities does the project offer?
- How will it provide competitive differentiation?
- Is it innovative?
Being smarter about investments in Mode 2 systems and the way you support them can also free up additional resources. Consider thinking outside the box and looking to a third-party support provider, rather than depending on the original vendor's support, which can be expensive and inflexible.
One Size Does Not Fit All
Bimodal IT can provide some powerful benefits, but it is not a panacea. Some contend that bimodal IT is not a new concept at all and that existing IT processes are flexible enough to support today's needs, without the need to formally establish parallel teams or operations.
Others contend that the bimodal model does not adequately consider development differences between systems of record and systems of engagement. They assert that most companies already have robust core operations but lack systems of engagement to compete effectively. To address this issue, companies need to put systems of engagement in place rapidly.
However, the lines aren't always clear: A business process for a system of engagement could cross into a system of record, so development across both modes needs to happen fast.
The bimodal IT model isn't perfect. Is it a reductionist view of IT? Maybe. Are there integration and synchronization challenges? For sure. But can organizations move every single system in their entire operation forward at the light speed required to compete in a digital world? And should they? Absolutely not. Bimodal IT offers a path forward. Some analysts even offer a multimodal model designed to make bimodal IT even better. What's important is to get moving and innovate most effectively at points of engagement that drive customer experience excellence in a digital world.
It's clear that Gartner's recommended bimodal model has tremendous potential and can be an effective way to drive innovation. But to succeed, remember to consider how the initiative will align with your overall business.
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David Rowe, SVP & CMO
Mr. Rowe is a 29-year veteran of the enterprise software industry with proven experience formulating, building and marketing technology solutions for both large international software firms and high-growth technology start-ups. He has been a featured speaker at technology and marketing conferences and was named as one of the Top Chief Marketing Officers of 2010 by the CMO Institute. Mr. Rowe oversees all global marketing for Rimini Street.