Each year at the annual Gartner IT Symposium, the gathering of 10,000 IT professionals anxiously waits through the pulsing music and flashing lights for Peter Sondergaard to hit the stage with the opening keynote. The question on every alumni-attendee’s mind is: What will the new Gartner IT buzzword be this year?
We want to know, because although it often at first seems terribly idealistic, it usually ends up being very relevant in some way, and, it will be the theme woven into every session in the coming days of the event. You want to be sure you’re on board the thought train early.
This year’s buzzword was not immediately obvious. For a while, Peter held us in suspense with “Digital Business” which we’d heard before, but evenutally he let it fly: Bimodal IT. I tweeted this from the floor, and one of my friends thought I was talking about a gastrointestinal issue. To understand bimodal IT, we have to sort of back into it, which I’ll do by very briefly breaking down the keynote for you and commenting along the way.
Bimodal IT has to do with the fact that businesses in every industry are becoming digital in order to remain relevant. If we think about physical, or “analog” business being our traditional brick-and-mortar operations, and virtual business being that which we do online, then a digital business is simply a combination of the two. As an example, in the area I live we have the Boscov’s department store chain. It has both physical and virtual stores – a perfect example of a digital business.
A specific example cited by Sondergaard was Williams-Sonoma – 50% of their revenue is from the online portion of their digital business. Both their top-line revenues and margin are up, despite competitors going flat or in the opposite direction.
To do digital business well, says Gartner, you have to support two business models, not just a once-and-done online project here or there. Are you beginning to see the word “Bimodal” sneaking up in the rearview mirror?
Oh, and to make sure we care about doing digital business well, and therefore Bimodal IT, it was pointed out to us that globally, digital commerce is currently a 1 trillion dollar affair.
Two Modes, Two Speeds
Traditional business, or “Mode 1”, is driven by business moments, that is, when a business discovers something that customers want. Digital business, or “Mode 2” starts instead with customer behavior. Rather than worrying about what the customer wants, Mode 2 determines strategies based on what the customer is doing, which comes from using algorithms to analyze past interactions with them. Think here of Amazon’s recommendations to you based on your past purchase history.
Mode 1 moves slowly using traditional methods to develop products and go to market. By necessity, Mode 2 must iterate quickly based on ever-changing customer behavior and cannot be constrained by the traditional methods. We do Mode 2 by creating so-called “innovation units”, which are new digital initiatives running along side our traditional analog business units, but at much faster speeds and without the weight of traditional processes. (How’s that for a Gartner mouthful!) The two modes do not compete with each other, but instead work together to create a integrated, successful digital business.
Seems reasonable so far.
Getting There – Part 1
Some organizations are building Mode 2 innovation units themselves, while others are buying them through – are you ready for another buzzword? – “Techquisitions” to get there more quickly. Oh boy.
The point being that digital business can’t be built on top of a traditional Mode 1 platform because Mode 1 by nature moves too slowly (they beat this point to death, so I will too). Instead, the solution is to create a “bimodal IT” organization, and introduce a Mode 2 initiative with a different emphasis. Mode 2 breaks out of the slow stable approach of Mode 1 and is built for speed to fail fast and achieve results quickly.
Not surprisingly, Mode 2 uses more cloud than it does in-house apps and resources. This new mode is less about gathering data as IT systems have traditionally done, and more about algorithms acting on the data.
I should be careful to point out here is that Mode 1 is not to be viewed as “bad”, but rather that it’s just not enough anymore to remain competitive. Mode 1 and Mode 2 exist happily together. And of course, without Mode 1, there would be no “bi” in bimodal.
Getting There – Part 2
The relationship between IT and the business itself has changed. Per Gartner, in 2005 IT controlled 70% of the IT spend, and those spending the rest of it were considered non-strategic, “stealth IT” that needed to be stamped out like a bug. Now in 2015, IT controls 58% of the spend, and by 2017 this is expected to fall to 50%. And, this trend is no longer being hidden by the business units – they’ve come out and freely admit to it. So we have technology being openly embedded into the business from outside of IT, and IT doesn’t control it?! Oh, the humanity… Where does that leave the CIO and his team?
From Control to Influence
It leaves them to consider exchanging control of IT for influencing its direction. With the rise of consumer technology, there are now many tech-savvy folks in businesses who work completely outside of IT. Both technology ownership and talent have shifted, and have taken some IT leadership along with them. But rather than view this as a bad thing, IT leaders would be better served by viewing it as something to be tapped into, or put another way, as more resources to draw on.
As an IT leader in today’s world, you no longer really can have total control, but you can have great influence. Rather than struggle against the tide, perhaps it would be better to change your style, along with the perception of the value that IT brings. Instead of being a provider of all things IT, you may be more successful serving as a “broker” that helps users get the IT services they need, regardless of whether they’re sourced internally or from the cloud. Instead of being controlling, you become a valuable coordinator.
The Bear in the Woods
The best way to illustrate this control vs. coordination concept is to share a story told by Gartner’s Daryl Plummer in one of the breakout sessions. It’s called “The Bear in the Woods” and illustrates the difference between control and coordination. Here’ goes:
One day the IT department took their users on a visit to the woods. But the users were scared of the woods, and all the growls, and the darkness. So IT built a perfectly straight, level, and wide path through the forest clear to the other side, completely lighted. Then they gathered the users together said, “You’re all set. Stay on the path, and you will get through the woods successfully. We guarantee it.” And as they left for the night, they said to the users, “Do not leave the path because we’ve lined both sides of it with an 8 foot-high electric fence. If you touch it, you will die.”
So IT went home feeling they had served their users well. Unfortunately they had neglected to consider the part of human nature that rebels when told it can’t do something. When IT came back the next morning to see how things were going, they found that the users had become split into four groups. The first group, thinking they knew better than IT, had tried to climb the fence and got electrocuted, their bodies still stuck in the fence. The second group made it over OK, but got scared once they were in the woods and had came back to the fence. They realized it really was scary in the woods and wanted to be let back on the path. (we might refer to this group as “shadow IT”).
The third group was sitting huddled in the middle of the path. They were so terrified by the whole situation they couldn’t move all night. They said to IT, “You made us so scared we couldn’t do anything, and now we feel like cowards. We don’t like you any more.” The fourth group made it over the fence and were never heard from again. They didn’t need to come back because they didn’t really need IT after all. The unhappy result however, is that all four groups of users hated IT for treating them this way, because IT had tried to totally control them.
By contrast, IT as a coordinator takes a different approach. They build a narrow path, put the users on it and say “Stay on the path, and you’ll be safe.” But they also say, “If you choose to leave the path, you’re free to go at any time. Just tell us why you’re leaving, because we’ll use that knowledge to widen the path. Maybe next time you won’t have to leave it. If you want to take one of us with you, that would be great, we’d like to learn what happens and help you along your journey.” If you do go out there though, know that there are bears in the woods. If you meet a bear, no one will come looking for your body. You are on your own. If you survive the bear, we definitely want to talk to you, because we will use what you learned to widen the path.”
The moral of the story? IT leaders today should always be positioning themselves to help by guiding rather than by controlling.
The application to Bimodal IT is this: Fast moving Mode 2 is chock-full of cloud services, and some of that work will happen outside of IT because a portion of the talent now lives there. Sometimes they will try to head into those woods alone only to meet tragically with the bear. To stay involved in a meaningful way, you want to become a guide rather than a drill sergeant. The former will be helpful and well-received, the latter is doomed to fail.
Bimodal IT is not a new idea, it seems to me. It’s just a word put to something that was already happening. But by naming it, Gartner raises our awareness of it, and helps us think about how we can apply it in our traditional Mode 1 businesses so that we can remain relevant to our customers and profitable in the marketplace. The key to making Mode 2 work will be the ability, and willingness, to move with great agility – something that I think will require a significant change in thinking and much more trust within an organization.
So I’m on board with the idea of Bimodal IT, are you?