True North Tech Series: Point-Counterpoint on the Value of Bi-Modal IT

Technology and Digital

By

October 9, 2018

It’s no secret today that digital transformation is imperative for survival. And as explored in our recent POV, “The New Rules of Digital Transformation,” digital transformation success stems from the capacity to continuously do, adapt, and learn in keeping pace with the accelerated rate of change.  In another of our recent pieces, “The Path to Professional Salvation for Modern IT Leaders,” we’ve observed that the CIO is under increasing pressure to deliver innovative, digital solutions both within and outside of IT. As a result, a bi-modal operating model—one in which routine, keep-the-lights-on activities and experimentation and innovation run in separate tracks—has bubbled to the top of the agenda for many IT leaders.

Can bi-modal IT crack the code on the decades-old challenges associated with IT’s strategic partnership to the business?

In this True North Tech Point-Counterpoint special edition, we sit down with Dwight Specht, Vice President and Global Technology Lead, and Mike Hill, IT Operations Lead, to debate the value of bi-modal IT.

Q: Mike, let’s start with you. How do you believe a bi-modal operating model can better position IT leaders to more strategically partner with the business?

[Mike]: Bi-modal has been blanketly criticized or defended, but the reality is much more nuanced. It encapsulates so much more than the ages-old struggle between development and innovation versus operations and stability. The fact of the matter is that the skills and practices needed to maintain legacy infrastructure are vastly different than what’s needed for IT-enabled business innovation. There’s often a notion that bi-modal IT creates excessive structure and governance—but this position casts a blind eye to the fact that large, hierarchical enterprises typically operate within this reality. The transition from entrenched IT ways of working to modern IT won’t happen overnight. Bi-modal gives CIOs a way to begin “crossing the chasm,” so to speak.

Q: Dwight, keeping in mind the organizational complexities that Mike has cited, do you think bi-modal IT can work in certain instances?

[Dwight]: Haven’t we seen this movie before? There’s an inherent tension between innovation and stability in any department – not just IT. Aside from being a spurious rehashing of old concepts, bi-modal IT puts unnecessary structure and risk on an IT enterprise – this runs counter to agile concepts. Ironically, much of the hype surrounding bi-modal IT stems from the desire to be more agile in the digital age. It necessitates the creation of separate investment, management, and governance techniques for each operating mode.

Q: Let’s dig into some of the virtues and failure points associated with each of the modes.

[Mike]: As I said before, I don’t think the answer surrounding bi-modal can be relegated to a yes or no answer. Take, for example, technical debt. Dealing with the expense of legacy systems is a real issue, particularly for legacy, non-digital organizations. As such, it necessitates a flexible response that mode 1 or mode 2 cannot tackle alone. A mix needs to be considered.

And, of course, bi-modal is a delivery model, not a decisioning model. At the foundation, enterprises must upgrade how they think about the intersection of business and IT. Modern IT planning should drive investments to rationalize and transform mode 1 work so that it transitions over time into mode 2.  Bi-modal is not a permanent state, and organizations that think this way do so at their own peril.

[Dwight]: In separating key activities into mode 1 and mode 2 tracks isolation is inevitable. In mode 1, IT leadership will focus solely on the issues facing customers and business units, rather than looking at the impact to stability. Worse yet, it creates an environment in which IT leadership in mode 1 will be more prone—and, in most cases, incentivized—to overlook innovation that could also help to improve stability. Introducing these sorts of ways of working are toxic to any organization seeking to move the needle on digital innovation.

Q: Dwight, earlier you mentioned the organizational complexity that can result from a bi-modal operating model. Can you expand on that position?

[Dwight]:  By giving way to separate teams with two separate goals, risks and communication issues will undoubtedly arise between both. Organizations should be focusing on embedding technology as the driving core of the business by breaking down functional silos – not adding more. The creation of artificial silos can cripple organizations seeking the innovation and collaboration that the digital era necessitates.

Inevitably, two modes will give way to different products, processes, and people within each silo. There may also be mode 1 stagnation as innovation on legacy systems is stifled. Even Gartner admits that mode 2 still requires a disciplined approach. This is counter to an innovative model and, ironically, supports mode 1 principles.

[Mike]: I believe that bi-modal IT can eliminate silos – when done right of course. IT is already segmented into many silos.  The integration between front end, customer-facing applications and back-end operational systems is rapidly accelerating. Modern IT systems that are cloud-enabled, platform-based and leverage microservices and APIs provide the essential capabilities for building modern applications and transforming legacy systems using techniques such as Domain Driven Design (DDD).

Q: In the discussion so far, you’ve highlighted that there’s a different operational reality for born-digital and legacy organizations. How does this shape your thinking on bi-modal IT?

[Mike]: Google, Microsoft, Uber, etc. may be the exemplars of our technology future, but they do not represent the real technology challenges that many Fortune 500 companies face. Mainframe systems that run reliably, but represent a half-century of legacy investment, will not go away soon.  And many firms have no desire to take on the risk of ripping out systems that run reliably, are very complex, and where the knowledge of what and how they work is long gone. By pairing bi-modal delivery with DDD, organizations will be equipped with design and delivery strategy for modernizing key components of these aging systems, without having to take on the risk of wholesale replacement. DDD provides very practical strategies for innovating mode 1 systems without the risk that comes with full replacement. The foreseeable future for many organizations will be bi-modal.

[Dwight]: While you mention bi-modal IT being a better fit for legacy, non-digital organizations, such as those in the Fortune 500, I believe it’s arguably worse. For one, bi-modal IT causes stagnation, forcing organizations to deal with growing friction within their legacy systems when sprints and agility are over emphasized. This stagnation leaves a second team in the IT “back office” to trudge through underwhelming work deliverables. Plus, the realities of culture cannot be underestimated, particularly in legacy organizations. Any time a business tries to change the way it’s operated for years, there will inevitably be some employees who want no part of it. Splitting IT into two separate teams can give way to an “us vs. them” mentality and you may unintentionally segregate the workforce and create two “classes.” While this can be mitigated, bi-modal IT comes with costs that can offset benefits.

Q: Are there any final remarks you’d like to leave us with?

[Mike]: Bi-modal remains an appropriate response to linking legacy systems and new, modern web app development to drive innovation. Increasingly, innovation is driven by the ability to link old world and new world systems to drive new forms of value and customer experience. This emerging need is, and will remain to be, where bi-modal can serve as a stepping stone for evolving enterprises.

[Dwight]: The costs of bi-modal IT simply outweigh any of its anticipated benefits. Innovation and stability are not mutually exclusive, and they shouldn’t be treated that way. By driving stagnation across modes and creating siloed cultures within the IT department, bi-modal IT fundamentally impedes much of the agility that organizations are seeking in their digital transformation efforts—ultimately perpetuating the entrenched tension between IT and the business.


This piece was co-authored by Mike Hill

Michael Hill is a Principal at North Highland. He has over 24 years of experience helping clients gain more value from their internal or outsourced IT organizations. Specific areas of expertise include IT Business enablement, IT functional strategy, IT business planning, and IT investment planning and business alignment. He has experience working across multiple sectors including financial services, manufacturing, distribution and warehousing, transportation, and telecommunications.

 

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