Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Bimodal IT decomposes the IT function into two modes—Traditional and Agile—the
former focused on stability, the latter on the speed and experimentation necessary to
support innovative uses of IT in a digital business context. Our study identified four
bimodal IT archetypes and the factors that drive an organization to adopt bimodal IT.
We found that companies switch between different archetypes as they transform the
IT function, and we describe possible IT transformation journeys they can take. The
article concludes with guidelines for transforming the IT function in the context of
bimodal IT.
Page 1/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Agenda
 Introduction to the Bimodal IT Function
 Insights from this Research into Bimodal IT
 Navigating the IT Transformation Journey
 Guidelines for Transforming the IT Function
 Moving Beyond Bimodal IT
Page 2/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Introduction to a Bimodal IT Function
 Bimodal IT – decomposes the IT function into 2
modes – Traditional and Agile
 Traditional IT is focused on stability
 Agile IT is focused on experimentation
 Agile is needed to support digital transformation
 Bimodal IT allows the IT function to operate in
two parallel modes—Traditional and Agile
 Bimodal IT enables organizations to transform the
IT function to support digitization
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Traditional IT vs. Agile IT
Traditional IT Function
 Designed to deliver
reliability, scalability,
security and efficiency
 Functions as a service
provider
 Viewed as a cost center
 Focused on stability
 Risk averse
Need for IT Agility
 Demand to respond to
digital environment
 Focuses on customer
experience and
business outcomes
 Works on projects with
less certain outcomes
 Employs agile
methodology
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
The Bimodal IT Approach Resolves
Conflicting Goals
 A challenge to achieve optimal balance of explorative
and exploitative IT while simultaneously delivering
agility and reliability
 Firms must have IT agility
and IT explorative capabilities
while simultaneously not
losing sight of the IT function’s
traditional objectives
 An increasing number of firms are considering bimodal
IT approaches as the means to develop these
capabilities
Page 5/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Agenda
 Introduction to the Bimodal IT Function
 Insights from this Research into Bimodal IT
 Navigating the IT Transformation Journey
 Guidelines for Transforming the IT Function
 Moving Beyond Bimodal IT
Page 6/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Field Study and General Findings
 Field study with 19
European companies
 Companies had a minimum
of 250 employees, annual
revenues of at least 50
million euros ($53 million)
and an internal IT function
in existence for at least 15
years
 38 interviews with CIOs and
business executives
 Identified 3 reasons for
deciding to adopt
bimodal IT
 Identified four archetypes
of bimodal IT, each with
specific advantages and
disadvantages
 Found that bimodal IT is
used in the overarching
transformation of the IT
function
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Reasons Why Companies Decide to
Adopt Bimodal IT
1
The Need for IT Agility
2
3
The Need for IT Explorative Capabilities
The Need for Structural Alignment with the
Business
Page 8/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Four Archetypes of Bimodal IT
Identified four distinct archetypes with different levels of
structural separation between the Traditional and Agile modes
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Archetype A: Project by Project
 Certain projects are “fast
tracked” and tasked to
explore innovative IT use
cases while others follow
traditional governance
principles
 Allows companies to
gradually introduce Agile
mode
 Good choice for
companies reluctant to
engage in major changes
because it
Page 10/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Archetype B: Subdivisional
 Company subdivides the IT
function into two distinct
groups, one operates in
Traditional mode and the
other in Agile mode
 Agile mode requires a
different employee skill set
from that typically found in
traditional IT units.
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Archetype C: Divisionally Separated
 Establishes an Agile mode
division outside the traditional
IT function
 The Agile division is frequently
led by a chief digital officer
(CDO) and is often referred to
as the “digital division.”
 Causes the highest level of
internal disruption
 Appropriate for firms that have
fallen behind their increasingly
digital competitors and want to
signal their digital ambitions
both internally and externally
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Archetype D: Reintegrated
After establishing bimodal IT, firms
may decide to reintegrate Bimodal IT
archetypes and create a seemingly
unimodal IT function
Operates with heightened levels of
agility and explorative capabilities
Allows a firm to focus on its digital
business transformation mission while
moving traditional IT operations to
outsourcing partners or to a smaller
subdivision
The IT function retains its
Traditional mode in the background
while appearing to external
stakeholders as a unimodal IT function
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Difference between Four Bimodal IT
Archetypes
The differences between the four different
archetypes are:
Extent of internal disruption caused by the
bimodal split
Level of cultural divide caused by split
Management of IT resources
Alignment mechanisms between the business
and IT function and the two modes of IT.
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Differences between the Four Bimodal IT Archetypes
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Agenda
 Introduction to the Bimodal IT Function
 Insights from this Research into Bimodal IT
 Navigating the IT Transformation Journey
 Guidelines for Transforming the IT Function
 Moving Beyond Bimodal IT
Page 16/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Switching Between Archetypes
Common practice to switch as firms gain
experience and learn from the difficulties
Movement through archetypes is not
necessarily sequential from A to D
Duration and effort required for a transition
between archetypes can differ
Various motivations to switch
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Switching Between Archetypes 1/2
Archetype A:
Project-by-Project
Archetype B:
Subdivisional
Archetype C:
Archetype D:
Divisionally Separated Reintegrated
Typical
scope
Certain projects are
“fast tracked” and
tasked to explore
innovative IT use
cases while others
follow traditional
governance
principles.
IT function is divided
into two separate
divisions, one focusing
on “digital initiatives”
and the other focusing
on traditional IT service
delivery.
Separate “digital
division” is created
outside the IT function
under non-CIO
leadership and with
little or no ties to the
traditional IT function.
Potential
reasons
for
adopting
archetype
Individual groups
CIO has had significant IT staff members do
have previously
involvement in creating not have the skills or
introduced an
digital strategy.
the mindset to explore
Agile mode informally. Experience with
and deliver businessThe business is
explorative IT innovation relevant digital
trialing more agile
projects exists within the innovations. Top
and explorative
management wants to
IT function.
approaches on a few
express its digital
ambitions more
individual endeavors.
disruptively.
IT function involved in all
IT-related projects, but
with a focus on digital
initiatives. Traditional IT
services often performed
by outsourcing partners or
teams operating in the
background.
Agile mode and
Traditional mode
operations have matured
to an extent that they
could be (partially)
merged, with Traditional
mode activities
disappearing into the
background.
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Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Switching Between Archetypes 2/2
Critical
success
factors
Archetype A:
Project-by-Project
Appropriate training of
staff on Agile mode
methods.
Formally accepted Agile
mode governance
principles.
Business awareness of
risks and potential cost
traps of Agile mode
projects.
Archetype B:
Subdivisional
Strategically minded and
business-oriented CIO
manages the IT function.
Clear resource allocation,
governance, objectives
and division of
responsibilities in place
for both subdivisions.
Challenges/ Tensions between Agile IT function hierarchy
motivations mode and Traditional
inhibits motivation of all
to switch to a mode project resources. staff and engenders
different
High attention on Agile cultural division.
mode projects reduces Allocation of resources
archetype
the attention devoted to between subdivisions
Traditional mode IT
causes tension between
service delivery projects. them.
Archetype C:
Divisionally Separated
Appropriate governance
mechanisms for Agile
mode “digital division.”
Knowledge transfer and
cross-training of staff
between Agile mode
and Traditional mode
divisions.
Archetype D:
Reintegrated
“Legacy perception” of
slow and inflexible IT
function no longer
exists.
Business accepts IT staff
as competent and
adaptive partner who
deliver technologybased business valueadd.
Misalignment between
the digital division and
IT function. Digital
division generates IT
innovations that IT
function cannot easily
integrate with existing
systems. Duplications
between the two
divisions.
Little attention given to
providing commoditized
core IT services.
Potential loss of deep
knowledge about
traditional core IT
services and critical
backend operations.
Page 19/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Pathways for Transforming the IT Function to Bimodal IT
(A)
Project-byProject
Bimodal IT
Define Agile
project Mode
Host Mode 2
projects
in/outside IT
Traditional
IT Function
Implement / remove structural
separation
(B)
Subdivisional
Bimodal IT
Create Agile Mode
within IT function
Heal the
divide
Merge the two
Modes
(D)
Reintegrated
Bimodal IT
Form/dissolve Agile
Mode division outside IT
Create Agile Mode
division outside of IT
(C)
Divisionallyseparated
Bimodal IT
Major hubs (states of the IT function)
Stations (steps along the way from on hub to another)
IT transformation pathways (no case evidence for grey lines)
Page 20/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Agenda
 Introduction to the Bimodal IT Function
 Insights from this Research into Bimodal IT
 Navigating the IT Transformation Journey
 Guidelines for Transforming the IT Function
 Moving Beyond Bimodal IT
Page 21/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Guidelines for Transforming the IT
Function
1: Recognize and Promote the
Importance of Bimodal IT
2: Select a Bimodal IT Archetype
and Articulate your Future Vision
3: Continuously Re-evaluate Whether
to Switch to a Different Bimodal Archetype
4: Set up Appropriate Governance to Manage
the Transformation
Page 22/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Agenda
 Introduction to the Bimodal IT Function
 Insights from this Research into Bimodal IT
 Navigating the IT Transformation Journey
 Guidelines for Transforming the IT Function
 Moving Beyond Bimodal IT
Page 23/24
Options for Transforming the IT Function Using Bimodal IT
Haffke, Kalgovas, and Benlian – June 2017
Moving Beyond Bimodal IT
 Firms may eventually move away from bimodal
concepts to realize their future vision of
corporate IT
 Some companies strive for
a unimodal agile design
 Unimodal agile design can
be achieved by outsourcing
Traditional mode operations
so that the IT function can
fully focus on supporting
digital business objectives
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