This document was made possible by a scan of available literature on the subject, and several expert interviews with Daniel Van den Hove (LinkedIn), Thierry Delvaux, Eric Hella (LinkedIn) and Bruno Carbonnelle
We are in a VUCA - volatile, uncertain, complex and ambiguous – environment, that is putting the IT departments of large and small organisations under pressure. Change is coming more rapidly and is more and more driven by technological innovations. Typically, we know that organisations should adapt to this and, as it is said a lot, should become “Agile”. But, what does “Agile” mean concretely? What is its impact on the current way of working and structures? How should it be introduced? What is the role of IT, and what is the role of business in this transformation journey to become Agile? This article gives our point of view on this topic, and we are more than open for a constructive discussion with you around the subject.
In this context, some IT departments have grown dramatically and are having difficulties in getting organised internally as well as building an effective partnership with the business. They must maintain their legacy systems, and, in the meantime, they are asked to tackle new opportunities or innovate. In reply to this, Gartner introduces in 2014 the Bi-Modal IT paradigm, an operating model for IT. Gartner defined Bi-Modal as:
“The practice of managing two separate but coherent styles of work: one focused on predictability; the other on exploration. Mode 1 is optimised for areas that are more predictable and well-understood. It focuses on exploiting what is known while renovating the legacy environment into a state that is fit for a digital world. Mode 2 is exploratory, experimenting to solve new problems and optimised for areas of uncertainty. These initiatives often begin with a hypothesis that is tested and adapted during a process involving short iterations, definitively adopting a minimum viable product (MVP) approach. Both modes are essential to creating substantial value and drive significant organisational change, and neither is static. Marrying a more predictable evolution of products and technologies (Mode 1) with the new and innovative (Mode 2) is the essence of a bimodal enterprise capability. Both play an essential role in the digital transformation.” [1]
The fact that what is innovative today will become legacy tomorrow creates an additional level of complexity.
In its origin, the concept of Bi-Modal was mainly focused on IT. However, when Bi-Modal transformation is discussed, ngage and related experts agree to say that it refers to the introduction of agility and innovation (i.e. mode 2) within a whole company - not just its IT department. Chief information officers' (CIO), Chief Technology Officers' (CTO) or Chief Transformation Officers' (CTO) question themselves about this transformation: how to introduce it within their current ways of working, how to organise and what is the link with agile transformation. As the article will show, there is, unfortunately, no easy, off-the-shelve answer for this.
In our opinion, the introduction of “Bi-Modal” has implications on the way we manage six main areas. For each of them, based on expert interviews, we highlight the following key elements:
The Enterprise Architecture: The discipline of Enterprise Architecture is typically organised to look on the (very) long run. However, the introduction of Bi-Modal means that a part of the enterprise assets is changing less predictably and a lot faster compared with other assets evolving at a much slower pace. It means that EA should (1) allow this to happen and (2) be able to review and to adapt the target operating model. It should be noted that an introduction of “data-centric architecture” [3] is vital in this context (refer to 5th paragraph: The Data Centricity).
The IT Solution Landscape: The Pace Layer Framework from Gartner [4] can be used to classify the solution landscape and define the proper management in line with the attributes. IT solution landscape should allow the stability of the core business functions, and the flexibility to IT for innovation (for example, allowing shadow IT and allowing new technology in the IT portfolio). However, when innovation becomes a core business, it should be on a stable platform.
The Process Management: As for the IT solutions, processes innovations should be supported as well in a Bi-Modal world. The business should be allowed to test a new process rapidly or be able to automate (parts of) its process(es), using new technology (e.g. via shadow IT under well-defined conditions and rules [5]), but without putting the current business functions at risk.
The Organizational Structure and Culture: Our experts highlighted this area as it is key for the success – or failure - of the transformation.
First of all, the traditional hierarchical structure should allow working matrix-like as well. One resource should be able to contribute based on its competences and its interests on projects outside of its business unit or the BU of its hierarchical manager. A multi-skilled team might be re-combined based on the required innovation. This clearly requires a different management style and a different set of rules in the HR policy, in terms of the evaluation process, competence management and RACI.
Secondly, a great deal of attention should be given to the “two-faced-culture” that will be created. It should be that the image of the innovations has as much value as the “keep it running” activities. As a matter of fact, some people function better in a particular, structured environment and others in an uncertain, flexible environment. Both cultures and mindsets should be there, allowing all to feel good and perform at best. As an extra dimension, one expert insists that from a recruitment point of view, one should have an agile component in the organisation to attract new talent.
In addition, sponsorship is crucial. The entire management team needs to be aligned with the new organisation, culture and set of rules. One expert highlights that a CXO should ensure efficient sourcing and HR strategy based on a multi-generational approach allowing team members to meet their aspirations. In general, but certainly, for bi-modal or agile cultures, the company needs to take into account the aspirations of the different generations.
The Data Centricity: Companies' traditional habits are to make the use of applications to automate well-defined business processes in such a way to gain stability over time (e.g. ERP, CRM,…). Nevertheless, those applications are mostly “function-centric” and implemented by department silos, creating redundant assets in monolithic legacy systems. Being Agile with its information system is made difficult in such a situation.
By nature, data assets are durable and strategic to any part of the company. They should not be confined to the sole usage of a specific department or information system function but easily consumable across the enterprise to answer the broadest scope of potential questions. It’s the flexibility and multi-usage character of data that should be introduced in order to set up agility in their processing and flexibility, modularity and scalability in business processes subject to continuous change and improvement. This can only be achieved by implemented two elements serving as the foundation stones of this transformation. The first element is a central enterprise data model along with the necessary dictionary to build an integrated view of the data created and consumed across the company, unbiased of any application. Secondly, an enterprise data governance will be necessary to define and enforce the policies regarding the shared data assets. The buildup of this technological agnostic layer will allow an efficient consumption of the data irrespective of the future functional needs.The Enterprise Governance: This should be viewed on different levels:
First of all, financial governance needs to be adapted. Business executives, including the CIO, should, as a team, accept more uncertainty. The template business case will need to be reviewed with the instruction of mode two projects.
The project portfolio cycle – with the decision to start, stop, continue and release projects – will need to be shortened as the company needs to react rapidly to changes, but also to decide on Minimum Viable Products (MVPs). All experts interviewed clearly stated that introducing innovation and agility doesn’t mean anarchy or freedom of decision. Governance rules still need to be followed, and project gates remain a must, certainly in a Bi-Modal world.
In terms of release management, the constant flow of Agile delivery should be aligned with the traditional delivery. Front-ends that need back-ends (and vice-versa) need to be mapped and monitored.
In short, Bi-Modal introduces a coexistence of two modes of working in different areas, that go together in one company. It has implications on the level of risk tolerance of the company, the speed of decision-making, the organisational culture/structure, and complexity of the governance. In this way, ngage and its subject-matter-experts are convinced that there is no “one size fits all”, and each company needs to decide how to shape it.
From traditional to Bi-Modal to Agile? Or not?
But then the question remains: how to start? Is a Bi-Modal enterprise an intermediate step towards Agile enterprise? Should one go directly “for Agile”? And how to introduce Bi-Modal within your organisation?
Our experts do disagree on this point. Some say that Bi-Modal is an intermediary stage and enabler towards a full Agile enterprise. The executives should introduce agility in one or more domain(s) or axe(s) at a particular moment in time – depending on how far and fast an organisation wants to go in a topic. In our opinion, this goes more for a clear goal of “Agile transformation”. Others say that it should be an evolution and that the goal doesn’t even have to be “all Agile”. This refers more to the Bi-Modal transformation. Bi-Modal, well organised and defined, is the goal and can deal with some complicated situations that might appear.
The questions should be addressed from what capabilities your company wants to offer. Some experts state that starting from the current and future capability map [6] an assessment can be made. What is the level of maturity around a specific capability, what level of stability does the business need, what is the maturity of the underlying technology,… In this way, IT is becoming an integrated part of the business. When a capability is mature, meaning not a lot of business change is expected in the short run, and it is fundamental for the business, we have the opinion the mode 1 – traditional – way of working is to be considered. However, when a lot of innovation is going on, then a mode 2 might be the best way to go forward.
Other experts add to this that independent domains – from an architectural point of view - should be identified to organise Bi-Modal in the best way. Typically, innovation and R&D can be managed in a different way than the core business as it is often independent or standalone. Interconnected domains follow ideally the same principles and approach of working. A large organisation will, at a certain moment in time, make a fundamental and brutal switch towards Agile concepts to make it real and viable. “We can see a transformation as a cube, that can be addressed from different angles, but at least on one angle, one should take a radical position.”
Introduction of automation in the data processing activities are essential to enhance data-centricity added value. The various components that compose the data pipeline must be able to meet a clear and well-defined use. In addition, they must be flexible and integrated or ensure data-related business objectives are reached.
Of course, both approaches imply the potential co-existence of the two modes – temporarily or permanently - which is complex on different levels, as introduced above and should be managed in this way as well. We suggest for all companies, who introduce agility in their day-to-day, to evaluate their situation on the six areas mentioned above axes, their willingness to adopt “Agile” in a domain and define the implementation strategy and plan in line with the particularities of the company. It will be a journey that requires decisions on each area on how far and fast we want to go in the implementation of agility.
___________________________
[1] https://www.gartner.com/it-glossary/bimodal
[2] A well-defined practise for conducting enterprise analysis, design, planning, and implementation, using a comprehensive approach at all times, for the successful development and execution of a strategy (Source: Wikipedia)
[3] Rather than an architecture based on the implementation of business process and/or precise functionality, data-centric architecture is based on availability of consumable and combinable data, allowing total modularity in the implementation of business processes that are constantly evolving and in continuous interaction with stakeholders outside the organization (whether human or systems) .
[4] Pace layering is a new methodology for categorising applications and developing a differentiated management and governance process that reflects how the applications are used and their rate of change.
https://www.gartner.com/en/documents/1488129
https://www.gartner.com/binaries/content/assets/events/keywords/applications/apn30/pace-layered-applications-research-report.pdf
[5] For more information on Shadow IT, we advise to consult the following sources: https://www.gartner.com/en/information-technology/glossary/shadow
https://www.forbes.com/sites/insights-ibmresiliency/2019/08/14/shadow-it-you-cant-protect-what-you-cant-see/#7bf182c43772
https://www.gartner.com/smarterwithgartner/make-the-best-of-shadow-it/
https://www.cio.com/article/3314738/shadow-it-the-cio-s-perspective.htm
https://www.gartner.com/en/documents/3886073/integrate-shadow-it-and-business-led-it-into-the-i-t-ope
[6] Business Capability Mapping: identifies, categorises, and decomposes the business capabilities required for the business to have the ability to deliver value to one or more stakeholders (https://pubs.opengroup.org/architecture/togaf9-doc/m/chap07.html, 19/09/2019)