Without a deliberate change approach, the only speed IT will play at is 78rpm –the speed of a broken record.
In the past five years, technology thought vendors have proclaimed that companies’ internal Information Technology (IT) departments need to work faster in order to successfully address the digital business challenges of the decade. First, BCG advocated a “Two-speed IT” in 2013, maintaining current technology practices in corporation but also developing a “second gear” to achieve digital speed with smaller, more agile teams modeled after online and software companies. Shortly afterwards, Gartner acknowledged the concept, and relabelling it as “Bimodal IT” included it in CIOs’ recommended agendas for 2014. Gartner’s proposed path followed BCG’s tracks: “build digital leadership and bimodal capability, while renovating the core of IT and otherwise preparing for the digital future.”
As the year went on, more thought vendors jumped on the bandwagon: The Corporate Executive Board proposed “Adaptive IT” in direct response to two-speed IT: acknowledging the need for speed, but rejecting the organization split advocated by BCG and Gartner. Accenture joined the party this year with a recommendation for “multi-speed IT”, and McKinsey developed a set of recommendations for “two-speed IT”, unusually adopting BCG’s terminology.
Beyond the automotive and cycling allegories and infographics, what lies behind this fixation with varied speeds? First, companies continue to be face the natural challenges of continued and sustained competition, innovation and disruption in their markets. In the past two decades, these forces have been fueled by the spread of online and mobile technologies, creating new product and services and usurping old ones. The Economist recently developed the theme of business speed in detail, sifting the hype from the reality. Second, the companies confronted by these changes have challenged their internal technology teams to provide new tools and shape new products to match or surpass the ones offered by competitors.
These technology teams, however, are usually already overwhelmed by the difficult combination of managing the legacy systems built in the past decades and by reducing operating costs. Just when technology became a strategic differentiator for some companies, technology services consumed by them were seen as a commodity, a service to be outsourced and cost-managed just like any other. As the mobile economy, riding on the consumer success of the iPhone and Android ecosystems, exploded starting in the 2010s, most companies’ IT departments faced a skill, talent and resource shortage. Business units, frustrated by the apparent inability of IT departments to respond to the challenges, turned to outside vendors, digital agencies and cloud software providers to meet their needs – just as they had in the 1990s in the early days of E-commerce, when companies such as Barnes and Noble and Walmart set up independent subsidiaries to protect their business against a newly birthed Amazon.
More recently, the clash of technology approaches was also demonstrated in the public sector with the technical failures of Obamacare’s launch: traditional IT, with its myriad vendors, contracts and requirements, failed to deliver a seamless enrollment experience. As the now well-told story goes, the mess was fixed by a focused A-team drawn from Silicon Valley technologists… and with a generous removal of bureaucratic red tape given the political pressure to succeed.
Confronted by such lessons, the temptation for CIOs to set up their own agile and rapid teams is hard to resist – these can draw from the most entrepreneurial managers internally and from key strategic hires, and tackle the most visible needs of the enterprise with a nimble mix of internal and outside efforts. Unfortunately, as Forbes’ critics of bimodal IT have outlined, success in the most visible areas does not mean that the legacy of IT’s problems is effectively addressed. Problems can include poor motivation in the ranks of “traditional IT”, an increased reliance on offshore vendors to complete mundane but critical tasks, and underinvestment in security, reliability and disaster recovery.
The opportunity to simplify and rationalize “traditional IT” remains urgent at most companies: outside of the “fast” groups, teams still rely on outdated and overcomplicated methodologies and approaches to build and manage their services – a perverted manner of ensuring job security. At most companies, there is no career safety in driving business and technology simplification. Instead, only the innovators are rewarded, even when their innovations represent just one more system to maintain and do not adequately simplify the legacy. These are the environments where vendors thrive – offering to manage and maintain services for companies, but achieving only marginal cost improvement compared to a true reinvention of the business.
IT departments have much to learn from experimentation, from quick and agile teams, and from innovative suppliers. But only if CIOs are ready to systematically address legacy issues in depth will they reap the rewards of technology. Without a deliberate change approach, the only speed IT will play at is 78rpm – too often the speed of a broken record.