Digital Transformation

Thought Leadership Enterprise Bimodal IT - Using the Appropriate IT Service Delivery Model to Increase Competitive Advantage May 2016

Enterprise Bimodal IT

Leverage a combination of methodologies to maintain rock solid IT service delivery while also bringing agility into your organization. In the age of digitization, accelerating customer expectations demands a faster rate of change and innovation from IT organizations. At the same time, basic solution maintenance and enhancements aren’t going away and may benefit from a more standard approach to implementing change. How do you bring in agility and innovation to your IT Products and Services while maintaining rock solid delivery that keeps the business running? The answer: Enterprise Bimodal IT. While this is a relatively new term in the market, chances are you have seen this approach playing out in your organization though possibly not intentionally. Bimodal IT is a framework of having two modes of IT; each with a specific intent and design to deliver IT Products and Services to customers. Mode 1 is the traditional plan-driven delivery; focusing on efficiency and reliability, and has a relatively long cycle time. Mode 2 is the faster, value-driven delivery; focusing on innovation, agility, and decreased time to market.

The challenge here is how to planfully move to a Bimodal IT approach as opposed to stumbling into it due to failed attempts to try and move slowly into an Agile environment or overly aggressive attempts to switch all IT operations to Agile too quickly.

We’ll be going over the following topics at a high level within this article:

“ By 2017, 75% of IT organizations will have a bimodal capability. Half will make a mess. Bimodal IT is not a “nice to have.””– Gartner, Inc.1

nn Where to get started with Enterprise

Enterprise Bimodal IT describes an organizational state of seamless integration of teams using Mode 1 while others are using Mode 2. This state has an evolved organization culture that fosters high levels of cross-business collaboration, has the wisdom to understand which projects or programs would benefit from Mode 1 or Mode 2, and sustains your organization’s reliability and agility over time.

nn Why you should care about Enterprise

Bimodal IT and what are the differences between Mode 1 and Mode 2. Bimodal IT and understand common pitfalls from other organizations’ experiences. nn Hitachi Consulting’s capabilities

and approach to Enterprise Bimodal IT and how we can help.

Better IT Approach

1 Gartner. Inc. Webinar Presentation, Bimodal IT: How to Have It All Without

Making a Mess, Simon Mingay, July 2015 2

Why you should care about Enterprise Bimodal IT and what are the differences between Mode 1 and Mode 2? You may have heard the common comparisons between marathon runners versus sprinters, police versus commandos, or town planners versus pioneers. All of these analogies can be applied in comparing the intent and capabilities of the two Modes of Enterprise Bimodal IT. In order to provide a better understanding of Enterprise Bimodal IT, it may be helpful to list what is not a part of this framework. Here is an initial list to consider. nn An IT-only capability nn Only applicable to software development nn Only changing the organizational chart or operational processes nn Creating duplicate IT capabilities nn A one-size-fits-all approach

In the age of digital business, organizations will need to conduct day-to-day business according to a predefined plan, but also have the capabilities to handle uncertainty from continuous innovations. From our perspective, your IT organization should provide the right mix of Mode 1 and Mode 2 capabilities that will meet the requirements of the business strategy. To help understand when it would be appropriate to apply Mode 1 and Mode 2, let’s take a look at the comparison table below through the lens of Strategy, People, Process, and Technology.

Mode 1

Mode 2

Stability, Reliability

Innovation, Agility

Technology focused, project metrics mainly measure success

Customer focused, customer satisfaction mainly measures success

Risk averse, risk reduction

Comfortable with the unknown and risks

Strategy: Direction People: Culture People: Leadership People: Talent

Fit for well-

Process: Governance

or repeatable projects

Fit for ambiguous or new concept projects

Plan-driven, approval-based

Value-driven, continuous

Process: Funding

One-time funding, detailed estimates, scope is not

Iterative gating/funding process, rolling

Process: Methodology

Waterfall, generally big bang or phased approach

Technology: Infrastructure

Owns and maintains technology stack

Cloud (IaaS, PaaS, SaaS) to support core technologies

Quarters, Years

Weeks, Months

Technology: Life Cycle Technology: Operations

prioritization

In-

In-

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outsource commodity services

What common challenges and pitfalls are there to navigate when getting started with Enterprise Bimodal IT? From our experience, we typically see the three general maturity levels listed below. Where does your organization land within this maturity spectrum?

Maturity level Initializing

Forming

Optimizing

General experience and capability characteristics • • • • • • • • • • • • • • •

Little or no Mode 2 experience within the organization Piloting or piloted Mode 2 through island projects or minor application replacement projects Attempting Wagile – waterfall masquerading as agile Technology free-for-all; lack of technical architecture oversight; solutions are not maintainable Low cross-business collaboration; little or no day-to-day business involvement Completed multiple island and/or enhancement projects with multiple teams using Mode 2 Some technical architecture oversight; transition to Application Management (Operations) is still painful May attempt to apply Mode 2 for all IT services or functions; where it may not be appropriate Single IT Governance structure both project types

Synchronization between Mode 1, Mode 2, and Infrastructure and Operation teams Strong cross business collaboration; the business gets Enterprise Bimodal IT and understands their involvement Encourages equity and transparency between the two modes

Most of the organizations that Hitachi Consulting engages with lie somewhere within this maturity spectrum. This highlevel maturity model is intended to provide a point-of-reference to help you determine roughly where your organization currently resides within the spectrum. From our experience, here are the top ten key challenges and pitfalls we’ve encountered that you should take into consideration when moving your organization toward Enterprise Bimodal IT: 1.

Use Waterfall or Agile, don’t go Wagile –– Clearly differentiate your project

methodology for Mode 1 and Mode 2; Mode 1.5 Wagile - waterfall masquerading as agile won’t work in moving your organization towards Enterprise Bimodal IT –– Be planful, but start before you think

you’re completely ready; you will learn from successes and failures 2. Don’t forget about the cross business engagement/ownership for Mode 2 –– Get the business involved as Product

Owners and/or Business Analysts with Mode 2 projects; prepare for daily interactions with the business –– Provide adequate training and

support on Mode 2 for the business

3. Equity in recognition and appreciation –– Make sure status, professional

development, and recognition are fair and transparent –– Be cognizant of your language

and actions – “We must maintain rock solid IT service delivery and innovate at the same time.” Instead of “We need agility to react to business needs.” 4. Synchronize Mode 2 with Mode 1 and Operation teams –– Keep your Mode 1 and Operation

teams involved and informed with what the Mode 2 teams are creating; feedback will be helpful for development (especially if your Mode 2 teams are largely contingent workers) –– Reducing information silos will

help gain buy-in and help facilitate Mode 2 transition to operations 5. Set aside time to address Mode 2 technical debt for maintainability and reliability –– Speed will create technical debts; it

would be safe to assume that 10% of new code will require refactoring –– Be sure to allocate additional time

for post-release support to address maintainability and reliability; don’t let unchecked technical debt hold future releases hostage

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6. Don’t forget to set aside time and money for post-implementation (Day One) support and knowledge transfer –– It’s very difficult to implement error-

free code, so be sure to allocate the appropriate time and money for your Mode 2 team to provide Day One support and knowledge transfer –– Agile values working software over

comprehensive documentation, but that will change as your Mode 2 team transitions new features to Operations 7. Not everyone is a fit or can make the adjustment for Mode 2 –– Agile isn’t for everyone; you need

to evaluate your staff’s professional goals, internal motivation, and personalities before creating or changing Agile teams –– Be creative and bold in how you

obtain and develop the right talent mix for both modes 8. Start, build, and refine your Mode 2 capabilities with solutions that differentiate you from your competitors. –– What is your organization’s value

proposition to your customers? Often, these differentiators are good candidates for Mode 2 projects

–– Even though your core systems don’t necessarily add direct customer value, you’ll need to keep your core

systems up-to-date; it could eventually become a bottleneck or roadblock to your newfound agility 9. With Mode 2, use the right measures and specific business outcomes to define success; don’t use the same measures as Mode 1 –– Most of the time, a highly structured and detailed Work Breakdown Structure (WBS) does not apply to Mode 2 projects; start thinking

about steady iteration velocity, iteration throughput, and work-in-progress (WIP) analysis / cumulative flow diagram analysis –– Collaborate with the business to prioritize the highest value features to be worked on first; set the expectation that the lowest value

features would be the first to be de-scoped, if needed; keep in mind that every feature or equirement outside of the current iteration can be reprioritized 10. Establish clear and separate paths for IT governance that nurtures Bimodal –– A prioritized product backlog will replace a detailed WBS deliverable; be mindful of what

deliverables are required or are nice to have for Mode 1 and Mode 2 projects –– Don’t forget to work with your leadership team and auditors to define/refine your SDLC audit requirements for Mode 2.

Hitachi Consulting’s experience and approach to Enterprise Bimodal IT and how we can help. We can strengthen your Mode 1 capabilities through our traditional delivery methodology:

The HFusion® Traditional Delivery Method is a comprehensive framework for project planning and execution. It is a customizable set of processes and deliverables that act as a starting point to support your projects, including those following waterfall and embedded iterative approaches.

We can add Mode 2 and agility to your organization through our Agile-Scrum delivery methodology: The HFusion® Agile-Scrum Method is a light-weight framework for project planning and execution. It is a customizable set of processes and deliverables that act as a starting point to support your Agile/Scrum projects and is appropriate for development that uses iterative incremental techniques and relies on self-organizing, self-managing cross functional teams.

We can run your commodity IT services so you can focus on your core competencies: The HFusion® Assure Outsourcing Method is a proprietary and comprehensive service management methodology. It focuses on all aspects of the ITIL Service Management framework including service strategy and design, transition planning, service operations including continuous service improvements, and quality and audit processes.

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We can use our Organizational Effectiveness experience to help your people move toward Enterprise Bimodal IT quickly and smoothly: Hitachi Consulting’s Organizational Strategy and Design (OS&D) solution brings proven experience and thought leadership to help our clients align people, processes, organizational capability, and structures with strategy and culture to optimize execution capabilities. We recognize that this work is both an art and a science. Our tailored approach is based on a comprehensive understanding of your organization: Before we offer our services, we typically complete a collaborative assessment for new clients to understand current operations and methodologies, determine where it would like to go, and how to get to Enterprise Bimodal IT. Our assessment approach is tailored to meet the needs of our clients. Duration is dependent on the depth of assessment needed, the number of business units being supported, the number of stakeholders to be involved, etc. In general, most assessments require approximately eight weeks to complete, with a typical range being between six and ten weeks. After this assessment, a high-level roadmap and an executable plan will be created and we will work together to determine how Hitachi Consulting can help your organization move toward Enterprise Bimodal IT. The following diagram depicts our approach toward Enterprise Bimodal IT.

Phase: Project Planning Key Objective: Identify key stakeholders, schedule interviews, schedule sessions, and confirm project plan/milestones. Key Activities: nn Set up logistics and establish assessment team nn Request and collect available documentation nn Develop assessment plan and schedule nn Identify key stakeholders (business and IT) nn Establish steering committee and status meetings nn Set up information gathering sessions and interviews nn Mobilize the assessment team and facilitate assessment kick off

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Phase: Current Reality Assessment

Phase: Statement of Future Vision

Phase: Gap Closing Roadmap

Key Objective: In order to properly implement an Enterprise Bimodal IT, a full understanding and assessment of the current culture, environment, and programs must be performed. This includes an assessment of the organizations readiness for change and how well the IT Strategy ties into the overall business strategy and business environment. The objective of this phase is to define “today’s reality” including current challenges and opportunities. We need to understand the landscape to develop a plan to bridge the gap between current reality and future vision.

Key Objective: Once the current-state reality is understood, we develop the future state vision. The objective of this phase is to describe a future Enterprise Bimodal IT vision and identify the gaps to achieving the future-state that will be addressed in the roadmap.

Key Objective: When we understand how the current reality supports the future vision and prioritize the gaps that need to be addressed, the high-level implementation planning can begin. The objective of this phase is to create a phased plan with timing, resources, deliverables and milestones that will guide Enterprise Bimodal IT implementation.

Key Activities:

nn Capability mapping

nn Current Mode 1 and Mode 2 capabilities –– Conduct focus interviews

with key leadership –– Conduct facilitated sessions with

business and IT stakeholders and teams –– Review infrastructure, platforms,

applications and solutions –– Evaluate resources and skill sets nn Ongoing and planned initiatives –– Review ongoing projects

and project pipeline(s) –– Understand Enterprise

standards and governance –– Review technology and applications nn Best practice assessment –– Gather existing models and best

Key Activities: nn Business objectives

Key Activities:

–– Overview of known business goals and

objectives –– Define leadership vision

nn Drivers and constraints –– Document know timeline

and milestones –– Identify constraints (i.e.

–– Understand business demands –– Prioritize and rank capabilities nn Best practice gap analysis –– Compare current state to best

practices and comparable models –– Analyze organizational

alignment and governance –– Assess process management –– Assess expected customer

expectations

resources, funding, etc.) –– Identify dependencies nn Define projects and initiatives –– Prioritize projects and

create project profiles –– Identify quick wins –– Bundle projects and initiatives

based on impact vs. cost/risk –– Map projects and initiatives on

a two to three year roadmap nn Execution plan

nn Technology –– Determine business value

–– Plan the immediate next steps

–– Evaluate technology planning

–– Define appropriate ownership of

–– Assess fit for purpose and fit for use –– Document gap analysis

practices from industry peers –– Document organizational

alignment and governance –– Evaluate process management –– Analyze current user experiences

(internal and external) –– Identify business value

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the roadmap moving forward and a cadence for reviewing and adjusting

Hitachi Consulting has a proven approach for developing strategy, roadmap and executable plan toward Enterprise Bimodal IT. It leverages an effective and proven framework based on Hitachi Consulting’s experience and IT best practices that are critical to IT success. Let us help your organization move toward Enterprise Bimodal IT.

About Authors Michael Broberg, VP of Consulting Services, Hitachi Consulting. Mr. Broberg is a Vice President in Hitachi Consulting’s Digital Transformation Community of Practice. He has 21 years of experience in business and IT consulting, enterprise planning, strategy, software selection, implementation, rollout of packaged solutions and custom applications. Michael works out of the Portland office and can be reached at 503.382.2814 or by email at [email protected].

Gang Fong , Manager of Digital Transformation Community of Practice, Hitachi Consulting, Mr. Fong has over 9 years of experience in the management and IT consulting across a wide range of industry sectors . With an emphasis on process improvement initiatives and software implementations. Gang is located in Portland, Oregon and can be reached at 503.382.2831 or by email at [email protected].

Hitachi Consulting is the global management consulting and IT services business of Hitachi Ltd., a global technology leader and a catalyst of sustainable societal change. In that same spirit—and building on its technology heritage—Hitachi Consulting is a catalyst of positive business change, propelling companies ahead by enabling superior operational performance. Working within their existing processes and focusing on targeted functional challenges, we help our clients respond to dynamic global change with insight and agility. Our unique approach delivers measurable, sustainable business results and a better consulting experience.

www.hitachiconsulting.com