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Bimodal IT and Sourcing: The Way Forward to Avoid PitfallsClaudio Da Rold
NASSCOM India Leadership Forum10-12 February 2016 | Mumbai, India
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Smash the Competition via Business Moments Value:Inexpensive Insurance Versus Teen Safety at a Premium Price
Car Crash
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Road Blocks & Limits to Scaling Bimodal
Organizational politics, egos, personalities, vested interests.
Inability or unwillingness to trust & delegate. Lack of Funding. Unrenovated Core. Lack of Skills. Management mindset — digitally unsavvy nodes. Insufficient employees able to adopt a Mode 2
mindset.
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Key Issues
1. What is causing an accelerated adoption of digital and cloud technologies?
2. How can bimodal adaptive sourcing support digital success?
3. What are the practical steps of a bimodal and brokering roadmap?
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While Disrupters Emerge Suddenly, a Single Strategy Is Not EnoughWhat is your strategy? Has moved alone 100 million tons for more than 1 million miles.
Small, nice, silent thing that may save 65% of hospital logistics labor.
Can book guests in far more rooms than any other big chain in the world.
Self-remediate 50%+ of IT incidents and reduce process labor by 50%.
A driverless truck fleet.
Sources: Firms' sites and Wikipedia; firms and providers are representative only.
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While Disrupters Emerge Suddenly, a Single Strategy Is Not EnoughWhat is your strategy? Has moved alone 100 million tons for more than 1 million miles.
Small, nice, silent thing that may save 65% of hospital logistics labor.
Can book guests in far more rooms than any other big chain in the world.
Self-remediate 50%+ of IT incidents and reduce process labor by 50%.
Tug robots.
Sources: Firms' sites and Wikipedia; firms and providers are representative only.
7 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
While Disrupters Emerge Suddenly, a Single Strategy Is Not EnoughWhat is your strategy? Has moved alone 100 million tons for more than 1 million miles.
Small, nice, silent thing that may save 65% of hospital logistics labor.
Can book guests in far more rooms than any other big chain in the world.
Self-remediate 50%+ of IT incidents and reduce process labor by 50%.
A 2008 startup.
Sources: Firms' sites and Wikipedia; firms and providers are representative only.
8 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
While Disrupters Emerge Suddenly, a Single Strategy Is Not EnoughWhat is your strategy? Has moved alone 100 million tons for more than 1 million miles.
Small, nice, silent thing that may save 65% of hospital logistics labor.
Can book guests in far more rooms than any other big chain in the world.
Self-remediate 50%+ of IT incidents and reduce process labor by 50%.
Cognitiveservices.
Sources: Firms' sites and Wikipedia; firms and providers are representative only.
9 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
While Disrupters Emerge Suddenly, a Single Strategy Is Not EnoughWhat is your strategy? Has moved alone 100 million tons for more than 1 million miles.
A driverless truck fleet.
Small, nice, silent thing that may save 65% of hospital logistics labor.
Tug robots.
Can book guests in far more rooms than any other big chain in the world.
A 2008 startup.
Self-remediate 50%+ of IT incidents and reduce process labor by 50%.
Cognitiveservices.
Sources: Firms' sites and Wikipedia; firms and providers are representative only.
10 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. What is causing an accelerated adoption of digital and cloud technologies?
2. How can bimodal adaptive sourcing support digital success?
3. What are the practical steps of a bimodal and brokering roadmap?
11 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
IT Organizations Either Adapt or Lose the Digital Business Race
Digital spending under control by business
CIOs control IT budget and capabilities
42% Lack of digitalskills 51%
Cannot respondtimely
to digital demand
38% 2015 50% 2017
Source Gartner 2015 CIO Survey
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Go Bimodal to Adapt to and Run the Digital Business Race
Empirical
Agile
CX Focus
Small Teams
Short Cycles
New Providers
New ModelsTrust
Plan-Driven
Linear
IT-Centric
ConventionalProjects
Traditional Providers
Rock Solid
Control
IsIs
We "take the order" from our stakeholders
and deliver
We explore the possibilities hand-in-hand
with our partners
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Adaptive Sourcing Is the Path to Digital Success
Competence and Performance
Valu
e an
d D
iffer
entia
tion
Buy,Outsource
Buy andInvest
Retain, Spin Off
Make and Invest
Mar
ket P
arity
Client Experience Innovation
Innovate
Business Process
PerformancesDifferentiate
IndustrializedIT/ProcessesRun
DB
CEOFocus
50% More $ Success,
Career
Source: "Business Outcomes, Differentiation and Performance Drive Bimodal Adaptive Sourcing Decisions" (G00272645)
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Learn From Leaders: Digital Success via Bimodal Adaptive Sourcing
From Mechanical Locks and Keys Leadership Into Digital Identity Management in a Decentralized €7B Global Business
Initiatives and Integration Global IT Council; Customer Experience Exercise
New Providers and Models Partner Ecosystem Around Specific Objectives
Sourcing Flexibility Trusted Mobile Devices Piloted and Delivered Fast
Migrating to a More Aligned and Consolidated Setup After M&As
Traditional Supply Chain, Toward VAS and Digital IDs, New Service Models
Acquisition (HID) Plus Organic and Ecosystem-Based GrowthInnovate
Differentiate
Run
Source: "Business Outcomes, Differentiation and Performance Drive Bimodal Adaptive Sourcing Decisions" (G00272645)
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Key Issues
1. What is causing an accelerated adoption of digital and cloud technologies?
2. How can bimodal adaptive sourcing support digital success?
3. What are the practical steps of a bimodal and brokering roadmap?
16 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.
Step 1. Ask What Business Moment Will Disrupt Us? What Is Our Own Industry "Uber" or "Airbnb"?
• Energy consumption • Motion, climate, device interaction
• Health data • Social media, location
• Performance• Energy usage
• Traffic conditions, route• Energy usage
House
Consumer
Washing Machine
Car
• Transactions, loyalty data • Inventory
Retailer
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Differentiate
Run
Mode 2
Linear BestPractices
DynamicCollaboration
Step 2. IT Must Go Bimodal, and Successful Innovation Will Do the Rest
CEOFocus
Innovate
Agile
Source
BPM
GRC
IO
EA
…
Mode 1EA SourceBPM
Source: "Adaptive Sourcing Innovate Layer: Innovation Strategies Accelerate Business Growth" (G00265994) and "Bimodal IT: How to Be Digitally Agile Without Making a Mess" (G00268866)
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Step 3. Make Sourcing Essential to Rapid Innovation: Seven Key Business Questions to Consider1. Do we know what organizations have done it already?
2. How are we protecting outcomes and IP ownership?
3. What new talents, capabilities, competences, data or technologies do we need next?
4. How are we integrating and testing each provider's contribution to the proof of concept (PoC) outcomes?
5. Have we got fair market T&Cs — including IoT software — for both PoC failure and solution scale up?
6. How are we managing vendor viability risk, lock-in and business continuity?
7. Are our vendor management, DevOps and service integration and management sufficiently mature?
Source: "Make Your Sourcing Team Essential and Ready for Bimodal Innovation Through Seven Key Business Questions" (G00272644)
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Step 4. Move to Adaptive Sourcing Strategies:Bimodal by Design
Stakeholders
Industrialized IT Services, Outsourcing, Utility, Hosting,Cloud IaaS/PaaS, SaaS
Transformation Projects, CSI, BPO, BPaaS, SaaS
Crowdsourcing, Cloud *aaS, CSI, JVs, Spin-Off, M&A
CIO or Shared-Service COO
Business Units, Supply Chain, Process Owners
R&D, Chief Digital Officer, Chief Marketing Officer, CEO
New Sourcing Options
Traditional Sourcing Strategy+ Accelerated Modernization
Rapid D
igital Innovation
Innovate
Differentiate
Run
Note: CSI = Consulting and solution implementation; JVs = Joint ventures; M&A = Merger and acquisition;BPO = Business process outsourcing; BPaaS = Business process as a service; IaaS = Infrastructure as a service;PaaS = Platform as a service Source: "IT Services Sourcing Reform Will Prepare the Organization for Bimodal IT and Digital Business" (G00259751)
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Rapid D
igital Innovation
Step 5. Adapt Your Path and Partners to Your Bimodal Sourcing Strategies
Technology Incubators
Network Aggregators
Collaborative Consumption
Collaborative Influence
Digital Business Consulting
Source: "Market Guide for Digital Business Consulting Services" (G00273009)
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Step 6. Build the Five Critical Capabilities to Support Adaptive Sourcing
Differentiate
Run
CEOFocus
Innovate
If You Align All Five Together Then
Bus
ines
s O
utco
mes
Flo
w F
rom
Inno
vatio
n to
Run
Gov
erna
nce
Ente
rpris
e an
d In
form
atio
n A
rchi
tect
ure
Mul
tisou
rcin
g M
anag
emen
t
Bus
ines
s Pr
oces
s an
d C
hang
e M
anag
emen
t
Ris
k an
d Se
curit
y
Source: "Exploiting MSI and CSB Roles to Effectively Manage Complex Hybrid IT Services Environments" (G00259842),"A Bimodal Enterprise Needs Three Subcultures" (G00273134) and "The New Mission of Your Office of the CIO" (G00272386)
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Mode 1
Step 7. Leverage Bimodal Innovation for People Development and Offer a Career Elevator
Mode 2
Differentiate
Run
CEOFocus
Innovate
Source: "Three-Step Roadmap to Bimodal Adaptive Sourcing: Leverage Digital Urgency to Be an IT Broker" (G00272646)
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Step 8. Create and Continuously Update Your Roadmap Moving Forward
RelationshipsPeople Processes Internal External
1 Detach People for Mode 2 Projects
Simple Decision Processes, Prove It Works, Protect IP
Keep Mode 2 Separated; Gain Internal Support
Use Research, Vendors, Small Innovators, Crowdsource
2 Sense of Urgency: Make Mode 1 Relevant
Rapid Innovation and Run Modernization Strategies, Divest nondifferentiating capabilities
Work With HR, Hire and Educate, Increase Trust, Focus on Risk, Security, Reliability, Start DevOps
Communication Plan, Outside-In Perspective, Leverage Social, Select Trusted Partners
3 Mode 2 Makes Innovation Run, Mode 1 Industrialize it
Carve Out Differentiating Capabilities, Refine and Protect Models and Algorithms
Raise Influence, Educate Board, Align, Direct and IT Procurement
Orchestrate Across Internal and External Capabilities; Balance Trust and Control
Source: "Three-Step Roadmap to Bimodal Adaptive Sourcing: Leverage Digital Urgency to Be an IT Broker" (G00272646)
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Use digital disrupters, business moments and smart business questions to raise the sense of urgency for new value propositions and your business influence.
Provide rapid innovation capabilities through bimodal sourcing, new providers, partnering, crowdsourcing. Make IT procurement relevant to innovation.
Help cut operating cost while ensuring end-to-end accountability and decreasing unit cost for IT services. Invest in leadership and key skills.
Implement your roadmap toward bimodal and adaptive sourcing to focus on business outcomes, competitive advantage and IP/algorithms protection.
Modernize your IT-sourcing strategy by divesting nondifferentiating capabilities, incorporating industrialized, cloud-based processes.
Deliver as a provider. Broker as a partner. Build and balance Trust and Control.
Recommendations
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Recommended Gartner Research
Toolkit: Your Roadmap to Delivering Bimodal IT and Adaptive Sourcing Claudio Da Rold and Jim Longwood (G00280396)
Bimodal IT and Adaptive Sourcing Are Critical to Digital Business SuccessClaudio Da Rold, Elise Olding and Julie Short (G00265879)
Market Guide for Digital Business Consulting ServicesJulie Short, Don Scheibenreif, Elise Olding and Others (G00273009)
Business Outcomes, Differentiation and Performance Drive Bimodal Adaptive Sourcing Decisions
Claudio Da Rold (G00272645) IT Services Sourcing Reform Will Prepare the Organization for Bimodal IT an
d Digital Business
Ruby Jivan, Claudio Da Rold and Frank Ridder (G00259751)For more information, stop by Gartner Research Zone.