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Bimodal IT Organization (Gartner)

What is Bimodal IT?

Gartner Research’s Bimodal IT framework recognizes that traditional development practices are no longer sufficient for organizations with growing enterprise application demand. Instead, the bimodal IT strategy calls for two parallel tracks that support rapid application development for digital innovation priorities, alongside existing application maintenance and operational stabilization projects. [1]

Gartner defines Bimodal IT as "the practice of managing two separate but coherent styles of work: one focused on predictability; the other on exploration.

  • Mode 1 is optimized 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 optimized for areas of uncertainty. These initiatives often begin with a hypothesis that is tested and adapted during a process involving short iterations, potentially adopting a minimum viable product (MVP) approach.

Both modes are essential to create substantial value and drive significant organizational 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 an enterprise bimodal capability. Both play an essential role in digital transformation."[2]

Bimodal IT is helping to solve major issues in how companies move forward. Traditionally, there can be a lot of confusion and pressure on IT departments that have to maintain infrastructure and keep operational hardware running, while also trying to get creative and modernize business operations. Bimodal IT helps to better outline the ways that companies can do both of those things at the same time.[3]



What is a Bimodal IT Organization? [4]

A Bimodal IT Organization splits the IT department into two teams, or, as the definition implies, two modes.

  • One focuses on all technology and applications that absolutely need attention. These core systems, legacy applications, and solutions that keep the wheels on absolutely need maintenance. They require a dedicated team, so they should have one.
  • The second team focuses solely on innovation. What can they build to make the business more efficient and successful? How quickly can they build it? This group is made up of “dreamer” engineers who envision new technology to push their companies forward.


The Bimodal IT Organization - Marathon Runner and Sprinter[5]

According to Peter Sondergaard, senior vice president at Gartner and global head of Research, “CIOs can’t transform their old IT organization into a digital startup, but they can turn it into a bi-modal IT organization.” Gartner's prediction in 2014 was that 75% of IT Organizations would be bi-modal in some way by 2017. they refer to those in the organization that fall under the traditional and predictable Mode 1 as 'Marathon Runners' and those that fall under the innovative and agile Mode 2 as 'Sprinters'.


The Bimodal IT Organization
source: Gartner


CIOs need to create business operations that are both rock-solid and fluid if they want to succeed in digital business, according to Gartner, Inc. At the same time, the IT organization will need bimodal IT to help CIOs efficiently develop the speed and agility their organization needs to meet digital challenges.


The Bimodal IT Organization Chart - The Division of IT Functions[6]

The figure below shows IT functions that has been divided along the lines of Mode 1 and Mode 2. To help emphasize that the two halves are intended to be separate (as part of the Gartner recommendation) there is some color added to the IT organizational chart. On the left of the IT org chart in purple is the Mode 1 group, and on the right in orange is the Mode 2 group. The colors have no particular special meaning here and are only being used to provide a more visually striking contrast and highlight that the two groups within IT are considered separate and distinct of each other.


The Bimodal IT Organization Chart
source: Lance Eliot


Types of Bimodal IT Organization[7]

In the age of digital business transformation, enterprises seek to increase their agility and speed of IT delivery. To accomplish this, they change their existing control-driven IT organizational structures and processes and establish separate modes for business-oriented and traditional IT delivery (“bimodal IT”). Though the concept of bimodal IT has been discussed in practice, empirical research regarding the approaches employed to implement bimodal IT is scarce.

A research paper by professors and researchers from the University of Hamburg and the Leuphana University of Lüneburg, presents findings from a qualitative-empirical study on the bimodal IT implementation approaches of nine companies. It identifies five different types of bimodal IT in these enterprises and shows that specific mechanisms are applied to enhance the (business) IT alignment in the respective organizational settings of each type. They identify and describe five types of bimodal IT (see table below)

They describe the implementation approach and the alignment mechanisms for each type and show how agile IT is embedded in the IT organization (location) and highlight the role of outsourcing. They further highlight the reach of agile IT in order to indicate which parts of the IT value network operate in this mode, as well as how agile IT is managed and controlled. Finally, they show how the alignments between traditional and agile IT and between (agile) IT and business are achieved. The order in which they describe these five types is based on the extent and degree of changes a traditional IT organization needs to make in order to implement the respective bimodal IT type, beginning with the least intrusive.


Types Bimodal IT Organizations
source: Bettina Horlach et al.


  • Traditional IT with Bimodal Development Processes: The first type of bimodal IT, identified in one organization, is characterized by traditional IT, with bimodality limited to the development process, which uses both agile and traditional process-driven waterfall development methodologies. Other phases, such as planning, testing and operations, continue to follow the traditional waterfall approach, with a high level of control in each step. This bimodal development approach applies to the development of new and changes to existing ‘systems of records,’ as well as to the development of customer-centric information systems, such as mobile applications.

    Because the development process is embedded in the waterfall process, agility is strongly inhibited when developing customer-centric applications. This problem occurs most frequently when a developed application leads to modifications of or extensions to legacy systems, which usually have releases only once or twice a year. In such an event, a complex change management process is initiated. Thus, the ‘systems of engagement’ can only be released in the same cycles as changes to the ‘systems of record.’

    Bimodal IT alignment for this type is usually enabled through projects and through the interaction among people within each project. For example, mobile developers enable knowledge sharing with operations during the handover process. Since development and operations are not co-located in the interviewed company, knowledge sharing is achieved through formal meetings, not continuous exchange. There is no formal mechanism for interaction between projects; instead, this occurs implicitly. Business (i.e. the customer) and IT align primarily through interdisciplinary steering committees for planning and governance. These involve boards for traditional project portfolio management and boards for making decisions on overall standards and architectural aspects, such as programming language and applied technology. At the operational level, business IT alignment mainly takes place between the project manager and the rest of the project team.
  • Traditional IT with Agile IT Outsourcing: A second mode of bimodal IT, encountered in two organizations, focuses on the traditional capabilities within the IT organization. The agile IT is achieved via third party providers or subsidiaries. This results in a partly outsourced IT organization with a traditionally organized (‘slow’) internal IT and an agile (‘fast’) external IT.

    This type has several commonalities with the first type, such as its functional internal traditional IT organization and its waterfall-driven IT delivery with dedicated and traditionally rigid processes concerning planning, operations, and project governance. However, companies of this type have realized that agile development cannot fulfill business needs on its own. This is substantiated by the fact that business units established a parallel IT organization within their units with the help of external providers to solve their problems without involvement of the main IT department due to internal IT’s “many barriers, acceptance, security restrictions, relatively rigid processes and resulting long lifecycle,” as one interviewee stated. To prevent this emergence of shadow IT, this type of IT organization might draw upon one or multiple third party providers or subsidiaries to establish an agile IT mode externally which is internally steered by traditional IT.

    The outsourcing of agile IT is primarily intended to overcome the “processual abyss” and slow speed of internal IT. Furthermore, such initiatives can build trust from business that “IT can deliver a solution which still satisfies their needs,” as an interviewee pointed out. Since the companies are operating in rapidly changing areas, time to market is further envisioned, requiring short-run IT capabilities that internal IT cannot currently provide.

    To enable internal alignment at a project level, an internal project-steering organization is created that consists of the application’s business owner and the central requirements management function of IT. External project alignment is established mainly through contracts or agreements. However, alignment can also be achieved by seating external staff inhouse to foster knowledge sharing among internal staff due to informal communication.

    On the strategic level, there is a clear distinction between business and IT of the duties in this type. The business units are perceived as customers of the IT, resulting in individual and business-exclusive product portfolio planning and budgeting. The responsibilities of the IT department lie in condensing the resulting product portfolios into a single project portfolio. Additionally, a dedicated IT department has the task of ensuring the compliance of individual product portfolios submitted by each business unit with formal and legal requirements. During this process, the people in charge of the product portfolios from business and the IT portfolio department have to collaborate tightly. Over the course of the project, interaction between business and IT occurs within formal steering committees, which make decisions regarding, for example, scope. This applies to both waterfall and agile projects.
  • Bimodal Sourcing IT: Outsourcing one IT delivery mode while keeping the other in-house is not the only prominent approach for enabling agility in traditional IT; outsourcing both modes is also popular. As one interviewee stated, the flexibility of integrating the skills of external partners is one argument for using outsourcing services for both traditional and agile IT. Another interviewee went a step further, declaring that outsourcing is critical for agility as “our hands are tied since we do not develop the IT ourselves.” However, internal supervision is still necessary to fulfill external requirements, since “financial service providers have also to provide very detailed plans to the auditors.”

    When outsourcing both IT delivery modes, two different types of corporate IT organizations that shape the role of internal IT can be distinguished:
    1. A client-supplier relationship between corporate IT and the outsourcing partner
    2. Internal IT project organization, with corporate IT as a project manager and an outsourcing partner for a project team.
    Each type has been identified in one organization.

    The first setting resembles the traditional customer-supplier relationship in a bimodal manner, with corporate IT being the client and one or multiple outsourcing partners or subsidiaries for the IT delivery modes. In this type, the corporate IT commissions the supplier(s) for one of the modes and sets the requirements for the specific service. The delivery lies solely in the hands of the outsourcing partner, such that internal IT has little operational involvement. Internal IT also acts as the governance instance during the development phase to monitor progress through regular meetings with the partner.

    The relationship with the corporate business is a traditional client-supplier structure. This implies a similar approach to the planning and the governance as used in the bimodal IT approaches described above. Governance mechanisms like steering boards are used, as are waterfall-like planning processes. Alternatively, planning is conducted and steered by dedicated business and IT departments.

    The second form of bimodal outsourcing focuses on a lower degree of outsourcing. In this setting, both agile and traditional projects are steered internally, while the resources for development, testing, and operations are sourced from outsourcing providers. Thus, the internal bimodality lies in the bimodal skills of the project managers.

    In this type, the project manager is in charge of the project methodology. To ensure an appropriate decision, project managers need to be able to master both agile and traditional methodologies. Thus, project managers need to be equipped with vast methodological skill sets through systematic training. Since such training is usually managed by the human resources department, all IT and business employees can apply for training in agile. However, external staff are expected to already have the requisite skills.

    Alignment among project managers is fostered in two ways. The first is via the project coordinator, who is responsible for governance and determines whether the applied approach is applicable for developing the solution, particularly at the beginning of the project. This role acts as a ‘hub’ through which bilateral exchanges with all project managers occur; however, no direct exchange among the managers is facilitated. The same applies to the ongoing interaction with the central IT controlling department, which has the task of ensuring that all projects fulfill formal requirements, such as compliance and other policies. Direct interaction among project managers is ensured by locally centralizing all people in a department with fixed workplaces.

    Alignment between business and IT is enhanced mainly by establishing steering boards together with the outsourcing partner to govern one or multiple projects. At the project level, alignment is fostered by appointing one technical IT and one business project manager per project. Finally, a business program manager is appointed as a business counterpart to the IT project coordinator. This business program manager continuously interacts with the business units involved in the projects and, thus, acts as a ‘hub’ for the business side.
  • Bimodal IT: Two investigated organizations decided to implement bimodal IT in-house, without giving outsourcing providers a major role. This type of bimodal IT characterizes the separation of the two IT delivery modes regarding structures and processes. The separation can culminate in separating executive leadership, with a Chief Digital Officer (CDO) being responsible for the agile IT and the CIO being responsible for the traditional IT organization. Though it also targets “time to market, creativity and collaboration with customer proximity fostering innovation”, internal agile IT mainly ensures “higher agility, flexibility and reactivity towards customers” with internal IT for the firms. Knowledge about the organization of the agile IT is seen as “intellectual property” and is considered a valuable asset. Outsourcing is not an option for these companies. As one interviewee puts it: “outsourced competencies are lost after 3-5 years. Then, it takes decades to build this know-how within the organization again.”

    Regarding the organizational structure, a separate agile IT organization and agile processes are currently being set up in these companies. While the traditional IT organization is still functionally structured and managed, new approaches for structuring agile IT, such as the concept of small (5 to 10 people) agile interdisciplinary business and IT teams, are being piloted. These are divisional teams, formed based on features as fractures of a complex service instead of the grouping of functions. The core method typically applied within these agile teams is scrum. Thus, the teams usually involve a product owner from business as well as a development team and a scrum master. The application of scrum in this context has several differences from the original scrum concept. First, the product owner is an active member of the team in all stages from planning to deployment, locally sitting together with the team instead of guiding the requirements engineering from the outside. Second, the sprint duration can be adapted to the requirements in terms of complexity and effort. However, the management structures for the agile teams are steered traditionally, with a personal union of disciplinary and technological leadership for each team. For the future, flat hierarchies within agile IT are planned instead.

    Working in agile IT requires a different skillset that is sometimes not sufficiently provided by internal staff members. Thus, insourcing is a prominent approach in this type. To staff the agile IT organization, the companies apply a plethora of sourcing mechanisms. For internal talent management, events like hackathons within the traditional IT department are organized. Further actions include reviews of skill sets and training in agile methodologies as well as the possibility for job rotation. These are conducted not only within the IT organization, but via the rotation of staff with certain skill sets from different business units. External talent management is mainly executed by insourcing from outsourcing partners. The degree of insourcing varies within departments and between companies. Many solely insource staff with certain skills and a t-shaped character. Such an approach implies that the talent has expertise in one context (e.g.cloud operations) and fundamental knowledge in multiple other domains. In certain new digital areas, such as data science and UX design, the focus is more on seeking specialists. Instead of pursuing individual staffing, agile IT organizations also increasingly maintain partnerships with one or several partners with digital expertise, such as specialized agile start-ups. To insource this talent, these companies are sometimes acquired by the larger organization.

    To separate traditional and agile IT at a process level, agile teams include sourced operations staff in the team structure and use cloud solutions for testing and operations environments, following the DevOps methodology. This enables agile IT to operate separately from traditional IT and further fosters intra-team alignment between development and operations. Since independency is also applied to other agile teams, the architectural concept of microservices is increasingly used in agile teams with small independent services, which can only be accessed via a standardized API. These services can then be composed into complex IT business services. However, in practice, dependencies between the two IT delivery modes still exist (e.g., through the use of data and functionalities from traditional IT legacy systems in agile IT services).

    Agile IT has the role of narrowing the distance to the business organization so that IT becomes a partner instead of a service provider. While this is facilitated by the close proximity of the business product owner at the team level, similar approaches are needed at the program and strategy levels as well to improve the alignment. Frameworks like the Scaled Agile Framework (SAFe) for scaling agility in a process-driven way at strategic, program, and project levels are increasingly used to approach this challenge. The SAFe framework implies an ongoing and tight partnership between IT and business throughout the delivery process from planning to deployment. For the planning phase, one organization currently argues for the use of such methodologies as design thinking or business games to deepen the business IT relationship to promote shared idea generation regarding new potential products. Finally, a step towards business IT partnership is to locate agile teams inside the business location, such that both ideally sit together in one place. Both organizations plan or have already established digital business units, which are dedicated units consisting of both business and IT staff for developing digital services. This proximity maximizes the bilateral exchange of knowledge and information and enhances shared domain knowledge.

    Currently, traditional governance approaches, such as steering boards and jour fixes, are still the most common pathways of interaction between business and IT. Furthermore, a central business relationship management function for both agile and traditional IT enhances the IT business relationship by ‘listening’ into current strategic business initiatives and filtering the required IT skills to realize respective initiatives. This role also serves as central demand and IT project portfolio manager and is responsible for governance with respect to formal requirements within the studied organization.
  • Agile IT: The last type of bimodal IT, identified in two organizations, is characterized by an internal, unimodal, agile IT organization that seeks to drive business agility and time-to-market via a rapidly responding IT organization. Internally, this organizational setup was favored by the interviewees for driving efficiency and performance because it “prevents whispers down the lane” by “reducing the number of parties in the backseat drive.” Communication overhead and long project durations are, thus, avoided, and agility is, in turn, enabled.

    To realize this agility within IT at the lowest level, autonomous agile interdisciplinary teams, which have long-term responsibility for a single feature of a service, are used. Team members are responsible for the entirety of the IT delivery process, from planning to operations, as well as for quality assurance; thus, they follow the DevOps methodology. These teams have democratic structures resulting in autonomic decisions based on discussions among the team members, typically regarding how to develop the solution and team management. Unlike the agile teams in the former type, these teams act as self-organizing units. They not only have responsibility for the applied method and sequence of task completion, but are also responsible for team composition, decision structures and the overall team mission. Functional leadership for these teams is provided by the product owner, who is responsible for prioritizing the work of the team and is also a member of the team. Due to the team’s autonomy, there is no disciplinary leadership. Instead, each employee has a dedicated supervisor who is responsible for the individual personnel development. This supervisor works in the central human resources department.

    Every autonomous team belongs to a divisional department. While these departments are led by dedicated managers, these managers exist solely in a coaching capacity for the individual teams. Coaching includes, for instance, acting as a mediator in case of conflicts or enforcing decision-making if a team gets stuck. Furthermore, the managers can advise teams to use specialized coaches, such as agile coaches, for methodology consulting and decision support, or specialized project managers for managing projects consisting of multiple teams; these additional coaches are provided by the organization. Finally, the managers are responsible for setting up the department’s annual goals, which are fulfilled at the beginning of the year based on corporate goals. For this purpose, one company follows Intel’s concept of “Objective Key Results” (OKR) which focuses on qualitative objectives for whose fulfillment every employee autonomously defines measurable key results. Both objectives and key results are accessible to all members of the organization.

    To foster alignment within the entire IT organization, while simultaneously scaling agility, team-based frameworks, such as Spotify’s model, are increasingly used in this type. According to this model, companies not only create feature-based autonomous teams, which are called ‘squads,’ but also combine them into departments, known as ‘tribes’, based on products. Shared knowledge and understanding among autonomous teams is enhanced throughout the organization by establishing semiformal ‘chapters’ of employees with similar professional functions and ‘guilds’ of larger communities of interests, which allow employees to discuss knowledge and practice. While chapters usually reside in one tribe, guilds enable organization-wide communication.

    Alignment with business is enabled not only by including the business product owner as a team member, but also by establishing digital business units by integrating the team inside the business unit using the developed digital product. At the executive level, business is involved in the product portfolio management process, as well as in meetings for budgeting new products. Unlike in the types described above, in this type, budgeting negotiations are product-driven instead of project-driven.

    Governance and compliance at the team level is kept simple through OKR and support via monitoring tools. Currently, there is no monitoring for team effectiveness; instead, teams follow codes of conduct. The way in which the teams reach their solutions is also not monitored. This applies to the organizational level, as well. Instead of process monitoring and optimization, the IT organization governs the success of the business models.


See Also


References

  1. What is Bimodal IT? Mendix
  2. Definition - What Does Bimodal IT Mean? Gartner
  3. Explaining Bimodal IT Techopedia
  4. What is a Bimodal IT Organization? Soliant
  5. The Bimodal IT Organization - Marathon Runner and Sprinter Cody Johnson, Salesforce
  6. The Bimodal IT Organization Chart Lance Eliot
  7. Five Types of Bimodal IT Organization Bettina Horlach, Paul Drews, Ingrid Schirmer, Tilo Böhmann