nasscom ilf 2016: bimodal it and adaptive sourcing: the way forward to avoid pitfalls

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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

2 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Smash the Competition via Business Moments Value:Inexpensive Insurance Versus Teen Safety at a Premium Price

Car Crash


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.


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?


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.






Tug robots.







A 2008 startup.







Cognitiveservices.




A driverless truck fleet.


Tug robots.


A 2008 startup.


Cognitiveservices.



Key Issues





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


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


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)


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)


Key Issues





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


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)


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)


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)


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)


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)


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)


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)


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


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.

http://www.gartner.com/document/3115024?ref=QuickSearch&sthkw=G00280396&refval=154898383&qid=0a2b06b3b3ebbe947ae998cdf5514972

http://www.gartner.com/document/2837117?ref=QuickSearch&sthkw=G00265879&refval=154898387&qid=ed0b6a8f2865919dcf09895ffcdea945

http://www.gartner.com/document/3077321?ref=QuickSearch&sthkw=G00273009&refval=154898402&qid=4b40ff154af006ad1ecc0eef797b584c

http://www.gartner.com/document/2991318?ref=QuickSearch&sthkw=G00272645&refval=154898771&qid=51b211ad2f2b2e62b888499075fe5cec

http://www.gartner.com/document/2991318?ref=QuickSearch&sthkw=G00272645&refval=154898771&qid=51b211ad2f2b2e62b888499075fe5cec

http://www.gartner.com/document/2788417?ref=QuickSearch&sthkw=G00259751&refval=154898392&qid=e074c97bb82bf24a2b7397335c8812b0

http://www.gartner.com/document/2788417?ref=QuickSearch&sthkw=G00259751&refval=154898392&qid=e074c97bb82bf24a2b7397335c8812b0

nasscom ilf 2016: bimodal it and adaptive sourcing: the way forward to avoid pitfalls

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