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International Institute of IT Economics

March 29, 2018

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Will your IT Future be Bimodal or Bipolar?

February 10, 2017

 

For many years I have discussed the idea of right-brain and left-brain dominated CIOs and their IT organizations. The left-brain dominated personality is logical and computational. The right-brain personality is visualizing and intuitive.

 

Left-brain focused CIOs are more likely to be focused on the infrastructure, the budget and efficiency.  Often, they are perceived and act like they running a cost center.

 

Right-brain oriented CIOs are more likely to be focused on applications, the customer, and revenue. These people are typically perceived as innovators.

 

The important thing to remember is; this is one brain with two hemispheres.

 

Gartner refers to this bifurcation as a bimodal IT organization.  It seems that the left mode is considered predictable, plodding. and reactive with focus on back office automation, big expensive projects and cost control, and consumes 80% of the IT budget.. The right mode is characterized as an agile, innovative IT  of the future, with DevOps, elasticity and scalability, and is currently largely funded outside of IT. The idea is that the predictability of the left mode and the innovation of the right mode will play a critical role in digital transformation.

 

Just like a human brain, it takes both of these spheres of influence to be a successful IT team. However, left out of this dialogue is a third critical anatomical feature – the corpus callosum. This part of the brain mediates the left and right modes, and it is critical to the success of both.

 

So what’s the corpus callosum of IT?  It is made up of governance, compliance, security, data and application integration, and IT financial management (ITFM).  Without these disciplines the bimodal IT organization would be a bipolar IT organization, in the sense that these extremes create dysfunctional behaviors.

 

Let’s focus on ITFM because there are so many facets of ITFM that are critical to the success of the bimodal approach. To make my point, I will identify one example of how this works within each discipline in ITFM.

 

Budget – the bimodal IT budget is the conduit of money from the two modes. As the left mode is driven to be more efficient, the right mode is driven to be more effective and business driven. Each have value and are complementary. For example, an enlightened budget process is one that reduces cost on the left side, (i.e., centralize, consolidate, rationalize, standardize technologies) and funds innovation on the right side.

 

From a planning perspective, left mode budgets will probably be resource constrained and the right mode  funding should be driven by resource on demand.

 

Service Pricing – Understanding service cost is a left mode responsibility. A service delivery model mechanism to show resource availability is a powerful supply demand mechanism. A total cost of services (TCS) model will provide the basis for service pricing transparency, which continues to be a credibility issue for IT. 

 

A problem that a TCS study helps solve is the comparison of market priced services to an internal service provider. The in-house provider is at a distinct disadvantage if they don’t understand and cannot communicate the cost basis for its service pricing. The rate card appears to be only a fraction of the in-house cost.

 

Life-Cycle Cost Optimization  - A traditional bastion of IT cost optimization, procurement has come to adopt Total Cost of Ownership as a framework, if not a process for procurement decisions. Asset management through the cradle to grave life-cycle also follows this approach. With the bimodal model, this approach has traditionally been focused on the left mode. However as the world has evolved from assets to services there are implications for the right mode.
  
First, business / IT cost optimization opportunities abound.  The cost impact of training, change management, benefit realization, and digital debt are fertile grounds for review.

 

Secondly, business process cost optimization, where IT expertise in automation, workflow and process can be complementary to the business drivers of revenue, customer loyalty and digital business initiatives is the gold standard for ITFM. A hallmark of this level of IT and business optimization will be to have more business plans for IT investment reviewed by third parties in the same manner that procurement contracts are reviewed at the procurement level.

 

In retrospect, much of the foundation of this view of IT was written 30 years ago (Happy Birthday TCO!). However, prior to thinking of IT as a bimodal approach it has been slow to gain traction and slow to implement at the enterprise level. (Thank you Gartner!) I’ve said it before, and I will say it again, we are on the cusp of a breakthrough, with ITFM helping to shape digital and digital enabled business. If it does not happen, the future bimodal IT shop will certainly be bipolar in the near future.

 

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The International Institute of IT Economics specializes in helping users realize the value of their IT investments by validating business cases for proposed projects and understand their Total Cost of Services.  We also help IT vendors tell their value story with TCO / ROI tools. For more information, contact us at info@iiievalue.com.

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