1. Bi-modal IT is real, and it's likely to be embraced by your company
Peter Sondergaard, senior vice president at Gartner and global head of research, said last November that while CIOs might not be able to transform their existing IT department into a digital startup, they could turn it into a bi-modal IT organization. "Forty-five percent of CIOs state they currently have a fast mode of operation," said Sondergaard, "and we predict that 75 percent of IT organizations will be bi-modal in some way by 2017."
Jerry Luftman, Ph.D., professor and managing director at the Global Institute for IT Management, also confirms that there's a bifurcating of the IT department. "It's clearly happening," Luftman says.
2. Larger companies are more likely to try a bi-modal setup
Arjun Sethi, a partner with the global consulting firm A.T. Kearney, where he leads the strategic IT Practice for the Americas, confirms that he's seeing an increase in the number of IT organizations that have this duality, although he qualifies it by pointing out he sees it mostly in large, progressive companies. "I'm not talking about small and medium-size organizations," he says.
Rob Meilen, vice president and CIO at Hunter Douglas North America in Broomfield, Colo., oversees an IT team of 120, supplemented by another 30 to 40 workers in outsourced or contract positions. "We don't have a formal separation, but in the past two years we've been talking more about the different focus of those two areas," he says, noting that the company is beginning to review how it budgets and allocates resources to reflect those two IT functions.
He says creating any more of a separation between the two sides wouldn't work well in an organization his size because it could either leave some areas without needed talent or force the company to hire more talent. "Sometimes we're only two people deep in a particular skill set, so it gets pretty thin if you're going to divide it up into two sets of teams," he says.
3. How IT is funded plays a role in the decision to go bi-modal
Robert Quarterman, vice president of Infrastructure Architecture and Technical Services at Service Benefit Plan Administrative Services Corp., says operations "is really about running the business, so once innovation is done, it becomes operationalized," adding that that side of the house "operates at a different speed. They have different priorities, and different funding." Funding for operations comes from the central IT department, he explains, whereas funding for innovation comes from business units as does advocacy for individual projects.
Jerry Luftman, Ph.D., professor and managing director at the Global Institute for IT Management, says the split is driven in part by the decentralization of IT, with more and more of the strategic applications owned by the business units and "less and less going into central IT."
4. Bi-modal IT isn't exactly new
Greg Davidson, a consultant with AlixPartners, says IT departments have always had some aspects of a bimodal approach. "There has always been the IT staff that works on the keep-it-running side of the business. When you're looking at things like desktop support, data center monitoring, application maintenance those kinds of things have been around for a long time," he says.
Like other CIOs, Meilen says it's the work itself that often falls into one of two camps, with one focused on new technology-enabled business initiatives and the second focused on keeping everything up and running smoothly. IT workers, too, seem to fall into these two buckets, Meilen says, although like the work itself, there's usually some overlap.
5. Bi-modal IT can coexist with outsourcing
Given the commoditized nature of the operational work, many CIOs are turning to third-parties to handle a large chunk of the operational tasks, Sethi says typically the very standard parts, such as low-level programming. They keep high-value skills in-house, skills such as high-level architecture because internal workers have the skills and organizational knowledge needed to help define the CIO's overall infrastructure strategy.
[Related: 10 outsourcing trends to watch in 2015]
CIOs can make this move to more outsourcing, he says, in large part because they've spent a lot of energy in moving IT toward "a more standardized and more predictable stack, all the way from the hardware to their application layer. And the moment it becomes more standardized and predictable and the level of customization is low, they lend themselves very well to a hosted or managed service environment, and then it becomes easier for a third party to run them."
6. Bi-modal IT doesn't have to mean two separate teams
Dale Denham, CIO of Geiger in Lewiston, Maine, has a 25-member IT department that supports 750 workers (300 staffers and 450 independent contractors). Denham recognizes the inherent value of a bi-modal IT philosophy. "It's absolutely true in a lot of places, and there's no doubt that both functions exist," says Denham, adding "I handle it differently than most places" by mixing operations and innovation within a single team.
While Denham acknowledges that a handful of help desk folks and networking staff are straight operations, he still feels they support innovation by, for example, spinning up a server when needed.
But overall, he explains, "when we launch new projects and new tools, the same people who support old tools are creating the plans and executing the plans for the new tools and then support them when they move to operations."
7. Bi-modal doesn't have to mean bifurcated
Even infrastructure and operations workers do tend to have some interaction with innovation projects. A data center worker, for example, might install a large server array for a new analytics program. Davidson sees that setup continuing he doesn't see his company many moving to a fully bifurcated IT department.
Davidson also says that piece of innovation work added to operations positions can add "spice to their jobs," and that that balance really helps morale.
Just as important, Davidson says, is that that intersection helps everyone stay up to date; Davidson says having staff working on a mix of operational and innovative work in the end helps projects be more successful, too, "because the infrastructure people who do the keep-it-running work can plan better, they're aware of the resource requirement, they may know and often do know about performance issues for example, there may be need to increase network bandwidth, something that the other team might not be aware of and those are the hidden landmines."
8. Two teams = twice the management headaches?
Quarterman says he's moving carefully down the path to a fully bifurcated IT team. "There's a cultural implication, which we don't fully comprehend yet," he says, noting that "if we don't get that right it would be extremely damaging."
Making the move without thoughtful communication and attention could alienate some workers, particularly those on the operations side. Quarterman points out, like others do, that operational work remains essential after all, if the engines aren't humming along, the business cannot operate at all, let alone focus on the next big thing.
"We don't want to alienate a whole group of people so that they feel their contribution is diminished because they're operations," he says. "Leadership can't build a wall. It has to be viewed as two equal parts for the same purpose: the same purpose is the delivery of the product and the service. And I don't mean just delivering innovation; it's also delivering operations on a daily basis."
"One of the cool things about [his] model [where everyone does some operations and some innovation] is the teamwork is incredible," Denham says. Of course, disagreements come up, "but everybody is pulling for the same goal." It comes down to knowing your people. "The people who are more operational are better suited to that and that's where they want to go, they prefer that. So they're already self-motivated because it's what they enjoy," he says.
Quarterman agrees. "That's why we're proceeding with caution. It's a very tricky thing to get right. There are some people who are suited to operations and that's what they want to do, and identifying who they are and then who has the skills and aptitude for innovation is tricky. I'm not sure everyone is going to sort out in it, so we're proceeding with caution and we're being very clear to why we're doing it." But he also points out that professionals on both sides will find challenges and advancement opportunities. For example, Quarterman says those on the operations side will have the chance to dive deep into the guts of operations, and "that's very challenging and there are a lot of people who get excited about that."
9. Bi-modal IT can give you a competitive edgeRead more: CIOs urged to re-examine budget amidst currency fluctuations
Hunter Douglas' Meilen thinks it's possible that companies with a decentralized IT department could have an advantage. "If you formally bifurcated and took the teams on the innovation side out of IT and put them into business units, you're going to drive a much closer connection between the technology folks. It's probably easier to rapidly innovate and that can lead to some competitive edge," noting that the approach might mean that you also give up control around architecture and infrastructure.
Quarterman adds: "For us, it's all about agility and flexibility for speed to market."
10. Bi-modal IT has career implications, both good and bad
Within a two-speed IT organization, some professionals are finding themselves on one path or the other. Sethi says that once on a specific path, IT workers stay on it as they develop specialization in certain areas, progressing along their own division's path but not necessarily moving over and up on the other.
Sethi says each path has its merits and its steps to senior levels. Operational professionals can move into senior technical roles, CTOs jobs and into positions with hardware and software vendors. Those on the innovation side become CIOs. "In the past it was people from the ranks, developers, who used to grow up and become CIOs. What I see now is the business analyst, those are the folks who grow up to be CIOs. We already see that trend," he says.
Luftman adds that job opportunities are going to be there, and more so in the next 10 to 20 years, but they'll be in new places with more operational folks coming from third-party providers and innovation folks belonging to business units. "The infrastructure is essential. You can't run a business without the infrastructure, like you can't run without telephones and electricity," Luftman says. "But the strategic value comes from those in IT who can work with the business partners."
But even as more IT departments segregate their operational and innovation teams, IT professionals will still have great job prospects, Luftman says.