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John MacDorman

Research Director

October 1, 2014

SCSIM The Future is Now

What Got You Here Won't Get You There

By 2020 the strongest companies

will be those with most industry

digital platform control.

Strategic Planning Assumption

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

We Have Entered a Third Era of Enterprise IT

Focus Technology Processes Business models

Capabilities Programming, system

management

IT management, service

management Digital leadership

Engagement Isolated, disengaged

internally and externally

Treat colleagues as

customers, unengaged with

external customers

Treat colleagues as

partners, engage external

customers

Outputs and

Outcomes Sporadic automation and

innovation, frequent issues

Services and solutions,

efficiency and effectiveness

Digital business innovation,

new types of value

IT Craftsmanship IT Industrialization Digitalization

We are here

ADAPT

ENGAGE

CREATE

IDEATE

OFFER

MONETIZE

Social

Analytics Mobile

Cloud

The Nexus

of Forces

The World Is Changing …

DIGITAL Is Becoming a Business Strategy Keyword

We have nothing we recognize as

digital strategy 14%

We have some strategy in that area,

but not called out as digital

37%

We have a digital strategy, separate to

our main business strategy

16%

Digital strategy is an integrated part of our

main business strategy

32%

Our digital strategy is our business

strategy 2%

"To what extent does your organization have a digital strategy today?"

49% have

a digital

strategy

N = 391 CEOs and

Senior Business

Executives Worldwide

The 4 things to remember

Every

industry will

be digitally

re-mastered

Technology will

redefine

core products

Attack will

come from

outside and

underneath

Control of

the platform

wins the game

Consulting Books Music

Cleaning

Services CPG Retail

Mining Appliances Cars

B2B B2B2C B2C

Heavy

Intermediate

Weightless

Nature of

market

Nature

of

product

The force of digital re-mastery will be felt in different sectors at different times

00s

20s

30s

What is IT’s Response to Digital?

IT Industrialization Digitalization

Renovate

the core

of IT

Create

powerful

digital

leadership

Build

bimodal

capability

• Clear digital roles

• Savvy digital executives

• Digital vision and digital legacy

• Agile development

• Multidisciplinary teams

• Innovative partnerships

• New risk/speed trade-offs

• Cloud/Web-scale infrastructure

• Information

• Talent

• Sourcing

Renovate the Core

Increased adoption

of public and

private IaaS, PaaS,

SaaS, BPaaS

Volume/velocity/

variety; in-memory;

advanced analytics

Use of SMBs/startups;

new categories of

partners, e.g., mobile,

design, analytics

More federated ERP,

multi-enterprise, cloud

components, mobile support,

embedded analytics Postmodern

ERP/Apps

Next-

generation

Information

Capabilities

More

Diverse

Partnerships

Hybrid

Cloud

Bimodal IT – What Are We Talking About?

Bimodal IT is not a "nice to have."

By 2017, 75% of IT

organizations will have

a bimodal capability.

Half will make a mess.

Bimodal IT = Marathon Runners + Sprinters; Deeply Different, Both Essential

Reliability Goal Agility

Price for

performance Value

Revenue, brand,

customer experience

Waterfall, V-Model,

high-ceremony IID Approach

Agile, kanban, low

ceremony IID

Plan-driven,

approval-based Governance

Empirical, continuous,

process-based

Enterprise

suppliers, long-term

deals

Sourcing Small, new vendors,

short-term deals

Good at

conventional

process, projects

Talent Good at new and

uncertain projects

IT-centric, removed

from customer Culture

Business-centric, close

to customer

Long (months) Cycle Times Short (days, weeks)

Think

Marathon

Runner .

Think

Sprinter

Mode 1 Mode 2

Caught in the Divide?

Avoid the "Timid Middle"

Mode 1 Mode 2

Stuck in the middle

"Fit for no one"

The Bimodal Continuum: From Tactical to Strategic

Low

Maturity

Limited

Value

High

Maturity

High

Value Business-capability-focused

Most CSFs not controlled by IT

Systemic

Focus on major (customer) initiatives

Enterprise Bimodal

Integrated

•Agile, iterative methods

•Highly collaborative x-biz

•CFO and CEO onboard

•Flexible funding

•Adaptive sourcing

•Scaling process

Point beyond which enterprise change is significant

Agile

Innovation

Lab

Iterative

Collaboration

Project-focused

Most CSFs under IT control

Fragmented

Experimental, at first

Project Bimodal

Typical second mode starting point

Isolated

Small

Vendors

Increasing importance of architecture and healthy digital core

Bimodal Critical Capabilities

Mindset and Talent Architecture

Bimodal

Critical

Capabilities

Teaming Syncing Modes

Engagement Funding

Governance I&O

Iterative Methods Innovation Mgmt.

Structure

Adaptive Sourcing

Project Bimodal Enterprise Bimodal

Low

Maturity

Limited

Value

High

Maturity

High

Value

Select Your Projects Based on their Mode 1 Impact

Impact on

Mode 1

Hi

Lo Bimodal Maturity Hi

Island

Extend

New Core

Replace-

ment

Start with an Island Project

Virgin Atlantic:

Pilots GoogleGlass with high value

customers

Luxottica: Creates Facebook-like retailer site

on CRM platform

IPC: Replaces Mode 1 credit card platform

with Mode 2 system

City of Boston: Attempts OneCard for metro pass,

library card, school ID

Island

Replace-

ment

Extension

New Core

The Changing Focus of IT Drives Four Dominant Futures

Focus

Orientation

Internally

Focused

Operational Transformational

Externally

Focused

Everyone's IT IT as engine room

IT "is"

the business

IT as global

service provider

Not mutually

exclusive

May exist in

combination

Explorer & Pioneer

Creates business differentiation

Champions values, creativity

Strategic fusion of IT &

business

Architect: Customer value

Enabler & Conductor

Grow IT-literate teams

Encourage open flow of ideas

& relationships

Harness peer-to-peer work

Architect: Easy connections

Roles and Skills in the IT Organization and the Enterprise

Integrator & Optimizer

IT as business; service mgt

Competitor analysis, sales,

marketing, product devt.

'Fit-for-service' good enough

Architect: Service & value

Broker & Engineer

Strategic IT sourcer/broker

Process maturity of core IT

Risk mitigation

Architect: Technology & cost

IT Organization Structures and Relationships

Explorer & Pioneer

IT personnel enterprisewide

Multidisciplinary teams

Lead industry value insight

Innovate: Competitiveness

Enabler & Conductor

Purpose Self-organizes ...

... fluid, multi-linked virtual

teams

Lead by vision, with trust

Innovate: Agility & learning

Integrator & Optimizer

Process/function matrix

Business service mgt

Scale economy, competitive

Innovate: To improve service

Broker & Engineer

Structure by skills/process

Business demand mgt

Vendor strategic relations

Innovate: For sourcing gain

Key Optimized Assets and Distribution of Governance

Explorer & Pioneer

Assets of bus. differentiation

Govern: Top line value

Fused bus/tech create value

CIO champions innovation for

differentiating value

Enabler & Conductor

Shared assets of information

& relationships

Self-managed collaboration

Creativity of fluid teams

CIO grows collaboration

Integrator & Optimizer

Bus. service assets/results

Govern: Integrated

price/market-led services

Partner for service value

CIO integrates services

Broker & Engineer

Technology assets

Govern: Resources/demand

Business sets direction

CIO sets technology

standards and sources

Attributes and Leadership Styles of the Four Futures

Broker & Engineer:

• Pacesetting or controlling leader

• Solution purveyor

• Background in tech mgt. & service

• Managing quality & service, conflict,

cost control; relationship management

• Risk mitigation

• Technology & sourcing innovation

Enabler & Conductor:

• Affiliative/coaching, leads by example

• Facilitation & connection purveyor

• Background in technology exploitation

& innovation

• Building shared purpose, influencing

& lobbying; relationship oriented

• Consensus and collaboration drive

Explorer & Pioneer:

• Visionary leader

• Ideas purveyor

• Entrepreneurial, venture capitalist

• Business innovation & development

• Exploitation of risk

• Strategic thinking, conceptualist

• Challenges frontiers of the industry

Integrator & Optimizer:

• Pacesetting or consultative leader

• Capability purveyor

• Multidiscipline (IT, HR, service devt)

• Leading change & transformation,

partnering, marketing

• Risk mgt., service innovation,

negotiation, operations analysis

Broker & Engineer

Integrator & Optimizer

Explorer & Pioneer

Enabler & Conductor

IT Capability Shows What Leadership Roles Are Appropriate

Level 1:

Functional

Level 2:

Enabling

Level 3:

Contributing

Level 4:

Differentiating

Level 5:

Transformational

Process

management

disciplines are

adopted

People

programs shift

from skill to

results

orientation

Sourcing is

approached

strategically and

based on explicit

business maxims

IT service and

solution

capabilities are

rock solid

IT is run like a

business

Technology

strategy is

explicitly

aligned to

business goals

IT performance

measures are tied

to key business

indicators

CIO is a fully

vested business

leader

IT organization

proactively identifies

and pursues

opportunities to

leverage technology

for strategic advantage

CIO has formal accountability

for at least some business

outcomes Portfolio

management is

applied to all major

resource classes

and investment

decisions

Integrated tools support IT

process and cost optimization

Service and solution

outcomes are measured

against formal

performance obligations

IT leaders drive

innovation,

pursuing

IT- enabled

opportunity where

external

competitors find

constraint

IT leaders fuel

agility through

extensive

external

relationships,

partnerships,

and personal

networks

Strategic human

capital management

processes maintain

appropriate

short-term, midterm,

and long-term talent

pipelines

Note: High maturity of IT organization processes for the associated disciplines is

required for effective performance even at lower levels of IT capability

Gartner's ITScore IT Maturity Model

Necessary

capability

level for

each role

Functional View of the IT Organization Articulates Three Distinct Internal IT Markets

Differentiating

Applications

Infrastructure

Commoditized

Applications

Commodity Business Processes Differentiating

Business Processes

Front Office: Business

Architecture View

(capabilities based)

Back Office: Business Services

Orientation (skills based)

Infrastructure and Operations:

IT Services Orientation (skills based)

Now is the time to Look at your Talent Differently…

Skills-Based

Competency-Based

How do I Know the Difference????

Competency Growth Stack: Key Definitions

“From delivery to engagement” competency growth stack

Delivery High Performance Leading Collaborative Engaged

Instigating

Attuned

Educating Educating

Partnering Partnering

Driving Driving Driving

Attentive Attentive Attentive

Efficiency Efficiency Efficiency Efficiency

Consistency Consistency Consistency Consistency

Responsiveness Responsiveness Responsiveness Responsiveness Responsiveness

Timeliness Timeliness Timeliness Timeliness Timeliness

Frugality Frugality Frugality Frugality Frugality

Definitions

Instigating Causing a colleague or team to take action; Inspiring new business solutions through technology

Attuned Total awareness of business levers; reciprocal business awareness of IT capabilities

Educating Explaining what is possible in intelligible terms

Partnering Working with others to address “pull” and “push” demands

Diving Stimulating demand; developing capabilities in advance of need

Attentive Anticipatory focus on customer needs and demands

Efficiency Maximizing deployed resources

Consistency Reliably meeting a set of expectations constrained by a budget, skill requirements, etc.

Responsiveness Aware of demand and able to address it in SLAs

Timeliness Responding and delivering on time; meeting commitments

Frugality Balancing time, cost and quality

Competency Growth Stack: Key Actions

“From delivery to engagement” competency growth stack

Delivery High Performance Leading Collaborative Engaged

Instigating

Attuned

Educating Educating

Partnering Partnering

Driving Driving Driving

Attentive Attentive Attentive

Efficiency Efficiency Efficiency Efficiency

Consistency Consistency Consistency Consistency

Responsiveness Responsiveness Responsiveness Responsiveness Responsiveness

Timeliness Timeliness Timeliness Timeliness Timeliness

Frugality Frugality Frugality Frugality Frugality

Key Actions

Implement service

management methods

(ITIL, etc.)

Disintegrate operational IT

from solutions IT

Implement business process

management conforming to

LOB ownership

Implement IT strategy as a

business-integrated process

Create service standards

(SLAs)

Implement service portfolios Develop business

architecture capability

Integrate business and

technical architectures into

true enterprise architecture

Define service costing Align architects to business

lines

Develop multilateral

relationship management

Develop active demand-

generation and innovation

codevelopment processes

Define business services Implement IT strategy as an

integrated process

Implement internal IT

“selling” processes

Actively engage with LOB

managers at a business

metrics level to ensure

tactical situational awareness

Supply and Demand Talent Gaps Impedes IT Agility and Business Transformation

Demand Supply

49%

52%

49%

50%

42%

43%

19%

18%

22%

17%

24%

21%

The supply of IT talent with skills inmobile technologies is sufficient to

meet our demand

The supply of IT talent with hybridbusiness and IT skills is sufficient

to meet our demand

The supply of IT talent withintegration and process

management skills (between thebusiness and IT) is sufficient to…

The supply of IT talent with skills inbig data and analytics is sufficient

to meet our demand

The supply of skilled IT talentmeets our demand for knowledge,

skills and competencies for adigital business

The supply of IT talent with socialscience skills (why people act or

behave in particular ways) issufficient to meet our demand

4%

5%

5%

3%

7%

11%

81%

81%

79%

79%

73%

54%

The demand for skills in mobiletechnologies is increasing

The demand for hybrid businessand IT skills is increasing

The increasingly complex businesslandscape and technology

environment is driving an increasein demand for integration and…

The demand for big data andanalytics skills is increasing

The demand for skilled IT talent withthe knowledge, skills and

competencies needed for a digitalbusiness is increasing

The demand for skills in the socialsciences (why people act or behave

in particular ways) is increasing

Source: 2013 IT Workforce Management Survey, Gartner Symposiums (Global), n = 241

Disagree Agree

Recommendations

Educate & Coach the Executive Team

Start before you think you are ready – choose an “island” project

Develop agile Mode 2 capabilities – launch an innovation lab/center of excellence

Work with the Champs

Challenge Yourself as a Leader

What Got You Here Won't Get You There

What's Your Question?