By Peter Sondergaard
Gartner, Inc.
Picture a room packed with young professionals elbow to elbow at their laptops, ready to launch the next version of a hot new product. Now think of this digital startup not in a loft downtown or in Silicon Valley, but in the conference room down the hall from your IT department.
More and more, today’s startups spring from departments inside the organization. Leaders in HR, marketing, logistics and other business units drive their own digital innovation. They approach technology differently, trying new analytic tools, cloud solutions and technology services. Sometimes, they don’t invite IT to lead the development. Sometimes IT can’t match their agile temperament and timetable.
The Widening Digital Divide
The business units’ explosive digital demand stems from the combination of business pressures and the disruptive digital trends crowding the horizon. Executive teams face a diminishing ability to forecast the future of their competitive environments, markets and value chains.
These same teams seek ways to mitigate stakeholder risks and exploit business opportunities. Meanwhile, the business wants to leverage value from consumerization of IT, the Nexus of Forces (social, mobile, cloud, information and analytics) and the Internet of Things. All of this leads to the digital divide widening between what the IT organization can provide and what the enterprise wants and needs.
Speeding Up IT
CIOs need to respond to the cataclysmic technology shift within their own organizations. The IT organization can’t turn into a digital startup overnight and, besides, there’s a raft of business-critical responsibilities that it simply can’t (and absolutely should not) divest.
The answer is bimodal IT. In Mode 1, IT operates traditional IT services, emphasizing safety and accuracy — what a traditional IT organization does best. Mode 2 emphasizes agility and speed, like a digital startup. Thus, one organization can operate at two speeds. The business coordinates, communicates, and leverages shared knowledge. More so, it focuses on one shared, not competing, goal: to improve performance.
CIOs need to function at two speeds to seize the opportunity in digital business, and nearly half of them are currently doing so. In a Gartner survey, 45 percent of CIOs state they currently have a second fast mode of operation and, by 2017 we predict that 75 percent of IT organizations will have a bimodal capability. This capability allows the IT organization to respond to the digital divide within their organizations by operating in two modes that are comprehensive and coherent, but deeply different, while exploiting the benefits of both.
The Risk of Shadow IT
Without bimodal IT leadership, organizations risk a proliferation of shadow IT. This is the long-standing phenomenon whereby unofficial investment in IT occurs around the enterprise often “under the radar.” It’s growing at a rapid rate, aided by technology providers looking for new sources of revenue outside of IT’s expected 3% budget growth.
This is not merely decentralized IT. Shadow IT sidesteps the designated IT organization to derive value from technology. The growth in shadow IT is a manifestation of users’ desire to control their technological destiny, of their growing confidence in their ability to do so and of their dissatisfaction with the IT organization’s current methods.
The problem with shadow IT for CEOs and CIOs is not just that activities are happening outside the direct control of a formal IT organization. It’s that in acting independently, shadow IT leads to problems with integration, security and technical debt. The digital divide isn’t merely an IT annoyance. It poses real risks to the enterprise. And it’s a wake-up call for CEOs to acknowledge that bimodal IT is in the interest of the enterprise, not just the CIO and their team. It’s the best way for IT to be a full-fledged partner in the creation of a sustainable digital enterprise.
Mr. Sondergaard is a senior vice president and global head of Research at Gartner.
