1. reppelandpartners.com 1
Advisory | Business Intelligence | Technology
[ Why IT needs two modes to master Digitization ]
Information Technology has been driven by
technological innovation and process
optimization over the years. With the fast
adoption of cloud-based technologies and a
deeper understanding of application
development (and its respective customer
engagement), the need for increased speed
is becoming critical.
This need is driven by a new competitive
situation in which a challenger has new or
similar established operations and applies
‘blue-ocean innovation’1
to alter the market
to their advantage. On the edge, this can
lead to ‘business disruption’, creating a
fundamentally new landscape with new
rules that are accepted and adopted by
customers. Oft-cited examples for this
situation are: Uber, Airbnb and Amazon,
with the former two being so disruptive
that they even challenge established legal
frameworks.
As the lifecycle of technology continues to
decrease, market leaders are realizing that
they can no longer hold tight to their
established systems. Some players see
opportunities in new areas like e.g. electric
vehicles or auto piloted cars, forcing
traditional automobile manufacturers to
either innovate in similar areas or invent
substitutes to these new technologies.
Participants in currently changing markets
must react urgently; working in parallel to
adopt necessary technologies that will allow
them compete with new challengers.
Simultaneously, a new environment must
be forged, in which necessary responses to
change can be accelerated while not
affecting traditional business.
Today’s society has also adapted to the ever
rapid changes in available technology, and
as such there are significantly higher
expectations towards any company to offer
a rich digital experience. Consumer
products has seen one of the biggest shifts,
as customers increasingly demand that they
are able to browse products, place an
order, or make use of their return rights
from mobile devices with a few swipes or
clicks.
It may sound dramatic, but one thing is
extremely clear: no business will be spared.
Neglecting to react is not an option and will
ultimately lead to a declining business.
There is no timeline: It might happen
tomorrow, in a few months, or even years
later – but it certainly will to companies
who fail to adapt.
Business leaders driven by outside forces
can be reluctant to adjust due to increased
risk and uncertainty and thus show lagging
willingness to change, hoping that these
‘fads’ will go by. They will miss the
opportunity of early adoption, which could
turn this trend into the company’s strength.
Pro-active managers will take the challenge
head-on by shaping the future to their
advantage: creating a business suited for a
new environment. At the moment, though,
there are only a few successful examples to
align with (“Best Practice). Every traditional
manager has to learn to accept a different
style, expectations and, ultimately, assume
higher risk!
“There are significantly higher
expectations towards companies
to offer a rich digital experience.”
“Pro-active managers will take
the challenge head-on .“
Pointing to a solution, established agile
principles (“scrum”), lead the discussion on
how to best respond to disruptive market
forces. Gartner Inc., a leading technology
research company, has proposed a method
to respond to the above challenges, labelled
Bimodal IT2
. The essence of this principle is
that IT departments today must split into
two modes of operations: one traditional
and SLA-focused, and the other agile and
nonlinear.
By following this ideal of a two-paced IT,
maintaining the legacy IT and innovating at
the same pace or ahead of market trends
becomes possible. Departments that
demand innovative IT solutions like
marketing, sales and after-sales can be
supported with inventive solutions, while
the IT department keeps legacy systems
stable and provides the platform for
innovation.
“By following the idea of a two-
paced IT, maintaining the legacy
IT and innovating at the same
pace or ahead of market trends
becomes possible.”
The two modes of Bimodal IT are rather
straightforward from a technology
department’s standpoint: Old and New!
“Old” refers to operating traditional IT
procedures that adhere to SLAs, Standard
Operating Procedures (SOP) and produce
measurable results. The goal of this
traditional arm is to generate tested
technology that is optimized for
performance and cost.
“New” refers to the principles of agile
development, which have unpredictable
outcomes but would be based on app-
development technologies with a strong
mobile character. Whether it is in-house or
external, this team must always strive to
provide a quick and innovative solution for
the customer need.
Beyond changing methodologies used in IT
operations today, digitization changes the
demand on IT in 3 major ways.3
First, sophisticated technology becomes a
basic requirement. Considering the success
stories of Netflix, Booking.com, or
Starbucks: it is apparent that their customer
experience relies heavily on advanced
technology and usability. Netflix conducts
user analysis to predict customer choice,
Booking.com implemented one of the best
search and caching systems and Starbucks
introduced a sophisticated member loyalty
system. These are just a few examples on
how advanced technology can create new
markets or a competitive edge.
Second, IT delivery and security are crucial
parts of any business and must consistently
strive to performance better. Many IT
functions have historically been built
around the aims of cost and efficiency
optimization, which is not enough anymore.
Every aspect of IT delivery matters more
today. Speed is important for delivering
new innovations to customers quickly and,
more importantly, ahead of competition.
Reliability becomes increasingly important
since downtimes stop sales or destroy
customer experience.
“Digitization changes the
demand on IT in 3 major ways.”
1
https://www.blueoceanstrategy.com/
2
http://www.gartner.com/it-glossary/bimodal/
3
http://www.mckinsey.com/business-functions/
business-technology/our-insights/reinventing-it-to-
support-digitization

2. reppelandpartners.com 2
IT Security must be top notch in order to
protect the growing online presence from
attacks and prevent greater losses,
particularly reputation.
Third, digitization will foster deeper
engagement and oversight from C-level
management towards IT, since the stakes
have risen dramatically. The significance of
IT varies between businesses, from up to
40% of overall sales to the very survival of
the company.
Frank Reppel —Managing Partner
Frank studied Physics at the KIT( Karlsruhe
Institute of Technology). In the late 1990’s
he brought IXOS Software (Now OpenText)
to Asia. After IXOS Asia’s tremendous
success. After stints as COO of one of
Singapore’s most promising internet start-
ups, he founded Reppel & Partners in 2003
to fill a void in the market – addressing the
ICT management needs of small and
medium sized companies.
In 2015, he shifted the company focus on IT
Advisory and Consulting, and Business
Intelligence
[ About the Authors ]
Gartner itself is coining the alternate
opposites ‘Sprint’ and ‘Marathon’, which in
turn led to the passphrase: ‘The IT of two
speeds’.
Honestly, nobody wants to be a “tortoise”
in such a race. The alternative picture may
sound a bit bellicose, but it comes closer to
the core of Bimodal IT: The Samurai and The
Ninja.
Samurais are trusted and highly reliable
protectors of their land. Ninjas are tasked
with challenging tradition and use unusual
tactics to accomplish results. The first takes
pride in being a dependable and consistent
force; the latter can be seen as temporarily
active, achieving the desired outcome in
only a few steps and then vanish again.
Particularly, the last quality makes it crucial
to predefine tactics giving control over
potentially costly resources on critical
checkpoints during deployment.
Advisory | Business Intelligence | Technology
“The most critical resource in
bimodal IT is fitting managerial
oversight.”
While the IT department of yesterday no
longer exists today, all employees can still
find a home within the new bimodal world
if proper managerial guidance is provided.
The modern IT business leaders role has
become diluting the boundaries of her
department and deploying staff based on
ability and fit in changing roles. Assuring
that both the Samurai and Ninja teams
understand the importance of their roles
and the collaboration required between the
two is a crucial piece of the puzzle.
“An agile team cannot perform
without the technological
platforms set out by the traditional
departments ”
An agile team cannot perform without the
technological platforms set out by the
traditional departments – being in harmony
with the Samurai is required for the Ninjas
to exist. Furthermore, the IT business leader
must seek out participants from other areas
such as finance, HR, and marketing to
ensure that a team is formed tackling all
aspects of an uncertain and risk-based bi-
modal IT project.
Once a team has been formed and the
business need established, they will be
tasked with producing quick results that can
be evaluated, tweaked, or stopped
immediately. This in turn requires a
fundamental shift in the way that a
manager and his colleagues evaluate cases.
In past decades, IT has been seen as a
support function to help increase the
organization’s operational efficiency. The
digitization of internal systems has been
seen primarily as cost centers and required
justification for any investment. This trend
is changing dramatically as time becomes a
crucial resource and life cycles are
shortening.
Today, digitization is not only occurring
within organizations, but appears
everywhere. Customers carry at least one
smart device and are constantly connected
to the internet. New homes are designed as
smart homes, and cities aim to become
smart cities to provide citizens more
convenience and comfort.
After large organizations digitize the
majority of their internal operations, they
struggle to cope with new demands coming
from both internal and external customers;
quick and innovative IT innovations are a
must. Adding minor tweaks to existing
operations may help in the short term, but
what is really needed is a comprehensive
reinvention of IT for the long term.
As complete IT transformation takes several
years to complete and requires far reaching
changes and strong leadership, quicker
results can be achieved by splitting the IT
into two modes: One maintains legacy
systems like the Samurai guards his land,
the other can tackle the demand for quick
solutions to support the most valuable
business areas, evolving eventually into the
Ninja.
“Quicker results can be achieved
by splitting the IT into two modes.”
The evolution of the supply of infrastructure
in an ever more dependable, though
flexible and cost-optimized fashion can be
achieved with the tools available today.
The challenging part remains implementing
a functional “fast”, “new” or “ninja” mode
of IT operation by using agile
methodologies that are scalable. This mode
requires a different set of rules, skills and
-importantly- leadership style to
successfully deliver solutions in short
production cycles with uncertain outcomes
(“Fail Fast”). Ultimately though, it is
necessary to offer the customer a complete
new experience and reaching a new level of
satisfaction.
The measures deployed to achieve this
transformation cannot be limited to
traditional ones. Managers need to be open
minded, proactive about how to achieve the
intended results and provide clear guidance
and strong leadership
Besides this, trusted and experienced
advisory from outside may be a good way
to increase the chances of success and
speed up your Bimodal IT strategy and
implementation projects.
Christoph Schroeter — Consultant
After gaining broad international IT
Consulting experience while working for
Siemens AG and Atos from 2010 until 2014,
Christoph moved to Shanghai to do a
Master in International Business. He has
joined R&P in 2015.