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
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.
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.
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.
