Discussing bimodal IT, digital business and IT budgets with CIOs

I recently had the pleasure of participating in the Wall Street Journal CIO Network conference in California. In an opening discussion on stage with Steve Rosenbush, Editor, CIO Journal, we explored topics such as bimodal IT, digital business, software platform battles and the crisis of talent.

Afterward, we broke into working groups to explore key issues that CIOs face. The task force session I facilitated focused on "getting digital right." Working with a very experienced and talented group of CIOs, we drafted a set of priorities as a starting point. They are:

1. Understand the business situation and strategy. Measure your company's progress along different dimensions to choose the best course of action. Understand the demographics, revenue, margin and risk. Strategies vary according to a unit's place in its digital evolutionary life cycle. 2. Get the leadership right. Put the company's digital future in the hands of people who are digitally minded and collaborative. Develop appropriate performance metrics for the business and its leaders. 3. Choose your starting point. Decide whether you will create dedicated digital units, drive digital innovation to the core of the business, create one or more separate digital business units, or a mix. 4. Treat organisation as product. Approach the organisation as a product or service, and assess the skill sets, tools and processes of each unit.

A couple of additional key points stood out for me from the discussion.

First, bimodal business, and as a result bimodal IT, continues to gain momentum among leading organisations as a methodology for diving digital transformation. Several high-profile CEOs and CIOs have recently been cited in the press discussing the way they are adopting the strategy to drive digital business, including Marcy Klevorn, Ford Motor Company CIO, Bill Ruh, GE Digital CEO and Keith Jones, Deputy CIO at U.S. Citizenship and Immigration Services. They know that business is bimodal and, as a result, CIOs need to structure IT to support it.

Bimodal IT is the tool for CIOs to balance the highly competitive demands of maintaining core capabilities while simultaneously driving innovation, with the overall goal to drive digital to the core. To get there, CIOs will likely combine three different approaches to bimodal business:

1. Create dedicated teams: Create dedicated teams to focus on core business processes and driving digital innovation. This is best done within one organisational structure inside the existing organisation.

2. Create a separate business unit: Provide freedom from legacy for innovation to thrive within your organisation by creating a separate business unit focused on creating new digital sources of revenue.

3. Drive digital to the core: Everything — the business and IT — has to operate in a more agile, aligned environment in order for the organisation to innovative at digital speed.

Long term, the third approach, driving digital to the core, will become the one that define all organisations

Second, CIOs attending the conference were feeling the early impact of pressure on their budgets due to a broad range of indicators that the global economy may be slowing. This was a recurring theme in sideline conversations for many CIOs. They shared the concerns of their leadership teams about the opportunity to accelerate, or even maintain, spending in 2016 in order to drive digital transformation. There is certainly a heightened sense of caution as we progress through the first quarter of this economically uncertain year.