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Capitalize on The Digitization of Everything with two different IT modes


In my last blog post I talked about the need for two modes of IT - one to look after our Systems of Record (a requirement that is not going to go away) and one to embrace and capitalize on the Digitization of Everything.

Let’s look that what each mode of IT does, and how we ensure they cooperate well with each other. 

Before I start, let me suggest names for each mode. Let’s call the group that looks after the Systems of Record, “Core IT”. And let’s call the group that capitalizes on the Digitization of Everything, “Fluid IT”.

This post is arranged as follows ... 

A. What does Core IT need to do?

B. What does Fluid IT need to do?

C. Fluid and Core IT's attitudes and behaviours

D. Is Fluid IT from the business or from IT?

E. Related blog posts

5. Core Fluid.png


A. What does Core IT need to do?

1. What does Core IT work on? 

As we’ve already discussed, Core IT needs to look after the Systems of Record. When I talk about Core and Fluid IT, people often say to me, "can you give guidance on exactly what projects Core IT should work on and what Fluid IT should work on?" I've had some thoughts on this, and I'm going to do a blog post on it soon. I think that there are a couple of models that can help us to answer this question in detail.

Also, when we look in detail at the Service Provider / Service Consumer relationship between Core and Fluid IT, we'll look into the types of services and APIs that Core IT needs to provide to Fluid IT.

2. How is Core IT funded?

Core IT's funding will almost certainly be planned in a centralised, annualised way.

3. Core IT's timescales

Core IT will work in terms of years. Systems of Record don’t change quickly - they are complex things upon which lots of things are built. They can’t be changed on a monthly basis. When people say, “IT needs to get faster”, I really think that that statement needs qualification. I’m pretty sure I’d leave my bank if they told me they were going to “have a go at agile for the central banking app - releasing a canary drop every couple of weeks”.

4. How is Core IT measured?

We need to keep Core IT's measures like they are today, adding some regarding working with Fluid IT (more on what these additional goals should be later). We are looking for a good price/performance for the IT services that they deliver. And we want the availability and performance, the compliance, the security, the reliable change, and the data protection they have worked so hard to give us for our Systems of Record.

5. Does Core IT innovate?

Do we want Core IT to innovate, or is innovation to sole remit of Fluid IT? I think we do want them to innovate. Just because they are looking after Systems of Record and Systems of Record have been around for while doesn’t mean we expect a lack of innovation.

In a later post, I’ll talk about the Service Provider / Service Consumer relationship that needs to exist between Core IT and Fluid IT. There is much innovation needed in this interface. We need Core IT to take part in the DevOps initiatives that Fluid IT drives, and there is plenty of scope of innovation here too.

So, yes, we do want Core IT to innovate.

6. Will Core IT continue to do what they have always done?

Will Core IT do the same today as they have always done? No, they won’t. There is lots to be done to make Fluid IT successful. And cloud and SaaS mean that Core IT shouldn’t try to “do it all”. (In a later blog post, we’ll look at the planning methods we can use to drive Core IT, and this includes deciding what services are key to the business and what services really don’t differentiate us that we should probably put out to SaaS.) 

7. How do we get the budget and people to move to Core/Fluid IT?

The other comment I get from Core IT groups is, "I agree with all this Fluid IT / Core IT stuff, but we don't have the budget or the people to work on making this two mode IT model work". This is related to the fact that for many IT organizations, 60% of their budget is still spent "keeping the lights on".

Us IT management tool vendors have, of course, been talking about this problem for many years. I think that we can now prove that the use of automation and big data technologies really do allow us to attack this 60%, thus freeing up budget, management energy and good people to work on the Fluid/Core IT model, and thus, to capitalize on the Digitization of Everything.

B. What does Fluid IT need to do?

In a previous blog post (ref), I talked about how the new style of business enabled by the Digitization of Everything demanded Continuous Innovation and thus, Continuous Delivery, from IT. Fluid IT will be putting out one release a week - that kind of frequency.

1. Fluid IT's modus operandi

Fluid IT should be prepared to experiment, and sometimes, to “fail” - they should have measures that reflect this. While we really don’t want Core IT to fail when they upgrade to the latest database version, we should expect Fluid IT to sometimes fail with, say, a limited rollout of a new feature. 

Fluid IT will have to embrace the new. You can’t create an application to support people wearing smart yoga suits (yes, such a thing really does exist) if you use well tried and tested technology. Fluid IT should be able to take risks - balancing the business risk against the potential business gain.

2. Fluid IT must sit with the business team. It must live or die in the same way as the business team

This is a point that I personally believe is hugely important. About two years ago, I worked on a project to paint a picture of the Enterprise in the year 2020. It was, unsurprisingly, called Enterprise 2020. We wanted to ensure that the web experience associated with Enterprise 2020 was a good one. At the time, we felt that HP’s existing web platform wasn’t able to deliver this experience. And so we “bought” an IT resource from central IT. Rahul was measured, like us, on customer engagement with the Enterprise 2020 project. He sat with us. He attended “our” meetings. In other words, he was physically and goal-wise exactly the same as us. Rahul and his small team did a fabulous job. Many times, in team meetings, they would say, “actually - we could something really cool here”. While, of course, our content was important the contribution of Rahul and his team made was equally so.

This was my first experience of “Fluid IT in action”. I can’t stress enough how important is was that Rahul and his team were physically with us and not, “hiding behind the IT service desk”.

And it was equally important that they were goaled and measured in same way as us - you know that sinking feeling when someone new turns up to a team meeting and says, “I’m here to help you” and not, “I’m here to live and die in exactly the same way that you live and die”. (I’m reminded of the joke about a breakfast of eggs and bacon. The hen was involved, but the pig was committed. Fluid IT needs to be committed to the business project and not just involved.)

3. How do we measure Fluid IT?

The kinds of measures we want for Fluid IT are to do with innovation, contribution to product differentiation, and profit generated for the business. These are not the usual measures we put on central IT groups.

4. How do we fund Fluid IT?

Fluid IT’s funding needs to be more flexible than that of Core IT.

Some companies give Fluid IT a “playpen” environment that allows them to play - a playpen without any expectation that it will generate an ROI. For example, Google engineers are encourage to play for one day a week.

Others use a venture capital model (we’ll talk about who acts as the venture capitalist in the next blog post) - Fluid IT will make a proposal and if they get funding, it will be for a limited period. After that perido, they will go back either for more money, or to adjust, or to cancel the endeavour.

C. Core and Fluid IT teams' Attitudes and Behaviours

There is a psychologist who researches marriages. He can look at newlyweds talking for 10 minutes and then predict with high accuracy whether or not the marriage will be a longterm success. He says that what he is looking for is mutual respect.

5. attitudues.png

In general, the attitudes of those in Core IT will reflect what we are asking them to do - be solid, be skeptical of new technology until it’s proven, be longterm-plan orientated.

And those in Fluid IT will typically be embracers of change, they will probably be easily bored by process, they will love to “get something out there so people can play with it”.

If we want our Core IT / Fluid IT setup to work, it’s very important that we ensure a mutual respect between Core and Fluid IT for their different attitudes and beliefs.

Half of my career in HP was spent in development, first in the lab and then as a product manager. The most successful project I ever worked on started with just what I described above. We spent three, high pressure, days forming as a team. During that period, the facilitators skilfully showed us that “it takes all sorts” to make a project succeed.

A lot of attention is now paid to diversity of a racial or ageist nature. I am talking here about diversity of attitude and belief, and in the interworking between Core and Fluid IT, such diversity is essential.

Gartner puts a percentage on this (I’d love to know how they come up with these figures). They say that if you try to use people with a “Core IT attitude” in Fluid IT, in over than 80% of instances, they will fail. However Gartner came up with the percentage, it feels about right to me.

D. Is Fluid IT from the business or from IT?

A month ago, I did a keynote speech on The Digitization of Everything and Bimodal IT at a customer event in Stockholm. I then did a workshop on “bringing Fluid IT in from the cold” - linking Fluid IT and Core IT together. We had a series of great discussions in the workshop. And one of the questions we kicked around was “is Fluid IT from the business or from central IT?”

The conclusion we came to was, “yes” - there are three different situations:

1 : Business IT team already formed - needs to link to Core IT

A business IT team has already have been formed and all they want is to link to Core IT (we’ll talk about how we do this in a later blog post).

2: Cool, outside boutique consultancy does first version. Now needs to be brought in house

Or, and this is a common one, the business has hired a “cool, boutique consultancy” to create the first “minimum, viable product” at which point, the business realizes that they need to bring development in house to continue it. In this case, central IT will be asked to help, with maybe the business and central IT providing people.

3: Business asks IT to form a Fluid IT group from scratch

Or, and this is probably the rarest from my limited data set in Stockholm, the business comes to IT and asks them to provide a new team to work on “Digitization of Everything” products.

However Fluid IT is formed, and wherever they report in the organization, I think that central IT needs to “go with the flow”, accepting the situation they are presented with, setting up the cooperation between Core IT and Fluid IT and putting in place the “Guardian Function” that we’ll talk about in the next blog post. 

E. Related blog posts

Below is a list of related blog posts on The Digitization of Everything, Digital Disruption and Core / Fluid IT:

1. The Digitization of Everything and A New Style of Business : digitally-based, software-powered products allow the business to do things very differently. We can release "minimum viable product", we can experiment with new products we can "continuously innovate". 

2. Digital Disuption: From Transforming a Product to Disrupting an Industry : digitization starts with a digital product that replaces the analog one. Think CD or DVD or home thermostat. But, once products are digital, the business model can be disrupted - think Spotify, think "the connected home", think Uber, think AirBnB. This blog looks at this disruption for a number of industries including transportation, retail banking and the connected home. 

3.  Digitization of Everything and the role of Central IT : digital disruptions are "software powered". Which is great because IT creates software, doesn't it? But it's a very different style of software development to that that we used for our Systems of Record. 

4.  Capitalize on The Digitization of Everything with two different IT modes (this blog post) : IT can't be innovative, cool, experimental and reliable, careful and solid using the same people, the same behaviours, the same processes, the same supplier relationships. We need to split IT into two - Core IT and Fluid IT.

5.  The Guardian Function - making the Core / Fluid IT co-operation work : If the two parts of IT, the Fluid and the Core, don't cooperate with each other, we'll eventually become uncompetitive and inefficient across the whole organization We need to ensure that the two parts of IT work well together. This is part technology (as discussed in the next blog post) and partly about governance, finance and attitudes. This blog post talks about "The Guardian Function"; that function that ensures the cooperation works. 

6.  The Five Areas of Cooperation between Core and Fluid IT : I've broken the technical aspects of cooperation between Core and Fluid IT into five areas : i. Service Brokering, ii. Continuous Delivery, iii. Creating a best-in-class user experience, iv. Big Data and v. Protecting your assets. This blog post looks at these five areas in overview.

7.  Service Brokering for Core and Fluid IT cooperation : This post dives into what customers tell me is the most important of the five cooperation areas; Service Brokering. 

8. How to get to Continuous Delivery and thus, Continuous Innovation : This post looks at the second cooperation area; getting Continuous Delivery of new functionality. This entails a flow of new releases from Fluid across to Core IT. It is, of course, DevOps, but I've put a Core/Fluid IT spin on it. 

9. How to create an Engaging, Best-in-class  Digital User Experience : Digital products pretty much always mean either a mobile application and / or a smart device like a smart cooker, a smart thermostat, or a smart shopping trolley. We need to ensure that the user experience of that mobile application or smart device is best-in-class. How do we do this across our Fluid and Core IT teams?

My "" topic on the Digitzation of Everything - a couple of times a week, I post interesting articles on what's happening in the world of "the Digitization of Everything".

Screen Shot 2015-09-07 at 09.16.17 7 Sep 2015.png

Everything I post releated to The Digitization of Everything I also tweet  -  @mike_j_shaw.

Or, you can "connect" to me on LinkedIn - Mike Shaw at HP.

Mike Shaw
Director Strategic Marketing

linkedin.gifMike Shaw

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About the Author


Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .

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