by Steve Mezak

Outsourcing the slow speed with two-speed IT

May 26, 2016
OutsourcingSoftware DevelopmentTechnology Industry

Many companies struggle to maintain proper support of their complex internal applications needed to run the business while embarking on a digital transformation at the same time.

global network of employees
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Many companies struggle to maintain proper support of their complex internal applications needed to run the business while embarking on a digital transformation at the same time. They struggle because the skills required to maintain stability of legacy apps are different than those needed to deliver new and rapidly changing customer-facing technical solutions. It’s technically impossible for one team to successfully carry out both at the same time. Faced with this challenge, IT departments are forced to reinvent themselves by adopting a two-speed (slow and fast) or bimodal (mode 1 and 2) IT architecture and organization. Strategic IT organizations also use outsourcing to help implement one or the other, and sometimes both speeds.

Adopting a two-speed IT architecture is recommended as a first step for transforming a traditional consumer-facing organization that is looking to create new business models and more online customer engagement. Some say two-speed IT is a myth and an oversimplification of the complex issues related to corporate culture and politics, leadership styles and performance incentives. But given the stakes, two speeds can also be seen as a simplification effort, with the benefit of providing the critical focus needed to support legacy systems while also carrying out a digital transformation.

What is two-speed IT?

Two-speed IT is the practice of managing two separate modes of IT delivery, one focused on stability and the other on agility. Gartner defines the two speeds as modes. Mode 1 is traditional and sequential, emphasizing safety and accuracy. Mode 2 is exploratory, nonlinear and emphasizes agility and speed while embracing change, which is an essential component to the digital transformation of a company.

The goal of digital transformation is to increase sales and support customers through innovative online systems, apps and social media. Some companies choose to develop these apps in-house to be close to the business units where the products are designed and supported. This requires the IT organizations to staff a team of experts to deliver this high-speed, mode 2 type of development. (Read more about “fast” IT in the next post).

But what about supporting the legacy systems? That takes an IT staff with a different kind of expertise. Two-speed IT proposes that agile, innovative IT initiatives should allow for quick, forward momentum without being hampered by the checks and balances that are needed to maintain business-critical IT operations. It is about enabling the people, processes, and technology of a business. IT departments are being forced to reinvent themselves as a means of adapting to the fast paced evolution of technology. 

Where does outsourcing fit into the two-speed IT paradigm?

Outsourcing allows you to find qualified talent, save time and ensure quality of service, whether your company is small or large. Your return on investment is so much greater when you outsource to a firm that specializes in the core areas you need.

Let’s be clear about the definition of outsourcing. It’s the process of hiring a company to provide a service with skill and expertise usually better than what you can do internally with your own employees. Cost savings is not the goal, although there may be cost savings when comparing the expense of an outsourced team with the salaries and overhead of employees.

Outsourcing will gain you access to the latest and greatest in technology and get you up to speed much faster than when using a full-time staff that might not have specific qualifications and certifications.

IT outsourcing enables digital transformation in two ways:

  • Slow Speed – Outsource the maintenance and support of your legacy apps and systems while you ramp up an internal digital development team for the required “second gear
  • Fast Speed – Outsource to create a “second gear” focused on a digital transformation of the company’s business, which is capable of operating at internet speed

Outsourcing the slow speed is mirroring the outsourcing process at large companies where there is a focus on carefully crafted specifications and large global outsourced teams to enhance, maintain and support enterprise systems like SAP, Oracle E-Business Suite and/or document sharing portals. Work on these systems is slow, deployed over months, sometimes years, so as not to disrupt the day-to-day operations of the business.

Outsource “fast” or “slow”?

If your IT team presently supports these internal systems (with no outsourcing) then you can shift these efforts to digital transformation and outsource support of your legacy systems. There are many competent companies out there with proven practices in every major enterprise application. Choosing one makes it possible for you to free up IT talent to embark on digital transformation of your company.

Two-speed or bimodal IT is a good model for enabling companies to make the digital transformation of their business in an agile and dynamic manner that delivers the positive user experience expected by customers. IT outsourcing is a way to accelerate this transformation. Outsourcing of the “slow” mode in which careful changes to business-critical IT systems are made is one way to free up talent and budget to launch a digital transformation initiative. The “fast” mode is considered even more ideal for outsourcing and will be the topic of discussion in my next post, so stay tuned.