Analysts to Discuss How to Create a Bimodal Sourcing Organization at the Gartner Sourcing & Strategic Vendor Relationships Summit 2015, June 1-2 in London, U.K.

Traditional enterprise sourcing procedures are proving unfit to deliver the level of agility, speed and innovation that a bimodal organization needs. Gartner, Inc., said that a bimodal organization needs to adopt an adaptive approach to sourcing, where the distinct needs of both modes of IT are recognized.

A bimodal organization has two modes of IT. Mode 1 is traditional, emphasizing safety and accuracy. Mode 2 is non-sequential, emphasizing agility and speed. Both are necessary and must work in tandem.

"A truly bimodal approach to managing IT requires that sourcing reflects the different requirements of the two modes," said Ruby Jivan, research vice president at Gartner. "In a controlled and coherent fashion, this sourcing should deliver the industrialized low-cost solutions that support Mode 1, while enabling the more dynamic, exploratory and agile needs of Mode 2."

The new opportunities and threats of the digital economy are forcing organizations to focus on fast, flexible, collaborative innovation. CIOs need to improve their sourcing strategy to provide a sustainable boost to the IT agility of their organization. While traditional sourcing can constrain improvements and innovation, adaptive sourcing can deliver greater agility benefits than the more homogenous traditional sourcing approaches.

By applying an adaptive sourcing approach (see Figure 1), CIOs can rationally apply different governance rules to IT services in each layer, regardless of the buying center requesting the services (e.g., IT, the chief marketing officer and the chief digital officer).

Figure 1. Bimodal and Adaptive Sourcing

Source: Gartner (May 2015)

Adaptive sourcing uses a three-layer model to gain agility:

  • Innovate. Services are sourced on an ad hoc basis to address emerging business requirements or opportunities. They typically entail a short life cycle and use departmental, external and consumer-grade technologies.
  • Differentiate. Services that enable ongoing improvement of unique company processes and industry-specific capabilities. They have a medium life cycle (one to three years) and need frequent reconfiguring to accommodate changing business practices and customer requirements. At this layer, continuous process improvement and reconfiguration are the major goals.
  • Run. Established services that support the end-to-end delivery of IT services, such as core transaction processing and critical master data management for corporate processes and the entire business. Typically, they constitute 50 percent to 70 percent of the IT budget and, being critical for business viability, they are subject to the highest controls in terms of security, compliance and financial and technical compatibility, for example. Process efficiency is the primary focus at this layer. Because the Run layer includes the operation and support of systems of record, innovation and differentiation (once the latter two enter production), the compliance requirements are very specific. There is, however, a need for modernization of the production environment to prepare for the new digital technologies that will form the basis of the Innovate and Differentiate layers.

"Adaptive sourcing affects operating practices at many levels, so CIOs who anticipate the effects are more likely to succeed," said Ms. Jivan. "The success of adaptive sourcing rests on the agility of the sourcing and vendor management organization to embrace robust management practices."

Gartner analysts will further discuss steps towards making better sourcing decisions at the Gartner Sourcing & Strategic Vendor Relationships Summit 2015 taking place on June 1-2 in London, U.K. Media can register to attend the Summit by contacting laurence.goasduff @gartner.com.

Additional information from the Summit will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSSVR.

About Gartner Sourcing & Strategic Vendor Relationships Summit 2015

Sourcing IT services to ensure effective support to your business has never been more challenging. At the Summit, Gartner analysts will help organizations create and recalibrate effective sourcing strategies and governance, share practice techniques for engaging and negotiating with the optimal choice of providers, and explore the latest techniques for the management of current and emerging providers.

Contacts
  • Laurence Goasduff
  • Gartner
  • laurence.goasduff@gartner.com
  • Rob van der Meulen
  • Gartner
  • rob.vandermeulen@gartner.com
About Gartner

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 6,800 associates, including more than 1,500 research analysts and consultants, and clients in 90 countries.www.gartner.com.

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