As digital business transforms buying behaviours, organisations are quickly adopting bimodal strategies and questioning whether service providers can rapidly adapt to their evolving needs, reports Gartner.
The analyst firm says service provider executives and strategists must implement a bimodal roadmap to exploit this unprecedented differentiation opportunity.
"Confronted by digital transformation, IT leaders recognise the need to innovate more, manage uncertainty better and establish more agility," states Claudio Da Rold, vice president and distinguished analyst at Gartner.
"We anticipate that three out of four organisations will be at some level of bimodal maturity by 2017," says Da Rold. "Unfortunately, the same can't be said for providers' ability to aggressively transform into organisations that are able to respond to the needs of agile, bimodal enterprises."
In the next two years, Gartner says many organisations will reconsider existing provider relationships while implementing their roadmap to implement bimodal IT and adaptive sourcing.
We anticipate that three out of four organisations will be at some level of bimodal maturity by 2017. Unfortunately, the same can't be said for providers' ability to aggressively transform into organisations that are able to respond to the needs of agile, bimodal enterprises.
In a similar way, service providers looking to differentiate themselves in the market and evolve rapidly toward a bimodal approach must create a practical roadmap of the many changes required for this transformation.
When providers decide to embrace a bimodal work style and capabilities, they must also consider the overall go-to-market, sales and partnering strategy as well.Read more: 'What do we get for our IT spending?': A CIO's response
Providers that fail to co-innovate with their customers will not realise the full potential of digital business, says Gartner.
Gartner says many incumbent providers have found themselves challenged to make the necessary transition to embrace a bimodal work style, to deliver different product and services via new consumption models, to provide the basic sales model enhancements, and to focus on rapidly changing customer expectations across both Mode 1 and Mode 2 IT demands.
"The speed of digital business not only is dictating a new speed for IT, but a new pace for providers' own internal innovation if they want to remain relevant and competitive," says Da Rold. "While a few service providers have begun to employ bimodal capabilities in some business units, they face substantial cultural and mind-set challenges in scaling this across the organisation."
While not all providers need to contemplate building bimodal capabilities organically, if a provider is targeting a customer segment that is interested in building stronger digital and bimodal capabilities, it is in their best interest to identify how best to transform, says Da Rold.Read more: The relentless pursuit of sameness
"Start with small experiential steps but keep the momentum going by transferring a sense of urgency from top to bottom and from Mode 2 to Mode 1,” advises Da Rold. “Use small Mode 2 proof of concept (POC) projects to influence and sell the large Mode 1 projects that will follow."
Service providers that demonstrate understanding, alignment and prioritisation of both Mode 1 and Mode 2 initiatives will accelerate their relevance and exploit large opportunities.
"Winning providers will co-innovate with customers, get linked into their POC and pilots, and ramp up in influence, volumes and large-scale Mode 1 transformation and modernisation projects," says Da Rold.
"Providers that are unable to meet Mode 2 business buyers' expectations of speed, trust and credibility will face a market of cost-reduction-oriented services, frozen IT budgets and high competition for traditional spending."Read more: The 2016 CIO100 report: Full speed ahead
Send news tips and comments to firstname.lastname@example.org
Follow Divina Paredes on Twitter: @divinap
Follow CIO New Zealand on Twitter:@cio_nz
Click here to read digital editions of CIO New ZealandRead more: NZ IT spending to reach $11.5 billion in 2016: Gartner
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, CDOs, COOs, CTOs and senior IT managers.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.