Many SMBs don’t have the right answer to the question of how to start their journey to Digital Transformation. As I wrote earlier, I see four mandatory prerequisites:
- Commitment and Understanding of the CEO/Board. Without this, Digital Transformation cannot happen.
- CDO – Chief Digital Officer, or any other person who is driving digitalization. SMBs with less than 500 employees may not be able to have a dedicated CDO. In this case, the CIO can fill the CDO role as well.
- Digital Strategy. With Board support, a CDO (I’ve also heard “Chief Disruption Officer”) can prepare the digital strategy. This is a major change process. Make sure you have a clear goal and vision.
- Finally, act! Digital Transformation is a real challenge that cannot be underestimated. It usually includes a change of corporate culture. The human factor is crucial in the success of this process. If you haven’t read John Kotter’s “Leading Change,” get a copy. Part of the process is also to scrutinize your own products and services. If your products and business model have been in the market for a long time, you must analyze whether they are sufficient for the future.
Managers may be intimidated by the task of digitalization. Where do we start? We cannot start another enormous project; we can barely find the time to get our daily business done. The following picture, which I found on LinkedIn, symbolizes this Catch-22 situation:
The question is: how do we get going, if we don’t have sufficient resources? How can we start Digital Transformation while keeping our business running?
During the Global Smart Manufacturing Summit in Frankfurt, where Infor had invited me to speak, I met Simon Jacobson, VP at Gartner, who gave the keynote. While discussing Digital Transformation in the networking break, he mentioned Bimodal IT, an important concept that Gartner has researched. That piqued my interest. After looking into this concept, and reading some articles from Gartner and others, I realized two things:
- I had already implemented portions of Bimodal IT in my business and that made me think even more, because I found it to be common sense.
- Bimodal seems to be the answer to the question, of how to start Digital Transformation in small and medium businesses.
What is bimodal?
Here is another graph that I found on the Internet, that gives a good idea of how bimodal can be compared to a marathon runner and a sprinter.
If you want to learn more about Gartner’s view on bimodal, I highly recommend the article “Kick-Start Bimodal IT by Launching Mode 2” is. I was able to access the article for free by registering on the Gartner website.
While Gartner initially started out with, and coined the term bimodal IT, they eventually extended the concept to bimodal enterprise. I have also heard the term two-speed IT or two-speed enterprise. The two speeds relate to Mode 1 and Mode 2. From an SMB’s point of view, I would state that:
- Mode 1 is simply running the IT, or the entire enterprise.
- Mode 2 is exploring new areas and implementing new technologies in small steps without overstraining the business.
The last point is important: “Mode 2 must not overstrain the business! ” Otherwise your digitalization efforts will fail. Here are five aspects I have identified, where bimodal can help SMBs in their Digital Transformation
- Prepare your business
- Split large projects into smaller parts
- Experiment with new technologies, innovate faster
- Be aware of the cultural changes
- Get going, even if you’re not ready
#1 Prepare your business
What Gartner says is right: especially in IT you need to renovate your core.
- Identify legacy software that was developed around more than 10 years ago and is still a vital part of your IT. Legacy software will slow down our innovation process and it barely interfaces with modern systems. Get rid of it!
- Identify your systems like firewalls, switches, virtualization environment, operating systems, etc. Make sure you have an adequate, up-to-date system. That does not mean that you need to replace all the hardware, but you do want to answer this question: do your systems easily interface with modern technology?
- Keep up with the training of your team. Only a well-trained team can make the right decisions based on the latest information.
Keep in mind that renovating your core can also be a Mode 2 activity! Preparing your business is like housekeeping. Take a broom and go into the corners and sweep out the dust!
#2 Split huge projects into smaller parts
When I talk to my peers I often hear that a huge problem is having projects that are too large. Especially in Germany, we tend to make things perfect. This starts with the planning process, where we try to consider each aspect in advance. In November 2016, I visited the Agile PEP Minds conference that dealt with using agile methods in the product development process.
One speaker stated: “We overestimate our ability to plan and underestimate our ability to deal with exceptions!” In the end, this means that the waterfall method doesn’t work in many cases. Agile methods, like SCRUM can help you especially in Mode 2 to get better and quicker results. If you haven’t read Jeff Sutherlands excellent book “SCRUM, The Art of Doing Twice the Work in Half the Time” make sure, you get a copy.
If you feel overwhelmed by the epic size of your projects and feel paralyzed by them, you may just split your projects into more easily manageable parts . Make sure every part works and contributes to your business. This is crucial.
Let me give you an example. We needed a new PDA (production data acquisition) system, and in the past, we had started to prepare a project plan that covered all details until the go-live in a big bang. This presented many problems: first, we could not get all the people that we needed to work for the project as they were often also involved in other projects. Second, the planning phase took too long.
Now we divide the project into pieces.
- Find the right software. In the past, we wrote a comprehensive specification sheet and tried to figure out every eventuality. That took much time. Now, I have a much simpler approach: look what the vendor of our ERP system (Infor) has. In this case, we don’t have to worry about integration with the ERP. Then, ask reference customers if the software works well for them. If it works well for comparable businesses, it will work well for us too. Some may say, “But we have very special needs!” This hasn’t yet been proven. As I wrote earlier, Digitalization requires standardization and simplification.
- Start implementation in a single area. In this case, the new software coexists with the old system and we can start with a very simple setup.
- Allow the system to mature over time. In software development, we talk about an MVP, or minimum viable product. Essentially, you start with a minimal setup and add functions over time. This way the user can help you find the best approach to support his or her daily work. This can also be applied in implementing existing software: start with the basic functions and add more functions as you go.
Steps 2 and 3 will be iterated through the different phases. You will see that it is a much smoother approach which will not overstrain your employees. The best part is that you can celebrate your successes while you go.
#3 Experiment with new technologies, Innovate faster.
There are new technologies that will not only help us improve, but also to find new business models for the future. Here are some examples:
- IIoT, Industrial Internet of Things
- Big Data
- AI, Artificial Intelligence
- Generative Design
- 3D Printing or AM, Additive Manufacturing
These technologies have one thing in common: they all rely on the Cloud. Therefore, Cloud technologies are extremely important to consider for bimodal . Be it IaaS (Infrastructure as a Service), PaaS (Platform as a Service), or SaaS (Software as a Service).
But how can we experiment with that? Let me give you an example. While we were considering a new PDA system (see above), we also understood that it would be useful to see how long a machine has run. Starting and stopping the jobs on a terminal in production by employees is usually not very precise. The idea was to measure the power consumption of the machine with an IoT driven device. Usually these devices are mounted around the machine’s power line and measure the amperage.
In Mode 2 we don’t look for a solution that fits all machines on the shop floor. We start in an experimental way:
- Find a device that can be easily used
- Connect it with Microsoft Azure IoT to also learn this new technology
- Analyze the data
For example, we are currently searching for a power-monitoring sensor, and I will write a blog post of what we have found soon. I believe that with the information gathered, we will in fact discover more than we expect . Perhaps we can ascertain the different surface qualities of our cast-iron parts. If the quality is poor, the surface of the parts is too hard. Will the amperage data show this? It should because the machine needs more power to turn the mill.
This approach is experimental and doesn’t cover an entire project. We will initially start with two or three machine-tools only. With the data, we will get from that test, we may conclude that we need a different approach or different sensors. In addition, we may need to change some parameters to evolve over the time. A traditional approach doesn’t leave room for failure and experimenting.
#4 Be aware of the cultural changes
I always compare changes in an organization with the course correction of a vessel. I have learned over time that even SMBs can be compared to an enormous tanker rather than an agile speedboat . To me, the bimodal approach is a way to start a change process within a company. Although only parts of the business will be affected, it is crucial to understand that even minor changes will cause resistance among the employees. Therefore, it is ever so important to make sure to involve your peers and employees.
At this point it becomes evident that the CEO or board of directors must support this change process. If not, long-time employees who are not willing to support the change process will ally with the CEO and the entire thing will be stopped before you have even started.
#5 Get going, even if you’re not ready
Especially here in Germany, we tend to make everything to perfection. Implementing bimodal enterprise would mean that we plan every detail before we get going. This approach wouldn’t help. Mode 2 is per se, experimental and agile. Mode 2 will help you learn and understand technology . Not to overly prepare is part of the bimodal idea.
So, get going even if there are some white spots left which you cannot judge. This must not be confused with #4, awareness of cultural changes.
Taking my own experiences and judgment into consideration, I concluded that a bimodal IT or—even better—bimodal enterprise will help significantly in the Digital Transformation of SMBs . Bimodal will automatically support agile methods and doesn’t overstrain businesses. I have also found that bimodal will be a fast track to digitalization. Check it out and let me know your experiences. I’d be happy to discuss this interesting approach with you.