Brainstorming The Best Use Cases For Bimodal IT

Greg McStravick

Part 2 in the Biomodal IT series

In my last blog, I discussed the need to embrace a bimodal IT strategy that helps companies modernize the core of the business while innovating at the edge. Bimodal IT can help companies grow incrementally while innovating in ways that support competitive differentiation.

Retail and consumer businesses have generally been the fastest to embrace bimodal IT, thanks to their focus on understanding individual customers. Coop Group, a huge retail and wholesale company in Switzerland, operates as a cooperative society with about 2.5 million members. By ridding itself of data silos and incorporating new sources of data, the company is using bimodal IT to better understand customers, accelerating innovation and growth.

I know a CEO who is moving toward bimodal IT because he recognizes that his enterprise doesn’t know everything it should about its customers. The challenge isn’t exclusively about collecting more data, but getting the right data and using it to gain new insight. As we talked, he wondered whether the consumer products sold by his company could someday provide data about customers. That’s thinking big!

Disrupting your own business

Organizations in other industries also can benefit from using bimodal IT to create audiences of one. Utilities and healthcare firms can use new forms of data to communicate with individuals. Even government administrations might better serve their constituents by more effectively leveraging data.

One industry that is especially ripe for disruption is insurance. Think about how the market works now: To sell me a policy, the company starts with my basic information – my age, where I live, what kind of car I drive. Then I need to provide information about the number of miles I drive, any accidents I’ve had, or tickets I’ve been issued.

Using actuarial tables, the company pools me with similar drivers. Everyone in the pool is charged the same rate. That makes no sense, but that’s the best they can do with the data they have.

But times – and customers – are changing. There are 1.4 billion cars on the world’s roads today, but the utilization rate is declining. The younger generation – which increasingly resists owning a car – doesn’t want to continuously pay for insurance that they only use part-time. What if insurance could be calculated dynamically, based on when it is used?

By collecting the right data, the insurer could know how often a person drives the car, at what time of the day, and what the weather is while driving. Insurers could tell how fast the customer is driving, when they drive aggressively, and whether they’re using a cellphone.

With this real-time information, insurers could provide variable-rate insurance that is priced dynamically according to conditions. Driving in a snowstorm? Your rate rises. Driving on a clear day in low-traffic areas? The rate falls.

The possibilities for data-driven innovation are endless. But to take advantage of them, companies need to be bold enough to willingly disrupt themselves. An insurer would need to change its entire booking and billing system to accommodate this type of model. And it also would need to find new ways to combine its mode 1 systems of record with the mode 2 systems that analyze data.

Preparing for the transition to bimodal IT

Data is the currency that will allow companies to create a personal, differentiated relationship with customers. This transition requires not only certain new tools based on a next-generation, universal data framework that enables unconstrained access to data across the enterprise. It also requires the understanding that the movement to bimodal IT is a journey, not a single act.

The challenge for companies in every industry is to develop the courage to let go of the past, be willing to risk failure, and embrace the need for innovation. Companies that are digital natives certainly have an advantage, because they can build new business systems and support innovative business models without regard to their legacy investment. Finances based on venture capital funding certainly make this easier.

But with determination and a commitment to the bimodal journey, any company can build a digital platform that supports future success. Clinging to systems because they work now and hoping no one comes along to disrupt your business is not an effective strategy. By using bimodal IT to support deliberate, future-focused self-disruption, CIOs can pave the way for innovation and business-enhancing change.

Please be sure to check out the Forrester white paper “Seven Laws of Data” for more information on this topic. I welcome any comments or feedback as well. Leave a note in the comments section, or tweet me at @McStravickGreg.

Greg McStravick

About Greg McStravick

Greg McStravick is the president of Database and Data Management at SAP, leading development and go-to-market teams for SAP’s core digital innovation platform, SAP HANA, and databases (including SAP ASE and SAP IQ), enterprise information management, middleware, and SAP Vora. Formerly, Greg led the go-to-market teams and strategy for some of SAP’s largest and fastest-growing businesses, including the SAP HANA platform, analytics, database, and SAP Cloud Platform. With more than 20 years of progressive experience as a leader in technology solution sales management and strategy, Greg has held senior leadership positions throughout SAP, including president (U.S.), where he was responsible for driving customer success and developing new opportunities for SAP to expand its business across the entire U.S. region.