Agile IT

Agile IT
Today's IT for Tomorrow's solutions
by Srini Koushik

Today’s Digital Businesses require a radically different
approach to managing Information Technology within the
organization. This approach should deliver better
outcomes by making Business Agility a core
competency to deliver innovation, adaptability, ﬂexibility,
and a continuously improving value proposition.
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Srini Koushik is the President and CEO of NTT Innovation Institute Inc.,
the Silicon Valley-based R&D arm of the NTT Group, a global leader in
information and communications technology. With thirty years of
experience as a programmer, architect, CTO, CDO, and CIO for Fortune
100 Companies including IBM, HP and Nationwide, Srini has a track
record of unpacking complex problems, and hacking the technology and
culture of global enterprises to deliver extraordinary results.
He is an Open Group Distinguished Certiﬁed Architect and has published several
articles, including co-authored a best-selling book, Patterns for E-Business in
2001. Srini was elected to the IBM Academy of Technology, and was named an
IBM Distinguished Engineer in 1996. He was named an Elite 8 CIO by Insurance
and Technology, a Top 25 CTO by Infoworld, a Top 10 All-Star in the ﬁnancial
services industry by TechDecisions, and a 2014 Computerworld Premier 100
Technology Leader.
Srini has a passion for lifelong learning and holds a bachelor’s degree in physics
from the University of Madras, a master’s degree in computer science from the
University of Bombay, a master’s degree in business administration from Ohio
State University, and executive education on Systems Thinking, Design Thinking,
Clean Energy and Innovation from the MIT Sloan School of Management, Stanford
d.school and Duke University.
Srini Koushik
President and CEO of NTT i3
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Agile IT
The 21st century has seen the emergence of a hyper
competitive marketplace characterized by innovative business
models, better informed and demanding customers, nimble
and smarter competitors and a rapidly changing regulatory
and threat environment. In this dynamic global marketplace
that is fueled by constant changes in the underlying social,
economic, political and technical landscape. Competitive
advantage, market valuations and reputations that used to
take decades to build and develop are created and destroyed
in a matter of weeks and months.
The key to success for businesses in all industries in this
exciting and sometimes chaotic marketplace is Business
Agility, which is the ability to sense changes in the
marketplace and respond quickly and efﬁciently by adapting
its products, services and operations to capitalize on
opportunities and overcome challenges in the marketplace.
These businesses are Digital Businesses that are highly
adaptive to shifting market dynamics, new technologies and
evolving regulatory environments. They have technology in
their DNA and have the organizational capability to use
technology as a source of competitive advantage, to
experiment with options, prototype potential solutions by
rewiring systems and processes, gain insights from internal
and external data, and quickly execute on these insights to
drive meaningful business outcomes.
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To build a Digital Business you have to look beyond
implementing the latest technology and envision a
fundamentally new value proposition—one
that is more focused on a reciprocal
exchange of value with customers and
partners than the more traditional,
limited model of a ‘consumer’.
Digital Businesses operate in
ecosystems in which the very
nature of competition shifts from the
features of a product to the business’
ability to deliver an experience that can be
tailored to meet the individual needs of its users
in a consistent and trusted fashion.1
Technology is
necessary but
not suﬃcient to
build a Digital
Business
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Digital Businesses truly understand how they deliver value to their customers by
going beyond traditional measures of delivering existing products and services
faster, better and cheaper. In many cases they reimagine products and services by
making the customer a co-creator in the product development process and in
others they create services that cater to and influence a significant change in
customer behavior.
Digital Businesses deliver services to their customers through well designed,
secure, context sensitive and highly differentiated experiences that take advantage
of the rapid changes in technology. They understand their value chain and have
made strategic choices around owning those core capabilities that provide them a
sustainable competitive advantage and partnering across a tightly knit ecosystem
for other capabilities.
Finally, Digital Businesses require bendable organizations, operations that are
flexible and extensible, supported by systems and processes, making them
resilient. More precisely, your IT functions are required to be highly adaptive and
customizable in responding to change. Digital Businesses succeed by Thinking
Smarter, Acting Faster and Flexing their business model and processes to
take advantage of emerging opportunities in the marketplace.
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For example, consider the Tesla, the first software-defined car that could not be
viable without today’s powerful computers, advanced sensors and high-speed
networks. Tesla’s business model is also pretty unique as they tightly control and
in many cases own parts of their value chain such as selling directly to customers
through company owned stores and using a build-to-order process that eliminates
the need for holding inventory. Tesla made deliberate choices to bypass traditional
dealership model used by every other manufacturer in the automotive industry.
They have also made strategic choices to offer a simple and easy to use
configuration process that makes the customer a part of the design process and
enables the build-to-order process they use to manufacture their
cars. They have also made strategic choices to own certain
parts of their value chain such as battery manufacturing
and building a supercharger network. At the same time,
they have used exclusive partnerships with regional
telecommunications providers, Google Maps and
other services to provide the connected car
experience in the Tesla Model S.
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Digital
Business
and IT
Many of today’s successful Digital Businesses were
born Digital. They have a significant structural
advantage that allows them to achieve Minimum
Efficient Scale rapidly by leveraging today’s technology
infrastructure and processes to act as challengers and
disruptors in traditional industries. These structural
advantages give them business agility that they use
effectively to out maneuver significantly larger and more
established competitors.
As established enterprises in all industries begin to
evolve themselves into the successful Digital
Organizations of the future they need to begin with the
realization that the road to becoming a Digital
Business goes through their IT functions. However,
many of these incumbents are saddled with IT that has
organizational structures, management models,
operational processes, workforces and systems that
were built to solve “turn of the century” problems of the
past.
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With the ready availability of cloud enabled services (such as CRM, HR,
Marketing micro-sites, etc.), organizations are choosing to bypass their internal
IT teams and engage these services on their own. This has caused a
perceptible rift between IT departments and the business units they support.
More importantly, this dilutes the focus of the business from “What” technology
can do for them to “How” to build and operate technology. As technology
permeates and becomes indispensable to all aspects of today's businesses,
this problem is going to continue to grow unless IT organizations recognize the
limitations of the model that helped them succeed in the past and retrofit it
quickly to adapt to the needs of today.
Many analysts and industry experts have recognized the need for a new model
to manage IT in their Businesses and have proposed approaches to
understand and manage a hybrid IT environment that includes slower legacy
applications and infrastructure in combination with today’s rapidly evolving
Digital-first, mobile-first and analytics-enabled applications.
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Gartner for instance talks extensively about an IT organization that is Bi-Modal:
Bimodal IT is a concept that helps CIOs address the intrinsic tension that
exists between what IT needs to provide and what the organization needs to
grow. Mode one is all-things traditional, emphasizing safety and accuracy
— what a traditional IT organization does best. Mode two is non sequential,
emphasizing agility and speed - like a digital startup. Put them together and
what you have is bimodal IT. One organization operating at two speeds, but
coordinating, communicating, leveraging shared knowledge and focused on
one shared, not competing, goal: improving performance.2
While Bi-Model IT does a good job of defining the challenges and opportunities
faced by IT leaders, Gartner also defines speed of operation and ‘fluidity’ as
important prerequisites. However, we believe it does not go far enough
An alternate way of describing IT applications was proposed by Geoffrey Moore,
who described information systems into two categories – Systems of
Engagement, or those systems people wanted to use; and Systems of Record or
those systems that people had to use. This faces similar concerns of not being
enough.
speed of operation
and ‘fluidity’ as
Gartner defines are
important
prerequisites of
next generation IT
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While both these approaches do a good job of talking about the challenge from
different perspectives, we believe they are not sufﬁcient to describe and address
the challenge faced by IT organizations in today’s Digital Businesses. The ﬁrst and
most obvious reason is as most IT leaders will recognize, an organization’s
application portfolio does not neatly divide itself into two distinct categories. Most
business processes are enabled by systems that fall into both categories. For
instance, it is not uncommon for a mobile banking application to be closely
integrated with a Checking Application that is still based on a mainframe written in
Cobol. In other words, Speed 1 Applications depend on Speed 2 Applications (in
Gartner’s Bi-Modal IT model) or Systems of Engagement interact with Systems of
Record to deliver seamless experiences (in Geoffrey Moore’s model). Secondly, in
most cases these applications share common infrastructure and information
security models which means that both applications can only be as fast as the
infrastructure they run on. Finally, the organizational challenges associated with
having a ‘Fast IT’ and ‘Slow IT’ or a ‘Innovative IT’ and a “Traditional IT’ are non-
trivial as all of these solutions have to be implemented by people who are included
and valued as part of this whole process.
We believe the answer for incumbent businesses has to be evolutionary,
sustainable and resilient to the rapidly changing environment. It should aim to
deliver Business Agility as a core competency to today’s Digital Businesses.
an organization’s
application portfolio
does not neatly
divide itself into two
distinct categories
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The Agile IT
Framework
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Agile IT
Building a
sustainable
model for
managing the
“Business of IT”
Transformation is an overused and overhyped word in
IT. At NTT, we believe that the current model used to
manage the “Business of IT” needs to evolve
incrementally and delivered iteratively. The model
should be inclusive of all aspects of the business while
also being targeted and selective in its focus, we call
this model Agile IT.
Agile IT is a model for managing IT that is built for
purpose to address the speciﬁc challenge at hand and
is adaptive and extensible to meet the evolving IT needs
of Digital Businesses. This model is informed by
customer needs, inﬂuenced by business priorities and
integrated into the fabric of the business by effectively
utilizing the people and underlying culture of any
enterprise. Agile IT uses Systems Thinking to address
the skills, process, technology, systems, ecosystem
and organizational dynamics that are the underpinning
of today’s digital businesses. The main objective of
Agile IT is to enable businesses to Think Smarter, Act
Faster and Flex the business within the context of
current market opportunities and broader prevailing
culture and trends in the marketplace.
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The current model for IT, which is built around delivering IT Faster, Better and
Cheaper, is not adequate to deal with the increased volume, velocity and
variety of change driven by the rapidly evolving digital landscape.
In order to support Digital Businesses, the current model needs to be extended
to support Innovation, Agility and Value. To do this IT needs to go beyond
today's point solutions such as Agile software development, DevOps, and
Continuous Delivery to a more holistic model that can deliver sustainable
results and is highly adaptable to change.
Our model for Agile IT is built on over 15 years of managing large scale IT
organizations, observing some of the best IT departments across the globe,
engaging with some of the most innovative startups and working with well
established offshore development factories in Asia and Eastern Europe. It
focuses on managing IT professionally (IT as a Business) to deliver competitive
differentiation and value to today's Digital Businesses and their customers.
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Our model for Agile IT builds on many of innovative approaches around managing IT, applications
development, application maintenance, DevOps and infrastructure management functions. Agile IT focuses
on building an innovative, adaptive, efficient and sustainable IT capability in today’s businesses. This model
does two things:
Implement a
comprehensive business
system that produces
technology enabled
solutions that are focused
on innovation, quality and
throughput in a
sustainable and scalable
manner; and…
Attract, develop and retain a
diverse workforce to operate
within this business system.
One of the key elements of
the workforce of an Agile IT
organization is the definition
of talent that goes beyond
looking at traditional STEM
fields to look at fields such as
Anthropology, Visual Design
and other Liberal Arts fields of
study.
In order to build an Agile IT organization, we believe you have to do both these things well. We believe that
good talent in a bad system will not be able to deliver good results. Similarly, a great system with bad talent
will also fail to deliver good results. However, a good system with good talent can deliver extraordinary results.
1
Components
2
Components
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Leading
Agile IT
Agile IT starts with a change in the mindset and skill
set of IT leaders. This model requires CIOs and IT
leaders to model three primary leadership behaviors:
1. Understand how IT enables the business -
Recognize and understand how the business
model of any enterprise is implemented in
practice.
2. Run IT as a Business - Understand the business
model, operational processes and metrics that
measure the effectiveness of IT in an enterprise.
3. Be the Change Leader - CIOs should model and
demonstrate the change they want to see in an
Agile IT organization.
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Understand how IT enables the
business
In most enterprises, IT leaders need to recognize that the business model of the
enterprise is a conceptual model that is instantiated in its IT systems and process.
In other words, IT systems are the only comprehensive and concrete instantiation
of the business model and processes in most enterprises. All other departments
and functions of the business are siloed and specialized. For instance, in an
insurance company the underwriting department specializes in underwriting, the
claims department focuses on claims handling and the sales department focuses
on customer acquisition, the ﬁnance department works on the ﬁnancials of the
business and so on. In this insurance company, the IT organization is the only
place where these systems and processes are integrated to provide a
comprehensive end-to-end view of the business.
IT systems are the
only comprehensive
and concrete
instantiation of the
business model and
business processes
in most enterprises.
1
Leadership
Qualities
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Run IT as a business
Agile IT also requires a good understanding and view of how IT is managed as a
business within the enterprise. This requires:
• Starting with identifying how IT delivers value to customers, employees and
partners within and outside the enterprise
• Looking beyond the traditional approaches of interfacing with the business
and replicating business silos within the IT organization.
• Going beyond traditional metrics of success focused on Operational-Level
Agreements (OLA), SLAs and move to how to set up Business Level
Agreements that enable Business Outcomes, and
• Reorienting the focus of IT from optimizing unit costs and efﬁciency to focus
more on throughput, total cost to deliver the business outcome and
effectiveness.
2
Leadership
Qualities
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Be the Change
Leader
Implementing this model in any enterprise
requires the unequivocal support from the CIO.
Many IT leaders ﬁnd it very difﬁcult to adapt
their leadership style and management models
to the new approach. The new model requires
IT leaders to abandon their centralized
command and control style in order take on a
Servant Leadership model (described in later
sections in more detail) with their employees,
partners and customers. It also requires them
to become lifelong learners focused on
continuous improvement. They need to be
change agents who are highly adaptive and
effective in dealing with the inherent ambiguity
associated with a rapidly evolving future.
3
Leadership
Qualities
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The
System:
Core capabilities
of agile IT
The Agile IT organization aims to deliver Business Agility
as a core competency. This requires ﬁve core capabilities
that will help IT move beyond playing defense and
“keeping the lights on” to a key stakeholder in the
business that plays an effective offense that adds value
to the enterprise.
1. Adaptive Enterprise Architecture
2. Digital Portfolio Management
3. Innovation and Customer Centricity
4. Platform Thinking and Multi-Sided Platforms for IT
5. Horizontal IT Teams
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Adaptive Enterprise Architecture
(AEA)
Over the past two decades there has been a lot of focus on Enterprise
Architectures (EA) and Enterprise Data Architectures. Many IT organizations have
invested millions of dollars and countless man hours in their quest to map the
businesses they support in a set of models and documents. However, these
efforts have at best been met with mixed results. The most successful efforts have
been able to capture a snapshot of the IT industrial complex in any organization at
a particular point in time. The challenge is that enterprises are dynamic
organizations that change and evolve on a daily basis and these large and
complex EA efforts turn into legacy systems very quickly. Today’s Digital Business
and Agile IT require the ability to move quickly and adapt to rapid and constant
changes in underlying technologies and the ecosystem in which these businesses
operate and compete on a daily basis.
1
Capabilities
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Adaptive Enterprise Architecture (AEA) represents an
organizational capability that provides the foundation for
any business to Think Smarter, Act Faster and Flex
their Business to meet the changing needs of their
customers and marketplace. An AEA begins with strong
understanding of how a business adds value to its
customers, employees and stakeholders. In other words,
it is important to understand the Business Architecture of
an organization prior to beginning the journey towards
becoming a Digital Business. Unlike traditional EAs, the
Business Architecture in an AEA focuses on gaining a
good understanding of how information is created,
consumed and enhanced as it ﬂows through the business.
It looks at how various entities in the business including
people, organizations, partners and applications interact
with the information and modify it as it moves across the
value chain. This recognition of data and information as
the key currency and asset of a Digital Business is at the
core of an AEA. It is the secret ingredient that helps
improve speed and adaptability of the business, the ability
to sense changes in the marketplace, gain insights
through analytics and respond to these changes by
quickly translating these insights into operational actions,
business outcomes and deliver value to its customers.
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An AEA differs from traditional Enterprise Architecture in many ways. Here are some of these key
differences:
• AEA looks at the business as a set of horizontal Digital Experiences (see next section on Digital
Portfolio Management) and value chains that are implemented through applications within the
Enterprise. This is different in that traditional approaches attempt to break IT down into functional
or technology towers that usually reﬂect the way in which departments within the enterprise are
organized.
• Traditional architectural approaches start with an application and break it down into its
components and analyze how they handle and process data. In these approaches the application
owns the data and an unintended consequence is that the data is siloed. In an AEA, the focus is
to deliver information, products and services to customers and making sure that there is no
friction or waste in the value chain. This starts with a good understanding of information and data
and how it is originated, changed, processed and transformed into value to the customer. In
other words, it is an information-centric approach where applications are viewed as instruments
to enable seamless and frictionless ﬂow of information and value to customers.
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• By definition, AEAs are targeted and prioritized to address specific aspects of the business that
deliver the most value to its customers. It is built and enhanced in an iterative and incremental
manner. It also requires a pragmatic approach to implementation that uses the right mix of
technology, people and process to balance agility and deliver meaningful business outcomes.
The definition of an AEA should not take months or years, but is done in a matter of weeks and
evolved to adapt to the changing needs of the marketplace and customers.
• Finally, the AEA in a Digital Business is not an overlay function performed by Enterprise
Architects and CTOs but is woven into the fabric of an Agile IT organization. The application
and infrastructure team should understand, own and incrementally develop the information
flows that support key experiences within the enterprise.
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Digital Portfolio Management
Digital Portfolio Management (DPM) is the capability of an organization to provide
better understanding and insights of the key experiences that any business uses
to deliver value to its main stakeholders (customers, employees and partners).
These Digital Experiences span multiple channels and cut across organizational
silos and boundaries of IT applications and Infrastructure. In other words, these
experiences are a collection of activities and interaction that, when orchestrated
well and executed consistently helps provide a meaningful and value-added
experience that is hard to replicate and brings competitive differentiation into the
marketplace. For example:
• In a P&C Insurance company, the submission of a claim by a policy
holder to be compensated for a loss is a key experience
• In Retail Banking, the interaction between a customer and the bank
while transferring money or paying bills is a key experience provided by
the bank
• In the Automotive Industry, the process of configuring a car online and
understanding pricing and options is a key experience provided by the
automotive company
• In any enterprise, the annual process of understanding benefits and
making annual benefit choices is a key experience that any enterprise
provides to its employees and
• In any IT organization, the process of procuring and provisioning new
services (infrastructure, applications, new IT enabled business
capabilities etc.) is a key experience that is provided by the IT team to
their business partners.
2
Capabilities
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DPM is an effective mix of art and science that focuses on prioritizing and
making business IT decisions, determining investment policy and mix,
matching investments to business priorities, and allocating resources to
enable expected business outcomes. DPM treats the key experiences
and the IT industrial complex (infrastructure, applications, people, etc.) as
an investment and applies professional portfolio management techniques
to this investment. It helps deﬁne the intrinsic value and underlying risk of
these experiences and identiﬁes how IT assets and people contribute to
the core value chain of activities that enable the experience. Finally, DPM
helps a business implement a targeted investment strategy that is aligned
with the enterprise’s Digital strategy that focuses on enhancing,
improving, substituting or outsourcing each experience or category of
experiences in the Digital portfolio.
Our DPM approach includes a set of tools and techniques such as the
Digital Experience Matrix that helps us understand and prioritize what
needs to be done to accelerate the journey towards becoming a Digital
Business. This matrix is a simple and color coded 3x3 grid that plots
business criticality of any experience on the X-axis and the frequency of
how often the experience is repeated on the Y-axis. The 3 rows or
columns represent Low, Medium and High. The color coding of the text in
the grid is Red and Green and it represents if the experience is
differentiated (Green) or sub-par (Red). This grid when viewed for a
particular domain provides a quick view of the priorities that need to be
tackled to become an Agile IT organization.
PRIORITY
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For example, the Digital Experience Matrix
shown in the picture shows a representative
sample of experiences provided by an IT
organization to its business partners. A very
quick view of this matrix tells you that the
experience of releasing new business
functions into production is of high
importance to the business and occurs very
frequently. However, since the experience is
colored Red, it shows that this is not a good
experience. In other words, the priorities for
differentiation and improvement are clear.
Each of these experiences can be further
unpacked into the people, process and
technologies that enable this experience
paving the foundation for rapid and targeted
improvements. It is very easy to see how
any business domain can be broken down
into a collection of experiences on the
Digital Experience Matrix providing clear
insights into how IT can begin the
incremental and iterative journey towards
becoming an Agile IT organization.
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Capabilities
Innovation and Customer Centricity
In order to drive the evolution to a Digital Business, IT needs to build and sustain a
mindset of Innovation and Customer Centricity. One of the approaches to
introduce Customer Centricity is the approach to User Centered Design (UCD)
pioneered by the ground breaking consultancy ﬁrm IDEO. This approach explores
the creative tension and tradeoffs between the Feasibility of the solution (can it be
built) against the Viability (can we make money off the solution) and the Desirability
(will people want it). Truly customer-centric companies have learned to strike an
effective balance to User Centered Design to consistently deliver successful
products and services to the marketplace. In our experience, becoming an Agile IT
organization that is customer-centric requires starting the design process with the
desirability of a concept before moving to the feasibility and viability of any
proposed solution. Approaching UCD in this sequence enables IT to identify
solutions that resonate with their customers. However, this is only one part of the
solution, the second part is building the organizational skills for Divergent Thinking.
VIABILITY
(BUSINESS)
FEASIBILITY
(TECHNICAL)
DESIRABILITY
(HUMAN)
INNOVATION
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3

Most best IT teams have excelled at understanding complex problems and working to solve these problems with
technology. This strength is based on Convergent Thinking, which is an approach to structured thinking that uses
techniques and tools to evaluate alternatives and focus on culling these choices down with the objective of
identifying a solution to the task at hand.
While this approach is a core strength of
good IT departments, it can also have
the unintended consequences of stifling
innovation by closing out avenues of
thinking that could have led to truly out-
of-the-box ideas and solutions.
Fostering innovation and especially
breakthrough innovation requires an
iterative process that alternates between
Divergent Thinking to explore new ideas
and Convergent Thinking that culls
down new ideas with the objective of
reaching a solution. Divergent Thinking
is a creative though process that
explores new avenues and ideas that
may even redefine the problem.
Divergent Thinking allows teams to flare
out choices through brainstorming, lateral thinking and other techniques and tools that are typically not used in
IT. Agile IT organizations make a conscious effort to mix Divergent and Convergent Thinking to unlock the
creativity and innovation in all of IT.
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provides the ability
to achieve minimum
efficient scale in any
process or solution
without requiring the
volume, size and
scale that was
required to drive
efficiency in the
Industrialized IT
model.
Platform Thinking and Multi-Sided
Platforms for IT
The first three capabilities we discussed focused on identifying ideas, experiences and
opportunities for differentiation. The fourth capability, Platform Thinking focuses on how
to implement many of these ideas in a faster and less capital intensive manner that
allows us to start small and fail early or scale fast.
Today’s de-facto model for delivering IT solutions is based on a proven playbook that
focuses on eliminating variability and IT Sprawl. It does so through ruthless
standardization, implementing command and control based management structures
and centralized teams that are designed to drive economies of scale and optimize unit
costs. This model also depends on the availability of large numbers of skilled resources
that are always in short supply around the world. This “Industrialized IT” model was
effective in solving problems such as Y2K conversions, large multi-year ERP
implementations and repeatable/recurring problems. Additionally, this model has
several unintended consequences such as increasing time to market, reducing flexibility
and stifling innovation. The result is that these businesses have inflexible and expensive
IT and a workforce that has lost its ability to innovate for the business, costs too much
and is slow to react to the changing needs of the marketplace.
Platform Thinking provides the ability to achieve minimum efficient scale in any process
or solution without requiring the volume, size and scale that was required to drive
efficiency in the Industrialized IT model. Platform Thinking focuses on creating more
throughput and output for IT without resorting to traditional approaches to achieving
scale. For example, consider how Apple’s recently announced ResearchKit turns any
willing user of an iPhone into a participant in a global research effort. This platform
allows researchers across the globe to get access to global participants and gives
them the ability to scale without actually having to recruit people for these studies.
4
Capabilities
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For Agile IT organizations it is critical to identify and architect solutions that use
Multi-sided platforms (MSP) for IT in emerging areas such as Cloud, Security,
Analytics, IoT etc. in order to rapidly scale capabilities without having to add a lot
of headcount and retool a lot of their existing talent. Using MSPs effectively
requires a good understanding of the information flows, identifying functions that
are core to IT for architecting and integrating information flows between enterprise
applications and these MSPs. In short, this capability builds on AEA, DPM and
UCD (the first three capabilities). MSPs are consumed as a service thereby
providing the ability to start small and scale fast and have security and privacy
engineered into the information flows. MSPs allow organizations to quickly reach
Minimum Efficient Scale in their products and services by leveraging the cloud to
lower barriers to entry and providing the flexibility to rapidly scale or reorient the
business without significant capital and resource outlays. Finally, any MSP should
facilitate the shift from ruthless standardization to smart mass customization.
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Horizontal IT Teams
Horizontal IT Teams (HIT) are one of the most critical components of the Agile IT.
This approach to building IT organizations abandons the tried and trusted way or
organizing IT around business and technology towers that was used in the
Industrialized IT model. Building a truly Agile IT organization requires HIT teams
that are tuned to deliver and improve a specific experience(s). These teams can be
dynamically configured to drive innovation and increase the throughput of the
experience that they are focused on. These HIT teams start off by radically
rethinking how to deliver the experience using 21st Century approaches and
rebuild teams that are dynamic, built for purpose and flexible enough to morph
themselves to adapt to changing requirements. This approach combines proven
techniques in a unique and innovative way to address the opportunities presented
by today’s digital businesses.
5
Capabilities
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For instance a
typical HIT team for
IT will include
application,
integration,
usability, testing
and infrastructure
skills.
The core components of HIT teams are:
• Standing 2PTs builds on and extend the Two-pizza team concept that was
popularized by Jeff Bezos and Amazon. These teams derive their name from the
heuristic that the teams need to be small enough (8 to 12 people) so that you
can feed them with two pizzas. Standing 2PTs extend the core 2PT to include a
set of standing team roles that stay together across all projects to minimize the
typical learning curve associated with assembling a new team every single time.
Standing 2PTs are also driven by, and focus on 1 to 3 key business metrics that
provides focus and increases empowerment and accountability.
• These teams are made up cross-functional and full-stack technology skills. For
instance a typical HIT team for IT will include application, integration, usability,
testing and infrastructure skills.
• These HIT teams are embedded into the business organizations that need to
come together to deliver the experience to the customer.
• HIT teams use alternative and innovative approaches to scale capacity through
the use of Multi-sided Platforms and selective crowd-sourcing
• Finally HIT teams are made sustainable through asymmetric hiring techniques
that extend traditional hiring models that focus on STEM skills with one that
values diversity of thought, and areas such as industrial design, anthropology
and other domains. This hiring model is supplemented with an Adult Learning
Model and a focus on continuous improvement.
33 www.ntti3.com

The 8 Plays
in the Agile
IT Playbook
The Playbook is a set of approaches,
techniques and best practices that we
have developed to help organizations
implement the Agile IT model in the
enterprise. We expect this to be a
reference library that is enhanced and
extended as the model gets adopted
into enterprise IT across the globe. We
have a library with eight plays that we
have found to be effective in Agile IT.
34 www.ntti3.com

lean thinking
changes the focus
of management
from optimizing
separate
technologies,
assets, and vertical
departments to
optimizing the flow
of products and
services
Real Lean
Real Lean3 is a non-zero sum (win-win) principle based management system
focused on creating value for our end customers. The system strives to
continuously improve results by eliminating waste, reducing the unevenness of
demand and streamlining work activities to eliminate unreasonableness of
workload on our employees. In today’s marketplace many service providers
have blurred the lines between Six Sigma, Agile practices and in order to apply
Real Lean, one has to start with respect for people. Lean principles were
developed and used successfully in manufacturing and production companies
in industrialized nations over the past three decades. Lean has its roots in the
Toyota Production System and has been extended to suit various industries
and domains over the years. Today, Lean principles are being used to redesign
organizations, reinvent management and re-engineer processes in many
industries and domains. The core idea behind Lean is maximizing customer
value while minimizing waste. A lean organization understands customer value
and focuses its key processes to continuously increase it. The ultimate goal is
to provide perfect value to the customer through a perfect value creation
process that has zero waste. To accomplish this, lean thinking changes the
focus of management from optimizing separate technologies, assets, and
vertical departments to optimizing the flow of products and services through
entire value streams that flow horizontally across technologies, assets, and
departments to customers.
For more information on Real Lean, please visit http://www.bobemiliani.com
1
Plays
35 www.ntti3.com

Design Thinking
Design Thinking is a design methodology and creative process that encourages
Divergent Thinking and the “flaring” of ideas and is contrasted against more
analytical approaches based on Convergent Thinking aimed at narrowing down
choices to reach a specific solution. Design Thinking encourages a rapid and
iterative approach that alternates between divergent and convergent techniques
to come up with creative and out-of-the-box solutions to all kinds of problems.
During the divergent stages, participants defer early judgments about the quality
or quantity of ideas. These rapid cycles encourage creativity, increase the volume
of ideas and reduce the fear of failure as participants do not have the time to get
vested in any particular idea.
Design Thinking is an iterative and time boxed method
with multiple feedback loops that starts with techniques
to empathize and identify with the customer. All ideas and
solutions that result from any Design Thinking effort are
grounded on this knowledge and empathy for the
customer. The process then helps you derive and define
unique insights. During the next step, various techniques
to foster creativity are used to ideate new and out of the
box solutions based on these insights. A select set of
these ideas are used to create a low-fidelity prototype.
This prototype is used to test the concept with the
customer and provide feedback into the appropriate stage of the design thinking
approach. A typical cycle for Design Thinking is completed in 2 to 3 days with
frequent and ongoing dialog with potential customers. The fast-paced, creative
and collaborative approach used by Design Thinking makes it an ideal choice for
today’s Agile IT organizations. For more information on Design Thinking, please
visit http://dschool.stanford.edu
2
Plays
36 www.ntti3.com

Discovery Driven Planning
Many successful enterprises have tried and proven conventional planning
methods to create well understood and predictable strategies and business
plans. These approaches are effective for ongoing businesses as they rely on
insights derived from proven and reliable data and experiences and they help
ensure predictable outcomes. In this approach, deviations from the plan are a
bad thing.
Innovative digital ventures in today’s highly competitive economy call for the
enterprise to imagine a desired future, envision new value propositions and
reimagine experiences. In many cases the value of these ventures is not obvious
to executive leadership and competitors alike. These new ventures require
leaders to work with assumptions on possible futures and outcomes. In other
words, these new ventures rely on a high ratio of assumptions to knowledge.
This carries an inherently high level of risk as these assumptions about the
unknown turn out to be wrong. This causes digital ventures to pivot away from
assumptions that are proven wrong and rapidly adapt to emerging knowledge.
Some of these pivots are small but others require fundamental redirection of the
venture. The startup ecosystem is full of examples of ventures that had to
radically pivot their business model and solutions in the face of evolving
knowledge and emerging insights.
Discovery-driven planning (DDP) is a planning approach originally proposed by
Rita Gunther McGrath and Ian C. Macmillan in their HBR article with the same
title in 1995. DDP is a practical tool that acknowledges the difference between
planning for a Digital venture and planning for a more conventional line of
business.
3
Plays
37 www.ntti3.com

Discovery Driven
Planning
recognizes that
planning for Digital
Ventures involves
envisioning the
unknown and
pivoting quickly to
address changes in
underlying
assumptions
Discovery-driven planning provides an iterative approach to creating business
models and underlying business plans that is more suited to new and innovative
ventures. DDP offers a set of tools that help uncover the dangerous implicit
assumptions that are suggested in plans and provide us a way to acknowledge,
challenge and deal with these assumptions that typically result in the demise of a
good idea. The process involves incrementally developing and elaborating the
plan in four related work products:
• A reverse income statement - this is used to model the basic economics of the
business
• A Pro forma operations specs - this deﬁnes the operations needed to run the
business;
• A key assumptions checklist, which is used to ensure that assumptions are
checked; and
• A milestone planning chart, which speciﬁes the assumptions to be tested at
each project milestone.
These documents are updated throughout the lifecycle of the venture. These
changes are made as new insights are gained and new data is uncovered that
validates or disproves initial assumptions. DDP makes sure that the strategy
and planning for a Digital Venture is Smart, Agile, Adaptive and Responsive to
stay ahead of a rapidly changing and evolving competitive marketplace.
38 www.ntti3.com

Visual Management
Human beings are visual learners. We use visual cues every day to process
information, organize how to get things done, make decisions and navigate
through everyday tasks. Consider the routine task of driving into work; you are
woken up by a clock with a visual display giving you the time, your dashboard and
navigation system in the car you get into gives you a lot of important information
as you are driving, signs on the road tell you everything from where you are to how
far you have to go to how fast you can drive.
One of the key techniques to improve the efﬁciency and effectiveness of an IT
organization is to make work visual. Making work visual ensures improved
transparency and surfaces problems as they occur so that management can
address them as they happen.
4
Plays
39 www.ntti3.com

These boards are
visible, consistent,
easy to understand
and informative
Using visual management makes sure that an Agile IT organization relies on
personal interactions and frequent and open communication instead of
documentation and formal contracts. Project status and key work products are
communicated using a Visual Management System and other low-tech vehicles
such as a project status board and a story-card wall that is similar to work
assignment charts seen on hospital ﬂoors. Each HIT team conducts daily stand-
up meetings where both progress and potential blockers to progress are surfaced
immediately. Team leaders and managers either address or escalate these
blockers in real time. This escalation process moves in real time to senior
management on a daily basis, greatly eliminating wait states for each team. An
open real-time communication is enabled by the work space layout that promotes
collaboration, communication and ﬂow. The management team is encouraged to
interact and sit among the HIT teams and observe how work is done, which
ensures that all facets of a decision are considered, and increases the speed and
quality of decisions made in an Agile IT organization.
Most Visual Management approaches will start with the establishment of Visual
Controls on Visual Management Boards (VMB). Once these VMBs are established
they will then quickly require the other 2 elements of a lean management system:
routine accountability habits, and Leader Standard Work.
VMBs have been used for decades by automotive companies and other
manufacturers that used Lean Manufacturing. The boards are simple, easy to use,
and maintain communication tools that make it easy to learn more information
about the production process at a glance. These boards are visible, consistent,
easy to understand and informative. Over the past years visual management
boards have been used in many other domains from managing ER rooms to Agile
Software Development. We believe IT organizations can use Visual Management
Boards to manage, measure and continuously improve how they deliver business
agility, quality and value to today’s Digital Business.
40 www.ntti3.com

Servant Leadership
Servant leadership is one of the earliest
philosophies and approaches to leadership
which was ﬁrst published in a landmark
essay, The Servant as a Leader in the late
1960s by Dr. Robert Greenleaf. At the core
of this leadership approach is the concept of
a servant-leader who sets aside his/her own
needs in order to aid or assist others with
their needs. Servant Leaders lead by
example and produce the positive impact on
their teams through their humility, authentic
behavior, integrity and honesty. They treat
people with respect and kindness but most
importantly are 100% committed to the effort
at hand. Servant Leadership as a concept
and management approach, when applied
truly, brings the team members together,
providing a solid and differentiated approach
for creating high value within organizations.
For more information on Servant Leadership,
please visit http://www.greenleaf.org
5
Plays
41 www.ntti3.com

The 10-20-70 Adult Learning Model
The Talent development model of today’s Agile IT organizations is as innovative as
the technology or processes used in the rest of the model. This model builds and
sustains a culture of continuous learning by using an asymmetric model for hiring
and an apprenticeship based adult learning approach that makes sure that every
member of the workforce has the desire and opportunity to improve their skills
throughout their career. At the core of the model is a focus on developing the
workforce from a more diverse set of skills and backgrounds as opposed to
entering into bidding wars
for marginal talent in the
scarce and stretched
technology workforce
educated in STEM ﬁelds.
The 10-20-70 adult
learning approach is built
on a carefully planned
strategic curriculum that
develops employees who
have a broad base of
understanding of
technology and have deep skills in one or more domains (T-shaped skills). In this
model, 10% of learning on any domain comes from a carefully and continuously
curated set of reading and viewing material around a speciﬁc topic. About 20% of
the learning in this model comes from just-in-time training through traditional
instructor led classes, self-paced tutorials or from one of the increasingly popular
Massively Open Online Courses (MOOCs).
6
Plays
42 www.ntti3.com

Finally, 70% of learning comes from on-the-job training on progressively tougher
tasks and projects with active mentoring provided by practitioner coaches
embedded within the organization. This model has been proven in several teams
that use techniques such as paired programming to help increase their ability to
understand a programming language, write better code and learn from the
coach’s experience of what works and what does not. This unique learning model
significantly improves the chances of up-skilling and re-tooling employees and
make sure they have the necessary skills to do their job, continuously improve on
existing skills and continue to gain new skills to keep pace with the technology
marketplace. This has the direct benefit of improving the efficiency of IT
organizations and helps mitigate the risk of short and long- term skills and wage
stagnation.
43 www.ntti3.com

Component Design and APIs
Earlier in this document we talked about Adaptive Enterprise Architectures and
the need to build capabilities that can adapt quickly and easily to changes in the
environment. AEA is used to capture and describe digital experiences that cut
horizontally across business, application and infrastructure silos in any
organization. As these experiences are translated into design and working
software it is important to utilize Component based Design (CBD). CBD is a
proven and tested approach to building extensible and reusable software. It
provides flexibility, extensibility, dexterity and agility to any business experience
by implementing a software design that delivers:
• Separation of Concerns by defining architectural and software components
that act as black boxes with well understood functionality. Each component in
the design performs a distinct function which has a discrete start and finish.
This design characteristic is called encapsulation and it is critical to ensure
reuse and extensibility of the overall system
• Provides encapsulation and reuse of functionality that improves and enhances
the integrity of the overall system
• Extensibility provided by integration across published open APIs with well
defined service levels
7
Plays
44 www.ntti3.com

Crowdsourcing
Crowdsourcing is a customized implementation of Platform Thinking which
allows organizations and individuals with a need for a services, ideas or content
to access an online community of resources with the skills and capabilities to
solve them rather than through employees or traditional suppliers. Most
Crowdsourcing platforms such as Kaggle and 99Designs focus on a speciﬁc
domain and they provide access to a large, global community of skilled
professionals. The most common engagement model for these platforms is for
an individual or organization to setup a challenge and offer a reward or payout
for the best solution to the problem. There are also many specialized
implementations of Crowdsourcing such as the crowdfunding sites Kickstarter
and Indiegogo. Other sites such as Amazon's MTurk (Mechanical Turk) creates a
marketplace that matches work with a need for skills to be matched with people
with skills looking for work.
In IT there are several crowdsourcing sites that provide access to specialize skills
that perform speciﬁc tasks in the applications development and management
lifecycle. For instance, sites such as TopCoder provide companies access to a
large global community of developers with common and specialized skills, while
others such as CrowdSourcedTesting provide access to a large community of
testers who can perform functional, usability and localization testing. These sites
have the potential of disrupting large established systems integrators and
services companies.
8
Plays
45 www.ntti3.com

Agile IT organizations can take advantage of these crowdsourcing sites by re-
engineering their Agile and Lean software development approaches to build and
test stories, sprints, iterations and even large epics within their software
development projects. Using capabilities such as Adaptive Enterprise
Architecture and Digital Portfolio Management, Platform Thinking and HIT teams
identiﬁed earlier in this document provide the necessary foundation but then
couple it with targeted crowdsourcing with a software development mindset that
focuses on integration, component based design and proactive security testing
to truly get the complete beneﬁts of Crowdsourcing.
In the context of Digital Business and Agile IT, we believe that these techniques
can be used together or in isolation and customized for use within the context of
any IT organization.
46 www.ntti3.com

Implementing the
Agile IT Framework
in your
organization
We do not believe “Transformation” is a good
word – because it frequently implies large, multi-
year, centrally controlled and mandated
programs. Instead, we believe today’s IT
organizations should adopt the Agile IT model in
a incremental and iterative way
47 www.ntti3.com

Scale out the
experiences - Work to
rapidly scale out
successful experiences by
implementing and
leveraging platforms to
deliver additional
capabilities on an on-
demand model.
Prototype
these experiences, test,
customize and evaluate
them in 4-6 week
experiments. Learn from
and shut down those
experiences that do not
work and rapidly scale up
those experiences that
resonate with your
customers and the
marketplace
Adoptplatforms
thinking - Understand and
architect how to leverage
platform thinking and NTT
i3 platforms to implement
differentiated customer
experiences
Plan from our
Playbook - how your IT
organization will become
Agile by selecting and
customizing one or more
plays from our Agile IT
Playbook
Prioritize
“What” you will work on.
Work collaboratively with
your partners to select
and prioritize the “What”
to work on. Selecting the
experiences and
interactions that provide
the most value to your
customers (refer to the
discussion of value in our
Digital Business book)
The Approach
48 www.ntti3.com

The Agile IT
Framework
49 www.ntti3.com

About NTT Innovation Institute
Building Platforms for  
Digital Businesses
NTT Innovation Institute, Inc., (NTT i³,
pronounced "i-cubed") is the Silicon Valley-
based, open innovation/applied research &
development center of NTT Group. NTT i³ builds
platforms that are transforming today's
enterprises into the digital businesses of the
future. Our platforms help our clients engage with
customers and markets in exciting new ways by
pushing the boundaries of cloud computing,
information security, machine learning and the
social network of things. NTT i³ builds on the vast
intellectual capital base of NTT Group, which
invests more than $2.5 billion a year in R&D, an
extensive network of technology partners,
engineers and scientists.
Learn more at www.ntti3.com
50 www.ntti3.com

References
Koushik, S., & Petroni, MJ. (n.d.). Digital Business Transformation. Retrieved March 21, 2015,
from https://itun.es/us/bSM54.l
Gartner Says in the Digital World CIOs Need Bimodal IT: Rock Solid IT with Ability for Fluidity.
(n.d.). Retrieved March 21, 2015, from http://www.gartner.com/newsroom/id/2865718
Systems of Engagement and the Future of Enterprise IT: A Sea Change in Enterprise IT. (n.d.).
Retrieved March 21, 2015, from http://www.aiim.org/futurehistory
How Can CIOs Compete When Every Business Unit Is A Technology Startup? - Peter
Sondergaard. (2014, November 22). Retrieved March 21, 2015, from http://blogs.gartner.com/
peter-sondergaard/how-can-cios-compete-when-every-business-unit-is-a-technology-startup/
What Gartner's Bimodal IT Model Means to Enterprise CIOs. (n.d.). Retrieved March 21, 2015,
from http://www.cio.com/article/2875803/cio-role/what-gartner-s-bimodal-it-model-means-to-
enterprise-cios.html?page=2
Paul Choudary, S. (n.d.). Platform Thinking Blog - The New Rules of Business in a Networked
World. Retrieved April 23, 2015, from http://platformed.info
Koushik, S. Nationwide Application Development Center (2009). Nationwide Mutual Insurance
Company.
Emiliani, B. (2007). Real lean: Understanding the lean management system. Kensington, Conn.:
The Center for Lean Business Management, LLC.
Design Thinking http://dschool.stanford.edu
Servant Leadership http://www.greenleaf.org
Real Lean http://www.bobemiliani.com
51 www.ntti3.com

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