The title chief information officer became widespread in the Indian
enterprises only a few years backand more than a decade after they became
mainstream in the developed markets. That has not deterred Indian CIOs from
playing a more proactive business role within the enterprise. In fact, if
anything, that has helped them leapfrog. According to the respected annual
Capgemini Global CIO report 2009, which classifies the enterprises into three
clusters based on the role IT plays in their business, most Indian enterprises
feature in the most mature categoryBusiness Technology. These are enterprises,
which says the consulting firm, where IT is partnership oriented; CIOs have
business process expertise and are close to the CEO. As many as 55% of the
enterprises that the firm surveyed in India, fall into this category. The global
average is just about 37%.
Capgemini calls the other two categories Technology Utilityfirms where IT is
cost and new technology oriented, and is close to the CFOand Service Centerwhere
IT is service delivery-oriented, with clear SLAs defined, and the relationship
with business is that of supplier-buyer. The former, of course, is the least
mature model of IT deployment.
While Capgemini defines these as two distinct categories, on closer look, one
would tend to believe that the second is just a more evolved form of the first,
without anything fundamentally different. The thirdBusiness Technologyon the
other hand, is a fundamentally different way of looking at IT. One would even go
on to argue that some enterprises may remain in the second category for ever,
without ever evolving to the third, while improving on many of the parameters of
|Daya Prakash, CIO, LG India
|SS Mathur, GM, IT, CRIS
|Upal Chakraborty, CIO, DLF
The Capgemini survey that started in 2002 was different in two ways this
year. One, for the first time (since the survey began), the global economy was
going through a severe slowdown. And two, for the first time, it included a few
emerging countries, India being one of them.
The 2009 survey focused on three underlying themes of managing IT for value
IT value management systems in place and on-going initiatives: The objective
was for CIOs to position themselves and to define the degree of usage and
success they have deployed in four practices:
- Levers between Business and IT
- Roles and responsibilities of CIOs
- IS governance
Impact of 2009 recessionary economic condition: The objective is to
understand how CIOs react to 2009s challenges in three fields:
- IS governance
- IS cost reduction
- IT organization
Capabilities to create business value using IT: The objective is to measure
the usage value of the company through three capabilities:
- IT Management
- Information Management
- Information Behavior and Value
The survey had many interesting findings. And many of them had to do with how
Indian CIOs compare with global CIOs when it came to their approach towards IT.
global practice network, Capgemini
|David Briskman, CIO, Ranbaxy
director, COLT Telecom
Capgemini decided to release the India-specific findings in India. And the
firm chose Dataquest as partner to organize an exclusive round table of selected
Indian CIOs who were presented the survey results, followed by an interactive
and informal discussion on the findings, and related challenges and
John Varghese, who coordinated the survey in India, introduced the findings.
Ten CIOs from large and fast growing enterprises across different verticals took
part in the discussion. They were Upal Chakraborty, CIO, DLF; David Briskman,
CIO, Ranbaxy; Hilal Khan, CIO, Honda Siel; Atul Kumar, AGM (IT), Syndicate Bank;
Subodh Dubey, Group CIO, Usha International; Daya Prakash, CIO, LG India; S. P
Arya, CIO, Amtek Auto; Rajesh Munjal, CIO Carzonrent, Ashsish Kalay, Director,
COLT Telecom, and SS Mathur, GM (IT), Centre for Railways Information Systems.
Sabyasachi Choudhury, head, consulting, India represented Capgemini on the panel
discussion, which was moderated by Shyamanuja Das, editor, Dataquest.
Verghese outlined the areas where Indian CIOs showed marked differences with
their global peers. These were:
Distribution of the three IT function clusters
Outsourcing of IT and consequent Integration of IT function with business
- IT spend
- IT value chain
- IT functions as a leverage to innovation
- HR as an indicator of the integration of IT function and business
- Response to the current economic context
The most important finding, of course, was the distribution of enterprises
among the three clusters defined by Capgemini, as outlined above. The finding
showed that more Indian enterprises belong to the most mature clusterBusiness
Technologywhere IT and business act as partners. Most CIOs agreed with this
finding and highlighted the reasons behind it.
They said that in the developed market where the business value essentially
comes from efficiency and cost reduction, ITs function has been reduced to
that. In contrast, in Indiaa growth marketmost businesses focus on topline,
innovative products and services at affordable prices and managing scalability.
IT is expected to achieve these business objectives and since many businesses
are new or are re-engineering themselves, IT is woven into the business right
from day one, rather than being an after-thought. That is not how IT started in
developed markets. Most CIOs agreed that the relative clean slate helps them to
take a more strategic look at business.
|Rajesh Munjal, CIO, Carzonrent
|Hilal Khan, CIO, Honda Siel
|Atul Kumar, AGM, IT, Syndicate Bank
"The main aim of a CIO is to align IT with business, and has to have a
strategic direction in place along with the domain expertise," says Daya Prakash,
CIO, LG India.
However, a few questioned the applicability of findings. "Twenty (that was
the number of CIOs who took part in this survey from India) is too small a base
to conclude anything," said David Briskman of Ranbaxy. While acknowledging that
it is a small base in terms of pure statistical significance, Capgemini
clarified that the results indicated a trend rather than definite findings.
SP Arya, VP, corporate IT, Amtek
Ranjan Tayal, VP, Capgemini
Some panelists also questioned if the perception of CIOs and other CXOs about
the role of IT are in sync with each other. "It depends on whom you ask," said
Ashish Kalay of COLT. He argued that the CIOs in India often had a better
perception about their own roles, as compared to what is the reality.
Subodh Subey of Usha International made a pertinent point. "The #1 brief that
I have is to think of IT solutions that would enhance topline," he said,
summarizing probably the most important difference between Indian CIOs and
developed market CIOs. Few CIOs in the US or Western Europe can say that.
The other difference between Indian CIOs and their global counterparts that
caught the attention of almost all CIOs in the discussion was the distribution
of IT resources within in-house and outsourced teams. In fact, almost half of
the discussion time was spent on this issue. While a few like Atul Kumar of
Syndicate Bank said that most IT vendors still do not understandor even bother
to understandthe business needs, thus making outsourcing a dangerous option,
those who defended outsourcing aggressively included Upal Chakraborty of DLF.
"That is why you should outsource non-core functions," he said. He said that
unless the CIO releases day to day supervision of the back-end infrastructure to
an outsourced team, he can never be free to concentrate on aligning business
with IT. Interestingly, most CIOs decided to highlight the same point, rather
than focusing on cost, even when outsourcing to a third party. That also showed
why Indian companies outsource vis-a-vis why the American and European companies
do. "Outsourcing has helped us in lowering the downtime", says Upal Chakraborty,
CIO, DLF. Outsourcing helps time in saving on training costs since there is no
separate investment in manpower.
While by and large, Indian CIOs have not chosen the service center model, one
organization where it has worked very well is Indian Railways. "Indian Railways
has outsourced its IT part to CRIS, a separate unit under itself. This
outsourcing has worked well for years", said SS Mathur, GM, IT, CRIS.
Interestingly, most CIOs took the middle pathof keeping the applications
inhouse while outsourcing infrastructure management. "We are in a growing
market. It is important to consider changing market dynamics. I would prefer to
look more into strategic part and partner with experts in the industry to take
care of the technology implementation and maintenance," said Hilal Khan of Honda
Siel. Echoed SP Arya of Amtek Auto, "We want to focus on business related
activities because we are in evolution phase so we would like to outsource the
Shyamanuja Das, editor, Dataquest and Sabyasachi Chaudhury,
The only CIO who differed from this approach was David Briskman of Ranbaxy.
"I would like to leverage the internal team to manage the IT infrastructure.
This is the ideal situation for Indian CIOs," he said. A strong and
knowledgeable internal IT team reduces dependencies on the external providers
but also assists them deliver quality service as per the contract.
Another difference that the survey pointed out between Indian CIOs and their
global peers was the budget allocation to operations, strategy and development.
Indian CIOs, according to the research, Indian CIOs spend 65% of the budget on
strategy and development while only 50% of the global peers do. Most CIOs
attributed it to the phase of evolution. "As most businesses are new, or are
redefining an existing business, the need to innovate is more," said Rajesh
Munjal, CIO, Carzonrent. Most CIOs were not surprised by the finding but did not
attach too much importance to it, considering that the Indian economy and
business maturity are in very different stages of evolution as compared to the
One surprising finding was that despite featuring in the highest maturity
cluster of technology usage, most Indian enterprises took to far more aggressive
cost cutting than their global peers. According to the survey, while the global
cost reduction target level was 16%, it was 21% for Indian CIOs. So what
explains this anomaly? "Cost-cutting has been the mainstay of IT strategy for
the developed market CIOs for last few years. On the other hand, Indian CIOs
took to it for the first time, in a major way. So, simply the scope was far
more," said Shyamanuja Das of Dataquest. "Also, when you are in a mature running
stage, you cannot just lower your infrastructure costs drastically. Many Indian
CIOs had the option to defer the new investments, which looked like cost
cutting," he further added.
The other point that got passionate responses from the panelists was about a
finding that despite having highest maturity, IT function exposure as part of
career path is still low. The discussion focused on the role of CIO as a
business manager vis-a-vis the role of business manager as an IT-literate
"We are going through exciting times. The whole model of SaaS and cloud
offers immense opportunity for all of us to look at IT in a fundamentally
different way," said Sabyascahi Choudhury of Capgemini, while summing up the
discussion. The executive summary of the research can be downloaded at
A DQ report