CIO Handbook 2008 : From Hype to Happening

Charles Wang, the founder of Computer Associates, who wrote a book,

TechnoVision, about a decade ago about CIO-CEO relationship had famously

remarked, “I wish CIOs had just one hand; so that they would stop saying, on the

other hand.”

That was then. When the CIO's job was to suggest options and leave the

decision to other C level executives “who understood business”. While Wang may

have been impatient about it, the CIO behavior that he was referring to was a

result of the expectation from him by the average CEO in a large corporation.

Things have changed. The CIO is more a business executive than a techie

today. And his understanding of the business is not inferior to any other C

level exec's. While he may have smoothly-and sometimes not so

smoothly-transformed himself to be the business manager that everyone expects

him to, his responsibility of evaluating technologies and keeping an eye on the

development in IT to be able to get the best out of it, has not gone away

anywhere.

The CIO Handbook, done by Dataquest once a year, is our way of just providing

a little helping hand.

India is a high-growth economy, and growth is visible in all sectors of the

economy-manufacturing, consumer products and services, infrastructure, business

services... No matter how cliché it sounds, the responsibility of making that

growth smooth, if not faster, lies with the CIO. While there has been an

acceptability of that fact and the CIO's importance within the organization,

that does not make his job any simpler. And let us make a disclaimer: Ten

handbooks like this will not do it for him. It is just a small little help.

So, how did we select what we have carried in the handbook, from the vast

world of business and IT. Here is a small round-up of what we have taken into

account while selecting the edit mix of the issue.

Growth is the Driver for IT



Much of today's IT (the technologies, solutions, and services) is developed

to cater to the needs of the developed markets in the West. These are markets

that are growing 1-2% annually, if at all. In contrast, much of the Indian

business is growing at 20% plus.

Accordingly, what drives business value in a market like the US and in one

like India are very, very different. In a developed market, with little growth

happening, the only way to increase bottomline is by cutting cost. Much of the

developed world's strategy for IT deployment and outsourcing is derived from

that reality-to get an extra half a cent from a dollar.

On the other hand, in India, with the growth happening all around, it is a

question of how well you capture that growth. The priority for most CEOs is to

make that growth smoother and faster, while not letting bottomline get out of

hands.

So while the buzzword for business-and hence IT-in developed markets is

efficiency, in a growth market like India, the key word is scalability. The CIOs

job, by and large, is to make that possibly as well as he can.

It is not that efficiency is not important. Forward-looking companies in

telecom, retail, and aviation-all high-growth segments -have invested on IT

solutions that would build efficiency from day one. But the top-of-mind issue

for every CEO-of a big company or small, of a services firm or a manufacturing

outft-is growing fast, growing well.

Much of the technology areas, case studies and companies in CIO Handbook have

been chosen keeping this reality in mind.

No SMBs Here



The fact that India is a high-growth economy which is starting from scratch

in many areas means the rules of the game are not yet fully written. Small and

medium business-a term borrowed from the developed markets and still used a lot

in the Indian market-is a phrase that many business organizations today are not

comfortable with.

In a market with 1% growth, everyone knows who the leaders are and why they

will be there for time to come. So a company with a 0.04% market share does not

even aspire to take market share from a company with 22% market share. In a

nascent market like India, that is not the case. Most small companies-in high

growth segments of the economy-believe that it is a matter of time before they

become large enterprises and genuinely hope that they can beat today's leaders.

We endorse that belief. And that is why slowly but steadily, we are replacing

SMBs with emerging enterprises when we denote the small companies in high-growth

segments.

Thanks to India's vibrant IT culture-a result of its offshore industry-many

such emerging enterprises believe that they can take on the existing leaders

with the help of IT, and are taking all steps to turn that belief into practice.

Not surprisingly, many of them are taking a lead in IT deployment.

This is also shown in how vendors are adjusting their strategy in the market.

On-demand is something that most software vendors are looking at very seriously.

In Oracle, for example, while CEO Larry Ellison says that they are still not

convinced about how to make money from the small business segment, his India MD

identifies on demand solutions for emerging enterprises as a hot trend for 2008.

Many of our case studies and technologies are taken from this

segment-emerging enterprises.

IT in Core Business, not Support



The paradox of Indian business is that while there is growth and no

large-scale cost cutting measures which drives IT deployment and outsourcing in

the developed markets, affordability of the end products and services is

extremely important in a market like India. For lack of space for further

explanation, let us simply call it the Nano paradigm.

In a typical legacy business operation, when a company wants to cut down

costs, it starts with areas where cutting cost will not affect the business

significantly. That is the case in developed markets. In large enterprises in

developed markets, since the business value is linked to cost cutting, all IT

deployment and outsourcing starts with non-core, back-end support functions. But

in markets like India where the cost of end product is the driver behind

business strategy, IT gets applied first to core business, rather than support,

which we are already seeing. This gets accelerated because everything is so new

that the risk of applying new technologies is far lower compared to the rewards

of potential benefits that it can bring in for a company. So, by and large, most

growth sectors are putting IT straight into the core business resulting in more

verticalized approach by the vendors and solution providers.

The selection of areas in 'IT in Excellence section' in the CIO handbook and

the topics in 'CIO Gyan' represent this reality.

Emergence of IT-heavy Verticals



Business transformation through IT was a phrase invented by large IT

companies to impress Fortune 500 clients. But if there is business

transformation that is truly happening through IT, it is not the Fortune 500 but

selected areas of Indian industry which are realizing that the entire business

can be reinvented using IT.

Media is a case in point. In other areas like engineering, telecom, and

online businesses, IT is being deployed to change the way business is done,

creating far better customer experience, at the same time increasing efficiency.

Bollywood-India's showbiz industry-is transforming production through the use

of IT. We have an interview with Subhash Ghai, CEO of Mukta Arts and director of

popular Bollywood classics such as Hero, Saudagar, Ram Lakhan, Karma, and Taal-on

how Bollywood is taking to IT.

Little Legacy



The absence of legacy IT in India in most businesses means that the decision

regarding IT deployment will not be done to minimize risk but to maximize

rewards-meaning more strategic than tactical. As the articles and case studies

in the CIO Handbook will show you, this has already started happening.

The challenge before each CIO is to make sure that he/she makes a clear

distinction between the demand side of IT and the supply side of IT. The fact

that manpower is becoming such a scarce resource in a country of a billion

people-thanks to India's status as the global IT services superpower-means going

forward in the near to medium term it will be far more difficult to attract

technical talent to user companies.

A judicious mix of outsourcing and in-house deployment will be a far more

effective step. Maybe, in next year's CIO Handbook, we will focus on that in a

major way!

Shyamanuja Das



shyamanujad@cybermedia.co.in