The term emerging has been derived from the Latin word, Emergere, where e
stands for out, forth and mergere means to dip. Literally, it would
translate to coming out from dip/slide. The Oxford English Dictionary defines
the verb emerge as: 1) become gradually visible or apparent. 2) Recover or
survive a difficult period. 3) (Of an insect) break out from an egg, cocoon or
pupal case. And from the verb emerge, we get the adjective, emerging. But
all this is mere etymology (how the word originated) and one would wonder what
the real significance of such deliberation is?
Indeed there is; the three aspects, as described above by the dictionary, are
hallmarks of what we refer to as an emerging enterprise. The firm or the company
is slowly getting credence in the marketplace and gaining recognition, it is
surviving the onslaught of competition, and is trying to create an identity
which is not solely defined by its parent company.
What distinguishes an emerging enterprise is basically what we call fire in
the bellyit is trying to do different things or simply doing things
differently. Stagnation is an anathema for an emerging enterprise, and growth
is the only mantra. In this article, we talk about a few such companies, how
they are deploying IT, what challenges they face, and what the key findings are.
Emerging or SMB?
Browsing through a magazine or a newspaper on any given day, one is very
likely to come across some mention of the SMB segmenteither it will be a big
company targeting this market (XYZ banks on SMB) or some report that talks about
them (SMBs to spend XYZ crores). As the Indian economy continues its upward
ascent and growth percolates to smaller towns and cities, a vibrant community of
entrepreneurs is coming to the fore. These entrepreneurs had set up shop most
likely in the License Quota Raj times and managed to survive the babudom days.
But the challenges brought about by liberalization were just too much.
|In two roundtables organized by
Dataquest, 12 CIOs shared their challenges, priorities, and opportunities
As the floodgates opened and foreign companies started selling their goods
and services, the Indian customer too developed a taste and liking for
professional services. For instance, if one wants to purchase a motorbike, the
customer does not want to wait long, he wants everything, including the delivery
of the motorbike, to be done in a day. Gone are the days when you booked a
scooter and waited years to hear from the Hamara company. In this world of
instant gratification, instant discontent is equally pervasive.
It is in such a scenario that emerging companies have to not only survive but
also thrive. While it is a common practice to label such companies as SMBs,
Dataquest thinks otherwise.
The term SMB lays a lot of emphasis on the size of the company, not exactly
highlighting the nature of business. For instance, an SMB in the aviation
industry, for instance, IndiGo or SpiceJet, would always be many times larger
than a Tonic Media working in the digital advertising space. Whereas, when we
talk of an emerging enterprise, it refers to a company that is not a leader in
its space but is moving upward and would emerge as a challenger in some time.
Thus, while emerging and SMB might refer to the same company, very often,
they do not necessarily mean the same.
|No surprise that the CIO in an
emerging enterprise is also an implementer
|Well, it could be better, but
more than half the CIOs report to the CEO means that the position has come
Also, SMBs in most sectors want to survive somehow. In India, many small
companies aspire to be leaders of tomorrow, not a lofty dream considering that
the game is still wide open, and the penetration levels are very low.
Strategic or Not-so-Strategic
Last year, the survey conducted on emerging enterprises by IDC, in
conjunction with Dataquest, touched upon a very pertinent question. Is IT
strategic? Sadly, the answer was in the negative, with over three-fourth of the
respondents not considering IT as strategic. It was a big letdown considering
the overwhelming numbers that were stacked against the notion.
The good news is that the trend seems to be changing, with almost all CIOs
with whom Dataquest interacted, giving their thumbs up for IT. While many spoke
about their troubles with higher management and the entrepreneurial boss, they
confided that IT, nevertheless, was being regarded not only as integral but also
important to the success of the organization.
|In the present-day scenario, IT
has become the backbone for every business. Nowadays, every company is using
IT in some form or the other
Ketan Shah, associate director,
|While IT adoption is a matter
of a companys business model, nonetheless, one can safely say that these
days business strategy is driving the IT strategy
Pradeep Pendse, dean, IT,
Does growth propel IT, or does IT enable growth? In the present-day
scenario, IT has become the backbone for every business. Nowadays, every company
is using IT in some form or the other, feels Ketan Shah, associate director,
IT, Angel Broking.
A clear indicator of the change is the fact that many CIOs agreed that
convincing and getting commitment from top management, though still an issue,
has become less challenging. The chief factor is growth. Unlike foreign
economies, the Indian economy is growing at a rapid pace, and so are different
sectors. This growth is facilitating much of the IT investments. As emerging
companies go up the ladder of profitability, they increasingly realize the need
to be more productive. And IT and productivity go hand in hand.
While IT adoption is a matter of a companys business model; for instance, a
brick and mortar company would not really consider IT as strategic; in newer
segments, the role played by IT is almost critical. Nonetheless, one can safely
say that these days business strategy is driving the IT strategy, Pradeep
Pendse, dean, IT, LN Welingkar Institute of Management Development and Research.
IT plays a supporting role in the manufacturing segment, where the focus is
more on heavy manufacturing machines than nimble computers. It is easier for
top management to be convinced for the purchase of manufacturing equipment that
have a direct impact on the topline than to invest in systems that add to the
bottomline, says HS Sai, CIO, Thomson Press.
IT is still a service function in most manufacturing companies. Its basic
role is to cut costs. Though not yet strategic, the shift toward it is
happening, feels KP Parab, AVP, IT, Ion Exchange.
Getting the Nod
Most emerging companies have roots in the entrepreneurial talent of a single
person, someone who stepped out of the line and decided to pursue a path created
by self. Usually, the single owner, while being aware of IT, does not realize
the dominant role played by it. In such a scenario, it is harder for a CIO to
convince the boss to invest in a firewall, whereas the owner is contemplating
wall-to-wall air-conditioning. Indeed, quite many CIOs complain about this
disconnect; more so as the ball firmly lies in the owners court.
|While the opinion is fairly
divided on this one, the difference gets highlighted when the discussion
comes to vendors understanding of their unique needs. Most CIOs emphasize
that both their size and business that they are in, matters
|While the discussions did not
focus too much on this aspect, as it is probably not top-of-the-mind, when
asked, most CIOs said finding the right people is a challenge
The best thing about entrepreneurs is that they are a great bunch of
business minds and visionaries who can often look into the future. If they are
convinced about a business need, they would not mind spending any amount of
money on it, says Ramesh Wahi, CIO, House of Pearl.
The big idea is to show tangible benefits to the CEO rather than talking in
terms of obscure technical terms. It makes more sense to talk the business
languagein terms of RoI, profit, benefitsrather than open source, SOA and WAN
optimization. To be able to convince the CEO, the CIO needs to understand the
business needs of the organization and present his solution as a business case.
One needs to talk in the language that is easily understood by them, says KS
Bhattacharjee, CIO, XPS World.
|The top two options show that
there is little legacy; good news for the new vendors
The issue with many emerging enterprises is that usually the CIO is a
technical person who has grown within the organization as the firm has grown.
Thus, it wouldnt be terribly surprising to see an administrative person sitting
on the CIOs chair not because he deserved to but because he was promoted to the
post. In such a scenario, the CIO is also a conformist, eager to follow the
instructions doled out by the boss. In the best interests of the organization,
it is certainly not the best practice. A CIOs job is not merely to implement IT
but to fashion the IT strategy. The best way for a CIO is to create a blueprint
for the future, a roadmap, and get a nod from the management for the same. It
makes the work a lot more easier when it comes to convincing the owner for a
technological investment in the future, says Bhattacharjee.
|It is easier for top management
to be convinced for the purchase of manufacturing equipment that have a
direct impact on the topline than to invest in systems that add to the
HS Sai, CIO, Thomson Press
|IT is still a service function
in most manufacturing companies. Its basic role is to cut costs. Though not
yet strategic, the shift toward it is happening
KP Parab, AVP, IT, Ion Exchange
According to Suresh Shanmugham, national head, Business IT Solutions,
Mahindra Finance, IT professionals need to upgrade their business acumen. For
IT professionals, technical skills are given as they are supposed to be
technically sound and savvy. I believe it is very crucial for the professional
to go in for some kind of business training to be able to comprehend business
needs of the organization, he says.
The Not-so-critical Approach
Navtej Matharu, VP and CIO, Infovision Group, suggests an innovative way to
proselytize the CEO to IT. The best way for the CIO to win the confidence of
the CEO is to make him see real benefits of IT. One of the best ways to do it is
to take a non-critical project, successfully implement it, and then prove and
convince the CEO. This way the CEO is convinced on the benefits that can be
driven out of IT, and this will sets the tone for future interactions, he says.
In reality, CEOs of emerging companies are so focused on the business
opportunity that many times they are not clued in to the benefits that can be
driven from IT investments. A little subterfuge on the part of the CIO can go a
long way in allaying the fears playing in the minds of CEOs.
Taking minor business problems and solving them in a tangible manner is a
good way to convince top bosses and carry users along. Take care of small
problems; the big ones will be solved eventually, quips Matharu.
Wahi says, At Pearl Global, we have recently gone in for a videoconferencing
solution. As our factories and offices are spread across different countries, it
made a lot of sense to go in for videoconferencing. The solution solved a
tangible communication need and displayed the productivity benefits that can be
driven out of IT.
|The best thing about
entrepreneurs is that they are a great bunch of business minds and
visionaries. If they are convinced about a business need, they would not
mind spending money on it
Not only from the owners perspective, the not-so-important approach also
goes a long way in convincing the user about the use of IT as an effective tool.
As employees within the organization become comfortable in using technology,
there will be little resistance when the CIO puts in place bigger things like
ERP and SCM.
|To be able to convince the CEO,
the CIO needs to understand the business needs of the organization and to
talk in a language easily understood by him
KS Bhattacharjee, CIO, XPS World
|It is very crucial for IT
professionals to go in for some kind of business training, to be able to
comprehend business needs of the organization
Suresh Shanmugham, national head,
|One of the best ways to
convince the CEO is to take a non-critical project, successfully implement
it, and then prove the benefits to the CEO
Navtej Matharu, VP and CIO, Infovision
|The CIO is regarded as the
virtual know-it-all. At times it can get very overbearing
Prakash Pradhan, head, IT, Jagsonpal
A Nightmare for the CIO
It is often said that the CIO is the most responsible man in the
organization. If anything goes wrong, it is the CIO who is held responsible. The
same is painfully true when it comes to emerging companies. Every CIO has a
funny anecdote of the trials and travails that he has to go through; for
instance, waking up in the middle of the night just because half way across the
globe his bosss Blackberry isnt working. In fact, the most common phrase a CIO
is subjected to, yeh kaam kyon naheen kar raha (why is this not working?). It
is almost as if the CIO is endowed with super powers.
Most of the times, the expectations are very high from the CIO. He is
regarded as the virtual know-it-all when it comes to running the organization.
At times it can get very overbearing, says Prakash Pradhan, head, IT, Jagsonpal
Pharmaceuticals. Almost all CIOs agree with Pradhans contention. It is a fact
of life and one has to learn to live with these expectations, says Parab from
The biggest challenge faced by the CIO is islands of applications. In
emerging companies, the infrastructure is added on an immediate need basis, so
after a few years time, the whole system gets infinitely complex and becomes a
nightmare for the CIO, says HS Sai from Thomson Press.
Meanwhile, the expectations from the CIO have also increased phenomenally,
both from within the organization as well as from outside. A CIO today has to
satisfy internal customers (employees of the company) as well as external
customers. Everyone wants information at the click of the mouse, thus, the
responsibilities borne by CIOs have increased manifold, Vishwajeet Singh,
national manager, IT, FCm Travel Solutions.
It is said that necessity is the mother of invention and that is especially
true for CIOs of emerging companies. As IT departments work on stringent
budgets, it is imperative on the part of the CIO to be innovative. Most CIOs
have stated that their focus in the coming year is small investments with high
returns. It just proves that innovation is very much a KRA for a CIO.
Take the case of XPS World; it had to provide its clients hard copies of
bills for receiving payments. But scanning the bill and couriering it to the
user was a costly and time consuming method. Also, the company could not invest
in hi-end PDAs just for the sake of printing bills. To solve this problem,
Bhattacharjee came up with a unique homegrown solution. With the help of a
computer and a webcam, he developed a system whereby the hard copy of the bill
could be engineered cheaply and effectively. The system also did not cost much
in terms of infrastructure investment, and has also won an award for innovation
from CyberMedia. The best way to solve a problem is not necessarily the
costliest way. A CIO from an emerging enterprise needs to be conscious of saving
every penny that he possibly can while delivering an effective solution, says
|Business process transformation
and infrastructure consolidation are the two challenges for CIO, the
strategist and CIO, the implementer respectively
|A CIO today has to satisfy
internal customers (employees) as well as external customers. Everyone wants
information at the click of the mouse
Meanwhile, Matharu talks about going green for the sake of profitability. I
am passionate about going green not only from the point of environment
friendliness but also profitability. Just by doing little things, a company can
save immense amount of money in terms of power costs. Hence, at Infovision, I am
driving a major push for clients. I am also looking at earning carbon credits.
And someday we would be adding to the bottomline in a big way, he says.
While almost every fortnight, big vendorslike SAP and Oraclemake
announcements of how they are keenly focusing on emerging companies, the ground
reality is quite different. Many CIOs complain that these companies are not
clued in to the needs and requirements of small companies and what they
basically offer is a rundown version of the same products they sell to big
companies. This creates a lot of problems for CIOs as they need to display the
benefits of an enterprise application in a short time. So, the only option
available is to demand what you want.
We dont really entertain sales pitches. Rather than going through vendor
presentations, we tell them to go through ours so that they can understand our
needs and suggest solutions instead of the other way round, says Shah from
Angel Broking. Pendse from Wellingkar also emphasizes on the partnership model.
Buyer and seller is not the best equation. It needs to be more collaborative in
nature, he says.
Nonetheless, a majority of CIOs list finding the right vendor as one of
their top challenges, and are open to build rather than buy if the need be.
Bhattarcharjee has evolved a simple thumb rule, If the modification to an
application is around 30-40%, then it is preferable to build rather than buy,
The relationship is also much dependent on how the CIO interacts. If you
leave the steering wheel, the vendor will drive it. One needs to be firm and
clear about the business and technical objectives at the very onset. Once you
have the commitment, there is little that can go wrong, says V Subramaniam,
|If you leave the steering
wheel, the vendor will drive it. One needs to be firm and clear about the
business and technical objectives at the very onset
V Subramaniam, CIO, Otis Elevator
|Talent management is the
biggest challenge faced by the Indian economy, more so for emerging
companies… we are continuously grappling with this issue
Chetan Asher, CEO, Tonic Media
For Chetan Asher, CEO, Tonic Media, the biggest worry is not only to find
the right person for the right job but also to somehow hold him back long enough
to justify the hiring cost. Talent management is the biggest challenge faced by
the Indian economy, more so for emerging companies. It is very difficult to find
and retain a right candidate when the market is booming and 30% salary hikes are
the order of the day. We are continuously grappling with this issue, says
Asher. So, one of the many ways devised by him is to give a higher designation
to his employees to meet their aspirations and give them an ego boost. Also
this, in a way, makes them rather unemployable so as to say.
We ensure that team members are happy and content with their work and also
see that they are getting challenging projects, says Shanmugham from Mahindra
Finance. Getting the right manpower was listed as the biggest challenge by most
CIOs polled for this story.
Globalization and Compliance
Since 1991, when the Indian economy was liberalized, there has been much
change in the Indian context. While Indian companies have faced the onslaught of
foreign brands, they have also been privy to how these companies function. This
has compelled Indian companies to relook and adapt to the new business scenario.
Emerging companies have not been untouched by the wand of globalization.
|In fact, most of the discussions
centered around the business process improvements and how IT could help
As many Indian companies are doing business with foreign companies, this had
led to a transformation from within. Indian companies have immensely benefited
from this exposure. The flattening of the world has also compelled Indian
companies to work on their internal processes and functions, thereby making the
most of them. The best thing that I personally admire about foreign companies is
their devotion to processes. Anything that impacts more than five people needs
to go through a complex change control mechanism wherein all systems and
processes are defined and documented. This ensures that the system works
brilliantly, says Matharu.
While globalization is driving the uptake of systems and processes, emerging
companies are also very conscious about compliance-related issues and more than
half of all panelists agreed that compliance will be a big driver for IT
adoption in the next few years. One of the best ways to get a CEO to agree for
investment into a project nowadays is to package it under the risk and
compliance heading. Anything under that title gets cleared in a jiffy, quipped
a CIO in a lighter vein.
In conclusion, sitting with all those CIOs attired in a business manner in
Mumbai and Delhi, checking mails frequently on their Blackberrys or constantly
monitoring the systems on their laptops, one thing is certain: their needs and
requirements are little or no different from those of big companies. As a matter
of fact, their requirements are more complex as they have the additional
responsibility of providing a roadmap to the company while constantly working on
All CIOs appeared business savvy and articulate on the fact that IT is very
important for driving growth and transformation of small companies to top tier
companies. It is heartening to see a new breed of CIOs leading the change at the
very core of the Indian economy; and if they continue to keep doing the great
work they are doing at present, the emerging enterprise tag would need to be
replaced pretty soon. And we hope and pray for the same.