Prioritizing IT

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 of age

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, IT, Angel Broking	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, LN Welingkar Institute of Management Development and Research

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 bottomline 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 Ramesh Wahi, CIO, House of Pearl

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, Business IT Solutions, Mahindra Finance	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 Group	The CIO is regarded as the virtual know-it-all. At times it can get very overbearing Prakash Pradhan, head, IT, Jagsonpal Pharmaceuticals

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

Ion Exchange.

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.

Indigenous Innovation



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

Bhattacharjee.

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 Vishwajeet Singh, national manager, IT, FCm Travel Solutions

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.

Vendor Tangle



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,

he says.

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,

CIO, Otis.

Finding Talent



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.

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

the nut-bolts.

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.

Shashwat DC



shashwatc@cybermedia.co.in