Theres no issue with outsourcing

A flat (0.0%) and 3.3% in best-case scenario, between flat (0.0 %) and a
decline of 2.5% in worst-case scenario and between flat (0.0%) and an increase
of 3.0% in the most-likely scenariothis is how global IT budgets are predicted
by research experts like Gartner. In an interesting projection released some
time back from Gartner EXP CIO survey, the full results of which will be
available in the first quarter of 2009, Gartner has said economic uncertainty
dictates that prudent IT organizations prepare three alternative budgets:
best-case, worst-case and most-likely scenarios.

Of the 444 CIOs surveyed around the world, 48% were projecting an IT
budget increase in 2009 while 52% of CIOs reported flat or IT budget decreases
in 2009. On a weighted basis and considering all 444 IT organizations, 2009 IT
budgets are set to increase 3.36%.

The figure-watch is surely coming up with a new flavor for CIOs. Slowdown,
reduced IT spends, and a fog around outsourcing made deeper by recent political
and protectionist weather. All this seems to be the zeitgeist for any CIO today.
Its no surprise that in the annual Gartner Executive Programs (EXP) CIO survey,
Gartner said IT leaders are wary of making dramatic budget cuts because they
know it will be difficult to ramp up their IT capabilities when opportunities
for business growth return. But at the same time, it added that business growth
is not declining at the same rate across geographies, and CIOs can exploit
asymmetries between regions and industries to find new opportunities. The
spotlight naturally turns sharper for a CIO from geographies like UK or US, and
specially one that represents the much battered global banking industry. But
keeping the focus intact and steering smart with a pragmatic aproach is what
separates the wheat from the chaff.

David Awcock, group head, technology, Standard Chartered Bank speaks to
CyberMedia News on some hot issues concerning a CIO in the current times. He has
held a number of senior roles in SCB across application development, technology
for the Banks Wholesale Division and his metier covers over 25 years management
experience in the IT industry for a wide range of companies engaged in financial
services, manufacturing and FMCG businesses. Also, he brings along a wide
experience in working with IT vendors across the whole spectrum of IT services,
and has had extensive involvement and engagement with Indian software companies
for more than 10 years. Here are some excerpts of the interview on the sidelines
of NILF 2009.

It couldnt get tougher than what we are seeing now. How are you as a CIO,
coping with issues like buy vs build, outsourcing, trimmed budgets, technology
portfolio, contract renewals etc?

We have always had a conservative approach and never allowed to over-invest
oursleves into anything. Today, we are definitely evaluating every technology
spend, and not just the how much part of it but the what, why and benefit
part crucially. We would try to run an efficient model.

What are your expectations as a customer? What are the missing pieces
today?

We want IT vendors to give us propositions that are cost competitive as well
as unique and attractive. Combining cost arbitrage with a tempting value
proposition, and putting everything in a right package at the right price would
really help.

How much impact has slowdown brought on immediate spends?

We are continuously reviewing our plans in the face of changing economic
conditions.

And how would the current global and political scenario play out for
outsourcing as an IT strategy per se?

It will continue. To me, it is not a big difference if we get the required
value and skills from anywhere in the global economy. We take advantage of the
best access to talent, anywhere. If that constitutes outsourcing, we will do
that. And India is definitely a beneficiary point here.

Where does India figure in the overall gameplan?

India is indeed very critical to our overall strategy, not merely as a
development center but also as a vibrant market. Today, we have close to 8,000
employees working out of the numerous development centres, like in Chennai. We
also have a lot of partnerships going on with numerous Indian services
companies. We have been in India as a banker for the past 150 odd years, and
have a strong presence in the credit card market. Considering all these factors,
India is indeed important.

What according to you are the biggest challenges facing the Indian IT
players?

The single biggest disadvantage for Indian IT industry is that it is too
closely wedded to the cost arbitrage plank. IT vendors keep talking about
productivity gains, but there is little action on that front. I often tell my
partners to bring something different and innovative, but there is little of
that happening as of the moment.

Another big issue is that of domain expertise. As much of the industry was
providing plain-vanilla services, little attention was paid to garnering domain
expertise. Thus, you have a large talent pool, but not all of it is up to the
mark. In our instance, we have started to work with IIT Chennai into developing
courses that empower students with finance capabilities, thereby making them
more productive. There needs to be a lot more of these public-private
partnerships going in India.

Pratima Harigunani

mail@dqindia.com