VC Gopalratnam, CIO for Cisco's International Operations and SVP for IT, on how organizational expectations from IT are changing and what that means for CIOs.
"When the budgets are either flat or down how do you continue to be more productive and deliver efficiently as you have to do more with less..."
What is happening to enterprise IT? What are the top changes that you see that has happened in the past couple of years?
If you think about what has been happening to IT organizations, about 6 or 7 years ago, people actually started talking about digitization and digital disruption. There was a general feeling that the board will make the IT organization obsolete and the role of CIO irrelevant. But then, what has happened in the past 5 or 6 years is that the people are recognizing that in order to do digital transformation for any enterprise, the IT organization and therefore, the CIOs of the organization have to play a leading role rather than just the role of an enabler. They will have to lead the transformation. Therefore, the IT organizations have again become popular and the IT team is given a seat at the boardroom. Technology is being viewed as a differentiator today for companies in order to drive the whole digital transformation or digital disruption. As per my opinion, the digital transformation that has happened in the enterprise IT space is actually the relevance of the organization coming back in a serious way.
In terms of working with their tech partners, have the expectations changed?
Yes. The IT organization is really viewed as the service provider to the rest of the company, which essentially means the customers (internally or externally) are demanding more and more from the IT organization. Things need to be done in a faster, scalable and secure way. But most importantly, the IT organization needs to be flexible, which means that the customers are expecting things to be delivered to them at their convenience - delivering the services in the fastest time with the best quality while also providing flexibility of choice. Because of that the user experience that these customers need is dictating what the IT organization is delivering. User experience is a proxy for adoption and if the experience is not good, people are not going to use the solution that IT delivers.
The world that we live in today, these IT services is also available outside the enterprise. One of the things that the IT organization has to guard against is to make sure that what they are doing is constantly benchmarked against what is being offered outside, so that the enterprise IT organization continues to be the service provider of the choice.
How does that change the expectation of the enterprise IT CIO from their technology partners?
One of the clear expectations is that, when the budgets are either flat or down, and therefore how do you continue to be more productive and deliver efficiently as you have to do more with less, is a clear expectation. Because of the fact that the customers are asking for everything today and as they are not willing to wait for a significant amount of time, it requires the CIO to really look closer at the skill sets within the organization. As technology continues to evolve faster, the up skilling for the employees within the IT organization has to happen. How do you rapidly develop skill set is organically within the enterprise or inorganically where you are hiring from outside. So it really forces the CIO to have the ability to up skill the capabilities quickly. This is what is happening to the IT teams today.
There have been many discussions around the business alignment and CIO’s and IT managers’ ability to understand the language and the requirement of business. With the new way of digitization, the conversations start and end with used cases, basically technology first. Then they figure out how you can help businesses with new technology. Is that a logical approach or it needs some change?
Honestly, the success of any organization is determined by what business outcomes they influence. For enterprise IT, the success of whatever they do is determined by the contribution to the growth, profitability of the company, deliverance of better experience for the customers, driving productivity, efficiency and the ease that we provide to our customers to do business with us. These are tangible business outcomes that are measured and if we do not influence those outcomes then we are not up to the mark.
Secondly, more business people have found their way into the IT organization over a period of time and more IT people have moved on to the business side. Therefore, there is a clear recognition that business acumen and understanding of what the key levers are which influence the success and failure of a business is becoming extremely relevant. The organization is also being forced to talk about the business outcomes and to use the language of business to explain what they are doing. One of the key skills that are demanded of IT professionals today is the ability to speak the language of business. It does not matter how smart one is technically.
Thirdly, the technology is changing so rapidly that whether it is an enterprise platform or a mobility solution, today it is solution X, tomorrow it is solution Y and the day after it is solution Z. The technology itself is not necessarily adding the value; it is just an enabler of the value. The real value is what kind of outcomes are you delivering, whether you are influencing top line or bottom line of the company. If the IT organization is too caught up in the technology part and does not spend enough time on the business part, then they are not delivering the right level of value.
In some of the businesses, IT transformation has not happened in a big way till now. Some of the new technologies like IoT are also enabling them, so they often gain the metric of productivity and they also gain tremendously by going for the low-hanging fruits. Then they start expanding horizontally and then transformation goes for a toss. There is definitely no change in their business model. Is it a transformation or not? What is the situation in such cases?
You can either influence the growth or profitability of the company and in some cases you can improve the productivity and efficiency of the company. Depending on the vertical, the level of impact on the top line versus bottom line will be different. It is expected of every industry vertical to behave exactly the same. There are industries that focus quite a bit on efficiency and productivity because their margins might be lower and every rupee or dollar counts. That is where the impact on productivity and efficiency is quite significant.
Transformation not only means impacting the top-line growth; it means helping the business and customers become more competitive and by changing the way they do business with their customers. If productivity and efficiency frees up time for the sales organization to spend more time with customers or if it makes the supply chain more efficient and reduces the chain cost across the supply chain, then the organization is transforming in some way- the impact maybe on the line of the productivity and efficiency side and not necessarily on the top line. Every industry vertical is different but transformation can occur in every industry as it can be related to top line enhancement or even impact on the bottom line. Therefore, it is hard to define transformation in one sentence that is universally applicable.
In a country like India, there are a lot of business challenges due to demography or government policies. In terms of technology, how does an entire business proposition change for a country like India?
Let’s focus this from two stand points; first is the government side and second is the private sector. If we look at what the government is doing, there very few countries around the world that are attempting to do digital transformation at the scale at which the Indian government is doing. There are a lot of initiatives that have been put in place to drive ‘Digital India’. But the fact is, India is one of the countries which not just because of its history but has the aspiration to lead from the generations of technology, where we really want to invest in the next generation of technology to drive the digital transformation of the country. From that stand point, we are well positioned with all economic parameters in our favour. We are very well positioned to try digital transformation using technology.
On the private side, whether the banking, IT or BPO sector, the word that is defining those industries is scale. There is no country in the world maybe except China, which can actually boast up to the scale that India is talking about. Banks are adding a million new customers, this does not happen anywhere else in the world. Therefore, the businesses that are competing in those industries have to invest not just in their infrastructure but in the transformation of their business model in order to take advantage of the opportunities. That is where the role of technology becomes important because it becomes critical for the competitors to attain the ability of these industries to actually invest in the latest cloud, networking or collaboration technologies. This kind of environment has not existed in too many countries in the history, where the government is driving digital transformation, the private sector is driving digital transformation and the consumers of the country are demanding digital services.
It is almost like a perfect storm that are coming together and that is why the role of technology and the investments that all of these entities are making becomes important.
(Excerpts from www.cioandleader.com)