November 30, 2006

Ashok Santhanam
CEO, Bristlecone

The CTO Forum, Mumbai, November 30, 2006 - The new generation CTO has to be a partner to business. The goal has to be how business can be facilitated more and more. For instance, we see so many schemes that are launched by enterprises to propagate their product. A CTO may understand the business processes in such cases and suggest how a business process might be more efficient by the use of technology. Thus a CIO has a great scope in bringing in relevance and compactness to business processes. A case in point may be the use of SCM solutions by various enterprises that has led to increased transparency, better and smarter movement of goods from the warehouse to the customer facing endpoint etc.

In this sense a CIO can induce and drive a lot of organizational change. When technology strengthens business processes at the backend. the ripple effect gets reflected in the form of greater customer satisfaction, increased investor confidence, more stakeholder and partner cooperation etc. The aim has to be to use technology as a driving force to business growth and maximizing corporate competitiveness. If you look at new age private banks in India. it is careful deployment of IT that has delivered them the much-needed competitiveness in the industry. Moreover the growth that they have witnessed is phenomenal.

However, things are much less than satisfactory at this point in time in India. Still most Indian enterprises do not recognize the potential that a well carved out information architecture possesses. The buzzword at many places is either computerization or automation. This has to change. It would rather be information.

We gel to see CIOs in India preoccupied with selection and evaluation of systems. I would rat her want that they retain the ownership of technology but get more involved in the charting out of how innovative IT can better certain business processes. Thus they ought to delegate IT decisions to others in the IT team and become more business savvy.

In doing that, the CIO not only has to grasp business processes of each department, understand how the respective industry has performed over the years and how has the organization done in that industry, but also probe whether there is a business-technology mismatch in the processes, whether the current architecture will be able to handle business expansion, whether he technology is capable of delivering the edge to the business as compared to competition.

India-based CTOs also face the challenges of justifying return on investment (ROI) and reducing the total cost of ownership (TCO). It has to be understood that not all IT investments would throw up instant monetary returns. Enablement of the customers, business expansion through the vehicle of technology etc. can be counted as returns. Similarly the TCO of a system might be high initially but gets countered with volume increase in business.

This is where the ingenuity of a CTO comes to play. The originality might not always be in the usage of technology but it can also be the way operational costs are reduced, the way customers and partners derive value from the processes, the way decision making is enabled within the organization.

A case in point may be the dilemma on outsourcing. Have all of Indian outsourcing deals that we hear about really become fruitful initiatives? We all know that it is better to let experts manage IT. but will that have to be for the whole IT architecture? A CFO has to think of segmentation of tasks based on their criticality and assign priority to them. Then one has to decide the permissible limits of breach that has minimum impact on business processes. All these mechanism would allow the CIO to decide what has to be kept in and what to outsource.

In India attrition of IT experts top feature amongst the reasons for IT outsourcing. The key here would be to expose the in-house professionals to work on cutting edge technology. There has to be reward and recognition for innovation.

The technology landscape is changing fast as usual. As we cling to the Web more and more, in the enterprise space, the component based utilization of applications will become widespread in the next five years. However as IT architecture becomes more and more complex, outsourcing is going to be a rampant phenomenon, especially in India.