'Innovate for the next quantum jump'

BANGALORE, INDIA: Information Technology stands synonymous with this construction conglomerate’s global reach and leadership in its business. S. Anantha Sayana, Head Corporate IT, Larsen & Toubro Ltd, a Champion CIO winner of EnterpriseConnect Awards 2007, in Bangalore as a member of Jury to select the winners of ECA ‘08 talks to Sigi Achappa, Asst. Editor, CIOL on using technology to meet business goals, the challenges of a CIO and the importance of innovation to the business.

Excerpts.

CIOL: In your opinion what is your feedback on some of the implementations that have been done by companies in the above 1000cr category.  Do you think that they are going in the right direction and implementing the right kind of projects?

Anantha Sayana: I think, if you look at the scene of what large companies are doing in IT and I think that this is the trend that we have even seen today that lot of large companies have completed their first level of IT implementations, that scrap their transaction processing engine in place and then we have been seeing that the couple of awards that we have seen this year are really focusing on IT implementation that are delivering some kind of significant operational efficiency or I would even say a competitive advantage to this company because of an IT implementation.  We have seen some phenomenon success stories about how information technology makes a difference to the way somebody is attending to a costumer. We have also seen a couple of companies that are doing significant difference to the way their supply chain works.  That’s actually the second stage of development in the information technology maturity of a company and it is good to see everybody going that way.

CIOL:  With reference to L&T, where does L&T stand right now, in terms of technology meeting business objectives?

AS:  I think we are looking at 2 major things that we are doing (a) one is coping up with growth, as our businesses expand, we expand into newer businesses.  There is a lot of information technology needs that we need to fulfill.  There are more information technology hardware, there is more hunger for bandwidth, there is more hunger for applications.  Having completed the first phase of applications for transaction processing, we are seeing a phenomenal opportunity in doing IT at the peripheral areas of transaction processing.  To areas which were not touched by large application system, we are rolling out applications in this areas.  The other significant areas were we are seeing work is in the need of integration between applications.  A lot of applications talk to central apex level applications and a couple of years ago it was ok to do this transaction through batch interface and you upload and download data and things like that but the business does not satisfy with that anymore.  We need to look at how do we pump data from the business systems to corporate systems in real time, and so enterprise application integration, the use of the service bars, middle ware, integration technologies are something that we are doing a lot of work around these days.

CIOL: How important is collaboration for L&T?

AS: The need for collaboration inside the company is becoming more and more important.  I mean we become that much a better company if we can tap into the innovation skills of every employee in the company.  So an innovation portal, collaboration portal is something that we are currently working on and we see phenomenal potential for that.  Another very large trend that everybody is grappling with is that, the company is not the company inside the company itself anymore I mean if you see what I mean that the employee is not in the office only when he/she is within the office premises.  Every employee wants to access the applications of the enterprise from wherever they are.  So what was called the Intranet is not the Intranet anymore and the difference between the Intranet and the Internet is kind of going away.  So today I am seeing a lot more need for all our applications to be visible or to be accessible securely for all our employees and partners through the Internet. So implementation of information security, putting the capability into our applications to be performing well outside the intranet is one of the things that I am seeing as a trend, not only in our company but that something that everybody is making available.

CIOL: What are some of your key business goals, which could be met by using technology.

AS:  At the first level information technology basically increases the productivity of the employee by enabling the employee to do something faster, reducing cycle time, get axis information faster and because you get information timely you are able to take a better decision, deliver a better output; that about the first level.  The second level is, when the information technology does that one bit more that delivers a competitive advantage to the company saying that because information technology was there I was able to tap into one more customer’s base or expand my markers or deliver something better than what I did before, reduce one more turn of inventory and things like that.  So we are slowly getting into that second level of information technology implementations, where the focus is not on just doing the routine transaction but enabling the business to do something better than what it was doing before.

CIOL: Given the current global economics, do you think as a company you need to invest more than usual in technology?  Are you‘ll planning to increase your expenditure in technology?  Or will it remain the same.

AS: No, I am sure investments in information technology are going to go up, so every implementation has the standard components of investment that you make; you need to invest in hardware, you need to invest in networks and you need to invest in the application and the methodology to implement it.  Hardware prizes must be going down but the hunger for the computing power and the hunger for storage is increasing day by day.  At one point of time we were just pushing date through the network, currently data is not just streams of data, its voice, its video, its lot of web conferencing and tele-meetings and stuff like that and even content, which we get from somebody else is very rich. 

And of course, for a company like us, has a lot of engineering data that is both compute and band with intensive.  So are we increasing investments in information technology, obviously yes; as the business grows and we want to do more with information technology. Investments in information technology will increase.  But at the same the difference between then and now is that the ability to see that there is valued delivery from the investments on information technology and the alignment to the business and the value, we derive from information technology.  It is some of the key aspects of the IT governance structure that we have in place.  So we manage risks, make sure that resources are optimized, value is delivered and the information technology gets aligned to the business, that broadly the four or five pillars of IT governance in an enterprise.

CIOL: How much of your IT do you’ll outsource?  And how much is developed in-house?

AS: We have an in-house information technology company called L&T Infotech Ltd.  Majority of our work is done by L&T infotech Ltd.  It’s a kind of in-sourced outsourcing.

CIOL: As an IT head, what are some of the challenges that you foresee in the current global scenario?

AS:  If you are going to ask me to speak about what are the challenges of the CIO, and what will the CIO role evolve into the future, and that’s a very interesting question.  What will happen to the CIO after the CIO role, and then there is a lot of thought in the world about saying that the CIO’s role is not just about information technology, because information technology has moved into actually doing what the business needs to be done.   So everybody talks about how important it is for the CIO to understand the business and then we are seeing a trend all over the world where the CIO also dons another hat, which has a direct business role.  So we have a lot of CIOs who are actually running a certain portion of the business.  There are CIOs also doubling up us, strategy officers, and being responsible for some things in the business.  So that’s the clear trend that the CIO needs to be more a part of the business and the strategy than just being a mere technologist and that’s what everybody in the world says. 

But another very significant fact that remains is that information technology per say is not getting simpler.  The inherent complexities in the technologies the variety of choices in applications and vendors and support models and so on is increasing.  I don’t think so it is right for the CIO to say to stay completely disconnected from what core technology is all about.  A person will be a successful CIO, definitely if he or she should understand the business. But you can’t runaway from the fact that you need to understand technology and the way technology is moving extremely well.  That is something that only you are doing, nobody else in the business is doing.  You could do other things too but this is something that CIOs cannot afford to sacrifice in having a good grasp on what the technology is, how it can help the business and where it’s going.  That I see is really a challenge for the CIOs, not to get faced by all these talk about, aligning the business and forget the technology.

CIOL: Talking about technology, how important a role does innovation play?

AS:  If somebody just goes by the technology, then you go blindly into the technology.  Then who needs innovation?  Innovation is needed by the business, because we see the innovation as something that makes a change to the business.

CIOL:  How important is it to L&T?

AS:  It is extremely important because innovation makes a difference to the business.  And so you can innovate only if you know what the business needs and use that knowledge of what the business needs, you use the knowledge of what technology can potentially solve a problem and when you combine the two, you get a result of an innovation that gives a benefit to the business. Innovation is very important because once you have done the core IT, and if you want to go to the next quantum jump, you need to innovate. 

CIOL: Then what are the challenges you face when you want to go about innovating or investing in a huge implementation?  And how do you go about achieving it?

AS: You don’t set out and say, yes today I am going to innovate; you innovate because you see and identify yourself with either a pain or an opportunity.  Which means that you are very very sharply keyed into what the business all about, and if that passion is driving you that you need to make some difference to the business, then innovation comes forth.