Prioritizing IT

Shashwat DC

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.

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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