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CIO Speak



Today's CIO : A Value Creator and a 'Chief Innovation Officer'

Background :

There has been a lot of debate in recent times about the role of the CIO in an organization, especially in the turbulent and challenging times of the last two years, which are expected to continue for some more time and set performance benchmarks for future as well. Ranging from discussing the 'I' in CIO, whether it signifies 'Innovation', 'Information' or 'Irritation', to the 'Board Readiness' of the CIO, or whether the relationship between the CEO, CFO & CIO is one of 'conflict' or 'partnership' ? Many questions, heated debates and lots of answers, but it's time to understand these in a deeper perspective and get more clarity on the role – perceived and actual.

Before we look into these issues, let's go back in the time zone and see the evolution of the CIO as we see him today. If you see over the last 30 years or so, many of the early entrants in our IT Industry were either from engineering, maths or science background, and were responsible for developing and maintaining their in-house IT systems. Most of the work used to be manual and over a period of time, these systems were 'computerized' or simply automated to reduce manual work. The skills required were more on programming, systems development and technology understanding / deployment, and it was often left to the IT Manager to drive this automation. Consequently, the IT (EDP) Manager or Systems Administrator was a person, who was more of a Technology Specialist rather than a Business Manager, and very often this role was reporting to the Finance, Accounts, Commercial or Operations Head, depending on the structure of the organization and the way computerization was being perceived by the Management. Very often, this resulted in a skew whereas the automation efforts were focused on the Finance or Commercial functions of the organization or were directed towards PPC/Production etc. This was also a result of the perception that most organizations had (and still do) that the IT Manager and his function will provide a miraculous cure to all technology challenges ! The fallout of this is that today, many organizations and their Senior Management look at IT with a skeptical eye. Coupled with the new buzzwords and jargon that is in the news daily, Managements are not clear and often ambiguous about IT Spend and its relevance to the organization's business, while the CIO has to contend with keeping 'the lights on' on one side and managing the organization's expectations on the other side - quite a balancing feat considering that the role clarity, span of control and authority depends many times on the organizational structure, organizational dynamics and the profile of the CIO and he/she may not have much control over these aspects.

What does the CIO need to do ?

Today's CIO is expected to be a business savvy leader, coupled with his expertise in technology and excellent people management skills. Just being part of the 'C' suite does not get him acceptability in the organization, he is expected to understand business, know the language of business and speak the same with his peers. The CIO of today must understand technology, but more importantly, understand how this technology has to be aligned with the business needs of the organization. Most IT projects which fail, do not fail only because of technical issues, but a lot of the failures can be attributable to Leadership, Management, People related issues or, improper IT - Business Alignment. As they say, the four pillars of any successful IT implementation are 'P P B T – People, Processes, Business (Alignment) and Technology'. Any dissonance in even one area is courting sure shot disaster.

Speaking of IT-Business Alignment, what does Management expect from the CIO ? In today's challenging times where most organizations are at an inflection point, mere cost cutting, automation or integration does not endear the CIO to the Stakeholders or the Board ! What is expected is a deep insight of the business, the ability to think out of the box, a 'fish out of the water' capability, the ability to lead and motivate, technological expertise, operational credibility and the skills of good communication. Most importantly, he is expected to deliver value to the business by deploying technology in a strategic manner. The value cannot be just mere cost reduction, it has to extend across the entire value chain of the organization, viz streamlining internal processes, restructuring / rightsizing operations, innovative ideas to make the business more agile and responsive, integration of the partner eco system e.g. Suppliers, Customers, Service Providers etc with the IT systems of the organization, permeation of systems across and down / up all layers, integration of manufacturing systems with ERP etc are all examples of innovation and how the CIO can bring value to the organization. In addition to this, since the role has been very much refined now and is perceived to be quite powerful and assertive, the CIO should be in a position to influence to a certain extent the way the organization can do business and improve its topline / bottomline by judicious deployment of IT. A point not to be missed is the aspect of Information Security and Managing Governance, Risk & Compliance. These are two very important areas where organizations are facing challenges due to regulatory pressure and minimizing risk to the business due to IT. The CIO can play an exemplary role in delivering value to the business by focusing on the 'C I A' triad, i.e., 'Confidentiality, Integrity and Availability, and creating a Risk Assured IT landscape for the organization.

How CIOs should think about business value and creating Value for the Enterprise :

As we have seen above, a lot of organizations cannot get an actual fix on the value that IT adds to the businesses it serves – defining, measuring and maximizing that value often remains 'in the shadows'. Needless to say, CIOs who are successful in this endeavor, broaden their scope of action beyond the technical sphere and traditional IT levers, and are considered valuable creators for the organization.

    If we have to look at IT Generated Value, the Core Business Priorities and expectations from IT for any organization will be –
  1. Operational excellence
  2. Security & Risk Assurance
  3. Investment protection
  4. Operational Planning
  5. Innovation
  6. Transformation

The business value from IT is of an economic and/or strategic nature, it has different facets depending on business priorities. The metrics of measuring IT value vary in accordance with business context, prime driver being that Business units own the IT projects and the value created.

    To elaborate on the Core Business Priorities mentioned above and finding Levers where IT and Business Units Intersect, we can do so as follows :
  1. Operational Excellence
    • Process reengineering
    • Six Sigma / TPM / TQM
    • Change Management
  2. Security and Risk Assurance
    • Define and implement policies governing Security, Governance and Risk Management
  3. Investment protection
    • Look at dynamic methods for investment control
  4. Operational Planning
    • Deploy operational planning methods
    • Project portfolio management
  5. Innovation
    • Technology watch
    • R&D on specialized and new tools
  6. Transformation
    • Program management
    • Enterprise architecture
    • Business Transformation

In order to achieve the above, it is important for the CIO to build alliances with his peers and key stakeholders. These will be in HR, Audit, Strategy, Business Unit Managers, Project Managers, the CFO, CPO, CRO etc. Involving these stakeholders will foster better Governance and create an IT inclusive strategy for the organization.

To Summarize :

  1. Value of IT for the Business
    • Understand business priorities
    • Define and Measure Value in Business Terms
    • Proactively champion Business – IT initiatives
  2. Alliances / New Roles for the CIO
    • Build Alliances and develop new skills
  3. Joint Business / IT levers
    • Take action and work on projects tightly synchronized with business units
  4. Integrated Governance
    • Integrate IT Governance with Corporate Governance
  5. Get the Basics right
    • Control "Q C D A" – Quality, Costs, Delivery and Availability

Application of these thoughts and concepts in JSL :

The Metals, Mining and Minerals Industry, specifically Steel Industry, follows a cyclic pattern to a large extent and has seen tremendous pressure since the last couple of years with a lot of contraction in the eco system. As an organization, we have always been circumspect in our investments and spending pattern, and have a robust framework for Corporate and IT Governance in place. Some of the very interesting examples where IT has delivered significant value to the organization are :

  1. Partner Eco System
    • We have a well defined Partner eco system which operates on Integrity, Trust and mutual Respect. A very close alignment of the Partners with our Organizational Vision and IT Roadmap ensures a healthy and equitable relationship for both. Our cost conservation efforts resulted in almost 28% reduction in Opex over the last two years, with no compromise whatsoever on any aspect, and all the partners have stayed with us. This would not have been possible without following the norms mentioned above and their support and faith in the organization and the team they have been working with.

  2. Innovation
    • We used Open Source Tools for our Network Monitoring System across the entire organization. Since last four years, we had been on the lookout but the tools available were proprietary and expensive to own and sustain. We did in-house research and finally out of a selection of 5 tools which were shortlisted, we chose one and deployed it across the organization, all using internal talent and resources. This acted as a great motivator for the team and they were gainfully occupied during this tough time. In addition to that, we saved money for the organization as the investment was miniscule, compared to the gains.
    • Another interesting deployment was on the front of Security, where we moved our pattern update to the Cloud. This was done in house and we have saved considerable resources as well as time, as compared to what was being spent earlier in maintaining the security landscape. Quantifying the savings in time and effort – 80%.

  3. Transformation
    • By actively investing in HMI (Human Machine Interface), we have brought a competitive edge to our organization. Our efforts in implementation of Bar Coding at the shop floor, use of RF / Biometric systems for Attendance Recording, Interface of SCADA with SAP in our Manufacturing, etc., have all given a technology push to the organization and transformed the way of working – integrating the Shopfloor with the Topfloor !

  4. Collaboration and Knowledge Management
    • We have facilitated collaboration and knowledge management in JSL by deploying our corporate Intranet 'JConnect', which has been developed in house and is maintained by the team from IT and HR. Low Cost, High Value, High Visibility !! All internal collaboration and Knowledge Management is done through this only. We have our e-library called our Knowledge Center, which is linked with this portal and the wealth of information stored and available online is a real treasure. Maintenance of the Knowledge Center is done in-house, creating a huge potential for internal intellectual talent.

  5. Security and Governance
    • We have defined our IT Vision and Roadmap for a three year period and have published it across the organization. In addition to this, our internal team has created the IT Policy for JSL and its group entities and this is being deployed in a systematic manner to create a Risk Assured Landscape. Next steps are to go in for certification to bring standardization in our processes and we are actively working on the same in a step by step manner.

Thus, it is clearly visible how the CIO and his team can be a Value Creator for the organization, and the role goes much more beyond mere cost cutting and technology deployment, actually leading to the definition of the word CIO as 'Chief Innovation Officer'.

The message for CIOs (current as well as aspiring / upcoming) is to be as innovative as you can, and if that is a challenge due to any reason, then at least create and foster an environment that supports innovation, collaboration and direct alignment to the business. Try to rise above the routine and mundane tasks in the IT function and align yourself to the needs of the business and the organization.

Tough times can actually be a stimulant for the CIO and his team, and make the entire function agile, more robust and aligned for delivering value to the enterprise. This is supported by the very popular sayings –

'Tough times never last but tough people do !'
'Those who dare, win !'.
'Success is a choice. The man at the top of the mountain did not fall there !'

What CIOs want from Vendors ? Candid Advice from a CIO !

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