Group CIOs

The group CIO and IT governance

S. Krishnasarma, CIO, KEC International

2005 will be a time of learning for Indian group CIOs as they align IT to business goals and bring the benefits of corporate IT governance to their organisations. by Soutiman Das Gupta

Ask Indian group CIOs what the future has in store and chances are that the answer will be that they need to keep on learning, and that it is as important as ever to align IT with business.

Learn and align

The business landscape is constantly changing. Companies may have to introduce new business units, add locations and personnel, re-engineer existing processes, and comply with regulatory requirements.

In such a scenario, the group CIO has to keep on learning about new operations and management areas, and responsibilities that are born as his organisation’s business evolves.

To understand this better, let us look at the situation that

S. Krishnasarma faced. He is the CIO of KEC International, a member of the RPG group of companies, and his company is a leading player in the design, manufacture, and deployment of power transmission towers and lines.

When he became the Corporate CIO for the RPG Group, Krishnasarma realised that he also had to create an IT governance framework and strategic initiatives for Ceat Ltd, the business unit that manufactures automobile tyres.

"I had to go through a period of intense learning where I educated myself on the manufacturing process, input and output values, metrics, and methods of recording information in the new area," says Krishnasarma.

"It will be critical for the group CIO to keep aligning IT to business. He should create strategies, policies, processes, and guidelines related to IT, that will enable business to be performed in a faster, more productive, and secure manner," explains Mani Mulki, GM (IS), Godrej Industries Limited.

Role of the group CIO

CIOs of organisations in a single line of business tend to focus upon the business and IT needs that are pertinent to a single corporate entity. They have to craft strategies accordingly.

When the same responsibilities are extended across two or more business units, new challenges come to the fore.

"CIOs have to consider how they will present themselves and their IT departments to new business units and areas that have cultural and behavioural differences. A CIO cannot simply copy the behaviour and culture patterns from one unit to another," says Mulki.

At this stage its necessary for group CIOs to address the responsibilities and needs of disparate business units by following the approach of corporate IT governance. This practice ensures that regardless of the size, number of personnel, and type of business, an IT department will aim for better management and business value.

Corporate IT governance

Group CIOs should ideally use corporate IT governance practices and put a system in place that will design and assign decision rights. An accountability framework to encourage desirable behaviour in the use of IT is recommended.

Bob Hayward, VP - Research Fellow, Gartner Asia-Pacific and Japan describes corporate IT governance as, "An entire system of organisational issues, constructs, committees, councils, various forums, and how often the participants involved meet to discuss and arrive at decisions about what to do with technology."

The use of corporate IT governance can help corporate IT create a formal framework that empowers IT and related business leaders to answer questions such as, 'How do you make investment decisions?', 'What sort of metrics do you use?', ‘How are those decision made and who has inputs to those decisions?', and 'Who actually is responsible at the end of the day?'

Key for success

Sanjay Mashruwala, Group President, Reliance Infocomm

To ensure the success of corporate IT governance initiatives in 2005, Group CIOs will need to involve business leaders in the decision making processes and on committees. Management buy-in is essential for any IT-related project to get off the ground.

Most IT-related initiatives fail because the project hasn't been aligned to the business, or the business has wrongly assumed it to be a purely IT-driven initiative.

For instance, a CRM initiative will only succeed if the related business units and their leaders are involved in the decision. This brings about accountability and a sense of involvement.

The challenges

Mani Mulki, GM (IS), Godrej Industries Limited

Group CIOs will face challenges related to technology, strategy, human resources, change management, training and learning, or budgets.

There is no 'most effective way' to deal with these. It's best left to the individual group CIO to take decisions on a case-to-case-basis, because corporate IT governance strategies are rarely the same in any two organisations.

The creation of committees, councils, and forums that are allotted certain decision-making rights and responsibilities will help the group CIO mitigate risk to a large extent. Regular audits and review committees will also ensure a certain amount of standardization in the processes.

Sanjay Mashruwala, Group President, Reliance Infocomm has a number of projects and activities on the anvil. His aim is to create strategies and enable IT to provide better value to business. As far as IT infrastructure is concerned, he plans to implement better information security and connectivity in the form of virus protection, firewalls, and VPN services.

"The challenges are to provide training and distributed support on a nationwide basis. We also have to manage application or client upgrades at all business units. We will achieve this goal by conducting extensive training programmes, expanding nationwide support systems, and centralising our control systems," he says.

Setting priorities

Bob Hayward, VP - Research Fellow, Gartner Asia-Pacific and Japan

Since group CIOs have to create strategy for a number of businesses in the conglomerate, how do they prioritise their time and effort across businesses?

This depends upon factors like criticality of the business and IT needs, rotation schedules, and planned level of commitment.

Krishnasarma dedicates 50 percent of his time to KEC International and the remaining half to the strategy needs of the other group companies, which deal with telecom, retail products, hypermarkets, cables, tyres, and production of music. "My role in the group is that of a consultant, implementer, and program manager," he explains.

Mulki handles group IT responsibilities for the various business units at Godrej Industries Limited and Godrej Consumer Products Limited. He feels that due to the numerous business segments and dynamic nature of the business environment, "I dedicate priority to areas where IT is more important as a strategy, rather than as an infrastructure."

Strategy and initiatives

Mashruwala's group companies have various clients spread across the country. Therefore he wants to build a centralised server architecture with well-defined DR policies, in order to ensure business continuance. "We have a strong managed services team and field service group to implement and monitor operations and policies," he says.

Strategies concerning information security, data integrity, and employee ethics will be prime items on Mulki's list of things-to-do this year. He has set up an audit committee that reviews the levels of adherence to corporate strategies and policies. The audit committee also meets and presents its views to the board since information security is also on the corporate governance agenda.

Krishnasarma exchanges ideas with other CIOs in his group through a knowledge management platform and meets them every year to prepare strategies. His agenda for the coming year is to standardise infrastructure, improve sales, marginalise inventory, use BI tools, and set up a common information repository. His strategy for the group's telecom and retail businesses is to use a single-vendor approach for all solution needs. "Choose a competent vendor, sign a well-prepared SLA, and use the solution provider's services for all your needs. It's difficult to manage multiple solution provider relationships and it may become a roadblock to fast and reliable deployment," he explains.

The emerging group CIO

Many Indian companies are set to expand their businesses, and introduce new product lines in 2005. Some companies may even buy others, and some may be bought over.

So a CIO might suddenly find himself in the role of a group CIO of a conglomerate that sells products as diverse as chalk and cheese.

Freshly minted Group CIOs are advised to understand the new business, and then innovate with regard to how IT can help achieve stated business goals. “They should also undergo training and learn how other conglomerates manage IT in their group companies, suggests Krishnasarma.

Mashruwala says, "With significant improvements in the availability of bandwidth, international connectivity, and lower IT infrastructure costs, it is simpler to justify and achieve improvements in IT functions. CIOs should leverage this to implement the rapid advancement of IT infrastructure and services."

"They should start wearing additional hats. Earlier they reported to one business head, but now they will report to many. So they must re-orient themselves accordingly.” Last but not least, Group CIOs need to immediately put performance metrics and means of measurement in place and build separate teams dedicated to the different units of their organisation. q

soutimand@networkmagazineindia.com