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Issue of June 2005 

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Top of the CIO’s mind

If there are ten commandments that apply to the CIO tribe, these are the ones, says Prashant L Rao with inputs from Deepali Gupta

If you’ve ever wondered what’s on top of the CIO’s mind—other than how he or she’s going to get by on a tight IT budget that is—well, you need to look no further. This year, we decided to use the IS survey to find out what CIOs were thinking about—a lot!

Not surprisingly, data security and integrity was top of mind. Data security is a no-brainer, but integrity is a much overlooked aspect of corporate IT. Without clean data, your shiny new ERP system is so much rubbish. GIGO and all that. Business intelligence? Without data integrity, it doesn’t have a leg to stand upon. That’s why 56 percent of survey respondents across verticals voted with their feet to make this their number one IT priority.

Dig deeper and you find that BFSI is most serious about this aspect of IT. Two out of three CIOs in this vertical rate data security and integrity as their primary concern. At the other end of the spectrum, you find telecom with only 17 percent of respondents voting for it. Other verticals toe BFSI’s line with roughly half the respondents rating this aspect as the biggest concern.

Not so close behind, occupying the runner-up’s slot, is redesigning or rationalising IT architecture. This one’s all about the ongoing adoption of ERP and its derivatives by India Inc. Before deploying any EWA, a company has no choice but to rework its IT architecture. Without changing processes and cleaning up data, you’re not going to gain anything from putting a shiny new application in place.

The auto components and telecom folks are the ones who are most interested in redoing their IT architecture. BPO and services companies are the most satisfied with the way things are.

“We have redesigned the IT architecture to consolidate and centralise our operations. The implementation of the same is under progress. We have networked all our satellite labs using VPN, and Reliance is providing the VPDN services,” says Radhakrishna Pillai, CIO, SRL Ranbaxy.

Managing customer relationships or improving customer service comes next on the agenda, which means that CRM is on the corporate radar. There aren’t any surprises over here with BFSI and telecom being the sectors that are most worried about keeping customers happy. About half the respondents in these two sectors are gung-ho about managing customer relationships. Again, it’s no surprise that government/PSU organisations are least bothered about customer relationships. The number of respondents from these sectors citing this as an IT priority is zero.

Web services and e-commerce make for strange bedfellows. That said, the former can power the latter. In any case, one in four respondents picked this as a priority. This is pretty much why e-commerce in India isn’t really going like gangbusters. Here, in an uncharacteristic display, government and PSUs lead the pack with no less than half these organisations giving e-commerce a thumbs up. Considering that the Indian Railways’ online reservation system is India’s biggest B2C venture, that’s not too hard to swallow. BFSI and BPO follow with 29 percent of respondents in both these segments being bullish on e-commerce. Telecom, surprisingly, doesn’t evince much interest and nor do the oil/power folk.

Optimising return on investment (ROI) and total cost of ownership (TCO) are the two most touted means of measuring returns on IT. Again, about a quarter of respondents across industry verticals deem these as important. Here, telecom is the biggest believer in these measurements with two-thirds of respondents in this industry vertical voting with their feet in its favour. BFSI and BPO have about a third saying aye. FMCG, auto components and government/PSUs are not very interested in measuring returns on IT investments.

Pillai of SRL Ranbaxy feels that ROI should be measurable and that it’s important to optimise ROI from every IT investment. SRL Ranbaxy is setting up a VoIP solution over its existing VPN that was primarily implemented for data. Similarly, its Web server was used to host one application for three years. Now the same server hosts more applications.

On the other hand, Sunil Mehta, Senior Vice-president and Area Systems Director, Central Asia, J Walter Thompson, is of the opinion that ROI/TCO is important but it’s not the top priority for his organisation.

Disaster recovery and business continuity come next by a whisker. Here, BPO companies take it more seriously than the rest with 36 percent citing DR/BC as an IT priority. Next come BFSI with 27 percent and services with 26, which are rather low numbers. Is India really so safe that companies feel that they don’t need to invest in DR?

Automating or optimising the supply chain gets just under a fifth of the punters voting for it. FMCG/retail and oil/power tie for the top spot with 31 percent. Auto components is close with 30 percent. Manufacturing has a surprisingly low number of 17 percent. This is an area where companies need to invest—particularly manufacturers and retailers who live or die based on how good their supply chain is.

CIOs traditionally take new technologies with a pinch (or pound) of salt. We asked them what they thought of grid computing, Web services and RFID. Interest was decidedly lukewarm with about one in five citing these as a priority. “RFID is not a big deal for us as our assets are limited,” says Sunil Mehta, Senior Vice President and Area Systems Director – Central Asia, J Walter Thompson.

Services bucked this trend with over a third of firms in this sector enthused about new technologies. Services companies are known for innovating in terms of IT architecture (take the case of courier companies that have cobbled together IT systems that tie online interfaces onto existing systems to help customers track their consignments across continents). Pharmaceutical/chemical companies are the most enthusiastic about fresh technologies with no less than 38 percent of respondents indicating an affirmative response to these. “RFID is on the cards but we can not just go for the sake of technology and it should be affordable. RFID based temperature monitoring sensors and Diagnostics specimen identification tags etc are usable and will add value to our operations. I have a wait and watch approach towards RFID,” says Pillai of SRL Ranbaxy.

Out with the old and in with the new. That sentiment heartens almost a fifth of the respondent base as they prepare to get rid of legacy systems and replace them with the latest that IT has to offer. A third of government/PSU organisations plan to rip and replace, as do one in four manufacturers.

Sales force automation isn’t very popular overall with only 15 percent of respondents voting for it, but in FMCG/retail, SFA is quite the favourite (better than one in four) as it should be. FMCG stands to benefit more than any other sector through SFA tools. A case in point is Godrej Industries which is extending its Sampark distributor management system to gather data from retailers using PDAs or cellular/SMS. The augmented system will be deployed in six to eight months across the company’s supply chain. Pharma’s next with one in five respondents being gung-ho about SFA.

Prashant L Rao can be reached at
Deepali Gupta can be reached at

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