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Issue of April 2006 

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The Relationship Intergration Officer

The CIO through the eyes of the world

The image that the CIO projects to the outside world reflects not only on himself but also on the company. His changing role means that the way he maintains relationships with internal and external entities also affects the organisation. Kumar Dawada reports

The contemporary CIO plays a key role in formulating business strategy. He has to be the person who has expertise on all fronts, whether IT or business. His organisation and he are measured on an ongoing basis by the way he interacts with the outside world.

Aditya Menon

“According to a global study by Gartner, the CIO’s role is more in developing strategies to enhance the organisation’s business value. He has to align IT with business goals. Maintaining IT or ensuring infrastructure uptime is no longer his sole responsibility,” says Aditya Menon, CIO, Yes Bank. To achieve these business objectives, the CIO has to interact with key players within the organisation as well as with key external entities.

“By being more accessible to the external world, the CIO builds up informed sources who brief him about what is happening on the technology as well as other fronts. He learns new things and gets different perspectives through these interactions,” says Suresh Shenoy, Vice-President, IT, Wockhardt.

Technology has expanded the horizon to the extent where business expansion is global and diverse. Many businesses no longer focus on their core business alone. “To maintain and ensure success levels, an IT organisation has business relationship managers. CIOs not only have to run IT, but manage relations with other departments as well as other industries or verticals which directly affect the business,” explains Menon.

Communication Interfaces

Comprehensive interface mechanisms are necessary for the CIO to interact with the outside world. At the corporate governance or IT level, there has to be a council which focusses on business objectives, product management, knowledge management and IT. “A channel is needed for the CIO to review market trends as well as the strategies and initiatives required to take a strategic lead or support the organisation’s positioning,” says Menon.

This is where the help desk can be a great interface mechanism for corporate communication. “The help desk is a single-point communication centre. Internal or external customers can ask any questions related to technical, operational or after-sales support and get answers at a single point,” says Shenoy. The help desk or support centre generates tickets depending on issues faced by customers. It helps find solutions to the issues faced by the organisation. However, it is imperative to have a robust multi-channel strategy in place. The CIO must ensure that a combination of existing and emerging communication technologies is available.

The CIO must constantly high-light and point out the positive aspects of the organisation to the external world. “He should participate in industry forums, panel discussions and media communications. Another way is to give his views in the corporate newsletter to show his intent and execution to the whole world,” remarks Menon.

If a new business model or technology is introduced, then the CIO’s role as a leader and media spokesman is more pronounced. But if it is business as usual, then he just has to ensure that product management is implemented properly to maintain an optimum image of self and the organisation.

Two Customers

P Rangarajan

IT plays a strategic role in the organisation because it usually has two customers that it must serve. “The big ‘C’ is the external end-customer whom the company cannot do without. The small c’ is the internal customer represented by the various departments and stakeholders who are also supported by IT,” says P Rangarajan, CTO, Dawnay, Day AV.

A customer focus is necessary for the CIO to improve business revenues and reduce costs. IT initiatives must be understood from the user’s perspective. An organisation may launch innovative communication methods, but they will succeed only if those can be translated into gains at the customer level. “Does he get the required service or can he complete transactions faster? The minute a transaction is created, it should be captured in totality. This reduces the cost of transaction servicing and increases direct benefit to the end-customer per transaction,” adds Menon.

Hence, technology’s judicial use based on customer interaction ensures that the CIO covers all customer requirements. This simultaneously makes sure that the customer pays less. By hosting customer councils and seeking open dialogues with the customer, the CIO can understand customers, which in turn allows him to develop and align his organisation’s IT with customer needs.

Organisations can implement a measurement system to monitor how they are serving customers. “This is done by annual customer surveys to assess long-term satisfaction levels. Customer councils provide insightful feedback and help clarify problem areas. Transaction surveys provide immediate feedback on service levels given to customers,” states Rangarajan.

Armed with all this information, the CIO has to attack problems from all sides—the business, workflow and technology issues which have to be solved on a priority basis. He has to come up with IT initiatives which provide the customer with better comfort levels, allow the organisation to move with current market trends, and meet overall customer requirements.

Communication During Disaster

Robust communication mechanisms are a key requirement for disaster recovery or BCP. The organisation has to co-ordinate with internal entities so that they can provide periodic updates on the status of what exactly is going on. This helps notify the loss or risk of human life.

According to Menon, “From the operational perspective, proper communication ensures that there is zero or minimum downtime, and also ensures stable customer service. A multi-channel communication matrix ensures that in the event of a breakdown in one or more channels of communication other viable alternatives are available. This is necessary for mission-critical data or business operations.”

Start Off On The Right Note

Vendors and service providers have to be treated by organisations as business partners. “If you are vocal and honest, the relationship remains. To ensure long-term relations, vendors have to provide value addition. They have to provide continuity of support or service, and ensure proper uptime and scalability for future upgrades,” says Shenoy.

Good vendor relationships start with a good contract. A proper vendor governance model affects the CIO as well as the service to the organisation. “While making an SLA, always include business users of the service being provided. Once the SLA is defined, it becomes easier to see whether you have performance or non-performance,” advises Menon.

When Things Go Sour

The CIO has to ensure that the vendors deliver as per the SLA. If they do not deliver, then bring it up with them. Ensure that the reasons are genuine and beyond their control. “The CIO must make it clear to the vendor that he has to take a call whether to continue with them or not. However, he must discuss the options with vendors in a constructive way so that if they have some suggestions or solutions, then the glitches can be solved,” says Menon.

In long-term relationships with vendors, quick and viable alternatives are not easily
available, so there is risk involved in disengaging
a relationship

Depending on the circumstances, the CIO has to take tough decisions or diplomatically extract the maximum mileage from a relationship. If he has to pull the plug, he should also be in a position to have a viable alternative. In long-term relationships with vendors, quick and viable alternatives are not easily available, so there is risk involved in disengaging a relationship.

However, no matter how good the CIO’s relations are with the vendor, his first loyalty is to the organisation. “The CIO is accountable and responsible to the organisation for ensuring that the IT functions smoothly. He cannot make an excuse that the vendor is not delivering. He has to be ruthless at times in order to safeguard the interest of his organisation,” warns Shenoy. (See the box Seven steps towards successful vendor relationships for more CIO insights on how to walk the fine line when it comes to vendor management.)

Seven steps towards successful vendor relationships

According to Rangarajan of Dawnay, Day AV, it is not uncommon to be frustrated with a vendor. So how does the CIO improve the situation? He outlines seven steps.

  • The organisation and vendor must agree on the perceived economic impact of the product or service procured. A huge investment of critical importance to the enterprise must have similar consideration from the vendor. If the vendor sees the purchase as a small account, then the relationship will never work out.
  • The CIO should get feedback from the vendor’s previous customers about the vendor’s pre- and post-purchase attitude towards the customer.
  • He must make the vendor talk to business users who will actually own the initiative. Only after the vendor and his product’s credibility are established with operational managers should the vendors meet the CIO. Enterprises can hold a full-day meeting with their vendors and discuss short- and long-term business goals as well as their major pain points.
  • He must educate the vendor on how to work successfully with the organisation.
  • The CIO must understand what motivates vendors. The vendor’s success ensures the customer’s success. Profitable customer accounts usually get higher levels of service.
  • The CIO must keep other options open so that vendors get a clear signal of best practice and competitive pricing expectations. Introducing competition ensures that mediocre products or slack service is not given.
  • He must standardise a few vendors, create a vendor management office, and use relationship management software to improve his chances of creating successful vendor relationships.

Dealing With Consultants

The CIO’s relations with consultants depend on the project he is handling. The CIO must clearly explain the project’s objectives and expectations. When the consultants deliver a document, the CIO must take time to review it and understand whether the objectives are achieved.

Adding to this is the fact that tactical projects may require external software professionals to develop them. “CIOs must ensure that the broad objectives and visions are laid down, articulated and understood by developers. He must also ensure that the software company is driven by proper standards so that it has the right processes, quality assurance and governance mechanism in place,” cautions Menon.

Outsourcing And The CIO

Menon feels that once a function is outsourced, the vice-president who manages the business relationship deals with it—this includes the vendor side as well. “The CIO’s relationship with outsourced functions is strategy-based. It is the CIO’s role to see that vendor relationships are being managed in a way that they can be successful in meeting their targets. If not, then the CIO has to step in and ensure that they deliver as per the SLA,” insists Menon.

However, Rangarajan points out that outsourcing may not be for everyone and it cannot go on forever. “Many outsourcing arrangements end in failure, or are taken over by other outsourcers, or the organisation may decide to reclaim the outsourced work.”

CIO And All Matters Legal

The CIO needs to have a thorough knowledge of agreements and contracts, compliance management, data privacy, security laws, intellectual property and ownership laws, as well as regulations like the Sarbanes-Oxley Act.

Suresh Shenoy

Menon is of the opinion that the CIO must be able to read and understand contracts. He must also look out for any commitments made by either party outside the contract. “Most misunderstandings happen due to verbal or e-mail commitments made outside the contract originally agreed upon. People come and go, so perception of the contract can change. To prevent this from happening, the contract must actually say what the organisation means it to say,” cautions Menon.

Regulatory Authorities And Auditors

Menon is of the opinion that good relationships with regulatory authorities are a must. The CIO must understand regulatory requirements and put an effective model in place. After all, who can explain better than the regulatory authority what its requirements are?

Shenoy also feels that the CIO must maintain good relationships with auditors. “There are a lot of things to learn from auditors. They have been to larger organisations in the industry verticals. As a result, they are in an ideal position to tell you about certain practices that you may have not even considered,” concludes Shenoy.

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