A little over a decade ago, Information Technology (IT) was still a grey area for most people. A company’s IT network primarily comprised large computers with a complex set of wires that remained locked up in a dark, air-conditioned room. The person in charge of these systems was often the target of wisecracks from co-workers, perhaps to hide their envy that he got to spend his day in an AC room. This was a time when fans were the rule rather than the exception, in most offices in India.
But now, as the computers have come out of the back office into the front office, so also has the person handling them. What has happened in the tech world reflects what is happening in the real world. As technology evolves, so does the role of the person who handles it.
From just making sure that the company’s IT systems are up and running and the data is being properly digitised, the Chief Technology Officer is now one of those responsible for driving the company’s business strategy. As the role evolved, so has the designation. From the ‘computer manager’ or ‘head-data processing’, the person today has a C-suite title — the CTO, or better still, the Chief Information Officer (CIO). There has been an increase in the strategic value of IT in an organization, and hence in the strategic role of the CIO. However, in India we still come across titles like ‘head-MIS’ which were phased out globally five years ago.
The role of IT as an enabler merely for automation and head count reduction is no more valid. IT has to be seen as a source of competitive advantage by the businesses. A vice-chairman and CFO of Hindustan Unilever, also represents the IT function at the board level.
Technology is certainly changing the way people do business, and as the person who knows it best, the CIO’s becoming an increasingly important part of the business. The advent of ERP brought in the need for a person who could understand business processes as well as IT. That was the time when the function really started evolving.
At Essar, group CIO lists his five fundamental responsibilities as technology, application, data, business processes and organization structure from the IT point of view. But so far, the attention has been primarily on the first two, which are just the tip of the iceberg — only 10%. Over the last few years, the shift is happening in the other three as well.
Indeed, technology and application have come to be seen as hygiene factors in most organizations, where the CIO no longer needs to be personally involved. Instead, he invests his time in creating whole new processes that improve the business model. Take the case of Essar Steel which finished updating a supply chain solution across all its steel plants, which enables both the company and its clients to track production at every stage of the process. As a result, even at the time of placing an order, a client can now be told exactly how long it will take for delivery, unlike the guesstimates of the past.
The CIO has to view himself as a tactical leader the focus will remain on the technology aspects. In a strategic role, what is needed is a lot more re-engineering of the business processes to come up with solutions. To make the move from tactical to strategic, the CIO also has to take the initiative to make the change.
If an organization starts doing something after a competitor has done it, it’s no longer strategic. The CIO’s job is to enable innovation and do things before the business asks for it. While the CIO and CTO are two distinct positions internationally, the term is still used interchangeably in India
Mahindra & Mahindra (M&M ) is among the few companies to create a CTO position distinct from the CIO. The role of technology in business increases, we are likely to see this split happen in India as well. They say they have created the position of CTO because their need to be more focused on R&D. The research team is busy with implementation deadlines, but there is a need to have a group of people focused on advancing technologies.