"Inside the CIOs Mind..."

The economy picking up has put the CIOs in a catch-22 situation. The recession was a time when CIOs had to struggle with management issues like limited IT budgets and withholding of IT projects. They also had to brush up their management and leadership skills to keep up the motivation levels within their teams. Having lasted for 2 years, it seems that the management issues occupying the CIOs mind during recession havent changed much.

The recession seems to have passed now, and theres a lot of buzz in the industry as the job market starts to open. And this has aggravated talent management issues. After 4-6 quarters of slowdown, the job market has opened up considerably and entry level staffing is extremely volatile whereas middle management staff has a perennial crunch. The challenge with the end user company is to attract people and give them career path which can help in retaining. Unfortunately, after some time, the end user company can only offer limited options on domain expansion, technology learning as well as role change. This makes a very strong case of right sourcing of the IT department, says Dhiren Savla, CIO, Crisil.

As a consequence, retaining the talent pool is now considered to be the next big challenge for companies and will be on top of the CIOs mind in 2011. To address the talent management issue, CIOs now feel the need to perform attrition analysis and design strategies to retain their star staffers. The cost of losing talent is considerable in terms of the investments made in training and grooming the candidate, or finding new talent.

Attrition analysis and employee retention strategies have to be initiated at the top of the pyramid. It is here that the managements role becomes crucial in terms of communicating with employees. By contrast, companies where the management encourages a healthy dialogue with the workforce (as well as proper attrition analysis) may not face an exodus due to the return of growth, says Madhav Chablani, member ISACAs India Task Force and a Board Member for the ISACA New Delhi Chapter.

Vijay Sethi, vice president, IS and CIO, Hero Honda Motors talks about key strategies that organizations need to adopt for employee retention as well as recruitment of new talent: Focus on employee retention (as cost of getting a new employee is much higher); institute a workforce succession planning program for giving assurance to both the existing workforce as well as the ones joining new; and invest heavily in employee training and development.

Meanwhile organizations can also look at re-hiring their ex-employees as it comes with few benefits such as reduction in cost of hiring and inducting as these people are already aware of the companys culture and policies.

At K Raheja, Group CIO Arun Gupta has been able to successfully contain attrition by providing a balance of challenges as well as addressing the needs of the team. Hiring the right talent always takes a lot of effort and the current times makes it harder. The key to addressing team expectations is frequent dialog across layers to ensure that everyone understands the direction taken by the company and what it means to them, Gupta says.

For Neena Pahuja, CIO at Max Healthcare however there was no such problem. Even during the slowdown phase, hiring was relatively easy as people understand that the healthcare industry is on the growth path. At Max too we are in the process to implement a big-ticket project and everyone wants to be a part of this. Dr Pahuja doesnt forget to add the significance of outsourcing, as it reduces dependency on key people...

Shrinking IT Budgets

CIOs today face no shortage of challenges, and their jobs are only set to become tougherCEOs and boards expect IT to expand scope from cost cutting to revenue generation, and quickly.

The market has picked up and so has the budget, but there is a cautioneach line item in the IT budget, be it existing cost of running the operations or cost of new projects, is being thoroughly scanned and deliberated first by the CIO and then by the Board. Companies now require the IT investment process to provide a data driven, holistic view that empowers better decision making by providing comprehensive information on the TCO of the investment; data to evaluate the merits of competing IT investment approaches; and guidance on focusing IT investment to support innovation and business growth, says Umesh Mehta, CIO, Jubilant.

For Gupta, working closely with his business team has resulted in keeping the operating expenses under check, and as a ratio to the revenue it has come down to less than 0.5%. We believe that this is sustainable as we create scale across the business even when we are expanding to new locations. The baseline for expenses has shifted by a notch and this will be the new benchmark for future expenses, is what Gupta has to say.

While the budgets may have to, to a certain extent, go back to the pre-2008 phase, the slowdown has resulted in increased expectations from the CIO as organizations recognize that investments in IT can actually help reduce overall costs and improve efficiencies and customer service. At the same time, showing the RoI of IT investments is an expectation from the management.

Citing an example, Sethi elaborates that at Hero Honda, IT is regarded as a key business enabler, Our IT philosophy is tomorrow belongs to those who prepare for it today, he says. Keeping this as a guiding principle, we have been investing heavily in IT since 2008-09 and our budgets and IT investments have actually increased a lot over the last few years. We have initiated many large projects over the last 2-3 years and in 2011-12, our IT investments would continue to be significantly high, adds Sethi.

Ditto for Dr Pahuja who like Sethi has seen an increase in her IT budgets as Max is expanding and adding new hospitals.

Pressure from the Top

Thanks to the recession, every penny counts and boards too are looking for business value of the complete solution. POC is the best way out in circumstances like these and these days most vendors are ready to do it on FOC (Free Of Cost) basis or at a nominal cost.

Denying any such instance of unwarranted pressure from the board to adopt unsuitable technology, Sethi says, From the managements side we have not faced a situation where a technology was to be deployed only because it was the latest one. We decide on investments based only on what is necessary for business growth and efficiency, and what is in line with our business objectives.

Enterprises and CIOs are no longer going to be reactive. Planning for innovative working framework, planned adoption of newer technology is going to be on the radar of all CIOs. And momentum for this process could not slow down even when economy starts looking up. Yes! Applicability of a technology of the enterprise should be well thought through before jumping on the bandwagon. Its important that the CIO advises other decision makers on what is good for the enterprise, says Savla.

Keeping Busy in 2011

As the global economy will continue to be unpredictable, there will be pressure on the commodity prices and oil prices. In addition, cost pressures and pressures to constantly evolve and innovate on the industry would continue to prevail and hence IT has to be work more closely with business than ever before.

The customers too would be demanding enhanced customer service from organizations, and here IT will have to be the key enabler.

For Savla, people will continue to be high on the priority list closely followed by governance, risk & compliance management. However he is quick to emphasize that importance of GRC would vary depending on the industry and geography.

FY 2011 is the year that promises hyper growth; the CIO and the IT team will be under pressure to perform at peak levels throughout the year. The scalability of resources will be under the scanner as the demand peaks towards the latter part of the year. In case the economy for some reason starts faltering, the difficulty will be to stall ongoing projects or find ways to manage the new challenges, signs off Gupta.

Stuti Das

stutid @cybermedia.co.in