INTERVIEWS OF THE MONTH
INTERVIEW WITH MR.A.BALAJI
Global Chief Information Officer, UPL Limited.
The role of the CTO evolved into a CIO and now most enterprises are talking of running a digital business. In your view, what kind of opportunities does this present for the CTO / CIO and how are the best in class leveraging this opportunity?
Digital Strategy (DS) should be looked as another arm for the CIO. The dosage of digital strategy though, is entirely dependent on the nature of the industry that the enterprise operates in. Several enterprises have filled the role of a Chief Digital Officer (CDO). For instance, Google gives 28 million records when searched on the topic of CDO. It is a much-discussed topic. If one looks at the kind of industries that have appointed a CDO, many are in the B2C business – for instance L’Oreal, McDonalds, Starbucks etc. In general a B2C business cannot afford to ignore DS.
Gartner predicts that 25% business will have CDO by 2015. One needs to first differentiate between digitizing and digitalization. Several people use it interchangeably, while to me they are both different. Digitizing is in the commodity space whereas digitalization is more strategy related. Digitalization can arise as a result of impact through mobility, social media, virtual goods etc., which is more of web based information management and marketing. It is not necessarily a “survival mantra” for enterprises operating in the B2C space, but is rather a business imperative for them. A CIO cannot afford to ignore this space.
A DS is more of an Outside-In strategy – where an enterprise needs to adapt and act upon the expectation of its ecosystem of customers, vendors (partners). Importantly, DS can be an extended arm for marketing and product promotions as well as branding. It also plays an important role in enabling collaboration and optimizing customer experience. For enterprises where CSR is an area of focus, DS could play a crucial role in their CSR initiatives. The word “collaboration” itself has deeper connotations both with respect to internal and external stakeholders including employees, shareholders and partners.
Social Media could have both positive and a negative impact to a business. If an enterprise is not creating or executing a social media strategy, they could be missing out on some vital business enablers. For any enterprise, consistency in approach not only brings in dependability but also builds trust. Hence social media should be handled with extreme care. Enterprises have to be careful about adopting a differentiated DS not only based on lines of business they operate in, but also based on the geographical complexities. In my experience, enterprises that have adopted a country wise strategy have benefited more via DS than the rest. Technology just contributes to about 40% weightage in assembling a DS together. A lot depends on the framework of communication, branding and culture that play a crucial role. Some companies have made an attempt in the form of ghost writing – this to me will not work in the long run.
DS can bring in tremendous transparency for an organization. This could turn out to be an issue especially if transparency is not a part of the company culture. In the present day context, organizations should be ambivert in nature rather than being extrovert or introvert.
A DS should be aligned with the organizational goals and cannot operate in isolation. I’ve come across organizations that have gone overboard on specific individual brands that are inconsistent with the overall organization’s strategy, thereby causing a lot of conflict and confusion. This learning needs to be leveraged well as they plan for the future. Consistency is therefore crucial for success of any DS.
The main objective of any organization is to maximize returns for its stakeholders and as long as digitalization enhances this objective, every enterprise should definitely focus on this. Some classic examples include FMCG, E-commerce, Retail, Auto, Banking, Financial Services and Insurance. But say in the manufacturing segment, especially in a B2B environment, enterprises should ideally evaluate what kind of levers does digitalization present and how it aligns to overall business goals.
Several enterprises in the B2C space have taken digitalization to a completely different level to enable more simplified customer experiences. For instance, I recently tweeted my frustration on not being able to access my bank ATM since it was repeatedly out of order. I immediately got a call from the bank who promised to take quick action. Consider the shift happening in customer engagement and customer experience. No longer do customers have to rely only on the call center. These kind of fundamental shifts are taking place in the form of consumerisation and customer experience.
Technology is only an enabler and should not be viewed in isolation when it comes to forming a DS. Tools and technology will continue to undergo continuous evolution. There are solutions available today that allows an enterprise to have insights into their brand via sentiment analysis that is built on top of unstructured data from social feeds. For instance, an auto company in India that launched a product, reviewed sentiment analysis within a span of 20 days of their product launch and identified brake drum as an issue those customers commonly complained about. This resulted in the company being more responsive to their customers. A typical analysis of this nature would have taken over 3 months to derive coming in from traditional channels such as customer surveys. The company made use of this insight to resolve this issue in a short timeframe.
Several organizations have already put in place enterprise mobility solutions and are now taking it to the next level. Initiatives relating to insights from unstructured content are assuming significance and consequently projects on enterprise collaboration, competitor analysis, market information etc. will see more investments by enterprises.
What kind of challenges does the CIO face as they evolve from a technology evangelist to a business strategist? How are you coping with these challenges?
Personally I think Digital Strategy(DS) will enable rather than affect the CIO’s interest as long as he / she comes with significant strengths in the domain understanding. Irrespective of digitalization, a CIO should fully understand the business dynamics and build the IT architecture around the business dynamics. A me-too type of implementation will only lead to issues, because the dynamics of any business decides the nature of products required and it is imperative to take this into account at the time of finalizing the IT strategy. The engagement with business users will not happen if the CIO leads only with a technology dialog. A CIO needs to demonstrate how he / she is able to solve the business problem by clearly articulating the business case and business value.
Gone are the days where the leadership is looking at technology for technology sake. The word ROI is also passé – enterprises are looking at how technology can take them ahead of the curve. In this situation therefore the technology evangelist position will not solve the problem.
What are some of the characteristics that best in class CIO’s display that allows them to lead a digital business and influence the rest of the stakeholders?
First and foremost, a CIO should have the capability to de-code solutions to the simple business measure before presenting it to the management rather than pushing solutions from a technology angle. Everyone understands technology today. The simpler that CIO’s are able to make it in terms of translating its benefits to business-users, the better their chances of playing a leadership role within organizations.
About half a decade back, the real talking points of a solution were around integration, virtualization, consolidation etc. Now it is all about user experience.
What are the risks that the Chief Digital Officer faces in leading a digital business? How are the CDOs themselves to handle these risks?
Let’s not forget that the strategy itself is evolving – no organization can claim that it has a 100% comprehensive DS. We need to be agile and learn from others’ mistakes. We can’t afford to repeat mistakes of the past.
For any initiative that is evolving, the probability of failure is higher. Investors could still be a little tolerant if certain social media initiatives don’t take shape entirely as planned. However there is little tolerance if there is no consistency in approach, especially for traditional businesses such as say FMCG or BFSI. The digital strategy should therefore be instituted along-with a consistency framework.
Another important aspect is that of security. Stringent government norms, high market volatility and horizontal data flow, calls for building a strong security layer without which it can become a risk.
In summary, a Digital Strategy will not work in isolation. We need to have a strategy and execution plan that is not only aligned with business goals but also exhibits strong flavors of consistency.