INTERVIEW OF THE MONTH
INTERVIEW ARTICLE WITH MR. PARNA GHOSH,
VP and Group CIO, UNO Minda Group
Enterprises are at different stages of their digital journey. What kind of competitive advantage can enterprises get with early adoption of new and emerging technologies?
There are multiple types of enterprises in the digital space and one of the companies I believe are digital native enterprises who start their journey as a digital enterprise. The journey of these companies is very different, as they start everything from scratch with the support of technologies like the cloud, digital CRM, etc. They adopt new technologies rapidly and have agile processes. They even deliver great results because of the nature of their digitalization, processes, etc. The other type of enterprises are companies that have old legacy applications and processes that go for digital transformation. In this case, what happens initially is that these organizations tend to do automation or digitization at first and then they take up the journey of digitalization and then they go for digital transformation. In organizations like these sudden changes in terms of digital bring about disruption in processes, people, technology, adoption, training, and awareness and many companies struggle in this phase. Additionally, there is a third type of organization who have a hybrid model of modern technologies like cloud or supply chain automation implemented in some places and in some, they have traditional technologies in place.
Enterprises already on the path of digital transformation are well prepared for volatile situations, while others scramble to cope with the sudden demand for technology assets during these situations. What are some of the good practices in digital transformation and making an enterprise future proof?
I will take the example of my organization which is in the manufacturing industry, specifically in the auto ancillary space. In a manufacturing scenario, given that you can have Industry 4.0, advanced planning systems, or execution systems but in the physical part of manufacturing i.e., creating components, etc it is difficult to automate completely. For example, if we get the materials to be delivered by drones without any human intervention and robots pick up the materials and go to the shop floor and automatic production and dispatch happen. In this case, as well, it is good to have a mix of robots as well as humans to do the tasks. In my experience, I have seen that automation in this manufacturing space is a double-edged sword i.e., if you invest in technology and automation the product cost increases and you are no longer competitive and if you do not invest in technology you perish over a period. Therefore, it is important to have the right balance of automation and manual processes, where you have the complete digital visibility of the shop floor processes, supply chain and customer processes and perform all the necessary manual tasks required in the manufacturing space. In summary, it is important to strike the right balance between your customer experience, your digital experience, cost, profitability, and cash flow. During the pandemic, we observed that cash was king and if your company’s cash flow was poor or the receivables were under stress, then it would have been very difficult for your company’s operations to run smoothly. Having said that, achieving complete digital transformation is also possible for industries such as BFSI where a lot of services do not require any human intervention.
CIOs are transforming from traditional IT service delivery to a more strategic role. They are no longer just responsible for IT services management, rather they are leading strategic initiatives. What is your opinion of the evolving role of a CIO?
When I started my career about 32 years back, IT was looked at mainly as a data processing unit with the additional tasks of reporting, MIS, etc. IT was not regarded as a core business process. So, IT has evolved from being a data processing unit to an MIS unit to a business enabler in the early 2000s. The role of the CIO has evolved a lot starting from the 2000s because when one starts enabling the business, one starts to analyze processes, activities, functions, etc and discover inefficiencies that need to be minimized. So, the CIOs at that time, I believe were brokers because in the market a lot of sophisticated tools such as CRM, Supply Chain tools, Cloud, Data centers, mobile apps etc were coming up and the CIOs were primarily responsible for helping the enterprise implement those solutions and achieve its objectives. Since 2010, the CIO’s role is rapidly evolving mainly in line with the advent of Industry 4.0 and related technologies such as Artificial Intelligence, Machine Learning, Blockchain, Augmented Reality, Virtual reality etc as these technologies are rapidly changing business processes. So, earlier the transformation was happening on the technology layer where we were changing and modernizing the technology and creating better user experiences whereas now the transformations are completely changing the business models. Good examples of this can be seen in industries like banking, food, and transportation where technology is having a huge impact and are changing business models. I believe because of the proliferation of these technologies the use cases and business cases have increased and the role of a CIO has become easier now as more technologies, tools, and service providers are present in the market than ever before.
How have digital solutions helped enterprises to improve actual business processes? Are you seeing any trends relating to this in the past year?
Earlier when we used to implement ERPs (SAP, Oracle etc.), we did business process reengineering where we used to chart out As-Is processes, and To-Be processes, do gap analysis, and evaluate whether our To-be objectives have been met or not. But today, processes are getting disrupted which means the old ways of doing certain things do not exist at all. For example, in manufacturing with the advent of robotics, artificial intelligence, machine learning etc manual activities are getting completely disrupted. You do not have to capture data in SAP anymore manually, you can simply capture the data from the machine directly into SAP. This is called digital transformation, and this is how it disrupts processes. Therefore, companies that are digitally native have a huge advantage over companies that are not traditionally digital. So, both these types of companies will have great differences between their customer experiences, products, resource availability etc, the only challenges that I see here is managing cashflows, finances, balance sheet, and working capital. If these are maintained well, digital mature companies will do well as compared to companies that are not traditionally digital.
Have you read or experienced any unique ways to incentivize people towards faster adoption of digital solutions within enterprise?
We have a process of hiring graduate engineer trainees (GETs) who go through a 3-year program in which their learning curve is steep, and they start implementing solutions and at the end of the day, they deliver certain results. We also have cross-functional teams who work on diverse areas such as new-generation technologies, new-generation manufacturing, automation, smart manufacturing, etc. So, we have an incentive program for these teams to implement their ideas. Without having the right incentives, I believe the culture of an organization will not change and rapid adoption of technologies might not be possible.