Digitization is a subject which is current and hence everyone likes to dabble in it, itching to get on to the bandwagon. They know if they don’t embrace this new approach others would do so and run away with the booty. Therefore we find companies rushing in to go digital and pull all stops to get there first. Though there is nothing wrong with companies adopting contemporary methods and gaining a competitive advantage in the market but they need to take a considered view and proceed with a bit of caution ensuring they take the right direction with everyone on board.
Since so much has been written and spoken about going digital, it is but natural for executives to be bombarded with information and opinion coming in from various sources. Using this input they develop their own perceptions and lend their weight to the digital initiatives in the organization. For some executives it is all about extensive use of technology, for some others it about a new and effective way of engaging with the customers and other stakeholders while for the rest it may be about an entirely new approach to business and growth. While none of them would be wrong in their assumptions, these differing perspectives could cause hurdles to charting a clear and an unambiguous path for digitization. Such a lack of alignment would inhibit working out of a common vision about where the business needs to go. In such situations, companies may embark on a few piecemeal initiatives or make uncoordinated efforts which may result in missed opportunities, sub-optimal performance or false starts.
Business leaders therefore should have a clear and a common understanding about what digitization involves, what it means to them and the resultant impact on business. They should delve deeper and evolve a meaningful digital strategy to drive business performance and to achieve business goals. In order to make this work, one can look at the following three objectives of digitization to lend clarity to the approach.
Creating new opportunities
Digitization opens up new possibilities that the organizations can exploit and be ready to reexamine the entire way of doing business as also to explore new areas that provide value. It may be new methods of service delivery or newer methods of engaging with the customers or starting new businesses that are possible now with digitization. For example ‘Internet of Things’ opens up new opportunities for disruptors who can use unprecedented levels of data capture & accuracy to identify weaknesses in value chains and to take immediate corrective action. Using mobility and location aware sensors, companies can be in touch with developments on the ground and take proactive steps to get ahead of the competition. This requires company’s commitment to understand the implications of the developments in the marketplace and to evaluate how they may present opportunities or threats.
Adding value to the current business
The next element of digitization is to use this new capability to improve existing level of delivery, customer service, stock movement, decision making etc. For example understanding each step of the customers purchase journey, irrespective of the channels, and then using digital capabilities to ensure the best possible experience to the customer would be one such step. Similarly the supply chain can be improved upon for greater flexibility, efficiency and speed to deliver the right product at the right place. At the same time, data and metrics can focus on delivering insights about customers that in turn drive marketing and sales decisions. These will be cyclical dynamic processes where processes and capabilities evolve based on inputs from customers and other supply chain constituents.
Making technology work
Another element of going digital is about building technological and organizational processes that allow an enterprise to be responsive, agile and efficient. The basic platform on which the new initiatives would run will have to be properly designed and adequately equipped to handle the new demand of the times. IT systems will have to be architected afresh and decoupled from the earlier legacy systems. The new platform will have to be flexible, agile and open, in order to handle company’s response to the changing market conditions. A key feature of digitized IT is the commitment to building networks that connect devices, objects, and people. This approach is embodied in a continuous-delivery model where cross-functional IT teams automate systems and optimize processes to be able to release and iterate on software quickly. For these to work, it will be important to address mindsets of people so that they adopt and work with the new processes. Companies often create small teams which work iteratively to bring about initial changes and help institutionalize these methods and build capabilities for the longer term.
In conclusion I would say that the objective of going digital should be to unlock growth. Companies may interpret or act on this in different ways, but by having a clear understanding of what digital means allows business leaders to develop a shared vision of how it can be used to capture value. When rightly applied this could take the organization to the next level of growth and performance or otherwise they would just rue their missed chances.
Organizations embark on the digital journey with a fond hope of staying ahead of the competition. Their decision to go digital is often influenced by the desire to use contemporary technology & methods, peer pressure, persuasion of the CIO or other business heads or advise of consultants. Whatever the reason to go digital, the start of the journey should always be marked with careful thought and planning to avoid subsequent hiccups.
Taking up the project without a careful assessment of capabilities and resources could land the organization in trouble. With a focus on technology and its possible benefits, companies often forget that organizational readiness is important. They need to consider factors such as the organization culture – to see if it supports digitization, orientation of the senior management – whether they have been briefed and taken on board, capabilities of the key staff members – to assess if they have the right skills & attitudes, and a capable IT organization – if they have the right set up and capability of handling digital information. Let us discuss each of these factors.
Organization culture : Companies undergoing business transformation often ignore the risks of non-adoption when they fail to address cultural issues, either assuming that people would align themselves on their own or that they could be forced to fall in line. These measures, however, do not work and the proposed change remains a hostage to the work methods and behavior patterns of various people groups. It is important therefore to work on the cultural aspects and have the HR department hold transformational programs to bring about a change in the mindsets or even relocate staff members who do not fit the bill.
Orientation of the senior management : The C-level executives should be the driving force for digitization but they could also be the hindering factor. Their participation is important as they are expected to provide direction to the operational staff who work with them. The Board or the CEO should take these senior members into confidence and discuss the entire plan with them and buy their commitment and support. It is important for them to realize that their success as business heads hinges on the successful roll out of the digitization initiatives. Wherever possible they should be exposed to the contemporary methods by getting them over to visit companies that run such digitization programs. Once they are convinced, they will themselves champion the cause and work for it.
Capability of key staff members : This is an area generally not given much attention to. We often see staff not adequately qualified, short on capability, not skilled or differently skilled, not trained or wrong on attitude. It is important to assess this aspect of readiness and address the issue before the start of the digitization project. This is a transformational program and therefore needs thorough assessment. This involves selection of the right people, relocation of those not fit, training, skilling or reskilling them, taking them through motivational and soft skills programs, empowering them to act independently and make them customer centric. Where the required talent does not exist within the organization, immediate steps should be taken to acquire talent from outside. Reorganization and restructuring of functions and changing of reporting relationships might be necessary along with defining new job descriptions and this need to be carefully worked out, taking external help where necessary.
A capable IT organization : Many companies are still unclear about the best way to set up their IT organizations and develop the tools and talent required to manage digital information and establish and maintain online services and automated processes. The traditional set up is usually carried along with some superficial changes. Such an attempt would not work and may derail progress. Most do not properly acknowledge that many of the critical resources required to facilitate this transition may not be available in-house. The right talent may be in short supply and may often take years to build such capability. It is therefore necessary to hunt for talent outside and also consider outsourcing a few tasks where the required skills do not exist within.
Before taking on the digitization programs companies would do well to assess their level of preparedness and build capabilities to successfully implement and derive benefits on a sustained basis. Companies need to identify the business domains and activities that would most benefit from rapid digitization, and should manage those projects separately from their conventional IT projects.
Digitization efforts in many organizations do not fully yield results that are desired. While reasons could be many, one of the main factors for poor showing is ITs lack of alignment with business. Initiatives that are localized at the level of the IT or taken up by stray business heads hardly ever bear fruit. These initiatives may result in some improvements but they are insignificant and remain within a small sphere. Large organizations manage to steer clear of this trouble because of good professionals on board, but the gap is more pronounced in small and medium sized organizations. SMEs find it extremely hard to manage technology deployment without the right people and therefore their digital journey lacks clear direction.
One way of overcoming this problem is to seek advice from an external source and employ management or technology consultants to draw up a road map and suggest a plan of action. The consultants may be reputed firms or accomplished individuals but the success lies in making right use of them and it here that many are found lacking.
Let me cite a few examples from my engagements with clients over the last three years. In most places it was the lack of effective leadership that resulted in sub-optimal use of technology. Though the CEO is best placed to give it a right direction, any other senior person nominated by him can also deliver if he can think from the CEOs perspective, but that rarely happens. The following examples would go on to show that many organizations do need to wake up and bring in greater professionalism in the work place.
Where the CFO takes charge : It is customary in most organizations to make IT department report to the CFO. I cite an example of a mid-sized manufacturing company which decided to seek advice and their CFO called me over for a discussion. Since they had already decided on an ERP, I helped them through the implementation process with suitable business process changes and help streamline the functioning of IT. However to make effective use of their investment in technology I suggested they use business intelligence to strengthen decision making. The CFO, I guess felt uncomfortable with the idea as he was already getting his usual reports and did not feel the need to proceed further. The CEO never got involved directly but got briefing from the CFO. The company therefore was stay put at that level and lost an opportunity to build up on their initial work.
When the CEO calls for review but delegates responsibility – We often say a job well begun is half done. However, if the direction changes after the start, the job remains half-done. It played true for a fairly large company in the auto parts sector. The CEO was concerned about the efficacy of its IT and its contribution to business and hence was himself present for the initial discussion. He wanted me to do a quick study and share with him my broad findings. After this stage, the command passed over to the CFO, who along with the CIO tried to resist changes. Some of my first recommendations like centralization of the IT, IT governance and enterprise portal required some investment. The CFO cited lack of funds and wanted to defer these actions. I was insulated me from the CEO and he did not get the right status update. This was again a case of opportunity lost.
Where the CEO initiates but does not participate – These situations are also not uncommon. I was called in by the head of an institution who had taken the initiative to modernize work both in the academic function and the administrative area. Products were then selected and the work began in the right earnest. The initial enthusiasm could not however drive the project further due to the organization culture which was slow-paced and had informal work methods. The initial enthusiasm faded as the institutional head thought it was not necessary for him to participate and that technology should be dealt with by IT. The responsibility then was placed on the IT administrator to drive the projects on his own. Due to lack of direct participation by the head, adoption of new methods by employees, discussions on new initiatives, work cooperation, data discipline etc. suffered. Small superficial successes seem to provide satisfaction to the institutional head and the management. Instead of being an advisor to the management, I ended up being an advisor to the IT administrator. Technology could not therefore be gainfully deployed and benefits in terms of governance and better running of the institution could not be realized.
When the CEO keeps himself at an arm’s distance – A subsidiary of a MNC doing well in India decided to automate work to handle their expanding business. I worked with them to draw an overall plan to introduce ERP and other applications, connect with all stakeholders, mobility solutions etc., which was approved by the CEO. The CEO was perhaps advised internally to appear only for the steering committee meetings and therefore maintained a distance from the project. Internal contradictions in the form of cross functional problems arose at regular intervals which affected work but did not surface well during the steering committee meetings. Compromises at various stages resulted in a sub-optimal solution. Without a direct contact with the consultants, the CEO got colored information from his internal team and therefore could not get from technology what he would have wanted.
From the above examples it is clear that right leadership is critical to steer the digital journey of any organization. Unless the digital plan is driven by organization strategy, objectives and goals, work meanders taking care of a few procedural issues but leaving the main purpose behind. Organization heads need to realize that they are in a digital age and should directly confront technology and not just view it from the corners of their eyes.
In my last post I had discussed how important for it is for the CIO to get his CEO on board for his plans for technology deployment. I had said that CIOs should learn the art of influencing those who matter and be persistent with the task in spite of early failures. Best efforts however come to a naught when the incumbent CEO refuses to play ball and proves a hard nut to crack. The poor CIO keeps banging the door that refuses to open. I have encountered such situations and often wondered how to wade my way through. On some occasions I managed to address the situation but at other times I was left without answers.
The CEOs that I handled, both as a CIO then and as a consultant now, were accomplished men in their own ways but were not really cut out for handling the play of technology in their businesses. They had their own characteristics, background, understanding and orientation and therefore needed different approaches to make them come around to listen to me. Instead of being a guide and a motivator, many a times, they acted as speed breakers and did not assist in the absorption of technology into business. I would classify such CEOs into four distinct types viz. :
Not technology literate : These are old time CEOs, ones from the earlier generation, who may have spent their entire lifetime without the help of IT and therefore do not understand this clamor for technology. Wary of gizmos with smart guys running fingers on them, these CEOs tend to keep technology away at an arms distance. Any proposal on technology is promptly and automatically passed over to the CFO or some other functionary for consideration. His only concern is the expense on capital or revenue account and availability of budgets. There is very little that the CIO can expect of them and the CIO would do well to keep out of his away. For instance in my last outing as a CIO, I had to report directly to the CEO as I handled two functions but whenever I spoke of technology he would re-direct me to the CFO and lose further interest in the meeting. I soon learnt and decided not to put him through this torture and be a little more kind to him.
Use technology a bit but still indifferent : They know and use technology say for sending or receiving mails, opening an excel sheet or a word document, but that is where it all ends. Technology beyond this point is not their area of interest and they cannot comprehend the tall talk of a technology revolution and its likely impact. Decisions on technology are sometimes conveniently deferred, referred to an expert or forwarded to the executive committee. They would not directly participate but may really not act a spoilsport. However they are happy so long as they get their mail messages and periodic reports they ask for. In one of the organizations that I worked with, the only question that the CEO would ask me was whether the systems were working alright and if I took up a point for discussion he would advise me to put it up in the next executive committee meeting.
Have a function bias : These are functional experts who get elevated to the position of CEO but continue to retain a strong functional bias. Though they discuss various issues, any reference to their parent area evokes an immediate response whereas other matters get less than an enthusiastic response. Discussing technology plans therefore becomes so much more difficult. Reporting to the CEO who had come from operations, I struggled to get through initiatives on dealer management, CRM, treasury management etc. but a proposal for streamlining Supply Chain management got his instant approval. In another case, the CEO from Finance gave a green signal for ERP implementation but asked us to cover only finance and commercial applications along with inventory accounting. For them technology is just one another activity and not as important as the functions that they are comfortable with.
Those who believe in delegation : They are ostensibly great leaders who believe in participative management. They are masters in delegation and distribute responsibility on various matters. Information technology obviously doesn’t figure in the list of tasks that they directly look into and therefore pass it onto some functionary of their choice. In one of the companies I recently rendered advice to, I was called in and spoken to by the CEO but he later delegated the responsibility to the CFO and what happened thereafter was the usual, and the objective with which I was called for was not fully served.
So friends, here we are. Pray that you get to work with a CEO whom you can talk to – a CEO who can lend you an ear and at least absorb a little of what you say. Even if he or she were to be covered with a shell, you would wish it is not too hard to pierce through. It is important to win him over and those who can do so can ride rough seas with relative ease. For those who are not able to, the best way is to make friends with the COO or the next in line and use his influence to wade your way through.
It is always our endeavor to see that IT deployment in our companies have clear purpose and direction. As CIOs we often struggle to place our IT plans on the right path. The IT plan drawn is not for the IT function alone but one for the organization. Such a plan therefore has to be accepted and absorbed by the senior management especially the person at the top.
Many a times seemingly good IT plans get stuck at various junctures due to lack of adequate support from various constituents in the organization. Reasons could be many and the blame could fall on one or the other. The CIO could be at fault at times, not being able to understand the need of business, priorities or the processes but at other times factors like cultural issues, lack of proper orientation of the people who matter, and displaced priorities of executives could derail the program. Though the CIO can take various measures to engage with the people and explain the plans, his best bet will be to reach out to the CEO and try to get him on board. In my opinion the CEO is the single most important person whom we should have on our side. It is great to have his support but the story can be complete only if he/she participates in the execution process. Let us consider the ways in which the CEO can add value :
- Guidance : He can guide and lead us in a proper direction by articulating his vision, objectives, goals and priorities. He can also refer us to the management team for further details and can provide a lot of clarity for us to follow-up with further study and analysis,
- Being a catalyst : His buy-in into our initiative sets off a trigger reaction making other senior executives to fall in line. Those executives who could have set low priorities otherwise come around and start discussing. Co-operation then runs down the line as people are instructed to share documents and data. Engaging with users gets easier.
- Helping through problems : The CEO could really help when stuck with problems that act as hurdles in performance of systems. His gentle nudge to the reluctant user, or conducting a review of work on the project, passing clear directives or resolving cross functional contentious issues could pave the way for a smooth run.
- Helps obtain resources : When we face a resource crunch impacting our project, there could be no better a person than the CEO to help us fight through the maze of tedious processes, budgets and botched priorities to get resources like funds, manpower, working space, facilities etc.
The question, of course is how to get him on board and make him take our side especially when there could be many others seeking his attention. The task is not easy and there are no clear formulae that work. It depends on how we position technology in the organization, on how we build up rapport with senior people and on how we evoke confidence in others. Let us consider a few steps here :
Educate the CEO : When the CEO is IT savvy, it is a cake-walk but if he is not, we will have to seize an opportunity to explain a few simple terms to him. Rushing him into quick learning may not be a good idea and we have to exercise patience to let him catch up. If necessary we can seek services of a consultant or get a senior person from the IT vendor organization to speak and update him on the current trends.
Be pro-active : Offer to make a presentation to the management committee and place your plan to buoy up business. Speak the language of business and don’t try to impress with technical jargons. If we just concentrate on familiarization without seeking approvals it will not put the people on the defensive.
Making a business case : When putting up proposals for approval include a short summary explaining the purpose and the likely impact on business. While the accompanying details could be comprehensive, the objective, proposed solution, work plan and the outcome should make a compelling case for the CEO to appreciate and approve. What he is convinced of will receive his encouragement and support.
Maintaining a high success rate : What if you were to complete a critical project successfully and on time and repeat the performance on your next project. If you keep a close watch and demonstrate measurable impact to business, the CEO would not only give you support but also trust you with more responsibilities.
In my last post I talked about Digital Enterprises and why companies must adopt this new approach to remain competitive in today’s world. Let me now talk about methods that organizations can adopt to digitize their operations and do it in a manner that benefits the enterprise.
It is not a question of when to start but how to get going with modernizing of our businesses. Putting the debate aside, it may be prudent to think holistically and work out solutions that are appropriate for the organization. Organizations are often flat footed in adopting new methods and this provides an opportunity for the CIO to take lead in digitizing the enterprise.
Current status in Indian enterprises
Many CEOs are generally aware of this new approach and do enquire and seek to understand. Competitive pressures today force companies to consider and leverage new digital channels like social media and mobile computing to further their business. As digitization rides the hype cycle, companies are often unsure of their approach and therefore hire consultants to advise them on the subject. While some work out clear strategies others tend to get carried away by consultants’ ambitious projections. I have heard from quite a few of my friends about their digital initiatives but I find many of them lacking a concerted and a well-defined approach. Many initiatives fall short of the targets as they simply introduce mobility or get onto social networks or move a part of their applications to a cloud environment, as separate initiatives. This is where they fail to realize the full benefit of digitization.
When companies embark upon their digital journey the first thing they have to do is define the purpose and direction of this exercise. There could be many organization priorities like addressing the issue of growth, enhancing productivity, meeting customer expectations, increasing market share, revamping distribution channels etc. Many a times these business priorities are not clearly articulated and factored in the IT plans. The digital strategy here should address both the short term and long term plans of the organization. The business strategy should clearly indicate the role of IT. Specific roles and responsibilities to support the business and IT strategies should be well defined. The governance structure, processes and practices need to be laid down and practiced. The infrastructure that is needed to support this initiative should also be well thought out and planned and therefore an appropriate enterprise architecture should be drawn out to put in comprehensive plans that would support the organization into the foreseeable future. The trouble is that CIOs often install incremental facility in the form of hardware/virtualization or move a part of the applications to the cloud saying they are preparing for digitization. This belies a lack of vision or absence of strategy. One needs to create a future road map and build up to the final state slowly over time.
Challenges to overcome
Cultural issues are usually impediments to adopting digital initiatives. This requires adequate education and awareness programs to make people aware of the moves and the impact that this may have on them. Readiness is required even at the top so that they provide the right leadership and the right organization structure and policies to make implementation easier. Those at the top have also to manage and resolve all the conflicts and struggles that this may create at various levels of management. Poor understanding of the potential of these initiatives and lack of accountability of personnel involved in the efforts could derail the process and need to be addressed. Another problem often faced is the lack of talented people to drive these initiatives and to handle the changed processes. Re-skilling of the available staff and induction of new talent may be a necessity. It is also essential for the company to have a capable and empowered IT cell which can work alongside the business team to add strength to the efforts.
Digitization should therefore be viewed as a significant and strategic management program which can make a great impact on business and make it ready to face the future. Half-hearted initiatives or those lead by the IT teams may result in minor gains without providing a competitive edge to business.
Much has been written about Digital Enterprises of late and enough buzz has been generated on digitization, which seems to have taken the industry by storm. As happens with most new technologies and new practices, digitization too has gone through the hype cycle generating noise and creating visibility. People have been told this is the future and those who don’t follow this route may find themselves doomed.
I met a few CIOs and broached this subject with them. Though some were clear others displayed an air of understanding though would talk no further. They speak in generalities and say they are at the stage of planning. Some were adventurous enough to claim complete digitization in their organizations, simply meaning that they have automated a lot of stuff. I had the opportunity to teach this subject as an introduction to students of a management institution, however in the ensuing exams, half of the students described digital enterprises as ones who practice extensive automation.
It is perhaps not fair to blame them since the industry has not explained the subject rationally to people but created a buzz around the subject. Vendors would serve better selling the concept rather than their wares and develop partnership with customers. Let me attempt to demystify this topic and explain this in simple terms.
What is a Digital Enterprise (DE) ?
Digital Enterprise is an IT driven business model created in response to the emerging market place and value chains which are going digital. Companies can either take a pro-active stance and create a competitive advantage or quickly react to moves by competitors. The Digital Enterprise is built upon the use of IT to automate the processes (both internal and external) to create a digital boundary enabling all stakeholder interactions. An immense amount of information is created which needs to be consumed and acted upon. In other words ‘DE’ is an organization that uses technology as a competitive advantage in its internal and external operations.
There is an enabling environment which makes this shift feasible. Customers and employees today, particularly those who are digital aware, expect a new style of commerce, content and collaboration. They look for anytime, anywhere access and any-device convenience. They interact with companies through multiple channels and therefore it becomes important for companies to access these channels to understand their behavior. Vast amount of market and customer data need to be analyzed for understanding opportunities and trends. This calls for companies to be agile and to have IT infrastructure that is flexible and scalable.
The way to go
In order to take care of these requirements in this emerging scenario, organizations have to go the ‘SMAC’ way ; SMAC stands for ‘social’, ‘mobility, ‘analytics’ and ‘cloud’. These are the four pillars of a Digital Enterprise. Let me explain these terms briefly :
Social : This covers all interactions on the digital social platforms with individual users and groups which Include tweeting, texting, instant messaging and posts in blogs and on the company’s website. These are important indicators for the company to address.
Mobility : There is a distinct shift towards mobility and therefore important to capture transactions from all portable devices including laptops, smart phones via wireless networks (WLAN, GSM,GPRS etc.). Policies and procedures have to be geared to meet this requirement.
Analytics : A huge amount of data is likely to be collected in the form of structured, semi-structured and unstructured data which would need analysis to draw meaning out of them. Several technologies such as Big Data, Business Intelligence (BI) can help analyze and summarize to draw conclusions and aid decision-making. This can provide huge amount of learning about customers and markets.
Cloud : For meeting all the above requirements we would need an Infrastructure that is flexible and scalable. Rather than building, it could be far more convenient and cost effective to work on infrastructure and applications as acquired services. This is where cloud computing comes in as an essential part.
It is the combination of these four themes that gives it meaning – its a catchword or an acronym but represents a comprehensive view of the solution. It is about viewing the customers through a multitude of channels and working out suitable responses. What we need is a holistic approach to digitization and a choosing an effective way to attain competitive advantage.
We see changes that take place all around us and realize that nothing remains static. The Earth moves around in space and so do all objects in the Universe. Situations change, so does the environment people change and so do businesses. With so much going around can we afford to sit pretty and resist change? Perhaps not.
We also get bombarded with lots of phrases like ‘change is the only constant’, ‘perish or change’, ‘run even if you want to stand at the same place’, ‘embrace change if you wish to survive’ and so on. Management jargons and clichés thrown at the CIO make him run for cover. Facing such intimidation, the poor CIO reluctantly decides to go for a change. He may not be quite clear what he has to change but he knows he has to. This is where the problem takes its shape.
The change program
The CIO sometimes takes this change business a little too seriously. When he joins a new organization he notices that IT has still not achieved the star status that is should have with the previous incumbent. Loaded with the knowledge that ‘change’ does the trick, he tries his hand at making changes all around him. He relooks at the hardware and network architecture, changes IT vendors that the organization has been dealing with, reworks the application priority list and starts fresh dialogue with some users. If he has been in the same place for a while, he tries to reshuffle his team, rework user interface screens and may be try to aggressively introduce new technologies. However when all these measures do not seem to impress the management, the poor CIO looks crestfallen not knowing what more he could do. The same is the experience when I see CIOs executing their role as members of professional associations ; they bring about changes and when they don’t work, they blame the CIO community, the vendors, the industrial environment etc.
I agree that their predicament is genuine. An era where ‘change’ is touted as the most powerful tool of governance, how is it that the changes carried out by him are not accepted by the organization that he works for. While he may not have the answers some others may have.
Untangling the mystery
Now let us look at a some of the reasons why organizations adopt changes ;
- Change in the marketplace – New challenges often crop up in the form of new players, new products, price wars, new methods of distribution etc. to which the organization develops its responses.
- Change in consumer behavior – Customers needs change over time and they may have different demands to which the company has to respond to.
- Internal drive to excel – When companies try to get better, improve its working and want to scale new heights.
- Change in circumstances – Like new laws, political and geographical changes etc.
- Technology developments – Necessitate use of technology to ride a few notches above the competitors.
Now when organizations set on this journey of change and in the right manner, they are aware of the objectives they are trying to meet. They are clear about their purpose and targets they are pursuing.
CIOs can take a cue from this illustration and work out their change program to lend it purpose. A change for the sake of change leads us nowhere. It is important to have an agenda for change. He has to ask a few questions of himself when taking on this task. For example he can look at the unfulfilled business needs from the technology standpoint, he can assess if the technology infrastructure is the bottleneck, he can seek external advice to reorient his IT plans, he can find out delivery failures or inefficiencies etc. and devise programs to tackle these problems. If he finds that no IT Plan or strategy exists he should work to prepare a new document.
In the end a change has to have some end purpose which acts as a beacon to guide their path. The CIO has to define a specific business purpose that he is attempting to tackle and one that is in line with the business objectives and goals. Just making a few technology changes or restructuring his organization without a business purpose in mind does not find purchase from the management. A change is a powerful tool which could either help meet a challenge, scale new peaks or win over competition, only if it is properly targeted.
We witnessed the telecom revolution over the last two decades which altered the way people communicated with each other, a change that impacted the daily lives of people. The information technology boom and the advent of internet did something similar by significantly redefining the way people dealt with tasks on a day-to-day basis and the way businesses functioned. Development on both these fronts initially went along in parallel.
The convergence of telecommunications and computing has been noted and commented on for some time now. However, there is a much richer interrelationship at present than at any time in the past. In fact, one can argue that the very terms “telecommunications” and “computing” are losing their relevance as separate identities, and also that these fields will become virtually indistinguishable in the near future.
Merging of computing, communication and entertainment has changed the landscape. Emergence of the acronym ‘ICE’ really signified this move towards convergence. The boundaries between telecom and computing have really been blurred with significant overlap between the two. The traditional use of a telephone to talk and use of computers to access the net & to do other tasks is giving way to a scene where we increasingly use computers and applications like skype, hangout, yahoo messenger etc. to talk to people on a audio or a video chat and use our handset for accessing our mails, for using the social; networking sites, read news and for general browsing – a role reversal of sorts.
Impact on telecom companies
Telcos have been reporting fall in the ‘average revenue per user’ (ARPU) and this is understandable. There has been an increasing usage of free apps like viber, jumblo, skype to talk to others riding on the web and thereby starving telcos of revenue through voice calls. Widespread use of chat facility on whatsapp, yahoo messenger, hangout etc., for messaging has resulted in revenue loss for telcos for such value-added services. Revenue from long distance calls has also seen significant drop as people use skype, hangout etc., to set up video calls connecting with anyone around the world.
Let me share my experience of communicating and net browsing when travelling abroad recently. I purchased a country specific card from one of the telecom service providers which carried call lower tariffs than international roaming charges for my regular number, and also an internet service pack. At the end of my trip I incurred very little expense over and above the fixed charges. At most places I could find access wi-fi connection like in the hotels that we stayed, most airports, train stations, shopping malls and even in the long distance bus that we were travelled. I could fetch my mails, post entries in facebook, linkedIn and twitter, send messages on whatsapp and speak to people using viber without incurring any extra charges. I am sure telcos would be ruing this revenue loss and may already be revisiting their business models to plug such loss to business.
The future scenario
While describing the current state of convergence and as we speculate what it may mean in the coming years, one can argue that as a result of the horizontal integration of all media (voice, audio, video, animation, data) in a common network and terminal infrastructure, telecommunications and networked-computing applications will no longer be distinguishable.
We are going to see cities with wi-fi connect at public places and chances are that many big cities may sport widespread free wi-fi connects covering a good part of the city. As more people use this facility, tariffs for telephone networks and internet bandwidth may undergo revision to become more realistic. Telecom companies have been charging indecently high rates for international roaming but I am sure this would change soon.
Taking the argument further it is not clear whether we would use our telecom handset for talking to others or we would use a gadget connected to the internet instead. In other words I am not sure if we will be using a phone of a telecom company which also gives access to internet or that we will we use a gadget connected to the internet and do away with the phones altogether.
Vendors form an essential part of our team that strives to excel in our organizations and vendors play a prominent role in the implementation of our IT plans. The vendors include those who supply and install hardware, those who put in our networks, develop software, help implement application systems, consultants, outsourcing vendors, security reviewers, audit partners etc. They work for us and work with us to ensure completion of the tasks that we work on. They do contribute to our success and do so in different measures depending on the role that they have been assigned. It will therefore be in order to acknowledge contributions made by them.
There is no doubt that vendors are bound by the contract and have to perform for the fee that they charge. However the quality of work done by them depends to a large extent on the work environment that we create. When vendors are enthused, they put their heart out and accomplish more than what we would have bargained for.
We are all advised to treat vendors as partners and to work together with them to create new solutions that work for us. Vendors may be many, some who perform critical tasks, some who carry out small and odd jobs and others who perform routine but important operations, but all play a role in our success. They are worthy of being called partners and we should be treated as such. Such an approach goes on to improve relationships and thereby their performance.
It is important to have a formal process to manage vendors so that we get the best out of them. The vendor base should be rationalized and there should be a defined process for vendor evaluation, selection, contract execution and their deployment. Subsequent processes including project management with periodic reviews and mapping results to the agreed deliverables are essential to ensure successful completion of projects.
To keep vendors motivated it is important to acknowledge whatever good work that they do. While we may have punitive measures to make vendors perform, rewarding them for good work is more positive and goes on to ensure their full participation. There are multiple ways to acknowledge them. For example calling some of the critical vendors to a company function gives them a feeling of being a part of the company. Awards, rewards and recognition programs are wonderful ways of acknowledging their work. You could institute an award and choose the best vendor every year, or call over and honor a vendor if he really has been a partner in your progress and has contributed significantly. Some companies treat IT vendors on par with the material and other main suppliers and include them in their vendor conferences.
One other requirement of vendors is that we become their reference clients and speak positively about them to their potential customers. By agreeing to do so we get their appreciation and they stay committed to us. I remember whenever we had become reference points, vendors not only gave us heightened attention, they also charged us lesser so as to ensure out continued support.
Does it work ?
Well, it does. I have heard great stories from others and I have experienced it too. A small recognition goes a long way in keeping the partner enthusiastic and committed to the task. The focus should not be limited to ensuring their performance on the current projects but to keep in mind future relationships. Such vendors come back on their own to help even after they have completed their tasks and are no longer actively engaged. If they have helped us, it is but fair to acknowledge their contribution.