Lessons on digital transformation for CIO from inherited companies

Technological transformation is almost never at the heart of most traditional or legacy organizations, but rather one of the many considerations faced by business leaders who want to modernize. In the absence of its inclusion in the overall strategic intent of the business, IT can simply become a back office or an isolated department that is expected to simply maintain the lights.

Excluding the strategy makes the CIO’s job much more difficult. We spoke with leading Indian CIOs from traditional companies to get an idea of ​​the challenges they have faced and the strategies they are implementing to overcome them.

IT is not seen as transformative

Tata Motors (formerly Tata Engineering and Locomotive Company) was founded in 1945, long before the Digital Revolution. Such traditional companies are witnessing a wave of growth without necessarily taking advantage of technology. Therefore, senior management often assumes that what has been successful in the past will continue to pay off in the future.

“Expecting growth in the absence of IT is part of management’s belief system,” said Jagdish Belwal, who served as CIO of Tata Motors from 2009 to 2017.

Much of their time is spent on aggressive marketing, building channels, etc. The IT department is not seen as transformative and therefore not given importance. “

With low levels of trust in internal IT, Tata Motors tends to rely heavily on outsourcing. The applications were handed over to one partner and the infrastructure to another, while the CIO was expected to simply sign the accounts of the technology partners.

Belwal decided to change the image of the company’s resident IT department by demonstrating its transformational capabilities.

Each of the company’s seven production facilities had thousands of precision tools such as calipers, torque wrenches and mechanical devices. After using the tools for a certain period, they had to be sent to a calibration agency for certification, whose logistics were huge.

“There was no solution in ERP to address this challenge. Initially, we devised a system based on MS Excel to start the entire calibration process in a specific enterprise. It was later turned into a web-based solution that could be used anywhere. This not only improved compliance, but also increased productivity by 30%, ”says Belval.

“With the destructive power of technology now visible, management has begun to see IT in a new light. The IT department has moved from the back office to the front and downtown. “

Narrow places of technological complexity, limited skills

Kapil Mahajan joined Safexpress, a logistics company born in the pre-digital era of the 1990s as a CIO at a time when it lacked CRM, mobile applications or even a customer portal.

“On the one hand, there were no avant-garde solutions implemented, and on the other hand, there were n the number of the software that is running n number of hardware, which leads to technological expansion and complexity. There was no differentiated architecture and the IT team was qualified in a specific technology stack that included Java, .NET applications and local Oracle EBS, ”says Mahajan.

While management understood the importance of technology in business, the challenge for Mahajan came from a departmental culture that lacked self-confidence.

“Not only was the technology outdated, but the IT team was insecure and doubted it would change,” he said.

Mahajan tackled this challenge by retaining and retraining staff.

“As a CIO, I made them feel safe by defending their jobs and dispelling fears that technology would replace them. Their skills were improved and they were involved in co-creating newer versions of applications, not just managing older ones. It gave them a sense of ownership, encouraging them to do even better, ”he said.

Mahajan continued to modernize technological architecture. “From the lack of any cloud applications to becoming cloud-based over the next four to five years, Safexpress has come a long way. Today, our ERP is on microservices and Kubernetes, we have a CI-CD as part of our overall development, and we use Force.com to build custom use cases, ”he says.

“Gaining the trust of all stakeholders and taking everyone on the path to digital has played a crucial role. The results of these efforts were clearly visible. Over the next five years, the company achieved its goal of expanding its geographical coverage to 30,000 pin codes in its own infrastructure.

There is a gap between business and IT

Modern and / or born digital companies are adopting the CI-CD model to ensure continuous development. This is not the case with legacy companies, which often approach project-to-project IT with a commitment that is entirely project-oriented.

Technology leaders believe that a regular communication channel can bridge this gap between business and technology. To ensure continued engagement with business leaders, some companies have set up a special transformation office.

Atul Govil of India Glycols, a chemical company founded in 1983, is one such IT leader with the role of Chief Transformation Officer and Technology Manager.

“The role of Transformation Officer is designed to create value with business leaders and inform them about the potential of new age technologies through regular engagements,” says Goville.

However, business engagement is not just about technology. “Under the umbrella of transformation, technology is just one lever, not the only lever,” he said. “If we keep talking about technology, business will not be interested. To get the attention of business executives, the key is to identify an opportunity for a business case. Next is the use of IT to build the case. ”

Adopting this strategy, Govil has successfully implemented several technological solutions to streamline business functions such as manufacturing and logistics.

It may seem daunting for a CIO to join a legacy company, but that shouldn’t stop him from taking on the challenge, according to Arvin Sivaramakrishnan, CIO at Apollo Hospital.

“Heritage is not a bad word. In the field of healthcare, I would like to be known for my pedigree, ”says Sivaramakrishnan.

“A 40-year-old hospital would certainly have an advantage over a six-month hospital. It is important for the CIO to first understand the structure, costs, and goals of the organization. When embarking on a digital transformation, the CIO should not accelerate from zero to 100. CIOs need to find a mutually acceptable stop with business stakeholders. ”

Speaking to the CIO, Mahajan said that “bringing about a digital transformation in an inherited company can be huge.”

“If you have to embark on a transformation, let it come from the leadership, not from you. Find out where the company is right now and where it wants to go. The ideal approach would then be to figure out the closest step to it, using a technology stack that complements it. “