 "Hardware Consolidation, Software Uniformity: Keys To Cost Cutting")
Vikas Gadre, CIO, Tata Chemicals, in conversation with Biztech2.com, shares his opinion on some current issues like the global recession, the Satyam episode and the buzz surrounding cloud computing.
What should be the CIO’s role during crisis?
Most businesses today are going in for stringent cost cutting. Contraction of demand is affecting almost all industries and has affected Tata Chemicals also. A cost reduction exercise on the IT side would mean re-looking at most initiatives either on the hardware, software or connectivity front without compromising on value creation for both internal and external customers. There should be no compromise in providing service level standards, which have already been established within the enterprise. This poses an extreme challenge for CIOs.
What steps have you taken at Tata Chemicals to sail through this crisis?
This is the right time for CIOs to re-look at their opportunity portfolio and decide on projects, which need to be continued and those which can be completely slashed.
The CIO can help the organisation by initiating process and business innovation, by doing things not only in a cost-effective manner but also bringing in more customer intimacy and value from each transaction.
At Tata Chemicals, we have looked at all our budgets almost like zero base budgets. We have gone in for hardware consolidation so that unutilised hardware can be utilised more effectively. In case of software, one of the key aspects by which cost can be decreased is reduction in variety. What I mean by reduction in variety is that, when people ask for different versions or flavours of the same software, maintenance of such software becomes very expensive. It might make our users slightly unhappy but if I become upfront as a CIO and make them understand how it will impact our profits then people do understand. Uniformity under such circumstances helps to bring down costs.
What kind of impact do you think the Satyam Episode will have on governance frameworks and the CIO role?
Section 49, which governs the CFO-CIO relationship and talks about the responsibility of information, which is printed to the board, has definite implications for CIOs. I feel after the Satyam saga probably the teeth, which section 49 had, will get more edge. Acts like SarbenOxly will also get implemented in India. When such Acts get implemented, the CIO role assumes far more importance because any kind of wrong certification will have serious implications including jail terms.
It will also mean that more of governance, risk and compliance related frameworks will be implemented. In case of Tata Chemicals, we have implemented GRC software for authorisation and control. GRC implementations are like fighting a continuous battle; so it is hardly ever an easy task to complete them.
Information availability and security will assume more significance. The CIO will be responsible for management of information security in terms of hardware, application software, authorisation, user training, compliance and audit. This will add many new dimensions to the CIO’s role. Today, many companies have CISOs or chief information security officers playing this role. However, when SarbenOxly kind of laws will get implemented, it will be the CIO, who will be pulled up if anything goes wrong.
What are your views on cloud computing?
With the current economic downturn, more and more companies will be going in for cost reduction. This will spur the adoption of SaaS and pay-per-use kind of models, which depend on cloud computing. Besides, when major IT vendors are coming up with cloud offerings, the connectivity in India is also tremendously increasing. We already have some 230 million mobile users and this number is increasing every day, 3G is also now spreading in the country. With availability of 3G, chances are that mobile phone users will be able to conduct business transactions using cloud computing. This will bring about a kind of revolution and will give tremendous business benefits to users.
Have you thought of using cloud computing at Tata Chemicals?
We have looked at two or three areas where cloud computing can help the organisation. We are looking forward to use the SaaS model for our customer contact care and the salesmen organisation system. SaaS models have worked well in these areas. The challenge, however, is that the packages available are standardised. If you go in for customisation of these packages to suit your exact requirements, then you are losing the benefit of the SaaS model altogether. The best way would be to modify your requirements to suit what is available and configure it in such a fashion that it meets at least 85 percent of your requirements. Then you will get an actual cost benefit analysis out of it.
Won’t this affect the flexibility of the organisation?
Come to think of it, very often managers take decisions with incomplete information at hand. As per my experience, when people are looking for customisation, it is not the content but the format, which they are really looking to customise. The content in terms of data is always available, what the users normally require is formatting of that content. So as long as the manager is able to get the content in one form or another, his decision making will not be impacted.