The group CIO of UNO Minda group, Parna Ghosh, tell us how IT has transformed in the digital era, the new challenges it now faces, and the transformational technologies to watch out for.
Interview by Anil Chopra
A few years ago, the SMAC (Social, Mobile, Analytics, Cloud) stack was known as a bunch of emerging technologies. Today, it has become mainstream and every organization has deployed it in one form or the other. The stack has played a key role in carving the path for today’s fast-moving digital era. It has also resulted in many more new technologies to emerge, like Hybrid IT, Hyper-converged Infrastructure, consumption-based IT, Big Data, AI and ML, Blockchain, IoT, just to name a few. Pretty soon, some of these technologies will also become mainstream, completely transforming IT as we’ve known it.
Organizations must therefore seriously evaluate these new technologies in order to remain competitive. They have to understand the impact of these changes and the challenges they will bring. We spoke to Parna Ghosh, Group CIO, UNO Minda Group to understand this mega transition in IT as we’ve always known it, what sort of challenges will it bring, and which other technologies can we expect to make it big in the near future.
Q. How has traditional IT transformed from what it used to be into what it is today?
Parna: Earlier, IT was mostly a support provider. Then it became a business enabler. Today, it has become a business driver. To illustrate this with an example, every two/four-wheeler OEM today has 3-4 revenue channels—sell insurance, sell the vehicle itself, service, and vehicle warranty. Can IT become a 5th revenue channel and generate revenue for the business? For instance, in my previous organization, we developed a mobile app to track/capture orders of tractors and construction equipment. This helped the business in many ways. For one, it helped attract new customers. Second, it helped speed up the flow of information, and third and most important, my conversion ratio increased from 1 is to 8 to 1 is to 4. So earlier, if 1 in 8 customers was getting converted, with the app, this increased to 1 in 4 customers all because everyone in the business, be it call center, service, sales, or dealers, everyone was getting the leads, which led to faster conversion. This is how IT has transformed, where business expects a lot of things to be driven by technology. If IT can take the lead, then it can deliver a lot of business efficiency, better bottomlines or even toplines.
Q. What are the challenges in enabling IT to create a new revenue channel, as IT has mostly been supporting the business till now, and may not be geared up for it?
Parna: My board asks me to show the key business benefits from IT, like faster payback and returns. In fact, our company’s investors also look at it just as they see other key business parameters like PBT (profit before tax), market share, etc. They’re interested in knowing how much head count could either be reduced or kept the same for a particular investment. As a result, it forces IT to bring more efficiency in business. Each and every IT spend is currently linked with my business goals. We have an IT strategy 2025, which has 17-18 components that will be done over a period of time. All components of the strategy, like CRM, PLM, IoT, Bots, Analytics, Hadoop, etc. are tangible and provides details on how much head count to reduce/retain to deliver better revenue. That’s the kind of efficiency being asked for. IT is no longer a cost-center where a budget is allotted and you’re free to spend as required. It’s changing. Every company is changing whether it’s an MNC or even a public enterprise. For instance, many companies that are on the Fortune 500 list today were not there ten years ago, besides a few exceptions.
Today, all IT companies in India, like TCS or Infosys, are trying to map their business with OEMs and trying to collaborate with the business. That’s because companies like GAFA (Google, Amazon, Facebook, Apple), are going to become car makers. This is a big change and every company has to collaborate with others in a big way. Somebody has to broker this, and IT has a key role to play in enabling the eco-system. So the roles are changing and expectations from IT are very high.
Skill development is also very important, where IT has to wear multiple hats of a CMO, CFO, and even CEO. At the same time, the first/second/third line of IT team must gear up to a level of specialists, like data scientist, analytics, etc. so that you have internal skills to deliver the desired services.
Q. What sort of technologies do you see playing a key role in this entire transformation?
Parna: SMAC will stay, but on top of that IoT and RPA (Robotic Process Automation) will be game changers. It won’t only help rationalize manpower and improve the efficiency, but also bring new revenue channels for the organization. e.g. today my invoice making process from order to invoice takes say 10 minutes. If it happens on a flight on a mobile, I can put RPA on a mobile, and from there, you can deliver services to the customer on the spot. There are lots of use cases which we haven’t even explored. Similarly, AI/ML will be a big disruptor.
I believe digital is going to really change organizations as they’re working now. In 3D printing for instance, do you really need a designer to design, when the machine can design for you in lesser time? Though the CapEx for this new technology is high, but if you have to deliver 50 different products to 10 customers on the same day for instance, it’s possible. It would not be possible in today’s world without it because you could have to hire engineers, train them, bring in the relevant skill sets, etc.
In a country like India where employment is already a challenge, balancing employment with technology is going to be a conflicting strategy. HR will therefore have to be a challenge to manage.
Disruption therefore, is not only changing the business, but it’s also changing the way we’re working. We started with automation, and then went to digitization. Now we’re moving to digitalization. The last two have been a big leap. There was very low adoption of cloud about 10 years ago. 5 years ago, it began picking up, but pace was still slow. Today, everybody talks about it. The leap was very fast.
We can expect the same leap to happen in digital in the next couple of years to come.