Aligning IT with Business Innovation

Harnath Babu, CIO, KPMG India explains how IT can help businesses innovate for the digital era, the enabling technologies, and essential skills required to make a difference. 

Interaction by Anil Chopra

Many businesses have already started realising the advantages of going digital, and there are many who are yet to discover its prowess. However, somewhere everyone understands that without going digital, IT really cannot do anything.  It is critical therefore for organisations to invest in digital technology and innovate so that they are able to reinvent themselves for the digital era. This poses a lot of challenges for IT departments as it means moving beyond traditional IT management and understanding how digital technologies can be used to help the business. To understand what some of these challenges are and the way IT should move forward in the digital era, we interacted with Harnath Babu, CIO, KPMG in India, to get his perspective. Excerpts…

What are some of the challenges that IT is facing today, in an increasingly digital world, and what are the opportunities?

Harnath: In the digital era, you have to start looking at things from a customer demand perspective. Customer demands are increasing because they are experiencing technology and new types of services from many directions/corners. These are setting new expectations and benchmarks for many organisations, who have till now been working in a traditional manner. They are therefore necessarily forced to innovate. It is putting a lot of pressure on businesses, because competition now can come from anywhere and not just from within your own industry, by a bigger player. In fact, it could even come from a small, relatively unknown start-up from a completely different industry. In the digital world therefore, it is no longer about the big fish eating the smaller ones, but rather the faster fish eating the slower fish. This is a paradigm shift that is already happening, so organisations have to evolve.

There is also a vast amount of data being generated. Any service that is reach enabled is generating lots of data and giving deeper insights into what the customer wants. Data is also enabling companies to look at or predict what sort of expectations and demands their customers have. So as a result, we have moved from pure product selling to services selling and now to experience selling. Take the restaurants business for instance. Till now, restaurants primarily focused on the product they offered, e.g. food. So, customers would either go to a restaurant, or order their food online or over the phone for home delivery. Today, aggregators have come in and by using the same data that you generated online, they are able to target what your preferences are in terms of food, what time will you eat what food, and as a result are able to offer you more customised services on-demand. In fact, you do not have to make or receive calls because it is all app driven.

What this means is that new business models are coming up. Just like restaurants, you will find similar examples everywhere, be it hotels, transport, healthcare, etc.  Everybody is trying to come up with data driven innovations.

The challenge for IT therefore is to be able to help their business innovate with the help of digital technology.

There are so many innovations happening everywhere across industries. How do you align IT with these kinds of innovations? What should they look at helping their business understand, because it’s not possible to look at everything and follow everything?

There are multiple aspects to any business, and when it comes to key stakeholders in a business, they will look at two-three things. One is am I spending on the right thing, and am I getting the return on investment? Two, am I building an organisation for the future? A CIO or any IT leader must answer the same question what the business folks think. So if you walk up to a business person and try to convince that person to spend on technology without showing the business case, it will not sell. However, if you start by talking about business and take technology as a residual or support mechanism, it can work.

That’s easier said than done, because IT folks are largely coming from a tech background, while the business folks have a completely different experience. How can they possibly talk the same language?

The fact is very simple. If you have to survive, you need to learn. There is no other option. Moreover, a CIO has to be versatile and acquire the ability to talk to different types of business heads in their own language. A marketing person for instance, will only talk about marketing, while a sales person would only talk sales, and the Operations person would only talk Operations. A CIO however, would need to be able to talk all languages. You need not be a subject matter expert in each area, but when you are having that conversation, you have to be able to understand what they want. Two, you must have empathy for what they want, else you will not be putting yourself in the shoes of that person. As a result, you will never be able to appreciate the value you need to give to that business with your solutions.

Third, in the course of doing all this, you need to learn and pick-up. Fourth is picking up a business problem and applying the right technology so that you are able to achieve the eventual outcome that any business is expecting—quicker RoI, higher revenues, and lower costs.

If CIOs need to learn and understand the business language, what would be the value of having specific tech skills? Would those diminish or evolve over time? How will it change?

It will always evolve. Take a doctor for instance, who could have all the knowledge in the world about a variety of things, but unless he has his own technical skills, he would not be able to treat patients. Similarly, if CIOs do not know or have less knowledge of technology, then they cannot really solve others problems. So the point is that while you should be able to understand the business problem that needs to be solved, you also need to have the right tools to solve it. This could be your qualification, an understanding of technology, experience, etc. At the end of the day, unless you have the right tools, you cannot really go and provide the right solutions to your customers.

As a CIO who constantly evaluates tech for business needs, which are the 4-5 key technologies that are really going to disrupt the entire eco-system in the near future?

It will not be a single technology that would create a difference, but a combination of them required to solve a business problem. So while AI with ML could solve one problem, AI combined with ML and analytics can create another level of difference. Similarly, AI, ML, Analytics, and Big Data is likely to create yet another outcome.

What you will continue to see is that as businesses are getting more complex, people will try to find solutions to every problem. Today, blockchain is a very strong technology that is rising, but we do not have many use cases for it. AI on the other hand is solving a lot of issues and it has a use case for all major sectors.

The most important thing to note here is that all this can only happen if  relevant data is being generated. AI, or any other technology for that matter, can work if you have the right data and the right mode of capturing it.

To summarise, AI, ML, and Big Data are key technologies that can be driving disruption across sectors provided there is relevant data available. Look at search engines. You look for info and it fetches it for you, but besides that it also captures what is going on in your mind and about yourself, like your behaviour, where you stay, political conditions in that place, etc.

It all may boil down to a scenario where your search engine will tell you which car you should buy based on what it knows about you.

The point is that as data gets democratised, new use cases will keep emerging, so it is up to your business and IT to understand how to leverage it.