Digital Transformation lessons for CIOs from legacy companies
Technology transformation is almost never centerpiece for most traditional or legacy organizations, but rather one of many considerations facing business leaders looking to modernize. In the absence of its inclusion in a business’s overall strategic intent, IT can become merely a back office or secluded department expected to simply keep the lights on.
Being left out of the strategy-setting makes the work of a CIO much harder. We spoke to top Indian CIOs from traditional enterprises to get insights into the challenges they have confronted and the strategies they employed to overcome them.
Tata Motors (formerly Tata Engineering and Locomotive Company) was founded in 1945, long before the digital revolution began. Such traditional companies have witnessed a growth wave without necessarily riding on technology. Top management, therefore, has often assumed that what brought success in the past would continue to deliver in the future.
“To expect growth in the absence of IT becomes a part of the leadership’s belief system,” says Jagdish Belwal, who served as the CIO of Tata Motors from 2009 until 2017.
“A major chunk of their time is spent on aggressive marketing, channel building, etc. The IT department is not viewed as transformational and, therefore, not accorded importance.”
With low levels of confidence in internal IT, Tata Motors tended to lean heavily on outsourcing. Applications were farmed out to one partner and infrastructure to another, while the CIO was expected to simply sign the bills of technology partners.
Belwal decided to change the image of the company’s resident IT department by showcasing its transformational capabilities.
Each of the company’s seven manufacturing facilities had thousands of precision tools such as vernier calipers, torque wrenches and mechanical gauges. After using the tools for a certain period, they had to be sent to a calibration agency for certification, the logistics of which were massive.
“There was no solution in the ERP to handle this challenge. We initially came up with an MS Excel-based system to run the entire process of calibration in a particular plant. It was later converted into a web-based solution to be used across all locations. Not only did this improve compliance but it also enhanced productivity by 30%,” Belwal says.
“With the disruptive power of technology now visible, the management began to see IT in a new light. The IT department moved from the back office to front and center.”
Kapil Mahajan joined Safexpress, a logistics company born in the pre-digital era of the ‘90s, as the CIO at a time when it didn’t have a CRM, mobile apps, or even a customer portal.
“On the one hand there were no cutting-edge solutions deployed, while on the other hand there were n numbers of software running on n numbers of hardware, leading to tech sprawl and complexity. There was no differentiated architecture and the IT team was skilled on a specific tech stack that comprised Java, .NET applications and an on-prem Oracle EBS,” Mahajan says.
While the leadership understood the importance of technology in business, the challenge for Mahajan came from a departmental culture that was lacking in self-confidence.
“Not only was the technology dated, the IT team was also insecure and self-doubting to change it,” he says.
Mahajan addressed this challenge by retaining the employees and reskilling them.
