CXO Speak On The relevance of IT for their business

Deepak Satwalekar



CEO and MD, HDFC Standard Life Insurance

The challenging business environment will force life insurance companies

to rethink the fundamentals of their business

The Indian Insurance sector has come a full circle. It started as an open

market, became nationalized, and it's back to being liberal again. Things today

however are different. More players are vying for market share, there's much

more competition, and lots of other issues. Deepak tells us about the issues

that plague the Indian insurance sector, and how his company has been using IT

to surge forward.

Q HDFC Standard Life recorded an impressive 63% YoY growth in the previous

financial year. How much of that success can be attributed to the usage of IT?



IT is integral to our business. It is not a separate stand alone function.

The use of appropriate technology has helped drive sales processes, new business

processing, claims administration, and almost every function within the

organization.

This growth has been enabled by collaboration of the employees, Internet

based self servicing for our Financial Consultant community, and our retail and

group (company) customers.

IT has been used laterally to increase productivity, and to execute customer

servicing processes in a cost effective manner.

Q What's the relevance of IT for HDFC Standard Life Insurance's business?



IT is all pervasive in our organization. We have refocused IT around the

business drivers. The application of critical technology has been crucial in

developing successful business partnerships, implementing effective outsourcing

arrangements and having the ability to create, analyze, handle and distribute

huge amounts of data across geographies to create value for all stakeholders.





IT has enabled us to create a centralized virtual organization where time and
distance are irrelevant.

Digitized workflow solutions have enhanced the quality of policy

administrations as well as improved customer servicing.

The absence of paper moving around has resulted in enhanced customer data

confidentiality - something which is critical to our business.

We are further dependent on IT to ensure integrity of our policy

administration systems and thereby the inputs for Insurance valuation.

We have initiated a COBIT (Control Objectives for Information and related

Technology - www.cobit.org) process for Change Management and are working

towards its certification.

Our objective is to leverage technology to enhance the productivity of a

mobile work force, achieve growth with sustained performance by building strong

processes, and create a service differentiator in a converged financial services

market.

QWhat are some of the key issues that plague the Indian insurance sector?



There are a few issues that face the insurance industry that I would like to

highlight.

The first is regulatory convergence. In an increasingly fast converging

financial sector, we need to remove sectoral regulatory walls and pockets of

arbitrary decision making, in favor of a cross sectoral regulatory framework

spanning across narrow boundaries of individual regulatory agencies.

Second would be the issue of risk management. A more volatile business

environment, increasingly stringent regulatory requirements, complex products

and restrictions on hedging instruments, will require insurers to significantly

upgrade their enterprise wide risk management capabilities.

The third issue relates to the absence of proper performance measurement

metrics leading to distortions in product features and sales practices.

The fourth issue would be something which corporate India is facing - the

shortage of skilled and trained human resources. This could be the one

overriding factor that could stunt the growth of the industry or expose it to

significant unplanned risks.

And finally, the challenging business environment will force life insurance

companies to rethink the fundamentals of their business.

They will need to concentrate on the core fundamentals - focus on and

successfully meet customers' needs, make optimal use of technology to improve

product offerings and level of service and abide by a philosophy that shirks

short cuts and unethical practices.

Prabir Sengupta, ITC WillsLifestyle

Prabir Sengupta



Vice President, Finance & IT, ITC WillsLifestyle

QRetail is fast emerging as a strong vertical in IT usage. What is the

relevance of IT for this segment?



Information Technology is absolutely mission critical for the retail

industry, especially 'speciality apparel retail', the business we are in. At one

level, it is like a basic operating machine for certain key processes, such as

retail billing & customer engagement, and distribution centre operations, where,

without IT enablement, given our volumes and complexity, such operations are

just not possible. Additionally, IT enables us to plan, monitor, and

course-correct our business-and in that sense, our IT platforms and processes

are like the 'eyes & ears' of the business.

Prabir Sengupta Vice President, Finance & IT, ITC WillsLifestyle

QA slew of challenges at the retail sector, how does IT combat these?



Challenges are many and huge, but if I were to pick some, they would be--A

very distributed and customer facing footprint; A very large number of new SKUs

that have to be dealt with every season; Seasons and their overlaps; and finally

multiple processes and people.

Our IT systems and processes address all these challenges and help create

visibility-a common scoreboard and dashboard for everyone within the

business-resulting in superior internal efficiencies and higher order customer

satisfaction.

QHow does IT help ensure the strength of your sector? What are your future

strategies?



We began our IT enablement journey, about four years ago and today, we

believe, we have built capabilities that are amongst the finest in this

industry. The RFID initiative is a small, but important cog in our overall IT

capability building process, the core, of which, we have, more or less,

completed. However, in our endeavour to continuously improve, some of the

projects and add-ons that are on the boil at the moment, are further

enhancements in the retail, distribution and the CRM areas.

Dheeraj Sinha, Apollo Tyres

Dheeraj Sinha



Head-Corporate Management Services, Apollo tyres

Dheeraj Sinha Head-Corporate Management Services, Apollo tyres

QManufacturing is fast emerging as a strong vertical in IT usage. What is

the relevance of IT for this segment?



The competitive battles of the future will be won and lost in the supply,

manufacturing and distribution networks, not in the front office, by companies

that are highly adaptive and relentlessly efficient-all in real time. IT has a

huge bearing on the existence of any organization, more so in the manufacturing

world. The ability of the organization of the future would be to adapt to the

challenges of manufacturing like Shorter New Product Development and Launch,

more product variants, Increasing Regulatory Compliance, Cost Reduction,

Increasing Demand Forecast Error, Demand driven Dynamic Supply Networks. All

this would only be possible with real time integration of Information technology

with the businesses to harness the capability of these processes. Information

technology is and will continue to be the critical success factor in the

transformation of these processes to beat the best in the world.

Q A slew of challenges at the manufacturing sector, how does IT combat

these?



The ability of having the shop floor intelligence, integrated PLCs linked to

business processes to adapt to changing business needs, exceptions based

reporting, efficiency of supply chain to take optimized decision making, moving

to a supply chain that works on consumption rather than the forecast will be

critical to the organization. In today's competitive world, the ability of tight

integration with marketing and sales function and flow of relevant information,

trends and patterns, integrated product life cycle management, and the supply

networks will differentiate the 'best runner' companies from the 'also ran.' And

IT has a key role to play in the transformation of all these processes.

RD Grover,CMS Computers

RD Grover,



MD, CMS Computers

Looking at the overall IT cost and after the cost of hardware it is now

choosing the application and doing a very good project management, to get

maximum advantage of the systems

Q Over the past few years, have you witnessed any major change in the way

IT projects are being deployed by Indian organizations?



Looking from a larger perspective, to make IT as an enabler of business, the

major trend which is going on presently is the deployment of end-to-end

solutions. They could be either in-house end-to-end solution from vendors or

outsourced services. By end-to-end solution what I mean is that customer does

not want to put any effort in terms of integration of systems alongwith the

system software and application etc. They would want the implementation partner

to look at right from the selection of the application to the hardware and

software, which would integrate in. Also, there are a lot of outsourcing trends.

IT companies prefer to outsource segmented part of their activity, while non-IT

companies prefer to outsource most of it.

RD Grover, MD, CMS Computers

Q You would have been involved in many complex IT implementations. Based

on your experience, tell us that single most important ingredient required for a

successful IT project deployment.



In today's scenario, manpower is a big challenge. The most important

ingredient would be getting dedicated a project manager who could implement the

project in a time-bound manner.

QAny advice that you would like to give CIOs on IT project management.



Once an IT project starts and a charter is made, it should be looked at

every stage to know as what are deliverables and work accordingly. That would

ensure success in a long way.

Q What is happening on IT implementation front across different

industries. What kind of implementations are in demand these days.



IT has become an enabler for businesses across verticals now. The finance

and Insurance industry is doing a lot in IT. Even manufacturing is trying to

become very competitive and agile in terms and products. The other area, which

is gaining lot of momentum, is the government sector. Departments in the

government have started to automate a lot of their activities.

Q Could you give some tips on how CIOs can save cost and get the best ROI

out of their IT implementation?



Looking at the overall IT cost and after the cost of hardware it is now

choosing the application and doing a very good project management, to get

maximum advantage of the systems. At the sametime, continuing with older system

takes much more integration and operational hazards. Newer systems can help them

possibly become more and more online. Also, web technologies can help them get

better ROI. So, having end-to-end approach of IT and integrating it with

operational management of the company is necessary.

William W. Blausey Jr.,Eaton Corporation

William W. Blausey Jr.



VP and CIO of Eaton Corporation, a global $12.4 billion diversified

industrial manufacturer

We take our ERP into the shop floor and leverage the way we manage our

supply chain, and how we operate across the board in the shop

Q Manufacturing is one of the oldest industries today. In fact, whenever

anybody wants to give an example of IT usage, the manufacturing industry is

always taken as reference. Where has it reached today as far as IT goes?



As an organization we've come a long way in manufacturing. Our basic

financial systems and fundamental systems are already in place. The job that

remains now is to leverage existing systems to improve cycle times and delivery

performance, and use systems to take cost out of our system. We've come a long

way with our supply chain capabilities, wherein we're well connected with our

channel partners and distributed through web-based technologies, and we've

extended many of our ERP apps to partners and suppliers. We already have strong

supply chain systems in pockets in Europe and North America. We now want to take

those capabilities and extend them to other parts of the world.

Q ERP is an extension of MRP. So when we look at IT in manufacturing, is

it about taking ERP to the next level or is there anything new emerging? Eg.

integrating IT with manufacturing equipment, tools, etc, and pull out data for

analysis, etc.



Probably the way to think about it is to extend IT as much into the shop

floor as possible. For instance, we take our ERP into the shop floor and

leverage the way we manage our supply chain, and how we operate across the board

in the shop. We tie it into equipment and pull out quality information. We have

manufacturing execution systems, from which we can mine information for defects.

That's an opportunity to bring the two pieces together.

William W. Blausey Jr. VP and CIO of Eaton Corporation, a global $12.4 billion diversified industrial manufacturer

QSOA is a hot buzzword, with vendors aggressively pushing its architecture

and how it can benefit your business. Yet, even after many years, you don't

really hear too many success stories. What are your comments? Is it really on

your cards?



SOA is interesting and something we've dabbled in, but it's not something that
we've deployed at this point. It's only in limited development efforts and we

are trying to leverage its capabilities and learn from it than anything else.

The jury is still out there on whether SOA will deliver on its promise. There

are a lot of pilots that demonstrate benefits and really achieve quick

turnarounds, and bring together components, but the jury is still out.

We focus on the processes and functionality we're delivering as opposed to

the architecture underneath and how we deliver it. So whether it's green

capabilities that we drive in the plant, or how we connect to a customer on

order management, the tools for doing so are of interest for information

technology experts. Whether such capabilities are built with SOA or something

else, the customer or plant manager doesn't care. As long as we're achieving

capabilities with regards to building apps, integrating apps, delivering

functionalities, it doesn't matter to them. So while SOA might be a viable

opportunity, I'm not entirely sold on it yet.

Q Manufacturing is one segment that has the maximum competition. From an

IT standpoint, how do you remain competitive?



First of all, we're really trying to leverage technologies to create value

in the organization. Streamlining processes, improving our business processes,

taking out waste, that still is one of the objectives. In our plants, reducing

working capital, really driving improvements with those manufacturing systems is

one of the ways we take out cost and be cost competitive. The other piece of the

equation is to improve processes related to customers, interact with them, and

deliver capabilities on the front end of the business. We have some 50000

external consumers of our apps that sit out on our extranets, and are business

to business oriented. Many of those apps link customers as tightly as possible.

We have systems that allow us to link our planning and supply chain information

with either suppliers or customers, making it beneficial for those organizations

to work with us and finally take cost out as much as possible.

So it's really focused in two spots-improving our own operations and the

supply chain linkage into the customers and suppliers, and tightening that link.

We've recently started deploying more CRM-related apps that take time out of our

sales force and allow us to get a better picture of our customer base across the

diverse business we have at Eaton. The electrical business just deployed a

pretty sizable 1000 person field service deployment that allows them to manage

warranty and field service tickets to stream line internal processes and become

more responsive.

Ashish Chauhan, Reliance Industries

Ashish Chauhan



CIO, Reliance Industries

Effective use of IT Project Management system ensures that we remain

delivery oriented, effective and accountable in all the areas we work in.

How do you use IT to manage a 40,000 strong employee base? We talk to the CIO

Reliance Industries to find out how he's using IT in sync with the company's

overall strategy.

Q You obviously need a large IT team to manage such a large employee base

in Reliance. How do you keep your team encouraged and motivated through

intermittent phases of highs and lows?



Reliance has a very entrepreneurial culture. Each employee at every level is

encouraged to take ownership. The motivation therefore flows from the way the

organization works overall. IT being a very important component of the

organization that provides service to each and every aspect of the organization,

the overall motivation levels remains very high.

Q How has IT helped in streamlining the processes of Reliance and its

40,000 employees?



IT provides a 'Common Glue' to the entire organization and provides

consistency of experience to all employees and other stake holders. The common

IT enabled processes from marketing and sales to production, from logistics to

commercial, across Reliance group ensure that the organization provides

consistent services and experiences to its internal and external clientele.



The benefits in terms of scale it offers to the organization are immense and can
be fully appreciated only when one works in such a large organization spanning

across several business, several sites, several continents and several thousand

employees.

Ashish Chauhan CIO, Reliance Industries

Like any other large organization we too depend heavily on technology to

carry out our day to day operations. IT in that sense has to be completely

aligned with business and the entire focus of our team is to provide business

centric, state-of-the-art solutions.

SAP has helped bind the entire organization seamlessly in almost all

functional areas. Today we are the largest SAP installation in India. We have a

strong team in each area of technology to support the business needs. As a

culture, we continuously strive for improvement and work towards global

benchmarks in all the areas in which we work. Effective use of IT Project

Management system ensures that we remain delivery oriented, effective and

accountable in all the areas we work in.

At IT, we feel proud to be working for such an organization which is known

for its scale, speed, accuracy and flexibility. We feel proud to be able to

contribute in our own small way, as a team, in this great movement called

Reliance.

QWhat is the current growth strategy for the company and how much of IT is

involved in it?



Reliance motto is 'Growth is Life'.From its establishment 30 years ago till

date when it has become a US $ 35 billion - Fortune Global 100 sales behemoth,

Reliance has thrived on use of new technology. IT acts as one of the important

pieces in the overall growth strategy of the company. IT team is involved from

strategy to planning to execution to roll out to operations, maintenance, change

management etc. In essence IT is an integral part of the growth strategy of the

company.

Today, Reliance is considered amongst the pioneers in innovative and most

effective users of IT in the world in each areas of business it operates in

largely thanks to the involvement of the leadership team in a hands on manner.

Q Moving towards 'Green IT' makes sense both economically and

environmentally. What advice would you like to give to others in this respect

and what is RIL doing in this respect?



'Green IT' at Reliance is a 'Way of Life'. The philosophy has to touch each

aspect of IT - from planning to execution and operations. Good thing about

'Green IT' in today's context is that it is not only morally correct. It is also

becoming economically efficient to follow.

Like any visionary corporation across the world, Reliance is taking a

leadership role in using 'Green IT' across all its manufacturing locations,

offices and other establishments.