How to keep flexible and agile in the midst of
disruptive business change is the key theme among more than 350
CIOs at HCL's third customer convention in New Delhi this
week.
Delegates said they face growing technological and market
complexity and the need to respond quicker and better, which
increasingly depends on their IT capability.
Tony McCarthy, Deutsche Bank's global head of IT for its
investment banking division, said the bank was facing huge
increases in the volume and value of transactions, with a growing
number of customers. In addition events such as sudden collapses in
the stock markets created peaks of activity that made it very
difficult to plan ahead. The bank
announced a major outsourcing deal today with HCL.
"When the Chinese market lost 8% in a day, the Dow was not
quoted for 16 minutes, and it took weeks to clear up the backlog,"
he said. "Such events add complexity. This is making us re-evaluate
our technology and skills with respect to location, skills and
position in the value chain."
James Anderson, group CIO of UK-based music group EMI, said the
shift to digital meant the music companies no longer control
distribution of content. They also face dealing with millions of
customers who now download songs formerly they dealt with a few
hundred retailers or media outlets.
Anderson said "Artists and customers are now in charge. They say
how and when they will receive the product, and now technology such
as YouTube is blurring the difference between artists and
consumers."
Peter Bender-Samuel, CEO of outsourcing consultancy Everest,
said there is a growing appreciation that a firm's "IT ecosystem"
now critically affects its ability to deliver products and services
to the market.
"(IT) standards are becoming crucial to getting control over
transaction volumes, while you need to provide value through
differentiation," he said.
That appears to be a tricky balance. Randall Carrier, executive
vice-president at FirstHorizon, a financial services firm, said
most present efforts to balance this are still based on "silos" of
knowledge.
Wim Elfrink, chief globalisation officer of network equipment
supplier Cisco, said this was to Cisco's advantage. "Companies have
to move from the command and control model of US business to a more
collaborative, teamworking model," he said.
Elfrink has just moved to Bangalore because, he said "70% of the
world's population lives within a five-hour flight from there. The
old economies are not growing as fast, and the emerging economies
are going to do things differently."
The key change, he said, would be in the relationship between
supplier and customer. This was already apparent in the way Cisco
was sharing risk in systems development projects with firms like
HCL. "You have to bet on co-creation," he said.
Several delegates noted that increasingly complexity of supplier
relationships was encouraging them to pick fewer partners, either
to simplify their choices, or to off-load the technology
burden.
Deutsche Bank's McCarthy said that at one point the bank had
outsourced some 70% of its IT operations, but that had been
unsatisfactory. Now it is around half.
"That feels about right," he said. "Proximity to the market and
its resources are vital when you have to decide how and when a
product hits the tipping points between high value, flow and
volume, and you need different resources at each of those
points."