When a CIO graduates to become a group CIO, a new set of challenges await him. As compared to a CIO, who is responsible for only one company, a group CIO has the mammoth task of monitoring the entire group of companies, which divulge in a lot of sectors. In short, a group CIO has to manage stakeholders, prioritize their needs, and fulfill their expectations.
Steering the IT direction for the group
Evaluating the information technology (IT) requirements is a tough and colossal task for a group CIO. For instance, TG Dhandapani, group CIO at TVS Motor Company and Sundaram Clayton group had to be clear on assessing the right technology as the two companies had different priorities and needs. While TVS Motor Company is into the automobile sector and lays stress on launching new products and maintaining a great customer relationship management (CRM) system, Sundaram Clayton, which is into manufacturing, emphasizes on manufacturing execution, optimization, and cost reduction.
A group CIO is responsible for managing such priorities, while also pleasing the chief executive officer (CEO). For this, a group CIO should first understand business requirements and align IT initiatives in line with business urgencies. Also, standardizing and documenting IT policies and procedures help.
One of the biggest advantages for a group CIO is that he can standardize the best practices across the group. Dhandapani agrees, “Horizontal deployment of successful projects (with or without minor tuning for local needs) helps in faster implementation and yields rapid benefits.”
Interestingly, different groups of companies have different working styles. For instance, Mahindra and Mahindra (M&M) follows a pyramid way of working. The top level comprises activities at the group level. The second level is transactional and includes infrastructure and common processes, irrespective of the group’s businesses. M&M has four processes across the group – human resources (HR), health, purchasing, and IT. The processes receive support from different units, including IT. The last level is industry specific, wherein a particular industry’s CIO takes over the lead role and the group IT acts as support.
V S Parthasarathy, group CIO and EVP Finance - M&A at M&M, says, “While the enterprise resource planning (ERP) may be common across all industries, the CRM tool used by the auto industry and the one used by Mahindra Holidays will be very different.”
Similarly, Shoppers Stop has individual CIOs and IT heads depending on the size and complexity of each business.“At the group level, consolidation, moderation and alignment are part of my deliverables. Technology verticals are centralized and run as a shared service in partnership with external vendors,” says Arun Gupta, customer care associate and group CTO at Shoppers Stop.
Conceiving and monitoring the IT budget
Another important challenge faced by a group CIO is supervising the IT budget. The general practice followed by companies is preparing a cumulative budget for the entire group and splitting it based on the necessities of the different sectors. For instance, at M&M, the group CIO, his office and the entire set of CIOs and chief financial officers (CFOs) prepare a single IT budget and present it to the investment clearing committee. On the other hand, at Shoppers Stop, the IT budget is divided into three parts:
a) Operational expenses: In this, individual companies (business units) are charged on directly attributable expenses and the remaining budget is allocated based on agreements with respective CIOs and CFOs.
b) Expenses for new projects: New projects are allocated budgets by respective business units and roll up into the overall IT budget. This includes capital investments for equipment as well as periodic refreshes based on the accepted cycle.
c) Corporate project expenses: These include systems common to all business units, including large scale systems deployment like ERP, CRM, as well as data center and networking.
Managing the IT team
Handling different CIOs, IT heads and IT managers is another major task before a group CIO. Frequent meetings, discussions, debates and moderation of expectations ensure that all are engaged and aware of the overall direction. Team management plays an important role as any unrest in the team could result in attrition or directions that may not be aligned with the company’s strategy. “Considering differing skills and aspirations, each person requires individual attention. Situational leadership traits help in managing this challenge,” adds Gupta.
For a group CIO, managing different IT managers is more challenging than managing different CEOs. Just like M&M, a popular way is to create a center of excellence according to the strengths of respective IT managers and make them interdependent.
“A structured journey cycle to all units of the group, conducting group level sharing of best practices and achievements, and communicating plans and developments across all levels of IT would help. Also, periodical job rotation is important,” concludes Dhandapani.