PwC’s Vikas Agarwal on how IT needs to be more aligned with business strategies in 2008.
CIO: What role can IT play in securing the future of the organization, in terms of business? IT’s value proposition is so firmly established and so well demonstrated that it can safely be said that business, today, can not survive without it. IT services, built with a clear vision of business outcomes and aligned with business requirements, act as enablers. They help in gaining the competitive advantage and contribute tremendously to growth opportunities.
Vikas Agarwal:
IT has redefined the speed to market and can be an effective tool to improve efficiency and productivity. It has redefined the way businesses are conducted by enabling offshoring, real time monitoring of business performance and also, by adding new avenues and levels of customer services.
You talked about the importance of IT infrastructure as beyond just technology. Could you elaborate?It comprises of whatever it takes to deliver ‘business focused’ IT services. Typically, out of the total IT spend of an organization, infrastructure would account for 40 to 50 percent.
IT Infrastructure comprises of technology and non-technology components. Technology includes the hardware, the software, third party services, networking infrastructure and the accommodation for all this. But equally critical are people, processes and documentation. People would include the roles, the skills required and organizational structure. Process includes the standards and guidelines that define the lifecycle of infrastructure.
Do you think the way forward will be with tried and tested technologies or emerging technologies?While business may demand deployment of new technologies, the ‘new’ here may not mean ’emerging’ at many instances. On one end of the spectrum are organizations, who traditionally, are early and aggressive adopters of technology, the other end is occupied by those which adopt technology only when compelled by market forces.
A mixed approach, with a judicious tilt towards tested and proven technologies would be a good idea.
How important is simplification of IT in streamlining the organization for the future?Complexity in deployment of technology has become an impediment both for business and for IT. From business perspective, complexity may slow down or hold up business flexibility and transformation which in turn may affect efficiency and profitability. From the technology perspective, complexities make IT management a cumbersome job and reduce efficacy.
IT has grown from a back office function to a business enabler and a critical business tool. But somewhere during this transformation, many organizations have got their hands tied backwards in a mesh of multiple layers of architectures and a plethora of interfaces.
Do you think outsourcing could be one of the ways to cut costs?IT Outsourcing is catching up. But to look at it merely from a cost savings angle would be akin to missing the bigger picture. And unless very well designed and appropriately implemented, outsourcing may not live up to the promise of business benefits including ‘cost savings.’
The key points to be considered are what, why, how much and from where to whom. It would be advisable to take into account all the aspects like service levels, service management and governance.
