CIO PRIORITIES AND ROADMAP A CIO study by Wipro Consulting Services

Transcription

1 CIO PRIORITIES AND ROADMAP A CIO study by Wipro Consulting Services

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3 As the legend goes, the Gordian Knot was unsolvable. When Alexander the Great stepped up, he tried something unusual slicing the knot in half with a stroke of his sword. This document is similar. By rejecting conventional thinking, it offers a strategic guide on how CIOs can cut themselves free.

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5 A MESSAGE TO CIOS Mandar Vanarse What makes your nights sleepless? It s exactly the converse set of activities that are required for planning! Though you want to invest more time on strategic and planning functions, your bandwidth gets consumed by the transactions and you are not alone. When I interact with the CIOs across the globe, I observe all CIOs go through similar issues. The crux lies in identifying the pattern of issues and CIO opportunities across the organizations to prescribe solutions with required customizations. Issues and expectations have a lifecycle. Ways to tackle these issues depend on the CIO s organizational need states. Here also there are patterns which are specific to industry verticals with an infiuence of local conditions. It means that - CIOs should understand the specific industry vertical issues and competitive differentiators of their organization. This report will help you achieve that. That is the reason why we decided to take up this study specifically for the identified verticals in UAE, Saudi Arabia, Qatar, Oman and India, as these countries form a concrete regional pattern. Our belief is, if these common issues are handled in a systematic way, the CIOs can: 1. Achieve much discussed Business- IT alignment 2. Quantify business value of IT 3. Reduce transactions and spend more time on strategic planning 4. Reduce costs 5. Create a career path for themselves beyond the CIO position I m sure you will find this report useful and will be able to use this as your day-do-day guide for strategic planning. Mandar Vanarse Global Practice Head Enterprise Architecture and IT Strategy, Wipro Consulting Services and GIS

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7 TABLE OF CONTENTS 1 Business opportunities, challenges and solutions Business opportunities Business Opportunities by Verticals Business issues & Management Triggers for investments Events affecting investments: Topical insights Investment planned for FIFA World Cup in Qatar Development of Smart Cities in UAE Key CIO issues Key Cio Issues Across Countries and Verticals 17 2 Variabilization Overview Key Insights Preferred IT elements and processes Variabilization - IT Elements Variabilization - Process Areas Advantages of variabilization Triggers to initiate variabilization Linking business outcomes with payments to IT vendors 30 3 Hiring Consultants Reaching out to consultants Top consultants 33 4 CIO s professional growth imperative CIO s role in the organization Challenges faced by peers CIO growth enablers 38 Recommendations 39

8 EXECUTIVE SUMMARY

9 EXECUTIVE SUMMARY The Wipro CIO report covered 116 CIOs across KSA, UAE, Qatar, Oman and India. The study covered CIOs across various verticals and experience groups. The study highlights various business opportunities across verticals. It also covers the business issues currently faced across countries and verticals and current ways of managing them. The Survey highlights the key events that affect investments in the organization. Consumer demand emerges as the key trigger to investment. A lot of investment is planned in Qatar, because of FIFA 2022, focused in the area of E-governance followed by Infrastructure. Development of Smart Cities is gaining momentum across countries. In UAE, companies are looking to enter into joint venture in the development of smart cities. The report also covers the key issues faced by CIOs (across experience groups) with high mentions of Shortage of Talented Workforce as the key issue faced by CIOs across countries. Cost reduction is an important area for CIOs; variabilization is one of the most acceptable way of addressing cost reduction with 6 out of 10 CIOs already having an agreement with vendors on variabilization. The report also highlights the following aspects of variabilization: Triggers to initiate variabilization Linking payment for variabilization to IT vendors Technology strategy is a clear winner among the most preferred area of IT for reaching out to a consultant. IBM stands out as the most preferred consultant. The report highlights various reasons for which companies reach out to a consultant, preferred consultants and key aspects considered before deciding on a consultant. Helping CEOs and CFOs in decision making stands out to be the primary role of CIOs. 6 out of 10 CIOs role is perceived to be that of using technology to take care of immediate business issues faced by different units within the business. Reducing maintenance expenditure and data security are the key challenges faced by peers according to CIOs. Helping decision-making by enabling quick information availability and leading innovation are the top growth enablers for CIOs across verticals. Enterprise Architecture and IT Strategy is an important vehicle to achieve the Business IT alignment, and CIOs have either started these initiatives or are in the final stages of initiating it. EA Frameworks like TOGAF, ASSIMPLER and Zachman can help them in this journey. Processes where variabilization would work Advantages of variabilization CIO PRIORITIES & ROAD MAP

10 RESEARCH METHODOLOGY A CIO RESEARCH WITH GEOGRAPHICAL AND VERTICAL FOCUS This report is based on primary research. The outcomes are based on interviews with 116 Chief Information Officers across various verticals spread across India, Kingdom of Saudi Arabia, United Arab Emirates, Oman and Qatar. The study was conducted using Computer Aided Personal Interview and in few cases Computer Aided Telephonic Interview methodology. The Study was conducted in two phases. Phase 1 covered India, Oman and Qatar and was conducted between January and March Phase 2 of the study in KSA and UAE was conducted between April and May The participating CIOs in this study are spread across Banking & Financial Services, Telecom, Oil and Gas, Infrastructure, Government, Manufacturing and Healthcare. The biggest share of CIOs was from Financial Services (22%). This is followed by CIOs from Oil and Gas, Government and Manufacturing sectors. The experience of CIOs varied from less than 10 yrs to more than 30 yrs with an average experience of 20.3 yrs. The most experienced CIOs were from Government sector with an average experience of 25 yrs. VERTICAL COMPOSITION OF SAMPLE GEOGRAPHIC COMPOSITION OF SAMPLE BFSI Others Manufacturing 12 7 Telecom Government 13 Infrastructure Oil and Gas 51 INDIA 17 UAE 17 KSA 16 QATAR 15 OMAN 1 A CIO STUDY BY WIPRO CONSULTING SERVICES

11 RESEARCH OBJECTIVES To bring forth hitherto unavailable key geographical and vertical business insights across KSA, UAE,Qatar,Oman and India across Oil and Gas, Banking Financial Services, Telecom, Infrastructure, Government, Manufacturing and Healthcare verticals. OBJECTIVES Identify key issues and challenges faced by businesses and CIOs across geographies and verticals Understand IT organization maturity, topologies and business need-states To understand major events affecting technology spend, awareness and adoption of a variabilization model and reasons for hiring consultants by businesses Understand the CIO s role and aspiration in the organization from a technological and business perspective, and coach CIOs to get to the next level Understand IT decision making & influencers both from process and stakeholder participation perspective To make sure Wipro Consulting Services offerings are objectively defined to address focus areas of the organizations to make them successful CIO PRIORITIES & ROAD MAP 2

12 3.I REACHING OUT TO CONSULTANTS DECIDING ON A CONSULTANT Technology strategy is a clear winner as the key reason for reaching out to a consultant About 10% companies do not use a consultant. This is relatively high for companies in Qatar IBM followed by E&Y are among the most preferred consultants hired by companies 6 out of 10 CIOs look at the previous experience of the consulting company HR rationalization & re-alignment, market sizing & BI strategy are the areas with low use of consultants IT/Technology Strategy New market or new segment entry strategy 44% Feasibility Analysis Business Re-structuring BPM, SOA and BPR 26% Enterprise Architecture Business Acquisition 24% 24% 24% 23% 20% 20% IT Rationalization 1. CIO Business Opportunities, Challenges and Solutions 2. Variabilization 3. Hiring Consultants 4. CIO Professional Growth Imperative 5. Recommendations Figure 20: Reasons for reaching out to consultants DECIDING ON A CONSULTANT: 1. Previous experience 2. Tender process 3. References outside the current organization 4. References within the current organization 5. Through Analyst reports 3 A CIO STUDY BY WIPRO CONSULTING SERVICES CIO PRIORITIES & ROAD MAP 32 4

13 FINDINGS 1. CIO BUSINESS OPPORTUNITIES, CHALLENGES AND SOLUTIONS 1.1 CIO Business Opportunities 1.2 Business Issues & Management 1.3 Triggers for Investment 1.4 Events Affecting Investments: Topical Insights Investments Planned for FIFA World Cup in Qatar Development of Smart Cities in UAE 1.5 Key CIO Issues 5 A CIO STUDY BY WIPRO CONSULTING SERVICES

14 1.1 BUSINESS OPPORTUNITIES Business opportunities varied across the verticals and geographies. Usage of IT for Automation is key opportunity for CIOs from Oil and Gas vertical. CIOs from Telecom vertical are looking to target customers with more customized offerings, integrating data services, targeting multi-sim users and customer analytics to address challenges arising from fragmented market and low ARPU. Cloud applications, e-governance and business intelligence solutions are key opportunities across CIOs from Oil and Gas sector in KSA, rural reach and targeting youth are key business opportunity as per CIOs in India from BFSI sector whereas expanding channels for accessing financial services is an opportunity in Oman BUSINESS OPPORTUNITIES BY VERTICALS OIL AND GAS Oil and Gas companies are looking into alternative energy forms such as artificial fuel, renewable energy, chemical, nuclear power, gas based power plant, etc. Information Management and Intelligent Oil field initiatives are key opportunities looked by Oil and Gas sector Key solutions that would help are understanding of the opportunity, market size and growth which exists within the sector TELECOM Customer analytics is the key opportunity area for the segment given the fragmented market and low ARPU. Telecom companies are looking to target customers with more customised offerings, integrating data services and multi-sim users Developing new products like Mozaic and the opportunities in offering aligned solutions Multi-SIM consumers, targeting companies which are going global and health care has a big scope of value add Installation of fiber optic and wireless, communications networks & electrical projects are also among the key business opportunities looked by companies in Telecom sector CIO PRIORITIES & ROAD MAP 6

15 BFSI Rural reach and a growing middle class with more financial knowledge are seen as key opportunities Companies are also looking for diversification of products as well as services offered within the regulatory framework for the sector. Targeting youth segment and offering better online services to reduce transaction cycle time invested in visiting branch are the key business opportunities targetted by companies from Finance sector INFRASTRUCTURE Technologies helping in optimizing the processes, supply chain and transportation Companies are also looking to optimise their profits during price fluctuation and also increase their reach to rural and semi-urban areas KEY BUSINESS OPPORTUNITIES IN THE STUDY GEOGRAPHIES INDIA Rural reach, youth and a growing middle class with more financial knowledge are seen as key opportunities. Companies are also looking for diversification of products as well as services offered within the regulatory framework for the sector Rural market is not key target as of now because of current issues in managing cost per transaction which companies are trying to manage by using technology Provide technology platform for auto loan market for faster processing is another opportunity for BFSI sector. Currently the processing time for loans in auto financing varies from few hours to 2 days depending upon the location (Metro/Urban/Rural). Companies are trying to cover this gap by using technology for faster processing Targeting companies which are going global and health with tremendous scope for value add are key business focus for Telecom CIOs In the Infrastructure sector, offering add-ons like handheld devices, consolidation, enhancing technology so that they could meet the economies of scale and going into semi-urban and rural areas are among the key opportunities In Oil and Gas Sector, Virtualization of Data Management, offering automated Information management and Swipe diversification are key opportunities 7 A CIO STUDY BY WIPRO CONSULTING SERVICES

16 OMAN In BFSI Sector, expansion of channels for accessing financial services is a key opportunity area Oil and Gas sector will undergo thorough/major transformation, and Information and Knowledge Management will be a key focus area Cloud application, e-governance and business intelligence solutions are considered as an opportunity areas among Infrastructure companies Organizations are looking at moving to shared services mode and making IT as a profit center Innovation is a focus area of business as well as IT KSA In BFSI sector, Data center migration and enabling online payments are considered as the key opportunity areas Among Telecom companies, communication networks and electronic projects are considered as key opportunity areas End-to-end architecture and managing data center is an opportunity area for Oil and Gas sector UAE Marketing strategy software, ERP and promotion of online mortgage with clear understanding on different type of Islamic mortgage calculators are the key opportunities among BFSI Sector QATAR Maximization of the IT services usage is key business opportunity in Qatar E-governance is the largest opportunity in the government sector CIOs see an opportunity of investing in infrastructure for the planned FIFA World Cup CIO PRIORITIES & ROAD MAP 8

17 1.2 BUSINESS ISSUES AND MANAGEMENT Uncertain regulatory environment is the key business issue in Telecom, whereas risk and compliance to government regulations is a key issue in the BFSI sector. CIOs from Oil and Gas sector report talent shortage to be the key business issue. Low awareness of Islamic banking system and adherence to Takaful insurance guidelines are the key business issues for CIOs in Saudi Arabia. OVERALL SUMMARY SECTOR Oil and Gas SECTOR Telecom SECTOR BFSI SECTOR Infrastructure KEY CHALLENGE Talent shortage ISSUE MANAGEMENT External consultants to improve strategic positioning Automation/Software implementation Training and workshops with the employees Solutions ensuring access of complete lifecycle of data at one central place and monitoring and control through a single window KEY CHALLENGE Uncertain regulatory environment ISSUE MANAGEMENT Consolidate business partners Solutions to ensure transparency and compliance from regulatory perspective Improve productivity Aggressive pricing strategy affecting margins/profits KEY CHALLENGE Risk and compliance to government regulations ISSUE MANAGEMENT Making large scale investments to make sure that the guidelines given by the regulators are adhered to Centralized approach in operations Online mortgage, understanding among customers about the different type for mortgage Islamic calculators Technology adoption overall KEY CHALLENGE Availability of credit and environmental clearances ISSUE MANAGEMENT Aggressive in quoting for tenders by sacrificing margin to ensure continuous presence in the market Solutions for managing capital Reduce manpower costs Electronic contracting of real estate Contracting related work and logistics Table 1: Industry challenges and issue management 9 A CIO STUDY BY WIPRO CONSULTING SERVICES

18 1.2.1 BUSINESS ISSUES ACROSS COUNTRIES AND VERTICALS Aggressive pricing strategy affecting margins/profits, limited mobile market size for subscriber base expansion, low awareness of Islamic banking system, improve facility integrity and reliability, production optimization and modernization of infrastructure are the key business issues for CIOs in KSA. Lack of talented manpower, changing regulatory requirements and low awareness of Islamic banking system and modernization of infrastructure are the key business issues for CIOs in UAE. KSA OIL AND GAS Improve facility integrity and reliability Production optimization BFSI Low awareness of Islamic banking system Lack of talented manpower Adherence to takaful insurance guidelines Technology adoption Aggressive pricing strategy affecting margins/profits Modernization of infrastructure TELECOM INFRASTRUCTURE Figure 2: Business issues in KSA UAE BFSI Improve facility integrity and reliability Production optimization INFRASTRUCTURE Modernization of infrastructure Environmental clearances Increased customer satisfaction & market demand ensuring quality technology adoption Figure 3: Business issues in UAE CIO PRIORITIES & ROAD MAP 10

19 E-governance, providing better customer service to people and shortage of talented manpower are among the top business issues in Qatar, E-governance is the key issue in Govt sector. Technology adoption, lack of talented manpower, adherence to takaful insurance guidelines are key business issues faced by CIOs in Oman. QATAR Ensuring quality of service Reduce operation cost Need to support new broadband infrastructure Shortage of talented manpower TELECOM OIL AND GAS Figure 4: Business issues in QATAR Modernization of infrastructure OMAN Technology adoption Lack of talented manpower Shortage of talented manpower in the sector BFSI OIL AND GAS Figure 5: Business issues in OMAN Lack of talented workforce is the most critical challenge faced by CIOs in Oil & Gas sector in India. Lack of business focus on IT is the next big challenge, whereas uncertain regulatory environment and resulting uncertainty for long term strategy and hence lack of fixed infrastructure is the key challenge faced by CIOs in Telecom sector in India. INDIA OIL AND GAS Talent shortage Unutilized infrastructure Challenges with fluctuating global prices Government regulations BFSI Rural penetration so far is mere regulatory compliance driven, for paradigm shift companies need to crack transaction cost vis-a-vis business volume by aligning technology adoption and innovation Provide technology platform for auto loan market for faster processing TELECOM Uncertain regulatory environment Customer acquisition and falling ARPU Maintaining quality service delivery INFRASTRUCTURE Availability of credit Environmental clearances High cost of capital Challenges in land acquisition Unutilized infrastructure Figure 2: Business issues in KSA 11 A CIO STUDY BY WIPRO CONSULTING SERVICES

20 Change in policies, more frequent change in technology so no fixed infrastructure, long term planning TELECOM SECTOR POLICY REFRAMING RELATED ISSUES: Dual activation process Offering adequate agility in the diplomat solutions Transparency and quality when it comes to operations requirement External demand from the regulators - transparency, customers are given what they ask for, customers are genuine from security standpoint There are certain challenges at strategic level such as sector policy, reform related issues and regulatory challenges on the operation side as well. Offering adequate agility in the coming solutions. Most importantly also making sure that there is requisite level of transparency and quality when it is comes to operations requirement CIO PRIORITIES & ROAD MAP 12

21 1.3 TRIGGERS FOR INVESTMENTS Global economy prospects, government regulations are the key triggers for investment KSA Global economy prospects Government regulations Consumer demand Entry of new players International regulations UAE Global economy prospects Consumer demand Investments in infrastructure projects Tourism Entry of new players QATAR Government regulations for higher IT usage International initiative on better quality of service Integration of government services Initiative towards greener technologies OMAN Internal initiative on better quality of service Initiative on construction projects International regulations Creation of national data center Creation of national disaster management body INDIA Consumer demand internal Economic growth of the country International initiative on better quality of service Consumer demand global/external Government regulations 13 A CIO STUDY BY WIPRO CONSULTING SERVICES

22 1.4 EVENTS AFFECTING INVESTMENTS: TOPICAL INSIGHTS INVESTMENTS PLANNED FOR FIFA WORLD CUP IN QATAR The FIFA World Cup 2022 to be hosted in Qatar is driving a lot of investments across areas Companies are trying to manage the skill gaps to get the desired output by increasing the investment E-governance in the Government sector and Infrastructure in the Oil and Gas sector are the top two areas of investments planned 16% TOURISM 50% E-GOVERNANCE 25% HOSPITALITY 38% INFRASTRUCTURE The key skill gaps which exist for achieving the plans set out for FIFA World Cup is expected to be achieved by spending more money; we need more skilled workers - CIO from Oil and Gas sector We haven't designed any concrete plans until now but are looking at making our presence remarkable during 2022 World Cup - CIO from BFSI sector CIO PRIORITIES & ROAD MAP 14

23 1.4.2 DEVELOPMENT OF SMART CITIES IN UAE A large number of Infrastructure companies across various countries are getting into development of smart cities Infrastructure companies who have currently worked on projects related to smart cities prefer to work on IT services enabled infrastructure projects Infrastucture companies prefer to work with IT companies on a joint venture in the development of smart cities rather than as an end client They are also looking at IT companies to offer value add by providing services such as mobile parking, online fine payment, metro trip planner, etc. Companies also look at IT companies to work on connecting via fiber optic and ensure connectivity between branches of companies Wipro has unique experience on SEZs and Smart Cities. Wipro has defined complete Business and Technology blueprints (including which sectors to attract, which services SEZ and smart cities should provide to their customers, what is the potential revenue, define processes for building and running SEZs and smart cities, benchmarking the processes, define application and technology roadmap. etc.) Wipro has also entered into JV with a city to provide such services to end customers 15 A CIO STUDY BY WIPRO CONSULTING SERVICES

24 1.5 KEY CIO ISSUES Lack of talented workforce is one of the key issues for CIOs across countries. CIOs report crunch of resources with aligned vertical and IT skills The problem is escalated in Oil and Gas sector because new recruit typically come with no industry background Budgetary constraint is a key issue across India, KSA and UAE KSA UAE QATAR OMAN INDIA Lack of talented workforce Budgetary constraints Poor infrastructure Lack of business focus on IT Budgetary constraints Lack of business focus on IT Lack of talented workforce High inflation Lack of business focus on IT Lack of talented workforce High dependence on Oil and Gas sector Cultural difference in conducting business Relatively lower subsidy than other GCC countries Lack of talented manpower Lack of talented manpower Budgetary constraints Lack of business focus on IT Figure 8: Key CIO issues across geographies Budgetary constraint is relatively higher concern area among younger CIOs with less than 20 yrs experience Lack of talented workforce is relatively bigger concern among CIOs with 25 to 30 yrs experience in comparison to others Those with more than 30 yrs experience are finding issues in aligning Business with IT CIO PRIORITIES & ROAD MAP 16

25 1.5.1 KEY CIO ISSUES ACROSS COUNTRIES AND VERTICALS Lack of talented workforce is a key CIO issue across verticals. Lack of business focus on IT is a key CIO issue among BFSI and Infrastructure sector in KSA, whereas budgetary constraint and lack of talented workforce are the key CIO issues among CIOs in UAE in BFSI and Infrastructure verticals. KSA OIL AND GAS BFSI Lack of talented workforce Poor infrastructure Market entry barriers Poor infrastructure Budgetary constraints Lack of business focus on IT TELECOM INFRASTRUCTURE Labor laws Lack of clarity on govt policies Lack of talented workforce Governance issues Budgetary constraints Lack of talented workforce Lack of business focus on IT Figure 9: Key CIO issues in KSA UAE BFSI INFRASTRUCTURE Budgetary constraints Lack of talented workforce Lack of business focus on IT Budgetary constraints Lack of talented workforce Figure 10: Key CIO issues in UAE 17 A CIO STUDY BY WIPRO CONSULTING SERVICES

26 Lack of talented workforce is a key CIO issue among CIOs in Telecom vertical in Qatar, whereas high inflation is an issue among CIOs in Oil and Gas and Infrastructure verticals. Cultural difference in conducting business and relatively lower subsidy than other GCC countries are among the key issues common across verticals in Oman. Lack of talented workforce is a key CIO issue in BFSI sector in Oman. QATAR TELECOM OIL AND GAS Lack of talented workforce High inflation High dependence of Oil and Gas sector Lack of business focus on IT INFRASTRUCTURE High inflation Figure 11: Key CIO issues in QATAR OMAN BFSI OIL AND GAS Lack of talented workforce Cultural difference in conducting business Relatively lower subsidy than other GCC countries High inflation High dependence of Oil and Gas sector Lack of business focus on IT Figure 12 Key CIO issues in OMAN Lack of business focus on IT is a CIO issue among CIOs from Telecom and BFSI sector in India. CIO PRIORITIES & ROAD MAP 18

27 INDIA OIL AND GAS BFSI Lack of talented workforce Lack of clarity on government policies Lack of talented workforce Lack of business focus on IT TELECOM INFRASTRUCTURE Lack of talented workforce Lack of business focus on IT Lack of clarity on government policies Lack of talented workforce Budgetary constraints Figure 13: Key CIO issues in INDIA Resource with sector experience: Oil and Gas: Lack of training avenues offering industry knowledge results in forcing companies to offer in-house training resulting in shortage. Companies are looking for resources with sound IT knowledge that would help them in functioning better Niche Sector Experience: Sectors like fiber technology which is niche, resource constraint is always an issue We need people to do their basic operational work well; Issue is with the pool of talent at the middle level. - CIO from BFSI Sector, Qatar There is a certain expectation from each resource. This is going down nowadays because of various options available for resources so turnover is high at the lower level - CIO from Oman Since our industry is not common and there are no courses available to learn, we are responsible to train employees and explain how the sector functions. This results in a lot of time investment and thus we always face shortage of talent - CIO from Oil and Gas Sector, India 19 A CIO STUDY BY WIPRO CONSULTING SERVICES

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29 FINDINGS 2. VARIABILIZATION 2.1 Overview 2.2 Key insights 2.3 Preferred IT elements and processes IT elements Process areas 2.4 Advantages of variabilization 2.5 Triggers to initiate variabilization 2.6 Linking business outcomes with payments to IT vendors 21 A CIO STUDY BY WIPRO CONSULTING SERVICES

30 2.1 OVERVIEW Variabilization is the transformation of fixed costs into variable costs for greater ROI achieved by aligning cost with demand, and providing an agile IT infrastructure that enables effective response to dynamic market scenarios. 2.2 KEY INSIGHTS 7 out of 10 CIOs are aware of variabilization, while 6 out of 10 companies have got into an agreement with vendors Data center, software and solutions and desktop workstations are among the top preferred IT areas for variabilization Operations, Customer Service and Procurement are among the top processes where variabilization is being considered useful Agility stands out to be the key advantage in comparison to others for variabilization Reduction in number of resources and increase in operating margin are among the top triggers to initiate variabilization Cost rationalization through cost reductions by automation, etc. Cost arbitrage through outsourcing operations, IT, etc., to vendors Channel sharing between multiple product lines Reduction in head-count and downsizing Hiving off non-performing/loss making units 19% 24% 28% 63% 72% Figure 14: CIO Perspective on cost reduction CIO PRIORITIES & ROAD MAP 22

31 Aware of variabilization Not aware of variabilization 30% 70% Agree on adopting variabilization Do not agree 42% 58% Figure 15: Variabilization of awareness and acceptance 23 A CIO STUDY BY WIPRO CONSULTING SERVICES

32 Wipro has developed a Unique Framework called COST METAMORPHOSIS FRAMEWORK to plan for variabilization. Cost Metamorphosis Framework can be used to identify which costs are currently constant and can affect the bottom-line, out of those which costs can be variabilized, to what extent these costs can be variabilized. The steps are: Map IT Spending categories to Dynamic Business Outcomes Assess % of Variabilization possible in principle Define % of Variabilization target for each parameter Create a roadmap for variabilization Wipro s consulting offerings like Outsourcing Strategy, IT Cost Optimization, LEAP (Leveraging EA for Performance), APR and (Application Portfolio Rationalization, Cloud Strategy, Green IT Strategy are some of the offerings within the variabilization umbrella. CIO PRIORITIES & ROAD MAP 24

33 2.3 PREFERRED IT ELEMENTS AND PROCESSES Data center, software & solutions and desktop workstations are among the top preferred IT areas for variabilization. It works best when you variabilize your complete end-to-end process and not just few areas. However, variabilizing data center, desktops, software solutions and low skill resources will work. I wouldn t like to variabilize high skill resources, but instead retain them within company. We anyways buy licenses. -CIO from BFSI sector 25 A CIO STUDY BY WIPRO CONSULTING SERVICES

34 2.3.1 VARIABILIZATION - IT ELEMENTS VARIABILIZATION: APPLICATION POSSIBILITIES Data center Software and solutions Desktop/Workstations Storage Licenses High skill resources Low skill resources Analytics and Bl UAE KSA QATAR OMAN INDIA % 27% 29% 38% 44% 49% 53% 54% Table 2: CIO perspective on cost reduction by geography Data Center is a prominent IT area where variabilization can work. A significant number of CIOs in India and KSA consider Data center to be among the top areas for variabilization Software and Solutions is the next big IT area where variabilization can work Desktop/workstations and storage are among the next top IT areas being considered for variabilization. CIOs in Qatar have relatively higher number of mentions for the same Relatively higher number of CIOs in Oman consider Software & Solutions to be the key area for variabilization. It also has significantly high mentions in Oil and Gas and Infrastructure companies CIO PRIORITIES & ROAD MAP 26

35 Variabilization: Application possibilities Analytics and Bl Low skill resources High skill resources Licenses Storage Desktop/Workstations Software and solutions Data Center Oil and Gas Telecom BFSI Infrastructure % 28% 49% 53% 58% 59% 65% 72% Table 3: CIO Perspective on cost reduction by verticals VARIABILIZATION - PROCESS AREAS Procurement, Operations and Customer Service are among the top processes where variabilization is being considered to be useful Procurement is considered more useful in Qatar and Oman and among CIOs from Oil and Gas sector and Infrastructure sector Relatively higher mentions of operations to be key process for variabilization among CIOs from Telecom, Healthcare and Manufacturing sector CIOs from Govt Sector prioritized financial processes for variabilization PROCUREMENT OPERATIONS SERVICE Higher mention among Oil and Gas and Infrastructure companies Higher mention among Telecom, Healthcare and Manufacturing companies Higher mention among BFSI companies Table 3: CIO Perspective on cost reduction by verticals 27 A CIO STUDY BY WIPRO CONSULTING SERVICES

36 2.4 ADVANTAGES OF VARIABILIZATION Customer Service process has higher mention among CIOs from BFSI sector Companies which have got into a variabilization agreement consider procurement to be relatively more useful Agility stands out to be the key advantage for variabilization. It has relatively higher mention in KSA CIOs also consider low upfront cost and reduction in total cost of ownership as the other key advantages CIOs in Oman consider linking payments to business outputs as the key advantage Reduction in total cost of ownership Linking payments to business outputs Lower upfront cost Elimination of need to constantly upgrade More agile solution - ability to scale when desired Table 3: CIO Perspective on cost reduction by verticals CIO PRIORITIES & ROAD MAP 28

37 2.5 TRIGGERS TO INITIATE VARIABILIZATION Reduction in number of resources and increase in operating margin are the top triggers among CIOs to initiate variabilization. It has: Relatively higher mention among CIOs in India and UAE. CIOs in Oman consider reduction in number of employees to be the key trigger About 15% of CIOs consider other internal KPI as the key trigger to initiate variabilization Other KPIs include: - Low/No Capex - Managing volatility of demand - Reduction in lead time - Reduction in IT cost per employee Reduction in number of resources used Increase in operating margin Reduction in number of employees Increase in revenue Payments based on transaction Any other KPI 15% 22% 24% 27% 41% 48% Figure 18: Variabilization advantages 29 A CIO STUDY BY WIPRO CONSULTING SERVICES

38 2.6 LINKING BUSINESS OUTCOMES WITH PAYMENTS TO IT VENDORS Savings in cost and reduction in cycle time are the top business outcomes that could be linked to payments to IT vendors Other business outcomes are reduction in customer complaints and increase in customer satisfaction score Saving in cost Reduction in cycle time Reduction in customer complaints Increase in customer satisfaction score Increase in profit Increase in revenue Increase in sales 11% 21% 25% 37% 38% 45% 66% Figure 19: Linking business outcomes with payments to IT vendors CIO PRIORITIES & ROAD MAP 30

39 FINDINGS 3. HIRING CONSULTANTS I 3.1 Reaching out to consultants 3.2 Top consultants preferred 31 A CIO STUDY BY WIPRO CONSULTING SERVICES

40 3.I REACHING OUT TO CONSULTANTS DECIDING ON A CONSULTANT Technology strategy is a clear winner as the key reason for reaching out to a consultant About 10% companies do not use a consultant. This is relatively high for companies in Qatar IBM followed by E&Y are among the most preferred consultants hired by companies 6 out of 10 CIOs look at the previous experience of the consulting company HR rationalization & re-alignment, market sizing & BI strategy are the areas with low use of consultants IT/Technology Strategy New market or new segment entry strategy 44% Feasibility Analysis Business Re-structuring BPM, SOA and BPR 26% Enterprise Architecture Business Acquisition 24% IT Rationalization 24% 24% 23% 20% 20% Figure 20: Reasons for reaching out to consultants DECIDING ON A CONSULTANT: 1. Previous experience 2. Tender process 3. References outside the current organization 4. References within the current organization 5. Through Analyst reports CIO PRIORITIES & ROAD MAP 32

41 3.2 TOP CONSULTANTS Pecking order for consulting assignment: Wipro is the Top IT consulting services provider. IBM E&Y OIL AND GAS WIPRO DELOITTE KPMG KPMG Wipro E&Y WIPRO ACCENTURE TELECOM PWC Deloitte BFSI WIPRO IBM E&Y McKinsey TCS Accenture WIPRO IBM E&Y INFRASTRUCTURE Figure 21: Top consultants 33 A CIO STUDY BY WIPRO CONSULTING SERVICES

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43 FINDINGS 4. CIO PROFESSIONAL GROWTH IMPERATIVE 4.1 CIOs role in the organization 4.2 Challenges faced by peers 4.3 CIO growth enablers 35 A CIO STUDY BY WIPRO CONSULTING SERVICES

44 4.1 CIO S ROLE IN THE ORGANIZATION Streamline the operations by using technology Increase security and business confidentiality Increase the reach and communication with customers through use of IT and online means Use technology to explore and understand new growth markets Help in identifying the key business bottlenecks by analyzing business data points Helping CEOs, CFOs and other stakeholders in reducing cost through use of technology Reduce the company carbon foot print PRIMARY ROLE Figure 22: CIO s role in the organization Use technology to take care of immediate business issues faced by particular units within the business Helping reduce the operational cost and better management of processes within the organization Ability to guide organization expansion & growth and being a stakeholder in key long-term decision making Helping CEOs and CFOs stand out to be the primary role of CIOs 6 out of 10 CIOs role is perceived as to taking care of immediate business issues faced by particular units within the business by using technology. It is relatively higher among CIOs in KSA and UAE and among those with years experience in comparison to others CIOs in India and Qatar are perceived to have more strategic role which would involve guiding organization expansion and growth and being a key stakeholder in long term decision making CIO PRIORITIES & ROAD MAP 36

45 4.2. CHALLENGES FACED BY PEERS Pecking order for consulting assignment: Wipro is the Top IT consulting services provider. KSA UAE QATAR OMAN INDIA Driving innovation Next generation portal Reducing maintenance expenditure Increase visibility on social media Integrating operations Data security Managing business information through analytics, Big Data, etc. Identifying the right outsourcing partner Lack of long-term vision on technology from superiors Application portfolio rationalization Data centre consolidation/migration Server consolidations Table 4: Challenges faced by Peers Not a challenge Challenge to some extent Bigger challenge Data security and reducing maintenance expenditure & lack of long-term vision on technology from superiors are among the top issues faced by peers CIOs in India also feel driving innovation, managing business information through analytics are also among the challenges faced by their peers Intergrating operations is a challenge faced by peers to some extent according to most CIOs 37 A CIO STUDY BY WIPRO CONSULTING SERVICES

46 4.3. CIO GROWTH ENABLERS Helping decision-making by enabling quick information availability and leading innovation are the top growth enablers for CIOs across verticals. Value management is the top enabler for CIOs in Telecom vertical. BFSI TELECOM OIL AND GAS INFRASTRUCTURE GOVT HEALTHCARE MFG Helping decision making by enabling quick information availability Leading innovation Business process re-engineering Creating a more employeefriendly working environment by using technology Value management Increased data security of internal information Enabling better business control by aiding continuous process/channel visibility Ability to identify new profitable markets/ areas of investment Table 5: CIO growth enablers Highest 2 nd Highest 3 rd Highest CIO PRIORITIES & ROAD MAP 38

47 RECOMMENDATIONS Reducing Maintenance Expenditure Increase visibility on Social Media Managing business information through Analytics, Big Data, etc. Next Generation Portal Driving Innovation Outsourcing Strategy and Variabilization* IT Strategy and End to End EA* Next Generation DC Planning* VALUE MANAGEMENT BUSINESS PROCESS REENGINEERING Setting up innovation Center, Service Strategy * ENABLE BETTER BUSINESS CONTROL Mobility, multichannel and Portal Strategy * IDENTIFY PROFITABLE MARKETS INCREASE DATA SECURITY CREATE EMPLOYEE FRIENDLY WORK ENVIRONMENT Social Media Strategy Infrastructure Consolidation* User Experience and LifeX in a Pocket Integrating Operations Data Security Data Centre Consolidation / Migration Application Portfolio Rationalization* Informed Decisions, BIIM, Security and Big Data * HELP DECISION MAKING Cloud Strategy* LEADING INNOVATION LEAP - Leveraging EA for Performance* SOA and BPM Strategy VMO Value Management Office Identifying the right outsourcing partner Server Consolidations Migration Lack of long-term vision on technology from superiors Application Portfolio Rationalization Figure 23: CIO challenges, growth enablers and Wipro offerings *continuous process/channel visibility Challenges faced by Peers Offerings by Wipro Growth enablers for CIOs For every challenge that CIOs face and CIO growth enablers, Wipro has an offering that could help you overcome the challenge and achieve the goal. 1. Have a Coach to guide you through your Journey 2. For overall Business-IT alignment Use a Framework like TOGAF, Zachman or ASSIMPLER to become more structured TOGAF is an Open Group Framework, Zachman is based on Work of John Zachman and ASSIMPLER is based on work of Mandar Vanarse. ASSIMPLER was originally written in 2002 to help organizations achieve Business-IT alignment and transformation. The most common scenarios considered were: Help organizations define a business strategy and define the initiatives and time frame for transformation Aligning IT with business and improve ability of an enterprise to derive co-relation between any IT initiative/ IT asset to the business strategy Business-Technology Blueprinting for Greenfield Organizations Identify underinvested and under automated areas which are affecting Enterprise Performance and hence bottom-line Optimize and Rationalize IT Taking over IT operations from clients and running them more efficiently (including owning assets and people) Innovation in action We are sure that these recommendations will help you plan your IT initiatives in tandem with your business requirements. 39 A CIO STUDY BY WIPRO CONSULTING SERVICES

48 CIO PRIORITIES & ROAD MAP 40

49 LIST OF FIGURES 1 CIO study sample composition 11 2 Business issues in KSA 20 3 Business issues in UAE 20 4 Business issues in QATAR 21 5 Business issues in OMAN 21 6 Business issues in INDIA 22 7 Qatar FIFA World Cup investment plans 24 8 Key CIO issues across geographies 26 9 Key CIO issues in KSA Key CIO issues in UAE Key CIO issues in QATAR Key CIO issues in OMAN Key CIO issues in INDIA CIO perspective on cost reduction Variabilization of awareness and acceptance Processes where variabilization can work Advantages of variabilization Variabilization advantages Linking business outcomes with payments to IT vendors Reasons for reaching out to consultants Top consultants CIO s role in the organization CIO challenges, growth enablers and Wipro offerings 44 LIST OF TABLES 1 Industry challenges and issue management 19 2 CIO perspective on cost reduction by geography 33 3 CIO perspective on cost reduction by verticals 34 4 Challenges faced by peers 42 5 CIO growth enablers A CIO STUDY BY WIPRO CONSULTING SERVICES

50 WIPRO CONSULTING SERVICES Wipro Consulting Services helps companies solve today s business issues while thinking ahead to future challenges and opportunities. As a business unit of Wipro, one of the world s leading providers of integrated consulting, technology, and outsourcing solutions, we bring value to our clients through end-to-end business transformation think, build and operate. Our model for the 21 st century corporation includes implementing lean process transformation, exploiting new technology, optimizing human capital and physical assets, and structuring next generation partnering agreements that create value and win-win business outcomes for our clients. For information visit or wcs.info@wipro.com. ABOUT WIPRO Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner's approach to delivering innovation and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 57 countries. For more information, please visit CIO PRIORITIES & ROAD MAP 42

51 ABOUT WIPRO LIMITED Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360º view of "Business through Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner's approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 57 countries. For more information, us at: info@wipro.com DO BUSINESS BETTER NYSE:WIT OVER 140,000 EMPLOYEES 57 COUNTRIES CONSULTING SYSTEM INTEGRATION OUTSOURCING WIPRO LTD., DODDAKANNELLI, SARJAPUR ROAD, BANGALORE , INDIA TEL : +91 (80) , FAX : +91 (80) , info@wipro.com Wipro Technologies 2013 IND/TMPL/OCT-DEC2013