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It isnt so much that hard times are coming; the change observed is mostly soft times going.

Groucho Marx

The woe indeed is that the soft times are gone. But what really were these soft times. People reminisce that those were the times when you didnt have to care about efficiencies. Those were the times when companies had too much money to care about debts, and when no bank ever refused a credit card or loan.

Over the past few years, consumers got used to pulling out second credit card as soon as the credit limit for the first one got over.Now they can no longer do so, because the bank to which the credit card belongs to is surviving on bailout money, they say that the soft times have gone. But have they really bought in the hard times?

Maybe its fairer to call this the time for reality, rather than copying the title of Dickens novel. The dream has been shattered, and we are back to the real world.

And this reality has many facets. The US facet might be a bit bitter, but thankfully, in India we werent too far away from the reality ever. It was only our proximity to the big brother US that hurt us a bit. But amid lesser projects, advertisements, and cost cutting measureswe are back to basicsthat thing we call Efficiency!

This change of parentage has done us much good. For one, we have recognized the need for internal dependency, and that has resulted in recognizing the huge potential thats residing within our borders. Secondly, once again IT has emerged as the primary means to drive efficiency. Projects that our CIOs undertook (yes, amid the slowdown!) corroborate that IT is more of an enabler than a cost.

So heres looking into some of the IT investments that the CIOs made during the downturn.

Sizes and Fits
There is small, big and then there is the mighty. It all depends on what really fits you well. While small works for some organizations, the mighty find relief only in the big. The pattern continued during the slowdown. While small projects continued to happen, like the the introduction of an ERP here and there, or small automation within a process, it were the biggies that caught the attention.

What is the highlight here, is the confidence that these CIOs displayed not only in their team, but also in IT as the investments were by no means insubstantial.

Take the example of Arun Gupta, CTO, Shoppers Stop. In order to reduce the fixed cost, Gupta automated electricity monitoring and store fill process, and embarked confidently on the outsourcing path. Result: fixed costs came down by 37%. And whats more, consumption of electricity units also showed a 30% decrease. Now, these are some earnings to boast of during slowdown times!

The other CIOs also embarked on the IT path. While Guptas investment was purely cost related, that of Daya Prakash, CIO, LG electronics, had more to do with customer leads and tracking. That resulted in spending big money on analytics like CRM, etc. Similar was the case of Girish Rao of Marico, who took to prototyping to scale up fast, and also managed to bring down rack space by over 25%, thanks to consolidation.

Driving Innovation during Downturn

Intels two-city eventDriving Innovation and Efficiency during the Economic Downturnin Delhi and Mumbai, revolved around themes of IT investments, innovation, and shift in IT spend patterns during the slowdown. In Mumbai, the panel discussion had various eminent CIOs like Arun Gupta of Shoppers Stop; Dhiren Savla of Kuoni Travels; Pratap Ghatge of Bajaj Electricals; Girish Rao of Marico; and Pat Gelsinger of Intel. The discussion focused on investments that these people made, and also talked about innovative methods of using IT during the tough times. The Delhi chapter had more representation from government side, and the discussions were mainly on how IT can be used to drive efficiency, and big investments that have been made in the past year or so. The Delhi event had panelists from Bechtel, Indian Oil, Indian Railways, NIIT, and NTPC. Best part of this series was that it was not merely a preaching session on how to drive innovation in tough times, it was coming together of people, who had been there, done that, to share their experiences, and elucidate their learnings. Both the events were moderated by Prasanto K Roy, president and chief editor, ICT Publications, CyberMedia.

Even the biggies of the globe, like Intel went in for their data center consolidation project during the past year. Pat Gelsinger of Intel says, We have about 25,000 engineers and 50,000 servers. Data center efficiency is the key for a company like us.

Another example was that of Sunil Sirohi , VP and head, information resources, NIIT. He decided to consolidate all NIIT portals, and move to one single server instead of twenty. They also migrated to centralized infrastructure management for their virtual lab. For us, cash became king, he says.

While there are many examples of such projects, what emerges clearly after a careful analysis was that investments in IT continued to happen.

The Government Stimulus
This isnt just about bailout packages and stimulus. Besides doing all this, government also invested big time in IT during the past one year. From videoconferencing to analytical tools, from data centers to automated systems; government emerged as a big buyer of IT products and services.

One obvious reason for this is the fact that government is recession proof. The other good news is that government is finally recognizing IT as an enabler. As Dinesh Kumar, ED, IT, NTPC puts it, Nothing moves if IT isnt involved. NTPC did a whole lot of IT investment, including videoconferencing and other business tools in the past two years.

Indian Railways, father of government entities, also went for some process automation. They started computerization of ticketing system, after realizing that they were losing a lot of money on the daily commuters front. They now have plans to put ticketing machines everywhereoutside stations, markets, etc. RB Das, ED, C&IS, Indian Railways says, IT consolidation has resulted into huge benefits both for us and consumers.

Other PSUs like BHEL, Indian Oil, and banks like SBI, PNB also went in for IT solutions. Unlike the private sector, focus for them was not cost, but efficiency and convenience. If there is one technology that was adopted across all government departments during the last two years or so, its been videoconferencing. From India Post to Indian Railways everyone is doing their meetings and reviews the virtual way.

Other things like SAP implementations and database synchronization were also in vogue. S Ramasamy, ED, Indian Oil went for a major SAP implementation. From demand planning to procurement, oil industry has a lot of IT usage. We at Indian Oil have a huge role in IT, he says.

The Refresh Button!
Even though big IT investments continued to happen during the slowdown, if there was something that was somewhat impacted, it were hardware refresh cycles. Most of the CIOs looked at their systems, etc, due for refresh, and asked the questionCan I stretch it for six months more? And where the answer was yes, product was given an extension. The usual three to four years time span has been relaxed a bit, if change is not immediately required. Similarly, major hardware replacements have been put on hold.

However, some of the CIOs did go ahead with their pre-set refresh cycles. But this put-on-hold for nowwas an attitude that was prevalent across the industry. Some of the projects which were having a major bearing on capex were stalled, and some completely scrapped.

But in our case, decisions were not really derailed, even if they were delayed for some time!

Mehak Chawla
mehakc@cybermedia.co.in

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