The CIO Imperative: Boosting today’s performance while building business future

The CIO Imperative: Boosting today’s performance while building business future S Gopalakrishnan COO and Co-founder Infosys Arindom Basu Head, Business Consulting (Europe) Infosys November 8, 2002 Monte Carlo

Questions CIO’s Should Be Asking About IT Boosting today’s performance • Are my operations supporting current business needs? • Is IT a credible support service for business operations and continuity ? • Are we getting the best return on our IT expenditures? • Is the IT Organisation a learning organisation ?

Questions CIO’s Should Be Asking About IT Supporting future growth • Are we aligning IT spend to Business Cycles? • Are we leveraging IT in our most important business initiatives? • Are we integrating and deriving value from existing systems? • Are my Business and IT Strategies aligned?

Are my operations supporting current business needs ? 1 Point • IT represents at least four distinct services: • Business facing • Enabling • Utility • Administration • The touchstones for each of these functions varies widely Counterpoint • Most businesses need to be able to keep the complexity of IT down to that of a support service and not a mainline business

Is IT a credible support service for business operations and continuity ? 2 Point • There is a need to manage perception of credibility within the business • There are well established SLAs with business that are tracked and published • IT is seen as a peer function within the organisation • Business needs to believe that IT has what it takes to meet it’s needs and it does not need to bypass IT Counterpoint • With the external service providers so mature why should a business invest in building a credible IT organisation – why not outsource IT ?

Are we getting the best return on our IT expenditures? 3 Point • Returns on IT investment need to be reviewed against both internal and external benchmarks • Industry Benchmarks • ROI Thresholds • Returns on IT expenditure need to be reviewed beyond financials Counterpoint • IT spend is too small an expenditure in the P&L ? And either way 75 - 80% is non-discretionary • Too much rigor and discipline around IT cost and value management can stifle innovative and high risk (with potentially high reward) opportunities

Is the IT Organisation a Learning Organisation? 4 Point • IT Organisations need to keep abreast of new technologies and methodologies • There needs to be a deliberate focus on developing the IT Organisation along the Capability Maturity Model Counterpoint • IT Organisations cannot do away with legacy skills • New technology skills can always be outsourced

Are we aligning IT spend to Business Cycles 5 Point • IT Organisations need to recognise that business is cyclical • Core and non-core spending • Is non-core capable of flexible scale up/down • Are technology cycles aligned with business cycles Counterpoint • Structuring to respond to business cycles may be relevant only beyond a certain scale

Are we leveraging IT in our most important business initiatives? 6 Point • How are we leveraging IT in our top 5 business initiatives? • What proportion of our IT resources are devoted to the top 5 business initiatives? Counterpoint • It’s easy to go too far – technology for technology’s sake

Are my Business and IT Strategies aligned? 7 Point • How well does Business understand IT developments and strategies • What mechanisms are in place to align strategies and how rigorously are they implemented Counterpoint • The real challenge is in execution

Are we integrating and deriving value from our existing systems ? 8 Point • Legacy systems cannot be wished away • There is no silver bullet for replacing existing systems • Majority of the business knowledge still resides in existing systems Counterpoint • There are cases though where replacing legacy systems is more economical

Q&A ?

THANK YOU Kris_sg@infosys.com Arindom_Basu@Infosys.com

The CIO Imperative: Boosting today’s performance while building business future