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CIOs Should Lead ‘Digitization of Business’

Published Date: 
Aug 27, 2012
Source: 
Wall Street Journal

Vineet Nayar, CEO of IT services and outsourcing firm HCL Technologies, believes the increasing digitization of business makes CIOs more valuable to their organizations than ever. He also believes U.S. institutions of higher learning, and IT leadership in general, need to do a better job of selling IT services as a way for people to build their careers. In an interview held at CIO Journal offices Thursday, Nayar also said the company is investing in new jobs to build a U.S.-based workforce that will help HCL overcome the negative connotations of outsourcing.

With U.S. unemployment hovering at around 8% and economic growth stagnant, HCL would seem to have its work cut out and facing political headwinds. But the company followed up a strong first quarter, during which profits rose 29%, with an even stronger second quarter, when net profits rose 67%. Nayar says the company expects economic conditions to worsen, but sees that as an advantage for HCL, which uses management practices such as 360-degree performance appraisals to foster individual responsibility and empowerment. “The economic situation in the world is troubled more than it ever was,” he told CIO Journal. But it’s also “the biggest opportunity HCL has ever seen, because this is the time we can outgrow our competitors because we are smarter, we think more innovative, and we have a culture where 85,000 people work very hard every day, rather than one person.”

Nayar believes the most nimble and innovative companies can prosper in this type of environment by understanding the generational shifts in their customer bases. “Innovation has to be at the cutting edge and at a completely different cost point” than previously, he said. This will require companies to embrace an increasing digitization of their business processes – a strategy he says can be best led by CIOs. “CIOs today have become more important than ever before,” he says. Who in the company understands technology and business interface better than the CIO? Who understands process better than the CIO?… [CIOs should be the ones deciding] what digitization of the business should happen.”

If there’s one thing that concerns Nayar, it’s the lack of technology talent available in the United States. His company has committed to creating 10,000 new jobs in the U.S. and Europe over five years, and has opened campuses in Washington, Michigan, North Carolina and New York. But its ability to achieve its goal is threatened by a poorly qualified workforce, and institutions of higher learning reluctant to partner with business. Nayar would like to see colleges change their curriculum and encourage students to take summer internships with the company, but “the response is a mixed bag.”

But Nayar says the company will “forward-invest” in a U.S.-based workforce to “create the mass pool of available skilled resources.” He says creating new jobs will help change the conversation around outsourcing. But he also believes the industry has “a pretty bad job of selling being a manager in an IT services company.” He says the industry should do more to emphasize the opportunity workers get to manage teams early in their careers. “IT services is the only place where you can become a leader overnight. You can be managing 10 people in your second year, you can be managing 100 people in your fourth year of experience. Where else can you get that opportunity?”

Source: 
Wall Street Journal
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