The real disruption and after…

It is not the kind of disruptions you keep talking about. It is real, huge and unprecedented. There are more questions than answers. We try to separate the short-term priorities from long-term impact.

The real disruption and after… - CIO&Leader
Guess how much we have discussed, analyzed and prophesized about disruptions – business model disruptions, creative disruptions, not to talk of digital disruption. 
But few would have imagined how those debates and discourses would mean little when the real thing came. The disruption spelt C-O-V-I-D. 
Well, all of us are wise in hindsight. Except that we are nowhere close to a time when we can draw the hindsight, for it is not yet behind us. And we don’t know when it will be. 
But business must run. And who knows that better than you—the IT managers—who made the economy run when everything looked so gloomy? You may not have got the public applause because you were not in the frontline and hence few know your real contribution—to make the hospitals, the logistics companies, the retailers, the banks and all those essential goods and services run—when the country needed it most, albeit working in the background. 
But this is no time to celebrate that achievement! The road ahead is long, tough and most importantly, unpredictable. It is the last part that is most challenging for businesses in general and for technology in particular. 
And that is what we are trying to explore—by talking to all of you about how you managed the immediate challenge, what are some of the known but unresolved challenges, what are the challenges that you already anticipate, and try figuring out—we have no quarrel if you even call it ‘speculating’—what could be some of the other challenges—now, as the situation continues; in the next few months, as the recovery starts and when the businesses are back to normal. 
You don’t have to be a genius to figure out that it will be a New Normal.
What changed post mid-March?
WFH has today become common vocabulary. Work from home—the three words sound so deceptively simple. But it was anything but simple for the IT managers, especially in industries that were not used to this mode of working. And this simple change in working style could change many things—corporate practices, culture, strategy, ecosystem, and many more. 
But first things first. Before getting into the future, it is imperative that we touch upon, albeit briefly, what were the challenges faced by the IT managers and what technologies they used to make it possible.  
The first phase in our two-phased research examined these questions. We sought responses from 44 IT managers from diverse industries and at various levels – mid level to senior level – to get to the bottom of it. Even as these IT warriors were still figuring out how to take COVID-19 head-on to keep their companies—and indirectly the nation—running, they were enthusiastic in sharing their experiences and the learning.  
We briefly summarize the findings here. Most IT managers pointed to a combination of one or more of the five below-mentioned tasks:
  1. They ensured that everyone has a secure access to all applications that they needed to access. That is why VPN features such overwhelmingly in the responses. For many sectors used to remote working, it was familiar territory but they still had challenges such as allowing access to specific applications to a wider base of users and ensuring that the infrastructure supports everyone accessing remotely.
  2. They also ensured that those who worked on desktops are given laptops. Many turned to VDI too. Some smaller companies even went for a non-technical solution: They allowed their employees to take home the desktops. 
  3. The next step was to enable collaborative working and videoconferencing. A few had software like GoToMeeting and WebEx. Microsoft Teams is also popular. But what emerged as a cult application in the time is Zoom, which has now become a household name, even for non-business applications.  
  4. Of course, WFH required extra security features. That were enabled by the security teams.
  5. In some organizations where there was a need to access bandwidth hungry applications, they had to ensure extra bandwidth and Internet access for the employees. Employees were given dongles, data cards and often, it involved a non-technical solution like reimbursing the access fees.
The battle was decisively won. But what about the war?
The Digitalization Driver 
Most of you would have seen the joke making the rounds on WhatsApp and other social media platforms about COVID-19 being a far more effective driver of digital transformation within enterprises than either the CIOs or CEOs. The joke, of course, reflects a reality—like all good jokes do. 
And that is what we focused on in the second phase of our research. We spoke to about a dozen CIOs in businesses where digitalization was not exactly a given—businesses like steel, heavy engineering, chemicals, textiles, cement and pharma.
These businesses where ‘work from home’ was often considered a euphemism for leave, are now working from home as seamlessly as anyone else. Those CXOs, who found all the reasons not to use technology, now love the experience, albeit after a bit of struggle. 
If that was not forced digitalization, what is?
CIOs’ responses vindicate that explicitly. Most CIOs agreed that the naysayers to technology have now been convinced about its ability to make businesses run. The CIO of a large company described how some CXOs, when they had to work from home, struggled because they did not even know the use of basic applications like Excel, which their secretaries used for them. “But some of them, thanks to the post COVID-19 reality, are now not just able to use collaborative software but are even excited to discover newer features—starting from screen sharing onwards,” he said, a sense of happiness and satisfaction oozing from his voice. 
Well, not everyone may be as ignorant about technology, but the skepticism about the power of new technologies is not an isolated phenomenon in these businesses. Even when they were not skeptical, not many were too enthusiastic either. 
“Migration to cloud and Office 365 has helped us immensely. Our senior and middle-level managers are having regular meetings now using utilities like Teams, OneNote, Planner, etc., and are using some critical apps on cloud. The value is recognized much more in a situation like this,” says Jitendra Singh, CIO, JK Cement
Many CIOs are now confident that the new-found love will survive the crisis time and will become a regular practice. 
Confirms Ashish Pandey, CIO of GSK Consumer Healthcare, “R&D being central to our industry, these activities must be sustained under all circumstances but roles that entail secondary research will work from home. So, in this situation, we have managed to work around the problem. Going forward, these practices are likely to become the norm.” 
Even a process manufacturing company like Essar Steel sees value in this.
“As uncertainty looms large regarding the neutralization of the COVID-19, work from home may become the new norm," says Rahul Kumar, CIO, Essar Steel.
He says that being a manufacturing enterprise, they will have to think of different ways of not just supporting but executing manufacturing operations remotely. That surely is a big change in the way manufacturing businesses are run today. 
“Going forward, there will be a change in ways corporations work as more roles that are not required in office will begin to work from home,” says Manoj Kumar, CIO, ABB.
And ABB is not an FMCG or white goods maker. It is a hardcore engineering company. In-short the realization about the need to relook at the way people work and move to significant remote working is near-universal. Forget not, simple as it may sound, effective work from home means huge changes in levels of digitalization, as it involves change in the way endpoints are deployed, managed and how secure access is provided to a large set of people beyond the physical boundaries of the organization. 
That is the first lever of digitalization that COVID-19 has catalyzed.
Another common realization seems to be an even more explicit mandate for digitalization—moving from physical to digital in many processes that are still manual. 
“Despite significant digitalization done in our organization, during the lockdown period, we realized that there is scope for further streamlining and digitalization of processes to make them more effective, simple to adapt,” says Atul Govil, Chief Transformation Officer of India Glycols.
“For example, for certain departments (within a location and also across manufacturing plants and Head Office), physical documents movement is involved for getting approvals, or completing due workflows,” he explains. “These will be addressed with due prioritization,” he adds. 
Govil says they have already started working on digitalizing some of the manual processes. 
Govil’s observation is echoed by Bhavesh Gandhi, CIO, Piramal Industries.
“Some departments, such as Compliance, Supply Chain and Accounts which required hard copy approvals moved to digital signatures,” says Bhavesh Gandhi, CIO, Piramal Industries
Moving from paper approvals to digital processes with digital signatures is a recurring theme in most CIO conversations (just to remind you, we spoke to manufacturing companies). Many say they have already started digitalizing the internal approval processes. 
But that is only part of the story. If the ecosystem does not move along, the exercise will not yield the full value. 
“Going forward, external stakeholders, such as government agencies and supply chain partners will need to change processes by moving on to digital platforms for clearances and approvals,” says Ashish Pandey, CIO of GSK Consumer Healthcare.
In short, there is already a growing voice for moving from paper to digital. That is the second lever of digitalization that COVID-19 has ‘unleashed’ on organizations. 
So, what do these ‘changes’ in attitude towards digitalization mean? Of course, going for more of technology in all aspects of business. And remember, we are talking of manufacturing businesses. 
Encouraged by the ease and smoothness of working from home, for example, many have already started working on how it could be retained, even post the crisis.
“We are exploring cloud-based solutions to enable WFH to more employees. Our experience finds this a working model and we found many reluctant first-time users comfortably using collaborative tools,” says Manoranjan Kumar, CIO, Shree Cement.
Cloud seems to be a natural choice, in response to this new-found enthusiasm for remote working. “To be sufficiently agile, we will have to accelerate migration to cloud and adopt VDI technologies. Travel will have to be replaced by video conferencing and e-collaboration tools,” says Rahul Kumar of Essar Steel.
‘There’s a stronger reason to adopt cloud more extensively in a work from home scenario, especially for large companies. It is just a natural fit for that kind of environment. But going forward, you have to be a lot careful about security,” says Sukanta Kumar Nayak, CIO in a large diversified group company.  
Agrees Rahul Kumar of Essar Steel, “The cybersecurity scenario will grow worse—as nations stack up against each other in cyberwarfare, building a cybersecurity army within an enterprise would become difficult by the day. Being a manufacturing enterprise, attracting and retaining the right kind of cybersecurity talent is even more difficult for us,” says Kumar hinting a shift towards large scale managed security services. 
“As a majority of the employee base is working from home, the enterprise boundaries have been redefined. For the IT function, we are practically moving towards an infinite enterprise; there are really no boundaries. It’s like trying to protect your valuables in a crowd – the risks are much higher than when you’re sitting in your home,” Kumar elaborates. 
In short, it means by the move towards digitalization—and specifically collaboration tools, cloud and security—will accelerate. 
There seems to be a move to greater digitalization—and that is what the WhatsApp joke put so succinctly and humorously. But to conclude that as the main message would be extremely, extremely simplistic—simply because there is a big difference between intent and execution. 
Here is why?
The Short-Term Challenges
While almost every CIOs we spoke to agree that COVID-19 crisis—especially the subsequent response by the IT teams resulting in businesses managing to run their operations effectively, albeit in a low-load scenario—has created a greater trust in the role of digitalization and technology in businesses. 
Many even said that they have started closing some of the gaps—manual processes—by automating them. 
Does it mean that once the lockdown is over, we are going to see the technology investment floodgates opening?
Far from it. In fact, large projects have been stalled. Some of the new or planned projects have been abandoned. And the focus has shifted to cost-saving.
This is because almost all companies—which are operating at anywhere between 30-50% of their capacity, because of the lockdown expect that there will be a liquidity/cash flow issue going forward, because of both volumes dropping significantly and many of the smaller distributors defaulting on credit. While they can plan for the first one, the exact magnitude of impact of the second factor is still unknown. 
“The mood is cautious. And quite rightly so,” says Sukanta Kumar Nayak. “Budgets will have to be reworked, you cannot pretend that nothing has happened,” adds Singh of JK Cement. Govil of India Glycols says, “It is difficult to think of major new investments now.”
In other words, while there has been an increase in appreciation of role of IT in business, we are not going to see huge investments flowing in, thanks to budget constraints. While there is no estimate yet, this is going to be the biggest downturn we have seen in our lifetime. The diagram shows how the IT managers’ challenge has changed over time—especially pre- and post-COVID.
Does it mean that companies will stop investing completely, at least in the short run?
Not really. It is big money that will be elusive. That is not just because of the cash crunch. It is also because of drastic changes in operational models expected post recovery. 
Yet, one thing will define this recovery phase. As companies realize the small but impactful gaps in their processes, they will try to close those gaps. This means smaller, tactical investments will be made that give an immediate return in terms of efficiency, lesser utilization of manpower or safer operations for people. 
Take Spoton Logistics, a tech-leveraged express logistics company that is growing fastest in the industry and is challenging the biggies in the game. It has already implemented a contactless PUD solution to minimize, if not eliminate roughly 11,000 human touch points daily using technology.
“With the help of different platforms like Web Shipping Tools, Self Service Portal, API Integration and Manual Con Note Elimination, customers can book and generate and print the e-Con Note or e-labels and provide to the pickup executive to minimize paper exchange and processing time,” says Satya Pal, AVP - Business Engineering, Spoton Logistics.
As discussed, many companies have already started digitalizing paper approval processes. As companies quickly automate some of the processes and as work from home continues for a while, security is in the minds of most CIOs, though many hasten to clarify that they are not looking for organizational security overhaul. 
But ‘secure access’ is clearly an immediate focus, based on the learnings that they have had. 
When it comes to manufacturing, CIOs identified a number of business challenges in the recovery phase. Most of them could be put into three baskets:
  • Liquidity challenges
  • Supply chain challenges
  • Managing human resources 
And they are not exactly mutually exclusive. And all the three have implications for IT—both in terms of expectations from it and in terms of budget available. Take liquidity challenge. As articulated by several CIOs, large projects are kept in abeyance for the time being. But there are discussions too around how IT can help in minimizing the impact of cash flow. In supply chain, the focus is not just in automating approvals and other manual processes, but also to ensure that human beings are safely deployed. 
Similarly, when it comes to people’s work, WFH is going to stay, if not 
fully, but significantly. For last few years, many large companies like Microsoft and Cisco have created a major focus on Future of Work. 
But the way COVID-19 has acceler-ated the movement towards digital working, even these companies could never have imagined. Today, almost all companies—more so the lesser digitalized manufacturing companies—have to realign many resources to make that happen. 
The Long Shot
What about post-recovery? 
Well, to put it straight, no one has an iota of an idea what it will be like. 
But based on the analysis globally and CIOs’ inputs, some of the areas that will be significantly impacted will be the following:
  1. Huge change in distribution of workforce: While that itself is a no-brainer—TCS has already announced that in two years, 75% of its workforce will work from anywhere—the implication for it is still lesser understood. It will impact information store and access, culture, events, security, real estate, transportation and many, many other aspects of business. And in each—and we emphasize on each—of these areas, technology will play a major role in the making the shift happen, some of which cannot even be envisaged now. It will not be surprising if this becomes the biggest innovation plane, with number of startups.
  2. Industry 4.0: What we in India just keep debating, China has already done. The typical Indian narrative is the West is going for automation because it does not have people and it is compulsion. But China has shown that even the thick of crisis, large plants were run by less than 20% of people who run a similar size of plant in India. That is not just safe. That is hugely efficient. How can you compete with companies who have that kind of efficiency? Of course, what the role technology will play there does not need elaboration. It is an out and out technology game.
  3. New way to look at BCP: The Business Continuity Planning (BCP) so far has been focused on protecting data repositories and infrastructure. They were planned to protect against not just human threats but even natural disasters like cyclones, floods and earthquakes. The focus was data center. In COVID-19, data centers were hale and hearty. It is people who needed secure access. Beyond the details of difference, it teaches one big lesson. BCP is a risk planning, not a process planning. Processes are the means of achieving. We will see huge shift in the way organizations do BCP.
  4. Security getting bundled: Interestingly, in our research, we would hear the adjective, at least five times more than the noun. Everyone was talking of secure access, secure application, secure network, secure cloud—very few about security. The expectation is: Whoever provides these components has the onus of making them secure. Organizations will focus on the core part of their data protection. This will see a huge shift in security planning and the role of chief information security officers. 
As of now, we know little to be talk anything more specific. But one thing is for sure. There will be new times. And there will be new rules. 
New rules of business will get written—and technology will be built into those rules. 
We will leave you with that thought—and a big question mark, that we started with. You find the answer. We will be happy to be of any help.

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