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A CIO study by Wipro Consulting Services

CIO PRIORITIES AND ROADMAP

As the legend goes, the Gordian Knot was unsolvable. When Alexander the Great stepped up, he tried something unusualslicing 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.

FOREWORD

A MESSAGE TO CIOS
What makes your nights sleepless? Its 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 CIOs 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 BusinessIT 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 Im 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

Mandar Vanarse
Global Practice Head Enterprise Architecture and IT Strategy, Wipro Consulting Services and GIS

TABLE OF CONTENTS
1 1.1 1.1.1 1.2 1.3 1.4 1.4.1 1.4.2 1.5 1.5.1 2 2.1 2.2 2.3 2.3. 2.3.2 2.4 2.5 2.6 3 3.1 3.2 4 4.1 4.2 4.3 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 Variabilization Overview Key Insights Preferred IT elements and processes 1 Variabilization - IT Elements Variabilization - Process Areas Advantages of variabilization Triggers to initiate variabilization Linking business outcomes with payments to IT vendors Hiring Consultants Reaching out to consultants Top consultants CIOs professional growth imperative CIOs role in the organization Challenges faced by peers CIO growth enablers Recommendations 05 06 06 09 13 14 14 15 16 17 21 22 22 25 26 27 28 29 30 31 32 33 35 36 37 38 39

EXECUTIVE SUMMARY

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: Processes where variabilization would work Advantages of variabilization Triggers to initiate variabilization Linking payment IT vendors for variabilization to

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 BusinessIT 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.

CIO PRIORITIES & ROAD MAP

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 2013. Phase 2 of the study in KSA and UAE was conducted between April and May 2013. 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

BFSI Others

GEOGRAPHIC COMPOSITION OF SAMPLE

27

25 7
Telecom

Manufacturing

12 13 19 13
Infrastructure

Government

Oil and Gas

51 INDIA 17 UAE 17 KSA 16 QATAR 15 OMAN

A CIO STUDY BY WIPRO CONSULTING SERVICES

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 CIOs 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

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% 24% 24%

Enterprise Architecture Business Acquisition IT Rationalization

24% Opportunities, Challenges 1. CIO Business and Solutions 23%

2. Variabilization

20% 20%

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

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CIO PRIORITIES & ROAD MAP

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FINDINGS
1. CIO BUSINESS OPPORTUNITIES, CHALLENGES AND SOLUTIONS
1.1 1.2 1.3 1.4 CIO Business Opportunities Business Issues & Management Triggers for Investment Events Affecting Investments: Topical Insights

1.4.1 Investments Planned for FIFA World Cup in Qatar 1.4.2 Development of Smart Cities in UAE 1.5 Key CIO Issues

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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.

1.1.1 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

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

1.1.2 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 ser vices 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

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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

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

SECTOR

SECTOR

SECTOR

Oil and Gas

KEY CHALLENGE

Telecom
KEY CHALLENGE

BFSI
KEY CHALLENGE

Infrastructure
KEY CHALLENGE

Talent shortage
ISSUE MANAGEMENT

Uncertain regulatory environment

ISSUE MANAGEMENT

Risk and compliance to government regulations

ISSUE MANAGEMENT

Availability of credit and environmental clearances

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

Consolidate business partners Solutions to ensure transparency and compliance from regulatory perspective Improve productivity Aggressive pricing strategy affecting margins/profits

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

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

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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
Improve facility integrity and reliability Production optimization
OIL AND GAS 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
Modernization of infrastructure Improve facility integrity and reliability Production optimization
BFSI
INFRASTRUCTURE

Environmental clearances Increased customer satisfaction & market demand ensuring quality technology adoption

Figure 3: Business issues in UAE

CIO PRIORITIES & ROAD MAP

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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
TELECOM OIL AND GAS

Shortage of talented manpower

Figure 4: Business issues in QATAR

Modernization of infrastructure

OMAN

Technology adoption Lack of talented manpower

BFSI OIL AND GAS

Shortage of talented manpower in the sector

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
Talent shortage Unutilized infrastructure Challenges with fluctuating global prices
OIL AND GAS

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

Uncertain regulatory environment Customer acquisition and falling ARPU Maintaining quality service delivery

Availability of credit Environmental clearances High cost of capital Challenges in land acquisition Unutilized infrastructure
INFRASTRUCTURE

TELECOM

Figure 2: Business issues in KSA

11

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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

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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 demandglobal/external Government regulations

13

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1.4 EVENTS AFFECTING INVESTMENTS: TOPICAL INSIGHTS 1.4.1 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
CIO PRIORITIES & ROAD MAP

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
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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

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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

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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

Market entry barriers Lack of talented workforce Poor infrastructure 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

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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

High inflation Lack of talented workforce 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 Lack of talented workforce Cultural difference in conducting business Relatively lower subsidy than other GCC countries

OIL AND GAS

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

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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

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CIO PRIORITIES & ROAD MAP

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FINDINGS
2. VARIABILIZATION
2.1 2.2 2.3 Overview Key insights Preferred IT elements and processes

2.3.1 IT elements 2.3.2 Process areas 2.4 2.5 2.6 Advantages of variabilization Triggers to initiate variabilization Linking business outcomes with payments to IT vendors

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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 C C Channel sharing between multiple product lines R Reduction in head-count and downsizing Hiving off non-performing/loss making units H

19% 24% 28% 63% 72%

Figure 14: CIO Perspective on cost reduction

CIO PRIORITIES & ROAD MAP

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A Aware of variabilization Not aware of variabilization

30% 70%
A Agree on adopting variabilization D Do not agree

42% 58%

Figure 15:Variabilization of awareness and acceptance

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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 Wipros 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

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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 wouldnt like to variabilize high skill resources, but instead retain them within company. We anyways buy licenses. -CIO from BFSI sector

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2.3.1 VARIABILIZATION - IT ELEMENTS

VARIABILIZATION: APPLICATION POSSIBILITIES
Data center D Software and solutions So S Desktop/Workstations D Storage S t Licenses L ic H High skill resources Low L o skill resources Analytics and Bl A

UAE
29 47 47 29 53

KSA
71 53 24 24 6 18 0 24

QATAR
56 44 81 75 44 38 13 25

OMAN
13 67 33 20 7 27 13 7

INDIA
76 55 53 53 51 35 49 25

22% 27% 29% 38% 44% 49% 53% 54%

18 12 18

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

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Variabilization: Application possibilities

Analytics and Bl Low skill resources High skill resources Licenses Storage Desktop/Workstations Software and solutions Data Center

Oil and Gas

47 63 63 53 26 26 21 72% 32

Telecom
71 57 71 57 43 71 29 43

BFSI
56 44 36 20 20 32 32 16

Infrastructure
80 70 50 40 30 30 20 0

49% 24% 28%

53%

58% 59% 65%

Table 3: CIO Perspective on cost reduction by verticals

2.3.2 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 Higher mention among Oil and Gas and Infrastructure companies

OPERATIONS Higher mention among Telecom, Healthcare and Manufacturing companies

SERVICE Higher mention among BFSI companies

Table 3: CIO Perspective on cost reduction by verticals

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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

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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 Red R Increase In I nc n cr in operating margin Reduction in number of employees R ed Increase in revenue In nc cr Payments based on transaction Pay Any An other KPI

15% 22% 24% 27% 41% 48%

Figure 18:Variabilization advantages

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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 Sav Sa S Reduction in cycle time Red R Reduction Re R ed in customer complaints Increase I ncr n in customer satisfaction score In nc cr Increase in profit Increase Incr in revenue In I nc Increase in sales

11% 21% 25% 37% 38% 45% 66%

Figure 19: Linking business outcomes with payments to IT vendors

CIO PRIORITIES & ROAD MAP

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FINDINGS
3. HIRING CONSULTANTS
3.1 Reaching out to consultants 3.2 Top consultants preferred

I
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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% 24% 24% 24%

Enterprise Architecture Business Acquisition IT Rationalization

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

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3.2 TOP CONSULTANTS

Pecking order for consulting assignment: Wipro is the Top p IT c consu consulting ult ltin ing g services provider.
IBM E&Y KPMG Wipro PWC Deloitte McKinsey TCS Accenture
WIPRO IBM E&Y BFSI E&Y WIPRO ACCENTURE TELECOM OIL AND GAS WIPRO DELOITTE KPMG

WIPRO IBM E&Y

INFRASTRUCTURE

Figure 21: Top consultants

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FINDINGS
4. CIO PROFESSIONAL GROWTH IMPERATIVE
4.1 CIOs role in the organization 4.2 Challenges faced by peers 4.3 CIO growth enablers

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A CIO STUDY BY WIPRO CONSULTING SERVICES

4.1 CIOS 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 Reduce the company carbon foot print

Helping CEOs, CFOs and other stakeholders in reducing cost through use of technology

PRIMARY ROLE

Figure 22: CIOs role in the organization

Helping CEOs and CFOs stand out to be the primary role of CIOs
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

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 15-20 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

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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

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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

2nd Highest

3rd Highest

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RECOMMENDATIONS
Reducing Maintenance Expenditure Increase visibility on Social Media Managing business information through Analytics, Big Data, etc.

Next Generation DC Planning* Driving Innovation Outsourcing Strategy and Variabilization*

Setting up innovation Center, Service Strategy *

Mobility, multichannel and Portal Strategy *

Social Media Strategy Data Security

A CIO STUDY BY WIPRO CONSULTING SERVICES

ENABLE BETTER BUSINESS CONTROL VALUE MANAGEMENT

IDENTIFY PROFITABLE MARKETS INCREASE DATA SECURITY

Next Generation Portal

User Experience and LifeX in a Pocket

Infrastructure Consolidation*

BUSINESS PROCESS REENGINEERING

CREATE EMPLOYEE FRIENDLY WORK ENVIRONMENT HELP DECISION MAKING LEADING INNOVATION

Application Portfolio Rationalization*

Data Centre Consolidation / Migration

VMO Value Management Office

Informed Decisions, BIIM, Security and Big Data *

Cloud Strategy*

LEAP - Leveraging EA for Performance*

SOA and BPM Strategy

Server Consolidations Migration

Lack of long-term vision on technology from superiors

Application Portfolio Rationalization

Figure 23: CIO challenges, growth enablers and Wipro offerings Challenges faced by Peers Offerings by Wipro Growth enablers for CIOs

*continuous process/channel visibility

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

Identifying the right outsourcing partner

Integrating Operations

IT Strategy and End to End EA*

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LIST OF FIGURES
1 2 3 4 5 6 7 8 9 CIO study sample composition Business issues in KSA Business issues in UAE Business issues in QATAR Business issues in OMAN Business issues in INDIA Qatar FIFA World Cup investment plans Key CIO issues across geographies Key CIO issues in KSA 11 20 20 21 21 22 24 26 27 27 28 28 29 31 31 35 35 36 37 39 39 41 44

10 Key CIO issues in UAE 11 Key CIO issues in QATAR 12 Key CIO issues in OMAN 13 Key CIO issues in INDIA 14 CIO perspective on cost reduction 15 Variabilization of awareness and acceptance 16 Processes where variabilization can work 17 Advantages of variabilization 18 Variabilization advantages 19 Linking business outcomes with payments to IT vendors 20 Reasons for reaching out to consultants 21 Top consultants 22 CIOs role in the organization 23 CIO challenges, growth enablers and Wipro offerings

LIST OF TABLES
1 2 3 4 5 Industry challenges and issue management CIO perspective on cost reduction by geography CIO perspective on cost reduction by verticals Challenges faced by peers CIO growth enablers 19 33 34 42 43

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WIPRO CONSULTING SERVICES

Wipro Consulting Services helps companies solve todays business issues while thinking ahead to future challenges and opportunities. As a business unit of Wipro, one of the worlds 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 21st 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 www.wipro.com/consulting or email 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 www.wipro.com.

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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 360 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, email us at: info@wipro.com

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