Indian CIOs 5 Years Behind Time: Ajit Balakrishnan

Ajit Balakrishnan is perhaps one of the most tech-savvy entrepreneurs in the country. And his IT-savvy does not lie in using technology for its own sake, but using it to create services for the consumer. Always striving to create technologically sophisticated platforms but with a penchant for user-friendly and simple interfaces, Ajit is a part of important think tanks such as the review committee on Indian Information Technology Act and Confederation of Indian Industry s (CII) task force on e-Commerce.

In a no holds barred interview with Tabrez Khan, the Rediff CEO almost manages to give one a feeling of a virtual tour of IT’s evolution in the Indian Industry.

What are the key factors that determine success in your industry? How are you as a company responding to these challenges?

We are a consumer business in the sense that we deal with users. In India there are 30 million PC users and 100 million on the mobile phone. Success is not essentially about technology but figuring out what are the real issues people have in life and trying to solve them through innovative use of technology.

For example recently when the CAT results were announced, 300,000 candidates and their multiple relatives wanted to simultaneously know how they had fared. We responded by enabling CAT results on the mobile phone, which meant that candidates or their well-wishers just had to send an SMS with their roll numbers and they would get the results by SMS.

So a lot of it depends on quickly responding technologically to an existing demand, which solves people s anxieties. Soon after Mumbai terror attacks we had a facility where people could upload videos, and some of them were quite remarkable.

Increasingly we see our role as a media entity is to provide a platform which is technologically sophisticated but at the same time simple to use. If you have a thought to express which is political, post it on a message board, if you want to meet people with similar views with one click connect to them. If you have a video you want the world to see for social justice reasons or entertainment or for any other reason, we have a platform which lets you do that.

So all these are recurring themes, mobile, PC, user generated content, collective intelligence of people brought to bear on a particular topic, all this generates the cutting edge. But this has to be done in an absolutely simple and user-friendly way. They call me the chief simplicity officer here, because with every new product we make I question my team, will my mother be able to use that? If the answer is no, we need to make it simpler.

What has been impact of the US meltdown on your business? How are you coping with the current recessionary business climate?

I keep telling my younger colleagues that this is the seventh recession of my work life, since I graduated from IIM Calcutta in 1971. We have roughly one recession every 4 years or so. So we have the recession now driven largely by the Wall Street crisis, before that we had one in 2000 when the dotcom bubble burst, in 1996-97 which was led by the Asian financial crisis and we had a horrible one in 1989-90 that led to India becoming bankrupt. And we had a few before that. So recessions come and they last typically for two years.

Each time we were faced with a recession it looked like the world was going to end, but like the sun sets recessions also go away. However as long as it lasts, revenue becomes hard to get, you no longer grow at the breathtaking pace as during a boom, forget growth even remaining at the same place becomes a challenge, very often you see declines. If you are staying at the same place during a recession often you are doing very well, it is foolish to try and grow by spending more on advertising and distribution. But the other feature of recession is that costs also go down.

Like recently we had to shift our office in New York from one location to another. We got it for the equivalent of Rs 65 per square feet, air-conditioned and fully done-up and for a period of 10 years. What that means is that in Mumbai real estate prices have to go down to Rs 40 per square feet. So the point is that costs go down during a recession and these are opportunities. Sometimes you bring down costs to such an extent that in the first year after recession you witness a bumper profit. But you need not always control costs by firing people, if they are incompetent you would fire them anyway, recession or no recession.

Also during times of boom there s a lot of irrational exuberance, which gets dealt with during a recession?

Yes, very true. Recessions are often the midwives for the transition from one economic era to the other. So during the transition from one economic era to another, the revenue hit you take is the least of your problems. Actually your business model might be becoming out of date and you have to watch out for that.

For instance, investment banks in New York and elsewhere did good business for 5-7 years on a business model that comprised borrowing $35 for each $ that they owned and taking bets on derivatives, which is a good thing to do, but whose risks they did not fully understand. And they discovered that their business model had become outdated.

Over the last ten years large enterprises have automated their business processes and increased their efficiencies by deploying information technology, what has been your own experience in this regard?

We are centered on technology so acceptance of technology here is universal, sometimes too much. We are at the leading edge of technology adoption in India.

Some of the things we are doing might sound arcane, nonetheless what keeps us awake at nights is to make sure everything we create is visible on every device such as PCs, mobiles, a Nokia or a Microsoft smart phone or a Google android phone. In the US they have 250 different types of mobile phones and four to five different PC types so how to design sites and make them work across different devices is a challenge which we just conquered. Our editors can now publish an item and it gets distributed across devices, as a result none of the device has a more than eight percent market share.

The other thing is that Internet penetration in India has a lot to do with languages. So we are working to ensure that we have a technological solution which enables conversion of content we create to multiple languages and its distribution. This is our other preoccupation.

Thirdly, we have been great supporters of Open Source. All our services run on open source software. Also things like Semantic tagging are gaining traction but they are very specific to us. Besides that we have converted all our internal services into web services. Recently I was asked to speak an audience of CIOs on web-enabling of services and I found a very skeptical audience to whom I was trying to explain that I am not a technology vendor dishing out marketing hype. So I have a feeling that Indian IT folks are 5 years behind time.

Moving forward do you see technology becoming increasingly critical to business success?

In India we have changed our views about technology quite historically since the 1980 s and 90 s when technology was supposed to be a job destroyer. In the 80s and early 90s we used to have periodic strikes against automation in LIC or railways offices because people perceived automation as something that took their jobs away. But then the IT services boom happened, people realized technology was not a job destroyer but job creator. You had iconic companies like Satyam and Infosys come up and people hoped to get jobs in them.
The positive feel was further enhanced when these companies announced adding thousands of employees each year. Indian policymakers then started to think technology meant jobs while in the US they took an exactly opposite view. In my personal view neither of this can be the reason why you adopt technology. The real reason should be convenience, benefits for users and use of technology to extend services to users. For instance ATMs enable you to save time and effort by avoiding going to bank branches and the railway reservation system is similarly convenient. I am a great fan of using technology to extend services to people and make their lives easier.

As an industry person who has observed Indian industry closely, do you think Indian businesses use IT strategically or just as a tactical tool?

I don’t think in India they use it strategically. For instance take this example of a leader of a large enterprise which is known for extending technology to rural areas. I met him once at an event and while interacting with him found out that he does not have an e-mail id. His secretary receives his e-mail and prints it out for him to read everyday. And this for the leader of a company that has a specialized IT division, is known for rural extension of technology and even has a Harvard Business School case study done on it for innovative use of technology.

So Indian business executives who are currently at the top, have not had to learn anything technologically, it has not been important. They have grown in the licence-permit raj by their ability to get licences from government or getting government to deny licences to competitors or being able to raise capital quickly or raiding the stock markets. But using technology to shape things is something that has not mattered really to many companies in India. I think all this will change as competition intensifies.

What about your own use of technology? Is it strategic or merely tactical?

For us it has to be strategic because our business is centered on that. For me to say anything else would not be correct.

What are your expectations from somebody who handles IT in your organization?

One issue we have is when we recruit people for finance or other functional areas, it is hard to find those who are IT-savvy. Today when everything is digital, people in all functional areas need to be IT-savvy. For instance in order to implement Sarbanes Oxley controls you have to do it digitally.

On the other hand, we have a lot of IITians who are very IT-savvy; they know data mining and computer science but lack the business or marketing skills. Our education system and the curriculums we set have a lot to answer for this. For instance, the IT syllabus for Chartered Accountancy courses is 15 years behind time. If you look at some of the leading business schools, including the IIMs, and I am on the board of IIM Calcutta so I have seen it closely, they have heavy duty IT and marketing courses, but nothing that intersects both.

Personally, are you gadget-savvy? What are the gadgets you use?

I personally love gadgets and the most exciting thing about them is that now you can do a lot many smart things on smartphones like iPhone and Android. Anything that provides applications comparable to a PC, I find exciting, not just for productivity purposes but also for fun. I think the action arena in the future is clearly going to be mobiles.

Source: CXOToday

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