CIOIN

Interview Questions

Full Interview with P.V. Kannan

P.V. Kannan:

My journey as an entrepreneur started way back in 1994 and began with the launch of a CRM product company. We built the first Web platform to handle customer e-mails and included chat sessions. The leap from there to 24/7 Customer was not a difficult one. 24/7 is a combination of the offshoring tasks beginning in India and my exposure in the CRM industry. 24/7 was founded with innovation and technology in mind rather than being just about manual tasks.

P.V. Kannan:

At 24/7 we look at IT in two layers. One is the hygiene layer which does the support function. The responsibility here is to keep things running including network connectivity, applications for end-users, security, etcetera. Then there’s the innovation layer which is where you can see a change in the role of IT. The innovation layer is meant to provide value to customers. Any call that we receive is supported by the hygiene layer, while value additions to better customer experience before and during the call comes from the innovation layer.

P.V. Kannan:

Absolutely. We outsource a lot of our IT functions. Some of the products that we develop are also outsourced. We are an IT shop, but we don’t necessarily have to build all of it ourselves. To outsource or not is a question of costs. Now, the answer to whether to outsource or not can be answered clearly by asking one question: will it be cheaper to develop in-house  or outsource?

P.V. Kannan:

Let me explain with an example. At 24/7 agents assist callers who are facing a certain issue, with billing for example. There’s a lot of background processes that happen before that call actually takes place. In case of a possible billing error, customers today tend to check with the website of a service provider. That’s where the innovation lab steps in — by giving a front-end to a customer before he even needs to make a call. When a customer visits a support website, our technology predicts what he is trying to do. We know that the customer has received a bill and he’s probably making a query regarding that bill. The website then points the customer to the billing section rather than presenting him with overwhelming number of options. This is a win-win arrangement: Increased customer satisfaction and better operating efficiency for us. This kind of value addition comes from the innovation labs.

P.V. Kannan:

Innovation has been a part of the DNA of the company. We drive innovations across all functions and that includes IT. For instance, marketing folk cannot take credit for routine activities but need to show what they have done to bring in more customers, IT too needs to come up with ideas and implement them to drive business. This is irrespective of the state of the economy.
A slowdown comes every few years; it is part of the business cycle. For us, the slowdown was about measures to ensure that we stayed alive as a company, and now, a year-and-a-half later when things are heading back to normal, we are still around. Concurrently, we figured we could undertake initiatives that our weaker competitors could not. When the upturn begins, we are sure that we will come out stronger than the competition. A slowdown is a period when your weak competitors are eliminated. So, it is not a case of accelerating innovation — we just had more time while our competition weakened.

P.V. Kannan:

This is an opportunistic time. If you are in the market to buy a car, you have better negotiating power at the dealership because sales are low. That’s the case even with enterprise deals. Though there is a general feeling of recovery in the market, there are technology service providers who are yet to recover. When we talk to one vendor, others come in offering better prices and there’s not much we have to do to get a good deal. But I don’t believe in terms like ‘squeezing the vendor’. It is just the market adjusting its prices to reality.

P.V. Kannan:

We have a compliance team that racks compliance requirements in every geography we operate in, like the US, the UK, Canada, Philippines and Australia, among others. Our legal team monitors compliance requirements in each of these egions. We also conduct spot audits. Every quarter we see changes in policies — different data security norms come in and there are norms pertaining to specific industry verticals. The money and effort spent in complying to these norms is the cost of business. We have to be a compliant organization worldwide.

P.V. Kannan:

As IT infrastructure becomes standardized, there’s less need to worry about it. Basic IT tasks are now taken for granted. It’s like the supply of electricity and water: we don’t spend a lot of time discussing the strategy to obtain and maintain it.
A 99.99 percent uptime is no great shakes now — it’s an expectation. There are no brownie points given for ‘keeping the light on’, so to say. I expect a CIO to deliver additional value. If there is no value addition beyond playing the support function, I’d go so far as to ask why hire a CIO? And value addition comes  from innovation.

P.V. Kannan:

Of course, this largely depends on the CEO’s view of IT’s function in his company. In many cases CIOs don’t directly report to the CEOs. Sometimes they report to the CFO and bizarrely even head of HR. You can figure out how strategic the CIO’s function is by seeing who he reports to. Then, it depends on the personal strengths of the CIO himself. Even in cases where the CEO is not appreciative of IT’s strength, the right kind of CIO can come up with suggestions for improving the business with the help of IT. That is sure to get  him recognition.
Take the example of FedEx, in which IT brought in innovation to something as mundane as a courier business by introducing the now famous tracking feature. That’s clearly an IT-driven project. When IT plays a critical and innovative role, it reserves a place for itself in management board rooms.
So, the question that’s on the minds of business heads is: Can I count on IT as a revenue generator rather than just being a cost-saver? To me, it all boils down to the issue of ROI.

P.V. Kannan:

No, it is very easy to calculate ROI, even for ideas. An idea has to produce money, otherwise its value is zero. I believe that ROI for IT projects, like any other, is  fairly measurable.

P.V. Kannan:

First and foremost, the IT leader must understand how the company makes money, it’s business model. He should be able to contribute to the process. In our case, it is about acquiring customers and keeping them happy.
My IT leader should think of innovations focused on these needs. He should be in a position to recognize which of our customer’s pain points we can ease, and then do it.

P.V. Kannan:

An IT leader, by definition, is in a leadership position, so he has to be a manager. If I have a person who is great with vision but has issues in getting things done, then I call him a visionary.

P.V. Kannan:

No. Domain expertise is not a huge advantage, at least in our industry. For example, an IT leader who is well versed in the travel space can innovate for financial services as well. For me, innovation is key.

P.V. Kannan:

We live in a very new world, where companies like Facebook and Twitter build over 400 million users in 14 months, and then we have IT projects, like an application development that takes 18 months. This is not acceptable. IT leaders have to create an environment where deliverables are in days and not months or years. The whole cycle has to shrink and they must be ahead of the curve. Right now, the biggest challenge our clients have with IT is that IT is still working on projects that they started way back in 2004. The user requirements have changed so much since then that the project now does not bring any value. If you start writing the specs for developing a social media application today and deliver it by 2014, the entire context would have changed.