“Digital technology by itself does not guarantee Competitive Edge”

“Digital technology by itself does not guarantee Competitive Edge”

Vijay Sethi, CIO, CHRO, and Head CSR, Hero MotoCorp Ltd, discusses dealing with legacy infra, new technologies, and the challenges they pose for CIOs.

Vijay Sethi is a diversified leader heading various functions at Hero MotoCorp Ltd, one of India’s leading automotive companies. He believes that digital and other technologies have a huge potential to improve customer experience. In this exclusive interview he shares with us his views on how transformation will occur within the automotive sector and the role that IT will play in it.

You have been selling vehicles and spare parts online for sometime. How has the response been?
Recently there has been a huge focus on digital, automation and distribution. We were the first company to sell two wheelers online. In the first few months alone we sold 5,00,000 units. Last year we started selling spare parts online and that has picked up quite well. So we have been exploring and using new technologies. We have a huge focus on e-commerce. Our experience so far has been fantastic. Online sales are increasing in a big way.

While you are digitally transforming to address changing customer expectations, does legacy IT infra present a big challenge?
Legacy or non-legacy is immaterial beyond a point. At the end of the day as long as we are delivering value we are perfectly okay with whether we have invested in something earlier or now. The value that any initiative has to deliver has to always be more than the cost of ownership of the current software, getting new software and implementing it. As long as we can bring more value to the table (whether in the short term or medium term) we are willing to look at new investments.
Having said that I admit legacy is there and you do not always have to live with it. You must change in the wake of changing consumer preferences and new technology. When you move from system A to system B there will be a transition. For example, we were one of the most involved users of Lotus with 100s of workflows around Lotus notes and were the first company to put Lotus notes on mobile phones in India more than 10 years ago. But requirements change and we took a call and moved to Google mail.

How are you trying to leverage new technologies like IoT, AI, and machine learning for greater business benefits?
There are two parts to this. One is looking at the technology, understanding it and second part is seeing and analysing where it can make an impact in the auto industry. Blockchain, for instance, really makes sense. Blockchain as a technology has the potential to disrupt how HR works, revolutionise supply chain or for that matter financial transactions. IoT, ML, AI, 3D, AR, VR and many more technologies today have great potential and we are exploring each one of them.

I also lead innovation in the organisation and experimentation is a big thing for us. We provide training, and create budgets for pilots of help employees explore new technologies. The aim is to explore and gain experience rather than relying on consultants day in and day out.

What has been your experience in shifting IT from Capex to Opex?
A few years ago we were considering moving to the cloud. People were arguing about whether cloud was safe. We demonstrated our commitment to cloud by moving one of the most critical apps in any organisation in today’s context—email—to cloud. We have not looked back after that and we do have a cloud first / mobile first strategy. Today we have many workloads on public cloud and some on hybrid cloud. There are two learnings from this transition—cloud first and mobile first are key. This will help us reap immense business benefits.

How do you see the role of a CIO changing? In a digitally transformed world IT is becoming a utility that’s consumed by enterprises.
The CIO role will not change and yet change. There are two dimensions to this. What really is the role of the CIO? You need to understand technologies, align them to business objectives, and see how they can be deployed within your organisation. Technologies will come and go, but the conceptual role of the CIO stays the same.

The second dimension involves keeping customers satisfied and functions running efficiently. With changing technologies and fast changing customer expectations, CIOs need to change; but not so much in their role, but thinking in a big way and anticipating changing requirements, becoming agile and strategic. Today we don’t have the luxury of months when it comes to technology-led transformation; we need to talk in days.

Do you think LOBs are getting more involved in IT decision-making?
Honestly, I don’t think this is an issue at all. Particularly when we are working collaboratively with business leadership and team members. I, for example, also lead two other LOBs (HR and CSR) in the organisation apart from IT. It’s important to know that IT decisions are taken after evaluating business considerations and the value they provide. I personally feel that if business is involved in the decision then it helps a lot. I welcome it.

What are your biggest business challenges in 2019?
Specifically from an automotive industry perspective, all products are undergoing a huge change because of regulations. Global economic conditions present their own challenges. Despite that we continue to grow, both in India and globally. For that we have to always focus on creating an environment conducive to growth. One of our key focus areas is to use digital technology to continue to enhance customer delight and experience. Technology is rapidly changing and so are customer expectations, and we need to keep up with them.

How do you see Hero MotoCorp evolving in the years to come?
As we progress there will be further enhanced usage of digital technologies extensively to reach out to customers. Digital is going to transform the entire industry. In the next couple of years we will be further deploying various emerging technologies to take customer experience to the next level.

What factors do you see defining competitive edge in the coming years?
It’s not digital technology by itself that will bring in long-term competitive edge; it is the usage. For example, many companies use same ERP but do they get the same value. Same is true for new age technologies. Question is how do you actually deploy and utilise the technologies in the ecosystem? Additionally, you need to optimise your processes and bring on a culture of digitisation—I think that will decide whether you have a competitive edge using digital.