IT leaders meet the challenge to innovate frugally

These are challenging economic times for enterprises, and more so for IT leaders asked to drive innovation despite budgetary constraints.

“There is a huge pressure on IT budgets across organizations,” says Vijay Sethi, chairman and chief mentor at technology-based mentorship platform MentorKart. “At the same time, the demands of users from IT are growing as they expect more digitization and better hardware.”

Sethi, who prior to setting up MentorKart, served as the CIO and CHRO of two-wheeler manufacturer Hero MotoCorp for over a decade, lists the increasing cost of software licenses, spikes in consulting fees, rising hardware costs due to chip shortages, and inflation among the many factors adding pressure on IT budgets.

“While it may seem very challenging for a CIO to drive innovation in such a scenario of budgetary pressures, the reality is that the need for innovation is the highest at such times,” he says.

As a result, many IT leaders have found themselves in need of delivering business-altering innovation on tight or virtually nonexistent budgets, with more expected to be pressed to the task in the year ahead. Here, IT leaders offer examples of such innovation in action, as well as strategies for driving innovation frugally and the impact on CIOs doing so.

Transforming a bank on a shoestring budget

Banks across the world are going digital. So, when Prasanna Lohar, then vice president of technology (digital, innovation, and architecture) at DCB Bank, was asked to drive organization-wide innovation, he requested for a team of six to seven people to help him. Top management turned him down.

“Banks such as ICICI Bank and Citibank are at level one in lending importance to innovation. We were languishing at level three. The management didn’t realize the time and effort that went into innovation,” says Lohar, who, with no budgetary commitment, set about driving innovation at minimal cost.

“I started meeting all the partners and banks to understand where the industry was moving, what innovations they were doing, and their levels of digitization,” he says, work that helped Lohar establish a structure and framework for innovation without having to contract with a big consultancy. “It was even better that it came from within the company as we understood the people, the culture, and the IT infrastructure better.”

As part of his innovation strategy, Lohar organized an acceleration program/hackathon, called DCB Innovation Carnival, to get technical expertise and innovative digital solutions at a fraction of a cost. “In consultation with the business stakeholders, we identified more than 40 areas across the organization that could leverage the power of digital” through the program, he says.

Going one step further, Lohar partnered with leading technology vendors and the National Association of Software and Service Companies (NASSCOM), an Indian non-governmental trade association and advocacy group, for these multicity events. “We got more than 90 companies as members of the acceleration program,” he says, adding that DCB used NASSCOM offices in conducting seven hackathons across cities such has Bengaluru, Pune, and Ahmedabad to save on real estate costs.

“We spent around ₹1.6 million to ₹1.7 million, which would have otherwise costed us ₹5 million. We were also able to implement more than 15 technology solutions such as HRMS, ATM opening process through blockchain, lead management system, Aadhaar-enabled ATM, and card management, issuance, and other card projects with the partners we met at the event. We easily saved ₹20-30 million through this initiative,” he says.

Developing in-house to expedite innovation at lower cost

While DCB Bank’s Lohar led innovation across the enterprise, impactful innovations can also be undertaken at a project level. This was the case with Subroto Panda, CIO at intellectual property law firm Anand & Anand, who decided to leverage automation innovatively to elevate customer experience.

That Panda developed the solution in-house was as much of necessity as choice owing to the nature of the law firm’s business. “The lawyers are busy in court from 9 a.m. to 6 p.m. It would have become difficult had we hired developers from outside, as getting time from the lawyers during the development of the solution was tough. Large vendors and SIs have their own SOPs, which would have meant high costs and long timelines. Moreover, they were offering us off-the-shelf products that wouldn’t have met our needs. The top management was also open to the idea of bringing in a partner only when the project was large,” he says.

Panda, therefore, decided to go it alone. Panda’s team built crawlers using ASP.NET and JSON to compare the company’s database with those of the governments’ patent and trademark registration websites such as USPTO and WIPO, checking for any updates. Every application has a unique patent application number which the crawlers track. Any changes in application status trigger the crawlers to extract information from the government’s site and send it as an email to the attorney handling that client for action.

“Instead of waiting for the communication to come from the government’s end, we have leveraged technology to become proactive. It has not only saved time but also eliminated errors due to manually culling out and typing information from applications on the government sites. Earlier, it used to take a person 30-35 minutes for handling one application with no guarantee of accuracy. Now a couple of applications are completed within 60 seconds with 100% accuracy,” says Panda.

Panda has also developed a solution that predicts whether the client will be granted the desired patent/trademark. “We arranged metadata on all the historical cases. The master database collates all the information into a database on which we then run an ETN or extract, transform, load tool and a specially developed algorithm is run to predict the success or failure. Technology combined with the experience and hunch of our lawyers ensures that the accuracy of the solution is as high as 80%,” he says.

“Partners had quoted ₹25 million and three months’ time frame. We did it without any capex in just 15 days,” he says.

Open source to the rescue

Abhishek Singh, CIO at US market travel portal Cheapflightsfares.com, had to innovate as his organization’s business was at stake and there was no cost-effective solution available in the market.

“Travel portals, such as ours, typically see a lot of Telephony Denial of Service (TDoS), also called robocalling, attacks that can overwhelm critical telephone systems such as call centers. There was a phase when we were badly hit by such attacks. Our call centers were receiving as many as 2.5 million TDoS calls a day, choking the entire customer service and sales operations. There was no respite, and attackers were determined motivated and ruthless,” Singh says.

“Whatever solutions were available, were too expensive. Approaching vendors such as Avaya and Cisco would have meant at least $400,000 in capex and a development cycle of one year. Meanwhile, off-the-shelf solutions were charging .01 cent for processing each call. If we got 500,000 calls a day, the cost would be exorbitant for us. Besides, these solutions offered partial functionality,” says Singh. “Necessity is the mother of invention so we went inventing.”

Singh along with two team members developed a solution in-house. “SIP call handling was the primary base that we worked on. We analyzed and manipulated the SIP header and modified the existing PBX program,” he says. Session Initiation Protocol (SIP) is a signaling protocol that enables VoIP by defining the messages sent between endpoints and managing the actual elements of a call. The other components Singh’s solution included the open source communications framework Asterix, basic cryptography, encryption, API integrations, database queries, and scripting. 

“The entire solution, developed purely on open source, went live in 2019 and it took only four months, one server, and three resources. The solution quickly analyses a call, whether it is fake or genuine, and routes it accordingly. With 100% impact on the business, it is so designed that it is scalable and can handle any number of calls,” Singh says.

Hidden benefits of innovating on the cheap

Driving low-cost innovations such as these can yield multiple benefits for IT leaders and their organizations. In addition to showing a CIO’s hunger to get things done, such innovations can open new revenue streams, something top management increasingly expects from IT leaders today.

For example, Panda’s solution for Anand & Anand has been extended to the law firm’s clients on a subscription basis. “We already have a few customers and plan to market it aggressively going forward. It has transformed the IT department from a cost center to a profit center,” he says.

Moreover, innovation initiatives such as the hackathon approach taken by DCB Bank’s Lohar can give and IT leader crucial connections across the IT industry. “Today, if anyone needs a startup for a project, we can align it in one day,” Lohar says. “If there was something that needed three or four partners, we can connect the dots and enable that as well in no time.”

Such endeavors also boost trust in the CIO across the organization “as everyone would get a message that the CIO is sensitive to organizational financial health and priorities rather than trying to push his own agenda,” says MentorKart’s Sethi.

Singh agrees, adding that his work at Cheapflightsfares.com also boosted the confidence of the team. “The solution that we developed has been adopted by other big travel portals by adding some more features. This was very heartening and a big validation of our efforts,” he says. “Large enterprises also file patents for innovative projects done by their CIOs, which mentions their names, and provides additional R&D budgets to the IT department.”

For some CIOs, such as Lohar, frugal innovation can also be a game changer for their careers. Lohar’s work at DCB Bank enabled him to become an expert and a thought leader in innovation. “With my experience, I now drive innovation for both Indian and international banks,” says Lohar, who has since quit DCB Bank to become the CEO of Block Stack and counts SBI, Union Bank, Motilal Oswal, and NIBM among his clients.

Tips for innovating frugally

With frugality a high priority for many enterprises, here are some strategies IT leaders can adopt to do more with less.

Prioritize your budget

With IT budgets under tremendous pressure, CIOs can find it challenging to carve out money to push innovation. Sethi advises categorizing IT initiatives into three buckets — vital, essential, and desirable — by considering them from three perspectives: business criticality, technical criticality, and risk mitigation.

When CIOs undertake this exercise, Sethi says, “they should ensure that their biases and preferences are kept at bay. For instance, if an IT leader wants to upgrade a system but the analysis shows it is not critical from a business, technology, or risk perspective, it should be deferred.”

This approach helps CIOs prioritize spend. “At the end of the exercise, technology leaders may finally come up with 50% budget for vital initiatives, 30% for essential projects, and the balance 20% for desirable initiatives.” With budgets locked, at whatever levels, CIOs will get the clarity to take up and sustain innovative implementations accordingly.

Leverage the power of collaboration

CIOs can budget limitations by leveraging the power of collaboration, an approach that Lohar adopted with stellar results.

“The DCB Innovation Carnival was kickstarted by forging partnerships with technology companies and industry bodies. This enabled us to get access to their resources and execute the initiative cost effectively,” he says. “Besides fueling innovation on a shoestring budget, the initiative delivered intangible benefits to the bank in the form of immense marketing and branding boost. We even received five awards for this program.”

Once the solutions developed through the DCB Innovation Carnival were successfully implemented, Lohar’s CFO was more forthcoming with budget for further innovations. “After this hackathon, we wanted to set up an innovation lab. The budget needed was ₹46 lakh, which the CFO cleared immediately. This was the confidence we built in the company,” he says.

Reward partners and team members

According to Singh, “one of the most challenging aspects of innovating with budget constraints is to find a vendor who is willing to customize and develop at a low cost. The second was to find team members who were ready to toil hard to run and test the scenarios in real time.”

“We offered an attractive proposition to the partner company ­— it was free to sell the developed solution to other customers. The partner found it compelling enough to work for us virtually free of cost. We also motivated the team members by giving them incentives and an opportunity to upskill themselves, which brought them around,” he says.

Invest time in upskilling and research

When Panda and his team at Anand & Anand decided to build the patent automation solution in-house, they burnt the midnight oil upskilling themselves. “To cut our dependency on external resources, we had to build internal competency. We allocated specific time each day to be spent on deliberation around innovation, managing operations, and tactical areas. Several hours were spent daily studying and watching YouTube videos,” he says.

Singh agrees, saying, “Before developing the TDOS solution, we read a lot of research articles on how the product was designed. CIOs should look at university research articles rather than product presentations because new products are based on the former. But what helped us solve this problem even more than technology was asking questions, readjusting the course to be agile, and observing the pattern. These three things should be at the core of problem-solving: Ask questions, agility, and pattern mapping.”

“Innovating cost effectively is easier said than done. It demands a CIO to minimize costs and risks while maximizing returns. However, there are IT leaders who always think about doing things faster, cheaper, and better and they stand a better chance of delivering innovation on a shoestring budget. When such enterprise technology leaders build and deploy unique solutions frugally, they are respected, referred, and remembered,” says Panda.