Harvard Business Publishing

In the last few weeks, I interacted with the CIOs of leading Indian firms such as Tata Motors, Larsen & Toubro, Asian Paints, ICICI Bank, ITC, and Suzlon to learn how they are driving business innovation in their organization. My goal was to benchmark their innovation performance against their US and European peers.

In a report published last year, Forrester reported that only 28% of Western CEOs believe that their IT department is proactively driving business innovation. I have heard many Western business execs complain that while their IT function is good at showcasing cool new tech inventions like RFID and Web 2.0, it is unable to align these technologies with the firm's business processes in a way that boosts value and impact for the enterprise. In other words, Western CEOs view their CIOs as great tech inventors but poor business transformers. As a result, in most US and European companies, the IT department is relegated to a support function, instead of acting as an innovation catalyst.

But in India, I found a totally different scenario: here, the IT department is actively driving business innovation. The Indian CIOs I met view themselves as change agents and strive to harness technology to continually transform their firms' products, services, processes, and even business models. Based on my research, I identified two key reasons for why Indian CIOs excel at business innovation:

1) Indian CIOs are obsessed with IT/business alignment. Unlike their Western peers, Indian CIOs are not career IT managers. Many of them come from a finance or operations background and have held P&L responsibilities as general managers or business unit leaders. Manish Gupta, Tata Motors' CIO, was previously a senior sales exec. He credits that experience for his ability to practice "customer-focused innovation," and to proactively engage his business peers in building the business case for emerging technologies. Manish Choksi, CIO at Asian Paints, is also the firm's Chief Enterprise Strategist: this dual role allows Choksi to act as a mediator between IT and business, ensuring that IT "keeps the lights on," while also driving long-term growth by enabling new business models. All the Indian CIOs I met used the term "time-to-value" again and again: rather than dabbling with the latest technologies in a lab setting, they vie to rapidly scale the deployment of cutting-edge technologies in a business context that yields maximum value for their corporation. As Choksi eloquently puts it: "As a strategic business innovator, my task is to leverage IT to compress the aspiration-to-execution cycle."

2) Indian CIOs are effective at orchestrating innovation networks. Rather than reinvent the technology wheel in-house, Indian CIOs rely on external providers to address most of their technology needs. They avoid developing custom applications from scratch, and opt for packaged software from vendors like SAP. To effectively meet his company's growing business innovation demand, Anantha Sayana, Group CIO, Larsen & Toubro, has shifted his IT staff's responsibilities from tech developers to sourcing professionals of external IT solutions. Many Indian CIOs have built fluid ecosystems that tap into the creativity of rank-and-file employees, customers, and partners to conceive and implement innovative business solutions.

As innovative Indian corporations like the Tata Group, ICICI Bank, and Larsen & Toubro aggressively expand abroad, expect their business-savvy and well-networked CIOs to enable, and even drive, their firms' international growth strategy.