IT Helped Titan Grow : Bhaskar Bhat

Interview Questions

Full Interview with Bhaskar Bhat

Bhaskar Bhat:

We are working on an objective: achieving a $1-billion turnover by 2009-10 and exceeding that significantly thereafter. By that time, we also have the desire to become an institution which is healthy, wealthy, sharing and caring, one that will be the envy of Indian corporates.

It is not just in terms of scale - not just about creating a billion-dollar company.

Wealth is about financial health; and health is about sustained, long-term growth. Sharing means that we will share our wealth with all our stakeholders, and caring means that we will care for the individual, the environment and the community. Becoming the envy of Indian corporations means that we want all people - associates, employees and customers - to be touched. We want people to own our brand, work for our company, and associate with us. Even if we are just a billion-dollar company and if there are other companies that have a turnover of $10 billion, it doesn't matter. People must say, "I wish to work for Titan. I wish to buy its products, do business with it, and run a franchise store for Titan."

 

Bhaskar Bhat:

I think that during some years, IT has outpaced expansion in terms of investments. But overall, if you take the last five years, it has kept pace. Sometimes, you have to outpace to be able to prepare yourself for the future, especially with something like IT. Similarly in HR, sometimes you have to recruit the talent that is required to run your future vision.

And not only has it gone as per plan, it has gone as per strategy. We have an operating plan for a year, apart from our strategy.

Our strategic plan covers five years, but IT strategy can't be embedded because technology is changing so rapidly. You have to be flexible and nimble, but, at an overall level, you need to create an information culture.

 

Bhaskar Bhat:

Normally, we are in the Rs 10 crore per annum bracket. I think that this year, it will be around Rs 8 crore-10 crore. But overall, including revenue expenditure for software and associated heads, it is around Rs 15 crore per annum. As a percentage of turnover, we spend around 1 percent on IT. As a percentage of turnover, I don't think that it will grow much, and I expect IT spending to generally account for around 0.5-1 percent.

Bhaskar Bhat:

I think that the greatest impact of IT has been in the supply chain and distribution channel. It starts with our entire business, which is based on consumer understanding. Our brands are our most important assets. Therefore, enriched consumer understanding helps us to derive greater value from our brands.

All the action is in the marketplace as far as we are concerned. Capturing that transaction - or non-transaction, so that we can find out why a consumer didn't buy our product - is critical to building a competitive advantage. Therefore, we have processes and technologies to align manufacturing with the marketplace requirement. So, everything is marketplace driven and for that to happen, IT becomes a key bridge between the marketplace and the backend.

 

Bhaskar Bhat:

Ours is a lifestyle product and in this category, design plays a very key role - and this is just on the outside. But, if you take a watch, all the internal moving parts have to be engineered to perfection. So, IT has helped convert the creative output of a designer into an engineering and factory-floor manufacturable product. In the development of significantly advanced technological products like Edge, the slimmest watch in the world, IT has played a significant role both with respect to the design of the technical parts of the watch and in the aesthetics.

Bhaskar Bhat:

We have been evaluating RFID and feel that it will play a very crucial role across all our products because you can embed so much on the products using RFID. You can extract a lot of information and it is a very attractive area of opportunty for us. We will start with jewelry and tracking of inventory. For instance, we provide a guarantee for our watches and if there is any defect, the consumer can bring it back. Using RFID, we can get information on when the watch was produced, the batch number, and so on. We already have pilots running for jewelry, and plan to do something with RFID and watches next year.

Bhaskar Bhat:

Actually, our global expansion plans will not make any difference to our IT setup. For instance, we have opened an office in Hong Kong, and the people there are seamlessly connected to our SAP systems. We are also building portals for all our distributors to use. Nowadays, people are talking about the death of distance. The vision for the IT department is to build a robust information system and to align the same with the business needs of the organization, so that the company's future requirements are met.

 

Bhaskar Bhat:

We have got specific programs for this. First of all, we have addressed the problem of attrition at a very basic level by creating a separate pay and perks system focusing on the IT staff, differentiating them from the rest of the organization. Additionally, the IT function is so attractive within Titan that people from other departments have begun to move to IT. So, we have created a mobility policy in HR, which enables employees who are qualified to work on IT projects to do so. But, the culture-enabling thought in the organization is most important - that IT is integrated into the company and that IT people are seen as part of the team. So, it is not just the money or the job that makes them work with us; it is the culture that we have created that makes them want to work for Titan. Therefore, I wouldn't want to bracket it as just an HR initiative. There is a strong sense of belonging that we have created, and this ultimately helps us to tackle attrition.

Bhaskar Bhat:

We have benefited a great deal by keeping IT in-house. It is not just about cost-cutting. We feel that IT is such a critical function that we don't want to outsource it. The way we are growing, there are fire-fighting issues, development issues and long-term issues.

 

If you have an IT team that is in-house, it will be totally aligned to the vision of the company. The sheer commitment of the IT employees will help us achieve our goals faster and in an easier manner. If you outsource it, it is seen as a business. When it is done in-house, the commitment of the people working on the IT project is higher. This again is created by the sense of belonging. We have people who visit the shop floor at midnight to see if the disaster recovery systems are working. This sort of commitment is not something that you can get if you outsource.

 

Another problem with outsourcing is that creativity doesn't blossom. We have IT people working with brand managers of the jewelry business, who are telling them how IT can solve issues. You can outsource something like traveling, but business driven creative solutions will only emerge when things are done in-house.

 

Bhaskar Bhat:

The CIO has access to information as well as processes in our company. He is involved in the development of business plans. I think that the CIO's strategic role is increasing, and it will grow further in terms of strategy development. Because of process orientation and process knowledge, our CIO is already the corporate quality head. The CIO here also handles the knowledge and business excellence management role, and this is a very strategic role.

The CIO can also play a major role in the think tank of the company, which mostly comprises the top management. But since the top management is very much hands-on in running the company, the CIO is in the best position to stand apart and facilitate the thinking process of the company.

 

Bhaskar Bhat:

Today, the company is able to collect data on every single sale. We have developed advanced forecasting tools, which can take this past data and help us to forecast what will happen in the future. These forecasts are then vetted by our sales people. Since the entire supply chain rides on the IT backbone, this knowledge can be fed back to the manufacturing units and is used to design better products.

Bhaskar Bhat:

This happens at two levels. For one, our retail outlets are highly IT-enabled, and are feeding information on the transactions that the customer has with the company. In addition, we capture the customer information and have a loyalty program. All the information comes through our IT network. Since the transaction information is generated and goes back to the ERP system, data mining gives us useful information.

All the reports that our brand managers get on cluster wide and geographic trends help them to take better decisions. This is especially useful while launching new products - the faster you get the information, the quicker you are able to react to market trends. Thus, IT has given us a lot of agility, which is important because the fashion business changes very rapidly. IT has also helped us to significantly reduce costs in terms of inventory. I think that we are one of the few watch companies in the world that doesn't carry dead inventory.