Digital transformation and the build Vs. buy conundrum: A CIO’s perspective

Host Guru Venkatesan is joined by Sukumar Rajagopal, founder & CEO of Tiny Magiq, a digital transformation & behaviour transformation accelerator start-up. They discuss the importance of digital transformation in today’s technology driven world and how it presents huge opportunities to enterprises to transform their business.


Umashankar Natarajan


1 min read

For most problems businesses face today – solutions are plenty, purpose-built by innovators. The question is mostly around identifying the right transformative opportunities within and the choices one needs to make – core vs. context, now vs. later and more importantly, build vs. buy.

Host Guru Venkatesan is joined by Sukumar Rajagopal, founder & CEO of Tiny Magiq, a digital transformation & behaviour transformation accelerator start-up. They discuss the importance of digital transformation in today’s technology-driven world and how it presents huge opportunities to enterprises to transform their business. 

Here’s how it goes: 

Guru: Hi, I'm Guru Venkatesan and I would like to welcome you all to this episode of Clause & Effect, a podcast presented by SimpliContract. Joining us today is Sukumar Rajagopal, a thought leader, innovator, and an award winning CEO with 33 years of industry experience in information technology. Sukumar is the founder and CEO of a digital transformation and behavior transformation accelerator startup called Tiny Magic. 

Prior to starting this firm, Sukumar was the global CIO and the Head of Innovation at Cognizant and has led several billion dollar plus transformation programs during his stent. Sukumar has also received lifetime recognition for his work in IT through  Computerworld Premier 100 IT Leaders program and was also rated one of the Top 100 Social CIOs in 2013 & 2014 by Huffington Post. Sukumar, we are glad to have you join us today on this podcast and I'm excited to have this conversation with you. 

Sukumar: Thanks a lot, Guru, for those kind words of introduction. I'm happy to be here as well. 

Guru: Let me start with one of the favorite topics that's across the tech industry today - digital transformation. That's very imperative given quite a bit of tailwind that this pandemic is created for the tech industry and the need for leveraging technology for digital transformation. Given your experience and having worked across client facing roles, led large transformation programs, want to share some thoughts about what you think of digital transformation from your view and why is it important at this critical time of given the pandemic and given the continuous threat that's coming up, thoughts Sukumar, from your side. 

Sukumar: As a technologist, every time some new technology comes, we are all excited about it. So one popular thing, maybe to just dismiss this as the next big fat from the tech industry because we seem to move from one fad to another. But in my experience, I think there is a fundamental shift that has happened. And my canonical example or I use that more for self flagellation, I should say is, why didn't I come up with Uber? Now, whenever somebody you mentioned the CIO role. I was also the Head of innovation of Cognizant. I've been working in the field of innovation for 20+ years. The question that I had, every time an iPod comes, iPhone comes, I would be like, why didn't I come up with that? And immediately my brain will produce a pat answer, ‘hey, I don't have the R&D, dollars and any of that. So how could I have come up with this?’

But when Uber came, I could no longer give that excuse one, I was the CIO as you said. So I had several thousand people in my IT Department and we were transporting 25,000 people a day, even at that time, for specific SLA driven jobs. Had I come up with that idea, I could have made a real business impact on Cognizant. But the fact is I didn't come up with it. Now, why is this item of self flagellation? Because if you look at what Uber did, did they come up with any new technology? No. Google Maps, GPS based navigation, payment gateways, APIs, app store, social media, all of it was already there. They just reconfigured the whole thing to digitally transform the, I would say, urban transportation landscape. Uber and its clones, you can say. Now has that resulted in a new set of problems? No. Yeah, but when they started it, they have changed the game. 

Why I think this is a canonical and inspirational example is why can't we do this in every function, process, system? Because the iPod and iPhone didn't leave me in because that's a radically new hardware technology. I obviously don't have the resources to do that. But can any of us in this room, and can any of your audience transform their process and system digitally using these digital technologies? The answer is a resounding. Yes. 

Guru: IT's a great point that you brought in. The canonical example was one that I'm sure every B school and every leader is talking about - how an innovation can be a huge transformation across the globe. Now, having led multiple such projects in working across enterprise and BitMarket customers in my previous life, I would say, across large MNCs today, I feel there are so many options in front of business leaders. The earlier anything to do with technology and digital was only confined to the CIO's office. Currently, if you look at there are so many offerings and solutions, let's say for business businesses and marketing, the business like sales business for finance offerings, for, let's say, even procurement organizations. There are so many, so to speak, digital transformation offerings that are across, and it only confuses the audience across what is the right thing to do? What's your thinking about how should you go about aligning your priorities to offerings in the market? What's your experience Sukumar? Share some of your lifetime learnings on this.

Sukumar: Let me give two perspectives. One is, let's say I am a CIO. I'm a process IT person. The other is if I am a product or a service vendor, what do I do with the clients? In both cases, the answer seems to be, I would say, somewhat of a common pattern. And I'll describe this carrying on with the same Uber example. Now, I have been standing in Manhattan in pouring rain with a couple of my colleagues and frantically waving the cabs down and we couldn't get the cab, we were frustrated. But I didn't still come up with the idea, because Travis Kalanick and Garrett can say that is the scenario that led them to come up with the Uber idea. Why didn't I come up with it? 

The answer turns out to be something very interesting we found about what is the problem. Problem is an unmet expectation. Now, I have not found an exception to this rule. Let's go back to the Uber example. I did not have the expectation that when I am standing, where I am standing, a car should come right now. Since there is no expectation that I had, I'm satisfied with this frantic wailing down of the cab or call the phone company. I didn't see a problem. There is no unmet expectation. There is no problem. Which means there is no idea I can generate. So what do we call this phenomenon? That Uber. And if we studied all the transformative innovators, inventors, thousand plus from across all industries, all of them go after this other thing, which we had to coin a new phrase for performance under supply. 

If you define it in the same unmet expectations context, you can say this is an unimagined expectation that the innovator has thought of. Now, when they start looking at, I want to get the car where I am standing, when I am standing right now. As a technologist, it's not that hard to make the connection to GPS based triangulation. So the starting point of the great idea, Uber, is not GPS based triangulation. IT's the spotting of that unimagined expectation which we call performance under supply. 

Now, if you look at what we did in the IT Department, the same thing we did what my IT Department used to do. And I think most corporate Fortune 500 IT departments would find a big problem, come with a big app solution to IT and roll it out over two, three years. And what I found is that by the time the change management is done, Cognizant has 300,000 employees. I found that the ROI was maybe somewhat negative if you actually count all the change management costs, because we pursued, what, 15% - 20% productivity gain for our associates. So me and my team said that seems to be the problem. Let's chase 500% productivity gain. This was one of our tenets, there were a few more. Now, how to do 500% productivity gain in a corporate IT Department is a performance under something. IT's a new unimagined expectation that gave us so many ideas and opportunities that we ended up developing 700 applications in three years. In the same three years, a conventional approach might have given you maybe 25 apps, and even those wouldn't have been sold in a delightful way. IT'll be like yet another big solution. So I'll stop here. So this is the thing I would say from the CIO point of view. From a vendor point of view also, I think it's similar, but we can tackle the subsequently.

Guru: So that leads me to think of if you're looking at some of this, you explain the way of unmet expectations. There is also something called unmet needs in the market. There are large enterprises which are still looking at should we build or should we buy? Should we go all harvest - because there's a lot of compliance GDPR, there is a SOC2, the compliance risks of exposure - that's making them think should we go in house or should we look at buying some solutions? Build or buy, right. What's your experience and what would be your feedback basis, your experience on the build vs. buy question that's with many enterprises today. 

Sukumar: Let's look at it from the service provider or the vendors perspective first and then we will look at the CIO. Now let's say that I want to buy vs. build some software. What I am not looking for today, and this is a mistake I have made in my career. What we do in the IT Department is to make a big list of features that we want which is turned into the RFP and then we send it to the vendors and then we evaluate vendors on how closely they adhere to that list of features. Somewhere it's around 80% and then it becomes the usual beauty contest and then rate negotiation and pick the vendor. That is the standard buying strategy that has adopted. Now this doesn't address the notion of performance under supply, which is why the buying thing is not being done properly because the vendors are not solving a performance under supply. They are solving unmet expectations which is pre-existing. 

Now if I were to take your own case, Guru, you are solving a problem of contract lifecycle management which is a performance undersupply. There was no expectation around it. For example, how I did incognisant was if we speak to the legal department, we had a documentary based repository and that's where we stored all the contracts and management and we didn't see that that was a problem. Like I didn't see the pouring rain and cab problem, we didn't see the door. The legal department needs a sophisticated contract lifecycle management in a way that actually solves the problem - managing the contracts. Writing the contracts is what we were focused on, on the actual bottom of the iceberg. Turns out to be actually the monitoring of the contract lifecycle which I learned from you. In fact, I had not thought deeply about that problem at all. But if I didn't have this vendor approach that you are bringing, I would have gone down or will do a future list. If I were to summarize this, if you are a vendor, are you solving a performance under supply for your customer? Then the buy decision becomes easier and you don't get into this beauty contest type of thing. 

But what have I seen? Typically, again, I have done this. We will move from peoples of CRM to Salesforce. I will move peoples from HCM to Workday. These are all massive programs that take a lot of time to do. But at the end of it, what have you got? I'm sorry to say we have old wine in new bottle. Yes, this new age software are better but they are not dramatically better like the Uber. You don't move peoples from HCM to Workday,  I feel it's like taxi versus Uber. That's not happening. IT's going from taxi to taxi plus plus, which I am not convinced that's correct. 


Guru: Very interesting perspective on how do you decide the right platform, what's your gap and what do you analyze on. So that's another point I want to bring up. So a couple of days back I had an opportunity to meet with another good friend of mine who used to be the CIO, the earlier organization he worked and I have sold some software to him. One of the big projects that he passionately took up was roll out of a CRM within the company. IT was a big transformation of the marketing, very big investments they made in completely transforming the sales and marketing with CRM across all the modules and all the good reasons and right reasons they did. But when I met him recently, I was disappointed to know that the project didn't show them the ROI as it is. And one of the imperative that the CEO came and spoke about is, on the hindsight, if he had to give a honest assessment, he completely missed out integrating some of these systems together. While this digital transformation presents a huge opportunity for every business to transform their own business process, but running them in silos is not the right thing from an organization perspective. Having run a large organization, what do you think? Are some of those imperative on this? 

Sukumar: I'm glad that your friend CIO came out and said that in the open. In fact, when I started on the job I went to my boss, the CFO and asked for more money, and he showed me how already $500 million or something. Some big numbers like that had been spent in the IT system. When I look at the landscape, it is everything we have SAP, Oracle, whatever you name we have. From an IT perspective we have chosen the best of each software. But what about the associate who is supposed to use the software? When I looked at it from that way and our team looked at it, there were something like 5000 URLs for people to go to. Leave management, go to this URL or you want to order IT assets, go here or you want to do whatever expenses go here, you want to do this. Everything was a separate URL and bookmarking couldn't keep up with it. The people who are already there in the company for a long time, they knew which URL to go to for what. And the super apps like the ERPs have within them 50,000 options. So you had to know which particular menu option you would choose. So something like filling a timesheet, which we had to do every 15 days, mandatory, a compliance requirement for our company would take anywhere from 20 to 30 minutes. Because it will ask you what date are you filling? Which projects again and again, over and over because our projects don't actually change that fast in the consulting industry. I am on a project for six months, one year like that. 

So what we did was this transformation that we did which kind of addresses the problem that you brought about is the one cognizant small apps platform. This is how we were able to build the 800 apps. Since I mentioned the timesheet we converted into a one click timesheet that will do that in like five minutes. What was taking 20 to 30 minutes. The compliance of entering the timesheets improved. All the transactions that we need to do, the MVP for us was 80% of the transactions that associates do, that was like 25 applications. We made them appear as small apps in this platform in the first six months of the platform; it took off virally. There is no change management, no training. 

We were inspired by the iOS App Store as well as the Android App Store that had just come in the mobile market. We found that was very easy for people. Yeah, I want to do this, download this app. In our business because we are a browser based thing, there was not even any download to do. Each app is just run within the browser and over a period of time you could run it from your iPad, any device, because every device has a browser. In fact, someone actually ran the app from a Nintendo. They were just playing around with it. They could bring up the browser and actually enter the timesheet from that device. This unified the user experience for people. They don't need to know, oh, I have to go to SAP, this people of CRM to enter the opportunity, they will just go under opportunities, it will automatically connect to that legacy thing and bring up that screen, CRM opportunity entry screen into one cognizant. I enter my thing, hit submit. I am done. I don't have to figure out who is the provider of this particular feature that I want to use. Everything becomes unified. So this made it seamless. 

Now, how we calculated that $1 billion impact is 300,000 people multiplied by all these applications together saved several hours per month. And if you convert that into dollar 1 billion is just a very conservative estimate.

Guru: That really seems to be a true transformational rollout and an experience that you had, Sukumar. One question on the topic, you said so much of options and so much of availability to end customers or so to speak, enterprise consumers has also led to adoption issues. As a CIO, one is about the internal rollouts you did or when you rolled out any of your Salesforce or your Workday rollouts. What are those critical KPIs that you or your organization would track that you feel that users are comfortable? Of course, there's a lot of accountability on the vendors or the platform providers to focus on customer UI or user experience. But beyond that, is there something that you would have experienced or you would have expected from your vendors to deliver?

Sukumar: So this is what I was going to say. Now this one cognizant platform that we built. There was no pre existing platform that we put out of. We had to build some of these and let's say we buy a product like CRM. Like I said, we will build a connector up from the One Cognizant platform to that. So we would look for which brings to your point about integration, do you have API based integration mechanisms available? 

We had a microservices based architecture so we could bring in those. So I would look for API type integration features if I'm buying new software. But even before that, I will look for is it truly solving a performance under supply and not just a problem? To me, CRM is a problem. A performance under supply is how do I get the sales people to enter all the opportunities that they are working on into the system? I don't know any CRM system that is able to do this. 

Guru: And if you have to give your advice based on experience to any CRM vendor or any product vendor for that perspective. That's a challenge the whole industry has. How do users start using one is investing, but beyond that, there is only a little an organization can do to drive users, use the product that you invested for and the technology you invested for. Are there some feedback that you have for vendors on some of those areas? Having let such large user base of consumers

Sukumar: Even we evaluate our own software through these three lenses. One is it should be super fast. We said 500 millisecond response time, and 500% productivity gain and there should be no change management. If you are selling me a software and you say all the users from your company have to go through this four hour training program, you have lost it. I don't go through training to use Facebook or Google or Twitter or any of that. So we as a team challenged ourselves to say why should I require training for using enterprise software? It should be so intuitive that I know how to use it, this is one. 

Second, what is the performance under supply in the CRM world? I have sales background and that I have used the opportunity. I have ten opportunities in my back pocket. I will enter only two into the system just to keep the CRM police happy. Now, if I start analyzing my own behavior on why I do that, the point is I enter into the CRM system, what does that system give back to me? Nothing. Yeah. I will appear in the green in some report that the CEO is looking at. Which by doing this two opportunity, I am in the green. What I don't see from the CRM system is the value. So why don't I enter? What value are you delivering to the salesperson that entered the opportunity? I expect something simple. 

For example, this executive that you're talking to. There are these three people in team in your own organization that know those executives. The CRM system won't share that it has LinkedIn, API, but that's not what I need. Why can't it say as soon as the opportunity is entered, hey, this executive is a college buddy of your other colleague who sits in Timbuktu, who you have never met yourself. Why doesn't it say that? Second, this opportunity is similar to 50 opportunities that have closed in the last year, 48 of them we have lost. Why isn't that system giving me that information at the point at which I'm entering it? No. Who enters the form with 50 fields? It's boring. I entered it and all it does is send some report to somebody else. It doesn't even give me any information. What is the point of this system? This is the heart rate thinking that we have to move away from IT, which is systems of recording. If you are developing a software that only does this, you should seriously question yourself what software you are delivering. 

Maybe I'm being very blunt about my message, but I feel very strongly about this, that this is not good enough for software. 

Guru: No, I mean with all respects. I completely empathize with what you said. I've been a sales guy life long and I know every time how much I hated CRM and how much it was tough for me to convince my sales team to use CRM till they see the benefits. The moment they start seeing benefits in terms of managing the relationships, like start giving them information back, then they realize the value of it. If it's like a one way communication of just doing because the leadership wanted it was never a success. Great example of what it means. 

Do you have some examples of any rollouts or any experience of roll outs that's not been done, that's not been a great success - purely because of adoption issues or something to do with users not able to see value on the UI? Credit cluttered, anything of that sort, you want to share Sukumar?

Sukumar: There are several. The only caveat here is - all of our teams work so hard to do this. So if I may be very specific, some of my team members may be unhappy, but I led the project. So I take the full responsibility for it. But without saying what the system is, I have told you right this thing that I did. There is a requirement, we will say XYZ requirement for that a big app requirement. I made the feature list, I got the team, they did the feature list. These are all the features we did. The standard RFP, beauty contest, paid a lot of money, several million dollars, bought the software. Roll out was a mess. Because the user interface was clunky, it was not intuitive, it was not integrating with the rest of the stuff. It was a major pain. We finally managed to roll it out because we have paid the money, we have to do it. But are the users happy using it? No. Are the executives who are in charge of the project like me, happy? No. Who is happy? Nobody. But somebody has made a million dollars and walked away from it. And, from their point of view, this is probably a successful implementation. 
Sukumar: Yeah. I am so lucky in my life that I worked for a person named Godon Kobu. He was the former CFO of Cognizant, my boss. He's probably one of the most prodigious people I have worked for. So when I started as a new CIO, I asked him, I went and asked him, I need $25 million in two years. He sat me down and showed me what IT investment. And he said this $25 million in two years I don't have. And even if I gave you the same thing is only going to happen. So he challenged me saying, yeah, I asked him the question, do you want transformation or efficiency? Since he made the speech, I made him the question, do you want transformation? And because as I said, he's a prodigious man, he obviously chose transformation, which is what I wanted him to choose. 

I don't know what the vendor is thinking. I don't want to name anybody for obvious reasons. But this particular construct I have been through several times in my life and I've seen my own clients do this and I think this is simply the wrong way to buy software. Like I said, if you are not solving a performance under supply, don't even buy the software. It's not worth it because it's just going to replace frying pan by fire or whatever is your metaphor. 

Guru: Great. So one last question from my side and maybe would like to hear more from you. Having worked closely with the CFO's office at Cognizant and your experience of managing such large spend projects, particularly, how does the CFO’s office look at digital transformation investments or areas that they really prioritize when it comes to investments?

Then I pitched this 25 million. He says okay, now I have a deal for you. I want transformation. I will not give you any new money than what is already in the IT budget. You do the transformation with that. I said okay Sir, I have one counterpoint for you, in the next three years you cannot ask me anything about efficiency. He said okay. Because at that point I thought transformation and efficiency were mutually exclusive. So now I got the delay. You cannot ask me about why these three cents is being spent here. Don't ask me. Transformation, I will get done. I probably knew CIO and I may be naive whatever, but I signed up for the challenge. But Interestingly, can you guess what happened after three years? We improved our efficiency also by 500%. 

Now how do we know that? Because at the start of it I had got a third party consultant to come and do a benchmarking on what our IT costs were and all that. I just wanted to see where are we spending money all that. So we were able to take with our operations team a metrics based approach to drive the cost per application cost down so much that it's dramatically different. So, by pursuing transformation you can get every chance. Any CFO, if you can sell them transformation, they will buy it. But what they will not buy is what I was unable to sell to my boss. Three years and $50 million. This smart CFO like Gordon will not buy. Luckily he didn't buy it. I am just worried that if he had approved the project, what would I have done? I would have done the same, right? Old wine in a new bottle. Replace peoples of HCM by Workday. Replace peoples of CRM by Salesforce. This is what I would have done. Same mess in a new form. 

Guru: Excellent. That was pretty insightful. Thank you so much for sharing your personal anecdotal experiences in your corporate career. Thank you so much for the time Sukumar and we wish good luck for Tiny Magic and we look forward to joining together in some digital transformation projects. 

Sukumar: Thank you Guru. You have been a gracious host and you asked some wonderful questions. I'm grateful to your audience for listening to us patiently and giving us their ears and maybe they picked up a thing or two from this conversation. Thank you 

Guru: So listeners, that was Sukumar Raja Kupal sharing with us his insights on the importance of digital transformation in today's tech driven world. Digital transformation presents huge opportunities to enterprises to transform their business, but this can be truly achieved with solutions that solve performance and as well stated by Sukumar today. 

Those were some of the unique experiences from Sukumar's professional journey over the years. We have many such interesting conversations with industry leaders in the upcoming episodes. Stay tuned and catch us on the next episode of Clause & Effect. subscribe to our podcast and visit for more information.