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From The Editor

A few weeks ago, I was having dinner with a CIO 100 honoree, when the issue of

Creating Harmony Get into business and buy-in shall follow.

securing management buy-in for IT initiatives came up. As is the case with many CIOs, navigating this sensitive area wasn’t always easy. In his case, things began to improve after he ensured that his team understood business requirements better. The transformation neither happened overnight nor did it require him to constantly push his guys. All it took, he said, was insisting that all members of the IT team have at least a few years of non-IT experience. Given the war for talent out there, this is a courageous move for the CIO of any organization where IT is not part of the core offering. That he has done so is a testament to the level of business savvy that CIOs are expected to display today. As Ashish Chauhan, president and CIO–IT applications, Reliance Industries, points out in his column (Page 62), aligning business with IT is quite often about being multi-faceted and willing to be as hands-on as possible. Our research shows that business-IT Aligning business with alignment remains the top management IT is not at all about priority for CIOs. Mind you I said alignment, managing the expectations not managing business expectations, since of business leaders. the latter phrase can also stand in for Machiavellian maneuvering. Another IT leader, Michael Rapken, CIO of global transportation solutions YRC Worldwide, borrows the sales tack of key account management to help his team understand business priorities better. Rapken, who’s also won CIO 100 in the US this year, assigns these ‘accounts’ to six senior members of his team, making them responsible for taking care of specific corporate functions such as HR or Accounts. Each manager then tracks business objectives and priorities related to this ‘account’, including revenue generation, and looks for ways that IT can help enable this. Rapken also insists that his staff spend time with both internal and external customers to increase their business knowledge and to see how end-users actually use technology. How do you ensure that your team plugs into the business imperatives of your organization? Write in and let me know.

Vijay Ramachandran, Editor vijay_r@cio.in 

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OCTOBER 1 2006‑ | ‑VOl/1‑ | ‑issuE/22

ontent o CIO 100 Symposium & Awards

Q&A: John Hagel III

COVER STORy | WhAT ThE STARS SAy | 30

ThE OppORTunITy In fRICTIOn | 68 CIOs should use friction in organizations as a trigger to new ideas that create value, notes management consultant John Hagel III.

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The key reason behind organizing the CIO 100 Symposium and Awards was to take knowledge-sharing to a different level, and to honor the largest organizations and the people at the forefront of building the IT practice. A photo feature on the little-known traits and beliefs of the CIO 100 honorees.

Interview by Gunjan Trivedi

Feature 6 4

Peer-to-Peer

CoVE r: ImaGInG by an Il t

BuSInESS’ BuSInESS IS yOuR BuSInESS | 62 Aligning IT with business doesn’t just mean ‘managing expectations’. Often, it also means being multi-faceted and getting your hands dirty in their mess.

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WInnInG STRATEGIES | 74 Three CIO 100 honorees spell out their approaches in keeping pace with their organization’s size and diversity. f feature by Rahul neel Mani, harichandan Arakali and Gunjan Trivedi

Panel Discussion

Column by Ashish Chauhan

ADOpTInG nEW TEChnOLOGIES | 82 A CIO panel discussion.

ATTRACTInG & RETAInInG TOp TALEnT | 64 How you too can rope in the best and the brightest, and make them want to stay, even if you’re small, unknown and located in Timbuktu.

Report by Sunil Shah

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ThE SyMpOSIuM & AWARDS nIGhT | 86

Column by Dr Moti Vyas



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CIO 100 Snapshot more »

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content

(cont.) departments Trendlines | 15 Security | Keeping Pace with Technology Research | Data Breaches Yield Few IT Thefts Change Studies | Throwback To Apollo 13 Technology | IP v6 Here Faster Than you Know Book Review | How to Manage Innovation Vendor Management | I Say Maintenance, you

Say Moolah By The Numbers | Virtual Private Networks Strategy | Basic Security Metrics

From the Editor | 4 Creating Harmony | Aligning business with IT is not at all about managing the expectations of business leaders. By Vijay Ramachandran

Inbox | 14

NOW ONLINE

2 2 Essential Technology DISRUPTION? RIDE WITH IT |  22 Five hot technologies that have the significant potential to transform the way your IT department will do business in the years to come. Feature by David Strom

DEVELOPMENT STRATEGY |  28 How do you ensure user enthusiasm? A great way is to keep them in the loop, right from the stage of development.

For more opinions, features, analyses and updates, log on to our companion website and discover content designed to help you and your organization deploy IT strategically. Go to www.cio.in

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marketing & sales

Manage ment

President N. Bringi Dev

COO Louis D’Mello Editorial Editor Vijay Ramachandran

Bureau Head-North Rahul Neel Mani

Assistant Editor Harichandan Arakali

Special Correspondent Balaji Narasimhan

Senior Correspondent Gunjan Trivedi Chief COPY EDITOR Kunal N. Talgeri

COPY EDITOR Sunil Shah www.C IO.IN

Editorial Director-Online R. Giridhar D esign & Production

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Photography Srivatsa Shandilya

Production T.K. Karunakaran

T.K. Jayadeep Marketing and Sales

General Manager, Sales Naveen Chand Singh brand Manager Alok Anand Marketing Siddharth Singh Bangalore Mahantesh Godi Santosh Malleswara Ashish Kumar Delhi Nitin Walia; Aveek Bhose; Neeraj Puri; Anandram B Mumbai Rupesh Sreedharan Nagesh Pai; Swatantra Tiwari Japan Tomoko Fujikawa USA Larry Arthur; Jo Ben-Atar

Singapore Michael Mullaney UK Shane Hannam

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Advertiser Index

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reader feedback

Catalyzing Change I was glad to see the feature on project management in the latest issue of CIO (‘Maine’s Medicaid Mistakes’, September 15, 2006). I strongly feel that the CIO community in India now has a great opportunity to catalyze change through innovation and IT to help our economy and society surge ahead. In the media, CIO, in particular, is fulfilling the role of bringing useful IT news to — and educating — the CIO community in India.

Winning the CIO 100 Award was a tremendous high, especially upon being able to move onto other responsibilities, having positioned the team with a place in the starting block. In the days ahead, I hope to see them feature in the global listings. rAhul gOswAMI Head-IT global, Ranbaxy Laboratories

It feels good to be identified with the select group of individuals who share common challenges. The CIO 100 forum will hopefully become a great platform to share best practices. More importantly, it is good to know that institutions like yours are trying to highlight the profession.

M.D. AgrAwAl

lAxMAn BADIgA

Chief manager-IS refinery system

CIO, Wipro Technologies

congratulations for the grand CIO 100 symposium and award ceremony. It was par excellence! It was also a great pleasure and honor to receive the CIO 100 award. The ceremony fills the void of recognition for IT as a role, and provides a forum for sharing issues — by listening to various speakers and interactions with other CIOs. I feel the CIO community has unique problems, not understood and appreciated sufficiently by CEOs: issues of maintaining leading edge in technology, convincing and managing over-budgets, apart from motivating IT employees and preventing an exodus. I believe that in the years to come, the CIO 100 ceremony will address all these issues faced by the fraternity. PArAshAr M shAh VP (systems), IPCL

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To be recognized among the awardees in the first-ever CIO 100 makes my team and me feel great. s. rAMAkrIshnAn Associate VP (IT), Tractors and Farm Equipment

Getting the award was really an honor, and it evoked a feeling of pride. The entire credit for the award goes to my team. It is their contribution that led us to this award. AjAy A khAnnA Ay

Bharat Petroleum

CIO 100: winners-speak

“a cIO’s effectiveness is limited by the buyin of his strategy — and the wherewithal of the management in embracing the change.”

a cIO’s effectiveness is limited by the company’s buy-in of his strategy. It is a good feeling that the plans of Raymond are recognized as being significant in its pursuit of harnessing technology to manage business and growth. It is an award for the wherewithal of the company’s management leadership in embracing the change that is required to support IT initiatives and garner benefits.

Head-IT, Eicher Motors

rAjeev shIrODkAr

Group CIO, Mphasis

The feeling has been good, a recognition of the work done by Team Mphasis. Sure, I was at the helm as a catalyst, strategist or enabler — but the real contribution is from the 250-odd people who have contributed through their achievements to make this possible. ABnAsh sIngh

VP-IT, Raymond

What Do You Think? We welcome your feedback on our articles, apart from your thoughts and suggestions. Write in to editor@cio.in. Letters may be edited for length or clarity.

editor@c o.in

I am reminded of the famous verse from the Bhagavad Gita, “Karmanye Vadhikaraste Ma Phaleshu Kadachana...” I have always sought to do my duties sincerely without worrying about the reward. The CIO 100 recognition is a fruit of my labor, which has been bestowed without asking for it. BIhAg lAlAjI AVP-IT, Gujarat Ambuja Cements

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Keeping pace with Technology

S E C U R I T Y Trying to lock down your company’s applications and protect your systems from attack? If so, security scanners and source-code analysis tools are not up to the job — despite vendor claims to the contrary. “There’s an awful lot of marketing spiel, people introducing technology tools that are sold as silver bullets,” says Mark Curphey, VP of professional services at McAfee’s Foundstone division. “The reality is, in a large enterprise, those things generally don’t work.” “Technology is increasing at such a fast and crazy pace, but security technology isn’t keeping up with it. With application security, it’s

even worse,” says Curphey. Security tools, such as code scanners, are able to detect just one percent to two percent of vulnerabilities in an application, leaving “gaping holes” behind, he adds. Software vendors and companies must get back to basics to secure their applications. “What the smart banks are doing about this is they’re building security into their development lifecycles and that’s exactly what Microsoft has done,” says Curphey, who has worked on security for US financial institutions. Since being hit by a series of high-profile vulnerabilities in its software, Microsoft has significantly improved the security of the software it produces, resulting in fewer critical vulnerabilities being reported, he says. To help protect their systems, companies need to be sure they are hiring IT staff with the right set of technical skills, setting business processes that determine how to respond to attacks on the system, and providing staff with the tools they need to respond when attacks happen, Curphey says. — By Sumner Lemon

Data Breaches Yield Few ID Thefts R E S E A R C H Contrary to popular perception, computer data breaches are less likely to result in identity theft and other fraud compared with offline incidents such as lost or stolen wallets and checkbooks. That was the finding of a 12-month study of about 5,000 US consumers by analyst firm Javelin Strategy & Research. Javelin’s study showed that despite the hype, data breaches were responsible for just six percent of all known cases of ID theft, compared with 30 percent from incidents like losing one’s wallet. The research also showed that less than one

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percent of all individuals whose data was lost later became victims of ID theft. The numbers are important at a time when a spate of data breach disclosures have heightened consumer concerns and are fueling a debate among lawmakers about the need for more stringent dataprotection laws, analysts say. “There is a misperception that there is a one-to-one correlation between a data breach and ID theft,” says Thomas Oscherwitz, vice president of government affairs and chief privacy officer at San Diego-based ID Analytics. But in reality “the mere fact that you are part of a data

breach doesn’t mean that you are a victim of ID theft,” he says. The degree of risk can vary based on the type of data breach, Oscherwitz says. Breaches involving deliberate hacking, for instance, are likely to be much more risky than those involving a lost disk or laptop, he explained. A failure to make such distinctions can result in consumers taking wasted action for protecting themselves and also impose unnecessary burdens on corporations, says Mary Monahan, author of the Javelin study.

— By Jaikumar Vijayan

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C H A n G E S T U D I E S Could your IT team band together to save the Apollo 13 astronauts? That’s the mission for participants in a novel IT Infrastructure Library (ITIL) training program run by CA (formerly Computer Associates). Knowing the Apollo 13 story, in which astronauts and NASA scientists modified a lunar excursion module to get astronauts home safely, doesn’t equal success in this class. Participants in the one-day role-playing course are dealt cards that ask them to solve Apollo 13 operational issues; if they don’t apply processes properly, they can’t progress toward winning the game. Between rounds, players brainstorm on how to improve. ITIL, a customizable framework, provides guidelines to help IT departments coordinate their processes and deliver the best IT service — for instance, quick problem resolution. ITIL typically involves big change for IT departments, because work that was being done ad hoc must be done in formal steps. Another change: people must understand IT processes outside their immediate areas of responsibility. CA’s training aims to remove the fear of these changes by showing how good processes work together to solve problems, says David Yachnin, director of CA’s Federal Technology Office and a leader of the course. Phil Bertolini, CIO for Oakland County, Michigan, took the class earlier this year as he and his staff prepared to transform five help desks into one centralized service desk using ITIL. The class improved his planning, he says. For example, he played ‘Capsule Communicator’, the person who must get data to the team to solve problems — a role analogous to an IT help desk manager. When he and his team failed to save the astronauts in the first half of the game, Bertolini says he got a deeper realization of how hard it is to be a help desk manager, and of how intricate a good knowledge base must be. Plus, his 11 staff members participating saw that he understood their challenges, Bertolini says. About 90 percent of teams save the astronauts, Yachnin says. The take-home lesson: don’t make processes have so many steps that they kill someone. —By Laurianne McLaughlin

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For many IT managers, IPv6 (Internet Protocol version 6), the next version of the Internet Protocol, may seem like a far-off concern. But the technology will make its way into corporate IT systems sooner than many people realize, forcing IT departments to confront potential security vulnerabilities inherent in the new protocol, a security consultant warned. Companies need to prepare themselves for IPv6, even if they don’t have plans to upgrade their networks, says Van hauser, a security consultant and the founder of a hacking group called The hacker’s Choice. “Most people think there’s no IPv6 now, so where’s the problem?” says hauser. “The thing is if you install any Unix operating system now it comes with IPv6 enabled.” In addition, Microsoft’s Vista operating system, set for release in the coming months, is expected to have support for IPv6 enabled, he adds. With support for IPv6 enabled in these operating systems, IT managers need to be prepared to address security issues in the new protocol. “It has the same vulnerabilites as IPv4. When you thought with IPv6 everything will change in regards to security this is not really the case,” hauser says. Among the vulnerabilities that IPv6 and IPv4 share is the ability for a hacker to launch a man-in-the-middle attack, hauser says. In this type of attack, a hacker is able to monitor or insert packets being sent back and forth between two parties, without either one realizing that the network link between them has been compromised by a third party. To secure against vulnerabilities in IPv6, companies must use IPSec (IP Security) on their networks, hauser says. “If you use IPSec, most of the problems go away,” he points out. however, owever, even then networks will not be completely secure. “It’s not that easy. If you do encryption and authentication, it doesn’t mean that security is okay,” hauser auser says. “It just narrows down the number of people who can do something.” TECHnOlOGY

— By Sumner lemon

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throwback to Apollo 13

IPv6 Here Faster Than you Know it


How to Manage Innovation The book looks at five disciplines that need to addressed. B O O K R E V I E W Like other media genres, business books are subject to fads. Thus, the proliferation of titles concerning innovation — how to generate it, manage it and make money from it. The final step depends on the successful execution of the first two. And yet, argue Curtis R. Carlson and William W. Wilmot in Innovation: The Five Disciplines for Creating What Customers Want, many great ideas wither for lack of a coherent value proposition, or they are

torpedoed by fear. The authors share their approach for how to navigate these obstacles. Carlson and Wilmot’s ‘five disciplines’ encompass identifying important market needs, creating business value, championing innovative ideas, building and maintaining innovation teams and aligning innovation with the organization. The authors’ methodology comes from years of experience with research institute SRI International,

If men are from Mars and women are from Venus, CIOs and CMOs must be in different solar systems. At least that’s the conclusion of C-Tech, a recent study from New York– based research firm Doremus. The study, querying 400 C-level execs at Fortune 500 firms, revealed CIOs have overwhelming distrust for independent technology vendors, and by extension, their chief marketing officers. In particular, the study noted that CIOs and vendor CMOs use the same words to describe what they mean by service, but their meanings differ. “One says service and the other thinks price,” says Lou Rubin, managing director of DPrime Consulting, a division of Doremus. Rubin adds that Doremus hired an ethnographer to delve into the discrepancies between meanings, and this specialist determined that “none of these technology leaders has defined a set of terms.”

VEnDOR MAnAGEMEnT

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known for pioneering the computer mouse, HDTV and robotic surgery. (Carlson is SRI’s CEO. Wilmot helped create SRI’s Disciplines of Innovation workshop for executives, which teaches the approach.) Each chapter spotlights one aspect of the innovation process using detailed examples, such as how SRI pulled together its HDTV prototype team — and kept it together through grueling work. Refreshingly, the book also acknowledges failure:

one “brilliant inventor” who got Rs 27 crore to develop an insulin patch for diabetics, was fired when he refused to collaborate and kept asking for raises. Everyone knows that infighting can kill a great idea. The broader lesson of this book: successful innovation is almost always hard, requiring dedicated leadership, a welldefined (and well-understood) project vision and a willingness to tackle problems quickly. —By Elana Varon

I Say , e c n a n e t Main h a l o o M y a You S Another example: To CMOs, trust means fulfilling service agreements, but to CIOs, it means anticipation of problems. Total cost of ownership and return on investment also cause trouble, Rubin notes. Semantics wasn’t the only sore subject unearthed in the report: CIOs also criticized product vendors for problem resolution. They too often replace technology instead of finding solutions, CIOs said.

According to Rubin, CIOs can get better service by requesting explicit, incentiveladen SLAs. Rubin suggests CIOs only sign SLAs tied to vendor follow-through and success. “At this point the Holy Grail is a service agreement that rewards both parties for achieving certain performance metrics,” he says. “This kind of contract may be the only way to restore trust.” —By Matt Villano

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Innovation: The Five Disciplines for Creating What Customers Want Curtis R. Carlson & William W. Wilmot Crown Business, 2006, Rs 1,475


BY DIAnn DAnIEl

With VPn investments, companies prepare for emerging applications. V I R T U A l P R I VAT E n E T W O R K S Increased corporate investment in new VPN technologies indicates that companies now recognize the Internet as a businessclass network, according to a survey by Forrester Research. Forrester found that deployment of state-of-the-art VPN technology has increased as much as 80 percent during the past year. VPNs eliminate the need for dedicated connections to corporate systems by carving out private space across a shared network such as the Internet. Most of the 735 telecommunications decision-makers surveyed were replacing their existing VPNs. The survey findings mean that companies are preparing to support emerging applications — such as voice over IP that require converged voice and data networks — to enable employees to become more mobile. “We’re at a tipping point in terms of people upgrading connectivity,” says Robert Whiteley, an analyst at Forrester. The survey showed a spike in adoption rates of two VPN technologies: multiprotocol label switching (MPLS) and remote access SSL. MPLS enables companies to manage network traffic according to priority and is popular for converged networks carrying voice, video and data. Remote access SSL is a widely used encryption protocol. Whiteley says security, reliability and cost reduction are driving MPLS adoption. For example, the ability to prioritize traffic protects business continuity, so that an event like a denial of service attack would not affect critical applications such as voice and SAP. The interest in SSL supports the idea that employees are becoming more mobile, Whiteley adds.

Upgrading Connectivity

TREnDlInES

Networks of the Future

Best Practices 1

Plan ahead. look ook now into upgrading your VPn VP for potential savings down the road. Although the initial investment in MPlS MP S can be high, the savings from operating a converged network will begin in around 18 months. Remote access SSl pays for itself in as little as six to eight months.

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Consider the big picture. ‘Old’ VPn technologies (such as frame VP relay) may become a bottleneck to deploying emerging technologies, says Whiteley, due to their limited bandwidth, higher latency (how much time it takes for a packet of data to get from one point to another) and higher operational costs, among other issues.

3

Revisit rejected projects. Projects such as ERP systems that may have been too expensive or technically unsupportable may become do-able using MPlS because the networking standard offers lower latency, increased bandwidth and the ability to prioritize traffic.

VPn Technology Adoption Rates Multiprotocol Label Switching (MPLS)

Secure Socket Layer (SSL)

Fully deployed/upgrading

38%

Fully deployed/upgrading

34%

Initial rollout underway

22%

Initial rollout underway

19%

Evaluating/piloting

17%

Evaluating/piloting

18%

no plans/don’t know

23%

no plans/don’t know

30%

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Basic Security Metrics

Welcome to NetMagic’s Hosted Exchange Services

how do you put a price on security operations, since the best results occur when nothing goes wrong? Business executives use metrics to report on the operations that they lead. here is a to-do list for establishing a measurement program that’s meaningful to everyone in the company. S T R AT E G Y

KnOW WHAT’S IMPORTAnT. listen to top executives and business unit leaders discuss their priorities. Identify one or two security metrics vital to their success. Consider: loss reduction (be specific), cost reductions, shorter cycle times, use of technology versus use of people, elimination of vulnerabilities that affect uptime, reliability, and so on. RISK AnAlYSIS IS A MUST. Assess the risks, costs and benefits of business activities. IDEnTIFY InCIDEnT TREnDS that matter to key senior managers. Track changes monthly or quarterly. Focus on what’s important in your business. Consider: safety violations, workplace violence, public safety, emergency medical technician response times, etcetera. DEVElOP A FEW VAlUE InDICATORS that provide reliable information you can track. Candidates include security cost per employee as a percentage of sales or revenue, the property protection cost per square foot of occupied space, case cost versus recovery and case cost over time. Benchmark these against comparable peers. SET UP A SECURITY COUnCIl. If security functions are spread among various departments, this group can develop metrics goals for the organization. TRACK CHAnGES. Develop confidence indicators, like annual customer satisfaction surveys, posted on your corporate intranet. Or track business process improvement recommendations in incident postmortems.

NetMagic gives you the advantage of having your own Microsoft Dedicated Exchange Server, without the hassles of managing it. NetMagic’s Hosted Dedicated Exchange Servers are perfect solution for your enterprise communication needs. • Completely managed Dedicated Exchange Servers • No hardware or license costs, NetMagic provides a complete ready-to-deploy Dedicated Exchange server • Instant scaling as you need to add more users • Complete Mail Security – Firewall, Antivirus, and Antispam. • Outlook 2003 licenses, and Outlook Web Access • 24x7 Management, 24x7 Support, and 24x7 Helpdesk • World-class datacenter infrastructure (ISO 27001 certified)

USE METRICS In PlAnnInG. Build your annual business plan around two or three ‘reach objectives’ that have at their heart a specific measurement like ‘in the next fiscal year, reduce background investigation cycle time by 15 percent and case cost by five percent.’ CHECK YOUR nUMBERS. Make sure they are accurate before you present them.

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Datacenter Hosting Services | Managed Services | Remote Infrastructure Management Professional Services | Disaster Recovery and Business Continuity Enterprise Mail and Messaging | Application Management | Bandwidth & Connectivity

Info@netmagicsolutions.com 91-22-26850001 All logos are the property of their respective owners.

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Essential

technology Gamechanging technologies are a part of IT life. It’s up to you to run with them — or get run over.

From Inception to Implementation — I.T. That Matters

Disruption? Ride With it BY DAVID STROM

HOT TECHNOLOGY | New technologies can change the relationship of supplier and customer. New applications can create huge infrastructure implications. And sometimes the best way to learn how to cope with these changes is to face them squarely. To give you early warning, we queried various experts and found five technologies that have the significant potential to transform the way your IT department does business in the coming years.

Disruption 1: Multicore Processors Old thinking: One processor in every box IT impact: New numbers in the ‘performance, power and cooling’ equation New computing platforms from Intel and AMD have arrived with reduced power requirements that take price and performance to new levels. On the plus side, the newer processors are more energy-efficient and can deliver more raw horsepower per watt of power, so IT departments concerned with their energy bills will be motivated to replace their older servers. 22

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essential technology

But even the most energy-efficient designs are still an issue for data centers that were constructed long ago on mainframe layouts. The trouble is that these spaces aren’t able to withstand the intense heat generated by racks of densely stacked distributed processors that generate more heat per square foot when stacked in large columns than the mainframes ever did. This may mean wholesale design changes on the data center floor. “For every watt of server power consumption, we pay twice — first for powering the server and second for the air-conditioning that cools it down,” says Rene Wienholtz, CTO of German Web hosting provider Strato.

Disruption 2: Server Consolidation and Virtualization Old thinking: PCs running a single OS IT impact: Quicker software development and application deployment, cutting costs and better leveraging server hardware The concept behind virtual machines (VMs) is simple to state but hard to implement: take a single server and divvy it into separate ‘virtual’ machines with their own softwarebuilt memory, virtual hardware, drive images and other resources. Virtualization isn’t new: IBM has been doing this on its mainframes for close to 30 years. What is new is that the power of virtual machines can be effectively delivered to the PC platform. And fierce competition in this space is forcing the major players literally to give away pieces of their VM server software. Why the hot market? For IT, virtualization lets multiple operating systems and applications run on the same box, making it easier to provision new servers as necessary and make more efficient use of hardware. This continues the consolidation trend that began several years ago with blade servers: think of virtualization as the ultimate result, where many individual servers can now run on the same piece of hardware rather than on individual blades. You save space, time, simplify your IT support structure, and you save plenty of money reusing the same gear. 24

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The Web 2.0 Mashup Mass-market composite apps show the path for the next corporate tools. With simple, Web-based products acting as building blocks, developers now have a new option for creating enterprise-class applications. Using standard tools such as Javascript and XML while separating application logic from presentation and reporting pieces, lightweight tools such as Web browsers can easily access rich features previously reserved for full-fledged applications. And by combining several such applications, complex tools are within reach. Several vendors are already delivering concrete examples of the possibilities: Zimbra can host enterprise-class e-mail; Amazon’s s3 can do offsite disk storage; Basecamp can perform project management; Concur can track expense reporting; Ajaxwrite can do word processing; and Google Spreadsheet can handle number crunching. Thanks to published APIs from the various vendors, IT developers can combine these online tools to develop their own solutions, using bits and pieces of open-source code as glue between tools that all talk to the same set of Web services (Zimbra, for instance, can scan e-mail content and automatically link street addresses to Google Maps.) The benefit for IT behind the ‘mashup’ trend is flexibility. If business changes, it is easier to replace a particular piece of mashed-up code rather than rewrite an entire application. And unlike internal object-oriented and service-oriented development efforts, the Internet is a vast code repository, with plenty of self-help, expert communities and samples to get developers started. For a quick tutorial on creating mashups as well as a long list of online resources, visit www.programmableweb.com/howto. —D.S.

But there is more to VM than server consolidation. EMC, for instance, has already established some prebuilt virtual machine appliances that come with readymade applications such as Web, e-mail and database servers that IT can install and have running in minutes — further reducing the time to build out new servers. “We plan to use virtual server management to reduce our server support efforts, minimize downtime and reduce the ongoing costs of server replacement, enabling us to support more hardware with existing staff,” says Karen Green, CIO of Brooks Health System. “Two years ago, it wouldn’t have been possible to handle [such a heavy] workload in a data center. Now we can, thanks to this new virtualization software,” says Wienholtz.

Disruption 3: RFID Old thinking: Automating production was all about making cheaper finished goods IT impact: Dramatic changes in the supply chain and ERP systems will let

companies keep closer tabs on inventory and production Trading information between suppliers and distributors will never be the same thanks to the maturation of radio frequency identification (RFID). While the technology is a decade old, new developments in the integration of supply chain infrastructure, more solid standards, and products such as Reva Systems’ tag acquisition processor have made it easier to integrate RFID data directly into inventory, supply chain and manufacturing systems. Tagged merchandise can be tracked as it leaves finished-goods inventory, travels across state lines, arrives at the loading dock door and gets purchased by a retail consumer — with each step along the way providing real-time information to various systems. And with Wal-Mart and the US Department of Defense making RFID information exchange mandatory for many suppliers, tens of thousands of vendors are implementing RFID to track everything from pill bottles to palettes to people. RFID enables

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essential technology

all sorts of applications such as alarms that sound when items are shoplifted, payment systems that don’t require a credit card swipe and automatic employee-access controls surrounding specific sensitive locations. Older RFID applications were built to locate a particular palette or track a shipment. Tomorrow’s applications will enable product line managers to track where all of their goods are in the production and delivery process in near-real-time, letting them closely observe any bottlenecks or supply problems. The consequences of RFID are huge, especially the infrastructure implications. “RFID computerizes the edges of the enterprise,” says Marlo Brooke, senior partner at systems integrator Avatar Partners. This means that companies will need to upgrade

of office tools that is just as significant as the jump that occurred when the first PCs landed on people’s desks.” Instead of picking application partners that have the best prices or series of features, savvy CIOs can order a combination of small-scoped applications that are more appropriate to particular situations yet work well together. Take one part hosted e-mail server, mix in another part Java servlet to process a series of forms, then add an online storage repository from Amazon called by another Web application to configure automated backups and to run batch jobs. All of these can connect to each other via the Internet and may not even reside on your company’s servers. The hard part with all this ‘Web 2.0’ talk is understanding how to take apart your particular application into discrete

By 2008, the majority of Global 1000 companies will adopt several technology-related aspects of Web 2.0 but will be slow to adopt the social dimension of Web 2.0, resulting in a a slow impact of business. Source: Gartner

Virtualization isn’t new: IBM’s applied it to mainframes for 30 years.What’s new is that the power of virtual machines can be delivered to the PC platform. networking infrastructure — both wired and wireless — as RFID readers are deployed across the enterprise.

Disruption 4: Software as a Service Old thinking: Build your apps one at a time from the ground up IT impact: Mix and match your browserbased apps to create cheap custom tools The Web has become a solid application delivery platform, transforming the way we can deploy enterprise software. Call it a mashup, Web service, software as a service or service-oriented architecture — it all amounts to the same thing: becoming more flexible and nimble while saving a boatload of money by not having to write code from the ground up for each application. By using these techniques, says management consultant Rod Boothby, “We are on the verge of experiencing a jump in the capabilities 26

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pieces that someone else has already written. To adapt, IT managers must think in layers, just like the Internet is designed with different protocols that distinguish between lower-level transportation and higher-level applications. According to Doug Neal, a research fellow with the Computer Sciences Corp. LeadingEdge Forum Executive Program, “We finally have a layered series of services that can meet changing [business] requirements. You can pick the right layers to match your needs.”

Disruption 5: Endpoint Security Old thinking: Security point solutions from multiple vendors IT Impact: Protect your laptops and defend your entire network by thinking in broader strokes Our last trend is a real challenge: delivering consolidated endpoint security across the enterprise. You buy single-purpose products

that do one or two things well, such as antivirus, firewall, intrusion prevention, policy enforcement, authentication and the like. Trouble is, there is no single product that delivers a complete solution. Meanwhile, roaming laptops are coming into your network and spreading infections daily. Picking among the three current major architectural efforts for endpoint security will consume a good part of your budget and time. Cisco and Microsoft have their own takes on the issue, and an open-standards group called Trusted Computing Group is behind door number three. Cisco focuses more on securing network infrastructure, Microsoft more on desktop remediation, and Trusted Computing Group starts with low-level hardware protection. Before you get behind any approach, take the time to research the differences and decided which vendors implement the pieces of the endpoint puzzle most critical to your business. Right now, no single approach covers all the security bases. CIO

David Strom is a freelance writer who has written books on e-mail and home networking. Send feedback on this column to editor@cio.in

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In This Issue Page: 33 Roll of Honor/ The List of CIO 100 Winners Page: 35 Photo Feature/ What The Stars Say Page: 62 Column/ Aligning IT with Business Page: 64 Column/ How to Attract and Retain Top Talent Page : 68 Q&A/ Management consultant John Hagel III Page : 74 Winning Strategies/ Three IT Paths in Giant Enterprises Page : 82 New Technology/ A Panel Discussion on Early Adoption

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The first-ever CIO 100 Awards, instituted by CIO India, continues the tradition instituted by CIO in the U.S. The awards honor 100 organizations that distinguish themselves in their use of technology. From the start, the CIO 100 Awards were designed to apply a different selection criterion every year. In the U.S., these criteria have ranged from resourcefulness to integration to innovation, for instance. After much deliberation, we chose to seek out the largest, most complex IT deployments by the largest of Indian organizations, and hence the title ‘The Giant 100’. Based on extensive secondary research and feedback from CIOs, a panel of senior members of IDG Media and CIO drew up a list of top 300 listed and unlisted Indian corporations from both the private and public sector on the basis of revenue. Subsequently, a nomination form was sent out to the CIOs of these organizations, seeking both qualitative and quantitative information on the IT infrastructure deployed in their companies. After a careful scrutiny, compilation and analysis of the nomination forms received, the editorial panel of CIO India prepared a list of the 100 largest users of information technology, which accurately and reasonably reflected the selection criteria defined at the beginning of the process. Though this was The Giant 100, the panel was not quite prepared for the sheer weight of this century of behemoths — their combined turnover exceeded Rs 8,35,000 crore, with these organizations accounting for over 85 percent of domestic IT spend by corporates. While the CIOs of these organizations have rolled out core banking solutions, dealer management systems, BI and predictive analytics, their top concern was security followed by ensuring reliability. The CIO 100 companies are organizations that have demonstrated not only that they were able to create new value using IT, but also that they did so by setting the bar higher for their competitors. In short, these companies are technology leaders.

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Imaging by anil t

H

ow we Chose the CIO Giant 100

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roll of honor

H

GOdRej CONSumeR PROduCTS mani mulki — VP-IS GRASIm INduSTRIeS k.R. krishnakumar — VP-IT

onorees

AdANI WIlmAR Biplab Prakashi - GM - Commercial & IT APOllO TyReS dheeraj Sinha – Head IT ARvINd mIllS Bhupendra mangaldas Shah – VP-IT ASHOk leylANd N. mohanakrishnan — Special Director-IT

GReAT eASTeRN SHIPPING Rohinton dumasia — GM- IT GujARAT AmBujA CemeNTS Bihag lalaji — AVP-IT GujARAT STATe FeRTIlIzeRS & CHemICAlS Ashok R. Patel — DGM-Systems

BRITANNIA INduSTRIeS T.S. Purushothaman — Corporate HeadIT & Systems CHAmBAl FeRTIlIzeRS & CHemICAlS S.R. Balasubramanian — Group CIO COlGATe PAlmOlIve Arun Pande — VP-IT CROmPTON GReAveS Shrikant karode — Dy GM-Corporate IT

ASIAN PAINTS manish m. Choksi — Chief Corporate Strategy & CIO

CeSC Subrato das — CIO

AuROBINdO PHARmA mahesh kumar Pinnamaneni — CIO

eICHeR mOTORS Ajay khanna — CIO

AvIvA lIFe INSuRANCe Abir Basak — Head-IT Infrastructure

eId PARRy P.S. Narayanaswamy — Head-IT

BAjAj AuTO Anil khopkar — GM-MIS (CIO)

eRICSSON INdIA Tamal Chakravorthy — CIO

BANk OF INdIA P.A. kalyanasundar — GM-IT

eSSAR STeel Chetan Agarwal — CIO

BHARAT AlumINIum Subrata Banerjee — CIO

GAIl v.C. Chittoda — CIO v

BHARTI AIRTel dr. jai menon — Director (IT and Innovation) and Group CIO

GlAxO SmITHklINe PHARmACeuTICAlS k. vasant v kumar — VP-IT & Supply Chain

GNFC Tarak H. diwan — Additional GM HAldIA PeTROCHemICAlS Anjan Bose — CIO HCl TeCHNOlOGIeS Shyamal Bhattacharya — GM-IT HdFC R. Arivazahagan — Chief Head–IT HdFC BANk C.N. Ram — Country IT Head HeRO CyCleS vikram Saxena — GM-IT HeRO HONdA Ravi Sood — CIO & CFO HINdAlCO Sanjeev Goel — VP-IT HAl vv v. .v .v v.. Subrahmanyam — GM-MS & IT HINduSTAN COCA COlA BeveRAGeS Gopal Shukla — Director-Business Systems HPCl Nishi vasudeva v — Executive DirectorIT & ERP

BHel C. Subba Rao — GM-IT

GOdFRey PHIlIPS Alagu Balaraman — Sen. VP-IT & Corporate

Hll k. Harishankar — Head-IT

BPCl Shrikant P. Gathoo — Executive Director (IIS)

GOdRej & BOyCe Ajay Pimparkar — GM Infotech

HONdA SIel CARS Hilal Isar khan — Head-IT

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s p e c i a l

Hyundai Motor M. Suresh — GM-IT

Max Newyork Amit Kumar — Senior VP & Head Technology

SAIL Rajeev Pandey — GM Computer & IT

i-flex Solutions S. Hariharan — Senior VP Infrastructure Services

McDowell and Company T.K. Subramanian — Divisional VP-IS

Samsung India Electronics Rajesh Chopra — GM-ISD

Moser Baer V. Muthu Kumar — GM-IT

Satyam T.R. Anand — Senior VP & Director

Mphasis Abnash Singh — Group CIO

State Bank of India Ashwini Kumar Sharma Deputy Managing Director-IT

IOCL S.S. Soni — Executive Director Optimisation Indian Rayon H. Krishnan — AVP-IT Infosys Technologies Group Captain (Retd.) Deepak Sinha — VP-CCD ITC V.V.R. Babu — CIO IPCL Parashar M. Shah — VP (Systems) ICICI OneSource Sanjiv Dalal — CTO ICICI Bank Pravir Vohra — Senior GM (Head-Technology Management Group & Retail Technology Group)

MRF Prince Azariah — CIO National Fertilizers N.R. Satyapalan — DGM Pantaloon Retail Chinar Deshpande — CIO Paradeep Phosphates V. Seetharamaiah — GM-IT PATNI COMPUTER SYSTEMS Satish Joshi — Head IT

Sun Pharmaceuticals Amit Sheth — Head IT Sutherland Global Services Ganesh Raj — GM-IT Suzlon Energy V.V. Rao — Advisor-Systems & IT T.V. Sundram Iyengar & Sons V. Sundar — CIO Tata Consultancy Services Alok Kumar — Global Head-Internal IT

Philips Arun Gupta — Director P-Global Infrastructure Services

Tata Motors Probir Mitra — GM-IT

IDBI Sanjay Sharma — Corporate Head Technology Officer

Polaris Software Balakrishnan V. — CIO

Tata Power Company Eruch R. Batliwala — GM-IT

JK INDUSTRIES S.S. Sharma — GM-IT

Punjab National Bank R.K. Bansal — DGM-IT

TATA STEEL Shreekant Mokashi — CIO

JOHNSON & JOHNSON Kiran G. Chandras — Head IT

Ranbaxy Laboratories Rahul Goswami — Head IT Global

Titan Industries N. Kailasnathan — VP & CIO

JSW Steel K. Vijayaraghavan — VP-IT

Rashtriya Chemicals and Fertilizers V.G. Londhe — CFM

Torrent Pharmaceuticals Jyoti S. Bandopadhyay — VP-IT

Kansai Nerolac Paints Jason Simon Gonsalves — VP Corporate Planning and IT

Raymond Rajeev Shirodkar — VP-IT

L&T V.K. Magapu — Group CIO

Reliance Communications Sumit Dutta Chowdhury — CIO

LG Electronics India Arindam Bose — CIO

Reliance Industries Jyotindra Thacker — Senior VP

Mahindra & Mahindra Arvind G. Tawde — VP & CIO

RPG Amit Mukherjee — Group CIO

Maruti Udyog R. Uppal — CIO

Ruchi Soya Ranveer Chadha — Director IT

Tractors & Farm Equipment S. Ramakrishnan — AVP-IT UTI Bank V. K. Ramani — Head IT Whirlpool

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Wipro Technologies Laxman Badiga — CIO Zee Network Ishwar Jha — VP-Business Technology

REAL CIO WORLD | O C T O B E R 1 , 2 0 0 6

34

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hat the

“I COUNT!” There’s more to that confident declaration by Haldia Petrochemicals’ CIO and CIO 100 honoree Anjan Bose than just pride. It’s also about the transition that IT leaders in India’s largest enterprises are making from technology tycoons to pashas of business strategy. That was a key reason behind organizing the CIO 100 Symposium and Awards last month. So, it would be quite natural to look for their take on business and technology, wouldn’t it? For instance, we could ask

Rajeev Shirodkar, VP-IT, Raymond, about the challenges of migrating from a host of homebrewed applications. But, did you know that if he weren’t an IT executive, he’d rather be a cop? Or that a full 68 percent of the CIO Giant 100 winners voted Lage Raho Munnabhai as their favorite film? “I have often struggled with Change Management in an organization of just a few thousand people, and I think this film is a great attempt at changing a billion of us,” observes Gopal

Shukla, director-BSG, Hindustan CocaCola Beverages. By now, you’ve probably figured out that our approach to reporting on the CIO 100 Symposium and Awards is hardly par for the course. In the following photo feature, CIO takes a look at the little-known traits and beliefs of these IT leaders. And to keep things even more interesting, we have organized the honorees not by industry vertical, but rather by their sun signs. Enjoy!

IllUST RATIOn By BInESH SREEDHARA SREEDHARAn

W Stars Say InFORMATIOn On SUn SIGnS, COURTESy ASTROlOGy.COM

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THE ARIAN CIOs (clockwise, from top right): Chinar Deshpande, CIO of Pantaloon Retail, Anjan Bose, CIO of Haldia Petrochemicals, Ajay Pimparkar, GM-Infotech of Godrej & Boyce, Nishi Vasudeva, executive director-IT & ERP of HPCL, M. Suresh, GM-IT of Hyundai Motor, and Parashar M. Shah, VP (systems) of IPCL.

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Little-Known Facts

From the

W i n n e r s

Shammi Kapoor-starrer Junglee

to Harry Potter, PARASHAR M. SHAH, VP (systems) of IPCL, knows just how to develop the quality he admires in others: a positive outlook. Anjan Bose, CIO of Haldia Petrochemicals, says there’s no reason to be stressed.

“I’ve learnt from Asterix and Obelix that the sky usually does not fall on our heads!”

Head-IT Global for Ranbaxy Labs, Rahul Goswami's best holiday was a

driving with his family “through

hill and dale

in northern Himachal Pradesh.”

Arians are the leaders of the pack. Whether or not everything gets done is another question altogether. If a project needs kick-starting, call an Aries. The leadership displayed by Arians is most impressive, so don’t be surprised if they can rally the troops against seemingly insurmountable odds — they have that kind of personal magnetism. Arians don’t shy away from new ground. They make great pioneers since their fearless trek into the unknown often wins the day. They are a bundle of energy and dynamism. Arians are bold, aggressive and courageous. They can summon up the inner strength required to take on almost anyone, and they’ll probably win. Now that’s a winning edge. Rams are also independent and aware of their own interests in a given situation. Their competitive nature ensures that they will play the game with zeal and vigor. Vol/1 | ISSUE/22

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Imagin g by Unn ikrishnan A.V. Photos by Sr ivatsa Shandilya & KAP IL SHARO F

week spent

39

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Little-Known Facts

W i n n e r s

How Jyotindra Thacker, Senior VP, Reliance Industries, deals with stress: “Just like any pressure cooker.

I let off some steam occasionally… whistling.”

You know what you pick up as a CIO?

A nose for trouble. Raymond's VP–IT Rajeev Shirodkar's alternate career would have been in the crime branch or the

anti-terrorist-squad.

Staff pointer 23: “The right attitude with

a fire in the belly

Taureans love the rewards of the game. Think physical pleasures and material goods, for those born under this sign revel in delicious excess. Taureans adore comfort and like being surrounded by pleasing, soothing things. Along these lines, they also favor a good meal and fine wine. This is in reward for their attitude of getting things done, not matter how long it takes. Along these lines, those born under this Sign are happy to stick with their projects until they have reached a successful conclusion. They are also extremely patient and dependable along the way. Seeing as how Bulls are generally strong, it’s no surprise that Taureans enjoy testing their strength on the field . Expect to find a Bull engaged in a spirited game or mountain climbing. Hiking is also a favorite pastime, since it keeps Taureans close to their beloved earth. 40

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Imaging by Un n ikrishn an A.V.

will take you places.” M.K. Vasant Kumar, VP-IT & Supply Chain, GSK

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Taureans (clockwise, from top left): K. Vasant Kumar, VP-IT of GSK, Pravir Vohra, senior GM (head-technology management & retail technology) of ICICI Bank, Ajay Khanna, CIO of Eicher Motors, Jyotindra Thacker, senior VP of Reliance Industries, Rajeev Shirodkar, VP-IT of Raymond, T.K. Subramanian, div. VP-IS of McDowell, and V.V. Rao, advisor-systems & IT, Suzlon Energy. (Middle row, from left) V. Muthu Kumar, GM-IT of Moser Baer, and Arun Gupta, director of Philips Global Infrastructure Services.

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THE GEMINI FOLK (Clockwise from top): Vikram Saxena, GM-IT of Hero Cycles, Sanjiv Dalal, CTO of ICICI OneSource, Arvind G. Tawde, VP & CIO of Mahindra & Mahindra, Jason Simon Gonsalves, VP (corporate planning and IT) of Kansai Nerolac Paints, Abnash Singh, group CIO of Mphasis, and V.K. Magapu, group CIO of L&T.

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Little-Known Facts

W i n n e r s

2 hours, 8 minutes and 30 seconds: the time it took ABNASH SINGH, Group-CIO. Mphasis to complete the

Bangalore International Half-marathon.

consults “the best strategist”, Lord Krishna, for advice.

Vikram Saxena, GM-IT of Hero Cycles,

Group CIO of Larsen & Toubro V.K. MAGAPU says studying

cosmology and evolution

Geminis love to talk! The driving force behind a Gemini’s conversation is their mind. The Gemini-born are intellectually inclined, forever probing people and places in search of information. Sharing that information is also fun, since Geminis are interested in developing relationships. Geminis are fast on their feet, curious and clever, which makes them a hit at cocktail parties. They also love to listen and learn. At work, they are the clearest of thinkers, looking at a project from all sides and putting forth some logical and well-thought-out ideas. This quality makes Geminis an asset to any team. Geminis enjoy short road trips and are natural for doubles tennis partners. They love the camaraderie of games and play. A book club would certainly stimulate their literary minds. Physically speaking, Gemini rules the nervous system, which is why they should practice yoga or deep breathing techniques. Vol/1 | ISSUE/22

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Imaging by P C Anoop

is his favorite pastime.

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Little-Known Facts

W i n n e r s

“Don’t let go of a job

until it’s 100% complete. Most

tasks fail because we rest at the 99% mark.”

— Ishwar Jha, VP-Business Technology, Zee Network

V. Seetharamaiah, GM-IT, Paradeep Phosphates,

spends his leisure time

He also

reading ancient Telugu literature.

composes Telugu poetry.

Shyamal Bhattacharya, GM-IT, HCL Technologies, says he'd like to be the Principal of an educational institution whose

aim is to create good citizens,

Cancer is all about home. Cancerians are a ‘roots’ kind of people and take great pleasure in the comforts of home and family. Traditions are upheld in a Cancer’s household, since they prize family history and love communal activities. They also tend to be patriotic. A Cancer’s good memory is the basis for stories told around the dinner table. It’s said that Crabs are first to laugh and first to cry. They are also tenacious and strongwilled and like to get their way. Their intuition is also a great help to them, especially in times of stress. Cancers are good with money, probably because they value a sense of security. Crabs are also quick to help others and tend to avoid confrontation. In keeping with their nurturing bent, those born under this Sign are a whiz with food.

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Imagin g by PC An oop

not money-making machines.

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THE CANCER CIOs (Clockwise, from top left): S.S. Soni, executive director optimisation of IOCL, R.K. Bansal, DGM-IT of Punjab National Bank, Shyamal Bhattacharya, GM-IT of HCL Technologies, Jyoti S. Bandopadhyay, VP-IT of Torrent Pharmaceuticals; T.S. Purushothaman, corporate head-IT & systems of Britannia Industries, V. Seetharamaiah, GM-IT of Paradeep Phosphates, and (center) Ishwar Jha, VP-business technology of Zee Network.

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THE LEO LEADERS (Clockwise, from top left): R. Arivazahagan, chief head窶的T of HDFC, N. Mohanakrishnan, special director-IT of Ashok Leyland, N.R. Satyapalan, DGM of National Fertilizers, Ashok R. Patel, DGM-systems of Gujarat State Fertilizers & Chemicals, and Bihag Lalaji, AVP-IT of Gujarat Ambuja Cements,

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Little-Known Facts

W i n n e r s

HDFC's Chief Head of IT R. Arivazahagan would have chosen to be an

aeronautical engineer if he weren't in IT.

Bihag Lalaji, AVP-IT, Gujarat Ambuja Cements:

“Disasters are opportunities in disguise. The 26/7 floods gave us the opportunity to create a

24x7, fully redundant IT infrastructure.” N. Mohanakrishnan, Special Director-IT, Ashok Leyland, reminisces the

Kullu Manali as his most treasured vacation.

Leos are impossible to miss — they love the center stage. When you consider their personal magnetism, you see the job is quite easy. Leos are an ambitious lot, and their strength of purpose allows them to accomplish a great deal. The fact that these folks are also creative makes their endeavors fun. They are also supremely talented and have a flair for the dramatic. Warmth and enthusiasm make these folks a pleasure to be around. Like Lions, Leos are dignified and strong. A Leo on your team is a good thing, since Lions are eager to see their projects through to completion. Putting them at the helm is a good thing since the Leo-born are natural leaders. If you need someone to lead the charge, call a Leo — and the bigger the project, the better, since these folks love an expansive stage.

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Imaging by V ishwan ath Van jire

10 days he spent in

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Little-Known Facts

W i n n e r s

“Always keep

Karmanye Vadhikarste Ma Phaleshu Kadachana in mind to deal with stress.” Tarak H. Diwan, Additional GM of GNFC

“I’d like to be a troubleshooter at the PMO,” in another life.

Vishwas G. Londhe, CFM, Rashtriya Chemicals and Fertilizers

Children of Heaven: the Iranian film that touched N. Kailasnathan,

It’s common knowledge that Virgos are an exacting lot. They like things precise, clear-cut, just so. And they can be critical if things aren’t. But there’s a method to their ‘pickiness’: they want to help others. Virgos were born to serve. And they come as well prepared. Their painstaking attention to detail and their sometimes annoying habit of playing devil’s advocate — stem from one thing: they’re usually ahead of the game; they’ve already done the thinking, plus years applying their mind to every situation has left many of them with impeccable taste. Virgos are also full of energy. A Virgo’s running at full steam most of their waking hours. They are also good communicators. They are balanced and fair in their assessments.If you have a Virgo on your team, you can heave a sigh of relief. Any job, too hard, too small, to difficult you can depend on them fix — the first time around. 48

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Imagin g by P C An oo p

CIO, Titan Industries.

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10/10/2006 6:27:30 PM


THE VIRGO CIOs (Clockwise, from top left): V.G. Londhe, CFM of Rashtriya Chemicals and Fertilizers, N. Kailasnathan, VP & CIO of Titan Industries, Rajesh Chopra, GM-ISD of Samsung India Electronics, Tarak H. Diwan, additional GM of GNFC, Ranveer Chadha, director-IT of Ruchi Soya, and (center) Manish M. Choksi, chief corporate strategy & CIO of Asian Paints.

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10/10/2006 6:27:33 PM


THE LIBRANS (Clockwise, from top): Group capt. (retd) Deepak Sinha, VP-CCD of Infosys Technologies, Rohinton Dumasia, GM-IT of Great Eastern Shipping, Bhupendra Mangaldas Shah, VP-IT of Arvind Mills, Arun Pande, VP-IT of Colgate Palmolive, and Arindam Bose, CIO of LG Electronics India.

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Little-Known Facts

W i n n e r s

Rohinton Dumasia, GM-IT of Great Eastern Shipping,

hasn’t been on a family vacation

in a quarter century. VP-IT of Colgate-Palmolive Arun Pande’s favorite

Alvin Toffler, Somerset Maugham and Roald Dahl.

authors are

you’d probably see his bylines

If Arindam Bose, CIO of LG Electronics India wasn’t in IT,

Librans are focused on others and how they relate to them. They are partnership with a capital ‘P’ because they don’t want to be alone! Librans are good when paired up since they epitomize balance, harmony and a sense of fair play. It’s the Scales which symbolize Libra, and Librans want to be on an even keel. Librans are objective, just, and do what’s best for everyone. They are keen strategists, organizing groups with poise and getting the job done. You can expect the Scales to make a fair argument since they live by the principles of diplomacy and compromise. Librans at play may not be as energized as at work, which is what they think socializing is. Exercise for Librans needs to have a social component — such as a gym. Alternatively, Librans love the outdoors, so riding and biking can also prove fun.

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Imaging by P C Anoop

in a travel magazine.

51

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Little-Known Facts

W i n n e r s

achieve greatness

“People don’t because it’s easy to settle for good.” Head-IT, Apollo Tyres, Dheeraj Sinha realized in the past year. What’s your biggest learning this year?

Technology is handy in solving people issues.

— K.R. Krishnakumar, VP-IT, Grasim Industries

Ericcson India's CIO, Tamal Chakravorthy,

organized Delhi’s most famous merchant’s soccer cup for the

Those born under this sign are the ones who are in ultimate control of their destiny. It is life on the Scorpion’s terms, too, since these folks promote their agenda (they are quite the executives), and see to it that things go forward. Fearless Scorpions rarely lose, they just keep on going determined to succeed. Scorpios work, so they can someday sit back and feel satisfied with themselves. Scorpios are intense and passionate. They are dead serious in their mission to learn about others. These folks will zero in on the essential questions, gleaning the secrets. The curiosity of Scorpios is immeasurable, which may be why they are such adept investigators. The fact that they have a keen sense of intuition certainly helps. Scorpios love competition in both work and play. Extreme sports are right up the Scorpion’s alley, as is most anything which will test their mettle. 52

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Imaging by MM Shanith

“oldies and baldies” in the Delhi corporate circle.

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THE SCORPIO CIOs (Clockwise, from top right): Mahesh Kumar Pinnamaneni, CIO of Aurobindo Pharma, K.R. Krishnakumar, VP-IT of Grasim Industries, Dheeraj Sinha, Head-IT of Apollo Tyres, and Tamal Chakravorthy, CIO of Ericsson India

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THE SAGITTARIUS CIOs (Clockwise, from top left): H. Krishnan, AVP-IT of Indian Rayon, S.R. Balasubramanian, group CIO of Chambal Fertilizers & Chemicals, P.A. Kalyanasundar, GM-IT of Bank of India, Satish Joshi, head-IT of Patni Computer Systems, and S. Ramakrishnan, AVP-IT of Tractors & Farm Equipment.

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10/10/2006 6:34:56 PM


Little-Known Facts

W i n n e r s

Satish Joshi of Patni Computer Systems says his most important learning of the year has been the meaning of the

2nd law of Thermodynamics.

“Entropy increases the

not because it has to, but because that’s

most likely state a system can be.”

GM-IT of Bank of India P.A. KALYANASUNDAR’s

most treasured vacation spent in Egypt. was the week he

Sagittarians are truth-seekers, and the best way for them to do this is to hit the road, talk to others and get some answers. Knowledge is key to them, since it fuels their broadminded approach to life. The Sagittarian-born are keenly interested in philosophy and religion, and they find that these disciplines aid their internal quest. Those born under this sign are clear thinkers and choose to look at the big picture. Sagittarians are enthusiastic consumers of information (and enthusiastic in general). For the Sag-born, it’s all about action and adventure. They are often athletic and full of stamina. You’re likely to find them in an around-the-world solo boat race or climbing up the highest peaks. Life for these folks is played full-on, and often their words serve to inspire others. It’s no surprise then that attract others with ease — high-spirited Sags love to socialize — with an ever-changing crew. Vol/1 | ISSUE/22

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The last book S.R. Balasubramanian, Group CIO, Chambal Fertilizers & Chemicals, read was In Search of Excellence by Tom Peters.

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Little-Known Facts

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“It changed the way I look at things,”

says S. Hariharan, senior VP-infrastructure services of i-Flex Solutions, about the vacation he spent at a school for special children two years ago. ALAGU BALARAMAN, senior VP-IT & corporate development, Godfrey Philips India, on stress: “I enjoy protective amnesia. I forget things all the time, so

nothing sticks.”

Most treasured vacation of SUMIT DUTTA CHOWDHURY, CIO of Reliance Communications:

Bora Bora where rush hour is a school of

The Goat symbolizes Capricorns and it’s an apt mascot. Goats love to climb to the top of the mountain and Capricorns want to get to the top of their chosen field. Capricorns are all about hard work. They are happy to put in a full day at the office, realizing that it will take work to get to the top. Life is one big project for them, and they have a businesslike approach to almost everything. Capricorns are practical, take things one step at a time and are realistic. Capricorns are industrious, efficient, organized and won’t make a lot of waves. They are scrupulous with details and adopt a rather conventional posture in business and in life. Caps aren’t interested in wild ideas or round-the-world dreams. They are patient, which is probably why they enjoy leisurely sports like golf. Capricorns tend to be mature and are amply blessed with common sense, two more qualities which help their success-driven endeavors. 56

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Imagin g by MM Shanith

stingrays swimming by.

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THE CAPRICORN FOLK (Clockwise from top left): S.S. Sharma, GM-IT of JK Industries, Subrata Banerjee, CIO of Bharat Aluminium, Amit Mukherjee, group CIO of RPG, V.V.R. Babu, CIO of ITC, Alagu Balaraman, sr VP-IT of Godfrey Philips, S. Hariharan, Sen. VP infrastructure services of i-flex Solutions, and Sumit Dutta Chowdhury, CIO of Reliance Communications.

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THE AQUARIANS (Clockwise from top): Ganesh Raj, GM-IT of Sutherland Global Services, Alok Kumar, global head-internal IT, Tata Consultancy Services, C.N. Ram, country IT head, HDFC Bank, Mani Mulki, VP-IS of Godrej Consumer Products, Dr. Jai Menon, director (IT and innovation) and group CIO of Bharti Airtel, and Probir Mitra, GM-IT of Tata Motors.

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10/10/2006 6:35:10 PM


Little-Known Facts

W i n n e r s

GANESH RAJ, GM-IT of Sutherland Global Services,

would rather research

the Occult

if he had a choice.

If C.N. Ram wasn’t country IT head of HDFC Bank, he might have been burning the

rubber

as a car racer.

Mani Mulki, VP-IS, Godrej Consumer Products: If you could choose an

alternate career,

Professional Artist.

Those born under this are humanitarian, philanthropic and keenly interested in making the world a better place. Aquarians are visionaries — they’d like to make the world work better, which is why they focus much of their energy on our social institutions. They also have many friends and acquaintances. The Water Bearers are also all about progress and technology — they love the latest gadgets, gewgaws, computers and next-generation technologies. Aquarians are also artistic, inventive and believe that their offbeat, original approach will win the day. Those born under this sign are altruistic, humane people who are determined to make a difference. At play, Aquarians like to surround themselves with lots of people, preferably family and friends. Vol/1 | ISSUE/22

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Imaging by Sasi Bhaskar

what would it be?

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Little-Known Facts

W i n n e r s

“Viva Las Vegas!”

is what you'd hear Rajesh Uppal, CIO of Maruti Udyog, say about his most treasured vacation.

Gopal Shukla, Director-Business Systems Group, Hindustan Coca-Cola Beverages India, doesn’t mind doing any work so long as it doesn‘t come with the epithet of

‘support function’.

Sanjay Sharma, Corporate Head Technology Officer, IDBI,

drawing cartoons.

Pisceans brings together many of the characteristics of the other eleven signs. But, they are happiest keeping these qualities under wraps. They are selfless, spiritual and focused on their inner journey. They place great weight on what they are feeling. Feelings define Pisceans, and they feel their own and other’s burdens (and joys). The intuition of the Pisces-born is highly-evolved. Pisceans are fluid and easy-going. Their primary goal is to help others. Pisceans are compassionate, charitable and will quickly put the needs of others ahead of their own. It’s this kind of self-sacrifice which keeps these folks going. Relaxation for them comes in the way of water sports. Pisceans love to swim, and it’s this easy glide in a pool or the sea which serves to alleviate much of their stress.

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Imagin g by Sasi Bhask ar

fancies his hand at

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THE PISCEAN CIOs (clockwise from top left): Gopal Shukla, director-business systems of Hindustan Coca-Cola Beverages, V.V. Subrahmanyam, GM-MS & IT of HAL, Abir Basak, head-IT infrastructure of Aviva Life Insurance, Sanjay Sharma, corporate head technology officer of IDBI, R. Uppal, CIO of Maruti Udyog, and P.S. Narayanaswamy, head-IT of EID Parry.

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10/10/2006 6:35:18 PM


Ashish Chauhan 

Peer-to-Peer

usiness’ Business B isYour Business Aligning IT with business doesn't just mean ‘managing expectations’. Often, it also means being multi-faceted and getting your hands dirty in their mess.

W

Illust ration by MM Shan ith

hen you are a company of 50,000 employees, IT tends to be small and very hands-on. You have to work with people closely and on a personal basis. In the process, you get to know first-hand, in a seamless and direct way, the IT needs of people and departments. When you step over the 1-lakh employee threshold, your set of challenges change. And when you have millions of users spread across the world, you have yet another set of challenges. The question then is: how do you go about aligning an IT goal with a business goal? Much of my work as a banker, 15 years ago, involved setting up companies and project finance. It gave me an understanding of how to set up and run a business. And since I knew more about IT than others at these places, I also got involved with setting up IT. Much of these experiences help me today primarily because a CIO today has to be a ‘super-user’. He has to know accounts, finance, treasury, and risk management. Each time you talk to a user, you are talking to someone who wants to do something that will make his job easier, which might not necessarily make things better for the larger organization. As a CIO, you are the only one who binds the organization. IT is the glue that holds an organization together, lends it efficiency, and directly impacts its brand. Take the Reliance Industries Limited (RIL) service network, which has nodes everywhere. Typically, a RIL customer makes an order for a certain grade of material over the phone to a regional office. These offices usually have no access to SAP — Reliance has an enterprise62

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Ashish Chauhan

Peer-to-Peer

wide SAP — and tend to call the regional headquarters. The request is entered on our system at this point. But after two layers of communication, the margin for error is substantial, and is complicated by the fact that Reliance does door-step deliveries to 70,000 customers. Errors in the form of wrong dates, wrong grades of material, and worse, wrong addresses, have occurred. When I joined Reliance in 2000 to set up its e-commerce initiative, the objective was to reduce the sales lifecycle by streamlining the order entry process, providing agents with real-time inventory information, and getting quick clearance for credit from the risk management group. Reliance practically works on negative working capital by ensuring that it receives payment before delivery. So, both the customer and the risk management group had to agree that payment had been made for a shipment. We wanted a solution that would provide quick response and ensure a minimum flow of data between a remote client and the center. The question before us then was: who is the customer? Who is the business? With so many people involved, asking for various ends to be met, it was complicated. It also proved interesting. We figured out that ‘business’ was the end customer’s employee sitting in Timbuktu, the ‘business’ was also a truck driver who was responsible for picking up material and delivering it, ‘business’ was also the person manning security gates at the customer’s end. Then there was the chairman, the business heads, the sales people, the marketing people, accounts, and so on. Each of them had a different perspective of what would make an ideal system. As CIO, it was up to me to make a call and ensure that the interests of the company were well-served. We had to sit all of them down, play smart and be at our diplomatic best before we found a workable solution. One of the issues with SAP, with which we’d worked, was its requirement of a large pipe to connect to remote locations. Our users in the far corners of the country worked with little bandwidth. This problem and the high cost of rollout led to the failure of the project. So, we went for our own system in 2002. We got a system running on ASP and .Net in a few months, which was integrated to the SAP backend. By 2005, it allowed 70,000 users, 4,000 distributors, and over 1,200 petrol pumps to punch in orders for materials like PVC products and polymers — all on very thin pipes. Part of aligning the e-commerce initiative to business goals meant that we had to empower our distributors and infuse more transparency into the system. We do about Rs 25,000 crore in e-commerce a year. What we learnt was that if you want to align with business, you have to be flexible. You have to be willing to shoot down a failing project mid-way.

Make Those Tough Calls Although I had joined Reliance to set up its e-commerce initiative, I worked closely with Reliance Infocomm. When Reliance Infocomm launched, it faced a problem of plenty. There were days when Infocomm received 150,000 customers everyday, a large number by any standard. Within a year, it touched 10 million customers. Today, it has about 22 million. These numbers bring a multitude of challenges. The problem was that our dealers were selling our cellphones like roadside halwa. Customers would walk up to them, and pick

As a CIO, you are the only one who binds the organization. IT is the glue that holds an organization together and lends it efficiency and directly impacts its brand.

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whatever they wanted. Personal information forms took a back seat, which meant data wasn’t complete and would be rejected by the central server. At that point, management stepped in. Infocomm had 10 million customers and we were getting 6 lakh calls at our call centers, sometimes because the same customers called on successive days about the same billing issues. We created a system called Simplify and asked the business to stop selling pre-configured phones, which could be activated by a customer by punching in a code, immaterial of whether we knew where to send his bills. We also decided to use the phone’s data capabilities to ask customers to fill personal information themselves via the phone. The solution cleaned up the mess within six months, and the number of calls to the call center was reduced by 90 percent. Today, two years on, Infocomm can handle between 1 lakh and 1.5 lakh new customers everyday, and generate 2 lakh bills everyday. But this alignment necessitated that the CIO, and the users under him, could ask management to make tough decisions and take some tough decisions themselves. CIO

Ashish Chauhan is the president and CIO-IT applications at Reliance Industries. He is a recipient of the CIO US 100 award for 2005. This column is based on his presentation he made at the CIO 100 Symposium and Award 2006 event in Mumbai. Send feedback on this column to editor@cio.in

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Dr Moti Vyas 

Peer-to-peer

ttracting and A Retaining Top Talent How you too can rope in the best and the brightest, and make them want to stay, even if you’re small, unknown and located in Timbuktu.

I

Illust ration BY PC ANOOP

t was 6:30 PM, October 27, 2003, flight 327 Newark, New Jersey to California, the date’s engraved in my memory. I was dreaming of a corner office and a growing portfolio. Little did I realize the sort of quagmire I was getting myself into for the next 18 months. As the plane landed, I smelt smoke. As I looked outside I saw fires burning — the flames of the famous San Diego wildfires of 2003. I could only hope that the casino company I was to join was intact. I later found out that the fires had burned only a half-mile from it. The state of affairs when I joined was telling. The company was completely dysfunctional and its infrastructure was in shambles. It wasn’t that the casino wasn’t making money — they were making hundreds of millions of dollars. But, the IT department was a joke and the vendors drove all the strategies. The casino was making at least Rs 2,700 crore in profit, but it didn’t have onsite support and didn’t use the Internet or e-mail as late as 2000. The then IT head thought e-mail was a waste of time if you could walk down to a colleague’s office. This was the culture I inherited. It was evident that these guys were living in the Stone Age. The whole dotcom boom was bypassing them. My mandate was to turn the whole mess around in two years, make it state-of-the-art, and be able to take on a billion dollars of investment. Most of what they ran were mom-and-pop apps that couldn’t have cost over Rs 4.5 lakh. They supported systems using cell phones. Systems didn’t have any redundancy, everything worked from a single server. No test server, no Q&A, no

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Dr Moti Vyas

Peer-to-peer

development. They believed in on-the-job training, and salaries were just above the poverty line. What made it worse was that the casino was located in the boondocks. It’s close to San Diego, California, 30 miles out in the mountains. For a 20-mile radius around the casino, there’s isn’t any civilization. Neither did the casino have a brand. The few that know about it can't pronounce its name right. Creating a brand for Viejas's IT department was a challenge. The first time I met my key staff was at a pub. My new CEO had made it clear that I was to open the casino in seven days, once the fires were out. I didn’t know the people, their systems, their culture… I wasn’t even issued an ID card, without which I wasn’t allowed in the casino. But over a few beers, we created a war strategy to get the systems up and running in a week. My longer-term goals were standard: keep the lights on, manage risk, create the organization’s IP and handle strategic alliance with business. The bonding that took place that evening saw me through the next three years. I like to believe that my people will follow me to death. That is the type of relationship you should have with your staff. And there is nothing like a crisis to bring that about. The first thing I did was to build a team; infrastructure could come later. Without a team, I couldn’t do a thing. That process proved to be a most critical first step. I started by taking a survey of the team, asking them what they did. One of the responses I received verbatim was, “I have been doing this for over two years now without a job description or official title.” The enormity of the job soon struck me. Many of the staff comprised five- to seven-year veterans who treated the job like an entitlement and hadn’t received merit-based performance reviews. In one case, I couldn’t fire four people who had worked there for 10 years because they knew how to navigate through the politics of the organization. But since we monitored Internet use across the company, I used that information to force the legal department to fire them.

was: we go where the talent is. We don’t sit around waiting for people to join us. What is talent and what’s retention? Talent is the top 20 percent of your organization — the rest are followers. Retention means keeping talent for five years. Good people grow faster than the companies they work for. The new structure was more flat and very matrix-based. It ran only four levels. Then, I hired directors and gave them a mandate: go and pick your team. Delegate. Empower. And never undermine your people. Almost 70 percent of the original staff changed. This wasn't achieved overnight. Remember, I had a casino to

Talent is the top 20 percent of your organization — the rest are followers. Retention means to keeping talent for five years. Good people grow faster than their companies.

Hire Top Notch One thing I realized early in my career was that people join a company but, all things being the same, leave because of their managers. So, I decided that hiring and firing would start at the top, especially since I didn’t have any department directors. The entire department, though, needed restructuring because it ran too deep — 10 layers in some cases. And there was no way I could communicate with the bottom of that pyramid. I realized that I couldn’t delegate recruiting to HR because they belonged to the same backward-looking culture that didn’t believe in paying people well. So, I created a HR department within IT. One of the decisions we made while recruiting people

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run 24/7, one that worked on systems so old that just keeping them running was a challenge. If you want to hire right, the first step is to do a thorough checkup on potential employees. Don’t hire bad apples just because you need to fill a position urgently. I’ve had to keep positions open for over a year, which made management think that they didn’t really need filling. Don’t fill a position with a mediocre candidate. Period. By sticking to our guns, we've begun attracting talent from some of the best companies in the world such as AT&T, Boeing, IBM, Merrill Lynch and Yahoo! despite our location and a lack of a brand.

Branding is Simple When are people looking for when they go to work? A job, a good salary and rubbing shoulders with celebrities so they can tell their friends about it. Creating a brand is very important. Imagine a systems administrator at Microsoft, then think of the same position at Google. Google has a cool company image, and that’s important in attracting talent. As part of the process of creating a brand, I encourage my people to attend conferences and give speeches. Once they are published, it creates industrywide recognition for them and for Viejas. It’s no secret that IT boys have a geeky image. They don’t communicate well with business and tend to be viewed as a black box. I've tried to change the image of the IT department using techniques learnt from the marketing department. We demonstrated, for example, that if IT systems go down, the casino loses Rs 11.25 lakh every hour. I leverage this simple correlation to get more funds for my department. REAL CIO WORLD | O C T O B E R 1 , 2 0 0 6

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CIOs need to create visibility of your accomplishments. IT does impressive work, but doesn’t market its service very well, which means no one really knows what we do. While coming to this calculation, we measured and documented work done on every app, and then used this chart to reward IT staffers. If everyone can keep individual systems running 99.99 percent of the time, then they get 90 percent of their bonus.

Challenge Them Many organizations make the mistake of assuming that IT isn’t interested in business goals. You must explain to everyone, even at the most junior level, why they are where they are, who pays their salaries, and what they can do to help the business. I share Viejas’s business vision with my IT staff. Its vision over the next three years is to build two more casinos, two hotels of 1,000 rooms each, a resort — and manage a number of new properties. Giving them this vision helps them look for new technologies to aid business. This also helps me because a lack of new technologies is one of the reasons staffers leave. Based on my staff's inputs, I can go back to the board and tell them how much I need over the next three to four years. If business is going to invest Rs 4,500 crore, I’m going to need some of that money today to set up infrastructure to support their investment. So, I've asked them for two percent of that chunk. I’ve used some of that money to start a Rs 13.5-crore database center. And I’ve given this project to someone who joined me six months ago. I’ve learnt that you have to challenge your talent or they’re going to bolt. Another way I've used new technology to keep staffers is to change the IT stack. This had dual benefits: it challenged my entire IT team and benefited the business. It also gave me a chance to explain to management that although they only made money using the application layer, there was a lot going on behind the scenes. Of course, you can’t change your entire system every year. So what I’ve found useful is asking my IT staffers to create an application grade-card for all the applications we have. This is shown to C-level executives. It can, however, be a double-edged sword. Too many Fs in successive years, and someone is fired. I use the grade-card as a tactical weapon to get more money, deploy new technology and keep my staff busy. We also created a roadmap for each layer, counting in tomorrow’s technologies and applications. Show them the path, as a leader, and then get out of the way. For example, I told my staff in 2004 that we would be using blade servers and WiMax, giving them something to look forward to. This, in turn, creates enthusiasm among them as they read technological 66

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magazines, attend training sessions and exchange notes. It helps when they know that these activities keeps them from becoming obsolete. The benefit is that everyone, especially my IT staff, knows what’s coming their way. The downside is that I am training someone for another company, but you have to be OK with that if you want the best. We also created a new group, the IT security group, which has responsibility across the entire stack, from applications to infrastructure.

Getting the CFO to Cough Up More Every year at budget time, it’s a huge struggle. The first time I got away with asking for a 20 percent raise for my people; the next year to get another raise, I said people threatened to leave. But apart from being creative, you need to create visibility of your accomplishments. You need to market your work. IT does impressive work, but doesn’t market its service very well, which means no one really knows what we do. When a system goes down for a minute, everyone sits up. But no one notices the 23 hours and 59 minutes that it was running fine. I market my 23 hours and 59 minutes aggressively. Another way to gain credibility and funds is cleaning up your house. Messy server rooms do little to win over CFO confidence. Cleaning-up also boosts the morale of the IT staffers who don’t feel like they work at a sweatshop. They should feel like they work in a place of change, where there are serious matters at hand. So, even if it means working at midnight, which is probably the only time an IT team gets their systems to themselves, it’s worth it. You can also use your IT security audits to create more visibility for your team. Let them make your presentations, with you in the room. Let them have as much credit as they can get. The visibility causes them to talk to their families and this generates a lot of well-being. CIO

Dr Moti Vyas is CIO at Viejas Enterprises, a gaming and entertainment major. He is an active member of the CIO Executive Council’s ‘emerging technology task force’. This column is based on his presentation he made at the CIO

100 Symposium and Award 2006 event in Mumbai. Send feedback on this column to editor@cio.in

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Trendline_Nov11.indd 19

11/16/2011 11:56:19 AM


interview

he Opportunity in Productive Friction By Gunjan Trivedi

CIOs should use friction in modern organizations as a trigger to new ideas that create new value for customers and the marketplace, notes management consultant John Hagel III.

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CIO: What is the only sustainable edge of business? And how does IT influence it? JOhn hagel: The book I wrote last year called The Only Sustainable Edge really focused on the fact that in business strategy we have evolved over time from looking for structural advantages like geography or economies of scale to the view of advantages of skills or competencies that a company has. Increasingly, 68

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even that is being challenged. From our perspective, the only sustainable edge now is the ability to get better and faster. No matter what your skill or competency is at any point of time, you will be very vulnerable if you just rest on that. I make the case in the book that the only way to really get better and faster is by working effectively with other companies. Any individual company will have a hard time getting better and faster, unless it seeks help from other companies. So, it is ultimately the notion of rapidly building the capability that provides the only sustainable edge. IT plays a critical role in building the sustainable edge. In the past, information technology has been very hard wired. Once you implement a set

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PAIN TING by b INesh sreedhArAN

ith 25 years as a management consultant and senior executive, John Hagel III has experience with both entrepreneurial startups and large enterprises across leading industry sectors. He has worked with businesses in North America, Europe and Asia, and is the author of four bestsellers including The Only Sustainable Edge. In this interview prior to the CIO 100 Symposium and Awards, Hagel holds a mirror to the evolving role of the CIO today — and reiterates the significance of a more dynamic approach.


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interview

of applications or a set of platforms, you have to be consistent in operating with that. We are now moving to the new generations of IT that are much more adaptable and can change rapidly to accommodate changing business practices, customer needs, and opportunities in the marketplace. In that context, companies that are the most aggressive in terms of harnessing these new generations of IT will, I believe, have significant advantage in building that sustainable edge. They will be able to move faster, get better, and be more agile than their competitors.

defined interfaces — making it easy to move one module in and the other out, to respond to changing market needs — applies to information technology in terms of designing new architectures. It also increasingly applies to how you manage your business processes. In the past, we did tend to think about business processes in a very hard-wired design approach, specifying in great detail the activities needed to be performed at each stage, and managing those activities very tightly. If you take this principle of loose coupling, you can now think about redesigning the business processes in a much more modular fashion, so that you can move modules of activities in it to create a much more flexible approach to the business processes. A CIO can be very helpful to general business management in being a catalyst in rethinking the design of business processes, and take advantage of some of the capabilities of IT that are now available.

What role can a CIO play in helping his organization master the edge to build a more sustainable core?

You have stated in recent articles that innovation, while being key to business, can also generate friction as people with varying experience and skill sets collaborate to face challenges. How can a CIO strike the right balance between productive and dysfunctional friction in his organization?

CIOs play a critical role at several levels. As I mentioned, there is a new generation of technology coming into the marketplace. It actually has several components to it, one of which is a new set of architecture known as Service-Oriented Architecture (SOA). This is going to be critical to build that agility for companies. Most directly, a CIO ought to be the key evangelist in implementing and deploying these new architectures. In addition, there are sets of interaction technology tools that span a range of social software, collaboration tools such as video conferencing, or collaboration workspaces where teams can come together from many different locations to collaborate online. These sets of tools become critical to getting better and faster as well. Here, CIOs play a key role in bringing these technologies in. The more indirect role that a CIO can play has to do with the notion that goes back to one of the characteristics of IT being much more modular and loosely coupled than previous generations of technology. The design principle of creating modules of activity with very well-

For most executives, friction is perceived as bad. They want to eliminate friction. Several years ago, we had the vision of frictionless e-commerce. This is certainly a valid goal if you think about friction as inefficiency. Under increasing competitive pressure, you want to be as efficient as possible, want to remove that dysfunctional friction that is causing lead times or waste to occur in business activity. On the other hand, not all friction is bad, particularly when you are faced with a new set of needs or opportunities in the marketplace. As you bring together people with different backgrounds, skill sets and experience to create ways to respond to these needs, there is going to be friction, disagreements and different points of view. Out of that friction, you get innovation and new ideas that create new value for customers and the marketplace. Again, a CIO plays an important role here because the CIO is coming to the business table with a set of perspectives about what IT can do to change how business operates, and create new ways to do business. There is likely to be resistance from business managers who have had success with traditional approaches. They are confident about the way they have done business, and will question whether the new approaches really make sense. Here, there is an opportunity for CIOs to convert this to productive friction and say that we understand and respect different point of views, but also that we need to create an environment where we can engage with each other around those points of view, and resolve those issues and generate more value to business. I think the challenge, not only for the CIO but also for all business executives, is to create an environment where these clashes of views can generate new insights and new approaches to creating value.

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Is it similar to change management initiatives? In change management, productive or dysfunctional friction can certainly be a

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India ready for the FAST Track?

he audience at the first-ever CIO 100 symposium were witness to management consultant John hagel’s celebrated business and IT concept, which stems from four verbs: Focus, Accelerate, strengthen, and Tie it all together. simply put, this is the FAsT strategy. hagel spelt out the concept in the context of India’s telecom giant, bharti Airtel. CIO Jai Menon shared the podium with hagel to discuss the FAsT strategy and its relevance to Indian organizations. “While we need capabilities to roll out new technologies and services in the next 6-12 months, we have to simultaneously keep in mind the processes impacting business over the long-term,” noted Menon. hagel reiterated the value of the FAsT strategy to cope with this challenge because it questions two basic tenets of business strategy. First, it rejects the notion that detailed strategic blueprints need to be laid out before a company can proceed with operational implementation. secondly, it asks organizations to abandon the traditional strategic view that the relevant time-frame for strategic planning is a five-year horizon. “The FAsT approach urges executives to move along parallel paths, operating on two very different time horizons: one horizon takes a five- to ten-year view of the business, and the second horizon concentrates on a much more tactical 6-12 month view of the business,” said hagel. he pointed out that Focus is the key activity on the 5-10 years horizon. Unlike other strategic approaches, it doesn’t require management to develop a detailed view of the future, but requires management to develop a clear, high-level view to help the company make important near-term choices. Accelerate and strengthen are the key requirements for the 6-12 months horizon. ““by Accelerate, I mean identifying a few

key operating initiatives that have the potential to significantly accelerate movement towards the long-term Focus,” he explained. Management then needs to set aggressive and measurable operating performance objectives for initiatives over the next 6-12 months, he added. Finally, CIOs need to tie it all together. “It is a process of actively managing both the time horizons as you ask what am I going to earn from my operating initiatives in the short-term that will help me to get even better view of the longer-term destination? And, how can I use this longterm destination to make the critical choices in choosing the near-term operating initiatives?” said hagel. Menon classified bharti Airtel’s challenges under scale, innovation and transformation. Airtel has to constantly put in place key infrastructure and provide architecture to support its massive growth at a time when many presentday IT solutions are not even equipped or designed to handle large volume of customers. Parallel to this, Airtel has to meet the needs of innovation and subsequent transformation, especially in the context of the telecom industry’s proximity to three neighboring industries: IT services, media & entertainment and portal & IsP industry. The current infrastructure handles voice and data, which is different from what is needed to enable commerce and content distribution on various different mediums, Menon added. In such a scenario, the FAsT strategy offers a useful context for understanding how to create strategic advantage through sustained innovation in business practices enabled by IT capabilities, said hagel. h

significant factor. The challenge in change management is that you have people who are very comfortable with the traditional ways of doing things and trying to get them to adopt new practices. The productive friction I am referring to is almost a step before change management. It assumes that you already have a view of where you want to go and what change you want to implement, whereas I am focused on how you generate that new view and come up with a new, creative way of organizing your business better.

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— G.T

collaborating, given their cultural differences? I actually think that the developing economies play a major and increasingly central role to innovation on a global scale, particularly when you look at the emergence of new sets of consumers who are more demanding and have less disposable income. They really become a catalyst for coming out with much more innovative product and process designs to REAL CIO WORLD | O C T O B E R 1 , 2 0 0 6

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CIOs face the constant pressure to deliver on near-term business needs. At the same time, one of their key roles is to anticipate longerterm business opportunities and architectures that would be sustainable and scalable over time for the company. One of the valuable approaches to reconcile these two demands, I believe, is what I call as FAST strategy. (See box: India Ready for the

FAST Track?). FAST stands for Focus, Accelerate, Strengthen and Tie together. It puts the attention on two time horizons in parallel. A CIO first needs to focus on a time horizon of 5-10 years. No matter how much uncertainty the company faces, it is important to have the view of what kinds of business you need to have five to 10 years from now, and what is required for future success. It creates a sense of a long-term destination. It is not a very detailed view, but more of a high-level view of the destination with enough details to help make intelligent choices in the short term. At the same time as you are

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How can a CIO balance the nearterm business impact and longterm opportunities arising from the adoption of cutting-edge technologies?

“In some respect, agility can become vulnerability: you may move so quickly that you will lose sense of any direction and focus.�

Imaging by b inesh sreedha ran

reach the markets. Look at the Indian example of the kinds of innovation Tata Motors is talking about in designing low-cost cars or the eChaupal approach of ITC reaching the farmers in remote rural areas. Those are highly innovative approaches that deal with challenging market environments. In another context of what I describe as innovation blowback, which is the notion that the innovations will continue to serve the consumers in the emerging markets, this actually provides the basis for potentially very successful global strategy of taking those innovations, which are targeted at consumers in emerging markets, to tap the positions of established companies in more developed, western economies. If there is more value at lower costs, it would be just as appealing to the western consumers as well. It would be the notion of doing more with less. The other form of edge I wrote about in the book is this innovative notion of the emerging economies as the key in terms of geographic edge that would reshape the way business is done in more developed economies. The opportunity is there for both sets of companies in developed and developing economies to join forces around these innovation challenges and opportunities. Western companies have deep resources in terms of technological expertise, scale of operations, and experience in dealing with broad geographic markets. Enterprises from emerging markets come with different kinds of mindset without a lot of legacy systems or business processes. Together, they can enforce productive friction to come up with creative business innovation.

P h oto by Srivatsa Sh and ilya

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developing this long-term view, introduce the short-time horizon of 6-12 months. The aspect of Accelerate helps organizations ask themselves about the two or three operating initiatives in the next 6 to 12 months that will have the greatest potential impact in accelerating movements towards the long-term destination. It is a matter of discipline as most companies have hundreds and thousands of ongoing initiatives. Of these, which are the two or three initiatives that are really going to make the greatest difference? And do you have enough resources against those to make sure that those initiatives will be successful? The third aspect figures out the key bottlenecks that are holding you back and preventing you from moving faster as an organization. Organizations are held back by a lack of skills, resources and information systems. With the help of the third aspect of the strategy, enterprises figure out which are the two or three biggest bottlenecks over the next 6-12 months that should be addressed to move even faster. And finally, tie them all together. Keep working in parallel against both of these time horizons to figure out how you can use the sense of long-term destination to make better choices in the near-term, and how you can use what you are learning in the near-term to refine your view of the longterm destination. We need to continually move back and forth between these two time horizons to learn and get better faster. From my experience, that’s a powerful way for companies to effectively manage the tension between shortterm resolves and long-term opportunities.

“Tata Motors' low-cost cars and ITC's e-Chaupal are innovative approaches that deal with challenging market environments. ”

Does this perspective of time horizons change as you move across geographies, considering that CIOs in emerging markets can be more agile? Certainly the absence of legacy systems and practices can be a significant advantage in terms of responding to rapidly changing markets. But, companies in both the developed world and developing economies have a common challenge: as change accelerates, uncertainty increases. There is a temptation to spread yourself very thin. Because things are so uncertain, you place many different bets and hope for some of them to be successful. Here, the risk is that you may spread yourself so thin that none of those bets become successful. From my experience, the FAST strategy is a discipline that will really give a sense of destination. Even in the most uncertain times, if you don’t have the long-term view of where you are headed, you are really at the risk of spreading yourself thin in that short term. In some respect, agility can become vulnerability: you may move so quickly that you will lose sense of any direction and focus. FAST is the discipline for organizations to manage and remain in focus even during very uncertain times.

didn’t, you could get into deep trouble. Once the investments were made, it was very hard to change if you hadn’t anticipated the needs of the business. In contrast, the new, modular, looselycoupled architectures provide an opportunity for CIOs to let go. They don’t need to have a detailed architectural blueprint or map of the future. They can incrementally build it as the needs of the business evolve. I think what becomes more important than a map or a blueprint of the architecture is a set of governing principles. CIOs should focus more on figuring out the principles for organizing their IT resources to make them accessible and flexible over time. For example, what kinds of standards would you insist on for specifying the interfaces in these modules of IT resources or what kind of security would you ensure for your IT resources? Defining standards and practices becomes the key aspects of a sound architecture over time. Focusing on governing principles as opposed to architectural blueprints, while evolving the architecture as you go, is going to be the opportunity for the CIOs to let it go. CIO

CIOs’ efforts to champion elaborate conceptual IT architectures can sometimes give birth to a black hole, consuming time, money and people. When is the best time for a CIO to let go? Historically, because our technology has been so hard-wired, you had to have a very detailed architectural view of the future. And if you

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Senior correspondent Gunjan Trivedi can be reached at gunjan_t@cio.in

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"IT must partner with various users to provide effective business-IT solutions."

— V.V.R. Babu, ITC "Look at the big picture. That's where greater synergies can be created."

"CIOs must emphasize on building a long-term IT vision for the organization."

— Arun Gupta, Philips Electronics India

— Chinar Deshpande, Pantaloon Retail

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In ThIS STORy y | ITC | Philips Electronics | Pantaloon Retail

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I IllUST RaTIOn by P C anOOP

Size does matter. No one knows this better than the IT leaders of this year’s CIO 100 winners. For one, there is the need to keep pace with the organization’s growth rate and be in line with its proposed trajectory. It hardly leaves time for an IT leader or his team to course-correct, if needed. Then, there are the multi-faceted needs of diversification — an inevitable path for any large organization. The IT teams in such enterprises have a number of areas to address: budgeting, sustained operations and competitive edge, new technology adoption and attrition, to name just a few. In an environment as challenging as this, the CIO is striving to reach that sweet spot which compels top management to perceive IT as a business enabler and profit center — and not a liability. In a large enterprise that is expanding, the problems can also take large shapes and forms. So, how does the CIO combat these problems and delve deep into business? Conventional wisdom suggests that constant change in technology and a lucid approach towards financing IT projects, on the back of vibrant IT infrastructure, are the triggers to a winning strategy. There are the hygiene factors, such as mapping your IT requirements and budgeting for them. A tight control over both capital and operational expenditure is imperative. And don’t shut your eyes on upgrades and changes. In our coverage of successful approaches, we turned to three CIO Giant 100 honorees who have explored unique IT paths to take on the challenges of diversification, scale, and adoption of new technologies.

P h OTO by S RIVaTSa ShandIlya

When your enterprise is growing at a fast clip and diversifying, your IT organization braces up to new challenges. Three CIO 100 honorees spell out each of their approaches in keeping pace with their organization’s footprint.

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PerfectingitsRun-up By RAhul neel MAni ITC believes deeply in process. It’s one of the ways in which the Rs 16,511-crore company can keep its IT deployments alive and relevant. The fact that process means more run-up time and a number of filtering committees is something ITC is willing to live with, if it means that it can sail through deployments. The moot question is: when the size of an enterprise grows exponentially, how do you use transformational methods for incremental IT deployments to keep business adrenaline pumping? According to ITC, you don’t. What’s needed are high-impact IT projects, in parallel with more humdrum IT. ITC is a classic case

v.v.R. bAbu, gROUP CIO, ITC, bElIEVES In a WElldOCUmEnTEd mEChanISm TO alIgn bUSInESS WITh IT.

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of how a huge, diversified business has stayed on top of its mandate to stay aligned with business. ITC has over 60 locations, 20,000 employees, and has diversified into 11 businesses that include FMCG products like cigarettes, food products, stationery, manufacturing and distribution of paper and paperboard, lifestyle retailing, travel and hospitality, printing and packaging and agri-commodity trading, to name a few. Each of these businesses throws up different IT challenges. Given the size and diversity of ITC, planning, budgeting and executing IT — that’s aligned with business — could potentially turn into a chaotic anthill, a pile of wet sand worth over Rs 300 crore a year. ITC’s stayed on top of its hill using structure and planning. V.V.R. Babu, group CIO of ITC, says that the budget-processing for IT is similar to the process an ITC division follows to clear a business plan, where business growth and pain points are identified. Part of the structure that keeps ITC’s gigantic IT machine moving is that each business unit (BU) creates a multi-function planning taskforce — which includes IT managers — to undertake an annual business planning exercise. The yearly huddle introduces a comprehensive IT plan and roadmap as part of the division’s overall business plan. Though ITC isn’t a holding company in a literal sense for its group subsidiaries, it acts as one when it comes to budgetary allocations. Each if ITC’s 11 business also has its own IT steering committee that works closely with the businesses. The committee, with the group CIO, ensures efficient delivery, sustainability, and also that new technology is in line with an overall IT plan. The yearly blueprints turned out by the 11 divisions are reviewed by a Corporate Management Committee (CMC), the apex body at ITC. Its responsibilities include mitigating the risk of technology purchase. “CMC takes into account all annual capital and revenue expenditures. This includes individual business units’ plans, which also includes the IT needs of that unit,” says Babu. This pyramid-structure of decision-making is replicated in the IT setup across the group. Each of the eleven business units has a separate IT team and an IT head who reports to the unit head. The structure might seem dated and rigid, but if ITC’s track record is anything to go by, it works. “The divisional CIO works on dotted lines with the group CIO and as a group CIO, I ensure that the synergies within the organization are well-exploited,” says Babu. It’s also Babu’s responsibility to ensure that the technology is right, the resources allocated are appropriate and the funding is sufficient. “This process ensures the sustenance and support for that particular technology or solution

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through its lifecycle,” says Babu. “It’s only when the technology up divisional IT teams from process is finalized that other things like implementation the hassles of these services,” SNAPSHOT partners come into picture.” explains Babu. ITC Babu, with the help of separate teams, also looks into issues Apart from this structure, REvENuE: Rs 16,511 crore like technology upgrades and evaluation, annual budget planning ITC has put in place a ‘roving (2005-06) and central procurement across the group. “We ensure that we band’ of IT coordinators who IT buDgET: buy as a group, eliminating separate budgeting for individual are business process experts > Rs 300 crore business units,” says Babu. This helps ITC tamp down on cost and work closely with the EmPLOyEES: and keep better control of their technology partners, even if the business IT teams, ensuring >20,000 actual purchase is a BU activity. IT-business alignment. “The IT STAff: The basis of a business case for divisional IT isn’t necessarily IT teams don’t compete with >350 ROI. If a BU’s IT team can prove return on value (ROV), they business managers. They bRANCH OffICES: can have the project. But, “the CMC needs to be absolutely partner with various teams to >60 in India convinced of the business edge of an IT deployment before it provide effective business IT mANufACTuRINg is budgeted,” says Babu. This value could range from better solutions,” he says. LOCATIONS: customer satisfaction, productivity enhancement or efficiency, “Although our structure >12 or providing competitive advantage. is slightly old-fashioned and NODES: ITC classifies each initiative into three categories: bureaucratic, in the end, we have >12,000 transformational, enablement and enrichment. Each category a well-documented mechanism to SERvERS: has access to different resources and budgets, he says. The align business with IT that leaves >600 organization also realizes that some projects have a panlittle scope for undue justification organization impact and have to be deployed across all divisions. of resources and budget allocations These large projects are looked into by ITC’s CMC. It is headed by for projects of any size and any ITC’s director of finance, who reports to the CMC. kind,” adds Babu. CIO “These projects are treated as special. Since these initiatives have an overall impact, it is justified to have all organizational layers included in the decisionmaking process. It helps mitigate the risks of an investment not going in the right direction,” says Babu. To ensure that the conglomerate doesn’t lose focus, ITC’s IT division is Bureau head-north Rahul Neel Mani can be reached at divided into two parts: demand-side IT (the teams working with specific rahul_m@cio.in business units) and the shared services team, who work at the corporate level under the group CIO. The shared services team provides end-to-end IT management services, including As a percent of revenue creation and running of data Pros: Easy to calculate; gives basic insight into spending levels in certain industries. Widely used. centers, maintaining the ITCCons: averages can mislead. doesn’t distinguish between strategic and non-strategic spending. VPN, databases, storage, archival, security management, network Lights-on operations as a percent of revenue management, etcetera. Pros: distinguishes between strategic and non-strategic spending; can show trends in Separating the two ensures improved IT efficiency over time, even if overall spending doesn’t change. that demand-side IT doesn’t Cons: Tougher to calculate. definitions of strategic and non-strategic IT vary across industries. suffer because of backend issues. “At the business unit level, IT Per employee teams negotiate these shared Pros: maps IT spending directly to those consuming IT services. services at the beginning of the Cons: Outsourcing can skew numbers. does not describe IT effectiveness, only costs. financial year. The IT shared services team then puts up a plan Per user for the infrastructure required to Pros: Can be useful for benchmarking cost of well-understood categories of products and services, support business units. This frees like PCs or enterprise applications. Can be extrapolated into 'unit cost' of automated services. Cons: does not differentiate between strategic and non-strategic spending. — Christopher Koch

Four IT Spending Metrics

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OpportunitiesinScale By h A R i C h A n DA n A RA k A l i For Philips Electronics India, the scale of the business at home as well as its need to stay in sync with the parent company’s global operations has created challenges and opportunities at several levels. These range from straightforward consolidation of servers to finding ways of deriving a 'single view' of the customer and creating 'virtual redundancies' for talented people. Arun Gupta, director of Philips Global Infrastructure Services, has 39 people on his ‘in-house’ staff supporting the company’s 5,000 employees across 30 locations. With another 75 outsourced staff handling day-to-day IT

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operations, Gupta believes, “The focus of my team is business management and managing the IT expectations of the business units.” With Philips outsourcing most of its activities, its IT team is fairly lean. Its competitive edge is derived from tapping the expertise that the team brings to the table, and translating it into business systems for the company to use, says Gupta. One can argue that a lean organization faces constraints of capacity, but so far Philips India hasn’t faced that issue. “Outsourcing has given us a fair amount of flexibility on scaling up or down and, to that extent, the ability to control costs,” he says. Gupta gives the example of the 350-odd servers in his organization, and the storage and other requirements they throw up. “Over the three days of a monthend, we generate nearly 6,000 invoices with an average of four line items per invoice. The pressure that and from some of the business folk is tremendous. “In such a situation, if the network goes down at say 9 PM, there may be nothing I can do about it. That’s where reliance on people-based processes comes into operation. The resilience created in our systems ensures that 99.9 percent of the time, any disruption to the business is nominal,” says Gupta. At the same time, there are some 25 terabytes of information in the organization, and Philips’ IT team has to ensure its constant availability to everyone. This leaves a very small window to keep everything backed up and in sync for disaster recovery. These are some of the challenges on a daily basis. In leveraging scale — Philips prides itself in being a large IT buyer — the company is able to get a fair amount of benefit. Further, with each business unit being independent, its IT team attempts to create synergies among them, building collaborative tools such as knowledge portals. “Wherever possible, create common infrastructure — that is the aim now. We are now moving towards shared infrastructure, which means that at the departmental level, there is reduction in IT budgets,” Gupta explains. At the same time, Philips has started a new initiative to take a closer look at the customer. “Let’s say, the lighting business unit sells bulbs and CFLs to a customer. Then, we also want to sell them electrical appliances and so on,” he says. With the convergence that IT enables, and brought about by market changes, Philips is able to do this targeted 'management' of its customers. The biggest driver for this ‘master data management’ is the uniformity of the systems and the masters — the way you create and use them. Two months ago, Philips started the process of synchronizing the masters across various business units. This is still work in progress but at the end of it, Gupta thinks, the company will have a much better view of the customers — and be able to come up with specific proposals for them.

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Every system has a customer master. When companies deploy are very close to finalizing our systems based on business units, each BU ends up owning its deal, which should go live next SNAPSHOT customer master. And the way they use the master will be in year. My initial estimate says this Philips Electronics accordance with that. This will then be different for each BU, will definitely give us improved REvENuE: Rs 3,500 crore which means that the way one accounts for each customer will utilization in managing the entire (2005-06) be business-unit specific. IT operation,” he says. IT buDgET: The synchronization can combine the masters to give Philips • Optimization: Scale requires Rs 39 crore apprx.* a single view of customers across BUs. The systems for which a holistic review of all IT EmPLOyEES: the masters are being synchronized include financial accounting, deployments in the company. 5,000 sales and distribution, and CRM. Within each, there will be “Earlier we had point-to-point IT STAff: a multiplicity of systems. networks. Then, we switched 39 (in-house) Diversity of technology is one challenge for a company as large as most major locations to a VPN, 75 (outsourced IT staff) Philips Electronics India. Another is conflict of business priorities and used an MPLS cloud, which LOCATIONS: — one division wants one thing and another wants something else helps us manage bandwidth 30 — for “there is always a pressure between creating a local optima better,” says Gupta. buSINESS uNITS: and a global optima,” as Gupta puts it. People want to optimize Philips reviewed its 4 their own operations because they get measured by that, whereas deployment of third party SERvERS: the challenge for the organization is “to create global optima”. “We service p r ov i de r s and 350 look at the big picture and that’s where greater synergies can be deployment of infrastructure. *includes figures of Philips created,” asserts Gupta. “For example, a new project Innovation Center Other problems include the complexity of the technologies comes up. What do you do? You currently in use, and the lack of process coherence among don’t have machines, and you go different business units. “For instance, the way one BU manages hire them. These used to be local credit based on its dealings with its customers and its market requirements decisions. Now, Philips has centralized this can be different from that of another BU. We are trying to simplify some of process and reduced some cost there. CIO this,” says Gupta. Still, if one has scale, technology brings in opportunities, such as consolidation, virtualization, which Philips is doing at the Bangalore center, and optimization. Assistant editor Harichandan Arakali can be reached at • Consolidation: If you have 100 servers in one location, each comes with hari_a@cio.in software licences, application and maintenance contracts, and so on. Cutting them down to 10, cuts down on those costs and saves on space and power usage. “We try to look at total cost of ownership for a three- to five-year period, which we just completed arun gupta on people issues in large enterprises — and how he tackles them. for Bangalore and should be able to present the management with a Keeping the team together and excited about its work business case for it,” says Gupta. We talk with each other through a tele-con, everyday. We also have two periodic • Virtualization: There are a meetings: IT council meetings and IT departmental meetings. In the council meeting, variety of NAS devices, SAN boxes every bU participates. This is done to understand the other person’s pain, and create and direct attach storage. Philips involvement. Electronics did an exercise with an IT vendor who came back with the Consistency of performance across groups finding that on an average, Philips’ They should be able to meet Slas without cost overruns or putting people under undue utilization was less than 50 per pressure. This is where most exits happen, not just money. We will be publishing a monthly cent. But in some cases, people newsletter to tell everyone in the organization about what we promised and delivered. are seeing a crunch. “Direct attach hardly allows any flexibility — it managing career expectations can’t really create a good DR. We People expect the company to do more. Someone in bangalore will probably have different expectations, with greater demand on the IT organization there, so maybe there will be a salary differential. We don’t have a good answer yet, but these are some ideas.

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strategy

aking Way M for New Technologies By GunjAn TRiVeDi Chinar Deshpande, CIO of Pantaloon Retail, likens new technology adoption in his Rs 2,000crore organization with a celebrated situation in cricket: a new batsman taking guard at the wicket. For one, IT adoption also involves uncertainty. And any inaccurate judgment, poor planning, inadequate support from the team, or simply a stroke of bad luck can ail a CIO at the start of his innings, just as it can dismiss a Test batsman. Deshpande recalls such a moment of truth when he struggled to make the adoption of new technologies a success in his organization. His

aS CIO, CHINAR DESHPANDE haS SUCCEEdEd In ElEVaTIng I.T. fROm a SUPPORT fUnCTIOn TO a STRaTEgIC OnE aT PanTalOOn.

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mission to 'win the game' reached a point where he spent an additional couple of crores to make up for the inaccurate planning and breaking windows and cabins in server rooms to make way for new servers. Deshpande deems these situations as his innings in a Test to harbor the long-term IT vision for his organization. Pantaloon isn’t alien to new technology adoption. However, the status of technology had been relegated to a support function. As the company was clocking explosive growth, the focus was on exploring new, emerging markets and tapping class B and C cities in addition to metros in the country. In the midst of the retail boom, there was a reasonable amount of appreciation of what IT could do in the ranks of Pantaloon. However, several initiatives of application development — from scratch or revamp of app architecture to the transition from specific software to industry-class solutions — were greenflagged during the initial phases only when they were unable to cope with the business needs. Pantaloon lacked a concrete vision of how IT can benefit the organization in the long run. Shortly after Deshpande joined Pantaloon in May 2004, he began work on two initiatives: first, to bring in people with project and business focus. And second, to abandon the application development projects with local vendors. His team began to evaluate high-end ERP solutions for Pantaloon, when he confronted his second roadblock: the mindset of business people in the organization. “We were not mentally prepared to deal with such a large investment in IT. I had to struggle with the mindset that ‘just because this person has come from some MNC, it doesn’t mean we should go with whatever he says’,” he says. Deshpande decided to change people’s approach towards new technology by rolling out the new enterprisewide technology projects that would produce results for business immediately. At the same time, he tried to convince business that his team shouldn’t be expected to have functional knowledge of everything and do everything hands on. He impressed upon them the merits of partnering with large IT solution providers, while undertaking several projects to help Pantaloon realize that IT is more of a business enabler than a support function. One of the things the IT team did then was to setup corporate VPN across the organization. Pantaloon partnered with Sify to interconnect all its locations. In effect, “at the end of every day, we had central consolidation of all of our sales reports and data. The very next morning, management could see the performance of every single store and category of merchandize,” recalls Deshpande. The other thing he demonstrated was that the same infrastructure could be used for several purposes apart from mere data transfer. “The same infrastructure was catering

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to all data, voice and video. They started seeing the benefit of the Master Blaster larger picture,” he recalls. SNAPSHOT SAP now handles financials for The next step for Deshpande was to garner enough support from the organization as well. Pantaloon Pantaloon Retail his organization towards a comprehensive long-term plan for IT. By has a large server computing grid Revenue: Rs 2,000 crore then, people were aggressive in opting for newer platforms to cater for SAP. Over 180 locations are (2005-06) to their specific business functions or working style. Deshpande’s live on SAP, with 2,000-plus IT Budget: response was a request to include him in all their annual business users. “We have already generated Rs 100 crore over plans and strategies. “I wanted them to tell me what business plans 50 lakh purchase orders with the next 3 years they are working on, which geographies they are targeting and SAP, and are exclusively paying Employees: their plans to capture markets. Accordingly, I would translate that all our vendors only through >14,000 into an IT vision, share the solution possibilities, and include their SAP interfacing with 167 banks. IT Staff: designated team members in actual solution developing part. It We now have 32 lakh SKUs >85 in HO was like asking them to leave the details to experts and focus on the across various formats of our (central role) >250 in store support bigger picture,” he says. retail business and have over five After months of deliberations, Deshpande and his team zeroed billion article type combinations,” Locations: 180 in on SAP as the ERP solution to be rolled out. At this point, he feels he says. that his innings took an interesting turn. He faced three successive The SAP is completely Nodes: >4,000 risks associated with the adoption of new technology. The first risk integrated with point of sales was more of a technological one: whether the decision to opt for machines. Further, all the Servers: >150 POS servers, 5 certain technology is correct or not. “Choosing the right partner or sales data generated in a day is SAP servers, 80 e-mail vendor or technology is critical because the risk associated with the uploaded into SAP overnight, servers, 40 other servers choice is always compounded by the uncertainty of the fate of the automatically updating the product, vendor or technology itself,” he notes. The other problem inventory movement and financial was: once it is established that the technology a CIO has adopted is changes. It is not only able to good enough, the trained employees start to sell like hotcakes in the job market. handle retail functionality such as category The biggest of the three risks was planning the implementation — and the management, merchandising management, danger of investment going awfully wrong. Deshpande grappled with this risk planning and supply chain, but is also taking the most. “We realized that because the technology we adopted was beneficial, our care of financials, HR and payroll apart from business people wanted to increasingly exploit it. Suddenly, our expenditures to other transactions of business. enable necessary support for the technology exploded,” he says. Initially, his entire “I am working on the second innings of my IT focus was on validity of the solution, and whether it met business needs. The vision, so to speak — working on Vision 2010. A budgeting exercise was focused on user licenses and underlying infrastructure. lot of things such as ERP and BI enterprise portals Everything seemed fine on paper. Pantaloon had 3 lakh stock keeping units are already up and running,” says Deshpande. (SKUs) and had planned for 250 stores. The organization uses a particular His objective is to adopt technologies that will measure called ‘article type combination’. Deshpande had estimated 35 enhance the customer’s shopping experience, million article type combinations and planned accordingly in SAP. “But when such as mobile POS, queue-busting technologies, we actually went live at several hundred locations in December 2005, the in-store marketing and customer kiosks. data exploded. The server infrastructure we initially planned for got exhausted Apart from expanding its retail business, in three months,” he says. In this period, Pantaloon reached 1.3 billion article Pantaloon is delving into real-estate business, type combinations. financial services, e-commerce and mall Perhaps, the entire planning exercise hadn’t been done accurately to cope with management avenues. Business is growing in all the large data Pantaloon generated. And it led to the purchase of HP Superdomes directions. “My second innings is just starting. I — the heavy performance, high-end servers — with a Rs 2-crore investment. remember how Sunil Gavaskar, after a century, “Within four months of implementation, we completely revamped our server would take guard again to go for his double century. infrastructure. These Superdome servers were 8 feet tall and weighed 2,000 We are taking a fresh guard and concentrating kilograms. The machines were so huge that we had to recruit a whole bunch on building another long-term vision for the of local workers to get the mammoth machines in. In fact, we had to break two organization,” smiles Deshpande. CIO cabins and windows to accommodate these super number-crunchers,” he says. “The whole planning went for a toss. If the management wouldn’t have backed us at that time, as they could see the upcoming business benefits, it would have Senior correspondent Gunjan Trivedi can be reached at been a disaster.” gunjan_t@cio.in

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Photos by Srivatsa Shandi lya & Kapil S hro ff

Illust ration by unn ikrishna n av

pringboard of Tomorrow’s Technology By sunil shaH

Do you and, more importantly, your organization know what it takes to make the planned leap to a new technology? A CIO panel discussion on the total cost of ownership fleshed out some of the issues you should watch out for. When Fast Ethernet became more accessible as a technology in the early 1990s, several companies were skeptical about moving away from their 10 megabit networks. It took a lot of time before they were confident of making a smooth transition. The Fast Ethernet experience epitomises how difficult it is to adopt new technologies, even among mature, tech-savvy companies, noted Ramamurthy Sivakumar, MD (South Asia), Intel Technology, at a panel discussion at the CIO 100 Symposium and Awards on the ‘Total Cost of Technology Adoption and Managing Corporate Risks’. 82

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To a large extent, this perception towards adopting new technologies remains, observed Sivakumar. What has changed over the last 10 to 15 years is that the portfolio of technologies, which needs looking into, continues to grow and accelerate. “And the luxury of waiting for a technology to mature and establish itself in the market is no longer available. Companies need to develop fairly intricate processes that allow them to keep the process running, and accelerate adoption into their companies,” he said. Sumit Dutta Chowdhury, CIO of Reliance Communications, pointed out that the problem of plenty doesn’t, however, extend to vendor choice. “Today, the number of EMA vendors is small, and there are only two chip vendors: AMD and Intel. Which one do you choose? Tomorrow, it could be storage. We’ve come down to limited technology choices and it’s a risk we must take into account.” CIO of Haldia Petrochemicals, Anjan Bose, concurred. The biggest risk associated with new deployments of technology is something that a CIO can do little about — because the risk lies with the vendors, he said. The diminishing pool of vendors hurts companies, he added. It partly explain why IT folk, more than any other lot, are prone to high risks. “Possibly, we are one of the few verticals that have single-product companies. And once these companies disappear, we are left holding the baby,” said Bose. Chinar Deshpande, CIO of Pantaloon Retail expressed disappointment over vendors’ inability to contain risk during new implementations. When Pantaloon Retail set out to install an ERP system, it wasn’t only the learning curve that was steep; the cost of the project also kept increasing, so much so that he thanks his management today for supporting his decision. “When you’re taking big decisions, involve your technology partner and let the ecosystem help you decide, so that you’re not alone in your decision. Hopefully, this will reduce the chances of failure,” advised Manoj Chugh, president, EMCIndia and SAARC. “We tried to involve our technology partners when we started ERP,” said Deshpande. “But I was wondering whether they could have shown more

“Too often, companies have very small pilots andthink enthusiasm will see them scale up.” Ramamurthy Sivakumar MD (South Asia), Intel Technology

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interest in understanding our business model. We ended up spending a lot more money than we’d originally anticipated, probably because the vendor was more interested in selling the product than studying our business model and foreseeing that we would spend so much more.” Arun Gupta, director-global infrastructure services at Philips, was more forgiving. In his experience, vendors are a mixed bag. “There are some who do a good job in assessing what organizations need before making suggestions and others who don’t,” he said. However, vendors don’t quite deliver the kind of emerging technologies that companies are looking for, he added. Sometimes, there is too much focus on features, said Chugh of EMC. “Often, as vendors, we get prescriptions from customers. I still remember customers asking me whether I supported a ‘cycle-stealing’ feature. I needed to go back and ask friends about that microprocessor class that I missed, and check whether we did, in fact, support it.” But in this process, he says, there is a risk of missing the woods for the trees. But the question of which side a vendor should play persists. Does IT have a larger share of ‘partner-failures’ than other industries? Intel’s Sivakumar, does not think so: “As with anything else, it has to do with the ability to be prepared before you take the plunge. There’s too much of the ‘Kar denge Saab’ attitude.” The thinking that IT people can figure things out on the fly is very dangerous in technology, he said. The level of evaluation a CIO might do for an accounting package versus an enterprisewide wireless implementation is very different, he said. But even if the scales are different, fundamentally, they need to think through the entire process, he added. “One of the biggest pieces of this is training,” Sivakumar pointed out. When a corporation sets out to deploy a new technology, there’re hundreds and hundreds of hours of training involved during which you tell people what’s appropriate and inappropriate use.” According to him, corporations will still have bad apples, but CIOs at least would have reduced the risks that come with new deployments. Another thing that needs to be done is identifying a complete test-bed, with a sizable REAL CIO WORLD | O C T O B E R 1 , 2 0 0 6

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“Solutions have to come from the Clevel. They have to lead the company in accepting new concepts.” Ninad Karpe MD (India & SAARC), CA pilot. “Too often, companies do very small tests and think that enthusiasm will carry them when they want to scale up,” said Sivakumar. A lot of the risk-related problems associated with new technologies have to do with the archaic procurement processes of the IT industry. Sivakumar advised CIOs to look closely at what sort of legal exits they have as they get into the process of buying a solution that they are already somewhat familiar with. “You have to be ready to disengage from your pilot. You have to be ready not to deploy a technology beyond a certain point. You have to address these issues from the very beginning,” he said. 84

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Jyoti Bandopadhyay, VP-IT of Torrent Pharmaceuticals, felt the problem lies elsewhere. Where implementing security technology is concerned, there are plenty of vendors that will sit with companies and even help rewrite their security policy, he said. It’s the implementation that’s hard, he added, likening the process with an ERP implementation. “That requires boardroom commitment, which is what many organizations lack. It’s not really a vendor problem. What this unresponsiveness means is that something as important as a security policy remains a document, with security measures implemented in bits and pieces,” said Bandopadhyay. With security up there on the priority list of CIOs, new security applications come under close scrutiny. The biggest reason corporates invest in IT is to get maximum value out from their information, said EMC’s Chugh. “That’s what IT stands for: information technology. We’ve spent too much time on technology, forgetting the real reason why we invested in it in the first place.” He questioned the need to invest more, and the thought put into a company’s capability to backtrack when a new implantation fails. “When we want to restore data, what’s the probability that we can do it and restore the application as well? In the blur of risk assessment and worries over the total cost of adoption, companies aren’t thinking through their archival strategies, said Chugh. Sivakumar pointed to another area that isn’t getting its fair share of focus in the heat of risk assessment: macro models. For a CIO, he said, defining a macro-usage model is very important since it is the only way a CIO can deal with the big problems first. “Apart from security and networks, I think what CIOs are really trying to figure out is: how do I get users more mobile? People are getting more mobile and are consuming data all over the place,” said Sivakumar. When an enterprise decides that its people have to be mobile, it has to define a comprehensive pilot in the framework of that macro-usage model. Without a macromodel, companies will be forced to have many fragmented deployments, Sivakumar warned. A unifying theme, like mobility, facilitates wide deployments, he said. Indian Rayon’s AVP-IT, H. Krishnan, addressed a more basic problem at the panel discussion. His organization views IT just as it sees electricity: a mere support service. The important question, he mooted, was: how do you get business users comfortable enough with IT to be able to take business forward? Sivakumar felt that the only way a company can get more strategic value out of their IT is by involving, early on, various end-consumers from different parts of the organization in an IT resource that is expected to be deployed. He cited the early days of e-mail, and how corporations used 30 different e-mail programs. Somewhere in the early 1990s, they moved to a single application. Initially, IT thought, cost out, and ratified the new solution. But over time, as the number of users grew, the cost of that solution became too great to be put under one department. So, corporations moved to a cost-per-use model, although monitoring was still done from the CIO’s office. Over time, departments opted out from an app they didn’t need. “It’s the business user with the needs,’ said Sivakumar. “You have to define a process, which includes evaluating the solution in the context of the user-business, define a migratory path and, more importantly, backtrack if the pilot cannot scale up. The important thing is to work with the end-consumer,” he explained. Ninad Karpe, MD (India & SAARC), CA, agreed and pointed to where he thinks the directive for that cooperation should come from. “We should have a holistic, enterprise-view. There are too many inter-connected layers with geographies and divisions impacting each other. Solutions have to come from

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the top, the C-level. They have to lead the company in accepting new concepts.” Chugh agreed. “I’ve met many business-users who have invested in things like disaster recovery. When I’ve asked them what their return-time objective is, they said, 'Go ask the CIO'. Business-users need to be able to answer critical questions. We need to work collaboratively with business to reduce the cost of adoption and mitigate risk.” This approach introduced new questions among the panel: where does the buck stop if risk assessment is an enterprisewide exercise? Is a collective call on IT deployments possible? And does a CIO have to make sense of enterprisewide risk and set risk-weights to different aspects in a siloed organization? “The simple answer to that question,” said Sivakumar, “is that if it’s a CIO, sitting a room, making a decision, there’s no doubt you’re going to have siloed answers.” When you look at the broader enterprise — whether it’s the intranet or any other business process — C-level executives come together to review risk, although various organizations place their risk assessment units in different areas of the enterprise. There isn’t a standard model, he said. However, Chugh was concerned that there isn’t enough being done to work on the risks of integration. “Let us remember that we cannot divorce ourselves from the architectures of the past. The truth is we have created many silos of excellence in our IT organizations. In terms of adoption, I see challenges as we marry the past to the present and then to the future.” SOA could be a solution, said N. Nataraj, CIO of Aztecsoft. If you study organizations, you’ll see that they have 30-40 applications running across them. These apps are created on the spur, based on need and fuelled by frustration. Now, as organizations grow and as they try to integrate these apps , it can get very complex. SOA can put all of these together for business. EMC’s Chugh put a perspective to the dangers that business expectations can bring. “When you decide to implement IT, there is a fundamental promise that you make. It’s a promise to ride the tiger. When you’ve made that decision, you’ve decided to show benefit to your company and you’ve decided to meet the risks involved. But the thing is you can’t later turn around and say, ‘I’ve failed with one or two solutions. Now, I’m going into vanaprasth.’ You still need to show business benefit.” To succeed, CIOs should choose solutions that are simple to implement but have high impact. “Sometimes, applications developed off standard spreadsheets with some macros have huge impact in terms of improving high-level MIS requirements of organizations. Let’s begin with applications that we can roll out in no more than 60-90 days, and CIOs would have limited their risk,” said Chugh. There is, however, an easier way out of all this, but it comes with a price: be a follower. Philip’s Gupta says the risk associated with that “is about staying where you are and whether you are willing to stay there. If you don’t adopt, you run the risk of being left behind because someone else will do it. Then you’re left playing catch up. It’s the cost of opportunity. Every chance you take with new or old technology is ultimately a leap of faith.” “We, for instance, are taking a risk for a piece of work on IPTV,” said Chowdhury of Reliance Communications. “We chose to work with a MicrosoftIntel platform — a decision that might not work tomorrow,” he added. “It depends on the risk appetite of an organization and how forward-looking it is with technologies for newer services and markets. If they want to be ahead of the curve, they have to make some investment and take a risk. The greater the risk, the greater the possibility of rewards because no one else has attempted it.”

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“While taking big decisions, involve your technology partner and let the ecosystem help you.” Manoj Chugh President, EMC-India and SAARC “What would be bad news is if we slowed down the pace of innovation,” said Sivakumar. “The concerns of manageability continue to heighten and technologies are becoming increasingly sophisticated, but what we need to do is continue sharing and looking for solutions.” CIO

Copy editor Sunil Shah can be reached at sunil_shah@cio.in

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By Team CIo

with apologies to jeff foxworthy

You Might be a CIO if You… Only buy appliances that run on Linux.

configuration in the Harrison Ford thriller, Firewall.

Send your girlfriend an RFP instead of just asking her to marry you.

Refer to family members as ‘users’. (Even once.)

Give your kids SLAs instead of chores.

Give a pep talk to your son’s cricket team and mention the importance of proper alignment.

Use ‘text’ as a verb. Don’t have a CD player, only a computer and an iPod. Can type 50 wpm on a BlackBerry. Were ticked off at the inaccurate description of a device

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RSVP to invitations by listing the resources you’ll need to attend. Want a pizza, but can’t remember the number. So, you turn on your laptop, open a browser, google the pizza place, go to its website, open a new tab to have the menu on the same screen as the phone

number and then dial using your Skype account… instead of picking up the phone and dialing 197 instead. Call the mint chutney mission critical when you’re barbecueing kebabs. Remind your family that their home PCs and Internet connections are up “99 percent of the time”. Ask the gardener if he’d be willing to cut his price if you acted as his vendor reference. Would rather be in the office than on vacation.

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October 1 2006  

Technology, Business, Leadership

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