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11/18/2011 6:25:55 PM


From The Editor-in-Chief

I’ve looked at clouds from both sides now From up and down, and still somehow It’s cloud illusions I recall I really don’t know clouds at all. — Joni Mitchell (Both Sides, Now)

Of Clouds & Silver Linings Nothing’s going to happen in a hurry.

What is it about buzzwords that makes them clichéd, loved and hated? Is it the mindless repetition of a fervent chant or is it much more than that, a lot more, in fact? Take cloud computing, for instance. Over the past year, you would have found it tough to escape ‘cloud computing’ being thrust at you as the most credible enterprise option from a host of technology and service providers. While I do not dispute that there are The typical CIO response to indeed a clutch of vendors who do have the cloud is one of interest, interesting solutions based upon the followed by confusion, cloud, the typical CIO response is one of skepticism and cynicism — interest, followed by confusion, skepticism in that order. and cynicism — in that order. This doesn’t surprise me since the waters have been muddied by technology providers who do not have adequate an understanding about large enterprise realities or for that matter solution sets that can leverage the cloud. The way I see it, just too many vendors have been taking one of three approaches for them to be taken seriously by enterprises. They’re positioning the cloud either as a ‘silver bullet’ that’ll lick all problems that plague organizations; or they’re suggesting that transitioning to the cloud is as easy as the ‘snap of fingers’; or there is the ‘(dis) integration approach’ that tends to downplay issues that stem from transporting data and maintaining its integrity between legacy apps and infrastructure and the cloud. Gimme a break. How many large enterprises will be comfortable moving their data to the ‘public cloud’? How many organizations have the standardized processes that will allow them to integrate the ‘cloud’ with the ‘non-cloud’ bits of enterprise IT? What is the extent of virtualization even in organizations high up on the tech maturity curve? Critical questions that both CIOs and vendors ought to be asking. I’m not suggesting that cloud computing doesn’t have merit. Far from it. I do see large enterprises plumping for private clouds, the benefits and the promise are just too great to ignore. I see them commencing on this journey this year, starting small with ‘non-core’ applications. ERP on the cloud? That’s a while away. What do you feel about this? Write in and let me know.

Vijay Ramachandran Editor-in-Chief vijay_r@cio.in 2

m a y 1 5 , 2 0 1 0 | REAL CIO WORLD

Vol/5 | ISSUE/06


content may 15 2010‑ | ‑Vol/5‑ | ‑issue/07

Case Study

M&A d ESIGN BY MM SHAN ITH

COVER STORy xxxTWIn POWERED| 24

xxxxxM&M’s acquisition of Kinetic Motors beat the 70 percent failure rate associated with M&As. Its success came on the back of hard decisions and some unusual strategies — including the role of its CIO.

CoVEr: p HoToGrApH BY FoToCo rp/SHAIl ESH

Feature by Priyanka more »

ThE Sky IS ThE LImIT | 38 Bajaj Auto Finance’s old CRM system hobbled the NBFC’s Rs 600-crore operations. By turning to the cloud, it equipped itself to deal with customer spikes five times its old record — and cross-sell to its customers. Feature by Anup Varier

kA-ChIng! | 38 How an uncommon but bright idea brought Trent’s cash tills the holy trinity of cash tills: cost effectivenes, security and agility. Feature by Sneha Jha

Deep Dive IS UC mAkIng A COmEbACk? | 49 UC might have lost its buzzword status, but a need for collaboration and lower-cost UC models are getting some CIOs excited again.

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more »

Vol/5 | ISSUE/08


content

(cont.) departments Trendlines | 11 CIO Role| Who’s Calling the Shots? IT Management | Sumit Gupta on IT Governance Voices| Does Third Party Database Make Sense? Leadership | What They Need to Grow Enterprise Apps | Gartner: SaaS on Steroids Opinion Poll | Business Smarts IT Budget |No Money, No Innovation Hardware | Hard Disk Drive Shipments to Soar Smartphones | Teaming Up on Poisoned Apps Government | Bomb Blasts Data Mining Alternative Views | Whom Should the CSO Report To?

Thrive | 70 Career | Cut Out for Consulting?

Feature by Kim S. Nash

Mentor | 72 CSR |Business for Society’s Sake

Column by V.V.R. Babu, ITC

From the Editor-in-Chief | 2 Xxxxxxxxxxxxxxxx

By Vijay Ramachandran

NOW ONLINE “It’s the cumulative effect of small innovative tweaks in customer experience that makes all the difference between a repeat customer and a lost opportunity,” says Deep Kalra, founder and CEO, MakeMyTrip.com.

34

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

c o.in

Executive Expectations View From The Top | 34 Deep Kalra, founder and CEO, MakeMyTrip.com, says that with increasing competition in the OTA sector, he is riding on technology to create competitive advantage and enhance customer experience. Interview byVarsha Chidambaram

Career I Was A CIO | 22 As the role of the CIO overlaps into business and more members of a new-generation of CXOs are familiar with technology, the question is: do COOs make CIOs redundant? Column by Paul Bellack

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Governing BOARD

Publisher Louis D’Mello Editoria l

Editor-IN-CHIEF Vijay Ramachandran EXECUTIVE EDITOR (COMPUTERWORLD) Gunjan Trivedi Associate Editor (Online) Kanika Goswami Features Editor Sunil Shah Copy Editor Shardha Subramanian CorrespondentS Anup Varier, Priyanka, Sneha Jha, Varsha Chidambaram Product manager Online Sreekant Sastry Custom Pub l ishing

Associate Editor Arakali A Harichandan Copy editor Kavita Madhusudan Correspondent Deepti Balani D es ign & Production

Lead Designers Jithesh C.C, Vikas Kapoor, Vinoj KN SENIOR Designers Jinan K V, Sani Mani Designer M M Shanith trainee designer Amrita C Roy Photography Srivatsa Shandilya Production Manager T K Karunakaran Events & Au dience Development VP Rupesh Sreedharan Senior Manager Chetan Acharya Managers Ajay Adhikari Pooja Chhabra Manager Projects Sachin Arora Management trainee Ramya Menon Marketin g & Sa l es (Nation a l) President Sales and Marketing Sudhir Kamath VP Sales Sudhir Argula General manager Sales Parul Singh Asst. GM BRAND Siddharth Singh ASSt. Manager Brand Disha Gaur ASSOCIATE MARKETING Dinesh P SR. Manager Client Marketing Rohan Chandhok ASSt. Manager Marketing Sukanya Saikia Ad Sales Co-ordinators Hema Saravanan C.M. Nadira Hyder

Alok Kumar Global Head - Internal IT, TCS Anil Khopkar GM (MIS) & CIO, Bajaj Auto Anjan Choudhury CTO, BSE Ashish Chauhan Deputy CEO, BSE Atul Jayawant President Corporate IT & Group CIO, Aditya Birla Group

Advertiser Index

Advertiser Page No. ADC Krone Communications

17

Amercian Power Conversion

7

Canon India

5

EMC Data Storage Systems

3

Emerson Networks Power

21

Donald Patra CIO, HSBC India

Fujitsu Asaia

15

Dr. Jai Menon Director Technology & Customer Service, Bharti Airtel & Group CIO, Bharti Enterprises

IBM India Ltd

Gopal Shukla VP - Business Systems, Hindustan Coca Cola Manish Choksi Chief Corporate Strategy & CIO, Asian Paints Manish Gupta Director-IT, Pepsi Foods Murali krishna K. Head - CCD, Infosys Technologies Navin Chadha CIO, Vodafone

HP Enterprise Services

Intel Technologies

43 IFC, 1, 8 & 9 8 page booklet

Microsoft Corporation Reverse Gate Fold Oracle

IBC

Rittal India

66 & 67

SAS Institute

13

Smartlink Network Systems

27

Tulip Telecom

BC

Pravir Vohra Group CTO, ICICI Bank Rajesh Uppal Chief General Manager IT & Distribution, Maruti Udyog Sanjay Jain CIO, WNS Global Services Shreekant Mokashi Chief-IT, Tata Steel Sunil Mehta Sr. VP & Area Systems Director (Central Asia), JWT T.K. Subramanian Div. VP-IS, UB Group V. K Magapu Director, Larsen & Toubro V.V.R Babu Group CIO, ITC

Regional sa l es Bangalore Ajay S. Chakravarthy Kumarjeet Bhattacharjee Manoj D Delhi Aveek Bhose, Mohit Dhingra Prachi Gupta, Punit Mishra Mumbai Dipti Mahendra Modi Hafeez Shaikh, Pooja Nayak

All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher. Address requests for customized reprints to IDG Media Private Limited, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027, India. IDG Media Private Limited is an IDG (International Data Group) company.

Printed and Published by Louis D’Mello on behalf of IDG Media Private Limited, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027. Editor: Louis D’Mello Printed at Manipal Press Ltd., Press Corner, Tile Factory Road, Manipal, Udupi, Karnataka - 576 104.

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IDG offices Bangalore Geetha Building, 49, 3rd Cross, Mission Road Bangalore 560 027 Ph: 3053 0300 Fax: 3058 6065 DELHI 410, Hemkunt Towers 98, Nehru Place New Delhi 110 019 Ph:011- 4167 4230 Fax: 4167 4233 MUMBAI 201, Madhava Bandra Kurla Complex Bandra (E) Mumbai 400 051 Ph: 3068 5000 Fax: 2659 2708

This index is provided as an additional service. The publisher does not assume any liabilities for errors or omissions.

Vol/5 | ISSUE/07


NEW

*

HOT

*

UNEXPECTED

Who's Calling the Shots? r o l e Who's the top IT decisionmaker inside companies today: The CIO, right? Ahhh, no. The CEO? Guess again. The CTO? Nope. Try the CFO. According to new research from Gartner and Financial Executives Research Foundation (FERF), CFOs are increasingly becoming the top technology investment decision maker in many organizations. The study revealed that 42 percent of organizations reported that their IT department (and, presumably, the CIO) reports to the CFO, 33 percent to the CEO, 16 percent to the COO, 2 percent to a chief administrative officer, and 7 percent to other officers. In 41 percent of organizations, the senior financial executives (mostly CFOs) who responded to the survey viewed themselves as being the main decision maker for IT investments. This response occurred in most situations where IT reports to the CFO, but it also Cio

occurred in other reporting models. In another 34 percent, CFOs are among the key recommending or sponsoring executives. Thus, in 75 percent of firms, the CFO plays a vital role in determining IT investment. One interpretation of the survey data is that many chief bean counters are trying to both centralize and expand their corporate authority, using the IT function to bolster their own power base inside

the executive suite. This would not be a dumb move for CFOs, though it seems like a major setback for CIOs trying to raise their profile in the executive suite. Another interpretation of these results, however, is that CFOs are overstating their own technological importance: I know how to use my BlackBerry, therefore I'm an IT expert! CIOs and IT executives felt they deserved to be reporting into the CEO today — dues had been paid, business competence had been shown and they were RSVPing their seat at the proverbial table, if they hadn't already been seated yet. But as it turns out, CFOs may have other ideas about that. The survey found that 53 percent of CFOs said that they would like to move to an arrangement where CIOs report into CFOs. — Thomas Wailgum

QUICK TAKE

Sumit Gupta on IT Governance m a n a G e m e n t IT governance is an umbrella that involves a host of things. But what’s critical is how CIOs use it to ensure business-IT alignment, among other things. Priyanka spoke to Sumit Gupta, CIO Fidelity Business Services India, about the CIOs role in IT governance.

ImAGING & IllUSTrATIoN BY mm ShANIT h

it

need to ask themselves what value does it add to the organization: does it bring in more revenue, reduce risks and so on. And once a proposal is viewed from an IT-business alignment angle, you need to make sure that the business also sees value in it. If you do both, the board will be very comfortable in agreeing with your proposal.

How do you see the role of a CIO in IT governance? Any type of governance is a part of the boards’ responsibility. And when it comes to IT governance, the CIO needs to work closely with the board. He must engage with it on a regular basis, and make sure it understands the decision-making processes that the CIO has put in place. This means the board should know who gets to make what decisions and who reviews those decisions. What steps should a CIO take to play a more prominent role in IT governance? CIOs need to look at it from a business perspective. They

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How has the role of CIO in IT governance changed in the last few years? Today, IT plays a much bigger role in running the day-to-day business. Even in businesses that are not entirely dependent on IT, it is playing a much larger role in making the business successful. When that begins to happen, a CIO has to work with the board to ensure that it is aware of and is comfortable with the overall IT strategy and IT governance model. I do believe that in larger organizations, the CIO works much more closely with the board. CIOs used to throw IT jargon at the business, which obviously nobody understands. But today, CIOs present business data that is more relevant to the board. Sumit Gupta REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

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SAP helps sell about Rs 4,500 crore of Oracle databases annually. But now SAP has its own database products and can offer its customers an option not to choose third-party databases. Sneha Jha spoke to your peers to find out if they would still stick to third-party databases.

it manaGement

"Yes. Sybase’s database doesn’t give me the confidence to look beyond thirdparty databases. Oracle is best suited for large databases like ours. Also, it has a wide array of features." trendlines

DILIP ALSHI head-IS, Piaggio Vehicles

"No. It’s time we started looking beyond third-party databases. I’ll buy a database that is recommended by SAP and is well integrated with SAP. And if SAP has a database of its own, I believe it will have better integration." KARAN B. SINGH VP-IT and CIo, BSES

"Customers will now definitely have more options to choose from. There might be some performance

advantages in Sybase. However, for the time being, I don’t foresee active customers looking beyond thirdparty databases." T.G. DHANDAPANI Group CIo, TVS motors

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LEND YOUR

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VOICE

Write to editor@cio.in

What They Need to Grow C i o r o l e Hands-on experience leading an enterprise-wide project is the best way to get ahead, according to an exclusive CIO magazine survey of 100 respondents identified by their managers as up-and-coming IT leaders. A whopping 76 percent of those who had the opportunity to lead such a project rated the experience as critical to their career development. The survey, conducted earlier this year, also found that 52 percent are only somewhat satisfied with their leadership development opportunities. Mentoring or coaching by internal (37 percent) or external (53 percent) leaders also ranks among the most frequently cited leadership development opportunities of interest. Aspiring leaders face obstacles, however. Thirtynine percent of respondents said they lack time to devote to their career development, while 19 percent said they lack management support. However, 54 percent envision themselves as CIOs in five years, while 29 percent are aiming for some other corporate leadership role. "For many, the challenge is availability of opportunity, to be at a place where they can actually grow," says Simon Dunning, managing director at Applied Materials. "It's a double-edged sword. You need the opportunities to grow but you also need to be successful at the opportunities. It only takes one failure to destroy a lifetime of growth." Relationship building (78 percent), change leadership (75 percent) and the ability to shape executive expectations (67 percent) are among the leadership skills most instrumental in taking the respondents where they are today. Driving business innovation (49 percent) and strategic planning (44 percent) were most frequently cited as the skills these future leaders are most interested in improving. According to Brad Busick, manager of change management for the city of Takoma, Washington, younger IT staff may also benefit from their familiarity with rapidly changing technology and social networking tools. "Today's Twitter is yesterday's CIO conference that required everybody to fly to Florida," says Busick. "It's realtime, relevant and that is the competitive advantage for the next group of leaders coming up through the ranks." — By CIO US Staff

IllUST rATIoN BY mm ShANIT h

Sybase’s Database is in SAP’s Kitty, Does Third Party Still Make Sense?

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6/9/2010 3:16:03 PM


Gartner: SaaS on Steroids a p p s More than 95 percent of organizations expect to maintain or grow their use of software as a service (SaaS), said Gartner. The research firm unveiled results of a survey, where respondents cited significant integration requirements and a change in sourcing strategy as the top two reasons for adoption followed by high TCO. However, most companies still don't have policies governing the evaluation and use of SaaS with only 39 percent of respondents indicating that such a policy or process exists, up just 1 percent from 38 percent in 2008, said Gartner. "SaaS applications clearly are no longer seen as a new deployment model by our survey base, with almost half of those surveyed affirming use of SaaS applications in their business for more than three years," said Sharon Mertz, research director at Gartner. "The varying levels of maturity within the user base suggest growing opportunities for service providers along the adoption curve." The scope of functionality of SaaS applications has broadened significantly in recent years, Mertz noted. In terms of popularity for SaaS usage, the survey showed that e-mail, financial management (accounting), sales force automation and customer service, and expense management are the most popular in terms of current use, with more than 30 percent of the survey base using these types of applications. In terms of expected investment levels in SaaS offerings over the next two years, survey respondents gave generally encouraging responses for software and service providers, with 53 percent of organizations expecting to increase investment levels slightly and 19 percent significantly, said Gartner. However, not all buyers intend to increase usage, with almost one-quarter of all respondents expecting investment levels to remain about the same, and 4 percent looking at a slight decrease in investment levels, the analyst house added.

trendlines

enterprise

SaaS or through a subscription model through year-end 2010, Gartner noted. The survey also found that some organizations have found SaaS offerings to be less than optimal for some buyers, and 16 percent of respondents said that they are transitioning from SaaS to on-premises solutions. Although there was no single outstanding reason that caused respondents to shift to on-premises, in general, the majority of organizations in this position was facing significant integration requirements and became unsatisfied with a TCO that became too high, said Gartner. Despite the continuous adoption of SaaS across regions, more than one-third of the respondents have noted concerns on their recent SaaS deployments. Most respondents with these issues are located outside North America, specifically in Asia Pacific where highspeed high-availability networks, are not as readily available as in North America, said Gartner, adding that issues with integration and customization were some of the primary issues cited by respondents overall. —By Computerworld Hong Kong staff

E-mail, accounting, sales force automation, customer service, and expense management are the most popular SaaS apps in terms of current use, with more than 30 percent using these types of applications. In comparing current with new investments in future on-premises and SaaS investments within their organizations, 72 percent of respondents believe SaaS investments will increase, while 45 percent hold the same notion about on-premises budgets, according to the report. Regionally, North America and Asia Pacific respondents indicated a stronger interest in procuring tools via a SaaS model, and, compared with those in Europe, show greater confidence that their organizations will increase investments in products offered as

Business Smarts While strategic thinking, collaboration and change leadership remain the most important leadership skills for CIOs, more of you now put a priority on understanding how to make money.

Critical Leadership Competencies

2009 2010

Meeting or beating business goals

18%

30%

Identifying and seizing on commercial opportunities

6%

22%

External customer focus

9%

18%

SoUrCE: CIo rESEArCh

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hard Disk Drive Shipments to Soar Despite historical declines in sales last year and the onslaught of solid state drives, hard disk drive shipments are expected to soar through 2014, representing 300,000 petabytes of capacity, according to a new study released by market research firm IDC. The study, worldwide hard Disk Drive 2010-2014 Forecast, estimates that hard disk drive purchases for use in enterprise-class applications will increase by more than 12 million units by 2014, or from 40.5 million in 2009 to 52.6 million. Additionally, the total amount of capacity on hard drives shipping in the next two years will be more than the amount the industry shipped over the past 20 years, says IDC. A growing interest by enterprise-class companies in new models, such as storage as a service or in the cloud, will place greater demands on Internet datacenters. over the next four years, there will be a shift away from higher cost, performanceoptimized hard drives to lower cost, but higher capacity serial ATA (SATA) drives. The performance-optimized drive market is made up of 10,000rpm or 15,000rpm drives with either a Fibre Channel or serial-attached SCSI (SAS) interface. with that shift, enterprises will also increase their purchases of solid state drives (SSDs) to deal with the smaller number of applications requiring high I/o throughput, such as video streaming and relational databases, IDC said. Through 2014, hard drive revenue in the enterprise markets will grow at only a 1.7 percent CAGr. organizations will continue to optimize their existing infrastructures. "we're definitely seeing intensive cost cutting measures among end users striving to bring more efficiency to current solutions," John rydning, IDC's research director for Storage mechanisms, said in a statement. "The employment of technologies such as data de-duplication, thin provisioning, and storage virtualization are all contributing to reducing end-user costs." —By lucas mearian h a r d Wa r e

No Money

Il lUSTrAT IoN BY mm ShAN IT h

trendlines

No Innovation i t B u d G e t A study, commissioned by HP and done by Coleman Parkes Research, showed that one out of every two business executives felt that their organization suffered from innovation gridlock. Almost 70 percent of the respondents indicated they are unable to invest in new technologies to meet changing business needs. Asked what was stopping them from investing more in IT innovation, one in two respondents indicated that too much budget is spent on operations. Of the respondents' overall budgets, only 30 percent is spent on new technology initiatives, while the rest is spent on running missioncritical systems (40 percent) and legacy systems (30 percent). Ironically, the worldwide study also showed that because companies are not investing in innovation, the gridlock is costing their business. Ninety-five percent of business and technology executives said innovation gridlock resulted in lost opportunities for their organizations. Meanwhile, 91 percent felt that innovation gridlock cost their organizations lost effort (from resources). "The phrase 'time is money' rings true here, as 99 percent of organizations said innovation gridlock cost them lost time," said Piau Phang Foo, senior VP and MD for HP Asia Pacific and Japan. If companies do invest in innovation, particularly on IT, realizing fruits from such investments may not come easily. Across all countries, the average payback time is 9.8 months. Respondents in the Asia Pacific, however, are more demanding in their estimates, saying the payback time is only 7.7 months. In contrast, respondents from Latin America said payback time is estimated at 12.3 months. The study concluded that there does not seem to be a common view on the payback window for a major IT project. However, researchers noted that the attitude of respondents on the ideal payback period "is likely to have a major impact on how the success of IT projects is viewed". Unfortunately, not all organizations are measuring the cost involved in not innovating. The study showed that only 52 percent of major firms in North America, compared with 76 percent in Asia Pacific and 65 percent overall, evaluate the cost of not doing an IT initiative. —By Veronica C. Silva

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6/9/2010 3:16:09 PM


Teaming Up on Poisoned Apps

trendlines

the industry and the companies formed the group to support the efforts. "The mobile phone industry is plagued by scams," says Mark Natkin, managing director of Marbridge Consulting in Beijing. Many companies charge people for services that they are either unaware they're paying for or where the charges are so small that it's not worth suing over, he said. In this case, the handset vendors joining the cause are in control of a lot of the software that goes into the handsets. "If they're not putting it on the handsets, who is?" Natkin asks, though he adds that it's also possible the service providers or retailers could install the software. He says such efforts are usually the result of at least a few companies conspiring with each other, and they share the ill-gotten gains. — By Dan Nystedt

Photo From www.keso.cn

More than a dozen mobile phone makers in China have teamed up to tackle a growing problem of poisoned software applications in handsets that steal money from users. The illegal applications are designed to slowly bleed money from a user in a number of ways, either by increasing phone usage charges, such as charging to the monthly bill every time a user clicks on the app, or offering Mark Natkin, MD, Marbridge Consulting with Kai Fu Lee products or services that are paid for but never delivered. The group of companies, which includes discover any such malicious software in Lenovo, Haier, TCL and chip maker their products. "As everyone knows, some mobile phone MediaTek, pledged to answer the call by China's Ministry of Industry and IT to makers collude with value-added service crack down on the illegal applications. They providers to put software on handsets aimed signed an agreement not to pre-install any at stealing money from consumers," said such applications on the cell phones they chip maker MediaTek, in a news release. make and to take appropriate action if they The government has worked to clean up

Smartphones

Bomb Blasts Data Mining The recently botched bombing attempt in New York City provides an example of why the use of data mining approaches to uncover potential terrorism plots is a little like weather forecasting. "You definitely need to do it, because it gives you warning of major storms," said John Pescatore, an analyst with Gartner and a former analyst with the National Security Agency. "But it's not going to tell you about individual raindrops." Faisal Shahzad, a naturalized US citizen of Pakistani descent was arrested at New York's JFK airport in connection with an attempt to detonate a car bomb in Times Square. Shahzad is alleged to have parked an explosives-laden vehicle in Times Square, apparently with the intention of blowing it up. The antiterrorism task force was quickly able to identify Shahzad as the prime suspect but there is little to show that authorities had any inkling of either Shahzad or of his plot beforehand. That fact is likely to provide more fodder for those who question the effectiveness of using data mining approaches to uncover and forecast terror plots. The tools typically work by searching through mountains of data in large databases for unusual patterns of activity, which are then used to predict

Government

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future behavior. The data is often culled from dozens of sources including commercial and government databases and meshed together to see what kind of patterns emerge. In January 2007, there were nearly 200 data mining programs planned or already operating in the US. Critics of such programs argue that data mining for terrorists is essentially an exercise in futility given the vast amounts of data that would need to be sifted through on a daily basis. Bruce Schneier, a noted security guru and chief security technology officer at BT, has long argued that using data mining approaches to search for potential terrorists is akin to searching for a needle in a haystack. "Data mining works best when there's a well-defined profile you're searching for, a reasonable number of attacks per year, and a low cost of false alarms," Schneier wrote in a blog post. In the terrorism context, a data mining program can be vital in searching for more information and context on a specific, already identified individual such as Shahzad. Schneier calculates that even the most accurate and finely tuned data mining system will generate one billion false alarms for every real terrorist plot it uncovers. — By Jaikumar Vijayan

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6/9/2010 3:16:13 PM


alternative views B Y A n u p Va r i e r

Whom Should the CSO Report To? CIO vs CEO

the CSO reports to the CIO that compromise would be made.” R.I.S. Sidhu GM-IT, Punjab National Bank

a mix of pure technology players and those who have an understanding of the business as well. But a technology guy would not be able to assess risk. There are normally two options regarding whom the security team could report to: either the CIO or the Chief Risk Officer. I believe that the security team should report to the CRO or the CSO. The CSO should be completely focused on security and it’s his responsibility to flag off security concerns. Therefore, it’s obvious that all areas relating to risk should be communicated directly to the CSO and then to the CEO. Initially, there could be ego issues if the CSO is not reporting to the CIO but the CIO must realize that in the end it is for his own benefit. Also, maintaining the IT team and the security team will add to the operational complexity of the organization but that’s the way companies are today: they are getting more and more complex. If the CSO reports to the CIO there are other disadvantages: it’s a fact that technology people tend to simplify the processes. And when you simplify too much, security risks tend to increase. The simpler the process, the weaker the security attached to it. So if the CSO reports to the CIO, that compromise would have to be made.

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that's why I believe that the CIO should be kept in the loop at all times.” Sanjay M. Belsare Sr. VP-IT, Kotak Mahindra Bank

We have business information

trendlines

The security team at PNB is

“A large part of business security is IT security and

security officers who primarily report to the business heads. They also work with the CISO in coordinating the overall security of the bank. This helps us address the security concerns of all the departments. That said, it is very important that things move fast within an organization and for that to happen, I think, the CSO needs to report to the CIO. If the CSO reports to the CEO then it becomes difficult to manage day-to-day affairs. At Kotak, the CISO has dual responsibility and also reports into a small group called the Information Security Committee which comprises some of the senior members. The CIO is an integral part of this committee. This committee also develops the broad guideline and decides on how to go about the policies that are already in place. It is the CSO’s responsibility to ensure that everything is followed and implemented while also evaluating the upcoming technologies. But it is not viable to report into the committee on a daily basis and it is also not essential. Reporting into one senior member who has board level access, which in this case is the CIO, is what is necessary. When a CISO reports into the CIO regarding project deadlines and tasks that need to be completed on a regular basis, it also helps him gain support of the CIO in fast tracking things at the senior level. And since a large part of business security is IT security, the CIO needs to be always kept in the loop.

REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

Ph otos by Srivatsa Shandilya

“IT people tend to simplify the processes. This leads to security risk. If

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Paul Bellack

Career

I Was A CIO As the role of the CIO overlaps into business and more members of a new-generation of CXOs are familiar with technology, the question is: do COOs make CIOs redundant?

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Illust ration by mm s hanith

echnology is now so ubiquitous and so central to business enablement that arguably the responsibilities of any business executive will include most of the essential elements of what today is in the CIO's exclusive domain. It’s a trend that’s been on for some years and the opposite is also true: CIOs are getting more business-savvy. Is it therefore not plausible that 10 years from now, the chief operating officer could take over most of the CIO's responsibilities and, wait for it, render the CIO position extinct? According to the largest global survey of chief information officers, the role of today's CIO continues to profoundly evolve. More and more CIOs have a ‘new voice’, and now spend less than half their time on traditional IT management. CIOs are now engaged in multiple, diverse, business-facing tasks including sales, human resources, supply chain, inventory, and strategy. The question is whether their specialized IT management skills are sufficient to preserve the role of the CIO into the future. IBM conducted face-to-face interviews with almost 2,600 global executives in charge of their firms' information systems to get a view into the world of the CIO. It found that today's CIO has one foot firmly planted in the business and one foot in IT. They are much more involved in driving smarter innovation in the business, squeezing business value from IT investments and generally operating as a full-fledged member of the senior management team collaborating on business issues and strategy. This new CIO profile represents a fundamental change from 10 to 15 years ago, when the CIO was principally charged with back-office technology management to ‘keep the IT lights on’. 1 8 j u n e 1 5 , 2 0 1 0 | REAL CIO WORLD

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Paul Bellack

Career

That is exactly how I would have described my initial CIO roles in several of Canada's large retail and service businesses. The largely universal acceptance of IT's value-add to business enablement and now common-place IT outsourcing arrangements have fueled the transition of CIOs into the business. Another key driver has been the advancing commoditization of routine elements of IT service delivery and core business support. We now have universal standards such as ITIL, CMMI and CoBIT to describe leading practices for IT management, and ever-present ERPs like SAP to enable standardized, optimized, routine business processes. Due to these factors, the mechanical elements of technology management are now arguably more like ‘paint by numbers’ than creating a Michelangelo classic — leaving the CIO with more time to explore new areas of the business.

Second Nature A final driver of the CIO transition is demographics. To the new generation of management now entering the executive

As that blending continues to advance, could we provocatively conclude that at some point in the future the need for a chief information officer will disappear entirely? As more and more CIOs take on broader operational responsibilities drifting into the realm of the COO, might these two executive roles merge? After all, providing essential day-to-day IT services fundamental to operating the business would be better aligned with operations if IT management was fully integrated into it. My experience tells me that while the COO could take on the day-to-day roles of the current day CIO, there are key executive responsibilities that don't fit into the COO mandate or typical skill set. In the enterprise of the future, a senior executive with intimate involvement in business strategy will still be required to continually develop and evangelize a vision of architecture. The CIO will need still need to translate the operating model of the enterprise into technology capabilities and be the keeper of technology standards in support of that vision.

My experience tells me that while the COO could take on the day-to-day roles of the current day CIO, there are responsibilities that don't fit into the COO mandate. suite, technology is second nature. They have grown up with far more technology exposure than their predecessors. They probably spend more time on their smartphones and Internet browsers than on any other activity, so the notion of technology as something not completely integrated into daytoday business is foreign to them. Having ascended to my first of several IT executive leadership positions 25 years ago, I have personal exposure to this sea-change in CIO positioning. Back then, the senior IT manager was only concerned with keeping the IT lights on at the lowest cost. Marking the slow evolution of my CIO role along the way were key milestones like getting invited to a business meeting for the first time, coming up with the first technology-enabled business innovation or being asked to lead a major business initiative that had little to do with IT. In retrospect, those now seem like baby steps, but they have all lead to the transformation of the business-oriented CIO. A CIO role that is much more business oriented implies changes in many aspects of the ideal CIO profile. Personal professional skills important to their success are no longer about being the best technologist anymore — skills like political savvy, relationship management, vendor management and strategic planning will dominate. These management skills are now part of the CIO yardstick. Moreover, measuring CIO success will be progressively more integrated into overall business measures, as the CIO role increasingly blends seamlessly into the business.

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Two Paths As well, that leader will have to centrally champion technology innovation, and provide unbiased and informed governance over ever-advancing technology choices the company faces. Such challenges will continue to be critical to the business, and will require a unique enterprise view and executive skill set that fuses business and technology. It's my hypothesis that those challenges will comprise the mandate the next generation CIO. This view of the future offers today's CIOs with two very different executive career paths as traditional CIO positions split into either a broader operating role (i.e. COO) or a technology stewardship function. The choice will depend on personal skill set and professional aspiration as both roles will be essential in a thriving enterprise of the future. IT has been a component of business for more than 50 years. Its management has morphed constantly over that period. The CIO is still clearly needed in the executive suite more than ever, but the role of the future CIO will most certainly continue to evolve. CIO

Paul Bellack is partner, Practice Leader Technology Strategy at IBM Canada. In the past he has also been senior vice president, Business Development and CIO at Speedy Muffler King and interim senior vice president and CIO at Hudson's Bay Company. Send feedback on this column to editor@cio.in

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Cover Story | Mobile Apps

Manish Amin, co-founder and CTO, yatra Online, says that “nothing is bigger than the mobile.” 22

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External Customers

Internal customers

Cover Story | Mobile Apps

Eveready Industries

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Voltas

Pg 28

Dr Reddy’s Laboratories

Pg 30

Yatra Online

Pg 32

Bharti Airtel DTH

Pg 36

Heralding The

Phone Age By Anup Varier

Reader ROI:

Why change is inevitable Ways around the multiple business and IT challenges of a mobility solution How CIOs can contribute by focusing beyond internal customers Vol/5 | ISSUE/08

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oday’s knowledge worker is as much a gizmo-junkie as any enthusiastic teenager. And they’re bringing their addiction to the office. As a result, organizations that deny these individuals their mobile productivity tools look like they are out-of-touch with change. “The time to respond on any business-related matter has become very short, which is forcing organizations to change IT strategy to suit to such change,” says Hemant Joshi, partner, Deloitte Haskins & Sells. According to a December 2009 ChangeWave survey of 4,068 consumers, 42 percent of respondents said they owned a smartphone, and 12.8 percent said they would purchase a smartphone in the next 90 days. There is very little doubt then that smartphones are becoming a musthave personal mobile device. But many IT leaders are still figuring out how to balance the increasing need for employee flexibility and access with their enterprises’ mandate for cost optimization, security and compliance. Time is not on their side. Already there is a bounty of mobile applications targeted at employees. Just REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

Photo by d r lohia

It’s already here. For many, the mobile phone is their preferred endpoint. Yet, many CIOs haven’t got onboard. Here are five CIOs who aren’t waiting any longer.

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Cover Story | Mobile Apps Enterprise Mobility, estimates the overall market for enterprise mobility software and applications like instant messaging (IM), business applications, and conferencing will grow at a compounded annual rate of 34 percent from 2008 to 2012. In India, it is estimated to grow at a CAGR of 41 percent from 2008 to 2012 — the highest in the region. On the infrastructure side, India is witnessing significant investments in its telecom network and technologies such as 3G and WiMAX. Recently, telecom operators battled each other for 34 days (in 183 rounds of bidding) to corner a piece of 3G spectrum. It netted the Indian government Rs 67,718.95 crore, which Investigating the Hype is indicative of the kind of investment Will the mobile really be the next interface telecom players are willing to pour into of choice? Research certainly seems to be achieving high-speed networks that will pointing in that direction. A recent report enable data intensive applications. from Springboard Research titled Staying Once consumers get a taste of that Connected: The Next Wave in Asia Pacific speed, they’re likely to ask for seconds. “We’ve realized clearly Mobility: It’s a Best ‘Cell’er that nothing is bigger And given current trend, it’s going to stay that way. than the mobile,” 700 says Manish Amin, co-founder and CTO, 600 Yatra Online. “We 500 believe that there is going to be an entire 400 generation of young adults who are going 300 to skip the PC and laptops and use 200 Mobile Subscribers in India (in millions) the mobile as their 100 preferred endpoint.” This will have a 0 snowball effect on the June2008 July 2009 May 2010 growing demand for mobility solutions — 60 that will have to be backed (but hopefully, 50 driven) by enterprise IT. “With the increase 40 in literacy and earning levels, the majority of 30 Indian consumers are purchasing online and 20 are using the Internet Smartphone Sale Worldwide (in millions) and mobile devices. 10 In such a scenario mobile applications 0 Apple’s App Store currently houses over 2,000 applications that fall under a business category from companies including Cisco, Salesforce.com and QuickOffice. These apps range from simple flight schedule applications to AT&T’s Workbench, an application that enables secure access to enterprise Web apps from their phones. Even the SAPs of the world are offering their business applications on mobile devices, including the iPhone, Windows Mobile, BlackBerry, Symbian and Palm devices. Employees are spoilt for choice — a fact that IT departments are not ignorant of.

2008

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may differentiate organizations from their competitors and create competitive advantage,” says Deloitte’s Joshi.

Challenges to Enterprise Mobility There are challenges, however, in terms of a cumbersome QWERTY keypads and displays that are not suited for prolonged use. Then there is the multiplicity of platforms and a lack of standardization that will result interoperability issues. “Data security, privacy, the additional cost of changing over to this new technology, and drafting or revising appropriate IT policies to ensure compliance are some of the challenges CIOs will have to face,” says Joshi. Even with the coming of newer technology and powerful 3G networks, smartphones can’t match the bandwidth of devices connected to fiber lines. Mobile versions of enterprise applications will need to be created with these constraints in mind. Then there are device management and mobility management offerings that CIOs will have to come to terms with quickly. (IDC predicts that the mobile device management enterprise market will grow by a CAGR of 9.2 percent over the next five years.) Initial device configuration, policy updates, overthe-air software updates, and backup as well as functionality management, and remote wipes or locks are subjects IT team will need to be conversant with.

Whereto from Here? It is true that smartphones will remain complementary to laptops for now. But that should change within five years as functionality improves, processors get faster, and more apps (including support for Open-source software) become available. Already in some job functions like field-force support, the mobile phone is replacing the laptop. “Many concerns surrounding data security will get resolved over time resulting in greater CIO comfort levels and a mobile IT strategy and mobile-based applications may become the main component of IT strategy in the coming years,” says Joshi. For some that day is today. Here are five IT leaders who are getting ahead of the curve and implementing a mobile strategy.

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Cover Story | Mobile Apps

Internal Eveready Industries sr. Gm-It: Arup Choudhury technology Challenge: Data Security CIo Challenge: Ideas for a mobile app naturally tend to come from users — which makes scope creep and unreasonable demands a real challenge.

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veready is known for a lot of things, batteries, flashlights and even CFLs, packet tea, and mosquito repellants (surprise!). What’s less known is that its distribution network covers 3.3 million retail outlets out of a total universe of 7.3 million FMCG outlets — which means they are present in villages with populations as low as 5,000. To keep that network serviced, it needs over 4,000 distributors. That’s a large number of people whose requirements need to be orchestrated. “It was becoming exceedingly important to keep a tab on a distributor’s inventory position for timely demand fulfillment. It was also important to know which distributors were doing well and who were not,” says Arup Choudhury, Sr. GM-IT, Eveready Industries. At the same time, Eveready’s sales force, too, had its set of problems. The company’s sales people are assigned to specific beats and in order to push Eveready products, they needed to be equipped with information of each retailer they visit. Knowing, for instance, at what intervals a retailer orders for batteries and CFLs could go a long way in persuading him to stock more batteries and fewer bulbs. But until recently, gathering this information was a manual exercise, which led to human errors and a heavy reliance on an individual sales person’s judgment. That’s when one sales person came up with an idea. Use a mobile phone to link salespeople with HQ’s servers and their distributors. “The project was the brainchild of a sales manager from North India,” remembers Choudhury. That is a common occurrence with mobile projects. Because everyone has one, many

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consider themselves experts on the technology and its capacities. And as good as it is to gather ideas from the troops (and save yourself much change management headaches), scope creep and just plain dumb ideas need to be shot down quickly and efficiently. That’s a leadership role that says CIO all over it. Choudhury, for example, remembers the amount of discussion and deliberation that went into the ideation of the mobile solution. His first job was to ensure that they were not inundated with ideas, so he made certain that branch managers acted as idea collectors and filters for their sales officers’ ideas. “I met with 15 branch managers,” says Choudhury, “and there were suggestions of empowering the distributor’s sales force with PDAs. We had to strike it down because it just wasn’t feasible to hand out over 5,500 devices and keep track of them. So we started by setting the objectives we hoped to achieve through the implementation and short-listed the ideas on those parameters.” To carry out the project, Choudhury worked with an outsourced provider to develop a mobile interface for its sales reporting system which interacted with their existing database. “We just had to build a small interface to capture the primary, secondary, and forecast information into a data warehouse and use a tool to generate meaningful information from it,” says Choudhury. Now sales agents could just log into their accounts using a Java-enabled mobile and meet retailers well-equipped with information like the past history of that retailer, its stock-keeping history and specific sales. It ensures retailers that Eveready cares

Arup Choudhury, Sr. GM-IT, eveready Industries, took ideas from users but had to navigate past impossible requests.

and that at the distributor’s end there isn’t an unnecessary pile-up of stock. But there was a question of security that needed to be taken care of. What if a sales person lost his phone with market data on it? Choudhury says the risk is insignificant because the mobile phone would only carry data pertaining to a very localized market. Security, however, needed to be tight at the integration point because the entire organization’s data resides in a single database. And Choudhury wanted no shortrEal CIo WorlD | j u n e 1 5 , 2 0 1 0

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Cover Story | Mobile Apps cuts here. He ensured that data on the central server was encrypted. In collaboration with his mobile provider, they built a system whereby the database can only be decrypted while generating reports and dashboards, through the program itself. “So even if anyone has access to the database, the data will not make any sense until decrypted,” says Choudhury. The project, which was first rolled out in India’s eastern region including Kolkata, Patna, Bhubaneswar, and Guwahati in 2008, was fully completed in November of 2009. Choudhury says Eveready put up capital of Rs 25 lakh for the project and pays another

Voltas CIO: Asmita Junnarkar Technology Challenge: Use cheaper, non-smartphones. CIO Challenge: The more broadbased a mobile solution, the more standardization challenges — like language — you face.

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s organizations go, Voltas is a great place to implement a mobile strategy. Enterprise mobility enjoys top-level commitment and it gets real attention. Though this makes CIO, Asmita Junnarkar’s job easier, it doesn’t do a thing for the technical and operational challenges of a mobile app deployment. Before the company’s current mobile solution, customers calling for their ACs to be serviced were entertained either by the Voltas receptionist, a sales executive, a project manager — or anybody else who was available. The request was then handed to a third-party service provider who had to manually check for the availability of the components he thought would be needed for the job and then dispatch a technician via SMS. Not only was that process timeconsuming and ridden with gaps, but being two-steps removed from the service process meant that Voltas had no data to update 28

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Rs 15 lakh every year for hosting charges and reimbursing employees. “Just with the implementation in the eastern region, I think we have attained our ROI,” says Choudhury. Much of that return has come from the 15 percent increase the company has seen in forecast accuracy and lower stock-out incidents at the retail level. There has also been an increase in the number of inventory turns (a measure of the number of times inventory is sold or used in a given period). It’s also helped the company connect better with their sales employees who can report online. “No more sitting after office hours, filling up excel reports for them,” says

Choudhury. “They can spend quality time at home after office hours.” The mobile project, in the meanwhile, is surging forward. There are already plans to integrate market intelligence, capture economic and market population data, add competitor information, etcetera, to the phones to make a more realistic trend accessible to the field force. “We also want to extend this solution to the modern trade business (large format stores), this time with PDAs for order booking and delivery. We will also integrate this with a data mining solution to help us in product placement and marketing strategies,” says Choudhury.

customers calling back. It also meant that they were sending technicians into service requests — with little more than a name and address — blind. Voltas needed service engineers to be able to pull data off the company’s servers. They needed an app that service engineers — who are not the company’s employees and number in the hundreds — could use. Handing out pre-loaded handsets was ruled out — it was

too expensive. But finding an app that would work on the plethora of handsets in today’s market — including cheap Chinese phones — was no mean task. “I don’t think many service engineers can afford smartphones, so we had to ensure that the app could run on multiple mobile operating systems and on varying screen sizes and different orientations. It needed to be device-agnostic. It was a major challenge,” says Junnarkar. To distribute the app, Junnarkar ensured that all service agents needed to do is download the app on their own phones — which ensures Voltas isn’t coughing up for everyone’s handsets, a large cost component of mobile initiatives. Within the app, technicians need to login and information is pushed onto their phone. Once a call is resolved, that update is entered and is pushed back into Voltas’ servers and is stored on a database. “To ensure it doesn’t hamper other mission critical systems, this data is not transferred from the database into our ERP in real-time but on a pre-designated time interval basis,” says Prasanna Wadke, senior manager-corporate IT, Voltas. That almost-constant flow of data is making everyone’s work easier, especially since the integration with a call center. “First, the call center logs a complaint on our Web portal, which ties back to our ERP and a decision regarding component requirements is made,” says Wadke. “From here it goes to service provider who then allocates work.” At the furthest end of this chain, a technician receives an SMS alerting him to check the app

2

Ways toLet Customers Pay With Their Phones

Barista’s Mobile Menu: Using Bluetooth both Barista and Café Coffee Day ask customers to download a mobile app with which they can place their orders and receive their bills, reducing the need for paper. Citibank’s Tap and Pay: Piloting a Near Field Communication, contactless payment solution, Citibank allows customers to shop and pay by ‘swiping’ their phones. No more plastic money!

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Cover Story | Mobile Apps on his phone. Information related to a service call is available through the app including whether a product is still under warranty and previous complaints, among others. Once a service technician takes on a case, that update is visible to the call center, which is then armed to respond to customer queries. But Voltas’ third-party service strategy had inherent challenges: their technicians were spread across a nation with 23 official languages and they were not all English speakers. And that became an IT problem. It was not feasible for Voltas to create applications in all those languages. English was chosen as the standard for the interface. Their answer was to pare down the app to a minimum — two pages — to reduce the amount of English training that Voltas needed to do. Junnarkar says it took a few months to train the technicians to use the English interface and get out of the “SMS mentality”. The hassle has been worth it. With a budget under Rs 50-lakh (includes both hardware and software costs) Voltas has a mobile app that meets the needs of their customers. And it can cater to an unlimited number of service technicians. The mobile solution has slashed Voltas’ service cycle times by 50 percent (which means that a service technician can take on twice as many calls as he could before) and customer satisfaction has shot up. Now Voltas is piloting a sales CRM app which will run on internal employee smartphones. “This (mobiles) is the need of the hour. Because the technology is getting popular so fast, we have to take advantage of it to business our benefit. This is the way to go.”

Asmita Junnarkar, CIO, Voltas, used low-end phones — instead of handing out expensive smartphones.

Dr Reddy’s Laboratories

P hoto by FotoCorP

Dy. CIo: B.V. Srinivas | technology Challenge: Remote connectivity CIo Challenge: Finding a new solution that didn’t purge an existing investment.

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he face of any pharmaceutical company is its R&D team. But few would survive without their feet on the street: their medical representatives. Yet the 2,000 medical representatives at Hyderabad-based, Dr Reddy’s Laboratories — they are called professional medical sales representatives or PMSRs at the company — didn’t have the 30

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tools to be as effective as they could. In the way was a legacy mobile customer relationship management (CRM) application. The system, which required PMSRs to carry two separate devices — a PDA (Palm) and a mobile — was a one-way street. It only allowed sales people to upload data to the company’s servers, like a report of a meeting with a doctor or a question that doctors might have.

It was certainly a step forward from the days when medical representatives needed to maintain that data on paper. But what it didn’t do was arm sales representatives with the data they needed to be taken seriously by doctors. And like any salesperson, when you’re a medical representative, building a relationship with a doctor is a major part of the job. Worse, the PDA-mobile combo was maintenance intensive. Software upgrades, for example, couldn’t be done on the fly and meant downtime for the solution. And pushing out new functionalities was impossible. Yet Dr Reddy’s couldn’t give up on the solution — not with the amount of money that had already been sunk into buying the PDA-mobile combo. To overcome these challenges, B.V. Srinivas, deputy CIO for Dr Reddy’s, went on the hunt for a mobile CRM solution. He needed something that was scalable, allowed two-way traffic between the company’s ERP and the salespeople> It also needed to work in remote locations, and would operate with both PDAs and the new Window’s based smartphones Srinivas wanted to introduce. It was a tall order, but he found it. An important factor in his final decision was his solution provider’s willingness to work on the necessary customizations needed to run the solution in far-flung parts of India, where bandwidth is low. The no-frills user interface ensures all functions are easily usable even on slow connections. Srinivas also made sure that PMSRs could work offline even if they are out of coverage area. Today, medical representatives go online for just three to five minutes to sync their mobile devices. And in case the mobile application fails completely, Srinivas backed it up with a Web portal. “So if a device goes down, staff can still complete their tasks and report Vol/5 | iSSUE/08

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Cover Story | Mobile Apps back to base by spending a few minutes at a local Internet café,” he says. The new mobile client application, which was piloted with around 50 professionals, is today being used by close to 2,000 employees — most of them on the smartphones Srinivas phased in. And it’s making a difference. Not only can sales representatives upload customer details, their visit schedules and expenses claims, today they can also pull out relevant information from the company’s ERP, enabling them to have greater impact with doctors. “While a representative is waiting to see a doctor, he can access information from past interactions with the doctor. This can be from his birthday to his daughter’s wedding date, in short any information that will not only help him sell more but also inculcate a personal bond,” says Srinivas. Doctor queries regarding a product can also be logged into the system through an application on the rep’s mobile and when he syncs it with the backend systems, the question is forwarded to a panel of experts who can handle those queries and respond — which goes a long way in building a sales

person’s credibility. Dr Reddy’s estimates that the new solution makes their salespeople between 6 percent to 8 percent more effective. Back at regional headquarters, managers to whom these medical reps report also enjoy mobile access to dashboard reports based on data fed in by their reps — something that wasn’t possible earlier. This makes it easier to keep a closer tab on the activities of medical representatives and their efficiency. And when a medical representative leaves, it helps the replacement catch up quickly — some estimate that the information can cut the time needed to build a new relationship by a third. Although Srinivas is unwilling to share how the new solution with all its customization cost, the combined benefits lead Dr Reddy’s to believe that they will recoup their investment within a year. In fact, they are so confident that since the project began they have already phased out the Palms and bought about 2,000 Windows smartphones — that cost between Rs 10,000 and Rs 15,000 a pop.

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xternal

Yatra Online Cto and Co-founder: Manish Amin technology Challenge: Customize the mobile experience across thousands of phone models. CIo Challenge: Decide whether to outsource or build in-house capabilities.

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oyalty isn’t the strong suit of the Indian online travel consumer. According to a 2010 iXigo-INSEAD survey, 61 percent of travelers aren’t faithful to one online travel agent (OTA) — they’re too busy looking for the best deal. That’s bad news for Yatra Online, but the company isn’t letting that bog them down because they have a plan. They’re going to follow consumers wherever they go, on whatever medium they choose. Yatra Online provides its customers with information and 32

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a booking facility for air travel, hotels, buses and car rentals across 5,000 cities around the globe. In an early bid to follow its customers on their mobiles, Yatra initially put out a basic mCommerce application: a plain-vanilla extension of its website, which offered basic facilities like booking. But if Yatra wanted to keep customers coming to them, they knew they were going to have to do better. They decided to create an enhanced version of their mobile app. But the decision was preceded by a larger, more strategic move. For

B.V. Srinivas, Dy. CIO, Dr Reddy’s Laboratories, found a new solution that worked with his existing Palms and new Windows-based smartphones.

years, the company had watched as millions of Indians flocked to mobile stores, creating one of the greatest mobile growth-markets in the world. With over 621 million mobile subscribers, the advent of 3G and a telecom price war that drove down prices to new lows, Yatra knew the mobile platform just couldn’t be ignored. “We’ve realized clearly that nothing is bigger than the mobile. We believe that there is going to be an entire generation of young adults who are going to skip the PC and laptops and use

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Cover Story | Mobile Apps the mobile as their preferred endpoint,” says Manish Amin, co-founder and CTO, Yatra. That’s when they decided that it was time to really invest in the platform, a move that is still not common among Indian enterprises. The importance of the mobile space and the constant innovation needed to make it userfriendly, made it too critical to be left to a third party. So while its first mobile attempt was developed by an outside party, its new avatar, Yatra was convinced, needed to be made in-house. “Today, we have in-house capabilities for J2ME, WAP and the Blackberry,” says Amin. “What we don’t have is expertise on the iPhone and the Android but getting that is an expense that barely touches six digits.” It was a bold, strategic move (Makemytrip and Cleartrip, for instance, have both outsourced their mobile solution) and it resulted in a new mobile offering (developed using a J2ME client application) that can run on any Java-enabled handset — covering upwards of 95 percent of all handsets. Today, all the offers available on the company’s website, including Yatra miles, promotion codes, and discounts, among others, are available on the new application in addition to the old search and booking functions. All a user needs to do is SMS ‘Yatra’ to 51818 to get a WAP link to download the application. But unlike internal-facing mobile applications that are more popular with Indian CIOs, Yatra’s external audience was harder to please. The application needed to be intuitive and fit snugly with user phones — no matter which phone. The navigation and exit buttons, for example, on a Motorola phone are on the opposite sides of where they are located on a Nokia phone. And memory sizes differ from phone to phone. “We are not approaching this like other app providers who have one large app and a small app. We wanted to make sure that we sent the one best-suited app to a customer’s handset,” says Manish Amin, CTO, Yatra. That’s when they a hit a standardization roadblock: how do you customize customer experience across thousands of phone models? The trick, they found out, lay in identifying a device by the header information that accompanies an SMS request. They then send that information to an Open Source community called WURFL, which has a device description repository. Based on 34

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that information, an application is selected that best suits a ‘family’ of phones. (OEMs generally have lead devices, so, for example, Nokia’s 6100 model functions as a lead device for 20-odd phones in that family. Which means that if an application works on that model it will for the rest in that family.) Today, when Yatra gets a message requesting an application download, they send the header information to WURFL, which returns essential parameters like a model number, its screen resolution, and the key codes for the cancel key, among others. And then sends out the appropriate application. “We have to maintain multiple copies of the application, but it’s worth the effort in terms of customer experience,” says Amin. Another challenge was finding a way to ensure that customers didn’t have to key in multiple pieces of information every time they wanted to book a ticket, for instance. One option to make it easier for users was to store all that information on Yatra’s

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Ways

to Market with Your Mobile

Honda’s BluFi: To market Honda’s Jazz, a company dealer in Bangalore fitted one of its cars with a BluFi device and rode around the city. It then asked people to switch on their Bluetooth and download Honda Jazz content such as videos, wallpapers and the details of the dealer. Imagine the lead generation possibilities. Ford’s Quick Response Codes: For its new hatchback, the Figo, Ford launched a print ad in major dailies with QR codes, which when scanned by a QR code reader app on a mobile (downloadable) delivered a video ad for the car. Mid-day, too, has used QR codes, and now wants to use it to give readers access to ‘related’ stories.

servers — but that could end up making customers uncomfortable. So, Amin and team, decided to use the phone’s local storage to maintain information like a billing address. “Once keyed in, all a customer had to do the next time is select it from a drop down,” says Amin. The downloaded application can store information for up to 25 travelers and five credit card details — but for security reasons it doesn’t store the expiry date or the CVV. It also uses local memory to let customers remember their preferred search parameters like airlines, flying times, refunds, non-stop flights, etcetera. Yet, the app, says Amin, is designed to ensure minimum scrolling. The app isn’t only for travelers, says Amin. It comes with a currency converter and flight schedule tracker. “So even if you are just going to pick up someone at the airport, you can use it to check their flight’s status,” says Amin. It took a dedicated team just under two-anda-half months — from concept to testing — to develop the (less than 200 kb) app. The cost of building in-house expertise and creating the application is hard to estimate, says Amin. But ROI isn’t a focus area, he says. “We are gearing up for the big wave and we will definitely see demand increasing with 3G coming in,” he says, justifying the investment. It’s a demand they intend to stay ahead of. Amin says that Yatra is currently in the process of launching a ‘tour guide’ application, which will guide a user to the closest restaurant, night club, or metro station complete with fare charts, depending on their location. “We have a proof-of-concept for Delhi and aim to launch it by the Commonwealth Games,” says Amin. Work is also in progress to extend the travel guide as a ‘hotel companion’ for the 4,000-odd hotels Yatra works with. By the time that’s done, hotels that tie up with Yatra can have an application dedicated to themselves. Potential customers could then have all the information they need about that hotel plus the places around the hotel, how to visit them, down to how to order a cab. “Starting with the top 10 to 15 cities. And after a study of the interest in the application and the traffic we generate, we will scale it up,” says Amin. And with the advent of 3G, they also plan to push out relevant content, like videos. “Our backend is ready for that already,” says Amin. And so is Yatra.

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Cover Story | Mobile Apps

Bharti Airtel DTH Director technology & Customer service, Bharti airtel & Group CIo, Bharti Enterprises: Jai Menon technology Challenge: Backend Integration CIo Challenge: Combining teams to come up with mobile innovations customers expect.

Photo by SriVatSa ShaNdilya

W

hat do you do if you were stuck in traffic and desperate to get home to watch that muchawaited India-Pakistan ODI? Tough luck would normally have been your answer. Fortunately, there are some companies that won’t just let things be. Recently, Airtel’s Digital TV Services gave their customers the option of recording their programs from anywhere using a mobile phone. Primarily targeted at their ‘time-challenged’ customers, Airtel’s DTH business is ushering in a concept of ‘maximum TV viewing at the viewers’ convenience’. With a Java-based mobile app (that requires GPRS to download), users can search a program guide that includes details like the length and ratings of TV programs and can also search for any show within the next two days. Once they’ve selected the program, they hit record and their show is recorded. As Indian TV shows are not available for immediate download on the Internet, unlike in the US, the new app makes a lot of sense, says Jai Menon, Group CIO, Bharti Airtel. The application, which was developed by a Bharti Airtel Group company, works with Airtel’s 124 million customer base but also with other telecom operators. “The mobile device serves as a client to access the application,” says Menon. “It works over GPRS and Wifi.” Once downloaded, the app talks to Airtel DTH’s server which then orchestrates with the backend systems of their set top boxes, Airtel DTH’s IT systems for provisioning and billing and the customer profile management systems — all integrated using SOA. Airtel’s IT team had to bring strong integration standards to the table to ensure that service components are reusable and that 36

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Cover_Story_June2010.indd 36

the systems operate in a fail-safe manner in a multi-channel environment. “We have to work in near real-time so that when a command is issued, it’s passed on through various systems. We brought different teams together and ensured that there is enough cross-fertilization and a common architecture that everybody signs up to because mismatches could lead to gaps in the systems,” says Menon. Gaps could mean that messages leaked through the system and this was avoided by ensuring that the message queuing and the message response system were made robust. Airtel’s SOA approach handles the complex task of managing the recording servers, provisioning systems, the conditional access system and the set top box. “Our IT architecture is built with two components: a robust SOA

Jai Menon, Bharti airtel’s IT leader, wants to conquer three screens: the mobile, the TV and the PC.

and a strong mobile architecture by investing in the Service Delivery Platform which allows various mobile linkages,” he says. The teams Menon is referring to include IT team at Airtel (that is a core member of the DTH leadership team), the marketing and customer service department, the Airtel group company that made the app and the manufacturers of the set-top boxes, NDS. This teamwork and the formation of an “ideation funnel” was key to the success of the project, says Menon. And will be for most mobile projects given people’s high expectations from the mobile platform. “Typically, these ideas are a product of brainstorming session by this combined team and from this ideation funnel. We prioritize and decide the one we will implement right away,” says Menon. And thanks to that robust technology and people platform, Airtel is ready to dish out new, innovative ideas. “Our strategy is to provide digital lifestyle services across the three screens: the mobile, the TV and the PC. And this helps us deliver that.” Even internally, Airtel’s already leveraging the mobile more than most other companies. Administrative jobs like leave and travel approvals are already available to Airtel employees on their handset and these processes are linked to its HR systems. “The mobile is front and center whether with respect to retailers, customers or employees,” says Menon. “Communication and content are now available on the mobile and with proper regulations in place mCommerce will be a very big opportunity as customers start seeing money transactions through their mobile. Then we will see the mobile acting as a computing device with cloud based service. The 4C’s: communication, content, commerce and computing will eventually pan out on the mobile,” says Menon. CIo Anup Varier is correspondent. Send feedback on this feature to anup_varier@ idgindia.com

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esp

Mid-Year Report Card

R

Mid Term

eview

0 210

Challenges Then

Deploying technologies and applications Supporting business expansion Governance, risk and compliance

Access to skilled resources Shrinking IT budgets Inadequate skill sets

Challenges Now

Supporting business expansion

Access to skilled resources Deploying technologies and applications Governance, risk and compliance

Inadequate skill sets Shrinking IT budgets

Six months ago, we asked you what your plans and expectations were for 2010. Now, it’s time to re-look those assumptions and see for yourself how far your plans have panned out.


Mid-Term Review

All AbouT You There’s More Work

But Your Pay’s Increased

Decreased The Same

Remained the same

71.4% 1.1%

Increased by 1-5 percent

27.5%

Have your responsibilities or roles increased in the last six months?

81%

Increased by 6-10 percent Increased by 11-15 percent Increased by 16-20 percent

Do You Now Spend More Time with the Business than You Did Before?

88%

of manufacturing CIOs have more responsibilities today, compared to 54% of those in BFSI.

Increased by 21-25 percent Increased by 26-30 percent

13%

Increased by above 30 percent

Yes No The Progress of Your Tech Plans Technology

Today

Business intelligence

On My Radar

Currently Implementing

Business process management

Actively Researching

On My Radar

Collaboration tools

On My Radar

Actively Researching

Content/document management

Actively Researching

Currently Implementing

Customer service/CRM

Upgrading/ Refining

Upgrading/ Refining

Enterprise resource planning (ERP)

Upgrading/ Refining

Upgrading/ Refining

Mobile/wireless

Not Interested

Actively Researching

Open source technologies

Not Interested

Not Interested

Supply chain management software

Not Interested

Not Interested

Video conferencing/telepresence

Upgrading/ Refining

Upgrading/ Refining

Web 2.0 (wikis, blogs, social networking)

Not Interested

Not Interested

Not Interested 38

Nov ‘09

On My Radar

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Actively Researching

Currently Implementing

Upgrading/ Refining VOl/5 | ISSUE/08

N


s

Justifying IT Projects Isn’t Harder

Not Really Changed 22%

34.4%

18%

38.1% 16.7%

18%

10% 9.5% 8.3%

41% 20% 19% 17.8% 19%

4.8%

33.3%

Slightly Harder Unchanged Much Harder Slightly Easier Much Easier 1.1%

25%

11.1%

And the ROI Window has Not Shrunk

16.7%

3.3% 9.5%

Not changed 50% It has but not significantly 33%

2%

I have more time to show ROI 9% It’s shrunk significantly 8%

1.1% All

Manufacturing

BFSI

Is Now a Better Time to Change Jobs?

53%

84%

16%

Yes No

of CIOs from BFSI feel it’s a better time to move (than six months ago), compared to 71.4% of those in manufacturing.

Top Challenges Then and Now Your Challenges

Nov ‘09

Today

Supporting business expansion

2

1

Access to skilled resources

4

2

Deploying technologies / applications

1

3

Governance risk & compliance

3

4

Inadequate in-house skill sets

6

5

Shrinking IT budgets

5

6

respondents chose all that applied VOl/5 | ISSUE/08

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39


Mid-Term Review

YouR DepARTMenT You Got the IT Budget You Wanted

Increased By How Much? 15%

Yes

12%

74%

No

26%

8%

Did you get the IT budget you expected?

Deferred IT Projects Resume

8% 5% 3% 2%

2% 2

5

7

2% 8

10

12

15

Increased by above 30 percent Increased by 26-30 percent

32%

2% 0%

Increased by 21-25 percent

4%

Increased by 16-20 percent

20%

13%

Increased by 11-15 percent

21%

Increased by 6-10 percent

28%

Increased by 1-5 percent

No

25

Your Staff’s Pay Has Gone Up

48%

Yes

20

Percentage of IT budget

Not Applicable

12%

Remained the same Decreased

Have you re-started projects you had canceled or postponed?

20% 0%

Your Changing Priorities Business Impact You Wanted IT to Have in 2010

40

Business Impact IT Has Had Until Now

Drive innovative new market offerings

1

lowered the company’s overall operating costs

Improve security and end user productivity

2

Improved end-user workforce productivity

Improve quality of processes

3

Improved security/risk management

Re-engineer core business processes

4

Improved end-user workforce productivity

lower the company’s overall operating costs

5

Drove agility

j u n e 1 5 , 2 0 1 0 | REAL CIO WORLD

VOl/5 | ISSUE/08


Attrition is Still a Problem -50

-35

-30

-25

-20

-15

-10

2%

32%

-5

2%

15%

3% 5%

5%

53%

5% Increase

Decrease

The Same

10% 12%

Decreased By How Much?

75%

of CIOs in manufacturing expect attrition at the midlevel, compared to 54% of CIOs from BFSI.

SuRve RveY Rve veY MeThoDologY olog ologY The Mid-Term Review 2010 was administered online between May 4, 2010 and June 2, 2010. One hundred and one IT leaders participated in the survey. All were heads of IT. Sixty-three percent were from organizations with annual revenues over Rs 1,000 crore; 30 percent represented enterprises with annual net sales between Rs 100 crore and Rs 1,000 crore and 7 percent were from organizations with annual revenues below Rs 100 crore. The bulk of the respondents came from CIOs from the BFSI (17.3 percent) and manufacturing (25 percent) sectors, although there was representation from nearly every vertical. All responses were gathered using a secure server and then combined to develop a composite picture, with all individual data kept confidential. The degree of error is +/- 1 percent.

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And You’re Afraid of Losing Your Middle Line Senior

6%

Mid-level 62% Entry

32%

At which level do you expect the most attrition?

The Importance of Outsourcing has Increased Nov ‘09

26% 34%

of CIOs say the importance of outsourcing is decreasing.

Today

of CIOs say the importance of outsourcing is increasing.

15% 44%

believe that today.

believe that today.

REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

41


VIEW

from the TOP

Road Trip to

Success By Varsha Chidambaram

There was a time — not very long ago — when Indian families would plan their annual trip six months in advance, after spending long, sweaty hours queuing up in front of ticket booths. It sure wasn’t easy. But in 2005, Deep Kalra, CEO and founder of MakeMyTrip.com, changed all that. He brought the concept of Online Travel Agents (OTA) to India and revolutionized the way the Indian middle class travels and plans their vacation. Today, the rise of Internet credibility coupled with falling rates of air travel has helped OTAs catapult to glorious success. And with a turnover of Rs 2,200 crore, MakeMyTrip.com has been a pioneer in the OTA success story. With over 50 percent market share, it’s the single most recognized and trusted player in the OTA industry. That’s because Kalra envisioned his brand to be synonymous with instant access and customer delight. In this interview, Kalra talks about how MakeMyTrip.com has consistently stupefied competition and how IT has helped iron out the challenges in the OTA business.

In a cutthroat industry like OTA, how do you maintain competitive advantage? Deep Kalra:

View from the top is a series of interviews with CEOs and other C-level executives about the role of IT in their companies and what they expect from their CIOs.

42

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View from the Top.indd 82

Creating an experience for the customer is very important. Every OTA player today is focusing on providing more value for the customer’s time and money. The focus this year for MakeMyTrip is to move beyond customer satisfaction

and towards creating customer delight. Also, we take pride in our customer relations; we have customer testimonials that speak very highly of our customer care executives. Being ahead on the technology curve is what gives us an edge. It’s very important to keep on upgrading and reinventing new processes to enhance customer experience.

Ph oto by D r Loh ia

Deep Kalra, founder and CEO, MakeMyTrip. com, says that with increasing competition in the OTA sector, he is riding on technology to create competitive advantage and enhance customer experience.

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dy with anywh

Deep Kalra expects I.T. to Enhance customer experience Provide competitive edge Aid Innovation

The same holds true for our suppliers. We always strive to provide them with the best environment to showcase their products. Since we are an intermediary, it’s critical that we add value to both our crucial stakeholders.

But are these advantages sustainable? Couldn’t they be replicated by your competitors? The basic service offered by any OTA player remains the same across

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the industry, but it’s the experience that creates the difference in the minds of the customers. Our customers come to us because of the unparalleled experience that we provide. Our edge is clearly our expertise in innovation. Any technological development can be replicated, but being an industry leader, we have always managed to be the first to offer unique services. Of course, often these services are then offered by other players in the industry.

Customer experience is another advantage and we achieve this with our robust customer satisfaction measurement process and training. As the saying goes, the devil is in the details and that is especially true in our industry. It’s the cumulative effect of those seemingly small innovative tweaks to enhance customer experience that makes all the difference between a repeat customer and a lost opportunity.

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6/9/2010 3:48:35 PM


View from the Top

How are you taking on the competition from OTAs who offer lower prices? We still offer the lowest prices for most flights across sectors. But it’s not just low fares that bring customers back to our site. The fact that we offer value added services is the driving force that directs so many customers to our website.

What’s behind your advertising strategy? It’s very important to establish the brand. For us, the focus is not just to provide cheap tickets. Advertising helps in getting your message across to the target audience more effectively. And with more and more players entering the segment, it is necessary to advertise to ensure you have captured sufficient mind-share. Again, the product basket that we offer is growing and our customers have to be updated accordingly.

What’s the revenue breakup between your businesses? Between hotel and air, air captures a much higher percentage — two-thirds — of our business. But other product lines are growing fast, especially hotels and buses. The effort is to reduce reliance on a single line of business. While we lead the sector in terms of air tickets, we are continuously focusing on non-air products to increase their share of revenue as well.

But today travelers can get the lowest fares on an airline’s site itself… The advantage that MakeMyTrip offers is that it lists all available options at a glance. The customer thus saves valuable time. The whole existence of any travel agent depends on value customer services that we offer. Also, customers can avail special offers and other discounts on MakeMyTrip itself. We run joint promotions with various financial and banking organizations on an ongoing basis to create valued 44

View from the Top.indd 84

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SNAPSHOT propositions for more of our customers.

What’s changed in the industry since the slowdown?

MakeMyTrip. com turnover:

Rs 2,200 crore

Also, this is our effort in fighting the challenge of low Internet penetration in the country. Indians are not yet comfortable buying holiday packages online so the brickand-mortar presence is essential for communicating our holiday packages. This requires the services of a counselor who can advice the customer and redress queries and concerns immediately.

No. of employees: The effects of the 750 slowdown are gradually Established: reducing. People have started 2000 traveling again for business and pleasure. Most airlines Headquarters: Delhi have reported profits in the last quarter, indicating that travel trends are improving. We expect some consolidation among How crucial is the role of the travel players. Technology will play a CIO in the OTA space? major role in differentiating the leaders It’s a critical position as technology of tomorrow. is vital to our success. Our CTO is an integral member of the leadership team at MakeMyTrip. So, what’s been your most

valuable lesson?

The industry has learnt to expand capacity with caution, especially because the sector is capex hungry for the suppliers. We, at MakeMyTrip, have learnt that our suppliers are very important. Unless we make sure our suppliers’ business is profitable, we won’t be profitable.

Does India’s low Internet penetration bother you? This can be perceived as a challenge or an opportunity. We are constantly reinventing ourselves to offer maximum convenience and ease to our customers. We do realize that a large number of Internet users access our site through a dial-up connection and there are always low bandwidth issues. We have designed our website to suit these requirements. Surely, an increase in Internet penetration will help in the growth of OTA industry.

Do you use IT to monitor how your fares stack up against your competitors? We use international IT platforms like Amadeus (a global travel distribution system) for stacking fares of different airlines. This provides customers the ease of viewing all options at one go. We keep a very close watch on market dynamics so we do real-time shop analysis to ensure that we are always competitive.

What does the future of the OTA industry in India look like? Consolidation, dynamic packaging, offering more for less and creating a memorable experience will be the focus areas going forward. CIO

Is it possible for any online company to stay solely online in India? Our stores are an extension of our online presence. The stores exist to provide further convenience to our customers.

Varsha Chidambaram is correspondent. Send feedback on this interview to editor@cio.in

Vol/5 | ISSUE/08

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Trendline_Nov11.indd 19

11/16/2011 11:56:19 AM


BY ANUP VARIER

Bajaj Auto Finance’s old CRM system hobbled the non-banking financial corporation’s Rs 600-crore operations. By turning to the cloud it equipped itself to deal with customer spikes five times its old record — and cross-sell to its customers. 48

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Case Study_Bajaj_Auto.indd 48

unning a nonbanking financial corporation — or NFBC — is a tricky business. That’s because NFBCs, which primarily finance automobiles and general purpose industrial machinery, operate in a narrow strip of land. On the one side are banks, which with their size can afford more competitive lending rates, and on the side are credit cards lapping away at their business with their quick access to cash. One way NBFCs are hitting back is by broadening their portfolio. By offering more services, an NBFC widens its net and grows the loyalty of existing customers. When Bajaj Auto Finance (BAFL), launched in 1987, for example, it only financed loans on two-wheelers. It quickly expanded that portfolio to include consumer durables and IT products. As a result, the company — which made 60 percent of its earning from financing two-and three-wheelers in 2006 — only depended on that sector for 32 percent of its revenues in 2009. It continues to leverage that strategy. It recently Reader ROI: l au n c h e d a Wh y companies financing scheme whose IT is intergral for constructo their operations tion equipment are taking to the cloud and now offers an ‘insurance Infrastructure issues to expect distribution and extended warranty’ to its customers. But the combination of new services and a network of over 50 branches made it increasingly hard for the Rs 600-crore organization to handle all the requirements of its customers. The additional lines of business were beginning to take a toll on the company’s legacy CRM applications, says CIO, Rakesh Bhatt. For example, with the old warhorse — a combination of locally and internally developed

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Case File CRM applications — it was almost impossible to scale to the end-to-end loan underwriting needs of BAFL’s growing customer base (slowing it down) or to cross-sell their multiple products. “The earlier platforms restricted the fast deployment of our new business needs,” says Bhatt. “In order to keep pace with the dynamic changes in the market there was a pressing need to identify and launch new platforms.”

Floating Rate So Bhatt and his team plunged into extensive research to evaluate different CRM applications. Their search brought them face-to-face with cloud-computing based CRM applications. “When we found that the cloud model delivered better, we tested it even more extensively for a 90-day period. We then had a pilot and only once we were completely satisfied did we chose to adopt a cloudbased model. It took us about four months to come to that conclusion,” Bhatt recalls. That’s not unusual. CIOs are approaching the cloud with caution and adoption has been low. A worldwide Information Technology Intelligence survey done during the middle of last year showed that only 15 percent of enterprises have or are planning to go cloud. In India that number is even lower. According to the CIO research, only 4 percent of

"Only once we were completely satisfied did we chose to adopt a cloudbased model. It took us about four months to come to that conclusion."

— Rakesh Bhatt, CIO, Bajaj Auto Finance

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Indian CIOs are currently support has paid off. Look at implementing a cloud the benefits BAFL derived computing strategy. out of these initiatives,” he Among their biggest consays, referring to the deep cerns is security. “An overinsights into day-to-day whelming 85 percent majority business operations the of corporate customers will organization has got through not implement a private or real-time dashboards and SNAPSHOT public cloud computing infrasophisticated — yet easy to structure because of fears create — reporting analytics. Bajaj Auto that cloud providers may not These benefits, he says, Finance be able to adequately secure have ensured an improved HEADQUARTERS: Pune sensitive corporate data,” flow of approval between REVENUE: says Information Technology operations centers and the Rs 599 crore Intelligence principal analyst dealer network, improving EMPLOYEES: Laura DiDio. general staff productivity by 2,007 Well aware of the about 50 percent. BRANCHES: 50 widespread fear surrounding The new system cut the CEO: Rajeev Jain the cloud, Bhatt made sure he time it took to navigate attacked the problem early processes to approve a on. “The concerns around data security loan by four minutes to a new total of 15 were addressed during the evaluation minutes. It also equipped the company stage by understanding the principal’s meet a rise in transactions from 1,500 per initiatives and compliance certifications,” day to a record of 8,500 a day — processing he says. one transaction every 4 seconds at peak. He also dangled the cost effectiveness It’s also allowed BAFL to deal with an of the model before the company’s increase in business volume at the counter management headquartered in Pune. of over three times. BAFL, which opted for a subscriberOver the last 14 months, BAFL’s cloud based model, has about 300 licenses. initiatives have picked up steam thanks Bhatt says he buys more in batches of five to the positive impression made by the or 10, although he is allowed to buy even first project. Post a detailed analysis of a single one. the features, benefits, drawbacks, costs Once the application was up, it (capex and opex), maintenance, uptime was quickly extended to include the and security, and considering the various acquisition-and-approval cycle for principals involved in providing these sourcing new customers, says Bhatt. services, BAFL is now moving ahead This lead to a challenge of integrating the with the implemention of a unified cloud-based platform with datacentermail environment and communication based applications as well as third-party platform; with discussion and presentation hosted databases. “In order to achieve forums with audio/video capabilities on this integration we implemented a Web the cloud. Services-based integration model, which The idea behind this, says Bhatt, is to provided a seamless workflow for new “arrive at an application architecture customer acquisition data,” says Bhatt. which fits in with the business model and Bhatt cautions that despite its evident allows the technology team to evaluate advantages, a cloud initiative can’t simply and take a decision on which architecture stand on its own legs and needs hardware component is best suited for an in-premise upgrades to support it. “Infrastructure model or a cloud model.” For BAFL it growth is essential to ensure an effective seems the old adage is coming true: The integration with the datacenter,” he says. higher the cloud the better the weather. CIO He also admits that he was lucky to get support from the business and technology Anup Varier is correspondent. Send feedback on functions within his organization. “Their this feature to anup_varier@idgindia.com J U N E 1 5 , 2 0 1 0 | REAL CIO WORLD

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6/9/2010 2:41:25 PM


CIO Role

The Leg Up Your Stars Want

IllUST RATIoN BY MM SHAN ITH

A

Savvy CIOs make sure their protégées build up the skills needed to handle the big tasks.

sk Paul J. Capizzi about his career plans and he’ll tell you, “I’m taking the stairs, not the elevator.” It’s an BY STEPHANIE OVERBY unlikely admission from the fast-talking New Yorker, who, at 36, has already risen to the number-two spot in IT at insurer SBLI USA. It’s not that Capizzi, isn’t ambitious. He of any development opportunity in a simply wants to make sure he succeeds. CIO survey of 100 aspiring IT leaders. “I’m very aggressive and I’m always doing Although 60 percent were participating something,” says Capizzi, who just tookin such programs, only 17 percent found and aced-the life insurance agent test to them to be very effective. On-the-job beef up his business know-how. “But I’m experiences rated higher: 76 percent said not in a rush to get to a CIO position. I want that steering an enterprisewide project, to take advantage of all the people around for example, was instrumental to their me — my peers, my direct reports, my professional growth. managers — and continue learning. I’ll get “Traditional programs fail when there eventually, but I’ll get there with a nothing comes out of them,” says Robert wealth of knowledge.” Reeg, MasterCard’s president CIOs and up-and-comers of global technology and Reader ROI: agree-on-the-job experiences operations. “If an employee is The smarter way of trump traditional succession recognized as high-potential growing leaders plans in preparing IT and then is in the same job What your protégés professionals to lead. for five years, you’re using want from you Formal succession planning succession planning as a Why you’re possibly programs received the tool in development. [You] not being the best teacher you can be lowest effectiveness rating need to understand the

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responsibility and the impact of labeling an employee as high-potential [and] make sure the potential is realized.” Successful IT succession planning needs real-life chances to learn valuable leadership lessons that last. Ask any CIO and they’re likely to tell you that what best prepared them for the role was having seen-and done-it all: helming efforts in IT, such as starting up new teams or developing staff capabilities; leading corporate initiatives, such as executing major business process improvements or running enterprisewide projects; and tackling external challenges, including negotiating major contracts and identifying business opportunities. (See 10 Ways to Groom a Leader) Steve Finnerty, VP IT and vendor services at Applied Materials, says having varied experiences is “the most important REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

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CIO Role thing you can do to get to the CIO job and stay there.” Ten percent of IT leadership development can happen in a classroom, says Finnerty, who has held CIO positions with Kraft Foods, Johnson Controls and J.M. Huber. The rest happens on the clock. To reap real benefits, however, these opportunities must be deliberately selected and delicately managed to balance risk and reward to the individual, the IT organization and the business as whole. “Your career is a portfolio of experiences, but it shouldn’t be something random that happens,” says Finnerty, who’s sent more than a dozen CIOs into the world from his ranks. “It should be set up to allow leaders to go to their full potential.” Making that portfolio pay off requires setting up experiences that are big enough for aspiring IT leaders to grow into and providing enough support to enable success-but not so much oversight that they’re stifled. Finnerty’s former direct report Simon Dunning, now Applied Materials’ managing director of IT demand management, is the product of learning by doing throughout his 22-year career. “I have written code and pulled wires, worked out of multiple locations worldwide, managed eight SAP implementations or upgrades, reported to the business and reported to IT,” says Dunning, who’s seen peers in classic succession plans stagnate because they weren’t challenged. “It is only when you are faced with real-life situations, forced outside of your comfort zone and put in positions where you have to make difficult decisions that you expand your core skill set.”

Make Them Stretch Traditional succession planning often focuses more on ‘planning’ than ‘success’. Organizational charts, skills assessments, HR meetings and performance reviews are all integral to succession planning, but that planning falls short if it’s unaccompanied by well-thought-out leadership development experiences. The best way to build leadership muscle is by exercising it. “To be a good leader, you have to have intuition,” says Finnerty. “And the only way you develop intuition is through experience.”Picking the right experiences for IT executive development 52

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can be tricky. “There is a balancing act between what is required by the business and what is best for the individual’s career development,” says Finnerty, who talks to the members of his management team about their strengths, weaknesses and aspirations as part of a collaborative process of deciding on their next challenges. This can require patience — there isn’t always an appropriate opportunity available when the candidate is ready for one. “The key to maintaining balance is having an ongoing dialogue with people in your organization.” When available, big, bold moves are often best. Finnerty remembers a time early in his career when he’d been working primarily in financial systems development and was tapped to take over the datacenter. “It was a big stretch,” he says. “But when the time came to move into the CIO role, I had broader and deeper experiences to pull from when making key strategic decisions.” When, later in his career, he was confronted with two major datacenter crises, he and his team were able to make better tactical decisions because of his datacenter background. “A new on-the-

job experience stretches the individual’s capabilities into new areas where they are not yet fully developed. If you’re getting a job or an experience, and you’re ready for it,” Finnerty says, “it’s not big enough.” When Capizzi was promoted to VP of technology at SBLI — a newly created position that put him second-in-command to the CIO — he wasn’t just leading a new team, he was leading the team — “the whole org chart,” Capizzi explains. The former head of infrastructure had no experience with application development or e-commerce, service-level agreements or business processes. It took months of sleepless nights, working weekends and learning from mistakes before he got comfortable. His CIO, Eric J. Bulis, had just taken on a stretch role himself, taking over operations in addition to IT. “We needed a strong emerging leader to step into these shoes — both tactical and strategic — to work with me on the bigger picture and take deep dives with me into execution where needed,” Bulis says. “Paul had proven that he is able to operate outside of his comfort zone effectively. He knows how and when to defer to his subject-matter experts in areas where he is not the strongest, and how to create a team environment.” In 2006, when Applied Materials’ Dunning took over management for one of the largest SAP implementations in the world (a two-year project affecting 16,500 users in 21 countries), he had SAP project experience. “But I hadn’t done anything on this scale,” he says. “Heck, no one had. We had 600 people on the project team, a bazillion processes, and we needed a breadth of skills on the business analyst side that was not easily found.” Dunning says the trial by fire was one of the most effective tools thus far for honing his leadership skills. Among the challenges: refining the project’s scope when it was already underway; resetting business leaders’ expectations for results; strengthening the partnership between business and IT through shared governance; and mastering the tactical requirements of a project larger than any he’d seen. Each obstacle brought revelations. He could have communicated better. He learned how to Vol/5 | ISSUE/08

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see IT projects through a CFO’s eyes. Most important, he learned the value of decisive action. At one point, “we faced a critical decision about whether to keep pushing on the project or to reset the schedule,” recalls Dunning. He pushed the schedule out, but knows he waited too long to do so. “Sometimes the competitive fire and desire to win will push you to do things that aren’t best for the ultimate success of the program,” he says, adding that it’s important to think about the capabilities of your organization rather than your own. MasterCard’s Reeg knew his protégée John Meister was the right candidate to head the authorization and database management group in 2008. “He’d built a track record of delivering great results and would routinely meet or exceed goals,” says Reeg. “That, combined with his own drive to succeed and learn, made it easy for him to work at different levels and roles.” But Meister was wary. “Authorization is the heartbeat of our business. If it doesn’t work, MasterCard doesn’t work,” says Meister. He told Reeg the idea “scared the daylights” out of him. That’s when Reeg knew Meister was ready for the role. “I would have been more worried if he was coming in thinking this was going to be a piece of cake,” Reeg says. “We knew [John] had the technical, people and management skills to be successful.” Being new to card authorization had benefits. “John gets to ask ‘Why?’ a lot and challenge the status quo,” says Reeg. One question Meister posed was, if MasterCard could give banks customer data that helped them build their credit card business, why couldn’t it do the same for their merchants? From that question came a system for delivering valuable data to retailers, such as where the customers come from and how loyal they are, and how same-store sales compare over time. And MasterCard is building stronger relationships with merchants, traditionally a challenging audience. Meister has instilled a more strategic focus in the card authorization group that

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nocks ted equal. In fact, some popular approaches K y t i n u t r o pp are not all crea t opportunities ring IT leaders.

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has translated into increased funding for projects like the retailer data service, Reeg says. “It’s a bigger risk, in my opinion, not to offer employees new opportunities and help them manage through failures that might occur.” And they will fail. Overnight success is rare in the IT leadership ranks. Savvy CIOs make sure their protégées build up the skills needed to handle the big tasks. “That’s one thing I have a better appreciation for than I used to,” says Finnerty. Rather than putting someone in charge of IT strategy all at once, he’ll offer aspiring leaders less-risky opportunities first. They might participate in developing financial forecasts and annual operation plans, or take a class on strategic thinking, “so it’s not such a shock” when they have to make big decisions, he says.

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backs, securing support up and down the company chain of command. A rising IT star, Ruchir Rodrigues, vice president of product design and development at Verizon, says broad corporate support was critical when he created a revenue-generating consumer R&D group within the corporate IT department. The organization had traditionally provided back-office support. If the company wasn’t behind the new team, says Rodrigues, “we would have had sparks but no light.” The genesis of the product-development group goes back more than six years, when Rodrigues and his team worked with CIO Shaygan Kheradpir on ideas for digitizing Verizon’s analog offerings. Doing so would give the millions of customers using Verizon’s traditional public-switched telephone network (PSTN) the benefits of what we now associate with voiceover-IP, even before VoIP was a viable platform. They didn’t need to rip out the PSTN, argued Rodrigues; they could write REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

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CIO Role software to translate the information into something usable on the Internet. “Shaygan saw the vision of it,” says Rodrigues. “He said, ‘I will help you guys work on this.’” The key was starting out small, with projects like Visual Voice, which translates traditional voice mail messages into a form compatible with IP-enabled devices and software. “We prototyped it in our spare time,” says Rodrigues. Kheradpir worked with the marketing department. And slowly but surely, a productdevelopment group blossomed. Since then, the group has developed dozens of consumer products, including mobile handsets and fiber-optics based video, voice, and data services (marketed as FiOS), generating hundreds of millions of dollars in revenue. “With Shaygan’s

few months to negotiate an infrastructure outsourcing contract for the airline to address system-availability concerns and pave the way for a new reservations system. He’d set up application development deals before, but nothing with such a great impact on the enterprise or with such a tight deadline. However, he had backing of the airline’s senior executive team and its board. CIO Joe Eng joined Dinterman in meetings with board members, invited him to speak at senior leadership forums to build awareness of the project, and served as Dinterman’s trusted advisor. “Joe always made himself available to discuss the approach and progress of the RFP and negotiations,” Dinterman says. That not only gave him the confidence to

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support, we were able to build this from small successes rather than him going to senior management right away to invest in it before we knew if it would work,” says Rodrigues. The CIO gave Rodrigues the time to prove the value of the productdevelopment mind-set and the support necessary to build it into a successful enterprisewide program. Mentoring is critical for these stretch assignments. “If someone’s a little over their head,” adds Finnerty of Applied Materials. “I make sure I surround them with expertise.” People who have done the work before, or at least some piece of it, are there to provide advice. Terry Dinterman, JetBlue’s vice president of technology services, had just a 54

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ip Across IT Leadershise the Enterpr e a major business

he also negotiated contracts with Microsoft and EMC, relocated part of his workforce and managed a dozen other enterprise projects — “I had no choice but to develop my ability to discern when to trust [my] team and when to dive into the details.”

Give Them Room to Grow There’s a fine line between having a supportive CIO and becoming suffocated by oversight. Having space to make mistakes is essential to moving ahead, says Dinterman. He’s probably his own harshest critic, but he has a long list of things that he now knows he could have done better on the infrastructure outsourcing deal. He should have staffed up the project office

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nail down a deal in eight months, but also the authority to handle vendors who tried to circumvent his RFP process by going to Eng and other JetBlue execs. Dinterman walked away not only with an enterprise win but also with a wealth of leadership know-how. “Simply the experience of going through a very visible and challenging project generates leadership development,” he says. “You cannot underestimate the value of new relationships that get established with senior executives, key business leaders and even business partners when navigating an enterprise project.” He’s now worked closely with executives from finance to legal to sales. And because the infrastructure outsourcing contract was only one of the big projects on his plate —

more instead of assuming technical leaders could also provide full oversight. He should have created a more comprehensive communication and change-management plan to jump-start adoption of technology such as new teleconferencing capabilities. He should have realized earlier that he needed deeper expertise in some technology areas than he had on staff and brought in consultants sooner. Letting up-and-coming leaders learn doesn’t mean letting go of the reins altogether. Charting a course is exceedingly important when giving your best and brightest a shot at something new. “You have to set up the experience with the takeaways in mind,” says MasterCard’s Reeg. “It’s got to be fundamental to the program that they learn something new.” Reeg wanted Meister to run real-time, Vol/5 | ISSUE/08

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mission-critical services and manage a large, global team spread from Missouri to Mumbai. Though Meister keeps succeeding, he says one of the benefits of new experiences has been learning how to fail. A few years ago, he was struggling to build a website using a new rich user-interface tool. His team was stymied by performance issues in the final days of testing. “Because we had a high level of trust across our organization and with our pilot customer, we were able to switch to an alternate technology, quickly redeploy the site incorporating our pilot customer’s feedback and still hit production in time for our second customer’s implementation,” says Meister. He witnessed other aspiring leaders refuse to admit mistakes for weeks or months, wasting time and money. “I’ve learned that if you’re going to fail at something — and there is enough trust across an entire team to admit that something is going to fail — then fail quickly. The sooner you take responsibility, the better.” That requires the CIO to create a culture that views failure as “a small setback to longer-term success,” says Meister. Turns out that advice also applies to the CIO’s task of assigning up-and-coming IT leaders these opportunities. Sometimes a new on-the-job experience doesn’t work out — the environment is too political, the resources aren’t there, the timing isn’t right. “You have to get the balance right when it comes to pulling the plug on a new experience,” says Finnerty of Applied Materials. Too early, and you may shortchange someone who could have been successful. Too late, “and you can burn out a great person or stop a career.” It comes down to matching the right experience to the right person, providing support while leaving room for growth, and constantly communicating about how things are going. Particularly in the early weeks of a new assignment, says Finnerty, it’s important not just to be available to someone tackling a new experience but also to actively track how the project or role is going and make adjustments when necessary. Finnerty doesn’t want to smooth the course too much. “Part of the experience is

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4

CIO Role

Ways to Building Your Bench

Running a succession planning program is not easy, and with all of the other responsibilities on your plate, it can sit on the back burner for a long, long time. Here are some lessons from CIOs who have created a culture of succession

Re-organize and Embed Succession Planning in the New Structure When insurance company Bristol West Holdings went public, and the board of directors listed enterprise succession planning as a top priority. Jack Ondeck, CIO, did a gap analysis of the skills his direct reports had at the time and those they needed in order to succeed him as CIO. In addition to providing them the training they needed to tighten the gaps — by giving them more budget responsibility to help build their financial knowledge, for example — he made succession planning a critical factor in his re-organization the following year. “We moved to a federated model so that most of my senior staff has a dotted line to a senior VP who is responsible for a large area like claims, point of sale or product lifecycle,” says Ondeck. “Since my directors are now setting priorities for the entire group, they are essentially running their own IT organization with all of the strategic, leadership and political responsibilities that come along with the role.” Create a Succession Planning Program for Technologists Karin Catton, CIO at manufacturer Johns Manville , has a program for her senior leaders, but also created one for her independent contributors. “Your technologists may not be born managers, but they need a development path as well,” says Catton. “We created a succession path in our architecture group that includes a ‘principal’ level. The principals do not have staff, but they are recognized throughout the company as thought leaders.” Involve HR Early On Larry Pickett, CIO of Purdue Pharma, joined forces with HR to implement a formal succession planning program that includes job rotation, training, goal setting, feedback and executive coaching. “The organizational team [in HR] really exceeded my expectations,” says Pickett. “They created an innovative executive coaching program that combines the best assessment methodologies from external programs with the involvement of our own executives who work with these leaders.” Manage Expectations When Pickett sees the need for a stronger enterprise focus on a particular area, like security, he will pull a manager with expertise in that area from the middle ranks of his organization up into his group of direct reports for an interim period. This gives the topic some additional focus and the employee an opportunity to work more directly with Pickett and to participate in IT leadership meetings. The benefits of this leadership development approach are great, but Pickett warns: “The employees need to know up front that they will be transitioning back into their place in the organization,” he says. “This can feel like a demotion, it is critical that they understand that while they will no longer report to me, they will now be better positioned for future growth.” — By Martha Heller

learning that CIO environments are never easy,” he says. But when things truly aren’t going well, “it’s all about being candid and open and saying, ‘Here’s the situation. How can we adjust it?’” says Finnerty. Maybe he needs to provide his protégée with more political cover. Maybe more or different resources are required. Maybe a deadline should be changed. “I’ll always ask if there’s something I can do. In some cases they’ll say yes. In other

cases, they’ll say, ‘Let me handle it, but let’s talk about how to do it,’” says Finnerty. “In most cases, they solve it themselves.” CIO

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Cloud Computing

Private Cloud Check-

List

A majority of organizations aren’t anywhere near ready to get on a public cloud. Starting with a private cloud seems to be the best way forward. But how many enterprises are ready even for that? Here’s how to tell if you are.

BY BETH SCHULTZ

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Cloud Computing

N

Automating deployment is probably the best place to start because that enables self-service capabilities. And for a private cloud, this isn’t Amazon-style in which any developer can deploy virtual machines (VM) at will. “That’s chaos and completely unrealistic,” Staten says. Rather, for a private cloud, self-service means that an enterprise has established an automated workflow where resource requests go through an approvals process. Once approved, the cloud platform automatically deploys the specified environment. More often, private cloud self-service is about developers asking for “three VMs of this size, a storage volume of this size and this much bandwidth,” Staten says. Self-service for end users seeking resources from the internal cloud would be “I need a SharePoint volume or a file share.” Third, building an internal cloud means sharing resources — “and that usually knocks the rest of the companies off the list,” he says. This is not about technology. “It’s organizational — marketing doesn’t want to share servers with HR, and finance won’t share with anybody. When you’re of that mindset, it’s hard to operate a cloud. Clouds are highly inefficient when resources aren’t shared,” Staten says. Faced with that challenge, IT Director Marcos Athanasoulis has come up with a creative way to get participants to share resources on the Linux-based cloud infrastructure he oversees at Harvard Medical School (HMS) . It’s a contributed hardware approach, he says. At HMS, which Athanasoulis calls the land of 1,000 CIOs, IT faces a bit of a unique challenge. It doesn’t have the authority to tell a lab what technology to use. It has some constraints in place, but if a lab wants to deploy its own infrastructure, it can. So when HMS approached the cloud concept four years ago, it did so wanting “a model where we could have capacity available in a shared way that the school paid for and subsidized so that folks with First Steps: Standardization, small needs could come in and get what they needed to get Automation, Shared Resources their research done but also be attractive to those labs that Forrester has three tenets for building an internal cloud. would have wanted to build their own high-performance To build an on-premises cloud, you must have computing or cloud environments.” standardized — and documented — procedures for With this approach, if a lab bought 100 nodes in the operating, deploying and maintaining that cloud cloud, it got guaranteed access to that capacity. But if environment, Staten says. that capacity was idle, others’ workloads could run on Most enterprises are not nearly standardized enough, it, Athanasoulis says. “We told them — although companies moving down the IT you own this hardware but if you let us Information Library (ITIL) path are closer Reader ROI: integrate into the cloud, we’ll manage it for to this objective than others, he adds. A private cloud’s three you and keep it updated and patched. But Standardized procedures that allow building blocks if you don’t like how this cloud is working, efficiency and consistency are critical for the Why technology comes second you can take it away.” He adds, “That next foundational layer: automation. “You to knowing your turned out to be a good selling point, and have to be trusting of and a big-time user of applications well not once [in four years] has anybody left automation technology,” Staten says. “That’s What you can’t put the cloud.” usually a big hurdle for most companies.”

ervous about running your business apps on a public cloud? Many experts recommend that you take a spin around a private cloud first. But building and managing a cloud within your datacenter is not just another infrastructure project, says Joe Tobolski, director of cloud computing at Accenture. “A number of technology companies are portraying this as something you can go out and buy — sprinkle a little cloud-ulator powder on your datacenter and you have an internal cloud,” he says. “That couldn’t be further from the truth.” An internal, on-premise, private cloud is what leading IT organizations have been working toward for years. It begins with datacenter consolidation, rationalization of OS, hardware and software platforms, and virtualization up and down the stack — servers, storage and network, Tobolski says. Elasticity and pay-as-you-go pricing are guiding principles, which imply standardization, automation and commoditization of IT, he adds. And it goes way beyond about infrastructure and provisioning resources, Tobolski adds. “It’s about the app build and the user’s experience with IT, too.” Despite all the hype, we’re at a very early stage when it comes to internal clouds. According to Forrester Research, only 5 percent of large enterprises globally are even capable of running an internal cloud, with maybe half of those actually having one, says James Staten, principal analyst with the firm. But if you’re interested in exploring private cloud computing, here’s what you need to know.

Private Cloud Checklist You Can’t Even Get Started if Your Infrastructure is Not Standardized Automated And does not share resources

on a private cloud

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Cloud Computing Don’t Proceed Until You Understand Your Services

Building an internal cloud means sharing resources — and that usually knocks most companies off the list of private cloud users.

If clouds are inefficient when resources aren’t shared, they can be outright pointless if services aren’t considered before all else. IBM, for example, begins every potential cloud engagement with an assessment of the different types of workloads and the risk, benefit and cost of moving each to different cloud models, says Fausto Bernardini, director IT strategy and architecture, cloud portfolio services, at IBM. Whether a workload has affinity with a private, public or hybrid model depends on a number of attributes, including key ones as compliance and security but others, too, such as latency and interdependencies of components in applications, he says. Many enterprises think about building a private cloud from a product perspective before they consider services and service needs — and that’s the exact opposite of where to start, says Tom Bittman, VP and distinguished analyst at Gartner. “If you’re going to build a private cloud, you need to know what your services are, and what the [SLA], costs and road maps are for each of those. It’s about understanding whether the services are going toward the cloud computing style or not,” he says. Common services with relatively static interfaces, even if your business is highly reliant on them, are those you should be considering for cloud-style computing, private or public, Bittman says. E-mail is one example. “I may use it a lot, but it’s not intertwined with the inner workings of my company. It’s the kind of service moving in the direction of interface and independence — I don’t want it to be integrated tightly with the company,” Bittman says.

Services that define a business and that see constant innovation are not cloud contenders, Bittman says. “The goal for these services is intimacy and integration, and they are never going to the cloud. They may use cloud functions at a low level, like for raw compute, but the interface to the company isn’t going to be a cloud model.” Only once you understand which services are right for the cloud and how long it might take you to get them to a public-readiness state will you be ready to build a business case and start to look at building a private cloud from a technology perspective, he says.

The Final Tiers: Service Management and Access Management Toward that end, Gartner has defined four tiers of components for building a private cloud. At the bottom sits the resource tier comprising infrastructure, platforms or software. Raw virtualization comes to mind immediately, but VMs aren’t the only option — as long as you’ve got a mechanism for turning resources into a pool you’re on the way, Bittman says. Rapid re-provisioning technology is another option, for example. Above the resource pool sits the resource management tier. “This is where I manage that pool in an automated manner,” says Bittman. “These two levels are fairly mature,” he says. “You can find products for these n the market, although there’s not a lot of competition yet at the resource management tier.” Next comes the service management tier. “This is where there’s more magic required,” he says. “I need something that lets me do service governance, something that lets me convert

Eight Private Cloud Planning Requirements Here are the top eight requirements for successful deployments of private clouds. Virtual Plus Physical Scalable Management Integrating physical and virtual management is a key requirement to successfully deploying private clouds. There is a growing need to have both ‘element’ management and end-to-end ‘value’ management that drive the need to use existing root-cause analytics, models-based management, integrated interfaces, and run book automation for both physical and virtual environments. Virtualization doesn’t obviate the need for management; it makes it more critical. Next Generation Architectures Next generation datacenter architectureswill play a key role in enabling private clouds as they compress 58

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network, storage, and server connectivity into a single chassis. These architectures use virtualization and offer customers new management paradigms for configuration, automation, security, and applicationaware problem resolution. Management of these systems must deliver to customers dynamic capacity management and business service visibility. Policy-Based Management Management solutions must understand and aggregate polices from across different components; this is a notable requirement as private clouds dynamically shift and manage resources based on business demands. Pseudo standards such as OVF will be deployed over the next few years as the need to manage VMs from a service perspective (versus current component) enable service-

oriented management. Policies will come in many different flavors, such as business or technology, and aggregation points will become critical to maintaining service levels in dynamic cloud environments. The integration of contractual agreements, chargeback, performance, service level agreements, and quality of service (QoS) metrics will be paramount in measuring value and delivering high quality IT capabilities that support and drive the business. Process Standardization The fastest way to reduce costs is to standardize. Processes — both human and technology — offer opportunities to contain costs, not just reduce them across physical and virtual infrastructures. The integration of these environments is paramount. Value Justification Analysis CIOs will be urged to define costs and make decisions based on business value, comparing VOL/5 | ISSUE/08

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Cloud Computing pools of resources into service levels. In the end, I need to be able to present to the user some kind of service-level interface that says ‘performance’ or ‘availability’ and have this services management tier for delivering on that.” As you think about building a private cloud, understand that the gap between need and product availability is pretty big, Bittman says. “VMware, for example, does a good job of allowing you to manage your virtualization pool, but it doesn’t know anything about services. VMware’s vCenter AppSpeed is one early attempt to get started on this,” he adds. “What we really need is a good service governor, and that doesn’t exist yet,” says Bittman. Sitting atop it all is the access management tier, which is all about the user self-service interface. “It presents a service catalog, and gives users all the knobs to turn and lets you manage subscribers,” Bittman says. “The interface has to be tied in to costing and chargeback, or at least metering — it ties to the service management tier at that level.” Chargeback is a particularly thorny challenge for private cloud builders, but one that they can’t ignore for long. “It’s tricky from a technology perspective — what do I charge based on? But also from political and cultural perspectives,” Bittman says. “But frankly, if I’m going to move to cloud computing I’m going to move to a chargeback model so that’s going to be one of the barriers that needs to be broken anyways.”

In the End, it’s About the Business And while cloud-builders need to think in terms of elasticity, automation, self-service, and chargeback, they shouldn’t be too rigid about the distinctions at this stage of cloud’s evolution, Bittman says. “We will see a lot of organizations doing pure cloud and a lot doing pure non-cloud, and a whole lot of stuff

in-house IT capabilities versus public cloud models. Each model should take into account the types of services and underlying cost structure to deliver those IT capabilities. Most important is the discussion of the business criticality of the IT capabilities and how strategic they are to achieving business growth. . Mainframe Virtualization The mainframe is very much alive with MIPS growing, as is virtualized mainframe environments. In some cases, enterprises are looking to integrate virtualized mainframe app processes with other types of physical architectures. As many apps traverse both mainframe and physical architectures, IT organizations are considering the impact on costs by looking at root cause analytics for app performance management. The ability to

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If you’re going to build a private cloud, you need to know what your services are, and what the service level agreements, costs and road maps are for each of those. It’s about understanding whether the services are going toward the cloud computing style or not. somewhere in the middle. What it all really comes down to is: is there benefit?” Wentworth-Douglass Hospital, for example, is building what it calls a private cloud but it’s doing so more with an eye toward abstraction of servers and not so much on the idea of self-provisioning or software-as-a-service (SaaS), says Scott Heffner, network operations manager for the hospital. “Maybe we’ll get to SaaS eventually, and we are doing as much automation as we can, but I’m introducing concepts slowly to the organization because the cloud model is so advanced that to get the whole organization to conceive of and understand it right off the bat is too much,” he says. As HMS’ Athanasoulis says, “The reason why people use our cloud … is because it provides compelling value to them — and that’s not a bad place for IT to be.” CIO Send feedback on this feature to editor@cio.in

see a transaction as it crosses various pieces of the architecture, both physical and virtual, mainframe and distributed, is going to a key requirement for private cloud deployments. Increased Automation Automation is a key enabling technology of private clouds because it helps reduce and contain costs. Physical and virtual processes must be integrated, but this is not enough. Automatic problem identification, thresholding, and problem remediation are key capabilities that enable private cloud deployments. Self-Service The idea of ‘self-service’ is exploding with customers as they consider what it means to them. The notion is simple, to empower employees to request compute resources on demand and deliver those resources

automatically. Private cloud deployments increase the value of self-service as customer demands will require a linkage to chargeback models, resource availability, network, storage, and server knowledge, and an easy to use portal that casual IT and business workers can use. Take for example, one financial service firm that wants to have a ‘branch in a box’ with all the key applications and infrastructure virtualized, and a layer of management to provide control and visibility. IT organizations are adapting to the speed and pressure to deliver private cloud services across their infrastructure fabrics. The net benefits of these capabilities are clear: reduce costs, contain costs, drive tighter business impact, and get more out of people, process, and technologies. — Stephen Elliot REAL CIO WORLD | J U N E 1 5 , 2 0 1 0

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How an uncommon, but bright idea brought Trent’s cash tills the holy trinity of cash tills: cost effectivenes, security and agility. BY SNEHA JHA

Ka Reader ROI:

ching !

How Open Source's benefits go beyond just cost

The challenges that are inherent to an Open Source strategy

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IMAGING BY MM SHANITH

Case File “Retail is in the detail.” That’s a mantra that resonates across Trent House, the corporate office of Trent, the retail arm of the Tata Group. It’s a philosophy is driven by Noel Tata, MD, Trent, known for his eye for detail. It’s also a strategy that helps Trent stay on — what some experts call — its ‘conservative’ course. Although ‘conservative’ turned ‘smart’ when Trent maintained profitability — one of the few retailers (possibly the only Indian one) — during the growth frenzy that the sector faced a few years ago. That conservative tag, however, can’t be applied to Trent’s IT operations. Headquartered in Mumbai, Trent operates multiple formats including Westside (its lifestyle retailing stores); Star Bazaar (its value retailing stores and hypermarkets) and Landmark (its books and music retail chain). Currently, Trent operates 42 Westside stores in 23 cities, seven Star Bazaars across three cities and over 25 Landmark bookstores across nine cities. It employs over 1,000 staffers and owns over four lakh sq.ft. of retail space. That’s a small footprint compared with the 600-odd stores its competitors like Reliance and the Aditya Birla Group have. But Trent has plans to invest Rs 2,000 crore and set up 50 Star Bazaars over the next few years. Trent’s expansion will come on the back of a rising tide of growth in the sector. According to a McKinsey report The Rise of Indian Consumer Market, the Indian retail industry is estimated to quadruple by 2025. Some of that growth will come from an increasing number of foreign players looking to grab a pie of one of the world’s most lucrative retail markets. In 2009, the Indian retail market leaped to the top spot on the Global Retail Development Index, an annual study of retail investment attractiveness among 30 emerging markets conducted by A.T. Kearney. To support that growth, retailers are going to have to invest in technology. The sector is expected to invest around Rs 2,260 crore in retail technology service solutions during the current fiscal,

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“With the existing number of tills we were facing a challenge of increasing costs. And we knew that this problem would only be compounded as we expanded." — Vikram Idnani, Head IT, Trent

according to the India Brand Equity Foundation. This could rise further to Rs 5,670 crore in the next four to five years.

Leaky Cash Tills At Trent, the IT team led by Vikram Idnani, the retailer’s head of IT, was trying to figure out how they could prepare the company for growth by infusing it with more operational agility and flexibility. Like all retailers, Trent’s life centered around their cash tills. When it snapped open with a characteristic ka-ching!, it made everyone glad. But it was also open to security challenges. For instance, the system allowed some staffers access to sales data because the POS and the backend interacted via flat files and these were available to some people in a store’s back office. “The fact that my day-to-day sales data was accessible to someone before he sends it out to the head office was the biggest sign of a security gap in the system. Also, we did not have visibility. If a store manager was removing some transactions, it would only come out in a post-facto analysis, when finance did not get the money they expected. Our objective was to have a system where the stores had no access to sale data after sales were closed,” says Idnani. The retailer’s challenges with their cash tills did not stop at security. Trent’s business demanded quick deployments and better control but each time the

IT team made a change to the cash till’s software, it needed to ensure that the update was replicated across all of Trents multiple format stores — quickly. And that could only be done with a centralized set up — something Trent didn’t have. “Earlier, we needed someone to go to a store physically and make sure he configures the cash till for every single store,” says Idnani. The rising cost of managing their cash tills was also beginning to pinch. “A cash till should be a highly efficient, robust, secure, and cost effective piece of equipment,” says Idnani. “With the existing number of tills we were facing a challenge of increasing costs. And we knew that this problem would only be compounded as we expanded. Mind you, this was a time when Trent’s revenues were growing a consistent clip of 55 percent CAGR. We were planning to add 10 new stores for both Westside and Star Bazaar over the next two years.” Typically, each Westside store has between seven and nine cash tills. By adding 10 stores a year, just Westside would have 90 more tills to manage. And Star Bazzar has about 30 tills a store, so 10 new stores meant 300 more tills. “The growth in the numbers could lead to a huge escalation of our costs,” says Idnani.

Open Source Decisions With plans for expansion already in the works, Idnani had to move fast, but he also needed a technology solution that offered a holistic solution. REAL CIO WORLD | J U N E 1 5 , 2 0 1 0

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Case File With that out of the way, When Idnani joined Trent in June Idnani was faced with of 2006, the enterprise depended another challenge: his on a platform called Retail Pro team was ill-equipped for its purchasing and tracking to work on an Open the movement of its goods. It also Source platform. They acted as their point of sale. But had no prior exposure Trent was quickly outgrowing to it. In fact, Trent was the software. “We were looking going to be the first at SAP and a front-end solution SNAPSHOT retailer in India to as RetailPro would not be able to Trent use an Open Source scale anymore. With this in mind, ESTABLISHED: 1998 platform, Idnani says. we decided to have a bespoke HEADQUARTERS: Mumbai He quickly put his front-end. That was the threshold entire infrastructure moment that drove us to look for a M.D.: Noel Naval Tata team through intensive new solution,” says Idnani. EMPLOYEES: 1,000+ training. In his earlier stint as an IT TURNOVER: Rs Idnani then took consultant for 20 years in the US, 1,000 crore another important Idnani had seen what Open Source IT TEAM: 5 decision: Trent would could do. He decided to apply his not embark on the knowledge to deal with his current project in a phased manner because challenges. He knew Open Source could they could not have some stores on one offer a solution to his problems of cost, platform and the rest on another. But for security, and agility. that strategy to work, they had to seal But an Open Source solution in the Indian every loophole in their plan. “So we did a retail industry was unheard of, he says. So pilot with two Westside stores in Mumbai he decided to evaluate other solutions. He for about six to eight weeks,” says Idnani. looked at an off-the-shelf product which operated on a Windows platform. “It was not a popular product but it was from a Teething Troubles very stable company. It didn’t make the cut When Trent embarked on the Open Source because it could not contain cost over a long initiative, it was also engaged in multiple period. The product addressed the need projects at the same time. It was in the for centralization, but we knew that with middle of an ERP initiative at the backend, Windows there would always be a security an OS replacement at the front end and a risk at the cash till. And with Windows, POS replacement at the front end. “We we would end up spending a lot of money were revamping our whole business with buying licenses for each new release. On the this one go-live. From that point of view other hand, Open Source would help keep it was a significant challenge. That’s the our costs significantly lower. We realized reason we went live late,” says Idnani. that if we chose an Open Source solution it That wasn’t the only challenge the would give us a lot of agility and we were team faced. Vendor support was a major also keen to take advantage of flexibility issue that hamstrung the implementation. and cost efficiency it offered,” says Idnani. “While there were a lot of promises from Idnani next challenge was securing our provider, they could not deliver on buy-in from his executive peers. He made them. They had very good resources but a presentation that demonstrated how the very limited ones. Hence pulling those Open Source solution would benefit Trent resources for our work and getting timely in building business agility, saving costs, help from them remained a big challenge and attaining a high level of security — throughout the course of the project. It many of the same reasons that convinced did not affect us to the point that it hit our him. Management saw merit in the case business but the closure of certain issues and gave Idnani the go ahead. was definitely affected. So we had to spend

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a lot of extra time on research to resolve these issues,” says Idnani, adding that despite the training, his people needed a fair amount of handholding after going live. Idnani says the learning curve lasted for a good year.

Benefits Galore When the project went live in June 2008, Trent became the first retailer in India to go the Open Source route says IdnaniBut he adds that the strategy of using Open Source gave Trent an edge over their peers in terms of operational efficiency, security and agility. “Since we went live we have probably had about probably six to eight releases for our point of sales software across all stores. We have brought in several new functionalities to our point of sales system and increased the speed of deployment. So we have faster time-to-market. It helped us adopt new functionalities across the stores before our competition,” says Idnani. Take for example when Trent’s marketing team needed to roll out a new customer loyalty program called the ‘Blue Tier’ program. The IT team made a quick change to the POS and the program was deployed across 42 stores — all in just two days. This is a far cry from the days when it took 20 days to roll out a new release across all Trent’s stores. Trent has also accrued benefits in the area of cost efficiency. Over a four-to-five year timeframe, Trent’s operating expenses are have been slashed by 40 percent, says Idnani. With the deployment of the Open Source project, Trent has also upped their security posture. From the looks of it, the Open Source gamble has paid off and will reap Trent benefits for years to come. Now, who said Trent was risk averse? CIO

Sneha Jha is senior correspondent. Send feedback on this feature to sneha_jha@idgindia.com

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everything you wanted to know and more

Is UC Making a Comeback? Unified communications might have lost its buzzword status in the last few years, but an increased need for collaboration and lower-cost UC models are getting some CIOs excited again. Vol/5 | ISSUE/08

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What’s Inside Deep Dive Features Hanging on to UC�������������������������������������������������������������������������64 Gain or Drain?�������������������������������������������������������������������������������68 Under the Same Roof�������������������������������������������������������������������76 Column Crafting a UC Strategy�����������������������������������������������������������������83 test center The Low-cost Telepresence Battle�������������������������������������������� 80

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Deep Dive | Unified Communications

Hanging on o n to UC

BY GARY ANTHES

Make no mistake: It’s a big project to choose and roll out one system for voice, IM and video conferencing. Still, more CIOs are now using unified communication systems, to keep colleagues and customers in constant touch. 64

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r

obert Fort, CIO of music retailer Virgin Entertainment Group, would have liked to wave a magic wand to give key employees the ability to easily transition between voice, instant messaging and video conferencing technologies. His practical answer: a unified communications (UC) environment. By providing an integrated version of all those services, unified communications gives selected Virgin executives, store managers, administrative employees and IT staffers the ability to reach colleagues wherever they may be, with whatever communications mode

is most appropriate. “There are major cultural differences between employees, so it’s critical to have good, strong communications across the corporation,” Fort says. Like Fort, a growing number of CIOs are seeking to merge disparate communications modes into one universally accessible service. As communications options proliferate, employees increasingly face the choice of juggling multiple communications devices or potentially missing critical calls and messages. But using IP technology, vendors such as Microsoft, Cisco Systems and Mitel VOl/5 | ISSUE/08

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Deep Dive | Unified Communications Presence technology, for example, shows whether a person is available to receive a call. “If it’s urgent, you might decide to send the individual an IM instead,” Fort says. During live meetings or conference calls, participants can get fast answers to questions from colleagues in the same building, or in a store on the opposite coast, by contacting them via IM or voice. Employees can also tap into their computers to share spreadsheets, charts or other relevant data with conference participants. “You’ve got the capability of making the best choice on who to contact and how to contact them,” Fort says. “After a while, it just becomes a very seamless, natural way of exchanging information.” Virgin began exploring the possibility of adding unified communications shortly after deploying a Cisco Systems’ based IP phone system on its network in 2005. The company initially considered utilizing the Cisco Unified Communications environment but ultimately changed course and adopted rival Microsoft technology. “The thing that gave me more comfort with the Microsoft approach is that I looked at it from the desktop use [angle] and I found that the Microsoft solution is so deeply embedded and integrated with all the rest of our enterprise software,” Fort says. “There were also cost factors in our case — the Microsoft solution was cheaper for us.”

promise to keep enterprise employees and customers better connected. “Unified communications solutions allow enterprises to leverage the vertical communications applications they’re already using, such as desktop phones, mobile phones and messaging systems, but which can’t talk to each other,” says Nora Freedman, a senior research analyst at IDC. “Unified communications is designed to bring all of these disparate technologies into an environment that reduces time and effort.” While the unified communications concept has been batted about for more than a decade, it’s finally becoming practical thanks to the growing adoption of IP telephony, says Mark Cortner, a senior analyst at Burton Group. Companies that have adopted IP telephony are already in the on-ramp to unified communications, he notes. “Now that your voice communications is in IP, it joins messaging, e-mail and other forms of IP-based communications, all of which can be directed and managed in unison over data networks,” he says. “This is what’s at the heart of the growing interest in UC.” But as Fort and his peers have found, deploying unified communications and making all the pieces work together is a time- and testing-intensive job for IT.

Maximizing Time With Customers For the 140-plus lawyers at Bowman and Brooke, a law firm with offices in Minneapolis, Los Angeles, Phoenix, Detroit and San Jose, UC boils down to customer service. Clients such as

Based in Los Angeles, Virgin Entertainment Group, under the Virgin Megastores USA brand, operates 11 outlets in New York, California, Florida, Colorado and Texas. Facing business challenges posed by bigbox music retailers, such as Best Buy and Wal-Mart, as well as the popularity of online music downloading services, like iTunes, Virgin needs to run a tight and efficient organization that keeps sales high and prices down. Unified communications supports those goals, Fort says, while helping employees in several different ways.

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Who is driving UC?

Piecing Together the Puzzle While most CIOs agree that UC can streamline and expedite employee and customer interaction, most adopters also

are you currently using or planning to implement UC? 13%

32% 20%

4%

Senior IT management 49.8%

11%

20%

No individual or group yet 14.6%

SOURCE: CIO RESE ARCh

IllUST RATIOn BY MM ShAnITh

Fewer Misses, Better Meetings

General Motors, Toyota and Ecolab demand fast answers to crucial questions, says Michael Cammack, Bowman and Brooke’s CIO. Besides giving clients access to key attorneys at any time, on any device and in any place, the firm’s UC system provides key support information that helps attorneys be prepared as they accept an incoming call or message. Cammack plans to enable a feature that will mean when an attorney is using a computer, for example, a screen pop will tell him who is calling and to what case the call relates. “It used to take three to five minutes just to get moving,” Cammack says. “I send you an e-mail, you download the documents, then you write back to me and so on.” With UC, information is exchanged in real time, interactively, without wasting time on procedural matters. “The whole system saves time and, ultimately, allows us to provide better service,” Cammack says.

Senior non-IT management 9.2%

Currently using/running

Line of business owners 8.7%

Planning to implement within one year

UC team representing business functions 6.1% Dedicated UC champion 5.6%

10

20

Planning to implement within 3-5 years No plans to implement

Not sure 6.1% 0

Planning to implement within 1-3 years

Not sure 30

40

50 real CIo WorlD | j u n e 1 5 , 2 0 1 0

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Deep Dive | Unified Communications say that the technology can create a big ball of confusion for IT departments. Since UC involves so many different communication modes, as well as multiple hardware and software platforms and applications, the technology can rapidly snowball into the most complex communications project an enterprise has tackled. “I think the biggest challenge is that there are so many pieces to it,” Fort says. Virgin’s deployment required a boxcar’s worth of technologies, all of which had to be painstakingly tested for interoperability under a variety of scenarios. The system’s products include Microsoft Office Communications Server 2007, the Microsoft Office Communicator 2007 unified communications client and Microsoft RoundTable conferencing and collaboration software. Call routing is handled by the Cisco CallManager system, which Virgin installed before adopting UC. At Virgin, the service’s presence and IM and document sharing functions required links to Office Outlook 2007, Office

SharePoint Portal Server and the Microsoft Active Directory Service. The company equipped selected users with the LG Nortel IP Phone 8540, which supports features such as name-based dialing, conference call setup and presence status capabilities. The service can also be accessed through laptop computers, Cisco and BlackBerry handsets and other devices. Like Virgin, Bowman and Brooke also uses Office Communications Server 2007 linked into Office Communicator 2007 clients. The law firm uses Mitel’s Live Business Gateway to allow click-tocall capabilities from Microsoft Offiice Communicator and soon from within Office documents. For multimedia conferencing, the firm chose Cisco MeetingPlace. Then there’s Mitel’s 3300 IP Communications Platform, an IP gateway, to do IP trunking between offices. There’s also Mitel Mobile Extension that gives key attorneys a single phone number and mailbox for multiple communication devices. “The presence status of the user is

4 Tips to Be Better Prepared From hype and ROI to system requirements and quality control, communications convergence can be a complex road to navigate. Jack Santos, executive strategist, Burton Group, tells you four things you need to know before you begin.

1

Traditional (Analog) PBXs are going the way of the dinosaur. IP-based phone systems bring capabilities for new functions that have not been possible, and will enable unified communications in the future. You need to know what those features are as part of your selection process for a PBX replacement, especially if your PBX is end-of-life.

2

You need to be ready to address business ROI opportunities for UC technologies once they are identified, or confidently tell technology-enamored business partners that there is no ROI, at least for now.

3

Consumer phone options are delivering e-mail-enabled voice mail as an option for residential use. This is voice mail that is either delivered as an audio file to e-mail, or as speech-to-text. You need to know that those expectations will come into play for organizational phone and e-mail system. Other technologies, such as instant messaging, call routing options, consolidated phone numbers (wireless and wired), wireless IP phones, and conferencing options (video and audio) will drive future innovation. You need to manage innovation and new technology opportunities in a planned, architected approach, using IT governance techniques. Manage user expectations before they get hyped by the vendor.

updated no matter which device they are using,” notes Cammack. Given the complexity involved in that many parts, deploying a UC environment demands patience, diligence and persistence. Cammack feels that careful product selection is the key to UC success, with the CIO and staff making sure that platforms, devices, applications and everything else interoperate seamlessly. “It’s essential that everything can talk to each other,” he says. “Otherwise, your employees will be the middleware.” It’s possible to build a unified communications infrastructure using just a single vendor, one that creates, selects and tests all the key technologies itself. “But if you’re creating a best-of-breed approach, you really need to make sure the companies you’re looking at are going to actively cooperate with the products from the other companies you’ve chosen,” Cammack warns. Still, Cammack feels that unified communications’ case is so compelling that it’s worth the effort of juggling and interweaving multiple technologies in order to achieve lasting productivity benefits. “You have to look at the end results,” he says. Like many unified communications adopters, Virgin conducted an extended pilot project that involved a staged deployment to IT workers, administrative staffers and, finally, to company executives. “It’s certainly not the sort of thing you rush into,” Fort says. On the other hand, convincing employees to use the system isn’t particularly difficult, Fort observes, since people are rapidly growing accustomed to IP-based communications technologies. “You start to realize that most of your users are probably already using instant messaging, VoIP and other technologies at home,” Fort says. “When you take the time to show them that they’ll be using the same tools in an integrated fashion for business benefits, they get it.” CIO

4

Most of all, you need to make sure any innovation happening in the phone/telecom space does not impact voice service levels, which in many ways is regarded as the gold standard of reliable technology for most organizations.

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By John diX

Crafting a UC Strategy IT STRATEGY | If you have been putting off crafting your unified communications strategy, we don’t blame you. The more you know, the more you realize how much you don’t know. Adding to your woes is the fact that there’s no dearth of information out there. And that could be a problem sometimes. The road to unified communications, therefore, isn’t bereft of hurdles. Simply because, there are many ways to approach

they are actively researching unified communications. Despite the vagueness surrounding UC, its benefits are hard to ignore. While you hear some talk about UC leading to cost savings — minimizing a bit of travel or enabling you to consolidate some servers or voice mail systems — UC is really about improving productivity by stitching together various systems employees rely on. Sixty four percent of CIOs who have implemented unified

To figure that out, let the users be the guide. Do some internal survey work and let them tell you what would simplify or improve their jobs. After all, UC is all about helping these folks make better decisions faster, or improving their ability to serve customers, or facilitating the manner in which they collaborate on different tasks. With that in hand, you can identify a few test cases and then match these targets to the capabilities of your existing systems

While you need to be cognizant of the various capabilities and limitations of different platforms, don’t pick one before you know where you want to go. the opportunity, lots of competing technologies, loads of legacy investments to accommodate, political issues to address, and questions about everything from how to identify key business processes to how to measure success. If that sums up your feelings about UC, take solace in the fact that you’re not alone. Even the largest companies haven’t figured it out. The UC picture is so unclear that one Fortune 100 company went to the extent of appointing a UC czar to piece it together. His job: Crafting a vision, a road map and architecture. That, mind you, is no mean feat in a company with hundreds of thousands of employees. But, according to the State of the CIO 2009 survey, 35.6 percent of CIOs say

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communication solutions cite increased productivity as one of the major benefits, according to CIO Research. But before you accrue the benefits or even implement UC, you need to answer a few important questions: What center do you build from? Should UC be anchored by your VoIP or voice mail system? E-mail or IM? Your mobile or smartphone platform? Your audio, video or Web conferencing systems? Maybe your desktop apps? Or do you even have to pick a core? Don’t fall into the trap of making that decision too early, experts say. While you need to be cognizant of the various capabilities and limitations of the platforms, don’t pick one before you know where you want to go.

and identify where you need to fill in the gaps. The tricky part, however, is assessing whether the resulting plan is resilient enough to support other foreseeable needs. You don’t want to paint yourself into a corner. And it is perhaps this last worry that stymies more UC efforts than anything. Paralysis isn’t much of a strategy, though, so it is important to reach a conclusion and plow ahead. A controlled introduction will minimize the risks and, hopefully, lead to enough success to build onward and upward. CIo

john Dix is editor-in-chief of networkWorld (CIo’s sister publication). Send feedback on this column to editor@cio.in

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Deep Dive | Unified Communications Communication

Gain or Drain? By Kim S. nash

Unified communications can save time, cut costs and improve collaboration, but the tricky part is choosing the right combination of tools.

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I

t’s hard to find anyone who likes audio conferences. Worker bees can put themselves on mute to chat with fellow cube dwellers. Or play Facebook Scrabble and check e-mail until it’s their turn to talk. Yes, for true lows in productivity, the fuzzy, disembodied, dial-in audio conference is hard to beat. And what about all those mail and messaging systems anyway? Office voice mail, cell phone voice mail, office e-mail, personal e-mail, texting, instant messaging, social media communiques. Make it stop, you cry! Unified communications won’t do that, but depending on which communications and messaging systems you integrate, UC could make it better. At its most basic, UC makes real-time communication systems, such as instant messaging, share information with non-realtime systems, such as e-mail or voice mail, and runs them over the same network. Ideally, there is one simple interface or VOl/5 | ISSUE/08

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p hoto by srivatsa shan dilya

Deep Dive | Unified Communications

dashboard for users to access these systems. With UC, CIOs aim to speed up communication and collaboration internally and perhaps raise customer satisfaction externally. Using VoIP to cut the traditional phone bill (the foundation for UC) doesn’t hurt, nor does reducing travel costs as employees meet in video or audio chats rather than fly to faraway hotel conference rooms. About 31 percent of 466 organizations surveyed recently by Forrester have deployed some form of UC. Half of those who haven’t, say they are investigating or piloting UC, up from 30 percent in 2007. But in Forrester’s survey, 42 percent of respondents who said they weren’t investing in UC cited lack of money or the absence of clear business value to justify the investment. “Certainly it does make sense to connect voice mail, e-mail and mobile systems,” says Jerry Hodge, senior director of information services at appliance distributor Hamilton Beach. “Unfortunately, the economic situation limited my aggressiveness in moving forward.” The same is true at movie-rental chain Blockbuster and food and beverage maker Shaklee, their CIOs say. Still, if you have money and want to move forward with UC, early adopters have advice about planning projects and measuring returns.

The Original Social Networking UC has evolved from a back-room effort to simplify

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networking by, for example, running data and voice traffic on the same infrastructure, to applications that let employees share information no matter the device in front of them. We’re not quite at the point yet where a BlackBerry, say, can get you into any corporate system and connect you to any colleague. But it’s coming, predicts Steven John, CIO of manufacturing company H.B. Fuller. The rise of consumer social networking platforms such as Facebook, Flikr and Twitter reinforce daily the desire among corporate employees to strip the friction from communicating at work, too, John says. Presence, meanwhile, is moving from a cool, gadgety technology to real corporate tool. That’s when computer devices detect each other and indicate the fastest or preferred way to reach the person on the other end. It’s like instant messaging for every kind of connection you might make to your corporate network or, if configured for it, the public Internet. One simpler UC move is to integrate voice mail and e-mail so that users can listen to e-mail or read voice mail. Another is to allow instant messaging or document sharing during video conferences. According to Autodesk VP of Strategic Initiatives Billy Hinners, the ultimate in video is telepresence technology. Autodesk went whole hog into Cisco’s TelePresence system, which involves highquality video conferencing that can connect up to 48

Which UC technologies are CIOs interested in? 47% Unified messaging

46% Desktop videoconferencing

45% Telepresence technology

43% Cellular/Wi-Fi integration

37% Corporate videoconferencing

35% Speech recognition

34% IP Telephony

32% VoIP

30% Smart phones

0

10

20

30

40

50

Source: CIO Research

locations at once. Cisco calls it an ‘immersive’ experience — think Star Trek’s Holodeck. Of course, the price for such a system is steep. Autodesk spent $350,000 (about 1.5 crore) to outfit its first six-person TelePresence room. It runs 15 rooms now, ranging from twoperson to 12-person sites, and spends about $10,000 (about Rs 4.7 lakh) per month on networking costs. “Cost savings was not a big driver for us,” Hinners says. Rather, the company initially wanted better collaboration between software designers and engineers in the United States and its 1,000-plus

software engineers in Shanghai to pump out products faster at an improved quality. Employees embraced the technology right away, he says. Time booked in the telepresence rooms for regular video conferencing has become “a precious commodity.” In fact, if there is any project for which success depends on users rather than IT guiding the planning and rollout, it’s UC. These projects are some of the most technical ones that CIOs have to contend with today. But communicating is, by nature, a personal act. Foisting upon people unwanted changes to how they

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Deep Dive | Unified Communications talk and type to each other makes people uncomfortable, says Don Lewis, president of consultancy Strategic Intersect. “You think all you’re doing is taking away someone’s phone and giving them another one but you’re not,” says Lewis. “Changing the button they push to forward a call to someone is hugely disruptive.”

Is There a Doctor on the Device? What you really want are users who push for a UC project, says Michael McTigue, CIO of Saint Barnabas Medical Center. The hospital group — which provides cardiac services, burn treatment and organ transplant among its offerings — wanted to speed up the time for doctors, nurses and technicians to reach

each other. The time-honored pager method was no longer good enough. “Everyone was looking for a communications vehicle that would give better turnaround time,” he says.So, in March 2007, Saint Barnabas launched a pilot of Vocera Communication’s badge devices. The 2-ounce rectangles are worn on a lanyard around the neck or clipped to a collar or pocket. They allow hands-free voice communication. A nurse might press the activation button and say the name of a physician who is needed to check a medication order. Via a wireless network, the device pings a database to look up the doctor’s name and relay the call. The doctor taps his button and speaks to respond. Saint Barnabas spent $500,000 (about Rs 2.25

Are projects delayed or deadlines missed because employees can’t effectively contact co-workers or decision-makers? 5%

Often

43%

Rarely

30% Don’t know

30%

Never

30%

Sometimes

lakh) for devices and software for 450 concurrent users, starting with the telemetry group. Instead of 15 minutes, responses now take nine to 15 seconds, McTigue says. Such dramatic results convinced the hospital to get as many of its 3,000 employees on the system as quickly as possible. Within nine months, the hospital spent $250,000 (about Rs 1.1 crore) to add another 300 concurrent users, giving 2,700 employees access to the system. IBM managed the initial training, helping new users enunciate and speak directly into the Vocera device. In the emergency room, where there’s more noise than in other parts of a hospital, the staff uses headsets rather than dangling the device at chest level. The training helped get Saint Barnabas to a high rate of calls recognized and completed on the first try: 83 percent. Seventy percent is more typical, McTigue says proudly. Along the way, the hospital worked with IBM, Cisco and Vocera to identify and fix wireless dead spots in stairwells, elevators and the lead-walled radiology area. They had to fiddle with wireless access point configurations to get all areas hot. “If you don’t have tight infrastructure, the application will get a bad name,” he warns. Yearly operating costs are $75,000 to $85,000, (between Rs 34 lakh and Rs 38 lakh) mainly for Vocera software maintenance, he says. The hospital expects to connect 1.5 million to 2 million calls through the system says McTigue. The hospital has saved another $70,000 (about Rs 31 lakh) by getting rid of its

backup phone system used during power outages. The wireless system replaces a traditional dedicated circuit for that old emergency system. Payback from UC projects doesn’t typically come from savings on networking equipment because those prices are low already, says Lewis of Strategic Intersect. Obviously, meeting virtually can cut travel costs. Setting up call center staff to work from home, but access integrated voice, e-mail and document capabilities frees up physical room at the company for other uses. Softer results, Lewis says, can also be important: By merging voice mail, e-mail and BlackBerry messages, your sales organization may save 30 minutes every day. How valuable is that in productivity and morale?

Try It, They’ll Like It As the experience at Saint Barnabas shows, unifying the communications for lots of people is more beneficial. The more people on the system, the faster and more frictionless their communication. Woods Bagot, an architectural design firm with offices in Dubai, Hong Kong and London, among other cities, has built elaborate buildings worldwide. In 2007, the board at Woods Bagot decided that it wanted the company to operate like one big studio no matter where its clients, engineers and architects lived. Exchanging drawings is key for an architecture firm. But the people who work at Woods Bagot are visual thinkers, so any new communications tools would have to let them see each other says CIO Nectarios Lazaris.

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“Being a design firm, we don’t sit in a boardroom and look at Excel spreadsheets,” he says. “We walk around and interact with people.” Not to mention swap 3-D visualization files that are a couple of gigabytes unto themselves. He tried at least five products, including Microsoft Live Meeting, whose video quality users found poor. Same with Polycom’s Web conferencing product, he says. Lazaris chose Microsoft Office Communicator for desktop video conferencing and collaboration, products from Tandberg for boardroom video conferencing and Blue Coat’s software for secure Web connections. He was impressed that Blue Coat sent engineers — not salespeople — to Woods Bagot during the decision phase and let them stay as long as needed during and after launch. The first test came when a week after the video system went live, the Woods Bagot board opted to try the new toy instead of meeting in person. “It was a nervous time for us,” he says, noting that Blue Coat had people on-site to troubleshoot should something go wrong during the pivotal meeting. The company saved $450,000 (Rs 2 crore) by not flying the 12 board members to Sydney or providing their accommodations for that meeting as well as the remaining ones planned that year, Lazaris says. But it was the experience that sold the board. “When they see their investment in play, that’s a bigger win than trying to show them a PowerPoint that says, ‘I saved you $450,000,’” he says. The technology lets Woods Bagot work with creamof-the-crop designers and

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Who would benefit greatly from UC? 33% Customer Service

31% Operations

28% Executives

28% Sales

10% Marketing

5% Finance

10

5

10

15

20

25

30

35

Source: Orange Business Services: CIO Survey

architects residing anywhere in the world, according to Lazaris, which is a point the firm makes in presentations to potential clients. He says it’s gotten the firm work it might not otherwise have won. “This is not follow-the-sun like in outsourcing. We’re not handing over projects but collaborating in a live environment,” he says. “It’s comforting to them.”

How UC Helps IT The mere thought of coordinating a global supply chain project will send many IT managers quivering under their project management software and spreadsheets. Volvo Group wanted a better way to work across time zones with colleagues who don’t necessarily respond to e-mail — however red-hot urgent it’s marked, says Magnus Holmqvist, director for the IT innovation center at the company. Volvo Group makes Mac trucks and Volvo busses and construction equipment;

Ford now makes the famously rectangular cars. An IT team of 70 people around the world are working on a project to streamline Volvo’s spare-parts supply chain, which reaches 60,000 mechanics in 180 countries. Previously, various team members would meet every 12 weeks to test versions of the new SAP and Red Prairie applications they are building. Early last year, Volvo started virtual test rooms online, using Microsoft Office Communicator and HewlettPackard’s TestDirector quality-check tool running over VoIP. So far, half of the in-person meetings have been eliminated, but plane trips have been reduced by more than half because the technology is so good, Holmqvist says. Even people in the same city sometimes opt to attend meetings virtually rather than trek across town. He declines to say how much money Volvo has

saved in travel costs but says the system has cut carbon dioxide emissions by 630 tons — about the equivalent of taking 250 cars off the road for a year. Don’t underestimate the mileage, so to speak, that you may get from promoting the green ROI of cutting travel, Homqvist says. “People don’t feel too good about flying across the Atlantic when we know we have climate change going on. But people feel much better about eliminating those kinds of meetings,” he says. Linking that idea to costcutting has helped IT get the new technology more eagerly accepted across the company, he adds. “That is real.” Homqvist predicts work quality and productivity will rise because employees will spend less time planning meeting logistics and traveling. “Our perception is that we’re already earlier on these testsuite sessions. Instead of a 12-week cycle, we may reduce the cycle.”

Defining the ROI Some organizations, however, aren’t seeing the returns they expected on UC projects. Or rather, they don’t know how to tie a dollar figure to them, says Henry Dewing, a principal analyst at Forrester Research. The softer benefits of smoother collaboration are hard to quantify and therefore, Dewing says, hard to justify. Especially now. Twenty-four percent of the telecommunications and networking managers surveyed by Forrester say they aren’t getting all the benefits they expected from UC. Another 11 percent said they didn’t know whether they were or not. It’s hard

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Deep Dive | Unified Communications to pin down the dollars generated or saved by faster project completion or product launches, Dewing says. John, the H.B. Fuller CIO, isn’t sure yet what mix of tools will produce the best return. As a $1 billion (about Rs 4,500 crore) company, Fuller’s revenues aren’t huge but its global footprint is. The adhesives company does business in 100 countries, with offices in 36. The pressure is on John to find technological ways to overcome such geographic diversity, he says. But he doesn’t want to jump too quickly. For example, it’s easier to unify communications when PCs and laptops are standardized, in part because tweaking the configurations takes less time. But standardizing hardware is something Fuller has only recently started to do. He doesn’t want to buy more products than he needs. Say a Fuller engineer in China views a document created by a US counterpart and can hover over his colleague’s name with his mouse to automatically dial that person for a PC-based call. How about accessing your computer calendar by voice, over the phone? That’s the kind of razzle dazzle UC application vendors pitch that isn’t available in, say, SharePoint, Microsoft’s document sharing and collaboration system. “It’s fun, fancy, very sexy but is it needed? Would that be a competitive advantage?” John wonders. One part of the calculation, he says, will be trying to predict how much bandwidth different combinations of UC technologies would eat and whether the network costs will be worth the UC benefits.

He hasn’t reached any conclusions yet, but a product like SharePoint might provide enough collaboration for Fuller employees so that a big UC investment isn’t necessary. “That’s what we’re debating.” Loomis, the armored car company, has been installing UC components for two years, expecting to cut telecommunications costs and make some business processes more efficient. But first, the company had to lay some infrastructure. Wayne Sadin, Loomis’ CIO, began contemplating UC a few years ago, when the company was outgrowing its existing phone systems. Loomis had acquired several smaller armored car companies along with their mix of different PBXes. If a branch’s voice mail needed reprogramming, they had to call local providers who would drive over to do the work for $100 to $200 (about Rs 4,500 to Rs 9,000) an hour, Sadin recalls. Loomis

replaced those PBX systems at headquarters and, so far, a little more than 10 percent of its 200 branches with Cisco VoIP. Now those tasks can be done by Loomis’ own IT staff, centrally. “You just call the help desk. It’s 10 minutes of work or even one minute of work,” he says. Not paying PBX vendors for move, add or change orders is a big part of Loomis’ ROI, he adds. In 2007, Loomis finished putting its Microsoft Exchange e-mail system on VoIP. Meanwhile, Microsoft Office C o m m u n i c at o r supplies video conferencing, instant messaging and presence, including a BlackBerry IM client. Employees can forward voice mails as if they were e-mail and they don’t have to log in to separate voice mail, e-mail and BlackBerry messaging systems, Sadin says.

A Unified Mind-Set Melding all of these capabilities takes some forethought and,

Top challenges to an enterprisewide implementation of an integrated system for your IT and telecommunication tools. 1 Complexity of product integration 2 Compatibility with legacy systems 3 Security concerns 4 Lack of best practices and track record 5 No compelling need for new functionality 6 Reliability and trust in VoIP 7 No business case 8 Untested technologies

perhaps, changes to how the IT group works together and with outside vendors. When Pacific Medical Centers put in VoIP to let data and voice traffic run unified on its network, it had to re-arrange some job responsibilities, says consultant Lewis, who was the hospital’s CIO at the time. Network administrators, for example, had to learn to plan for spikes in traffic during peak application usage times as well as for telecommunications. For many companies, separate vendors supply networking gear, servers and software. But as UC takes root, CIOs and IT staff must make sure those different vendors coordinate their work, he says. For example, Loomis planned to upgrade Cisco’s Call Manager administrative suite last spring, in part to more fully integrate Cisco phone handsets with Microsoft’s Office Communications Server. Loomis’ network and server teams planned and tested the upgrade with a local VoIP consultant for two to three months. But the morning of the scheduled upgrade, the teams discovered that the need for a schema change to Microsoft’s Active Directory got overlooked. The upgrade was aborted. Loomis tried again in late August, after the Active Directory tweak was tested and rolled out. “I guess the phoneoriented vendor didn’t realize how carefully our server team guards Active Directory from untested changes,” he says. “The hardest thing about integrating communications is integrating people’s mind-sets.” CIo Kim S. nash is senior editor. Send feedback on this feature to editor@

Source: Orange Business Services: CIO Survey

cio.in

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Deep Dive | Unified Communications

Telepresence is increasingly making travel irrelevant by bringing people in different continents into the same room. Sure, it’s heavy on the purse, but companies that have taken the telepresence route say: saved travel costs equal double-digit ROI.

UNDER THE SAME

ROOF By Esther Shein

W

hen the economy was in a downturn, companies had slashed their travel budgets. And with good reason. But at MetLife, the focus was on employees’ quality of life, keeping them home as much as possible. As a result, the insurance giant made a big push into telepresence technology. This involves an immersive video experience, or technology that provides 76

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high-end, high-definition visual and audio communications in a completely integrated environment. The goal is to make anyone involved in these meetings feel as if they’re actually in the room with the other meeting participants, regardless of where everyone is physically based. To achieve this, MetLife is using Cisco TelePresence in three dedicated conference rooms in Chicago, New

York and New Jersey, and plans to expand to other offices nationally and internationally this year. The company’s not yet sure how many more offices will use the technology. “Instead of having to take people away from their families, you walk down to the room and turn on the lights and have your three-hour meeting and it’s extremely effective,” says Anthony Nugent, executive vice president of employee benefits

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4 sales. He regularly uses telepresence to communicate with his direct reports in Chicago and Somerset, New Jersey, and the clarity is so good that, he says with a laugh, “Everyone jokes around that they can reach a Coke across the table” from one location to another. MetLife has seen a direct cost savings as well as better employee time efficiency and a way to help the company meet its green initiative goal of reducing its carbon emissions by 20 percent this year, says Nugent. The company finished its initial telepresence rollout last May and hasn’t yet determined an exact savings, but Nugent estimates the use of the systems will provide double-digit ROI in travel savings alone.

Step into a telepresence studio and you’ll find the typical conference table along with a couple of very large flatscreen displays. The wide screens fill your peripheral vision, Weinstein says, and “your brain sees that as being in the same room” as someone else. “All of this is a way of tricking your mind and making your brain think you’re actually at an in-person meeting. “These telepresence solutions are about meeting, bonding, teaming and meeting face-to-face without getting on the plane — with five minutes’ notice,” Weinstein adds. “I can conveniently meet with people without sacrificing the experience.”

Bricks That Build Telepresence

The Price Bracket

Depending on how a system is being marketed, there can be a thin line between high-definition videoconferencing and outright telepresence. Some vendors call a single-screen, high-end videoconferencing system telepresence, says Roopam Jain, an analyst at Chicago consultancy Frost & Sullivan. Others define telepresence as a system with multiple screens and customized furniture. Telepresence essentially uses the same basic technology as videoconferencing, says Ira Weinstein, an Atlanta-based senior analyst and partner at Wainhouse Research. “Anyone who says this is not at least in some way related to videoconferencing is selling you something.” The difference, he says, is that the video in telepresence has been stepped up to a level of “experience,” with greater attention to detail, quality, environment and usability. A telepresence system at a minimum must include the codecs (chips that convert data), the compression and decompression devices, the cameras, the displays and what Weinstein calls the telepresence user interface or engine. He says one screen can work fine, depending on the experience a company is looking for.

The use of both high-definition videoconferencing and telepresence is on the rise, despite the high prices. Telepresence systems can range from over $100,000 to $400,000 (about Rs 45 lakh to 180 lakh) for a complete studio setup. There is also a recurring monthly fee on top of that, ranging from a few thousand dollars to upwards of $18,000 (about Rs 8.1 lakh), depending on the level of service wanted and the amount of network bandwidth that is required. In comparison, even high-definition videoconferencing systems cost much less, in the range of $6,000 (about Rs 2.7 lakh). Given the cost disparity, telepresence systems — including Cisco’s CPS 3000, Hewlett-Packard’s Halo, Teliris’ 6G and Polycom’s HDX 7000 and HDX 9004 — tend to be geared toward larger enterprises that have sky-high travel expenses. For their part, high-definition videoconferencing systems are being eyed more frequently by small and midsize businesses and bank branches. Additionally, network provisioning and management costs must be factored in. “Some customer environments already have the excess bandwidth available on their network which they can utilize to

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Defining Characteristics of Telepresence

There is telepresence and then there is telepresence. Its definition can vary from vendor to vendor and the industry has still to agree on a common definition. But there are some distinct features that characterize a truly immersive experience.

Hard Factors Video: The presentation of high quality, true-to-life pictures of the people with whom the user is communicating that are characterized by detailed image, smooth and realistic motion, and accurate color and contrast replication. Audio: Superb sound that is very natural and open in quality, accurately synchronized with the pictures presented, and allows meetings of several hours’ duration without listener fatigue.

Soft Factors Environment: A purpose-built, enclosed meeting environment in which each element has been fully optimized to create the illusion of a face-to-face encounter for all participants. Support: A reliable, hassle-free process for setting up the meeting, and with a strong expectation in the minds of all the participants that the meeting will start on time and will run to its conclusion without problem. Source: Frost & Sullivan

run telepresence,” Jain says. In other cases, she adds, customers would need to acquire a separate overlay IP network to ensure the availability of bandwidth as well as the quality of service required for telepresence. Immersive telepresence was a $350 million (about Rs 1,575 crore) market in 2008, Jain says. She expects this segment to grow to over $1 billion (about Rs 4,500 crore) by 2014. Currently more than 60 percent of all videoconferencing REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

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Deep Dive | Unified Communications systems that are sold are HD-based, says Jain.“The expectation for 2009 was that telepresence was going to take a hit because of the recession and low capex budgets, but we continue to see high growth numbers from the telepresence vendors,” Jain says. “Organizations are looking at technologies that will help them through these times with reduced travel budgets, and they want effective technologies to communicate with global teams. And green initiatives are playing into this too. Concurring with Jain, Weinstein calls telepresence a very fast-growing segment, but says unit sales are in the single digits right now, in the vicinity of 1 percent. The real action, says Weinstein, is in sales of “a typical videoconferencing solution, highdefinition or not, tossing it into a room and enjoying the experience. Telepresence is growing quickly, but it started off small and is not the lion’s share of the market.”

One of the Two, or Both? At MetLife, the three Cisco telepresence systems cost just

Virtual Meetings

under $1 million (about Rs 450 lakh) to install, according to Paul Galvin, VP of enterprise services in the information technology group. Nugent says he uses both videoconferencing and telepresence, depending on what his needs are. Videoconferencing is a better choice for one-on-one situations, such as “if someone is going to do a quick presentation to me,” he says, but telepresence is ideal for meetings where participants are located in multiple offices. Telepresence allows him to have face-to face-contact with a broader group “so it allows me to get to know people better,” Nugent says. He runs an organization with people based all around the country and used to require that his direct reports come to New York for quarterly reviews. Now they can stay in their offices and he can discuss business with a wider range of employees. “Using telepresence allows me to see and virtually interact with more people on my team instead of just my direct reports,’’ says Nugent. “When we use telepresence for meetings, people who

Making the Most of Them

You may think having the ability to see someone who is far away with perfect clarity means you’ll have their undivided attention because they can’t tweet or send e-mails as you’re talking. But that doesn’t necessarily mean you’re engaging them. Mike Song, CEO of Infoexcellence. com, a business productivity firm, offers a few tips to ensure virtual meetings will be productive: Interact every five minutes. Practice what Song calls “five alive,” which means you try to interact with people every five minutes by asking a question. Find a role for everyone. If people read action items or queue up a best practice, they’re much more engaged “because they’re more of a part of the drama,” says Song. Turn the gathering into an action meeting. Suggest doing one of the tasks discussed after the meeting, such as finishing an administrative assignment. “Rather than talking about going to a website and logging in and do something, if people have their laptops, they can go there during the meeting and do the task,” Song says. Be decisive. Whenever you can make a decision in the meeting, people become more engaged, Song says. Explain how the meeting will be conducted, how the decision will be arrived at during the meeting and when it will be made so you can put it on the agenda to achieve greater momentum. Recount decisions made during meeting. Get decisions down on paper (or pixels) afterward to make sure action items are followed up on afterward. — By Esther Shein

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wouldn’t normally be asked to travel to New York have the opportunity to make presentations and get valuable exposure to executive management. It really facilitates face-to-face interaction with a broader cross-section of employees on an economically efficient basis.” MetLife is considering putting a telepresence system at a business processing plant in India to avoid having employees fly over to see it. The company is also looking at ways to utilize telepresence with salespeople across the country. The idea is to have as many people using the system as possible, Nugent says. “Flying out of Boston for a meeting when I was 20 sounded great, but the sales pitch I always give is we’re respecting the time of the employee,” he says. “So if we can give a person the effectiveness of being there and then be home with his family, it’s two wins.”

Virtual Reality The law firm of Lathrop & Gage, LLP, is using both high-definition videoconferencing and telepresence. Employees conduct more than 300 meetings every month at the firm’s Kansas City headquarters. The 600person firm is using the HDX 7000 and HDX 9004 systems from Polycom, and a WAN optimization device from Riverbed Technology in six dedicated rooms in Kansas City. There’s also at least one system at each of its 10 other national offices. “It’s a more meaningful way to conduct [meetings] than over the phone,” says CEO Joel Voran, who uses the system about three times a week. While he still tries to make it to all of the firm’s offices twice a year, Voran says use of the Polycom systems has significantly reduced the need for lawyers to fly to Kansas City. Steelhead, the WAN optimization device, identifies network traffic and gives priority to videoconferencing packets to provide adequate bandwidth and ensure highquality picture and sound. “The clarity has been impressive,” Voran says. “At one of our very first meetings at one of our offices I could see the brand of the beverage someone was drinking and that made the partner sit up and take notice.”

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Deep Dive | Unified Communications “This is a billable-hour profession,” notes Ben Weinberger, CIO at Lathrop & Gage, who adds that one attorney alone can save over $1,500 (about Rs 67, 500) in travel expenses and productivity loss by not having to fly somewhere to attend a meeting. Because many lawyers travel monthly, the Polycom system could represent a savings of more than $30,000 (about Rs 13.5 lakh) in annual travel expenses and productivity loss for a single attorney, he estimates. Weinberger differentiates between high-end videoconferencing and telepresence by the size of the screens. The rooms that have 50-plus-inch screens and run high-quality, highdefinition cameras are utilizing telepresence, he says.

Businesses Like Telepresence

Telepresence is still in the early stages of adoption, but businesses that try it, like it and want more, a new study says. Nearly seven out of 10 businesses polled don’t use telepresence and have no plans to use it, but of those that have it deployed, 60 percent say they plan to spend more to expand it’s coverage in 2010, according to survey results by TheInfoPro. “That speaks well of a technology in the early adopter phase,” says William Trussell, MD, network research for the research firm. About 13 percent of the 230 interviewed for the study say they plan to try telepresence by the end of the first quarter of next year, he says. The main reason businesses give for expanding telepresence use once they have it is that the technology meets business goals, which primarily means it saves on travel costs, Trussell says. When a similar survey was conducted last year, many respondents indicated they were reluctant to invest in telepresence because it called for a significant initial investment they found daunting. In this year’s survey, those who have adopted say the technology fits into strategic plans and it delivers on the savings. Also, vendors have made an effort to introduce lower-end options that require a smaller initial outlay, Trussell says. In its wide-ranging survey, TheInfoPro found that spending on WAN optimization continues to grow, but at a slower rate. The technology has passed into the mainstream with 47 percent of those surveyed saying they use it. Of those who responded to the current survey as well as the last one, fewer now say they have plans to roll out WAN optimization because in the meantime, they have actually rolled it out, he says. In another area, TheInfoPro found that 41 percent of businesses have some form of unified communications deployed, with roughly equal percentages (about 29 percent each) saying they have plans to implement unified communication by the end of the first quarter for 2011 and saying they have no such plans. — By Tim Greene

60%

of businesses plan to spend more on telepresence and expand it’s coverage in 2010.

Rent a System The Taj Hotels Resorts and Palaces company, based in Mumbai, India, owns 77 hotels across five continents. Executives wanted a more efficient and affordable way to collaborate as rapid global expansion is underway. The Taj began utilizing GlobalMeet, a high-performance audio and Web conferencing system from Tata Communications, its parent company, about a year ago for internal meetings, and also rents out its conference rooms to other companies in London, Mumbai, Delhi and Boston. “It was a fantastic opportunity to be the first hotel group in the world to have a pioneering technology for our clients,” says Araceli Rius-Perez, director of sales and marketing at the Taj Hotels, in London. “It is a real-time conversation; you can see every single sign from the other person, no delay, the colors are real and it makes you feel you are having a personal relationship.” The cost for renting a room that can hold up to six people is $400 (about Rs 18,000) for one hour, she says. “We’re not limited to just the other Taj hotels; we can also connect to telepresence

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rooms at companies in India that share the same technology,” with Tata acting as the managed service provider connecting the different systems together. Rius-Perez says the rooms are being booked and have “created a level of interest,” although she doesn’t have usage figures yet. “But as more and more locations come in, we expect the reach will be much greater.” She says there is a Tata IT person on site at each hotel. According to Caesar Pereira, IT manager of Taj Hotels, international travel costs for hotel executives has decreased by 30 percent. Although Taj executives declined to be specific, a spokesman acknowledged that translates into “millions” of dollars saved. Rius-Perez says use of the telepresence rooms so far has been steady, and customers have found the technology to

be unique and easy to use, making for an enjoyable experience, whether for business or personal purposes. “It is one of the few technologies on a global basis that are ‘green,’ which makes customers feel that we and they are ‘doing their bit,’” she says. CIO

Esther Shein is a freelance writer and editor. Send feedback on this feature to editor@cio.in

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The Low-cost

Telepresence

BaT TLe We pit the Polycom QDX 6000 against the LifeSize Express 200 to figure out who delivers the best under a budget.

By Mike heck

P

lenty of small, geographically dispersed teams within large organizations can benefit from telepresence. The same holds true for small and mid-sized businesses. However, the technology may seem impractical for these scenarios, due to its notoriously high price. Whereas higher-end telepresence products do come with a large price tag, some vendors also offer alternatives that deliver a similar, if not identical, face-to-face experience — far more affordably. You won’t get all the bells and whistles of a dedicated telepresence suite, but you may find that these types 80

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of solutions are capable of putting a big dent in your travel budget while boosting productivity. Needless to say, anything that reduces costs is definetely a good thing. I had a chance to test two affordable telepresence solutions, the Polycom QDX 6000 and the LifeSize Express 200. They both offer small, powersaving desktop hardware, television-like remote controls for simple operation, plus quality audio and video. For the lower price, Polycom’s video is standard definition (wide screen), while LifeSize provides true high-definition pictures. On the flip side, Polycom works over

marginal Internet connections and lets you connect more audio and video sources — the main reason we rated it just slightly higher.

Polycom QDX 6000: Best value and Performance at Low Bandwidth The Polycom QDX 6000 does not deliver high-definition video; that’s reserved for the company’s pricier HDX Series. Nevertheless, the system’s wide-screen, DVD-quality (480p) images look great on large monitors. Four more attributes make this system enticing: It’s easy to set up and use; the

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Deep Dive | Unified Communications

then press the Graphics icon on the $3,000 (about Rs 1.35 lakh) street price and enter a secure conference in a remote. The Polycom StereoSurround puts several units within buying reach; few seconds. microphones produced CD-quality it’s based on industry video standards I was impressed with several other audio with very good spatial separation. (H.264, H.263, and H.261), so you can aspects of the QDX 6000. To begin, the There’s automatic gain control and noise connect with partners that might have studio-quality camera’s performance is suppression, which eliminates the need other vendors’ hardware; and Polycom’s amazing, with sharpness and low-light to play with any settings. own Lost Packet Recovery (LPR) color quality found in video cameras that My Internet network speed is pretty algorithm delivers smooth video over could cost $3,000 alone. The 12X optical bad (typically about 384Kbps to slow or congested connections (as low as zoom let me zero in on people or items 512Kbps), so I didn’t have to do anything 256 Kbps). on the desktop; zooming, panning, and special to test Lost Packet Recovery. With I successfully tested a QDX 6000 by tilting (using the remote) was extremely LifeSize and 5 percent packet loss, I saw dialing in to an identical unit at Polycom smooth and fast. broken video and artifacts. However, (a cross-country hop over a relatively The compact remote control is equally Polycom’s QoS maintained clear video slow cable modem). Setup was simple, easy to use because of clearly labeled at the same 5 percent packet loss. LPR is yet there are enough video and audio buttons and on-screen prompts that especially beneficial for home workers or inputs and outputs to accommodate are readable from across a room. For employees connected through wireless media-heavy meetings. example, with one press you can store (or networks. Yet this feature could also In the most basic scenario, you plug recall) up to 100 preset camera positions, prove essential for critical medical in the supplied wide-view camera and select a video source, or view far and applications, such as where medical two wideband microphones, attach near sites side-by-side. specialists would share X-rays or an Internet cable and power, and add Alternately, a free Polycom application patient images. your own wide-screen monitor (I used (People+Content IP) lets you display the Overall, with high-quality video and a Samsung 32-inch 6 Series highscreen of a Windows computer to meeting audio, multiple video inputs and outputs, definition LCD television connected participants without plugging the video and compatibility with other systems, the using component video cables). With output of the PC into the Polycom QDS Polycom QDX 6000 delivered smooth these five connections, the system was 6000 system. and uninterrupted videoconferences. operational in less than five minutes. To use this feature, all I did was load Sure, video on this model is standardFurther, the main system, which can be the software, enter the name of the definition wide screen. But that’s hardly placed on a table top or mounted in a rack conferencing system and password, a negative considering the low price, cabinet, provides outputs for standard simplified installation, and performance 4:3-format televisions and VGA computer at low bandwidths. monitors or projectors. Inputs from computers, other video cameras, VCRs, DVD Polycom lifesize lifesize: players, and audio mixers are QDX 6000 express 200 Express Lane to all accepted. Telepresence The system automatically Ease-of-use 9 9 LifeSize offers four conferencing gets an IP address and leads solutions, but all meet you through the minimum the company’s criteria for Interoperability 9 9 configuration steps to place telepresence: People need a call, which is done from the to appear life-size, in highManagement 9 9 remote control. More extensive definition, full 30-fps video, but system configuration, such as without a high price. Performance 8 98 monitor setup and advanced The product line starts with network settings, is performed LifeSize Express 200 ($5,999 or Ease-of-setup 9 9 from a Web interface. $6,999, about Rs 2.7 lakh to 3.1 From start to finish, I was lakh), which I tested. The codec Value 10 9 conferencing in less than 10 (main unit) is about the size of an minutes. In everyday use, you 8.5-by-11-inch sheet of paper and Overall Score 8�9 8�8 should be able to call others a little over 1 inch thick.

Test Center Scorecard

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LifeSize Team ($10,000, about Rs 4.5 lakh) lets you add an additional HD camera. LifeSize Room ($17,000, about Rs 7.6 lakh) ups video to 1080p quality. And the Conference solutions ($39,000 to $49,900, about Rs 17.5 lakh to Rs 22.4 lakh), with four monitors, compete favorable with the HP, Cisco, and Teliris products — but at one-tenth the cost. Common across all LifeSize products is superb audio and video performance. Video starts at high-definition 1,280by-720-pixel resolution over the open Internet (as long as you have between 1Mbps and 2Mbps bandwidth). Therefore, there’s no incremental networking cost. Full-duplex, high definition audio (with echo cancellation) lets participants have natural conversations. Dual streaming permits sharing of a computer screen or any other digital video source. Unlike high-end solutions, which are sometimes too heavy to be installed in standard conference rooms, all LifeSize systems can be placed inside of any office space, with no special lights or

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For Half

the cost, Polycom makes a compelling argument. other physical requirements. Moreover, standards are extensive (H.261, H.263, H.263+, H.264, and H.239), so LifeSize systems can interoperate with most other standards-compliance conferencing systems available in the market, without a gateway. Hooking up LifeSize Express 200’s remarkably small codec is simple because the backplane is uncluttered, sockets are logically arranged, and the number of cables is kept to a minimum. I made five easy connections: power, network,

camera, HD video monitor (using a single HDMI cable for both audio and video), and microphone pod. The just-released model I tested has a second HDMI output to connect another HD monitor (which is used to display content from a PC). After making a few initial settings, such as creating a room password, via the remote control, I was ready to make my first call. In all, I went from unboxing to making my first call in just about 15 minutes or so. Advanced configuration is done from a Web-based management tool, which is localized for 14 languages. The contextsensitive user interface makes it easy to create address book entries (up to 1,000 local entries are possible), change video or networking settings, and perform other similar tasks. The difference between the two Express 200 models is that the lowerpriced unit has a fixed autofocus camera, while the more expensive system that I tested includes an upgraded PTZ (pantilt-zoom) camera. In quantity, its 10 presets (any combination of pan, tilt, and zoom

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settings) don’t match the 100 you get with the Polycom QDX 6000 but should be ample for most situations. Moreover, LifeSize camera’s autofocus worked quickly and reliably. Compared to the Polycom system, the high-definition camera required more room illumination to produce a picture with natural-looking skin tones and moderate contrast. However, LifeSize pulled ahead in video quality. The true high resolution (even though it’s limited to 720p) made a noticeable difference in picture clarity, especially when zooming in on small objects. People, too, appeared more realistic. The system includes a single highdefinition microphone (a dual MicPod is optional). With full-duplex audio, conversations were natural, with no echo. The LifeSize Express interface that’s displayed on a room monitor is aesthetically pleasing — and performing common tasks actually didn’t require more than one or two steps. For example, the main screen shows what the near camera is viewing along with options to place a call. Once you’re in a call, the solidly constructed handheld remote is used

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to zoom the camera, take control of the far system’s camera, and change video sources. As with the Polycom system, LifeSize also lets you control a lot of conference functions from the Web interface itself. Naturally, HD video requires more bandwidth compared to standard definition. On many tests with my marginal cable modem connection, LifeSize automatically switched to a lower screen resolution to match available Internet speed; there are 50 resolutions for the best experience at any bandwidth. But when I was able to coax enough bandwidth for high-definition video, the experience was definitely very immersive. Next, using the Web interface, I made appropriate directory entries for non-LifeSize systems that used other standards, such as H.323 video phones. LifeSize Express didn’t have any trouble connecting to these systems. On the security side, the Web interface let me disable HTTP, SSH, and Telenet services. Privacy of conferences is handled with H.235 encryption. Overall, LifeSize Express 200 has a lot to love. The diminutive codec is

quick to set up and reduces cable clutter. When there’s adequate bandwidth, picture quality is outstanding. Using and managing the system, including connecting to standards-compliant competitors, requires minimal effort. Yet this all comes with a price: the monetary cost and some of the flexibility you give up compared to Polycom’s QDX 6000 (such as more video and audio inputs). For SMBs with the appropriate network infrastructure and the need for HD video, LifeSize is a wise choice. Yet for half the cost, Polycom makes a compelling argument, especially for organizations with a number of remote offices and home workers. CIO

Mike Heck is a contributing editor of the InfoWorld Test Center. InfoWorld is a sister publication to CIO. Send feedback on this feature to editor@cio.in

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Smart

Strategies Snapshots from the second season of CIO's Leadership Summit — with an HR focus. "2009 was a fantastic year for us." That's a rare feeling. But what's more unusual is the fact that it came from the CIO of a retail giant — one of the unfortunate sectors battered by the economic downturn. And he wasn't alone. The IT head of a manufacturing company also sang the same song. What sets these two gentlemen apart is not their optimism, but the strategies they put in place to ensure that they weren't merely surviving the slowdown but beating it. Today, six months into 2010, things couldn't have been better. Most companies are in a growth phase and this is the perfect time for them to carve strategies for growth. That growth will be driven by people and the second season of the leadership council looked at how IT leaders can drive themselves and their staff to grab growth with both hands. 84

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Learning to Grow L. Selvam George, 5E Serpraise

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Beat Your Inner Devil Krishna Kumar, ISEC

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People Management Prof. Vasanthi Srinivasan, IIM-B

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Insecure Security Risk Management

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Complexity War Infrastructure

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Your Big Worries Storage

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Then, And Now Tech Trends

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Leadership Summit I CXO Vision

Leadership Summit I CXO Vision

learnIng to groW L. Selvam George, chairman and prime servant, 5E Serpraise, talks about the relationship between personal growth and succession planning.

P HoToS BY HARISH

Every one has a set perception of personal growth but I would like you to understand the relationship between personal growth and succession planning: Is one is a subset of the other? Are they contrary to each other or do they complement each other? But before we get there we should get down to basics. Personal Growth: If personal growth is a part of your larger life, why should your organization worry about it? There is a sense of a commonality of approach when it comes to the organization. Therefore, if each person is pursuing individual growth paths, it would be a challenge for the organization to yield that. In order to grow — in the organization or otherwise — you should first determine where you are heading, what your mission or goal in life is. Unfortunately, many of us have not done that. It’s time to define your personal mission and it doesn’t have to be restricted to your personal life. For example, look at American Psychologist Abraham Maslow’s hierarchy of human needs: Level 1 are your basic needs (food, water, and shelter), level 2 is security, level 3 is love and belonging, level 4 is self-esteem and level 5 — your ultimate mission — is self actualization. When you apply these needs to your corporate life, you will understand how you are unconsciously working toward the same needs, only what you expect is different. Take your self-esteem for instance; a big car or a big house would boost it in your personal life. But when it comes to your organization most of us attach a dollar value to self-esteem. It’s not gauged with a pat on your back for good work. That’s why a lot of how you look at your self-esteem depends on your values. You have to identify your value system, then set a goal, create a plan to get to that goal by incorporating

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it in your daily activities. Otherwise, you’ll lose yourself in the muddle of to-do lists, 80 percent of which is reactive in nature. Succession Planning: For any succession planning exercise your first step is to gauge the level of competency of your prospective successors. There are four basic levels: 1.Basic awareness: Understanding how stuff works 2.Contributory: Ability to apply and contribute to the organization 3.Expert Coach: Ability to teach others 4.Leading Edge: Ability to innovate Now to determine your successor, you start with the organization chart which constitutes a description of the position, the competency required to fill in that position and criticality of each competency. The most crucial element, however, is to define the competencies in a behavioral manner so that there is no room for opinion-based judgment. Otherwise, a successor would be determined by his designation: the higher the position of the person in the hierarchy, better the opinion. As CIOs, you have been on both sides, so personal growth and succession planning cannot be contrary to each other. REAL CIO WORLD | j u n e 1 5 , 2 0 1 0

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Leadership LeadershipSummit SummitIICXO CXOVision Vision

Beat Your Inner Devil With over a decade of coaching behind him, tennis coach Krishna Kumar, founder of Kinesis Sports, tells CIOs how to win their inner game. When an archer shoots for nothing, he has all his skill. If he shoots for a brass buckle, he is already nervous. If he shoots for a prize of gold, he goes blind, Or sees two targets – he is out of his mind! His skill has not changed, but the prize divides him. He thinks more of winning than of shooting, And the need to win drains him of power. — Taoist sage, Chuang Tzu There is a defeatist in all of us. Whether you are a star athlete, a corporate leader, or the average Joe, we are all haunted by a voice in our heads telling us we will fail. It’s that voice which is the cause for many of our failures. It’s why often we don’t live up to our potential, or reach new heights only to be dragged back down. That voice is called Self 1. It’s what causes the interference that blocks the concentration and focus needed to excel. Take, for example, a tennis player at match point. The pressure of the moment brings new levels of ‘interference’. Just as the player is about to serve, instead of focusing on the moment, he is thinking of the glory of walking off the court a winner, or of the next match. As a corporate leader about to sign a big deal, you could be disturbed by bouts of doubt, driven by a lack of self-confidence. These are the actions of Self 1. Self 1 is the voice of authority in our heads; the know-it-all that commands Self 2. Self 2 is the real us; the one that embodies the potential we are born with. Self 2 is characterized by relaxed concentration, enjoyment and trust. Beating Self 1: How can you reduce interference? The simple answer is learning to focus; by cutting out the voice of Self 1.

The aim of the inner game is to get to a state of ‘flow’. It is a state in which you are deeply involved in an activity and generate memories of positive experiences, which in turn defeat the negativism of Self 1. 86

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One of the tricks tennis pros, including Rafael Nadal, use, is to call out “printed side, outer cover” as they hit the ball. The words refer to the side of the ball on which the manufacturer’s make is printed on. But the action of having to call out distracts Self 1, and allows Self 2 to focus fully on hitting the ball. There are other ways to hone focus. One is the STOP (step back, think, organize your thoughts, proceed) technique. For instance, at work you’re focused fully on something and the phone rings. The common response is to pick it up. But if you applied the STOP technique, you would stop and ask yourself if it’s worth breaking your focus, make a decision you are in control of and then proceed. The aim of this inner game is to get to a state of ‘flow’. It is a state in which you are deeply involved in an activity and generate memories of positive experiences, which in turn defeat the negativism of Self 1. Here are five steps to achieve flow: •Fit difficulty to skill. Keep a balance between the difficulty of overcoming a challenge and a person’s ability to achieve it. •Focus attention. This will merge awareness and activity. •Forget time. So that you can focus on the moment. •Relax. Having an alert mind and a relaxed body helps. •Training for flow. High focus activities like dance, meditation, music etcetera build your ability to get flow.

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Leadership Summit I CXO Vision

Smart Staffing Vasanthi Srinivasan, associate prof., organizational behavior & HRM, IIM-B, tells you why you should take grooming your next-inline more seriously. The rest of the world seems to believe that India has the manpower for the future. Really? My hunch is that the people that we have in organizations today are not the kind of people we will need 10 years from now. In fact, 50 percent of them will become redundant. Roles and responsibilities of people change with time and this is not something delivered by the HR department, it is something that requires proactive thinking from IT leaders. It is important to know that every bit of change in information processing has an impact on people. But most Indian leaders fail to understand that people are important and hence, they fail to groom them. Also, I haven’t really seen CIOs crafting a deliberate succession plan. Does it then mean that anybody can do a CIO’s job? As leaders, CIOs also face the challenge of striking a balance between standardization and customization of practices that impact people management. The more standardized processes and practices are, the greater the need to customize it to suit concerned individuals. Even demographics will have a significant implication on people management in the next 20 years. If you are to do any kind of a strategic planning exercise without understanding the demographics, it would be a disaster. In a country of over 1.2 billion, we tend to operate from a mindset of abundance. But when you think of the age distribution of the population and the disparities in women joining the workforce, we have less than 15 million employable people. When you get the best lot out of the country, your selection costs are high and your training costs are low. And countries that have experienced demographic transitions show

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that this trend will reverse and companies will have to spend more on training and less on selection. With the semi globalization that we see around us even the plumber’s labor market is global! So, whether we like it or not, people management becomes a core responsibility for organizations. CIOs have to continually deal with a multigenerational and a diverse workforce. This then leads to generational differences in work values as the current HR processes in organizations are driven by an urban mindset whereas earlier it used to focus on Tier 2 and Tier 3 cities. So, understanding this new mix and their constant need for change is important. As people leaders, CIOs will have to look beyond money, retention and even training has the only motivators. If a new entrant is shown a clear growth path and a role planning that looks at a four year perspective then he will get a feeling that he is wanted. Most of the present generation quit either 45 days into a job as they are under the impression that they are easily replaceable. So you must look inwards and answer the question: Why should people stay with you?

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Leadership Summit I CIO Discussions

Insecure Security Cloud computing and security are like antonyms. But it’s hard to ignore the benefits of the cloud. Would you put your data on the cloud?

A

ny self respecting CIO today will admit that corporate espionage is a reality. There is a big bad world out there waiting to hack into your most sensitive data, and it’s your job to protect it. Web security is no longer just about passwords. In this age of high speed mobility and free access, security-as-a-service is slowly gaining acceptance and popularity among many of the more liberal and experimental CIOs. Clearly, the biggest benefit CIOs are seeing is a reduction in complexity. Arun Gupta, group CIO, Shoppers Stop said, “When I moved my mail security set up to a service-based model, I no longer had to worry about upgrades, and licensing and a whole gamut of issues. It was being managed for me.” Daya Prakash, head-IT of LG, brought in another benefit of the cloud: it takes care of itself. “Till about 2008, we hosted our security outside the organization’s premise till we brought it back because of an internal policy change. Personally, I preferred the earlier set up because it automatically took care

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of a lot of issues that I have to deal with today.” Sure there are benefits, but the resistance to the cloud depends on many extraneous factors. The intense speculation around the cloud has revealed that service provider offerings fall short of expectations. Charles Padmakumar, director-IT, Aricent Technologies, pointed out that the current offerings in the cloud do not address an organization’s unique requirements. “The technology around the cloud hasn’t matured enough to handle multiple identities,” he said. To top that, regulation and legal issues remain cloudy. But if regulatory policies are laid down would you still be ready to take the plunge? Srinivas Iyengar, director technology and change management, Aegon Religare, said,“Building confidence is the first step to the cloud.” Cloud adoption trends reveal that CIOs are far more likely to put their e-mail systems on the cloud rather than ERP. However, Partha Sengupta, CIO, head-IT shared services, ITC, said “My e-mail is as critical as my ERP; therefore I won’t be comfortable keeping it outside.” A lot of larger organizations, who’ve already invested in datacenters seem reluctant to go the cloud way. “For large organizations like us, it is very difficult to exist partly in the datacenter and partly on the cloud,” said Joydeep Dutta, CTO, ICICI Securities. Whether you like it or not the cloud is here to stay. As not many organizations have invested on security infrastructure, using it as a service on the cloud will soon start doling out its ROI.

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Complexity War

New technologies are making their presence felt by increasing complexity in the datacenter. Are CIos armed to deal with them?

M

anaging datacenters and their complexities had, till recently, taken a back seat in the CIO priority list. Often relegated as a hygiene factor, the task of datacenter management gets pigeonholed in specific teams that are required to keep the lights on. However, because of the steep increase in the degree of complexities, thanks to new technologies and infrastructure sprawl, datacenter management is again hogging the limelight. In a roundtable titled From Efficiency to Effectiveness, IT leaders agreed unanimously that they are now increasingly focusing on reducing datacenter complexities, arrest server and related infrastructure sprawl and transition from maintaining efficiency to delivering effectiveness. Consolidation of core infrastructure is an ongoing process and various forms of virtualization are being used to increase agility, improve control and management and reduce inefficiencies in datacenters. “We rely heavily on virtualization at our datacenter for the self-service portal that

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we have created for our users who increasingly demand server computing power. The portal built with cloud computing components reduces the complexities involved in server utilization and provisioning,” said Murali Krishna K., CIO, Infosys Technologies. Quite a few CIOs are seriously considering desktop virtualization as well. Sunil Sirohi, VP-IT, NIIT, said, “Despite high costs, desktop virtualization is the route to take.” This idea found resonance with Sumit Gupta, CIO, Fidelity Business Services, who plans to implement desktop virtualization in the next year. However, Atul Luthra, head-IT, PVR, disagreed and stated that if desktop virtualization is not managed properly, it could prove to be a sizeable burden on the datacenter and increase complexities. From the perspective of regulatory compliance and information security while supporting mobile workers, Sarbjit Singh, head-IS, Uninor, felt that application virtualization could be a better option than desktop virtualization, to reduce inefficiencies and increase the effectiveness of a workforce. CIOs agreed that in an effort to bring in effectiveness, one should be careful of buzzwords and approach solutions in a phased manner. Saving costs should not be the only driving factor. Instead, CIOs should aim to achieve computing on-demand at their datacenters where agility and simplification are the key factors.

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Your Big Worries Storage might not be expensive but it’s hard for CIos to ignore the growing data explosion. CIos share what's bothering them.

F

rom a storage perspective, this is possibly the hardest time it’s ever been for a CIO. Unfortunately, things are only going to get worse. The explosion of data is reaching new highs and unless CIOs find smarter strategies, there is every chance that the tidal wave of data could overwhelm their companies. At a recent CIO roundtable on the subject, CIOs from a cross-section of industries shared their pains. “Over the past few years, more and more business processes are being handled using IT. Naturally the amount of data being produced is increasing,” said Bhupendra Pant, head-IT, L&T Ewac Alloys. Srinivas Iyengar, director technology & change management, Aegon Religare Life Insurance, seconded that opinion. “The more you automate, the more data you have. The growth of an organization and the number of steps you automate follows a 1:2 ratio. Which is why virtualization is critical.” At ONGC, VP-IT Rajesh Kaul is facing a similar challenge, but it’s compounded by another. “Any technological decision has a bearing on the power structure within an organization. Some business owners feel that they own their data and when you put that data on a central system, they lose control over it. Storage can be less of a technical issue and more of 90

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a social issue.” Two other IT leaders from customer-centric organizations introduced a third challenge to the group: different types of data. “In our line of work,” said Ravishankar Subramanian, director IT & corporate services, ING VYSYA Life Insurance, “there are three types of data and the complexity of each is different.” These, he said, include data with a short lifecycle, like data pertaining to employees in an industry with high attrition rate. Then there is e-mail data, and finally, there is the insurance policy information that needs to be kept for up to 35 years. Some of the answers from the group came from looking ahead. “We are looking at storage from the perspective of the next four to five years. And we’re planning for a central, mega storage system,” said Pant. But Kaul summed up the mood when he said, “Change is coming. It is gradual, but we are moving forward.” Brought to you by:

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Leadership Summit I CIO Discussions

Then, And Now The first six months of 2010 have been more than promising and IT leaders are setting a trend by grabbing new opportunities.

W

hat exactly were you doing at this time of the year in 2009? You were probably canceling projects, renegotiating with your vendor, handing out pink slips or fighting security threats. But those days are thankfully a thing of the past. The clouds of the slowdown have receded and 2010 has arrived with a new wave of opportunities. Already six months into the year, organizations and CIOs are finding more and more money stacked in their lockers. This means, more investments and more experiments. But other than that what has the year really brought? What strategies are organizations looking at and what are the new technologies worth investing in? Arun Gupta, group CIO, Shoppers Stop, said, “We are in a growth phase and are setting up a small organization to look at new technologies, so that we can do a POC and then show business if deploying that technology will make sense or not. Also, mobile technologies are something we are interested in.” Gupta does admit though, that despite growth, cost still remains an important factor. But for Sunil Sirohi, VP-IT, NIIT, lower budgets means more innovation. “Cost has been a prime factor. But lower budgets have ensured that we innovate. Shrinking budgets forced us to think out-of-the-box and today we are reaping benefits,” he said. Arvind Saksena, group CIO, Consilium Software, felt that IT spending is now moving towards collaborative tools. “Collaboration is going to be an imperative, going forward. I also think organizations are now

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seriously looking at leveraging cloud computing as people are increasingly beginning to get a feel of the cloud.” But what about strategies like outsourcing? Ramakrishna Subramanian, chief information and technology officer, TAFE, said, “We are a huge team of around 50-60 people and we are well-aligned with the business. We are not thinking about outsourcing at all.” Outsourcing or no, SLAs are always a pain-point. “If there’s a breach, what will happen to business? Who is responsible for downtime? SLAs completely ignore that fact," said Charles Padmakumar, director-IT, Aricent Technologies.

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Y O U R L i F e & C A r e e r PA T H

Cut Out for Consulting? BY KIM S. NASH

thrive

Consulting can provide a lucrative alternative career. But it's not the right fit for all CIOs.

C A r e e r Perhaps you've seen the writing on the wall; you can’t remain a CIO forever. Maybe you're tired of corporate life and want to ditch ���The Man’ and become your own boss. But if you are considering becoming a consultant, listen up: Some CIOs aren't cut out for the job. If you have power-hungry tendencies, for example, you may want to keep your day job. Consulting differs from being a career CIO in that a consultant doesn't rule an IT department. He or she can offer advice, but not issue directives, says James Sutter, senior partner at IT management firm The Peer Consulting Group, and former CIO of Xerox and Rockwell. In the absence of hierarchical authority, influence and persuasion are now important parts of the job, says Sutter. You need to get things done, much like a CIO does, but you may have to emphasize different skills than you've used in the past. And if you ask those who've done it, they'll tell you that the transition won't necessarily be easy.

IllUST RATIoN BY M M SHANIT H

Market Yourself Consulting involves marketing that may not come naturally to everyone, especially when the product you're selling is yourself, says Jesus Arriaga, president and CIO of CIO Strategic Solutions, a consulting firm he started three years ago after CIO stints at Keystone Automotive

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and Spirent Communications. Arriaga has found a unique way to occupy his prospective clients' mind-space. He doesn't do much formal marketing by using brochures or advertising, he says. Rather, he does "a lot of networking, talking to a lot of people all the time." To those who aren't ready for that, he advises signing on with an established IT consultancy with its own marketing function. "Then you can slowly transition into managing your own company and those important relationships."

Consulting is less risky than starting a business. However, your ability to build relationships remains critical.

Sell Yourself, Smartly Be smart when you frame your pitch. "If you consider yourself an innovator and you need financial investment to make things happen, that won't sell now. But if you're a great cost-cutter, that's a skill set to sell," she says. Fashion your résumé to emphasize diverse company and industry experiences, she says, plus past consulting engagements. Finally, remember to adjust your attitude. As a consultant, you're considered a vendor now, Heller adds. But you do have an advantage: As a former CIO, you can align emotionally with the client because you've hired consultants before and know exactly what bugs IT leaders about these outsiders, she says. That may help you win engagements. You want to be clear you're not there to rack up billable hours, she says, but to get a job done. CIO

Help ! How can I get recruiters to call me with great jobs? Mark Polansky, Senior Client Partner & Managing Director I.T. Officers Practice, KORN/FERRY INTERNATIONAL

Always try to target a single recruiter within a particular firm rather than throw out a wide net to many recruiters at a firm. Building a personal relationship with a recruiter is not your goal. Your goal is to be recognized by a recruiter as a standout and highly qualified candidate. Do your homework and identify the recruiter who is most appropriate for your background. If possible, network through someone who knows that recruiter and can make a personal introduction. Cold calls don't usually yield the best results. Follow up with a brief e-mail with your résumé attached. Always be transparent and honest when you're making claims in your résumé. They will check you out and will not want to represent folks who seem to have exaggerated or expanded upon their experiences. Sometimes you can stand out by sharing information, market knowledge or contacts with recruiters. This allows you to maintain contact with a group of recruiters you may be targeting while showing them that you know what's happening within your industry. By being helpful, you stay top of mind when good jobs come along. Never ignore a recruiter's call — you may need that connection some day. Even if you are not interested in hearing about new opportunities, be responsive and offer referrals whenever possible. Do not feign interest in a job simply to get face time with a recruiter. You will not be taken seriously the next time a potential job comes up. You also do not want to be too narrow in your job search focus. You may inadvertently limit your options. CIO

thrive

Building Bonds When Rick Carney left his CTO post at Barr Pharmaceuticals, he joined Melillo Consulting, an existing firm where he is vice president and general manager. Taking this route is definitely less risky than starting a business, Carney says, since you have the benefit of marketing, a sales force and existing customer relationships. However, your ability to build relationships always remains critical. Transforming yourself from a fulltime, on-staff CIO into a consultant can unlock career options — especially at a time when budgets are down. According to Martha Heller, a managing director at executive search firm ZRG Partners and CIO columnist, not many small or midsize companies are hiring CIOs but they are willing to hire good consultants for high-level IT strategy and project work.

threeminute coach

Mark Polansky has worked in the field of executive search for more than 25 years, extensively recruiting CIOs, CTOs Send feedback on this feature to editor@cio.in.

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and other senior IT leaders.

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Insights from Members of the CIO Governing Council

V.V.R Babu

The group CIO of ITC Infotech, Babu has been working with ITC and its group companies in the Software division since 1979. In his previous assignments at ITC Infotech, Babu set up strategic business units, created a focused account management structure and robust project management practices to ensure timely delivery of IT services to customers..He is a senior member of the IT Committee in CII, TiE Core Committee, and Computer Society of India.

Business for Society’s Sake

Photos by Srivatsa Sh an dilya

ITC’s CIO V.V.R. Babu, tells you how CSR initiatives can serve both the society and your business. CSR India is a nation that is engulfed with challenges of endemic poverty and income inequities which give rise to social unrest. According to World Bank estimates, more than 800 million people in India live on less than $2 (about Rs 90) per day. That’s not it. The country is languishing with a progressively degrading environment and unequal social structures. But these are not just social concerns because they affect how we do business. Businesses cannot expect to grow in societies that are unstable and it is extremely important to look at sustainability. Businesses are an integral part of society and have inherent strengths that enable them to contribute to inclusive development. They are well positioned to craft strategies that support livelihood creation. They are also equipped with managerial and financial resources that can bring about social development initiatives that improve the lives of people living on the margins. I take pride in being part of an enterprise that has been an exemplar in sustainability and corporate citizenship. ITC’s large scale corporate social responsibility (CSR) initiatives are inspired by the opportunity to make a meaningful difference. Our initiatives find expression in two major areas. The first set relates to initiatives that are integrated and embedded into our business operations. The e-Choupal project — which I helped implement — is today the world’s largest rural digital infrastructure. But it’s not just that. It is also an example of a 124

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business-embedded social initiative. I believe that CSR should not be seen just as a marketing tool. It needs to be embedded in one’s business strategies. The e-choupal model has provided the advantages of an efficient supply chain and identity preserved procurement to ITC’s packaged foods business, but in the process, it has also created an inclusive model of business that empowers small and marginal farmers by giving them the power of digital connectivity and access to markets. It gives me immense satisfaction that this initiative has empowered more than four million farmers in our country. The second set relates to CSR activities around each ITC Unit, focused on creating sustainable livelihoods. Working with local communities and NGOs, ITC has built a large portfolio of projects that span different areas such as watershed development, animal husbandry, supplementary education, women’s empowerment

CSR should not be seen as just a marketing tool. It needs to be embedded in one’s business strategies. and so on. These initiatives, which transform rural landscapes into vibrant economic organizations, focus on empowering communities to conserve and manage their natural resources, create sustainable farm livelihoods, and improve social infrastructure especially in areas where it impacts women and children. Our chairman Y. C. Deveshwar always tells us that committed corporates create societal value by serving their consumers through competitively superior value propositions, by protecting and nurturing the environment. So, I believe that businesses can, and must, contribute to a larger societal purpose by creating corporate strategies. CIO

As told to Anup Varier Send feedback on this column to editor@cio.in

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CIO June 15 2010 Issue