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From The Editor-in-Chief

We are the Pilgrims, master; we shall go Always a little further: it may be Beyond the last blue mountain barred with snow, Across that angry or that glimmering sea. — ‘The Golden Road to Samarkand’ — James Elroy Flecker

Four years of CIO & IDG in India coincided with the fourth slowdown that I’ve seen

From Buzzword to Benefit Onward. Ever Onward.

in my career. While, each of them has been different in impact, in duration, and in the path to recovery, they have engendered in me an appreciation for the cyclical nature of things, be it the economy or the climate. After all, winter however bitter, always turns to spring. While we eased into the downturn in The need in the new year late 2008, the recovery has been gathering is for actual, tangible proof momentum each passing day. From the that IT has grown beyond trickle down effect of the Sixth Central being a support function. Pay Commission award to the infusion of funds due to the general elections earlier this year, we seem to have pulled through the worst. It’s little wonder then that many CIOs that I met at the CIO 2010: The Year Ahead Symposium are upbeat about prospects for the next year. However, the exuberance is tempered with some caution at this stage. That, I suspect, is the lasting effect of the blow that our collective psyche took on discovering that the gusts powering the sails of growth could dwindle to a breeze. Is the next year going to be risky? You bet it is. Business is about risk. It is about taking chances. It is about pushing your luck. It is about making causes, and about reaping their effects. And, above all, it is about making good; about getting back on to a growth track. The real challenge begins now as we set out to move technology beyond buzzwords to business benefits. Because it’s not enough to have theoretical proof; the need in the new year is for actual, tangible proof that IT has grown beyond being a support function. For that, it’ll be essential, nay mandatory, for all of us to walk in the shoes of our customers, our peers and our end-users. The last year has been about discovering how low the economy could fall before it bounced back. Let us see, in 2010, how high we can rise. Here’s wishing you a year filled with good fortune and happiness. Auf uns!

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

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cont nten ntt 2010 Advantage DECEMBER 15 2009- | -VOL/5- | -ISSUE/2

CIO The time for action is now. As chances go, the upturn is hard to beat as an opportunity to prove what IT can do.

We ask five gurus what they see in the year ahead.

REFORM TO REBOUND | 42 Bibek Debroy, professor at the International Management Institute and research professor at the Centre for Policy Research, says only powerful reforms will get India to a 6-7 percent growth rate in two to three years. You might be feeling good, but it isn't time to party yet. Interview by Priyanka

SAVE YOUR STAFF | 45 Kumar Parkala, KPMG’s executive director and head IT Advisory, sums up the CIO agenda for 2010: help launch organizations on a growth path.

26

The Year ahead

COVER STORY ThE BETTER CIO 2010| 26 You set yourselves three priorities for 2010. To help you, we look at the technologies that will help you meet those goals — and the technologies that will be important beyond the year.

COVER: PHOTOS BY SRIVATSA SH AN DIlYA

ExPERT SPEAK | 41

Interview by Kanika Goswami

UP BUT NOT YET ABOUT | 47 We’re entering a new economic phase but your threshold for risk is still stuck in the middle of 2009, warns Kapil Dev Singh, IDC's India country manager. Interview by Deepti Ahuja Balani

BACK ON TRACK | 50 The Indian economy is beginning to dust the slowdown off. But how quickly will it get back on the saddle? Aroop Zutshi, global president and MD of Frost & Sullivan has some ideas.

Feature by Team CIO

Interview by Kanika Goswami

IT MANAGEMENT ERP: 2010 AND BEYOND| 72

ThE NEW VALUE OF SECURITY | 53 The future of enterprise security will be value-driven. Sivarama Krishnan, executive director and partner, Performance Improvement, PwC, tells you what exactly that is.

After four decades, billions of dollars, and many huge failures, ERP has become the software that no business can live without. Here’s what’s at stake and what is and isn’t likely to happen in the future.

Interview by Gunjan Trivedi

Feature by Thomas Wailgum more » 4

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content

(cont.) departments Trendlines | 9 Innovation | Keeping an Eye Quick Take | Vikram Idnani on Customer Connect Voices | What Tops Your Wish List in 2010? IT Management | From 2010 to 2015 Devices | What We’ll Miss (and Won’t) in 2010 Opinion Poll | Top Ten Technologies for Next Year Business Issues | Seven Deadly Tech Sins Survey | Putting Customers First Technology | A New Brain Wave Mobile | To Transfer Money Press 2012 Alternative Views | Is Storage Virtualization Worth It?

Thrive | 97 Social Networking | Expand Your Brand

Feature by Kristin Burnham

Mentor | 100 Work-life Balance| Find Balance Column by T.K. Subramanian

From the Editor-in-Chief | 2 From Buzzword to Benefit

By Vijay Ramachandran

NOW ONLINE

64 Case Study Line of Control | 64 Since 1853, the Indian Railways, one of the world’s largest and busiest rail networks, plotted train traffic across the country with a pen and paper. Crammed with inefficient and inaccurate data, the railways realized that it needed to automate its processes. Here’s what happened when IT took control.

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

22

Feature by Gunjan Trivedi

Column Fixed Price is Not Right | 22 Many companies buy CRM consulting services the way they buy hardware: Fixed price. What if this just isn’t the right model, no matter how good a price you get? Column by David Taber 6

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12/14/2009 4:31:37 PM


GoVerninG BoArd PUBLISHER louis D’Mello EDITOR IA L EDITOR-IN-CHIEF Vijay Ramachandran ASSISTANT EDITORS Gunjan Trivedi, Kanika Goswami CHIEF COPY EDITOR Sunil Shah COPY EDITOR Shardha Subramanian SENIOR CORRESPONDENT Kailas Shastry CORRESPONDENT Deepti Balani Sneha Jha TRAINEE JOURNALISTS Priyanka Varsha Chidambaram PRODUCT MANAGER ONLINE Sreekant Sastry SR. ENGINEER ONLINE Anil Kumar B.S. D ESIGN & PRODUCTION LEAD DESIGNERS Girish A V Vinoj KN SENIOR DESIGNERS Jithesh CC, Sani Mani DESIGNER MM Shanith TRAINEE DESIGNER Amrita C Roy PHOTOGRAPHY Srivatsa Shandilya PRODUCTION MANAGER T K Karunakaran DY. PRODUCTION MANAGER Jayadeep T K EV ENTS & AUDIENCE DEVELOPMENT VP Rupesh Sreedharan SENIOR MANAGER Chetan Acharya MANAGERS Ajay Adhikari Pooja Chhabra ASSISTANT MANAGER Erica Michelle Gopalakrishnan, Sachin Arora MARKETING & SA L ES (NATIONA L) VP SALES & MARKETING VP CLIENT MARKETING VP SALES AGM SALES SR. MANAGER CLIENT MARKETING SENIOR MANAGER BRAND ASST. MANAGER MARKETING ASSOCIATE BRAND ASSOCIATE MARKETING AD SALES CO-ORDINATORS

Sudhir Kamath Alok Anand Sudhir Argula Parul Singh Rohan Chandhok Siddharth Singh Sukanya Saikia Disha Gaur Dinesh P Hema Saravanan C.M. Nadira Hyder

R EGIONA L SA L ES BANGALORE Ajay S. Chakravarthy Arun Kumar, Kumarjeet Bhattacharjee Manoj D, Sheetal Violet Singh DELHI Aveek Bhose, Mohit Dhingra Prachi Gupta, Punit Mishra Rajesh Kumar Sharma MUMBAI Dipti Mahendra Modi Hafeez Shaikh, Pooja Nayak Rajesh Punjabi

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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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 DONALD PATRA CIO, HSBC India DR. JAI MENON Director Technology & Customer Service, Bharti Airtel & Group CIO, Bharti Enterprises 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 PRAVIR VOHRA Group CTO, ICICI Bank RAJESH UPPAL Chief General Manager IT & Distribution, Maruti Udyog

AdVerTiSer indeX

Alcatel Lucent India Ltd

17

BmC Software

49

Checkpoint

83

D-Link India Ltd

13

Elitecore Technologies Ltd

82

Emerson Networks Power (I) Pvt Ltd

19

Epson

1

Extreme Networks

75

Genesys

20 & 21

HP PSG

23

Huawei Symantec

5

IBm India Ltd

IBC

Interface Connectronics Pvt Ltd

33

Krone Communications Ltd

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miti Solutions Pvt Ltd

86 &99

Oracle RSA

3 39, 66,67,68 &69

SAS Institue (I) Pvt Ltd

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SANJAY JAIN CIO, WNS Global Services

Sigma Byte

SHREEKANT MOKASHI Chief-IT, Tata Steel

Symantec Software Solutions Pvt Ltd

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

25 & 87 11

Tata Communications

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Tulip Telecom Ltd

BC

Verizon Business

IFC, 58 & 59

Wipro Infotech

30

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

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

Corrigendum In our November 15, 2009 issue, Sundeep Khisty’s name and designation should have read Green Practice leader, HP Enterprise Services, Asia Pacific Japan.

MUMBAI 201, Madhava Bandra Kurla Complex Bandra (E) Mumbai 400 051 Ph: 3068 5000 Fax: 022 3068 5023

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uneXPecTed

IllUSTrATIOn By MM SHAnITH

KeePING AN eYe i n n o v a t i o n An Indian eye hospital is piloting software that will push retinal images collected from patients in remote locations to doctors' iPhones. Doctors can then quickly send their diagnosis and recommendations from their iPhones, said Anand Vinekar, project coordinator and pediatric retinal surgeon at the Narayana Nethralaya Postgraduate Institute of Ophthalmology in Bangalore. The hospital plans to use the technology to test infants for a potentially blinding condition called Retinopathy of Prematurity (ROP), besides other conditions such as ocular cancers. As part of its village outreach program in rural areas, two years ago the hospital started sending qualified doctors to villages and equipped them with instruments used to examine the eye. To improve its reach in rural and semi-urban areas, the hospital trained people to take eye images using a wide-angle retinal digital camera. These

people, who were not doctors or technicians, were also trained to make a preliminary diagnosis, Vinekar said. Once the hospital started using images for a diagnosis, the doctors did not have to travel to the rural locations.Images were transferred from the camera to a computer, and then e-mailed to doctors in Bangalore. Some months ago, the hospital installed a system that allowed images to be uploaded to a server using the Internet, and a doctor could access the images from a computer. Under the new system, images from the computer are uploaded to a server using the Internet, and the software then pushes the images to the doctor's iPhone. Doctors from other hospitals in other locations can also download the application to their iPhones, and collaborate in the diagnosis, said Sham

Banerji, CEO of i2i TeleSolutions, the company that developed the software, and also hosts the application and the images. Doctors can give their diagnosis, and send their reports from their mobile phones to the server, and from there on through the Internet to the patient's site. The ability to create PDF reports on the iPhone also helps doctors to create diagnostic reports and upload them on the Internet, Vinekar said. —By John Ribeiro

QuicK TaKe

Vikram Idnani on Customer Connect According to the State of the CIO 2009 survey, customer service took the last spot in the list of business processes that CIOs were improving. But Vikram Idnani, Head-IT, Tata Trent, is determined not to be a statistic. He spoke to Priyanka about the various initiatives he has taken in his organization to connect with his customers. Here’s what he said:

cu st o M e r s e rv i c e

How do you get constant information from your customers? We have proactive policies, for example, customer feedback within a store, customer satisfaction surveys, and specific promotions applicable only to loyal customers who are then awarded. We improvise with different mechanisms to get inputs from customers. How do you incorporate customer feedback in decision making? Customer information is vital to make decisions. We are able to understand trends like their spending habits, the

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person who always shops for the family etcetera. Accordingly, we take decisions to improve our service levels or change our product. What are the loyalty programs initiated in your company and what are their benefits? Our loyalty program focuses on targeting specific customers with specific types of promotions. The West Side loyalty program has been one of the most successful programs in the market. Currently being used only at West Side, it has ensured accuracy of information, availability of information in real time and fraud protection. Considering retail was one of the worst hit sectors, how did you tackle the slowdown? We took a step back to introspect. During the downturn, we focused our energies on improving our existing internal processes and on making them robust.

Vikram Idnani REAL CIO WORLD | D e c e m b e r 1 5 , 2 0 0 9

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12/13/2009 12:51:17 AM


What Tops Your Wish List in 2010? As we pull the curtains on 2009, marking the end of the despair brought in by the economic recession, we usher in a new year. To find out what they hoped to see in the 2010, Deepti Ahuja Balani spoke to CIOs. Here's what some of them are looking forward to.

IT M a n a g e m e n t

“I would like to see more virtualization and green IT for easy manageability and to lower operational costs.” trendlines

T. Jaganathan Director-Technology, Ajuba Solutions India

“I certainly hope we will be able to create an enterprisewide secure environment, instead of protecting just data, infrastructure and people.” K.T. Rajan, Director-Operations, IS & Projects, Allergan India

“I wish hardware vendors would provide bundled standard software so that we don’t have to put in so much more effort to install software. It is a challenge for us in remote locations.”

Karan B. Singh, Head-IT, BSES

Lend Your

Voice

Write to editor@cio.in 10

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From 2010 to 2015 T e c h n o l o g y The top trends affecting technology infrastructure over the next five years can largely be summed up as a list representing where IT and users are battling for control over technology. IT is poised to strike back, with technologies such as client virtualization. Centrally managed virtualized clients introduce a new approach: one of "let's give them what they actually need, not what they want," says David Cappuccio, chief of research for the Infrastructure teams at Gartner. Client virtualization was just the first trend on the list. Gartner's other trends are ranked from those that are well under way to the more emerging ones further down. Here are the others: The amount of enterprise data will grow about 650 percent over the next five years, the vast majority of it unstructured, or not included in any database. Cutting that growth will mean adopting methodologies such as data de-duplication and automated tiering of storage. Green IT is about efficiency and that is prompting the business to ask how IT runs its shop and what they're spending on energy. A closely-related trend to green IT is what's called complex resource tracking, which gives you the tools to monitor energy consumption as well as automate energy usage to optimal levels. Companies are beginning to realize that if you don't allow workplace use of Wikis, Twitter, or Facebook, to communicate for business people are going to use it anyways, they’ll find a way around it. Companies are trying to unify as much of their communications as possible, tying in Web communications, social networking and other platforms "so we have some control with what's going on," Cappuccio said. More and more people are utilizing applications for mobile and wireless applications that are either free or modestly priced. The energy cost of supporting a server will exceed the cost of the server in three years. It is helping to usher a buildwhat-you-need approach in the datacenter. Blades are leading a move to componentized servers: plug-and-play the resources as needed, storage, processors, I/O, etcetera. Mashups created by users are also something that IT has to manage. "If we aren't careful, these things are going to take off like crazy," Cappuccio warned. Cloud computing, particularly a private cloud separates users from the technology decision because it turns IT into a set of services. "If you do that, it frees up IT to make decisions on what technology to buy, when to buy," Cappuccio said. The public cloud will grow slower than the private cloud, he said.

—By Patrick Thibodeau

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What We'll Miss (and Won't) in 2010

trendlines

devices The times, they are a-changin. But change isn't always good. Here are seven tech items whose days are numbered, and we're going to miss them all — though some more than others — when they're gone. MP3 Players: Sure, we'll still have portable devices that can play MP3s, but a few years from now they'll all be cell phones. Even the once-mighty iPod is no longer a growth product for Apple; in fact, iPod sales are now declining in doubledigit percentages. It probably won't be long before Apple gives up on the thing, what with the far fatter profit margin that the iPhone offers, but consumers will lose out in the bargain. Optical Drives: Suppose that you need to install some software on several computers. You could download a copy from an FTP site, copy it to a thumb drive, and then carry that thumb drive from one computer to another, pausing at each station for drivers to install and for Windows to recognize the thing. Or you could grab a labeled, archivable application CD, pop it into each computer's optical drive, and handle the task that way (assuming that they have such a drive). And don't get us started on the agony of trying to watch a movie on your laptop without having a drive on your laptop. The Mouse: A funny thing happened this year. Computer manufacturers got it into their heads that people would rather lift their entire arm up off the table and draw on their screen with their fingers instead of using a touchpad or mouse as they have for the past 25 years. Blame the iPhone, of course: Multi-touch went from the next big thing to the big thing right now, all because of that blasted device — and despite the fact that a phone in your hand and a mammoth laptop on your desk has virtually nothing in common. Digital Cameras: There's nothing quite like receiving via MMS a grainy, underlit, out-of-focus, badly framed shot of your niece. Yet more and more of the phone-clutching populace is abandoning

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The twilight of Microsoft Windows is approaching, as the cloud takes over more and more. We'll miss you, Clippy! stand-alone digital cameras as the device of choice for snapping occasional photos; instead they're turning to their cell phones, which are always at the ready and are "good enough" for sending a snap to the rents or posting something pithy to their blogs. Microsoft Windows: From the overthe-top marketing campaigns to the soothing default backgrounds to the dulcet startup sounds, what's not to like about Microsoft Windows? Mock it all you want, but Windows has served lots of people reasonably well over the years. Now the twilight of the OS is approaching, as the cloud consumes more and more of what we used to need our computers to do. From Webmail to hosted apps, online conveniences have rendered full-fledged computers unnecessary for many former users, who can get by with a Linux netbook or a Mac. We'll miss you most of all, Clippy!

MySpace: We hasten to say: MySpace is horrible. We certainly won't miss the gaudy wasteland that fills 99 percent of MySpace space. Rather, we're going to miss the original idea underlying this social network: a place where in theory you might go to find out where your favorite band is playing, listen to their latest tracks, hear a comic try out a few new jokes, and maybe keep in touch with friends. Instead, MySpace has become a dying magnet for spammers, clueless preteens, and attention addicts, none of whom are in on the joke. Good riddance. Good Manners: So there you are, pouring your soul out to your best friend over a cocktail, and just when you hit the meat of your story, he reaches into his pocket, pulls out his cell phone, and starts looking through his text messages and e-mail. Sure, he's nodding along while you relate your tragic tale, but really! Being connected by technology means never being out of touch with anyone else, and the rise of texting makes carrying on multiple conversations less obvious than it would be via voice. That doesn't make it right of course, but you can keep talking while I check this message. —By Christopher Null

Cloud computing 60%

I.T.’s top10 What technology decision makers are actively researching now in preparation for next year.

Business intelligence 51% Business process management 51% Collaboration tools 50% Wikis, blogs, social networking 49% Desktop virtualization 48% Enterprise architecture 48% Web services/ SaaS 48% Content/ document management 47% Open Source 47% Source: CIO research

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PUTTING CustOMERs FIRst

7 deadly Tech Sins

IllUST rATIOn By MM SHAnIT H

trendlines

B u s i n e s s i s s u e s Here are the seven deadliest sins IT leaders can commit. Lust for New Technology: The most damaging unbridled desire in the IT workplace might just be gadget lust. The most common expression of lust in IT is the endless pursuit of new technology for the sole purpose of having new technology, notes James J. DeLuccia, author of IT Compliance and Controls."If you're going after new technology, it has to be really practical and necessary to the business. Lusting after technology for the sake of desire is a costly sin," he says. Information Gluttony: Not as expensive as lust but more common is the sin of hoarding information. "I worked with one IT manager who was fine with letting other people handle servers and periphery switches, but he controlled the core of the network and didn't want anyone else to know how it worked. He liked being the go-to guy for this," says Josh Stephens, head geek at SolarWinds, a network management software provider. Avarice as an Action Item: When an IT project fails, more often than not, it is due to arrogance, says Michael Krigsman, CEO of Asuret, a consultancy that specializes in reducing IT project failures. The problem, says Krigsman, is that naive or arrogant customers who craft hopelessly unrealistic RFPs (requests for proposals); system integrators and consultants who promise to deliver what they know is impossible; and technology providers caught in the middle. Slothful Approaches to IT: "IT people have a fundamental belief that they're not doing anything wrong," says Tony Fisher, CEO of dataquality specialists DataFlux. "That's because they lack an understanding of the business at large. A CIO thinks he's reading all the right journals, and executing everything according to specs that have everything to do with technology but little to do with the business." In-house Envy: People stop sharing data and instead spend most of their time protecting their own turf and envying the status or budgets of others. The result? Duplication, lack of transparency, and culturedestroying politics that can cripple an organization, he says. Wrath Management: "I think CIO wrath is probably the most damaging of the sins," says Marcelo Schnettler. "They demoralize the IT department leading to finger-pointing and a lack of collaboration. "Inexperienced or immature IT leaders throw temper tantrums when they're forced to admit that computers are not magic and that they should have listened to steadier heads when they had the chance. Pride Creep: Pride manifests as sin when it blinds IT leaders into thinking they know everything they need to know. "Pride implies a state of completion and achievement," says DeLuccia. "It exposes an organization more to competitors and nastier threats than any other form of sin." —By Dan Tynan

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s u r v e y Keeping customers satisfied, and not cutting costs, is the top priority of Asian contact centers despite the economic uncertainty that swept the globe last year, data from a benchmarking report by IT services provider Datacraft showed. At least 22.5 percent of companies surveyed by the firm prioritize growing value with existing customers as their most important commercial driver, with cost cutting only ranking fourth, with only 12.5 percent of respondents saying it is their top priority. "Asian contact centers are not much focused on cost savings, but on strategic decisions aimed at keeping customers," said nagi Kasinadhuni, general manager, converged communications and customer interactive solutions, Datacraft. With companies struggling to stifle the impact of the recent crisis, Kasinadhuni said most firms are on their toes to keep their current base of customers. "Companies can't afford to lose customers, and call centers are realizing the need to focus on keeping the customers satisfied," he explained. Because of this, most companies are putting a premium on improving the quality of their service (38.4 percent) and optimizing their processes (11.7 percent) to ensure the call process is shorter. rationalizing platforms (25 percent) and unifying customers' view towards a single, accessible channel (38.7 percent) also came out as an emerging trend in keeping customers satisfied. But customers are hardly the only set of people that contact center managers need to carefully handle in order to ensure quality of operations. Agents who interact with customers, according to Kasinadhuni, are also key ingredients towards success in the industry. "Call center operators need to look into increasing their staff's salaries, which remains at the lowest margin, comprising only 54.4 percent of operational budget, compared to the UK's 69 percent," Kasinadhuni suggested. Similarly, staff retention sits surprisingly at the bottom of contact center priority issues, with only 3.6 percent of the respondents ranking it as a top issue. In the Datacraft Benchmarking Survey 2009, 554 respondents from over 36 countries were surveyed about the working conditions and operational procedures in their respective contact centers.

—By John Mark V. Tuazon VOl/5 | ISSUE/02

12/13/2009 12:51:21 AM


A new Brain Wave by 2020

trendlines

technology By the year 2020, you won't need a keyboard and mouse to control your computer, say Intel researchers. Instead, users will open documents and surf the Web using nothing more than their brain waves. Scientists at Intel's research lab in Pittsburgh are working to find ways to read and harness human brain waves so they can be used to operate computers, television sets and cell phones. The brain waves would be harnessed with Intel-developed sensors implanted in people's brains. Researchers expect that consumers will want the freedom they will gain by using the implant."I think human beings are remarkably adaptive," said Andrew Chien, vice president of research and director of future technologies research at Intel Labs. "If you told people 20 years ago that they would be carrying computers all the time, they would have said, 'I don't want that. I don't need that.' Now you can't get them to

stop [carrying devices]. There are a lot of things that have to be done first but I think [implanting chips into human brains] is well within the scope of possibility." Intel research scientist Dean Pomerleau said that users will soon tire of depending on a computer interface, and having to fish a device out of their pocket or bag to access it. He also predicted that users will tire of having to manipulate an interface with their fingers. Instead, they'll simply manipulate their various devices with their brains. To get to that point Pomerleau and his research teammates from Intel, Carnegie Mellon University and the University of Pittsburgh, are currently working on decoding human brain activity. Pomerleau said the team has used Functional Magnetic Resonance Imaging (FMRI) machines to determine that blood flow changes in specific areas of the brain based on what word or image someone is thinking of. People tend to show the

same brain patterns for similar thoughts, he added. For instance, if two people think of the image of a bear or hear the word bear or even hear a bear growl, a neuroimage would show similar brain activity. Basically, there are standard patterns that show up in the brain for different words or images. Today, Pomerleau said various research facilities are developing technologies to sense activity from inside the skull. "If we can get to the point where we can accurately detect specific words, you could mentally type," he added. "You could compose characters or words by thinking about letters flashing on the screen or typing whole words rather than their individual characters." The more scientists figure out about the brain, it will help them design better microprocessors. He said, "If we can see how the brain does it, then we could build smarter computers." —By Sharon Gaudin

To Transfer Money Press 2012

IllUSTrATIOn By Un nIKrISHnAn AV

M o B i l e Money transfers and payments over mobile phones will be among the top 10 most important mobile applications by 2012, market research company Gartner said. Mobile money transfers top the list, beating out location-based services, search and browsing. Money transfers are already popular in a number of developing countries, and will continue to attract more users, according to Sandy Shen, research director in Gartner's Mobile Devices and Consumer Services group. "It's a way for users who don't have a bank account to get access to financial services," said Shen. Mobile payments came in sixth place on Gartner's list and will be used in both developed and developing markets, according to Shen. In developing markets, mobile payments aren't about offering something that hasn't been available before, and in the developed part of the world it's about

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offering more convenient ways of paying, she said. The use of nFC (near field communication), which is in seventh place on Gartner's list, will be part of that. The technology lets users pay for goods by waving their nFC-enabled handset in front of a reader. Mobile phones will also be used to authenticate online transactions, by sending one-time passwords to the phone, according to Shen, or creating them directly on the phone. However, paying or transferring money with a mobile phone comes with a set of challenges, including both real and perceived security threats, according to Shen. The fact that the data is transmitted wirelessly adds a new level of risk, compared to traditional card payments, she said.

—By Mikael ricknäs VOl/5 | ISSUE/02

12/13/2009 12:51:22 AM


alternative views B Y G u nja n T r i v e d i

storage virtualization Pros Vs Cons

"Storage virtualization is highly beneficial and valuable for

organizations that have a large amount of data for processing and storing." Ravikiran Mankikar, GM-IT, Shamrao Vithal Co-op Bank

trendlines

I believe storage virtualization is definitely worth the effort for three

P hotos by Srivatsa Shan dilya

straightforward reasons: our storage needs are growing day by day. Second, as consumer requirements are increasing, more applications are coming into play because of which, managing everyday storage needs is getting more and more complex. Third, organizations are inadvertently duplicating their data almost all the time. Different departments are looking at one huge chunk of data and are using it to fulfill their respective needs but are also creating, multiplying and reproducing several copies of the same data. Moreover, for regulatory compliance, archiving data is critical, which means maintaining copies of data. Hence, our storage requirements are increasing exponentially. For these reasons, we need to rationalize and optimze our hardware resources. Nowadays, servers in the market have built-in storage devices or are available in thin computing environments. But either way, users tend to store a lot more than they actually need and they also keep adding storage as and when there is a requirement. All this makes a strong case for technologies like storage virtualization. I feel that storage virtualization is worth the effort and large organizations that use a plenty of data — both for processing and storing purposes — will find it both highly beneficial and valuable.

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"I am not ready to put

sensitive and critical information on virtual storage because I would lose control in an emergency." Chandrakesh Rai, Head-ITIM, Quinnox Consultancy Services

Storage virtualization is a risky and adventurous path. Although it is true that storage virtualization has value — it is limited to very specific scenarios. In my understanding, storage virtualization solution is merely an interface for users who want to utilize fragmented storage space that’s spread across multiple storage boxes. It creates transparency and makes storage look like a single block. This is only valuable when enterprises have complex and distributed multi-box environments. If customers feel that they have started stretching their investments and resources in managing their storage, only then they should start thinking of storage virtualization as an option. If your storage ecosystem is not complex, then storage virtualization will turn out to be very expensive and that doesn’t add much value to an enterprise. I strongly believe that we should not go overboard with a technology just for the sake of it. It should tie back to business needs and the organizational environment. As fragmented storage space is used across multiple boxes, you don't really know where all your data is actually sitting. This is not a very comforting situation from a DR perspective. That's another reason I am not ready to put sensitive and critical organizational information on virtual storage as I feel that I would lose control in an emergency.

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12/13/2009 12:51:30 AM


David Taber

applied insight

Fixed Price is Not Right Many companies buy CRM consulting services the way they buy hardware: Fixed price. What if this just isn't the right model, no matter how good a price you get?

I

magine a CRM consulting project with inadequately specified requirements, no clear internal project manager, and ill-defined success criteria. Your consultant bids it on a time and materials (T&M) basis. You're in a rush, no time for a detailed RFP — you know the consultant can do the job, but you need a budgetary number to get approval. We've all been through this drill: somebody brilliant suggests that this has to be fixed price, it'll be easier to get project approval and manage to conclusion that way. You know, just like it would be when buying servers. But you're not buying servers: you're buying services. While 80 percent of CRM projects are formulaic and could be bid as a ‘standard project’, the other 20 percent of the project work is not only a one-off, but an unknown. Nobody actually knows the requirements, or the ramifications of ‘something simple’, or the shape of your data, or the tricky parts of external interfaces. You may think you're signing up for a three-hour tour, but you're on the way to Gilligan's Island.

Is Fixed Price Lose-Lose? Il lustrat io n by unnikrishn an AV

While fixed price projects are easy to measure, the simplistic calendar-and-budget approach misses the point. Will the project result in any value to the business? Did it satisfy the letter of the requirements without solving any real problems? Let's look at this a little deeper. You don't want to pay too much, so you get competitive bids. But all consultants have a powerful incentive to bid too high: they need the wiggle room to manage the risk of scope creep, weak project management, and ambiguous success criteria. This is particularly endemic in CRM projects that have to satisfy 22

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Vol/5 | ISSUE/02

12/12/2009 10:26:58 PM


David Taber

applied insight

right-brained types in sales and marketing. Look at it from the consultants' economic perspective: a fixed price project must be more profitable to compensate for the extra risk. Listen to Alan Weiss, the dean of high-profit consultancies: he insists that his followers always bid fixed price because that's the only way to make real money. Only fixed price lets vendors hide costs and margins. Let's say you get lucky. Your consultant made a low fixed price bid. You win... except you don't. The consultants will be spending all their time during the project trying to figure out how to deliver as little as possible and develop some engineering change orders (ECOs) or other tricks to get you to pay more on their money-losing bid. Now let's say the consultant is a saint. They don't try to upsell you, and they eat the losses on the project. What happens next? They lose their talent. And no, those people won't come to work for you. So all the institutional knowledge they brought and the business process expertise they developed for you on the project is gone. You get to pay for the learning curve all over again. What do you think the chances are that the consultant's bid is within 10 percent of the effort required to make your team

of the effort. Still think your team's initial task estimation is within 10 percent of the optimal outcome (where the users are actually satisfied, but without unneeded bells and whistles)? There's an old adage in politics, "If you can get the other side working on the wrong question, it doesn't matter what answer they come up with." Maybe "how do I get it done at for $X" is asking the wrong question. All too often, the word "it" isn't tightly defined, guaranteeing a sub-optimal answer. And the unspoken issue is trust and tight management.

Agile Fixed Price? You may not practice Agile in your organization. Fine. But know that CRM system deployments are best done in this incremental, user-centered style. Salesforce.com and SugarCRM even build their products that way. If an incremental deployment style is the right way to do CRM, how does that fit with a fixed price project? Agile projects do have fixed budgets and schedules — in fact, proper Agile projects have a better record of meeting those targets than conventional IT projects do. But Agile projects don’t have a pre-determined set of features for any specific delivery. The requirement ‘cards’ and ‘stories’ are continuously evaluated

You may not practice Agile in your organization. Fine. But know that CRM system deployments are best done in this incremental, user-centered style. Salesforce.com and SugarCRM even build their products that way. happy? Or that you had the foresight to tell the consultant at least 90 percent of your actual requirements before the statement of work? And what about the rubber yardstick of satisfying your users? Do you really think you can do that consistently, even when your own staff hasn't even analyzed your database before getting the bid?

Fixed Price Discovery, T&M Tasks A common solution for these issues is to have the discovery and detailed requirements setting phase of the engagement be fixed price (perhaps 10 percent of the expected project value), with the actual implementation tasks as T&M. Even if the follow-on tasks are done as fixed price, this is a good step forward in containing risk on both sides of the table. This approach provides incentives for both the consultant and the internal project manager to manage scope creep, make sensible tradeoffs, and apply some "value engineering." But there's still the issue of the unknown: the subtle data corruption or the API glitch or the political subterfuge coming from the sales team (who — for reasons that are never clear — subtly oppose the project). In CRM projects of any size, these unknowns and unpleasant surprises can account for 25 percent 24

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and re-prioritized through the life of the project. Why? Because the business doesn't really know what's going to be valuable until it sees it, or even uses it for a while. In a perverse way, Agile is an ideal fit for CRM work precisely because the details and ramifications of your requirements are seldom known until the project is underway. So an Agile project would have fixed price and a timeboxed schedule, but a variable set of deliverables. You get the most valuable deliverables that could be produced for a given budget, but you don't get a fixed SOW. Making Agile work for consulting engagements will require the same project management skills and attitude adjustment that it does for internal projects. But most consultants are living the Agile lifestyle already — the authors of the Agile Manifesto were consultants. So maybe the right question to be asking here isn't "how do we get it for $X?" but "given our fixed resources, how do we get the business payback from CRM in the fastest way?" CIO

David Taber is the author of the new book, Salesforce.com Secrets of Success. Send feedback on this column to editor@cio.in.

Vol/5 | ISSUE/02

12/12/2009 10:26:58 PM


Cover Story | Technology Trends

DRIVE NEW MARKET OFFERINGS PUSH USER PRODUCTIVITY IMPROVE THE QUALITY OF PROCESSES

26

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Pg. 31

Pg. 32

I P HOTOS BY SRIVATSA SHANDILYA

It's an evolution story. Desktop virtualization is going to drive new efficiencies.

5 Server Virtualization

Desktop Virtualization

Just because there's a lot of people out there calling it hype, doesn't mean you take it off your radar. Energy efficient IT is here to stay, best give it your time.

4

This is a no-brainer. If you haven't tried it, you're in the minority. (94 percent of your peers are already there).

ILLUSTRAT IO NS BY MM SHANIT H

Pg. 28

The number of wireless subscribers in India is set to reach over 850 million in 2013. That little screen will fuel more enterprise apps.

3 Energy Efficiency

The buzz around the technology is becoming a roar. But don't turn off your hearing, cloud computing's getting more mature — and more enterprise-ready.

2

Mobile Applications

Cloud Computing

1

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Cover Story | Technology Trends

tasks this year. It’s a simple list; the way good lists are meant to be. But as resolutions go, they aren’t the easiest. To help, we put together a list of 10 technologies that we and your peers think will help you go the distance. Think of it as the 10 for 2010. Some of them, like cloud computing, might seem risky. But as Atul Jayawant, president corporate IT & Group CIO, Aditya Birla Group, says, “I see cloud computing as transformative IT. Of course, there will be risks. But what business doesn’t have risk? I think IT executives should stick their necks out."

Pg. 35

Pg. 36

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It's been at the top of IT leaders' priority for years now, Nuff said.

Pg. 37

your goals. Those three simple ideas that will pull your company ahead of the pack, will align your IT better with the business, and will win you more respect from your peers. Why would you want to stay away?

Reader ROI:

Technologies to watch our for in 2010 What your peers are aiming to accomplish

9 Business Process Management

Sure, the folks at Twitter and Facebook don't have a business case. But that isn't stopping your employees or your customers. People like to talk, it's that simple. Put it on your radar.

8 Business Intelligence

Your data is going to blossom 650 percent in the next five years. Better start looking for solutions now.

7

Social Computing

Storage Virtualization

6

He’s right: this isn’t the time play safe. Nor is it a time to shy away from being a visionary. In fact, this is probably the most important juncture in the last decade. As the global economy pulls out of the worst recession in most people’s lives, there’s a new landscape bearing new opportunities. And suddenly f irst-mover advantage is the new flavor. And your organization needs you to lead it. The 10 for 2010 will help. Some of you are probably going to say, “dream on!” at our list of next year’s technologies. That’s ok. Predicting the future isn't easy. The 10 for 2010 are meant to help you meet

10

There isn't enough space in one edition of the magazine to convey half of the opinions veterans and analysts have of how to deal with the upturn. But here's one word that's always on their lips: agility. BPM's your best bet to get there.

Pg. 38

Data De-duplication

You set yourselves three

Surprised? Not if you see the data tsunami heading your way. Clean up your act and soon.

Pg. 40

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Cover Story | Technology Trends “Cloud computing is definitely going to be an IT mantra in 2010. I see SaaS and cloud computing as transformative IT. I think more organizations are going to adopt cloud But that’s about to change. technologies and organizations that have already deployed The same survey shows that it will extend it to other areas,” says Atul Jayawant, president 37 percent of Indian CIOs are corporate IT & group CIO, Aditya Birla Group. actively researching the delivery But what makes the cloud so attractive? “Reduced timemodel (with an intent to use in to-market, scalability, and lowered TCO are the prime 2010) and another 50 business drivers,” says Jayawant. However, as the technology gains popularity, concerns Of Indian CIOs say are beginning to grow about just how safe the cloud computing will environment is. “Cloud computing is a step in be disruptive evolution. It is reasonable to have concerns over in 2010. cloud security, but one must address these in a Source: State of the CIO, 2009 percent practical way,” says Jayawant. “After all, IT risk is say it is on business risk. Today, the cost of business downtime due to their radar. And why IT downtime outweighs the potential IT cost benefits from shouldn’t it be? Cloud services, the cloud. And that is perhaps why the actual number of despite their challenges, organizations that have deployed cloud computing is still tease CIOs with lower very low.” infrastructure and IT staffing That, he says, shouldn’t stop CIOs from auditioning the and administration costs. delivery model. “Despite all the security threats, it’s a risk Embarking on a cloud worth taking. As the technology evolves, the rules of the computing project may game will be defined and a legal system will fall in place. take extensive research and We need to take the plunge instead of sitting around and preparation, but the payoff can waiting for things to happen.” be significant if you can get it right. In order to realize its promised reductions in cost, complexity and time-to-launch, companies need to make sure they pick the right projects to send to the cloud. CIO

Cloud Computing

C

loud computing is poised to win the title of the most popular buzzword of 2009. It’s no surprise. Budget-minded CEOs are ordering IT leaders to look into cloud computing to reduce the amount of expensive hardware in their datacenters; CFOs are interested because they've heard the model can slash costs associated with new IT projects; and tech-savvy employees want it because it sounds cool. However, the actual number of organizations that have deployed cloud computing remains small — only about 6 percent of Indian CIOs say they are currently using cloud services, according to The State of the CIO 2009.

75%

“Despite all the security threats, cloud computing is a risk worth taking. We need to take the plunge instead of sitting around and waiting for things to happen.”

Full Disclosure: Only 6 percent of Indian CIOs say they used cloud computing services in 2009. SOURCE: STATE OF THE CIO, 2009

— Atul Jayawant, President Corporate IT & Group CIO,

Artificial Intelligence

SPUTTERING

TECH 10 technology trends that didn't live up to the hype.

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Aditya Birla Group

Era: Late 1950s to the present

Pitch: "Some day we will build a thinking machine. It will be a truly intelligent machine. One that can see and hear and speak. A machine that will be proud of us." — Thinking Machines, year unknown Bursting that Bubble: In 1964, researchers at the newly-created Stanford Artificial Intelligence Lab assured the Pentagon that a truly intelligent machine was only about a decade away. Guess what? It's still at least 10 years away.

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Cover Story | Technology Trends

Mobile Applications

M

obile applications made an easy entry into our list. Why? ‘Cause we’re a humongous country and with built-in, customized, Web apps, smart phones are steadily taking over as the chief tool for enterprise communication and collaboration. We’re willing to wager that 56.4 percent of nationally-present Indian companies are using mobile applications to span the enormity of the country. No one’s done such a survey but we’re pretty sure that figure is accurate. As Bill Piatt, the CIO of the International Finance puts it, "The only thing that works reliably in emerging markets is cell phones." Thank you, Bill. What is helping the cause of les portables, as the French like to call it, are chip makers who are developing mobile processors that look like the PC processors of yesteryear says Carl Claunch, a Gartner analyst. He — and we — believe that there is an increasing potential to create an environment on cell phones to allow an enormous pool of PC applications on a smart phone. So what can you expect in 2010? More mobile money transfers, search and browsing applications, mobile health

Virtual Reality

monitoring and cell-phone advertising, location-based services, among other things. What to watch out for: vociferous debates around customizing apps or using a onesize-fits-all approach, security challenges, and users that are smarter than the IT dept. CIO

“With the maturing of the technology and its affordability, mobile apps will definitely be something to watch out for in 2010. — Rajesh Uppal,

Chief GM-IT & Distribution, Maruti Suzuki India

Era: 1970s to the present

Pitch: “Virtual reality may be one of the most important technologies in our future, producing a great leap forward in many fields. While most people now focus on VR's use in entertainment areas, its real impacts will be in the arts, business, communication, design, education, engineering, medicine, and many other fields.” — John C. Briggs, The Promise of Virtual Reality, Vol. 30, The Futurist, 1996 Bursting that Bubble: Maybe VR failed in the mass market because of consumer concerns that the equipment would cost too much or make them look silly. Or maybe virtual reality worlds were less real and compelling than our own imaginations. In any case, VR never took off commercially, even though some useful niche applications still exist.

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Cover Story | Technology Trends

Energy Efficiency

Y

our skepticism is palpable. (See box on the right). But we think that's only part of a long journey. From the Energy Star Program in 1992 to the Copenhagen summit, the green movement and it’s effects on IT have come a long way. But let’s admit it, even as the term turns into a moldy cliché, there are of Indian IT still precious few leaders see enterprises that alternative energy have real green IT sources as a programs. Less technology worth than 10 percent watching out for of 1,200 firms next year. across Asia Source: State of the CIO, 2009 Pacific have a formal green IT strategy in place, says Springboard Research. But there is reason to believe that things might change in the near future. Nick Jones, a senior analyst at Gartner says green IT is one of the top-10 strategic technologies for 2010.

And it isn’t only the analyst community that’s going down green street in 2010. The IT industry and its products have been and are likely to remain focused on green IT. The writing’s on the wall and it says green. CIO

36%

Anil Khopkar, GM (MIS) & CIO, Bajaj Auto, is very critical about the elite status given to green IT and he questions its sudden upsurge in the industry. Green IT, he says, is not a novel concept but merely another buzzword, deliberately created by vendors to sell their equipment under a fancy name. “Give me one specific thing that happened recently that makes green IT so important,” he challenges. “The concept of green IT has been around for many years. Every year there have been significant improvements in servers by manufacturers,” he says. “Where do I draw a line and say that some of my actions are driven by technology whereas the rest strive for green IT only?” he asks. “If what we are doing now is green IT then how would you describe what we have been doing for the last decade or so?" These are some of the questions that nag at Khopkar. His advice to CIOs for 2010? “Don’t wait for anything big to happen, or new technology to arrive,” he says. “Every time you get an opportunity, do whatever you can to improve the environment.”

"Give me one specific thing that happened recently that makes green IT so important." — Anil Khopkar

GM (MIS) & CIO, Bajaj Auto

91%

Of IT decision-makers say that a product’s energy efficiency will be an important or very important criterion in their purchasing decisions in 2010.

Read about the economic drivers behind the growth of this industry from Aroop Zutshi, Global President and Managing Partner, Frost & Sullivan on Pg 50

The Paperless Office

Yet

Source: Symantec Green IT Report

Era: 1975-2000

Pitch: "There is absolutely no question that there will be a revolution in the office over the next 20 years. What we are doing will change the office like the jet plane revolutionized travel and the way TV altered family life." — Business Week, 1975 Bursting that Bubble: Here’s a reality check: A book published by MIT Press in 2002 called The Myth of the Paperless Office found that e-mail caused a 40 percent increase in paper use in many organizations. The truth is that it's actually harder to preserve digital records than the old-fashioned kind.

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Cover Story | Technology Trends

Desktop Virtualization

W

hy do we think desktop virtualization is something to keep tabs on? Simple: we’re watching the way the river’s flowing. Fact 1: applications are getting increasingly network- and server-based. Fact 2: more users are moving to non-PC devices including smartphones and netbooks. Fact 3: more employees are demanding flexible work times and environments, like working from home. These drivers are — and will — increasingly boost diversity in hardware, operating systems and applications that organizations have to deal with. Yet CIOs still need to manage their IT infrastructures and their costs. There’s one way to synthesize the two opposing forces of user flexibility and IT control and that’s desktop virtualization. A study conducted by Enterprise Management Associates in August showed how important the quality of the user experience was as

a criterion enterprises use to evaluate virtual desktop infrastructures. Asked to rate the most important factor in choosing a desktop virtualization system, out of 10 options, 75 percent of

companies chose "ease of use for end-users." But even if your enterprise can swing computing environments that are not user-friendly, virtual desktops can still help you cut costs and increase security. Of course, there are challenges. Like any other new technology, enterprises are reluctant to be the first one in the desktop virtualization pool. The high capital expense desktop virtualization requires and the fact that it’ll require new servers in already densely-packed datacenters are some of the reasons behind the technology’s slow start. That said, a senior analyst with the Burton group, Chris Wolf, expects desktop virtualization to pick up speed in 2010. He suspects penetration

levels to go up to between 20 and 25 percent. So in 2010 look out for more people around getting on the desktop virtualization boat, slowly at first and faster and faster as the year progresses. CIO

40% Of Indian CIOs are currently implementing desktop virtualization and another 54 percent say that it's either on their radar or that they are actively researching the technology. Source: State of the CIO, 2009

“WNS views desktop virtualization as not just a promising future technology, but as one that has gained increasing leverage in real world implementations over the last two to three years." — Arvind Sood, CTO, WNS

Computer-aided Software Engineering (CASE)

Era: Mid-1980s to mid-1990s

Pitch: “With their disciplined, highly structured engineering approach and emphasis on rigid design rules, CASE tools verify consistency and completeness at early stages of the development process." — Douglas Menendez, Internal Auditor, 1991 Bursting that Bubble: CASE tools automatically generated code using intelligent algorithms but did not eliminate significant amounts of coding, let alone the programmers themselves. Business blogger and former programmer Philip McLean says, “The biggest problem was that people fed bad specs in one end and got bad code out of the other." 32

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Cover Story | Technology Trends

Server Virtualization

W

hile IT media and analysts have been discussing server virtualization for what seems like eons in the technology time-space, IT leaders have been busy implementing it and have made it the most common form

of virtualization in enterprise IT today. There’s more to come, though. According to Gartner, the year 2010 will see virtual servers handle 28 percent of server workloads, up by a massive 10 percentage points from 18 percent currently. In terms of sheer numbers, there are 5.8 million virtual machines (VM) in use today. Come 2012, and Gartner says half the server workloads will be served by virtual machines. Until now large enterprises h ave d r ive n s e r ve r virtualization, but the big growth action is anticipated among small-to-midsize businesses, according to Gartner analyst Thomas Bittman. For most organizations, immaterial of domain and size, the question won’t be whether to virtualize

watch out for with server virtuor not, but which VM provider alization. Virtualization vendors to go with. may still be touting the potenThere’s another reason tial of putting 20, 50, or even virtualization will dominate 100 VMs (virtual machines) enterprise IT in 2010: it’s tied on a single physical machine, to the cloud computing revolubut CIOs and tion. Enterprises industry experts are likely to consay those ratios sider various are dangerous strategies from in production private clouds of Indian CIOs environments, to public cloud say that they already use server causing perforservices and virtualization. mance problems hybrid models. Source: State of the CIO, 2009 or, worse, outThe choice of inages. Too much house virtualizaof a good idea can be bad. tion platform enterprises make That said, the benefits far now (and in the near future) are outweigh the challenges and likely to influence their cloudyou can expect us to talk more computing choices. about server virtualization as Despite the allure of dynamic you and your peers reap benefits provisioning, disaster-recovery from the technology. CIO support, server consolidation and lower operating costs, there are challenges IT leaders must

94%

"In the near future, server virtualization will continue to be adopted primarily for cost savings in power and real estate." — Sanjay Belsare

Head IT Infrastructure, Kotak Mahindra Bank

Thin Clients

Era: Early 1990s to present

Pitch: "Thin-client computing can save 30 to 70 percent of your IT costs. Centralizing servers and server support staff leads directly to higher utilization levels." — Newburn Consulting, March 2002 Bursting that Bubble: For a solution whose primary benefit was economics, it was economically unattractive for most. "The problem was that the servers that supported the platform weren't designed for the kind of massive I/O that the concept required, and network bandwidth wasn't up to the task, either," says analyst Rob Enderle, principal analyst for the Enderle Group. Plus, users resented giving up control of their ‘personal’ machines’. 34

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Cover Story | Technology Trends

Storage Virtualization

T

he writing on the wall is clear and neon-loud: enterprise data will grow by 650 percent over the next five years. Most of it will be unstructured and not belong to any database. This growth "is going to cost us dearly if we don’t pay attention," says David Cappuccio, chief of research for Infrastructure teams, Gartner.

“Because it can help enterprises focus on increasing ROI, I believe storage virtualization is a key technology to look out for in the near future. — Alok Kumar

Which is why we’re sure enterprises are going to pay more attention to technologies like storage virtualization. By virtualizing storage, the complexities of managing, backing up, archiving and migrating data across disparate storage devices are reduced. It helps enterprises increase capacity, better utilize their resources, and reduce costs. Virtualization also increases the efficiency of storage; allowing files to be stored wherever there is room, rather than let some drives go underutilized. In just a few short years, the technology has traveled that well-worn path from pricey boutique solution to affordable commodity. That aside, enterprises coming out of a tough macroeconomic climate are more willing to invest in storage virtualization in 2010 says research firm TheInfoPro. In fact, it points out that going forward technology purchases will increasingly focus on optimizing existing storage assets, stressing on a six- to 12-month ROI. CIO

Global Head-Internal IT, Tata Consultancy Services

ERP Systems

Era: Mid-1990s to the present

Pitch: "ERP systems promise seamless integration of all information flows — financial and accounting, human resource, operations, supply chain, and customer information." — Elizabeth and Michael Umble, Baylor University, January 2002 Bursting that Bubble: A Cutter Consortium report found that application software packages — mainly ERP — are fully implemented less than a third of the time. Millions of dollars later, most massive ERP projects end up half-finished or largely ignored by users. Yet they are common across almost all large enterprises.

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ITin 2010

MANAGEMENT

It’s going to resemble 2009: complex, costly and confounding.

No one ever claimed that managing corporate IT systems was easy, or without its fair share of tumult. But during the past decade, as better IT tools emerged in the high-tech industry — such as application integration software, Web-based software delivery methods, project implementation strategies and virtualization techniques — it would be reasonable to think that the overall management of IT would have become less arduous and risky. As 2010 rolls around, that appears not to be the case. The cluttered and ever-expanding technological jungle that IT ecosystems now resemble seems, in many respects, to be much harder and more expensive to manage than it did a decade ago. Consider a couple of data points from a 2009 survey of 353 software buyers and sellers, by Neochange, SandHill.com and the Technology Services Industry Association: Complexity Hinders Software Success. "Two-thirds of survey respondents say enterprise IT environment is more complex than it was five years ago," notes the report. "The proliferation of technology combined with intricate organizational dynamics has raised the level of business IT complexity to the point of holding back software success." "Financial Upside" Is Left on the Table. Fifty-three percent of respondents said that, on average, "fewer than half of users are effectively using installed software in the enterprise. That means most companies are leaving benefits such as reduced costs, increased revenues and improved competitive differentiation on the table — benefits that were cited as the rationale behind the software investment in the first place." IT Still Gets Blamed for Failures. Nearly 60 percent of respondents claim that the CEO still holds IT responsible for a "lack of success," adds the report. Of course, just because IT can be difficult, messy and expensive doesn't mean that companies are going to throw the baby out with the bath water. But when IT's top priority for 2009 — for 2009! — is "modernizing key legacy applications," as detailed in a Forrester survey of more than 2,200 IT executives and technology decision-makers in North America and Europe, then companies might have a sizable problem on their hands as we forge into a new decade. One can't help but wonder if executives are lamenting about IT — just like kids in the back seat driving on long highway stretches during this holiday season — "When are we going to get there?" — By Thomas Wailgum REAL CIO WORLD | D E C E M B E R 1 5 , 2 0 0 9

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Cover Story | Technology Trends

Social Computing

3

70 million unique visitors in a month, 160 billion page views. These are Google Ad Planner figures for Facebook (August 2009) and are the envy of any online marketing expert. So why haven’t enterprises found a way — that isn’t lame

— to leverage social networks? Maybe because social networking opens new attack vectors. And there isn’t a CIO out there who won’t admit they fear socialengineering-based attacks. More telling, however, is the scanty number of companies that have blocked social networking sites. What does that tell you? They realize its potential business benefits. The challenge is to find the right balance between security and usability. And there is reason to stay positive: Every year, more companies dedicate staff to monitoring how employees use online assets — 57 percent this year compared to 50 percent last year and 40 percent

in 2006, according to a CIO-CSO study done in collaboration with PricewaterhouseCoopers. And, like it or not, the industry is already moving to develop tools that can harness the power of networking. Some examples include Novell’s Pulse, and Salesforce Chatter. It’s a list that is still being populated and we’re going to see more action in 2010. Count on that. CIO

25% Of Indian CIOs say that enterprise wikis and blogs will make

an impact in the year ahead.

Source: State of the CIO 2009

“At JWT, we encourage Twitter but are wary of Facebook. Social computing can serve a valid business purpose and that’s what we should look for in the near future.” — Sunil Mehta, CIO, JWT Check out why other people echo Sunil Mehta’s notexactly-all-embracing approach to social media. Read 10 Technologies that Sputtered and Lifestyle Hackers on Page 66.

IPv6

3 Tips

for a Social Media Security Policy Don't start from scratch The media landscape is so dynamic that if you create policy for today's hot technology, tomorrow it will be obscure, says Jack Phillips, co-founder and CEO, IANS, a research company that focuses on information security and IT risk management. Look at existing policies, like those in HR, he says. Use social media policies to raise security awareness "This issue is an opportunity for IT leaders to refocus attention on data security and risk," says Phillips. Be prepared for the next phase As social media platforms mature, some will become integral to an enterprise. At that point it will be necessary for policies to be more specific. "Because these technologies are so different, at some point we expect policies are going to have to get granular," says Phillips. — By Joan Goodchild

Era: 1998 to the present

Pitch: “2010 could be the last year for IPv4 as we know it.” — Iljitsch van Beijnum, Author of Running IPv6 Bursting that Bubble: Almost a decade into existence, the IPv6 is yet to displace IPv4. The threat that we are soon running out of Internet addresses isn’t giving too many people sleepless nights after all NAT (network address translation) allows more than one user to share the same address. Also, IPv6’s high cost makes it less attractive.

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Cover Cover Story Story | Technology | Xxxxxxxxxxxxxx Trends

Business Intelligence

B

usiness intelligence has been a top CIO priority for so long that we’re beginning to get tired of it. And it’s back again in 2010. According to the State of the CIO survey 2009, Indian CIOs say BI is their highest technology priority for 2010. Nor is this an India-specific commitment. In 2008-09, as IT markets everywhere were being pummeled, the market for BI tools in Asia Pacific grew by 7.7 percent, according to IDC. But just as persistent are the challenges to analytics — something CIOs will have to face in the coming year. According to a recent survey by Kognitio (which provides business intelligence solutions), over 75 percent of BI projects take over a year to

39% of Indian IT decision-makers say that they are currently implementing BI

and another 41 percent say they intend to do so in the following year.

produce results. And almost two-thirds of companies who have such a system get regular complaints from users. Not that this is making users are turning away from BI. "Following the economic crisis, many decision makers and information workers felt the pain of insufficient, inaccurate or contradictory information as they tried hard to grow their business," says Sharon Tan, Research Manager of IDC's Asia/ Pacific Software Research. "IDC expects this need to fuel interest in BI solutions and pave the way for future BI growth. In fact, despite tough times, a significant percentage of organizations surveyed are already planning to equip users, such as managers and customer-facing employees, with timely information over the next 18 months by having BI more pervasively available in their organization," Tan says. The slowdown might have bitten deep into CIOs' pockets, but it isn't stopping them from investing in their favorite application. Re-lock, re-load. CIO

Business intelligence will definitely be big next year. It has to be. Look at the main issue organizations are facing: consolidating reporting systems. Every other system, like SAP, runs in clusters within the organization but managements still need consolidated reports. That’s where BI can be a real-time solution. I’ll give you an example. At Raymond, we have three instances of SAP and the data from one instance cannot be pushed into another. Now apply that to our apparel business, which supplies our retail business. Both have their own GIT (goods in transit) systems. If they don’t match, we’re going to have a lot of stock that’s lying around un-reconciled. Using BI, we’re bringing these two systems together, in what we call a ‘sail-through’ report. And that’s what BI can bring other enterprises: a clearer picture and more visibility. But to get there, CIOs have to market BI. Without marketing, it’s going to be hard to find takers. That’s because users enjoy the comfort of reading reports they have been using all this while. What they don’t know is that with BI, the user has the capability to create reports according to their needs, and this is not possible in other business system. It’s also necessary to sit with users and understand their requirements. Arindam Sinha is GM (Corporate IT) at Raymond.

Source: State of the CIO, 2009

Enterprise Social Media

Era: Now

Pitch: "[Our enterprise social media product] improves organizational awareness and fosters cross-functional workflows in ways that collaboration and social networking software alone never will.” — Unnamed enterprise social media vendor, October 2009 Bursting that Bubble: Although IDC predicts that the market for workplace 'online community software' will grow to $1.6 billion (about Rs 7,200 crore) by 2013, consumers are using Facebook and Twitter to network with their own social circles rather than ‘brainstorming for new ideas and collaborate on projects’. Worse, they have become security holes.

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Business Process Management

T

he tide’s turning. The need of the hour is for organizations to make workflow changes on the fly and cash in on the recovery — or lose consumers and trading partners alike. Your ability to ensure that your enterprise

leads the charge on the up-slope makes it imperative to leverage the power of automation. Business process management (BPM) could be one of the most significant weapons in your arsenal to meet changed business needs over the next few months. BPM, most CIOs realize, can help derive more value from business transformation initiatives. Perhaps, that is what’s behind these numbers from the State of the CIO 2009: 30 percent of CIOs say they are already implementing BPM — and another 60 percent are

"If we hadn’t used BPM, we would would have needed to hire 45,000 people more." — Chandrasekaran Mohan,

CTO, Reliance Life Insurance

WiMax

either upgrading their current BPM projects or looking to start one in 2010. There are other indicators that BPM will be big in 2010. Sixty percent of CIOs from around the world continue to rank 'improving business processes' as their top IT priority, says Gartner. The research firm also predicts that the BPM market will grow from $1 billion to

$2.6 billion by 2011 (about Rs 4,000 crore to Rs 11,700 crore) — a CAGR of 23.8 percent. And PricewaterhouseCoopers thinks that demand for BPM tools will exceed that of BI tools! Also, BPM edges over other technologies to get into our list because it can help enterprises with their compliance challenges. Bottom line: BPM will play a greater role in 2010 as enterprises zero in on market enhancement and customer satisfaction. Over the next year, expect to see process automation free up more manual operations and resources, which in turn will contribute to more strategic objectives. CIO

In the next few months, as the market finds more robustness, what we need is agility. The ability to identify errors and weak links in processes and the flexibility to rectify them will give us an edge. And BPM provides that. At Reliance Life Insurance, we deployed a BPM application — one of the first in the Indian insurance industry. It cost us Rs 2.58 crore but it saved us over Rs 32 crore in operational costs and over Rs 5.66 crore in IT infrastructure costs — all within its first year of implementation. Here’s another way of looking at it: if we hadn’t used BPM, we would have needed to hire 45,000 people more. Plus, by automating 1,200 branches with BPM, we have cut the time to issue a policy from 30 days to seven days. CIOs with BPM on their radars need to be clear about the processes where the biggest challenges lie. Also, look for a champion who can handle change management and share global benchmark practices. Chandrasekaran Mohan, CTO, Reliance Life Insurance, won the 2009 Global Awards for Excellence in BPM and Workflow.

Era: Mid 2001 to the present

Pitch: India will have 6.9 million mobile and fixed WiMax connections by the end of 2011, but will continue to be a niche market for the wireless technology — Gartner Bursting that Bubble: Wi Max was touted to be the next big thing in India, after 3G. With 3G still struggling to find acceptance, WiMax sure has a long way to go. The PC penetration in the country is still low, mobile frequencies are not readily available and the cost of rolling out WiMax is prohibitive — and frankly the government isn’t all that interested.

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Cover Story | Xxxxxxxxxxxxxx

Data De-duplication

A

t a recent Storage Ne t wo rk Wo rl d conference a number of IT leaders and CIOs from across the globe argued on many topics but agreed on one: that data de-duplication would be a key technology in the near future. It’s hard to disagree with that. Databases have grown to such mammoth proportions

“Data explosion is definitely a big concern today, so more people may start using data de-duplication technology.”

that it has become impossible to manage them. According to a recent Gartner report, enterprise data is likely to increase by 650 percent by 2014. The same report predicts that data de-duplication will be one of the top-10 IT management trends among CIOs. And why not? Data de-duplication helps IT departments cut costs and use storage more efficiently. “The vast amount of unstructured data is costing enterprises dearly and this cost can be reduced by using technologies such as data de-duplication,” says David Cappuccio, chief of research for the Infrastructure teams at Gartner. There’s plenty of vendors offering de-duplication. The choice of which to use is yours. But ignoring this trend? We think not. CIO

EARTH-SHAKING

PROJECTS The Ether-car: A number of car manufacturers are toying with moving Ethernet inside their automobile designs. Case in point, BMW says it intends to have two-way communications in their future cars. Vehicles will be able to be customized like the way a PC can be — screen savers, menu colors, etcetera. These customizations will not need to be made within the car, they can be made remotely on a personal home computer and transferred to the vehicle via a remote server from the Internet or from a portable device via an Ethernet port. Visual Law : The National Science Foundation is developing mathematical and computational algorithms and techniques that will improve law enforcement and the intelligence communities' ability to transform large, often streaming data sets, e-mails, images, numbers and sounds into a form that better supports visualization and analytic reasoning. But the project is also raising privacy issues.

Smart Buzzing: Harvard researchers recently got a multimillion dollar grant to create a colony of flying robotic bees, or RoboBees to spur innovation in ultra-low-power computing and electronic ‘smart’ sensors — and refine coordination algorithms to manage multiple, independent machines. The RoboBee project could lead to a better understanding of how to mimic the unique collective behavior of a bee colony.

— Sudhir K. Reddy, CIO,

MindTree

With inputs from CIO.com, InfoWorld, NetworkWorld and ComputerWorld

B-to-B Marketplaces Era: 1999 to 2002 Pitch: "By 2005, 35 percent of the Internet B-to-B trade volume will be conducted via a net market or a consortium of buyers or sellers.” — Jupiter Research, June 2000 Bursting that Bubble: At the height of the dot-com boom there were over 2,500 major B-to-B exchanges worldwide. Today, 90 percent of them are gone. Part of the problem was timing; the other part was the difficulty in getting people to substantially change the way they did business. Business is a social function and people prefer to do it face to face. 40

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AI System: DARPA is building avant-garde artificial intelligence (AI) software known as a Machine Reading Program that can capture knowledge from naturally occurring text and transform it into the formal representations used by AI reasoning systems. Such an intelligent learning system could unleash a wide variety of AI apps ranging from intelligent bots to personal tutors. Imagine feeding it all the text on the Web. Robotic Gardner: MIT's Computer Science and Artificial Intelligence Laboratory is experimenting with robotic gardening or ‘precision agriculture’. The idea is to take advantage of swarm robotics: and plant sensors that let plants request additional water from their robot overlords. Ripe tomatoes for example, are picked by other bots.

— By Michael Cooney VOL/5 | ISSUE/02

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2010

AN ECONOMIC

FORECAST

There’s a place for optimism and a place for realism. Now it seems the time for Cover Story |isXxxxxxxxxxxxxx the latter. the world in 2010 from five top economists, analysts and researchers.

In the next few months, the single most important objective for a CIO is to help launch their organization on a growth path. — Kumar Parakala, Executive Director & Head-IT Advisory, Global Head-Sourcing , KPMG

We are not going to go back to 8.5-9 percent GDP. I would say the growth would be between six to seven percent in the next two to three years. — Bibek Debroy, Professor at the International Management Institute and research professor at the Centre for Policy Research

Confidence in the IT industry will only come when the (overall) economy sustains growth for a longer period. — Kapil Dev Singh,, Country Manager, IDC India

One lesson everybody learnt is that we can no

longer stay focused only on the customer or the competitor.

— Aroop Zutshi, Global President and Managing Partner, Frost & Sullivan

Organizations will change the way they invest in IT in 2010. And CIOs will spend more on introducing higher levels of automation.

— Sivarama Krishnan, Executive Director and Partner, Performance Improvement, PwC

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Reform to Rebound Did we get off lightly with the slowdown? Bibek Debroy: There has definitely been an impact. India is not as open as China, so it does not have as much exposure in exports to the external markets. The exports to GDP ratio (that includes figures for both goods and services) is about 21 percent. The economic slowdown has brought down the growth rate from about 8.5-9 percent to about 6 percent. That said, it’s true that India has been let off lightly.

Is it a wake-up call for India and Indian organizations to fix our economic act? One reason why India got off relatively easily is because of the indigenous sources of growth like agriculture. Hike in procurement prices, farmers’ debt relief, and to some extent, the NREGS (National Rural Employment Guarantee Scheme) have kept the rural sector going. But these are not part of the fundamental structural reforms in the Indian agricultural and rural sector that should have been implemented. So, it's a wake up call for the Indian government, rather than the corporate sector, to introduce structural reforms. 42

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Future Watch

Bibek Debroy

The professor at the International Management Institute and research professor at the Centre for Policy Research, says only powerful reforms will get India to a 6 or 7 percent growth rate in twothree years. You might be feeling good, but it isn't time to party yet. BY PRIYANKA

Which sectors were worst hit, accordinng to you?

P HoTo BY PRAVEEN KUMAR

The export sector such as garments, gems and jewelry, handicrafts, and leather and leather products have been some of the worst hit sectors. Other export itmes like chemicals and pharmaceuticals haven’t been severely impacted. Apart from exports, real estate, software and IT related services, tourism and civil aviation have been battered by the slowdown. That said, I think the real estate sector was due for a correction in any case and it is also not wise to generalize because what is happening in the metros is not happening in the smaller towns.

Is the export sector likely to recover soon? And, is this a warning for us to focus less on North America as an export destination? Our exports have already diversified from North America. If we exclude exports and imports of crude, our largest trading partner today is China. So, we are looking at East Asia and China as export destinations. Having said that, many Chinese exports also go to the US, simply because the world is interdependent. That's why if the US

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economy suffers, China’s exports also suffer and therefore imports to India are also affected. So, one should not drive that point too hard. I think it will take at least two to three years for global exports to recover. It will be a gradual recovery, in fact, now export orders are slowly beginning to revive and there's no credit crunch anymore. Exports essentially depend on one: demand; two: supply side problems like infrastructure, ports, road transport; three: the export incentive system and four: the exchange rate. For instance, if the economy does well then ideally the rupee should appreciate, so the question before the RBI is to what extent will it control and cushion the appreciation? Because any appreciation will hurt export, the real question now is how can one run counter to market forces especially when capital forces have begun to revive? There is only one answer: reforms.

Will the software services industry recover faster than other sectors? One needs to be careful with statements about the software industry because there is a lot of disparity between the top 10 software ReAL CIo WoRLd | D e c e m b e r 1 5 , 2 0 0 9

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Future Watch companies and the rest. The recovery impacts them differently. So, if you are talking about the top 10 or 20 companies, I think you can already see the signs of recovery. But that doesn’t hold true for the smaller ones.

Has the way foreign investors view India suffered due to the slowdown? For foreign investment in terms of FDI, September 2008 is not the right benchmark to use. Also, there have always been classical problems related to FDI in India including infrastructure, roads, electricity and literacy among others. So, FDI in India vary from state to state and sector to sector. For example, we might have an open market in manufacturing, but in services we have equity caps and we continue to debate whether we should allow FDI in retail or not. Before September 2008, FDI was beginning to come in fairly substantial amounts largely because of traction in the consumer market. Now, I think you can already see FDI coming to India.

How do you rate the Indian government’s role in hastening recovery? Like I said, the Indian government has not implemented structural reforms. But government policies are either talking about monetary

It would be a mistake for the RBI to tighten the monetary policy because the recovery is not yet robust enough. policy or fiscal policy. I really can’t criticize the RBI on what it has done in loosening the monetary policy. My worry is that the RBI may decide to tighten the monetary policy because of inflation and I think it would be a big mistake because the recovery is not robust enough yet. Now you might say that because of the financial crisis the government introduced fiscal measures that arrested the drop but that is not true. Public expenditure rose even before the economic crisis happened and all the public expenditure programs including the fifth pay commission, farmer’s debt relief and NREGS happened before September 2008. The fiscal packages from December 2008 to February 2009 added very little to public expenditure. I think it was pure coincidence that public expenditure increased and that the fiscal packages provided some kind of cushion.

What fiscal reforms are required for the Indian economy to rebound faster? As far as the fiscal reforms are concerned, if there is going to be a rise in public expenditure, then we should ensure efficiency of public expenditure. This has not been achieved despite RTI and thirdparty audits and not enough has been done about administrative 44

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reforms and decentralization. There is another proposal to de-link public debt management from the RBI’s other operations, and this is important because it will create upward pressure on the interest rates. But the final step to fiscal policy reform is the tax reform agenda both on direct and indirect taxes. This essentially means that they should be standardized and rationalized; also tax exemption should be removed.

Over the next few years, where do you see India’s economic growth heading? We are not going to go back to 8.5-9 percent GDP. If we have a big bang reform in agriculture and the infrastructure sector, then we will get to 8.5 percent even without the global economy recovering but that is not very likely. I would say the growth would be between six and seven percent in the next two to three years.

How best do you think Indian enterprises and their CXOs should capitalize on the current upturn in the economy? The availability of credit is still a problem for small scale enterprises. Indian large scale manufacturing was hit in the second half of the 90s, but between 1995-96 it became much more globally competitive. Now, because of the global economic crisis, we have become more competitive and are investing in technology, getting rid of surplus manpower, and are getting access to marketing networks and are also entering into joint ventures and tie ups. I think all these steps should now be incorporated into the small scale sector.

Is it too late to talk about inclusive growth? Is that battle already lost? I don’t like either of these questions because I don’t understand what the expression “inclusive growth” means. I am very uncomfortable with the term inclusive growth because when people say inclusive growth they mean SC, ST and other minorities, but that’s not the issue. We need to look at the larger picture. When I go to states in India that have been growing rapidly, I don’t know where rural ends and urban begins. What I do think is that there are parts of the country which have not benefited from the growth and reforms. So, inclusive growth means addressing these geographical regions in central India like Madhya Pradesh, Chattisgarh, eastern parts of UP, Bihar, Orissa, and some backward areas in Andhra Pradesh, Maharashtra and Karnataka. In most of these places, both physical infrastructure and law and order are non-existent. Also social infrastructure like schools and primary health centers are few and far between. CIo Priyanka is a trainee journalist. Send feedback on this interview to priyanka@idgindia.com

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bRInG bACK tHe GRoWtH BY KANIKA GOSWAMI

Will the coming upswing give CIOs and innovative IT a chance to play a more significant role than they ever have?

P HoTo BY SRIVATSA SHAN DIlYA

Kumar Parakala

KPMG's Exec Dir., Head IT Advisory,Global Head-Sourcing, says CIOs agenda for 2010 is to launch organizations on a growth path. Vol/5 | ISSUE/02

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Kumar Parakala: I agree that IT innovation will be critical in helping business organizations recover faster from the global financial crisis. It is extremely important for an organization to continue to innovate to remain in business — runs the risk of commoditization. IT has always been an enabler for business transformation and also plays a very important role in various organizations within the enterprise to improve operational efficiencies. On both those fronts, innovation is absolutely critical. And the CIO, as the leader of the IT organization, definitely has a significant role to play in helping organizations recover faster from the impact of the global financial crisis — as well as coming up with innovative solutions that will drive the recovery and the business strategy of a company. This includes looking at innovative service delivery opportunities using IT. The CIO needs to be become chief innovation officer using IT.

Are a CIO’s cost-cutting days done? The Indian economy is very buoyant, and in the last few months we have seen a number of positive signs of recovery. Vendors that we’ve been interacting with tell us that there’s a lot of optimism in the market. They believe that organizations are now in a recovery and growth mode, which means more money will be spent to support a growth agenda, which is good for vendors. As far as cost cutting is concerned, there are now healthy indications of growth over the next two years, and I don’t think CIOs should look at significant costcutting. Value creation is more important than costcutting to support the growth agenda of companies and that should be a CIO’s focus. ReAL CIo WoRLd | D e c e m b e r 1 5 , 2 0 0 9

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Future Watch

Attrition will be high with the start of the recovery. CIos who will retain their staff are those who can motivate. Is that the single most important thing a CIO should focus on in the next few months? Or is there something else? CIOs must understand the direction of the business they are supporting and enabling. The need to very carefully analyze how IT can support either a growth or a cost-optimization agenda. During the next few months, the single most important objective for a CIO should be to develop strategies that will enable recovery from the recent economic slowdown and help launch their organization on a growth path.

What avatar of the CIO does India Inc need right now: the visionary, the pragmatist, the value creator; the cost-cutter; or the business leader? Indian enterprises are going through different phases of change. CIOs need to align their capabilities to the change occurring within their organizations. The job of a CIO is extremely difficult. They need to be visionary like a CEO, have the financial acumen of a CFO and the operational abilities of a COO. In response to your question, the CIO needs to take all these aspects; they need to be a visionary, a strategist and at the same time be practical and deliver solutions and also clearly demonstrate their contribution’s value. So really, a CIO today is expected to have wide-ranging skills and those skills need to be aligned to the issues that the organization is facing to help business leaders pave the way ahead. The days of the purely technical CIO are almost over. In many countries, the CIO is now a very important part of the organization’s senior executive team. They are involved in the running of the organization alongside the CFO, the COO and the CEO. The CIOs are moving up the value-chain in India and increasingly playing a critical role in value-creation. Their CEO will be looking up to them to come up with innovative ideas using IT to drive the business forward. The CIO must embrace this leadership challenge.

Do you agree that the toughest part of being a CIO is making choices and selling them to management? Selling to management is only a challenge, if a CIO is not able to connect with the leadership team. Often technology speak becomes a barrier and an inhibitor. If the CIO can communicate in simple business language and gain the trust of management, getting support on key decisions is becomes very easy. Gaining management buy-in was never a challenge in any of my CIO roles. 46

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I would say that CIOs need sound business acumen. They need to communicate the benefits of investing in IT and the impact those investments are going to have on the overall business and growth strategy of an organization. Cost is only an issue if the value proposition is not compelling. The CIO has the responsibility of communicating that value proposition in way the leadership team understands.

And how would you rank a CIO’s HR skills? I consider a CIO as a business leader. Leadership needs emotional empathy. It is no longer sufficient for CIOs to have only technical skills — in fact this is a disadvantage sometimes. CIOs need to have the skills to manage a large number of technical people. A CIO is not required to be a technical expert and should not even try become one. CIOs need to have the ability to motivate technical teams, who very intelligent people. They need good people skills and also mentoring and coaching skills. As the economy recovers, CIOs will face competition and attrition will be high since the market will open up and opportunities will increase for their staff. CIOs who will retain their teams will be those who can relate to their staff, motivate them and provide a clear purpose for working. Paying a higher salary than anyone else is only a short-term solution. CIOs need to be good people leaders.

The new economic order is likely to see more M&As. What should CIOs be prepared for? When there is M&A activity in progress — and I agree there will be many on the way to recovery — one of the most expensive exercises is the integration of technology. When you look around at some of the major M&As around the world, you will see that the technology integration was so complex and costly that organizations decided to leave the technology platforms on a standalone basis. But in doing so, complete integration was not possible and the synergies could not be fully achieved. From my own experience, when two companies come together, the CIO needs to be on the frontline and needs to clearly define how the two companies are going to merge in a cost-effective manner. When you see successful marriages, it’s clear that those organizations have got their IT integration right. CEOs need to understand this. They need to hire the right CIOs with the right skills. They need to support CIOs, empower them, and support them in being transformational agents who want to effectively use technology to help the business grow. CIo

Kanika Goswami is assistant editor. Send feedback on this interview to kanika_g@cio.in

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Kapil Dev Singh

We’re entering a new economic phase but your threshold for risk is still stuck in the middle of 2009, warns IDC India's country manager. uP but not Yet About BY DEEPTI AHUJA BALANI

Is it time for Indian businesses to get out of survival mode?

P HoTo BY SRIVATSA SHANDIlYA

Kapildev Singh: Just three quarters ago, the need was to cease bleeding and start re-breeding. Today, most businesses have come to terms with the challenge though it will take some time for them to regain their past glory in terms of revenue and profitability. But their emergence from this challenging time proves that they have done the right thing with their cost structures and business models. It also shows that the race for survival is over. Businesses are now coming out of the survival mode and they are preparing to ride the next wave of growth. That course will be different from the past. I must add however that even as more Indian businesses come out of survival mode, I am not sure if the scars of the slump will fade soon. There will be some caution and anxiety that will remain.

Do you think cost cutting strategies vis-à-vis IT operations, will continue? The cost-cutting that happened during the recession will continue because the pressure on IT budgets is still prevalent.

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But in the future that approach could change. The kind of things that IT can do for businesses and the level of IT adoption by enterprises is overwhelming. That said, in the time to come the sheer ability to spend on almost everything looks restricted for IT. It may look like an act of cost-cutting, but it is primarily being done from a perspective that everyone has finite budgets and you can’t do everything that’s possible under the sky. Basically, businesses will be selective while charting out IT budgets.

Will the slump activate domestic IT outsourcing? The outsourcing business depends on two divergent, though related, factors. The first is the underlying need to ‘de-capex’ IT investments or reduce direct investments in capital expenditure. Why? Because over time these investments become legacy and can’t be done away with easily. The second is making IT more responsive to business needs, and the rapid integration of IT with business in the wake of changing business dynamics. These factors will drive IT outsourcing. ReAL CIo WoRLd | D e c e m b e r 1 5 , 2 0 0 9

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Future Watch The ‘de-capitalizing’ factor has been driven by the recession, and IT leaders are facing increasing pressure to do more with less and not spend too much capital because these investments will become obsolete anyway, given the rate at which technology is changing. This need has come to the surface in a strong way during the slowdown and favors outsourcing. Also, as we move ahead, IT-business integration needs will give thrust to IT outsourcing. It won’t happen immediately, but gradually as IT users and large enterprises seek different business models and different cost structures. IT outsourcing will certainly grow over a period of time.

been slow, showing only single-digit growth rate, but we can expect to see it grow in double digits, that is, 13 or 14 percent in 2010. All the sectors and components will start looking up in the coming year and we can expect some investments as well.

What struck you about the slowdown?

Will a slow recovery of the overall Indian economy have a ripple effect?

One prevalent characteristic I noticed was the resilience many players adopted during the recession. This resilience has come in the wake of a shift from an investment-led paradigm to a cost-reduction paradigm. The pace at which the market plunged was significant and amid all of that organizations still came out with new strategies, new pitches and value propositions for their customers. Organizations are expected to continue to bring flexible because they understand that the market is not going to go back to what it was. Resilience — in terms of responding to fast-changing needs — is a lesson that we have all learnt and it’s going to stay.

Is the domestic IT market out of the woods yet? The signs indicating a recovery of the domestic IT market are fairly evident. Take the PC market as an indicator. From Q1 to Q3 of 2009, though you will see a year-on-year ‘de-growth’, you will also notice that the rate of ‘de-growth’ is slowing. You can say that the fall has been arrested now. And, in the last two quarters, there has been a noticeable quarter-onquarter increase in growth. The growth of the PC market, and several other areas in the IT industry, indicate that the slump has reached its bottom and that the industry has started looking up — though the going may be slow. In 2009, we saw the domestic IT market grow in single digits and if this trend continues, recovery is sure.

But specifically in 2010? 2009 has been a troublesome year for the industry. Domestic IT growth has

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How does that compare with the global scene? If we take into account all the components of the industry, the Indian IT market has not weakened as much compared to its counterparts in the US and Europe. Here in India, the pace of growth of the industry might have decreased but the pace at which it will come out of this slowdown is expected to be much faster compared with worldwide markets.

A lag in economic activities always impacts domestic IT markets. The rate at which the economy plummeted was drastic and as the economic situations got graver, the reaction of the Indian buyers and consumers was quite rapid. The sentiment of buyers could be one reason for the slightly elongated growth of the IT industry. Basing ourselves on this, we must rule out the thought that the moment the economic situation becomes rosy, the IT industry will also start picking up. It will take some time to put that confidence back in the industry; it will only come when the economy sustains growth for a longer period. The coming year seems to hold some promise with projections that the Indian economy will grow between 6 and 7 percent rate. In 2009, we saw some growth quarter-on-quarter and if this continues for another two quarters that will speed up the upturn. So, somewhere between the second quarter and the fourth quarter of 2010, is when we can project a firm tendency for the IT industry to move up the path of recovery. Today, you can see optimism in the industry but people are still cautious. In the coming year we will see this enthusiasm result in spending and a new business cycle is expected to begin then. IT demand is a derived demand and only when other industries grow can IT grow. Once other industries catch the next wave of economic growth, then IT is bound to grow.

Will the downturn get IT and business to collaborate more? Today, IT is available to everyone so IT in itself can’t be a source of competitive advantage. It’s what organizations do with it and the way they configure it with their businesses that will give them an edge. The focus is going to be on putting IT to innovative use and deriving advantage out of it, rather than treating it as a generic commodity. There’s innovation expected in terms of how IT is configured and how it is delivered. The delivery mode is also undergoing rapid transformation. I know various areas where vendors and users are jointly trying to develop unique functionalities for IT that can be converted into competitive advantages. To sum up, the lessons from the slump have been learnt well and now the focus is going to be on how to put IT to use and what kind of competitive advantage the business can draw from it. CIo Deepti Ahuja Balani is correspondent. Send feedback on this interview to deepti_ balani@idgindia.com

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Aroop Zutshi

The Indian economy is beginning to dust the slowdown off. But how quickly will it get back in the saddle?The global president and MD of Frost & Sullivan has some ideas.

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bACK In fRont BY KANIKA GOSWAMI

What are your views on the momentum of India’s recovery?

Which is the least-hyped industry in India, and why?

Aroop Zutshi: I think India is definitely on the road; the only question is about the kind of speed and curves we shall see. But this is sure: we shall see a stronger Indian recovery. There will be relatively sharper improvements in the Indian economy compared to the world economy. 2010 is going to be a significantly better year for Indian companies. There is still a largely un-penetrated domestic market, which represents a huge opportunity. Combine improvements on the global scene with domestic demand and India is on to something really big.

The reality is that IT is such a ubiquitous industry, it cuts across all verticals. So I look at IT to get an upswing in all verticals. It touches everybody, it has the greatest influence. It may be hyped, but it is very much a part of our lives, like it or not. On the other hand, I believe that telecom is an industry that is a core sector industry now. It helps communicate, share information and it should get more attention. It doesn’t get the same level of importance that IT gets, but it should.

Which sector will lead the recovery? There are multiple sectors. ITES is certainly in good recovery mode. Other sectors which will show promise are transportation and logistics. I can see good growth in the energy industry too; this includes generation, transmission, distribution, storage and renewable energy. I think we will see a lot of growth in those areas because if India is to grow as a market, there is no way that can be achieved with existing infrastructure. One of the other areas that will impact the entire IT industry is green. We are going to see a significant number of new products and services with a green perspective. Green will drive the recovery a lot more than it has done in the past. Consumers are getting more knowledgeable and more interested in using products and technologies that are green. That will stimulate the market for new types of products and services.

PHoTo BY SRIVATSA SH AN DIlYA

Which sectors will lag?

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Sectors that will take a while to recover at a global level are the automotive industry and housing and real estate. In India, I see a relatively faster recovery but globally I see a slower comeback. I think defense will see a bigger resurgence but the commercial airline industry will take a little longer to recover, simply because travel is quite restricted and businesses have not quite grown up so much that they allow people to travel.

What do you foresee for the Indian economy in the year ahead? From an analyst perspective, we are going to see significant improvements in some sectors. These include a stronger manufacturing and retail industry, a refreshed technology mode and some rural markets being developed. The benefits of the economic upswing have been relatively restricted to a few Tier-I and Tier-II cities in this country. I think more penetration will occur over the next few years and when this happens, India's GDP will easily do 7 to 8 percent.

What other economic trends do you foresee in India in 2010? I think some of the mega trends that I see globally could also have an impact on India. Mobility is a big mega trend, with more transportation systems and things like electric vehicles coming up in almost every part of the world. Similarly, climate change is another big issue around which a lot of things are happening in the world. I also see a lot of peerto-peer networking, that’s why I see significant emergence in networking websites. These are global mega trends and India cannot avoid them. We have to figure out how we can leverage a Twitter to communicate our value provisions, our products and our services to the customer. These things will impact the way we do our business in the future. Companies have to be adaptive. If your competitors are doing things differently, you better ReAL CIo WoRLd | D e c e m b e r 1 5 , 2 0 0 9

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Many companies globally overinvested and when revenues declined, their capability to move costs around was diminished. be comfortable with these mega trends to be able to meet them head on.

What do you think is the big learning from this hard phase? I have seen three economic downturns but this has been the worst. Economic downturns are humble reminders that not everything will always continue to be rosy and that business cycles can be treacherous. When financial systems collapse, there is little people can do. What makes it tougher is that during tough times you need financial support the most. Companies now realize that they have to create a structure — complete with best practices — within the organization. They need to have the immunity and the power to fight back what is happening outside their walls. They need to re-invest in the business — yet ensure they don’t over-invest. What we saw in many companies globally was significant amounts of over-investment. When revenues declined, their capability to move costs around was diminished. Because of that there was an incredible pressure on margins which put pressure on cash. I am hoping that companies learn that they need to build long-term, sustainable and agile businesses, and that this downturn is the last in our lifetimes. Yet I know that ups and downs in business are common, and that they will continue to happen.

Do you think the Indian industry has learnt some something? I do, especially those industries that were exposed to global markets. They have learnt that they have to be equally agile and adaptive to what is happening in the outside world because their businesses are now much closer. Did they move fast enough? Probably not. They could have been a little more agile. They were, of course, living in an environment which allowed them to think that the great momentum would continue. That said, I think the ITES industry saw some quick adjustments. They were able to handle the recession effectively. Of course when things get tight in other parts of the world there is a natural flow of business coming this way, since companies in those parts of the world need to cut costs. 52

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I think one lesson everybody has learnt is that we have to continually monitor the business from a 360-degree perspective. We can no longer stay focused on the customer or the competitor; we need technology, environment, competitors, industry integration, all of them. It’s a very challenging world, and that’s why we need all this perspective.

Has the slowdown made lasting changes to the IT industry in India? I believe so. I think all IT, ITES and semi-conductor companies now have to live in a different world. They have to realize that competition is no longer domestic, it’s global and customers are demanding more value. The customer base is getting extremely price conscious so solutions that provide greater value at much lower price points have to be figured out.

Will a focus on marketing hasten the recovery? Absolutely. I think every company has two types of challenges. One is internal and the other is external. Internal challenges are where companies can implement strategies to fix their challenges. It’s in a much more controlled environment. What companies don’t have a handle on are the external challenges. And that’s what the marketing function does: to understand — from a 360 degree perspective — what a business’ customers need and what is competition is up to. Awareness is also needed on economic issues that are likely to affect the market including government policies, import-export duties and trade regulations. We should also know about the restrictions in place for marketing like the collateral that we can produce and the tools that we can use. For example, in many countries of the world today, e-blitzing is no longer allowed. We need to be aware of these changes in our external environment.

Till now, infrastructure has been a hurdle to India’s global ranking. Do you see that changing in the near future? Certainly, key for India, besides all the technology and products, is a continued focus on infrastructure. Not only bridges and roads, but also IT infrastructure. We need high speed Internet connectivity. Telecom infrastructure is good but we need it to be better. We need more value-added services. I think this is the moment for India to shine. Given the stability of the present government, we can continue to build on the policies that have been set, and build an environment that’s more conducive to business. This country has the potential to be in the top 10 and even the top five economies of the world in 10 to 15 years. Already, at the rate at which it is moving right now, it will surpass the Japanese and Chinese economies in the next 10-12 years. CIo

Kanika Goswami is assistant editor. Send feedback on this interview to kanika_g@cio.in

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Sivarama Krishnan

The future of enterprise security will be value-driven. The executive director and partner, Performance Improvement, PwC, tells you what exactly that is. tHe neW VALue of SeCuRItY BY GUNJAN TRIVEDI

PHoTo BY SRIVATSA SH AN DIlYA

How do you foresee the information threat landscape shaping up in the near future? What’s our biggest problem in 2010? Sivarama Krishnan: The threat landscape is changing. I believe the critical threats that are now evolving include eco-terrorism, insider threat, profit-driven attacks, pandemics, vulnerabilities in cloud computing and Web 2.0, among others. We are witnessing a significant shift in the threat landscape as attacks from viruses, botnets, and the like, which are basically intent on exploiting vulnerabilities, to a more sophisticated form of attack, one aimed at gaining financial benefit.

Will an organization’s security stance change to accommodate this new threat? Organizations are aware of the changing threat profile and are aligning their defenses to the new order. The main shift we are

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Future Watch seeing is how companies are protecting their information based on its value. The new area of focus has been in preventing leaks in information and increasing end-user awareness. Why? Because organizations have realized that the best form of defense is to educate end users and ensure end-user compliance.

What about CIOs? How should they change? The basic principle of security is not to take anything at face value. The CIO's strategy for security has to undergo a change to tackle emerging global trends. The prominent change that I think they have to make is to assess what they propose to protect and figure out its value. The CIO's attention now needs to shift from protecting IT infrastructure to protecting business information.

What about disruptive changes? What do you see on the horizon? I believe we will see two disruptive approaches being undertaken in the near future. One is obviously in the area of value-driven security, in which CIOs will have to map their investments in security to real values for their

CIos have to map security investments to real values. Threat-based investments will be a thing of the past. businesses. Threat-based investments will be soon be a thing of the past and CIOs and CISOs will now need to clearly justify an investment in a solution according to the value of information it protects or the value of the threat it minimizes. The other disruptive approach is deploying security by creating zones that combine the physical and logical locations of an enterprise. Why? Because we are witnessing disappearing boundaries in terms of the extended reach and network of an enterprise.

Over 35 percent of Indian CIOs considered managed security services a key strategy, during the slowdown. Will that continue? The harder economic realities obviously impacted the cost of IT operations. Hence, it was wise for CIOs to turn to managed security services as these would reduce cost and simultaneously enhance CIO’s reach for skilled resources at a lower cost. As I said earlier, security practices are now moving towards a value-based approach. 54

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Investments in security and resource availability will directly depend on the value organizations see in protecting their information. Managed services offer CIOs a viable way to access good resources — if they run enterprises that do not deal in sensitive data. However, you will also continue to see in-house security teams being maintained in verticals that see security as an absolute essential for their businesses, such as BFSI, telecom and IT/ITES.

From the 2009 CIO-PwC State of Information Security survey, insider threat is still a significant problem. Will that change in 2010? Insider threat has always been on the high side. During the initial years, insider problems were due to a lack of employees awareness. However, with the Internet eliciting economic value from every scrap of information, insider threat to gain economic benefit has gone up. Also, over the years, corporate networks have gone beyond the organizations’ walls to include its customers and suppliers. Hence, you see a surge in insider threat leveraging these extended corporate operations. As Indian corporates globalize their operations, they will see similar trends. Nevertheless, I believe that Indian corporates are well prepared for these threats; look at the number of reported incidents in India, are lower than the global average.

Many CIOs say that the regulatory environment became more burdensome during the downturn. Is that your observation too? That perspective isn’t true for Indian enterprises — other than multinationals. As we have seen several mergers and acquisitions in the BFSI vertical along with various cases of government investments across the globe, it is true that some regulatory requirements have been enhanced. Nevertheless, this is more of a global phenomenon and it does not hold good for natively Indian organizations.

What changes do you see in the way companies will invest in security in 2010? Not only will organizations change the way they invest in security and compliance in 2010, but also the way they invest in IT overall. As the realization of benefits become clearer, CIOs will continue their focus on optimizing the use of existing resources and reducing the size of their non-core workforce. I think CIOs will spend more on introducing higher levels of automation.

A final word: One thing that CIOs should keep in mind in 2010. I think enough investments have been made in securing various IT infrastructure levels. The threat perception has now changed to leverage the value of information rather than gaining unauthorized access or inducing the unavailability of resources. CIOs now need to focus on what information they should secure and what is its value. Based on this value, they need to decide how and what needs to be protected. I believe CIOs should have a much larger focus on end-user awareness and compliance. CIo Gunjan Trivedi is assistant editor. Send feedback on this interview to gunjan_trivedi@

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EVENT REPORT

Virtualization ROI As the slowdown wears off, CIos are facing calls for greater agility, which makes it a great time to introduce virtualization. How do they get their peers to see beyond the technology’s cost? Some CIos have a few ideas.

I PHoToS BY SRIVATSA SH AN DIlYA

n November, 2009, CIO magazine’s State of the CIO survey spotted some interesting trends. One of these is that business seems to be finding steadier feet, though momentum is still weak. The survey also revealed an enthusiasm among IT leaders, who felt that they were heading towards a recovery. Although that’s a testament to a rise CIOs see, it is also testimony to how inward-looking our economy was — and the effort it’s going to take for CXOs to come out of that mode. Among the various ways IT leaders have been looking to leverage the upturn is virtualization. The technology offers increased flexibility — at a time when businesses across verticals are demanding agility and their IT infrastructures have been physical, entrenched and rigid. But if virtualization is such a perfect fit, why is it that CIOs have a hard time implementing it? That question was answered at a recent series of CIO roundtables on virtualization and cloud computing titled Enjoy the Flex, Transforming Businesses. The roundtables also gave CIOs a chance to exchange views and experiences on the two technologies.

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Where CIOs are Coming From As bad as the downturn was, it gave many enterprises the chance to re-organize their IT strategies and infrastructure. For instance, Murali Krishna, VP, Head Computers and Communication, Infosys Technologies, completely retooled the backend of his organization during the recession and said the slowdown was the perfect time to make such a transformation because with the downturn came maturity. “It was during the slump that we understood that we needed to make ourselves more agile and improve our business delivery model, thus improving our provisioning and increasing utility. We focused on standardization, and once we standardized and made changes, it streamlined things for us,” he said. Krishna is not alone. Another project that took off during the slump was something started by Subbarao Hegde, CTO, GMR Group. “We came out with an ISTP (Information Systems and Technology Plan) to align IT with business strategy and focus on a process-driven system approach,” he said. “By the time the slowdown began, we had started implementing

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money from licensing,” said Subhasis Sarkar, automation technology in our organization divisional CIO, ITC Lifestyle Retailing Business and it was a success. Now, the emphasis is on Division. Girish Rao, Head IT, Marico, echoed training and awareness.” that sentiment, “Desktop virtualization helped At Metlife India Insurance, Associate us a lot in terms of power saving, lowering Director-IT, Capt. Siva Kumar, was also doing of Indian CIOs say they capex, and increasing manageability.” something similar. “When growth was slack, “First and foremost it enables IT to be we took it as an opportunity to straighten and are managed in a better fashion, in shorter time and sort out processes and process-related issues.” with fewer resources,’’ said Sudesh Agarwal, Dhiren Savla, CIO, Kuoni Travel India, did the VP-IT, Landmark Group. "The initial cost may same. “During the recession, we were busy desktop virtualization be high but ROI is definitely there. It is helpful investing in projects that would make our for use in 2010. in terms of lowering the burden of licensing organization lean in the future,” he said. State of the CIO 2009 cost, increases flexibility, manageability, and All of these projects point in one direction: ensures business continuity.” companies focused and continue to focus on Some CIOs have chosen to consolidate first. “Our agenda consolidation, as a means to find greater agility and drive down is to first consolidate and then virtualize, because the cost of costs. “People have become cautious about investments after managing our entire infrastructure is huge and that could the slump, but also smarter,’’ said Sunil Mehta, Sr. VP and Area be reduced by consolidation,” said Rajesh Munjal, head-IT, Systems Director (Central Asia), JWT. In terms of investments Carzonrent (India). At the other end of the spectrum is Satish CIOs are not only looking at core competencies but also other Das, CSO, Cognizant Technology Solutions, who said, “I think areas in the periphery, which can help them save money, if a person has not virtualized yet, they can move on to the cloud manpower and time. "Cost has become the driving force now, directly, thereby cutting down complexity and TCO.” but at the same time we realized that our core competencies M.D. Agrawal, Chief Manager (Refinery), BPCL, agreed with have become stronger as a result of these challenging times,” Das, and pointed out that with technologies like the cloud, there's an opportunity to save a lot of cost, “without even having to train Why CIOs Turn to Virtualization people on the technology.” One way that IT leaders are creating a leaner future is by turning But what does the cloud have to do with virtualization? “The to virtualization. “Organizations across the world want to cloud is not just about the ability to provide computing on quickly adapt to changes in the marketplace,” said T. Srinivasan, demand but also the ability to switch on and you’ve your whole MD, VMware-India and SAARC. “They want the ability to IT infrastructure according to your convenience. The first step move data across virtual sites instead of having to set up large towards the cloud is virtualization,” said VMware’s Srinivasan. and complex infrastructure. The impact that has led businesses He also added another benefit from virtualization: “One to take cognizance of the virtual space — from the technical of the best takeaways from virtualization is the ability of an standpoint — is the ability to quickly develop infrastructure and organization to become operating system agnostic. As you move test the environment while moving to production. Virtualization forward, the reliance on any one operating system has to go.” plays a role in making that happen, along with the ability to utilize existing resources more optimally.” On their part, CIOs are taking to virtualization for a number of The ROI Bar Gets Higher reasons. One of them is cost. “Virtualization helps in the immediate But the fact is virtualization costs money and capital is in short provisioning of servers and also helps us save huge amounts of supply. Take the case of Abnash Singh, President IT and Center of

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“Virtualization has become an enterprise discussion point rather than just being an IT managementlevel issue. It is extending to all the aspects of the IT enterprise, gradually morphing into the cloud." — T. Srinivasan MD, VMware-India and SAARC

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“More than anything else, what drives virtualization more than ROI is utilization. It is a factor that dictates the need to virtualize." — Seema Ambastha Director Technology, VMware

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our management, as IT in our organization Excellence, UCB Pharma India. “While dealing has always delivered beyond expectation, and with the requirements of the business, our focus also because the volume of transactions is so has been to cut costs and spend only on areas high that the payback period for our projects that are strategic to our businesses,” he said. is very low.” The ground reality for CIOs is that of Indian CIOs the recession has dramatically increased most management’s expectations from IT Innovative Justifications say investments. One result is that ROI timelines But those who were not so lucky had to find is have shortened. Another is that CXOs now new and sometimes innovation methods to on their radar. want ROI and then some. That’s the experience justify their investments. “Definitely ROI of Krishna of Infosys, “ROI’s a given and apart matters, but it matters to the entire business, Source: State of the CIO 2009 from that the management asks for what we and not only to one unit of investment. Hence can bring in, on top of the ROI,” he said. we should look for integrated ROI,” said Arun Gupta, Group CTO, Shoppers Stop, put a number on Sunil Sirohi, VP, NIIT. how hard it was. “During the recession, project screening got Explaining how he deals with this demand for ROI, Daya really hard. Only two out of 25 projects got the go ahead,” he Prakash, head-IT, LG Electronics India, said, “IT should be said. “Selection was based on factors like what the competition placed so strategically that it becomes an integral part of the was doing and how to conserve cost. The choice of projects was business, and then the need for the justification of a separate based majorly on their criticality.” ROI for IT is not felt. This will also help reduce the ROI cycles Some, however, are more fortunate. According to P.A. for IT. This approach also helps you do away with a lot of Kalyanasundar, GM, Bank of India, management buy-in has waste in processes.” never been an issue at his organization. “We have had many Adding to this, Rajeev Seoni, CIO, Ernst & Young, said, instances where IT helped business achieve its goals,” he said. “The green approach — and the savings associated with it “For instance, with the introduction of a VRS scheme, the — have eased the job of getting approvals for virtualizationnumber of employees at our bank reduced, and our workload based projects." increased. It was technology that helped business cope with that That’s something that Laxman Badiga, CIO, Wipro situation. So, at our bank IT has never encountered any problem Technologies agrees with. “One of the key things to consider aligning with business goals.” when planning for an IT investment is to align IT with Swaranjit S. Soni, Executive Director (IS), IOCL, also shares business,” he said. “When the slowdown started, costthat experience. “All our IT initiatives have been endorsed by cutting was a major criterion to decide investments and some other factors were greening, security and also operational efficiencies. Another important thing was to move capex to opex, which we did through software consolidation and that “When we decided to go down the really made the things simple for us.” path of virtualization, we didn’t push V. Subramaniam, CIO (India and UAE), Otis Elevator a proposal based on ROI but as the Company, pointed out that today management styles have consequential expenditure of not changed and that they emphasize more on effectiveness. virtualizing.” “One important factor to evaluate an IT investment is the — S. R. Balasubramanian, eVP-IT and discipline of execution, that is, how fast you can deliver it,” Corporate Development, Godfrey Phillips he said. “What we did in the last two years is to prioritize our projects dividing them into critical and mandatory projects. For process effectiveness we mapped our processes to find “First and foremost it enables IT out which ones were not efficient and removed them.” to be managed in a better fashion, Prasad Kodali, Head-IT Operations, Timken Engineering in shorter time and with fewer and Research India, seconds the speed approach. “The resources. The initial cost may be speed at which we can deliver a service with the help of high but ROI is definitely there.” virtualization is in itself an ROI,” he said. Another way to getting buy-in for virtualization is to — Sudesh Agarwal VP-IT, Landmark Group look at the cost of not choosing the technology. “When we decided to go down the path of virtualization, we didn’t

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push a proposal based on ROI but as the consequential expenditure of not virtualizing,” said S. R. Balasubramanian, EVP - IT and Corporate Development, Godfrey Phillips India. Commenting on this Seema Ambastha, directortechnology, VMware, said, “More than anything else, what drives virtualization more than ROI is utilization. It is a factor that dictates the need to virtualize." Wipro’s Badiga, however, is more focused on the immediate. “The tangible benefits are needed for demonstration purposes. And then you can go on to develop intangible benefits like ease of provisioning for the next project. All that will come over a period of time, but initially, when you implement a technology, the short-term deliverables are part of the demonstration,” he said. UCB Pharma’s Singh didn’t quite agree with Badiga and said that in end-user companies parameters are different from those followed in the services industry. “Here, the intangibles are a necessary part of the ROI. We need to show better uptime, better response time, and better support that a technology implementation can bring,” he said. At Aegon Religare Life Insurance, director-IT and change management, Srinivas Iyengar, said he observed another technique that worked. “I agree that the total cost of return and the speed of pay-back period are some factors that have come up as trends. But now, management is also interested in knowing how fast an investment can help them scale up the business. The point is: Certain amounts of intangibles have also found their way in.” "What we believe in as a group is that there is no dearth of money as far as you can prove what you plan to do can disrupt the market, and therefore help make the organization more efficient. Hence, intangibles are equally important for us as the tangible part of ROI,” he said.

What to Watch out for With the variety of justifications available to CIOs, the group’s attention turned to some of the common mistakes people make while investing in a technology like virtualization. Hariharan Subramaniam, Sr. Group GM-IT, Nitesh Estates, said that, “Normally, we don’t have standard operating procedures in an organization. This is why sometimes ROI is not realized, because the method to measure it has not been put in place in the beginning. And that’s a challenge.” Tarun Pandey, VP-IT, Aditya Birla Financial Services, was more concerned about the lack of an exit plan. "An important thing that people miss out while virtualizing is that they don’t strategize how to get out of virtualization. Sustaining a virtualized environment is not always possible and CIOs need to think of the time when they might want to get out of virtualization.’’

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“The speed at which we can deliver a service with the help of virtualization is in itself an ROI.” — Prasad Kodali, Head-IT Operations, Timken engineering and Research India

"An important thing that people miss out while virtualizing is that they don’t strategize plan a proper exit strategy.” — Tarun Pandey VP-IT, Aditya birla Financial Services

S. Hariharan, Sr. VP, Infrastructure Solutions and Services Group, Oracle Financial Services Software, agreed. “Taking decisions on time to get out of such projects might be difficult, but that saves you further trouble,” he said.

Going the Distance Despite these challenges, both on the justification and pitfall fronts, virtualization is finding greater acceptance. “Lately, people are focusing on three kinds of energies: the financial energy — IT spending that has direct impact on the bottom line; human energy – manpower; and earth energy, which is conservation. Virtualization has shown promise on all these three fronts,” said Srinivasan. “Virtualization has become an enterprise discussion point rather than just being an IT management-level issue. It is extending to all the aspects of the IT enterprise, gradually morphing into the cloud.’’ CIO

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CONTROL Since 1853, the Indian Railways, one of the world’s largest and busiest rail networks, plotted train traffic across the country with a pen and paper. Crammed with inefficient and inaccurate data, the railways realized that it needed to automate its processes. Here’s what happened when IT took control. BY GUNJAN TRIVEDI

Manual Control

How automation can enhance customer serviceaking

When the first-ever passenger train ran from Howrah to Hoogly in 1853 — a short

Tackling change management issues

ILLUSTRAT IO N BY MM SHAN IT H

W

hat about the Indian Railways is taken for granted, despite the colossal complexities involved in running Asia’s largest rail system? Controllling its train traffic. Consider this: With over 9,000 passenger trains, the Indian Railways covers about 63,630 kilometers of the country, ferrying 18 million passengers and more than 2 million tons of freight daily. In fact, just the broad gauge track, which is about 52,000 kilometers, carried 6,974 million passengers last year and brought in 99.8 percent of the total freight earnings of the organization. This is significant because the Indian Railways makes about 70 percent of its total revenues from the freight sector alone. And when all that traffic is managed and controlled manually, you have a lot more reasons to worry. The railways realized that it couldn’t run with manual, inaccurate and inefficient processes any longer. As the number of passengers and trains using its services increased, the need to automate its key Reader ROI: processes intensified further.

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Case File distance of 24 miles — nobody would have imagined the amount of ground the Indian Railways would cover. And definitely not how complex its network would get. The Indian Railways is divided into 16 zones that further break down to 68 divisions. Each division comprises several sections that are manned by section controllers who individually control about 200 kilometers of rail track. A section controller, manning a control office, directly interacts with the stations within his section to understand the movement of trains. Traditionally, the movement of trains — whether running between stations or departing from and arriving at stations — was recorded and plotted manually. “Suppose there is a freight train and a Shatabdi is running three stations behind, the controller decides that the Shatabdi is a fast and a high-priority train. So if the freight train is running on the same track, it will delay the Shatabdi. That’s why the controller needs to control the freight train at the station which has a loop line that enables the Shatabdi to overtake the freight train,” explains R. Badri Narayan, GM-R&D, CRIS. On the large grids of time-distance charts, section controllers continuously plot the movement of trains by communicating with stations. What one section controller does can affect train traffic across the nation. Think of them as air traffic controllers with paper and pencil. More importantly, it is also time-sensitive. However,

this process required cona way that they can’t undo stant supervision and analysomething just to fudge sis by chief controllers and records,” explains Narayan. operations managers everyBut management refused to SNAPSHOT day. It was also important to budge and users were left Indian Railways check if control officers were with no choice. And today, HEADQUARTERS: following the rules and were even for users, the benefits New Delhi not detaining trains beyond a of the application are hard to ESTABLISHED: reasonable period. ignore. 1853 To automate these Section controllers now DIVISIONS: processes, CRIS, the IT arm have better visibility of 16 zones of the railways, rolled out train movements in their EMPLOYEES a control office application respective sections. The time13.95 lakh (COA) a pan-India unified consuming task of manually application to help manage train traffic charting and plotting train traffic has been across all divisions. replaced with real-time plotting. The app has also enabled the organization to react swiftly to abnormal traffic conditions such as accidents or inadvertent delays due to fog, for instance. The project began under the aegis of the It has also benefited customers. “Today, then general manager of projects at CRIS, information available to us allows us to Sanjaya Das, who later moved to Ajmer as significantly improve our bottom line — its Divisional Railway Manager. Narayan, customer service. Now, we can inform with the help of the original core team took our customers where exactly their freight over the project. crates are, when they should expect these Today, the application provides realto reach their destinations or the expected time train traffic information to division time of arrival of passenger trains and controllers, enabling quick decision much more,” says Narayan. making. It has enhanced transparency The COA also interfaces with various and accountability, by dramatically critical systems of the organization to cutting down corrupt means of affecting provide more accurate information to the movement of freight trains. its passengers in terms of the arrival or Despite transparency being a benefit, departure of trains, prompt status updates there was resistance from users who were to its customers about freight movements, not ready to change the way they worked. corrective action plan for its integrated “The application has been built in such coach management. Overall, the project has improved rail efficiency and safety. “This has translated into greater passenger and freight customer satisfaction, and increased revenues and efficiencies for the Indian Railways as it can now transport increased payloads leveraging the same rail infrastructure,” says Narayan. Although, controlling train traffic is still not the easiest job in the world, but it certainly has made the Indian Railways’ life a lot simpler. CIO

Automatic Transmission

“Today, data available to us enables us to significantly improve our bottom line: customer service.” — R. Badri Narayan, GM-R&D, CRIS

Gunjan Trivedi is assistant editor. Send feedback on this feature to gunjan_t@idgindia.com

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LIFESTYLE HACKERS When twenty-somethings hack into a blocked social networking site in the workplace, they mean no harm. In fact, with Web 2.0, they are multi-tasking to increase productivity. But do senior colleagues look at them as enthusiastic youngsters or malicious insiders? BY JIM ROUTH AND GARY MCGRAW

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Security

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incidents in the past two years were lifestyle hacks. The he insider threat, the bane of computer Reader ROI: root of the problem is that newly minted staff members security and a topic of worried Why Web 2.0 is a necessity for young being hired today were generally born in the late '80s; conversation among CSOs, is undergoing employees their managers and rule-imposers are of the Baby Boom significant change. Over the years, the Why you have to generation (born between 1947 and 1961). Baby Boomers majority of insider threats have carried compromise on were brought up with television as the dominant out attacks in order to line their pockets, punish their security for Web 2.0 household technology, while the Net Generation (as Don colleagues, spy for the enemy or wreak havoc from Bridging the Tapscott calls them in Growing Up Digital: The Rise of the Net within. Today's insider threats may have something generation gap Generation) was exposed to the Internet as early as they much less insidious in mind — multi-tasking and can remember. Television is a mostly passive broadcast social networking to get their jobs done. medium. By contrast, the Internet promotes widespread collaboration. There's a growing risk within most organizations today that is This difference engenders significant divergence in behavior for the clearly an insider threat but is also clearly not caused by a disgruntled two generations. Baby Boomers focus on a single task when under or disillusioned employee. More often than not, the new insider threat pressure, while the Net Generation prefers multi-tasking. is a recently hired twenty-something. We've coined the term ‘lifestyle The University of Oregon Library published a study that showed hacker’ to refer to this new cadre of insider threats. The lifestyle hacker that the average Net Gen'er, by the age of 21, has been exposed to: does not have malicious intent. Nevertheless, he is highly successful at skirting various corporate controls put in place to protect security10,000 hours of video games related Websites and critical endpoints. The most interesting and ironic 200,000 e-mails aspect of the lifestyle hacker is that he is motivated by the pursuit of 20,000 hours of TV productivity, often the very same motivation driving the implementation 10,000 hours of cell phone conversation of various corporate controls. Tightly managed organizations often Less than 5,000 hours reading books block access to Web 2.0 capabilities in order to promote productivity Some demographers bifurcate the Net Generation into Generation of staff. However, this very same staff often desires to utilize Web 2.0 X and Y, but for the purposes of understanding the lifestyle hacker, Net capabilities in the name of enhancing personal productivity. Gen says it all. As Internet-facing technology became ubiquitous and This conundrum exists as the inherent conflict between those who leaped from the home to the mobile device, the Net Generation adapted make the rules and break them, both of whom are driven by the exact by incorporating new technology into its very social fabric. The Net same motivation —being more productive in the work environment. Generation prefers SMS texting and using instant messaging in many There are two fascinating and problematic aspects of this situation social situations. Utilizing a texting system as an essential productivity worth mentioning: tool in a professional environment is a natural extension of normal Net 1. The population of lifestyle hackers is growing in size and diversity Gen social behavior. The same can be said for social networks such as demographics of new hires shift toward those people who grew up as Facebook, which offer excellent tools for collaborating on complex on the Internet. problem solving and building effective relationships. 2. Neither the corporate decision makers nor the lifestyle hackers Unfortunately, many Baby Boomers have never used Web 2.0 tools understand the security threats of emerging and evolving Web 2.0. at work. Such tools simply did not exist when they entered the work force. As a result, they often view such tools as distractions from doing real work. Not Logged in Yet One high-tech firm did a study on the primary reason for To get a handle on the growth of the lifestyle hacking problem, consider undergraduate offer rejections by prospective new hires and discovered this: One Wall Street firm estimated that 45 percent of all security

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Security

ironically, the lifestyle hacker is also motivated by the pursuit of productivity.

that the number-one reason for rejection was that access to Facebook was blocked. The firm now offers access to Facebook. Along the same lines, but without a solution to the problem, FS-ISAC survey results from April 2009 indicated that over 90 percent of financial service firms block access to social networking sites. The number-one reason for blocking access is a concern over productivity, not security. Ninety-five percent of the firms responding to the survey have no plans to change policies to allow access to social networking sites. To restate the conundrum, leaders believe that social networking, instant messaging and using SMS constantly in the work environment will lead to lower overall productivity, so they block access. Net Gen'ers believe that Web 2.0 technologies are essential for collaboration and relationship management and that they improve productivity. Impasse.

ACCeSS deNied? Not ReALLY To sidestep the impasse, a growing number of Net Gen'ers are using their technical savvy to find creative ways of bypassing controls so they can leverage Web 2.0 capabilities. Perhaps an example can make this clear. Dylan (not his real name) was an intern working in the IT department doing server administration for two years while he completed graduate school. He then applied for and was hired as an analyst working in the operational risk department. Dylan established himself as an effective contributor to the department over a period of six months. One day, the corporate security staff noticed a spike in network traffic coming from Dylan's workstation. The large volume of data transfer indicated the possibility of a security breach in which company information was being shoveled off to an outside party. The security staff initiated an investigation. They eventually approached Dylan and completed a forensic analysis of his computer. They figured that Dylan had constructed a secure tunnel by exploiting a vulnerability in the company's Web proxy, and he was connecting his workstation to his ISP at home. This allowed Dylan to watch pirated movies running on his home PC while he was streaming music from sites no longer filtered by the proxy. As it turns out, Dylan was also modifying a sensitive risk report at the same time. When Dylan's boss was told what was going on, Dylan

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was asked to leave the firm. His boss was disappointed, since Dylan was one of her most productive employees. Note that Dylan was not malicious and in fact did not intend to break established policies and federal laws. His actions were motivated purely by his desire to multitask, unfettered by the standard controls that all other employees had to live with. The question is, how many Dylans work in your organization? And what are you to do if you're the CSO trying to safeguard your firm while also enabling business growth? There are no easy answers here, just as there are no simple Web 2.0 technology controls ready for prime-time implementation. Upon reflection, we believe the most important thing to do is to educate staff about the security and brand risks associated with unfettered use of Web 2.0 capabilities while exploring ways to offer tools with collaborative capabilities with a level of control that the organization can manage effectively. This solution is likely to necessitate updating your security policies as well as communications and marketing policies governing publication of the firm's information. In addition, the firm's IT strategy should clearly define a road map for Web 2.0 implementation over time that provides for increased collaboration outside the firm. The right approach for each organization must, of course, be driven by its respective business model, since business and security risks always differ. The good news is that the problem of the lifestyle hacker provides a clear opportunity for innovative leadership by the CIO and the CSO. What is clear is that the technology frontier has moved well beyond the workstation to an increasing constellation of mobile devices and distributed software (some of it already in the cloud). As more processing capability emerges in PDAs, there will be no avoiding them or their distributed software as a work platform. Collaborative technology is here to stay. Solving the Net Gen productivity problem in order to avoid lifestyle hacking is thus a critical aspect of the CSO's job. Finding the right balance for your organization will require innovation, education and, most importantly, courage. We certainly can't hold back Web 2.0 in the name of security. At least not for long. CIO

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ERP

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uge h y n a m d n a d n e ons of sp li il b , s e d a c e d r u no t a h t After fo e r a w t f o s e come th e b s a h P R ke E a , t s s e t r a 's failu t a h w ’s e out. Her h it w e v li n re. a c u t s u s f e h t in busine n e p ly to hap e k li 't n is d n a is and what

SH AN ITH Io N BY MM

ately prove to be recession will ultim bal When asked if the , Jim Hayes, the glo e Reader ROI: t in ERP's history th in in po g lly in e, cia rn tic pe tu ac a es pr ture — e's Oracle n of How the definitio ctor of Accentur by re di led g Predicting the afu nd in e, ha ag ar st an be m ftw , so enterprise — is fool's errand erP is changing for decades with rs, ed be rk m technology world wo nu s, es o's m ter co wh let n th ing disruptio t board marked wi benefits of marry liever that from Ouija Boards (a fla agrees. "I'm a be icate with spirits) un m m s of disruptions co bI nd d to ki an ed P he us er Hayes says. "T of " re ty, tu and other symbols, ni fu rtu e th one po 't op isn ful, certainly on ading dartboards. And Where erP is he ise en have been pain se pr and IT analysts' ter ’ve en we , us ps at es th ap ak d m el, because it ? SaaS, on-deman n tic, on another lev tio eu za ERP already here ap ali er tu th vir be e, ay ar m level, but Open-source softw 2.0 collaboration, rse. rethink things." ly to the ERP unive s. 't exclusively me easily or quick isn co r e and cloud platform ve ar ne rs ftw s de so ha un ge ise Sa an But ch hool's Adam re of enterpr d The Wharton Sc lity. It's not only But the real futu an na on tio fss es nc jol fu tak yn d Br lly an ca ik MIT's Er that it typi tor applications ired for Innovation ery models can W liv based on wow-fac ok de d bo P an w ER ne ns e tio lik eir note in th investments, ich new applica e technological ars for major IT th ye about knowing wh ng n vi ve ar ha se ye o to tials e ul t fiv m between s due to the the business; bu t. That means tial returns. That' immediately help to deliver substan those new apps fas s, of m e ste ag sy nt e changes. va id ad -w s e e enterprise e-of-busines fleet of foot to tak ually takes to mak , but whenever lin us ter it ar d qu rio xt pe ne e th e. much time anymor not in 18 months or y. Think days. You don’t have that g ed that functionalit in ne rly ly de tru s un e er th ag at an m be certain th and IT staffs must urn are making In addition, CIOs on The DoWnT 18 months of economic ey have made (or iT th s e ion m cis la de B s m ste an sy t of xibility — architecture and ive has come ou that allows for fle e, in every If anything posit ts ided by a roadmap nies of every siz en gu ev pa e s m ar es co w) sin at no bu th ht e is rig tiv it up s, sr ao di ch ough to s es gy and busin h needed and thor terprise technolo , have made a muc try ability to adapt en un co the y er t's ev ha in W industry, strategies. o P investments and that the status qu ER as they occur. nt eir re th pa ery of ap Qu on t? ily ati en ad in re-exam , then, it's re l the investm l By that definition es the benefit equa deleterious globa e Do . Th Os e. CE or k ym As an true cost? ing to cut it clear. with ERP, ain't go ve made that quite ha ry ve co re s les recession and a job Ill US TR AT

IllUST RATIoN BY MM SHANIT H

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ERP helped clients move toward the dream," he says. "But like a lot of things CFOs. Are we getting the expected value from ERP systems? Demand you dreamed, it didn't turn out all that you had hoped, and therefore line-of-business managers. you modify your dream." Of late, when those core constituents haven't been satisfied with the So what's the future fix? A "happy middle," Hayes offers, which answers they've gotten in response from IT leaders, they've been brazen takes advantage of new advances in middleware offerings, tools from enough to raise once-heretical questions: What are the alternatives? the big vendors who allow easy integration between core databases Do we have to stick with SAP or Oracle, just because we always have? and infrastructure, and SaaS apps where appropriate. He calls it How about looking into software-as-a-service? For instance, Siemens, harmonization. All these capabilities become even more critical in created uproar when details leaked that it was questioning its ERP the future. First, many companies will soon face ‘to upgrade or not’ maintenance and support service agreement with SAP. If Siemens is questions as time continues to run out on their antiquated ERP challenging the status quo, then maybe we should too?Change was systems: Do they stick with their aged ERP versions inching closer already in the air. The global recession just accelerated it. to losing support from the vendors or take the plunge on a new and To Jon Reed, an independent analyst, SAP Mentor and blogger, different ERP package, such as a cloud-based or Open-source suite? outdated pricing models (such as ERP maintenance agreements) and Second, M&As are going to be on the rise as credit starts flowing again, ERP systems' slow pace of innovation are going to be two critical areas and the ERP systems of those companies making the deals and those for the vendor community in the near future. "I think the economy being dealt must be "nimble and responsive to change in business is a game changer," he says. "Even when it returns, it will return in a conditions," Hayes points out. way that will support different ERP business models than have been Crispin Read, general manager of marketing for Microsoft dominant in the past.” Dynamics ERP, which targets midsize organizations, points to a trend Make no mistake: Enterprise software vendors have recently felt he calls "hub and spoke" deployments: Companies more economic hardship and had to tolerate more use Oracle or SAP ERP suites as the central customer objections than ever before in their system of record, and use smaller app packages, histories. And for many, more pain lies in wait. "The like Dynamics, in the subsidiaries, plants and big ERP vendors are going to get a big punch in the various operating units of the larger company. "It's gut, and to some degree they've already gotten it. not new," Read says, "but we're seeing a lot more They've already gotten some body blows," Reed says. companies doing this." The rationale: A smaller, "How they respond is a really interesting question." Tier II system is much cheaper and faster to deploy At the venerable SAP, which has made billions than force-feeding big ERP software down on the from traditional big ERP installations, the future smaller properties of the company. of ERP commenced with the tacit realization that change was inevitable and good. "Enterprise software is going through a transformation in a very The Cloud Rolls In, Fast significant way," says Philip Say, VP, SAP Business Call it what you will: software-as-a-service, Suite. Themes that SAP has embraced in framing on-demand computing, Web-based software, Source: State of the CIO survey 2009 its own future of ERP include: clarity, innovation, cloud computing. Doesn't matter, because business enhancements without disruption, and timeless software experienced via an Internet connection and software. SAP is challenging the conventional thinking around ERP, browser is already here. At this point, however, no one is advocating for including the outdated acronym itself, according to Say. "It's ironic: wholesale rip and replaces of on-premise ERP installs. We're so invested in the notion of ERP, yet we're challenging the But as enthusiasm for traditional, on-premise, expensive and definition itself at SAP. I think it's radically changing," he says. "The complicated software deployments wanes even further, Web-based classic perception is that these are finance, HR, back-office, classic stuff software options hosted in either public or private clouds will become and that's it. I challenge that definition, because when I see operations even more attractive for companies big and small looking for low costs and how customers are using [enterprise software], they're not doing and easily consumed apps, analysts say. it in that way any more." Jim McGeever, the CFO of NetSuite, pays homage to Google for sticking to its uncomplicated homepage when the search world was morphing into portals in the late 1990s. Google's success is, in part, a The Homogenous Dream Dies validation that easy to use, intuitive Web apps are critical to the future One ERP system: a single, global instance of business software of ERP, McGeever contends. applications running our entire business and our business lines, "Although usage and adoption are still evolving, deployment of seamlessly uniting our CRM, supply chain and business analytics SaaS still varies between the enterprise application markets and applications. Efficiencies. Integration. Savings. Fewer headaches. within specific market segments because of buyer demand and That's been the dream at many companies and for CIOs since Y2K applicability of the solution," noted Sharon Mertz, research director — a dream most often fed to them by eager ERP vendors. at Gartner. Looking out even farther, Gartner predicts that the SaaS Accenture's Hayes says that for many — but not all — companies, market will show consistent growth through 2013 when global SaaS the pursuit of the single instance is a dream that hasn't come true. "The revenue will total more than $14 billion (about Rs 63,000 crore) for the homogenous dream was a great dream, and I think the industry has

35.3% Of CIOs are

planning to upgrade and refine their ERP apps in the next 12 months.

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ERP enterprise software markets. The research houses are equally bullish on cloud computing's future: David Cappuccio, Gartner's chief of research for the infrastructure teams, ranked it as one of the top trends affecting companies' technology use during the next five years. IDC's cloud services revenue forecast jumps from $17 billion (about Rs 76,500 crore) in 2009 to $44 billion (about Rs 198,000 crore) in 2013. Once loyal on-premise companies get a taste of SaaS and cloud-based services, they typically come back for seconds, however small a bite it may seem to the Big ERP vendors, analysts say.

Does Your DaTa maKe sense?

ERP INVESTMENTS

Top the list for Corporate IT Spending Corporate IT budgets may have gotten slashed in 2009, but that apparently didn't stop companies from investing in their ERP software this year. Forrester Research survey data of nearly 400 North American and European enterprise software decision-makers shows that two-thirds of companies are actively investing in ERP application portfolios — from pilot projects and implementations to expansions and upgrades, notes Forrester principal analyst Paul Hamerman, in the report The State of ERP 2009: Market Forces Drive Specialization, Consolidation, And Innovation. Even though the survey was fielded during the beginning of 2009 — when the global recession was sending businesses into full panic and spending lock-down mode — the data shows that just 1 percent of respondents had plans to decrease their ERP investment. Even with the frustration over maintenance fees and upgrade costs and today's corporate emphasis on business intelligence, analytics and CRM applications, an ERP suite is still considered the backbone of today's enterprises: supporting common administrative functions of finance and procurement, and often supporting the company's main operations and assets, revenue-generating activities, supply chain, and distribution channels, Hamerman points out. While the amount of ERP investment certainly can be discretionary, it appears that it is not optional — even during a global recession. "This level of activity is significantly higher than the other key packaged application categories," Hamerman writes, "including customer service, human resource management, order management, and supply chain." —T.W

Since the dawn of automated, electronic capture of corporate financial, operations, supply chain, HR and sales information data — what's become, more or less, ERP — companies have cumulatively spent billions, if not trillions, on managing and trying to extract value from their vast data repositories. Accenture's Hayes says companies know what they want to do — they see the value of BI and analytics output for their users — but they've often been stymied. "We know how to do transaction processing. We know how to close the books, capture orders, allocate stock and support business with ERP. But the real promise was: How could we take this data and turn it into information?" Enterprises today are deluged with terabytes of data: their own internal data; customer and partner data; as well as new unstructured data flows — from social networks and mobile devices. But guess what, during the next five years, Gartner predicts that the amount of enterprise data will grow by a jawdropping 650 percent. And the vast majority of that data will be unstructured. But all of this unstructured data could also be a huge opportunity for other, non-traditional ERP players to move into the market. For example, the unstructured data market is virtually owned and operated by Google. What about a Google play in the business applications space? At the Gartner IT Symposium 2009, CEO Eric Schmidt made no secret of the fact that Google has designs on the enterprise market space. However, independent analyst Reed has trouble envisioning Google building an ERP suite or acquiring an ERP company —"that's extreme," he says. However, "if a Google type of company can present a way of pulling together all this unstructured information in a cloud-based environment, and then somehow connect that to a structured platform — uniting the unstructured and structured information — then that's a big, big thing," Reed says.

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pressure — maybe even more — as the new millennium dawns. "Rapid proliferation of SaaS solutions inside the organization requires strong CIO leadership in coordinating data, business process and meta-data integration strategies," writes Ray Wang, Altimeter Group's partner for enterprise strategy, in a blog post. In particular, the business is crying out for easy-to-digest, highly usable and meaningful analytic data on enterprise-wide business functions. A 2009 IBM study of more than 2,500 global CIOs found that leveraging analytics to gain a competitive advantage and improve business decision-making is the top priority for CIOs. A whopping 83 percent of survey respondents reported that BI and analytics — the ability to see patterns in vast amounts of data and extract actionable insights — as the way they will enhance their businesses' competitiveness. Inside too many businesses today, a paradoxical data situation exists: While the struggling economy has forced businesses to attempt

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to cut costs that often means leaving this data store largely untapped, which creates the risk of more is less, notes a July 2009 Aberdeen Group report. "The ability to provide better decision support with integrated enterprise data is an important factor in turning data into actionable intelligence," write the Aberdeen analysts. ERP analyst Hamerman writes in the Forrester report that embedded analytics represent a key functionality in the future: "Rather than having to leave the application and launch separate reporting and analytics tools, ERP applications are moving toward embedding analytics within the context of the application itself," he states. So how are CIOs dealing with the ERP and BI demands? Nectarios Lazaris, CIO for Woods Bagot, an architectural design firm with offices in Dubai, Bangkok, London and Hong Kong, seems like he's coping the best he can. "We need an ERP system to do a lot of predictive forecasting, and output different [project] models and business scenarios for us," Lazaris says. He describes the complex process of how Woods Bagot vies for new business and how these global projects typically run their course — covering structured and unstructured data from all over the globe and how best to visualize that data. Is he getting that now? "With a great deal of difficulty and I guess a lot of skepticism in the output," he says. In fact, Lazaris laments that users still sometimes have more affinity for Microsoft Excel than the ERP system. "Sometimes you have to take it on the chin from your users," he says. "You go back, you try to talk to the account exec at your ERP vendor, and you try to get it across that you hope the next release is better. But [my] people will say: Why can't an ERP system be as powerful as Excel, which is ironic." The future of ERP, this is not. But it just might be the reality for too many CIOs as 2010 dawns. More than any time in its nearly four-decade history, change is swirling in the air of the ERP ecosystem. It's not that companies are cutting spending on ERP-related systems; in fact, quite the opposite: ERP investments still top the list of corporate IT investments and in 2009 were almost recession proof. It's just that the recession and years of questionable return have forcefully introduced a new strategy: Leave the commodity ERP processes to the back office (such as payroll and HR), but make damn sure that front-line users are freed from the banality and inflexibility of the Ghosts of ERP Past. Industry consultant Reed sums it up this way: "Empower me. Give me the tools to create differentiating processes that allow me to define myself from my competitors. And make sure that it's easier for me to do, so I don't have to hire 100 programmers. Give me the building blocks to put that together quickly, so that it's just humming in the background, and leave me free to focus on what makes us better than other companies." That's what customers are expecting now and really want. CIO

Your Quest for the

Perfect Case Study

Ends Here Finding the perfect case study on technology implementation just got simpler. Visit the Case Studies section at the all new CIO.in to find hundreds of case studies searchable by industry or technology. The easy navigation is enhanced with Executive Summaries, 1-page condensed versions and clear Reader ROI spelt out, so you can derive maximum value. Work-life, Simplified.

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Log on to www.cio.in/casestudy

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CHARTING

THE YEAR

AHEAD

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CIO | 2010: The Year Ahead Program 2009 gathered India's top CIOs and the leading lights of the industry to chart out the challenges and opportunites in upcoming year. And with a year like the one we have ahead, it couldn't have been timed better.

Index

PRESENTING PARTNERS

ASSOCIATE SPONSORS

PARTNERS

CEO Insights | Pg. 80 Session Coverage | Pg. 88

The Year Ahead_Index Page 78,79.indd 79

KNOWLEDGE PARTNERS

12/12/2009 10:49:56 PM


B.S. Nagesh, Vice Chairman, Shoppers Stop, urges IT leaders to connect with the customer in 2010. 80

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The Year Ahead Program I Keynote

HE WANTS YOU ON HIS SIDE The vice chairman of one of India’s most celebrated retailers tells you what CEOs want from IT leadership in the year ahead. NAME: B.S. NAGESH ORGANIZATION: SHOPPerS STOP HOBBY: TrAVeLING, cOOKING

We can safely assume that 2010 will be fantastic and that the consumer sector will see fast growth. But we need to remember that everything has a supply and a consumption side. I believe that 2010 will be driven by the consumption side. The debacle that was last year was more from the supply side: liquidity failed as did corporate governance. But our consumers didn’t fail. What was partially behind this failure? We believed labor was cheap and built hype around it. But it’s no longer cheap and will never be. We need not be pessimistic about growth. We need to be cautiously optimistic.

do, for instance. I have changed jobs three times, but my customers have remained with Shoppers Stop for the last 10 years. Another important issue is client integration. There was a time when we had to force our clients to work with us and share information with us. But today, we have about 900 to 1,200 suppliers and 90 percent of our B2B is connected to us. The customer and client integration with business will become very important.

The CIO’s Role in the Upturn To take part of the recovery, CIOs need to define their roles and figure out whether they will play a strategic or tactical role. In business, decisions come from two areas: the science, which takes care of finance, accounts, production, and technology; and the arts, which includes HR, marketing and administration. Traditionally,

CIos MUST BE MoRE AMBITIoUS. HoW MANYREAllY WANTTo BE CEo? AT SHoPPERS SToP, IT IS PART oF EVERYoNE’S KRATo TAKE oVER THEIR BoSS’JoBS. IF YoU'RE NoTAMBITIoUS,THAT’S WRoNG. Market Drivers In the next year, the marketplace and the factory will drive consumer business. The biggest driver will be going back to the consumer and seeing what can be done for them. Consumers will become extremely conscious about value and price. We have already achieved one second worth for one paisa, innovation will be about achieving one second at one tenth of a paisa now. Till last year, value for money used to be top priority for customers, this year the value for time was added, next year the value of relationship will join the mix. It is going to be all about getting the best price, as quick as possible but still in a humane way. I don’t know how people without technology will be able to build that. It is also certain that, hereafter, the customer will be more knowledgeable than us. Many of them know our stores better than I

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the CIO role has been thought of as a scientific role. But now CIOs need to learn the art and that will come from a CIO’s understanding of the customer. This connect is extremely critical. I was talking to a consumer who was looking for a pair of trousers at one of my stores recently. I told him we had over 5,000 trousers in our store, with over 4,000 varieties, when he told me: “That’s nice but I don’t buy from you. I go to that shop on Linking Road, which has only 200 varieties but where I can get my size.” That’s the connect I am talking about. This is especially true in the retail industry where the key business path is availability, which is driven by merchandising, which is driven by technology. Connect: This will be the smartest strategy to meet the cut-throat competition expected over the next two years. Since the slowdown, everybody’s become much smarter and when the recovery rolls around many companies will do much better, much faster. The only REAL CIO WORLD | D e c e m b e r 1 5 , 2 0 0 9

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way we will succeed in beating the competition is ensuring peer connects and customer connects. How can a CIO help? To assess a CIO’s role, one question that needs addressing is accountability. Internally, a CIO has to know: which part of the group’s balance scorecard is his deliverable. How many CIOs see their deliverables on the CEO’s list? If your CEO doesn’t share his problems with you, he will not think of you as someone who can succeed, and will not see you as the next CEO. Here are some examples from my industry. The success of B2B. Ensuring that queues at Hypermarket don’t go beyond three customers. At Shoppers Stop, 2009 will probably be the best year in terms of revenue, because our CIOs played a big role in it. They looked at every process, instead of just technology processes, streamlined our efficiency and made all the difference. And that’s why I say that CIOs need to be much more ambitious. How many CIOs, for example, genuinely believe they want to be a CEO? If CIOs don’t have ambition, that’s wrong. At Shoppers Stop, it is part of everyone’s KRA to take over their boss’ jobs. Ask yourself, how many times have you had lunch with your team? At least once a week? And how often have you had lunch

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with the peers? Not too many times, I’m sure. That has to change. Connecting with the customer will be a strong point, but peer connect will also be very significant. CIOs need to make sure they are a part of a management committee. Talk about your achievements, draw attention, and try your best. Get the human and functional integration right because you come from a science background. Most CIOs are considered intellectually arrogant, because neither the CEO nor CFO knows what they actually do. So CIOs need to educate their peer group in different technologies. It’s very important because if they are ignorant they will not support the CIO. The role CIOs will be asked to play over the next few years is going to be much tougher than the one they have been playing until now. The CIO’s involvement will be much greater than the CFO’s involvement, because as the only technology regulators, they bring efficiency and productivity. CIO

— As told to Kanika Goswami Kanika Goswami is assistant editor. Send feedback on this column to kanika_g@cio.in

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The Year Ahead Program I Keynote

IDEA BEHIND INNOVATION

The CEO of Philips Innovation Campus talks about the culture that drives great innovations and what you need to do to tackle change management issues in 2010. NAME: ALEXIUS COLLETTE ORGANIZATION: PHILIPS INNOVATION cAmPUS HOBBY: HIKING, PLAYING SQUASH

In his book, Good to Great, Jim Collins said, “Good is the enemy of great. And that’s one of the key reasons why we have so little that becomes great.” He is right. It is easy to go from bad to good, but from good to great is difficult. Life is about experiences, and bracing yourself for the unexpected. I feel the same about innovation. Meaningful innovations are those that can bring the right solutions at the right time and at the right cost. In business terms, innovation is about raking in profits. I invest in innovation because it helps me meet the business objective of making more money.

have our competence, and others have theirs. Let’s not get into this game of finding who is better. So, in 2010, identify your competence, and focus on it, and get rid of those which others are better at. At Philips, we have embraced a culture driven by competence and discipline. We can articulate our user's needs, simply because we’ve spent extensive time with them. Team Game: Innovation is the result of teamwork. While working in a team, it is important to remember that each member of your team is at a different maturity level. If you want to innovate successfully, you should know where you and your partners are placed in the maturity ladder. When you’re at step two, look where your partner is, and where you as a team want to be. Only collaboration and partnership can help you get to the top of that ladder. Innovation is not about just one great idea; it is the collaboration of competencies. Take for example, we used

INNoVATIoN IS NoT SoMETHINGYoU Do oN A FRIDAYAFTERNooN; IT SHoUlD BE EMBEDDED IN YoUR EVERYDAYPRoCESSES. Apart from that, innovation, especially in the coming year, should be customer driven. I feel that IT leaders do not always understand their customer’s needs. To do that, CIOs need to step out of their offices and spend time with their users. It is also important to realize that people’s needs are not the same across the world. Take the Nano for instance. It is a perfect example of a good innovation that connects with the needs of the Indians. If you want a lot of people to drive a car in India, you’ve got to focus on cost reduction. The Nano was an innovation, forced by the needs of the end users. Let's take a closer look at innovation: Culture of Innovation: Innovation is not something you do on a Friday afternoon; it should be embedded in your everyday processes. It is about identifying your competence and leveraging the best possible solution out of it. If you don’t believe that you can do something better than your competitors, don’t invest in it. We 84

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to have three models of shavers but they were made for the same purpose. We were looking for one perfect design. What did I do? I got five people from five different teams and locked them up for a week in a room. The results were amazing. They brainstormed and came up with one spectacular product. That is real innovation. Getting Buy-in: As a leader, you need to convince the business. For instance, my team is the ambassador of innovation and my job as the innovation leader is to open the doors of the senior management to my team. But to be successful, it is also my responsibility to convince top management that my team can achieve what it has set out to achieve. And to do that, you need to get your priorities right and align them with that of the business. If your CEO has a different vision than yours, you’d be wasting your time. In the new year, spend time analyzing your stakeholders, those you need to convince, and those who are your supporters.

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Alexius Collette, CEO, Philips Innovation Campus, believes that great innovations in 2010 will be the ones that bring in profits and are driven by customer needs. Vol/5 | ISSUE/02

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Step Out of Your Comfort Zone: Any innovation brings with it a world of change. And the only way to manage this change is to get people out of their comfort zones. Let me give you an example. My team had gone trekking once and members of the team had formed mini groups of their own. One group was leading the way and the other wasn’t very keen on continuing as it was very cold and they were shivering. But the team leader had to take a call on whether to stall the trek or proceed with it. He decided to move ahead and the group that was lagging behind had to push itself to get to the peak. But once they got there, the whole team was filled with a sense of achievement. In the end, it’s the team that matters and for the team to succeed, people need to get out of their comfort zones. Also, remember that with change management, there is only one important parameter: the timeline. In my experience, if there is no external threat, then you might as well forget about change. If there is no business challenge, or a dire financial crunch, or even a customer driven inadequacy, the business will not agree to alter the way it is

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functioning. In 2010, it will be your job as the innovator to find that external threat that will drive the change. Bridge the Gap: There will always be two elements that accompany any change: the financial repercussions and the emotional ones. The economics of change can be explained, but it is equally important to explain the sentiments behind it. Remember that in every change some people will gain but there will always be a few who will lose out. That’s why it is important to communicate clearly with your people. Don’t assume they’ll understand. People across the globe are the same inside; they all like a little respect, a little challenge and a little appreciation. What is different is the way you communicate with them. The external drivers to change might be different in different cultures, but the leadership to drive the internal change is the same everywhere. CIO — As told to Varsha Chidambaram Varsha Chidambaram is trainee journalist. Send feedback on this column to varsha_ chidambaram@ idgindia.com

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Future Tech "Convergent concepts with divergent implementation models is the name of the game. Classic examples include cloud computing, SaaS and SOA. " — Srinivas Kishan Anapu, VP-Enterprise IS, Mahindra Satyam

"I think mobility is the technology for the next year, especially with us.We will use it to enable our sales force to connect directly with customers and end users." — Subodh Dubey, CIO, USHA International

Everything Elastic Sanjeev Narsipur, VP Technology R&D India, Accenture

Agility and flexibility are at the top of every organization’s must-have list, said CEO VIEW: STRATEGIES TO LEVERAGE THE REBOUND

“Connect: this will be the smartest strategy to meet the cut-throat competition next year. The only way we will succeed in beating the competition is ensuring peer connects and customer connects.” —B.S. Nagesh, Vice Chairman, Shoppers Stop

NEXT-GEN DATACENTERS: VIRTUAL COMPUTING

“The future of the datacenter will be shared environments, where everything will be virtualized, datacenters will be transparent, flexible and facilitate the real-time transfer of information.” —Gaurish Lawande, Pre-sales and Lead Consultant, EMC

Heard at Year Ahead 2009 An employee’s KRA

must be to replace his

boss.

Sanjeev Narsipur, VP Technology R&D India, Accenture in his presentation that looked at how organizations could find more flexibility in the year ahead. “The coming year will be about technologies that enable businesses to attain agility in the face of the changing economy,” he said. To get there, he pointed to cloud computing. He predicted that it would be a disruptive technology that would lend agility to businesses. The disruption would come from an enterprise’s ability to buy an application from a SaaS vendor, for instance, instead of having to build it. And that same ability to buy and start up quickly would lend agility. And, the problems with the cloud were already being addressed, he said. One example was the introduction of caching technology that enables computing to continue even when Internet connectivity is an issue. The second technology that would help make organizations nimble would be BI and analytics, with its ability to make sense of the huge pool of data organizations maintain. The third trend he directed IT leaders attention to was mobile commerce and how mobile devices were turning into payment gateways. The fourth technology on his list was collaboration, aided by social networking skills. ■

There is nothing

called security.

All that exists is

opportunity.

I have trouble just dealing with the real world. Why should I complicate it with a virtual one?

The Year Ahead_Pages 88-96.indd 88

Where’s my IDG jacket? We can all be replaced by people

five years younger than us.

12/13/2009 12:46:02 AM


Enterprise Infrastructure “Even after indications of an upturn and recovery, it is very clear that only efficient enterprises will thrive,” said Sameer Garde, country general manager, Dell, speaking about how CIOs can unleash ‘the efficient enterprise’ and make best use of the upturn. He added that the way an efficient enterprise is defined today has also undergone some change. “The average age of employees has come down considerably and more people work from home,” he said. Work environments have also has transformed, he said, pointing out how employees relate easily to Web 2.0 applications and how many more work on-field, using technologies that allow business at any place, at any time. These changes will ensure that only enterprises which manage their resources efficiently will succeed, he said. “Virtualization and consolidation, cloud services and workforce transformation now define an efficient enterprise,” he said. Yet, he added only 15 percent of the servers are virtualized and IT leaders are still skeptical about cloud services. “Just promise me that you will set aside 5 percent of your budget for the cloud over the next two years,” he said as he urged CIOs to invest more in automated systems, and cloud services, in order to utilize their budgets better. ■

"Technologies to watch out for in the enterprise infrastructure space: cloud, virtualization and unified communications. I am looking forward to flash drives on storage." — Sanjay Belsare, Sr VP-IT, Kotak Mahindra Finance

"We are contemplating partial outsourcing of infrastructure and want to acquire virtual infrastructure with the help of technologies like the cloud." — Dinesh Chandna, CTO, Aksh Optifibre

FROM GROUND ZERO TO 30,000 FEET

“In 2010, cloud computing will definitely change your organization’s infrastructure landscape and therefore CIOs need to think of new risks, new processes, new skills and new tools.” —Sivarama Krishnan, Executive Director & Partner, PwC

THRIVING IN TODAY’S ECONOMY

“The future belongs to business intelligence. When organizations are gearing up for the recovery, executive leadership must focus beyond the here and now.” —Don Cooper Williams, Executive Director-Asia Pacific, SAS

Event in numbers

44206 cm2 The area that gift-wrapping paper would have covered if it was lined up.

Unleashing The Efficient Enterprise Sameer Garde, Country General Manager, Dell

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3 encore.

Times Raghu Dixit was

asked for an

211

at Hands th inr o it the ed f chie

shook. 12/13/2009 12:46:16 AM


Business Transformation Vinita Ananth, director, HP SaaS, Asia

Running IT Like A Business Vinita Ananth, Director, HP SaaS, Asia Pacific & Japan

Pacific & Japan, shared her thoughts on how SaaS would help today’s IT leaders transform into tomorrow’s business leaders. “When you go through recessionary times, new leaders come to the forefront,” she said. She backed her statement with a McKinsey survey, which showed that 40 percent of people who are leaders today, were not leaders before the recession. IT leaders have to adapt to a changing business climate, she said, adding that the knee-jerk reaction of cutting budgets to meet the slump wouldn’t prepare organizations for what comes after. “The smart CIOs of today are changing adversity into advantage by accelerating technology modernization while cutting costs,” she said. She elaborated how business-technology optimization with standardized and automated processes could give CIOs insight and control over IT spend and allow them to prioritize investments. She then introduced HP’s Business Service Automation (BSA), an offering for the automated management of client, server, software, network, storage and process. The service, she said, is designed to help reduce the duration of network device or server-related outages and improve IT staff performance, which would lead to economic benefits. ■

Datacenter MANAGING A RELIABILITY QUOTIENT

"There were learnings from the presentations and some interesting points were raised. I’d have loved to known more in the Indian context."

“Almost 70 percent of datacenter problems are caused due to physical inadequacies, which can be easily managed.” —Bala Chandran, MD, India and neighboring countries, ADC Krone

— M.D. Agrawal, Chief Manager (Refinery), BPCL

"We will see more consolidation in datacenters going forward.While I agree with the points made in the presentations, I would like to see CIOs talk about their success stories." — Johnny Paramian, Group CIO, GMR

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LEVERAGING MANAGED INFRASTRUCTURE SERVICES

“The need for optimal utilization of capital will drive consolidation and deliver services to end users more efficiently.” —Simon Robin, Head Managed Infrastructure Services, Tata Communication

12/13/2009 12:46:29 AM


THIS BUSINESS OF CLOUDS: PREPARING FOR THE FUTURE OF I.T.

“In addition to technology, business acumen coupled with diplomacy will help CIOs transform into efficient business leaders.”

“First and foremost, cloud computing is based on multi-tenancy – an environment that is shared. You will stick with a cloud provider not because of a legal contract but because you find value in the service.” —Shahed Latif, Partner, KPMG (USA)

— Ratnakar Nemani, CIO and Head-IT Projects Wing, VST Industries

“There's an increased push for CEOs and CIOs to connect on the same platform.CIOs can transform into business leaders by reducing opex and capex.It’s about doing more with less.”

Entertainment à-la Raghu Dixit

— Abnash Singh, President, IT Operations Center of Excellence, UCB Pharma

INTELLIGENT WORKLOAD MANAGEMENT

“Employees are now computing across multiple environments and the corporate network works more outside the office firewalls, which makes it necessary to use intelligent workload management" — Sandeep Menon, Country Head, Novell

INFRASTRUCTURE & SERVICES

“Data explosion, combined with a lack of space, power and skilled manpower, is pushing CIOs to house their servers outside their premises, and the availability of low cost bandwidth is making that move easier.” —Sudhanshu Tewari , Director, Trimax

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Virtualization It’s all about choice, said Frank Feldmann,

Breaking Virtualization Barriers Frank Feldmann, Senior Product Manager, Red Hat APAC

"CIOs need to figure out how they can leverage enterprise wide virtualization. The future of virtualization is to spread it across all levels: server, storage, security, network and the desktop."

senior product manager, Red Hat APAC, in his talk titled ‘Breaking Virtualization Adoption Barriers’. And Linux is a perfect example of choice, he said. “Since its birth in 1999, Linux has done a great job as a viable operating system alternative.” The choice of being able to turn to Linux has granted IT leaders bargaining power, scalability and flexibility, he said. When the US Customs chose Linux to run their systems, they saved to the tune of $60 billion (about Rs 270,000 crore. Open Source allows users to build the design, build and test applications in its own community and assures complete customization and scalability. "However, there are still barriers to the adoption of this technology, despite the fact that most of what it offers will stand by CIOs in the competitive times that lie ahead," he said. Virtualization, the technology that will surpass all in the next years, faces certain barriers — costs of proprietary solutions, performance, scalability and security many other issues, he said. Open Source takes care of most of these barriers, drastically reducing costs of hardware, software, with increased performance and much higher flexibility and scalability. "Red Hat’s enterprise virtualization manager for servers and enterprise virtualization hypervisor have been launched to meet this demand," he said ■

— Ranga Raj, CTO, Celstream Technologies

"Virtualization goes a long way in reducing cost and improving performance transitioning from virtualization to the cloud is certainly the next thing that could happen." — Vijay Bhaskar Dixit, Director-IT Asia, UnitedHealth International

BUSINESS LEVERAGE THROUGH PROCESS MATURITY

“2010 will be an important year for CIO as their organizations go back into growth mode. They will need to remember that process is just as important as people and process will enable high-performance businesses.” —K.K. Raman, Executive Director, Advisory Services & Head of Process Improvement Practice, KPMG

Going Traditional: Folk Dance SECURITY VIRTUALIZATION

“Next generation cloud-based offering that use a single chassis increase flexibility where security is concerned. It manages and allocates security resources according to need and sends out live security updates.” —Vishak Raman, Regional Director SAARC and Saudi Arabia, Fortinet

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12/13/2009 12:47:19 AM


Communication

Enterprise Solutions: Exciting Times Ahead Rajiv Sehgal, VP, Bharti Airtel

Rajiv Sehgal, VP, Bharti Airtel, spoke about key developments in telecom and how they could help organizations achieve their goals. Because voice revenue is going down and people are going mobile, Sehgal said that there’s pressure on organizations to stay connected. “Many budding technologies can help organizations stay connected on mobile platforms, apart from saving costs and increasing productivity. In the changing paradigm of communication, we are shifting from a peer-to-peer environment to a peer-to-application one, and the focus is moving from voice to non-voice apps. Organizations will now have customized solutions to cater to these needs, irrespective of their verticals,” he said. Demonstrating the devices available for deployment, Sehgal explained how the media application device, for instance, allows journalists to send video clips and graphic heavy data at a much lower cost. It even works in remote areas with little infrastructure. Another technology, the health application module, Sehgal said, offers a flexible platform that allows interaction between patients and doctors. He also spoke about a mobile enablement solution architecture and hosted services that could be outsourced. Sehgal pointed out that in the coming year, organizations should watch out for technologies like 3G, mobile commerce and unified communications that will offer large revenue generation opportunities. ■

“Our focus in 2010 is to further the extent and impact of unified communications and IP networks to our greenfield locations.”

“In India, the penetration of mobiles far exceed that of any other medium. Mobile-commerce is the next big thing for most enterprises in the coming year. ”

— Arvind Tawde, Senior VP & CIO, Mahindra & Mahindra.

— Sanjay Malhotra, VP-IT (BS & eBiz), Amway

Fun and Games: Paper Throwdown

NOT INVENTED HERE: MANAGING CHANGE & INNOVATION

“Meaningful innovations are those that can bring the right solutions at the right time and at the right cost.” — Alexius Collette, CEO, Philips Innovation Campus

INNOVATIVE SOLUTIONS FOR UC INFRASTRUCTURE

“CIOs can expect a lot of change in the next year. One of them is to integrate wired and wireless networks and ensure that it is both secure and reliable.” — Jayesh Kotak, VP-Product Marketing, D-Link

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12/13/2009 12:47:36 AM


Enterprise Applications “The biggest challenge now is figuring how best we can utilize cloud services in our apps.We are still unsure about the security of the cloud and whether we can move critical data to it.” — Zameer G. Syed, CTO, Reliance Money

“We want to see the automation of risk management and optimization of resources in 2010. CIOs will have to look for gaps in their businesses and also for apps to update the business.” — Keshav Samant, VP & Head-IT, Financial Technologies (India)

Achieving Operational Excellence Through Workforce Management Christopher Todd, VP, Kronos

Christopher Todd, VP, Kronos, told IT leaders how they could achieve operational excellence through workforce management. "Your ERP might be bleeding money and you never knew it,” he said. For example, he said, paychecks with an excess amount against them often never get reported and that money is a drain on the company’s financials if the ERP is unable to catch it. According to him, if the ERP isn’t equipped to detect such errors then CIOs should shift their focus to workforce management. "If your ERP can give you an overview of your entire workforce then there’s nothing like it. If not, it is time you looked at implementing workforce management that gives tangible benefits to both employees and the organization,” said Todd. A workforce management system integrated with the ERP can demonstrate either a boost or decline in productivity in terms of the number of people working on a particular day, he explained. This sort of analytics can be harnessed by manufacturing and BPO companies. By significantly reducing the man hours required to process employee transactions like leave requests, payrolls, etcetera the HR teams can save money, directly impacting the bottom line. Businesses today expect quick ROI from projects, and workforce management systems can deliver immediate results according to Todd. ■

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FOGLIGHT: ADAPTIVE APPLICATION AND SERVICES MANAGEMENT TO UNIFY I.T. AND BUSINESS

“Business and IT needs to align from IT applications and services management perspective as it enables an organization to be wiser and smarter while improving its productivity.” — Bhaskar Sengupta, Head-Presales & Consulting, Quest Software India

THE NEW CIO AGENDA

“The gap between IT investments and business performance has been widening. Aggressive business activity should start by mid-2010 at which time CIOs must derive more business benefits from IT investments.” — Kumar Parakala, Executive Director & Head of IT Advisory, Global Head of Sourcing, KPMG

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T

Panel Discussion: How Welcoming is Your Front Door?

Storage “Storage virtualization is fast being accepted and that’s making it easier for CIOs to sell it to management.It can be used in cloud computing where at least non-core activities can be moved out.” — Shashi Kumar Ravulapaty, CTO, Reliance Capital

he panel discussion focused on the different approaches to customer service and lessons learnt from the slowdown. It included a select group from the BFSI sector including C.V.G. Prasad, ING Vysya Bank, Sunil Rawlani, HDFC Standard Life Insurance and Sriram Naganathan, Reliance Life Insurance. Here’s what the downturn “CIOs have to realize taught IT leaders: that if a customer is The slowdown was an opportunity dissatisfied, they need for IT to look back at processes and to go after him and try to check efficiencies that were lacking convert his experience CIOs should train their employees into a positive one." to stick to the basics and deliver to the — Shamsheer Ahmed, customers what was promised MD, Genesys Customers don’t appreciate long periods of waiting and impersonal responses IT leaders need to bring in the human touch because personalized service wins more customers Technology is just an enabler, it is the face that operates it that makes all the difference Do not oversell

INTELLIGENT INFORMATION INFRASTRUCTURE

“We need an optimal infrastructure to reduce cost, risk and add value to information. The intelligent information infrastructure will change how organizations store, manage and deliver information.” — V. Krishnan, Enterprise Business Sales Director – South India and Sri Lanka, EMC

Playing With Fire

“As businesses increasingly require more data to take decisions, we are going to see data explosion.This trend will continue and we'll need storage virtualization to manage it.” — Ajay Kumar Meher, VP-IT, SET India

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Security “Security may take a backseat in the near future, but not because of growth. It’ll take a damaging incident that CIOs can relate to before we take it more seriously.” — Gaurav Sharma, Corporate VP, Application and Production Support, Max New York Life

“Securing customer data, internally and externally, should be a CIO’s primary security focus in 2010.” — Dilip Sharma, Head-IT, Applications and Initiative, Birla Sun Life Mutual Fund

MEETING EVOLVING SECURITY NEEDS

“The fact that 53 percent of all mobile workforce has sensitive data on their laptops and a whopping 65 percent don’t protect it should scare CIOs, since mobility is the next big thing in the enterprise.” — Ramandeep Singh, Head–System Engineering, Check Point India & SAARC

NEXT-GEN DATACENTERS: VIRTUAL COMPUTING

"The upturn will result in three changes: new services and markets, a demand for increased efficiency and more partners. Enterprises need to meet these changes and still ensure information security." —Sameer Shelke, Co-founder and COO, Aujas

If You Were Not There, these are just some of the organization whose CIOs you missed sharing thoughts with…

Roundtable: Can Security Be a Growth Driver?

I

n a roundtable discussion,

IT leaders across verticals shared their insights on security issues. With enough and more technology solutions available to counter security challenges, CIOs debated all the ways in which about how to balance security deployments and accessibility of data within the organization. The discussion threw up some interesting views:

“A large part of the awareness of risk is the packaging of its threat.”

Security is never merely an IT issue, it has to be considered a business information security — Satya Mishra risk, one that relates to the Head, Solutions, India health of the business, not the IT Business, TCS infrastructure Over enthused security deployments may actually cause more harm than good, so it is important to identify the actual threat, and then patch it Educating the end users about what could be a possible threat is more important than putting applications in place Senior management usually co-operates with firewalls and accessibility issues but it’s important that there is buy-in from everyone For any project, security should not be an afterthought; it should be a part of the building process A large part of the awareness of risk is the packaging of its threat Security can actually hamper growth so it is important that businesses keep it in perspective while strategizing for growth

Aditya Birla Group Philips The Hindu Raymond BPCL Amway Godrej ING Vysya Bank Ericsson JWT Reliance Consumer Finance HPCL TVS Motor DLF HDFC Standard Life Indian Oil Sony Kotak Mahindra Finance Titan Shoppers Stop ITC Foods Wyeth GMR M&M

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

Expand Your Brand The benefits of social media outweigh the downsides.It’s time for CIOs to reach out.

SOCiAL NetWOrKiNG At first glance, social media sites such as Facebook, LinkedIn and Twitter

may seem like a great way for CIOs to waste a very precious commodity: your time. Maybe you've resisted because you're worried about exposing too much of your personal life — or just don't get what the big deal is. Whatever your excuse, social media has more to offer than you realize. It's time to jump in and find out. "If for nothing else, try it because you're a CIO and CIOs are supposed to be ahead of the curve when it comes to new technology," says Kirsten Dixon, online reputation management expert and co-author of Career Distinction: Stand Out by Building Your Brand. "For anyone to really see the benefits [of social media] you just have to experience it." Achieving social media's benefits — networking, collaborating, innovating, to name a few — requires active participation, says Twitter user Mike Schaffner, director of IT for the Valves and Measurement Group at Cameron, a provider of flow equipment products and systems. "Social media is just like real-life social activities. You won't get much out of being a wallflower." Exploring several different platforms to determine which best suits your interests and goals is the best route to take, Dixon says. Be wary, however, that each platform's

IllUST RATIoN BY UNN IKRISHN AN AV

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audience will be different, so you'll need to tailor your Internet persona accordingly. "That doesn't mean that everything you post has to be professional in nature, but everything that's personal should be tied to who you are professionally," Dixon says. "Remember that when you participate in these sites, you become searchable."

Social media is just like real-life social activities: You won't get much out of being a wallflower.

Help ! Our help desk receives frequent complaints about its service. How can I better hold managers accountable? Coaches: Roger Connors and Tom Smith, Co-presidents, Partners In Leadership, and authors of the bestselling book: The Oz Principle and the newly released, How Did That Happen?

Always: Make sure your expectations have been clearly formed and communicated when holding others accountable. If expectations are unclear, then the accountability conversation may seem unfair to your employees and be received negatively. We call this the accountability paradox — the harder you try to hold others accountable, the less accountable they become. By taking the proper steps to clarify what you are holding people accountable for, you enhance their ability to report good results. To keep it positive and productive, make sure your expectations can be 1) Framed: consistent with current organizational priorities; 2) Obtained: they are realistic and achievable; 3) Repeated: easy to keep top of mind and simple to communicate; and 4) Measured: can be tracked. When you communicate expectations, make sure you explain the "why" behind the initiative so it's understood what you are trying to accomplish. Sometimes: The effort needs to be focused on ensuring alignment around your expectations. Just because people are willing to comply does not mean they are on board. If it is an important expectation, you need to take steps to ensure they really buy-in. Conducting the right kind of inspection — one that has been agreed upon and is positive — may be just what is missing in the accountability relationship. Never: Play the blame game. It's not productive and will only give everyone else in your organization permission to waste time and energy on something that yields no results. Remember, what you create accountability for is what you get.

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Take Me Off Your Dashboard Chris Curran, CTO and partner at Diamond Management & Technology Consultants, created the "CIO Twitter Dashboard," a directory of CIOs who tweet, categorized by industry (www.ciodashboard.com/ciotwitter-dashboard). When searching for CIOs on Twitter, an old friend turned up and he added him to his list. "I immediately got an e-mail from him saying, 'Take me off your dashboard!'" Curran recalls. "He's a poker player and only wanted to network with other poker players. So I told him to remove 'CIO' from his bio if he didn't want other CIOs searching for him." Curran recommended that he create a professional ID where he could list himself as a CIO, and use his personal account for personal connections. Curran says that his participation in social media has opened doors for him. "I've been offered a few speaking engagements and have had people wanting to meet up," he says. "I now have five or 10 contacts who I'd never heard of before who are great thinkers in IT strategy and governance." At Cameron, Schaffner has transferred his knowledge of social media to the workplace by promoting the use of internal profile pages — similar to Facebook pages — for each employee. He hopes to encourage employees to connect and share their areas of expertise. "Just as the Internet and e-mail created new opportunities and ways of doing business, I believe social media will do the same," Schaffner says. "Once you learn how to use this effectively — either externally with customers and vendors or internally with employees — I think you'll have a significant advantage over your competitors." CIO

threeminute coach

Send feedback on this column to editor@cio.in Kristin Burnham is associate editor. Send feedback on this feature to editor@cio.in

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Insights from Members of the CIO Governing Council

T.K. Subramanian

The IT helmsman of the UB Group, Subramanian, Div. VP-IS, started his journey with the brand in 1983, at Herbertson’s (one of UB’s companies). He moved on as country manager of Ubex (UB’s software export arm). In 1995, he set up the IT department of McDowell’s (now USL). He implemented ERP and in 2005 started virtualizing infrastructure. Today, all 40 manufacturing units of the group are consolidated on one platform.

Find Equilibrium Work-life balance doesn’t have to be a tightrope walk, as the CIO of the world’s third-largest spirit’s company tells you. Work-life Balance | I first learnt the importance of work-life balance in keeping a professional focus 30 years ago. I had just quit L&T and joined a pharmaceutical company. I had only been with the company for four months when a date for my wedding was set. I knew getting leave would be difficult, but my reporting manager assured me that marriage was the one occasion for which adjustments could be made. On my part, I was willing to finish work that was assigned to me. It was all going well, when the reporting manager told me — just a few days before my wedding — that his boss objected to our arrangement. Apparently, it was too soon for me to take leave. What did I do? I got married and I put in my papers on my return. At my exit interview, I was honest about why I wanted to leave. But that experience influenced the way I have thought of work-life balance ever since. It made me determined to provide a sensible balance for myself and my team. Here's how I do that: Build in back-ups. In my team, we make sure that everyone takes off for family time, be it children’s birthdays or anniversaries. We ensure that someone can step in when someone else needs to be away and we’ve also created infrastructure to guarantee that work doesn’t suffer. Geographical boundaries really don’t matter any more. People need some time away, especially since my staff sometimes works on weekends (Although we make sure no one works late unless absolutely required.) It also helps to build adequate redundancy in processes. Work with a merged calendar. Both my personal and work calendars are one and the same. It helps me ensure that no clashes — like birthdays — take place. 100

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Be Flexible. At UB, given that we are an old economy company, everything is based on grade and position. But in my department, we don’t always go by the book. I give my people facilities based on need — not rank. For instance, UB staffers need to be of a certain rank before they can get a data connection at home. But if the juniormost person needs to monitor the servers 24x7, he needs access from home. So if he needs a high speed data card, he gets it. And my management supports me. We also have arrangements — though not formal — for employees to work from home if their kids are unwell or their families need attention. It’s my opinion that productivity actually rises with arrangements like these. That’s probably why this freedom has begun to spread to other departments. Create a Nurturing Environment. I strongly feel that so long as a team is confident that no one will finger-point, they will never be stressed. We create an environment of understanding and co-operation, one in which everyone is treated well, and everyone knows they need to treat others well.

Work with a merged calendar. It helps ensure that your work and personal agendas don't clash. Make Quality Time Count. I believe that it’s not the amount of time you spend with your family that matters but the quality. Among other things, I make sure that we share at least one meal. On the days I get home from work early, I make sure we don’t sit in front of the television. We try to go for short walks, to a nearby temple, and generally try to spend time together. I always make sure that when I am home, I am really at home: By and large, I don’t carry over work and I switch off. Using these techniques, it gets easier to balance your work with a personal life — and that of your team as well. And when you get that right, it increases productivity by several notches. CIO Send feedback on this column to editor@cio.in

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CIO December 15 2009 Issue