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LEADERSHIP

MINDTREE’S CFO EXPLAINS HIS INTERESTING APPROACH TO FOREX VOL/08 | ISSUE/07

BUSINESS

TECHNOLOGY

RAMNATH IYER, CTO, CRISIL India, is meshing data from all sorts of sources to help analysts predict a company’s performance faster and more accurately.

THE UNVARNISHED TRUTH ABOUT

BIG DATA Beneath big data’s shiny exterior, will CIOs find the hollow ring of tin plating? Page 30

MAY 15, 2013 | `100.00 W WW.CIO.IN

VIEW FROM THE TOP Dharmakrishnan A.V. shares why he is dead serious about IT. Page 68

THE WORLD IS FLAT, NOT The dangers of falling for that world-is-flat tripe. Page 21


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FROM THE EDITOR-IN-CHIEF

PUBLISHER, PRESIDENT & CEO Louis D’Mello ASSOCIATE PUBLISHER Rupesh Sreedharan, Sudhir Argula E D I TO R I A L

Funding Business Indian organizations no longer invest in technology, instead they are funding business results. When the history of Indian enterprise IT is chronicled, the beginning of the economic slump in 2008-09 will emerge as the watershed year after which nothing ever was the same for Indian CIOs. Over these years, your organizations have rolled out more and more projects with fewer and fewer people in shorter and shorter time cycles. IT’s role as a valued service provider and as a key differentiator has never been in a brighter spotlight. Why then does CIO Research indicate a third of CIOs are looking to switch organizations? Do I hear that it’s because times are tough? And, budgets tougher to come by? That organizations have frozen IT spends? That justification cycles have become longer and longer? Why then are enterprises large and small doing three times the number of IT projects today than four years ago? How are those projects getting funded? Since the slowdown set in, I’ve seen managements transform how they view IT. Clearly, Indian organizations no longer invest in technology, instead they fund business results. As a consequence, the approach towards deployment is rapidly shifting from an ‘as is-transition-to-be’ model which involved selecting a product or service, customizing it and deploying the solution; to a paradigm that begins with identifying a business outcome, selecting the right product for the job, and finally adopting it in a best-practices or template model (with no customization). What you are pushing at business can’t be about big data or mobility or the cloud or analytics or ERP or any other enterprise-class technology—instead it has to be about revenue growth, about customer outreach, about helping the business build the right product or service rather than making the product right, and about profitable growth. How you can tap into organizational and departmental budgets—both implicit and explicit—is a function of how well you are addressing your organization’s business drivers and the competitive scenario. The technology is almost incidental. Business strategy like innovation has an expiry date. Forget the tech, focus on your organization’s business drivers, change how you deal with business. That’s has to be your mantra this year.

EDITOR-IN-CHIEF Vijay Ramachandran EXECUTIVE EDITOR Gunjan Trivedi, T.M. Arun Kumar ASSOCIATE EDITOR Yogesh Gupta DEPUTY EDITOR Sunil Shah ASSISTANT EDITOR ONLINE Varsha Chidambaram SPECIAL CORRESPONDENTS Radhika Nallayam, Shantheri Mallaya PRINCIPAL CORRESPONDENTS Gopal Kishore, SENIOR CORRESPONDENT Anup Varier, Sneha Jha CORRESPONDENTS Aritra Sarkhel, Debarati Roy, Eric Ernest, Ershad Kaleebullah, Shweta Rao, Shubhra Rishi CHIEF COPY EDITOR Shardha Subramanian SENIOR COPY EDITOR Shreehari Paliath COPY EDITOR Vinay Kumaar LEAD DESIGNERS Jinan K.V., Suresh Nair, Vikas Kapoor SENIOR DESIGNER Unnikrishnan A.V DESIGNERS Amrita C. Roy, Sabrina Naresh SALES & MARKETING PRESIDENT SALES & MARKETING VP SALES GM MARKETING MANAGER KEY ACCOUNTS

SENIOR MANAGER PROJECTS MANAGER- SALES SUPPORT ASST. MANAGER PRODUCTS SR. MARKETING ASSOCIATE MARKETING ASSOCIATES

PROJECT CO-ORDINATOR LEAD DESIGNERS DESIGNER

Sudhir Kamath Parul Singh Siddharth Singh Jaideep Marlur, Runjhun Kulshrestha Sakshee Bagri Ajay Chakravarthy Nadira Hyder Dinesh P. Dilip Gopinathan Anuradha Iyer, Benjamin Jeevanraj, Lavneetha Kunjappa Rima Biswas, Saurabh Patil Jitesh C.C., Pradeep Gulur Lalita Ramakrishna

EV E N TS & AU D I E N C E D EV E LO P M E N T SR. MANAGERS PROJECTS Ajay Adhikari, Chetan Acharya, Pooja Chhabra, MANAGER Tharuna Paul SENIOR EXECUTIVE Shwetha M. PROJECT COORDINATORS Archana Ganapathy F I N A N C E & O P E R AT I O N S FINANCIAL CONTROLLER CIO SR. MANAGER ACCOUNTS SR. ACCOUNTS EXECUTIVE MANAGER CREDIT CONTROL SR. MANAGER PRODUCTION SR. MANAGER IT

Sivaramakrishnan T. P. Pavan Mehra Sasi Kumar V. Poornima Prachi Gupta T.K.Karunakaran Satish Apagundi

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.

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

M A Y 1 5 , 2 0 1 3 | REAL CIO WORLD

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.

IDG Offices in India are listed on the next page


contents MAY 15, 2013 | VOL/8 | ISSUE/07

Case Files 48 | DHL Express UAE VDI Globally renowned logistics firm DHL is no stranger to making a fast, first-class delivery. So when its Express division made the move to bring in virtual desktops, there was no doubt that the project would be implemented quickly, seamlessly, and successfully. By Joe Lipscombe

76 | Indus International AUTOMATION In its endeavor to make school buses safer for its 750 students and optimally use its Rs 5 crore fleet, Indus International School turned to a unique solution. By Eric Ernest

COVER PHOTO BY SRIVATSA SHANDIL IYA \ COVER DESIGN BY VIK AS K AP OOR & UNNIKRISHNAN AV

78 | The Power of One

3 0

ERP When a slew of acquisitions hit Crompton Greaves with a host of ERPs, increasing expenses and inefficiency, its CIO decided to roll them into one, and saved crores. By Eric Ernest

more »

30 | The Unvarnished Truth About Big Data

6 8

COVER STORY | BIG DATA There are plenty who believe that beneath big data’s shiny exterior, companies will find the hollow ring of tin plating. Will big data reveal itself to be just another IT fad? By Debarati Roy

52 | New Chief in Town FEATURE | NEW ROLES CEOs are hiring hotshot chief digital officers. What does this really mean for the CIO? By Kim S. Nash

56 | Disrupt or Die FEATURE | BUSINESS STRATEGY Your company’s business model is threatened from inside and out.What should CIOs do about that? By Kim S. Nash 4

M A Y 1 5 , 2 0 1 3 | REAL CIO WORLD

VIEW FROM THE TOP: “ We hold the distinction of being among the first few companies to implement IT systems. Today, our entire operation depends on IT, ”says Dharmakrishnan A.V., CEO, Madras Cements.

VO L/8 | ISSUE/07


contents

(cont.) DEPARTMENTS 2 | From the Editor-in-Chief Funding Business By Vijay Ramachandran

7 | Trendlines Innovation | Mind Over Matter Quick Take | Facebook Marketing Lacks Punch Internet | Google Self Serves Technology | Armband Controls Your Laptop Robotics | Swarm Robots Aid Rescue Missions History | Now, History in 3D Opinion Poll | IT-Business: Poles Apart Devices | Mobilize Your iPad Popular Science | Life on Mars? By the Numbers | World Wide Web of Threats

4 4

12 | Alert Security Policy | BYOD: Stop Saying No Strategy | Three Common Security Mistakes

79 | Essential Technology Devices | Ushering in BYOD Policy | Caught Off-Guard

44 | W(h)edged Between

82 | Endlines

CXO AGENDA | FINANCE Just about 5 percent of the revenue Mindtree makes comes in rupees, which makes it vulnerable to currency markets. Rostow Ravanan, CFO, Mindtree, explains how his office deals with highly volatile forex. By Varsha Chidambaram

Columns

Innovation | Slam Dunk Stats By Lauren Brousell

52

19 | Intel Outside? FRANKLY SPEAKING The advent of tablets and smartphones, a declining PC market, and its reluctance to adapt to the changing dynamics of the PC industry, have left Intel out in the cold. By T.M. Arun Kumar

23

| Building Your ‘A’ Team

THINK TANK A team with individuals who have both aptitude and experience doesn't cut it anymore. In fact, innovation and success are created and generated by attitude. By Geoff Lazberger

27 | A Thing of the Future? LEADING EDGE The Internet of Things seems evidently inevitable in the near future. Should you be interested? Yes. Should you be concerned? Maybe. Should you be obsessed with the idea? Not yet. By Gunjan Trivedi

VOL/8 | ISSUE/07

2 1

EXECUTIVE COACH Economist and author Pankaj Ghemawat debunks some myths about globalization and explains why we don't actually live in a connected world.

REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

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3 51

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13

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

VO L/8 | ISSUE/07


EDITED BY SHARDHA SUBRAMANIAN

NEW

*

HOT

*

UNEXPECTED

Mind Over Matter

QUICK TAKE:

“dry connection” via a sensor placed on the forehead. It kind of resembles a hands free wraparound phone headset, except that the microphone is snuggled against your forehead rather than in

front of your mouth. The device can register “a dominant mental state, driven by collective neuron activity.” Test subjects were asked to perform various mental tasks such as focusing on their breathing, imagining their finger moving up and down, or listening to an audio tone while concentrating on a dot. Each subject also had their brain activity measured while performing personalized mental tasks such as visualizing a repetitive motion from a familiar sport, silently singing a song of their choice, or focusing on a thought of their choosing for 10 seconds. The team claims that by customizing an “authentication threshold” for each user, they were able to keep error rates under one percent. —By Evan Dashevsky

TRENDLINES

I N N O V A T I O N In the not-crazydistant future, instead of using a password to navigate our digital lives, we may be able to think our way into our various online services and evergrowing array of digital whatnots. Researchers at the University of California-Berkeley’s School of Information claim to have devised a method to use biosensors to accurately differentiate the brainwaves of specific subjects as they visualized songs, images, or other mental tasks. The brain activity resulting from these tasks appear to be inherent to each individual and may one day supplant traditional (and hackable) password security systems. The researchers used a commercially available EEG reader from NeuroSky. The Bluetooth-enabled device uses a

Why Marketing on Facebook is Not Effective

So, where does most of your traffic come from? And which channel ensures the highest returns? The first two important sources of Myntra.com’s online traffic are consumers who directly type the website’s name on a browser and Google search. Both contribute to 40 percent of our net traffic. The other sources of traffic are Facebook, partners and paid mediums such as affiliate networks. About 25 percent of your revenue comes through Facebook. Do you Initially, Facebook gave us a good jump as a marketing medium. intend to keep leveraging it? But we realized that scaling on Facebook was not very Actually, there’s been a substantial reduction in the ROI ‘ROI effective’. Slowly, our focus on other channels we’ve gotten from social media. It’s a single-digit figure has ensured better ROI. Today, the percentage of ROI now. There are a number of causes for this decline. from Facebook has come down to 8-10 percent. Our First, our overall net traffic has grown. Second, in customer base is around 5 million, out of which 1.5 the last few years, in India, Facebook has become million are active customers. cluttered as a marketing mechanism—although it Across these four sources, there’s a division between used to be the preferred medium for promotions. desktop browsers and mobile browsers. Today, 5-10 As a medium for marketing, Facebook’s ROI has percent of our traffic comes via mobiles, and we see that diminished. For us, social media now is more about doubling every six to nine months. engagement—not sales and marketing. Shamik Sharma

VOL/8 | ISSUE/07

REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

ILLUSTRATION BY MASTERF ILE.COM

S O C I A L M E D I A Plenty of enterprises, egged on by the hype around social media, have focused their energies on marketing on Facebook. But according to Shamik Sharma, chief product and technology officer at Rs 400 crore Myntra.com, the ROI from marketing on Facebook isn’t what it used to be. Shubhra Rishi finds out more.

7


Google Self Serves Google’s placement of its own flight-finding service in search results is resulting in lower click-through rates for companies that have not bought advertising, according to a study by Harvard University academics. The study provides data for how Google’s placement of its own services amid “organic” search results may hurt competitors, which is the focus of an ongoing antitrust case between Google and the European Union. How paid and non-paid search results are displayed has a powerful sway over consumers, the study found. Ben Edelman, an associate professor at Harvard Business School, and Zhenyu Lai, a Harvard doctoral candidate, looked at when Google began inserting its own Flight Search feature, launched in December 2011. They found that Google chose to display Flight Search depending on a user’s search terms. When Flight Search was displayed, it takes a top position in the search results, pushing lower down non-paid search results. The result was an 85 percent increase in click-through rates—a key measure for advertisers—for paid advertisements. Non-paid, algorithmically-generated search results for competing travel agencies dropped 65 percent. Edelman said the study showed that Flight Search wasn’t necessarily that popular with users. When Flight Search was displayed, however, users were more likely to click on AdWords, Google’s advertising product. For Google, it’s all good, since the company collects revenue from AdWords. The study analyzed data from ComScore’s Search Planner, which is a database that tracks algorithmic and paid clicks on search engines by users who agreed to have their Web surfing recorded.Edelman and Lai compared Internet searches performed for four months prior to the launch of Google Flight Search and then after it launched from January to April 2012. If a user searched for a flight in the format “flights to Orlando,” Flight Search would be displayed. But if a user searched for “flight to Orlando FL,” it was not displayed, they wrote. It wasn’t clear why slight query changes triggered the display of Flight Search. But showing Flight Search caused as much as an 80 percent drop in algorithmic traffic to the five online travel agencies that had received the most traffic from the search terms used. By contrast, click-through rates for paid advertising jumped 160 percent. They warned that intermediaries such as Google have a powerful influence over consumers by ordering search results in differing formats. “Google has a massive degree of control and uses that discretion in ways that services Google’s interest but much less obviously serves other interests like the public or websites,” he said. — By Jeremy Kirk

8

M A Y 1 5 , 2 0 1 3 | REAL CIO WORLD

Armband Controls Your Laptop Yet another motion controller, called MYO, has entered the fray, this time letting you wear the technology on your forearm. Unlike Kinect and Leap Motion, which sit near the computer screen and track users through the air, MYO is an armband that translates the muscles’ electrical activity into motion controls. Thalmic Labs, the company behind the MYO, says the sensor inside the armband is sensitive enough to pick up individual finger movements as well as “subtle movements in all directions.” According to MYO’s website, the device will work “out of the box” with certain uses and developers will be able to program for the controller as well. To prevent accidental input, users must activate the motion control with “a unique gesture that is unlikely to occur normally.” The armband will supposedly be one size fits all, and uses Bluetooth 4.0. While MYO is built for Windows and Mac, developers can integrate the device with their Android and iOS apps. MYO sounds impressive, but a lot depends on how it works in the real world. The other big question will be whether MYO can grab mindshare away from the Leap Motion controller, which has become somewhat of a phenomenon even though it hasn’t shipped yet. App developers tend to go where the consumers go, so the interest around Leap should give it a leg up on thirdparty app support. In addition to motion controls, there are new attempts at augmented reality such as Google Glass and Canon’s Mixed Reality, as well as the Oculus Rift virtual reality gaming headset. Meanwhile, a former Microsoft intern is working on a 3D desktop called SpaceTop that combines motion controls with a transparent display to create a threedimensional workspace. —By Jared Newman

TECHNOLOGY

VOL/8 | ISSUE/07

IMAGE COURTESY: P CWORL D.COM

TRENDLINES

INTERNET


Swarm Robots Aid Search and Rescue

CIO ROLE

CIO

There’s a yawning gap in perception between CIOs and the c-suite about the value IT leaders add to their organizations.

C-Suite

81%

Account for IT issues & costs

73%

68%

Contribute to operational agility

58%

60%

Enable fact-based decision-making

35%

60%

Deliver significant cost savings

50%

45%

Add value to business growth

33% Source: Ernst & Young

VOL/8 | ISSUE/07

When some of Iraq’s most historic sites were destroyed by war, Ben Kacyra decided to sell his civil engineering company and start a non-profit in 2003 with the mission of digitally preserving cultural heritage sites throughout the world with 3D laser imaging. Kacyra, an Iraqi-born US citizen, is providing open access to those images through his organization, CyArk (short for Cyber Ark). In the US, CyArk has already created 3D digital images of Mount Rushmore, Spanish missions in Texas, and Tudor Place, home to six generations of George Washington’s family. A team from CyArk repels down the face of Mount Rushmore and sets up a laser scanner on George Washington’s nose. “We’re out to build the Alexandria Library of 3D heritage data,” said Tom Greaves, executive director of CyArk. Other sites around the world for which CyArk has already created digital images include the Leaning Tower of Pisa, the ancient Hindu temple complex at Angkor Wat, Easter Island’s head statues, Inca ruins in Peru, and Thebes, the capital of ancient Egypt. Of course, not all the sites are all that ancient. The images have a number of uses, from simply offering educators authentic reproductions for teaching purposes to giving architects and engineers the exacting dimensions they may need to restore or rebuild historic sites. CyArk’s team creates the 3D digital models with laserscanning instruments that replicate a site to within a few millimeters of accuracy. Greaves said in an interview with Computerworld (CIO’s sister publication) that collecting the digital images on disk drives has been expensive, and the current backup process is far too manual. Up until last September, CyArk’s digitization projects had only taken 60TB of disk storage, but with more than 500 future projects scheduled, the organization expects its storage needs to grow at 30 percent per year over the next five years. It has also partnered with Iron Mountain to store those images in perpetuity in the company’s limestone mine storage facility in Pennsylvania. With its storage in place, Greaves said, visitors to his website can navigate the images in 3D. The website also provides a historic tour of sites, such as the Japanese-American confinement camps that were set up in California during World War II.

H I STO RY

IMAGE COURT ESY: IDG UK

IT-Business: Poles Apart

Now, History in 3D

TRENDLINES

R O B O T I C S Flying and ground-based robots, which could potentially help search and rescue organizations, are under development at Monash University’s Swarm Robotics lab. Swarm robotics makes use of principles observed in insect colonies, flocks of birds and physics to co-ordinate the behavior of groups of robots. The Robotics lab will collaborate with the university’s Wireless Sensors and Robot Networks (WSRN) laboratory to produce swarm robotics technologies. These technologies enable groups of flying and ground-moving robots to co-ordinate their behaviors—using wireless communication technology—and transmit information about their environment back to a base station. WSRN co-director Doctor Jan Carlo Barca said the technologies could be used to search for objects, people and pollution. “We have chosen to focus on search and rescue in disaster sites, as this will enable us to assist rescue workers in saving human lives,” he said. For example, the robots could aid rescue workers tasked with locating people in environments where GPS doesn’t work. This may be in regions where smoke obstructs the view from satellites, partially collapsed buildings and cities where structures impede the view from the sky. Barca predicted that over the next 20 years swarm robotics will evolve in such a way that humans will be able to“feel present” at a remote location via robots, and experience a phenomenon known as ‘multi-presence’. —By Hamish Barwick

—By Lucas Mearian REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

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Mobilize Your iPad on a PC and have conversations in places with WiFi coverage but no mobile signal. We’re letting nothing stand between our customers and their number.” The service could also come in handy for communicating when the user’s handset has run out of battery or has been accidentally left at home, allowing phone calls to be made and text messages to be sent as normal from other devices. O2 says TU Go combines VOIP and its mobile network to allow customers to view their communication history across multiple devices. Customers can log in to the app on up to five devices simultaneously, and this doesn’t need to include the O2 handset. When a user receives a call, the TU Go app will ring across all the devices it is installed on (which could get rather noisy), and text messages will arrive on other devices just as they would on a phone, says O2. Cowdry says that TU Go is still in its early stages, so we should expect to see further services added to the platform in the future. This could include OS X compatibility. —By Ashleigh Allsopp

Life on Mars? After just seven months on Mars, NASA’s rover Curiosity has sent back apparent proof that the Red Planet could have supported life in the distant past. “A fundamental question for this mission is whether Mars could have supported a habitable environment,” said Michael Meyer, lead scientist for NASA’s Mars Exploration, in a written statement. “The answer is yes.” The evidence came from the first rock that NASA technology has ever drilled on another planet. NASA reported that analysis of a rock sample that Curiosity’s robotic arm collected when it bored a 2.4-inch hole into a rock on February 8 showed that it contained sulfur, nitrogen, hydrogen, oxygen, phosphorus and carbon, key chemical ingredients for life.

IMAGE BY MASTERF IL E.COM

POPULAR SCIENCE

10

M A Y 1 5 , 2 0 1 3 | REAL CIO WORLD

The rock sample was analyzed by chemistry instruments on the rover. The data was then sent to NASA scientists. This is a huge finding for NASA, which sent the super rover Curiosity to Mars to seek evidence that the planet could have supported life, even in microbial form, at any point in its history, officials said. The sedimentary rock that was drilled sits near an ancient streambed in Gale Crater. Data from the test indicates that the area was once the end of an ancient river system or an intermittently wet lake bed that could have provided the chemical energy and other conditions that could support the growth and survival of microbes. The sample from the drilled rock also showed that the ancient environment it

came from was not harshly oxidizing, acidic or very salty, NASA reported. “We have characterized a very ancient, but strangely new ‘gray Mars’ where conditions once were favorable for life,” said John Grotzinger, Mars Science Laboratory project scientist. “Curiosity is on a mission of discovery and exploration, and as a team we feel there are many more exciting discoveries ahead of us in the months and years to come.” Curiosity, which carries 17 cameras and 10 scientific instruments, drilled the rock at a site only a few hundred yards away from the spot where it found an ancient streambed. Curiosity’s predecessors—the Mars rovers Spirit and Opportunity—were not equipped for drilling.—

—Sharon Gaudin VOL/8 | ISSUE/07

TRENDLINES

O2’s (UK-based provider of mobile services) new TU Go service allows users to make phone calls and send texts from their mobile number using any supported device, including Apple’s iPad and iPod touch. Available to O2’s pay monthly customers, the free-todownload TU Go app means that users can make and receive calls, texts and voicemail from their existing O2 mobile number on almost any Internet connected and microphoneequipped device. O2 says that the TU Go app is available on Apple’s iOS devices running iOS 5 and above, Android devices running Android 2.3.1 and above, and PCs running Windows 7 only. The texts and calls made using the TU Go app come out of the customer’s O2 bundle, and the person receiving the communication from you doesn’t need to be using the TU Go service. “Customers can now take their mobile number wherever they like, even away from their mobile,” said O2’s UK Marketing and Consumer Director Sally Cowdry. “TU Go lets you take a call on a tablet, pick up text messages

DEVICES


COMPILED BY ERIC ERNEST

Best Practices

World Wide Web of Threats Brace yourself. The world of cybercrime has just magnified. With nearly a 600 percent growth in global cyber-attacks in 2012, you have reason to worry.

REMEMBER that inline, realtime information security is necessary to help prevent webborne threats.

2

EMPLOY integrated security solutions to control inbound and outbound threats brought about through increasing use of social media by on-site, remote and mobile users.

3

AUGMENT mobile device management capabilities with defences that can control mobile access to key resources, and perform real-time analysis of potentially malicious content in all vectors.

TRENDLINES

I

It’s probably the worst time to be a CISO or even a CIO in-charge of enterprise security. Like you already didn’t have enough fires to put out, the latest findings from Websense 2013 Threat Report, promise to set more ablaze. According to the report, there has been an explosive year-on-year growth in global cyberattack trends. The report found that the number of malicious Webbased attacks increased by nearly 600 percent in 2011-12, representing over 100 million new global malicious websites. Indian enterprises will have even more reason to be worried, as the report found that India occupied the second spot among the top 10 victim countries in the APAC region, below China and ahead of Taiwan. When compared to the rest of the world, India stood at the seventh position. The top three places went to the US, France, and the UK. Moreover, 85 percent of these malicious sites were found on legitimate Web hosts that had been compromised—an increase of three percent from the previous year. With cybercriminals targeting legitimate websites, organizations will find it hard to defend themselves. Adding to their woes are social media and mobile threats. It was found that across all social media platforms, shortened Web links hid malicious content 32 percent of the time. And when it came to mobile threats, interestingly, one in 10 malicious apps asked for permission to install other apps—a rarity among legitimate apps.

1

In the Line of Fire Malicious sites on legitimate hosts

85%

Total e-mail Volume in 2012

The position India occupied in the list of top 10 cyberattack victim countries.

2%

82%

Phishing & Malware

22%

Legitimate

32%

76% 2012

2011

2

Spam

Of shortened Web links on social media hid malicious content. SOURCE: WEBSENSE 2013 THREAT REPORT

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alert

ENTERPRISE RISK MANAGEMENT

BYOD: Stop Saying No A

IMAGES BY PHOTOS.COM

bout a decade ago, the implementation of wireless networks was a very hot, even cutting-edge, issue in computer security circles. But unlike the rest of the world that was getting excited about the new technology opportunities, security pros were the naysayers. The widespread mantra for CISOs at that time was: “WiFi is a bad idea.” If you were a security leader back in the early days of 802.11, you were likely against implementation of wireless LANs in your enterprise. No guest accounts, no free Internet access in conference rooms, ban wireless cards in laptops and definitely no ubiquitous access around the company campus. Oh yes, we had plenty of ammunition. Technology and security magazines were full of scary true stories about wardriving, fired employees who implemented

unsecured wireless networks, and parking lot data breaches. White papers, reports from three-letter agencies and war-stories from friends around the country all confirmed that the job of information security leaders was to stop this horrible trend from becoming reality. However, very few in the security industry would now support banning WiFi—with the possible exception of some very restricted networks with classified data. Back in my early days as a CISO, I played the “No can do” part very well. I even lead the “No WiFi” charge in the State of Michigan. In fact, I almost lost my job fighting WiFi adoption. Over time as Michigan’s CISO, I learned a hard

lesson: My real job is to enable the business with the right level of security and compliance. My role was (and is) not to fight WiFi, or cloud computing, or new mobile devices or any other new technology trend. Rather, how can our organization adopt and secure innovative practices that the businesses want? How can we build trust with business executives? What options can improve security and meet customers where they are really at?

After WiFi, Cloud Computing So what happened next to WiFi? How did it become a normal part of our daily lives? What changed? The technology offerings evolved. New security options emerged.

FINDINGS

Dedicated to Security Indian CISOs are taking information security a lot more seriously than their global peers. This is evident from the fact that they are planning to set aside more funds for security.

Justification of Security Spending Legal/regulatory requirement Common industry practice Client requirement Potential liability exposure

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M A Y 1 5 , 2 0 1 3 | REAL CIO WORLD

45%

33%

43%

31% 33%

Of Indian CISOs— compared to 45 percent of global CISOs—expect an increase in security spending in 2013.

49%

39%

37% India

75%

Global

SOURCE: PwC GISS 2013

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ENTERPRISE RISK MANAGEMENT

Slowly, security pros warmed to the idea and even started to lead the efforts to secure WiFi in enterprises. Along the way, there were articles that warned of problems, yet still offered hope and a new mindset. Sure, we still have plenty of WiFi worries, guidance books are still written and more WiFi security is needed, but the security industry has largely moved on to other headlines. Also, new battles emerged for security pros that changed the subject. By 2009, most security pros turned on cloud computing as the new bad guy on the block. Articles started to proclaim that cloud computing was a bad idea. One of the main reasons given was security. And several large-scale breaches from major cloud providers gave us new ammunition to fear the cloud. But don’t think that this developing repeat trend means that I am advocating that security pros just adopt every technology that comes along next. I have also been critical of cloud computing—especially in the early years. The technology is evolving, and we now have new Cloud 2.0 offerings. Cloud security continues to be a hot topic and it should be. We’ll be improving end-to-end cloud security for the foreseeable future.

And yet, a pragmatic middle ground is emerging on the cloud as well.

BYOD: Your Time Has Come Beginning in 2011, BYOD started to emerge as the new hot topic for technology and security practitioners to condemn. I certainly agree that we have many current issues with BYOD security today. Policy is all over the map. Consumer device security options and MDM products needs to mature and improve. The list goes on and one. In fact, there are already calls for BYOD 2.0 from Wired Magazine. Does this trend sound familiar? And yet, I see a new industry trend starting emerge as well. For example, eWeek recently proclaimed that “BYOD Taking Over Business, but Security Issues Persist.” Here’s an excerpt: “A survey of BYOD participants found there is widespread acceptance of personal device use, but lax security controls. Ninety percent of US employees used their personal smartphones for work within the past year, yet only 46 percent believe their employers are prepared for any issues that could arise from BYOD, according to a new study in which a network of Cisco partners polled 1,000 consumers.”

Most security pros I know still think BYOD means “bring your own disaster.” But in my opinion, they are fighting the future. I’ve been there, done that and got that T-shirt. I can close my eyes and remember the battles a decade ago over WiFi. Many of the same arguments are being used today to fight BYOD. What am I suggesting? Get on the BYOD boat. Become part of the secureBYOD solution at your company. Offer alternatives. Meet your people where they are at. Don’t put on your blinders. Don’t say no. Say yes to secure BYOD. Meet your customers where they are. Help them move forward to a better place. Don’t bring your boss problems—bring solutions. What does that look like? How do we embrace BYOD? I have grappled with that question for the past year. For me, it has meant digging deeper and looking at the future. One friend said, “New innovations, new technologies and new business trends need security tools.” That means new people, process and technology answers. CIO

Daniel J. Lohrmann is Michigan’s first CSO. Send feedback to editor@idgindia.com

[FROM A SECRET MEETNG BETWEEN JULIAN ASSANGE AND ERIC SCHMIDT, CHMIDT, CEO,, GOOGLE]]

“The browser-based public key system that we have for authenticating what websites you are going to, is awful. It is truly awful. The number of people that have been licensed to mint keys is so tremendous.” — JULIAN ASSANGE, PUBLISHER, WIKILEAKS

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ENTERPRISE RISK MANAGEMENT

Three Common Security Mistakes

Lack of Vision When a team sets out to create a plan for vulnerability testing, no idea, even the most far-fetched, should be off the table, said Johnston. “I think a big mistake people make is shutting down ideas too early,” he said. That means during brainstorming and planning sessions, even the wildest, farfetched scenarios should be considered. Johnston said he’s observed that creativity seems stifled by the presence of a manager in the room and the perception that security is too serious to float wild ideas for testing. That’s a mistake. “The best ideas come late,” said Johnston. “You’re doing yourself a disservice if you shut down ideas too early.” Johnston also encourages all security practitioners to “think like the bad guys” if they want to really get at the most serious problems.

Bad Reporting Walters said after many assessments, he’s had outside consultancies simply “drop off a three-ring binder full of problems and leave.”This is a perfect example of bad, ineffective reporting. “We want people to shake the trees,” said Walters. “But if the reporting just focuses on the problems, they are not

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providing answers.” Johnston agrees. “Most regular employees see security He thinks teams are too critical of as compliance thing,” said Johnston. mistakes they find in assessments. You “They don’t see it as something relevant likely may find a lot of mistakes being to them. We need to motivate regular made. That’s OK. Security is hard. But employees and answer the question of you don’s have to fire anyone. Instead ‘What’s in it for me?’” of finding people to Johnston suggests a blame, focus on fixing conversation that includes the mistakes. Also, keep not only lessons learned in mind that all risk from the vulnerability OOP S ! management is assessments, but that ultimately subjective.” also includes examples of headline-making security incidents in Not Sharing other organizations. Knowledge “You’re trying to build a You know what culture, not a department,” vulnerabilities the he said. “Security is everybody’s job. assessment uncovered, but do the It sounds cliché, but I don’t think that employees in your organization? resonates in many organizations.” CIO Of course, there may be many things you can’t disclose to them. But what can you share that brings the issue of Joan Goodchild is executive editor of CSO Online. Send security to the forefront for everyone? feedback to editor@cio.in

Smoking Pot, Losing Plot

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n the quest to uncover security gaps and vulnerabilities, slip-ups are often made, too, that make these efforts less effective at having a positive impact. Two expert security veterans, Roger Johnston and Jerry Walters, provide best practices for vulnerability assessment. Johnston is the leader of the Vulnerability Assessment Team at Argonne National Laboratory and Jerry Walters is Director of Information Security with OhioHealth, a regional not-for-profit hospital network. They outline these three common mistakes that security teams make in the assessment process.

A dim-witted iPhone thief has taken a self-portrait where he is believed to be smoking dope, according to a photo released by the NYPD. Police report that a man stole a woman’s iPhone on 2 March 2013 in the Bronx, and is assumed to have been using it since then. The thief is alleged to have taken a photograph of himself emitting large quantities of smoke. The suspected phone snatcher was caught unawares because the iPhone was set to auto upload all photographs to Facebook. Since Apple integrated Facebook into the iPhone’s operating system in iOS 6, it has been possible to have all photographs taken on the phone automatically sent to Facebook (where the user can decide which ones to share). As soon as the suspect took his photograph it was sent straight to the victim’s Facebook account. The victim noticed the pictures appearing on her Facebook account, and chose to share them directly with the New York Police Department as well as Facebook, reports CBS News. Police believe the man in the photo is smoking marijuana, reports the Huffington Post. Cloud services, where a device’s functions are integrated with remote servers, are becoming increasingly commonplace. And it’s becoming clear that cloud services are going to be the bane of many of criminal’s life. Earlier this month, a man was arrested after child pornography was detected on a remote cloud service. — By Mark Hattersley

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CASE STUDY

When YES BANK entered the banking sector in 2004, it knew it was stepping into a territory not many would venture into. That banking is among the most highly-regulated and fiercely competitive sectors isn’t a closely guarded secret. Evidently, for a new bank to establish its presence is nothing short of a challenge.

Company YES BANK

Industry BFSI

Headquarters Mumbai

But it was a challenge YES BANK took head on. Today, in its ninth year, the bank, with Rs 99,104 crore in total assets, has managed to outpace most other private banks. So much so that it is even sponsoring one of the most expensive and biggest sporting events of the country, the IPL. However, to continue on its dream run, it needed to fix some nagging IT issues. In its quest for unfettered progress, YES BANK followed the principle of outsourcing all that was not core to business, including IT. “In the case of IT, we decided to outsource all that was commoditized,” says Suren Shetty, senior president and CIO at YES BANK. The company signed up for a complete asset and IT outsourcing contract, which recently came up for renewal. It was during the renegotiation of this contract that Shetty and his team dedicated efforts to alleviate some of the pain points that had crept into the system. One of the issues was the bank was using multiple devices for its printing needs across its branches and operating centers. “The branches were using one device for fax, another for


CUSTOM SOLUTIONS GROUP CANON

printing, and yet another for scanning and photocopying,” says Shetty. There was a lack of standardization and it was hard for the IT team to quickly respond to printing issues. Also, support at the branches in tier 3 cities was a challenge. Moreover, the IT team was spending a considerable amount of time keeping track of the annual maintenance contracts, re-order quantities, and tracing consumables like toners and cartridges.

PRINT RUN YES BANK knew it first had to fix one of its most pressing needs: Standardization. “When you are growing as a bank, you need every location to be serviced and catered to in a standard manner,” says Shetty. So, YES BANK needed to consolidate its printing assets and have a single service provider who would take care of its end-to-end printing requirements across the branches. It identified a few partners and assessed them on the basis of factors like the strength of their brand, the image they portray, a

“We have seen a 35 to 40 percent reduction in routine business and management costs over the previous model.”

pan-India service network, and their eco-sensitivity. More importantly, YES BANK also needed its partner to be flexible in terms of pricing and costs. “Technology in the domain of printing is fairly standardized. It is the service that makes all the difference,” says Shetty. And it found the quality of service it was looking for in Canon. But before it could take Canon’s help, the bank first needed to analyze its requirements. To do that, an on-site assessment was conducted to gather usage statistics—based on users’ proximity to machines, number of users at a branch, and the type of printing—in order to identify the avenues for saving costs. Post its analysis, YES BANK decided to take on 520 of Canon’s multi-function devices,

VENKAT KRISHNAN,

CTO, YES BANK

where one device would cater to all the bank’s needs—printing, scanning, and photocopying—coupled with a managed document services (MDS) contract.

IMPRINTING EFFICIENCY Battling an inefficient printing system, YES BANK’s IT team was spending a considerable amount of its time putting out fires. Until it turned to Canon, which improved efficiency and reduced the bank’s printing costs by upto 40 percent.


CUSTOM SOLUTIONS GROUP CANON

“Technology in the domain of printing is fairly standardized. It is the service that makes all the difference.”

YES BANK deployed entry-level MFDs at the branches that house fewer employees and opted for the mid and high-range MFDs for its corporate offices. “This helped us save capital expenditure we would otherwise have incurred,” says Shetty. YES BANK and Canon have agreed on a rental business model of five years for all the MFDs, under which, Canon would manage all the printing services, including consumables, on a per-click model.

PRINTING DELIGHT The MDS model relieves the IT team from managing consumables and spares across 430 branches. As per the SLAs, Canon has promised a high uptime of 99 percent across the bank on a month-on-month basis, helping the bank reduce approximately 30 percent of its carbon footprint. With duplexing enabled on all the MFDs, YES BANK will also stand to gain from the reduction in paper consumption costs. “This engagement with Canon has brought in more control. We can centrally monitor the usage of printing, scanning, and photocopying at our branches,” says Venkat Krishnan, CTO, YES BANK. Also, change management wasn’t too much of an issue as the initiative has given visibility to over 7,024of its employees and a

Benefits Reduced costs Provided monitoring capability Enhanced efficiency Increased productivity Infused flexibility

SUREN SHETTY,

Senior President & CIO, YES BANK

single point of contact for their grievances related to printing. “We have also seen productivity gains within the IT team from a helpdesk perspective because they don’t have to manage the day-to-day activities of printing services,” says Krishnan. The implementation has also taken care of costs associated with the time taken to resolve an issue, day-to-day management activities, and ensuring availability of services. “We have seen a 35 to 40 percent reduction in routine business and management costs over the previous model,” adds Krishnan. In terms of services, under the agreement with Canon, YES BANK’s branches located in the metros are guaranteed same-day services, while even the remotest of branches can expect to receive help from Canon within 24 hours of logging a complaint. Thanks to Canon’s technical expertise and experience, YES BANK is now able to achieve high return on investment and lower total costs of ownership on its print assets. The engagement also allows YES BANK the flexibility of averaging out the costs across locations if, for some reason, one branch’s usage goes beyond its usual range. That

way, not only does YES BANK avoid incurring additional expenditure, but it can also recalibrate its requirements accordingly in the following month. This is made possible by continuously keeping track of how the company’s print environment is performing through regular monitoring. Delighted with the overall service that YES BANK is enjoying, Krishnan says, “It has been a beautiful engagement for us and we hope to implement this across the YES BANK group and set an example in the banking service provider industry.”

This feature is brought to you by IDG Custom Solutions Group in association with


TM Arun Kumar

FRANKLY SPEAKING

Intel Outside? The advent of tablets and smartphones, a declining PC market, and its reluctance to adapt to the changing dynamics of the PC industry have left Intel out in the cold.

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n his book, Only the Paranoid Survive, Andy Grove, the co-founder and former CEO of chip-giant Intel, describes the forces that can affect a business. He explains that when one of those forces change, it can change the dynamics of the business. He then goes on to add that when a large change occurs in one of those forces—which he describes as a 10X force—it can cause a company to lose control of its destiny. “What such a transition does to a business is profound, and how the business manages this transition determines its future,” he explains. A similar 10X force hit the personal computing industry a few years ago, which perhaps Intel—and arguably many others too—failed to notice or refused to pay heed to. That was the advent of tablets. Intel seems to have missed the bus at that time, much like BlackBerry refused to acknowledge the threat posed by touch-enabled smartphones, and Nokia failed to see the rise of Android and iOS. And we all know the journey that these companies have made since missing the ‘touch’ bus. However, the case with Intel is slightly different, and any comparison with Nokia or BlackBerry can’t be an apple-to-apple one. For one, Intel is a well-entrenched player in the PC market with a market share in the PC processors business resembling that of a monopoly. Besides, it has a strong presence—again a near monopoly—in the x86 server processor market. And what these businesses have ensured is that Intel doesn’t suffer the same fate as Nokia or BlackBerry. At least till now. But, trouble may just be round the corner. The tabletsmartphone storm that started brewing a few years ago, is gaining momentum and is likely to unleash its full fury sooner rather than later.

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PHOTO BY SRIVATSA SH AN DILYA

TM Arun Kumar

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FRANKLY SPEAKING

But, how would all this affect Intel? The answer is simple: By cannibalizing the PC market. The fact is that Intel’s fortunes are heavily dependent on the PC market—it derives about two-thirds of its revenues from its PC client group. And this industry segment—the PC market—to put it mildly, hasn’t been in the pink of health for about a year now. After experiencing marginal to medium decline in shipments in the last three quarters of 2012—which was explained by saying that the market was awaiting the launch of Windows 8 which will give a boost to this market—the global PC market plunged in the first quarter of 2013. It fell anywhere from 14 to 16 percent, depending on whom you choose to believe, IDC or Gartner. However, both the research firms said that this has been the worst quarter for PC shipments since they started tracking this market. And things don’t seem to be getting any better. Look at what IDC says. “At this point it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,” it says. Gartner’s view is also equally negative. “Consumers are migrating content consumption from PCs to other connected devices, such as tablets and smartphones. Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors,” it says. On the other hand, the development in smartphones and tablets has meant that they can perform almost all the tasks of a traditional PC. And this is reflecting in their increasing sales. While global smartphone shipments increased by about 41 percent in the first quarter of 2013, according to IDC, worldwide tablet sales are growing even faster—surging by a whopping 142 percent in the first quarter of 2013 and amounting to more than the entire shipments of the first half of 2012. And tablets and smartphones are precisely the areas where Intel is on a weaker footing, though admittedly it has been trying to get a toe-hold in these markets, but with limited success. About a year ago, when Intel launched its first processor for smartphones, the heavyweights of the smartphone world like Samsung, HTC, LG, etcetera, stayed away and it was left to the little known Lava to come out with a phone with an Intel chip inside. Revenues from this segment, which Intel clubs under “Other Intel architecture operating segments” account for less than 8 percent of its revenues. To make matters worse for Intel, ARM, which dominates the smartphone and tablet processor market, is slowly entering the server market, which is not good news for Intel. So, where does all this leave Intel? Outside? CIO

Arun has covered the IT industry in India since the time 80386 was cutting edge, MS DOS was the predominant desktop OS, and Internet was still a few years away. Follow him on twitter @aruntm

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Pankaj Ghemawat

EXECUTIVE COACH

The World is Flat, Not While it’s convenient to believe that technology has blurred all boundaries, it’s necessary to dispel some powerfully entrenched—but incorrect—assumptions about globalization.

T ILLUST RATION BY STACIA RO DRICKS

oday, there’s enough proof to show that the world is far from being completely connected. There is a huge difference between the potential for connectedness and the actual levels of connectedness. Consider this: International voice calling minutes are just two percent of the total; immigrants are just three percent of the world’s population; or even friends on Facebook who are in different countries account for only 13 percent of total friends. Through Facebook, in principle, we can form friendships half-way across the globe as easily as we can next door. But the reason that 87 percent of our friends are domestic has something to do with the fact that technology is overlaid on a substratum of pre-existing relationships. That logic holds true in the world of business as well. When expanding to other geographies, organizations expect a business environment akin to what they have in their home countries. This is the traditional bias related partly to the fact that companies go overseas when they have no room for growth at home. The logic is that if you have been successful in the home market you will do well outside as well.

Far from Flat One of the problems with this world-is-flat type of thinking is that it reinforces what is already a dangerous bias to begin with. I think of this view as one out of a Hollywood screenwriters’ conference where the ‘flat world’ meets the ‘blue ocean’ and there are no impediments. And you wouldn’t even ask, let alone answer, some of the interesting questions about international business, like—

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Pankaj Ghemawat

EXECUTIVE COACH

where are you going to compete; what are you going to rely on as the basis for value creation; and what will help you overcome some of the barriers created by distances and borders, if you are convinced of this globalized view of the world. A great example of this is Wal-Mart. When a journalist asked Lee Scott (former CEO of Wal-Mart) what made him think the company could be successful internationally, he said, “People were saying we couldn’t move from Arkansas to Alabama and we were able to do that. So, how difficult is it going to be?” Well, he found out. Now, when Wal-Mart enters a new market, it does think harder about how it will adapt its business model to that market—something it had historically missed out on. Look at some automobile companies in the US. Players like GM and Ford are still hanging on to their European operations despite mounting losses. GM has lost money, if I am not mistaken, for 13 years in Europe. This belief, that for being truly global, you have to compete everywhere, is encouraged by the propaganda that everywhere is pretty much close-by and similar. If you take a view of the world where distances matter, a company like GM would realize—given the opportunities it has in emerging markets—that continuing to lose money in Europe may not be the appropriate use of scarce corporate resources. Closer home, even Indians tend to overestimate the extent of globalization. When I started publishing some of my views on the blogs that I post on Harvard Business Review, a disproportionate fraction of the people, who wrote in quite offended, were from India. It does seem that the world-is-flat theory catered to some need in the Indian psyche. I am appreciative of what the IT industry has done to lift not just the sector but also our sense of what is possible with the right tools and people within the Indian context. But people were taking my views as coming from someone who didn’t believe in the Indian IT sector. Moreover, in a survey on how people thought their culture was superior and how much they thought it needed protection from foreign cultures, India took the top spot ahead of countries like Bangladesh and Indonesia. It isn’t usually the developed part of the world that exhibits as much cultural insecurity.

things like devices to a free-for-all approach. Many companies have given up on keeping the iPads out of the boardroom. There is also something interesting going on in the IT environment in terms of the whole digital wave: the cascade of changes due to social media, mobility, analytics and big data, and cloud computing. What’s really interesting to me is how some companies are thinking hard about what these trends mean from a business perspective. And they are doing this in terms of dealing with customers and observing how employees are using social media internally. So, CIOs are inevitably getting drawn into a whole range of things because technology is all-pervasive. Not too long ago, I prepared some material on Kraft and the company is still trying to go from 40 IT systems to just a few. I have great respect for companies that have managed to insist on getting people on to the same systems and doing so quickly rather than over a 5-10 year period. I think of P&G and the kind

All Pervasive Tech

As told to Anup Varier

There are lots of things that technology can help enable but all of them are contingent to realizing that distances still matter. Or else technology wouldn’t have much impact.

This clearly is a time of ferment in the CIO’s job. In a whole bunch of sectors, especially where companies have grown through acquisitions, you have a situation where there are dozens of unique systems in each and every place. Another thing that is further complicating the scenario is the move from a situation where there were corporate policies on 22

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of emphasis it places, whether it is an acquisition or internal growth, on having information on the same system. This creates transparency, an ability to share information, and provides less cover for political games. But this has to be done from the top. Nestle today is considered a company capable of making more discerning judgments about what to standardize, how to get manufacturing costs down, and what to leave for local managers to have more freedom to play with. It is difficult to see such models working without the huge investments it made in IT systems for tying things together at a company that operates in over 160 countries. What we are starting to see is the application of technology that allows people to draw segments more finely and target foreign markets more effectively. There are lots of things that technology can help enable, but all of them are contingent to realizing that distances still matter. Or else technology wouldn’t have much impact. CIO

Pankaj Ghemawat is an economist, global strategist, speaker, and author of World 3.0: Global Prosperity and How to Achieve it. He was the youngest full-time professor at the Harvard Business School. He was also the youngest “guru” included in the guide to the greatest management thinkers of all time published in 2008 by The Economist. Send feedback to editor@cio.in

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Geoff Lazberger

THINK TANK

Building Your‘A’Team A team with individuals who have both aptitude and experience no longer cut it. In fact, innovation and success are created and generated by attitude.

P

ILLUST RATION BY STACIA RO DRICKS

eople are not fungible. This is something I learned very early on in my IT career. Everyone has a unique background and experience, with different strengths and weaknesses. We are not created equal and we've all faced different challenges. To help build a successful project team you need to follow a few simple guidelines: • Always hire attitude over aptitude. • Great outcomes are delivered by great teams • Past achievements are a good indicator of future performance. Attitude is king: Passion, enthusiasm, optimism—these are attitudinal characteristics which fuel success. I can't recall one successful project or initiative in my 33-year career where these attributes were absent from the team. Gaps in knowledge can easily be filled; attitude deficiencies can paralyze projects and, in extreme cases, guarantee their failure. Build a great team purposely: Be opportunistic with exceptional people. If you were the coach of a sports team wouldn't you want the best possible caliber of players on your side to maximize your chances of success? And if a highly rated player, with a track record for delivering wins, was suddenly available on the market wouldn't you seriously look to secure them for your team if you could afford them? Of course you would. The aim of the game after all is to maximize your chances of winning and reduce the risk of failure by providing the strongest and most capable team possible. The same applies to projects. The right people make a difference. In fact, I've previously hired someone exceptional, even though there was no specific role, simply because they were available and too good an opportunity to pass up. Once brought

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Geoff Lazberger

THINK TANK

into the organization, the individual repeatedly delivered as advertised and the company was the better for the hire. Reflect on past successes: Just as a rear view mirror shows us where we've been, so too a person's past achievements are a good reflection and predictor of their capabilities to deliver into the future. When recruiting, more weight should be given to specific examples where the candidate has delivered against all odds rather than the length of time spent in certain roles. If you were going into battle, would your preference be for a leader straight from military academy or a veteran soldier who had survived numerous heavy clashes and retained battle scars along with experience? Unfortunately, when markets become candidate rich (as has been the case in recent times), companies suddenly disregard this approach and instead see this as an opportunity to treat people as a commodity who can be bargained down. Recently, Yahoo CEO Marissa Mayer (according to press articles) has mandated the exclusion of candidates without degrees from prestigious universities from being recruited into the company. This seems a somewhat disadvantageous and silly path for Yahoo to go down. As someone who remembers the halcyon days of Yahoo when it was the dominant search engine on the Web (pre -Google) this is quite sad. On the surface, the intent appears to be in line with bringing the "best of the best" into Yahoo. But the point of contention is how "best" is being measured here. Performing outstandingly at university could perhaps mean an increased likelihood the person will be a productive and successful hire. But this no more guarantees success than the passing of a driving test assures people will become good and competent drivers. It just means they know stuff, but this doesn't necessarily translate into they can therefore do stuff. More importantly, the converse is not true—because a person has not been university educated doesn't mean they can't become exceptional innovators and leaders. To exemplify the silliness of Yahoo's hiring policy, there is a huge list of world-changing historical figures who wouldn't be allowed to work for Yahoo including: Abraham Lincoln, Bill Gates, Mark Zuckerberg, Steve Jobs, Henry Ford, Michael Dell, Steven Spielberg, Richard Branson, Thomas Edison and Albert Einstein. Ironically, there is also Jerry Yang who co-founded Yahoo after dropping out of a PhD program. Innovation and success is created and generated by attitude, not just know-how. Another by-product of a candidate rich job market is the great depth of experience which is readily available. I've always been quite bemused (and personally frustrated) with hearing

feedback along the lines that an applicant for a position has too much experience, or the challenge of a particular role falls below the level of their proficiency and therefore they are overqualified and may become bored. It never makes sense that someone could have "too much" experience (which, at its core, reduces risk and increases the likelihood of success). You would never hear a passenger complain about getting onto a plane because they felt the pilot had too much flying experience. Quite the opposite. In project parlance, this unwarranted rejection of an overly experienced applicant translates into not being willing to embrace someone who can help elevate and improve the quality of delivery across the team. In effect, it demonstrates a preference for mediocrity over excellence. It’s not just in IT where what one person brings to the table can make such a huge difference to the successful outcome. The music world is full of examples. When Queen lost its inimitable and dynamic lead singer Freddie Mercury in 1991, the band never managed to find a successful replacement. Similarly, when Michael Hutchence died suddenly at the peak of the band's success, INXS never found a lead singer who could emulate the same "x" factor.

It never makes sense that someone could have "too much" experience. You'd never hear passengers complaining about a pilot because they felt he had too much flying experience.

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History is littered with one-off, unique individuals who changed the landscape with their bespoke contributions and being different. Lincoln, Churchill, Socrates, Florence Nightingale, Aung San Suu Kyi, Mother Teresa—all historical change makers whose influence still resonates today. And, were it not for Apple re-importing Steve Jobs back in 1996, who knows if that company would have made it back from the brink of bankruptcy and gone on to become the largest corporation in the world. If you are resourcing a critical project which is complex and with a high likelihood of failure, you will increase your chances of success by selecting team players who have faced similar situations with enthusiasm. If you are required to "think different" in order to produce success, acting the same as everyone else won't get you where you need to go. It will just produce the same outcomes as everyone else. What makes a great swimmer is not how long they've been in the pool, but how many laps they have done whilst in it. CIO

Geoff Lazberger is a former CIO. Send feedback on this column to editor@cio.in

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Gunjan Trivedi

LEADING EDGE

AThing of the Future? The Internet of Things seems inevitable in the near future. Should you be interested? Yes. Should you be concerned? Maybe. Should you be obsessed with the idea? Not yet.

W

IMAGE BY MAST ERF IL E

hat role can a Coke vending machine play in defining how technology will be consumed going forward? Or determine the Internet of the future? Significant, if you now ask the bunch of programmers from Carnegie Mellon University, who in the 1980s, stoked a pretty creative use of technology. These programmers connected their vending machine to the Internet and wrote a piece of server program that checked its status, tracked how long it has been empty, and determined whether they’d get a drink cold enough when they’d make a trip down to the machine. Such was the creative consumption of technology that it took three decades to evolve into a form that perhaps they themselves wouldn’t have imagined. And now, it’s right on the cusp of a new timeline where, in no time, it can morph into the next big thing in IT. Experts call this phenomenon the Internet of Things (IoT). By definition, this term explains the phenomenal development the Internet has begun to experience. All this while, the Internet had been relegated to the Web we have largely known. But as the function of inter-connectivity is going beyond connecting people and including automated conversations among devices, the Internet of Things is gaining ground. In fact, in a global study of 750 CIOs on machine to machine (M2M) by SAP and Harris Interactive released last month, Sanjay Poonen, president of SAP’s technology solutions and mobile division, termed IoT as the ultimate social media collaboration of man and machine. He

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Gunjan Trivedi

LEADING EDGE

considered IoT a step above M2M, which is primarily used to collect vast amount of machine data from networkconnected embedded microprocessors. Poonen believed that IoT will integrate data from machines, ERP, CRM systems, social media etcetera in real time, allowing humans to intelligently interact with devices, devices with devices, and devices back to humans. The chief scientist of Accenture, Kishore Swaminathan mentions in his blog that Gartner has put the IoT way up in its hype cycle and practically every major technology company is in the process of developing an IoT product. He states that a number of universities in the US, Europe, and Asia have launched big R&D programs in IoT, and the European Union is funding a massive IoT Initiative. In fact, China has identified IoT as a technology of national priority. Quite evidently, it looks like the next big wave seems to be on its way to hit CIOs, who are still grappling with the advent of mobility devices in their systems and are just about to consider the problem of big data. If the IMS Research reads it right, by 2020, there may be as many as 22 billion embedded systems and other portable devices connected to the Internet. A back-of-envelope calculation sums it at more than 2.5 trillion bytes of new data every single day that will be produced by these systems, perhaps coining a new term:

Huge Data. So, should CIOs drop everything and prepare for the onslaught of the Internet of Things? Perhaps, not yet. Undoubtedly, this form of technology has been in the making for at least 30 years, and has begun to gain significant steam as the other supporting technologies such as sensors, embedded microprocessors, and IPv6 are getting cheaper and more mature. However, how various organizations are dabbling with the Internet of Things is still quite vague. And that’s because IoT is not an off-the-shelf technology, but a concept. There are still many what-if scenarios that organizations are working on. Ironically, every what-if scenario fails if there is no consistent Internet connectivity. Therefore, at present, technology integration and data volume may not be the problems at hand. Unless, ubiquity and longevity of wireless connections can be designed at the core and not as a bolt-on for these IoT solutions, the Internet of Things remains in the future. A very near future, for sure. CIO

Gunjan Trivedi is executive editor at IDG Media. He is an awardwinning writer with over a decade of experience in Indian IT. Before becoming a journalist, he had been a hands-on IT specialist, with expertise in setting up WANs. Reach him at gunjan_trivedi@idgindia.com


CUSTOM SOLUTIONS GROUP VMWARE

CLOUD CORNER Thought Leadership

VDI: Empowering and Shielding the Mobile Workforce HARNATH BABU VP & CIO, Aviva Life India

Virtual desktops have made it possible for organizations to leverage the potential of mobility. But security is still the biggest challenge. Mobility has become the lifeline for the insurance business. Today, my salesforce is using mobility for two reasons: To take sales orders, and to push information to our agents on a real-time basis. Today, we are even planning to collect digital signage on their mobiles, making the entire transaction paperless and cashless. This will substantially reduce the time taken to close a deal. Also, when we introduce new products or schemes, we can easily push the information on to our content platform that can be assessed and consumed by the mobile user anytime, anywhere.

Our next venture is to extend VDI to our mobile platform. However, security is still the biggest challenge. While vendors claim to have the ability to remote lock and wipe content off a stolen mobile, not many actually live up to it. The other challenge is around user interface. Today, the mobile platform has redefined the way users consume information, and the advent of Web services—with their social media like interfaces—have made it even more intuitive. In this context, the biggest challenge is to replicate those capabilities in enterprise mobile apps.

T. SRINIVASAN Managing Director, VMware India & SAARC

The VMware Horizon Suite is designed to solve the security and governance challenges that consumer-ready applications and devices pose to enterprises. Today, three major trends are forcing IT to evolve: New device platforms, new applications and new user expectations. IT organizations are increasingly challenged to support a dispersed mobile workforce that demands instant and user-friendly services for accessing data. The VMware Horizon Suite is designed to solve the security and governance challenges these applications and devices pose to enterprises. This enables IT to meet the demands of its users with a virtual workspace that is secure, compliant, and easy to manage. It connects end users to their data, applications, and desktops on any device while maintaining IT

security and control and lowering TCO. Moreover, end-users get a consistent experience across devices. The suite comprises three products: VMware Horizon View, VMware Horizon Mirage, and a new product, VMware Horizon Workspace. The suite allows IT organizations to empower users with a secure and easy-to-manage virtual workspace that delivers a consistent experience across devices. VMware Horizon Workspace simplifies the enduser experience and reduces IT costs. For the enduser this means anytime, anywhere access. For the administrator, the result is simpler, centralized, and policy-based management.


Big Data

THE UNVARNISHED TRUTH ABOUT

There are plenty who believe that beneath big data’s shiny exterior, companies will find the hollow ring of tin plating. Will big data reveal itself to be just another IT fad? By Debarati Roy

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Ramnath Iyer knows the business of information like few others. As the CTO of CRISIL India, the global ratings agency, he watches over financial and management data collected from over 15,000 medium and large enterprises. “Our database has more than 120 million data points,” says Iyer, who started his career at CRISIL as an analyst. Two years ago, CRISIL decided to help its analysts create more accurate ratings, faster. It did this by enabling analysts to tap into large pools of data—located outside CRISIL’s walls—in a more organized fashion. If, for example, its analysts wanted a whole set of challenges, doubts and questions that are typically to rate the performance of an auto manufacturer in Gurgaon, associated with technologies in their hype cycle. The question is: CRISIL’s big data systems would help by crawling social Will big data stand the test of enterprise adoption? Or will go up in media sites and blog posts for opinions about the company. a big cloud of smoke? It would also take data from sources as varied as government reports on the production of steel, online announcements of a new excise duty, weather reports affecting the production of rubber (to gauge the cost of tires) and news from Bloomberg When big data first started creating buzz, it was perceived as or Reuters regarding a strike at one of the company’s ancillary a technology that could manage large volumes of data. Since providers. Combining all that information and more gave then, however, newer definitions have evolved to include two analysts a more accurate picture of the company they were new parameters: The different disparate sources that companies rating and the environment it operated in. are gathering this data from, and the speed with which data is In a way, Iyer’s team has built a system that’s as smart as its collected, stored and processed. human counterpart and has become a member of the team. “We define big data as high volume, velocity and variety That’s allowed analysts to rate thrice the number of companies information assets that demand cost-effective, innovative forms they could before. “The toughest challenge was constructing of information processing for enhanced insights and decision a system with in-built intelligence; a system that can think making,” says Sid Deshpande, senior research analyst at Gartner. like an analyst, that can find and co-relate Gartner’s definition focuses more on the various pieces of information and throw overall management of data. Forrester’s, on the Reader ROI: results at analysts,” says Iyer. other hand, lays more emphasis on the ability Why big data is here to stay CRISIL’s story is just the sort that big to extract actionable intelligence from large data data vendors and analysts love to push. sets. Forrester’s VP and Country Manager, India, Overcoming its challenges And you’re their target. Manish Bahl defines big data as the, “techniques and The importance of starting to plan now But under scrutiny, the glossy veneer technologies that make capturing value from data at of big data’s brochure-ware gives way to an extreme scale economical.” Bahl is quick to add

The Big Identity Crisis

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that big data is about a set of different technologies and does not equal Hadoop and certainly not in-memory computing like some vendors suggest. More recently, vendors like IBM have added another V to the equation: Veracity. Most Indian CIOs we spoke to agree that big data is characterized by the 3Vs. When a company has to manage huge volumes of data, which are moving in and out of its systems at extremely high velocity, and these data sets originate from a large variety of disparate sources (social media, for instance), then a company has a big data problem and opportunity. Deshpande says it’s not necessary for an organization to be battling all the three Vs to have a big data problem. “Any company that’s struggling with either one or two of the three Vs and can’t solve the problem using their existing infrastructure and technology set can be

“The toughest challenge was constructing a system that can co-relate various pieces of information and can think like an analyst.” — Ramnath Iyer, CTO, CRISIL India

classified as an organization with a big data problem,” he says. By that definition, MTS certainly has a big data challenge. MTS India, the mobile telecom service brand of SSTL, has over 10 million customers across nine circles and generates about 100 TB of data everyday. For Rajeev Batra, CIO, MTS, just dealing with the volume and velocity of the data the company’s systems produce is a gargantuan task. “Data is constantly being generated from the call records of our customers, their usage pattern, location-based services, billing and Internet usage,” says Batra. Batra has already found ways to use that data downpour to create offerings that give MTS competitive advantage. Using data streams from different sources, MTS started a program it calls m-bonus that offers customers freebies like discounted call rates— in real time—with the aim of increasing customer loyalty. “If, for example, a customer has made five calls to a specific number in the span of an hour, we could possibly offer them a 20 percent off on the next call, thereby creating that customer delight,” says Batra. Batra also uses feeds from MTS’ social media platforms to figure out how happy customers are with MTS’ products. This information, he says, is used by marketing, sales and customer service to figure how they can improve service levels and customer satisfaction. “The time taken to set the wheels rolling to improve or tweak products and services based on customer feedback has been reduced by 40-50 percent,” says Batra. Some of Batra’s peers shrug off work similar to his as examples of “high-powered analytics”—which demonstrates big data’s lack of a universally-accepted definition. CIOs on the big data trail like Batra, in the meanwhile, aren’t waiting.

As easy as it is to take down big data—and the concept has its share of skeptics—there’s plenty of proof that the technology is here to stay. For one, with the amount of data we produce, we’ve created an ideal breeding ground for it. Everyday, we create 2.5 quintillion bytes of data. Ninety percent of the data in the world today has been created in the last two years 36

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Big Data’s Big Drivers


alone. The potential of all of that data is making businesses salivate. “With the rise of social media, mobility, M2M communication, RFID, GPS, etcetera, business can now tap into data they never knew existed earlier,” says Srinivas Peddada, EVP and CIO at SKS Microfinance. Part of big data’s charm is the more immediate results it offers, compared to traditional analytical tools like business intelligence. Earlier, for example, a new product’s success could only be measured after a company’s marketing team ran a survey. But in the time it took marketing to gather feedback and decide what colors to use in its presentation, unsatisfied customers already moved to the competition. That won’t happen at Target, the secondlargest discount retailer in the US, if Natarajan ‘Nat’ Malupillai, director, digital analytics at Target’s India operations, has his way. Malupillai is creating a system—it’s under pilot—that leverages social media and other data available on public domains to improve what Target is showing customers shopping on its website. In addition, Malupillai says, “We would like to leverage the big data solution to compare item attributes and prices in the market place to provide the best offering for Target customers.” “In the past, analytics sat separate from transactions and could only do what we call passive analysis,” says Malupillai. Any strategy a company wished to put into action based on a customer’s behavior or browsing pattern could only be post facto. But big data’s changing that. “From suggestions on what a customer could buy next or special offers, we should be able to get more interactive with customers on the go, and close the loop within one transaction cycle, says Malupillai. For CXOs, immediate intelligence is an irresistible idea. So much so that businesses are unclenching their tightly-closed fists to fund big data projects. The average amount Indian companies spent on big data in 2012 was $ 9.5 million (about Rs 52 crore), according to a 2013 TCS study on big data, Indian enterprises aren’t the only ones spending big on big data. Technology providers are investing large amounts to scale up their big data portfolio. In the last five years, IBM, for example, has invested over $16 billion (about Rs 88,000 crore) in 30 acquisitions to strengthen its family of big data products. At the other end of the size spectrum, millions of venture capitalist rupees are being pumped into big data startups, creating much-needed innovation. And when the likes of IBM decide that enterprises are going to buy a product, they back their decision with sizeable marketing budgets and create demand. It’s what’s gotten a

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“People talk about big data and unstructured data without having a clue about existing data sitting in the data base. That’s just blasphemy.” — Srinivas Peddada, EVP & CIO, SKS Microfinance technology concept as complex and niche as big data on the cover of the Harvard Business Review, Forbes and Businessworld. Michael Chui, principal, McKinsey Global Institute and coauthor of one of the first comprehensive reports on big data, says that since he co-authored his report in 2011, a lot has changed in the way big data is perceived. “A couple of years ago, there were a number of people in the tech community who were talking about big data, but in the intervening time we have seen interest and awareness increase in business and executive communities,” he says.

The Bigger They Are… One of the challenges of being a legend is living up to your reputation. That’s a problem big data is already beginning to face thanks to all the hype surrounding it. According to Gartner’s 2012 hype cycle for emerging technology, big REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

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data has moved into the Peak of Inflated Expectations. “There are several use cases where big data has helped solve various challenges at various organizations, but the hype being built around those cases are too high at the moment. End users are beginning to expect those benefits automatically, which might not turn out to be true in all cases,” says Deshpande at Gartner. One downside to that, as Arun Gupta, CIO, Cipla, points out are that IT leaders have begun to force fit problems to the technology. But because big data solutions aren’t solving organic problems, he says, it’s probable that big data won’t see mainstream enterprise acceptance. “Most companies I speak to are curious about big data, what with all the hype being built around it. But they have no clue what it means to them,” says Gupta. “Various models created by vendors or analyst firms are not based on empirical data but largely on hypothetical, potential use cases. Anecdotal references, too, are primarily from large Internet companies and a few global FMCG experiments,” he says. Even if big data does get past this hurdle, it’s going to have to face a number of legacy issues—challenges that have sunk many a business intelligence initiative in the past. First among these is the cultural change an analytical project like big data will introduce. According to Chui, big data will turn an organization into one giant laboratory and will force companies—that are used to listening to

HIPPOs (Highest Paid Person’s Opinion)—to change the way they make decisions. “Imagine having to move from experience and instinct to running an organization like a 24x7 laboratory. There is nothing harder than having an organization that is learning to make decisions in a different way,” he says. Gupta isn’t convinced that data gathered from sources like social media can be trusted to base critical business decisions on. “The probability that businesses can derive value from this data is low, although it does lend itself to insights that have been unavailable thus far,” says Gupta. Then there is funding. “Let’s agree, big data doesn’t come cheap,” says Malupillai. “During these initial stages, when the technology is not mature and projects are in beta phase, it is important that your business sees value in what you are doing,” he says. Gupta doubts businesses will see value in big data just yet. “It’s extremely difficult right now to provide any meaningful model which can calculate the ROI of big data investments for a typical commercial enterprise,” he says. “There is so much hype that CIOs may get initial investments cleared, but the second round of funding will be difficult to justify.” Malupillai says that CIOs who are doubtful about the ROI of big data should start small and use big-data-as-aservice models. “To begin with, CIOs can pick a small set

5 Myths About Big Data 1

Big data is about unstructured data: Analyzing unstructured data from social media sites, for example, doesn’t sum up big data. “A company that’s struggling with large volumes, high velocity, or variety of data is an organization having a big data problem,” says Sid Deshpande, senior research analyst, Gartner. Take Rajeev Batra, CIO, MTS, for example. Privacy laws don’t allow him to peek into customers’ Facebook accounts. But his systems process information from 110 TB of structured data everyday to provide better customer service.

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2

The biggest benefit of big data is better customer service: The most compelling cases of big data have come from companies that have used it to improve customer service. But Gartner has found that this isn’t the biggest benefit derived from big data. “When we asked some of the largest enterprises about the benefits they wanted to derive from big data, process efficiency topped the list. This was followed by identifying areas of security risk, and finding new areas of customer satisfaction,” says Deshpande.

3

Big data is an IT project: Sure, big data cannot impact the bottom-line. But it does provide intelligence that the business needs to act on to derive successful business outcomes. Which is why, it can’t be bracketed as an IT project. “If you deal with big data as an IT project, then it is destined to fail,” says Michael Chui, principal, McKinsey Global Institute. Srinivas Peddada, CIO, SKS Microfinance, agrees. “That’s the base note. If your business is not on your side for a big data project, it becomes an IT project and it all goes downhill from there,” he says.

4

Big data is a huge initiative: It doesn’t have to be. Nat Malupillai, director, digital analytics, Target India, and Manish Bahl, VP and country manager, Forrester India, say CIOs should not get bogged down by big data. CIOs who aren’t sure about how to embrace big data, or are skeptical about investing in it can always start small. “To begin with, CIOs can pick a small set of data (say 10-20 percent), be it structured or unstructured, and use the service of a data analysis firm to analyze that data,” says Malupillai.

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of data (say 10-20 percent of marketing or sales data), be it structured or unstructured, and use the service of a data analysis firm to analyze that data,” says Malupillai. Embracing big-data-as-a-service is an approach Bahl from Forrester suggests, too. “CIOs can explore cloudbased models for faster business results from their big data investments,” he says. That, however, doesn’t solve another issue: All the legacy data sitting in enterprise systems that hasn’t been mined for intelligence yet. “People talk about big data and unstructured data without having a clue about data sitting in their data base. That’s just blasphemy,” says Peddada at SKS Microfinance. According to Symantec’s 2012 State of the Information Survey, 66 percent of Indian businesses say they haven’t got to a “single version of the truth”. Another 63 percent say it’s too difficult to find the right information at the right time. That’s followed by 43 percent who are unsure how old information is. At SKS Microfinance, Peddada is currently dealing with large volumes of structured data. The micro-finance company has a presence in about 20 Indian states, with about 7 million customers. It has about 10,000 employees, and a large field force that goes into India’s rural interiors to disburse loans and collect payments. “The amount of transactional data we deal with is huge. Customers make payments on a weekly basis and there are as many as 1,000 reports that need to be generated in a month,” says Peddada. Peddada, an MBA from the Lally School of Management & Technology, New York, has a two-year plan chalked out to adopt big data at SKS Microfinance. “We have a good MIS system. But I wanted to streamline it first and go to the next level of Big data is all about business intelligence, analytics: SQL services, analytics Analytics is just one part of services, and finally get big data, essentially the endto the highest level of BI,” goal. You need to first figure he says. His aim is to use out how to store, manage, a number of information archive, and retrieve data. sources to be able to, But often, all this gets buried say, lower the microunder the fancy tag of finance company’s risk. analytics. Big data can get For example, he says, out of control quickly since he’d like to use weather discovering value from a slice reports and news feeds of data makes you greedy for to predict whether crop more data. production in a certain Big data can get too region is good enough complex too fast. The key is to ensure that customers to keep big data small and from there would be able reasonable, and figure out to pay their loans. how to manage it before Another challenge is analyzing it. the cost of storing and — By D.R. archiving of all that data.

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Big Data

Bahl says it’s likely that organizations will collect and store more data than ever before. The key challenge they will face is how to manage that data, what to retain, and how to eventually dispose it. At SKS Microfinance, Peddada plans to improve the company’s storage capacities, invest in data warehousing and processing power to match his big data goals, over the next six to seven months. But, what about data that’s coming from outside organizations? That’s a question Iyer at CRISIL had to ask himself. CRISIL generates 6TB of structured data and about 6GB of unstructured data everyday. It also uses Web crawlers to pick information from social media sites and various forums and platforms available on the Web. That’s then run through parsers, which conducts syntactic analysis and gives data some structure for use and before the data’s subsequently discarded. “Since this unstructured data is already available on the Internet, my database will only store which location the data was downloaded from,” says Iyer. “It helps lower my storage cost,” he says.

Big Data’s Building Blocks Some of big data’s challenges, like ROI and storage, can be countered if CIOs chip at it long enough. However, there are others, say skeptics, which are out of a CIO’s hands. One of these is the uneven speed at which different technologies that make up big data are maturing at. According to Gartner’s big data hype cycle, published July 2012, technologies like Web analytics and social media monitors will take less than two years to enter mainstream adoption, while technologies like in-memory data grids and Mapreduce will take between two and five years to mature. Other technology subsets of big data like the semantic Web and information valuation could take as long as 10 years to make in-roads into the enterprise. In this shifting landscape of technologies, CIOs will be hard-pressed to find a scalable, flexible platform for their big data initiatives. In answer to that problem, Batra, who has been on the big data road since mid-2009, has tried to use open-standards platforms as much as possible. This, he says, makes it easier to swap out obsolete and outdated components and add new ones, move data over as necessary, and keep working with as little disruption as possible. “The technology space has also evolved. Most new technologies are more of plug-and-play and are built on open standards specifications,” says Batra. He believes that vendors will keep integration and flexibility issues in mind as they keep developing new products. Bahl’s suggestion that CIOs adopt an incremental, opensource approach to big data resonates with Batra’s decision. “The evolving open source big data ecosystem around REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

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technologies such as Hadoop, Cassandra and Solr and platforms like Cloudera, Hortonworks, etcetera, is an increasingly attractive option for CIOs,” says Bahl. But what about big data skill sets, ask cynics? According to Gartner, by 2015, nearly 4.4 million new jobs will be created globally by the big data demand—and only a third of them will be filled. In India, the skill-set crunch has started seeping into the list of a CIO’s biggest challenges, even among those who have just started planning their big data debuts. “Skill sets was and will remain a major pain point, be it BI or analysts or data scientists,” says Peddada. In response, a number of training academies have mushroomed to fill the demand. Jigsaw Academy, a start-up based in Bangalore can train up to 4,000 students in a year, says Sarita Digumarti, founder, Jigsaw Academy. Courses include basic statistics (required to summarize, visualize and analyze data), analytic techniques (for descriptive and predictive modeling), and the use of analytic tools like SAS, Excel and others. Another Bangalore-based academy, Analytics Training Institute can train up to 1,200 students annually. Course fees range between Rs 27,000 to 36,000 (Jigsaw) per student. But Gupta, among others, is not convinced. “Indian engineering schools produce a million engineers every year. Having a degree doesn’t mean one is employable,” he says. This lack of experienced and skilled data scientists is what drove Malupillai to look within Target for people, from both business and IT, who could be cross-trained. Iyer, on the other hand, has been lucky: Out of the 3,800 employees at CRISIL, almost 3,200 are analysts. For CIOs who suspect they will face staffing challenge, Iyer suggests enrolling the services of an analysts firm.

Looking Forward Clearly, a large majority believe that big data is the next frontier of business-IT innovation, competition, and productivity. But the fact is that most analysts and Indian CIOs believe that mainstream 38

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“In the past, analytics could only do passive analysis. [With big data] we should be able to get more interactive with customers.” — Nat Malupillai, Director, Digital Analytics, Target India adoption of big data is going to take another two to five years. Chui from McKinsey Global Institute puts that number at a conservative 10 years. So why all the carpe diem? Because no one wants to get left behind. Batra, Malupillai and Iyer, for example, have had their head in the big data game since pre-2010. Indeed there will be challenges for those chasing the big data dream. But which new technology doesn’t? The cloud had plenty of skeptics before it’s gotten accepted. “Leaders who are currently using big data solutions are not shying away from the need to create solutions, and, as the technology matures, put in the effort required to integrate various solutions and make them work. I mean, that’s always been the work IT leaders have had to do,” says Chui. CIO Debarati Roy is correspondent. Send feedback to debarati_roy@idgindia.com

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CXO Agenda | Finance

Rostow’s Agenda: To continue to take a middleof-the-road strategy where forex is concerned.

Just about 5 percent of the revenue Mindtree makes comes in rupees, which makes it vulnerable to currency markets. Rostow Ravanan, CFO, Mindtree, explains how his office deals with highly volatile forex.

CIO: What is Mindtree’s forex exposure? ROSTOW RAVANAN: About 5-6 percent of our revenue (in 2011-2012, Mindtree’s revenues were Rs 1,953 crore) comes out of India in INR, and the rest is in foreign exchange. Of that, 70 percent comes in USD dominated contracts. Though the US itself brings in about 60 percent of our revenues, some of our invoices, for some non-US customers, are in USD. The two other large currencies for us are the euro (8-9 percent) and the GBP (5-6 percent). About 85 percent of our revenue comes in from these three currencies. The rest is in small denominations from other currencies. About 20-30 percent of our revenue goes back in to the same country’s onshore expenses such as salaries, rents, and such. The remaining 70-80 percent is the net cash inflow into Mindtree India. Structurally, we have set up Mindtree India as a registered corporate entity. All our overseas offices are branches of Mindtree India. All invoicing for all our global customers happens out of Mindtree India. In the last few years, the currency markets have seen a lot of volatility. How has that impacted your earnings?

B Y VA R S H A C H I D A M B A R A M

Since 2008 April, the rupee has seen huge variations. At one point it looked like it would go below 40—it briefly touch 39—and then it went all the way up to 57. In the previous decade, the rupee’s swing was usually in one direction. Even in the months or quarters it moved, it moved by small amounts. In comparison, today, it can move 10 percent in the span of a month.

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If you look at the rupee movement as a sine wave, its frequency and amplitude have both increased. This has huge implications for us. Since we are predominantly a rupee-cost and dollar-earner, a weaker rupee benefits us. But what is worrying is the volatility. If I know the rupee is going to weaken, I can plan my next quarter. I can use that extra money for other investments. But if it’s going to appreciate we need to cut down on certain expenses because we have already committed a certain profitability level to our investors. Not knowing how much money is coming is the biggest problem for the finance functions as of today. The rate itself is not that important. It can be 50 or 48 or 52, doesn’t matter much to the business. The requirement is predictability, not profitability. What’s your hedging strategy?

With most things in life, I tend to be quite decisive. This, however, is the only area in which I don’t want to take a call and take a middle-of-the-road strategy. At Mindtree, we have decided to hedge only the major

Are these in forward contracts or in options?

Under our hedging policy, we are allowed to hedge only what is called effective cashflow hedge instrument based on the accounting standard 30 which specifies what kind of instrument we can use for cashflow hedging. This is financial international reporting structure drafted by the Institute of Charter Accounts, India. It is predominantly forward. Once in a while, we use a plain vanilla put option but you have to pay a premium for it. You adopted that hedging strategy in 2008. Since then the rupee has seen a lot of volatility. Any plans to change your strategy?

Last September quarter we had a loss of $7.5 million (about Rs 41 crore) and in December a gain of $2.5 million (about Rs 13 crore). That’s almost a $10 million (about Rs 55 crore) swing. It was caused by the movement of the rupee. In August 2012, the rupee was very weak, and suddenly in the last fortnight of September it strengthened. So revenue that was booked in August and

I’ve always had peaceful sleep. As they say, a clean conscience is the softest pillow. If you reconcile to the fact that some things are beyond your control, you sleep peacefully. currencies, those are more than 5 percent of the total. This includes the US dollar, the euro, and the GBP. We forecast our collection over the next 12 months and within each of the main currencies we hedge 50 percent of our net exposure, on a 12-month basis. This is uniform across all 12 months, such that in each of the 12 months we hedge 50 percent. If the rupee appreciates, the 50 percent hedge insulates us to some extent, and if the rupee depreciates, the unhedged 50 percent protects us. So that is our middle-of-the-road policy on hedging; it is neither intended to be an aggressive profit-making venture or be a completely conservative approach.

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not yet collected in September led to a loss. The hedging, per se, minimizes volatility, but it is the accounting of your receivables that causes the loss if the rupee swings. Unfortunately, there is no way to completely insulate your P&L from that swing. You are in a way caught between the devil and the deep sea. We use hedging as a kind of car insurance. If I have an accident, at least 50 percent of my loss is met by the insurance company. But I still have to take the loss of the remaining 50 percent. At Mindtree, we have always consistently been with the market, we have neither gained nor lost that’s because of the design of our hedging strategy. We are just playing along.

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Then why hedge at all?

Research reports from top bankers have made me realize that the rupee always moves in the opposite direction it was predicted to move in.

If I had not hedged, the loss could’ve been higher—or the profits would’ve been higher. Either way we have decided not to take a view on the market. If I don’t hedge, then I am taking the view that the rupee will depreciate. However, I am saying I don’t know, and since I don’t want to gain or lose, I’m taking a floating approach. If you look at our treasury from a hedging effectiveness perspective, we are on par with anybody else. I’d give myself a 7.5 or 8 on 10 because it did what it was supposed to do. My stakeholder community would prefer us to have stability of earnings rather than an ambitious hedging strategy. If the road has potholes, I can put shock absorbers to minimize impact, but I can’t altogether remove it. Mindtree cannot be a shock absorber and beyond a point, a gain or a loss will get passed on to investors. This is the best design for us. Anything more will require us to be more sophisticated, take risks, or play for the upside. We explain to our investors what our model on currency is and then the rest is up to them. If they like Mindtree stock at certain price they can decide to buy or sell it. I’d rather let my investors make the currency assumption. But isn’t risk-taking a part of the finance function?

Whatever risks I take, I will take with my business. I may decide to accept a tough contract or a tough SLA, or take on tough pricing. All my risks and decisions are on that front because I understand that. Currency is not our core competency and playing forex to make money is not an expectation at Mindtree. We are not bankers. But that doesn’t make us risk averse. If I am evaluating an M&A or if I am evaluating a customer contract I will take all the necessary precautions and balance risks on that front but with currency we’d like to stay middle of the road. Is there a history to why Mindtree has adopted this position with hedging?

In the past, exchange rates reflected the underlying economic assumptions of the country. A weak economy leads to a weak currency. But today, the variables in the equation, the movement of the variables, and the interrelationship of these variables has changed significantly. For example, a country with a sustained current account deficit should typically have a weak currency.

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But the rupee doesn’t behave that way. Despite India’s huge current account deficit, the currency is appreciating from 57 to now probably touch 52. Many of these variables have become too complex for people to sit and understand and model after. I focus as much energy I have on Mindtree. We have a certain set of customers who have certain needs. Managing all those equations internally and with our stakeholder base is a lot smarter than breaking our heads on currency. Since March 2011, our profit has increased by 10 percent. Of that, 6-7 percent was because of operational efficiency and the rest because of currency. The currency bit will swing. We focus on garnering more operational improvements. What’s your view of currency for this year?

I have absolutely no view and I’d rather not take one. Every year the top bankers from all over send me research reports and they’ve made me realize one thing: The rupee always moves in the opposite direction that it was predicted to move in. We have seen famous people go wrong on the rupee. I’d rather not waste my time and energy taking a view on the rupee, because there are more chances of being wrong than of being right. At Mindtree, the treasury operates as a support function and not a profit center. The decision to hedge at 50 percent was taken in 2008. By not questioning the movement of currency, I minimize the chances of adding one more variable into the equation. While the impact of the rupee is significant (1 percent is almost 50 basis points) it is a fundamental force like gravity. I can’t fight it hence I’d rather float with it. So, does the CFO of Mindtree sleep peacefully at night?

I’ve always had very peaceful sleep. As they say, a clean conscience is the softest pillow. If you reconcile to the fact that some things in life are beyond your control, you sleep peacefully. CIO Send feedback on this interview to varsha_chidambaram@idgindia.com

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Case File | DHL Express UAE

SIGNED, SEALED, DELIVERED BY JOE LIPSCOMBE

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Reader ROI:

How to go about a VDI implementation The benefits of VDI

“It sounds like a cliché, but the information on the package is as important as the delivery of that package,” says Praveen Sashi, head-IT, DHL Express, UAE, as he explains that the IT department of the world’s most successful logistics company is pivotal to how it operates. DHL Express in the UAE had been struggling with its desktop management during a difficult time for businesses. Back in 2009, when half the world was suffering from a recession, DHL was searching for ways to improve its financial efficiency, as well as improving its service maintenance and management. Praveen Sashi, who has headed IT at the company since that year, says that the idea of virtual desktops was like a light at the end of a tunnel. “We had a lot of systems which were coming to the end of their time and needed to be upgraded or completely replaced. Also, around this time, we were searching for ways to manage our costs and reduce our servers, even application convergence and things like this. We had a lot on, and virtual desktop technology was maturing at the time, so that’s when we started looking into it,” he recalls.

Scouting for Talent With costs and timing playing a large role in the development of this project, DHL couldn’t really afford to make any ad hoc moves, so it

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IMAGE BY MASTERFIL E.COM

Globally-known logistics firm DHL is no stranger to making a fast, first-class delivery. So it was never in doubt that, when its Express division made the move to bring in virtual desktops, the project would be implemented quickly, seamlessly, and successfully.


Case File | DHL Express UAE

set about a very thoroughly planned-out proof of concept (POC) in order to gain a broad view of the solutions on the market, and therefore make a highly educated decision on which vendor to choose. “We had a very specific set of criteria that we needed to fulfill. We wanted something that integrated into our existing infrastructure easily, something that was cost-efficient, something that was userfriendly. We run a real-time customer call center here, so we needed something that was user-friendly and engaging.” DHL ran three separate 30-day POCs in succession and decided on the overall winner, a vendor whose desktop virtualization offering most closely matched its requirements. “They matched our requirements more closely than the other two vendors which we trialed. They began the implementation in early 2010 and within roughly three months, the majority of our office here was running virtual desktops,” Sashi says. “We obviously wanted someone in-house with the skills to manage this, so we had one employee shadowing the vendor as it implemented the solution. We supported this with a certification course in that vendor’s product and now we’ve one employee who is fully certified to manage the technology.” Sashi claims that the consolidation of workflows has improved significantly since the implementation of the virtual desktops. Provisioning a desktop from one central, virtual hub can take less than a few minutes and overall management of the entire center is done with complete ease.

Safety First Of course, transferring all desktop applications and managing data access in a roaming environment can raise alarm bells when it comes to security. However, Sashi says that managing security has improved, too. “Now we’ve nothing being stored locally, people are accessing everything from one central location and, in that regard, it’s easier to implement better controls on the server. Security is hugely improved in that way.” 50

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“We had a very specific set of criteria that we needed to fulfill. We wanted something that integrated into our existing infrastructure easily, something that was cost-efficient, something that was user-friendly. We run a real-time customer call center here, so we needed something that was user-friendly and engaging.” — Praveen Sashi, head-IT, DHL Express, UAE

Moreover, overall administration has become easier for Sashi’s team, not to mention disaster recovery. “If the facility went down, you wouldn’t be able to run a call center. Now, if the facility goes down, we can just walk over to our alternative location across the road and download all of our desktop applications and data and we’re back on again. Then employees can access anything they need to again, from wherever they may be.” Some main improvements which stand out for Sashi are, first, the fact that server management has been so brilliantly improved means that administrative staff have been able to free up far more time to do other tasks and learn new skills. “Customer service and business growth are a focus point for us now, and since we no longer need to concentrate on running and maintaining servers, we can put far more

time into these two areas,” he explains. Second, the more obvious of the two, is the cost saving. “We had a lot of servers and desktops becoming redundant, and would have to upgrade software around every third year. Now, with the virtual desktop, we’ve increased that time scale to seven years.”

Standing Strong Since the implementation, Sashi says that DHL hasn’t needed to have too much communication with the vendor; the stability of the project ensured that DHL would be able to manage and control the technology in-house. “We only really call on them if we wish to discuss ways of improving the product or the set-up; we don’t ever need to call them with a problem or a technical issue. The model we put in was so robust and the effort it takes to maintain it now is so much less than before that we’re absolutely fine by ourselves,” says Sashi. The importance of this project cannot be understated—this is the first trial implementation for this technology and now Sashi and his team are being used as the example for the next wave of implementations elsewhere in the world. “We were the first to trial this, we’ve had a very successful time with it and now we’re pushing it forward for consideration by the rest of our company. As well as this, we still have plenty of other big projects lined up for the foreseeable future, our priority being projects that aim to improve internal efficiencies, deliver great service quality to our customers, and support business growth.” DHL Express is currently testing the use of public cloud in order to deliver logistics and warehousing solutions in this region. The subscription-based model aims to utilize the benefits of cloud technology to deliver application services that add new business capabilities, improve operations, and overall provide better services. CIO

Joe Lipscombe is assistant editor for CNME. Send feedback on this feature to editor@cio.in

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New Roles

NEW CHIEF IN TOWN

CEOs are hiring hotshot chief digital officers. What does this really mean for the CIO? By Kim S. Nash

When consumers wanted movies, TV, music and other media to be online and on mobile devices, entertainment companies started recruiting chief digital officers (CDOs) to transform their businesses. Now the brisk hiring of CDOs and similar executives in other industries, including manufacturing, retail, food and financial services, leaves CIOs wondering where they stand. Contemplate too long, though, and you could be sidelined.

the CEO, the CDO gets the authority to rearrange staff Twenty-five percent of companies will have a CDO in and request funding to launch big plans. two years, Gartner predicts. In the past year, the number In other words, the CDO is handed the keys to drive of employment searches for CDOs in the United States the change the CEO wants but isn’t getting from the has grown by one-third, says recruiting firm Russell established hierarchy. Which means the future that Reynolds. Some CIOs will get the job, no doubt. elite CIOs thought they had sewn up—strategy setting About 20 percent of CIOs have already taken on digital and entrepreneurship—could be stolen. “You could call officer duties, according to Gartner. For example, CIOs it a vote of no confidence,” says Dave Aron, a research at the construction company Brady Corp. and clothier fellow at Gartner. Companies that hire CDOs say the Burberry recently expanded their roles that way. CIO is important, Aron says, but they’re In many more cases, however, the Reader ROI: clearly seeking something the CIO CDO is an executive from outside isn’t delivering. the company—and outside IT—who How chief digital officers could endanger the CIO’s role The potential of becoming digital parachutes in at the behest of a CEO What you can do about it reaches beyond enterprise IT to ideas who is adamant about corporate such as sending real-time pricing to transformation. Usually reporting to The role of digital executives 52

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Scott Durchslag, the top digital officer at Best Buy, is building his own technology operation because, he says, “enterprise IT is inwardfacing.”

customers’ mobile devices as they place digital orders to pick up later at a local store. Or, as at Starbucks, infusing technology innovation into the retail experience every bit as thoroughly as the fresh-ground coffee aroma permeates its stores. Or, as at Best Buy, completely transforming a dying core business. Ideally, CIOs should have already been setting up the technology needed for such a digital transformation, says George Westerman, a research scientist at MIT’s Center for Digital Business. CEOs are apt to bring in a hotshot CDO in cases where the CIO lacks the political pull to reorient the company, Westerman says. CIOs “have the right skills, but this depends on relationships. You’re talking about asking business-unit and marketing chiefs to change,” he says. “That takes power and respect.” Early CDO arrangements reveal further complications. Namely, there is no set job description nor any commonly accepted parameters for how a CDO and a CIO should work together. The line differentiating the CDO from the CIO varies between companies, depending on their goals, says Jim Barr, who joined OfficeMax, an office supplies company, as CDO in 2011. He and CIO Randy Burdick discussed for a few weeks how they and their teams would interact. “We may have org charts, but those are formalities,” Burdick says. “We’re trying hard to remove perceived boundaries.” Whether a CIO figures out how to thrive in this new ecosystem will dictate how relevant the CIO stays. As Westerman advises, “Don’t wait for someone to ask you to be strategic.”

Getting Along The hiring of a CDO at a troubled company signals to Wall Street that senior leaders see the problem and are doing something about it. For example, OfficeMax, whose sales have slipped every year for the last five, likes to include Barr in calls with financial analysts. Companies with high levels of “digital maturity” can reap impressive financial rewards, according to Westerman, who worked with Capgemini Consulting on a two-year study of 391 companies. Companies that take digital initiatives, such as monitoring internal operations in real time, coordinating corporate activities across silos, and engaging customers with technology for competitive advantage, book 9 percent higher revenue, 12 percent higher market valuation and 26 percent higher profits, the study found. Given those figures, who wouldn’t want to do all things digital? But that’s a bad plan, Westerman says. The most successful digital transformations focus on one or maybe two objectives, he says.

All potential projects and investments should be weighed against whether they further those clear goals. At OfficeMax, the dual priorities are customer experience and online sales. Last year, the company revamped its search engine to provide more accurate results and recommendations, which leads to customers shopping faster. In the search engine’s first month in action, the conversion rate of browsers to buyers increased, as did the average revenue per visit. Customer satisfaction with site navigation also improved. Barr has also asked the IT group to change its software development habits so it can deliver 20 upgrades per year instead of just a few. More frequent releases create more opportunities to respond to customer wants, maybe even getting ahead of them, Barr says. “We have 20 chances to learn and adjust our course.”


New Roles “Jim brought this passionately to the table,” CIO Burdick says. As a result, the IT group has adopted some agile methods. The CIOCDO duo, who both report to the CEO, have also teamed up to coax the legal and financial departments to tweak their processes to approve technology proposals faster. In particular, Burdick and Barr jointly convinced the CFO to modify his approach to ROI. Instead of seeking the business case on an individual project, it’s more productive to consider the hard and soft benefits of the entirety of the work, Barr explains. A cautious CFO agreed but requested monthly progress reports, which have since been relaxed to quarterly. “Nothing like getting corporate results to make the CFO happy,” Burdick says. At Starbucks, CIO Curt Garner and CDO Adam Brotman have worked diligently to define the borders and overlaps of their roles. Brotman has P&L responsibility for e-commerce and digital consumer endeavors, such as mobile apps and loyalty programs. Garner builds, supports and maintains the IT behind those ventures. But they collaborate at the inception of nearly every major project, Brotman says. Because their offices are next to each other, they’ve naturally fallen into the habit of frequently chatting and checking in, Garner says, adding, “We spend a lot of time in each other’s space, pushing each other in a healthy way.” They address potential conflicts right away, Brotman says. For example, some mobile development work was recently expanded, requiring more staff members from Garner’s group than previously allotted. The issue came to a head on a Friday afternoon, Brotman recalls. Saturday morning, he was on the phone with Garner. “He could have told me I was asking for too much. He could have said, ‘We had a plan, stick to it.’ But he literally said, ‘I trust you,’ and he went to bat for me with the financial team.” “We have mutual trust and respect,” Garner adds. “Without that, this digital innovation wouldn’t happen.” The results of that development work are expected later this year in new mobile features for the Starbucks loyalty program.

Power Shift At electronics retailer Best Buy, there’s extra tension as sales and profits slide and observers predict dire outcomes. Best Buy’s hometown paper, the Minneapolis Star Tribune, recently ran a long article enumerating the challenges ahead and missteps behind, calling the company “the lost empire.” Store sales have dropped in three of the past four years and Best Buy’s e-commerce business, which is competing with powerfully hungry Amazon, isn’t growing fast enough to make up the difference. Best Buy lost $1.2 billion (about Rs 6,600 crore) last year. Like other retailers, Best Buy sees a future in omnichannel shopping, where customers move with ease between the physical, Web and mobile realms to browse and buy. To make that happen, Best Buy, last March, created a new position: President of digital, global marketing and strategy. To fill this post of digital czar, the company recruited Stephen Gillett from a high-profile job running digital ventures at Starbucks, a role that branched far beyond his position then as CIO. 54

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In announcing the hire, Best Buy’s CEO at the time extolled Gillett’s “tremendous accomplishments” and his “rare combination of business leadership skills, retail transformation experience and digital and technological acumen.” Last November, Gillett spoke for 20 minutes during Best Buy’s presentation of its transformation plan to Wall Street. A few months later, however, a new CEO arrived with a newer transformation plan and hired another digital executive. A superstar known for global and online operations expertise, Scott Durchslag was lured from his position as president of Expedia Worldwide to be Best Buy’s president of online and global e-commerce, reporting to Gillett. Then just weeks later, on a chilly Wednesday amid the holiday shopping crunch, Gillett suddenly quit Best Buy. He had accepted an offer of the COO spot at vendor Symantec. Was there strain at a company that, at one point, simultaneously had a CIO, a CDO and an online president? Durchslag maintains that all of Best Buy’s senior leaders agreed on the company’s priorities, though he acknowledges that perhaps there were too many technology cooks. “Less is more in organizational questions during a turnaround,” he says. In any case, hours after Gillett called the CEO to resign, power was consolidated under Durchslag: He now oversees online business and marketing as well as the customer loyalty program. He praised Gillett as “an inspiring leader” in a recommendation he wrote on LinkedIn after Gillett left. Gillett declined to be interviewed. A month after Gillett left, CIO Jody Davids resigned. Davids had joined Best Buy in 2010, after a decade as CIO of $107.5 billion (about Rs 591,250 crore) Cardinal Health. As part of an executive shuffle last fall, Best Buy’s chief administrative officer left and Davids was reassigned to report to new CFO and CAO Sharon McCollam. It was unclear during Gillett’s short tenure what role Davids’ internal IT group would play. Durchslag says he plans to procure most of his technology and staff himself, not draw from corporate IT. “Enterprise IT is inward facing. I am responsible for outward,” he says. All major IT spending requests now go to Durchslag before proceeding so he “can see where they sit in the [overall company] priorities,” he says. If the request does clear that hurdle, it proceeds to McCollam, the CFO and CAO. “Sharon and I will be partners,” Durchslag says. Executive shake-ups are common in a digital transformation, says Aron at Gartner, and that’s when a CIO can lose standing. It’s a particularly dangerous time for CIOs who have a “guardian” mentality, trying to keep everything stable and safe, he says. “CDOs thinking about strategy are potentially threatening to the CIO.” So CIOs need to decide whether to work with, or in the shadow of, a digital executive, he advises. Russell Reynolds predicts that CDOs, with their credentials in general management, operations, revenue generation and technology strategy, can succeed CEOs. Few say that about even the best CIOs.

Virgin Territory CIOs who feel snubbed or who worry that they have little to contribute to a digital transformation do themselves no favors. “Get over it,” Westerman says. “You didn’t get the job as CDO.

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That doesn’t mean you don’t have a strong role to play.” After all, a CIO knows all the systems and processes at a company, plus how funding works—vital information. In partnership with a digital officer, a CIO can break new ground. Garner and Brotman pulled off a record-setting Starbucks promotion, partnering with LivingSocial, a daily-deals site. A oneday offer last September gave takers a $10 Starbucks e-gift card for $5. People bought 1.5 million gift cards, making it the biggest promotional campaign ever for LivingSocial, Garner says. He and Brotman set up a war room to monitor the action. A large screen displayed a dashboard of metrics about customer activity and any technical glitches that could have messed with the registration of new cards at starbucks.com. This was no time for an IT failure. “A big cheer went up from the technical side as we started to go past LivingSocial’s record,” he says, which was 1.16 million half-price Amazon gift cards, a record set in 2011. “Adam’s side cheered as we exceeded our record for number of concurrent transactions.” OfficeMax is contemplating its own first-ever moves. For example, the company wants to offer a wider array of products online, some of which would be drop-shipped from the manufacturer or distributor without winding through OfficeMax’s existing supply chain, Barr says. That would require changes to back-end financial and fulfillment systems. It’s part of an “endless aisle” concept that’s meant to fulfill more customer needs, he says. OfficeMax may also partner with local providers, such as website contractors, to offer services to small businesses. Helping the company try new ideas is critical for CIOs looking to enhance their skills and reputations, Westerman says. He tells the story of the French yellow pages, PagesJaunes, whose CEO told employees a few years ago that they would no longer make thick paper books. Instead, they were in the business of connecting small businesses to local customers. The company got into consulting, helping small businesses to set up websites, do search engine optimization and write mobile applications--with a new CIO involved.

Co-Opt the Threat Best Buy has ventured into new lands via “connected” stores outfitted with a fiber-optic backbone and Wi-Fi so customers can try out fully working versions of phones, tablets and other electronics. A highly trained sales force answers customer questions, helps set up new devices and offers follow-up support, all for free. A key goal of its turnaround is to become a trusted, unbiased source of information about competing and confusing products, says Josh Will, vice president of connected stores.

Jim Barr joined OfficeMax as chief digital officer in 2011 and works closely with CIO Randy Burdick to speed up the technology projects that are key to the retailer’s future.

Corporate transformations require executives to imagine how to unearth—or create from scratch—a new, somewhat unfamiliar company out of the remains of the old one, Durchslag says. “A future lens is needed,” which he’s not sure some CIOs can muster. Typically, a CIO gets to the top of the IT organization because he knows how to manage risks “and prevent conflagrations,” he says. “It’s intrinsically defensive, learning from mistakes and making people very focused on the past.” Going digital, with a CDO in charge, “doesn’t have to be a threat. It can be a career path,” Durchslag says, but only for CIOs who can break out of historical patterns. CIO Kim Nash is a senior editor. Send feedback on this feature to editor@cio.in


Innovation

disrupt ] or

e i [d

Your company’s business model is threatened from inside and out.What should CIOs do about that? By Kim S. Nash 56

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CIOs are learning some hard lessons about how industry leaders can be knocked off by out-of-the-blue competitors. Look at that quintessential business disrupter, Netflix. In 1997, the upstart launched a fast, convenient DVD-by-mail rental service that relied on highly efficient supply-chain systems, well-situated distribution centers and, of all things, the US Postal Service. Mixing existing technology and service tools in a new way let Netflix create a fresh business model in video rental that eventually displaced Blockbuster, Hollywood Video, and other stalwarts that relied on physical stores. Today, however, Netflix struggles to maintain its supremacy. Lots of companies with streaming video have invaded its territory, including YouTube, Hulu and Cablevision. Perhaps the biggest threat, in part because there appears to be no bounds to its ambition, is Amazon. The $48 billion (about Rs 264,000 crore) e-commerce company offers streaming and downloadable video for many devices—exactly the future Netflix imagines for

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Business Strategy

a US company in worse shape,” according to Netflix is aware of these challenges and is trying Reader ROI: financial research firm 24/7 Wall Street, which to boost its streaming business and revamp for How to save your organization’s predicts 2013 will be the year Avon falls. an all-digital market. But new pricing plans and business model from failing CEO Sheri McCoy insists that Avon’s financial an attempt to separate its by-mail and streaming The importance of overcoming troubles do not mean we’re witnessing the end subscriptions in 2011 got customers mad. The organizational inertia of the company’s business model. She and fellow company admits in recent financial filings that How to recognize unlikely senior leaders are trying to pull Avon into modern it has seen “higher than expected customer competitors times without dismantling direct sales, where a cancellations” and that those customers aren’t representative visits homes, personally delivers coming back quickly. Churn for 2011 was 4.9 catalogs to customers, or holds product parties. It’s not efficient, but percent, up from 3.8 in 2010. Vehement customer reaction led it is how the 127-year-old company climbed to success. It’s also how Netflix to reverse changes to its subscription business, though it McCoy, who joined a year ago, plans to conquer emerging markets, stood firm on its controversial pricing policy. such as Brazil and Russia. There, cosmetics aren’t sold widely in We don’t know how the Netflix story will end. But as so many retail stores and sales representatives are viewed as trusted sources. business models in so many industries come to depend on IT, CIOs Avon’s problem, McCoy says, isn’t its six million Ladies. Instead, need to heed the law of the business jungle: Disrupt or be disrupted. it’s a combination of the wrong product mix in some regions, some It’s a familiar pattern—disrupter moves in, flies high, then becomes ineffective pay incentives and, at various times, trouble with an ERP disrupted as markets and technologies evolve. Competitors emerge implementation that has so far taken eight years. As she recently from unexpected places. Some customers vacate to more appealing told analysts: “The challenges Avon is facing developed over time, companies while others resist your attempts to change. Every business not overnight. We still have a tremendous amount of work to do to model must eventually come to an end, but the trick is to recognize address issues Avon has wrestled with for years.” your own impending demise—plan for it, even. Problems with a supply-chain module rolled out in Brazil hurt CIOs who anticipate trouble can show colleagues how to avoid financial results there, the company has acknowledged; Avon has it, or fight it when it comes, says Gartner analyst Dave Aron. “You been working to implement a global ERP system since 2005 and want to escape conventional thinking.” expects the project to stretch into “the next several years,” according To disrupt worn habits in a company or in an industry, CIOs to its latest annual report. In the next three years, the company have to recognize when a competitive weapon can be a weakness plans to spend between $150 million (about Rs 825 crore) and and develop peripheral vision to spot unlikely competitors. Also $200 million (about Rs 1,100 crore) on IT, including on systems for critical: Overcome the corporate diseases of myopia and inertia, ordering and billing, analytics and mobile applications. which lead to certain death. Donagh Herlihy, CIO and head of e-commerce, declined to be interviewed. But in a presentation at CIO’s Leadership Event in 2011, he noted that reducing turnover among representatives is a Everyone wants to have a technology so innovative or a business major goal of his technology work. Improving the online ordering approach so inventive that it pushes you to the moon. But system will be lucrative for Avon, he said, because 15 percent of competitive weapons wear out. online reps order two or three more items when presented with For years, Avon and its famous Ladies in pink have faced down tailored promotions on the screen. He also outlined plans to forces trying to disrupt the classic direct-sales business model, incorporate social networking into how representatives find and notably e-commerce. While door-to-door encyclopedia salesmen have keep customers. died out, Avon Products has hung on. But maybe not for much longer. The personal touch of modern Avon representatives depends on Avon has spent $782 million (about Rs 4,301 crore) on restructuring IT—they need it to place orders, track customers and settle finances, projects dating back to 2005, and still its profits, ominously, have sunk Lash says. Technology problems, she explains, are dangerous to their lowest level in recent years, even as total sales have increased. because many Avon representatives also sell other products. “They “Avon has been putting out fires over the last several years, won’t necessarily push Avon products if they aren’t having a good trying to manage disruptions as they’ve arisen, rather than getting experience with Avon.” out in front of the issues,” says Erin Lash, a financial analyst at It’s easy for an outsider to diagnose problems. But insiders Morningstar. With Avon stock at its lowest point in five years, rival have to fix them, and sometimes that’s impossible, says a former Coty attempted a hostile takeover last year. “It’s hard to imagine

Weapon Becomes Weakness


Business Strategy Meanwhile, rival Best Buy had upgraded its POS system and aggressively pursued a “grocery-store” approach to selling electronics, says Alan Wurtzel, son of Circuit City’s founder and a former CEO and then board member at the company. That is, while Circuit City relied on knowledgeable commissioned sales staff, Best Buy took a less expensive approach, letting customers shop by themselves, Wurtzel says. Although Circuit City eventually switched to a lower-cost sales method, it was too late. For too long, he says, senior leaders “stubbornly stuck with the old model. That did us in.” As the former IT executive puts it, “We didn’t evolve fast enough into a very fast-changing and dynamic business.” He left the company a year before it fell. “It pained me,” he says. In bankruptcy, Circuit City, once a $12.4 billion (about Rs 66,000 crore) company, sold rights to its brand and domain names for a scant $6.5 million (about Rs 33 Recyclebank’s IT team work closely together crore) to Systemax, an electronics to make sure customer data and reward retailer that runs e-commerce points are accurate and shared, he says. sites. Now Best Buy, like other bigUpstarts in other industries, however, aren’t box stores, faces disruption from so friendly with established players. A financial the “showrooming” effect, where services company called Simple launched physical stores become a place for in May, offering real-time Web and mobile consumers to play with products monitoring tools to give customers frequent before buying from a different, updates about their personal finances. With usually cheaper, outlet online. Simple’s website and mobile apps, customers

IT executive at Circuit City, which once dominated the consumer electronics retail market, only to file for bankruptcy protection in late 2008. Circuit City was the original big-box electronics retailer—it was 60 years old at the time of its death-by-liquidation—and at one point it built a proprietary point-of-sale (POS) system that was used for 20 years. Senior leaders saw it as creative and not easily copied by competitors, says the former IT executive, who asked not to be named. The homegrown POS system did deliver competitive advantage for the first 10 years. Then it became onerous to support and slipped behind packaged POS systems in functionality, the executive says.

Who’s Disrupting Who?

Sometimes tech startups make deals with the very industry players they’re trying to disrupt.

P

art of what fuels entrepreneurs is the belief that they’re doing something different than what’s been done before. But those inventive scrappers also need other forms of fuel to launch a company, including money, influence and experience. Often those tools come from partnerships with established companies in the very industry that the startup wants to disrupt. Recyclebank uses sensors and GPS technology to track how much plastic, paper and other material people recycle, then gives them points to redeem at 4,000 businesses. The young company says the gamification of recycling encourages individuals and towns to change their behavior—once they sign up. Convincing them to join can be slow going, says Javier Flaim, chief sales and marketing officer at Recyclebank, and wading through municipal bureaucracies and contracting procedures can take years. But a relationship with the $13.2 billion (about Rs 71,500 crore) Waste Management gives Recyclebank access to the giant’s 20 million customers. Recyclebank also gains inroads into regions across the country where Waste Management is already established, as well as an undisclosed financial investment. Waste Management gets a ready-made, consumer-friendly mobile app and website to boost its recycling reputation. The symbiotic relationship doesn’t threaten Recyclebank’s independence, Flaim says. Waste Management’s marketing team and 58

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receive alerts about account balances and spending levels. They can also attach photos and notes to transactions records, allowing them to more readily understand their financial behaviors. A “Safe to Spend” figure shows not just an account balance snapshot but how much money is actually available after factoring in pending transactions, scheduled payments and personalized goals, such as saving for vacation. A customer who is kept apprised about his money will use it more carefully, says founder and CEO Josh Reich, but traditional banks don’t encourage that behavior. Simple’s customers transfer their funds to Simple’s commercial bank partner, Bancorp, which has no branches and serves as the regulatory and compliance back end to Simple’s customer experience front end. Reich relishes disrupting the banking business. Banking should be like an easy-touse utility integrated into your life, he says, not “an adversarial struggle.” — K.S.N.

Avoid Corporate Diseases Myopia and inertia can spread through overall corporate culture but also into the habits of individual CIOs. Many CIOs think of their job, aside from leading technology, as fixing and honing business processes, says Gartner’s Aron. But confining your scope that way, he says, guarantees an unremarkable tenure. If you’re concentrating on how to squeeze steps out of an existing process, you’ll never come up with an idea that smashes a spent business model or uncovers a brand new one. And best practices? By definition, they aren’t innovative; they’re tried and true. One technique to shake away establishment thinking is to borrow from other industries. For example, GlaxoSmithKline (GSK), like other pharmaceutical companies, sees that the traditional drug-discovery

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model—years of expensive research to find a needle-in-haystack blockbuster medication—is too slow and costly to maintain. When a drug patent expires, the profits on that pill essentially dry up. If there’s no new drug to replace it, company earnings can fall off a so-called patent cliff. GSK wants to interrupt that cycle by figuring out better ways of using analytics to find promising research paths in its gargantuan cache of scientific and consumer data. To jump-start its efforts, GSK looked outside the pharma industry to find a company that was good at handling big data issues, says Aron, who has studied GSK’s strategy. The unlikely partner? McLaren Group, a Formula 1 race car team. McLaren puts sensors on its cars that transmit data about 200 metrics to members of the pit crew, who use real-time predictive analytics to help drivers make fast, nuanced decisions during races. The proprietary analysis tools also help engineers adjust the car for the next race. GSK wants to apply the same principles to decisions about inventory and pricing, for example. Sometimes an upstart redraws an existing industry, the way Zipcar and Uber have used IT to claim territory in car rental and taxi services, respectively. Simple Finance Technology, a startup, aims to take on financial services with Web and mobile banking that bypasses mainstream banks. Disgusted by late fees and overdraft penalties, founder and CEO Josh Reich wants to give customers “constant situational awareness” of their personal finances. Customers ditch their current bank for an account with Bancorp, Simple’s partner. They also sign up to use Simple’s Visa card for purchases. Simple makes money on each Visa transaction and on interest margins that it splits with Bancorp. A traditional bank doesn’t want to push such specific real-time data to customers, Reich contends, for fear of losing late fees and overdraft penalties by prompting customers to better mind their accounts and habits. “When you make money from fees or from customers making mistakes, you benefit when customers don’t understand their finances.” Wal-Mart, too, sees room for itself in financial services, in a case where a giant in one industry disrupts another. In recent years, WalMart tried to enter financial services through established channels by applying for a bank charter and trying to acquire a bank, but it was denied by regulators. After its attempt to run a tried-and-true play met with failure, the retailer was spurred to be more inventive. Late last year, Wal-Mart launched Bluebird, a financial service with American Express that lets consumers make deposits, withdraw cash and pay bills. It is also seeking patents for mobile-payment technology.

Develop Peripheral Vision For all the talk of how companies can use IT to create new business models, nothing new actually gets created unless the company has

OfficeMax CIO Randy Burdick says the integration of physical, Web and mobile shopping systems— that is, omnichanel retailing—is critical to the company’s future.

New Roles

an entrepreneurial spirit, says Paul Stamas, vice president of IT at Mohawk, an 81-year-old, family-owned paper manufacturer. It also helps, he adds, to experience crisis. Mohawk has seen a perfect storm of developments: People using far less paper because of digitization, strong and growing environmentalist trends favoring living trees over dead paper, and the migration of paper-making to other countries. “We had to do something radically different or we’d be out of business,” Stamas says. The company brainstormed about new business ventures that would stimulate demand for its core high-end paper. In 2010, Mohawk and a design firm called Rosebrook, Peters, Funaro launched Pinhole Press, a small online photo gift company akin to Shutterfly. Pinhole uses Mohawk’s expensive specialty papers to produce items such as


Business Strategy wedding albums. For two years, Mohawk helped grow the business and learned about selling online, then sold Pinhole last year for more than the original $1 million (about Rs 550 lakh) it spent to start it. Mohawk, which has also invested in a small software company and a paper distributor in Germany, plans to incubate more businesses, Stamas says. “The CEO has looked to me and said, ‘Start thinking about what’s next. Institutionalize this.’” Apart from an entrepreneurial culture, Stamas credits a smart approach to experimentation for Mohawk’s successful diversification. The key, he says, is to augment what works (specialty paper) with related businesses (such as photo printing). “You can’t walk away from who you are or what you did,” he says, “but you need to evolve.” One way to compete when your position is threatened is to focus intently on a project to distinguish your company. At OfficeMax, that’s omnichannel retailing, where physical, Web and mobile shopping systems are integrated. The goal is to let customers interact with the company any way they want while systems share pertinent data in the background. “It’s really key to our future,” says Randy Burdick, OfficeMax CIO. “We want to be best-in-class.”

Paul Stamas, VP of IT at Mohawk, says an entrepreneurial culture and a smart approach to experimentation led to Mohawk’s successful diversification into online business.

The decision to concentrate on omnichannel expertise came from the company’s CEO and board of directors, Burdick says. OfficeMax comes in a perpetual third in the three-player market for office supplies, behind Staples and Office Depot. Meanwhile, competition from non-traditional outlets such as Target and Amazon has intensified, says Jim Barr, chief digital officer. “We take a broader view of the competition,” Barr says. “We’re all just a click away from each other. We have to pick our game up.”

It Gets Complicated Although business disruption is as old as business itself, one development that makes the current wave especially difficult to handle is the interdependency that has sprung up between many companies, says Jim Spitze, executive director of the Fisher CIO Leadership Program at the Haas School of Business at the University of California Berkeley. Some dependencies, he says, may need to be broken for a company to advance. Mohawk, for example, used to turn over its paper products to distributors and had little or no interaction with end customers. Distributors don’t or can’t tell you about nuanced changes in the market, Stamas says. Without the ability to sense and respond to customers, “you’re doomed to failure.” The company decided to gut its distribution model so it could build closer relationships with customers and find out what they want. “We needed to learn.” Netflix has created a complicated relationship with Amazon as partner and rival. The very technology Netflix has bet on—cloud computing—is supplied by Amazon. By the end of this year, Netflix expects to be Amazon’s largest cloud customer, after Amazon’s own retail operations. In its most recent annual report, Netflix calls out its IT relationship with Amazon as a critical risk factor. “[W]e run the vast majority of our computing on AWS. Given this, along with the fact that we cannot easily switch our AWS operations to another cloud provider, any disruption of our use of AWS would impact our operations and our business would be adversely impacted.” Indeed, Netflix streaming service was disrupted Decemebr 24 due to an AWS glitch. Netflix declined to make executives available for interviews. Netflix adds an optimistic note for worried investors: “While the retail side of Amazon may compete with us, we do not believe that Amazon will use the AWS operation in such a manner as to gain competitive advantage against our service.” Still, the video company knows that competitors can get in a snit, as it explains in that same filing. In 2010, Comcast, which is both an Internet service provider and a video competitor to Netflix, raised prices on Netflix technology partner Level 3 Communications for access to Comcast’s network. “Given that much of the traffic being requested by Comcast customers is Netflix data stored with Level 3, many commentators have looked to this situation as an example of Comcast either discriminating against Netflix traffic or trying to increase Netflix’s opex,” the filing says. “The intertwined nature of business models now will make the future interesting,” Spitze says. CIO

Send feedback on this feature to editor@cio.in

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CLOUD REDEFINING ERA

Building a Rapidly Scalable Enterprise Darshan Appayanna, CIO, Happiest Minds Technologies, says Microsoft Server 2012 and Microsoft System Center have created a robust, flexible, and scalable private cloud platform for his organization. Darshan Appayanna is CIO of Happiest Minds Technologies. He has over 19 years of experience in IT and is a highlymotivated and focused leader. Appayanna has extensive IT experience in the technology, retail, and aerospace sectors and has an excellent understanding of global markets.

Why did you choose Windows Server 2012 as a platform to host your private cloud? As an enterprise, we host our critical systems on the Windows platform. So it was a natural progression for us to upgrade to the latest version of Windows Server 2012. We also procured a new blade server stack to meet the needs of our developer community as well as our critical production machines. We implemented Microsoft System Center 2012 as the management and monitoring layer for our cloud stack. We chose Microsoft System Center 2012 because, compared to other solutions, it fits our needs in terms of compatibility and pricing. There are some features of Microsoft System Center that we use extensively like Configuration Manager, Ops Manager, Orchestrator and the Virtual Machine Manager. What key business benefits have you derived from your cloud platform, which is based on Windows Server 2012? First of all, as a company, we don’t have legacy systems. Our entire server infrastructure is virtualized. So, it’s not hard to see why we implemented a private cloud. The next step for us was to implement an in-house private cloud infrastructure to infuse scalability in our organization. While it might be too early

There’s definitely a cost benefit as far as Microsoft Azure is concerned, if you compare it with Microsoft technology stack offerings from other vendors.

to derive tangible benefits, we have been able to accomplish our primary goal of being able to manage the cloud better and rapidly provision development servers for our project teams. And it’s because of this cloud infrastructure that we have been able to greatly reduce the total cost of ownership on hardware. It has also allowed us to be flexible in scaling up our ongoing project needs. Today, we run all our critical services such as our domain servers, file servers, and development servers on the private cloud. Some of your applications are running on Windows Azure. What benefits have you accrued from it? In the last few years, Windows Azure has matured a lot in terms of the kind of environments it can support. For instance, it supports both Linux and Microsoft Native Windows environment. There’s definitely a cost benefit as far as Microsoft Azure is concerned, if you compare it with Microsoft technology stack offerings from other vendors. If you look at our roadmap, the idea is to look at platforms like Microsoft Windows Azure to provide us the elasticity to scale when demand peaks. Currently, Azure is used as a server infrastructure for POCs and some application development work. We plan to provision and manage this using our Microsoft System Center 2012 implementation.


Hybrid Cloud: Get the Best of Both Worlds Windows Server 2012, System Center, and Windows Azure together provide CIOs the advantages of both the public and private cloud, says Srikanth Karnakota, Country Head, Server and Cloud Platform, India, Microsoft. Srikanth Karnakota is Microsoft’s India country head for its Server and Cloud Platform business. In this role, he is responsible for P&L, strategy and marketing of Microsoft’s Cloud and Server platform business. In his earlier role at Microsoft, Karnakota incubated start-ups and the venture capital engagement arm of Microsoft India.

Why did you decide to add Windows Azure IaaS offering to PaaS? The reason is simple. In our conversations with different customers, it has become extremely clear to us that they are slowly realizing the value and benefits of deploying a cloud model. At the same time, a lot of them don’t want to completely rip-and-replace their existing infrastructure in order to derive benefits from the cloud. In addition, they also want to leverage the strength of on-premise investments and the flexibility of moving to the cloud. But they aren’t just looking for IaaS. Instead, our customers want all the capabilities of IaaS, in addition to SaaS and PaaS rolled into one. All these observations led to the addition of IaaS capabilities to Windows Azure. Adding IaaS to Windows Azure has been a significant step in our cloud computing strategy. How do Windows Server 2012 and IaaS on Azure strengthen on-premise applications and increase flexibility of the cloud? Windows Server 2012 provides a powerful platform for customers to run their infrastructure and server applications on-premise. This sturdy platform can virtualize on Hyper-V and build our customers’ private clouds on Windows Server 2012, along with System Center 2012. Now, with the availability of IaaS capabilities on Azure, customers can easily move these virtual machines to Azure to derive the benefits of a public cloud. This way, the cloud just becomes a simple extension of an organization’s IT fabric.

The powerful combination of Windows Server 2012, Windows Azure and System Center 2012 helps clients set up private clouds and move workloads to Azure to get the benefits of a hybrid cloud.

Would it be easier for organizations to leverage the power of this combination to set up private clouds? Yes, absolutely. As I mentioned earlier, customers can start building their private clouds on Windows Server 2012 and System Center 2012, and obtain immediate returns on investment. They also know that they have the flexibility to transfer the workloads onto Windows Azure (IaaS). This, in turn, will help them obtain the benefits of a public cloud without having to rip and replace their existing infrastructure. Also, with System Center 2012, they can now manage both their private cloud and public infrastructure, all at the same time. With the powerful combination of Windows Server 2012, Windows Azure, and System Center 2012, customers can now set up their pripri vate clouds and easily move workloads to Windows Azure and realize the benefits of a hybrid cloud. In your opinion, how will this combi combination benefit CIOs? Today, CIOs are looking at transforming IT into a strategic asset to obtain solid returns on investment. They are looking at moving to the cloud because of all the benefits it provides, in terms of economics, agility, and focus. Therefore, this combination of public and private cloud with Windows Server 2012, proSystem Center 2012, and IaaS on Azure pro vides a strong ROI as CIOs can leverage their already existing investments, and get the benefits of the hybrid cloud model. We are very excited about the addition of IaaS capacapa bilities on Windows Azure.

CUSTOM SOLUTIONS GROUP MICROSOFT


HYBRID CLOUDS ON THE RISE As enterprises look at adopting a hybrid cloud strategy to satiate their appetite for innovation, Microsoft, through its Cloud OS, is delivering the right solution.

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he era of rapid business innovation is fundamentally altering the face of IT and business. The whirlwind pace of innovation, coupled with increased globalization has opened deeper and wider varieties of markets, potential business partners, and competitors, driving a need for enhancing fundamental business capabilities. However, ideas and inventions can translate into actionable vision only if they are effectively executed. Realizing innovation inevitably involves the modification of business processes and the implementation of entirely new business processes that must be effectively integrated with underlying technology systems supporting them across the value chain. In addition to the implementation of new ideas, there is an imperative need to improve employee productivity as they

directly yield competitive differentiation, including increased efficiency, improved business velocity, and deeper relationships with customers and partners. New mobile technologies are enabling productivity improvements with new work scenarios, from access to colleagues and systems through personal devices, to the ubiquitous access to data and systems in the field while interacting with and servicing customers and partners. To add to the complexity, the information age has created exponentially growing volumes of data just waiting to be tapped to drive better business decisions. This data comes from multiple sources and formats, such as operational data from intelligent devices, social data from consumers, and syndicated data from third-party sources. Effectively harnessing this data can drive business innovation and promote a datadriven business.

Finally, the denominator of the bottom line, and costs, must be continually assessed and managed to provide the fuel for innovation, richer customer experiences, and a competitive cost position. These business needs have triggered a cascade of key technologies and IT trends that are making an impact and creating opportunities. Take mobile for instance. Innovations in highly mobile device form factors—with instant on, connectivity via Wi-Fi, cellular networks and integration of powerful features such as touch screens, cameras, and GPS—have created rich user experience preferences that carry expectations into the enterprise. Also, the exponential growth of available data creates significant challenges for IT. This data comes from a variety of internal and external sources, and is exacerbated by a proliferation of business and personal computing devices in use. In many


cases, the sheer volume of data prevents organizations from capturing and analyzing it with traditional methods such as storage in a database for query and analysis.

THE FUTURE IS HYBRID

To address the challenges of new applications, device proliferation, and data explosion, organizations need to take new approaches for effectively and efficiently harnessing the latest IT innovations in a converged datacenter infrastructure. Abstracting resources from individual hardware components to a pooled set of resources, while maintaining workload isolation, allows organizations to achieve highly agile workload provisioning, continuous availability, and elastic scaling. This cloud computing delivery model has evolved with new IT service delivery models to render and manage these capabilities to their full potential. It allows enterprises to look at their workloads and decide where to put them–in a public cloud or in an internal and controlled private cloud. But, companies need more flexibility–ability to seamlessly integrate the two and dynamically move workloads between them. And a well-orchestrated hybrid cloud strategy allows exactly that. Experts feel that the time for dabbling in cloud computing is over and its time companies implement a hybrid cloud strategy that puts select workloads in the public cloud and keeps others in-house. Though hybrid cloud deployment is not a new concept, research published by Gartner shows that the hype surrounding hybrid cloud reached its peak last summer and is primed for take-off now. If hybrid clouds are the deployment of choice, then the IT industry has to make significant inroads on how to manage it in terms of resource provisioning, scalability and performance. These would include automated infrastructure orchestration and virtualization management to enable dynamic infrastructure resource pooling and sharing across multiple workloads and user groups.

ENTER MICROSOFT CLOUD OS

Microsoft has anticipated and harnessed these trends and disruptive technologies into innovations in the datacenters. It provides resources, capabilities, and muscle for future business transformation. Microsoft delivers a highly dynamic, continuously available, and cost-effective platform consisting of the right operating system, the right management stack and tools, and the right services in the form of the Microsoft Cloud OS.

Microsoft uniquely delivers the Cloud OS as a consistent and comprehensive set of capabilities across the enterprise private cloud datacenter and public cloud datacenters, such as Windows Azure or public cloud offerings from service providers. The consistency of these capabilities enables the seamless and agile integration of private and public clouds needed for enterprises to further improve service scale, elasticity, and availability. As a result, the cloud and the server closet have become an integral part of Microsoft’s long-term vision. In addition to becoming a service provider via its Azure cloud platform, Microsoft is giving its customers the tools to build their own private clouds or virtualize existing server setups. To this end, Microsoft has integrated its hypervisor product, Hyper-V, directly into

Key Benefits The Microsoft Cloud OS delivers a modern platform of products and services that enables enterprise IT to more effectively address today’s IT needs. Here are some of its benefits. It provides enterprises with a highly elastic and scalable infrastructure with always-on, always-up services. Automated management, robust multi-tenant support, and self-service provisioning help enterprises transform their datacenters. It enables enterprises to quickly and flexibly build and manage modern applications that interact and exchange data with other applications built on multiple platforms and languages, and that live on-premises and/or offpremises. These modern applications may integrate social data or foster social connections among users. It enables enterprises to help users make faster, better business decisions by capturing and analyzing growing volumes of unstructured, streaming, and/or voluminous data (big data), from existing and new sources. It is a silver bullet solution that helps enterprises make their users productive wherever they choose, on whatever device they choose, with easier device management and secure delivery of applications and data in extended, mobile environments.

Windows Server 2012; it has made the bare hypervisor available as a free-to-use product (Hyper-V Server 2012); and it has contributed a Hyper-V driver to the Linux kernel so that Linux could run better under Hyper-V. By giving away Hyper-V, offering free tools for migrating, and positioning Azure as a cloud environment that’s technologically compatible with Microsoft’s in-house servers, Microsoft is entrenching its position in the datacenter.

THE SILVER BULLET Windows Server 2012 is a key subset of this silver bullet solution. It serves to make the Microsoft Cloud OS vision actionable. CIOs have to provide a mature, full-featured datacenter and cloud platform that supports fully isolated multi-tenancy, guarantees the right amount of resources, and provides comprehensive quality of service management for each workload as well as usage-based chargeback to business units and customers. These capabilities enable Windows Server 2012 to help organizations build private clouds, offer cloud services, and connect them more securely to public cloud services such as Azure. The Microsoft Cloud OS delivers on the promise of a modern datacenter and peoplecentric IT in four key ways. It goes beyond virtualization by offering a dynamic, multitenant infrastructure that provides maximum flexibility for delivering and connecting to cloud services. It offers the power of many servers with the simplicity of one. Windows Server 2012 offers excellent economics by integrating a continuously available and easy-to-manage multiple-server platform. Windows Server 2012 is a broad, scalable, and elastic server platform that gives organizations the flexibility to build and deploy applications and websites on-premises, in the cloud, and in a hybrid environment. It uses a consistent set of tools and frameworks, thereby opening the door to every app on any cloud. Moreover, it enables a modern workstyle. Windows Server 2012, coupled with Azure, empowers IT to provide users with flexible access to data and applications from virtually anywhere, on virtually any device. It provides users with a rich experience, while simplifying management and helping maintain security, control, and compliance. So, with Hyper-V, Windows Server 2012, and Azure, Microsoft is racing ahead of the pack to deliver a comprehensive hybrid cloud solution.

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EVENT REPORT

Five Mega Trends

That Redefine IT

In an exclusive gathering of elite CIOs, Microsoft in association with CIO magazine, highlighted five mega trends like cloud, social media, mobility, big data, and touch-enabled devices that will help IT leaders create their IT roadmap. BY SHWETA RAO

D

epartment heads of Indian enterprises have long been clamoring for increased budgets after the consistent cuts of the last few years. One of the ways CIOs can extract more funds from their businesses is to formulate strategies that maximize their business’ responsiveness to uncertain markets. Key to that initiative is understanding trends that affect both IT and the business. To help CIOs get a clearer idea of those trends, Kevin Turner, COO at Microsoft Corporation, spoke to several IT heads, on five mega technology trends that will dominate the industry. These are the cloud, social media, mobility, big data, and touch-enabled devices. “We believe that the role of the CIO is changing today and it is important to understand these mega trends so that they can move quickly to implement them,” said Turner. “The world cannot look at just one of these trends and continue to innovate because they’re all inter-related,” he said.

Turner spoke to CIOs about Microsoft’s comprehensive cloud strategy, which, he said, is both enterprise-grade and people focused. “Office 365 is now available in multiple countries and languages globally. And soon Lync 2013 users will be able to connect with anyone on Skype, unifying business communications,” he said. Speaking on Microsoft’s enterprise social media capabilities, he said that the real power of the enterprise is brought forth when they can connect employees and partners with customers. “More than 85 percent of Fortune 500 companies have already begun deploying social solutions. Microsoft has created hooks in the new Office to make tools more social. And with Yammer, social engagement and collaboration can be taken to a whole new level.”

Panel Discussion on cloud and mobilty trends with IT heads from Mindtree, Infosys and Happiest Minds Technologies.


Microsoft has created solutions to help businesses manage BYOD, both on-premise and in the cloud. “Not just that, we are on a path to manage all types of data in both the public and on-premise cloud. No one else in the market can say this,” he added. “1.5 billion people in the world, today, use Windows OS as it takes touchenabled devices to the masses,” he said. Turner also informed participants that after a robust, extended lifecycle, Microsoft is phasing out support for Windows XP. “This means the end of security updates, (paid) hotflix agreement support, and paid per-incident support services. Windows XP will stop from April 2014,” he said.

“We are on a path to manage all types of data in both the public and on-premise cloud. No one else in the market can say this.” BRIAN KEVIN TURNER, Chief Operating Officer, Microsoft

VIEW FROM THE TOP S. Gopalakrishnan, co-founder and executive co-chairman of Infosys, in his keynote spoke about changing business norms and how IT must speed up its pace to adapt. “From automation of business processes, we have now moved into an era of leveraging information that we have. That’s where big data comes in. We will similarly continue to move to the ‘Internet of things’ with avenues like social media collaboration and mobility,” he said. “These will disrupt all industries and raise questions about how can healthcare, education and services be delivered remotely? This will also change the way competition is viewed in the future.” Two IT trends that he suggested IT leaders focus on were the need for more self-service and co-creation. Indian CIOs, he said, needed to begin asking the right questions to get a head start. ‘They need to understand what ‘self service’ really means, and how to customize services by leveraging technology trends. For example, the sudden rise of the e-commerce industry is a big example of transformative business processes leveraged by IT,’ he said. IT has even helped change organization structures to adapt to business requirements. “Globally, the idea of banking revolves around pulling customers towards an online portal. But India’s unique demands require this business process to be turned upside down. In India, business correspondents, with the help of IT, enable grass-root banking among rural consumers, as it is financially non-viable to open rural branches,” he said. The demands of Indian consumers have also transformed and end-users have become more aware. “Today’s customers want to be involved with their service providers to innovate new and better products,” he said. “CIOs can only begin to win this game if they develop a strong perception of trends like the cloud, big data, and mobility.”

A PRACTITIONER’S TALE While most are still catching up with the mega trends that are driving IT’s transformation, some IT leaders stand ahead of the curve. CIOs who have enabled their enterprises with advanced tools exchanged stories of how IT is helping them augment business goals. As the conversation kick-started from BYOD in Indian enterprises, Sudhir Reddy, CIO at Mindtree, said their journey started two years ago, when they consolidated applications behind a unified corporate portal that was browser enabled. “For us, this was a pre-requisite since we wanted to enable BYOD across Mindtree and not restrict it to particular set of people. We see employee productivity and satisfaction as key benefits not to mention innovation and learnings on the path to achieve this”. Darshan Appayanna, CIO at Happiest Minds Technologies, however had a different story to narrate. “The idea that the cloud has negated traditional desktop use is wrong. Core use of desktop

“From automation of business processes, we have now moved into an era of leveraging information that we have. That’s where big data comes in.” S. GOPALAKRISHNAN, Co-Founder, Executive Co-Chairman, Infosys

“The idea that the cloud has negated traditional desktop use is wrong. Users are expecting that critical data is available across other platforms and that has to be extended to desktops too.” DARSHAN APPAYANNA, CIO, Happiest Minds Technologies

devices is still going to remain the same. Users are expecting that critical information is available across other platforms and that has to be extended to desktops too.” Muralikrishna, SVP and head-CCD at Infosys, said that legacy needs to be dealt with adequately vis-a-vis cloud. “It’s not just about adopting a new technology but it’s also about deploying it fast and that’s where special care must be taken,” he said. CIOs also shared their experiences about their cloud journeys and chargeback mechanisms. This Section is brought to you by IDG Custom Solutions Group in association with


VIEW

from the TOP

Dharmakrishnan A.V. , CEO, Madras Cements, says IT is the lifeblood of the company as it helps forecast demand, produce high quality products, and enhance customer experience.

Cementing

IT's Place BY ANUP VARIER

Madras Cements isn’t your typical manufacturing company. For one, it took to IT—in 1984—at a time when even contemporary enterprises weren't tech-savvy. If that's an aberration for a manufacturing firm, consider this: Its current CEO, Dharmakrishnan A.V., is a self-confessed tech enthusiast. And that makes him stand out among CEOs of old-economy companies. Today, with over 30 years in the company—which he joined as a CA— Dharmakrishnan hasn’t changed much. His undying faith in IT has ensured that he has the ability to monitor everything from his iPad—in real-time—from productivity in his manufacturing facilities to sales of finished products. Under his leadership, the flagship company of the Ramco group has generated the highest average EBITDA per tonne of cement produced in the industry at Rs 1,190. That’s 19 percent higher than its nearest rival. In this interview, he talks about the challenges in the cement industry and why he believes IT can tackle them.

CIO: You joined Madras Cements 30 years ago. What has changed since then? What do CEOs and other C-level executives expect from you? Read all about it in VIEW FROM THE TOP. Visit www.cio.in/ceointerviews

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Dharmakrishnan A.V.: When I joined Madras Cements in 1982, it was a very small company with a turnaround of Rs 50 crore. We were a regional player

with a capacity of around 5 lakh tonnes catering to four districts each in Tamil Nadu and Kerala. Now, we are at 14 million tonnes. Even though we are yet to be an all-India player, we are the second largest player in South India and among the top ten in India.

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DHARMAKRISHNAN A.V. EXPECTS I.T. TO Fix logistics challenges Take informed decisions

PHOTOS BY CHANDRO O

Encourage technology adoption

We have plans of reaching 20 million tonnes in four to five years. Madras Cements also holds the distinction of being among the first few companies to implement IT systems way back in 1984. We deployed computerized invoicing and accounting with COBOL and Focus systems. From the very start, we wanted everything to be automated. We also had the urge to be pioneers in the adoption of technology. Which is why, we keep assessing the relevance of the latest developments in

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IT for our business. We try and make the best use of systems not only to enhance our processes, but also in every sphere of running the enterprise—from limestone quarrying to dispatches. Madras Cements is considered one of the most well-managed companies as far as cost is concerned because we have IT systems in place. We always act on information and there is no need to rely on anyone’s gut feeling. And even if it is a decision based on gut feel, it has to be backed by information because numbers don’t lie.

Your thrust on IT is unlike other manufacturing companies. How has IT helped Madras Cements? Madras Cements has always held its IT department in high regard and has made huge investments in IT. At any point of time, we have 20 to 30 IT projects that extend to every part of the company. We started with report generation and are now at a level where our analysis is also aided with technology from Google. At any given point in time, I know the

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View from the Top

quantity of cement sold in any particular street. I can see who my competitors are in an area and analyze the potential of a particular location. Also, our sales representatives have been provided with devices that give them realtime information. It helps them assess their business in terms of dealer performance and responsiveness, understand their stocks, and help sales managers take stock of their team’s performance. Our dealers can book orders online. A dealer who uses the online system to book orders is bound to have a healthy stock and is assured of timely payments. This also helps gauge his performance on predecided parameters. Today, I expect my IT department to train people to use our IT systems. Our entire operation depends on IT products developed with the help of Ramco systems. The IT team should consistently demonstrate the advantage of using IT and drive adoption.

Does it also help you track the performance of your facilities and avoid downtime? Initially, the process of tracking downtime was manual and relied on someone’s assumptions. Today, we have an excellent IT system that gives us clarity on the equipments that are running and provides us with details like their speed and consistency. If there is any variation from the standard deviation of 0.5-0.6 percent— from the set parameters—the response teams are alerted and can enquire the reasons for it. If the variation is high despite these efforts, then an alert is sent to senior people at the location and also to the corporate headquarters, allowing us to take immediate action.

And does IT play a role in solving logistics problems? Cement is a high-volume and low-value commodity. So, at times, the distribution cost 70

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How does IT help you meet customer expectations?

“We hold the distinction of being among the first few companies to implement IT systems. Today, our entire operation depends on IT.” — Dharmakrishnan A.V. may be higher than the manufacturing cost. Even in terms of freight, cement manufacturers draw competition from unusual aspects like a sugar factory in the vicinity which would transport sugar in 50kg bags—each bag worth Rs 5,000-6,000. Whereas, a similar 50kg bag of cement will only have a value close to Rs 300. So, while the sugar guys can afford to pay close to Rs 1,000 per bag for freight, the cement players can barely manage to pay Rs 20-30 per bag. We have to compete with them during peak demand. We decided to get dedicated trucks that run exclusively for us by financing some of them and giving out interest free loans. Also, since Madras Cements is handling multilocation plants with distinct manufacturing costs, we figured out the total costs for select destinations with the help of our information systems. The dispatches then take place based on that information.

The quality of cement and service to our dealers are the most important factors in our business. In that context, IT helped us realize that we were de-growing in an area where we are traditionally very strong. Our systems helped us identify the dealers who were de-growing and the rate at which this was occurring. We realized that dealers expect delivery within five to six hours of placing an order. While this is possible, dispatching smaller orders of 8-10 tonne is a wasteful expense until another dealer from the same area also places an order. In that case, we can use larger trucks of 18-20 tonne capacity. But waiting for orders could cause an indefinite delay. There was no control over whom the lorry driver would first deliver the order. By the time these decisions were taken, it would be five to six days since the first person placed the order. Within 24 hours of realizing the need, we deployed LCVs and we are now growing by 25 percent in the area. That’s why our information system is the backbone of our operations.

What’s your strategy behind increasing capacity utilization to 90-95 percent? We have identified markets where there is a scarcity of cement. Our strategy is to move semi-finished goods to a location where other raw materials are available and manufacture cement at such locations. Clinker, for example, is a semi-finished product. In the case of fly ash-based cement (ash produced during combustion of coal), almost 65 to 70 percent is clinker and around 25 to 30 percent is fly ash. So, we move clinker to the place where fly ash is available and grind the cement and sell it in nearby locations. This also helps drastically reduce transportation costs. So, moving gypsum or even slag from a place like Vijayawada, where it is abundant, to a location where clinker is produced and

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then moving the finished product back to Vijayawada—because the demand there is high—is wastage of transportation. Instead, we move clinker to Vijayawada and grind it there, saving space and costs of transporting slag or gypsum. We currently have three grinding units and have plans of opening up three or four more units.

Vijayawada falls in AP which is politically unstable. How do you cope with decline in demand? We have always anticipated a situation where the demand for cement will be much less than its supply, especially as many companies are planning to invest in Andhra Pradesh (AP). We also need to realize that within 10 years, only four states will be able to produce incremental capacity of cement. AP, Rajasthan, and Gujarat have additional resources and incremental capacity can come only from these places.

We have no alternative but to rely on the raw materials from AP, produce clinker, and grind it elsewhere. This is why we have put up a grinding unit in Bengal, close to a thermal station where we can acquire fly ash at cheap rates. That unit is the farthest grinding unit from a clinker source. Our capacity in AP is three million tonnes of which one million will be taken to Bengal for grinding. In a place like Tamil Nadu, the incremental capacity can, at best, be one to 1.5 million tonnes because there’s only that much limestone available in the state. There’s very little limestone in South Karnataka, whereas in the western belt near Belgaum, it is available but that has now moved to serve Maharashtra.

with respect to expansion is to grow with internal accruals. In the south, we are able to control our costs and compete strongly. Being a raw-materials-based industry, we are looking for availability of rawmaterials in different areas. We are seriously considering one or two places outside our traditional market. If we are successful in getting to those, then we will go outside our market. Else, we will try to expand within our market. That said, there is enough scope for growth in the south. Even though the capacity is higher than consumption, I am convinced there is scope for improvement in our market share here. CIO

How do you plan to change your image as a player in the South Indian market? While we are pioneers in the adoption of technology, our promoter’s philosophy

Anup Varier is senior correspondent. Send feedback to anup_varier@idgindia.com


POWERED BY

BANGLALINK DIALS EMC TO BE IN LOCKSTEP WITH BUSINESS Crushed under a rapidly growing business, banglalink’s IT infrastructure—a subsidiary of one of the world’s largest telecom operators, VimpelCom—was struggling to keep pace with business. Until it turned to EMC’s consulting arm for guidance.

Company

VimpelCom

Industry Telecom

Headquarters Netherlands

VimpelCom operates in a cocktail of countries. For starters, it’s the world’s sixth largest mobile operator that has operations spread across the globe: From Pakistan to Italy, and from Canada to Bangladesh. This global telecom operator has over 200 million subscribers across the world. Its various acquisitions across geographies are a testament to its vision of being among the top global telecom operators. Among many of these acquisitions is Orascom Telecom, an Egyptian telecom company which VimpelCom acquired in 2011. Part of this group is one of the major players in Bangladesh’s telecom sector—banglalink digital communications—which Orascom acquired in 2004. Within eight years, banglalink has grown to serve over 25.8 million subscribers, with a market share of 26.8 percent (as of December 2012). For a company that is growing at lightning speed, it was imperative for banglalink to have a strong IT backbone. But that’s easier said than done. Like telecom, the IT space is also crowded, with numerous


CUSTOM SOLUTIONS GROUP EMC

“Given the potential impact on our business, we were looking to involve an expert consultant. EMC has done consulting exercises for us in the past and we are very pleased with their performance.” NIZAR EL-ASSAAD,

Director-IT, banglalink digital communications

vendors offering various solutions that they claim will meet every need of every business. Lost in this crowd, today’s organizations struggle to find a solution that best fits their needs. With its business growing, banglalink needed a robust IT setup to support this growth. “Given the potential impact on business, we were looking to involve an expert consultant,” says Nizar El-Assaad, director-IT, banglalink digital communications. And that expert consultant came in the form of EMC. EMC had started consulting banglalink way back in 2008. That’s why banglalink trusted EMC’s expertise.

THE GUIDING LIGHT Given banglalink’s business growth, the increase in the volume of data was placing new demands that

couldn’t be met by the company’s two datacenters at Dhaka. Limited capacity—in terms of real estate, power, and cooling—and the fact that the current system was becoming quite difficult to manage, forced banglalink to plan the migration of its business systems infrastructure and some of its services to a new datacenter. As the new datacenter would take a while to set up, the company decided to rent out a space and use it as a temporary datacenter to provide immediate relief to its overburdened existing datacenters. This interim datacenter was to consolidate and host the virtual infrastructure from its two existing datacenters. Another important objective was to rationalize and reorganize virtual sprawl and data into optimized and manageable filesystems. After understanding and observing the framework of


banglalink’s IT infrastructure, EMC knew what needed to be done. This was a complex migration, involving moving 95 VMs spread over 13 Penryn series eight core Intel servers and three CX (previous generation) storages into five Westmere 40 core Intel servers hosted on a single VNX 5700 storage frame. With the production environment running on 70 percent of this virtual infrastructure—the remaining 30 percent being used for test and development—banglalink couldn’t afford any downtime when this migration was to take place. EMC took three solid weeks—15 working days—to design and plan the migration to the minutest detail, including reorganizing about 90 virtual data files into 19 load balanced VMFS data stores, with a minimum of 25 percent headroom for future growth. It conducted a POC of its overall migration strategy to ensure that when the actual migration happens, it would be a smooth sailing for banglalink. Once the migration started—except for one app, which was a heavy database app—banglalink was able to complete the process in three days without any downtime. So even while the migration was taking place, banglalink’s users went about accessing the applications without noticing anything unusual. For the remaining one app, the migration happened over a course of two days, with marginal downtime during lean hours, ensuring minimum disturbance to business. One of the challenges during the migration was the bandwidth limitations in the IP part, which EMC had foreseen. EMC suggested adding an extra pipe

Benefits Reduced cost Improved performance Ensured optimal capacity utilization Created a robust storage system Flexible IT infrastructure

to increase the existing capacity for the duration of the migration. If the extra capacity was not added— with the existing bandwidth and usage during working hours—the company’s bandwidth needs would have overshot its capacity. This would have led to the migration being scheduled at night when the load on the systems would have been lower. This, in turn, would have resulted in extending the migration period, something that banglalink did not want. Having already understood the ecosystem in which banglalink’s applications worked, EMC was able to provide the telecom company with a solution that let it manage its resources more efficiently and accommodate further business growth.

CHECKING UP ON STORAGE

EMC had foreseen bandwidth limitation challenges in the IP part of its live migration process. EMC suggested adding

an extra pipe to increase the existing capacity for the duration of the migration. If this wasn’t done the company’s bandwidth needs would have overshot its capacity.

With its virtualization set up in place, banglalink needed EMC’s advice to do a storage assessment. It wanted to know how it could conduct a storage health-check assessment. “We wanted to know how the storage boxes were behaving in terms of performance and capacity planning. We also wanted to know whether there were any usage bottlenecks and if there was a need to upgrade the current systems,” says El-Assaad. To be able to do that, EMC evaluated the performance of the storage boxes—by running its storage healthcheck script—and provided information like: How much capacity on the box is being used, both in terms of space and processing power, and how the applications are using storage space. By considering all these factors, EMC was able to determine the optimum levels of usage to allow capacity planning. Through the storage health check, banglalink learnt that there were some hotspots in the system. There was an unbalanced load on the system which needed to be corrected. Additionally, banglalink had a


CUSTOM SOLUTIONS GROUP EMC

quantified profile on capacity and resource utilization of each application. This is essential for a drill down into application-based data growth, resource consumption, and future capacity planning. “Now we know which storage boxes we need to keep running, which need to be upgraded, and which need to be decommissioned immediately,” says El-Assaad. While this was the first time banglalink conducted a storage health-check—it had also recently started conducting network health checks—El-Assaad is enthused by the findings and believes the company will do it more frequently.

VIRTUAL DILEMMA After virtualizing its servers, the next logical step was to see whether banglalink needed any specific infrastructure for storage virtualization. It was important for the company to determine whether this

was going to serve the needs of its business and if it could leverage it optimally. Once again, banglalink leaned on EMC to figure this out. EMC did an analysis and found that compared to the in-built features and capability of banglalink’s existing systems, storage virtualization wasn’t going to provide the company with a substantial performance or cost benefit. The current storage that the company had, already had features which could provide banglalink with the benefits of storage virtualization. Thanks to EMC’s consulting expertise, ElAssaad today has a strong IT backbone to support banglalink’s aggressive growth plans. “We chose EMC as we have a good relationship with them. Having done consulting exercises for us in the past, we are very pleased with their performance,” says El-Assaad.

A New Era of Storage Solutions Abhijit Potnis, Director-Technology Solutions, EMC India & SAARC, says increase in data volumes has paved the way for new storage solutions and frameworks that are redefining the storage landscape. How important is federation architecture in today’s storage world? In today’s IT setting, the storage systems in datacenters increasingly demand geographical separation for addressing protection, performance, and resource balancing concerns. There’s just too much information pouring in to simply assume that it can all be sent to—and distributed from—a small number of centralized locations. We need federated architectures—infrastructure, data services, etcetera—to find a solution to this problem.

Today, newer EMC technologies such as VPLEX and Atmos are able to geographically distribute data without disrupting applications or management operations. This capability is becoming increasingly important in today’s scenario. How has management and orchestration evolved in terms of storage? Storage resources are presented as a dynamic and variable service to other layers of the IT stack. These layers include hypervisors, middleware, applications,

Today, EMC technologies such as VPLEX and Atmos are able to geographically distribute data without disrupting applications or management operations.” ABHIJIT POTNIS,

Director-Technology Solutions, EMC India & SAARC

etcetera. This approach has led to a new management and operations model that demands new tools and methodologies such as EMC Unisphere and ProSphere, EMC DataBridge, VMware vCenter Operations Manager, to name a few. The path forward lies in producing and orchestrating storage services that are consumed by others, which then leads to the development of an ‘as-a-service’ model. How is the consumption model evolving in storage? The IT model has started to shift to an asa-service-model. In such a scenario, IT owns the relationship, and builds or brokers a variable service catalog to meet the given requirements. This is a shift that even the storage domain is not immune to. This shift is made up of two components. First, organizations need to re-think how storage teams are organized and measured—in terms of service delivery—and second is an increasing attractiveness to brokered storage services.


casefiles REAL PEOPLE

* REAL PROBLEMS * REAL SOLUTIONS

THE POWER OF ONE When a slew of acquisitions hit Crompton Greaves with a host of ERPs—increasing expenses and inefficiency—its CIO rolled them all into one and saved crores. BY ERIC ERNEST The Organization: There’s no doubt that Crompton Greaves is one of the most respected companies in the power sector, but not many know that it’s one of the top ten electrical transformer manufacturers in the world. It got there by piggybacking on the success of a Belgium power transformer company—Pauwels Group—that it acquired in 2005. Acquisitions are a vehicle for the company—which is headquartered in Mumbai and is a part of the Avantha Group—to gain a foothold in foreign shores. Which is why, its recent history is peppered with a series of global acquisitions including Ganz in Hungary, Microsol in Ireland, MSE Power Systems in the US, and ZIV in Spain, to name a few. And thanks to this global spread, the company recently won a Rs 239 crore contract for the construction of a high voltage offshore substation in The Netherlands. The Business Case: While its global reach was great news for business, the company’s IT systems weren’t too kicked. With so many different acquisitions running different flavors of ERP, supply chain systems, CRM, and PLM, it was difficult for Crompton Greaves to manage disparate systems and operations. Especially in ERP. For instance, its Belgium firm had a process for cost reporting that was different from the one in India. “Because of this decentralized system, it took a lot of time for us to collect information,” says J. Ramesh, global CIO, Crompton Greaves. Another problem was the fact that it was getting increasingly difficult to give a single and complete picture of the company’s performance to the board. This information had to be collated from different sources and if someone was not present at a particular site, the data couldn’t be collected, resulting in the board not getting a full picture of the company's performance.

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So the same work had to be done at various locations, thereby increasing the overall workload. “As we are a big company that makes the same type of products, it makes sense for us to put in a single system that will help us move to implementing a single process,” says Ramesh. It would also help the company save precious costs. The First Steps: Till 2010, there were two instances of SAP running in the company, one in India and one from the company’s acquisition of Pauwels—which has offices in Belgium, the US, Canada, Ireland, and Indonesia. Additionally, there were other non-SAP ERP instances running in some of the other acquired companies. Ramesh had to move units from the non-SAP ERP systems to SAP, and upgrade the existing SAP instances across geographies. Then Ramesh decided to first upgrade and migrate both the hardware and software. This included new server hardware, databases, and upgrading SAP itself. Migrating from non-SAP to SAP was the toughest part of the project as he had to make sure he did not interrupt the smooth running of the business. "A data loss scenario along with an eventual recovery would have jeopardized my job," says Ramesh. But it was also important to do because, "unless I did this, I wouldn’t be able to opt for a global SAP instance quickly enough," he adds. The Project: After bringing all the nonSAP instances to SAP—and upgrading the existing SAP—Ramesh needed to consolidate these ERPs under a single global instance and run it from his datacenter in Mumbai. He also implemented a parallel ledger concept in SAP to accommodate different accounting standards. He first activated the unicode feature in SAP to support multiple global languages. Then he found a way to fix transaction currencies. So, if a unit were in Sweden, the local reporting would be carried out using the Swedish kroner, whereas the consolidated reporting would be done in Indian rupee. Now that language and

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J. Ramesh, Global CIO, Crompton Greaves, consolidated all his ERPs across the globe to create a single instance and saved Rs 5.5 crore for the company.

currency were taken care of, Ramesh decided to move SAP application support from Belgium to India. The Benefits: Having a single instance ERP has brought several benefits to the company. It saved about Rs 5.5 crore for the company. Also, it was now easier to implement policy changes and monitor them. “Consider that I want to include an assessment of the earnings from each sales

order at the time of capturing the order. The business can see whether the company is making the right value addition or not in different locations,” says Ramesh. Another benefit is that with a global ERP, it is easier for the company to standardize processes. Today, the project has added more feathers in Crompton Greaves' cap. CIO Send feedback to eric_ernest@idgindia.com

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casefiles

INDUS INTERNATIONAL SCHOOL

In its endeavor to make school buses safer for its 750 students and optimally use its Rs 5 crore fleet, Indus International School turned to a unique solution.

The Organization: Ten children injured in a school bus accident. School bus driver crushes a child. School bus topples, 15 kids injured. These headlines painted Bangalore newspapers red in early 2012. And they gave sleepless nights to worried parents. Until one school decided to change that. Based in Bangalore, the Indus International School was established in 2003. The brainchild of the Indus trust, the school has branches in Hyderabad and Pune. The Business Case: The school’s transportation

By implementing a GPS tracker, Major Kunal Kuttappa, Director-Admin, Indus International School, has ensured the safety of students.

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*

BY ERIC ERNES T

fleet, consisting of around 24 buses—ranging from 34-60 seaters—is used by around 750 of the school's students. "We wanted to control the speed at which our buses were moving and thereby guarantee the safety of our students," says Major Kunal Kuttappa, director-administration, Indus International School, who pioneered the project. Also, since the school had spent around Rs 5 crore on transportation, it had to utilize this asset optimally. To be able to do that, Kuttappa decided to implement a GPS tracker and monitoring solution. The Solution: With help from a solution partner, the company set up a GPS tracker and an antenna, both of which are enclosed within a box and placed in buses. This apparatus is connected to the main monitoring device which is placed below the dashboard of the bus. Through an online portal, the school can see whether there are any instances of over-speeding—the school's accepted speed limit is 45 km/hr—route and bus stop deviations, or device tampering. The device also sends alerts—in the form of e-mails and SMSes—to the school in case of overspeeding, etcetera. It also sends SMSes to parents informing them about pick-up and drop points. To facilitate that, prior to the beginning of each academic

year, the school sends all the relevant data—such as route, bus, driver, students' names, drop-points, and contact numbers of guardians—to the solution provider. This information is input into the solution partner’s system. Indus International School pays Rs 70 per child per month to the solution provider and an initial onetime registration fee of Rs 100 for every new student. The Challenges: But for the success of the project, Kuttappa had to solve one problem: SMS latency. At that time, TRAI regulations limited the number of SMSes that could be sent in a day. But by negotiating with TRAI officials, the solution partner fixed the problem. The Benefits: Now, Kuttappa is able to monitor if there are any rule violations—such as rash driving—and take corrective action. By making drivers more accountable, the school has ensured the safety of its students. Also, the school has been able to maximize its transportation fleet usage. It is also planning to implement a SIM card in the GPS tracker with which parents can track the buses by sending an SMS to the SIM. A message with the location of the vehicle will be sent back to them. With that, the school is doing its bit to make school buses safer. CIO Send feed back to eric_ernest@ idgindia.com.

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ESSENTIAL

technology IMAGE BY MAST ERFILE.COM

A CLOSER LOOK AT THE CONSUMERIZATION OF IT

Empowering a new breed of BYOD mobile workers revolves around being proactive in three key areas: Policy, management, and application support.

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Ushering in BYOD BY LYNN HABER

DEVICES | Today's bring-your-own-device (BYOD) employee isn't yesterday's road warrior, so it's time for businesses to put in place the structured support systems—policy, management, and application access—that align the expectations of the new corporate work style with its business priorities. With more than half of employees paying for their mobile devices (and all or some of their data plans), and the lion's share opting for their device of choice rather than IT's device of choice, the traditional notion of imposing operations based on standards and stability flies out the window. The great influx of a diversity of mobile devices driven by the user is driving IT toward a more conditional approach to support—with IT retaining the right to control cost and security while developing a new set of policies that allows some freedom. Consumerization is akin to the fashion business; in both, change is constant. Therefore, it makes sense that companies need to respond by being agile and adaptable, even to unprecedented events. "Businesses have to establish best practices that transition as the market transitions," says Ken Dulaney, vice president for mobile computing research at Gartner. Empowering this new breed of mobile worker and approach to work revolves around being proactive in the three key areas: Policy, management, and application support.

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ESSENTIAL technology

Accept the fact that consumerization is driving businesses to rethink everything, particularly the balance of the relationship between IT and employees. Then it becomes clear why a "my way or the highway" corporate policy will not work.

The Policy Conundrum Industry experts point to two aspects of policy to consider: Provisioning and usage. When it comes to the provisioning of devices, the good news is that with or without a BYOD stipend, employees are eager to retain the right to purchase their device of choice. A report from Good Technology found that half of the organizations surveyed with BYOD in place said employees covered costs for the device and data plan, while 25 percent of companies offered a stipend to encourage BYOD buy-in. A little encouragement apparently goes a long way, as a BYOD stipend bolstered adoption. Industry experts agree that there's no one-size-fits-all solution when it comes to the provisioning of mobile devices. The two

reimbursed for their device, and these users will receive reimbursement for a new smartphone of their choice when their current contract runs out. (These employees mostly have BlackBerrys, as that had been the corporate standard.) All other employees are free to purchase a device and data plan of their choice at their own expense and request access to the corporate network. Today, about 4,000 employees at Nationwide—3,500 smartphone users and 500 iPad users—use non-BlackBerry devices and are managed through the insurer's new mobile device management (MDM) platform, from Good Technology. Of those 4,000 users, more than 1,000 are self-provisioned BYOD users. Policy around usage, or protecting the data, is every organization's No. 1 concern. At Nationwide, users agree to usage terms when they sign up for BYOD. In the spirit of shared ownership, BYOD users must understand that the company has a business to run and retains the right to discontinue usage or wipe a device when necessary. Users must also use passwords

Consumerization is akin to the fashion business; in both,change is constant.Therefore,it makes sense that companies need to respond by being agile and adaptable,even to unprecedented events. popular options are to have employees pick up all costs or to have the employee and company each pay a part (usually through a company stipend). Whichever option a business adopts, businesses should seize upon the willingness of employees to pay for some of all of their devices, service plans, and even apps, advises Ted Schadler, a principal analyst at Forrester Research. The ideal route to consumerization at Nationwide Insurance, a company with 40,000 employees, is to keep BYOD costneutral. One quarter of its employees are

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and encryption. For some individuals or groups, business usage of BYOD devices may be prohibited; Nationwide disallows BYOD use by employees paid hourly and by employees subject to certain regulations.

Managing Devices BYOD and MDM go hand in hand. It's a key tool for the enterprise to track, monitor, and manage the mobile experience while securing business data and intellectual property. Gartner estimates that about 60 vendors offer MDM tools, about two dozen

69%

Of Indian CIOs say they include BYOD in their mobile device policies. SOURCE: CIO RESEARCH

of which are viable for the enterprise. Critical MDM capabilities that companies should look for in a product include support for device diversity, policy enforcement, security and compliance, containerization of applications and content, inventory management, software distribution, administration and reporting, and IT service management. It was these capabilities that Active Interest Media (AIM) sought out as the number of BYOD devices climbed and concerns about corporate exposure grew. IT executives must remember that although tools are important, it's critical that the policies they execute make sense for both the company and the user. In other words, if you lock down too much or impose too many limitations, you're guaranteed to get user pushback and workarounds. Done right, consumerization fosters a new relationship between the employee and IT and the employee and the business— one that is more equitable and adult. Empowered employees are a business's best friend. These self-taught experts not only know how to use smartphones, tablets, and Web apps like Google Docs and Dropbox, they know what they're good for and how they can help the business. And they're willing to do just that. Furthermore, the research shows empowered employees improve work processes and productivity. No one says it's going to be easy to transform the status quo, but it is possible— and attitude is everything. "Initially when the concept [of consumerization] came up, it was very uncomfortable. What we've learned is that the process of change is REAL CIO WORLD | M A Y 1 5 , 2 0 1 3

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ESSENTIAL technology

BYOD INSECURITY

iterative and doesn't have to be 100 percent anymore. It has to be acceptable," says Bob Burkhart, director of new technology innovation at Nationwide.

An App for That

Caught Off-Guard POLICY | BYOD security is lax for some 14,000 commercial mobile devices used at the US Military Academy and the United States Army Corps of Engineers Research and Development Center, according to a report. Not only had the Army's CIO not implemented an effective BYOD program to manage the devices, the report said, but he was unaware that the 14,000 devices were being used throughout the Army by soldiers and civilians. BYOD sins found by the report at West Point and Corps of Engineers center included: Absence of a mobile device management application to protect data on the devices; absence of a facility for wiping all data from a phone should it be lost or stolen; ability to use the devices as removable media for the storage of sensitive data; and absence of training and user agreements. "These actions occurred because the Army CIO did not develop clear and comprehensive policy for CMDs [commercial mobile devices] purchased under pilot and non-pilot programs," the report said. "In addition, the Army CIO inappropriately concluded that CMDs were not connecting to Army networks and storing sensitive information," the report said. "As a result, critical information assurance controls were not appropriately applied, which left the Army networks more vulnerable to cybersecurity attacks and leakage of sensitive data." In a response to the report, the Army's CIO said that policies are in place to address the concerns raised. He said that a request for proposal would be aired by the military branch and systems installed within the next 12 months to give it visibility of all devices and meet the governance and oversight recommendations. The problems associated with the mobile devices at West Point and the Corps center are similar to those facing all organizations grappling with the BYOD trend. However, a lot of corporations and government agencies are in the same shoes as the Army CIO when it comes to BYOD. "

— John P. Mello

Send feedback on this feature to editor@cio.in

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IMAGE BY MASTERF ILE

In this new reality, a smartphone is just a little PC, simply another endpoint. Like a PC, much of its value comes from its ability to run apps. "Empowerment is about access to applications and content from a device of choice," says Forrester's Schadler. That means a business will now have a mix of IT-led "back end" apps and employee-driven "front end" apps—not the traditional IT-managed portfolio. That said, companies have to make choices about mobile applications and explore the use case for each. Also up for review are the core applications users want to access on their mobile devices—e-mail and collaboration, Web apps, an employee portal, content or files, and enterprise business apps such as CRM and data dashboards, for example. After the "what" question is the "how" question: Should companies build their own enterprise app stores or use off-theshelf apps from third-parties? It's likely a mix of both—and an understanding that in some cases, individual users can make those decisions themselves. For example, International SOS, a company that provides medical assistance and security services to organizations, is developing a mobile app for a credentialing process used by 60 staff members who visit hospitals and doctors around the world. The app already existed for laptops but now is being ported to the iPad and Android OS. But for most companies, it's still early in the game to be thinking about private app stores—the first step, after all, is to develop the enterprise mobile apps you need and figure out how to deal with the apps that users buy, such as to manage information access and flow. In the new consumerization context, the key to empowering mobility is creating a flexible organization and learning to roll with the punches that come with enterprise mobility. CIO


endlines INNOVATION

* BY LAUREN BROUSELL

Data collection is still done the old school way in the NBA. Someone sits in the stands and counts the number of shots, rebounds, and baskets by each player. Unless, that is, they’re customers of Stats, a sports data collection company that automates the job. SportVU, a product based on technology acquired from Israel that was originally designed to track missiles, is a data-collection system that uses webcams in the arena to track each player on the court by jersey color and number. The data gathered allows teams to build more in-depth player assessments. Brian Kopp, VP of strategy and development at Stats, says SportVU can collect data points that were never available before, and it has created a new line of business for the company. “We hadn’t done a lot of business with NBA teams and now we have software to sell to them.” The company counts ten teams as customers and also provides its analysis to broadcasters, websites, and app vendors. It hopes to expand into other sports, such as football and hockey.

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PHOTO BY MASTERFILE

Slam Dunk Stats


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CIO Magazine May 2013  

The Unvarnished Truth About Big Data