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Leadership

VOL/09 | ISSUE/03

B u s i n e ss

Technology

Shamik Sharma, CIO and Chief Product Officer, Myntra, understands his customers better thanks to social media.

#NewAgeBusiness Four Indian companies lead the way in using social media to further their business. What they’re doing that you’re not. Page 22

State of the CIO 2014 Confidence down! Find out how the last year is defining the next.

January 15, 2014 | `100.00 w ww.CIO.IN

View From the TOp D. Sathish Babu on how IT helped make his Rs 1,000 crore.

Going Public Bausch & Lomb moves all its IT to the cloud.

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FROM THE EDITOR-IN-CHIEF

PUBLISHER, PRESIDENT & CEO Louis D’Mello ASSOCIATE PUBLISHER Parul Singh E D I TO R I A L EDITOR-IN-CHIEF MANAGING EDITOR EXECUTIVE EDITOR ASSOCIATE EDITORS FEATURES EDITOR SPECIAL CORRESPONDENTS

The New Oil Myriad technologies over the past half-decade have helped to transmute the business value of data from base metal to gold. “The difference between ordinary and extraordinary is that little extra.” —Jimmy Johnson (Football Coach) When ‘data’ entered the English language from Latin in the mid-17th century as a term in philosophy it meant a ‘thing’ or ‘things’ ‘given’. That connotation is closer to its play in the enterprise today. Managements are interested in data, that’s acquired value by being filtered, sifted through, clarified and correlated. They want data that helps build the right product upfront rather than make a product right. They want data that reduces inventory levels, improves the targeting of customers, and boosts profitability. Data. Period. Not mountains of information. Business Intelligence, Big Data, Visualization, Data Integration, and the Cloud have in the past half-decade helped to transmute the business value of data from base metal to gold. The time has come to chalk out a strategy for managing enterprise data, delivering it to those who can benefit from it and of seeking new revenue opportunities with it. The time is also ripe to take away its ownership from its traditional steward—the CIO. Don’t get me wrong, while the CIO and team might continue to drive data processes, formats and governance, another, very different C-suite executive needs to champion data as a strategic corporate asset. Not the CIO, not the CMO, but the CDO—Chief Data Officer. A CDO would combine tech savvy with business knowledge; be able to deal with the egos in the C-suite, while fine-tuning the RoI of corporate data strategy and communicating the value. Why can’t a CIO play this role? Because they are too enmeshed in technology, even today. I believe, the CDO is to the CIO what the CIO is to a CTO—lesser and lesser about the technology and more and more about the business value. As with a Chief Security Officer, the CDO role will be doomed if operating under a CIO’s purview—all that leads to is a data architect and not a data champion. This is not to suggest that CIOs couldn’t transition into a CDO role. Au contraire. CIOs, specially those with a proclivity for business might be the ideal candidates. This might truly be the path forward for CIOs who consider themselves business executives. Data is the new oil, do you have what it takes to drill for it?

Vijay Ramachandran T.M. Arun Kumar Gunjan Trivedi Sunil Shah,Yogesh Gupta Shardha Subramanian Gopal Kishore, Radhika Nallayam, Shantheri Mallaya PRINCIPAL CORRESPONDENTS Anup Varier, Debarati Roy, Sneha Jha, Varsha Chidambaram SENIOR CORRESPONDENTS Aritra Sarkhel, Eric Ernest, Ershad Kaleebullah, Shubhra Rishi, Shweta Rao SENIOR COPY EDITORS Shreehari Paliath, Vinay Kumaar LEAD DESIGNERS Pradeep Gulur, Suresh Nair, Vikas Kapoor SENIOR DESIGNERS Sabrina Naresh, Unnikrishnan A.V. SALES & MARKETING PRESIDENT SALES & MARKETING VICE PRESIDENT SALES GM MARKETING GENERAL MANAGER SALES MANAGER-KEYACCOUNTS MANAGER MARKETING MANAGER-SALES SUPPORT SR. MARKETING ASSOCIATES

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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.

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REAL CIO WORLD | J A N U A R Y 1 5 , 2 0 1 4

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contents January 15, 2014 | Vol/9 | issue/03

Case Files 34 | Bausch & Lomb Cloud Computing The riveting story of how the king of eyecare, Bausch & Lomb, moved all its IT to the public cloud and why it was possibly the best IT decision it ever made. By Varsha Chidambaram

58 | Yash Raj Films Storage Yash Raj Films' stable of 55 films needed a storage solution which would ensure the safety of its many classics and make them easy re-purpose. IT had just the solution. By Shubhra Rishi

60 | C-Edge Technologies

2 2

IT Management Clogged bandwidth and irregular power supply were hampering security updates at remote locations that C-Edge Technologies managed. Here's how it resolved the issue. By Debarati Roy

more »

22 | #NewAgeBusiness

3 8

COVER STORY | Social Media Four Indian businesses decide to stop merely talking about social media and do something with it. Their stories show you what you could be missing out on. By Shubhra Rish

Cover Design by Unnikrishnan av

30 | State of the CIO 2014 Survey | It Management A bad economy, a shrinking job market, and an underperforming rupee have jolted CIOs in 2013. Shaken, CIOs aren't as optimistic of the next year as they have been in the past. By Julia King

53 | Failure is an Option Feature | Innovation When George Borst made the jump in 1997 from general manager of Toyota’s Lexus division to head of the company’s finance group, he was faced with a big decision. By Tim Scannell

2

J a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

VIEW FROM THE TOP: D. Sathish Babu, Founder and CEO, UniverCell, talks about the role IT has had in making UniverCell a Rs 1,000-crore mobile retail chain.

Vol/9 | ISSUE/03


departments 1 | From the Editor-in-Chief The New Oil By Vijay Ramachandran

7 | Trendlines Security | The Real Robocop Innovation | This Tech’s Tongue-tied Robotics | Google’s Robots Rule Popular Science | Internet in Outer Space Wearble Computing | Your Heart on Your Arm Internet | History Repeats Itself By the Number | CFOs: We Want Visibility

16 | Alert

4 8

Security | High-profile Meeting Guide IT Management | IT Pros Share Blame for Shadow IT Problem

61 | Essential Technology SDN | Back to School Case File | Rx for Congestion

64 | Endlines Technology | Home, Smart Home By Florence Ion

48 | Logistical Dream CXO Agenda | Growth Hemanth D.P., COO-Hub Development, Free Trade Zone and Logistics Business at Rajiv Gandhi International Airport Hyderabad, wants to transform the airport into a logistical hub. To ramp up the amount of cargo the airport moves, he’s going to need IT. By Varsha Chidambaram

43 | Without a Trace

52

Feature | Supply Chain The challenge of inadequate supply chain technologies and data silos is making it tough to trace products and problems (think car recalls, drug shortages) back to their source. How companies and governments around the world are tackling the issue—and what India can learn. By Kim S. Nash

1 9

Columns 19 | You Are What You Wear Leading edge Wearable tech is slated to be magma hot this year. Can enterprises put Wearables to better use? Perhaps. Will it happen soon? Not really. By Gunjan Trivedi

4

J a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

Vol/9 | ISSUE/03


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Vol/9 | ISSUE/03


EDITED BY shardha subramanian

new

*

hot

*

unexpected

The Real Robocop

Knightscope’s chairman and CEO, William Santana Li, said his inspiration for the K5 came from the Sandy Hook school shooting in December 2012, and a realization that more can be done to prevent similar massacres. “Here in Silicon Valley we have a massive amount of technology, and we believe that with a combination of hardware, software and community engagement we can give

the community and the authorities and private security firms a new level of technology that we call ‘security 3.0’—a combination of humans, robotics and intelligence,” he said. The idea is to have K5 robots patrolling areas such as parking lots, shopping malls and schools, constantly on the lookout for anything out of the ordinary. It will scan license plates and faces and check them against law enforcement databases, while social media sites are checked for keywords indicating possible crimes. A mock control center displayed the data it might generate: “2 stolen cars, 4 rapid hand gestures, 2 persons horizontal, 1 noise-level excessive, 1 sexual offender, 3 social feed indicators, 1 911 call.” —Martyn Williams

trendlines

A Silicon Valley startup has developed a surveillance robot that it says can cut crime by half, but its appearance on streets would be sure to prompt more debate about technology and privacy. The K5 Knightscope stands 1.5 meters tall and travels around on wheels— something that led the company to promote it to reporters as “a mashup of Robocop and R2D2.” Like its fictional parallels, the K5 is packed with gadgets: There are several cameras to provide an all-around view day and night, a laser imaging sensor that maps an area in 3D, a thermal imaging system, and facial and license plate recognition systems. An air particle sensor is planned for the future.

Security

This Tech’s All Tongue-tied

Vol/9 | ISSUE/03

the mouth is recognised by four sensors mounted on a headset, two of which are placed on slim arms beside each cheek. The sensors then wirelessly transmit data to an iPod with an app that has been developed to convert various tongue movements into instructions for the device that the user wants to control, such as a wheelchair. The researchers behind the project claim it holds promise for patients who have lost the use of their arms and legs, a condition known as tetraplegia. Tetraplegic people previously had to rely on sip-and-puff technology to deliver a limited number of basic commands to a wheelchair.

The researchers claim the new system could provide paralyzed wheelchair users with a higher level of independence than that offered by this common assistive technology. The researchers trialled the technology on 23 able-bodied people and 11 with tetraplegia. Under the trial, six positions in the mouth were programmed to control a wheelchair or a computer. On average, people with tetraplegia were able to perform tasks three times as fast and with the same level of accuracy as with the other technologies currently on the market. —By Sam Shead REAL CIO WORLD | j a n u a r y 1 5 , 2 0 1 4

Im ages by m aster f il e .com

Researchers in the US have demonstrated that it’s possible for someone to navigate a computer or steer a wheelchair with a tongue piercing and a few sensors. The team at Georgia Institute of Technology in Atlanta showed that the movement of a tiny magnet in a tongue piercing can be detected by sensors and converted into commands, which can control a range of devices. The Tongue Drive System (TDS) allows the user to use their tongue like a joystick once it has been pierced with a barbell-shaped titanium piercing. This piercing is embedded with a highstrength magnet and its location within

I n n o vat i o n

7


Google’s Robots Rule

8

j a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

Internet in Outer Space NASA scientists say the first tests of what could someday become an outer space Internet have far surpassed their expectations. “It’s been beyond what we expected,” said Don Cornwell, the Lunar Laser Communications Mission manager at NASA’s Goddard Space Flight Center. “We obviously expected it would work well, but this is even better. Everything is going better than we thought it would. We’re running these systems error free.” With the tests already going so well, NASA is encouraged that a laser communications system could be the building block of an outer space Internet.“This is the beginning of that,” says Cornwell. “I think we could have that with delay tolerant networking. This is the beginning.” NASA’s lunar spacecraft, the Lunar Atmosphere and Dust Environment Explorer or LADEE, has begin a test of a high data-rate laser communication system. If the system works as planned, similar laser systems are expected to replace radio systems to speed up future satellite communications as well as deep space communications with robots and human exploration crews. Using a laser for communications would enable astronauts and robots similar to the Mars rover Curiosity or the lunar orbiter, to send and receive far greater data loads, whether they’re in orbit around Earth, on the moon or a distant asteroid. Space exploration is largely about the data. Rovers and astronauts are expected to take measurements, photos and video of distant planets and asteroids. However, if there’s a data bottleneck and they can’t get that information back to scientists on Earth, the entire mission could be crippled. The large pipe that laser communications give NASA scientists will become increasingly important as explorations travel farther from Earth. A laser beam sent from one of three Earth stations to the lunar-orbiting spacecraft, which is the size of a tall man, can relay 20 Mbps. The downlink, going from the spacecraft to an Earth station, can relay 622 Mbps. That is six times faster than radio communications from the moon. —By Sharon Gaudin

Popular Science

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Im ages by m aster f il e .com

trendlines

R o b o t i c s Imagine this future: Your smartphone chimes, you walk to the door, and touch your Android phone to a small tracked robot that hands you a package. Off it trundles back to a Google self-driving car, and on to the next delivery. Sounds far-fetched? Well, another piece of the puzzle dropped into place on when Google’s Andy Rubin revealed that he was heading up Google’s nascent robotics department. Speaking to The New York Times, Rubin actually revealed little, other than that the company has picked up several robotics houses. The idea, however, is that the robotics project is less a “moonshot” than an attempt to achieve something like low earth orbit—a project designed to become a product sooner, rather than later. As the Times notes, Google’s other projects have ranged from the ambitious to the practical. They encompass Project Loon, which aims to float routers on giant balloons to provide Internet access to underserved areas; the self-driving car, which has spurred similar efforts by automakers even if Google doesn’t eventually plan its own products; and Google Glass, which is already shipping to early adopters and will become a formal product sometime in 2014. “I am excited about Andy Rubin’s next project,” Larry Page, Google’s chief executive, said on his Google+ page. “His last big bet, Android, started off as a crazy idea that ended up putting a supercomputer in hundreds of millions of pockets. It is still very early days for this, but I can’t wait to see the progress.” Google could certainly use its robotics expertise to improve the factory floor, where more assembly lines are governed by robots, rather than teams of skilled workers. But Google has traditionally set its sights on individuals first, rather than businesses. But Amazon’s speculative drone delivery fantasy also suggests that delivery could be a possible target of Google’s robotics arm. Google recently launched Google Shopping Express, a same-day delivery service that nominally competes with a similar effort by Amazon. In reality, it’s probably more feasible to suggest that a fleet of self-driving vans armed with some sort of automated lockbox would be more feasible than dispatching a robot to your front door. But there’s another aspect: After Google maps the world’s roads, what’s next? There’s millions of miles of sidewalks and paths for Google’s robotic minions to explore. And all it needs are the robotic legs to take them there. — By Mary K. Pratt


MOVING AHEAD WITH

SOCIAL COLLABORATION The communication infrastructure of the future depends heavily upon social collaboration. Anthony Bartolo, SVP, Unified Communications and Collaboration, Tata Communications, sheds light on what enterprises stand to gain by adopting it and how they can achieve the same easily.

N

etwork capacity is abundant. Data is everywhere. Today, the world’s information workers can communicate across continents, collapsing barriers once imposed by time and geography. Yet when it comes to communication, there’s still work to be done. E-mail has replaced the telephone as the dominant tool in our working lives. In one minute, users across the globe are sending 204 million e-mails. This means in one hour, 12,240,000,000 e-mails find a new recipient—a number that is hard to imagine. But e-mail has its limitations. Users become overloaded with information, but all too often, the information they need is locked away as an attachment, inaccessible on the organization’s server. This explains why deploying social collaboration tools is becoming an ever-more urgent priority for enterprises everywhere. It is becoming increasingly crucial to connect employees internally and enable them to work more effectively with external stakeholders such as customers and partners. However, as many are discovering, the challenges can be significant. It can be difficult to connect closed and proprietary social platforms with the context of everyday workflow, which is necessary if they’re to become widely used. Mobile, social, gamifi-

cation and video: all can become part of the social enterprise’s toolkit. But we’re a long way from fusing these feature sets. Inside the enterprise, social platforms remain predominantly text-based. However, the flexibility and interoperability of open APIs (application programming interface) address these challenges.

"I am confident that open, well supported, APIs are the missing link enduring developers to focus on what really matters: building collaborative tools." — Anthony Bartolo, SVP, Unified Communications and Collaboration, Tata Communications

Because of their accessibility, enterprises can customise the API-based tools they build. This will allow enterprises to design and refine social tools until they are a perfect fit for the enterprise business processes and IT architecture and their employees, thereby maximizing participation and productivity gains as workforces become geographically disparate and as businesses look to expand their customer and partner base into new markets. To illustrate, WebRTC is an emerging open source technology platform that embeds real-time voice, text and video communications capabilities within Web browsers. Because WebRTC is browser-based, it also opens the door to collaboration where it’s needed: not within yet another stand-alone application, but within the browser, where most of us do most of our work. Open APIs available with WebRTC can enable the ultimate aim of enterprise social networking development efforts: a fusion of mobile, social, gamification, and video into a single collaboration platform for end-users. Next-generation collaboration tools that extend seamlessly across the enterprise and beyond are a natural extension of mobile and social trends in consumer markets. If enterprises can deploy tools of this kind to liberate information workers, the potential for productivity gains are substantial.


Sharing tacit strategic knowledge: What is your personal perspective on the future impact of social business on your business? 80%

Sharing tactical knowledge: For example, by popularizing Wikis containing employee-generated guidelines, workarounds, what-if scenarios, hints and tips; resources like this can liberate interaction workers: if they spend less time reinventing the wheel, they can spend more time with clients.

60%

40%

Recognition: Widely-used collaboration platforms can be used to recognize and thank colleagues and partners for their work.

20%

0%

By allowing access to recordings of past meetings and presentations, companies can make life easier for teammates, new employees, and newly promoted employees alike.

CEO/ CFO/ CIO/ President/ Treasurer/ Technology Managing Comptroller Director Director

CMO

Social business is: A risky medium that we are forced to confront Just another tool to communicate An opportunity to fundamentally change the way we work MIT Sloan Managment Review - "Social Business: Shifting Out of First Gear" (2013)

The need for improved collaboration inside enterprises and with customers and partners becomes clear when we start to consider what collaboration has done for consumers. During the past two decades, consumers have seized the lion’s share of the economic surplus created first by the Web and ecommerce and, more recently, by social platforms. Enterprises have responded, by using social media to maintain and deepen links with their customers. This explains why collaboration technologies (workflow) jumped into fourth place on Gartner’s list of top 10 CIO business and technology priorities recently. This increased interest is being driven by the enterprise as a whole. According to a recent survey conducted by MIT Sloan Management Review, approximately 70 percent of CEOs, CIOs, and CMOs agree with the suggestion that social technologies represent “an opportunity to fundamentally change the way we work”. For enterprises and small companies alike, the aim must be to reduce transaction

costs by making collaboration simpler and quicker. The potential for ubiquitous realtime collaboration inside enterprises as well as with customers and partners, using voice, video calling, instant messaging, and data remains vast. Here are a few examples:

Global collaboration: Collaboration platforms allow enterprises to bring together internal teams and to work together more effectively with their partners and customers, regardless of location constraints. Bounded co-creation: Companies can solve more challenges, and do so rapidly, by integrating trusted partners, customers, collaborators, contractors, and freelance workers into tightly-knit, ad hoc teams. Workflow collaboration: Giving employees the ability to discover internal experts and partners who can improve their performance by sharing knowledge on the fly.

Recruitment: Social media is a great external recruitment tool. Social collaboration platforms inside the enterprise can help managers and HR executives identify candidates for staff projects or promotion. E-learning: In the academic world, universities are starting to capitalize on the potential of massively open online courses (MOOCs) to extend teaching activities far beyond campus-based lecture halls. Enterprises can do the same, developing their own collaborative learning courses, free from the constraints of time zone and location. APIs may well prove to be the missing link that allows developers of enterprise social networks to focus upon what really matters: building collaborative tools. These could have the potential to relentlessly pull new users into their orbit, extending the reach of enterprise collaboration inside enterprises and between organizations substantially. They have disruptive potential as a platform for enterprise collaboration, one that integrates text, audio, and video interaction in a way that’s highly customizable. This is a prize worth having.

To read the entire insight paper, visit: http://www.tatacommunications.com/services/ enterprise/ucc

IDG SERVICES


Wear Your Heart on Your Arm

trendlines

W e a r b l e C o m p u t i n g Wearable mobile devices are diversifying even before some big bets have been proved out. Adidas recently unveiled a smartwatch that will be focused on a virtual coaching service and won’t communicate with smartphones. It’s designed for runners, who often don’t want to carry a phone on their workouts, said Paul Gaudio, VP of Adidas Interactive. It uses GPS to tell runners how far they’ve gone and how fast. It can also monitor heart rate, which will inform a coaching service that can guide runners up to their desired heart rate and back down, Gaudio said. There’s also an audio player built in, with Bluetooth to communicate with headphones. The coaching service can use visual and physical cues and even audible guidance based on the user’s preference, Gaudio said. One of the big challenges in developing the watch was leaving out features and streamlining it for the task of running, Gaudio said. Synchronizing with a mobile phone was one capability the company determined many runners could do without. “At a certain level, they get to a point where they don’t want to be bothered with carrying a phone,” Gaudio said. It can be a matter of both reducing carried weight and escaping from the world of alerts.

Wearable fitness monitors, such as the Fitbit and Nike Fuel families, were early hits in a market that’s still taking shape. Others, such as Google Glass, aren’t full commercial products and in some cases are still controversial. Glass may be a useful device for certain specialized users, including surgeons, soldiers and even some serious athletes, said Olof Schybergson, CEO of design consultancy Fjord. But he questions the product’s mainstream potential. “I don’t think it’s a mass market product, at least not yet,” Schybergson said. Adidas made a device for the wrist because consumers are already in the habit of wearing watches, Gaudio said. Several companies have come to Fjord wanting to develop smartwatches, but many just want one because it’s considered the hot new form factor, Schybergson said. Adidas had very clear goals, he said. Qualcomm, which introduced its Toq watch as a limited-edition showcase product, is focusing on making a range of services available rather than on pushing specific devices. Toq is intended to show off Qualcomm technologies, including AllJoyn, a protocol for device-todevice communication. —By Stephen Lawson

History Repeats Itself I n t e r n e t The Internet Archive’s new Historical Software Archive brings old software to your browser through the magic of JSMESS emulation. The Internet Archive has protected and preserved old software for a while now; archivist Jason Scott claimed that the organization possessed the largest historical software collection in the world. Software is so transient, though. It’s sometimes hard to get a program from 2003 to run on a modern machine, let alone a program from 1983. For most people it wouldn’t be worth the trouble to, as the Internet Archive puts it, “track down the hardware and media to run [old software], or download and install emulators and install floppy images as you boot up the separate emulator program, outside of the browser.”

12

j a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

The Historical Software Archive changes that. There’s no need to fuss with stand-alone emulators. Instead, the Internet Archive runs MESS (short for Multi Emulator Super System) with Javascript in Chrome, Firefox, Safari— any modern browser. “Turning computer history into a one-click experience bridges the gap between understanding these older programs and making them available in a universal fashion,” says the Internet Archive’s announcement. “Acquisition, for a library, is not enough—accessibility is where knowledge and lives change for the better.” Of course, this isn’t the first time someone has emulated old software in a browser. The difference, presumably, is two-fold. One is that the Historical

Software Archive is for all types of software—not just games. Go ahead and check out Apple Presents the IIc, a series of instructional guides that introduced users to their new computer. Then make a spreadsheet in VisiCalc, the 1979 Apple II program that pioneered the computer spreadsheet. The second difference is legality. The Internet Archive is a reputable organization with a clean website and a name you can trust. That site where you found all those Nintendo ROMs? Yeah, not so much. The unfortunate problem with legality, however, is it limits your scope. Hopefully more developers will open up their software for emulation through the archive. —By Hayden Dingman

Vol/9 | ISSUE/03


c o m p i l ed by va r s h a c h i d a m b a r a m

Best Practices

CFOs: We Want Visibility The biggest barrier to business growth today is visibility into future business, according to Accenture’s 2013 CFO Survey. Over 80 percent of respondents to the survey say they have medium to no visibility and predictability of their company’s business performance in 2013. Only 18 percent claim to have high visibility. The biggest reason for this? Economic uncertainty. The other three reasons are commodity pricing, volatility, and shifting customer expectations. But the good news is CFOs are not reacting to the economic uncertainty by tightening their pursue strings. So, what do CFOs want to invest it and better visibility? Mostly in skills and in IT systems. The top priority of the finance function is to invest in upgrading the skills of finance professional staff. Investing in systems to support planning, budgeting, and forecasting and in systems to support transaction processing are second and third on the list. Thirty-five percent CFOs said they want to invest in BI systems, and 24 percent on cloud computing. Other top investment priorities were: Supporting transaction processing, and providing increased visibility to revenues and expenses. It’s clear from the survey that the finance function is looking towards IT to invest in tools and technologies that can help them to more accurately forecast performance, identify risk and opportunities and then adjust their investment decision-making accordingly, positioning them to potentially take advantage as the global economy slowly improves.

1

invest in tools and technologies that can help you to more accurately forecast performance, identify risk and opportunities.

2

Adopt a very disciplined performance management process for tracking growth investments which includes, analytics and BI.

3

Develop a strong analytics framework. Organizations with good visibility, supported by strong analytics capabilities, may be better positioned to support profitable growth. The ability to deliver actionable data will be very helpful in a down economy.

trendlines

T

In a global survey of CFOs, Indian finance heads say they expect IT to provide them with business visibility.

Invisible Visibility Visibility of Business Performance

Tools to Gain Visibility

18%

40%

High Visibility

Invest in systems to support planning, budgeting and forecasting

38%

54% 28%

No or Low Visibility

Medium Visibility

Invest in systems to support transaction processing

35% Invest in systems to support business analytics

24% Adopt cloud capabilities Source: Accenture 2013 CFO Survey

Vol/9 | ISSUE/03

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MANAGED BENEFITS

Survey

As near-term business horizons shrink, multiple projects, fast rollouts, fewer people and increasing change requests from business stress the delivery capabilities of enterprise IT. With efficiencies and effectiveness both coming into play, the business ask is as much about gaining new skills, improving organizational focus and delivery speed, as it is about reigning in operational cost. Enterprises are increasingly turning to third party IT service providers to fill in the talent, deadline and budgetary gaps that exist.

HOW IT PERFORMANCE IMPACTS BUSINESS THE MOST? Employee Productivity

56%

Business Agility

56%

Time To Market Customer Retention Revenue

72%

43% 44% 55%

43%

40%

of CIOs are enhancing service management processes to improve business-IT performance metrics

of CIOs have already outsourced or are planning to outsource IT Security


WHAT ARE THE TOP 5 DRIVERS FOR OUTSOURCING? 1.

Specific function is difficult to manage

2.

Make capital funds available to business

3.

Free up internal resources for other purposes

4.

Inadequate internal skillsets

5.

Reduce and control operating costs

ARE YOU PLANNING TO USE SECURITY-AS-A-SERVICE TO SECURE IN-HOUSE OR CLOUDBASED ASSETS?

21% of CIOs are considering or implementing Managed Security Services

6%

11%

49%

34%

76% Implementing Security-as-a-Service Now

Using Security-as-a-Service

No plans for Security-as-a-Service yet

Evaluating Security-as-a-Service

of CIOs have already outsourced their Infrastructure Maintenance

This Survey is brought to you by IDG Services Group in association with HP


alert

Enterprise Risk management

High-profile Meeting Guide B

IMAGES by masterf ile.COM

efore the advent of smartphones, planting covert listening devices was the most popular way to illegally record a private meeting. Today, with millions of smartphones, every user has the potential to be a covert meeting operative with their own Wi-Fi receiver, camera, audio recorder, keyboard and computer. Maintaining security and privacy for high profile meetings is vital whether it is a shareholder meeting, or internal executive meeting. The theft of IP costs businesses billions each year. Discussions of proprietary information may include customer pricing, R&D and production processes, marketing and advertising strategies, and legal issues. How can you ensure your meetings are secure? Here are some guidelines.

Pre-planning is Critical About three months before the meeting, all critical parties (HR, legal, internal security, external security, local law

enforcement and facilities) should meet to begin the planning process and assess the level of risk associated with a meeting. Questions to ask include: How many people are expected, and where the meeting is being held? Will there be sufficient security assigned to the meeting? Who would have an interest in the content of the meeting? While corporate locations generally already have security controls in place, an important meeting could require additional security measures. Additionally, off-site meeting locations such as hotels demand more advance planning so that each area to be accessed is reviewed and accounted for from a security perspective. Effective pre-planning also includes social media and news monitoring to assess what topics are prominent in the

news and how the individual company may factor in. Active social media monitoring of Twitter, Facebook, Instagram and other channels can help intercept and prevent potential flash mob scenarios. One month before the meeting, a tabletop exercise should be conducted where everyone is tasked with creating potential crisis situations such as a medical emergency, disruptive attendee or water main break.

Establish Security Protocol Access control is critical and every meeting attendee should be thoroughly vetted. The security firm should engage in an electronic sweep of the meeting room right before it starts to ensure there are no surreptitious listening devices planted. Metal detectors at the point of meeting entry should be

Security Capital findings

Like any other project, security initiatives need capital expenses. We look at how those have fared during the slowdown.

Have You Cut the Cost of Security-related Initiatives Requiring Capex? (Indian firms only) Not reduced 43 percent Reduced the cost of initiatives by 1 percent to 9 percent Reduced the cost of initiatives by 10 percent to 19 percent Reduced the cost of initiatives by 20 percent to 39 percent Reduced the cost of initiatives by 40 percent to 49 percent Reduced the cost of initiatives by more than 50 percent

23 percent 22 percent 9 percent 3 percent 1 percent

42%

Of Indian enterprises have not deferred security related initiatives that require operating expenditure. source: Global Information Security Survey

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Enterprise Risk management

employed. All meeting attendees should be aware that security protocol is in place which could include: Pocketbook and briefcase check. Smartphones, computers, iPads and video and audio recorders should be removed and stored in a safe location. Corporate computer used for presentations. Speakers should provide their presentations in advance and all presentations should be run off of one master encrypted computer that is pre-screened for bugs. Post-meeting material check. There should be a review of all written material taken by meeting attendees to ensure that no sensitive data leaves the meeting room. Attendees should be briefed by the security team on appropriate protocol both during and after the meeting. Many secrets have been divulged at the hotel bar when executives are not aware that competitors are located at an adjacent bar stool. Security protocol should also account for meeting disruption. A shareholder who owns just one share of a company’s stock can lawfully gain access to a shareholder’s meeting. It is not uncommon for an activist to purchase a solitary share for this reason. While every shareholder has a right to ask questions during a shareholder’s meeting, no one has the right to be purposefully disruptive. It is important to pre-plan with corporate security and the company’s public relations department to establish protocols to handle a disruptive questioner, or even uninvited media.

Meeting Monitoring Security and surveillance should remain in full force throughout the meeting. Security officers should conduct continual perimeter checks. There should be elec-

tronic and physical monitoring during the meeting. Make sure that all unencrypted wireless microphones, which can transmit meeting content outside of the room, have been removed and replaced with encrypted ones.

Escape Clause Sometimes even the best laid plans can result in an unexpected surprise. A meeting that becomes unruly, for example, may require that the CEO and other top executives are able to depart the premises safely and quickly. Advance of the meeting, all escape routes should be detailed along with vehicles staged with drivers who can whisk away executives at a moment’s notice. If it is not possible to get the executives out of the building, it should be determined what the shelter in place plan is and that that this temporary shelter includes sufficient food and water. Effective meeting security must also consider the health and welfare of all meeting attendees. If an attendee has a medical emergency, can the company access medical personnel quietly and without public incident? A CEO of a publicly traded company who suffers a heart attack, for example, should not be wheeled out to awaiting ambulances at the main entrance where people can observe his condition. Crowds can impede departure and news of a CEO’s negative health issues could adversely affect stock price.

Confidentiality for All Everyone who comes into contact with the

meeting personnel (event planning personnel, security, audiovisual technicians, foodservice, administrative personnel, etc.) should sign a confidentiality agreement on behalf of the corporation and/or hosting hotel or venue. This should include not just those assisting the day of the event but those involved in pre-event preparations as well.

Post-meeting Review Conducting a post-mortem meeting analysis is a valuable way to identify and document lessons learned from the project. The security and administrative team benefits from this post-meeting review of protocol and processes and is better equipped and prepared to face the next big meeting. Meetings should not be publicized beyond the scope of meeting attendees. CEOs and other executives travelling to the meeting should be met by a driver who does not display the company name on their sign. There should not be any signs in the meeting location that draw attention to the nature of the meeting. Attendees should all understand that data should not be disseminated on any public Wi-Fi These important events should never be an opportunity for corporate spies to gather proprietary information and intelligence. With proper planning, training and resources, all meetings can be safe, secure and productive. CIO Harlan Calhoun was formerly a police officer, hostage negotiator and academy instructor in the CharlotteMecklenburg Police Department. Send feedback on this feature to editor@cio.in

[One Liner:]

What protection can NATGRID get in India?

Indian experts aren’t better than US cyber experts and they couldn’t prevent these leaks. — V. Balachandran, Former Special Secretary, Cabinet Secretariat, to the Sunday Observer

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Enterprise Risk management

IT Pros Share Blame for Shadow IT Problem

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and liability in what they are doing. Just under half cited strong concern about the potential for data exposures, theft, or simply not being able to get the data back from the cloud application. Twenty-two percent admitted they had already experienced some security incident with social media, while 16 percent pointed to a security-related incident in filesharing, backup or storage. There’s the sense that “the end justifies the means,” the report notes. What, if anything, can be done about “shadow IT,” especially since IT employees as much as any others may be implicated in it all? Geisler says the first step is nailing down policies, with the chief information security officer setting the tone in terms of confronting the need to use SaaS in a way that satisfies compliance and

Picture Passwords

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hen end users circumvent IT and start using software-as-a-service (SaaS) applications without permission, IT pros complain about the plague they call “shadow IT.” But it would seem the professionals are also operating in the shadows, according to a new survey. The report entitled, The Hidden Truth behind Shadow IT, was a collaboration of consultancy Frost & Sullivan and McAfee. The survey asked 300 IT pros and 300 line-of-business employees whether they used SaaS applications in their jobs without approval. Eighty percent admitted they did, with only 19 percent of the business employees and 17 percent of IT claiming to be innocent. The idea of the threat of “shadow IT” has grown with the expanded use of cloudbased applications that can easily and often cheaply be brought into use without IT knowing about it all, much less approving SaaS based on security policies. For IT, the reaction has often been, “Oh poor IT, if we could only stop the employees from doing this,” says Jennifer Geisler, senior director in McAfee’s network security division. Of the IT pros admitting complicity, 42 percent said they do it because they are “familiar” and “comfortable” using such services. A third said the “IT approval process for new software applications is too slow or cumbersome,” echoing lineof-business managers. A quarter said the non-approved software “better meets my needs than the IT-approved equivalent.” The favourite types of non-approved SaaS applications were related to business productivity, social media, file-sharing, storage and back-up. The most popular non-approved SaaS applications included Microsoft Office 365, Google Apps, LinkedIn and Facebook, Dropbox and Apple iCloud. Many even said they were planning to increase this non-approved usage. The report also indicates that these employees readily acknowledge the risks

security requirements. Technologies for monitoring and controlling SaaS can also be applied, but trying to shut down SaaS entirely is hardly feasible. SaaS is often a creative way to do business, especially with younger employees, the report notes. But those in charge of IT security have to set up viable ways to control passwords, identity and access management, encryption, and data-loss prevention, for example, as part of SaaS usage. With IT personnel confessing they are part of the “shadow IT” problem, Geisler suggests, the IT department “can no longer just point the finger” at the rest of the company. CIO Ellen Messmer covers news and technology trends related to information security. Send feedback on this feature to editor@cio.in

Once upon a time some Carnegie Mellon University researchers came up with a scheme to use stories and pictures to help users live happily ever after by creating and remembering dozens of passwords—and avoiding use of the exact same passwords for multiple sites. The trick though is that users need to repeat and practice those onesentence stories a lot at the start so that the tales and related images stick in their heads. The photos serve as mnemonic devices to trigger memories of the stories and words that can be used to secure multiple online accounts. “If you can memorize nine stories, our system can generate distinct passwords for 126 accounts,” says Jeremiah Blocki, a Ph.D. student in Carnegie Mellon’s Computer Science Department. The research is funded by the National Science Foundation and the Air Force Office of Scientific Research. Blocki and fellow researchers Manuel Blum, professor of computer science, and Anupam Datta, associate professor of computer science and electrical and computer engineering, are building a mobile app to put their system into place. The system involves users selecting photos of people and a scene and then the computer picking out photos of an object and an action. Equipped with the photos, the user then constructs a story “Say Miley Cyrus wrecks TIME magazine’s Person of the Year contest.” The system then involves grabbing letters from those words and combining them into passwords that users can recall with prompting via the images. — By Bob Brown

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Gunjan Trivedi 

leading edge

YouAreWhatYouWear Wearable tech is slated to be magma hot this year. Can enterprises put Wearables to better use? Perhaps. Will it happen soon? Not really.

L

image by mast erf il e

as Vegas saw an interesting start to 2014. I am not referring to its impressive New Year parties, rather this year’s edition of Consumer Electronics Show (CES). The show went bananas on this new, hot thing in the IT space: Wearable technologies and devices. Almost everyone and his brother was busy unveiling their versions of Wearables. The likes of Sony, Intel, Samsung, Google, Pebbles, LG, and Epson showcased their innovations that were largely Notifiers, Trackers or Glasses or all combined. Some seemed rather interesting, others downright clunky. At first, I was almost dismissive about the applicability of these innovations beyond certain, specific tasks such as counting steps or taking calls or perhaps snapping pictures (almost at the cost of other person’s privacy.) That’s till I visited at our Bangalore HQ where I had my first rendezvous with an interesting Wearable. Unnaturally for me, I was among the very few at our office who was not that clued in to this entire Wearable business. But, while everyone had an opinion, our editor-in-chief was actually testing out a Wearable: A fitness tracker wrist band called Fitbit Force. This piece of technology got me intrigued. Not because it allowed him to count the number of steps and flight of stairs he took a day, but because he was able to track his sleeping cycles, the amount of calories he burnt, the amount of water he drank, and how all of these deviated from his goals. This Wearable device was not just a front-end to a mobile device, it wasn’t just tracking steps like a pedometer. His Fitbit wrist band had an entire ecosystem of mobile apps, online tracking dashboards, and also synced with other related devices. What this tells me is this: With the right ecosystem of apps and infrastructure, wearable technologies and devices have the

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Gunjan Trivedi

leading edge

potential to take enterprises by storm. Forrester VP and Principal Analyst J.P. Gownder suggests that businesses represent a massive, immediate market for Wearables, and businesses will be looking for products that have been honed to their specific needs. This technology, I believe, can be used effectively in enterprises to develop richer and more productive businesses, and create differentiated value. Wearables can be used for multiple on-field scenarios that call for high-tech mobility, connectivity and agility, where data needs to be accessed or collected in an uninterrupted yet authenticated manner with little dependence on humans. Healthcare, emergency personnel, warehouse workers, technicians working on specialized machinery, are just some of the right candidates for this no-hands, no-fuss access to data. In fact, a combination of augmented reality and wearable technology can take this phenomenon to the next level where access to valuable information can be made seamless and instant or where it can reduce a learning curve drastically while increasing employee productivity phenomenally. For example, with Wearable glasses, all the dynamic information of an engine on an assembly line can be made readily accessible along with further steps of action for a worker. According to Gownder, Epson and Evena Medical have devised a healthcare application for Epson’s Moverio smart glasses: Using sensor technology and augmented reality, a phlebotomist can literally see the veins in a patient’s arm—reducing misses and the concomitant pain.

I believe that as we prepare for the advent of Wearables in the enterprise, the one thing that will be significantly impacted will be the management of big data. Not only will these new devices will generate unparalleled amounts of data, Wearables will push organizations to begin leveraging advanced levels of analytics, predictive or otherwise. Instead of a large dose of information that the present set of dashboards offer, CIOs will have to find ways to figure out absolutely (and perhaps, painfully) the precise data point or information required that can be displayed on the extreme small form-factors of these devices. All this boils down to one question: When will all this start to happen? Wearables are evolving fast. And so are the accompanying security, privacy, compliance and governance challenges. The hype bubble of Wearables has just begun to grow. Eventually, wearable tech will surely redeem and present itself as the technology of choice for the enterprise space. But, I think we are about four years away. As Forrester’s Gownder puts it, “Wearable tech is in the same hype bubble as the Internet was in 1999.” Wait and watch. 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

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IDG EVENTS STERIA

EVENT REPORT

BEYOND STATUS QUO: THE NEW RULES OF

DATA CENTER STRATEGY

At a recent roundtable by Tata Communications and CIO magazine, IT leaders discussed ways to create a robust data center strategy that will spell success for enterprises. By Vinay Kumaar

T

centers close to a decade ago. It was a traditional outsourcing model wherein we rented the space but owned the servers. What started off this way in India got extended to other geographies due to DR requirements. We currently don’t own any data centers and make great use of the hybrid cloud,” he said. One other thing that most IT leaders don’t seem to have second thoughts about is the usage of cloud, especially the hybrid model. JWT’s SVP and area systems director (Central Asia), Sunil Mehta spoke in detail about what makes the cloud effective. “The first ever app we moved to the cloud was e-mail. Since this was the most mission-critical app and it went on the cloud in a secure way, comfort levels were established easily. That gave us room to think of putting up the next mission-critical apps in line on to the cloud. This way, we eventually saved a lot of time, money, and licences. We saw not just capex savings, but also opex savings. Now we have our most critical assets, media, on the cloud and we’ve been able to drive business better.” But Mehta is also of the opinion that the movement towards cloud would not ring the death knell for data centers. “The “Enterprises’ needs for direction is always going to scalability, response time, and be a hybrid model. There’ll performance stability can be be data centers, but you may met by collaborating with a not really require the large good telecom service provider.” ones internally anymore. Those may probably shrink. C.R. SRINIVASAN But completely getting out VP, Global Product Management, Data of data centers will take a Centre Services, Tata Communications while,” he said.

he greatest boost for IT in recent times is businesses’ going beyond perceiving technology as just a support function to actually recognizing its contribution as a valued service provider. Playing a pivotal role in this rise of IT is the data center. However, challenges like lack of necessary skill sets pose a threat to utilizing the data center’s potential to the fullest. Indian IT decision-makers are not illequipped to handle this either. They are aware that traditional data center strategies won’t work wonders anymore and that a more evolved strategy would take their enterprises to greater heights. Tata Communications, in association with CIO magazine, recently conducted a roundtable among IT leaders at Mumbai to discuss how they are pulling up their socks to further their data center strategy. One thing that most IT leaders have no second thoughts about is that outsourcing data center management is much more effective than doing it internally. Dhiren Savla, CIO, VFS Global, spoke about his company’s journey on this route. “We decided to outsource our data

Now, since outsourcing data center management is an effective way, the next critical thing would be to choose the right partner. Mukund Prasad, director-group HR, Business Transformation and group CIO, Welspun Group, shed light on this aspect. He said, “Managing data centers is no rocket science. Companies probably have the in-house skillsets to manage them. What is critical is as you scale up, you need to augment those resources. The basic operations management requirements are the skills you need from the service provider. As an organization in a different vertical, your ability to attract these skills for a period of say, the next ten years will not be high. The big names in the outsourcing space will be able to do that.” C.R. Srinivasan, VP, Global Product Management, Data Centre Services, Tata Communications, spoke about how the connectivity aspect of data centers is often overlooked when data center strategy is formulated. “Every byte of data in the data center matters. It’s important to know how to secure, analyze, use, and retrieve it. This is where a telecom operator comes into play. The needs for stretchability, scalability, response time, and performance stability can be satisfied by collaborating with a good telecom service provider.” This event report is brought to you by IDG Services in association with


#NewAge

Business

Four Indian businesses decide to stop merely talking about social media and do something with it. Their stories show you what you could be missing out on. By Shubhra Rishi

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eople power. It’s hard to go Reader ROI: The benefits of leveraging anywhere in the country social media today without bumping into Different ways of using social platforms it. You start the day with the newspapers giving you a blow-by-blow account of how everyday people are joining Aam Aadmi Party and are taking the power back from politicians. You end your day with citizen journalists on TV commandeering the power of the media. And, in between, you have Gen Y consumers and staffers demanding a greater say and fewer controls. If you thought the command-and-control structure of the enterprise would keep you safe from the swarms calling for the end of centralized authority (as they are doing with politics and the fourth estate), you were wrong. Or, at least, you’ll be wrong soon. Never in the past has the work place been so diverse. Today’s place of work is increasingly becoming a sundry mix of the young, the middle-aged and the old. And it’s leaving businesses perplexed. Companies are worried about how they will manage such a wide assortment of expectations. A PwC survey reveals that attracting and keeping young workers is one of the biggest talent challenges for CEOs everywhere—and it should be. Millennials—those born in between 1980 to 2000—will account for over half of the global workforce by 2020. Yet their growing needs are driving CIOs up the wall. Take for instance, social media and BYOD. The two trends have jointly twisted the arm of enterprise IT to get rid of longstanding practices of restrict-andcontrol and are introducing an environment of collaboration and engagement to cater to a young workforce. While a number of progressive CIOs have latched on to the BYOD trend, they have not leveraged social as much. Not all CIOs see the rise of social media as a pain. A growing number see an untapped opportunity. According to CIO research (The Mid-Year Review Survey done in March 2013) about 40 percent of Indian CIOs were in the process of finalizing

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Social Business

enterprise social collaboration platforms, many of which aim to mimic public networks such as Facebook. Another 20 percent said, it would take them about 12 months—about two months from now. According to the State of the CIO Survey (taken three months ago), a full 37 percent of Indian CIOs say that they are either implementing or already refining their organizations’ social media push. Some CIOs have upgraded corporate intranets and My Site Microsoft SharePoint (a webspace where people from an organization can find information about another’s skills and interests) to accommodate social tools such as Lync and Chatter for internal collaboration. Others have tapped into external public networks such as Facebook and professional networks such as LinkedIn to drive business and increase internal efficiency. If you’re looking for ways in which your companies and your IT teams can tap the power of social media for business benefit, here are four.

Deeper Customer Engagement Myntra

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t’s no secret that a number of e-commerce portals in India use social media platforms to increase brand awareness and to promote their products using online campaigns. Myntra is no exception to the rule. According to Myntra, it is one of India’s top three e-commerce companies and it is the fastest growing fashion retailer in the country. Myntra, however, went one step further: It integrated its internal CRM with Facebook. Till a year ago, Facebook contributed to 25 percent of Myntra’s revenues. According to press reports, Myntra made Rs 400 crore in 2012-2013. That number has since dipped but mainly because the company’s organic traffic has grown extensively, but it’s still REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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Reimagining the Enterprise A three-city mega event, the Microsoft Enterprise Day helped IT decision-makers initiate a dialogue on how to multiply business benefits by reimagining conventional technology practices. By Ershad Kaleebullah

T

he ways in which people use technology are blurring the lines between work and play, and business and individual. With this shift comes opportunity but it requires a thoughtful approach to business scenarios. IT leaders, today, need to reimagine the enterprise with the latest technologies. At the recently concluded second edition of the Microsoft Enterprise Days (MED) event, which took place across three cities—Bangalore, Delhi, and Mumbai—industry leaders, IT heads, and Microsoft executives together discussed multiple facets of enterprise IT, from multiplying productivity to understanding business practices that capitalize on existing infrastructure. The VUCA Conundrum Microsoft India chairman, Bhaskar Pramanik, and managing director, Karan Bajwa discussed one of enterprise IT’s primary challenges, VUCA (volatility, uncertainty, complexity, and ambiguity), and how it affects the IT environment, in detail. Talking about Indian managers’ mindset, Bajwa said, “The one thing that sets apart Indian managers is how they are used to handling ambiguity and uncertainty much better than their foreign counterparts.” On the other hand, Pramanik touched on the complexity part by delving into consumerization of IT and how consumers are using more powerful devices at home. “As the proliferation of powerful smart devices increases, so will the complexity. The One Microsoft approach helps tackle this challenge.”

Pioneers of Reimagination Another highlight of MED was recognizing CIOs who have brought about a dramatic transformation in the enterprise. Across the three cities, Vijay Ramachandran, editor-in-chief, IDG Media, spoke to 17 leading CIOs and business leaders across different verticals. They spoke about how reimagining the

“We (Microsoft) are going through a transformation and expanding our horizon as a devices and services company.” Karan Bajwa

Managing Director, Microsoft India enterprise helped the business overall and Microsoft’s role in making it happen using cloud, CRM, data analytics, devices and productivity tools. For instance, Gaurav Gulati, global CIO, SMR Automotive, installed next-generation Windows 8.1

devices at “conventionally challenging” places like the shop floor, thus reimagining devices, while Sumeet Arora, VP-IT, Quest Global Services, bypassed stringent IT security controls by standardizing on Microsoft solutions. For more implementation stories, follow the CIO Spotlight Series. Beyond Technology Besides the IT pundits, enthralling the audience with a diverged view of reimagination beyond the realms of technology were Arun Shourie, author, politician, and Padma Bhushan awardee, and Santosh Desai, MD and CEO, Future Brands. Desai spoke at length about the mindset of the average Indian consumer. However, he clearly veered away from the lofty perspective around which typical conversations on India revolve. On the other hand, Shourie relived his experiences as an editor, played the role of a storyteller, and by doing so, delivered lessons on how to become better leaders. Surging Ahead Microsoft also launched CRM 2013 and Cloud OS at MED. The expo zone at the event showcased a wide range of devices, solutions, and services, which helped attendees engage in vertical-specific conversations with experts. Look forward to the 2014 edition of MED. In case you have reimagination stories to share, write to us at microsoft@cio.in


SPECIAL EVENT COVERAGE MICROSOFT

As part of the second edition of the Microsoft Enterprise Day, 17 IT and business leaders from different verticals were felicitated for the exemplary knack and drive they showed in transforming their businesses by reimagining conventional practices using cloud, CRM, data analytics, devices and productivity tools.

Reimagining the Enterprise: Spotlight Recognition

“Microsoft has helped companies accelerate business agility using connected technologies.” Bhaskar Pramanik Reimagined Productivity

Ashish Pachory CIO, Tata Teleservices

Reimagined BI

Reimagined Cloud

Reimagined Devices

Reimagined Productivity

Atul Kumar

Ekhlaque Bari

Gaurav Gulati

Jayantha Prabhu

GM-IT, Syndicate Bank

Group CIO, Hindustan Times

Global CIO, SMR Automotive

Chairman, Microsoft India

CTO, Essar Group

“A leader should embrace failure but distribute success.” Arun Shourie Reimagined CRM

Reimagined Cloud

Reimagined Productivity

Reimagined Enterprise

Kamal Shah

Mandar Marulkar

Manpreet Khurana

Murali Krishna

Reimagined Cloud

Reimagined Cloud

Reimagined Cloud

Reimagined Productivity

Pratap Gharge

Pravin Savant

Raj Gopal A S

Sanjeev Prasad

Global Head-IS, Wipro

VP and CIO, Bajaj Electricals

Head – IT, IS & CISO, KPIT Technologies

CTO, Lowe Lintas India

VP & Head – Global IT & Tel, HCL Technologies

Managing Director, NxtGen

Author, Politician, and Padma Bhushan Awardee

Senior VP & Head CCD, Infosys

CIO, Genpact

“Imaginative new enterprises are powered by the youth who help them in reimagining India.” Reimagined CRM

Reimagined Services

Reimagined Services

Reimagined CRM

Shirish Chitte

Subramanya C

Sumeet Arora

T K Ramesh

CTO, Reliance Capital

Global CTO, Hinduja Global Solutions

VP-IT, Quest Global Services

CEO, Micromatic Machine Tools

Santosh Desai

MD and CEO, Future Brands

IDG SERVICES


Cover Story

Social Business

a significant two-digit figure, says Shamik Sharma, CIO and chief product officer at Myntra, who closely and frequently partners with marketing and customer care LoBs to provide them with better tools to create maximum customer engagement. With over 1.6 million fans on its Facebook page, Myntra saw an opportunity to get closer to its consumers and create customer delight. To do that, the company encouraged its users to log on to Myntra (using their Facebook credentials). At that point Myntra asks users whether they would like to share information that’s currently on Facebook with Myntra. These includes something as innocuous as their e-mail ID and their public profile, to other more intimate details like their friends’

list, their likes, their relationships, their hometown and interests. As a result, the e-commerce player is now able to get a fuller picture of their customers. It allows Myntra to analyze customer behavior and gain deeper insights into what they should be selling consumers. This customer information is channeled automatically into the company’s CRM platform and mined on a per order basis to find out if there’s any correlation with a

Shamik Sharma CIO and Chief Product Officer, Myntra, integrated Facebook with Myntra’s CRM, giving the company a fuller picture of some of its customers.

specific order and customer information Myntra already has on a customer. For instance, if a customer had logged on to Myntra using Facebook and placed an order close to her birthday or anniversary, the company would send them little gifts wishing them on their special day. “Facebook data helps us form that close connection with customers and that, according to me, our biggest reward,” says Sharma. The company is also in the process of rolling out a CRM cloud service to its customer touch-points (like its customer care center) which will help organizations deliver superior customer experience at every contact and across every channel. “The ultimate goal,” Sharma says, “is to integrate with all of our social media networks and use it as a common platform to assist our agents monitor and respond to customer appreciation, query or grievance.” An IDC prediction for next year states that the demographic shift to young and mobile customers will require 80 percent of CIOs in B2C businesses to integrate IT with public social networks by 2015, and Sharma is sprinting ahead.

Opening a New Customer Channel ICICI Bank

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t’s extremely rare to see banks embark on anything social—or even talk about it. But ICICI has always done the unexpected and its social media push is the latest in a series of unexpected offerings for the young gen. Launching an initiative known as Pockets for Facebook, the bank empowered its young fan base—40 percent of which is under 34— to carry out transactions on Facebook. The app requires a user—who also needs to be an ICICI customer—to log on to her Facebook account and then on to Pockets and perform a one-time registration by entering her debit card number and pin. Further on, the app appears on a customer’s Facebook page and can be used to view accounts, make

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Steal This Idea Cosmetics brand Revlon India partnered with a digital marketing agency to run a unique social media campaign before the launch of its Whipped Crème Makeup. To get there, it ran surveys among Revlon India’s 2.3 lakh-strong Facebook community to gain insight into the beauty habits of Indian women. A whopping 75,000 responses were collected which were then used to tailor social media campaigns illustrating how Whipped Crème Makeup was the perfect solution for a flawless look.

payments, transfer funds, and conduct other non-banking transactions. “Facebook is where young consumers are spending more and more time and the app enables them to carry out a wide set of transactions without having to leave the social media site,” says Abonty Banerjee, GM and head-Digital, ICICI Bank. The app’s unique feature Split ‘n’ Share allows ICICI customers to divide and track group expenses and share them with friends on the site. If for example, you went out to the movies with friends and wanted to divvy up expenses later, Split ‘n’ Share would allow you to inform your friends how much they owed you. Another feature called Pay a Friend allows users to transfer funds to their friends without having to know their bank account details. If this sounds simple, Banerjee says, that security is of utmost importance and the bank sensitizes customers at every step of their Pockets’ journey, stating that the application is completely safe to use as all types of authentications and transactions are carried out on ICICI Bank’s secured servers. And even if a user’s Facebook account is compromised, it still does not affect her her personal financial information and bank user ID. Banerjee went on to add that Pockets is as safe as their internet banking channel.

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For an initiative that’s only two-anda-half-months-old, the results have been extremely encouraging, says Sujit Ganguli, senior general manager and head corporate communications and brand at ICICI Bank. The project was jointly ventured by IT and marketing teams. They are also constantly collecting feedback from early adopters to further provide a more seamless experience to customers. Primarily, the main objective, says Banerjee, is to be present in all channels and get on new channels before others. Further, the per-transaction cost for the bank is lower on digital channels compared to other traditional channels. Invariably, the bank’s larger goal is to attract newer, younger customers through this initiative.

Abonty Banerjee, GM and Head-Digital, ICICI Bank, worked with marketing folks to create an application that allows the bank’s customers to transact on Facebook.

Leveraging Internal Talent Applied Materials

A

pplied Materials is a semiconductor manufacturer with a global presence (over 84 locations in 18 countries.) There’s no dearth of innovative ideas within its 13,700-strong employee base and it has over 10,000 patents to prove it. REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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Cover Story

Social Business

With such a diverse workforce employed across different continents, the global manufacturer decided it needed to leverage enterprisewide social media tools to increase internal collaboration across its multiple team teams and business segments. It also wanted to tap into the minds of its thousands of employees. “As a global initiative, we developed an internal crowdsourcing and social innovation platform known as Ideabuilder, to improve productivity and customer satisfaction,” says Nagraj Bhat, senior director, Global Information Services Group, Applied Materials India. In 2012, the company also rolled out a knowledge management portal known an Applied Rapid Knowledge that enabled field engineers to search and find product

documentation across multiple data sources through a single interface. It was an important project given how dispersed the company was globally. As a result, the project singlehandedly reduced their search time by 50 percent. Startling results like that created an excitement around the possibility of social media within the enterprise and soon Applied Materials’ global HR department requested its IT team to

Nagraj Bhat, Senior Director, Global Information Services Group, Applied Materials, says they’ve integrated LinkedIn with internal HR systems to better identify opportunities for internal employees.

conduct a pilot and give a small group of employees the ability to upload their LinkedIn profiles to the company’s internal HR management portal. The company also noticed that a majority of its employees already had public LinkedIn profiles, so the capability to integrate LinkedIn to the HR talent profile seemed like a potential time-saver in terms of building a better employee profile. “For instance, an employee had the option to create a professional job profile on the HR platform from scratch or better still, by connecting his LinkedIn profile. In turn, the HR team was able to facilitate, to an extent, the buildup of internal talent profiles of their employees and identify opportunities for internal employees and potential candidates for expanded global reach,” says Bhat. Applied Materials isn’t alone in its push to derive more value from its employees. According to Nishant K. Rao, country manager, LinkedIn India, companies are quickly realizing the power of their internal employee base and leveraging the integration capabilities of external tools to enable a seamless hiring experience.

Creating Social Collaboration Tata Communications f you belong to the Tata Group and operate as one of its 450,000 employees across its 100 companies worldwide, it would be easy to be lost. Given the size of the group (it’s got as many people as a small Indian town) it’s easy for different groups within companies to never see each other, or communicate less than optimal. Therefore, four years ago, when a global initiative demanded a need to change old ways of connecting within the conglomerate, there were challenges. “Change management within IT was a daunting task,” says Rajiv Nandwani, VP-IT at Tata Communications. Another challenge was choosing the right platform at a time when social media platforms

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Photo by fotocorp

I


Cover Story were becoming extremely popular and IT was expected to deliver quickly and cater to the requirements of young, new-age employees. One of the ways the that company decided to do that was to connect and allow its huge workforce to collaborate by integrating existing Exchange, SharePoint Lync and Chatter solutions. The entire initiative took nine months at the end of which the efficiency of the company’s disparate work groups spiked. “The initiation to the process wasn’t driven by IT but by our employees who wanted us to intervene and deliver connectivity,” says Nandwani. The entire initiative has ensured cost savings for the entire group as well as improved collaboration across the company, and has also created better results on projects that require the collaboration of crossfunctional teams. As an added HR incentive, the company provided the opportunity for its employees to update their Share Point status updates on each individual’s personal LinkedIn profile. Additionally, each LinkedIn profile could be displayed on every user’s My Site

Steal This Idea Pepe Jeans has a strong social presence. It has 1.8 lakh fans on Facebook and runs contests on Twitter and Pinterest periodically. One such contest was ‘Pin It to Win It’, which helped Pepe Jeans create enormous value for the brand. The ‘Pin It to Win It’ board on Pinterest had nine pins consisting of Pepe apparel. While the contest was promoted on its Facebook page, participants were invited to follow and re-pin whatever they liked to be able to win. The winners were announced on the individual pins as well as on the

profile. Alternately, users could choose to add a link to their LinkedIn profile as well. Nandwani says that the company keeps adding new functionalities to the collaboration platform. Recently, for example,

Social Business

the company invited a number of partners to collaborate on Lync. They have also allowed the integration of Skype with Lync and allow staffers to communicate with external customers, an important functionality in a shrinking world. To those who would like to go down this route, LinkedIn’s Rao suggests that companies need to identify the right metrics to measure the business benefits of leveraging an external social platform internally. He also says that while change management will be harder, companies can ensure a better candidate experience and enable team efficiency and productivity. Using social media, enterprises can pick up intelligence or collaborate and all this is making the CIO role even more important. Therefore, to decide whether you want to get stuck in the rut of firefighting or get on the next wave of business, the choice is yours. As history show, the people will get what they want. It’s only a question of time. CIO

Shubhra Rishi is senior correspondent. Send feedback on this feature to shubhra_rishi@idgindia.com

Where Trends Come Alive!

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Listen to the views that matter. Catch up with industry news. Watch real CIOs talk about the real issues. All of this in a format that's short, crisp, and snappy. Tune into CIO videos now! REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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Annual Report Card

’14 A bad economy,

6-10%

tHE INCREASE IN PAY cios EXPECT IN 2014, COMPARED TO 11-15% THEY EXPECTED IN 2013

a shrinking job market, and an underperforming rupee seem to have jolted CIOs in 2013. Shaken, CIOs aren't as optimistic about the next year as they normally are. Their bleak outlook around compensation, IT budgets, the business and their roles are clear indicators of their growing scepticism. Here’s what the numbers say.


All About the CIO After a hard 2013, CIOs don't expect much from 2014. They aren't optimistic about changes in compensation, increases in budgets, or the economy. But they still claim to be satisfied with their jobs and work fewer hours.

11-15%

Satisfaction Guaranteed No matter what the external factors are—a bad economy, challenging work environments or excessive workloads— CIOs are always satisfied.

31% Satisfied, but looking to move

The average amount CIOs—in the manufacturing sector and companies in the Rs 500-1,999 crore bracket—expect their salaries to rise, unlike CIOs in other sectors and company sizes.

39% Satisfied

1%

29%

Not satisfied

Very satisfied

Expected Compensation Increase Compared to last year, the amount by which CIOs expect their salaries to rise has fallen. Also, fewer CIOs expect their compensation to change. Expected Increase in 2013 Expected Increase in 2014

11-15%

6-10%

Work Hours The average number of hours CIOs keep at work per week is coming down.

55%

2011

53%

2012

The Monies

Rs 44 Lakh

52%

2013

The average amount Indian CIOs make in a year. Surprisingly, this hasn’t changed in 2013, despite 93 percent of CIOs expecting it to change.

What You Spend Time On Interacting with vendors and leading projects has fallen off the list of what CIO spend most of their time doing and making strategic systems decision has made its debut, taking the second spot in 2014. Rank in 2012

Rank in 2013

Expected Rank in 2014

3

1

4

4

2

1

2

3

3

Leading projects

1

4

5

Interacting with IT vendors/service providers

5

5

NA

Budgeting / managing costs Interacting with your company’s CXOs and business executives Designing/optimizing business processes

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The IT Dept. and Business Last year, a bad economy changed the way business percieves IT; the number of CIOs who said the IT department was perceived as a competitive differentiator had risen by 10 percent. Unfortunately, in 2013, that number fell by 7 percent.

How Business Views You The number of CIOs considered competitive differentiators has fallen by 7 percent—a severe blow to how IT is perceived.

38%

2011

35%

2012 2013

31% 28%

27%

28%

27%

20%

20% 17% 14%

15%

Cost center

Valued Service Provider

Trusted Partner

Competitive Differentiator

Competitive Differentiator vs. Cost Center There's a stark difference between CIOs considered competitive differentiators and those considered cost centers. Competitive Differentatiors

Cost Center

Top Focus Area

Customer impact

Operational impact

Top IT Management Initiative

Measuring IT's impact on the business' performance

Investing in systems that help engage with customers or business partners

Top 3 IT Dept. Challenges Delayed decisions from the business has gone down to third position from top spot. But IT funding could be a challenge.

2013

Expected in 2014

Delayed decisions from the business

Governance risk & compliance

Inadequate in-house skill sets

IT funding

Governance risk and compliance

Delayed decisions from the business

32

Top 3 IT Management Initiatives for 2014 Measuring IT's impact on the business is a new entrant in the top three initiatives for 2014. Improving security and

38% Investing in systems that help engage with customers or partners

36% Improving business processes

J an u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

34% Measuring IT's impact on the business' performance

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44%

Expected Budget Increase The amount CIOs expect IT budgets to increase in 2014 is lower than what they have expected in the last few years. Expected Rise in 2013

Expected Rise in 2014

6 - 10%

1 - 5%

Of CIOs say the slowdown in the economy will be the top issue that will impact their organizations in 2014.

Capex-Opex Break Up More budgets are being devoted to opex, year-on-year. 57%

Top Five Drivers for Outsourcing CIOs say the top driver for outsourcing is access to new technologies窶馬ot cost cutting.

55%

54%

64% Access to new technologies or services

55%

46%

Will reduce and control operating costs

45%

49%

43% Estimated in 2012

Will free up internal resources for other purposes 2013

2014 Estimate Opex

Capex

Opex model

Of CIOs say 2014 will be a somewhat to very challenging year for business while 45% feel it will be a good year for the I.t. department to meet its goals.

Horizon of Your Business' Near-term Plans Six months ago, 61 percent of CIOs said the horizon of their business' plans was six months to 12 months. 23% Six months and under

56% Six to twelve months

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Gain access to world-class capabilities

42%

72%

20% More than twelve months

46%

Survey Methodology The State of the CIO Survey 2014 was administered online over two weeks in November 2013. Three hundred eighty-six Indian IT leaders participated. Twenty-two percent of respondents were from organizations with annual revenues of over Rs 10,000 crore; 32 percent from enterprises between Rs 2,000 crore and Rs 9,999 crore; 23 percent from organizations between Rs 500 and Rs 1,999 crore. A cross-section of Indian industry participated. CIO editors ensured all participants are bonafide IT leaders. All responses were gathered using a secure server with all individual data kept confidential. The degree of error is +/- 5.5 percent at a 95 percent confidence level.

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Going

Public The riveting story of how the king of eyecare, Bausch & Lomb, moved its entire IT to the public cloud and why it was possibly the best IT decision it ever made.

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By Varsha Chidambaram

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Case File | Bausch & Lomb

Public cloud computing is arguably the least trusted technology we have today. Despite a stupendous promise, the technology continues to be under-utilized and viewed with suspicion. But there comes a time in business, when companies need to make some hard decisions, defy conventions, and take the road less traveled. That’s exactly what Bausch & Lomb did when it decided to move its entire IT into a public cloud. In the business of providing best-inclass eye-care for over 150 years, Bausch & Lomb’s move to a public cloud shouldn’t come as a surprise. A peep into the company’s history is enough to understand that it has always had an innovative streak. For starters, it was the first company to manufacture x-ray glasses used for aviation and the ‘aviator’ glasses made famous my Tom Cruise in Top Gun. It was also the first to mass manufacture microphones and microscopes. In fact, it is the only company outside the film industry to have got the Oscar for manufacturing 70 mm screens way back in 1954. The company flaunts a proud lineage based on innovation primarily in three verticals— pharmacy (deals with eye related disease products), surgical (machines for doctors to perform surgeries) and vision care (deals with contact lenses and lens care products). Five years ago, the Indian wing of Bausch & Lomb was the hub of IT deliveries primarily for India operations only. It was quite neglected in terms of IT investments and more importantly not utilized for any global operations. But great ideas are often born out of the darkest recesses and by raising awareness of the huge talent pool that the country possesses.

Taking Baby Steps The APAC region of Bausch & Lomb started toying with the idea of cloud computing in 2008. The business case was fairly obvious: Cloud would give it the best scalability, reliability, and availability that its budgets could buy. It gave the company the much needed bandwidth, without which it couldn’t support business.

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Reader ROI:

The importance of monitoring fixed costs How simple tools can have a large impact

It was a critical call. Bausch & Lomb’s business in India was growing at 16 percent year-on-year, and the company had already captured close to 60 percent market share in one of the business areas. But unlike its IT counterparts in other geographies, money wasn’t flowing into IT. “Budgets were tight, but we couldn’t sit with our hands tied and refuse to support business because money wasn’t coming in,” says Shuchi Nagar, IT Director, Bausch & Lomb. But the problem was that there was a lot of negativity around cloud computing. However, it was still the company’s best bet. Nagar was ready to place the gamble, but not a blind one. In early 2009, Bausch & Lomb took its first baby steps towards the cloud by moving its CRM to the public cloud. But it already had a CRM in-house, which made moving to Salesforce a questionable decision. “To go out and change something that wasn’t broken wasn’t easy. But the case was built around the fact that Bausch was growing at an exceptional pace and the existing apps weren’t able to keep up with the pace of change we anticipated.” The entire sales and marketing teams at Bausch & Lomb took to the cloud with surprising ease. The entire sales and marketing cycle—be it measuring productive hours, call effectiveness, tracking campaigns or revenue generated, checking captured leads, and post sales activities—is now handled on the cloud. While there is no historic information to compare with, the productivity and transparency boost was too apparent to ignore. It was Nagar’s first win in many to come. While CRM on the cloud was an instant hit, Nagar’s plans to venture deeper into the cloud was still met with cautious skepticism and of course the dreaded ‘S’ word: Security.

There has not been a single discussion about cloud computing which hasn’t raised the question of security. But Nagar was well prepared, and he wasn’t going to plunge into the deep sea without a life jacket. Before moving its CRM to the cloud, the company did a detailed study and it was convinced that it had the necessary safeguards in place and good level of authorization around it. “It also helped that the vendor was audited by the same company that we use for our general audit,” adds Nagar. He took further caution. Initially, the company ventured without using any critical sales numbers. Dashboards came much later, once trust and comfort was well established. In phase one which lasted a year, Bausch grew from 61 to 1,200 cloud licenses. Nagar began dreaming of moving to a complete public cloud model where it could be purchased and used on the go without any investment and support worries. Little did he know that he’d realize the same in less than three years.

Welcome to the Cloud The APAC wing of Bausch and Lomb had many datacenters distributed across the region in Japan, Hong Kong, Australia, and India. Previous successes directed Nagar’s efforts to consolidate the datacenters into one location. “We had around 4,000 sq ft of area in HK. The entire 2010 was spent in consolidating our datacenter. This offered us better economies of scale, ” says Nagar. The consolidation began as a hardware consolidation project but soon, as Nagar gained more confidence, he decided to extend it to the company’s non-ERP, peripheral applications. “When we first began consolidation, we didn’t look at consolidating our ERP because we didn’t have the necessary storage capacity. We needed to grow our storage first before we took up the ambitious ERP consolidation project.” But he did it, eventually. The team consolidated eight instances of ERP in a single box. Nagar thought it prudent not to host the ERP on a virtual REAL CIO WORLD | j a n u a r y 1 5 , 2 0 1 4

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platform as it was fairly old and complex. Nagar used the successful consolidation as a launching pad to begin his real foray into the cloud. It was time to make the call to a private cloud operator in Hong Kong. Come 2013, Nagar was ready to stretch his wings further. He no longer wanted the company’s resources supporting the datacenter. There were much more important things to do. “Our core competency is not IT, our core competency is eye-care, and we want to focus on it,” he says. After having made that call and a few others, Bausch & Lomb went with a private cloud outsourcing partner and handed all its datacenter-related activities to it. Bausch & Lomb moved its entire IT to a caged area in a shared infrastructure platform in the outsourcer’s DC. By moving its IT outside, it was able to exploit the benefits of a better rack structure and storage device, with minimum investment. And that’s how it moved from a capex model to a completely pay-per use opex model. But it still was a private cloud. The company’s DC now resided in a caged area dedicated to Bausch & Lomb within the outsourcers’ premises with limited access. “Once our confidence was built, we started tinkling with the idea of moving to a public cloud,“ says Nagar. By the beginning of 2013, Nagar was ready to let go of the caged area: Better ROI, more scalability and more control, he reasoned. The primary motivation was mainly cost. “We were happy with the security and the quality of services was much better, but cost was the key driver.” By going entirely public, Bausch & Lomb reduced almost 20 percent of capex cost. Finally, it was time for Nagar to make the last big decision: To move or not to move ERP. He decided to go ahead. Today, all of Bausch’s apps, except for one instance of ERP runs off a public cloud. “The ERP that is still lying in private is 30 years old and fairly unique to us. But the plan is to consolidate that too and move to a common platform,” says Nagar. The company’s contract with its vendor spans three years and comes with 24/7 availability 36

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We operate in a high-growth market, hence agility is nonnegotiable. We need to be able to scale up and down on-demand. The cloud has helped us do that. —Shuchi Nagar, IT Director, Bausch & Lomb

and disaster recovery—a scale out model that it couldn’t have imagined without the cloud.

Stumbling Blocks The benefits of public clouds have always been universally accepted. And yet low adoption levels point to the fact that it’s just too hard to implement. People and

perception are always the biggest challenge, says Nagar. “You walk into a meeting with any business head, and his biggest worry is what will happen when something goes wrong. It’s the fear of change,” says Nagar. The other fear was the move itself. What will happen during the move? How much downtime will there be? Will there be a loss of data?

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Case File | Bausch & Lomb

“We did our best to prepare top management for the shift. We ran a series of awareness workshops, communicating the risks and rewards. We involved all the stakeholders, educated them on what the cloud means, and why it was good for business. Fear often stems out of ignorance. Our objective was to remove the very root of fear from their minds,” says Nagar. While he was prepared, in theory, Nagar didn’t stop there. For every move it made, either from its private DC to the private cloud, or from the private cloud to the public cloud, he did multiple dry runs. “On our last leg, we did five rehearsals of moving the ERP from private to public cloud over five weekends. Every Friday, we would shut down for four hours, take a complete backup, and then start ERP again in the migrated platform and upload all data. We would then run it past business to check if everything was fine. By the third time, they came back to us and asked if the other two runs were really necessary!” So, was getting buy-in difficult? Nagar says he worked hard for it. “The secret to getting a buy-in is pre-selling. Even before I presented my business case to move to the cloud, they were well aware of the trend and bought into the concept.”

20%

3,800 sq. ft. to 360 sq. ft.:

24/7

The capex cost that the company reduced by going entirely public.

The amount of datacenter floor space that the company was able to reduce, thanks to the cloud. It also brought down the cost of staff associated with running an in-house datacenter. The company’s contract with its vendor spans three years and comes with 24/7 availability and DR—a scale out model that it couldn’t have imagined without the cloud.

18 months

The ROI that moving applications from datacenters to a mixture of private and public cloud provided the company.

The Road Ahead Currently, the public cloud project covers only the APAC division of Bausch & Lomb, and it hasn’t been able to replicate the same success with its more developed geographies. And it doesn’t intend to do so. “Despite its benefit, public cloud is not for everyone. We had been neglected from an IT perspective for three decades, hence our cost case for cloud was stupendous. But in developed markets the business case is not that strong. APAC, on the other hand, couldn’t have survived without moving to the cloud.” Today, the company has eliminated capex entirely by moving to a completely pay-per use model. “We operate in a high-growth market, hence agility is nonnegotiable. We need to be able to scale up and down on-demand,” says Nagar. And this was brilliantly demonstrated recently when Bausch & Lomb was

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acquired by Valeant Pharmaceuticals International. “When we got taken over, we realized the need for synergies. I had to scale down my staff which was a breeze because I just had to give a two-month notice. My SLA with the vendor is so flexible that I don’t need to pay for extra capacity for even a day,” says Nagar. For a high growth market such as APAC, this has enabled the company to enter and exit new geographies dynamically as per business demand. One piece of advice to CIOs that Nagar wants to give: Be very careful while crafting the contract terms and conditions—even 99.9 versus 99.5 can result in a few hours of downtime for example. Nagar also cautions his peers in India against crafting contracts in dollars. “By just having my contract in rupees, I have saved significantly. Given the fluctuation in

the forex market, this can be a life saver.” Nagar believes the cloud project has been the single biggest boost to his career. “I have become more important now than I have ever been in the past. For example, when I go to speak to my supply chain head today, I talk to him about DSO, MOH, and OTIF and not about whether the systems would be up tomorrow night when he has to ship out his supplies.” Now, the conversation has shifted to how IT can help business turn things around. “Just the other day, we were having a conversation about how I can empower my network executive on the field with an iPad app for his customer. This conversation wouldn’t have happened without the cloud.” CIO

Varsha Chidambaram is principal correspondent. Send feedback to varsha_chidambaram@idgindia. com

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VIEW

from the TOP

D. Sathish Babu, Founder and CEO, UniverCell, is banking on IT to help the Rs 1,000-crore mobile retail chain to grow to Rs 10,000 crore by 2020.

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

38

J a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

UniverCell

Appeal By Shubhra Rishi

In 2000, when D. Sathish Babu, decided to open what is probably India’s first branded mobile retail store, he didn’t have much of a launch pad. Until he inaugurated the first UniverCell store, he worked from a 100-square feet garage that belonged to his father and people around him found it hard to fathom the need for a branded mobile store. But Babu saw a gap that he could fill. The market, which until then was disorganized and as grey as a government corridor, needed a player that made the mobile-buying public feel they weren’t being cheated, that they had made an informed decision, and that they had fun making a purchase. In the last 13 years, that gap grew into UniverCell, a Rs 1,000-crore mobile retail chain, with 450 stores in 300 locations, that sells three times more phones than any of the other large retailers in the country, says Babu. But now Babu is faced with another challenge: To ensure mobile retailing stays relevant in the age of e-commerce—and grow UniverCell into a Rs 10,000 crore company by 2020. IT, he says, was key to getting UniverCell to where it is today and it will help it get to the next milestone.

You opened UniverCell, among the first organized mobile retail stores, back in 2000. What made you think it would succeed?

D. Sathish Babu: In the early days, the Indian mobile retail market was fragmented with no organized retail chains selling mobile phones. It was also an extremely grey market, remember this was before

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D. Sathish Babu expects I.T. to Help UniverCell understand its customers better Tie UniverCell together as it expands Create better customer experience

Photos by r.Chandroo

Attract more customers

the dotcom age and much before Google. In addition, call rates were as high as Rs 16.80 a minute, and customers were forced to negotiate to get a good price for a phone. What they weren’t being offered was proper ambience and the right kind of information they needed to purchase a mobile device. That’s where I sensed a tremendous opportunity. We could provide customers with a unique platform, which would make the experience of buying a new phone pleasurable and ensure that they

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paid a reasonable price for their phones. When I decided to open UniverCell’s first mobile store in Chennai in 2000, there was a decent amount of apprehension from people close to me. They advised me against taking the plunge as no large companies were investing in mobile retail. Slowly, over the first 10 years, UniverCell opened 10 stores in Chennai. We could do so because we invested in people and IT, and I think these helped us tremendously in building the UniverCell brand and setting us apart.

The mobile retailing market is worth Rs 50,000 crore and growing. What’s your growth been like? Our track record proves that we have been growing consistently. In the last two years, we grew at the rate of 40 percent, despite sluggishness in the market. We are confident that we will continue to grow at around 30 percent till 2020. If we focus on market trends, smartphones will replace most other feature phones and gadgets.

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View from the Top

According to GfK research, smartphone sales will round off at 163 million units annually by 2015, up from 106 million in 2011. Our smartphone sales have doubled at 60 percent, compared to 30 percent last year. Even the number of UniverCell retail stores across Bangalore, Chennai and Hyderabad have grown from a mere 100 stores in 70 towns—to 450 stores across 300 locations in South India.

You give IT a lot of credit for UniverCell’s success. Today, we are a Rs 1,000 crore company. It would be inappropriate not to give IT a fair share of the credit for UniverCell’s consistent growth and success. Even during the inception years of the UniverCell brand, we needed to know more about our customers; what models they liked, and what time of the day they had a tendency to buy more. Therefore, we invested in technology, which at the time, wasn’t very affordable. We introduced a central server system to connect our stores when most other companies relied on fax machines to communicate. Looking back, I have to say that our early investments in IT paved the way for a better future. Today, we have a dedicated team that looks after IT deployments. We have already implemented an ERP system that ties all our stores and enables the exchange of real-time data.

Are you depending on IT to get to the next milestone? We want to become a Rs 10,000 crore company by 2020, that’s a 30 percent yearon-year growth. With 100 new stores in the pipeline, we will grow to 550 outlets this fiscal. We are investing in IT and we plan to connect all these stores using an ERP platform. We have new format stores such as SYNC to improve customer experience. We want to build a system of intelligent connects with the customer that will enable us to identify the customer the moment he enters our store. In this age of cashless transactions, we are looking at investing in wireless IVMs (intelligent vending machines) that will provide customers with a seamless shopping 40

J a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

taking a similar position. While it’s true that digital outreach is still very nascent, we will continue to leverage it in order to stay relevant to customers.

“The truth is that we sell three times more phones than any of the other large retailers in the country.” — D. Sathish Babu

experience. This means our investment in IT is only going to increase.

How else are you leveraging new media to acquire customers? We have been an early adopter of new media. From e-mail and SMS-based promotions to Facebook, we have come a long way. Today, we have a dedicated team that monitors our Facebook community, which is 5 lakh strong. We introduce new contests and offers and promote them on social media. For instance, on children’s day, we wanted to encourage kids to come to our stores and participate in a tablet contest. So we promoted the activity using social networks and received tremendous response. All this was made possible without TV or radio. We also collected a tremendous amount of information on consumer behavior based on likes, dislikes and feedback from our customers. We also have a loyalty program called Payback where our customers can earn loyalty points by shopping at our stores.

Isn’t it true that advertising was also crucial to your success? What’s your take on digital advertising?

UniverCell is strong in the south. Do you plan to expand to other geographies?

I used advertising as a medium to get quick recognition and increase UniverCell’s brand awareness among consumers. We started by advertising in the classifieds section of Tamil dailies and that propelled phone inquiries. We gradually moved to press and television. Between 2 to 3 percent of our sales budget is set aside for advertising. Today, digital has expanded our reach to customers, both old and new. It is a costeffective way to create traction for our brand and allow easy access to the younger, under30 crowd. During festivals, we indulge our online customers with several offers that allow them to either buy online or visit our stores. I take inspiration from countries like China and Vietnam where a number of large retailers are moving away from television and are increasing digital spends. We are

Very few retailers from the south have expanded to the west. It’s the south where the actual retailing happens; while in the north, it’s mostly discount retailing. There’s no customer experience involved and the market is mostly price-based. It’s the mallculture in the north that’s encouraging retailers to get organized. As far as the south of India is concerned, today, we have a presence in towns as small as Srikakulam (pop: 1.26 lakh) in Andhra Pradesh. In other parts of the country, we have already entered new markets like Mumbai, Pune and Ahmedabad. We plan to open 100 new stores this financial year, out of which 25 stores will be set up in the two cities (Mumbai and Pune). Consumer interest has been very encouraging. We also have plans to expand to northern markets in the next year.

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View from the Top

Wouldn’t that put you in direct competition with stores such as Chroma? Today, UniverCell has about 450 stores in India. The truth is that we sell three times more phones than any of the other large retailers in the country. We are not dealmakers but we want to create a specialized experience for customers and that’s what sets us apart. We are a telecom specialty retail store and we understand our customers far better than anyone else.

How else are you ensuring ever-increasing growth? Mobile retailing is such a dynamic market and you have to continuously come up with innovative schemes to stay relevant. That’s why the UniverCell brand gives its customers a variety of options. We started by letting customers simply buy off-the-shelf. Then, in 2009, to reignite the interest of consumers, we launched a touch-and-feel concept store called UniverCell Live. Apart from allowing customers to use and experience ‘real’

phones, the stores also had download kiosks and virtual gaming zones. Today, we use both formats of the stores. This year, in July, we launched our first ‘techsperience’ store called UniverCell SYNC which lets customers select gadgets from a variety of devices such as music, imaging, social/productivity and the Noteworthy, which is a very popular feature of the SYNC store. It is also a first-of-its-kind store in the sense that it allows customers experience gadgets that haven’t yet been introduced to the Indian market. Going by how complicated phones are becoming, our personal services will go a long way in delivering excellent customer experience by helping customers figure out what they want to buy.

How do these different store formats facilitate sales? India is a replacement market, which means that the number of customers coming to stores to buy mobile phones for the first time is negligible. Today, there are customers who will research online but buy a mobile

at a store, and then there are those who will research and buy online. We want more people to come to our stores and hence, the need to create and upgrade our experientialthemed stores. According to GfK, the average selling price (ASP) for mobiles in India is less than Rs 3,500. But the ASP of a customer coming to a SYNC store is close to Rs 20,000. If you look at the buying pattern of different customers, they are likely to spend an additional 10 percent on mobile accessories such as headphones, cover, skins, and pouches, etcetera. Therefore, we have trained our sales staff to recommend additional items and increase the bill size. We are also experimenting with selling new and quirky mobile apps. For instance, health apps aimed at helping consumers quit smoking or control diabetes. These are available exclusively at our stores. CIO

Shubhra Rishi is senior correspondent. Send feedback on this interview to shubhra_rishi@idgindia.com

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Supply Chain

Wi th ou t

A

t r a c e The challenge of inadequate supply chain technologies and data silos is making it tough to trace products and problems (think car recalls, drug shortages) back to their source. How companies and governments around the world are tackling the issue—and what India can learn. By Kim S. Nash

hink back to September 2006. Citizens in the United States started to get sick from spinach contaminated with E. coli bacteria. As more people were hospitalized, investigators narrowed the list of suspects but couldn’t pinpoint the source of the contamination. got onto the spinach. A final report wouldn’t be issued until Incomplete electronic data, unreliable verbal reports and March 2007. long trudges through too many paper files hindered progress. Ultimately 205 people in 26 states became ill. Two elderly The FBI served search warrants. Even the Bioterrorism Act, women and a toddler died. which was enacted after 9/11 in part to tighten monitoring of “The information we had wasn’t good enough,” says Ed Treacy, the American food supply, didn’t work as envisioned. vice president of supply chain efficiencies at the A frustrated US Food and Drug Produce Marketing Association, a trade group. Administration made a bold move: It advised Reader ROI: Data disconnects threaten public safety in other the public, flat out, to stop eating bagged How the question of ways. Serious drug shortages continue to surprise spinach. The next day, grower Natural Selection traceability is being handled doctors and hospitals in the US as pharmaceutical Foods launched a recall, followed by several in other parts of the world companies and a long chain of distributors and distributors and packagers. The investigation The benefits of traceability other sellers fail to share the right data soon continued into November as officials tried to and why it’s crucial enough to avoid problems. Four hundred twentypiece together where and exactly how E. coli Lessons for India Vol/9 | ISSUE/03

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Supply Chain nine drug shortages in 2010 and 2011 prompted US federal legislation to require the pharmaceutical industry to notify the FDA of potential shortages of certain kinds of drugs. Cancer drugs and anaesthetics, in particular, frequently fall into short supply. “The worst situation,” says Patty Morrison, CIO of $108 billion (about Rs 648,000 crore) drug distributor Cardinal Health, “is when a patient is scheduled [for treatment] and they don’t have the drug.” To make fundamental safety changes, companies must make big strides to share data with each other, government agencies, and even the public. But unstandardized product codes and incompatible systems block data sharing. Traceability is further complicated in the food business by the many processes a food or ingredient undergoes between farm and fork. As products move between origination, sorting, shipping, resorting and repacking before the consumer ever sees them, the traditional supply chain becomes a tangled supply web. In the drug

world, companies can exchange some data, but competitive strategy deters them from showing anyone too much information about manufacturing plans or problems. Yet some food and drug companies are tearing down barriers and dropping old habits to share information for public safety, compliance and, to some extent, for a business advantage. If sharing data means improving quality or heading off problems, that’s a plus. In pharmaceuticals, Cardinal Health, for example, is looking forward in the supply chain, using predictive analytics to avert or mitigate drug shortages. Food companies, meanwhile, are looking backward, trying to track the origins of their products, sometimes all the way to seeds in the field. They want to please consumers curious about where their food comes from but also make recalls faster, more accurate and less devastating. As Treacy puts it, “If our consumers don’t have confidence in us, we’re out of business.”

Traceability throughout the supply chain improves public safety and can become a competitive differentiator, says Patty Morrison, CIO and EVP of Customer Care Shared Services at Cardinal Healthcare. 44

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Backwards and in High Heels almon that carries listeria, baby incubators that delete or overwrite patient care data, blood products potentially tainted with germs, lawn mowers that can catch fire—hundreds of products in dozens of industries were recalled in 2013. CIOs who want to keep their companies out from under headlines about ever-expanding or botched recalls must understand that you won’t know how good your supplychain traceability is until you have to run it in reverse. The killer spinach crisis revealed communication gaps as the greens were picked, bagged, sorted into different brands, sent to grocers and purchased for consumer dinner plates. The Bioterrorism Act of 2002 fell short: It calls for food companies to track one step forward and one step back—that is, where they got a product and who they handed it off to. But farmers are exempt and although the act calls for identification codes on food products, it doesn’t require them to be in a format that’s standardized among all the parties handling a product. Plus, it doesn’t mandate that the data be digital, which leads to paper-asusual at many companies. The Food Safety Modernization Act (FSMA) signed in 2011 tries to shift from reacting to crises to preventing them, says Faye Feldstein, a senior adviser in Deloitte Consulting’s food and product safety practice. The act “puts the responsibility on the industry to understand the hazards in their system and how to minimize or eliminate them,” she says. The act, which is the first overhaul of food-safety rules since 1938, calls for the FDA to create record-keeping requirements for tracing high-risk foods, including a full pedigree of the food’s distribution history. The FDA has overseen required pilot traceability tests— on peanuts, tomatoes and frozen dinners—but hasn’t written the data requirements yet, nor defined what foods count as high-risk.

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Supply Chain

T r a c i n g G u n s i s a L o w -Te c h , I n e f f i c i e n t P r o c e s s Outdated technology, incomplete data, Byzantine processes and political constraints lead to inefficiencies in criminal investigations After the shooting deaths at Newtown, Conn.’s Sandy Hook Elementary School, a public outcry erupted in favor of stricter gun-control laws. In the weeks after the tragedy, 85 percent of Americans favored making gun sales between individuals and at gun shows subject to the same background checks as those required in retail transactions. And, according to a poll by the Pew Research Center, 67 percent wanted a federal database to track gun sales. But public sentiment hasn’t produced legislative change at the federal level. The politically powerful National Rifle Association took credit for halting Senate legislation that would have required background checks for almost all gun buyers. And current law, backed by the NRA, prohibits federal agencies from creating a central, electronic database of gun sales. Gun-rights activists worry that an easily searchable national database of gun owners, gun households and gun numbers could be used by an overreaching government to confiscate guns, in violation of the Second Amendment. So the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), which is the federal agency that traces guns for criminal investigations, often works in the IT Dark Ages. How dark? Microfiche

and paper. When a request for a trace comes in, an ATF employee scrolls through microfiche images of paper records to figure out where the gun was originally sold and to whom. ATF handled 344,000 trace requests last year. “Using this antiquated and inefficient system, a firearms trace can take days, or even weeks, thereby frustrating criminal investigations,” says a report by the Center for American Progress, a liberal think tank. Background checks on people who want to buy guns is a semi-manual process also. FBI or state officials query the National Instant Criminal Background Check System, known as NICS. Among other information, NICS indexes data about criminal convictions, illegal aliens and people ruled mentally ill by a court or other official body. While NICS is pretty big, with 10.4 million records, it’s incomplete. For example, states aren’t required to submit mental health records, and some don’t. Most states don’t submit non-criminal records that would be pertinent in a gun background check, such as failed drug tests for people on probation, according to a Government Accountability Office study. To do a background check, a store clerk has the customer fill out a “firearms transaction form”

The FDA’s recent pilots tried different approaches to analyzing information and defining critical data, such as receiving date, shipping date, lot and serial nu mbers, and various location identifiers. FSMA also requires the Department of Health and Human Services to work with the Secretary of Agriculture, among others, to assess technologies that can be used to trace food. They’re not supposed to prescribe specific technologies, but to offer general guidance. But there are no specifics yet. A lot of the work is going on now and industry groups hope to influence the final product, Feldstein says. For example, the Produce Marketing Association is

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that asks for information such as name, address, Social Security number, and the person’s criminal history or drug use. If he’s not in the NICS index, he gets to buy the gun. If he is in the index, the call is transferred to a NICS examiner, who has access to more detailed information. The examiner may make a decision then and there, or he may delay the request pending further investigation. If the gun is sold, the retailer must store certain data about the transaction, including who the buyer is and what the serial number is on the gun. If the gun is ever recovered in a criminal investigation, law officers can have the ATF trace it by serial number, to help with detective work. The traceability of guns remains caught in a web of outdated technology, Byzantine processes, incomplete records and political battles. A new Pew survey in May found public opinion virtually unchanged from January, says Carroll Doherty, an associate director there. Eighty-one percent of those surveyed want more background checks and 66 percent want a federal database. “A fourmonth debate on gun policy hasn’t changed many minds at all,” he says.

—K.N.

helping to implement the Produce Traceability Initiative (PTI), a set of standards it published with three other trade groups in 2008. PTI calls for every case of produce to carry a barcode containing a lot number and Global Trade Item Number that is scanned by every entity that handles it along the supply chain. This would replace the common practice of each company stamping its own lot number on the side of the case, which can’t be scanned or recorded by the receiver. In their own tests with tomatoes, PTI adopters traced the source and distribution of contaminated product in 24 to 48 hours. “A far cry from spinach,” Treacy notes. REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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Supply Chain

“There’s an extraordinarily complex web of interactions between producers, suppliers and consumers. Is it a shoebox or a database with common terminology?”

PTI supporters originally projected the produce industry would implement the standard by the end of last year. So far, just 20 percent to 40 percent of produce cases in the supply chain use it, he estimates. That has less to do with any onerous technology investment than the reality that big retailers, such as Wal-Mart and Kroger, haven’t mandated it. Wal-Mart has sent a letter to top suppliers strongly encouraging adoption but hasn’t forced the issue by, say, writing it into contracts. Many companies go their own way. The berry company Driscoll’s, for example, has its own system based on barcodes, Microsoft’s Dynamics AX software and HarvestMark traceability software. Most berries (except blueberries) are packed in pre-labelled, plastic clamshell containers in the field. Other foods, such as spinach, are brought to processing plants for washing and sorting, and to be readied for store shelves. Part of a day’s haul may be labelled there; another part may be sent somewhere else, perhaps to another company altogether, to be sorted, packaged and labelled. For many foods, says Erik Olson, senior director of the food portfolio at The Pew Charitable Trusts, “there’s an extraordinarily complex web of interactions between producers, suppliers and consumers.” Each organization that touches a food may keep records differently, he says. “Is it a shoebox or a database with common terminology?” It is at the handoffs between companies that visibility drops, says Craig Henry, a director in Deloitte Consulting’s food and product safety practice. A big industrial farming company may capture more detail about a crop than the regional distributor that handles it next. No matter the specifications eventually chosen, moving all food companies to standardized digital records will save time and expense during recalls, Henry says. “And in the event of a food-borne illness, it could save lives.”

Drugs: Getting Your Share

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harmaceutical companies worry about recalls, too, both for the dangers faulty products pose and for the shortages that often follow. Chemical contamination, deviation from approved processes, discoloration and packaging problems have all spurred recalls this year. Drug maker Pfizer is dealing with the recall of 250,909 bottles of Levoxyl, a thyroid pill, because of a strong odor. An oxygen-absorbing canister in the bottle is to blame, Pfizer says. The company advises patients to discuss alternative medications with their doctors because the recall will cause a temporary shortage. That’s just one of 241 shortages in 2013, according to the American Society of Health-System Pharmacists. The number of shortages in 2005? Just 61. Leading causes of drug shortages include manufacturing problems, delays in manufacturing or shipping and scarce active ingredients, the government says. “It has gotten to a crisis state,” says Andy Keller, a VP of inventory management at Cardinal Health, which delivers 50,000 different types of drugs and about one-third of all medications in the US. When problems occur, manufacturers are required to notify regulators but not necessarily business partners, such as distributors 46

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Erik Olson, Senior Director of the Food Portfolio, The Pew Charitable Trusts or pharmacies. Often, hospitals and doctors don’t find out about the lack of medicines until the FDA posts an alert online. Christiana Care Health System, a large hospital center with $2.1 billion (about Rs 12,600 crore) in patient revenue, is typical. Christiana has no internal systems to predict shortages of medicines its patients need, says Randall Gaboriault, CIO. Rather, pharmacy staff monitor the FDA’s website and rely on conversations with suppliers, among other information-gathering methods, he says. “They troll every day.” When the pharmacy team hears of a potential shortage of a given drug, the hospital tries to secure extra, he says. “They start doubling up. Everyone’s trying to stockpile.” Hoarding is just what Cardinal Health seeks to stop with its Supply Disruption Program for better predicting shortages. No one—not hospitals, suppliers or drug makers—wants to jeopardize patient care, CIO Morrison says. But hoarding by one organization often means less medication for another and creates the conditions that can lead to the sale of unauthorized, price-inflated, gray-market drugs, she says. “The unavailability of these products forces doctors to use lesseffective options,” she adds. Congress has held hearings on price gouging. One example: Cancer drug Fluorouracil, normally priced at $7 per dose, soared to $600 during a shortage. Cardinal’s predictive analytics system uses statistical analysis tools, including open-source R software and packages from SAS Institute, to reveal potential shortages. The system considers market intelligence from customers, manufacturers and Cardinal’s internal data. For example, a significant uptick in hospital orders for a cancer medicine might signal that customers are buying more because they think it could soon be scarce. The system would combine that tidbit with data from drug makers and other factors to predict the timing and severity of the shortage, Keller says. An allocation methodology then kicks in to mete out portions of the drug supply among customers clamoring for it. Cardinal doesn’t fill 100 percent of every customer’s order on a first-come, first-served basis. If a shortage is expected, Cardinal will allocate available products in proportion to what customers have ordered in the past. So if only half the needed supply of a drug is available, customers who normally order 40 doses will get 20 instead. “That’s the best, fairest way to ensure customers have what they need for patients,” he says. Traceability up, down and sideways through a supply chain can improve public safety. Along the way, transparency will become a

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Supply Chain competitive advantage, CIO Morrison says. Cardinal will be able to react faster to changing conditions, she says. For example, once it predicts a shortage, the company can launch a search for likely alternatives to offer to customers faster. To make its predictions more accurate, however, Cardinal needs more information more consistently from drug makers. It can’t force them to reveal supply issues. “Some of our suppliers are more advanced than others when it comes to providing accurate, timely information about manufacturing and other product availability issues,” Keller says, diplomatically. “We are committed to working closely with our suppliers to enhance collaboration and communication.” In part to help curb sales of counterfeit drugs—which rise during shortages of the real thing—some states have set new rules for tracing pharmaceuticals. For example, some states require serial numbers on packages that can be used to authenticate a chain of custody down to the dose level. That would help healthcare providers avoid fake medications that may harm patients, says Gabrielle Cosel, manager of drug safety at Pew. The numbers could also be linked to markings on the product itself. In 2012, for example, when attention-deficit pill Adderall was in short supply, a counterfeit version could be bought online. While real Adderall shows “dp” and “30” on either side of the pill, the counterfeits lacked those markings. In New York, 48 people were charged with fraud, accused of buying prescription drugs from patients and repackaging and reselling them into the legitimate supply chain.

Some companies have forged ahead, using California’s regulations as a guide. Pfizer recently built a system to trace drugs from the factory floor all the way to patients’ hands. The company applies serial numbers in the form of 2-dimensional and regular barcodes to individual units, cases and pallets, to monitor movements and share data with other companies and government agencies. Early tests of the system, starting in 2011 with McKesson, a $122 billion (about Rs 732,000 crore) drug distributor, revealed how complex the data integration problem is, according to Peggy Staver, director of product integrity at Pfizer. Staver talked about the system in a webinar on traceability. Pfizer declined interview requests. It was 10 months before Pfizer and McKesson were able to complete a transaction using all the required electronic data for a shipment of Viagra without any errors, Staver said. “This is one product between two trading partners. Think about the amount of effort across all trading partners and their trading partners. There’s a whole lot of work to be done before 2015,” she said.

Progress Is Slow, Uneven

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isparate systems, and sometimes no electronic systems at all, hide problems in any supply chain. But in food and drugs, the consequences can hurt people. At the very least, a lack of coherent, accessible data prolongs investigations and often magnifies the damage, says Treacy at the Produce Marketing Association. Some spinach companies went out of business after the 2006 debacle sent sales plummeting, he says. Spinach was implicated in another E. coli outbreak late in 2012. Part of the problem is that the food industry isn’t monolithic. Safety requirements for meat differ from those for peanuts, which differ from strawberries, which differ from eggs. Even within any one category, companies have invested in tracking systems to varying degrees, says Olson from Pew, which is promoting traceability legislation in both food and pharmaceuticals. “There’s a huge gray area between leading lights and folks who have done virtually nothing,” he says. But everyone sees that standardization will eventually come, “whether from the FDA or for business reasons.” Drug companies, meanwhile, are pressing forward. At a House hearing on traceability in 2013, members of key pharmaceutical associations agreed that uniform regulations at the federal level would increase security and patient safety, as well as improve the recall process. Michael Rose, a VP of supply chain visibility at Johnson & Johnson, exhorted Congress to move: “What we really need at this point in time as we’re making our investments is a clear end game. We need to know where the goalpost is fixed. If we’re making investments to put serialized numbers on our product and also to exchange data, we want to make sure the other parties in the supply chain are also using those numbers.” The need for new rules is clear, says Pew’s Cosel. What isn’t clear are the rules themselves. CIO

The unavailability of products forces doctors to use lesseffective options. For example, Cancer drug Fluorouracil, normally priced at $7 per dose, soared to $600 during a shortage in 2013.

Had track-and-trace systems been in place, where ideally each entity verified the numbers on the drugs, the crime may have been caught earlier, Cosel says. “We need to do something.” California is out front, requiring manufacturers, distributors and pharmacies to use unique identification numbers, transaction data, ownership information and other certification material, with phased implementation starting in 2015. A national system would supersede a patchwork of state rules, Cosel says, but there isn’t one—yet. In 2012, Congress, the pharmaceutical industry and various advocacy groups started to hammer out a workable policy, but the effort stalled this year as the Senate and House decided to push separate proposals. The industry is eager for national regulations, Cosel says, in part because complying with different state laws would be more expensive and complicated.

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Send feedback on this feature to editor@cio.in

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Hemanth’s Agenda: To transform Hyderabad into India’s logistical hub with plenty of help from IT.

Logistical By Varsha Chidambaram

Dream

Hemanth D.P., COO-Hub Development, Free Trade Zone and Logistics Business at Rajiv Gandhi International Airport Hyderabad, wants to transform the airport into a logistical hub. To ramp up the amount of cargo the airport moves, he’s going to need IT. Here's his vision. 48

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CXO Agenda | Growth

CIO: As the COO-Hub Development, Free Trade Zone and Logistics Business at Rajiv Gandhi International Airport Hyderabad, what’s your vision?

Hemanth D.P.: My aim is to make the Rajiv Gandhi International Airport (RGIA) the logistical hub of India and South-Asia. To realize this vision, we have leveraged the strategic central location of Hyderabad, built excellent infrastructure and unique air logistics centric businesses such as India’s first airport-based Free Trade Zone (FTZ). A free-trade zone is a foreign piece of land in your country. When something is imported, the inventory has to be stored for a period in the importing country because components have to be stocked and assembled and this doesn’t happen overnight. Moreover, the minute something enters India, you need to pay duties and taxes on it. The assembling, the packaging of goods inside a free-trade zone, as the name suggests, doesn’t attract duties and taxes and you save all these upfront costs till later. You pay duty and taxes only on the day you’re clearing it

city around it. That’s what an aerotropolis is. We have 5,495 acres of contiguous land allotted by the government to build an airport and an economic cluster around it. The aerotropolis will have a logistics port, hospitality port, leisure and entertainment port, aerospace park, among other, and will have everything from hotels, restaurants, FTZs, SEZs, spas, go-carting circuits, pharma zones, and cargo villages. It becomes an economic hub with huge scope for business and employment fuelled by air logistics and air passenger centric businesses. This growth in cargo and passenger throughput will attract more airlines to connect to Hyderabad, thereby providing the essential ‘spoke’ which will help us progress towards making RGIA a hub. What is role of IT in making Hyderabad a hub?

Traditionally, the role of IT in the airline industry has been to facilitate logistics. It’s even more important in the cargo business. Let me explain. If a passenger has to travel from

Cargo can’t wake itself up, hail a cab, and board a flight. IT does that for cargo. Without reliable IT systems, the supply process would be in shambles. and take it to your factory. The same applies to the goods you export. It is the unique offerings such as free-trade zones, other than excellent infrastructure, and strategic location that have made the airport of Singapore and Dubai the best and largest in the world. What makes Hyderabad a better choice for a hub than any other Indian airport?

First, is its strategic location. We are leveraging the fact that Hyderabad is located at the center of the country. Geographically, Hyderabad straddles traffic from Asia to Africa and Europe. The other important factor is Hyderabad’s infrastructure. If somebody brings stuff here then I better have solid infrastructure. Besides, Hyderabad is an all-weather airport. Other factors include A-class service, good multimodal (air, road, rail) connectivity, and, of course, good air connectivity. It is my responsibility to make Hyderabad an attractive destination to fly through.

Hyderabad to Brazil, she books a ticket, catches a cab, checks herself in, boards a flight, arrives in Brazil, and catches a taxi to her final destination. Who does that for the cargo? Cargo can’t wake itself up on time, hail a cab for the airport, and board the right flight. IT does that for cargo. In the absence of reliable IT systems, the supply process would be in shambles. The owner of a piece of cargo would wait like an expectant mother. Cargo certainly won’t WhatsApp or text its owner that it has arrived safely, will it? IT is the overarching system of cargo movement. It is the common interface which integrates the systems of different operators from different countries, working with different parameters (weather, time zones, language, policies, etcetera.) The IT tracking mechanism ensures there is no loss of cargo due to oversight. It ensures that the right cargo is loaded at the right terminal, into the right aircraft, at the right temperature. It also tracks whether cargo has the necessary regulatory paperwork for customs clearance. So, basically, it tracks and transports goods.

How are you going to do that?

By building an aerotropolis at Hyderabad airport. In the good old days, airports were built to service a city. Now we build an airport first and then build an economic cluster and a Vol/9 | ISSUE/03

And it does so efficiently! Everything from pharma, defense equipment, missiles, nuclear fuels, metro carriages, human remains, live animals—including horses and elephants—are transported by airplanes. REAL CIO WORLD | j a n u a r y 1 5 , 2 0 1 4

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CXO Agenda | Growth Cargo like medicines, explosives, ammunition, batteries, dangerous goods and animals, need to be transported in temperature-controlled environments. The temperature setting for a panda is different from that of a leopard. This has to be maintained by different people across the globe. To enable the tracking of temperature throughout the journey we have technology aiding us in the form of data loggers built into the containers. This tracks the temperature of the cargo in real-time. It also records dates. This data can be downloaded for monitoring. We also have data loggers within the terminal which are connected to IT systems. The entire terminal is temperature controlled. We have probes in each critical corner of the terminal because if a temperature spike occurs in one pocket how would you find out? In the event of a temperature breach beyond a fixed range, there will be an alert mechanism in the system. Not only does it record deviations, it also sends a message (SMS/e-mail) to the duty manager and triggers an alarm.

own aeroplanes. The point he was trying to make is that IT is paramount to the logistics business. IT can change us from being reactive to proactive. We are talking about disparate IT systems. How do they work together harmoniously?

You’re right, and yet systems are designed such that they all talk to each other. They are not 100 percent in the same platform. But they have to work together. Broadly speaking, there is a tracking system for everything; from the pick-up point to ground transportation, air transportation, regulatory clearance and delivery. Each businesses like Cargo Airline or a 3PL player or an integrator have different tracking systems. An integrator like FedEx, UPS, or DHL will have the most comprehensive system covering the first mile to the last mile all under one umbrella. In the integrator business, plug-and-play systems don’t work.

Dubai doesn’t produce anything, even water is imported. Yet the city moves 3 million tons of cargo a year. The same goes for Doha, Singapore, and Hong Kong. This smashes the illusion that to be a good hub you need to be a good production center as well. How else is IT key to the cargo business, and therefore to your vision of making Hyderabad a hub?

You would agree that in the passenger business, the highest level of care is directed at handling an unaccompanied minor or a wheel-chair passenger. But, we say that handling all cargo is like handling unaccompanied minors. Some types of cargo are hyper-sensitive. A plane is 400 tons, and lands at about 160 knots an hour. Now imagine if there are dangerous goods inside a plane as it experiences such high level of speed and stress. IT also calibrates tilt and shock tolerance meters for goods. An MRI scanner costs crores of rupees. While transporting it, if someone slams it on the ground, it goes kaput. And if this is detected only after it reaches the hospital, it has to be sent all the way back. The tilt and shock meters can measure if the jolt a piece of cargo undergoes is within an acceptable range and can also immediately detect anomalies. In a cargo terminal, goods are stacked to seven to eight meters high. How do you ensure the right cargo gets loaded to the right plane and reaches the right destination? IT is the all-encompassing component in all this. An IT guru once supposedly said that large integrators such as FedEx, and UPS—who own over 1,000 planes between them—are actually IT companies who happen to 50

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In my previous company, we reviewed 40 ERP offerings for our business. Only three were short listed, and even the best among those was only 40 percent compatible. In the integrator industry building from scratch is the only option. So how far is Hyderabad from becoming the logistic hub of India?

As operational complexity increases, human interference must decrease. Today, trucks in the terminals are loaded and offloaded manually. With time, we will handle 10 times more cargo than we are handling right now. How many men will I need to do this? Terminals that are manned manually will become less viable. We will move towards shipper built units (SBUs) like all modern airports, where these SBUs will be handled through automated lift-and-run systems and cranes controlled remotely from a console. Just like a ship container, airlines will now send a unit loading devices (ULD) to a customer’s premise, because they know best how to package their containers. We will then use hydraulic cranes to manoeuvre containers within terminals as well as loading onto the aircraft. These containers are stacked in racks one above the other. All this will have to be automated and remotely controlled. We will also need giant ULD scanners to examine these containers. I need the entire chain—from the customer to me—

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CXO Agenda | Growth to be synchronized. We are the first airport to have successfully concluded the trial of temperature-controlled SBU movement. We are now in the process of rolling it out to our customers and we plan to take this to general cargo shipments as well with the vision of moving towards a complete SBU movement like all major hubs in the world. You compared Hyderabad with Singapore and Dubai. Do you think that's realistic?

Dubai has a population of 2 million. That’s probably smaller than a suburb in Mumbai. But as a city it transports about 3 million tons of cargo a year. India, as a whole, does about 2.2 MT. What makes Dubai a more attractive flying destination is its strategic location, excellent infrastructure and unique offerings such as the free-trade zone. Dubai, for example, has companies importing goods from all over the world, and it allows these companies to stage goods there at a reasonable cost (also since the FTZ does not attract duties and taxes), then use its excellent connectivity to reach markets across the world. Hence, we feel unique service offerings such as an aerotropolis and a free-trade zone can elevate Hyderabad to that status. Hyderabad isn’t as industrialized as other Indian cities. Won't that be a negative?

No. Traditionally, airlines looked at the O&D—origin and destination—pull factor of a city. Bombay and Delhi have industrial clusters so they naturally have a high OND pull. But we aren’t positioning ourselves purely on the basis of O&D pull.

Take Dubai, for instance. Dubai doesn’t produce anything, even water is imported. And yet the city moves 3 million tons of cargo a year. The same goes for Doha, Singapore, and Hong Kong. These are the busiest airports of the world. This smashes the illusion that to be a good hub you need to be a good production center as well. The O&D attractiveness of a city is not necessary to transform it into a hub. What’s important is its strategic location, good infrastructure, good service and good connectivity. An aerotropolis, a free-trade zone, and pharma production are all icing on the cake. The vision of the Hyderabad airport is to become the logistic hub of India and South-Asia. Finally, how does it benefit India to build a free-trade zone?

First , an FTZ will help customers optimize their logistics spend and will also bring in foreign exchange, which will benefit the country. When companies bring in parts and assemble them at the FTZ, they will employ Indian manpower to assemble, calibrate it and test it. The company gets access to reasonably-priced manpower and the country gets more employment. For us, it’s a win-win as our customers (airlines, businesses, logistics companies, industry) get to fly goods through our airport. Our importers and exporters get world-class service at optimal cost which will make them more competitive. The region gets an economic boost due to the multiplier effect. CIO

Varsha Chidambaram is principal correspondent. Send feedback on this interview to varsha_chidambaram@idgindia.com

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COMPLETE FIND THE MISSING PIECE OF THE PUZZLE NO MATTER WHAT YOUR DILEMMA IS.

THE BUSINESS CONFERENCE FOR I.T. LEADERS

The CIO Summit 2014 is split into themes to help you find answers to your questions more easily. Find the answers you’re looking for at the 3rd edition of the CIO Summit, the business conference for CIOs.

Global Speakers, Local Insights: With an impressive lineup of international speakers, real-life case studies, and research findings that are locally relevant, you are bound to find the answers to all your questions. Be a part of an interactive conference, air your views, debate, participate in discussions and deliberations, and be seen as a thought leader among your peers.

Winning in a Connected World: Will help CIOs understand how their peers are collaborating with other functions to drive customerfacing systems to new frontiers. Winning with Technology Infrastructure: Using IDC’s research, these sessions will show CIOs what it takes to drive market-beating performance with IT infrastructure.

The CIO Summit is a global, premier gathering of CIOs and senior IT executives aimed at providing an unparalleled platform to share ideas and actionable insights. You can expect:

Network Like Never Before: Meet and interact with some of the brightest minds in Indian IT. Exchange ideas and best practices with them across three days in this residential conference. All this and much, much more at the CIO Summit 2014.

Winning through Transformational Outcomes: Will dwell on outcome-based IT services, sourcing, and partnerships that drive transformative outcomes. Winning through Competitive Differentiation: Will get CIOs to help their companies win by successfully deploying 4 Pillar technologies and associated business processes.

PRESENTS

20—22 February 2014 | Hyatt Regency, Pune

GLOBAL INSIGHTS

RICHARD VANCIL GROUP VP, EXECUTIVE ADVISORY STRATEGIES, IDC (USA )

SANDRA NG GROUP VP, PRACTICE GROUP, IDC (ASIA PACIFIC)

SIMON PIFF ASSOCIATE VP, ENTERPRISE INFRASTRUCTURE, IDC (ASIA PACIFIC)

ENTRY BY INVITATION ONLY To Request An Invitation, Visit www.ciosummit.in

JAIDEEP MEHTA VICE PRESIDENT & COUNTRY GM, IDC INDIA

SHALIL GUPTA DIRECTOR INSIGHTS AND CONSULTING, IDC INDIA

Event Organisers

VENU REDDY DIRECTOR, IDC INDIA


Innovation

Failure

is

an Option

At Toyota Financial, a close-knit, collaborative group of C-level execs allows for missteps in the company’s innovation strategy. By Tim Scannell

When George Borst made the jump in 1997 from general manager of Toyota’s Lexus division to head of the company’s finance group, he was faced with a big decision. As it turned out, that decision was a mistake. The finance group’s four core systems were in woeful shape, “George’s error was in signing on to the upgrade of multiple needing upgrades to improve performance and keep up with legacy systems concurrently without increasing the manpower the rapid growth of finance operations. Borst came to the job and business prowess to be successful,” says Ron Guerrier, CIO at long on strategy but admittedly a bit short on the intricacies of Toyota Financial Services (TFS). The core receivables system was IT and finance, having come from sales, marketing and producthardest hit, Guerrier says, noting that the effort had to be restarted planning groups. “I wish I’d paid a lot more attention in college three times. to my economics and finance courses,” he jokes. “But I was sent The IT department’s reputation also took a hit. “Even though it over there for a reason: To help increase sales and get closer to was my fault,” Borst says, “people were blaming IT the dealers.” Reader ROI: for not having the capability to do it.” Borst decided to upgrade all four systems at His mistake was trying to solve a problem the same time, including the core receivables The value a great C-suite team can bring without first gathering all the details and system, thinking that a staggered plan would take IT’s role in that team considering every variable, all while essentially longer and trigger an endless cycle of updates and flying solo. It’s a mistake that neither he nor redundant fixes. How to build such a team Vol/9 | ISSUE/03

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Innovation

the company would repeat today. Not because Borst has a deeper understanding of all the complexities of IT, but because he later pulled together a trusted team of executives willing to share responsibility and accountability, in good times and bad. The team includes the CEO, CIO, the vice presidents of sales and product marketing, and even the finance group’s VP and general counsel—many of whom came up through the ranks together over the past decade or more, cementing their collaborative relationships. It is a C-suite dream team, although its members might eschew that phrase because egos and lofty titles get in the way of collaboration and trust. The number one rule for this group: Leave that baggage at the door. The TFS team’s recipe for innovation and collaboration includes a list of basic ingredients: Trust, courage, confidence, a sprinkling of

diversity and a healthy dollop of mutual ownership of both successes and failures. Like many recipes, however, there is some wiggle room. “I’m huge on unity, but that doesn’t mean everybody agrees,” notes Mike Groff, who was until recently the senior VP of sales, marketing and product development at TFS. He was tapped to replace Borst as the organization’s president and CEO when Borst retired on Sept. 30. “You have to be transparent and you have to have courage,” Groff says. “You’ve got to be willing to say things are going well when they are and when they are not, and then be able to adjust course.” The team’s cohesiveness grew even stronger when TFS was spun off as a separate Toyota subsidiary in 2001 and Borst was appointed its first president and CEO. Under his leadership—with close support from the C-suite team—TFS has grown from $74.4 billion (about Rs 446,400 crore) in total assets in fiscal 2009 to more than $95 billion (about Rs 570,000 crore) in fiscal 2013. The company has more than 4 million customers and employs more than 3,200 workers. TFS works with a nationwide network of dealers to manage all the financial aspects of purchasing or leasing a Toyota vehicle, and goes head-to-head against some formidable competitors in the finance industry, including Capital One, Chase, Bank of America and Wells Fargo.

Building a Bridge

Ron Guerrier, CIO at Toyota Financial Services, has worked with other execs to turn the company’s Innovation Lab into a game-changing asset and idea generator.

CIO Ron Guerrier played an instrumental role in building and maintaining a collaborative bridge between the sometimes-insular business segments and IT, as well as in establishing a high level of trust among the company’s top executives, Borst says. Street smart and technically savvy, Guerrier brought a no-frills vibe to the group and the organization by eliminating unnecessary barriers and chipping away at midmanagement fiefdoms that stood in the way of productivity and innovation. Guerrier is also one of the driving forces behind the company’s Innovation Lab, or iLab, which was created a few years ago and is now the center of technology creativity at TFS and a nexus between IT and the organization’s various business sectors. The iLab’s success in bridging the gulf and enhancing the relationship between IT and business at TFS was one of the reasons it was selected as a CIO 100 award winner.

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“I know everything I do in terms of technology systems is a part of this longer value chain, and it’s to meet the needs of that end customer,” says Guerrier, whose 17-year tenure at Toyota began soon after his graduation from the University of Illinois. He grew up in some of the tougher areas of Chicago, where violence was an everyday occurrence, and his life could have taken a very different trajectory. After college, however, he set his sights on the business world and immediately started interviewing at companies like Philip Morris and Toyota. Guerrier applied to the automaker’s customer service department, but ended up in collections, a stint he refers to as “eyeopening.” Toyota seemed a good fit since he was looking to join a socially minded company and he was a car enthusiast. Perfect. Today, Guerrier spends a lot of time working with youth groups to educate inner-city young people about the world beyond gangs, and working with other departments at TFS to improve IT’s reputation. “I need to build up our street cred,” he says. “I need to show that IT is adding value along the way.”

Dealing With Adversity

Chasing the Dream A big payoff awaits those who can build a collaborative C-suite team. Here’s how to do it. Duplicating the success that Toyota Financial Services has had in building and nurturing its C-suite dream team is quite simple. Gather executives who have spent a long time working together—maybe a decade or so—and have establish trusted relationships. Have a CEO and team members willing to ignore titles and give everyone an equal voice. Get the blessing of a company with deep pockets and the willingness to ride out some inevitable bumps along the innovation road. Simple! While that may not be a plan most companies can follow, TFS executives offer some advice that any CIO can use to build a collaborative C-suite: Develop partnerships with other executives and keep a business-first mind-set. Ensure that all executives view IT as a true enabler of business success, not as a necessary evil. Find the sweet spot in technology conversations—make sure executives can comprehend the topic, but don’t oversimplify. Challenge them to raise their tech IQ. Don’t forget to think long-term. CIOs who are short-term thinkers—or worse, obsessed with getting recognition for what they did today—will lose the trust and confidence of their C-suite peers. Build a candid, trusting relationship with the CEO on matters of IT spending. If a project is going to go over budget, don’t wait to tell the CEO and other stakeholders. This level of executive teamwork won’t happen at companies where protecting turf and divisional boundaries are part of a hierarchical management culture, says Peter High, a management consultant and president of Metis Strategy. A collaborative culture starts at the top, with a CEO who has an extraordinary degree of self-confidence. “If you have a CEO that wants to think of the org structure more as a military hierarchy, as has been tradition, then it’s not going to filter down,” High says. “I’m hearing more and more CEOs say they want this type of culture, where leadership team members transcend their respective functional needs and expertise and embrace mutual responsibility for the digital opportunities and challenges,” says Rick Pastore, vice president of strategy at the CIO Executive Council. The payoff is big. According to PricewaterhouseCoopers’ fifth annual Digital IQ study, companies with strong relationships between the CIO and other C-suite executives are four times as likely as less-collaborative teams to achieve business results such as revenue growth and high profit margins —T.S.

Nearly every company can look back at its history and point to times of adversity, when executives and employees either rallied and survived or were crushed by the challenges. Toyota is no exception, although in its case the difficulties had more potential to devastate than most. A few years ago, the automaker was forced to recall 14 million vehicles worldwide due to problems with the accelerators, and in 2012 it recalled roughly half that many automobiles due to a risk of fire. While safety-related recalls are common in the auto industry, these incidents dealt a hard blow to Toyota’s longtime reputation for quality and manufacturing excellence and triggered a surge of critical media. In 2011, the company faced another frightening crisis in the form of the earthquake and tsunami that battered northeastern Japan. A few months later, unrelenting monsoon rains brought destructive flooding to Thailand. Both events severely disrupted Toyota’s supply

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of parts and affected the worldwide production capabilities of all Japanese automakers. The earthquake alone caused Toyota’s profits to plunge more than 18 percent as production lines went idle and orders were left unfilled. All this occurred as the Great Recession swept in, an implacable force that battered the economy and the business models of companies like Toyota that are dependent on new sales and the disposable income of consumers. Despite all this, Toyota bounced back and earlier last year recaptured the title of the world’s largest REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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Innovation

Cast

of Characters automaker with global sales of about 9.75 million vehicles. It would be easy to attribute Toyota’s resilience to the worn cliche that Japanese companies operate according to a less individualistic philosophy than most US concerns. This is true to some extent, of course, but it’s an oversimplification. “We live in a world of kaizen,” says Borst, dropping the Japanese term for continuous improvement and change for the better, though in this case he also means pulling together and overcoming seemingly insurmountable obstacles. “Toyota is a very collaborative environment,” adds Groff. “We had some failures along the way, and that just caused us to take a step back” and reassess, he says, pointing to a few missteps affecting both the business and IT. One Innovation Lab project that seemed to have potential, but was ultimately dropped, was a secure printing app for mobile devices. The printing app went against the grain of TFS’ green initiatives and was not approved to move forward, says a company source. But when executives emerge from adversity and take responsibility for both failures and successes, the bonds between them grow even stronger. Sometimes admitting failure can be not just tough but also expensive, as in the case of the early and wrong decision to upgrade all the group’s core systems at once. “I think it was one of the most disappointing things during [Borst’s] tenure here, because we spent so darn much money and didn’t have much to show for it,” Groff says. The company has since improved its decision-making process by adding a division information officer who oversees business-IT partnerships on specific technology projects and manages requirements gathering, says Guerrier. In October 2012, for example, the IT department got the green light to take a more surgical and collaborative approach when the decision was made to again upgrade the core receivables system, Guerrier says. 56

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The C-suite Team at Toyota Financial Services

Another project, which has been rolled out to TFS dealers as a major new product, is the e-Contracting system, which streamlines the entire legal and financial process associated with customer contracts, including policy checks and document management.

Rolling Out Mobile Apps Katherine Adkins: Vice President & General Counsel, also acts as the company’s innovation champion

George Borst: Retired as President & CEO, continues as an executive adviser to the company through the end of 2014

Pete Carey: VP of Sales, works closely with IT on customer-service technology

Mike Groff: Incoming President & CEO, promoted from SVP of Sales, Marketing and Product Development

Ron Guerrier: VP & CIO, started his career with Toyota 17 years ago in collections and moved up the ranks to his current position

Karen Ideno: VP of Product & Marketing, maintains close connections with dealers

Meanwhile, the Innovation Lab acts as an incubator and helps vet ideas for smaller but still-important IT projects. For example, the lab was the genesis of successful iOS and Android apps that were pitched and created by internal mobile app development groups to build on the company’s expanded use of smartphones and tablets in its interactions with dealerships. Two of these apps were showcased at the company’s national sales conference. The first is an enterprise social networking app (in development) that leverages SharePoint 2013 to give sales associates immediate access to multiple feeds of relevant information and sends them push notifications of important leadership or sales meetings. The other is a reporting app (being deployed now) that delivers performance indicators and measures— such as vehicle sales and market share— that help sales staff take a more interactive and controlling role in the consultative sales process with dealers. The iLab was created during the tenure of Guerrier’s predecessor as CIO, Dan Priest. The idea was to establish a formal hub where both business and IT people could come together to discuss new concepts and hopefully provide the spark for projects that would benefit the company. “Dan did a phenomenal job of resetting our agenda,” Guerrier says, noting that when Priest arrived in June 2010, IT had a lot of muda—the Japanese word for waste and uselessness—that Priest cleaned up. “He gave us the breathing room to do such things as the Innovation Lab.” Guerrier has worked with other TFS execs to take the lab to the next level,

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Innovation

street cred

“I need to build up our . I need to show that IT is adding value along the way.” - Ron Guerrier, CIO at Toyota Financial Services

turning it into a game-changing asset that functions as an idea generator to inspire creativity among employees at all levels of the organization and determine which ideas have the most promise. Participants in the annual Innovation Fair showcase projects that have already been implemented in their departments. And throughout the year, creativity and innovation workshops bring people from different departments together to analyze an issue and brainstorm potential solutions. TFS also stages internal innovation competitions, where all employees can pitch new ideas and possible projects—some more far-fetched than feasible. The competitions are organized by VP and General Counsel Katherine Adkins, a member of the C-suite team who has an official sideline as the company’s champion of innovation. While the lab is basically a space outfitted with computers, large touch-screen displays for presentations and videoconferencing, collaborative workspaces and other tools, it is part of the glue that binds the TFS team together and gives its innovation strategy staying power. Oddly enough, the lab has also helped people in both the business and IT acknowledge the possibility of failure—and figure out when to pull the plug on a pilot. Adkins says she works closely with the CIO on her innovation efforts and that, while IT owns the iLab, having someone outside IT serve as an innovation coordinator improves how others perceive the effort. “If you have a CIO who is also the chief innovation officer, then that connotes to your people that only technology equals innovation,” she says, but in fact innovation can certainly happen outside of IT. CIO Guerrier says he’s comfortable with Adkins’ role as chief innovation instigator. “It’s not about her better position or my worse position,” he says. “If she does this right, and I do my part right, we’re all better.” Guerrier’s comfort with Adkins is based largely on the fact they have a long history of working together at TFS. They first met when Guerrier came to the Torrance, California, headquarters in July 2005 as a national manager overseeing IT operations and service. Adkins was also a national manager and a retained attorney at the time, and she worked with Guerrier on a number of projects—as he puts it, “sitting in the trenches,

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going through long negotiations”—where they developed a relationship of trust and respect.

The Next Chapter The C-suite dynamic may see some subtle changes as Groff, the new CEO, looks to make his own mark on the organization. Whereas Borst projected a professorial and almost folksy image during his tenure as CEO, Groff seems to be a more pragmatic, bythe-numbers type of leader. Groff is committed to C-suite collaboration and to sparking innovation, but he says the efforts need to mature and become totally aligned with business objectives. “We’re not quite there yet,” he says. While it’s still early in his tenure, Groff says he’d like projects and initiatives to progress more quickly from concept to execution—without getting bogged down in over-analysis. “The world is moving awfully quick, and I think you’ve got to keep changing with it,” he says. In the last few years, TFS has let innovative experiments run “for a few months, six months, maybe a year, and then we’ll decide whether we’re really going to plunge into it in a big way,” Groff says. But if a project isn’t going anywhere, the new CEO may be a bit more aggressive in pulling the plug, given his background in finance (as opposed to the previous CEO’s experience in sales, marketing and strategic planning). “In the past, we probably had a tendency to stay with it, fuel it with more money, bring in a different team, and then two years later say, ‘This isn’t going anywhere.’ Instead, I’d like to see us be willing to say, ‘This one just isn’t going to fly, now let’s move on.’” If there is a sharper focus on success metrics and less tolerance for marginally successful projects, that could also put a bit more pressure on Guerrier as CIO. Groff says he’ll be expecting the CIO to have the courage to tell the new CEO whether the company is on the right path or not. “I’m really going to be looking for Ron to do that. Be honest, be transparent, and be thoroughly straightforward,” Groff says. “We’ve got to be honest with each other.” CIO

Tim Scannell is director of strategic content at the CIO Executive Council. Send feedback on this feature to editor@cio.in

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casefiles real people

* real problems * real solutions

Movie

Unreel Yash Raj Films' stable of about 55 films needed a storage solution to ensure the safety of many of its classics and make them easy to re-purpose. IT had just the solution. By shubhra rishi As the creator of timeless movies such as Kabhi Kabhie, Dilwale Dulhania Le Jayenge, Dil To Pagal Hai, Yash Raj Films needs no proof of the amount of passion it brings to its business. For the company, the drive to make memorable films and woo its audiences have ensured that it has stayed relevant for over 40 years. Whether it was Amitabh Bachchan in Silsila or Shahrukh Khan in Mohabbatein, or the recent Aamir Khan starrer Dhoom: 3, it’s important for Yash Raj Films that each moment and every bit of the eternal romance built into these films is never lost. The film company has a catalogue of about 55 outstanding triumphs to its credit and it strives to unceasingly produce its current average of seven to eight films per year. To maintain this wealth of movies, the company was using a variety of devices such as servers, tape drives and HDDs. While it was a great start, it wasn’t optimal. Imagine, for instance, if Yash Raj Films decided to screen a 3D version of Silsila today; it would be tough to locate the film given its current storage arrangement. But, what perhaps worried executives at Yash Raj Films more, was the chance that some parts of a movie might be lost. “Our film archive ran the risk of disk corruption or tape damage,” says Dilip Patil, general manager-digital, Yash Raj Films. Each frame of a film was about 15 MB. In the event of a single frame being corrupted, it would mean losing time and productivity in identifying the frame and restoring it. Apart from the loss of art, this had a price attached to it. “This would result in an enormous cost to the company and in turn, affect our distributors and audience at large,” says Patil. What YRF needed was a solution that could not only store its entire catalogue of

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Dilip Patil, General Manager-Digital, Yash Raj Films, created a system that archived movies more safely and allowed for greater search abilities. film footage in a single location but also ensure content availability whenever it was required by all types of business stakeholders. “We were keen to make the digital shift because we consider digitization as a preservation strategy and because it ensures the protection of materials that are in a fragile format. Also it would make it easier to chase new opportunities for this industry to recoup investments through the exploitation of new distribution channels and devices,” says Patil. After considering a number of options, Yash Raj Films chose a product to archive its film catalogue. “The solution allows us to integrate with our digital asset management software and the storage array lets us automate the meta-tagging process which was earlier a tedious manual task,” says Patil. For instance, considering that the total digital assets of an entire film could take up to 12-15 terabytes of hard disk space, the solution allowed YRF to simplify search of its film frames and footage, current or old. A critical advantage was the snapshot restoration feature of which saved the company a significant amount of time and ensured that there weren't any delays during a particular film's promotion and distribution. Simultaneously, thanks to technical innovation, there’s also been an increased use of computer-generated and computeraltered imagery, and a greater demand for high definition (HD) films. This has heightened the storage requirements of the media industry. Patil says that the media industry has to be on its toes and keep up with the latest technology in the world and, with a good IT solution backing up creative content, the industry’s growth will be unstoppable. With a good storage solution, Yash Raj Films now has the flexibility to access and use its archived catalogue of films for a range of media projects across

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platforms such as YouTube, Netflix, iTunes, among others. “With these platforms being accessible to millions of film lovers, having an easily accessible film catalogue that is searchable—down to the level of the single frame—is critical for ensuring global distribution,” says Patil. Additionally, the studio was able to deliver specific film files to dedicated workstations

where the IT team could package the film or film clip in the appropriate format for upload, thereby ensuring maximum exposure for the entire catalogue. “We can now respond to our media partners’ requests within days, which previously used to take weeks,” says Patil. CIO Shubhra Rishi is senior correspondent. Send feedback to shubhra_rishi@idgindia.com

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casefiles

C- E dge T echnologies

Clogged bandwidth and irregular power supply were hampering security updates at remote locations that C-Edge Technologies managed. Here's how it resolved the issue.

*

The Organization: C-Edge Technologies, a jointventure between TCS and SBI, provides technology infrastructure and services to 118 banks, and handles 7,500 branches and 83 million transactions per month. The success of C-Edge can be gauged from the fact that it manages around 35 percent of the rural regional banks. The Business Case: Being an institution that serves the BFSI sector, C-Edge needed to ensure that its services and networks adhered to the highest standards of security. But the anti-virus security

Jitendra Chivate, Program Manager, C-Edge Technologies, increased network availability by implementing an efficient and robust security suite.

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J a n u a r y 1 5 , 2 0 1 4 | REAL CIO WORLD

By de barati roy

suite at C-Edge was a heavy application and was unable to adequately detect and remove IT security threats. “This led to our networks’ being clogged by viruses, which in turn led to a security menace,” says Jitendra Chivate, program manager, C-Edge Technologies. This problem was magnified by the fact that most of the branches that C-Edge manages are in rural areas where network bandwidth is limited. Networks clogged by the malware menace made it difficult to send security patches and updates to remote branches, thereby making these branches susceptible to attacks. “Due to low bandwidth, patches couldn’t be sent at business hours because that would consume whatever little was available,” says Chivate. To add to its woes, irregular power supply at these branches forced them to shut down operations randomly, making it tough for the C-Edge team to schedule security updates. “In case a security update stopped midway due to unforeseen circumstances, the entire process had to be restarted” says Chivate. Chivate needed a lighter security software suite that could not only accommodate bandwidth limitations, but also intelligently figure out which branches had the available bandwidth to accept updates and schedule it with minimal human intervention.

The Solution: Chivate partnered with eScan, a security solution provider, which customized its existing security suite into a less resource-hungry one. It also developed an application with in-built intelligence to figure out which branches were ready to accept updates without hampering availability of business applications. The new security suite shows which branches received the last update based on the urgency of the security update and bandwidth availability at a branch. “Simple features like the ability to start an unfinished update from where it last stopped helps us manage and distribute the use of limited resources well,” says Chivate. With a single management console, C-Edge can now easily manage and monitor the network and overall security at each of the remote branches. The Benefits: With this solution, Chivate has managed to increase network availability by more than 50 percent, and freed his IT team from the tedious process of monitoring and managing network clogs, malwares, and updates. “Our business is all about making core banking available to customers in a secure manner, even at remote locations. We are now able to do that better,” he says. CIO

Send feed back to debarati_roy@ idgindia.com

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A CLOSER LOOK AT Software Defined Networking

Software defined networking is beginning to appear everywhere. What you need to know about this technology— including its drawbacks.

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Back to School: SDN By Jonathan Hassell

SDN| Software defined networking is one of the most misunderstood concepts in infrastructure computing. It's a phenomenon that's growing in relevance, but it's still mysterious to many CIOs, particularly those who were not reared in overly technical practice. Many myths still surround SDN. What exactly is the notion behind the technology? How can you apply SDN at your business? And how can your organization benefit from it.

The SDN Basics Essentially, SDN takes the virtualization phenomenon that's been sweeping datacenters around the globe for the past several years and extends it from computing hardware and storage devices to network infrastructure itself. By inserting a layer of intelligent software between network devices (such as switches, routers and network cards) and the operating system that talks to the wire, software defined networking lets an IT professional or administrator configure networks using only software. No longer must he travel to every physical device and configure—or, in many cases, reconfigure—settings. SDN achieves the same abstraction that hardware virtualization does. With hardware virtualization, the hypervisor inserts itself between the physical components of a REAL CIO WORLD | J an u a r y 1 5 , 2 0 1 4

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computer (the motherboard, main bus, processor, memory and so on) and the operating system. The operating system sees virtualized components and operates with those, and the hypervisor itself translates the instructions coming to these virtualized components into instructions the underlying physical hardware can handle. As a result, you can move virtual machines to different computers made up of different underlying hardware as long as the hypervisor is the same or is compatible. That's because the operating system in the virtual machine has to know only how to talk to the virtualized components; it can't see or interact directly with the underlying hardware. This abstraction provides a freedom and more capability to configure and reconfigure computers and servers as ongoing operational needs dictate. This abstraction idea is the same in SDN. It just involves different pieces of hardware. Networks are virtualized so software can configure how networks are

controlled, rerouted, redesigned and ‘troubleshooted’ from a software console. In particular, it allows for self-service network reconfiguration. When users request resources for themselves, the network can automatically accommodate connectivity for those requests—even if the resources are located in different physical areas. The network appears to be one ‘unit’ to the end user, a main benefit of this type of virtualization.

Why SDN Has Emerged SDN evolved from virtualization primarily because of its usefulness in public and private cloud scenarios. Runni ng clouds involves an enormous amount of network configuration and planning. Especially in disaster recovery scenarios, it's especially valuable to be able to reconfigure networks on the fly from software. In addition, most SDN implementations are open sourced—or at least based on widely accepted international standards— and thus are supported by a variety of

The main issue with SDN is it's new. Because of this,many believe SDN implementations are not ready for prime time.That said,it will play an increasingly important role around the globe in the next two to three years. built, routed and configured. While the underlying physical network components still route the actual traffic, the place where that traffic flow is controlled— which is called the control plane in SDN parlance—moves from the hardware to the software running on top of it. This is useful because the network then transforms from a bunch of wires physically connected to a lot of different devices—as you might guess, this is the data plane in SDN vernacular—into a quasi-intelligent fabric that can be 62

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different vendors. This sort of vendor neutrality is implemented by a set of APIs called OpenFlow. Think of OpenFlow as the engine and the mechanics behind implementing SDN. Most tools that let you administer and configure virtualized networks use OpenFlow to communicate with the various physical devices on the network. In the past, a network might have had several different profiles of capabilities among the different vendors represented in the infrastructure. Having an SDN

$3.7 B

The estimated amount the the software defined networking market will be worth by 2016. Source: IDC

implementation lets an administrator holistically administer the entire network using a known set of universal capabilities without having to worry about some vendor gear only supporting some specific capabilities and not others. SDN is taking on a particular prominence lately because it's essentially the last frontier of physical devices that have yet to be virtualized for easier management and usability. Hardware virtualization has been around for a while, software virtualization is ages old, but networks are the last stone that has been left unturned in this new ‘virtual’ way of thinking. Additionally, mainstream operating systems are beginning to add direct support for managing and configuring software defined networking. Windows Server 2012 and the upcoming Windows Server 2012 R2 in particular both offer increased support for managing SDN implementations.

Drawbacks of SDN The main issue with SDN is that it's new. Because of this infancy, many believe SDN implementations are not ready for prime time. Networks and backbones perform such a core and critical role in corporate IT operations. Plus, given the somewhat patchwork state of both OpenFlow APIs themselves and also vendor support for them, it stands to reason that you shouldn't plan to rely

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on network virtualization and SDN implementations fully at this time. (That said, as the OpenFlow stack of interfaces matures, and more network component vendors decide to fully implement SDN compatibility based on standards, SDNs will emerge into maturity.) Where might SDN deployments be appropriate? If you're thinking of setting up a private cloud for a department or a given set of development projects, that would represent an excellent opportunity to pilot some of these technologies with good gear, good software and good practices. Additionally, if you're planning a major, entire network restructuring, it may make sense to plan for SDN and deploy it in certain spots with an eye toward expanding your implementation as your network grows. It wouldn't be wise to invest the kind of money that a major network overhaul would require without planning for SDN in some way. Software defined networking is a concept that still has a ways to go before it should be considered mature. Standards are evolving, vendor support is patchy but improving, and many administrators simply don't have enough impetus to really get the ball rolling on proper deployments. For companies that have, or plan to have, extensive private cloud implementations, SDN provides a way to squeeze more usability and flexibility from existing network component infrastructure. Companies running public clouds, either from themselves or for paying customers to use for their own hosted infrastructure, already know this material and are well positioned to take a leadership role in pushing for standards to mature and manufacturers to support OpenFlow and other industry SDN efforts. The SDN concept is still forming, but it will play an increasingly important role in networks around the globe in the next two to three years. Be ready. CIO Jonathan Hassell runs 82 Ventures, a consulting firm based in Charlotte. Send feedback on this feature toeditor@cio.in

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Rx for Congestion Case File | The Henry Ford Health System (HFHS) serves 2.2 million patients. Its five campuses cover 8 million square feet. Wi-Fi is the transmission medium of choice for medical apps and communications, as well as providing streaming video and online access to patients. “We have 16 Wi-Fi controllers and about 4,400 access points/intrusion detection sensors,” says Doug McDonald, HFHS’ wireless network manager. “With the explosion in Wi-Fi based medical treatment and information devices, and the use of BYODs by both staff and patients, preventing wireless traffic jams has literally become a life-and-death priority.” HFHS is advancing its ability to manage its Wi-Fi network using SDN. “With SDN, we can define levels of access for Wi-Fi devices across the network, making sure that medical devices take priority when traffic levels climb, and that applications that require consistent bandwidth--like sign language-based telemedicine--have what they need,” McDonald says. “We have also just developed BYOD portals, with SDN allowing us to provision, regulate, and respond to problems as they occur. Right now we have 10,000 concurrent users plus 5,000 guest users every day.” The Henry Ford Health System was preparing to move its SDN project out of the lab and into initial deployment at one of its smaller hospitals. “The nice thing is it just worked,” he says. However, mapping out the deployment required careful preparation beforehand. “The biggest challenge is the planning piece,” says McDonald. “Documenting a detailed plan to roll out five large hospitals and a 100plus sites needs to be well orchestrated.” “My advice to IT departments considering SDN is to look very closely at your needs, study available SDN solutions carefully, and then rigorously test the best application before taking it into actual usage,” McDonald says. “Don't be afraid to kick the tires. Try it in the lab to get comfortable with the features.” — By James Careless REAL CIO WORLD | J a n u a r y 1 5 , 2 0 1 4

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* By Florence Ion

Knock, knock. Who's there? It's Google, and it wants to automate your home. Imagine if you could control the temperature in your house right from your Android phone? Well, Google's working on it. The news struck when The Information reported that Google may be working on a smart thermostat, similar to the popular Nest Lab's learning thermostat. Android Police caught an early glimpse of the service, dubbed Energy Sense. The service would be accessible via an Android app or the Web, and you would be able to easily control your home's temperature with just the slide of a finger, as well as create scheduled presets for different criteria. Presets won't be automated at launch, though there's the possibility Google would work some of the contextual abilities of Google Now into its home automation scheme. There is no information on when the service would go live, though there is a screenshot floating around of the app in the Google Play Store. Google would release the app beforehand as a "beta" service, and then follow up with more features later on.

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