cio february 2013 issue
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Technology, Business, LeadershipTRANSCRIPT
CXO AgendA
Zydus Cadila’s head of demand-supply wants
his rivals to back him. Page 42
RunAwAy SuCCeSS
How SpiceJet sold seven lakh tickets in three days flat.
Page 38february 15, 2013 | `100.00
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“No one wants to fire an employee. It’s probably the
most emotionally difficult part of this job,” sanTosh singh,
GM-IT, DS Group.
Eight classic mistakes to avoid before you make an offer this hiring season. Page 32
NaiNa LaL Kidwai oN How i.t. is redefiNiNg customer eNgagemeNt
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Vijay Ramachandran, [email protected]
From The ediTor-in-ChieF
Five years after Cloud Computing became
a buzzword, you’d think it was getting ripe for
mainstream adoption. As compared to those early
days the options available have increased, but
has acceptance?
The public cloud is still dogged by issues regarding
compliance, controls, confidentiality, and vendor
lock-in. What happens when a contract is breached?
How does one build in exit clauses that ensure data
privacy, safety, and availability? What about audits?
This makes a public cloud play for banks, for
instance, a strict no-no. And, even in other verticals
like automotive or pharmaceuticals or even financial services, the limited solution stack
restricts it to an infrastructure play or one that involves peripheral apps, like office
automation, mail, messaging, collaboration, and field-force automation. Throw in a multi-
geography footprint and the sheer weight of regulatory compliance renders it DOA.
Our research has shown that even mid-sized organizations (with annual revenues of
between Rs 500 crore and Rs 2,000 crore) have consistently rejected moving workloads
to the public cloud, simply because they lack the people, process and governance maturity
required for the transition.
But what about the private cloud? There are surely no issues with exit clauses or
compliance when the data and its supporting infrastructure reside within perimeter?
True. But is it a cloud at all? If virtualization and automation were the only hallmarks of
cloud computing, then I guess a ‘private cloud’ fits that bill.
Most, if not all, ‘private clouds’ display high levels of virtualization and some degree
of automation, an orchestration layer, a portal that aids rapid provisioning of compute
resources, and little else. Most are inelastic and require significant capex to get going.
The cloud ought to be like banking, permitting the transfer of funds from one
account to another and from one bank to another; giving one the trust that the funds
remain safe and fungible; and putting the control in the user’s hands.
The cloud represents truly transformational technology, but the haze is still too
heavy around core issues to allow CIOs to leverage it to its potential.
Foggy, Without RainIf the intent is so strong, why is there still so much reluctance about adopting the cloud?
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2 f E b R u a R y 1 5 , 2 0 1 3 | REAL CIO WORLD
Networks are complex. Your network performance management shouldn’t be. Decomplexify it with Riverbed Cascade.
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february 15, 2013 | Vol/8 | issue/04
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VieW From The ToP:“Having user engagements in the front-end and bringing out IT solutions that are cus-tomer-centric is key,” says Naina Lal Kidwai, group gM and Country Head, HSBC India.
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contentsCase Files38 | SpiceJetiT inFraSTruCTure SpiceJet made Rs 140 crore in three days selling 7 lakh tickets at Rs 2,013—on seats it probably would have made little from. Here’s the story behind the campaign that created a storm in the market—and IT’s role in it.By Anup Varier
58 | iGaTeinTeGraTion Caught between two giant ERPs, the iGATE-Patni acquisition could well have been one of the 60-plus percent of M&As that fail because the integration takes too long. Except that iGATE’s IT team would have none of it. By Shubhra Rishi
60 | The Leela Palaces, hotels and resortsTabLeTS The Leela Palaces, Hotels and Resorts, introduces in-room iPads—and increases customer satisfaction levels.By Debarati Roy
more»
32 | You're Hired! CoVer STorY | IT ManageMenT Learn to make better hires and build loyal, skilled, and collaborative teams.By Sandra gittlen and Shweta Rao
46 | Failure is an OptionFeaTure | InnovaTIonIn the new ‘fail fast and move on’ world of business, IT is learning to quickly tap into creative ideas and harness the power of innovation for competitive advantage.By Stacy Collett
VoL/8 | ISSUE/044 f E b R u a R y 1 5 , 2 0 1 3 | REAL CIO WORLD
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departments
contents (cont.)
52
42
CXo aGendaIn Search of a Chain Reaction Prashant Sharma, SVP Global Demand-Supply organization and Global IT, Zydus Cadila, wants pharma companies to work together to consolidate their supply chain.
VoL/8 | ISSUE/046 f E b R u a R y 1 5 , 2 0 1 3 | REAL CIO WORLD
2 | From the editor-in-Chief Foggy, Without Rain By Vijay Ramachandran
9 | trendlines Consumer Tech | IT Begins at Home Quick Take | Sold on IT Voices | Finding the Right Skills for BI Innovation | Lost and Found Robotics | Window Cleaning Robot Devices | See, Spot, Shoot CIO Career | Change Agent Automotive | Your New Valet: Your Car Augmented Reality | Breathing Life in Print By the Numbers | Data Mis-Management
16 | alert Government | Iran Hiring Botnet Armies
Strategy | Security Workout
73 | essential technology MDM | Mobilize Clouds
Mobile Apps | Remote Control Home
76 | endlines Technology | Pooch Protectors By Lauren Brousell
61 | Money MakersFeaTure | IT STraTegyA select few CIOs are generating cold hard cash through innovation and collaboration. They are turning to IT to boost sales or develop a product or service sold externally.By Diane Frank
Columns21 | in dell's Footsteps?FrankLY SPeakinG The similarities between technology giants HP and Dell are striking. Does that mean, as Dell goes private, HP would follow suit? By T.M. Arun Kumar
23 | Together We CaneXeCuTiVe CoaCh Gone are the days when decision-making was an autocratic, one-man army. Today’s corporate environment is tilting towards collaborative and consensual decision-making. By Ashok Panikkar
25 | The Pursuit of aPPinessLeadinG edGe Crafting the apt mobile application strategy and deploying it correctly will ensure maximum returns on mobility implementations in your organization. By Gunjan Trivedi
28 | how to Vet Your VendorVendor manaGemenT CIOs need a structured yet flexible approach that evaluates a vendor's stability as well as its service, solution, or delivery capability.By Stephanie Moore
61
.networks.When you run the numbers, Dubai means business.
see the film at vision.ae/viDeos/numbers
expo2020Dubai.ae
Galleries – part of Dubai’s vibrant art scene
people visiteD art Dubai in 2012
per cent of miDDle eastern art is traDeD here. Welcome to the reGion’s artistic hub
5422,00070
FalconDubaiAC_CIO_276x222_AW.indd 1 22/12/2012 14:43
adVerTiSer indeX
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VoL/8 | ISSUE/048 f E b R u a R y 1 5 , 2 0 1 3 | REAL CIO WORLD
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i n d u s t r y V e r t i c a l A lot has been said about the IT know-how Indian retailers would pick up when the industry opens up to FDI. But for years now, the UK’s largest retailer, Tesco, has been building its applications right here, in its Indian captive center, Tesco HSC. Shubhra Rishi spoke to Vinod Bidarkoppa, director-IT and CIO, Tesco HSC, to understand the importance of IT in retail.
What IT challenges do you see in retail? As brick and mortar retailers embark into the digital world, they need slightly different skill sets. We need a lot more online, e-commerce, mobile, and engineering skills. At Tesco HSC, we’ve spent eight years developing this talent and our 6,000 strong workforce understands the retail business. We are foraying into technologies such as social, mobile, cloud, and analytics.
How are you using analytics at Tesco?One example is how we incorporate the impact of the
weather into our algorithm when we order groceries for the next 7-21 days. Historical data that we’ve captured for the previous day, week, month or year, gets factored in. Using analyics we also try and increase the availability of our products for shoppers to make their shopping experience better. We get as much inventory required into stores so that our customers can pick fresh inventory.
How has the role of technology evolved in retail?I come from a background—sectors like aviation and BFSI—where technology has been an enabler. In the retail business, we are on the same trajectory. Our online, international, grocery-shopping business is a new business model which we built once and deployed in various countries. The CEOs love it because the platform itself became the business. Technology also helps us improve customer experience. Scan-as-you-shop, mobile checkouts, digital kiosks, and digital signage are all pure technology. Vinod Bidarkoppa
E D I T E D B Y s h a r D h a s u B r a m a n I a n
QUICK TAKE: Sold on It
REAL CIO WORLD | F e b r u a r y 1 5 , 2 0 1 3 9Vol/8 | issue/04
IT Begins at Homec o n s u m e r t e c h Sure, some of the home “innovations” we’ve seen till date are a little laughable. Do we really need dancing robot vacuum cleaners or refrigerators that post Facebook updates? Maybe not. But home automation is becoming more capable and impressive, if only because we’re realizing fantasy homes are finally possible.
Remember when a dishwasher was just a dishwasher? Those days are long gone. Now your dishwasher is smart—Internet connectivity gives it an app for a brain. We’ve seen plenty of smart appliances a over the past few years, but Wi-Fi now connects your refrigerator to your oven to dishwasher to your phone.
But it isn’t enough to control your dishwasher remotely with just a swipe on your smartphone. LG touted a more intelligent line of appliances equipped with NFC technology at the CES. Now, you can scan the NFC tag on your dishwasher with your mobile device to activate and control the appliance and connect it to the rest of your wireless kitchen gear.
Your refrigerator can take inventory of its motley assortment of ingredients and offer recipes to use them up. You choose a menu and send it to your oven, which preheats to the specified temperature and alerts your smartphone when your meal is finished. It’s like you’re not even there.
Also, an Android-powered smart oven from Dacor with integrated cooking apps and a Samsung refrigerator with
an LCD screen that lets you manage your schedule using Evernote and Calendar apps. Both appliances add to the kitchen a layer of tech designed to streamline your life.
A refrigerator that texts you when you forget to shut its door, as Whirlpool’s new sixth Sense smart fridge does, is an impressive advancement. But so far, smart home appl iances are slow to catch on
with consumers, perhaps because of price, but also because no one is upgrading their refrigerator just to run an app they can already download on a smartphone.
—By Caitlin McGarry
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s t a f f s k i l l s According to the CIO Year Ahead Survey 2013, 48 percent of CIOs say they will implement BI and analytics this year. But do they have sufficient skill sets to handle enterprise BI projects? Debarati Roy spoke to some of your peers to understand whether they prefer to pick staff from within their departments for BI projects or hire skills from outside.
SHREESH PALEKAR Director IT, Raymond
“There aren’t many bI solutions in the market that pose a resource availability challenge. Hence, I believe that when CIOs are embarking on a BI project, in the initial phase, it is a wise decision to hire a BI resource from outside even though it’s expensive. These resources bring in expertise—both in terms of domain knowledge and best practices—that can be extremely helpful to gradually build the skill-sets within internal IT teams.”
NANDKISHOR DHOmNE CIO, Manipal Health Enterprises
“We need to have a mix of internal business
users—who have a better understanding of the
business—and outsourced staff who can contribute with their technical skills to create the perfect balance in a bI team. Over time, the outsourced technical expertise can be brought in-house by gradually training internal IT teams.”
RAjESH NAIR VP - Business ContinuityCredit Suisse AG
“The technical skills for bI are available in the market. But it’s always easier to leverage internal talent for business insights. because these employees have spent considerable time in an organization, are aware of its systems, and have the relevant aptitude and knowledge of its processes and products.”
vOICES: FInDIng THE RIgHT SKIllS FOR BI
i n n o V a t i o n Some people just excel at losing things. Whether it be keys, sunglasses, or cell phones, items seem to simply slip right through their fingers. While there are a few ways to combat the tendency to lose track of personal articles—the key fobs that respond to a whistle comes to mind—they generally only work when they’re in range (and have battery life). One company has taken a high-tech approach to reuniting misplaced items with their owners.
FinderCodes has created smart ID tags that come in keychain, sticker, and iron-on form so that they can be adhered to everything from pet collars, to kids’ jackets and cell phones. If some honest soul recovers the tablet or smartphone that you left on your connecting flight, they can scan the QR code on the smart tag and you will instantly receive a text alert that someone has located your device with GPS information on the device’s location. The finder can also type a message in order to contact the item’s owner and the owner will receive the message via e-mail. Because the owner’s information is set up in their FinderCode profile, the finder never sees any of the owner’s personal information like e-mail or mailing addresses (unless the owner opts to provide it).
FinderCodes will also help the finder return the item, either by setting up an exchange with the owner or via an option to send the item through FedEx. Multiple shipping options are offered. Shipping charges are automatically billed to the owner; the finder never sees the owners billing information.
Grateful owners can also set up a reward payment through PayPal, which like the e-mail and return information can also be kept anonymous. If the finder doesn’t have a device that can scan QR codes, there’s also an option to enter in the FinderCode ID on the FinderCodes website. FinderCodes sells kits with multiple tags designed for pets, baby items, electronics, luggage, sports equipment, and home items like jackets or power tools. The tags are water and tear-proof; Findercodes also offers an app that offers more features for iPhone and Android users.
—By Amber Bouman
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Lost and Found
Vol/8 | issue/041 0 F e b r u a r y 1 5 , 2 0 1 3 | REAL CIO WORLD
REAL CIO WORLD | N o v e m b e r 1 5 , 2 0 1 2 1 7Vol/8 | issue/01
r o b o t i c s When a robot-like device comes along that can perform a cleaning task on its own so that we don’t have to, it naturally gets people talking. ecovacs robotics’ Winbot 7 certainly has people talking (and gawking). this little robot cleans windows and can get to hard-to-reach areas better than humans can.
Winbot 7 sticks to any window with two powerful vacuum suctions, and moves around the window using a set of rotating suction cups that power the robot along. a cleaning cloth wipes away dust, grime, and moisture as the Winbot zig-zags across the glass.
When first set on the window, Winbot crawls to the very bottom, and then to the very top, to measure the window size. it then moves across the window in a zig-zag pattern, making sure to cover every inch of surface. When finished, Winbot crawls back to the spot where it started. the time needed per window of course will vary with the window size, but the robot moves pretty fast overall.
While the Winbot is great for a quick dust or clean, it isn’t cordless, so it’s stuck with cleaning windows within reach of its 10-foot power cord. still, having a personal window cleaning assistant is pretty helpful. and you can see where this might go in the future. Home vacuuming robots have overcome similar limitations, dramatically reducing the human help they need to get their work done. someday soon we may see a machine like the Winbot that is wireless, jumps from window to window, and can be set to automatically do the windows every seven days.
—by leah yamshon
Window Cleaning ROBOT
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Change Agent c i o c a r e e r IT leaders who want to plan their careers need to know what external forces will shape the CIO role, in the near future. Here’s what your peers think.
source:cio research
Cloud computing (technology as a service)
Mobility
The slowdown in the Indian economy
Consumerization of desktop / devices
Big data
Social media
d e V i c e s The Consumer Electronic Show (CES) held last month was packed with plenty of offbeat gadgets, but the Precision Guided Firearm from TrackingPoint is the first lethal weapon ever seen at a tradeshow. Of course, the PGF isn’t just a rifle; it’s a system of devices designed to work together to make hunting safer and more enjoyable through technology.
A processor inside the rifle collects environmental data like temperature, barometric pressure, distance to target, the orientation of the barrel and even the Earth’s magnetic fields from sensors built into the networked digital tracking scope on top of the rifle. The user can then choose to input more data like wind direction and speed, then use the digital tracking display inside the scope to find a target and “lock on” by pressing a big red button. The scope will then display a big red dot that automatically compensates for environmental variables like wind, distance and intervening objects to show the user where they need to point the rifle in order to hit their intended target. It will even track the target if it moves by employing digital image processing techniques to determine what object the user is trying to target (elk, deer, a paper cutout, etcetera).
During its demonstration, the PGF would not fire until the user held down the trigger to arm the system; at that point the rifle itself will fire automatically once it was lined up precisely with the tracking system. You can turn this feature off so the PGF works just like a normal “dumb” rifle, but hopefully this sort of computer-aided tracking cuts down on human error and helps make users more successful (and safer) hunters.
Like pretty much every gadget at CES, there’s a social networking system built into the PGF. The rifle has a wireless server that streams images and video from the networked tracking scope (which has a 110m telephoto lens and a 14-megapixel image sensor) to mobile devices that connect to the rifle’s wireless network. Since the rifle is streaming the same digital video that’s being displayed inside the digital scope, this basically allows anyone nearby to connect their mobile device to the PGF and watch the action from the hunter’s perspective.
—By Alex Wawro
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Vol/8 | issue/041 2 F e b r u a r y 1 5 , 2 0 1 3 | REAL CIO WORLD
see, spot, shoot
a u g m e n t e d r e a l i t y the first time you point your smartphone at an iron man comic book and watch tony stark step off the cover and begin to fly, you’ll be sorely tempted to look past the phone’s screen to see if it’s real.
that’s exactly the reaction augmented reality software maker aurasma wanted as it demonstrated its application’s capabilities at the annual showstoppers event.
While it may look like magic, aurasma’s augmented reality software works by using a mobile device Web camera and image-based recognition to display auras, which is digital content connected to any enabled physical object.
once an object is recognized, the app activates a cloud-based video stream that simulates animation of the object on the phone’s or tablet’s screen or brings up additional educational or advertising content.
“it’s a way to merge the physical world with the digital,” said David stone, aurasma’s global head of operations.
aurasma’s app can recognize any object that has been enabled, from a magazine to a building. Publishers like marvel
comics and GQ magazine are signing up for the app to add digital content extras to their print publications.
since launching in June 2011, more than 15,000 businesses have purchased the service to augment their advertising or public service messages. more than 4 million people worldwide have downloaded aurasma’s free app to make inanimate objects appear to spring to life.
everything from buildings to magazine covers to movie posters have come alive using the app. because the software is cloud-based, there’s no need to update the app on a user’s phone each time an advertising campaign changes. only the software on the cloud service provider’s servers needs to be updated.
the video streams can include editorial content, picture slideshows, movie clips and can also be used in education.
“What’s really cool about this is that without touching the print product they can bring in digital content that they couldn’t bring in before,” stone said. “it’s kind of like DVD extras you wouldn’t have received anywhere else.”
— by lucas mearian
a u t o m o t i V e Wouldn’t it be nice if your car could valet itself? That’s right—imagine driving up to a hotel or restaurant, getting out of your car, and pressing a button. Your car would roll up its windows and drive off to find an available parking spot and park itself. Then, when you needed your car again, you could just press another button and it would leave its parking space and drive to where you are.
Automakers are already working on this type of less-intense automated driving. Audi’s proof-of-concept car isn’t quite Google’s self-driving vehicle—there’s no LIDAR laser on the roof, and it can’t drive hundreds of thousands of miles without human interaction (yet). But this car can drive itself into a parking lot, park itself, and drive back out to meet you with the press of a smartphone button.
The Audi proof-of-concept connected car uses multiple built-in sensors to determine whether a spot is open (and large enough for the car to park in) and whether—and how far
away—obstacles are from the car. It also uses some “infrastructure-based” sensors to help guide it to the parking garage (sensors built into the road, the walls of the garage, and so on).
In a demonstration, the car worked in tandem with a smartphone app. A rushed “businessman” jumped out of the car, held up his smartphone, and tapped a button in the app. The car, which had been turned off and put into park, restarted itself, rolled up its windows, and drove (slowly) off to the parking garage.
Once inside the parking garage,
the car found an empty parking spot (between two cars) and backed itself into the spot. In this particular demonstration, the car used both sensors built into the car and infrastructure-based laser sensors, which were placed along the curb to help guide the car into the parking lot.
Audi’s proof-of-concept has a couple of things that make it stand out from other autonomous vehicles, such as Google’s self-driving Prius and even Toyota’s automated Lexus research car. First, it only uses technology that already exists and that has been implemented in cars that are on the road today.
Second, it doesn’t need unsightly exposed lasers and sensors—the proof-of-concept car we saw looked like any regular Audi. Audi may not be ready to bring its piloted parking concept to market just yet, but, when it does, it will probably do so in style.
—By Sarah Jacobsson Purewal
Breathing Life in Print
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m o b i l i t y ntt Docomo is launching a new educational android phone for Japanese children, but the kids will have to wait to learn about Google.
the smartphone for Juniors, made by sharp, will only be able to access applications offered through a Docomo portal. the Google Play application store, along with apps such as Google maps and Gmail, will not be usable, though kids can surf the internet if their parents allow.
Docomo says the phone is aimed at “upper elementary and junior high school students” and is offering it in a youthful color collection of blue, pink and white. it includes filters for calls, mails, and internet access, as well as length and time of use.
the waterproof, dustproof handset has a loud buzzer feature for when children feel threatened, and can be tracked by parents throughout the day using an existing service. it also comes with some games installed, including a mobile version of the popular title monster Hunter.Japan currently has more mobile contracts
than total population, and competition between operators for existing users is fierce because of a number portability law that allows those that switch to a new carrier to keep their phone number.
all three of the country’s major operators offer family plans and phones aimed at children, but Docomo appears to be the first to offer a kiddy smartphone. last year, Docomo launched a smartphone for the elderly, under its successful “rakuraku” line, which means “easy” or “comfortable.” the phone, made
by fujitsu, features a scaled-down interface with large text and buttons, and also doesn’t require
a Google account, as registration can be confusing for seniors.
Docomo says parents will be able to control most aspects of how
children use the phone. Voice calls and mobile mail can be limited to names that are saved in the phone book, and duration limits can be set for the length of calls and internet use, as well as what time such activities are allowed
to occur.the phone is equipped with a four-
inch screen and a dual-core 1.5GHz processor. it will run android 4.0 at launch.
—by Jay alabaster
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s e c u r i t y The man who broke into the Palo Alto, California, home of late Apple CEO Steve Jobs and stole laptops, iPads and other possessions has been sentenced to seven years in a California state prison.
Kariem McFarlin, 35, was arrested in August last year by officers from the Rapid Enforcement Allied Computer Team, a Silicon Valley-based high-tech crime unit formed by local, state and federal law enforcement agencies.
REACT officers found McFarlin with help from Apple security, which tracked where the stolen devices were being used by matching their serial numbers with connections to Apple iTunes servers. The IP address in use matched a line in McFarlin’s apartment
in nearby Alameda that was also being used by an Apple device registered to a member of his family, according to a police report.
The burglary happened between the evening of July 16 and morning of July 17 last year while renovation work was being carried out on the Jobs house, which is now occupied by Jobs’ wife.
McFarlin jumped over a construction fence and entered the house through its garage. Once inside, he stole two iMacs, three iPads, three iPods, one Apple TV box, a diamond necklace and earrings, and several other items.
McFarlin admitted to the burglary under questioning by Palo Alto police and said he had stolen from other
homes in the San Francisco Bay Area, including two homes in Marin County, four homes in San Francisco County and one home in Alameda County.
He admitted keeping hundreds of thousands of dollars’ worth of property from those burglaries at his home and at a storage locker. The property included computers, jewelry, furniture and a solid silver bar, according to the Santa Clara District Attorney’s office.
At the time of his arrest, he apologized for his crimes and said he had taken to crime because he had money problems and was desperate.
He didn’t dispute the charges in court. He was also ordered to pay restitution to the victims of his crimes.
—by martyn Williams
Steve Jobs’ House Burglar Sentenced
compIlED BY debaratI roy
imProVe your transactional data quality. Data quality begins—and often ends—with oltP systems. a small investment in ensuring data quality in oltP systems will go a long way toward reducing future expenses and hassles.
stress on data maturity. companies need to establish standard processes to ensure that data moves to decision makers only when it is mature enough to provide them with complete, accurate, and timely information. companies can then reduce data de-duplication and increase efficiencies at all stages of the product lifecycle.
best practices
1
2bBad data management is like a tooth cavity: it’s not apparent, but if ignored, can grow into a painful and expensive exercise. it could plague employee productivity and even expose them to compliance risks.
it’s not hard to see why data management is important. according to 78 percent respondents to symantec’s state of information survey 2012, managing information better helps them make better decisions, 76 percent believe that it helps them understand customers better, and 76 percent think that it can increase the speed and agility of employees.
However, years of data piling up in the backyard has resulted in a heap of challenges. sixty-six percent of indian businesses say that there is no single version of truth. this is followed by 63 percent who say that it’s too difficult to find the right information at the right time. sixty-one percent are also worried that critical information is at the risk of falling into wrong hands if not managed properly.
What’s even more worrying is the fact that 35 percent of those surveyed feel that business data is currently out of control. thirty-eight percent are unsure of who has access to specific information, and while 43 percent are unsure of how old the information is and whether it is relevant anymore. Worse, 78 percent of indian organizations admit that they have missed compliance requirements in the past year due to poor data management. is anyone listening?
Data mis-managementData management has been on cio priority lists year after year. but in reality, it’s a neglected—and mounting—heap of trouble in indian organizations.
unsure how old information is
unsure if information is business or personal
unsure who owns information
unsure how important specific information is
unsure who has access to specific information
source: KPmG inDia frauD surVey 2012
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alert
Evidence collected from a website that was recently used to flood US banks with junk
traffic suggests that the people behind the ongoing DDoS attack campaign against US financial institutions—thought by some to be the work of Iran—are using botnets for hire.
The compromised website contained a PHP-based backdoor script that was regularly instructed to send numerous HTTP and UDP (User Datagram Protocol) requests to the websites of several US banks, including PNC Bank and HSBC, said Ronen Atias, a security analyst at Web security services provider Incapsula. Atias described the compromised site as a “small and seemingly harmless general interest UK website” that recently signed up for Incapsula’s services.
An analysis of the site and the server logs revealed that attackers were instructing the rogue script to send junk traffic to US banking sites
for limited periods of time varying between seven minutes and one hour. The commands were being renewed as soon as the banking sites showed signs of recovery, Atias said.
During breaks from attacking financial websites the backdoor script was being instructed to attack unrelated commercial and e-commerce sites. “This all led us to believe that we were monitoring the activities of a Botnet for hire,” Atias said.
“The use of a Web Site as a Botnet zombie army for hire did not surprise us,” the security analyst wrote. “After all, this is just a part of a growing trend we’re seeing in our DDoS prevention work.”
“In an attempt to increase the volume of the attacks, hackers prefer web servers over personal
computers,” Atias said. “It makes perfect sense. These are generally stronger machines, with access to the high quality hoster’s networks and
many of them can be easily accessed through a security loophole in one of the sites.”
Another interesting aspect of the PHP-based backdoor is that it had the ability to multiply on the server in order to take full advantage of its
resources, Atias said. In addition, the backdoor script provided an API (application programming interface) through which attackers could inject dynamic attack code in order to quickly adapt to changes in the website’s security, Atias said.
The attack script on the compromised UK website was being controlled through another website in Turkey that belongs to a Web
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Biggest Obstacles to Information Security A global survey—with 200 CXOs from India—points out that tight budget constraints is the biggest obstacle to tighter security.
Of organizations said they encountered security threats due to flaws in
existing software.
Tight budget constraints
Lack of understanding of IT security among budget holders
Lack of sufficiently knowledgable IT personnel to deal with threats
Senior managers do not think IT security is a significant threat to the business
Lack of available knowledge to inform and train staff about security threats
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Scan to downloadIDC Analyst Connection: Server Securityfor Today’s Datacenters
design company. Incapsula’s researchers believe that the Turkish site had been compromised as well and was serving as a bridge between the real attackers and their website-based botnet.
A group calling itself the Izz ad-Din al-Qassam Cyber Fighters has taken responsibility for the recent wave of attacks against the US financial websites that started in December last year. The same group claimed responsibility for similar attacks launched against the same financial institutions in September.
The group claims that its DDoS campaign is in response to a film trailer mocking the prophet Muhammad not being removed from YouTube. However, some US government officials and security experts are convinced that the attacks are actually the work of the Iranian government, according to The New York Times.
In September, Homeland Security and Governmental Affairs department, blamed the Iranian government for the attacks against US banks and said that they were probably launched in retaliation for the economic sanctions imposed on Iran.
The Iranian government officially denied its involvement. That said, the sophistication of the tools used in the attacks, as well as their unprecedented
EntErprisE risk managEmEntalert
scope and effectiveness, have been advanced as arguments that this DDoS attack campaign might be state sponsored.
The attacks against the US financial industry from the past few months are unique in scale, organization, innovation and scope, said Carl Herberger, vice president of security solutions at Israel-based network security vendor Radware.
The company cannot comment on the origin of the attacks, because it only focuses its resources on attack detection and mitigation, Herberger said. However, in Radware’s view, the DDoS attack campaign against US banks has represented the longest persistent cyberattack on a single industrial sector in history, he said.
If someone in the US government is indicating that the Iranians are doing it, like Lieberman did a few months ago, they’re probably spot on, said Scott Hammack, the CEO of DDoS mitigation vendor Prolexic.
These attackers are not using the traditional “pull” command and control technology where the botnet clients periodically connect to a server to check if new instructions are available. Instead, they are using a “push” technology to send instructions in a matter of seconds to hundreds of compromised servers, Hammack said.
This allows for more dynamic attacks, but also leaves the attackers open to being identified a lot easier, Hammack said. The US government is monitoring some of the compromised servers used in the attacks and can see exactly where those instructions are coming from, he said.
Herberger described the DDoS attacks as well-organized and innovative in the sense that they use newly uncovered vulnerabilities and attack origins. One example is that they leverage the infrastructure of cloud providers instead of the resources of consumer-oriented computers.
The attacks are definitely very sophisticated, Hammack said. The attackers know exactly what weak spots to hit and target them in rotation. They’ve obviously done a lot of research into the infrastructure of the banks and how it’s configured, he said.
“These attacks have, almost simultaneously, been launched on nearly every major commercial bank in the US,” Herberger said. However, not all of the targeted banks have suffered outages, which suggests that some effective defenses do exist, he said. CiO
Lucian Constantin is an IDG News Service
correspondent. Send feedback to [email protected]
[on thE govt’s call to rEstrict hardwarE imports for national sEcurity rEasons]
“the move is welcome because it will help foster internal trade and reduce india’s dependency on imported products. first, however, it should be ensured that indian companies can manufacture competitive products, in a cost effective way.”— SHIvkumAr PAndey, HeAd-IT InfrASTrucTure And SecurITy, STAr unIon dAI-IcHI LIfe InSurAnce
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EntErprisE risk managEmEntalert
W hen the new year arrived last month, I saw a lot of new joggers and dog walkers out
on the roads in my neighborhood. I’ve heard that gyms see a spike in business every new year as well. In both cases, after a few weeks, things revert to about where they were before, as most of those who resolved to get fit in the new year fall away.
The problem is that real fitness is not achieved through a quick fix. It’s an entire lifestyle.
Parallels can be drawn to security. For many organizations, certainly,
the quick fix can be tempting—and it’s just as illusory as the fitness quick fix. Again and again I’ve seen organizations that otherwise are lax in security matters commission a quick penetration test of whatever software or app they’re deploying. They hope the test will give them an easy list of things to fix and leave them secure. Even worse, they might go out and purchase a firewall, IDS, application firewall or some other product they heard about at a trade show and expect it to magically secure their shoddy software.
These things are to security what a pill that promises to burn fat while you sleep is to fitness. In both cases, the only thing you end up burning is cash.
Real security only comes with a lifestyle change, serious commitment and determination. It requires sweat and pain at times. But it’s worth it.
If you are ready for that kind of commitment, then the next natural question is where to begin. Quite simply, you need a plan. Here’s how I would recommend easing into better security shape:
Decide where you want to end up. Do you want the absolutely best security program that money can buy? Do you want to do the bare minimum to avoid some regulatory sanction? Thinking about questions like these will help you determine what you can afford to do—and what you can’t afford not to do.
Set a target, and then get senior buy-in and commitment for getting there. A fine example of goal-setting is the famous Bill Gates Trustworthy Computing memo, sent to all Microsoft employees in January 2002. In it, Gates wrote, “So now, when we face a choice between adding features and resolving security issues, we need to choose security.” Those simple words sent Microsoft in a new direction.
Next, critically assess where you are now. Just how bad is it? Whether you do the assessment yourself or hire consultants, you should emerge from the process with a candid understanding of your current state. And if you haven’t done such an assessment for some time, do it again. It’s worth updating that “before” snapshot from time to time.
Establish milestones. Start with bolstering the most glaring weaknesses uncovered in your current-state assessment. Plan and budget them out over a realistic timeline. Build each milestone into your organizational goals
and your staff ’s personal goals. Plan to measure successes (and failures). Reward those who succeed, and punish those who don’t.
Whatever path you take, be prepared for the hard work of getting into security shape. Just as
there are no magic diet pills, true security doesn’t come with buying a product. CiO
Kenneth van Wyk has worked at the uS Deptartment of
Defense. He has more than 20 years experience in the
security field. Send feedback to [email protected]
A resident of North las Vegas, Nevada, says owners of lost cell phones have repeatedly shown up at his house incorrectly demanding phones that they tracked via software to his location.
Wayne Dobson told the las Vegas review-Journal that he’s been awakened at night by people looking for their cell phones and has trouble explaining that he doesn’t have them.He has even posted a sign near his front door saying “No lost Cell Phones!”
The problem involves the location-tracking software included with most cell phones that take advantage of both GPS tracking and triangulation between nearby cell towers. When one woman came to his home and asked for her phone, Dobson invited her inside, from where she called police and Dobson called Sprint, her cell phone provider.
Dobson told the review-Journal that a Sprint technician told him that her cellphone’s GPS tracking capability was only approximate and indicates his home as a starting point.
Dobson was awakened by four young men one night searching for their phone, and then by North las Vegas police two weeks later. Apparently, all came to the house based on inexact location information.
A similar problem with inexact tracking was reported in New Orleans in April 2011. At the time, Diane Pierre-louis said that she got visits every weekend from people searching lost cell phones.
— by Matt Hamblen
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In Dell’s Footsteps?The similarities between technology giants HP and Dell are striking. Does that mean, as Dell goes private, HP would follow suit?
Its market cap is about a quarter of its revenues; its share of the PC market is declining as the overall market contracts. It’s in the midst of a turnaround—which is expected to take another year or two to complete—and
unsurprisingly, its stock price is battered and closer to its five-year low levels. Yes, this is about the troubled technology titan, Hewlett-Packard (HP).
In fact, another technology giant, Dell, is pretty much in the same boat. Only now it’s no longer a public-listed company.
This leads to an interesting question. Should HP follow Dell’s lead and go private too? There are enough similarities between the two to warrant this.
Consider this. When talks of Dell going private started around mid-January, it had a market cap of about $18 billion (about Rs 90,000 crore) on revenues of about $60 billion (about Rs 300,000 crore). HP has a market cap of around $32 billion (about Rs 160,000 crore) on revenues of about $120 billion (about Rs 600,000 crore).
Not too much of a difference in the ratio there. Both seem to have lost the confidence of the markets. Over a five-year period, Dell’s stock was down by 45 percent (before the ‘going private’ rumours started doing the rounds) and HP’s stock was down by 60 percent.
Also, both are in the midst of implementing a multi-year turn-around plan. Dell, after years of dominating the now declining PC market, is trying to turn itself into a vendor of choice for enter-prises by providing potential clients with end-to-end hardware, software, and services. And to bolster its offerings, it has invested more than $12 billion (about Rs 60,000 crore) in acquiring com-panies such as Compellent Technologies, Force10 Networks, Son-
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icWall, and Perot Systems. Both the company and analysts expect the turnaround to be complete by 2015.
HP has also adopted a similar strategy, though it admittedly had a larger portfolio to begin with. Over the last few years, it has spent billions of dollars in acquiring companies like 3Par, the infamous Autonomy—for reasons you might be aware of, but of no relevance here—EDS, and 3Com. And when does HP think its turnaround would be complete? By 2015.
“Turning HP around is going to be a multi-year journey and will not be linear. Fiscal 2013 is going to be a fix and re-build year for us, as critical changes to our organizational structure take hold. We expect to see real growth in each of our businesses in 2014.We expect that growth will accelerate as we enter FY '15 and beyond,” said HP CEO Meg Whitman in November last year.
There are differences, however.HP, for one, is considerably bigger than Dell and so are its
problems. HP’s revenues are twice that of Dell and its market cap is 50 percent higher. Also, HP has a substantially large printer business—a segment Dell is not present in.
Second, HP’s share holding pattern is diversified. While Michael Dell held about a 15 percent stake in his company, the case with HP is very different with the biggest owners being insti-tutions like mutual and pension funds.
So, a buyout of HP would be considerably more difficult—as multiple institutions would have to be convinced to sell—and expensive (since Michael Dell is involved in taking his company private, he doesn’t have to buy his own stake). However, history has shown that investment banks are quite adept at handling dif-ficult and complex buyout scenarios.
That leaves us with the question of it being a large buyout–an acquisition of HP would cost anywhere upwards of $35 billion (about Rs 175,000 crore) considering a premium over the current market price would have to be paid.
However, history has witnessed many such successful mega buyouts. For instance, private equity firm Kohlberg Kravis Roberts (KKR) bought First Data Corp for $29 billion (about Rs 145,000 crore) in 2007. If that is not big enough, Dallas-based energy company TXU Corp was acquired again by KKR along with Texas Pacific Group for a staggering $45 billion (about Rs 225,000 crore).
So, as long as some private equity firm is confident about HP’s turnaround potential and its ability to command a valuation simi-lar to that of IBM—which incidentally has a market cap of $225 billion (about Rs 1,192 crore) on revenues of $105 billion (about Rs 525,000 crore)–it will be able to raise the required resources.
Which brave soul will bet that the sharks in Wall Street aren’t already eyeing it? CIO
TM Arun Kumar frAnKly speAKing
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Internet was still a few years away. Follow him on twitter @aruntm
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Together We CanGone are the days when decision-making was an autocratic, one-man army. Today’s corporate environment is tilting towards collaborative and consensual decision-making.
A chaotic world is one that makes many of us nervous. And leaders in charge of this world—in their tryst to bring order—often take hasty and rash decisions. This leads to even more chaos.
The corporate world is no different. Stuck between deadline pressures and the need to keep up with business demands, CIOs are faced with the challenge of taking quick decisions—without consulting their associates. But they must understand that the days of autonomous decision making are fast disappearing.
Thirty to 40 years back, if a leader made a decision, everybody else followed suit. Today, the heads of a department have to take a plethora of perspectives into account before making decisions.
At a simplistic level, there are two types of decision-making: Autocratic and collaborative. In the former, the line of command is clearly defined, like in the army. This mode of decision making carries a burden of problems along with it. For starters, it is not inclusive and multiple perspectives often fall through the cracks. Also, the person who is making the decision may not even get buy-in from everybody—but he still goes ahead with it.
At the opposite end of the spectrum is completely collaborative and consensual decision-making. The Amish community is a very good example of consensual decision-making. Once they sit down to make a decision, they do not get up till they have complete unanimity—even if it takes hours to solve a problem. But big corporations don’t have the luxury of time. Also, the Amish community is very close-knit which is hard to find in a corporation. Hence, implementing the Amish model in a modern company is difficult.
But leaders should realize that collaborative decision-making does not only mean reaching unanimity. Just because a leader consults with his or her team or asks for their opinions doesn’t
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mean that they have to agree with his or her decision. A leader’s responsibility is to genuinely take the advice of his team members. And that calls for dialogue.
The Importance of DialogueCollaboration cannot function without dialogue. Period.
Most people in power, however, don’t like discussing and collaborating because they already have a solution to a problem and know—or think that they know—what needs to be done. They might tolerate discussion but beyond that they are not really looking for inputs.
For example, a CIO faced with the challenge of rolling out an IT implementation has a clear idea of what needs to be done. When the question of dialogue comes into play, he fears that a lot of time will be spent in discussions and that this will slow down the implementation process. But at the same time, stakeholders feel alienated and disrespected as their ideas aren't considered. To make the collaborative process more productive, CIOs should remember four things: 1. You are not getting into a dialogue to convince anyone but to
create a better understanding of the situation. 2. Spend more time listening than talking.3. Learn how to ask good questions. The basic raw material of
asking good questions is curiosity.4. Respect and value ignorance. This is the foundation of curiosity.
Remember that you are brilliant because you know what you don’t really know and not because you know.
A dialogue is a very specific structured process where both parties involved are genuinely interested in knowing what the other party has to say. I believe that most conversations in India are not dialogues. They are parallel monologues masquerading as dialogues.
The Secret of CollaborationIt’s very important to know when to use dialogue to reach a conclusive decision or action. If your house is burning, do you sit and discuss your options? No, you run as fast as you can.
But most of the time, your house is not burning.Very often, we operate under artificial deadlines. Leaders tend
to have this artificial sense of urgency to complete a task which is highly unnecessary. This is partly because they genuinely don’t want to spend time and energy in having discussions.
Anybody in power would rather do things their way. Even if you don’t have the power, you feel that your way is better than your boss’. Everybody feels that they can make better decisions than their superiors. Your boss knows that too. That’s why bosses discourage discussion. As a result, leaders make the bulk of decisions before presenting a problem to their teams.
And in their mind, leaders believe they have taken a fantastic decision. However, the people who have to implement
it are not convinced. Why? Because they aren’t motivated to implement a solution that doesn’t have their say. Thanks, to a lack of dialogue.
This leads to shoddy implementations which decreases productivity and reduces trust within teams. The lack of dialogue is endemic in most organizations. The problem is that corporations—including the ones that claim that they breed a culture of collaboration— don’t really know how to collaborate.
There are two ways in which leaders can create a collaborative environment. First, leaders should learn to develop a culture of collaboration. If the people at the top are not inherently interested in collaboration, then it will never work. They must believe that their teams have value to add over and above just blindly implementing their policy. A leader must encourage people who have ideas.
Second is the incentives-based approach to collaboration. For one of my clients, inter-departmental conflicts are a problem. They are competing with each other and it is not healthy competition. For example, when the marketing team for the European region gets a lead for Middle Eastern countries, they do not pass it to the relevant team. Why? Because, if they pass it to the relevant team, their revenues go up, which helps them meet the targets and makes them eligible for rewards and recognitions. This is why you need internal processes and incentives for teams and leaders to collaborate.
Striving for Better CollaborationIt’s very important that people see the value in collaboration. It is in their interest that collaboration happens. It is almost like enlightened self-interest. First, you get multiple perspectives that strengthen the decision-making process. Second, you get buy-in because decisions are not made solely on the basis of the wisdom of a leader. This makes team members feel respected and that they are adding value in the decision-making process.
So, create a culture within your team where you are constantly consulting and enabling dialogue. Follow this and collaboration should be a cinch. CIO
As told to Ershad Kaleebullahashok Panikkar is the founder and executive director of Meta
Culture, a conflict-resolution organization. Send feedback to
collaboration cannot function without dialogue. Period. But a lack of dialogue is endemic in most organizations. the problem is that corporations don’t really know how to collaborate.
Ashok Panikkar ExEcutivE coAch
VOL/8 | ISSUE/042 4 f e b r u a r y 1 5 , 2 0 1 3 | REAL CIO WORLD
The Pursuit of APPinessCrafting the apt mobile application strategy and deploying it correctly will ensure maximum returns on mobility implementations in your organization.
Enterprise IT in India has evidently come a long way from dealing with mammoth Unix-based platforms to Wintel (a portmanteau of Windows and Intel) architecture and now to various flavors
of cloud computing. All of this has been significantly impacting the back-end architecture, but the front-end compute devices have remained largely unaffected—in fact they got more powerful along the way.
However, in the last decade and a half, it is perhaps the first time when end-user interface is witnessing a phenomenal shift. This change is actually contrarian to the quest for fat, fatter, and fattest desktops or laptops. Today, data access and consumption devices are increasingly getting smaller, and perhaps not as powerful as their counterparts sitting on your desks—but smarter nonetheless.
CIOs are increasingly acknowledging the fact that however watertight one may keep the enterprise ecosystem, mobile devices of various flavors and form factors are flooding organizations. There is no way to stop the advent of devices in one’s system.
But I believe that’s just the first level of a long and hard game. The game, in fact, has just begun. The harder part is to design an enterprise strategy and build the required infrastructure for developing and managing mobile apps for the long run.
It is pertinent for CIOs to now craft and deploy an exhaustive mobile app strategy to continuously deliver more effective—and sexier—apps to extremely mobile end-users, executives, and customers.
Several IT leaders choose to deploy an app or two to see how the wind blows. After which, they go about designing and im
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deploying enterprise infrastructure and strategy before going all out on creating mobile apps.
For these mobile apps to be truly useful, they need to be developed from scratch and not ported as limited versions of existing desktop apps. Developers can maintain a razor-sharp focus on end-user requirements and activities as they work with resource and real estate constraints on devices and can’t afford to unnecessarily clutter the screen. Developing mobile apps from scratch improves efficiency and effectiveness of the apps, and significantly reduces the time to market as now one needs to develop a lot less.
Going mobile first, and perhaps then porting it to desktops, however requires CIOs to re-look the talent and expertise within their organizations. Developing a customer-centric app with the right mix of business functionality, user-friendliness, intuitiveness, and design is crucial for its successful adoption.
A variety of mobile platforms and OS versions require constant adjustments and tweaks to the code of an app. This, in turn, impacts its back-end integration with existing application servers and systems. For instance, a highly successful consumer app for India’s premier general insurance company developed severe memory leaks when the Android platform upgraded itself to the latest version of Jelly Bean. Significant recoding was required to solve the problem. The need to secure and encapsulate the app at each
level of code to ensure corporate data security further adds to an organization’s woes.
CIOs in India are yet to find their feet with this new phenomenon. Its inherent challenges warrant CIOs to either create expertise within or partner with large, established players with proven expertise on conventional business technologies.
However, in my opinion, both of these approaches may not yield a desired result. Going insular will constantly pressurize your team to be on top of the game, and not focus on what matters the most: The business. Partnering with large, established vendors also poses its problems, as they may generally lack the nimbleness required to deal with ever-so-fast evolving mobile technologies.
I strongly feel that you may want to collaborate with niche players that know nothing but mobility. They bring in their cross-platform expertise and you share your domain knowledge. And considering how young mobile technologies are, if you are dealing with experts that are on the wrong side of 25, you are definitely not doing it right. CIO
Gunjan Trivedi is executive editor at IDG Media. He is an award-winning 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 [email protected]
Gunjan Trivedi leadinG edGe
Enabling bEttEr businEss OutcOmEs using it
DELLCustom solutions Group
You’ve spent many years in China and are currently Dell’s president for APJ.
How is the east different from India? And what lessons do you think Indian CIOs can learn from their eastern counterparts?The quality of investments in the technol-ogy space is creating tremendous efficien-cies, capabilities, and the ability to compete in the new world. Korea, for instance, com-pletely changed the game for itself due to its broadband capability and its focus on educa-tion. Thanks to a generation that has been exposed to technology, large and successful companies have been spawned and domestic demand has soared. There is no substitute to good policies and a focus on education, be-cause they are what generates investments and creates capability. As an extension, un-less enterprises make investments, they cannot create capacity, and without capacity creation, costs will not go down, and that’s an important ingredient in competing glob-ally. Chinese enterprises are able to compete globally because they are driven by strong policies, have good liquidity, and because they have made aggressive investments in capacity. They have also gone after emerging markets such as Africa, which have tradition-ally been India’s stronghold.
Technology investments and risk taking is an inherent part of conducting business in China. Similarly, Indian CIOs can lead a transformative agenda using IT as an en-abler. If their teams are still thinking only about infrastructure, apps, processes, and just keeping the lights on, CIOs need to bring about a change in this mindset. They need to make every single person in IT un-derstand the business—and the business benefits that technology can enable.
How can CIOs foster that aggression in a company, and still do more with less?
While there may be a liquidity crunch in the traditional segment, there are plenty of funds available for new business ventures and there is absolutely no challenge in fostering
new competition. Three years from now, cur-rent businesses are going to wonder how it can tackle this competition. CIOs should build new capabilities that can create an agile in-frastructure to meet these challenges.
Most companies spend 70 percent of their IT costs—and much of their talent—keeping the lights on. Instead, CIOs should target a 50-50 split between maintenance and in-novation. By outsourcing mundane tasks, CIOs can reserve a larger pool of talent to foster innovation. The challenge—and the opportunity—lie in taking 80 percent of the IT department and getting them to focus on innovation, and 20 percent to watch over management and maintenance.
What technologies can make a difference to the way IT enables business outcomes?
Instead of focusing on technology trends, CIOs should understand business strategy and lead the business to new opportuni-ties, instead of being forced to come up with solutions to meet business demands. That said, mobility, big data and analytics, cloud computing, and basic infrastructure up-grades can make a huge difference to how technology can enable business outcomes.
Today, customers are different, and infra-structure needs to change. Dell can help enterprises future-proof their infrastruc-ture better than anyone else, so that the enterprise is more agile and can respond to challenges and threats faster.
This interview is brought to you by IDG Custom Solutions Group
in association with
Amit midhAPresident APJ & chAirmAn- GlobAl emerGinG mArkets, dell
Amit Midha is president Asia Pacific and Japan region for Dell, and chairman of Dell’s Global Emerging Markets. Midha has been with Dell for more than 15 years and has held various leadership positions within the US and APJ regions, during that time. He has been recognized for his contributions to China and the information technology industry on many occasions. He was most recently honoured with the Magnolia Silver Award for his outstanding contributions to the city of Shanghai.
Amit Midha, President APJ & Chairman-Global Emerging Markets, Dell, spoke about how CIOs can lead from the front to enable business outcomes and overcome competition using technology advancements.
ExECutIvE ViEwPoint
CIOs need to make every single
person in the IT department understand the business—and the
business benefits that technology
can enable.
Today, as companies seek to both consolidate their vendor relationships and multi-source, they tend to engage with a small number (typically two to nine) of preferred, very large IT services vendors that can
be centrally governed. The strategic objectives of consolidation are important: Services clients can pre-qualify a few preferred suppliers that all users of IT services can easily and safely engage with. However, given the rapid pace of technology change, the need for agility, the new business stakeholders, and the rise of cloud services, a company's IT and innovation requirements are often best met by multiple best-of-breed suppliers.
Vetting privately held vendors can be a big challenge—so much so that some Forrester clients are required to use publicly traded vendors only for critical services.
However, in this technology environment, that approach will preclude you from accessing some of the best innovations. Instead, companies need a structured yet flexible approach that evaluates the vendor's stability as well as its service, solution, or delivery capability. CIOs who are thinking about a services initiative should consider several factors when evaluating their needs versus the needs of the marketplace:
Start with Financial Stability While different types of services relationships require different types of evaluation criteria, all prospective services vendors must be evaluated for financial and legal stability. The last thing you need is for your IT strategy, data, and resources to be tied up with a vendor that's heading south. A vendor that has problems in any of these categories should be taken off the evaluation list.Don't overlook the importance of investigating the prospective
How to Vet Your VendorCIOs need a structured yet flexible approach that evaluates a vendor's stability as well as its service, solution, or delivery capability.
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vendor's track record and talking with references. Companies must be prepared with meaningful questions related to the references' positive and negative experiences with the vendor. Clients should also endeavor to find other clients of the services provider rather than just the vendor-supplied references, since the vendor-supplied references are likely to be the most satisfied clients.
Evaluate the People Because services businesses are so people-dependent, it is essential to understand the vendor's human capital management approach and the quality of its people. While this action may be unnecessary for the large cloud-based solution providers (like Google and Amazon.com), it applies to virtually every company you plan to have a personal connection with. Be sure to evaluate the quality of technical personnel, internal training programs, and quality of account management personnel. Customers should also seek to determine how and under what circumstances a supplier will subcontract, and they need to ensure that they approve of all subcontracting activity.
Say the supplier passed the analysis, but is it the right fit for your firm? Once financial and human capital elements are addressed, clients need to consider alignment with their own needs. To maintain a successful relationship, firms and suppliers should be on the same page regarding:
Methodology/Knowledge Management: Companies should look at methodology as a library of best practices that can be used to provide consistent training for services providers' own internal consultants and as a means of achieving high productivity, consistency, and quality on client engagements. In best cases, consulting firms require and/or compensate consultants for depositing lessons learned into the company methodology or knowledge management system. This practice ensures that the methodology is living and constantly being refined.
The Ability to Coach and Transfer Knowledge: The ability to transfer competency (for example, improved development processes) to clients is an important source of value in integration and outsourcing relationships. In the modern world of agile and software-as-a-service (SaaS), for example, knowledge transfer is still important, if not more so. Many corporate development shops, moving to more agile-like methodologies, will require coaching to make the engagement work and to prepare internal
staff to use a new approach to software development. On the SaaS or platform-as-a-service (PaaS) front, companies have similar requirements since they need to
learn how to integrate these services and platforms into their existing IT organization. Make sure that you understand how your vendors achieve the required knowledge transfer and seek references on their knowledge transfer capability.
Functional Breadth/Depth: Integrators and outsourcers have varying degrees of expertise in their functional offerings. Functional offerings include horizontal capabilities, such as datacenter outsourcing and desktop asset management. The breadth of functional offerings is significant in large-scale engagements, like full-service outsourcing. In more cases today, the depth of the functional expertise will be a primary consideration. For example, you may be using a vendor such as ThoughtWorks for Agile application development. In this case, you would only care about the depth of its capability in this area and not about its breadth of offerings across the IT stack.
Vertical Breadth/Depth: Deep vertical business expertise and technology capability is required to help clients optimize or innovate. Customers should evaluate a vendor's vertical capability not just by looking at revenue per vertical segment but by also looking at the credentials of the vendor's vertical consultants and experts and the customer references.
Scalability: Companies must make sure that a prospective vendor is sufficiently large (or small) to accommodate their project. If the largest similar project the vendor has dealt with before is significantly smaller than the one you are considering, you need reassurance that the vendor can step up in terms of staff, infrastructure, and process. Conversely, if your project is much smaller than the vendor's norm, this is also a risk. Clients that fall into the "small fish in a large pond" category rarely receive sufficient management attention.
Remember that some criteria will matter more to your internal IT and business contacts.
While methodology may not seem as important as it relates to cloud providers or even very niche services providers, it is still very important to your internal customers. These customers will need to understand how to implement and integrate their cloud solution, and they will need to ensure that their niche services providers have the ability to consistently deliver on their promises. CIO
Stephanie Moore is a VP and principal analyst at forrester research, serving
sourcing and vendor management professionals. Send feedback to [email protected]
If your project is much smaller than the vendor's norm, this is also a risk. Clients that fall into the "small fish in a large pond" category rarely receive sufficient management attention.
Stephanie Moore Vendor ManageMent
REAL CIO WORLD | f e b r u a r Y 1 5 , 2 0 1 3 2 9VOl/8 | Issue/04
to learn more about vendor
management read Getting the Vendor Collective Right
on www.cio.inc o.in
Crash Course
2 8 M o n t H X X , 2 0 0 5 | www.cio.com
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COLUMN callout style—the color of some words can be changed for emphasis.
Bernard Golden ThiNk TaNk
CIO
We built a private cloud using Windows Server
2012 and it’s guaranteed a faster disaster recovery
process, higher availability, and more customer
satisfaction.
Talisma Builds a Private CloudJins Varghese, Director, IT and Hosting, Talisma, talks about why he chose to create the company’s private cloud using Windows Server 2012 and how it’s benefited the company.
Jins Varghese provides leadership to Talisma’s IT functions. He leads the company’s IT and hosting operations, internal service delivery, and service support of infrastructure and applications. In this key role, Varghese also guides the development and deployment of innovative infrastructure management strategies and solutions.
Redefining eRa
CLOUD
Why has Talisma adopted Windows Server 2012 to build its private cloud?
At Talisma, we decided not to pay another vendor for software licenses and leverage an existing investment by entering into an enterprise agreement on Windows Server 2012 and Hyper-V. We built a private cloud model for our production and development environments. Its adoption has not only ensured higher availability, but has also guaranteed a faster, more efficient disaster recovery process. Both these benefits have, in turn, created a proportional hike in customer satisfaction levels.
Considering that you are one of the early adopters of Windows Server
2012, how easy—or difficult—was it for you to implement and roll out your private cloud based on Windows Server 2012?Cloud computing cannot be passed off as a fad anymore and today private cloud models have gained greater interest over public cloud models. Even as an early adopter, we faced a few hiccups in terms of configuring storage. But nonetheless, it was a fairly uncomplicated deployment of the private cloud infrastructure within the organization. We were able to get four blades and two clusters up and running in a matter of four weeks.
What kinds of applications and workloads are you running out of
your private cloud?We are currently running a number of applications and workloads out of our private cloud environment. The applications range from file and print, SharePoint, development
and QA virtual machines with Windows to Visual Studio and SQL. In the near future, we also have plans to migrate other core infrastructure components such as active directory, DNS, DHCP, Exchange and Lync onto our existing private cloud environment.
What level of improvements in efficiency have you seen as a result
of this implementation and what are some of the key business benefits that you have achieved?There has been a significant improvement in our efficiency through increased virtualization.
As a result, we are able to run an average of 25 virtual machines (VMs) per host. Also, the time required to deploy new VMs has gone down by 20 percent. As a result of this private cloud rollout, planned downtime associated with VM and VHD migration has reduced to zero.
You are also adopting Windows Azure. So, what kinds of applications
and workloads are you moving to Azure and how are you going to integrate them with your private cloud?While the private cloud model at Talisma is being used for our corporate IT services, Windows Azure is being deployed for hosting where we have rapid deployment
requirements. Therefore, at this time, we do not have any immediate plans
of integrating Windows Azure with our existing private cloud model since both of them are being used for different purposes.
www.cio.com | m o n t h X X , 2 0 0 5 2 9
Michael Schrage It’S all about the executIon
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CIO
We built a private cloud using Windows Server
2012 and it’s guaranteed a faster disaster recovery
process, higher availability, and more customer
satisfaction.
Talisma Builds a Private CloudJins Varghese, Director, IT and Hosting, Talisma, talks about why he chose to create the company’s private cloud using Windows Server 2012 and how it’s benefited the company.
Jins Varghese provides leadership to Talisma’s IT functions. He leads the company’s IT and hosting operations, internal service delivery, and service support of infrastructure and applications. In this key role, Varghese also guides the development and deployment of innovative infrastructure management strategies and solutions.
Redefining eRa
CLOUD
Why has Talisma adopted Windows Server 2012 to build its private cloud?
At Talisma, we decided not to pay another vendor for software licenses and leverage an existing investment by entering into an enterprise agreement on Windows Server 2012 and Hyper-V. We built a private cloud model for our production and development environments. Its adoption has not only ensured higher availability, but has also guaranteed a faster, more efficient disaster recovery process. Both these benefits have, in turn, created a proportional hike in customer satisfaction levels.
Considering that you are one of the early adopters of Windows Server
2012, how easy—or difficult—was it for you to implement and roll out your private cloud based on Windows Server 2012?Cloud computing cannot be passed off as a fad anymore and today private cloud models have gained greater interest over public cloud models. Even as an early adopter, we faced a few hiccups in terms of configuring storage. But nonetheless, it was a fairly uncomplicated deployment of the private cloud infrastructure within the organization. We were able to get four blades and two clusters up and running in a matter of four weeks.
What kinds of applications and workloads are you running out of
your private cloud?We are currently running a number of applications and workloads out of our private cloud environment. The applications range from file and print, SharePoint, development
and QA virtual machines with Windows to Visual Studio and SQL. In the near future, we also have plans to migrate other core infrastructure components such as active directory, DNS, DHCP, Exchange and Lync onto our existing private cloud environment.
What level of improvements in efficiency have you seen as a result
of this implementation and what are some of the key business benefits that you have achieved?There has been a significant improvement in our efficiency through increased virtualization.
As a result, we are able to run an average of 25 virtual machines (VMs) per host. Also, the time required to deploy new VMs has gone down by 20 percent. As a result of this private cloud rollout, planned downtime associated with VM and VHD migration has reduced to zero.
You are also adopting Windows Azure. So, what kinds of applications
and workloads are you moving to Azure and how are you going to integrate them with your private cloud?While the private cloud model at Talisma is being used for our corporate IT services, Windows Azure is being deployed for hosting where we have rapid deployment
requirements. Therefore, at this time, we do not have any immediate plans
of integrating Windows Azure with our existing private cloud model since both of them are being used for different purposes.
We have helped drive transformation in the industry before, and
customers can count on us to do the same in the cloud era—with the Cloud OS—
and beyond.
Creating a Bridge to Tomorrow
Srikanth Karnakota is Microsoft’s India country head for its Server and Cloud Platform business. In this role, he is responsible for P&L, strategy and marketing of Microsoft’s Cloud and Server platform business. In his earlier role at Microsoft, Karnakota incubated start-ups and the venture capital engagement arm of Microsoft India.
The Cloud OS will help enterprises step into the future, while allowing them to carry forward their current investments, says Srikanth Karnakota, Country Head, Server and Cloud Platform, India, Microsoft.
Custom solutions Group MICROSOFT
Why should enterprises rely on Micro-soft and its version of the Cloud OS?
In this era of cloud services and connected devices, we’re seeing that the role of the OS is changing, and that it’s more critical than ever. It is no longer just about managing hardware and delivering apps, it’s also about provid-ing a comprehensive platform for the world’s applications. We call this the Cloud OS. Win-dows Server 2012 is the cornerstone of the cloud OS. And we are seeing enterprises already betting on Windows Server 2012 to realize the promise of cloud computing.
With Windows Server and Windows Azure at its core, the Cloud OS expands the role of the OS from one server to multiple datacent-ers—private, hosted and public. The Cloud OS pulls in traditionally separate technologies—like virtualization, networking, database and storage—to foster a modern datacenter with-out boundaries and to provide a platform for modern applications.
We believe our unique legacy of delivering the most widely-used operating systems, apps, and global cloud services, positions Microsoft to deliver the Cloud OS. Our expe-rience in running petabyte-sized datacenters to deliver over 200 cloud services creates a virtuous cycle for the development of Win-dows Server and Windows Azure. And with the Cloud OS, customers are able to use familiar application development and man-agement tools, as well as common data, identity and virtualization platforms, across their private clouds, service pro-vider clouds, and the Windows Azure public cloud. This allows them to carry their current skills, experience, and investments forward.
Why is Microsoft trying to achieve so much with Windows Server 2012?
It is all about delivering a compelling product that addresses customer needs. Windows Server 2012 is the deepest and broadest Windows Server release ever. This release powers the Cloud OS, transforming and mod-ernizing IT operations for all kinds of organi-zations, whether they are based on a single server sitting under a desk, or server rooms powering mid-sized organizations, or mas-sive, distributed global datacenters. There is something important here for customers of all sizes. Plus, as always, Microsoft is commit-ted to delivering the best value and the best overall economics on the planet. We have helped drive transformation in the industry before, and customers can count on us to do the same in the cloud era and beyond.
It’s been about six months since Win-dows Server 2012 was launched.
What’s been the market’s response?The market’s response has been phenom-enal. Forrester says this is the biggest re-architecture of Windows Server since Windows NT, and for customers contem-plating a new cloud or virtualization project or initiative, Windows Server 2012 should be the virtualization platform of choice. We have more and more customers choosing Windows Server as the platform to virtual-ize their workloads. We are also seeing great response from partners who want to work even more closely with us to deliver compel-ling solutions to customers. The feedback from our ITPro community has also been extremely positive.
Today, perhaps more than ever, the business needs CIOs to connect closer with customers to help it stay profitable. Some of your peers tell you how to do that.
VOl/8 | ISSUE/048 0 F e b r u a r y 1 5 , 2 0 1 3 | REAL CIO WORLD
Cover Story Staff Management
To help avert disaster, we’ve identified eight IT hiring mistakes and tips for avoiding them.
The Poorly Written Job Description.By the time companies realize they need more IT staff, oftentimes they already have overloaded other workers. This can lead managers to either rush the job description or pass the task on to HR.
“HR will never be as up to date on [relevant] terms as IT. That leaves them to focus too heavily on skills and years of experience,” says Mark Herschberg, principal at advisory firm White Knight Consulting.
Job descriptions that are too general and don’t adequately address the corporate and department culture create more work later, Herschberg adds.
Rachel Russell, director at Allegis Group’s private talent management subsidiary TEKsystems, recom-mends prioritizing five must-have characteristics for each position and your organization overall. “While it might be therapeutic to write out every possible skill and attribute you’d like in a new hire, expecting to find someone who meets a laundry list of criteria isn’t realistic,” she says. To develop your
A poor hiring decision in IT can jeopardize budgets, the morale of other workers, and the future of a company. From
writing dated, irrelevant job descriptions to accepting a less-than-ideal candidate because work is piling up, classic hiring mistakes are just waiting to trip up managers.
“I hated doing job descriptions and usually only made minimum effort to get them right,” says Jim Smith, CEO of IT project consultancy Enterprise Management Group. “Also, as I look back at my failings, I made the mistake of promoting based on ‘he’s a good guy and I think he can do it.’
Smith, whose company is called upon to turn around unsuccessful IT projects, warns his peers, “It’s never the people you fire that get you into trouble, it’s the ones you don’t.”
For instance, Smith consulted on two particularly memorable projects that had been led by inexperienced managers. “One company was forced to write off $17 million (about Rs 93 crore) with nothing to show for it, and the other extended its project cycle from two to four years,” he says.
8 Classic IT Hiring Mistakes
REAL CIO WORLD | F e b r u a r y 1 5 , 2 0 1 3 3 3VOl/8 | ISSUE/04
Reader ROI: What to watch out for when you’re hiring
The importance of cultural fit
Components of a hiring strategy
By Sandra Gittlen
learn to make better hires and build loyal, skilled and collaborative teams.
and How to Avoid Them
Cover Story Staff Management
VOl/8 | ISSUE/04
list, she suggests conducting an internal au-dit of your successful employees.
Along with narrowing down the job description, update it. Managers often use company or industry templates or get help from HR to craft postings. “Make sure it’s not the one you used 10 years ago and that it’s going to be appealing to candidates, describing selling points like growth
path, cool projects, and perks,” says Tracy Cashman, partner and general manager of the IT search division at the Boston-based WinterWyman staffing consultancy.
Being Hyper-focused on Technical Skills.Hiring managers, HR, and recruiters can fall into the trap of trying to match candidates
based solely on technical skills. They zone in on syntax, tools used in a specific development environment, and hands-on experience with the latest version of software being used, says Gagan Singh, executive vice president and global HR leader at mobile e-commerce firm Freeborders.
Companies instead should emphasize behavioral traits such as an applicant’s
Keeping a Rs 3,000-crore company with a diverse portfolio (from tobacco products to condiments and hospitality to infrastructure) going, takes plenty of IT smarts. Finding that talent is the job of Santosh Singh, GM-IT, DS Group. Sometimes, the pressure to recruit staff can be overwhelming, he says. On one occasion, that pressure forced Singh to make a call he would later regret.
The Beginning Not too long ago, Singh was on the hunt for a mid-management candidate for one of the company’s manufacturing set-ups. “The remote nature of
the location attracted almost no internal volunteers,” he remembers. “Anyway, we knew from experience that
local hires last longer in such cases.”Pretty soon, the pressure to find someone
began to build. To make matters worse, external candidates weren’t really serious, delaying the hiring process. The company’s interview and evaluation process takes 25 days and notice
takes another month. So every time a prospective candidate stood up the hiring panel, it lost precious
time. “About 70 percent of the candidates we interviewed only wanted to
evaluate themselves. They would then try to en-cash our interest
in them somewhere else.”Before Singh knew it, six
months passed and by now, the position was
vacant for too long.
A Desperate MoveFinally, Singh received a resume
from a management executive who was from
the target region. He remembers tell-tale signs popping up right at the beginning of the hiring process. “The resume looked
tailor-made to fit the job description,” he says. “But the technical experience had little detailing. Ten minutes into the interview, we realized that we had been short-sold about the person’s technical experience.”
Under pressure, the panel made a decision, “We hired him,” says Singh. “The candidate promised to pick things up and learn quickly.”
The End GameSingh dove straight back into work. Days flew by and amid his many other responsibilities, Singh’s new recruit fell off his radar. It was a full six months before Singh figured that his new hire was possibly doing more harm than good. “Because we were forever occupied and due to his remote location, we realized that all these days he hadn’t learnt any new skills and most of the IT management was still being handled remotely,” says Singh.
Neither did the candidate seem committed to learn, says Singh. This affected the rest of the team and impacted overall staff morale. That’s when Singh decided to step in. “I tried to manage and salvage the situation by meeting the candidate personally. But the candidate didn’t have the potential to grasp such technical responsibilities,” he says.
Eventually, Singh recommended that corrective action be taken by the HR department and the candidate was asked to leave. “No one wants to fire an employee,” says Singh. “It’s probably the most emotionally difficult part of this job.”
Today, Singh’s a wiser man. “I think I just learnt to say ‘no’ from all this. No to management demand and no to candidates who take company time for granted. I especially learnt to say no to hire a lesser-than-okay candidate under pressure.”
—By Shweta Rao
Don’t Cave in to Hire PressureIt may not be easy to find the perfect candidate. But, getting a wrong one can make it difficult to recover from your mistake. A CIO tells us about his hiring slip-up.
Cover Story Customer Focus
ability to learn, problem-solving skills, adaptation level, and capacity for innovative thinking and collaboration.
Singh recommends incorporating interviewing techniques that assess soft skills, such as how candidates would handle certain common scenarios, and giving those results equal weight in hiring decisions. Companies should look for strong customer service, problem-solving and communications skills.
Fitting in is also important.“An organization must adequately source candidates that carry the appropriate social aptitude for quickly assimilating into the team in order to make an immediate impact,” says Joel Capparella, vice president for talent and outsourcing provider Yoh.
Capparella relies on agile development methodologies to determine if a candidate will be a good collaborative fit across an entire IT team, including business analysis, programming and quality assurance.
Don’t forget to have the candidate meet the actual IT team as well, advises Jon Grimes, CTO at office space finder The SquareFoot. “Team chemistry is probably one of the most important aspects of a hire. No matter how competent the candidate might be, if they are difficult to work with, they become a bad apple and can ruin a team’s morale,” he says.
Taking a Short-term View of Hiring.Hiring managers sometimes recruit for their immediate demands instead of factoring in the technology and leadership skills they’ll need later.
For instance, they laser-focus on finding Java developers instead of looking for IT professionals with a broader Web development skill set. “Leaders try to find a needle in a haystack because they believe that one skill is going to make or break the organization,” says Amelia Generalis, vice president of business HR for SAP Cloud.
Given the ongoing economic scenario, it’s going to be tough for CIOs to pay too much attention to staff challenges in the coming months. According to CIO research, one out of every 10 CIOs is going to spend less time hiring, developing and managing IT staff in 2013, compared to last year.
Jagmohan Bhatt isn’t one of them. As the SVP-IT at Arshiya International, India’s biggest free trade warehousing provider, Bhatt is going to be busy looking for IT talent to help with the international company’s restructuring. He tells us about what he is looking out for this hiring season.
What never fails to impress you during an interview?Someone who is not afraid to say ‘I don’t know’. People forget to appreciate honesty, the rare characteristic. I look for it in every interview. I ask candidates to talk about their experience—or the lack of it—in context of our job description. It’s the areas where they don’t have experience that matter. First, because I’d rather know—upfront—that someone I hired only initiated a project he says he has experience in—rather than discovering it later during a critical project update. Second, owning up to a lack of experience points to a candidate’s honesty, and their keenness to learn and adapt. That’s a very desirable quality. Honesty and maturity save people more time than they realize.
What are you not looking for?A candidate with a technical mind-set will find it difficult to see both the needs of end-users, and linkages in the supply chain. Real value, at every level, can only be unlocked when candidates are keen to understand end user need. When one looks for a SAP consultant, for example, one invariably finds people with five to eight years experience—but who are very focused on technology. That will not serve my purpose. I look for an individual’s aptitude to learn, and acquire new skills. We need talent that understands business and proactively delivers solutions. Talent will transform our IT function into a value-generator. Also, I don’t need dispassionate, short-sighted staff in my department, however skilful they are.
So, business skills trump technical skills?Yes, wide-viewed business skills trump hyper-focused, myopic technical skills, any day, although being blind to technical skill sets is wrong.
Someone with business focus can visualize end-user needs. He won’t need a team lead or manager to clean up his monthly objective sheet. Hyper-focused techies normally follow a structured approach to team work. The time they take to build business understanding, get business sign-offs, and get on with technical development lengthens the delivery phase.
What’s the sign of a winning resume?One, a candidate must have an aptitude for business that’s honed with experience in multiple industries. After moving across industries like telecom, pharma and now logistics, I think cross-vertical understanding is important. Two, he must not be a ‘jumper’; he must have spent quality years at each company. —By Shweta Rao
REAL CIO WORLD | F e b r u a r y 1 5 , 2 0 1 3 1 0 7VOl/8 | ISSUE/04
Avoid Dis-Appoint-mentHiring someone you’ve never met can be tricky and can lead to plenty of disappointment if you’re not careful. What’s a sure-fire way to know you have a good candidate sitting across you? They say ‘I don’t know’.
Cover Story Staff Management
Will Farley, webmaster at development firm Web Power Labs, says hiring for low wages just to get the job done can be just as shortsighted. For instance, Farley recently posted entry-level developer positions on Craigslist and through a local university.
From those efforts, he hired two university students who would receive class credit in lieu of pay and a local programmer who would accept an hourly wage. “The two students were unreliable and were dismissed for poor attendance and the Craigslist applicant could not perform and was unwilling to learn new methods and was also dismissed,” Farley says.
His conclusion: “I wasted a lot of time recruiting, training, scheduling and the like with no payoff. I will not seek low-cost individuals for an IT position in the future.”
Not only does short-term, narrow recruitment force multiple hiring sessions (now and down the road) for the same position, but limits the talent pool. Creating a long-term vision for the position attracts candidates that could be better assets to the entire company.
One approach is to train current employees to plug immediate skill gaps. Then, hiring managers can take time to consult with their peers across the enterprise to identify upcoming projects and their anticipated expertise.
Rushing the hiring process.When the work is piling up, it’s tempting to say “yes” to a candidate based primarily on the need to get projects off your desk.
“While it’s completely understandable to just want to be done with the recruiting process, patience is a virtue,” TEKsystems’ Russell says. “No matter how tempting, don’t compromise quality for speed.”
Jeff Gordon, founder of online marketing agency Interactive99 and a former industry recruiter, agrees. “If a company chooses the wrong person, it can be more painful than having vacant headcount,” he says.
Gordon believes companies should bring in at least three candidates to fill any position to get a good understanding of their strengths and weaknesses.
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Also, if you identify red flags in the screening process, don’t gloss over them. According to Russell, “[Those red flags] will be blazing after you extend the offer so keep searching. A great hire is worth the wait.”
Dragging Out the Hiring Process.Stringing candidates along can be as detrimental as making rash hiring decisions—especially in this economy where certain IT jobs, such as developers, are in high demand.
“Our interview process for IT talent is lengthy with interviews that can go up to four steps,” says Joanne Johnson, director of recruiting at technology integrator Force 3. “This means that we have candidates coming in three times, not including initial screens and tech screens.”
She acknowledges this approach takes its toll on the candidate pool and even can cause those who need to make a move quickly to drop out.
To ensure that the company is not only attracting top-notch applicants, but hiring them as well, Johnson educates IT managers on how to expedite interviews and decision-making. In addition, Force 3 is contemplating a move to full-day interviews vs. multiple rounds.
Overlooking Internal Talent.The best candidate for the job could be right under your nose. However, you’d only know that if you had a “next step” for your workers, according Russell.
“A-players like to have a vision of how they can develop and advance, and showing them opportunities for growth that exist within the company will help retain them,” she says.
SAP uses its SuccessFactors human capital management software to track employees’ hard and soft skills. They map available internal skills against project requirements to identify candidates for promotion or transfer. Employees are able to add skills as they acquire them, such as project management or a new technology, ensuring profiles are always up to date.
Generalis considers this the human capital equivalent of having an inventory of your technology assets, adding the software provides unique visibility into existing
resources so you can train up internal staff in time to lead future projects.
Not Educating Recruiters About Your Hiring Requirements.Recruiters can command upwards of 25 percent of a hire’s first-year salary. Yet, many IT managers don’t take the time to educate them about what they need in terms of hard and soft skills and corporate cultural fit.
This results in recruiters, who might be unfamiliar with the latest technology or changes in work style, piling up managers’ desks with nappropriate resumes.
Bharat Jadhav is on a hiring spree. As the head of IT operations and SAP support for Kalyani Hayes lemmerz, a globally-renowned truck wheel rims manufacturer, he has been tasked to set up a SAP Competency Center that will support all the offices of the Kalyani group in the Asia Pacific region. That will mean that his seven-man team will have to grow to a 50-strong department.
But as he goes about looking for recruits, Jadhav isn’t going to follow the old rules of hiring. He tell us why he is breaking away from clichés and conventions.
Conventional Wisdom: Candidates with strong interpersonal skills make better hires.Jadhav’s Take: I prefer hardcore technical skills over soft skills.In order to establish the SAP Competency Centre, Jadhav will need candidates with the ability to build apps that can run quickly over the Web and support users sitting miles away.
Breaking the Rules
A CIO from an Indian manufacturing company tells us why he’s breaking all the rules this hiring season.
Cover Story Customer Focus
“Quite often recruiters will ask technical questions and take notes without truly understanding the answers, which prevents them from capably qualifying the candidate,” Interactive99’s Gordon says.
Hiring managers should meet recruiters regularly. Also, companies should ensure the recruiters don’t rely heavily on search engine optimization and keyword searches on career sites and overuse social media to identify prospects. A recruiter should have intimate knowledge of the industry, the organization and the open position’s specific requirements.
Not Sharing Your Job Opening with Your Peer Network.Most IT executives—and their subordinates, for that matter—are part of online industry groups, peer networking sites and social media. These are optimal channels to unearth qualified applicants and referrals.
Hiring managers, who tend to leave job posting to HR, might have more success sharing the listing among their online contacts and friends and offering bonuses for employees who do the same.
“Job boards are a helpful recruiting tactic, but they are missing the communication and
relationship aspect of recruiting,” Russell says. “Research has proven that a new hire is significantly more likely to succeed at a company if they come from a referral.”
Companies that sail past these classic pitfalls are sure to make better hires, get projects underway in a timely and cost-effective fashion, and build a loyal, skilled and collaborative team working toward their next revenue-producing challenge. CIO
Sandra Gittlen is a freelance business and technology
journalist in the greater boston area. Send feedback on this
feature to [email protected]
REAL CIO WORLD | F e b r u a r y 1 5 , 2 0 1 3 3 7VOl/8 | ISSUE/04
“We aren’t a customer-facing function that needs to weigh soft skills seriously. The knowledge base of my new hires needs to be focused heavily on Internet capabilities, mainly Java and. NET framework skills. While ‘soft’ skills are critical at higher management levels, an IT manager must have a high-level of technical competence throughout the promotional process to be able to quickly nip problems that come up every day at work,” he says.
The search for technical skills isn’t making his job any easier. “Technical skills aren’t as commonplace as people gather,” he says.
Conventional Wisdom: Workplace diversity increases productivity.Jadhav’s Take: I can’t afford to hire women.Jadhav’s new IT department will be devoid of the fairer sex. Yes, devoid. Before eyebrows are raised, he goes beyond the clichéd norms on workplace homogeneity and delves into the practical and more real aspects of being an IT shop at a manufacturing firm.
Kalyani Hayes lemmers’ manufacturing base (at Chakan) is 40 kilometers away from the city of Pune. The location paints a starkly different workplace from the plush office spaces that other IT companies promise. “Very few candidates want to work with the constant hum of a lathe machine chugging away a few yards away from their desks, six days a week,” says Jadhav. “And then we have frequent IT updates
that need to be performed late at night. We will have to work in shifts, odd hours and overtime if need be. Many women candidates aren’t comfortable with that.”
Jadhav doesn’t take it as the man’s privilege trumping over a woman’s right to a job in his company. He looks at it impartially with the eye of a true problem solver. “It may look stern, but we do not have the funds to transport women employees back to their homes because it is late. We do have women employees working under other functions here. But, it gets tricky when it comes to critical support for internal as well as external users,” he says.
Conventional Wisdom: Social media galvanizes workplace collaboration.Jadhav’s Take: I’d avoid social media at all costs.In the wake of a completely interconnected social world, Kalyani Hayes lemmerz’s has a strict, no-nonsense Internet policy that restricts access to almost everything except e-mail and generic Web search sites. And why not, asks Jadhav. “Apart from avoiding the usual workplace distraction, restricted access ensures that confidential business information, especially critical product design data, the lifeline of any manufacturing company, remains within our walls. Cloud and virtualization have introduced enough concerns with design data security anyway,” says Jadhav.
—By Shweta Rao
SpiceJet made Rs 140 crore in three days selling 7 lakh tickets at Rs 2,013—on seats it probably would have made little from. Here’s the story behind the campaign that created a storm in the market—and IT’s role in it.
Folks in the Indian aviation industry hate the months following New Year’s. It’s that time of the year when airlines—that were making money hand over fist, piggybacking on the holiday season—begin to see a dip in sales.
Between January and March of 2012, for instance, SpiceJet’s net profit was Rs 249 crore in the negative. Compare that to the Rs 102 crore profit it made from October to December of the same year and you begin to understand the pressure on SpiceJet’s management to find a way to pull up sales during the first few months of a year. Finding a way to make sure every quarter is profitable is a challenge
every company faces. But not being able to do so bites more deeply in the aviation industry with its sizeable fixed costs.
One of the ways SpiceJet could make more money was to charge more for every seat it sold during January to March. But with low demand for air travel at that time of the year, and a watchful DGCA (the regulatory body for civil aviation), that idea wouldn’t really fly.
The only other option was to sell more seats. That wasn’t going to be easy either, not with a passenger load factor—an industry metric that measures the utilization level of an airliner’s planes—already running at about 74 percent (the industry
BY aNUP VaRIER
Reader ROI:
How to prepare for sudden business requirements
The importance of infusing flexibility and agility in IT systems Im
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average is 76 percent), there wasn’t really much room to grow.
But there was. “It was a collective management decision
to do something new, something that would acts as a catalyst and create an opportunity which would force people to fly in the lean season,” says Virender Pal, CTO, SpiceJet. The airline wanted to do a Godfather: Make an offer passengers could not refuse. It called its tempting offer the Big Sale.
Targeted at travelers who wanted to take a weekend off or plan a trip between February 1 and April 30, SpiceJet announced a three-day sale of 10 lakh tickets—out of a total of 50 lakh seats it would sell during the season—at Rs 2013 (a play on the New Year), on all its domestic routes.
Out in the market, it was an offer that fell straight from the sky. At Rs 2,013, SpiceJet was selling tickets that were 70 percent cheaper compared to regular fares
on some sectors. The campaign caught the entire industry off-guard.
The market, however, wasn’t the only group that would be surprised by the promotion.
Close CallThe rivalry in the Indian aviation industry is among the most intense in the world. Price wars and promotional imitations are a fact of life.
That makes it imperative for ideas to go from concept to execution extremely fast.
But that also meant that SpiceJet’s IT team couldn’t be given a lot of time to prepare for the onslaught that the Big Sale would subject the company’s IT infrastructure to. All the IT team had to prepare was four days; not a quarter, not a month, not even a full week.
“The time-to-market for an idea has to be minimal and management was looking to launch the sale in two days. But we didn’t want it to end in a disaster and negotiated to launch it in four days, not two,” says Pal.
While the IT team rolled up its sleeves, SpiceJet’s marketing team went in overdrive pitching the Big Sale to customers, bombarding every medium it could find. The offer was put up on SpiceJet’s website and circulated via Facebook and Twitter. It also utilized the television and FM network of its parent company Sun TV to spread the word.
“Taking into account the reach of our marketing campaign and the number of hits that were expected, IT took the lead and assessed our server infrastructure capability and decided on the channels through which we would conduct the sale,” says Pal. SpiceJet’s website and online travel agents (OTAs) were chosen as the most apt channels to conduct the sale.
Fortunately for Pal, SpiceJet didn’t have to invest or deploy additional infrastructure to meet the demands of the promotion. When it comes to infrastructure, Pal says, airlines are always over-provisioned. The global distribution systems (GDS)—responsible for online reservations—are not run out of simple rack servers. Because of the large volume of iterations these severs undergo, multi-tiered mainframe type machines are
Case File | SpiceJet
It was a collective management decision to do something new, something that would act as a catalyst and force people to fly in the lean season. Virender Pal, CTO, SpiceJet
deployed. “So, it was more a question of how to manage the processes on the servers. You have the option to set priorities for different channels and that is what we were managing in real-time,” says Pal.
In reality, piloting this plane wasn’t going to be as simple.
Flight Plan“The most important factor of this offer was that
the sale had to go on for three days—no matter what,” says Pal. This was a deviation from the regular norm of sales which offer limited amount of inventory and close the sale when the inventory is exhausted.
SpiceJet’s management reasoned that such an approach would help create momentum and help in positioning the company’s brand over time. But it also meant that there were no templates Pal could replicate in order to make this possible. “Although my server capacity was able to handle twice or thrice the load it normally does, we decided to monitor and control the inflow of visitors from our website,” he says.
Pal had to tweak his systems to ensure that the ticket inventory wasn’t sold out before the stipulated time. “If I opened the gates completely the whole inventory of 10 lakh tickets would have been sold out in just one-and-a-half days,” he says.
But how would he control that? Pal says he took a leaf out of the Balaji
temple’s (in Tirupathi) management handbook. As a case study in crowd control, few serve as a better example than the temple.
“They allow only a fixed number of people into the halls at a time. But it was challenging to replicate this into an IT system,” says Pal.
Any attempt at regulating the flow of customers would give them the impression that SpiceJet’s servers had crashed or were unable to take the load. Pal decided that people who were already in the booking flow should not suffer. “We were managing the sessions in such a way that the next set of people were let in only once the people who were already into the system had come out,” he says.
And he had to achieve this while insulating the core systems that manage the entire gamut of airline operations.
Case File | SpiceJet
Rundown of the
numbeRs:spiceJet’s big sale
Between 11th and 13th January,
SpiceJet offered 10 lakh tickets for the price of Rs 2,013.
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“We had a dedicated team that monitored the allocation of priorities to different processes onto my servers, second-by-second,” says Pal. This team watched over important areas—such as the performance of the website, internal applications, airport check-ins—and had systems in place to monitor and raise alerts that would be escalated to Pal or even up to the CEO if the situation demanded it.
Up in the AirSpiceJet’s Big Sale was a huge success.
The airline sold 7 lakh tickets in 72 hours. When you compare that with the 3.7 lakh tickets that IRCTC sells a day, you get an idea of the scale of the operation.
According to Pal, during peak loads, the system handled 26,000 transactions per hour (about seven to eight transactions per second)—as opposed to its regular peak loads of 2,000-4,000 transactions an hour.
But along with bouquets come brickbats. Not everyone who tried to grab tickets during the sale was able to beat the traffic congestion online. Customers unable to book tickets vented their ire on Facebook and Twitter. Customers who tried the OTA route were unable to book tickets under the offer. While MakeMyTrip and Yatra claim this was due to limitations of SpiceJet’s IT systems, Pal points to the OTAs’ inability to handle the unexpected load.
Pal, however, clarifies that it was all a part of the plan. “The system was always available. If during seat selection, the limit on the number of people was reached, the next set of people were re-directed to a cooling server, from where there was an automatic timed redirect to the website,” says Pal. This was echoed by SpiceJet’s CEO Neil Mills who was quoted in an Economic Times article, saying:
“We regulated the flow and we booked about 10,000-15,000 seats every hour during the weekend,” said Mills.
Purely in terms of revenue though, this offer was a huge success. SpiceJet says it earned over Rs 140 crore from the campaign—more than 35 percent of its monthly sales of Rs 400 crore—in just three days.
It’s also changed the way SpiceJet’s executive see the New Year. CIO
anup Varier is correspondent. Send feedback on this feature to [email protected]
7 lakh tickets sold
over 3 days. In comparis-ion, IRCTC sells an average of 3.7 lakh tickets a day
Rs 2,013: The cost of each ticket, a 70
percent knockdown on the average price of ticket
on some sectors
The Big Sale made SpiceJet
Rs 140 cRoRe in 3 days
The amount of money SpiceJet made in 3 days is 35 percent of its
monthly sales in just 10 percent of the time
The Big Sale saw up to
26,000 transactions per hour—or about 7-8 transactions
a second
Normally, at peak load, SpiceJet’s servers see 2,000-4,000 transactions an hour.
The IT department got only
4 days to pRepaRe
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Prashant Sharma, SVP Global Demand-Supply Organization and Global IT, Zydus Cadila, believes that if pharmaceutical companies can find a way to consolidate their supply chain networks, it could trigger the start of a number of benefits for the industry. But it’s going to require visionary thinking and a willingness to work with rivals.
Prashant’s agenda: to increase
collaboration with direct competitors
and unearth shared capabilities.
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CIO: The Planning Commission has set the pharma industry a target: To reach $100 billion by 2020 and account for five percent of the global drug industry. Yet, in the last two months of 2012, the sector’s revenue growth plunged to a two-year low. Are we going backwards?Prashant sharma: December 2012 saw one of the lowest growth rates in a long time. But the reality doesn’t seem as drastic as the last quarter suggests.
Some of the trends being discussed, as the industry figures out what’s behind the slowdown, include a slowing in new
patient detection in chronic therapies, generics acquiring a bigger share, and a subdued seasonal anti-infective market due to lower respiratory infections compared to the prior period.
Anti-infectives, which constitutes the largest size in sales revenues, carrying a weightage of almost 17 percent, is flat, leading to the lowering of growth rates. Also, the diabetes market is growing
slower than the cardiac market, which is surprising because the diabetes market has shown a 5-10 percent higher growth rate than
the cardiac segment for the last several years. Another market that is virtually stagnant for the month is respiratory along with pain/analgesics. While anti-infective, respiratory, and pain/analgesics (including anti-pyretic) face seasonal influences, the slowdown in the cardiac and diabetes markets points to a definite lowering of mid-term growth forecasts.
Yet, despite these market conditions, Zydus grew at 16.2 percent in December.
From a supply chain perspective, what capabilities does the industry need to build to support the growth envisioned by the Planning Commission?
One of the major challenges is anticipating demand in the right areas and adding correct production capacity. Despite having an agile supply chain, what keeps me up at night is whether we will be able to sustain this agility, especially since capacity addition is increasingly expensive. We are always trying to make the best of available resources by
CXO agenda | supply Chain
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CXO agenda | supply Chain
balancing supply and demand but the latter refuses to obey forecasts!
The problem is that this industry makes capacity decision in silos. Look at the auto industry, it works largely in clusters, allowing it to collaborate better. The Maruti plant in Gurgaon, for example, is surrounded by auto component vendors. The pharma industry needs something similar; maybe a pharma zone. This approach might help us deal with basic problems like aligning our capacity decisions with our vendors and partners, and make all stakeholders more cost competitive.
Are there other challenges?
The other problem is the logistics backbone of India. Given the problem of logistics, how do we balance the need for low inventories with the uncertainties of transportation time; and how can we keep pace with regulatory requirements?
One way ahead—and it would be a massive development—is for pharma companies to come together to create distribution/logistics campuses that allow us to leverage combined volumes. The CFAs or hubs of almost all pharma companies, across the country, are largely in the same cities. Most pharma companies also have similar stockist footprints. Can pharma companies join hands, and share common centers, where we share infrastructure for storage and distribution? This will increase volumes which will lower costs. Another benefit of such collaboration is that transporters will receive larger volumes, allowing them to invest in pharma quality vehicles, making compliance easier. On some drugs, for instance, we mention “store under 25°C. We have to adhere to this even when drugs are in transit. Zydus, by the way, is the first pharma company in India to invest in a real-time temperature logger that monitors all CFAs, allowing us to respond immediately to any deviation.
Today we are part of a collaborative pharma industry forum called LAZORR (Lupin, Aurobindo, Zydus, Orchid, Ranbaxy, Dr Reddys) that leverages each other’s knowledge and works on six areas of collaboration. How we can collectively become more cost competitive is a question we all need to answer. Today, the Indian pharma industry knows that we do not compete just with each other but with other countries like China.
In 2011, Zydus Cadila had the best inventory turn ratio among its peers. What does it take to achieve this?
We rolled out VMI (vendor managed inventory) to select partners and work with few vendors in the packaging materials space. What complicates our lives in the pharma industry is that whatever we buy and produce has a short shelf-life; so if I do not consume or sell in time, I end up destroying it, and that’s a huge cost.
My belief is that demand forecasting will always be a challenge. So, instead, we need to master our response to a
bad forecast. We have tried to keep our processes extremely agile and we roll the dice very often to ensure that we buy only the right quantities. I am blessed to work with a team that takes these challenges in their stride and keeps raising the bar. We keep working on areas like helping CFAs reduce stock that get blocked due to transit damage, or with vendors to address rejections.
What’s the challenge in ensuring a tightly-linked demand-supply- and-procurement chain across four continents?
Talent acquisition is one of the biggest challenges. If you look back 20 to 30 years, some of us were asked to get into logistics and warehousing without any proper training. Even today, there are few professional courses designed for supply chain professionals.
This is true across all the cross-cultural teams I have worked with. Today, we have teams—who work across time zones and cultural boundaries—who have no training in facing this complex global environment. They understand local supply chains and its intricacies. But today a drug is developed, produced, marketed, and sold in different countries.
A lot of the teams I work with are highly skilled in known territories because years of experience has given them a 360 degree-view of their plants and how things should work. But that experience doesn’t come handy when they are asked to plan for plants they have never seen, or order on vendors they may never meet. This sometimes creates communication gaps that have the potential of creating supply-demand gaps. E-mail is a big enabler and yet a big challenge because people sometimes misinterpret text. Unlike some functions, communication disconnects in the supply chain have a nasty way of showing up immediately as a delayed
A major challenge is anticipating demand. I
believe that demand
forecasting will always be a challenge. So, instead, we need to master our
response to a bad forecast.
production batch or a late shipment! We cannot hide our inefficiencies for more than minutes!
Even within India, each of our plants has its own set of strengths and nuances. Each region within India forecasts differently, and responds to urgencies differently. We need to work on creating solid interfaces which work seamlessly despite geographical disconnects, within India and globally. This means creating uniform vendor selection criteria, inventory policies, planning templates, or something as basic as having similar Excel templates. It extends to harmonizing review and governance mechanisms and similar ways of managing capacities.
The other challenge is the regulatory environment. It is diverse and has an immense impact on how we work with our partners, or how much time each country’s customs will take to clear our consignments. It is very complex to learn and appreciate these differences. My procurement team works continuously to keep itself updated on evolving regulatory contexts across multiple countries.
But then that’s also the fun part! Who wants to work in a supply chain that does not come with its share of theatrics?
How are you improving your supply chain downstream?
We work closely with our logistics partners and educate them on dealing more sensitively with the pharma products. It’s always work in progress since the transportation industry faces huge attrition.
We also work closely with the trade associations on projects like the auto-replenishment of stocks so that stockists can lower their inventories, get goods when they want, and in the quantity that they want. We call this program the Cadila Healthcare Auto Replenishment Model (CHARM) and have successfully rolled it out in Gujarat.
And, over the years, we have also built an excellent CFA network. As we evolved, they kept pace with our growing expectations. These included good warehousing practices (covering security, personnel, sanitation, among many others), computerization—or the adoption of ERP systems—the installation of controlled storage conditions, etcetera.
In less regulated markets like India, is it difficult to follow a drug from manufacturing to the consumer?
It is extremely difficult. We are in full control of what we manufacture till
stocks are at our CFA, in partial control till stocks are at our stockists, and very limited control at the pharmacist level. We have interfaces with many of our stockists to get their monthly stock and sales statements. But this is not yet a very robust process and what needs to be done ideally is to have a national IT backbone that allows stockists to have a uniform system to manage their inventories. The All India Organization of Chemists and Druggists has done something in this direction with AWACS (a pharmaceutical market research organization that has evolved into an IT infrastructure player in pharma distribution and retail) but we still have a long way to go.
Finally, how do you believe pharma companies can ensure better growth figures this year?
Pharma companies need to focus on adding patients, rather than focusing on switching patients to their brands. When I speak to friends in the industry, I hear that pharma companies are spending over 90 percent of their promotional budgets to get patients to switch. Even if we forget the rural market, which is largely untapped, we have a sizeable population in urban areas where patients are already suffering but are going undetected.
De novo activities like awareness camps or medical camps will help more people be aware of diseases and can increase the consumer base of a company. Areas like hypertension, dyslipdemia (high blood cholesterol), diabetes, osteoporosis, among others are grossly under-diagnosed (only 30 percent compared to incidence). Another key strategy is to increase volumes by improving patient compliance and lowering self-medication—something typical to the Indian subcontinent. CIO
Debarati roy is correspondent. Send feedback on
this interview to [email protected]
If pharma companies
worked together logistically, we could leverage
combined volumes;
that would be a massive development.
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In the new ‘fail fast and move on’ world of business, IT is learning to quickly tap into creative ideas and harness the power of innovation for competitive advantage.
Failure is an Option
B y S t a c y C o l l e t t
Reader ROI: a new take on innovation strategy
Why speed is of essence
The importance of iteration
Innovation
AA few years ago, Hertz learned that innovation isn’t just a luxury to be taken out for a test drive now and then, but rather a business imperative. Without new ideas constantly in the pipeline, the car rental giant would get run over by its competitors.
“We get copied a lot,” says CIO Joseph Eckroth. “Our competitors see [our innovations], and six months to a year later, they’re introducing their own versions of it. Speed of thought and speed to market are critical for us to keep our lead. If we stop, we’re dead.”
Hertz isn’t the only company that hears its competitors’ footsteps and is relying on innovation to maintain its edge. Indeed, a loosening up of IT budgets and the race for competitive advantage in a post-recession world, coupled with a flood of new technology platforms, have created the perfect storm for business innovation.
But these days, innovators must play by a new set of rules. IT leaders find themselves taking a fresh look at project management and resource planning as they seek to accommodate business demands for speed to market while assessing a deluge of new tools driven by new technologies. Developing the “next big thing” requires fearlessness, a fast pace and a fascination with new ideas, not to mention reliable partners and an open-minded team of professionals who can imagine the possibilities—a tall order in an often “command and control” IT environment.
Here’s a look at how four IT executives have learned to “fail fast and move on” with innovation while maintaining a competitive advantage in a cutthroat marketplace.
The ‘Lab Hotels’The next time you visit a Hyatt hotel, you may be part of one of its experiments to improve the customer experience, perhaps without even knowing it. Hyatt Hotels and Resorts wants to reinvent the art of hospitality through technology. So it has identified eight ‘lab hotels’—four in the US, four abroad—where John Prusnick, director of IT innovation and strategy, leads major, “disruptive” IT experiments. “We’re not looking at just wanting to improve upon current solutions,” Prusnick explains. “We’re trying to come up with ideas that are transformative.”
At any time, there are seven to nine unique projects under way at the lab hotels, and IT spends no more than 90 days on any one idea. Failure is definitely an option.
“Quite honestly, almost every idea fails fast. The solution we settle on relies on iterations of the original idea. Many times, perhaps as high as 60 percent of the time, we find that we revisit the original idea and find the solution to be something completely different,”
says Prusnick. The projects that don’t make the big time are chalked up to “return on experience” rather than ROI, he adds.
One of Hyatt’s most successful ideas emerged from the business side and was put to the test in a lab hotel. Hyatt International’s president announced that the company needed to change the way guests check in. The Rooms Operations team, together with IT, decided to get rid of the front desks and make every associate a ‘host’. The IT team created a mobile tool to untether front desk staffers and allow them to move about the lobby and interact with guests in a more personal way. The iOS-based iPad application includes hardware for credit-card swiping and
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Innovation
Show Me the MoneyIT departments are developing creative ways to
fund innovation projects—from both inside and
outside the company.
For instance, at Hyatt Hotels and Resorts,
depending on the scope of the project, “we
either get some funding from the hotel [where
the project takes place] or we take corporate
dollars and invest in those properties,” says John
Prusnick, director of IT innovation and strategy.
The hotels are corporate-owned, “so we’re not
taking particular interest in an individual owner or
franchise,” he adds.
The hotel chain also works with third-party
IT partners that “sometimes have brilliant ideas
and wish to try them out,” Prusnick says. “We give
them a venue and opportunity to [try out new
ideas], and they help to fund some of that effort.”—S.C
partners in the startup and university realms to bring new ideas to market fast.
In 2010, Shivanandan launched the Capital One innovation lab and staffed it with 20 “hard-core developers and product managers” in San Francisco and Washington. She then partnered with the FinTech Innovation Lab, a development organization that brings together New York area startups focused on banking applications, to tap into ideas and expertise from the outside. So far, the partnership is credited for new offerings such as Capital One’s Mobile Deals app.
“It’s been an incredible opportunity for both of us,” says Shivanandan. “We’ve been able to get into the marketplace a little bit quicker because we have these relationships, and we’ve been able to help some very small companies really advance their agendas and frame the product or service so they’re more realistic and more marketable.”
She also partners with research groups at MIT, Georgia Tech and Stanford.
The lab works on just three to four projects at a time, and a steering committee made up of business and IT leaders meets quarterly to develop a list of promising ideas to work on in the next two to three months.
“If you have the product people sitting next to the developers sitting next to the testing folks, and you’re all just working through it in a very rapid and iterative cycle, you will get something very good in 60 to 90 days,” says Shivanandan. “It may not be perfect, but you will have such a good idea of what it is.”
Sometimes, ideas that might have been scrapped by one business unit may turn out to be valuable to another part of the company. Capital One’s team discovered, for instance, that a credit card project that was about to be killed was well suited for the small business banking group. Now in incubation, the project is a big bet for 2014, she says.
encoding room keycards. The lab trial was so successful that the company decided to expand the mobile solution even further.
At the Hyatt Regency O’Hare in Chicago, mobile hosts are now stationed at the airport shuttle center, where they greet guests, check them in and issue room keys. “That has been a huge win for us from a customer intimacy standpoint,” says Prusnick. “The guests feel like they’re being greeted in a VIP way. They don’t have to wait in line.”
As the keeper of Hyatt’s major innovation projects, Prusnick’s biggest challenge is making sure everybody realizes that they’re all on the same team.
“Sometimes I feel like I’m stepping on other people’s toes,” he says. “Making sure that we can facilitate great cooperation between IT and the business can sometimes be a challenge.” That’s especially true when other departments come up with innovative projects on their own and Prusnick has to intervene to make corrections or stop the
project until the innovation team determines if it’s really needed.
“At the end of the day, everybody is looking for the best experience possible for our guests and [employees],” he says. “We all have the same goal. It’s just a case of who gets to run it and be the project manager.” In fact, all employees are trained in “Hyatt Thinking,” meaning they’re encouraged to come up with ways to improve existing solutions. “We’re trying to introduce a culture of innovation,” he adds. “That’s everybody’s job.”
Partners = Speed to MarketThe biggest banks are continually developing new services and payment applications. Speed to market and unique offerings are required to stay ahead of the pack.
At Capital One, Monique Shivanandan, senior vice president and CTO, relies on a new innovation lab team and trusted
Not every project makes it to the finish line, and that’s fine with Shivanandan. “A failure is sometimes the biggest success because you didn’t spend $10 million finding out that it didn’t work,” says Shivanandan.
That’s also one of the biggest challenges of leading an innovation team, she adds. “If you get one out of a thousand ideas implemented, that’s a good rate. Just make sure that people on the team understand that not everything is going to be implemented, and that’s OK. We’ve learned from that, but the individuals sometimes don’t feel that way.”
A Second LifeSometimes projects fail fast and then sit on a shelf until technology catches up to the idea. For instance, in late 2008, Hertz tried to launch car rental kiosks similar to those used by airlines. “It failed pretty fast,” Eckroth recalls. “Our process is so much more cumbersome than just checking in for your boarding pass and
picking a seat. There are so many added things we want to sell, so it really didn’t take off.”
Hertz scrapped the ki-osks by early 2009. Fast-forward to 2010, when an IT employee learned about a company that developed video integration technol-
ogy. Team members surmised that if they used the new technology and worked with their key suppliers to put it together, they could create a more interactive, personalized kiosk that would solve the problems they en-countered with the basic kiosk technology.
The new kiosks have two interactive video screens. When a customer picks up a receiver, a centralized customer service rep pops up and can complete the entire rental transaction remotely. The rep can even suggest optional services, print the rental agreement and give customers access to their car keys in a safe—24 hours a day.
In 2011, Hertz’s new ExpressRent kiosks hit major airports and have since catapulted the company into new markets. “This has been a real game-changer,” Eckroth says. “We have reduced line waits in most of our major airports and shaved peak staffing requirements. We can serve markets we
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Innovation
“We’re making some big bets on innovation. If you’re not willing to do that, you have to be willing to become a commodity.”
— Joseph Eckroth, CIO, Hertz
Innovation
weren’t able to serve before—we now have these [kiosks and rental cars] at hotels, body shops and parking garages in New York.”
A Method to Their MadnessThough ideas may run wild during brainstorming sessions, the process of refining a great idea into a workable plan usually includes a defined methodology.
Each quarter, the innovation management team at Steelcase, a workplace furnishings and services provider, convenes an innovation meeting with representatives of all areas of the business. The Innovation Management Office leader, who reports to the CIO, poses a single question to the group, such as “How do we create more efficiency in our manufacturing process?” He then uses a methodology developed by Palo Alto design firm IDEO to guide the team to new ideas.
The methodology is the company’s secret sauce for experimentation, says CIO Bob Krestakos. “IDEO is kind of our mentor in terms of design thinking methodologies,” he says. “That methodology is applied to various areas of the business. It creates some of the ideas that we follow up on.”
IDEO’s philosophy is that virtually everyone has the capacity to innovate, but over time, people tend to lose their
belief in their own creativity. Techniques such as defining problems through direct observation, developing empathy, encouraging people to come up with many ideas quickly, and fostering collaboration among colleagues with radically different viewpoints all help people regain their creative confidence.
The group comes up with three to five projects that they will work on for three to five months, depending on the experiment’s complexity and promise.
The company recently found success experimenting with RFID technology as a way to improve its lean manufacturing model, says Krestakos. As the first deployment of the technology rolls out in North America, the company is developing prototypes of other RFID-based systems in an effort to find more applications. “It has really snowballed into something that I think can be really significant,” he adds.
But Krestakos says it’s important to balance innovation projects and other IT responsibilities. Otherwise, resource constraints on either end can cause conflicts.
“IT organizations have their own projects, commitments and timetables, and innovation can sometimes be seen as a distraction,” Krestakos explains. “We don’t want to have
too many things in flight from an innovation standpoint, but enough to keep us busy and thinking about what’s possible.”
In many cases, partners can help organizations bridge resource gaps. For example, Steelcase often enlists the MIT Media Lab and its more than 140 master’s degree and Ph.D. student researchers to harness “outside thinking” and help Steelcase formulate hypotheses and conduct research that goes along with an idea, Krestakos adds.
Still, all Steelcase employees have the opportunity to come up with ideas and take part in experiments if they wish, and their enthusiasm for innovation work continues to grow. “It’s starting to feel like [innovation] is not just centered in one part of the organization. Anyone can participate,” Krestakos says. “I think that’s important to [building] optimism inside the organization.”
For its part, Hertz seeks innovative ideas from all corners of the organization to stay ahead. “We’re making some big bets [on innovation], and that’s exciting,” Eckroth says. “If you’re not willing to do that, you have to be willing to become a commodity and run in second or third place.” CIO
Send feedback on this feature to [email protected]
Shaking Things Up
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It’s easy to create a technology wish list, but the devil is in the
details, which could explain why some IT workers aren’t enthused
by innovation projects.
“The challenge for IT people is that we come traditionally from
a lens of ‘command and control,’” says John Prusnick, director of
IT innovation and strategy at Hyatt Hotels and Resorts. “We want
to have things standardized, lock them down and make sure they
work. We want consistency in delivery, and we don’t want to have
changes introduced that will cause us grief down the road.”
While empathetic to that viewpoint, Prusnick encourages
IT staffers to understand the importance of continually trying
to improve their products. “We want them to change to a more
communicative and collaborative way and have dialogue with
users on how they can improve their offerings,” he says. It could
be as simple as adding pictures to Active Directory, so people
know who’s sending an e-mail, he adds. In the past, IT staffers
would have balked at such an idea because it would create new
infrastructure needs. But today, “they understand what the user
needs to become more productive and effective,” Prusnick says.
“They will incrementally improve that product by implementing
that feature or function.”
Day-to-day IT responsibilities and the uncertainty of
“experiments” can also limit IT staff’s involvement in innovation
projects. “There has to be some negotiations about how time
can be made in a person’s schedule for these workshops and to
follow up on ideas,” says Bob Krestakos, CIO at Steelcase. “But
once you have a couple of ideas that really take hold that come
from that innovation mentality, it gets easier and easier” to get IT
employees involved.
At Hertz, CIO Joseph Eckroth doesn’t try to fit all IT employees
into the innovation mold. “Not everyone is entirely comfortable
with the process by which we [innovate],” he says. But when it
comes to the core innovation team, “you’ve got to hire and select
people who have in their DNA the ability to create turbulence,”
he adds. “They question and [blend] the normal discussion with
disruptive discussion. That’s the type of people I want to have” in
brainstorming sessions.
— S.C
What are some of the most significant shifts that you've witnessed in the banking sector?
There are two significant shifts that I have witnessed in the banking sector: One is rapid technological development and the other is the volatile nature of the retail business. This is true not only at HSBC but also for the industry because
every change brings a new model for growth.
On the technology front, what we have today is a banking sector which—including public sector banks—is driven off a strong technology platform. But ten years back, the public sector was wary of adopting technology as unions opposed it. Today, public sector banks easily work off these platforms, and as a
Naina Lal Kidwai, Group General Manager and Country Head, HSBC India, says IT helps provide private banks with an edge over well-funded public banks and is opening new channels for customer engagement.
She is the first woman president of FICCI, a Padma Shri recipient, a Harvard Business School alumnus, and the woman at the helm of one of the world’s most renowned banks. Naina Lal Kidwai needs no introduction.
As the group general manager and country head of HSBC India, Kidwai has been instrumental in charting the growth path of HSBC in India for the past 10 years. With a trailblazing career spanning nearly 30 years in the banking sector, Kidwai is easily one of the most respected personalities in the industry.
Her name consistently features in lists that recognize leaders in business. Like Time Magazine’s 15 Global Influentials of 2002.
In this interview, Kidwai talks about the changes shaping the banking sector, how IT is aiding private banks do a one up on public sector entities, and how it is redefining banking.
By Anup VArier
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
VIEWTOPfrom the
To IT’s Credit
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result, the sector is very well connected. Technology solutions are being provided by the best in the IT industry, hence there is no compromise on quality.
I think this sets the standard. Because when you compete against well-funded public sector banks, the private sector has to be technologically better. The private sector scores for the fact that it is more agile. It is able to easily adapt and bring new technologies into play faster.
Banks like HSBC brought the first ATM to the country. I must say that
foreign banks do help in bringing in cutting-edge technology. And this ensures that we have a global offering in India.
Could you elaborate what technology changes are shaping the banking sector?
I think the big change, going forward, will be around Internet and mobile banking. The Internet banking platforms of banks in India are truly
secure and—to that extent—we do have strong security technologies available in India. Also, our customers today are adopting technology at a much faster rate than ever before, given the youthful nature of our population.
On the other hand, an element that we have not leveraged effectively—which if you’d asked me five years ago I would have said was “the” technology—is mobile telephony banking that isn’t just SMS-led. We are yet to reach a stage where your mobile phone is your wallet.
NaiNa LaL Kidwai expects i.t. to
aid regulatory compliance
provide an edge over public sector banks
Leverage new channels for customer engagement
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I think the next leg of this mobile telephony banking is going to be an important one for us.
How does IT help you stay compliant with regulatory mandates?
I think, with respect to keeping pace with regulatory changes, there is very little that constrains you. Sometimes, when you are a part of a larger organization, the decision-making is such that you cannot have a technology in one location, which is different from what you have in others.
This is because it is important to ensure that all the technology platforms are linked together. Also, you can’t easily add on something that makes your global systems insecure.
So, in some ways, being a big organization and functioning across geographies poses its own constraints. But it also helps because you can easily import innovations. However, in order to keep all your systems and processes intact, there are multiple layers of checks and balances that you need to go through.
Here's where technology can help. In terms of security, technology definitely plays a big role. The ability to screen and know exactly what is happening is important. Also, the ability to put security walls and ensure that central systems do not get impacted are all parts of a security technology's evolution process.
I think no one will get it right all the time because technology evolves continuously and sometimes you learn things the hard way. But the good news is as long as we can learn about something that didn’t work somewhere else in the world we can avoid repeating those mistakes.
Technology must continue to evolve. The worst we could do is implement a change, sit back and relax, only to find out that six months down the line something else has come out that is far superior to what has been achieved or implemented by us.
How can organizations avoid falling into this trap?
You need to be able to move ahead, abandon what’s not working and make sure you are always listening to your customer. If we rely only on the technology guys, we will have an excellent system but it may not be the best for the customer.
However, we can’t get our relationship manager to drive a customer-friendly technology initiative which doesn’t meet other IT criteria like security, controls, and integration with other IT systems.
We should be able to check what our customers have to say. Having customer engagements in the front-end and bringing out technology solutions that are customer-centric is key.
We need to ensure that all the voices on social media platforms get heard, assembled, and due consideration is given
to them. You have to keep all channels open for ideas and innovative solutions.
HSBC India is enjoying healthy profit margins. How did you manage this in a down economy?
We tend to be a conservative lender. By not having an aggressive lending strategy in periods which were not that good for the economy, we were spared the large NPAs (non-performing assets) that other banks accumulated.
We also took a view of certain sectors like power and airlines where we either got out in time or just weren’t there. So we didn’t get hit by those. We got the full benefit of the growth sectors without getting hit by those that didn’t do well. I think our risk strategies, analysis, and experience helped us enormously in terms of our lending book.
How has IT helped you achieve this?
The risk models are developed with two things: Degrees of refinement, and inputs that come in from Hong Kong and the UK. But at the end of the day, we are dependent on a system that captures data. And here it is all about MI (management information).
It is about data that is captured in a way that reminds you of what may have happened in the past. The analysis of the information and the financials are all, at some level, IT-enabled. So IT’s role is very big.
The reports that our risk head presents to us at the APAC board-level meetings are phenomenal. It includes data across all the countries in this part of the world, which represents close to 66 percent of the profits of HSBC. We are able to understand this because of systems that have been set up and are able to pull together data in meaningful ways. To have good risk processes is important and to have the MI around risk—enabled by IT—is also very important.
View from the Top
“having user engagements in the front-end and bringing out technology solutions that are customer-centric is key.”
—Naina Lal Kidwai
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Is consolidation really inevitable in the banking sector?
Consolidation will hap-pen and it is good that it is happening. India needs a big-ger banking sector and that will come in two ways: More big banks and more banks in general. Consolidation is a natural process. Some banks outlive their utility and their strength comes in being absorbed by others.
You can have small banks which have every reason
to exist because of the niche they serve. So, it doesn’t always have to be just big banks. You need a variety of banks but at least two or three banks should make it into the top 50 banks in the world. This is not asking for much. For a large economy like ours, we need bigger banks that stack up in the context of global scale.
I am also pretty sure that we do not need 70 percent of the banking sector to be government-owned. That’s a big problem for the government as it has to keep pumping money into these banks. Let the government own some—say the SBI—but why 70 percent of the banking sector?
There is certainly room for the government to shed some of the public sector banks, consolidate others, and allow for a mix of healthy private sector banks which provide a competitive landscape. Ultimately, competition is good for the customer and it definitely strengthens the banking sector. CIO
anup Varier is senior correspondent. Send feedback
on this interview to [email protected]
View from the Top
What are your expectations from a CIO and what does the role entail?
First of all, a CIO needs to understand the business. If he doesn’t understand the business he wouldn’t be able to drive change. While he has to be customer-centric—towards external customers—the CIO should also focus on his internal customers, the employees of the bank.
For a large multi-national like us, the CIO needs to be constantly aware of the next wave of technology. It is important that he inputs and implements those technologies in the country or in his sector. If the technology is relevant, he should put his hand up early enough to get it here. That way, we are at an advantage, since 60 percent of all IT software development for the global HSBC group happens in Pune and Hyderabad.
Our CIO is on the board of our IT company in India so that he has moral authority to understand what is happening right under his nose. There was a danger, otherwise, of a disconnect between our software team reporting to the US and our India team reporting into Hong Kong.
Externally, the CIO needs to keep an eye on what the competition is doing. I think knowing what the competitive landscape looks like in one’s immediate vicinity is very important. He needs to know what technologies are being implemented at say ICICI or HDFC bank, so that we can pick up on that.
It may not be a technology we can implement but we should make sure we know what’s happening and explore every avenue to ensure that we too can. And if we can’t, we should have a good reason.
It is also about having a good team. The CIO obviously can’t do everything himself. So, it becomes important for him or her to show a commitment to the team.
We also have the added need to have fraud control and security and this goes
beyond what you do in-house. How do you engage with external agencies like the police and know the system and processes necessary to take action once you detect fraudulent activities. The whole chain therein needs to be understood as well.
What is the role of a foreign bank in helping the cause of financial inclusion?
What we are going to see in the spirit of financial inclusion is an ease of opening bank accounts for the financially excluded. This is important as 40-50 percent of Indians still don’t have a bank account.
HSBC has leveraged an IT-enabled financial inclusion eCard solution in rural India to help a women’s co-operative bank, potato farmers, and even dairy farmers. These are groups that do not have the capability to do Internet banking. The solution enables them to access basic information.
Getting past the entire KYC (know your customer) issue was tough. But the Aadhaar card will help in this regard as the RBI has said it will be accepted as proof of identification. We will be able to simplify the entire KYC process with the electronic model.
The counter-point to this is that banks are also going to be far more security conscious. The emphasis on security of information will also mean that the customer will have to put in more effort when he fulfills the KYC norms but he’ll need to do it just once.
At the end of the day, there are multiple ways by which money can move through banks. And banks do not always have the ability to trace the source or check if the person depositing the money has paid his taxes.
SNAPSHOT
HSBC India ESTABLISHED: 1853
HEADquARTERS: Mumbai
NET PROfIT: rs 1,988 crore
BRANCHES: 50
TOTAL DEPOSITS: rs 61,423 crore
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It was the year 2000, when Honda Motorcycles and Scooters India first rode down Indian roads. A wholly-owned subsidiary of Honda, Japan—the world’s largest two-wheeler maker—HMSI introduced its celebrated scooter Honda Activa in 2001 and followed it with successful launches of various scooters and motorcycles. Another big hit in the Indian market is the recent launch of its hugely popular motorbike, Dream Yuga.
Within 12 years of its existence, the company sold about 10 million two-wheelers. Today, its plants are pumping out a ton of scooters and bikes every few minutes. No wonder then that last month, the company’s sales shot up by 22 percent and it sold 2,30,304 units. Compare that with the 1,89,353 units it sold in the corresponding month last year.
Along with its sales figures, the number of automobiles manufactured in a year also grew multi-fold. Three years ago, the company manufactured about 16 lakh automobiles. And year-on-year, the numbers have increased by 6-10 lakh units a year. In early 2012, it manufactured around 21 lakh units, and currently HMSI manufactures
Company Honda Motorcycles and Scooters India (HMSI)
IndustryAutomotive
HeadquartersHaryana
EMC REvs Up HMsI’s GRowtH stoRyBattling an end-of-life storage solution, excess downtime, and a lack of scalability, the IT system at Honda Motorcycles and Scooters wasn’t able to keep up with business growth. Until EMC stepped in.
powered by
a volume of 27.5 lakh. The company is expecting to touch around 40 lakh units by the end of the next financial year.
For any automobile company, this is a dream run. But its growing numbers were exerting pressure on the company’s IT systems. As its storage systems neared end-of-life, Parna Ghosh, operating head-Strategic IS, HMSI, knew that he needed to do something to infuse scalability.
OUT WITH THE OLDAdding to Ghosh’s woes, business demanded more than 100 percent uptime and near-zero downtime so that it could continue growing at a steady pace.
Ghosh had his work cut out for him: He had to expand the company’s storage capacity, infuse scalability, and fulfill business’ needs.
He decided to tackle each problem in that order. Ghosh knew that the business problem was accentuated by the fact that the existing mid-segment storage solution from EMC—the Clariion CX3-20—was close to expiration. “We already had a good storage solution from EMC, but if we had to perform routine maintenance exercises on a particular application, we had to shut down the entire storage system. The downtime was high and business was affected. For the benefit of the business, we wanted it to be up and running always,” says Ghosh.
For a company like HMSI, which operates in a vertical that is fiercely competitive, the ability to scale up is non-negotiable. The ageing storage solution couldn’t handle the pressure of new applications beyond a point. Also, it was adding to the company’s initial
Parna GhoshOperating Head-Strategic IS, HMSI
We had two major concerns: Increasing capex investments (for storage) and downtime. But EMC’s VMAX solution is like an elephant which has handled all our storage problems. It is almost ten times more powerful than Clariion.”
EMCCustom solutions Group
Ghosh spoke to some of his peers and found that a global telecom giant based in north India had implemented EMC VMAX and claimed that the life of the solution is more than 10 years. “The telecom giant continues to use the same storage without any downtime. In fact, there is a huge amount of dust that gets accumulated inside the storage system but there has been absolutely no critical reason for them to open it up—in case of maintenance. They just scale up the drives using the solution’s hot swappable feature,” says Ghosh.
With the new solution, consolidation has become a breeze for HMSI. Storage is now a single-point solution and a single console maintains all the tiers, levels, layers, and disks. It’s hot swappable system helps HMSI swap bad or corrupted disks with new ones.
Cloning and creating SNAP copies (full backups) generally slows performance but with EMC VMAX, HMSI got a solution where storage doesn’t affect performance or the production environment, since the backplane capacity is almost ten times now.
As the business was growing, request for storage space started coming in fast and thick. Sometimes the marketing team would requisition for 100GB of data and at others 2TB of data would be needed for an SAP implementation. EMC VMAX helped immensely because it scales really fast, solving the problem of scalability.
A good rapport with EMC’s executives, built out of six years of working with them, ensured that the support for the new implementation is entirely handled by a highly qualified team of EMC engineers, with no secondary partners involved.
investment since it required additional maintenance. Also, re-investing in new storage was becoming an imperative. “Our capex investments were shooting through the roof—which was a business issue—and the downtime incurred during upgrade was a technical problem. Both issues lead to loss of productivity and indirectly affected business. We wanted to avoid this cycle as much as possible,” says Ghosh.
But this was just the tip of the iceberg. At HMSI, many levels of data —based on priority—
were used daily and monthly. This meant that storage tiering was an absolute necessity. The Clariion CX3-20 couldn’t do this efficiently. Also, in order to get optimal performance, the entire data was stored on a single storage solution. In case the company needed more storage, it invested in additional fibre channel or SATA drives—something that was no longer feasible.
IN WITH THE NEWThat’s when Ghosh turned to EMC’ VMAX storage solution.
“EMC’s VMAX storage solution is like an elephant which can handle all our storage problems—and more. It is almost ten times more powerful than Clariion,” says Ghosh.
However, the decision to move to VMAX was not taken without evaluating other potential vendors. Apart from EMC, the company looked at solutions from Hitachi, IBM, HP, and NetApp.
EMC VMAX gave HMSI exactly what it needed:
Scalability, performance, availability, security, and storage tiering. Also, EMC’s
Replication Manager Solution will help HMSI create synchronous
and asynchronous replication.
Infused scalability
Reduced downtime
Enhanced productivity
Reduced costs
Improved agility
Increased efficiency
Benefits
The only problem Ghosh expects to face in the course of the implementation is data migration, which is, incidentally, a very vital stage. There could be possibilities of downtime, but EMC has promised near-zero downtime.
But at the end of the day, EMC VMAX gave HMSI exactly what it needed: Scalability, performance, availability, security, storage tiering—and more.
REapINg REWaRDSStorage is a capex investment and EMC’s VMAX retains the investment for at least seven to 10 years down the line. HMSI no longer needs to re-invest in other solutions whenever problems arise.
HMSI plans to add tiering and virtualization to the storage solution, which will be provided by EMC as its VMAX solution allows the company to dynamically—and
EMCCustom solutions Group
automatically—allocate storage LUN volumes at will. Also, EMC’s Replication Manager Solution will help HMSI create synchronous and asynchronous replication.
A major advantage for HMSI is that EMC VMAX uses minimum bandwidth without choking while transferring data. It works just like a database for transferring data where it makes a commit and then checks whether data has been transferred 100 percent or not and then provides a confirmation to the primary data site.
The solution will be completely monitored directly and remotely and managed by EMC. The internal manpower cost for managing storage is almost zero. The call to resolution is also kept at a bare minimum of only four hours.
Today, with its VMAX solution, EMC is helping HMSI accelerate its growth story.
How can IT help increase security in the BFSI sector?In today’s business environment, tech-nology is allowing financial services to reach inaccessible areas. While this has increased the reach and revenue, it also brings in additional risk, increased con-trols from the regulator and challenges in protection, accessibility, and data reten-tion. EMC can help financial organizations drive down costs, improve time to market, increase revenue, and address regulatory
needs with disaster recovery, backup, re-covery and archiving along with a robust information-centric security strategy.
How do these concerns impact the adop-tion of cloud solutions in this segment?Due to its high risk environment and reg-ulatory demands, BFSI has been slow to adopt the cloud. This implies that regu-lated applications are going to stay away from the cloud for sometime. However, some of the early adopters who have em-
braced private cloud are reaping its ben-efits. Customers are slowly gaining con-fidence and understanding the benefits of the cloud. We believe the adoption rate will increase in 2013.
How can the BFSI sector better handle massive amounts of real-time data?The sector has not been able to come out with a clear data-classification strategy. This has resulted in an uncontrolled pro-liferation of data. It is important to cre-ate a data strategy to control data growth and look outside the traditional methods of storing, protecting, and analyzing data. Adoption of new technologies around storage tiering, scale-out storage, de-duplicated backup, and Hadoop-based archival make them efficient. EMC is best placed in the industry to help customers in this segment to capture, store, integrate, manage and analyze this data through its industry expertise and industry-leading solutions portfolio.
Staying Secure and Compliant in the BFSI SectorAnshuman Rai, Director-BFSI Business, India, EMC, says organizations in the highly-regulated BFSI sector need a solid DR, storage, security, and cloud strategy to stay compliant and competent.
EMC is best placed in the industry to help customers in the BFSI segment capture, store, integrate, manage, and analyze large swathes of real-time data.”aNSHUMaN RaI,Director, BFSI Business, India, EMC
The Organization: iGATE is the outcome of a merger that got every IT veteran to sit up and take notice. In January 2011, when iGATE acquired Patni Computer Systems for $1.2 billion, the M&A was touted as the largest in the Indian IT industry, so large that many said it would fail. Post the merger, the re-branded iGATE, grossed over $1 billion in revenues last year, and aims to make $3 billion by 2017. The Business Case: To ensure the merger succeeded, it was imperative to derive synergies as quickly as possible. In the way were two gigantic ERPs: Patni’s PeopleSoft 9.0, and iGATE’s PeopleSoft 8.x, which needed merging.
But prior to the merger, iGATE already had plans to migrate to SAP and had earmarked the entire month of February, 2012, to train 8,700 users on the new system. “We had invested in a new ERP solution in December 2010 and were working on migrating our existing PeopleSoft application and data to SAP by January 2012,” says Chella Namasivayam, CIO, iGATE.
Then news of acquisition broke out.Now Namasivayam had two choices: Get the employees of both companies to use SAP,
or allow the iGATE part of the company to work off its ERP (PeopleSoft 8.x) and upgrade Patni to SAP. Effectively, this meant running two ERPs.
The second strategy—maintaining two ERPs—was the easier of the two, but still meant training 8,700 Patni employees on SAP. And then building a business intelligence layer across both ERPs to consolidate reports and bridge business-enabling functions such as sales. That posed problems. If, for instance, the resource management group wanted
casefiles
iGate M&a:
real people * real problems * real solutions
Weld FasTBy ShuBhra riShi
Caught between two giant ERPs, the iGATE-Patni acquisition could well have been one of the 60-plus percent of M&As that fail because the integration takes too long. Except that iGate’s IT team would have none of it.
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a list of resources with a specific skill-set within the joint company, it would need to wait for 24 hours to get the report. The two-ERP strategy also had cost implications. “It would have been an expensive option from a product licensing and maintenance perspective,” says Namasivayam.
The first strategy—to port both companies to SAP—would require Namasivayam to migrate all 8,700 Patni employees (on PeopleSoft 9.0) to SAP—as well as iGATE's 18,000 staffers (on PeopleSoft 8.x). At the very least that meant executing two change management processes.
Neither solution pleased Namasivayam.The Project: So Namasivayam came up with a third option: Get all 26,700 employees to standardize on PeopleSoft 9.0. This plan had two benefits. One, it de-risks the success of the merger, by introducing less change into the mix. By standardizing on PeopleSoft 9.0, iGATE would only have to train the 8,700 employees who worked on PeopleSoft 8.x.
Second, and possibly more important benefit, was that this strategy ensured a faster integration of the two entities. Speed is among the most crucial aspects of an integration. According to multiple pieces of research, over 60 percent of M&As fail, many of which are because it takes too long to bring both companies together.
His decision to take the hard, but smart path didn’t go unnoticed. "The first option (running two disparate systems and building a BI layer on top) was the easiest," says Sujit Sircar, CFO, iGATE Patni, in a separate interview. "If he had come to me with that I would’ve probably cleared it. But he didn’t take the easy route, because he knew how aversely it would’ve impacted the business.” Benefits: Thanks to this strategy, Namasivayam spent only six months for the rollout. According to an Accenture report, Seven Catalysts for Merger Integration Success, six months is fast. The study shows that most core integrations (the activity that follows deal closure) take between 12 to 18 months.
The decision to use one ERP platform introduced new synergies. For example, it brought down the amount of effort and cost it took to run the ERP itself. “ERP can be very resource-hungry, both from an infrastructure as well as a human resource perspective,” says Namasivayam. “We would have required 110 people to handle two ERP systems. Now, we are doing it with only
30-odd people.” Additionally, there has been a 30 percent hike in user efficiency since the implementation. And its infrastructural requirement is only one-fourth of SAP’s for a given set of users, says Namasivayam. CIO
With inputs from Varsha ChidambaramShubhra rishi is correspondent. Send feedback on this
feature to [email protected].
faced with the gigantic job of merging Patni
with iGate, the strategy Chella Namasivayam,
CIO, iGate, chose, ensured the success of
the merger.
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The Organization: There’s one thing common to most of the thousands of guests The Leela Palaces, Hotels and Resorts serves annually: They 've tasted world-class amenities in hotels around the world. Which is why, The Leela constantly ensures its properties in eight Indian cities keep raising the bar.The Project: One of the ways it wanted to do that was to make in-room iPads a standard feature in every room. In The Leela’s vision, guests would use the iPad as a single console to change the temperature and the lighting
in their rooms, control devices like the TV and other appliances, and order for food and on-demand movies, among other things. “The idea was to create competitive edge by making this a first-of-its-kind implementation in India and create a ‘wow’ factor for our guests,” says Ravish Jhala, corporate head-IT, The Leela Palaces.The Challenge: For the idea to work, Jhala needed apps on the iPad to give commands, and devices on each appliance to receive commands. One app, for example, allowed guests to see who was knocking on their doors and allow them in. That required cameras outside each door to talk to the iPad, and a controller on each door to open it.
Building each app in-house and finding controllers for each appliance (TV, lights, doors, etcetera), would take his team too much time. So Jhala partnered with an Apple-certified app developer, DigiValet. The company sup-plies a controller unit in each room that acts as an interme-diary between the iPad and the controllers on the appli-ances, which it also provides.
The DigiValet controller unit is also linked to other enterprise applications allowing for the hospitality industry’s version of straight-through processing. If, for example, a guest orders for food using the iPad, the cost of his order is sent to the revenue management
system. “Integrating the DigiValet controller and the iPad application with core information management system was easy. A standard interface that integrates the two different applications was built by DigiValet and our PMSI partner,” says Jhala.
Another key element of the project was creating an intuitive UI. “Even the slightest confusion in navigating the device would build negative credibility. We had to ensure the icons were large enough for even older people to use with ease, while keeping the design sleek and aesthetic,” Jhala says.The Benefits: One of the outcomes of integrating the iPad solution with core management systems is real-time information. It ensures, for instance, that when the kitchen can’t serve up a dish, guests can’t order for it, so guests aren’t told 15 minutes after they’ve placed an order that they can’t have it.
“The digital medium offers several advantages over the paper medium. These include easy revisions for price fluctuations, and the ability to track inventory so customers can’t order items that are out of stock,” Jhala says.
Another benefit is increased customer satisfaction. Since the project, guest satisfaction levels have increased by 15 to 20 percent, although not all of that stems from the iPad project. CIO
Send feedback on this feature to
Ravish Jhala, Corporate head-iT, The Leela Palaces, created a ‘wow’ factor among the hotel’s guests by introducing iPad control consoles.
casefilesthe leela palaces, hotels and resorts * Debarati roy
The Leela Palaces, Hotels
and Resorts, introduces in-room
iPads—and increases customer
satisfaction levels.
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A select few CIOs are generating cold hard cash through innovation and collaboration. They are turning to IT to boost sales or develop
a product or service sold externally.
MoneyMakersB y D i a n e F r a n k
Reader ROI: Ways CIOs can generate revenue with IT projects
How to market IT’s value
Why it is important to partner with marketing and sales
he says. “It’s not the average CIO by any stretch of imagination.”
Find Out What Customers NeedAdvisor Group survives because, for a $1,000 fee (about Rs 50,000), independent financial advisers affiliate with one of Ad-visor Group’s broker-dealers for access to an array of services, including technology and regulatory compliance. The brokers are usually small businesses, and the more time they spend on chores like filling out forms and collecting paperwork, the less time they can spend with their clients.
Five years ago, IT at Advisor Group was considered a support function, Ballard says. “The business had no confidence that the IT organization could support the busi-ness model of providing tools to advisers.”
Ballard met with leaders throughout the company, then personally visited the advisers and broker-dealers to figure out what they really needed. He learned that the existing, primarily paper-based tools
A dvisor Group, a subsidiary of multi-national insurance com-pany AIG, was on the brink of being sold or disbanded five
years ago because it was losing business. The broker-dealers and investment advis-ers who used the company’s client-man-agement tools and forms were not seeing enough value to convince them to stay—until IT stepped up to give them a reason.
“We spent a lot of time over the last couple of years almost reinventing ourselves,” says David Ballard, who was recently promoted from CIO to COO. By developing a one-stop online portal for all the services and process-es that used to be scattered and paper-based, IT created a service that made advisers’ daily work lives better. Now they are choosing Ad-visor Group in numbers the company hasn’t seen in years. The adviser retention rate has grown steadily from 86 percent in 2009 to 98 percent in 2012.
Top-notch CIOs in various industries are creating new ways to pull in revenue at their companies. The techniques vary widely: Some use IT to boost showroom sales, or sell homegrown software to other companies. Others take the valuable data they produce in-house and turn it into a saleable information service.
These standout CIOs are at the top of what Ballard and other members of the CIO Executive Council, a global peer ad-visory service and professional associa-tion founded by CIO’s publisher, call the Future-State CIO Journey. CIOs that make their way through the journey’s framework begin with being seen as credible service providers, evolve to being influential and transformational business partners, and fi-nally become strategic business peers who boost the bottom line.
The CIO position has always had the poten-tial to generate revenue, says consultant Peter High, founder of Metis Strategy and author of World Class IT: Why Businesses Succeed When IT Triumphs. But he estimates that less than 25 percent of all CIOs have taken the leap to becoming revenue producers.
“It’s the particularly clever CIOs who rec-ognize this advantage and grab hold of it,”
were adequate and that competitors didn’t have anything better. But Ballard quickly realized that his company could leapfrog the competition if IT could provide a one-stop, accessible-anywhere portal with au-tomated versions of those tools.
The online CRM portal isn’t revolution-ary, but it makes a significant difference in the day-to-day work of advisers, Ballard says. Every time advisers can take advan-tage of pre-populated forms, that’s one less time they have to start from scratch for each new transaction with an existing client. And allowing electronic signatures and digital images of paperwork means transactions can be completed on-site rath-er through mail and faxes.
“Now we like to say that we’ve got what everyone else has, but no one has what we have,” Ballard says.
Organizing for SuccessBoeing makes its money in two very differ-ent markets. The commercial air division
CIO Kim Hammonds, has positioned her IT group to help Boeing’s defense unit win government contracts that require logistical support, such as datacenters and applications.
IT Strategy
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IT Strategy
is still in charge of maintaining the tech in-frastructure or they will find that the trust that allows them to work on revenue-pro-ducing services disappears, High says.
Adapt to Customer TrendsUnlike aerospace, the housing market isn’t a place people often look for IT innovation. But for Hovnanian Enterprises, as it adapts to today’s home-buying patterns, technolo-gy is essential. Nicholas Colisto, VP and CIO has formed such a tight partnership with his VP of marketing and sales that “these days, we finish each others’ sentences,” he says.
When the marketing group found that homebuyers like to research houses online, just as they research consumer appliances, the marketing and IT teams worked together
sells planes and related services, while the defense division relies primarily on winning government contracts. CIO Kim Hammonds has spent the last few years positioning her group to make it easier for the defense sector to achieve that goal, and they are succeed-ing. In 2010, Boeing’s UK defense subsidi-ary won a $1 billion (about Rs 5,000 crore) contract to support the British Ministry of Defence’s sea, air and land logistics. The or-ganization that is providing that logistical support: Boeing IT.
Support in this case involves building da-tacenters, integrating the ministry’s approxi-mately 200 logistics applications, and more. This is only one of several big contracts that Hammonds’ IT staff is part of, and she has plans for that role to grow by working even more closely with company leaders. “I want to heighten awareness of this capability.”
IT staffers dedicated to this effort col-laborate with business leaders to develop IT strategies for responding to govern-ment RFPs. Hammonds wants to let eve-ryone know what this group can do. In some cases, the IT role will make proposals stronger and increase the chance of win-ning the contract, and in others it will en-able the company to compete for contracts that might have been out of its reach before.
Hammonds is also looking at how IT could increase the services sold by the commercial air sector. “We’re working on solutions to help our airline customers.”
But Hammonds is aware that improving productivity within Boeing is IT’s primary job. Only about 10 percent of her organiza-tion currently works on revenue-driving efforts, and the people who do so are most-ly dedicated to that role. While that group may grow, the rest of the IT organization is still focused on internal productivity.
This kind of split is usually necessary, says High. Chasing revenue could easily become a distraction from maintaining the infrastructure of the business. Balance is required. “CIOs must be cognizant of how they are going to divide their time,” he says. Some of the IT leaders he works with as-sign days to work on core versus revenue-driving efforts, while others pick direct re-ports to have daily responsibility for each area while the CIO oversees them both. Whatever they do, they can’t forget that IT
to create a product called Style Suite, which launched last summer. This online design tool allows homebuyers to review options—such as available lots and floor plans, or de-sign elements like cabinets and lighting—but does not provide pricing or allow purchases.
In just the few months since the site’s launch, the company has already increased the value of individual sales because cus-tomers are now choosing to include op-tions that they didn’t know about before. In this pilot, Colisto expects Hovnanian will see a 15 percent average increase in the dol-lar value of option sales per home, a figure promised by the Style Suite software ven-dor, New Home Technologies.
“We’re turning what is a very long, labo-rious process into a friendly education and
Michelle McKenna-Doyle, who joined the National Football League in September as a
CIO focused on creating new services for fans, says the path to generating revenue starts
with innovation.
However, she cautions CIOs not to carve out a special innovation shop, because
there’s a danger that the more functional positions in the IT group will be seen as
unglamorous or undesirable, which can trigger a split in the IT department. “Innovation,”
she says, “has to weave its way through the whole organization.”
At several companies she’s worked for, McKenna-Doyle has created an innovation
council within IT that people routinely rotate through. Council members come from
various IT disciplines, so everyone gets a say in the new ideas.
“A lot of the revenue-driving ideas actually live at the base level of the people
keeping the lights on,” she says. “They’re the ones who will see the most waste or the
most opportunity.”
But it’s not easy to get IT people at that level to speak up, especially in a meeting with
talkative marketing staff. McKenna-Doyle suggests taking advantage of the social
media tools now available to help IT people make contributions. When she was CIO at
Constellation Energy, McKenna-Doyle deployed innovation-management software called
Spigit. This idea-generation tool awards points for contributing innovative ideas, then
rewards people for having the most ideas. But it would be easy for these suggestions
to simply go into a bucket and be forgotten. To ensure that didn’t happen, McKenna-
Doyle created a process for the group to decide which submissions should get a chance
to move forward. The people associated with those proposals then have a role in
shepherding them to fruition.
Using these crowdsourcing tools and keeping everyone involved in innovation,
McKenna-Doyle says, will help IT organizations be seen as a source of ideas, value and
revenue.
— By Diane Frank
Crowdsourcing Fosters IT InnovationAn experienced CIO says crowdsourcing tools can help IT staffers at all levels contribute their innovative ideas.
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buying experience,” Colisto says.Another new product tackles the other
side of the buying process: The people who prefer to visit an on-site sales center so they can see options in person and talk to a sales associate. Prospects often do this on week-ends, which creates a swarm of people who have to wait for an available sales associate and mill around looking at static informa-tion, like a poster or a brochure.
Colisto’s group plans to offer those wait-ing customers access to Hovnanian’s real-time information on homes and options, much like Style Suite, but through a touch-screen interface in the sales center. Cus-tomers will be able to do research on-site and even create their own customized bro-chure that can be used as a launching point when they do speak with a sales associate.
The company expects to see gains in sales from this tool similar to what it’s al-ready experiencing from Style Suite.
Seek Out Profitable PartnershipsSix years after online stock trading company OptionMonster Holdings was founded, the IT organization not only provides the tech-nology foundation for the business, it is also now responsible for a significant portion of the company’s revenue. And CTO Sanjib Sa-hoo sees that future growing brighter.
The company, which includes retail brokerage TradeMonster, has established a reputation for excellent service—earlier this year, TradeMonster received four and a half stars in the annual Barron’s ranking of online brokers. Sahoo wants more.
One product IT put into the market is an API that sits on top of the company’s trading platform and allows partners to in-tegrate TradingMonster’s brokerage func-tionality into their own sites. For example, when people are reading research or edu-cational material from a partner firm, they can click on companies’ names and trade
stocks or options within that research site. These tools already represent 10 to 12 per-cent of the company’s overall revenue, Sa-hoo says, and executives want to boost that figure to 50 percent within the next year.
That product is really for experienced traders, though. For newcomers, Option-Monster is working with partners to build educational services that in turn provide revenue for the company, Sahoo says.
When organizations such as the Chi-cago Board of Options Exchange (CBOE) offer classes and workshops, they often use a co-branded version of OptionMonster’s PaperTrade platform. By getting the class participants comfortable with online trad-ing, “people tend to move on to us and open full accounts,” Sahoo says. This last year, the relationship with CBOE generated 30 to 35 percent of the new-account leads that OptionMonster converts to full accounts.
Solving the Big ProblemsAt Quintiles Transnational, CIO Richard Thomas and his staff are almost becoming old hands at commercializing IT. Quintiles helps its customers, biopharmaceutical companies, make the process of developing and bringing drugs to market faster, easier and more cost-efficient. So it wasn’t much of a stretch to take the systems Thomas’ group created for inter-nal use and sell them to Quintiles’ customers.
The Infosario suite that resulted in-cludes cloud-based services and software for all the processes involved in developing and bringing a drug to market, including big data analytics and software for drug marketing. In the last year, Infosario di-rectly netted over $40 million (about Rs 200 crore) in new business, Thomas says.
It wasn’t easy to get to this point. As High points out, the daily efforts to keep your own company running can consume a lot of an IT organization’s time. When Thomas came to Quintiles in 2005, he brought in new leadership to change the culture from the top and shift his people into also think-ing about the problems the company is try-ing to solve for its customers.
“That work [on the infrastructure] can fill the day, and unless your focus is on the big problems, how can you know that you’re making a difference?” he says.
As the shift has taken hold, Thomas and
Robert Laskowski, left, CEO of Christiana Care Health System, says CIO Randy Gaboriault has a vital role as an “operational strategist.”
IT Strategy
IT departments have fast evolved from business enablers to business drivers. With increasing demand from CEOs and board members for measurable value of IT, it is now widely recognized that IT needs to step up and drive the business. The big question staring at CIOs today is ‘How can they make this transition successfully?’
Find the answers at the 2nd edition of CIO Summit. Driven by IDC & IDG, this business conference for IT leaders has been designed to focus on the business value of IT. With an impressive lineup of international speakers, real-life case studies and research findings; this residential conference will provide you with all the answers to make a successful transition from business enabler to business driver.
At the conference, you can also meet and interact with some of the brightest minds in Indian IT and exchange ideas and best practices. All this and much more, at the CIO Summit 2013.
DATE & VENUE6-8 March 2013|Hyatt Regency, Pune
ENTRY BY INVITATION ONLYTo Request For An Invitation, Visit www.ciosummit.in
GLOBAL INSIGHTS
INSIGHTS FROM IDC
Ankush Chopra, Ph.D. Asst. Prof. Of Strategy, Babson College (USA)
Venu ReddyResearch Director,
IDC India
David McNally IT Executive Advisor,
IDC (USA)
Shalil K Gupta Consulting & Insights
Director, IDC India
Sanchit Vir GogiaPrincipal Analyst,
Emerging Technologies, IDC India
Jaideep MehtaVP & Country GM,
IDC India
THEMATIC AGENDA FOR FOCUSED DISCUSSIONS The conference is designed with dedicated themes to focus on the impact of technology on your business.
Leading with Innovation: In this session leading academic and IDC analysts will present a framework for innovation encouragement and innovation management.
Leading with Performance: The session will examine how CIOs can deliver programs which result in shorter ‘time to market’ and tangibly contribute to business results.
Leading with Transformation: Lead by a global practitioner and IDC analysts, this session will help CIOs understand when a situation is truly ‘transformational’ and what they can do remain relevant and become successful through these situations.
PRESENTS
WHEN IT MEANS BUSINESS
Event Organisers
ASSOCIATE PARTNER
LEADING WITH PERFORMANCE
THEME PARTNER
ASSOCIATE PARTNER
LEADING WITH INNOVATION
ASSOCIATE PARTNERS
Hitachi Data Systems
PARTNERS IT MEANS BUSINESS TITLE PARTNER
PLATINUM PARTNER
ASSOCIATE PARTNER
LEADING WITH TRANSFORMATION
his people have formed close relationships with the marketing and sales groups within Quintiles, since that is where the real exper-tise in turning services into product lives. He has also emphasized to his staff the impor-tance of listening to external customers as well as the leaders within the company.
This process of learning about customer needs is creating another commercial ser-vice that could have a huge revenue po-tential, Thomas says. Over the past three years, Thomas’ staff has been working with global giant Eli Lilly to create a new service for designing clinical drug trials. They cre-ated a team of people from both companies, set up shop in Indianapolis, where Eli Lilly is headquartered, and spent almost three years creating a process that is heavily reli-ant on analytics and data visualization.Now that work is bearing fruit. Eli Lilly has a service designed for its needs, and Quin-tiles is starting to market that service to other pharmaceutical compa-nies. Full launch is still in the works, but Quintiles is already seeing more than $400 mil-lion (about Rs 2,000 crore) in new business from early sales that include this new offering, Thomas says.
Consequently, executives decided to set up a new business unit for the service—called the Center for Integrated Drug Develop-ment—with its own P&L. Quintiles appoint-ed Rick Sax, SVP and global head of integrat-ed clinical services, to lead the unit. While Sax is staffing up the front office, Thomas’s IT staff is handling the technology back-end, and what Thomas says was “just an exciting idea” three years ago is now on the verge of being another IT-driven service in Quintiles.
Seizing the OpportunityTechnology can be especially powerful when it improves the sales process. TBC operates multiple tire and automotive services brands throughout the United States, Canada and Mexico. In every retail and service loca-tion, sales associates are faced with an over-whelming variety of options for the many makes, models and model years of vehicles. When the company decided to upgrade its existing POS systems, CIO Steve Smith saw an opportunity to streamline the process.
The new system, which is still in pilot, has a sexier acronym than name—Next Infor-mation Technology for Retail Operations, or NITRO—but the real excitement comes from what it enables. NITRO, which combines more than 35 data feeds about parts, service and tires into a single system that sales as-sociates access via a cloud-based HTML5 touch-screen application, has already boost-ed overall sales by 5 to 15 percent. The reason: Associates only have to type in the vehicle identification number to get a display of ex-actly what parts it needs and what’s in stock and available to sell.
“Our associates are using the system to promote a wider array of vehicle mainte-nance services than just tire replacement,” Smith says. “They literally show the cus-tomer a graphical schematic of their vehi-cle, complete with the maintenance history and service recommendations based on manufacturer-provided guidelines.”
The application guides associates through the entire process. This makes sure they can’t get anything wrong—creat-ing greater trust with the customers—and also makes them more efficient.
Selling Homegrown TechSales, however, are not the goal at Christi-ana Care Health System—it’s improving patient care and regulatory compliance, says CIO Randy Gaboriault. But some of the healthcare IT advances developed at the hospital can be packaged up and offered to other hospitals. For example, Christiana Care created a telemedicine command center for intensive care units (ICU). This improves patient care by having experi-enced doctors and nurses remotely moni-toring multiple ICU patients and taking fast action when life-threatening symp-toms occur. As a bonus, it also generates revenue. Christiana Care brought in tens of millions of dollars in the last year by selling eCare ICU and other telemedicine services
to fellow hospitals, the company says.To become a revenue-generator like this,
you must separate core processes from the ones that could be key competitive differ-entiators, Gaboriault says. Improving the billing process, for example, is important, but in an industry with such tight mar-gins, it’s the services that will get a patient a quicker response and treatment that will make a competitive difference to a teaching hospital like Christiana Care.
“There’s not a magic way of saying we’re going to drive business, but it’s IT’s job to take the business goal and translate it into what could differentiate what we offer from everyone else,” Gaboriault says.
IT is also helping Christiana Care win federal grants for healthcare reform. In June, the hospital won a $10 million (about Rs 50 crore) grant from the Center for Medicare and Medicaid Innovation to create a model for co-ordinating care of patients who have been dis-
charged from hospitals after a cardiac event. A key step is consolidating the information that is collected and created about each patient, and making it possible for that information to travel with the person. Gaboriault, who is at the forefront of this effort as the chair of the Delaware Health Information Network, says the results could be turned into additional products and used across the United States.
Robert Laskowski, president and CEO of Christiana Care, knows the value of hav-ing his organization’s CIO serving as what he calls an “operational strategist,” turning mission needs into practical action and tools. “The way [Gaboriault] conceives of the CIO role is exactly what we need,” he says.
And when those tools bring in money, the company can provide even better treat-ment. “IT here is not a technology issue for us, or even a means to an end,” Laskowski says, “but a catalytic enabler of a whole new way to practice our profession.” CIO
Send feedback on this feature to [email protected].
The CIO position has always had the potential to generate revenue, but less than 25 percent of all CIOs actually do so.
Vol/8 | ISSUE/046 6 F e b r u a r y 1 5 , 2 0 1 3 | REAL CIO WORLD
IT Strategy
ASSOCIATE PARTNER
An exclusive initiative under:
innovationReeling under cost pressures, battling a bad economy, and battered by fierce competition India’s auto sector seems to have lost its way. But IT has taken over the wheels and is steering the sector towards customer-centric innovation. To find new ways to do that better, IT leaders from India’s top auto companies gathered at the CIO Powershift event in Goa. Here are some of the highlights.
Destination
ASSOCIATE PARTNER
An exclusive initiative under:
innovationReeling under cost pressures, battling a bad economy, and battered by fierce competition India’s auto sector seems to have lost its way. But IT has taken over the wheels and is steering the sector towards customer-centric innovation. To find new ways to do that better, IT leaders from India’s top auto companies gathered at the CIO Powershift event in Goa. Here are some of the highlights.
Destination sluggish economy has pulled the brakes on the accelerated growth of the auto sector in India. Spiraling interest rates, petrol price hike, and the fact that input costs for steel, aluminum,
rubber and batteries have risen isn’t helping. Traditionally, the auto sector has been a fast growth vertical. In fact, it’s the fastest growing vertical in the manufacturing sector. But today it’s plagued by challenges that continue to rage unabated and are contributing to the subdued customer sentiment and muted demand. Clearly, the auto sector is skidding and businesses are increasingly turning to their CIOs to steer them to safety.
In order to aid CIOs to achieve this, CIO magazine instituted CIO Powershift, an annual forum exclusively for the automotive sector. It aims to help CIOs and IT leaders to leverage their domain expertise and provide fresh impetus to their organizations. Held in Goa on 18th and 19th January, 2013, the forum brought together some of the most respected CIOs from the auto sector.
Vijay Ramachandran, editor-in-chief, IDG Media, set the tone of the event by unveiling the findings of The State of the Auto CIO 2013 survey. Slicing and dicing the findings from this vertical throws up interesting trends. Funding growth in recessionary times poses a challenge. And as things stand in the days of recession-era budgeting, CIOs will grapple with challenges around funding. Tight budget and justification rigor will get more excruciating. Of all the verticals that took part in the survey, auto will be the most squeezed for budgets. “This is an area where auto companies feel the pinch twice over. In organizations where the turnover is to the tune of Rs 2,000-Rs 10,000 crore funding took the eighth spot in the list of challenges. Only in mid-tier companies (Rs 500-Rs 2,000 crore) funding occupied the third spot. But in the auto sector it is the foremost issue,” Ramachandran said.
Inadequate in house skill-sets is another issue that’s bothering CIOs. Also, GRC is higher in this vertical than any other
because of the design IPs that it produces. But there is a skill gap in the area of implementation.
But there is a silver lining to this seemingly ominous cloud. The slowdown is a big landmark for enterprise IT in India. Owing to the changing market imperatives, IT in the auto sector is getting more engaged with customer requirements. It is in the fast lane of technology deployment and is overtaking other sectors in the adoption of outsourcing and cloud computing. This vertical has the least amount of trust deficit when it comes to public clouds. Auto companies are putting the pedal to the metal when it comes to big ticket deployments like mobility, cloud, and analytics.
SpeciAl coverAge
Fernandes’ move from the position of a tech executive to the role of a finance controller came with a steep learning curve. “I wanted to be a part of finance to acquire a better understanding of what business wants from IT,” he said. So when the opportunity presented itself he threw his hat into the ring. “I am discovering and decoding new concepts every day. It is like being on an aeroplane ride in the monsoon. Sometimes it is calm but you don’t know when the next turbulence will hit and you have to move with the troughs and waves. You have to manage all sides of the equation,” he said.
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72%of indian auto cios expect to complete mobility and mobile apps projects this
year—compared to 65 percent of other cios.
26%of indian auto cios plan to use the
public cloud—compared to 14 percent of other cios.
Indian auto CIOs trust the public cloud and
mobility more than their peers in other industries:
Opex Trendopex budgets for indian auto cios now
represent 60 percent of their iT budgets—compared to 54 percent with other cios.
BY GOPAL KISHORE & SnEHA JHA
ValeRIO FeRnandeS, Financial controller & gM-iT, continental Automotive components
To move up the ladder, show interest in other aspects of the business.
Customers in the Driver’s SeatIn line with the observations of the survey, Avinash Arora, director-IS (India and South East Asia), New Holland Tractors, underlined the fact that IT is embracing upcoming technologies like cloud and analytics to relentlessly focus on delivering a superior customer experience. In the course of his presentation titled Skywatch: Towards Customer Delight, he highlighted that New Holland Tractors was a late entrant in India’s farm equipment industry, hence, it was up against well entrenched players who had already carved a niche for themselves. IT was faced with the task of delivering competitive advantage and customer enhancement.
Arora accomplished the objective by initiating a slew of IT innovations. Skywatch is one such project that ensures that the company acquires new customers by empowering its dealers. Under this project, an electronic catalogue is created online which presents the picture of the assembly line of the tractors. Dealers can choose a model, click on it, and order for a particular item. It gets recorded into an electronic card on the cloud and then onto the organization’s ERP. The company’s ERP is integrated with the cloud to help customers place orders. “Today, 94 percent of our orders are coming through this cloud system. This is a first-of-a-kind implementation in the farm equipment manufacturing industry,” he said.
The organization also discovered that customers missing their warrant y was a major problem. So they created tractors fitted with a GPS and a GPRS chip. It enables farmers to monitor their tractors’ health and performance for better maintenance, operations, and enhanced productivity. The device gives timely reminders to both the dealer and customer when the time for servicing is due. It tracks the tractor’s location, and can therefore suggest a dealership for service in the vicinity. It improves servicing and is beneficial to dealers.
Like Arora, other auto companies are always scouting for new ways to embed a culture of customer centricity in their business. And to do this, they are leveraging smart platforms to interface with customers. One such interface said Pankaj Mathur, country manager, Manufacturing Industry Practice, HP India, is an integrated data model. This, in the form of, social media has become a mode to influence the market, creating change and influencing customers. Consumers are connected to each other, and organizations are connected via PDAs, mobile devices and mobile applications. This provide a constant stream of information and messaging which in turn provides valuable insight, leading to increased interactions, sales, and improved customer support and loyalty. This opens up another opportunity
We were faced with the task of delivering competitive advantage and customer enhancement.Today, 94 percent of our orders are coming through this cloud system. This is a first-of-a-kind implementation in the farm equipment manufacturing sector.”
AvinAsh ArorA, director-IS (India and South East Asia), New Holland Tractors
Organizations are in a perennial quest to manage costs efficiently. And sometimes introducing chargebacks can be a good route to financial prudence. Khopkar instituted the concept of chargebacks within his organization. “It helps IT departments keep track of who’s using what and how much they’re spending so that they can be charged accordingly,” he said. The new approach has earned them respect and credibility from the business. Currently, it is restricted to certain lines of business and some projects but it is gaining momentum gradually.
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anIl KHOPKaR, iT-Advisor, Bajaj Auto
In order to manage costs efficiently, CIOs should look at chargebacks as an option.
Customers in the Driver’s SeatIn line with the observations of the survey, Avinash Arora, director-IS (India and South East Asia), New Holland Tractors, underlined the fact that IT is embracing upcoming technologies like cloud and analytics to relentlessly focus on delivering a superior customer experience. In the course of his presentation titled Skywatch: Towards Customer Delight, he highlighted that New Holland Tractors was a late entrant in India’s farm equipment industry, hence, it was up against well entrenched players who had already carved a niche for themselves. IT was faced with the task of delivering competitive advantage and customer enhancement.
Arora accomplished the objective by initiating a slew of IT innovations. Skywatch is one such project that ensures that the company acquires new customers by empowering its dealers. Under this project, an electronic catalogue is created online which presents the picture of the assembly line of the tractors. Dealers can choose a model, click on it, and order for a particular item. It gets recorded into an electronic card on the cloud and then onto the organization’s ERP. The company’s ERP is integrated with the cloud to help customers place orders. “Today, 94 percent of our orders are coming through this cloud system. This is a first-of-a-kind implementation in the farm equipment manufacturing industry,” he said.
The organization also discovered that customers missing their warrant y was a major problem. So they created tractors fitted with a GPS and a GPRS chip. It enables farmers to monitor their tractors’ health and performance for better maintenance, operations, and enhanced productivity. The device gives timely reminders to both the dealer and customer when the time for servicing is due. It tracks the tractor’s location, and can therefore suggest a dealership for service in the vicinity. It improves servicing and is beneficial to dealers.
Like Arora, other auto companies are always scouting for new ways to embed a culture of customer centricity in their business. And to do this, they are leveraging smart platforms to interface with customers. One such interface said Pankaj Mathur, country manager, Manufacturing Industry Practice, HP India, is an integrated data model. This, in the form of, social media has become a mode to influence the market, creating change and influencing customers. Consumers are connected to each other, and organizations are connected via PDAs, mobile devices and mobile applications. This provide a constant stream of information and messaging which in turn provides valuable insight, leading to increased interactions, sales, and improved customer support and loyalty. This opens up another opportunity
We were faced with the task of delivering competitive advantage and customer enhancement.Today, 94 percent of our orders are coming through this cloud system. This is a first-of-a-kind implementation in the farm equipment manufacturing sector.”
AvinAsh ArorA, director-IS (India and South East Asia), New Holland Tractors
Organizations are in a perennial quest to manage costs efficiently. And sometimes introducing chargebacks can be a good route to financial prudence. Khopkar instituted the concept of chargebacks within his organization. “It helps IT departments keep track of who’s using what and how much they’re spending so that they can be charged accordingly,” he said. The new approach has earned them respect and credibility from the business. Currently, it is restricted to certain lines of business and some projects but it is gaining momentum gradually.
Steal This Idea
anIl KHOPKaR, iT-Advisor, Bajaj Auto
In order to manage costs efficiently, CIOs should look at chargebacks as an option.
for organizations: Social intelligence. This is a solution that uses technology and analytics that focus on customer interactions via preferred channels to enable visibility, insight, and understanding about customers for decision-making across the organization. This improves customer acquisition, service, profitability, and retention. Also, a next generation cloud-enabled integrated vehicle information system will create ripples in the auto sector, Mathur said.
Where Virtual Meets RealAnother emerging technology is Augmented reality (AR). It may seem like a futuristic concept, but it will be a reality of our digital lives
sooner than we think. AR is a new technology that blurs the line between what’s real and what’s virtual, by enhancing what we hear, see, and feel. With the proliferation of smartphones with touch screen, GPS and cameras, it was just a matter of time when augmented reality applications changed the way we perceive things and do business.
“In future, the real world is set to combine with the virtual,” said Sri Karumbati, CIO, Stumpp, Schuele & Somappa Springs, and deputy chair of ACMA Technology Committee. Showcasing a real life example of how 3D technology and motion dynamics are helping to construct better buildings, Karumbati stimulated the movement of cars within a basement to ensure that the pillars did not cause any obstruction. All this, even before the construction had started.
He also highlighted how augmented reality creates a bridge and extends the real world by adding virtual information. In the near future, this technology can be used for various purposes such as marketing a product, communicating with customers and businesses, and preventing counterfeiting, and inventory asset mapping among a host of other applications. In fact, BMW Service is planning to use augmented reality as a means to assist BMW Service staff in their highly demanding technical work. “Anything can become a marker, not just a bar code or a QR Code,” Karumbati added.
And this is just the tip of the virtual iceberg.
Driving Managed Print ServicesIn any given organization, irrespective of its size, a nagging pain—and a cause for multiple calls to IT—remains the print service. While businesses depend on the dynamic flow of ideas and information, document management—from multiple office printers and multi-function devices to servers and software—is getting increasingly complex.
K.Bhaskar, director-Enterprise Solution Division, Canon, spoke about how CIOs can realize outstanding productivity and impressive cost efficiencies while ensuring solutions that integrate seamlessly with the corporate IT infrastructure. One way to
Special coverage
Augmented reality creates a bridge and extends the real world by adding virtual information. It can be used for various purposes such as marketing a product, communicating with customers and businesses, preventing counterfeiting, and inventory asset mapping.”
sri KArumbAti, CIO, Stumpp, Schuele & Somappa Springs
RajeeV jORaPuR, Head-iT, Mercedes-Benz india
user resistance can derail the best projects. Show users how they will benefit from a project and assure job security.
Big ticket IT deployments fail at an alarming rate due to user resistance. Jorapur learnt this the hard way. His organization undertook two projects: Supply chain optimization (SCO) and analytics. The former only met about 40 percent of the original objectives as users were averse to change and feared that a loss of control will put their jobs at stake. But the analytics initiative exceeded all expectations as users were receptive to change. “The rewards of success must overshadow fear and cost of failure for a healthy harvest,” Jorapur said.
Steal This IdeaWith a systematic
approach to print management and document workflow, MDS can control costs, clarify the true costs of the current print environment, and identify potential savings.”
K.bhAsKAr, Director-Enterprise Solution Division, Canon
create consistent and scalable processes to handle changing information needs across the organization is to implement managed document services (MDS), he said.
“With a systematic approach to print management and document workflow, MDS can control costs, clarify the true costs of
the current print environment, and identify potential savings,” said Bhaskar. The several benefits of MDS include increase in productivity and user satisfaction, simplified device management, maximum uptime and enhanced security, he added. However, as with any solution, careful planning and assessment is extremely crucial. Organizations need to pay attention to needs assessment, optimization design, technical deployment, project management, and training, he added.
Riding on Analytics Managing the growth of India’s second largest vehicle manufacturer can be a daunting task. Venkatesh Natarajan, CIO and head of IT, Ashok Leyland, spoke about the crucial role of BI and analytics in Ashok Leyland. Some of the benefits of using BI tools include increasing the value of data, ensuring faster ROI, and also helping users to adhere to process compliance. “Previously, men, machine and materials were considered as assets. Now, we have added information to that list,” he said.
Though CIOs are now becoming a part of the core decision-making team, there is hardly any discussion around how IT can pioneer changes in the organization. According to Natarajan, IT used to work in silos and then moved on to be a strategic enabler for the business. “Now is the time when IT can lead the business, and
Today, IT can lead the business, but for this to happen, gaining insight into business functions—using BI tools—is crucial. IT is not just for the white collar employee, but also the blue collar workforce, the success of IT lies in taking its benefits to the shop-floor.”
venKAtesh nAtArAjAn, CIO & Head-IT, Ashok Leyland
While most CIOs look at finance as the next logical rung in the career ladder, Dhandapani chose to move from finance to IT. Dhandapani moved from finance to business planning, and later to operations and projects, before donning the hat of a CIO. “Over the past years, as business’ dependence on IT—both operationally and strategically—grew, the IT leader increasingly began to gain acceptance as a member of the executive team,” he said. Dhandapani said IT can help finance gather insights and improve business. “Finance and IT can help each other. While the former knows what’s happening, IT can provide inputs to what is NOT happening, and how that can be changed,” he said.
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T.G. dHandaPanI, cio, TvS Motors
Work across departments to gain a seat at the executive table.
HIlal KHan, cio, Honda Siel cars india
encourage employee rotation to bring IT closer to the business.
Steal This IdeaFor many CIOs, focussing on aligning IT to business goals is a priority. However, for many enterprises, IT and business can often resemble a marriage where the partners are forced to endure the other. Khan changed this situation using a simple and effective technique: Employee rotation. This exchange of personnel has resulted in IT gaining insights into different business functions—from sales and marketing to HR and operations. At the same time, the business has also begun to appreciate IT’s limitations and now sets realistic expectations from IT. “When an IT person thinks about operations, he is actually head of IT. But when he starts talking about innovation and enabling business growth, he has matured to be a CIO,” Khan said.
Auto companies are always scouting for new ways to embed a culture of customer-centricity in their business. Gathering social intelligence can help organizations improve customer acquisition, retention, service, and profitability.”
Pankaj mathur, Country Manager, Manufacturing Industry Practice, HP India
create consistent and scalable processes to handle changing information needs across the organization is to implement managed document services (MDS), he said.
“With a systematic approach to print management and document workflow, MDS can control costs, clarify the true costs of
the current print environment, and identify potential savings,” said Bhaskar. The several benefits of MDS include increase in productivity and user satisfaction, simplified device management, maximum uptime and enhanced security, he added. However, as with any solution, careful planning and assessment is extremely crucial. Organizations need to pay attention to needs assessment, optimization design, technical deployment, project management, and training, he added.
Riding on Analytics Managing the growth of India’s second largest vehicle manufacturer can be a daunting task. Venkatesh Natarajan, CIO and head of IT, Ashok Leyland, spoke about the crucial role of BI and analytics in Ashok Leyland. Some of the benefits of using BI tools include increasing the value of data, ensuring faster ROI, and also helping users to adhere to process compliance. “Previously, men, machine and materials were considered as assets. Now, we have added information to that list,” he said.
Though CIOs are now becoming a part of the core decision-making team, there is hardly any discussion around how IT can pioneer changes in the organization. According to Natarajan, IT used to work in silos and then moved on to be a strategic enabler for the business. “Now is the time when IT can lead the business, and
Today, IT can lead the business, but for this to happen, gaining insight into business functions—using BI tools—is crucial. IT is not just for the white collar employee, but also the blue collar workforce, the success of IT lies in taking its benefits to the shop-floor.”
venKAtesh nAtArAjAn, CIO & Head-IT, Ashok Leyland
While most CIOs look at finance as the next logical rung in the career ladder, Dhandapani chose to move from finance to IT. Dhandapani moved from finance to business planning, and later to operations and projects, before donning the hat of a CIO. “Over the past years, as business’ dependence on IT—both operationally and strategically—grew, the IT leader increasingly began to gain acceptance as a member of the executive team,” he said. Dhandapani said IT can help finance gather insights and improve business. “Finance and IT can help each other. While the former knows what’s happening, IT can provide inputs to what is NOT happening, and how that can be changed,” he said.
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T.G. dHandaPanI, cio, TvS Motors
Work across departments to gain a seat at the executive table.
HIlal KHan, cio, Honda Siel cars india
encourage employee rotation to bring IT closer to the business.
Steal This IdeaFor many CIOs, focussing on aligning IT to business goals is a priority. However, for many enterprises, IT and business can often resemble a marriage where the partners are forced to endure the other. Khan changed this situation using a simple and effective technique: Employee rotation. This exchange of personnel has resulted in IT gaining insights into different business functions—from sales and marketing to HR and operations. At the same time, the business has also begun to appreciate IT’s limitations and now sets realistic expectations from IT. “When an IT person thinks about operations, he is actually head of IT. But when he starts talking about innovation and enabling business growth, he has matured to be a CIO,” Khan said.
Auto companies are always scouting for new ways to embed a culture of customer-centricity in their business. Gathering social intelligence can help organizations improve customer acquisition, retention, service, and profitability.”
Pankaj mathur, Country Manager, Manufacturing Industry Practice, HP India
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for this to happen, gaining insight into the business functions using BI tools is extremely crucial. IT is not just for the white collar employee, but also the blue collar workforce, the success of IT lies in
how you can take the benefits of IT to the shop floor,” he added.
From customer marketing and demand forecasting to production and service operations, analytics can play a vital role at nearly every organizational touch point of automotive companies. Rajesh Dixit, director-Strategic Initiatives, SAS Institute India, spoke about the two most important components of business analytics: Customer management and demand quality and service availability, and how it can affect the automotive sector.
According to Dixit, customer intelligence is all about segmenting the potential customers, identifying buying patterns and targeting the customers who are most likely to buy the product and remain loyal to the brand. Analyzing social media data can help to improve customer experience, gain valuable insights about brand loyalty, and understand trends in consumer sentiment. “After-market service is another important aspect of customer service and warranty analytics can significantly reduce warranty costs, improve quality, and mitigate the risk and effects of potential recalls,” he added.
On the operations end, predictive analytics can help identify demand and supply gaps with greater precision, and profitably respond to supply and demand realities with speed and confidence. “It can also help anticipate customer demand in advance, and predict the impact of sales and marketing strategies on demand,” he added.
One of biggest challenges faced by CIOs is to recruit, groom, mentor, and then keep staff motivated. Hiring and training top talent can be a daunting task. A general rule of thumb is that it costs 25 percent more to replace and train new employees. In this backdrop, Arya said he takes a different approach to nurturing talent. “By working with several employees from humble backgrounds, I understood that qualification is not the only criterion to judge talent. Understanding what drives employees to excel, and the fire-in-the-belly to learn and improve their skill-sets is extremely important,” he said.
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S.P. aRya, cio, Amtek group
Spend more time with employees from diverse backgrounds to know how to keep them motivated.
ajay KHanna, gM & Head-iT, ve commercial vehicles
In order to maintain a healthy work-life balance, take 30 minutes out of your schedule to just relax.
Doing more with less, is an oft-repeated term in IT. However, when this leads to pressure, crazy work hours, downsizing, slashed budgets, and uncertainty, there can be only one outcome: Stress. But Khanna doesn’t let stress bog him down. Apart from managing more than 60 IT projects across 18 entities, Khanna is also a level II practitioner of Reiki. This helps him de-stress and maintain a healthy work-life balance. “Having a good team which can take the load off your plate, and having a good boss can help,” Khanna said. He added that CIOs need to hone their time management skills, and remember to keep 30 minutes aside to just relax before heading home. “Don’t forget to breathe,” he said.
Predictive analytics can help identify demand and supply gaps with greater precision, and profitably respond to supply and demand realities with speed and confidence. It can also help anticipate customer demand in advance, and predict the impact of sales and marketing strategies.”
rajesh Dixit, Director-Strategic Initiatives, SAS Institute India
Special coverage
Mobilize CloudsMobile Device ManageMent | Increasing numbers of business applications are helping mobile workers get things done in the field using tablets or smartphones, and more consumer applications support common business processes for mobile workers. More workers are using their own devices, and more people rely on multiple devices to access the same set of applications, depending on where they are and what they're doing.
Smartphones and tablets are all essentially Web-enabled computing technology. To help manage these devices in the field, and to help solve challenges inherent in the BYOD movement, many organizations operate mobile device management (MDM) platforms in-house. Recently the choice of solutions has widened, with perhaps the most dramatic shift arising from the proliferation of viable cloud-based MDM services.
Given the range of feature sets provided by MDM vendors, IT directors already struggled to make an informed decision on which one to buy. Now many consider the question of cloud-based versus on-premise secondary, preferring to filter offerings primarily by functionality. As Yasmin Jetha, CIO at Bupa, puts it: "With increasing need for companies to support consumer devices for their employees, there is a need for MDM solutions, whether cloud-based or in house."
Other IT directors prefer a combination of cloud-based and on-premise MDM. "Robust and flexible MDM has been critical to manage the explosion of consumer devices and mobility,
As mobile devices take organizations
by storm, moving mobile data
management into the cloud is
emerging as a cost-effective and
efficient option. Here’s how some
organizations are reaping its benefits.
technologyEssEntial A CLOSER LOOK AT MObiLiTy
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By Pat Brans
Real cio WoRlD | f E B r u a r y 1 5 , 2 0 1 3 7 3Vol/8 | issUe/04
and a variety of deployment options from on-premise to cloud are required to ensure the service is 'always on'," says Phil Jordan, group CIO of Telefonica.
Whether a company considers the choice of cloud-based versus on-premise a primary or secondary question depends a lot on what they need from a platform and on their timeline for amortizing IT investments in general.
Like many organizations, the London Borough of Lambeth has benefited from applying mobile technology to the business processes of at least part of their workforce, and can measure the results. In Lambeth, social workers go out to homes to assess children with disabilities and work out what support they can provide the children and their families. "Because our pilot project made the back-office applications available on mobile devices, those families can get a decision two weeks earlier," says its assistant IT director, Rob Miller.
Broad SupportHaving recognized the value of mobile technology, IT directors are now looking
to provide as much support as they can on as many devices as possible. "Enabling BYOD is a key part of our strategy. We want to move to a situation where we aren't focused on trusting devices but where we're managing information and apps to any device," says Miller.
Miller views MDM as a stop-gap solution solving problems that they won't need to address once Lambeth moves to a paradigm of managing applications and information, rather than devices. "Our goal is to policy-wrap applications," he says.
As for information protection, Miller takes a measured approach. "We won't allow personal devices to connect to our VPN, but will instead work to securely provide access to appropriate information through cloud-based e-mail and a corporate app store. This will be supported by policy, training and sensible risk management to keep sensitive data off personal devices."
Other CIOs view MDM as necessary, but these same directors quickly point out areas where they'd like to see vendors make improvements. "MDM addresses the issue for trusted devices," says Bupa's Jetha. "It does not adequately address the issue of tolerated or unsupported devices."
Some see user-centric device management as limiting, since many users have more than one device, and like Miller, many prefer a policy of application management.
For this reason, many MDM platforms offer mobile application management (MAM) features as well, and analyst IDC sees the combined MDM-MAM approach as the way forward, coining the term mobile enterprise management (MEM) to designate platforms which serve both roles.
Of all the features offered with MAM, IT directors rank most important those that allow staff to blacklist untrusted applications and 'whitelist' the trusted ones. While organizations like to let users find appropriate business tools on their own, IT needs to prevent misbehaving software from causing collateral damage.
Many directors also rank container policies high on their list of priorities, as it helps them support BYOD by setting up dual personas on a device. Certain data and applications belong to the private
persona, while other data and applications belong to the business persona. "The advantage with cloud-based solutions is utility-like transparent pricing but there are concerns with security, as well as potentially splitting identity management and device management," says Bupa's Jetha.
"Increasingly, cloud-based services are seen as the dominant approach for controlling and vetting access to systems when the main usage of our systems access is by customers as opposed to employees."
The London Borough of Brent carefully considers what can go on the cloud. "The challenge cloud computing presents organizations such as ours is that when you move information out of the datacenter, we don't see what happens to it," explains CIO Stephan Conaway.
"For things like children's mental health records, we aren't comfortable trusting the information with somebody else," says Conaway. "However, for things like mobile device management, it's immaterial, because there's less of a security concern."
Cost is also an advantage of cloud-based solutions. Organizations striving to cut costs generally take a close look at cloud-based services, which, as they are subscription-based, require little or no up-front investment in equipment or training.
IT departments that select cloud-based MDM frequently get users up and running hours after they sign up for the service. Day-to-day operations are minimal, platform upgrades are taken care of and the best providers regularly add support for new devices. Subscribers only have to
the most important benefit of cloud-based mDm is that if you become dissatisfied with a provider, you can switch to another. And if you no longer need mDm, you can simply switch it off.
51%Of indian CiOs say they lack in-house expertise in MDM.
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understand how to configure device management through the provider's Web interface.
Organizations with transitional staff find cloud-based MDM offerings particularly attractive, because they can easily scale both up and down as required. Of course each provider has different upper limits on the number of devices supported, so subscribers wishing to avoid unpleasant surprises should find out what this limit is beforehand.
The On-premise OptionBecause IT directors of large organizations support a variety of businesses over a vast area, many choose MDM platforms sold for operation on premise, but which are also offered as a cloud service. One such company is Telefonica. "IT departments should look for vendors that provide a variety of deployment options including on-premise and cloud of all types to ensure the solution grows with the needs of their different business users, while at the same time providing some consistency in the service," says its group CIO Phil Jordan.
Perhaps the most important benefit of cloud-based MDM is that if you become dissatisfied with one provider, you can switch to another with relative ease; and if you ever decide you no longer need MDM, you can simply switch it off.
"The reason cloud-based MDM works for us is we aren't making a big investment in a platform we don't think we'll need later," admits the London Borough of Lambeth's Robert Miller.
"We also recognize that the market is changing very fast. Because vendor offers are evolving, by buying a cloud service, we can easily change providers without having to decommission expensive infrastructure."
Tellingly, Miller views MDM as a poor solution for BYOD, because most people are against the idea of having the enterprise manage their personal systems.
"I don't want the corporate MDM system putting controls on my personal device, and switching off function I want," he says. "Some corporations have bought up several thousand MDM licenses, but in the end there was very little take-up, because none of their employees wanted MDM for their own devices." cio
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Mobile Apps | Home automation is finally moving forward under the power of
smartphones and tablets. Products for monitoring and controlling systems in homes
have been on the market for several years, but mobile apps to control those products
have expanded their uses and given the technology a cool factor it once lacked.
Cisco systems’ home automation platform ties together lighting, heating, home
alarm systems, door locks and other elements under the control of a wireless-based
system that can be managed via smartphones, tablets, and PCs. it will form the basis
of a service from At&t that will come to eight Us markets in march and 50 more over
the rest of the year, the companies said.
Within each home, the At&t Digital life service will run on a central Cisco-built
controller, which will be able to link to devices via existing electrical wiring with the
HomePlug AV networking protocol.
Alarm.com, which sells a service for remote control of home security systems, showed
how consumers can access the service through smartphone and tablet apps to do things
like arm and disarm home alarm systems. the company is developing new capabilities
for its service, including a geofencing feature that can change settings in the home or send
notifications when the residents are a certain distance away. for example, if a user left home
without turning on an alarm system, Alarm.com could automatically send a reminder to the
user's phone when the phone went beyond a certain distance from home. the user could
then turn on the alarm system via the phone. geofencing could also be used to automatically
turn on lights, air conditioners and other things when a user got close to home.
What’s more, a home improvement store, lowe's, has come out with new device
partners for its iris home-automation service, which lets users control security and
environmental settings remotely via smartphones, tablets and PCs. one of the new
partner products is a hose timer from orbit irrigation Products to control watering in a yard.
— stephen lawson
Remote Control Home
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Police dogs maybe fearless creatures who defend humans in dangerous situations, but these specially-trained canines need protection too. The K9 Storm Intruder bulletproof vest—a piece of equipment used by special forces in the raid on Osama Bin Laden’s complex—not only protect dogs from gunfire, but also provides a high-tech tool for police and military workers. Invented by Jim Slater, president of K9 Storm and a former police canine handler, the vests are equipped with high-definition video cameras that the dog’s handler can use to track the dog’s path on search-and-rescue-missions.
A radio-signal transmits the video to a handheld monitor from upto 1,000 feet away and through barriers such as thick concrete or steel. The handler commands dogs over radio, using a frequency that only dogs can hear to make sure the instructions can’t be intercepted. The volume of the audio can be adjusted depending on the noise level in the environment.
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endlines technology * By Lauren BrouseLL
