cio june 15 2009 issue

LeadingLeadingedge

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june 15, 2009 | Rs100.00

www.CIO.IN

VOL/04 | ISSue/15

Power Monitor

How to benchmark your datacenter’s

energy use.Page 58

SPeed Sourcing

A new outsourcing model tailored

for the slowdown.Page 50

amiT gupTaTaT , FIdeLIty BuSIneSS SeRVIceS IndIA,continues to invest in his staff

despite the downturn.

Lower attrition and 50 percent more productivity – find out how more productivity – find out how Fidelity ramped up leadership training to win. Page 24

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From The ediTor-in-ChieF

For close to two hundred years, Macedonian military strategy revolved around the

phalanx. Each unit was a square formation formed by 256 infantrymen armed with sharpened

wooden spears nearly 18 feet in length. Used to devastating effect by Alexander the Great, the

phalanx kept the enemy pinned while heavy horse-borne cavalry broke through their frontline.

In battle after battle, Alexander’s rivals found themselves at the mercy of the formidable and

nearly indestructible phalanx.

That’s the reason why the Macedonian emperor’s successors continued to employ it. That is

till the Battle of Pydna on June 22, 168 B.C. Faced by the more maneuverable Roman legions, the

slow-moving phalanx gave way in less than an hour, with the Romans turning the Macedonian

infantry’s very rigidity against itself. The battle was decisive for other reasons as well — it marked

the beginning of the rise of Rome.

Why this lesson in ancient history? Simple. In the war between rigid systems and more flexible

approaches, the latter will triumph. As management expert and author John Hagel points out,

conventional business strategy emphasizes the need to develop a detailed strategic blueprint and

then tightly couple operational initiatives

to execute the blueprint.

The rationale for this is understandable:

the need to drive more efficiency in

business and the desire to cut costs. But

faced with the growth of uncertainty in

business environments, systems start to develop cracks and became less viable. What some CEOs

are beginning to push for are systems with greater flexibility, which allow for experimentation

while reducing the element of risk.

Flexibility not only enhances the ability to react to new market demands, but also creates the

chance to anticipate new market forces and helps shape the changes that will challenge others.

Organizations that nurture flexibility and resiliency, and work toward greater financial

visibility are more likely to survive the crisis, nay, even thrive.

The options are limited, typically knee-jerk and scary. Gut instinct, giving in to impulses,

or even allowing the current economic scenario to directly dictate a response, is likely to

prove ineffective.

In the West, I see a trend toward protectionism and nationalized corporations that’s worrying

at the least. The answer to the crisis, I’m convinced, lies in building a different organization

ground up — one that is more responsive and less hierarchical and, even one, that’s based on a

business model focused on dealing with rapidly changing economic realities.

A radical reshaping of the way your company is set up may allow you to deal with today’s battles and tomorrow’s wars.

Flexibility. Experimentation. Success.

Resilience is the Key

Vol/4 | ISSUE/152 J U N E 1 5 , 2 0 0 9 | REAL CIO WORLD

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OutsourcingSpEED SOuRCIng: ThE nEW OuTSOuRCIng TREnD | 50Outsourcing consultancies are offering new ways to accelerate the outsourcing selection process — no exhaustive vendor search, no RFP, and a signed contract in record time. The concept is called speed sourcing, but it isn’t right for everyone. Here’s why. Feature by Stephanie Overby

more»

LeadershipCOVER STORY FORgIng gOOD LEADERS In BAD TImES | 24Leadership development doesn’t stop when the going gets tough. If anything, investing in the next generation matters now more than ever.Feature Stephanie Overby and Sneha Jha

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CEO VisiOnLeadership goes beyond the title. Four CEOs who continue to lead their companies on a growth path share their experiences.

34 I Subroto bagchi, Gardener, MindTree36 I bhaSkar bhat, MD, Titan Industries38 I anand SudarShan, MD & CEO, Manipal Education40 I k. ganeSh, CEO & Founder, TutorVista

CiO DisCussiOnsThe leadership council provided a platform for CIOs to express their opinions and insight on adopting cloud computing, investing in hardware and focusing on process.

42 I I hardware truthS44 I ouSting outage46 I Still overcaSt

FOrum48 I receSSion Survival SkillSFrom playing soccer to deploying a vendor performance system, Indian IT leaders are finding novel ways to beat the slowdown blues. Read how your peers are keeping their heads above water.

june 15 2009‑|‑Vol/4‑|‑issue/15

conntntn entntn

Amit Gupta, VP-IT, Fidelity Business Services India found novel ways to impart leadership training in order to keep employee enthusiasm from flagging.

24

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REAL CIO WORLD | J U N E 1 5 , 2 0 0 9 5Vol/4 | ISSUE/15

depArtments

NOW ONLINE

For more opinions, features, analyses and updates, log on to our companion website and discover content designed to help you and your organization deploy It strategically. go to www.cio.in

c o.in

Applied InsightpAYBACk TImE FOR ITIL | 16 Because it’s hard to quantify gains from ITIL projects, many are questioning their investments in the best-practice guidelines. But it pays to follow the rules. Column by Bob mathers

peer-to-peerThE WAY AhEAD WITh AnALYTICS | 19By weaning itself off a fix-the-worst-first approach and applying advanced analytics, the New Brunswick Department of Transportation has found a more cost-effective way to manage its assets.Column by Steve palmer

trendlines | 7 Survey | CIOs Are Made of Steel Quick Take | On Vendor ManagementVoices | Should CIOs be Part of M&A Deals?project management | Not Now, Later IT Strategy | Five Zero-Cost CRM StrategiesOpinion poll | The Next New ThingIT management | 38 Minutes and a DocumentIT Budget | Billing the CloudStaff management | Making Technology Fun Againgreen IT | India is Greener Than You ThoughtCareer | Wanted: GeneralistsInternet | Make Way for the Interactive Wiki Customer Service | May I Help You?Business Issues | Go out there and Get Them

essential technology | 58I.T. Strategy | Benchmarking Datacenter Energy Feature by Kristin Burnham pundit | Vantage Point Column by Thomas Wailgum

From the editor-in-Chief | 2 Resilience is the keykeyk

By Vijay Ramachandran

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PuBlISher louis d’Mello

ASSocIATe PuBlISher alok anand

edITorIAl

edITor-IN-chIeF Vijay ramachandran

ASSISTANT edITorS gunjan trivedi,

Kanika goswami

correSPoNdeNT Sneha Jha

chIeF coPY edITor Sunil Shah

coPY edITorS deepti balani,

Shardha Subramanian

TrAINee JourNAlISTS Priyanka

Varsha Chidambaram

ProducT mANAGer oNlINe Sreekant Sastry

deSIGN & ProducTIoN

creATIVe dIrecTor Jayan K narayanan

leAd VISuAlIzer binesh Sreedharan

leAd deSIGNerS Vikas Kapoor, anil V K

Vinoj K n, Suresh nair

girish a V (Multimedia)

SeNIor deSIGNerS Jinan K Vijayan, Jithesh C C

Unnikrishnan a V

Sani Mani (Multimedia)

deSIGNerS M M Shanith, anil t

P C anoop, Prasanth t r

PhoToGrAPhY Srivatsa Shandilya

ProducTIoN mANAGer t K Karunakaran

dY. ProducTIoN mANAGer t K Jayadeep

mArkeTING ANd SAleS

VP SAleS Sudhir Kamath

SeNIor mANANGer Siddharth Singh,

ASSISTANT mANAGer Sukanya Saikia

BANGAlore Kumarjeet bhattacharjee,

arun Kumar, Manoj d.

delhI aveek bhose, Punit Mishra

mumBAI Parul Singh, hafeez Shaikh,

Suresh balaji,

dipti Mahendra Modi

JAPAN tomoko Fujikawa

uSA larry arthur; Jo ben-atar

eVeNTS

VP rupesh Sreedharan

SeNIor mANAGer Chetan acharya

mANAGerS ajay adhikari, Pooja Chhabra

AdverTiser index

Canon IBC

Emerson 9

IBM BC

Krone 1

LG IFC

Sony 3

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

Alok kumAr

global head - Internal It, tCS

ANIl khoPkAr

gM (MIS) & CIo, bajaj auto

ANJAN choudhurY

Cto, bSE

AShISh chAuhAN

President & CIo, It applications, reliance Industries

ATul JAYAwANT

President Corporate It & group CIo, aditya birla group

doNAld PATrA

CIo, hSbC India

dr. JAI meNoN

director technology & Customer Service, bharti airtel &

group CIo, bharti Enterprises

GoPAl ShuklA

VP - business Systems, hindustan Coca Cola

mANISh chokSI

Chief Corporate Strategy & CIo, asian Paints

mANISh GuPTA

director-It, Pepsi Foods

murAlIkrIShNA k.

head - CCd, Infosys technologies

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CIo, Vodafone

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group Cto, ICICI bank

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Chief general Manager It & distribution, Maruti Udyog

SANJAY JAIN

CIo, WnS global Services

ShreekANT mokAShI

Chief-It, tata Steel

SuNIl mehTA

Sr. VP & area Systems director (Central asia), JWt

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div. VP-IS, Ub group

V. k mAGAPu

director, larsen & toubro

V.V.r BABu

group CIo, ItC

GoverninG BoArd


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n e w * h o t * u n e x p e c t e d

S u r v e y British and European CIOs are upbeat and seizing the opportunities the worldwide recession is throwing at them, the latest Harvey Nash IT Leadership Survey reveals. CIOs are under extreme pressure to deliver more with decreasing budgets, but according to the report CIOs are leading by example. CIOs across Europe are using the recession to challenge their organizations with the adoption of agile working practices or new technology that reduces costs, recruitment specialists Harvey Nash believe.

Analyzing the results of their survey, the company said, "IT leaders are being bolder, using a lack of cash as a catalyst to stimulate fundamental change in their business." Harvey Nash believes the overall sentiment of CIOs is structured change that focuses on recovery and is in no way a panic about reduced revenues.

The survey reveals that CIOs are leading by example and reassuring not only their teams, but also the entire organization. Perhaps as a result, more CIOs felt their role was becoming increasingly strategic, which reflects the maturing business view of IT as a provider of solutions in difficult times.

Reflecting the changed attitude towards IT, less than half of the respondents reported a decline in their budget in the last 12 months, although when compared to last year's survey, where 17 percent of respondents saw a decline, 42 percent this year have reported a budget cut.

CIOs are being called upon by their organizations to use IT in innovative ways. Harvey Nash found that 86 percent of those surveyed were being asked to use IT to boost the competitive abilities of the company. Asked about which leadership skills they consider to

be the most important in the downturn, 76 percent cite communications skills, 67 percent leadership, 52 percent strategy and 44 percent commercial awareness, which really indicates the business focused role of the European CIO.

The survey, produced in association with PA Consulting Group, polled 1,345 CIOs from across Europe.

—By Mark Chillingworth

CIOs: We Are MAde Of Steel

v e n d o r M a n a g e M e n t CIOs spend a lot of time negotiating with vendors but for the most part, it is a job that many CIOs find disagreeable. Sneha Jha spoke to Satish Das, CSO & Director-ERM, Cognizant Technology Solutions to find out if CIOs had a role to play in ending vendor bashing. Excerpts:

Is there something wrong with the way CIOs entertain vendors?CIOs don’t explain their requirements to the vendors in advance. They also don’t disclose their IT budgets. They are not clear about the profile of people they want to meet from the vendor side (sales or R&D). On their end, vendors should present solutions, not products, and understand a customer's budget constraints.

How should CIOs deal with vendors they can’t give business to? CIOs should communicate with vendors in a clear and transparent manner. At the same time, they should not share their confidential plans with these vendors.

Satish Das on Vendor Management What is the downside of leading a vendor on?

When a CIO leads a vendor on for a long time, he stands the risk of losing credibility. The vendors may not trust him the next time when he goes to them for business.

As a former vendor representative yourself, what would you say to CIOs who complain vendors don’t understand their business?CIOs should interact with people possessing the right skill set. They

should be clear about the problems and issues they need to discuss with vendors.

Vendors must also prepare before meeting a CIO. They should have adequate information about the CIO they are meeting, his or her company and the demands of the industry they operate in. If both parties invest their time and attention into these details they can have a more fruitful engagement with each other.

Quick take

Satish Das

n e w

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* h o t * u n e x p e c t e d

The survey reveals that CIOs are leading by example and reassuring not only their teams, but also the entire organization. Perhaps as a result, more CIOs felt their role was becoming increasingly strategic, which reflects the maturing business view of IT as a provider of

Reflecting the changed attitude towards IT, less than half of the respondents reported a decline in their budget in the last 12 months, although

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P r o j e c t M a n a g e M e n t IT leaders have outright canceled fewer client computing projects during the recession than expected, preferring instead to postpone or scale them back, according to a Gartner survey of 475 IT administrators at large companies in nine countries.

"We were surprised to find that IT leaders feel that postponement is better than canceling projects," said Gartner analyst Andrew Johnson.

The survey found that only 12 percent of IT leaders had canceled one or more projects since October 2008. The survey also found that 29 percent postponed at least one project and 33 percent implemented at least one project at a reduced rate, Johnson said. Respondents were allowed to answer in multiple categories, and might have managed several projects, taking different steps with each.

Overall, 48 percent of respondents said some of their client projects would be deployed as planned in 2009. By comparison, 43 percent said they expected to see a decrease in spending on laptops and desktops in 2009, when compared to 2008, Johnson said.

In earlier research, Gartner said that overall IT spending is expected to decline 3.7 percent in 2009 due to the recession, with nearly 15 percent drops in spending on client computing devices, such as laptops and desktops, servers, storage and printing systems. In 2010, Gartner expects IT spending overall to rebound with 2.4 percent growth, while IT hardware spending will grow 0.8 percent.

Johnson said the survey did not directly ask IT leaders whether they have plans to convert some laptop or desktop users to smartphone or mobile devices. However, he said it is logical to assume that some IT leaders are postponing laptop and desktop deployments to find lower cost options, and a lower cost option might be a smartphone for a group of users.

The Gartner survey found enormous regional differences, with 29 percent of US-based IT departments saying they planned to continue client computing projects as originally planned, compared to 18 percent in France, 85 percent in China and 64 percent in India. The average of all respondents globally was 48 percent.

Gartner also found that the industries most on track with laptop and desktop rollouts were insurance, media and consumer business services. Those most likely to reduce spending were in telecommunications, wholesale, agriculture, mining and construction. Those most likely to postpone projects were in retail and utilities. Johnson said the lesson to be learned from the survey is that laptop and desktop suppliers need to be ready to respond for growth in those regions and industries where the postponements were most significant.

—By Matt Hamblen

Why Should CIOs be Part of the Due Diligence in M&A Deals?i n t e g r a t i o n As an IT executive, the CIO is uniquely qualified to help companies sail through the integration process that follows any merger. If made a part of the due diligence team, CIOs can speed up the process of fully integrating IT infrastructure. To find out more about why CIOs should be a part of M&As Sneha Jha spoke to some of your peers. Here’s what they they had to say:

Bihag LaLajiVP-It, Ambuja Cements

k.R. BhatGM-It, t, t nAbArd

“IT requires a merger of networks, “IT requires a merger of networks, “IT requires a merger of

infrastructure and apps. A CIO is well-equipped to do that. He can also help in risk management.”

pRamod kumaRReddy kaLLemAVP–ICt, Applabs technologiestechnologiest

Write to [email protected]

Lend youR

Voice

“When a merger takes place, the integration of IT infrastructure and the integration of IT infrastructure and the integration ofsynergy of operations takes a much longer time than other departments. CIOs can speed up this process.”

“CIOs can provide accurate, transparent and real-time information, which executives

can use to take wise business decisions. Hence, they are

critical players in an M&A scenario.”

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Not Now, Later

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Five Zero-Cost CRM Strategies

Source: World economic forum/Inseadforum/Inseadf

i t S t r a t e g y Conventional wisdom would hold that customer relationship management (CRM) software is one area of the business not to be ignored during tough financial times. But who's got millions to spend on new CRM apps and functionalities?

"Companies need to think in terms of spending smarter, not spending less," notes Scott Nelson, managing vice president at Gartner.

"There are zero or low-cost strategies that can be implemented now that can make all the difference, generate competitive differentiation and not draw the attention of the CFO."

As recommended by Gartner, here are five CRM strategies that companies can undertake now while not breaking the bank:

Target Customer Communities: Like many other analysts, the Gartner report expects that future CRM strategies will rely on "creating online communities of customers" using social media, including Facebook, Twitter and other websites. These Web tools are quite free, of course.

"The economic downturn provides a great opportunity to begin experimenting in this area," notes the report.

Scour Customer Analytics: The average enterprise has already bought and installed analytic and customer intelligence packages (with varying degrees of success), and economic downturns are great times to tap into that computing horsepower. "Many companies have more information than they know what to do with," states the report, "and now they have the opportunity to put this to good use studying attrition models, looking at the next most likely to buy models, and figuring out channel usage patterns."

Of course, as the report points out, decision-makers using the analytic tools should remember that customer behaviors may change significantly when the economy finally does improve.

Review Customer-Segmentation Tactics: Gartner research finds that many segmentation strategies are based on "psycho-demographics, profitability or account attributes," notes the report. "However, a down economy provides companies with the opportunity to review their segmentation strategy and see if it really is the very best one that they could have."

Fix Broken CRM Processes: Process is "often an overlooked part of CRM and in many cases all that CRM technologies have done is taken out old, broken processes and made them run more efficiently," notes the report. But they're still bad processes. Now is a good time to re-examine customer processes with a

mindset to re-designing poor, inefficient ones. The end result for this strategy, according to Gartner, would be to create a situation in which both parties win: the company — which gets greater efficiency — and the customer-who gets a more interactive partner.

Change Your Organizational Structure:Not everyone likes change. And any type of organizational change can be one of the most difficult areas of CRM strategy, Gartner states. However, notes the report, "many companies need to make the move from product-centric to customer-centric." A down economy typically offers "fewer distractions," and many companies should find that this is the perfect time to begin addressing some of the organizational issues that get in the way of serving their customers, according to Gartner.

"At the end of the day, CRM is all about change. Changing age-old processes, mindsets, and how companies relate to customers," notes Gartner's Nelson. "All of this can be done without new systems, and the challenging economic environment may give companies just the chance they have been waiting for."

—By Thomas Wailgum

This is the perfect time for companies

to address some of the organizational issues that get in the way of serving

their customers.

ew ew thinghinghingCountries where businesses absorb new tech quickly:Countries where businesses absorb new tech quickly:Countries where businesses absorb new tech quickly:Countries where businesses absorb new tech quickly:Countries where businesses absorb new tech quickly:Countries where businesses absorb new tech quickly:

1. iceland2. japan3. united States4. SwedenSweden5. SwitzerlandSwitzerland6. DenmarkDenmark7. Austria8. Finland9. Norway10. Taiwan

The most aggressive adopters

of technologies

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i t M a n a g e M e n t In this age of sub-one-second Google search queries, modern networking and T1 Internet connections, it seems ludicrous that any type of information-based search would take even 38 seconds to complete.

A new survey, however, finds that employees at big companies (with more than 10,000 employees) spend, on average, 38 minutes searching for one document — whether that's on their own computers or their organization's networks, databases or intranet.

In addition, the survey of 200 respondents from companies in a wide range of industries found that employees are having trouble finding the most efficient and appropriate technology tools to locate documents or internal expertise. To find in-house experts, for instance, 71 percent of the respondents said they ask around; 46 percent said they use the company directory; 34 percent use the company website or intranet; and 30 percent said they send a companywide e-mail (and we all know how annoying those can be).

Just 9 percent of the companies responding to the survey have an automated system in place for locating experts. The results have to be unsettling to higher-ups who have any concern regarding employee productivity in these times of doing more with less, plus the hyper-litigious and regulatory environment in which we now live. According to the survey, 86 percent of employees expressed concern about how prepared their organizations are to deal with information risk.

"In spite of a heightened risk of litigation and regulatory investigation," notes the survey, "most enterprises aren't more stringently enforcing, or even updating, data-retention policies."

Overall, the findings, states the report, "illustrate a dangerous, recession-induced trend of over-reliance on outdated technology and an inability to provide workers with the most current tools available."

The survey was conducted by Osterman Research and commissioned by Recommind.

—By Thomas Wailgum

i t B u d g e t Cloud computing is taking off because the delivery of It services and infrastructure over the Web offers better pricing and more flexible pricing options. but what if cloud pricing models are so confusing that It shops end up paying more than they expect?

"the reason cloud is compelling is the pricing levels," Allan leinwand, a venture partner at Panorama Capital says. but the cloud industry has come up with several types of billing options, and they're not always easy to understand.

"you're talking about units that people don't normally you're talking about units that people don't normally ythink about," leinwand says. "CPU hours: that's not something I go buy. I buy a blade server, and the hours are infinite, they're mine."

even if an It pro finds it easy to understand CPU hours, a CfO might not. "try to explain to your Ctry to explain to your Ct fO how many CPU hours you're going to use in the cloud, and see if they care," leinwand says.

Pay-as-you-go models sound great at first, because they could eliminate long, fixed contracts that may force It to pay for more services than they actually use. System administrators "want to try stuff prior to having signed contracts, having a legal review," says Jesse robbins, co-founder and CeO of start-up Opscode. "the long lead, enterprise sales cycle is something where I would rather have to eat glass than deal with it. It's the most painful thing imaginable."

but the pay-as-you-go model introduces the risk that a customer uses far more resources than it expects, leading to a high bill, an event experienced by many cell phone customers when they exceed their allotted minutes. Such a problem is especially likely if a company lacks visibility into its usage of cloud services.

Amazon's Web Services don't expose how much a customer owes in real time, observes thorsten von eicken, CtO and founder of rightScale. "It's really a question of visibility and control," von eicken says. the cloud won't totally eliminate the prospect of long, fixed contracts.

One important consideration for enterprises considering cloud services is the service-level agreement, and whether it is easy to collect refunds if the cloud provider doesn't meet its obligations. (for other concerns Indian CIOs have with the cloud, read Still Overcast on page 46)

—by Jon brodkin

Billing the cloud

Ever Spent 38 Minutes Looking for a Document?

Just 9 percent of the companies responding to the survey

SEARChIng FOR In-hOuSE ExPERTS

Medium Used No. of Respondents

Asking Around 71 %

Company directory 46 %

Company Website or Intranet 34 %

Sending a Companywide e-mail 30 %

REAL CIO WORLD | J U N E 1 5 , 2 0 0 9 1 1VOl/4 | ISSUe/15


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S t a f f M a n a g e M e n t Whether it was his dressing in pumps and a skirt for the company's halloween party or distributing bobble heads of himself, dave Patzwald's It department knew the change they were yearning for had come. "I inherited an It department that was dispirited by rounds of outsourcing and canceled erP projects. they weren't feeling respected or recognized," he says. "When I was hired three years ago, they pleaded with me: 'dave, please just make this place fun again.'" And that's what he set out to do.

Patzwald, CIO of Schneider electric understood the benefits that workplace humor can bring: greater productivity, better camaraderie, happier workers. And now is a critical time to make humor a priority, says Stuart robertshaw, retired psychology professor and author of dear dr. humor. "With the bad economy, people need a reason to look forward to coming to work," he says. "happy people go the extra mile; they're more creative and ultimately produce better products."

Patzwald, who holds an MbA in marketing, also saw an opportunity to re-brand the It department. "We wanted others to know that you can have fun in It," he says.

being humorous doesn't come naturally to Patzwald, so he partnered with an old friend — a professional comic —

to produce an e-mail video. before filming, Patzwald held scripting meetings where he and his It team discussed ideas. the key to this, he says, was creating an environment where everyone felt safe to express any idea. "Creative people just need to be unleashed," he says. "I had some strange ideas, but if I'm willing to embarrass myself a little bit, then maybe they'll take a chance and put their ideas out there, too."

Once the video was edited and viewed by other departments, positive e-mails flooded in. "People were seeing It in a different way," he says. "the video was a hit and they were realizing that these weren't geeky, boring and unfriendly people — they had personalities." In turn, Patzwald saw significant morale changes in It. "they were finally feeling like others appreciated them. even the finance department asked us for creative ideas. that was quite a turnaround," he says.

you don't need a knack for humor to lighten the mood at work, says Jacob lentz, co-author of there's no I In Office: 4293 Meaningless Phrases to Keep your Co-workers Smiling While Avoiding Actual Conversation. "being self-deprecating shows that you're willing to take one for the team. It makes you human and that makes others more comfortable."

—by Kristin burnham

g r e e n i t When it comes to being green India comes second compared with other countries in Asia Pacific, according to an IDC study.

The results from IDC's 2008 green poll conducted with IT decision-makers in the Asia Pacific region reveal that where green requirements in a request for proposal (RFP) were concerned, India came second (46.7 percent) only to Taiwan (50 percent).

India’s arch rival China lagged way behind. Only 9.7 percent of respondents in China said that green needs in RFP are mandatory, compared with the average of 35.3 percent in the Asia Pacific countries that participated in IDC's green poll. The other countries that followed India were Japan (42.3 percent), New Zealand

(33.3 percent), Australia (30.2 percent), and Singapore (10 percent), with 69.2 percent of respondents indicating green requirements need to specified in an RFP.

Although technology is a highly strategic tool to achieve wider objectives

related to sustainability, there is a need for comprehensive transformations across the value chain, said IDC.

This means not just integrating green considerations into direct IT consumption, but also driving changes through

public procurement, given the public sector's multiple roles as a regulator, large employer, and core business owner of diverse policy areas ranging from primary industries and water

resources to urban planning and transportation, the research house added.Research from IDC also showed that many organizations in countries that did not make it to the top don't factor in the cost of electricity and utilities in their IT budgets.

The main priority of most IT leaders is to ensure that their system is reliable and secure for their organizations, the survey revealed. This is important because in general, these IT decision-makers aren't concerned with increases in power usage as a result of including new features and functions in their IT processes. In fact, what they are most concerned about is the costs and risks involved in implementing a green datacenter, IDC said.

—By Computerworld Hong Kong staff

Making Technology Fun Again

India is Greener Than You Thought

46.7 %The number of IT

leaders who said that it is mandatory to specify green requirements in a request for proposal.

India came second only to Taiwan.


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i n t e r n e t A Chinese rival of Wikipedia that also lets users join groups and chat as they might on facebook has drawn on those social elements to pull ahead of its competition.

hudong, which means 'interaction' in Chinese, has become the largest wiki-based encyclopedia in the language since its founding in 2005, says company CeO Pan haidong.

hudong has 3 million articles written by users, more than Wikipedia's count in english. the articles cover topics from astronomy to popular television shows.

but hudong is a step ahead of Wikipedia. It is also a social-networking site. Users can chat in forums and join groups of people with shared hobbies, like bicycle riding or watching movies. the homepage features top-ten lists and links to popular articles. hudong also awards work on articles with points, which users can spend to purchase articles and enter them into popularity duels with other entries, Pan said.

the Web site may eventually allow users to buy virtual items with real-world currency, just as facebook users can charge their credit cards to send each other virtual gifts. hudong users could pay, for example, to dress up the avatars that represent them on the site, Pan said.

Content on hudong appears to be monitored as well. there is, for instance, no entry on falun Gong, a spiritual movement beijing has banned as a cult, and hudong's article on tibet does not mention any calls for the region's independence.

hudong uses different wiki software from Wikipedia's MediaWiki. hudong's in-house software, called hdWiki, is also used on 10,000 other Chinese Web sites and internally in many companies, Pan said.

hudong's wiki software has helped it grow. Videos and Adobe flash applications appear more often on hudong than on Wikipedia because it is easier to incorporate multimedia in the Chinese wiki, says david Wolf, CeO of Wolf Group Asia, a beijing technology consultancy.

It makes sense to offer social networking on a wiki, software that is social by nature, Wolf says. but making money could be the biggest challenge for Pan's site, he said.

"While he's got a terrific idea, he's going to have a challenge selling it," Wolf says.

—by Owen fletcher

WAWAW nTED:Generalists, Generalists, nnot Specialistsot Specialists

c a r e e r High-tech professionals with fewer skills could land more IT jobs, according to Interop speakers who argue that specific high-tech training and IT certifications could be detrimental to a career in next-generation datacenters.

Tim McLaine, global functional manager for datacenter services at Perot Systems said, "The majority of people we bring in are entry-level and I don't care if they have datacenter or tactical experience. I more look for behavioral traits, such as enthusiasm, passion and energy because we can teach technical skills very easily."

McLaine said the changing environment requires IT pros to focus less on specific certifications and more on pros to focus less on specific certifications and more on adopting a broad knowledge of existing and emerging adopting a broad knowledge of existing and emerging technologies. Hiring leaders aren't seeking specific technologies. Hiring leaders aren't seeking specific experience in potential candidates, he said. "The deep technical experience from the past might not be applicable in our datacenter now," McLaine added during a panel at Interop that explored the technical skills needed to manage next-generation datacenters.

Paul Clark, datacenter manager at The Ohio State University Medical Center, agreed that candidates need to be able to learn a broad set of technologies, becoming generalists in essence, and then apply the high-tech know-how to business scenarios. Unlike in the past, the know-how to business scenarios. Unlike in the past, the datacenter team is not in a vacuum and needs to fully datacenter team is not in a vacuum and needs to fully interact with the IT department as well as business interact with the IT department as well as business leaders, he says.

"We have to become well-versed in multiple areas, not only in facilities and operations, but also the IT side," Clark explained. "We have to bridge that gap because in the past we leaned heavily on facilities. Now we must understand infrastructure and IT demand and get ahead of the curve to be able to support technologies as they come into the environment."

One area, green technologies, seems to be of interest among datacenter leaders, but not because it's new to these veterans. The practice of saving space, being energy conscious and driving out inefficiencies has long been embraced by datacenter leaders. "Most datacenter leaders were green before green was cool," McLaine said. "Finance was our motivation before. Now it falls under a new title and that is green."

With virtualization and cloud computing gaining traction in the environment, datacenter leaders need to find proactive staffers they can delegate day-to-day operational tasks.

—By Denise Dubie


Make Way for the Interactive Wiki

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c u S t o M e r S e r v i c e Results from IDC's Asia Pacific advanced customer care and retention (ACCR) 2009 poll of Asia-based firms indicate that 20 percent of the respondents will still invest in IT tools that can help them increase earnings, said IDC.

This trend is seen most clearly among larger enterprises, especially in China. Companies that are focusing on growth are significantly more likely to explore the more advanced areas of customer care. Nearly half of the respondents saw the main value of customer care as a way to generate revenue, and many are ready to go beyond traditional customer relationship management.

"Companies with growth ambitions are exploring more advanced options than those that hope to get through the downturn by cutting costs", said Claus Mortensen, principal for IDC Asia Pacific emerging technologies research group. "New advanced customer care tools such as customer analytics, customer database management, and new web-based tools, are much more on the agenda for these types of companies."

Despite the impact of the economic downturn, IDC's poll showed that the top business priority of more than half the companies

surveyed was to increase earnings over cost control. In fact, 25 percent said that they were focusing more on cost reduction. At the same time, nine out of 10 companies said they had increased their focus on the customer because of the economic downturn.

In another ACCR survey focusing on what Asian generation Y consumers expect from their customer care experiences, the respondents indicated that traditional customer care methods are inadequate, said IDC.

When it came to seeking technical support for IT gadgets, 62 percent said they had gone to someone they knew personally. "The survey highlighted how important the web has become in how companies connect and engage with consumers", Claus said. "It also revealed that as many as 20 percent of young Asians actually prefer to seek help in ways that circumvent the companies they bought their products from."

This means that companies will need to be more imaginative in how they engage their customers if they want to maintain relationships with their customers, Claus added.

—By Computerworld Hong Kong staff

B u S i n e S S i S S u e S CIOs should have It budgets taken away from them and eat what they kill, says boardroom advisor Ade McCormack.

"budget is like a charity, and if you have to rely on budget, you're not really empowered," said McCormack, a columnist for the financial times and author of the It Value Stack.

Instead McCormack advised CIOs to surrender their budget and then operate on a eat-what-they-kill-basis. Speaking at the Gartner Outsourcing & It services Summit, McCormack told CIOs to go out, win business and compete in the wider market place.

"Most CIOs are closely sealed in the company. If we released them into the wild one day, it would be a shock. but if we ate what we killed, we would have a lot more money. We would end up making the money that we spend."

the relationship between vendors and CIOs needs to be equal, he explained. If the vendor is too strong, the CIO could become a puppet, which in turn would

bring about their demise. If the CIO has too much power in the relationship, the vendor's role is weak and there is little innovation, he said. Services would be adequate at best and there would be legal nitpicking around contracts.

McCormack advised vendors to relax pressure on sales staff to hit targets because it puts at risk a long-term relationship with CIOs. Instead, the vendor should help the CIO make the value case and become more boardroom-ready. At the same time, the CIO needs to understand how to talk to the board and to articulate the value of It.

the problem, explained McCormack, was that the boardroom did not know whether investing in the It department would get sufficient returns. the CfO would always want to measure It as a black box with an excel interface, particularly when value can't be articulated. In some cases, the CfO does manage to get the CIO on the board. "but

if that CIO then uses expressions that are not comprehensible to the board, such as SaaS, then he won't be on it for long", he said. "the board understands terms like share price, profit, loss, balance sheet, governance, risk and prison. A lot of CIOs haven't woken up to that. "

"I'd encourage CfOs to first ask CIOs what the share price of the company is today. If the CIO can't answer that: interview terminated." said McCormack.

When asked about the rise of cloud computing, which treats It as asset-based rather

than forming strategic relationships with CIOs, McCormack said: "I don't have a strategic relationship with stapler suppliers. there will be vendors that focus on technology that will be pushed down the value chain. the danger with It is that it works so well that it is no longer interesting, and becomes boring. CIOs want something interesting. "

—by Siobhan Chapman

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The version 3 updates of the Information Technology Infrastructure Library (ITIL), released in the spring of 2007, have breathed new life into ITIL. Certainly, it has sparked renewed interest

from CIOs.By applying a common language and best-practice

guidelines to manage basic functional processes, ITIL goes beyond a basic focus on infrastructure cost efficiency and personnel productivity. As such, it is especially popular within organizations that are committed to performance improvement and seek to take their strategies to the next level.

Increasingly, however, many executives are questioning the payback of investments in ITIL. It's not that ITIL has failed. Indeed, evidence shows that a vast majority of executives involved in ITIL initiatives believe that the guidelines have produced benefits. However, few can quantify those gains in terms of cost savings or quality improvements.

This gap between perceived gains and actual results should be of particular concern in today's difficult economy, when demonstrating a direct impact on the bottom line is essential, and when initiatives limited to soft returns are likely candidates for elimination.

Today, top-performing organizations are re-assessing their approach by focusing on concrete results and quantifiable returns on investment from ITIL and other process improvement initiatives. Many of these efforts aim to identify discrete processes within the organization that need fixing, and take a more discrete approach to defining potential benefits and gauging results on an ongoing basis.

Bob Mathers Applied insight

Payback Time for ITIL Because it’s hard to quantify gains from ITIL projects, many are questioning their investments in the best-practice guidelines. But it pays to follow the rules.

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Why Benefits Are Hard to Gauge By design, ITIL process guidelines cover a broad range of functions that impact performance in a variety of areas across the enterprise. This wide reach presents a challenge in terms of gauging the benefits of ITIL. Specifically, how do you assess the impact of a specific process change when that process spans the entire IT organization, which in turn is influenced by a number of dynamic factors? Moreover, how do you determine where to begin in terms of developing and implementing a plan to adopt ITIL principles throughout the organization?

Another challenge to quantifying ITIL benefits that they often relate to quality of service rather than to costs. For example, while change management and problem management may reduce the

number of calls into the service desk, incident management can make the service desk more efficient in fixing calls. This increases user confidence in the service, and encourages users to call the desk for simple problems they would otherwise try to fix themselves. The net result: the number of calls remains constant, as do costs.

However, the benefits are undeniable — better service, higher user satisfaction, and higher productivity — since end users spend less time fixing IT and more time doing their jobs.

The CIO's ROIOne approach executives are taking to address these challenges is to recognize that an effective ITIL program need not be an all-or-nothing proposition that applies to all practices across all service areas. Rather, businesses are focusing on addressing the areas that have the most direct impact on operational performance in terms of cost, productivity, and service quality. Therefore, initial ITIL efforts are typically focused on incident management, change management, and problem management.

Incident management refers to the processes and procedures in place to react to situations that arise in an organizational setting, ranging from a call to a help desk to getting a user whose PC has crashed back online. Key metrics include response time, resolution time, length of outage, and so forth. The emphasis here is on addressing problems efficiently, rather than on addressing the underlying cause of the problem.

Change management is concerned with understanding and controlling how seemingly innocuous changes to IT systems and business applications can ripple through an organization and affect stability and quality of service and functionality available to end users. In this area, metrics — such as percentage of incidents

caused by changes — seek to identify the impact of changes on organizational performance. The goal of process improvement is to understand and minimize those impacts.

Problem management seeks to establish processes to proactively resolve problems by addressing root causes. Here, the emphasis shifts away from firefighting mode to avoiding problems in the first place. Appropriate metrics, as well as appropriate linkages between metrics and organizational goals, are essential.

Another approach is to integrate ITIL with other process frameworks such as CoBit to create hybrids that suit the specific objectives of the organization. This trend reflects the experiences and lessons learned from earlier forays into ITIL, which confirmed that ITIL is not a one-size-fits-all panacea. CIOs today

are taking a less doctrinaire approach, and picking and choosing from different models that best suit their unique requirements.

Holistic and DetailedThe most effective way to quantify the benefits of ITIL and similar methodologies is to apply a management framework that takes a holistic yet detailed view of process changes and identifies and tracks improvement on an ongoing basis. Such a framework analyzes process improvement over time from three perspectives: cost, productivity, and service quality.

Consider, for example, the impact of improving processes around incident resolution. A benefits-oriented analytical model assesses the following: What is the impact on the unit cost of the operation, in this case the cost to resolve an incident?

What is the impact on productivity, in terms of the number of incidents handled by an agent per day? What is the impact on service quality, in terms of the time to resolve an incident?

An essential starting point is a detailed baseline analysis from which to measure progress. Subsequently, as process improvement practices are adopted, snapshot measures of cost, quality, and productivity can be taken within a given scope of operations. In the case of incident management, tracking the number of incidents is relatively easy, as is tracking process changes relative to a reduction in the number of incidents.

However, since the environment is subjected to a variety of influences, the challenge is to determine cause and effect and to understand whether changes in unit cost, productivity, and quality result from process improvements, or whether those changes reflect some other factors. This can be done by defining milestones to which specific process changes are linked, and then instituting a time lag (say, milestone plus one week) to allow

An effective itil program need not be an all-or-nothing proposition that applies to all practices across all service areas, which is why initial itil efforts are typically focused on incident, change, and problem management.

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time for the process change to have an impact. Ideally, a dashboard-type of analytical model results, one that needn't be overwhelmingly complex, but that does go into sufficient detail to track benefits and demonstrate the impact of ITIL and/or other process improvements.

Tying Metrics to Business GoalsAnother essential success factor in quantifying the benefits of ITIL and related initiatives is to effectively link process maturity metrics to broader business goals.

In the area of problem management, process improvement aims to identify and resolve issues that cause problems. Metrics should drive actions that identify the source of problems so that they can be eliminated. In a service desk, first-contact resolution is often used to assess the productivity of individual agents. Agents who consistently resolve fewer contacts than their peers may require additional mentoring or training, while the practices of the very productive agents can be used as a model for other agents.

And this does not apply only to IT processes. Consider a bank that provides customers a confusing telephone self-service option to change their PINs. Callers quickly become frustrated and abandon the service to talk to a live agent. Because the customer problem is easy to solve, the first-call resolution rate approaches 100 percent. Call center management has no incentive to search out and prevent this type of call, because then the calls could be avoided altogether. Fewer calls would push down the overall resolution rate, which would reflect poorly on management performance. Meanwhile, the customer experience suffers.

In this instance, an effective problem management process defines incentives for agents to identify problems (here, a confusing self-service option) and subsequently tracks the impact in terms of reduced number of customer calls to reset PINs. The value of that improvement can be quantified by calculating increased agent productivity (time saved by eliminating unnecessary calls), as well as by surveying customers no longer subjected to a frustrating online experience. CIOs are increasingly moving beyond the realization of soft benefits from ITIL and other process improvement models to achieve quantifiable benefits within specific operational areas. Key success factors include establishing a baseline of performance to provide a context, focusing on discrete functions, applying appropriate metrics, defining cause/effect linkages, and tracking benefits over time. CIO

Bob Mathers is a principal with Compass Management Consulting, a global

management consulting firm for business and IT operational improvement

for large organizations. Send feedback on this column to [email protected]

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Your unique business data, the information you have gathered and that no one else has, can give your company the competitive edge it needs in these difficult economic times. You have more

information about your business — its environment, customers, operations — than ever before, and it can be used to develop profitable future strategies. You can even use it to improve your business processes or out-think your rivals.

In their book, Competing Analytics: The New Science of Winning, Thomas H. Davenport and Jeanne G. Harris reveal that using data to make decisions has shifted dramatically. They report that some high-performing enterprises are now building their competitive strategies around data-driven insights to generate impressive business results. This is done using analytics — software that incorporates sophisticated quantitative and statistical analysis as well as things like predictive modeling and linear programming.

As a former CIO of an 8,000-person telecommunications company, I lived in a messy world filled with incomplete data, limited budgets and conflicting projects. I greatly appreciate technology that helps CIOs evaluate alternatives when choosing the best path forward.

In my experience, CIOs are in a unique position to offer insight into what might be strategically possible for their organizations, particularly if they use advanced analytics. It takes big-picture thinking, appreciating the art of the possible and sharing the outcomes with stakeholders for incorporation in future actions.

Variables Everywhere A good example of advanced analytics in action can be found at the New Brunswick Department of Transportation (NBDoT),

Steve Palmer Peer-to-Peer

The Way Ahead With AnalyticsBy weaning itself off a fix-the-worst-first approach and applying advanced analytics, the New Brunswick Department of Transportation has found a more cost-effective way to manage its assets.

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Steve Palmer Peer-to-Peer

which used the technology to help it completely change the way it manages 200-year-old infrastructure, and in doing so established itself as a model to transportation authorities around the globe.

Prior to implementing this technology, the accepted way to manage 18,000 kilometers of roads, 2,900 bridges and various ferry crossings was to fix the worst first, a practice born out of necessity in a sector with aging assets, insufficient funds and complex, competing priorities. In an environment where lifecycles can stretch hundreds of years, informed decision-making and effective resource allocation were daunting challenges.

Consider the complexities of monitoring the deterioration of roads, bridges, sewers, and signs. Then factor in increased usage due to heavier traffic volumes, and adjacency issues — the proximity of pavement, culverts, sewers, curbs and sidewalks. Without a way to determine how dealing with one asset impacts the lifecycle of others, the task of maintaining all of them becomes a guessing game. In an area the size of New Brunswick, the mathematical calculations can be mind boggling.

Not surprising then that the fix-the-worst-first approach resulted in a slowly deteriorating infrastructure and steadily increasing maintenance costs. This prompted NBDoT to look for an alternative solution. The goal was to develop a plan to manage the province's infrastructure using a cost-effective, sustainable asset management approach.

The Analytical Way In 2005, NBDoT began implementing an Asset Management Business Framework, at the core of which was a sophisticated predictive modeling program called Spatial Woodstock.

The system was chosen for its analytic and predictive modeling capabilities. With its ability to calculate tens of thousands of constraints and other variables simultaneously, it was an apt solution because while NBDoT previously used modeling programs that allowed them to model individual assets like a bridge, for example, the relatively static programs were severely limited in their management capabilities. None allowed it to perform predictive analyses, to run what-if scenarios and test tradeoffs among multiple assets. The new system did.

NBDoT found that the most cost-effective way to manage its assets was to use a least-lifecycle-cost approach, using analytics software to spot efficiency trends and show the most profitable alternative through trade off-analyses and scenario-modeling.With the system in place, NBDoT applied asset management mathematical optimization techniques — used extensively in almost all areas of decision-making — to solve very complex problems and create balance among conflicting constraints. The new system gives the department a long-term view of the

resources required to sustain the condition of New Brunswick's transportation network within performance standards.

NBDoT now has the ability to understand short- and long-term consequences of investment and treatment alternatives and has a mechanism to visualize the decision results by conducting what-if scenarios as they relate to overall asset condition, performance and operational measures. Graphics and map displays of model results have made it easy for all levels of management to understand what the models are conveying.The overall result of the project has been the establishment of a

framework and business processes that allow the department to make better financial decisions by moving toward a performance-based, least lifecycle cost, asset-centric approach to long-term strategic planning. Most importantly, NBDoT now finds it much easier to communicate the effects of trade offs — the impact of spending less money and what happens to the condition of roads and bridges over time.

The Art of the PossibleUsing advanced analytics means having the ability to ask questions and set guidelines to explore options. For example, one can ask, "What would be the impacts on people, projects and benefit streams of deferring or canceling one or more projects?" Advanced analytics allow CIOs to ask: What if I cut my budget by $10 million (about Rs 50 crore)? It allows the user to start with 'what is the lowest I can go and still meet all my objectives?' This ability is useful in the current economic condition when executives across all areas of companies are being asked to do more with lower budgets.

At the same time, the overall value of project portfolios can be monitored, and the impact of their changing values as plans are implemented can be tracked to determine overall profitability. Each project can include before and after analyses of returns by year. Of course, this information can be rolled up into an accounting of total returns across all years as well. Perhaps what is most intriguing and what leads to the best solutions is the practice of using the same platform to look at IT assets and related projects assessing all the other organizational assets and projects. CIOs can lead the way by working with people from other departments and applying advanced analytics to look at all asset types and then incorporating the expertise and ideas from several departments into the final solution. CIO

Send feedback on this column to [email protected]

Using advanced analytics gives CIos the ability to ask questions like: What if I cut my budget by $10 million (about rs 50 crore)? or what is the lowest I can go and still meet all my objectives?

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The IT department is increasingly justifying its existence based upon its net contribution to profits and order to cash. However, budgets for large projects are woefully lacking. Fortunately, there are

alternatives that both minimize capital expenditure and increase automation. The key is to identify tactical, self-funding projects that provide efficiency and directly impact cash flow.

Embrace Shared ServicesWith restrictions on borrowing and personnel reductions, leaders are looking to consolidate their centralized business functions. These centers provide shared services that allow more efficient competencies that different business units, operating companies and locations can take advantage of. Shared services allow IT and other departments to focus on specific activities, while eliminating redundant resources and overhead costs and activities. It can also help companies better incorporate best practices.

The concept of shared services is not new, but it has never been more viable than it is today. Common examples of shared services are collections, purchasing, call centers and human resources.

Like all enterprise-wide projects that involve consolidation, communication is key. And because today's supply chain involves the exchange of highly diverse data with external trading partners, the more integrated, accessible and real-time the information, the better. For example, a credit and collections shared services center must have the tools to notify sales and operations of trends within customer groups and specific accounts. The forecasting of cash flow through day sales outstanding impacts cash.

Marlo Brooke Applied insight

Squeezing Cash From the Supply Chain When the ties between the financial and physical supply chain are supported within an optimal IT infrastructure, cash can be dramatically improved, even in tough times.

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While shared services provide an opportunity to reduce costs, thorough planning and risk analysis is important. Identifying the actual cost/benefit scenarios must involve variable what-if scenarios that include labor costs, software systems, hardware, communication platforms and other factors that are often difficult to see.

Increasing Cash FlowIt is well known that the method in which a company communicates to its trading partners has an enormous impact on cash flow. Invoicing has long been automated through methods such as EDI. But many companies are not completely on EDI, and they don't see what this is costing them. For example, if a $250 million (about Rs 1,250 crore) supplier does 94 percent of its business through EDI, and the remaining 6 percent is manual, the amount of money manually invoiced is $15 million (about Rs 75 crore) per year. If day sales outstanding on 6 percent of revenues can be reduced from 36 days down to 33 days, then attaining 100 percent electronic invoicing will result in $2.7 million (about Rs 13.5 crore) in additional cash flow per year.

Beefing Up CollectionsIn the days and months ahead, collections will become a more mission-critical function for companies that hope to survive.

Collections must be able to quickly and effectively track the entire order-to-cash cycle. Anything that improves results in collections is worth considering. According to industry averages, more than 50 percent of collection delays are due to internal processes.

Typically, the biggest procedural hurdle for collections managers is a lack of visibility and timely information. This problem is compounded because most legacy systems do not provide enough automation, visibility and control for the collections process. Collections agents need to be able to manage a single point of communication between sales, operations, collections and customer service. Being able to identify and focus on high impact activities, leverage existing systems, and proactively involve customers, sales and operations is key. Order-to-cash visibility can be well supported with solutions that integrate to existing systems, and which are available as a Software-as-a-Service (SaaS), enabling a quick return on investment and immediate cash flow.

Cash is as good as what you do with it. Finance and treasury needs a single point of visibility and control to cash. IT knows that the bottleneck is always data from external parties. Most ERP and accounting systems reconcile receivables up to 80 percent

and rely on manual, repetitive processes for the remainder. With lending so tight these days, the time delays of 20 percent of cash cannot be justified. It pays to consider a solution that can reduce this percentage to 1 to 2 percent of sales.

Business Process OutsourcingEvery company has an Achilles heel. In these difficult times, companies must diligently scrutinize functions or departments that are not executed well, no matter what the cause.

Some functional areas can be mission-critical, as they directly impact sales and cash flow. One indicator of a potential problem is when a company depends only on one or two people who know the crucial processes, events or systems; and in the absence of these people, the business could come to a grinding halt. These days, that is too high a risk to carry.

Outsourcing is an option worth considering if a company wants to go back to its core competencies, and still control cost and risk. If well implemented, outsourcing can save companies two to 10 times traditional in-house costs. It can be structured so as to guarantee predictable timelines and service levels, and it can also reduce the cost over time. It can work very effectively in situations where data must be exchanged on a regular basis between the company and external trading partners, such as electronic commerce, vendor managed inventory, etcetera.

On-demand BPO is an increasingly popular option; the on-demand prefix means that a company only pays for what it use, as opposed to paying a fixed cost. It can include management of daily operations, customer outreach functions, data integration, and management of software systems. Whatever type of consolidation or outsourcing is considered, key questions to ask are: How it will affect the order-to-cash cycle, how it will reduce risk and exposure and how it will serve to increase sales.

It is critical to choose a trusted partner who is will understand your business and the impact of that functional area on the business. Because outsourcing frequently includes both data and verbal communication with your business community, the partner must have strong communication skills that reflect and enhance your company's corporate culture, image and values.

Even in hard times, the financial and physical supply chain are tightly interlinked. What we always like to ask is: "If you knew one thing about your supply chain that would dramatically impact your cash flow, what would that be?" Finding the answer is closer than you think. CIO

Send feedback on this column to [email protected]

it is well known that the method in which a company communicates to its trading partners has an enormous impact on cash flow. if day sales outstanding can be reduced, it will result in additional cash flow.

Vol/4 | ISSUE/152 2 J U N E 1 5 , 2 0 0 9 | REAL CIO WORLD

Coloumn - 03-Squeezing Cash From the Supply Chain.indd 22 6/18/2009 4:32:07 PM

Trendline_Nov11.indd 19 11/16/2011 11:56:19 AM

Amit Gupta, VP-IT, Fidelity Business Services

India, went against the common wisdome when

he continued to impart leadership skills to his IT

staff after the slowdown. It was the organization

did not regret.

Good Leaders

Cover Story.indd 24 6/18/2009 4:33:38 PM

If there was ever a more difficult time to make leadership development a priority, you'd have a hard time convincing most IT executives of it. In the aftermath of the global economic meltdown, CIOs face a long list of challenges — from cost cutting and customer demands to strategic planning and successful innovation — and the resources available to accomplish them continue to contract.

Executives across the board are downgrading their concern about the pipeline of top talent in their organizations. Corporate leaders ranked pressure to cut costs (83 percent) as their toughest business challenge, according to recent research from Personnel Decisions International, an HR consultancy. Talent management fell to dead last, with just five percent of survey respondents citing loss of leaders in key areas or insufficient talent as a concern.

Indeed, it would be easy for CIOs to shift into autopilot when it comes to developing the next generation of IT leaders. Problem is, say management experts, that without a guiding force, leaders

Reader ROI:

The near-term dangers in ignoring leadership training

How to train up-and-coming leaders

What leadership is made of

Leadership development doesn't stop when the going gets tough. If anything,

investing in the next generation matters now more than ever. by StephanIe Overby & Sneha Jha

ForgIng

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Good Leaders

Cover Story | Leadership



will self select — and they may not be qualified for senior roles.

"Leaders are developing whether you want them to or not. The question is: Do we want to be aware of that and guide that in a conscious way?" says Karen Sobel-Lojeski, visiting assistant professor at Stony Brook University's department of technology and society. "We need to pay more, not less, attention to leader development because leaders are coming up anyway."

"The trick," says F. Warren McFarlan, professor of business administration at Harvard Business School and author of numerous books on IT management and strategy, "is to be able to identify the remarkable people in the organization while getting the work of the business portfolio done. You've still gotta get the laundry out."

The CIOs who identify, mentor and groom talent are flat-out focused on developing the next generation of leaders (and the generation after that) while still meeting the myriad challenges of the modern-day IT department. And while there's a lot of buzz about how to bring up Gen X or Gen Y, these IT leaders believe that leadership development is leadership development and that focusing on age or any other differentiating factor is not productive.

"It's simply a matter of priority," says Amtrak CIO Ed Trainor. "You must make the investment or else you will lose the good people."

CIOs should heed Trainor's advice. Many aspiring CIOs are dissatisfied with their CIO's approach to developing talent, says an exclusive new survey by CIO.


Fewer than half of respondents believe their CIO is “very committed" to developing internal leaders while 34 percent say their CIO is "somewhat committed." In addition, more than half gave their IT bench a weak rating, which suggests a need for more leadership development by the CIO. The survey polled 90 aspiring IT leaders, 80 percent of whom are Gen Xers now working their way to the top.

Clearly, CIOs should carve out time to devote specifically to leadership development throughout their organization. "But there's also a mindset that has to change," says Sobel-Lojeski, whose book, Leading the Virtual Workforce: How Great Leaders Transform Organizations in the 21st Century, publishes in August. "You must always be in leadership-development mode. You never know who may turn out to be the next leader."

Smart CIOs see leadership development moments in even the mundane. "I try to take advantage of everyday events — problems or personnel issues — and turn them into real-time learning opportunities," says Toyota CIO Barbra Cooper. "I just never stop trying to be a leadership developer. I am thinking about it all the time." Such coaching by senior staff is seen as a "very effective" form of training by 61 percent of would-be CIOs, according to CIO’s survey.

IT executives who make the effort to cultivate their up-and-comers reap results not just in the future but in the harried here and now. "Balancing competing demands is an important part of the job of any IT leader in a complex environment. I do everything I can to avoid the tyranny

of: ‘you can have either peak productivity or learning and growth," agrees American Red Cross SVP and CIO Mark Weischedel. "I firmly believe that — on the whole and over time — you can have both. If people like and believe in what they're doing, and are stimulated by new challenges, they'll perform better."

CIos for TomorrowToday's CIOs have to be a little clairvoyant, not only transforming their best and brightest managers into leaders, but also preparing them for challenges to come. The one bright spot in the torrent of bad economic news today is that it's made reading those tea leaves a little easier.

Risa Fogel was former vice president of business relationship management at Realogy, the $4.7 billion (about Rs 23,000 crore) parent company of real estate franchises Century 21 and Coldwell Banker whose revenues have sunk 27 percent since 2006. But Fogel, now senior managing director of business relationship management at Cushman & Wakefield, has a good handle on what she'll face as a CIO in the next few years. Everything that today's IT executives are confronted with — squared.

"Future CIOs will be challenged with many of the issues facing today's leaders, but in the context of how to guide their business to recovery," she says. "They will be particularly challenged with driving innovation. [But] encouraging new investment and risk taking will need to be carefully couched in terms of how it will deliver short- and long-term growth." The

It would be easy for CIos to shift into autopilot when it comes to developing the next generation of IT leaders. Problem is, say management experts, that without a guiding force, leaders will self select — and They

may noT be quaLIfIed for senIor roLes.




successful 21st century CIO will deliver on multiple dimensions. "The CIO's role will be to appropriately deliver innovative services that align with corporate strategy and to balance — in a cost- and risk-sensitive way — the work of inside staff and outside staff," says McFarlan.

That's just part of what CIOs must accomplish to make it today, says Weischedel, who took on the top IT job at the Red Cross last year. "Surviving and prospering as a CIO will require anticipation and agility like never before. Experience working in a diverse set of responsibilities, organizations, structures and situations is the best preparation," says Weischedel, whose own career spans a half-dozen industries and situations ranging from aggressive growth to downsizing and divestiture. "Especially in times like these, drawing on past experiences makes a huge difference."

oLd-fashIoned LeadershIp TraInInGFor all IT management's increased complexity, some of the most rewarding leadership development experiences cited by tomorrow's CIOs are tried and true.

Modell values his time at the Center for Creative Leadership. He took a CCL class, which involved taking various assessment tests (e.g. Myers-Briggs, 360-degree reviews), a six-hour simulation of a stressful corporate situation and tons of feedback. Modell, who served as interim vice president of IT infrastructure at the Red Cross before moving to the International Monetary Fund as division chief of IT client services in April, used to avoid feedback for fear of a bad review. "I gained an appreciation of the value of feedback and introspection," he says. Today he solicits feedback from his manager, employees and peers, provides feedback regularly to his own staff and coaches others on how to give and accept feedback. He has even sent his own staff to CCL classes.

Dee Waddell credits personal and business experiences along with management education (he has an MBA in strategic management and is working on a management doctorate)

tough times call for tough financial decisions. and going by the complexion of the current financial downturn, corporations will have to employ extensive cost rationalization measures to keep their balance sheets in good health. as a result, many training budgets often seen as unnecessary investments are feeling the heat. however, there are still some It leaders who have held out and continue t leaders who have held out and continue t

to endorse leadership training programs. amit Gupta, VP-It, Fidelity t, Fidelity t business Services India, is one of them. Gupta believes that investing in leaders is a ‘no-compromise’ agenda and has ramped up his training strategy despite the downturn.

It’s an approach encouraged by talent specialists. “Slashing your training budget at this time is like throwing the baby with the bath water. organizations are wasting the money they’ve invested in previous years, which leads to a gradual depletion of trained resources,” says Sanjay Shelvankar, VP-talent talent tacquisition at 7,600-strong Mindtree. tree. t

but he also knows that he is one among a few. “organizations do not acknowledge the need to enrich this critical resource: people. Most organizations adopt a conservative and apathetic approach to training programs. that’s not how I wanted to run my department,” says Gupta.

Part of his conviction stemmed from the fact that Gupta, who has been with the 7,000-strong Fidelity since its inception in 2001, had witnessed firsthand the company’s steep growth. he’s also had front row seats to it’s teething troubles, including when the company lost key talent to the market. With his eyes trained beyond the immediate, Gupta realized that if the company wanted to sustain its blistering growth, it needed to retain talent.

So, four years ago, Gupta initiated a leadership training program for his department. he was convinced that if Fidelity wanted to grow, then It would need to play an important role. and twenty years of experience had taught him that where It was concerned people were the levers for growth, they were the competitive differentiators.

that’s a thought that gets many CIos nodding — and stop there. Few CIos attempt to go beyond these abstractions but Gupta wanted something more specific from the training. “My people needed to develop business acumen to help them identify technology-enabled business opportunities. also, training

at Fidelity business Services India, VP-It amit Gupta has taken the unusual decision to increase leadership training in the face of the slowdown. he tells you why he did it, how it can benefit your organization — and why it is so essential now.

FoLLowthe Leader

(Continued on Page 28)


would serve twin purposes: first, it would make them participants in the company’s growth and second, it would enhance their level of engagement with the organization and serve as a tool for retention, motivation and engagement with business, which would in turn cultivate their leadership skills,” he says.

however, he knew there would be no place for such a program without the unflinching support of senior management. When Gupta put his plan before them, he managed to convince them of its strategic imperative. but while they saw how it could obviate the challenge of a chronic It skills shortage, they were apprehensive about its long-term sustainability. their reservations were well-founded: a one-off effort that didn’t last could not only damage their credibility, it could make employees cynical and impossible to handle when the next well-meaning program came along.

Gupta saw a way around the problem: point attacks. by breaking up the leadership agenda into many readily identifiable skills and by creating multiple formats to impart them, he knew he could avoid employee enthusiasm from flagging. “We had workshops, sessions, weekend classes, simulation exercises, one-to-one mentoring and counseling,” he says. but it took him between three and four months to get management on board.

Gupta’s modules include alignment with organizational values, decision making, conflict resolution, team work, ‘career-pathing, collaboration and trust, Fidelity’s revenue model, best practices in the industry and how to move up the ladder, among others. Gupta himself covered “how to be successful at Fidelity”. he also led sessions on business communication, partnering with business, negotiating skills, conflict resolution, customer responses and collaboration.

he also got senior management to pitch in. “It was a sort of internal knowledge management where top management shared their knowledge and success mantras at Fidelity. they gave lectures on the vision and philosophy of the company,” he says.

Gupta cautions other CIos to watch out for the practical issues that can derail a program like his: managing multiple schedules for instance. because many of the people who attend training tend to be the ones moving up (that’s why they feel the need to be trained), they have important responsibilities and securing time with them can be hard.

another challenge Gupta encountered was the inhibitions of some participants to discuss their weaknesses. this apprehension, Gupta found, came from the lack of clarity about the program’s objectives. “Some employees were concerned that revealing their shortcomings would impact their merit review ratings,” says Gupta.

but after these initial hiccups Gupta’s program found it’s rhythm. and the benefits began to show. the initiative has helped him build a three-man team in

with helping him overcome his own weaknesses. "I have had deep experience in many of the areas I am leading, so I have no issues in rolling up my sleeves and taking action. The biggest challenge I have is that sometimes I can move too fast and not ensure everyone is on the same page before moving forward," says Waddell, Amtrak's group information officer for marketing, sales and customer service. He learned the importance of collaborating with others through formal and informal meetings and regular check-ins as well as by following up with key constituents, even when his impulse is to barrel ahead.

At Toyota, Cooper encourages enrollment in executive MBA programs and has a career development plan for her staff that requires certain courses, conferences, speaking engagements and position rotations. She tailors the activities to the employee. Zack Hicks, who works under Cooper came from the business side, so his focus was on gaining confidence and expertise with technology and technical staff. And one of his peers, Karen Nocket, had a solid IT background but needed to shed her geek image and get more business exposure.

Not all traditional leadership training must be bought and paid for — thankfully. Fogel attended executive management programs and the Society for Information Management's regional leadership forum, which provided a strong foundation for working with the business. "Developing the ability to effectively communicate across all levels of the organization has been crucial to my success and is something I try to encourage for my staff," she says.

While at Realogy, Fogel says she offered her staff "the ability to step into unfamiliar situations, using a lot of one-on-one coaching and immediate feedback." She also used the company's business challenges to talk about "the difficult decisions leaders must make to adjust to a changing environment."

For all the formal management training Hicks has under his belt, he credits his one-on-one time with Toyota CIO Cooper as perhaps his most educational. "My strongest mentor and teacher has been

(Continued from Page 27)

Most organizations adopt a conservative and apathetic approach to training

programs. ThAT’s nOT hOW I WAnTED TO Run My DEpARTMEnT.




Barbra. She's got laser-beam-like insight into performance and corporate cultures, and she cuts through the B.S. with a machete. She gives strong, immediate and actionable feedback and insight," says Hicks. "I try to do the same with my staff."

busIness booT CampAmtrak's Trainor is 65-years-old. He's been a CIO for 25 years at four companies in four different industries. He's got an MBA with a specialty in information technology. But the best thing he ever did for his career, he says, was getting out of IT to spend some time in the business ranks.

It's no secret that an understanding of and ability to work with the business is a key success factor for IT leaders. In fact, aspiring CIOs say they consider strategic and business-focused skills to be key in getting to the next level, according to CIO’s survey.

"[The lack of] a deep ability to understand, relate to and communicate with senior people outside of IT is where a lot of IT professionals have gotten themselves in trouble," says McFarlan. But letting go of your best employees isn't easy. After all, there's a very real chance they may never return. But the business remains one of the best training grounds for IT leaders.

Kevin Cooke joined the Department of Energy right out of school, rising to associate CIO during a potentially contentious IT centralization effort. Communication and collaboration with the business units has led him to some early success. Naturally, Cooke wants to instill those same skills in his team. So he created an organizational development program with a budget for professional training, a focus on team- and communication-building exercises, and — most importantly — opportunities to cross-train in other departments. Dubbed ‘details’, these six-month to one-year assignments send IT employees to another DOE office or program temporarily.

During lean times, it can be difficult to give up even one prized employee for six months. But shorter-term business-IT exchanges can have lasting effects. "Earlier in my career at Realogy I had the

2003 to 130, over half of which has been loyal for over three years, which is unusual for the industry. the team also began to better appreciate business priorities, which has improved It’s relationship with business tremendously. decision-making became more inclusive. and the program solved an attrition problem by bringing it down 15 percent and prepared a strong second line to succeed Gupta. “It’s win-win for employers and employees. the company has access to a more committed, multi-skilled and productive It team that’s equipped to take on multiple roles and the employees have a more challenging career path. the work that we used to do with five people, we can now do with three,” says Gupta.

Gupta insists that this is the best time to train people in leadership. “the slowdown has provided the time and opportunity to engage with employees in a more intense manner. the schedules of our staff have eased up a bit because some projects have been put on ice for a paucity of funds,” he says.

Shelvankar agrees, “a recession represents a perfect opportunity to revamp these programs to focus on what they were originally designed to do: help leaders become more adept at helping organizations be competitive and make money in good times and in tough times. during a recession, training becomes critical as it keeps the organization robust and well-equipped to survive a downswing.”

Gupta’s got something out of it as well. he has learnt a great deal about behavioral management, he says. and intense mentoring sessions has helped Gupta identify and move 12 people into bigger roles.

and at a time like this, in a sector as hard hit as bFSI, new leaders are what they need.

—b

become more adept at helping organizations be competitive and make money in good times and in tough times.

uring a recession, training becomes critical as it keeps the organization

equipped to survive

management, he says. nd intense mentoring

sessions has helped

move 12 people into

nd at a time like this, in a sector as hard hit as

FSI, new leaders are what

by Sneha Jha

— Amit GuptaVP-IT, Fidelity Business Services India


Cover Story.indd 29Cover Story.indd 29Cover Story.indd 29Cover Story.indd 29Cover Story.indd 29Cover Story.indd 29Cover Story.indd 29

opportunity to travel with my business customers, which helped me understand their business strategy and challenges," says Cushman & Wakefield's Fogel. "It [also] helped them develop confidence in my ability to help solve business problems."

When Amtrak CIO Trainor brought Waddell in to interview for his role to help Trainor rehabilitate the department, he knew he needed someone capable of more than making the IT trains run on time. Waddell had been responsible for a business unit with revenues of nearly $3 billion (about Rs 15,000 crore) and had held senior business and IT leadership positions, but Trainor wanted to check his business credentials with Waddell's business partners, which was not unusual to do with a new hire. "He was very wise in having me interview with most of the senior business leaders I would be working with and supporting," says Waddell. Since he hired Waddell, Trainor has asked him to work closely with the business, giving him the opportunity, as part of a combined marketing and IT team, to present to the board of directors in March.

When the Red Cross's Modell was employed by the Washington Post, he worked closely with a vice president he was charged with supporting. She asked him to develop an IT road map for the business. But both quickly realized there was no clear business strategy on which to pin a technology plan. So together they built an IT-business strategy and a supporting IT road map. "I had always been a bit skeptical about the actual impact that the development of a vision could have," admits Modell. "By seeing the entire team rally around the direction and by participating in decisions to adjust priorities and kill projects, I gained an appreciation for their value."

At the Red Cross, he led his own leadership team with developing a mission, vision and road map. And while at the Post, he insisted on at least a full day each year in a business role. "There is great advantage to requiring all IT staff to [work] side-by-side with someone in the business," says Modell, who once spent a night distributing newspapers to understand part of the Post's business model.

freedom To faILSome future leaders are easy to recognize. Amtrak's Waddell achieved the rank of Eagle Scout by 13. He helped to set up an Internet-like computer messaging system when he was 14. He earned his real estate license at 18. And at 19, he licensed designs from his T-shirt business to a national, multi-million dollar company.

Still, Waddell insists he is a business and IT leader made, not born. And his most formative experiences have been, by most measures, failures.

After getting his MBA, he jumped at the chance to work with an Internet start-up at a venture capital firm that went through an IPO, but eventually went out of business. "I find myself fortunate that I escaped without much harm, while learning that business is

about bottom-line financial results — not the euphoria of high-growth website clicks," Waddell says. He joined Motorola, leading the development of a Web-based product that would enable the equipment manufacturer to bypass wireless carriers and sell to consumers directly. That never happened. But Waddell racked up significant experience as a corporate director for a Fortune 50 company. Then it was on to United Airlines, where he helped lead development of a new joint venture in the customer loyalty space. But after less than a year, the venture's partner panicked. United filed for Chapter 11 protection later that year. Waddell eventually left, but not before taking over the P&L for United.com and developing a reputation for driving strong product strategy and delivering projects with significant benefits amid company turmoil.

Corporate failures were leadership-building exercises that helped Waddell deal with his current challenge — turning around an IT department at Amtrak, where the business loathed IT and had built up the shadow IT organizations to prove it. He credits his success in rebuilding the broken business-IT relationship partly to his boss. "A key factor is that [CIO] Ed [Trainor] has created a safe environment where I am not afraid to take calculated risks," Waddell says. "When issues arise, he and I work together and focus on how to address and resolve them."

Trainor manages the risk of giving key assignments to Waddell and his other top leaders through "training and mentoring, and moving them judiciously into more responsibility," he says.

Hicks wasn't the logical choice to turn around a Toyota dealer extranet project that was years late, millions of dollars over budget and lacked a business sponsor. But Hicks, since elevated to vice president of administrative services, turned out to be the man for a floundering project. CIO Barbra Cooper didn't want just another IT project manager to take the wheel, so she took a chance on Hicks.

"Barbra liked that I didn't approach this challenge with the technological solutions first. I approached it from a

Giving budding leaders project management

control of larger programs is key

in preparing them to take over.

headInG an enTerprIse-

wIde projeCT was a very

effective form of leadership training said 77 percent of

respondents to a CIO survey.




For the first time ever, It organizations are staffed by multiple generations of workers — the Silent Generation, and Generations X and y. and while most leadership development attention is focused on handing the baton to Gen X

standouts, most of the anxiety is about managing Gen y."there's this perceived technology edge that young people have and this sense

that they've learned to live differently because of it," says dr. Karen Sobel-lojeski, visiting assistant professor at Stony brook University's department of technology technology tand Society.

and there may be leadership deficits that an organization's youngest workers need to overcome. "their ability to multi-task, while certainly useful, could prove a weakness as they are asked to focus on business or personnel problems that are not easily solved in a short timeframe," says risa Fogel, formerly of realogy and now at Cushman & Wakefield.

nonetheless, leaders in the making — charged with nurturing their own successors from among the millennials — see promise. "this generation can have a significant impact on the continued convergence of the It organization with the business," says Gen Xer dee Waddell of amtrak. "they will become the technology-savvy business leaders of the future."

"Generation y leaders could have a positive influence on the culture of a y leaders could have a positive influence on the culture of a yworkplace based on their enthusiasm for friends and collaboration," adds Fogel. "their expectations for immediate results may result in great innovation, particularly since they don't have the same imaginary boundaries as some earlier generations."

CIos and their managers must develop the next generation of leaders "in much the same way we did 20 years ago by giving them practical experience right out there on the battlefield," says F. Warren McFarlan, professor of business administration at harvard business School.

and now is the perfect time to hand real responsibilities and meaningful leadership experiences to Gen y as CIy as CIy os are tasked with doing more with fewer staff members.

— S.o.

more management-science perspective — financials, people and process — versus relying on what the current Gantt chart said." Hicks turned the project around with high satisfaction rates at headquarters.

Indeed, McFarlan says, giving budding leaders project management control of ever-larger programs is critical in preparing them to take over the top IT spot. Heading an enterprisewide project was cited by 77 percent of survey respondents as a "very effective" form of leadership training.

That can be trickier on the infrastructure side. Before Modell took on the customer support role at Red Cross, he focused solely on project management, strategy and software development. Two years ago, he decided to challenge himself and applied for an infrastructure role for which he had no experience. To his surprise, they gave him the reins of the 245-person group with a $30 million (about Rs 150 crore) budget. "I appreciate that Mark [Weischedel] and the previous CIO took a risk and gave me this opportunity," Modell says.

"In this position, I've been able to pull together all of my learnings and try them out on a larger scale." Modell transformed the department from geographically to competency-based, drove a 66 percent reduction in average IT case closure time and a 96 percent decrease in case backlog, and led the development of an Information Technology Infrastructure Library (ITIL) incident-management process.

Weischedel says he can't take a chance on just anyone. "There is a balance between ‘show’ and ‘grow' in an assignment. Over-extending someone's responsibilities beyond their performance capabilities is risky and can be a setup for failure," he says. "I don't ever want to put someone in a job they can't succeed in doing, so it's always a judgment call." Modell applied the experience to his own group at Red Cross. "As I've gained an understanding of my staff's talents, I've looked for opportunities to stretch them," he says.

That's an area of difficulty for the DOE's Cooke who knows his staff needs stretch assignments to grow. "In the past, I've been guilty of taking on too much personally

and not delegating enough to my direct reports," Cooke says. "While it may take more time initially to delegate to staff and guide them, in the long run it's a win for all involved." As his boss, Department of Energy CIO Tom Pyke says, "There is always a risk when delegating work, especially when stretching individuals beyond their past experience. [But] this is a key part of learning to be a manager in any area, including being a CIO."

Pyke is trying to practice what he preaches with all of his staff, not just

the standouts. "It's always important to challenge individuals — all employees, not just those who have significant potential as future leaders," says Pyke. "As these individuals grow, they learn to apply a similar model as they mentor others who are more junior than themselves." CIO

Stephanie Overby is a freelance writer. Send feedback

on this feature to [email protected]



Making LeaderS oF generation

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India’s finest CIOs came together to attend the first CIO Leadership Summit, powered by the CIO Leadership Council. The event was highlighted by extremely thought provoking discussions by leading CEOs such as Subroto Bagchi, Gardner, Mindtree, K Ganesh, Founder & CEO, TutorVista, Anand Sudarshan, MD & CEO, Manipal Education and Bhaskar Bhat, MD, Titan Industries. The discussions were focused on the most relevant topic today - Staying Buoyant in Troubled Times.You can now catch the proceedings of the event on CIO.in and access a wide range of web-exclusive content.

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CEO INTERVIEWS

CEO Vision

Like the amateur stock broker, good times can create leaders out of anyone willing to shoulder a little more than the next man. That's why, understudies, not yet groomed to be leaders hold load-bearing pillar positions across businesses. It's easy to spot these companies manned by false leaders. In the words of Bhaskar Bhat, MD, Titan, “They all react to the slowdown in the same way — immaterial of their business.” They trade hard-earned equity for quarterly targets, like exhausted sprinters in a long distance race. They had their time, but it is not now. CEOs who are weathering this storm better than their peers share how they do it. They say a crisis separates the boys from the men. Here are four of the best.


Leadership goes beyond the title. Four CEOs who continue to lead their companies on a growth path share their experiences.

LeadingLeadership goes beyond the title. Four CEOs who continue to Leadership goes beyond the title. Four CEOs who continue to Leadership goes beyond the title. Four CEOs who continue to

LeadingLeadingLeadingLeadingChange

The Customer ApproachSubroto Bagchi, MindTreePage 34

The Segmentation ApproachBhaskar Bhat, Titan IndustriesPage 36

The Entrepreneurial ApproachAnand Sudarshan, Manipal Education Page 38

The Re-invention ApproachK. Ganesh, TutorVistaPage 40

Subroto Bagchi, Gardener, MindTree, says CIOs should get ready for the 'attention economy' by focussing on end customers. As told to snehA JhA


“If you can’t get your customer's attention, you won’t survive.”

CEO_Speaking.indd 34 6/18/2009 8:11:11 PM

CEO Vision


There is a lot of gloom in the global market place. But this hostile economic climate isn't only due to a credit crunch, shrinking

margins and stalled growth. The fact is, most businesses are being overly cautious. Sure they need to take that approach because times are bad. But they need not be cynical.

It's time enterprises learnt to be cautiously optimistic about the slowdown and its aftermath. Organizations should not let the interim crises retard their growth momentum and freeze their businesses.

Instead of sitting back and waiting for signs of a recovery, CIOs should try to recognize the opportunities veiled in the economic turmoil that is in the now.

Cashing in on the sunny side of this economy can help organizations wade through it. Instead of unleashing cost management initiatives, organizations should re-think their strategies and re-invent their business models. They should think beyond a cost-saving-only approach. Enterprises should make the most of these opportunities so that when the economy gets back on its feet, they will come out sturdier.

And there are examples of those who have succeeded as they look for a silver lining. Take Kraft, the largest North American food company. It is capitalizing on the financial meltdown drawing on this insight: consumers eat at home more frequently during a crisis.

Being flexible, savvy and proactive helps in identifying opportunities disguised in challenges. And IT can be here. As organizations become more sensitive to cost reduction initiatives, the role of the CIO comes into sharp focus. CIOs can play an integral role in mitigating the impact of the global economic turmoil by formulating a winning game plan to sustain growth.

Customer is King, AlwaysAs CIOs evolve into strategists, they should focus on innovation that can help them re-model their company's businesses. But for

that they need to be aware of the dynamics of customer behavior.

Today, the world is witnessing the evolution of an attention economy. An attention economy is beyond a knowledge economy. Here, the central theme of customer engagement is attention. If you can’t engage your customer or catch his attention, you can’t survive. The company that understands the nature of attention and enjoys customer attention will prosper the most.

An IT executive equipped with an intimate understanding of IT’s inventive and game-changing capacities is uniquely qualified to exploit technology to derive maximum mileage from these opportunities. In uncertain times, CIOs can support critical business needs, expedite business operations, boost operational efficiency, conserve capital and reduce opex.

To accomplish this, CIOs should gauge the needs of their businesses. They need to be astute in analyzing and delivering business imperatives. CIOs who are can identify and capture opportunities will help their firms stay ahead of the curve. They can sustain their businesses by adopting innovative approaches to keep their business buoyant.

Stay Connected With the BusinessThe faculty to attain this emanates from knowledge — an understanding and perspective on the business. When a CIO engages with his business, he is taken seriously and his suggestions are valued.

A CIO should keep himself abreast of all that transpires in the business circuit. He should have an affinity for business imperatives. He should spend more time with people twice removed from his organization. This will help him acquire and understanding and affinity for business. A CIO should play an effective role in knowledge creation, harvesting and management. This, in turn, will help him secure that coveted seat in the corporate boardroom.

The last century was led by CIOs who adopted an analytical approach to solve business problems. This century will be led by CIOs who are sensitive to business problems. Instead of using their analytical left brain, CIOs should use their sensitive right brain when it comes to problem solving.

Instead of scampering for strategies to recession-proof their organizations, CIOs should seek ways to recession-proof themselves. Economic recession is an interim stutter but mental recession of an individual has a detrimental long- lasting effect. CIO

Sneha Jha is a correspondent. Send feedback on this

discussion to [email protected]

According to IDC’s Advanced Customer Care and Retention

(Asia/Pacific) 2009 survey nearly 50 percent of organizations consider ‘customer care’ as a way to generate revenue. "Companies with growth ambitions despite the current crisis are exploring more advanced options than companies that hope to get through the downturn by cutting costs," said Claus Mortensen, princi-pal, IDC Asia/Pacific Emerging Tech-nologies Research Group."other findings include:

A strong group (20 percent) expect to invest in IT solutions that can help them increase earnings. The top business priority of over half of the respondents' companies was the increase of earnings, versus cost reduction (less than 25 percent). Nine out of 10 companies said they had increased their focus on the cus-tomer because of economy.

— Teng Fang Yih

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Titan Industries’ MD, Bhaskar Bhat, reveals

the secrets that kept Titan growing despite

the slowdown — and why people are crucial at this time. As told to sunil shAh

“Leaders don’t

emulate others; they

look inwards for answers.”


CEO Vision

It is important for every company to understand it’s own business and separate the myth of the recession from reality when reacting to it,

because people tend to react in the same manner to a common crisis.

Take Titan, which is the dominant player in the Indian watch and jewelry industry. Because we leave our competition so far behind, where strategy is concerned, we cannot emulate anyone. For our reactions to the downturn, we look inward for answers, rather than outward.

These challenging times hold many opportunities for us to woo and retain our customers, to make ourselves leaner and to engage our people more deeply. We manage these times with this approach: Cut costs ruthlessly, conserve cash, re-evaluate customer needs, and engage staff positively.

OpportunitiesCome From Within The biggest impact of the recession has been on 'investment wealth'. Strategically speaking, a watch business doesn’t depend that sort of wealth. Buying a watch is a cash-flow issue. Consumers think twice about buying a house or a car, but not a watch. We realized we could benefit from this. Take for example, couples who have decided to back out of their plans to buy a house and are suddenly cash-flow wealthy. Or consider how a large part of our jewelry business is driven by housewives, with whom the impact of the recession is less because they don’t read the pink papers or listen to business news. Their cash flow is not as affected. Another example is large groups like government employees who have gotten substantial raises.

These are the segments companies should focus on and leverage their strengths to offer value to. How do we leverage our strengths ? Compared to our competition, for instance, we offer a greater range of watches, so we can catch

a buyer in the Rs 1,500, or Rs 1,000 or lower range. Our distribution is deeper and wider, which means that we can offer more schemes at the retail level or we turn revenues in smaller towns where the impact of the slowdown is smaller. And we also have many more brands and can address many more segments.

Remember, consumers will spend to make themselves feel good immaterial of the slowdown. For example, people will not cancel holidays, just downgrade or shorten them. And importantly, they will migrate to brands that they deem trust-worthy because they are less willing to take a risk. Because of the Tata name we are seeing a large migration and our jewelry business grew by 40 percent last year and it continues to grow.

Tactical Flexibility Companies should not do anything that they cannot reverse. There will be more demand soon so companies should not change long-term plans for a short-term downcycle.

Our information systems are coming in most handy at this time. Everyday, we get information about what is happening where, which means we can respond quickly to new situations. This is especially helpful in the jewelry business where gold prices change so often. Now, we can change the price of gold in a specific store in Benares to stay competitive compared to the local market.

The face of communication is changing. Below-the-line activities are coming to the fore rather than mass media. The Internet and retailing are getting greater advertising priority because a retail outlet has a catchement of 2,000-3,000 households and presents a much more effective way of advertising in the short term.

Cash is king. In our company, we conserve cash in every way possible; liquidity is key. We take it so seriously that we have given our sales people a formula. Remember the sales function is about sales, profitable sales and cash collection. We’ve told them that as a


priority sales is the least important, followed by the margin on a sale. They can give up a sale if they don’t get a profitable margin. But they can give it all up, if they think they won’t get cash. Cash is the most important.

Cut Cost SensiblyWell before the slowdown, we waged a war on waste. Today, we don’t do things like reduce the class of travel or hotels. We advise people to cut costs but we’ve never mandated it. If you can convince people to believe that saving is the right thing to do, the benefits are far greater, especially post this reversal. If you mandate things, credibility in your leadership drops.

We take our people so seriously that we made sure never to close our factory — and there have had days when we lost money by keeping it open. We also did not lay off anyone. Our employees voluntarily saved us Rs 6.9 crore in different ways. At a time like this people and communication are key. CIO

Sunil Shah is chief copy editor. Send feedback on this

column to [email protected]

Prioritize cash generation over sales volumes or profit margins Reduce cash guzzlers like idle assets and inventory. Secure lines of credit while they are available. Increase the quality and frequency of communication with key stakeholders Raise the level of top management ownership of problems. be transparent Empower Don’t stop investing Don’t go back on your promises

Bhaskar Bhat's Nine Rules for Growth


Anand Sudarshan, MD & CEO, Manipal Education feels that CIOs should play the role of a strategist and think like entrepreneurs. As told to shArdhA subrAmAniAn


This is a new world. And here, prior definitions are no longer valid. There has been a tremendous amount of

abrupt change and almost everyone has been yanked off their comfortable perks. These changes are not just affecting a single company or a single sector, but have spread across countries and no one has been spared. Every enterprise has been forced to re-appraise itself.

Needless to say, these are also interesting times. I think CIOs should look at this global situation not only as a challenge but as an opportunity.

To do that, we have to first understand the role IT plays in today’s organizations. In some companies, IT is a cost-center and is budget-driven. While others don’t look at IT as an added cost but as something that helps business do its job better. Other enterprises look at

“To succeed, you have to be self-centered.”


CEO Vision


for an organization to succeed. And bringing these things closer is what an entrepreneur does.

One of the challenges that CIOs have is the fact that they are so operationally driven. They are always focused on cost-reduction and taking measures to enhance operational efficiency. They have to broaden their horizons. Certain changes in thinking are required. The Entrepreneurial CIOI think it is time for CIOs to think like entrepreneurs. And by that I mean that a CIO needs to envision. He has to have a passion for change, a passion to think of ideas that propagate change.

We are all individually very good. The persona we put across when we are at work keeps changing. We are different with different people. So we are capable of adapting to change and switching personas. These are the signs of a good leader.

It is extremely important for a CIO to take risks. I know it sounds absurd that I am advocating a schizophrenic idea of a CIO. On one hand, we are talking about operational efficiency and risk-averse behavior; on the other, we want him to be entrepreneurial, which essentially means taking risk. A combination of these two is going to be absolutely crucial.

But there is a difference between taking risk and taking an ‘informed risk.’ Weighing the pros and cons and creating a strategy around them is a good idea at a time like this. We can all make a difference and encourage innovation. No one puts it better than Darwin John, the recently-retired CIO of FBI; “There is no profession in the last 40 years that has provided more opportunity to make a difference.” CIO

Shardha Subramanian is copy editor. Send feedback on

this column to editor @cio.in

Envisions with conviction Is passionate about ideas Focuses on results Takes risk Deserves before making demands Steps out of functional cocoon leads by example

Traits of an Entrepreneur

technology as a tool to manage risk. But the one thing that is common across all these enterprises is the fact that IT is playing just a participatory role. IT is still an enabler. And I think it is time it became a strategic contributor.

For that to happen, CIOs need to change their mindsets. It is time to transform. That’s why I believe a CIO has to think of himself or herself as a ‘transformational agent.’ He needs to take it upon himself to bring about positive change in his organization.

We need to re-define CIOs and IT as ‘value centers’. We have to move away from a budget-driven approach to a value-center approach. It’s like a batsman playing a cricket match — it doesn’t matter whether it’s a one-day or a test match — you have the same skill set but you have to change the way you play the game.

Love Thy Self These times also call for proactive leading. ‘Proactive’ essentially means that you plan and start acting even before an event occurs. The CIO has a clear understanding of information and data flows and therefore has the capacity to plan ahead, to anticipate — and also the opportunity to prepare a strategy. All these elements constitute proactive leading.

But in addition to being proactive, in order to be a successful leader, a CIO has to be self-centered. Not selfish, but self-centered. You must be acutely sensitive to what makes you successful. However, your self-centeredness cannot be divorced from making sure that business leaders in an organization succeed.

Clearly, in any organization, if the success of an individual or the success of a collection of individuals is aligned with the organization, then it will certainly lead to organizational success. A person has to be focused on his or her performance, if he wants to succeed. However, not at the cost of others.

And you cannot ignore the other self, the organizational self. That’s the larger organizational approach.

I call this S.E.L.F: strategy enhancement and leadership facilitation. I believe the CIO is very capable of steering the organization’s path towards success.

When the organizational self and the personal self come together — as a CIO brings them closer and closer — then there are better and better chances


K. Ganesh, CEO & Founder, TutorVista, urges CIOs to get out of their comfort zones and nurture self-belief.As told to KAniKA GoswAmi

“You are shortchanging yourself, if you are not trying

something new.”


CEO Vision


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break the standard mould and step out Innovate and be a pioneer Use new opportunities Create a flexible organization and adapt learn and fix problems Create a unique business model Use agility as a competitive weapon leverage global resources

How You Can Beat the Slowdown BluesT

here’s just one word that can define the slowdown: opportunity. Everything that characterizes this slowdown has

a hidden opportunity behind it. For example, there is a market for new and affordable services because customers want value for their money. There are less employment opportunities and that forces people to think out-of-the-box and create platforms to capitalize on the current situation.

Holding onto these opportunities and having an idea of what you are passionate about is what constitutes entrepreneurship. It is also important to be foolish enough to believe that the idea will be successful. An idea can come from anywhere. Sure, statistics say that only five percent of them succeed. But, if you can ignore this statistic and believe that you will fall in that five percent, then you are a winner.

There is an interesting story of a very well-known painter, who started to forge checks. When the police finally nabbed him, he had already made a few million. His paintings were auctioned to pay back his debts. One journalist asked him: “Who did you defraud the most? His answer? “Myself, because I did not realize that my paintings made $20 million, and the total amount I made through forgery was just $2 million. The point is that to succeed, you have to first believe in yourself and in your art.

Out of Your Comfort ZoneSelf-belief can take you places. It gives you the confidence to take risks and try something new. And if you aren’t indulging in something new, you are shortchanging yourself.

Back in 2004, outsourcing wasn’t all that popular. I saw a cartoon in which a father told his child that he could not outsource his homework to India. And that was the genesis of my idea for TutorVista. I decided to do something that

had never been done before. I decided to marry Internet resources with Indian expertise and create a global brand. I asked myself: ‘Can I use Indian teachers from B and C towns to teach kids in the US and elsewhere, one on one?’ We knew nobody had thought of teaching kids overseas online. And marching into this territory wasn’t devoid of challenges. I had my own doubts over the differences in accent and the bandwidth that we would require among other things. But I believe all this solely depended on what I wanted to achieve.

And importantly, I was willing to step out of my comfort zone.

If you perceive of something as possible, it is. Whenever there is a conflict between perception and reality, perception always wins. According to the law of aerodynamics, the bumblebee shouldn't be able to fly. But it does. The key is to adapt. IT leaders are used to adapting to new developments in technology. They can impact not just technology but business strategy as well. So that’s how their role becomes more comprehensive than just handling technology in organizations.

Keep the FaithIT teams, by their very nature have changed over the years. People have been getting out of their comfort zones and have been learning programming languages and new applications. But what I would urge them to go still further. Don’t restrict yourself to technology. Ask yourself: ‘Where is the business going? How are my competitors handling the slowdown?’ Those are the areas that can be enhanced when IT leaders move out of their cabins and datacenters into the big bad world of business.

The key here is to think out-of-the-box and see yourself not as a technology player but as a business enabler.

There is a story about a man who claimed he could walk a tightrope across the Niagara Falls. Mid-way, as the rope

started to sag, the crowd that had gathered to watch him accomplish this feat felt sure that he would fall. But he made it across safely. Then a journalist asked him: “Do you think you can do it again? The tightrope walker answered with this question: "Do you believe I can?", to which the journalist said he did. But when the tightrope walker offered to take him across in a wheelbarrow, he refused.

The difference I'm pointing to is between thinking and believing. The journalist thought he believed, but actually did not.

Finally, I believe that to get out of what's happened in the last 18 months, companies need to be ready for more fundamental changes — not gradual ones. Fortunately, technological changes make that possible. Again, while small tweaks will help, we have a great opportunity before us to take a giant leap forward. If you believe you can do it, you can. CIO

Kanika Goswami is assistant editor. Send feedback on

this column to [email protected]


Conventional wisdom has it that in a slowdown, businesses will cut infrastructure expenses. But CIO research shows that over 50 percent of organizations have increased or

not changed their hardware budgets. In fact, some IT leaders at a CIO roundtable like Ravishankar Subramanian, director IT & Corporate Services, ING Life, say that this is the right time for server and desktop refreshes.

And Arun Gupta, CCA & group CTO, Shoppers Stop, said that with the number of stores the retail chain is adding, the demand for infrastructure will scale up. “As peak capacity, we estimate plus-30 percent for this year. That is a variable factor,

since typically the peak is achieved in the last four months of the year, giving us 50 percent of our sale. That is when we need the highest agility in our infrastructure.”

In addition, Gupta is investing to support existing infrastructure. The idea is to create the right infrastructure and be ready for the upswing. “Thanks to our current tactical investments, when the market is favorable, we will be ahead of our competition,” he said.

Even at Godrej, where implementing IT is a business decision, CIO Mani Mulki has been able to convince his management to undertake an asset refresh at a time like this. What’s more is the fact that the company has a refresh policy of four years, which had not yet ended. How did he do this? Two years ago, Godrej implemented SAP and centralized a distributed ERP. “With SAP, we brought down the number of people we needed. In finance, for example, we had 40 people, which we brought down to three.” Leveraging this easily-translated business objective, Mulki convinced his management to invest in a downturn.

Outsource to Cut Cost: These infrastructure investments aside, cutting cost is still a CIO priority. And many CIOs see outsourcing as a means to this end. However, they are also wary of the fact that initially, outsourcing forces costs up and it is only after the three or four years that savings can be made.

That said, CIOs on the panel concurred that outsourcing some support functions was a great idea. K. Muralikrishna, VP & head CCD, Infosys Technologies, for instance, derived significant cost advantages from outsourcing Web conferencing. “We were doing between 1,000 and 2,000 Net conferences a month. I can’t see myself building that kind of facility inhouse over a few weeks.

A panel of leading CIOs debunks the myths surrounding hardware acquisitions in a slowdown, and sheds light on different ways of saving money on hardware. By KaniKa Goswami

Hardware Truths

"Thanks to our current tactical investments, when the market is favorable, we will be ahead of our competition."

— Arun GuptaCCA & Group CTO, Shoppers Stop

“In 2003, the government gave in to the outsourcing buzz.

Today, they have realized outsourcing was a mistake.”

— K.B. SinghGM-IT, BSES

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Since it was outsourced, we didn’t even feel the pinch,” he said.Kuoni Travel Groups’ CIO Dhiren Savla outsourced the company’s IT last year and said that he expects 15 percent savings this year, which he think will rise to 22 percent in three to four years.

But there were other IT leaders like Ajay Khanna of Eicher who maintained that there needed to be a balance between what was outsourced and what would be better to keep inhouse — even from a cost perspective. To this, Mulki said that it was hard for CIOs to create comparisons with IT companies because they have large IT infrastructure.

K.B. Singh, GM-IT, BSES, explained why he thought outsourcing needed to be a carefully thought out decision. “In 2003, the government gave in to the outsourcing buzz. Today, they do not have a consumer database and they don’t know anything. They have realized outsourcing was a mistake,” he said.

Hardware Disposal: Another way of saving on hardware that was discussed was extending the life of equipment. The age of a server is a key parameter in the decision to phase it out but some CIOs like BSES’ Singh say that age isn't always important. BSES, he said, has servers over 10-years-old. Mulki pointed out that these old servers would not be compatible with the rest of the network but agreed that they could still be used for other purposes. Bihag Lalaji, VP-IT, Ambuja Cements, disagreed, saying that the parameters that have changed are power, the speed of computing, and the user profile.

V. Balarishnan, CIO, Polaris Software Labs, said that his company had another metric: finance. “We have a policy not to upgrade anymore, we only buy high-end servers now. We don’t maintain too many of them, but employ techniques to utilize them well,” he said. On the desktop front, BSNL’s Upadhyay observed that PCs could be used longer by ensuring good AMCs. “We had five-year AMCs. We added another five years. This helps a lot, because our vendor has already committed.

Buyback: A number of hardware vendors, including Dell have solutions for e-waste management but as Balakrishnan pointed out, the real challenge was financial planning: how can a CIO write off so much of equipment? His peers on the panel gave him a solution: the book value of a piece of equipment after three years is zero, so writing it off wouldn’t mean much.

BSNL, said Upadhyay, has different policies for different types of waste. The telecom giant, he said, disposes its hardware via contractors who destroy them. But that was not an approach that worked for Subramanian. “Especially in the financial services,” he said, “we go through a lot of pain to ensure the proper destruction of data. Also, by law, if a company gives away a piece of the software, the liability for the misuse of its license lies with the company. A vendor could actually come after you, so we like to completely destroy equipment before disposing of it.” CIO

Kanika Goswami is assistant editor. Send feedback to [email protected]

Roundtable_01_CRISIS.indd 43 6/18/2009 7:32:24 PM

When companies are faced with IT service failures, they tend to focus single-mindedly on fixing the technology because it’s the easy way out. Process-

related issues often go unheeded. This, however, is not a foolproof approach because loopholes in process constitute a major cause of IT service outages.

A Gartner research study on IT service outages reveals some startling statistics. It reports that while 20 percent of outages are caused by technological failures, 10 percent are due to lack of skills, and a huge 70 percent are caused by various kinds of process failure. Despite this, most IT companies still focus exclusively on the technological issues that lead to the problem.

Clarity in Processes is Key: Tamal Chakravorty, CIO, Ericsson India, believed that unclear and confusing processes

are largely responsible for IT service outages. Employing precision in the implementation of processes is the key to obviating the risk of outages, he said. “Everybody has a different process in mind. This could lead to a lack of clarity. The process should be clear in the minds of business leaders. What appalls me is that there is very little documentation on this in companies,” he said.

Keeping Track of Changes: But processes keep changing and IT needs to adapt quickly. M. Suresh, GM-IT, Hyundai Motors said, “Technology

is easier to tackle, while processes are more difficult. If IT does not keep track of changes in processes there is a strong chance that outages will occur.”

Know Your Business: Keeping track of changes alone will not suffice. Sunil Mehta, Sr. VP & Area Systems Director, JWT, feels that despite exercising caution, even excellent processes fail. He cited Satyam as a classic example of such a failure. As a 50,000 strong company, it had all its processes in place. However, it is now considered one of the biggest disasters in the Indian IT sector. “It’s about how you implement and monitor these processes,” he said, “If there are 100 lines of process and you follow 50 percent of them properly, your boat is sailing perfectly. Monitoring is critical. Initially, processes maybe painful, but later they make for smooth sailing,” he said.

In this scenario, IT has a huge responsibility. It faces a tough situation, and has to constantly be on its toes. “You have to keep looking for solutions,” said Mehta. “A CIO is expected to know the entire business. My whole team is expected to know everything about our department. It is a partnership. But at the same time it’s a very exciting situation. IT is now expected

IT service failures have the power to halt business. But should you fix the technology or focus on process? By Sneha Jha

Ousting Outage

“Internally, IT can justify a process failure, but externally your dispatch could still be stuck."

— T.K. SubramanianDivisional VP- IT, United Spirits

“IT outages happen because of basic human errors. Hence, I believe domain knowledge is

extremely essential.”

— Rajeev SeoniCIO, Ernst & Young


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to come up with quick solutions. By default, IT is expected to provide instant gratification. Hence, everybody in our team has to be business savvy, not just tech savvy.”

Domain Knowledge Is Critical: In order to prevent IT service outages, it is imperative that people have the requisite domain knowledge. “Domain knowledge is very important for applications development in terms of providing solutions. A team lacking domain knowledge does not have a clear understanding of what the processes are,” said Rajeev Seoni, CIO, Ernst & Young.

Citing an instance from his company, he added, “We were in the process of developing our tax application, but we had to scrap it. Despite having an excellent software in place, the users were not very clear about application. In most companies, IT outages occur due to basic human errors. In spite of sophisticated processes, tools and excellent software, a lack of skills can cause serious outages. I believe domain knowledge is essential.”

Managing Change: Change management techniques are particulary important, as they leave very little room for error. Satish Das, CSO & Director-ERM, Cognizant Technology Solutions, pointed to two key aspects, “One is automating tasks and the second is handling change management processes effectively and efficiently. This ensures that common mistakes are avoided. There should be common change management methods. We, as leaders, should try to inculcate the process mindset in our people,” he said.

Say Goodbye to Silos: Traditionally, IT has functioned in silos. However today, business depends more and more on IT and monitoring techniques have become far more important. Satish Pendse, CIO, Hindustan Construction Company said, “We do monitor certain things in silos and tend to look at a service in a completely horizontal way. The end user, on the other hand, when given a service (which is basically an application running on a mature framework) will always look at it in a vertical way. That's why your perception of service is very important.”

T.K. Subramanian, divisional VP-IT, United Spirits believed that process is essentially a manifestation of technology. “People should follow certain standards in terms of processes and hence they should be educated to that level. Internally, IT can justify a process failure, but externally your dispatch could still be stuck,’ he said.

The panel was divided on the major reason for service outage. However, they were unanimous in their opinion that processes were central to the success of IT services and hence people need to develop the required skill set to implement, manage and monitor processes efficiently, especially at a time like this. CIO

Sneha Jha is a correspondent. Send feedback to [email protected]

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C loud computing has been garnering a significant amount of interest among CIOs as a cost-effective technology. But IT leaders are sceptical about its level

of maturity. The typical view in the last year-and-a-half has been that small and medium businesses that were most enthused about SaaS or IT that was moving to the cloud. That view seems to be changing today. Is the technology enterprise-ready and are CIOs willing to experiment with it? CIO India held a roundtable discussion to throw light on cloud computing’s future in India.

Taking It Slow With the Cloud: It's well known that many enterprises, especially those in the manufacturing space, feel it's too early to try on the cloud. That's a view that Manish Choksi, chief corporate strategy & CIO, Asian Paints shares. The technology, he says, is still in a nascent stage and he isn't experimenting with it

yet. “We have not reached a level where we seriously plan to deploy cloud computing. We are considering the kind of applications we can put on the cloud. We are in no hurry to become early adopters of the technology, although a combination of SaaS and cloud computing sounds like an interesting possibility,” he said.

On Cloud Nine: But there are some companies which are opening their doors to the cloud, convinced that it holds potential. Cognizant Technology

Solutions, had been experimenting with it. But when management took a formal decision to move to a

cloud environment, Satish Das, CSO, Cognizant shared his reservations. He felt that Cognizant was doing fairly well without the cloud and he wasn’t sure if moving to the technolgy was worth the risk. For Cognizant, however, it was a strategic move. “We needed to clearly demonstrate our experience. We can’t tell our customers that we’ve only done some R&D work or some pilot projects on it because we stand to lose a customer’s confidence,” he said.

After several rounds of deliberation between the IT department, the CFO and the legal department, the company decided to deploy the cloud for internal consumption. “We found significant security risks; significant contractual, legal and disruption risks. We kept our backups in place,’ said Das.

Cognizant only rolled it out to departments that dealt with less sensitive data. “We listed four departments: export-import, centre of excellence (COE), innovation group and R&D. These departments did not directly have a stake in the company’s business assets. They could safely go out of the standard business environment and move to the cloud,” he said.

Security concerns are making Indian CIOs wary of the cloud. But there are some who say it's time to begin experimenting. By Sneha Jha

Still Overcast

“I see SaaS and cloud computing as transformative IT. Of course, there will be risks. But, I think IT executives should stick their necks out."

— Atul JayawantPresident Corporate IT & Group CIO, Aditya Birla Group

"I don’t think cost will come down significantly. Risk mitigation factors

will effectively negate for what you are trying to save."

— Sunil MehtaSr. VP & Area Systems Director

Central Asia , JWT

VOl/4 | ISSUE/154 6 J U N E 1 5 , 2 0 0 9 | REAL CIO WORLD

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Roundtable_03_Cloud Computing.indd 46 6/18/2009 7:33:14 PM

Making IT work as one. It’s what sets us apart. At Novell, we’re taking interoperability to a whole new level. We believe every person, every partner and every piece of your mixed IT world should work as one. Our Enterprise-wide Linux, Identity and Security Management, Systems Management, and Collaboration solutions easily integrate with almost any IT infrastructure. That way, you can lower cost, complexity and risk on virtually any platform and make your IT work as one.

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Making IT work as one. It’s what sets us apart.

At Novell, we’re taking interoperability to a whole new level.

We believe every person, every partner and every piece of

your mixed IT world should work as one. Our Enterprisewide

Linux, Identity and Security Management, Systems

Management, and Collaboration solutions easily integrate

with almost any IT infrastructure. That way, you can lower

cost, complexity and risk on virtually any platform and make

your IT work as one.

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NOW ONLINE

For more presentations and opinions on what the cloud offers and the dangers ahead, log on to our companion website. Go to www.cio.in/leadership-summit c o.in

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Need to Experiment: But given the cloud's potential, more enterprises are auditioning the cloud. "Despite all the security threats, it’s a risk worth taking," said Atul Jayawant, president-corporate IT & group CIO, Aditya Birla Group. He stressed on the need to be extra cautious because business cannot afford to be exposed to security risks, especially at a time like this. “I see SaaS and cloud computing as transformative IT. Of course, there will be risks. If and when our business demands this technology, we should take the risk. The rules of the game will be defined as we move ahead. The legal system will fall in place. But we cannot wait for that. In certain situations, we need to just take the plunge. I think IT executives should stick their necks out,” said Jayawant.

K. Murlikrishna, VP & head CCD, Infosys Technologies, agrees that cloud computing is a good idea conceptually if companies can identify what they are putting on the cloud. “Risks are high in a cloud environment but it is fairly cost effective,” he said.

Still A Long Way To Go: K.T. Rajan, director solutions-information systems, Allergan India, begged to differ. He felt that the technology is not yet enterprise-ready for the healthcare sector. “It will take some years for the model to mature before these verticals to even experiment with it. In the healthcare industry, where you have to store vast amount of clinical data, cloud computing is still five to 10 years away from being ready. But the technology is highly beneficial for SMEs. It makes sound business sense for them because of the flexibility the model provides and its cost effectiveness,” he said.

Overcast Skies: Joining those who were skeptical of the cloud, Sunil Mehta, Sr. VP & area systems director, JWT said that hosting sensitive data on the cloud was a risky proposition. “If a client’s data is leaked, then you are in trouble. There should be a complete risk-mitigation analysis of the cloud. One should analyze other alternatives available in case of a security breach. I don’t think cost will come down significantly. Risk mitigation factors will effectively negate for what you are trying to save,” he said.

Despite these differences in opinion, the panel agreed that there were definite benefits in cloud computing for small and medium enterprises. Eveyone around the table concurred that SMEs could gain advantage in terms of software licenses that big companies already get. The panelists were also convinced that cloud computing would suit SMEs as it would go a long way in reducing their infrastructure costs.

What is a matter of fact is that the adoption of cloud services has been low in India what with security concerns looming large. But even though large enterprises are averse to being early adopters, small enterprises stand to gain a lot from the cloud model. There are opportunities, there are risks. It’s time to experiment with the cloud but with caution. CIO

Sneha Jha is a correspondent. Send feedback to [email protected]

Roundtable_03_Cloud Computing.indd 47 6/18/2009 7:33:19 PM

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Recession Survival Skills

Tac k l i n g T h e s low d ow n

ideas & insights from the cio Leadership counciL

Budgets now require much more of CIO Diana Melick's attention than they did before. Some of it was due to the faltering economy, but Melick went a step further. She had her staff scrutinize infrastructure costs, the largest area of IT spending. "In good times, no one looks at their phone bills," she says, but when things get tough, "it's time to start looking at the details. Once you see those costs, you can ask whether there is a better way to manage them," she adds. That includes confronting vendors and asking them for ideas to reduce costs.

Melick did all of the above, and as a result, the vice president and CIO at Alpharetta cut some costs by 15 to 20 percent.

Melick identifies such fiscal finesse as one of the top skills needed to run IT today. In fact, the economy is shaking up CIOs' skill sets and lowering the premium on some traditionally valued traits while putting others in the spotlight. Here are five skills that are vital to CIOs right now.

Penny-pinchingLike Melick, Guy J. Russo, the CIO at CommunityAmerica Credit Union says he's focused on finding efficiencies anywhere. "We're trying to make it fun to save costs, and we're trying to get people to think about it and demonstrate to the business that the IS organization knows how tough life is," he says.

He motivates workers by displaying their successes. A bulletin board on the IT department door holds a thermometer-style bar chart that tracks the savings realized through tech initiatives.

Russo is also setting new expectations. For example, his staffers know that coming in on budget isn't enough anymore; they have to come in under budget and still deliver high-quality.

Inspiring CalmWorkers can't influence corporate decisions that could determine their fate and, as a result, they can feel powerless and panicked. But if these times are tumultuous, your leadership shouldn't be,

says Peter Whatnell, CIO at Sunoco and president of the Society for Information Management. "Right now, your leadership counts more than it has for the past 10 years," he explains. "You have to let them know that you're going to keep them up to date. You have to maintain a positive but honest communication with your staff, deal with issues as they crop up, and if you have to make cuts, make them humanely."

Even those who tend to get flustered can learn to have a calm demeanor, says Susan J. Bethanis,

CEO of Mariposa Leadership, a leadership coaching service. "You have to be able to find out what your hot buttons are and make sure that when you feel [panic] coming, you take a breath. And when you're assessing other people's fears, ask questions to give them opportunities to express their concerns," she says.

The key, says Bethanis, is to turn your own or others' concerns away from panic by developing action plans. "Go from a victim mentality to 'What's the goal? What should we do?'" she says. "It's not denial. It's being realistic and positive. It's calming."

[one Liner]

“We turned IT into a business and now that staffers are project managers they have begun to look at the business side of things. Their complete outlook has changed.”—SatiSh PENdSECiO, hiNdUStaN CONStrUCtiON COmPaNy

says Peter Whatnell, CIO at Sunoco and president of the Society for Information Management. "Right now, your leadership counts more than it has for the past 10 years," he explains. "You have to let them know that you're going to keep them up to date. You have to maintain a positive but honest communication with your staff, deal with issues as they crop up, and if you have to make cuts, make them humanely."

to have a calm demeanor, says Susan J. Bethanis,

60%Of Indian CIOs say that

bringing innovative ideas is a significant part of their role and is instrumental in

gauging their success.Source: CIO Research

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The CIO Leadership Council is a professional organization for CIOs founded by CIO India. To learn more about the council, contact program director Alok Anand at [email protected] India. To learn more about the council, contact program director Alok Anand at [email protected]

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Motivating Workers"Even in this downturn, strong performers and good IT professionals are still very much in demand, so retention of top talent continues to be one of the main worries of an IT leader," says Raji Arasu, VP of product development at eBay. That means executives need to connect with junior-level workers now more than ever. Unfortunately, most companies don't have the cash to put staffers into cutting-edge assignments that might motivate them, Bethanis says.

Given that, IT leaders need to create low-cost ways to keep their best employees engaged, she says. Her advice? Give them new responsibilities and assign them to different types of projects.

Driving InnovationMany companies are so focused on survival right now that they're ignoring innovation, but, ironically, those that innovate will be likely to emerge the strongest, says Preeta M. Banerjee, an assistant professor of strategy at Brandeis University's International Business School. "You need to recognize innovation as a source of value, and formalize your approaches," says Bob Zukis, a partner in the PwC advisory practice in New York.

As an example, he points out that the companies that are better at weathering today's economic storm are using cloud computing and social networking to develop creative, cost-effective ways to deliver services.

You don't have to budget money for innovation to get results, Bethanis says. "You need to develop an innovation team. You be the sponsor, get them together and ask them to brainstorm, collect and vet ideas better. And make some rules — like the ideas have to be revenue-enhancing," she says. "It doesn't cost much in time or money to do that."

Moreover, involving your best employees in this kind of initiative will not only enhance innovation but also motivate and engage your people.

Marketing IT's ValueCIOs have to demonstrate — even trumpet — the value they add, says Dan Roberts, president of Ouellette & Associates Consulting and a contributing author to Leading IT Transformation: The Roadmap to Success. "Marketing is so critical today, and we need to understand that everyone from the CIO to our individual contributors is marketing the IT organization and creating perceptions of our value," he says.

Shouvik Dutta, CIO at Hart Schaffner Marx, a clothing manufacturer, says he believes in the importance of marketing so he has his direct reports spend a half-day every two weeks working in the business units that they serve. This gives them insight into business needs while heightening IT's visibility, making others aware of its contributions. For example, his workers recently recognized that the sales group needed better insight into the manufacturing side to do better forecasting. So IT delivered new applications that allowed sales to pull up the productivity data it needed.

CIOs who can refocus their skills to fit the current challenges can survive today's difficult environment and come out stronger when it's over. CIO

mary K. Pratt is a contributing writer. Send feedback to [email protected]

how have you Respondedto the Slowdown?

"We put in place a vendor performance system clubbed with an incentive scheme because we realized vendors are hard to replace and we wanted to see better services from them. Today, we’re seeing a 30 to 40 percent improvement in their services."

K. B. Singh GM-IT, BSES

"We faced the challenge of supporting multiple offices in 45 countries with a highly-fragmented system made up of 325 vendors. So we decided to go from a multi-vendor set up to a single-vendor system. We’re beginning to see results now."

Dhiren SavlaCIO, Kuoni Travel

Group, India

Tamal Chakravorty

CIO, Ericsson India

"I floated a concept I picked up from Calcutta: the Merchant’s Cup. Since I was a soccer fan, I started with soccer. Now the Delhi Merchant’s cup is a big

event. The players, like me, are all between 35 to 40 years old, have big bellies and run after a

ball that’s running away from them — it’s a thing to see!"

R.K. Upadhyay, Deputy GM, BSNL

"We decided to use customer feedback from our call centers to improve internal processes.

After breaking down each process, we monitored the performance of each area manager. The guys in the

red get really uncomfortable and we’re seeing drastic

improvements."

forum Tac k l i n g T h e s low d ow n

How are you reacting to the slump? Write in to [email protected] with your thoughts.

Forum.indd 49Forum.indd 49Forum.indd 49

Desperate times call for desperate measures.That's how outsourcing consultancy EquaTerra introduces the concept of "speed sourcing" on its web site.

As companies search for new ways to cut costs in challenging times, many are looking to third-party IT service providers to trim expenses. Some are moving at a measured pace through the traditional process of selecting an outsourcer and negotiating a contract. But others, EquaTerra says, are jumpstarting their potential savings by ‘speed sourcing’ — a new approach for choosing a service provider and sealing a deal in three months or less.

If you're an IT executive whose boss is demanding a 30 percent budget reduction — again — speed sourcing is a persuasive proposition.

The speed sourcing process involves several, critical short cuts:

SpeedSourcing:

The NewOutsourcing TrendOutsourcing consultancies are offering new ways to accelerate the outsourcing selection process — no exhaustive vendor search, no RFP, and a signed contract in record time. The concept is called speed sourcing, but it isn't right for everyone. Here's why. By Stephanie OverBy

Reader ROI:

The difference between speed sourcing and regular outsourcing

What the risks are

The focus of speed sourcing


Outsourcing

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instead of conducting an exhaustive review of the vendor marketplace, the customer limits its search

to tier 1 providers, existing partners, or industry-specific specialists.

instead of developing a comprehensive rFp, the customer puts together a

streamlined ‘request for services’, which may look like this: We're a financial

institution in 10 countries with seven datacenters in need of an

outsourcing solution to reduce costs and capital expenditures.

instead of a detailed response, providers come back with high-level

pitches: We can consolidate your it operations over a period of two years for an estimated savings of 30 to 40 percent. Based on that, the customer selects a partner.

During a series of ‘deep dive’ negotiation sessions, outsourcer and customer hammer out a signed contract. But the resulting document is markedly less detailed than most; it focuses solely on select must-haves like pricing, statements of work, key terms and conditions, and a high-level transition timeline. Other time-consuming particulars, such as detailed service-level agreements, transitions plans, and ancillary schedules are handled as part of the ‘clean-up’ after the ink is dry. Smaller, best-of-breed sourcing transactions can be completed particularly swiftly.

"In outsourcing, the contract process is like taking a piece of granite and carving a horse," EquaTerra explains on its web site. "But in speed sourcing, you're just going to carve out some big chunks to form the semblance of an animal; the actual horse will shape up later."

It's enough to break an outsourcing lawyer's heart.EquaTerra says it used the process to enable a Fortune

500 apparel manufacturer (who declined to be named

Outsourcing

for this article) to go from outsourcing strategy to vendor selection in just six weeks. It took four months to get the contract signed, but traditional negotiations would have taken as long as nine months, says EquaTerra program manager Doug Fonseca who worked on the deal.

The only thing the customer gave up by taking the speed sourcing approach was, "in a word, bureaucracy," says Fonseca. EquaTerra isn't the only consultancy expediting the provisioning process for IT outsourcing clients. TPI offers customers the opportunity to shorten the RFP process by narrowing down potential partners using its proprietary ‘center of expertise’ data on the outsourcing marketplace.

Sometimes customers are comfortable assuming that providers with considerable market share are qualified, says TPI Partner and MD Peter Allen. "There have been several occasions recently where we've helped clients select service providers without even using an RFP," Allen says. "We know enough about the market to help clients frame their needs in ways that are quite evident to the candidate providers. They know our language."

The RisksBut there can be significant drawbacks to an accelerated approach. "I think that speed sourcing could have some real benefits under certain circumstances, if a client has a real deadline such as lease expiration, or other factors that require extreme speed," says Edward J. Hansen, a partner in Morgan, Lewis & Bockius's Business and Finance Practice.

"The danger in this is not in the technique or the offering, but in properly setting clients' expectations," Hansen adds. "A client who has difficult change management issues, or who may need the give and take of a more iterative sourcing process, may not be a good candidate for a process like this."

There is, indeed, a real need for speed in IT organizations under pressure to cut costs and increase efficiency today. "But under many circumstances," Hansen continues, "speed translates into unacceptably decreased value and

Outsourcing Deals as a Percentage of the Total MarketYear $25-49M $50-99M $100-199M $200-499M $500-999M $1B

2008 39.50% 26.20% 17.10% 10.10% 4.50% 2.50%

2007 40.30% 25.50% 15.30% 11.30% 4.80% 2.80%

2006 33.20% 31.80% 16.30% 12.00% 3.90% 2.70%

2005 19.90% 32.20% 24.60% 13.80% 5.80% 3.70%

2004 27.70% 28.20% 20.50% 13.60% 4.50% 5.50%


unnecessarily increased risk. In many cases, particularly in more complex deals, the truthful answer is that the speed is not worth the trade-offs."

A traditional RFP approach, although more time consuming, can be enlightening for a client who doesn't sign an outsourcing deal every day. The process enables the customer to think through what the company is really trying to accomplish, consider potential change management and transition issues, and challenge assumptions.

But this more drawn-out deal-making process has been curtailed in recent years, notes Daniel A. Masur, a partner in the law firm Mayer Brown. "Like all external advisors, we are being pressed to do sourcing transactions more quickly and at lower cost," Masur says. "Nothing takes eight to twelve months anymore."

However, if you're starting from scratch, Masur notes, completing a sourcing transaction of any size in 60 to 90 days would be difficult. Some more cautious, but forward-thinking, outsourcing customers have been able to speed

up their sourcing deals by putting in place framework agreements with preferred providers. "The customer is able to avoid the time and expense of negotiating a new contract, and it is dealing with a proven provider, one that knows and is known by the customer," Masur explains. "They are focused principally on price, solution and exceptions to the established contract terms."

Using framework agreements, some customers can contract for a new project or scope of work in weeks.

Others reduce the time to contract by simply adding new scope to existing outsourcing agreements.

"It is important to note that [speed sourcing] is just one of many sourcing strategies that these firms have at their disposal, which should allow them to match the right sourcing technique to a client's individual circumstances," Hansen says. CIO

Stephanie Overby is a Boston-based freelance writer. Send feedback on this

feature to [email protected]

Outsourcing

Industry observers have prophesied the demise of mega-deals — those billion dollar, multi-year, single-source IT services contracts — time and again. And each year, big deals are signed anew.

The latest billion dollar baby — a ten-year, $1 billion (about Rs 5,000 crore) contract inked between Aviva and now HP-owned EDS — was announced just a couple of months ago. But that doesn't mean big deals are back in style.

By all three relevant measures — total number signed, total contract value, and annual contract value — outsourcing mega deals have more or less flat-lined over the last few years.

Most tellingly, the latter half of 2008 saw a significant slowdown in the awards of giant contracts. Just three mega deals were signed at a grand total of $6.5 billion (about Rs 32,500 crore), while customers signed twelve billion-dollar-plus deals worth $17 billion (about Rs 85,000 crore) in the first half of the year. The total contract value of done deals dropped 20 percent and the annual contract values fell 25 percent, according to outsourcing consultancy TPI. "There has not been

such a drop in total contract value in the past ten years," says Peter Allen, partner and MD of TPI, noting that deals are usually spread relatively evenly over the course of twelve months.

While the big fish of the outsourcing pond may represent just a drop in the bucket of the larger outsourcing market — 2.5 percent in 2008 — few expect the market for asset-heavy, comprehensive outsourcing deals to dry up altogether. "All the data I've seen suggest that there will continue to be a stream of large outsourcing deals," says Dr. Paul Roehrig, Forrester Research principal analyst of IT sourcing and vendor management. "And as economic pressures mount, the overall number of deals might even increase some over the next 18 to 24 months."

There can be significant downsides to these big deals for both buyer and vendor. Providers report that mega-deals are costly to pursue, complex to manage, and hard on profit margins, says Dean Blackmore, Gartner's senior research analyst for technology and service provider research, adding that this is why such deals tends to be cyclical in nature.

And Forrester data shows that client satisfaction is generally lower for comprehensive outsourcing contracts. "This form of 'lift and shift' approach limits the ability of the provider to deliver substantial cost improvements through standardization and simplification," says Allen. Good deal architecture, implementation, and ongoing governance — important for any IT services relationship — are even more vital for big, single-source deals, says Roehrig.

Still, some customers crave the potential economic advantages of a long term, single-source deal. "Providers with full control over the IT environment may be able to introduce efficiencies more effectively, and increased business volume also generally enables more cost savings," says Roehrig. Theoretically, organizational costs may be lower when managing a single vendor. If any IT services deals are headed for extinction, it may be the biggest of the big contracts. "It seems the days of mega deals in the $5 billion-plus (about Rs 25,000 crore) range are a thing of the past and that the popularity of selective sourcing will ensure they remain that way," says Blackmore.

— S.o.

Is the Mega Outsourcing Deal Dead?


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It’s Important for the financial sector to shield itself from all kinds of risk. But over time, the sector has witnessed extremely bold open source deployments, innovative use of GPRS technology, and revolutionary examples of virtualization. In fact, IT leaders in the BFSI sector are steering technology investments to positively impact the bottomline, while some vendors are developing technologies to streamline these efforts. CIO Money Matters, a program for IT leaders CIO Money Matters, a program for IT leaders CIO Money Mattersfrom the banking and financial sector was organized by CIO India in CIO India in CIO Indiacollaboration with EMC, Sun Microsystems and Wipro.

At the event the discussion centered around green IT in banks, risk management, reduction of operational expenses through automation, amendments to the IT Act and its consequences, how financial enterprises can exploit cloud computing concepts, grooming leadership and ways of cutting costs in recessionary times.

Bank of India last year took a decision to move to some non-conventional sources of electricity. Having deployed and used solar power in 60 percent of the bank's branches in the rural areas

Despite being severely hit by the slowdown, IT leaders in the BFSI sector are investing in technology and opening their doors to innovation.

Banking on iT

Presenting PartnersEvEnT REPORT

“Power issues in rural areas made us choose sunlight to power core banking."P.A. KAlyAlyAly nAsundArGM - IT, Bank of India

“iT can handle technology challenges and has the maturity to right fit applications."sAnKAr KrishnAmurthyLead Consultant, Wipro Infotech

across India, P.A. Kalyanasundar, GM-IT, Bank of India, shared his experience and discussed how going green can help cut operating expenditure and provide opportunities to improve business. He said that the challenges involved with power and infrastructure in the rural parts of the country made them choose solar energy as a source of electricity for its branches. “There’s a scarcity of power in these areas and using diesel generators added to the costs, noise and air pollution. now, we use sunlight, which is eco-friendly and a renewable source of energy,” said Kalyanasundar. The Bank first implemented solar power UPS in 200 of its remote branches and the project's success forced them to bring 200 more branches under the ambit. “We won a green IT award for our efforts. It was not just about

the availability of green, clean and uninterrupted power supply, we were also complimented for providing a better work environment for our employees. As far as the cost benefits are concerned, the payback for adopting this technology is four to five years and the life of the solar panel is a minimum 25 years,” he said.

Managing Risk: Sankar Krishnamurthy, lead consultant, Wipro Infotech, spoke about risk management in the BFSI sector. According to him, right now banks are focused on strengthening their risk management systems, processes and capital. He explained how Indian banks survived the meltdown, and pointed out that Indian PSUs that have strong systems and processes in place have shown excellent financial results during 2008-2009. Further, he explained how important it is to implement Basel II and other compliance frameworks like ALM and FTP that guard banks against financial and operational risks. He said that IT can help banks adhere to rigorous RBI requirements and challenges involved in the implementation of these directives. Krishnamurthy said that Indian banks have voluminous data processing requirements and the business tools they use are very complex. Also, banks have data in the form of heterogeneous applications and silos, and may have multiple environments and other such challenges that prevent banks from properly implementing risk management systems on their own. "Technology vendors have invested in risk knowledge and have other operational advantages, so there’s a strong case for IT in risk management," he said. IT also has the ability to handle technology challenges and has the maturity to right fit applications. He said that Wipro works on the cases from the Indian context and is ready to work with any technology of the banker's choice thus making these offerings flexible and user friendly.

Banking Beyond Tellers: Shedding light on what he called 'the electronic lobby,' Pravir vohra, group CTO, ICICI Bank, discussed the prospects of automating some branches to cut down the costs involved in maintaining them. "For a bank, a branch has always been an important service and sales channel. Branches have traditionally functioned on a person-to-person model and going forward, branches will be the focal point of business generation and service delivery," vohra said. But in the last two years, the bank has noticed decreased economies of scale vis-à-vis effort, since much of the repetitive transactions have shifted from branches to other channels. "Recently we have moved customers from expensive and personal channels to inexpensive and impersonal channels. A branch is the most expensive channel with regard to the cost-per transaction," vohra said. “Looking at the breakdown of transactions across all branches, we found that a major part of transactions were repetitive and didn’t need much human intervention, so we thought of challenging the convention and using electronic channels in branches,” he added. He detailed how technologies like cheque deposit machines, deposit ATMs and information kiosks help in servicing a large customer base with a

EvEnT REPORT

“innovations in elements like business, people and application will bring the desired change."sAji thoPPilPractice Head-Platforms & Storage, Wipro

“Leadership is a value-laden relationship that creates mutually beneficial change."BriAn BArnesVP-Technologies, American Express

“apps can be rolled out faster in the cloud, helping Cios meet business objectives more rapidly."sAntosh d’souzAChief Technologist, Sun Microsystems

“over a period of time, law has not kept pace with either technology or its misuse."n.s. nAPPinAiAdvocate, Nappinai & Co.

EvEnT REPORT

“it's not all doom and gloom; some part of

business is projecting a lot of strength at this

point of time."deeP roy

Sr. Technology Consultant,EMC Global Services - South Asia

“Cios should keep reemphasizing the

Dna anchors that the organization has created

for itself."PrAvir Avir A vohrA

Group CTO, ICICI Bank

of the new cybercrimes, penalties, issues, trends and offences have been addressed in the new IT Act. She also pointed out some positive additions to the Act like S.72A, which deal with contract breaches and malicious intent. These changes can influence the jurisdiction of the civil court. The Cloud gambit: There is room for financial institutions to exploit cloud computing concepts. Santosh D’Souza, chief technologist, Sun Microsystems, explained the trends associated with cloud computing. He also focused on how economic pressures make cloud computing relevant for IT environments. “At a fundamental level, cloud computing is about the delivery of IT resources as a service, that the network facilitates, and provisioning of these resources. Web 2.0 is moving towards the 'Symantic Web' and would proceed towards the 'Intelligent Web' as devices get increasingly networked. This will power new scale of demands in terms of computing, storage and networking. This kind of peta-scale computing couldn’t be attempted in standard datacenters or enterprises. Since cloud computing has evolved to address this peta-scale computing on the Web, we believe it will be relevant to enterprises." He added that moving to the cloud will lower costs as enterprises don’t have to buy the IT component, they only have to pay for its usage, hence converting capex into opex. It will also go a long way in providing business agility.

Cloud is self provisioning in nature and promises faster deployment, because it is automated. “The agility that

low cost model. “We are running some automated branches as pilots and gradually moving customers on to them. This effort has lead to substantial reduction on overheads, leading to a drop in recurring operational expenditure,” he said.

Constant innovation: Addressing the innovations in the platform space, Deep Roy, Sr. technology consultant, EMC Global Services (South Asia), talked about the global economic slowdown, which lead the GDP to dip and the global spending to drop. Consequently, customers are looking for just-in-time IT budgeting and doing away with the frills. They also want IT to be efficient and flexible. “The ways in which we are trying to deliver this is by looking at the information infrastructure model and combining this with virtual infrastructure, which we deliver through vMware; these infrastructures combined produce a lot of synergy.” EMC product portfolio, Roy explained, covers information storage, to content management, security and virtualization. EMC's information lifecycle management (ILM) approach helps in tiering storage information across technologies, thus saving a lot of cost. He talked about various energy efficient technologies, next generation CLARiiOn architecture, Cellera, and nAS gateways. Roy explained that EMC’s content-addressed storage approach helps in long term data retention, archival and also makes data tamper-proof. Talking about some key innovations, he said that EMC has developed tier zero for flash drives which has improved response time. Flash drives significantly reduce costs and can also lower power and cooling requirements.

a Case in Point: a Case in Point: a n.S.nappinai, Advocate, nappinai & Co., spoke about the IT Act and its amendments. She pointed out that over a period of time, law has not kept pace with either technology or its misuse. nappinai spoke about data protection principles under EUDP, which are the most stringent of laws. She was of the opinion that these laws go beyond the obvious in terms of data protection rights. She compared EUDP with the principles in the UK data protection Act. While drawing a parallel between IT Act 2000 and 2008, she said, “IT Act 2000 set out certain penalties that addressed those violations that were not considered criminal offences then. Unfortunately today cybercrime has reached more advanced levels. However, instead of evaluating the current trend and addressing those issues, the updated IT act is just a rehash of the earlier version.”

Despite the furor over cases of hacking in the last nine years, the IT Act of 2008 added just two sub sections to S.43 (this section talks about crimes committed without permission of owner or person in charge like downloading or copying data stored in a computer, introducing computer viruses; damaging computers and data stored therein, disrupting computers, denial of access) which is transposing other sections on to S.43. She pointed out serious deficiencies in S.43, which threatened employer-employee relationships and employee rights and liabilities. She said that none

comes with the cloud helps in rolling out applications faster, and therefore business objectives can be met much quickly,” D’Souza said. Talking about Sun’s offerings in the space of cloud computing, he said, “We develop core technologies for our open cloud platform and offer services through Sun's public cloud service. We also work with service providers and enterprises to build their own clouds, develop open standards, and build partnerships and communities."

of Leaders and Leadership: Tough times call for distinct leaders. And that's why Brian Barnes, vP-Technologies, American Express, stressed training for self-leadership, which involved making IT leaders understand their role in the company. “Leadership is all about developing the greatest resource we have — the leadership potential of our people. My passion for leadership grew from my desire to make sustainable differences in the lives of others and organizations,” he said. Barnes explained that most people define leadership by actions or outcomes or relate it to management, but that doesn’t really define leadership. It is a value-laden relationship that creates mutually beneficial change. He discussed a case for leadership development in an organization that was struggling to produce real business value. “We helped the team face the reality by being candid. We told them to quit managing the situation and start leading from the front. This created opportunities. We started teaching leadership skills on a weekly basis at all levels of the organization. I believe that you can’t make changes in people’s lives through a seminar; you make changes by teaching consistently,” he said. Sharing some key aspects of self-leadership, he said that it’s important for a leader to realize that the only person he can change is himself. CIOs should also challenge the status quo and be the ultimate example of trust. “The development of new leaders is not only the key to profitability it is also very satisfying in terms of feeling like you left a legacy and not just an income statement,” he concluded.

infrastructure innovation: Shifting focus to innovation in the IT infrastructure, Saji Thoppil, practice head-platforms & storage, Wipro, explained the current infrastructure landscape and the importance of IT infrastructure in the BFSI sector. He also explained how the transformations and innovations in business, people, application and information can bring in the desired changes. Further, he described the proposed architecture model and then made a comparative analysis of the

proposed architecture with the traditional architecture. Thoppil explained Wipro's FluidState datacenter framework in relation to an organization's business requirement, space, cooling and power. He said that FluidState works on mainframes which makes it reliable, standardized and efficient. The framework is also flexible, open and simple. FluidState also supports Web 2.0 mashup and cloud-based architecture, which gives it service transparency. "It has a block-based virtualized storage pool tiered with ILM and archival. Also the framework's been configured for a higher power envelope with fine-grained power management at rack and system level and intelligent cabling with full remote management. The framework also has an intelligent load balancer with compression, caching and site-level load balancing features," Thoppil said. He explained how Wipro can synthesize the requirements of different kinds of businesses into the framework and provide a customized and modular layout for small, medium and large enterprises.

Strategic iT Wins : A panel discussion focusing on how strategic IT was not an expensive gambit in the current scenario saw interesting responses. The panel comprised Sandeep Phanasgaonkar, president & CTO, Reliance Capital, Parvinder Singh, corporate vice president & head-IT services, Max new York Life and Atul Kumar, AGM-IT, Syndicate Bank. While most organizations in the financial sector have been impacted by the liquidity crunch and the consequent change in cost equations, they are still not refraining from taking up strategic, long-term projects. However, this sometimes meant breaking down a project into smaller chunks (of about 90-days each) thus staggering investment and balancing out risk. The panelists agreed that even at this point there was no cap on projects that improved efficiencies and had demonstrable business value. Interestingly, while they were seized by the need to cut costs, they did not openly embrace Open Source.

Panelists debated whether the time was appropriate for strategic IT. Their verdict: Yes! Panelists (FROM leFt): sAndeeP PhAnAsgAonKAr, President & CTO, Reliance Capital, PArvinder singh, Corporate Vice President & Head - IT Services, Max New York Life, Atul KumAr, AGM -IT, Syndicate Bank..

EvEnT REPORT

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I.T. STraTegy | In the spring of 2007, UPS's Ben Swanson and Joe Parrino attended a conference on the growing problem of datacenter power consumption. One suggested remedy was to benchmark and analyze the power flowing through the datacenter. So after the conference, Swanson, the facilities department manager, and Parrino, a datacenter facilities manager, profiled their two main datacenters to learn what they could do to increase their energy efficiency and, ultimately, save money.

They found one crucial area to improve: their 65 computer-room air handlers. Parrino and his team found that some of their power distribution units (PDUs) had perforated tops. "We were losing air through the tops of the cabinets," he says, which meant that some of the cool air circulated by the air handlers was being wasted by cooling the PDUs. They restricted the air flow through the cabinets, tested to make sure they wouldn't overheat, then turned 24 air handlers off. The move saved UPS 1.6 million kilowatt-hours and $124,160 (about Rs 62 lakh) per year. And that's not all — they also benchmarked their mechanical cooling system and were able

Benchmarking datacenter energy

costs is getting easier, but only if

you can access the right information

about power consumption.

technologyEssEntial From InceptIon to ImplementatIon — I.t. that matters

Benchmarking Datacenter Energy By Kristin Burnham

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11% Of it organizations are responsible for

paying their energy-related operating

costs. the figure is so small because

power bills typically go to the

facilities group. source: Forrester

technology to reduce its energy use, saving an additional $100,000 (about Rs 50 lakh) annually. The mechanical plant of these UPS datacenters consumes about half what a typical datacenter mechanical plant consumes, according to their benchmarking study, Parrino says.

Despite the potential for savings, however, most IT departments have not rushed to benchmark datacenter energy efficiency, primarily because there's no incentive to measure it, says Forrester analyst Doug Washburn. He notes that only 11 percent of IT organizations are responsible for paying their energy-related operating costs (the power bill typically goes to the facilities group). But that's changing: more CIOs are being asked to reduce energy consumption, Washburn

has found, and, as a result, new metrics — though they come with caveats — appear to help pinpoint which areas of your datacenter can be optimized.

Two Ways to BenchmarkOne such method of measuring energy efficiency, developed recently by the Uptime Institute, a datacenter research organization, is the Corporate Average Datacenter Efficiency (CADE). This calculation multiplies the efficiency of one's technology by the efficiency of the physical facility. Uptime calculates IT efficiency by multiplying a datacenter's IT asset utilization rate by the energy efficiency of the servers. It determines the facility efficiency by calculating the amount of space used and multiplying that by the energy efficiency of the building. The higher the CADE number, the more efficient your datacenter. This method tends to be best-suited for larger businesses since those usually have the automated monitoring tools to measure server utilization, according to Uptime Institute's Executive Director Kenneth Brill.

Another method — Power Usage Effectiveness (PUE) — was developed by The Green Grid, a group of technology companies collaborating to improve energy efficiency in datacenters. The PUE is calculated by dividing the total utility load (the power coming into your facility) by the total IT equipment load (the power consumed by switches, routers, servers and related gear). In this instance, the lower the PUE, the better.

Washburn warns that while these methods can be effective, the measurements required to calculate the benchmarks can be challenging to obtain. "Because most organizations do not pay for their energy-related IT expenditures, many are not measuring energy consumption — especially

on a granular level — which is required to actually calculate your datacenter energy efficiency metrics," he says.

Your ROI May VaryAlthough the emergence of industry-accepted benchmarks means you can be more certain you're measuring the right things, Washburn also notes it's usually larger businesses that benefit from benchmarking. The bigger the datacenter, the more energy it consumes and the more likely it will be that you'll have an incentive to reduce consumption. "For smaller businesses, the financial impact may not be as significant."

And, there isn't enough publicly available data yet for companies to benchmark against each other, so it's hard to know how efficient you can really get. If you try to compare your energy consumption with another company, peers in your industry might be a good start, says Washburn. But a more relevant comparison would be an organization with a similar-sized datacenter and similar server, storage and network needs.

Christian Belady, principle power and cooling architect for Microsoft Global Foundation Services and Microsoft's representative to The Green Grid, agrees that there are limits to these metrics, specifically for smaller businesses. But he thinks even small organizations can still benefit by benchmarking on a smaller scale. Belady says that once CIOs decide to benchmark their energy usage, they should consider benchmarks such as The Green Grid's PUE or any other metrics that may make sense for driving the right behavior for their business. "The industry is moving so fast that you can't wait for everyone to have the perfect definition of these metrics," he says.

One key to UPS's benchmarking success, Parrino and Swanson believe, is the support and trust from their CIO, David Barnes, to make these decisions. "You need to constantly strive to challenge yourself and be constructively dissatisfied with your own operation," Swanson says.

Whether these metrics come from vendors or industry organizations, Washburn believes that they're a good starting point for benchmarking. "At the end of the day, in most cases you'll be able to use the metrics regardless of which method you chose." CIO

send feedback on this feature to [email protected]

ESSEntIal technology

there isn't enough publicly available data yet for companies to benchmark against each other, so it's hard to know how efficient you can really get.

REAL CIO WORLD | J u n E 1 5 , 2 0 0 9 5 9Vol/4 | ISSUE/15

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Pundit

Data ManageMent | Just a guess: You've got a disconnected set of ERP software applications spread all over your enterprise. You've likely got a standalone SaaS CRM system for the sales folks. Perhaps you just bought a business intelligence package that's supposed to deliver analytics and reporting data to managers and operations people. In fact, you're probably working on it now. Throw in a data warehouse, under marketing's domain, and maybe a supply chain or

procurement system, and you know what you've really got? A mess.

For what seems like too long a time, most organizations have struggled to get a handle on all of the enterprisewide data contained in their disparate systems.

Take your pick of the common problems: too many data sources; too many issues with ‘dirty’ data; too many silos and no integration; too many questions about access rights — adding up to too many reasons why any sane person inside those companies would ever want to take ownership of the data. And unless someone does take ownership, an organization will never achieve the oft-discussed ‘one version of the truth’

goal with its enterprisewide data. If you haven’t already noticed, master data management initiatives have grabbed a hold of the ‘one version of the truth’ catchphrase.

Compounding this timeless trouble is the fact that most companies have been growing and adding new enterprise applications and systems — not reducing the number of overall data sources. In other words, the 21st century technological expansion has piled even

more data streams on top of an already vexing problem. The result: more fuel on an already out-of-control fire.

The newest attendee to the party is business intelligence, or BI. A recent report from the Aberdeen Group, by research director David Hatch, examines why companies struggle with ‘one version of the truth’ and how BI reporting and analytic tools fit into the picture.

"Many organizations spend months and endure significant costs to obtain the reporting and analysis capabilities that BI promises," Hatch writes, "only to find that different 'versions of the truth' still exist without any definite way of determining which one is real or accurate."

As part of the report, Aberdeen surveyed more than 200 senior executives and operations management professionals from 152 companies in varying industries. The root causes of multiple ‘versions of the truth’, according to those surveyed, included:

At the data source: 74 percent say “our data is not clean or properly managed.”

At the integration level: 60 percent say “our data sources are not integrated properly.”

At the end-user information access and consumption level: 49 percent say "Users introduce errors"

The top reason behind the ‘one version of truth’ quests for those surveyed was unsurprising: 36 percent wanted to replace gut-feel decisions with fact-based ones.

If enterprises don't fix their multiple versions of the truth predicaments, Hatch notes, the end result won't be pretty: No one inside the company will trust the information that is supposed to be aiding their decision making. And, most likely, they'll go straight back to their guts. CIO

Thomas Wailgum is senior editor. Send feedback on

this column to [email protected]

If enterprises don't fix their multiple versions of the truth predicaments, no one in the enterprise will trust information and people are likely to go straight back to their gut.

essentIal technology

Vantage Point the ugly truth about our quest for ‘one version of the truth’ is that most companies can’t see beyond their noses. By ThomaS Wailgum

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cio june 15 2009 issue

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