cio november 1 2007 issue

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From The ediTor

it is not easy to fully appreciate the importance of soft skills, not to mention

recognize and acknowledge a lack of it in ourselves. Somebody who clearly didn’t suffer from

that is Indra Nooyi, and that is probably why she is today the chairman and CEO of PepsiCo

today and the world’s ‘most powerful woman in business,’ according to Fortune magazine.

Nooyi, one would have imagined, would be the person least in need of soft skills. The

Chennai-born was raised in a privileged home, and studied at elitist institutions such as

Madras Christian College, IIM-Kolkata, and later Yale University. Yet in corporate America,

Nooyi felt out of sorts and thought she needed to learn a number of things if she needed to

succeed. She had to overcome a triple disadvantage: she was an immigrant, of a different

color and a woman.

In the late 1990s, when Nooyi was

already a rising star at PepsiCo, she

spoke of her corporate experiences in

a talk at New York’s Asia Society. The

top PepsiCo executives were a clubby,

all-male, back-thumping lot that fed on

American sports such as baseball and football. Nooyi didn’t belong in that world. But she

had to break in and win acceptance if she had to rise higher.

Nooyi said she watched baseball and American football whenever she could, and read

popular American magazines late into the night in order to understand the subtleties of the

games and their stars in order to be able to join in on the guys’ conversation.

To my mind, her experiences suggest two things. First, a burning desire to succeed and

consequently the yearning to learn anything including a variety of soft skills. Second,

soft skills are not a clearly laid-down set of things. They are varied. Table manners or

your ability to play golf or sip wine are not the only soft skills. In fact, these may be

totally unimportant in some circumstances. The thing is: soft skills are different in

different societies and in different circumstances, and what is even more important,

they aren’t always easy to learn.

CIOs, or for that matter anybody else, need to recognize the kind of soft skills required in

their individual circumstances, and then find ways to learn them. Are you game for it?

Table manners or your ability to play golf or sip wine are not the only soft skills. In fact, these may be totally irrelevant in some circumstances.

Soft skills don’t come easy but can open doors to success.

Bala Murali KrishnaExecutive [email protected]

Pray,What AreSoft Skills?

Vol/2 | ISSUE/242 n o v e m b e r 1 , 2 0 0 7 | REAL CIO WORLDREAL CIO WORLD

contentnovemBeR 1 2007‑|‑vol/2‑|‑issue/24

Peer To PeerThREE WAys TO MOTIvATE yOuR IT TEAM | 22To develop a team that can compete in the future, you have to help its members define a role for themselves and give them tools to get there.Column by John E.West

Enterprise ArchitectureLOsIng gROunD | 42

Where and how did Wal-Mart lose its technology advantage? Feature by Thomas Wailgum

more»

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Management Skills

COvER sTORy | sOFT skILLs MAkE hARD sEnsE | 32Mirror, mirror on the wall, who is the smartest of them all? Veterans and experts say CIOs with the most honed soft skills rise higher in their careers.Feature by kanika goswami

FOuR WAys TO bOOsT yOuR EMOTIOnAL InTELLIgEnCE | 38Technical knowledge might find top spot in a CIO’s must-have list, so should emotional intelligence and soft skills.Feature by Diann Daniel

Vol/2 | ISSUE/246 n o v e m b e r 1 , 2 0 0 7 | REAL CIO WORLD

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content (cont.)

Trendlines | 13 hR | Talent Management Goes Global security | If Hackers Target Storage? Environment | Small Firms Fail Green Test Web 2.0 | Gripe about Online Collaboration budget | Outsourcing, A Rising Flavor Offshoring | Dollar Downs Offshore Services study | Security Breach Severity Worsens Mobile | Cellphones Give Rise to The Rude Communication | The Unified Battlefield security | Hacker’s Guide To Microsoft Essential Technology | 52 storage | More Room For Less Money Feature by Galen Gruman Pundit | Wiping Out Legacy Support Column by Christopher Koch

Endlines | 56 Who Do You Think You Are? By Margaret Locher

From the Editor | 2 Pray, What Are Soft Skills? By Bala Murali Krishna

Inbox | 12

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GovernsEEDs OF E-LEARnIng | 48How good is e-governance if citizens aren’t computer literate? In a bid to make technolgy more relevant to the rural population, Kerala’s State IT Mission is determined to spread computer awareness.Feature by kanika goswami

Career Counsel | 28

sIx WARnIng sIgns IT’s TIME TO LOOk FOR A nEW JObIts easier for a CIO to make a career move from a position of strength (read: employed) So, use these ideas to assess your situation and

whether it’s time to make a move now. Column by Martha heller

8 n o v e m b e r 1 , 2 0 0 7 | REAL CIO WORLD

Content,Editorial,Colophone.indd 8 10/30/2007 1:04:35 PM

ManageMent

Publisher & editor n. bringi dev

Ceo louis d’Mello

editorial

editor-in-ChieF Vijay ramachandran

exeCutive editor bala Murali Krishna

bureau head - north Sanjay gupta

sPeCial CorresPondents balaji narasimhan

Kanika goswami

senior CorresPondent gunjan trivedi

ChieF CoPY editor Kunal n. talgeri

senior CoPY editor Sunil Shah

trainee Journalist Shardha Subramanian

design & ProduCtion

Creative direCtor Jayan K narayanan

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PC anoop; Jithesh C.C.

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PhotograPhY Srivatsa Shandilya

ProduCtion t.K. Karunakaran

t.K. Jayadeep

Marketing and sales

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brand Manager alok anand

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bangalore Santosh Malleswara

ashish Kumar, Chetna Mehta

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AdverTiser index

All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher. Address requests for customized reprints to IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. IDG Media Private Limited is an IDG (International Data Group) company.

Printed and Published by N Bringi Dev on behalf of IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. Editor: N. Bringi Dev. Printed at Rajhans Enterprises, No. 134, 4th Main Road, Industrial Town, Rajajinagar, Bangalore 560 044, India

APC 3

AMD 1

Avaya 4 & 5

Emerson BC

Fluke IBC

HP 15

IBM 17 & 31

MAIA 11

Microsoft IFC & 29

Procurve (HP) 40 & 41

ricoh 7

SAS 9

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

abnash singh

group CIo, Mphasis

alaganandan balaraMan

Vice president, britannia Industries

alok kuMar

global head-Internal It, tata Consultancy Services

anwer bagdadi

Senior VP & Cto, CFC International India Services

arun guPta

Customer Care associate & Cto, Shopper’s Stop

arvind tawde

VP & CIo, Mahindra & Mahindra

ashish k. Chauhan

President & CIo — It applications, reliance Industries

C.n. raM

head–It, hdFC bank

Chinar s. deshPande

CIo, Pantaloon retail

dr. Jai Menon

director (It & Innovation) & group CIo, bharti tele-Ventures

Manish Choksi

Chief-Corporate Strategy & CIo, asian Paints

M.d. agrawal

dy. gM (IS), bharat Petroleum Corporation limited

raJeev shirodkar

VP-It, raymond

raJesh uPPal

Chief gM It & distribution, Maruti Udyog

ProF. r.t. krishnan

Jamuna raghavan Chair Professor of Entrepreneurship,

IIM-bangalore

s. goPalakrishnan

CEo & Managing director, Infosys technologies

ProF. s. sadagoPan

director, IIIt-bangalore

s.r. balasubraMnian

Exec. VP (It & Corp. development), godfrey Phillips

satish das

CSo, Cognizant technology Solutions

sivaraMa krishnan

Executive director, PricewaterhouseCoopers

dr. sridhar Mitta

Md & Cto, e4e

s.s. Mathur

gM–It, Centre for railway Information Systems

sunil Mehta

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

v.v.r. babu

group CIo, ItC

AdvisorY BoArd

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Content,Editorial,Colophone.indd 10 10/30/2007 3:31:16 PM

In Defence of the CIOThis refers to your editorial, 'Do CIOs Have Fragile Egos' (September 15, 2007). While I welcome the comments and observations made by one of my esteemed colleagues, who holds both CIO and CFO portfolios, they appear to be too general.

The observations about fragile egos could be true because techies feel put down (unnecessarily) by adverse remarks against their proposals. This, of course, is wrong and corrective steps are being taken, i.e. having a larger business perspective and not getting too attached to their new IT projects.

His second observation is about diligence in creating spending plans. Contrary to what he says, it has become routine in all organizations. Gone are the days when IT heads had to prepare their proposals with great caution, looking at all the financial, emotional and political angles in an organization. This is because business processes need to be strongly supported by IT infrastructure and spending has lost its negative connotation. A smart CIO only has to time his proposal well.

Coming to the last observation about ROI metrics: to say that 'CIOs have a near-pathological inability to offer reasonable ROI metrics' is twisting the facts.

Usually, almost all CIOs are ready with alternate and strong business cases. A business case, a well-researched and documented market scenario and

an ROI/NPV/IRR model with tangibles-intangibles has become the norm.

This view may have arisen from CIOs' inability to convert intangible benefits into solid figures, as CFOs are known to be obsessed with their ability to deal with solid figures — only.

All in all, your editorial gave us a good reason to introspect and will certainly help to improve our approach in future. Sanjeev Munje

GM-IT, Kenstar

Dark Side of OutsourcingOutsourcing has been a buzzword for the past five years . Some officers look at it as an answer to every query. Even officers at the top use the buzzword without figuring out if outsourcing is really required.

There is a school of thought, which points out that outsourcing as a pure cost-saving exercise can lead to poor overall results. In addition, it appears to me that:

By outsourcing, the dependency on an outsourcing partner increases because even minor changes need to be relayed. The length of any process increases because instead of two parties, three parties are involved. For the same reason, the cost of a process increases, even if it decreases initially. It has been observed that infrastructure like WAN, ISP and the Internet needed to run outsourcing is not always available. And when there are problems, the outsourcing agency refuses to take responsibility.

Lastly, the staff at outsourcers are selected not on the basis of their qualifications or experience but because of low salaries, which gives rise to poor output or careless errors.

SurInDer Kapur

CIO, DSIIDC

The road aheadAs a cover story, 'On Higher Ground,'(July 15, 2007) was good and ran contrary to what most stories on these lines tend to say. That was a refreshing change, but it ended rather abruptly. I have heard similar reactions from my peers; the end could have been more conclusive. But the concept is extremely relevant to today’s CIOs because many of them feel the need for growth.

The story definitely gave pointers on what to focus on. The case studies format also played to that strength: you had CIOs and company heads with varying backgrounds recounting their experiences and talking about taking the path forward.

What would have been more interesting is if the article also had a process angle — how CIOs create or identify stepping-stones to furthering their careers, and understand business processes to aspire for a top management position.Changappa KODenDera

VP & CIO, Sapient Technologies

reAder feedbAck

What Do You Think?

We welcome your feedback on our articles, apart from your thoughts and suggestions. Write in to [email protected]. Letters may be edited for length or clarity.

editor@c o.in

To say that cIOs have a near-pathological

inability to offer reasonable rOI

metrics is twisting the facts.

Vol/2 | ISSUE/241 2 n O V e M b e r 1 , 2 0 0 7 | REAL CIO WORLD

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H U M A N R E S O U R C E S At the HR Technology conference in Chicago, talent management vendor Workstream announced that it will offer a set of integrated applications in a SaaS architecture under the name TalentCenter 7.0. This may be a signpost of where all hosted services are headed.

Workstream, through a series of acquisitions, now offers solutions for compensation, performance and talent management in addition to succession, and compensation planning. It is one of the first vendors to offer a 'truly integrated' HR platform and 'not just a bunch of disparate applications' sold by a single vendor, according to Leighanne Levensaler, principal analyst with Bersin & Associates.

By revamping separate solutions to a single data model, Levensaler says TalentCenter 7.0 goes deeper than one-stop shopping.

"Because they are integrated and are all based on the same data model, they can now do the type of embedded analytics that will give HR users more meaningful information," says Levensaler. Merging employee performance data with compensation data, for example, allows for a more informed compensation decision and lets a manager use compensation as a retention tool.

In addition to a single user layer that goes across all applications, Version 7.0 now offers built-in globalization. Ten languages can be toggled on and off for such things as system messages, help messages, and built-in guidance for users. Simplified Chinese is one of the languages available to users, according to Gary Damiano, senior vice president of marketing at Workstream.

"Up until now, talent management applications were at the line of business level and tactical. Now they can use the

SaaS model at the strategic level to make actionable, quantitative decisions," says Damiano. TalentCenter 7.0 will be available no later than the end of November.

— By Ephraim Schwartz

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Talent Management Goes Globaln e w * h o t * u n e x p e c t e d

What If Hackers Target Storage SystemS E C U R I T Y Corporate storage systems and networks are an attractive target for hackers looking to steal sensitive data or launch computer attacks, says to alan lustiger, security architect at tD ameritrade, which provides online trading services.

In particular, he warns It executives that network-attached storage (nas) systems are the most attractive entry point for hackers. "the easiest storage technology to hack is clearly nas. It is virtually indistinguishable to a file system from a hacker perspective; this is a well-developed and well-known means of attack."

according to lustiger, nas carries the largest bulls-eye for hackers because of its reliance on well-known protocols. the clearly defined protocols can be easily studied to uncover weak spots, he says.

For example, a hacker could penetrate a nas to discover and peek into file systems available for mounting, the process of adding a file system into an existing directory structure, he says.

the typical nas system could also allow a hacker to use software clients to create spoof permissions to access data, lustiger says. such a compromise could allow a hacker to create bogus users with unique IDs, he adds.

hackers penetrating nas systems can also build sniffing and password hashes; perform protocol downgrade attacks on Windows nt lan Manager and lan Manager authentication; and spy on clear text sent over Common Internet File system and network File system protocols to 'sniff' valuable data.

to protect nas and storage environments, lustiger says It storage personnel must regularly update server operating system security features to incorporate secure builds, patch processes and the latest malware definitions.

"[usually] the storage team doesn't have the same relationship with the security group as the network guys do," remarked lustiger. "Very often, security is not involved with [storage] and that's the problem."

— by brian Fonseca

REAL CIO WORLD | n o v e m b e r 1 , 2 0 0 7 1 3Vol/2 | IssuE/24

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W E B 2 . 0 Collaborative technologies are great and all, but right now we're not terribly satisfied with them at our business. that's the report from more than half of 400 CIos and It decision makers surveyed by avanade, an It consulting firm, about the use of collaborative technologies.

Examples covered in the survey included e-mail, instant messaging, videoconferencing and intranets. In most cases, respondents gripe about a lack of integration between the collaborative applications, which in turn frustrates end users, says larry lesueur, avanade's vice president of technology infrastructure solutions.

"only 11 percent of them had some strategy around how to implement these technologies with their existing environments," he says. "It's not that e-mail isn't driving value or that IM isn't. It's that both those technologies aren't integrated."

as a result, he adds, end users deal with too many windows on any given workday. "the information worker really bears the brunt of these technologies not being integrated," lesueur says.

but while collaborative technologies don't always give the business (or more specifically, your CFo) the hard roI typically demanded for It investments, 95 percent of CIos say they see an increase in worker productivity, lesueur says. that alone should encourage further investments.

best practices for adopting collaboration tools:Start smart. before you invest in collaboration, take a sober

assessment of your other productivity applications (even e-mail). If complaints exist, you may want to tie up those loose ends first.

Emphasize integration. try to think of collaborative technologies as one big picture or even as one application. More and more, vendors design systems to be agnostic toward other software.

Play up soft benefits. hard roI will be tough. one simple way to quantify value can be speed.

the avanade survey found that just 45 percent of us companies say they are currently satisfied with the impact of collaborative and communication technologies. one contributing factor: only 11 percent have a fully documented and implemented collaboration and communication strategy across the enterprise.

Planned fixes: 71 percent of us companies say they need to add new technologies to enhance their digital collaboration capabilities. 79 percent will implement enterprise search tools, compared to 59 percent that say they have these implemented today. and 68 percent will implement virtual work spaces, compared to 48 percent that say they're using them today.

— by C.G. lynch

Smaller FirmSFailing ‘green’ TeST

The Gripe abouT

online Collaboration

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E N V I R O N M E N T A quarter of small firms have not taken any steps to make their businesses greener and a growing number are recognizing they are not environmentally friendly, according to new research from the SERTeam at the Open University and Lloyds TSB Business.

The study reveals that the number of small firms who see themselves as environmentally-friendly has actually fallen over the past few years — perhaps an indication of the growing awareness amongst firms of how much they must do to be more environmentally sound.

More than half (52 percent) of UK's small businesses believe they still have some way to go before they become environmentally-friendly — a 9 percent increase on a similar survey in 1999. This is despite the fact that most firms (57 percent) realize customers are becoming increasingly sensitive to green business issues.

Only a quarter (26 percent) have begun to make more use of tools such as videoconferencing to reduce their reliance on meetings, and only 9 percent have changed the focus of their products and services to make them more environmentally-friendly, for example by dealing only with software suppliers who are greener.

A fifth (21 percent) blame a lack of information on environmental issues, while 15 percent say they lack the time to make the necessary changes and 12 percent say they dont't fully understand green laws like the Waste Electrical and Electronic Equipment (WEEE) directive, which was set by the European Union to ensure the safe disposal of IT assets,

Professor John Stanworth, of Westminster Business School, who authored the report, says: "The days of plentiful and relatively cheap energy seem to be numbered. Our smaller firms would be well-advised to assess — sooner, rather than later — the opportunities and costs that will arise from the demands of an increasingly energy-efficient future."

The SERTeam interviewed more than 100 SMEs for each of its surveys.

— Computerworld UK


O F F S H O R I N G The weakening of the US dollar could lead to poor quality and substandard skill sets in Indian offshore services, Forrester Research warns, as Indian service providers struggle to stop falling revenue.

According to the research firm, variations in the dollar-to-rupee conversions have been at a record high, with the dollar falling 7 percent in the quarter ending June 30, 2007. This value decrease directly affects Indian offshore service providers whose income is calculated in US dollars, but costs are paid out in rupees. For instance, Wipro reported its operating margins have dropped by between 3 percent to 4 percent.

The weakness of the US dollar is causing revenue to drop and forcing Indian companies to search for ways to stay in the black, Forrester says.

"Given that 60 percent to 80 percent of income is in dollars and more than 50 percent of providers' costs are incurred in rupees, offshore providers are struggling

to find ways to cope — including asking clients to bail them out by increasing billing rates, or in some cases, re-negotiating master service contracts," Forrester analysts write in the October report."Already struggling to protect margins, Indian providers have been dealt a major blow by the falling dollar. To curtail their own losses, providers

want their clients to absorb at least some of the fluctuation."

And for clients that agree to re-negotiate contracts that could mean an increase in monthly offshore fees and reduced cost savings from choosing to offshore parts of their business, Forrester warns. Yet, the research firm says that with or without re-negotiations, IT executives need to be aware that offshore providers could skimp on the quality of the services or opt to hire less-talented workers to cut costs.

"Few [providers] have approached clients for direct and immediate rate escalation, but most are pursuing subtle ways to accomplish this goal," Forrester reports. Forrester recommend clients "demand incremental value from their suppliers. Higher-skilled resources, better time and quality SLAs and complementary services in areas on the fringe of the main contract are a few to barter against increased costs."

—By Denise Dubie

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Falling Dollar May Reduce Offshore Services

B U d G E T Far more It managers are dedicating budget dollars to outsourcing than offshore services, according to a recent survey conducted by the society for Information Management (sIM), which also revealed It managers are spending less on average with offshore providers.

sIM, an industry organization that tracks trends in It, recently surveyed about 130 CIos and It executives from 112 companies to determine top priorities for 2007. the results show that about 80 percent of companies plan to dedicate as much as 5 percent or more of their It spending to outsourcing. While more than 70 t spending to outsourcing. While more than 70 tpercent of companies have allocated none of their budgets dollars toward offshore services.

specifically, close to 40 percent of survey respondents plan to allocate 5 percent or less of their overall It budget to outsourcing. alittle more than 20 percent say they will dedicate 10 percent or less of their It dollars, and more than 10 percent report they intend to spend up to 20 percent of their It budgets on outsourcing. about 6 percent plan to spend 30 percent, and 1 percent each say they would spend up to 40 percent, 50 percent and 75 percent. over 2 percent said they would invest over 75 percent outsourcing.

on the flip side, the survey found that far fewer CIos and Itexecutives polled, plan to dedicate the same dollars to offshore services. More than 70 percent report they would spend none of their It budget on offshore services. about 20 percent plan to spend less than 5 percent on services outside of the us. about 5 percent say they would spend as much as 10 percent, and just 1 percent intend to spend as much as another 20 percent. another 1 percent say they would be spending more than 75 percent of their It budget on offshore services.

When considering that more than 50 percent of companies intend to increase headcount in 2008 and close to 80 percent plan to outsource at least some of their It services within the us, sIM's vice president of academic affairs Jerry luftman says the outlook for It careers can only be seen as positive.

"the types of skills people are looking for and the plans to outsource bode well for the state of our industry," he says.

the sIM report also highlighted how many of those surveyed ranked issues with hiring and retaining talent a top concern.

—by Denise Dubie

Outsourcing, a Rising Flavor


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ESSeverity of Security

Breach Worsens

S T U d Y The number of reported security breaches is down, yet the average severity of breaches has doubled, says a new study.

The Computing Technology Industry Association (CompTIA) study, based on data collected from more than 1,000 IT professionals, revealed that 34 percent of organizations reported a major security breach in 2006, down from 38 percent in 2005 and 58 percent in 2004.

But respondents rate the average severity of breaches as 4.8 (with 10 being most severe), up from between 2.3 and 2.6 in previous years. That might not be surprising given the number of headline-grabbing breaches, such as the TJX breach in which tens of millions of credit and debit card numbers were stolen.

IT professionals reported increasing their spending on security technology, training and certifications. The amount of their IT budgets dedicated to security totaled 20 percent in 2006, an increase from 15 percent in 2005 and 12 percent in 2004. Over two-thirds (68 percent) of companies allocate at least some portion of their IT budget to training or certification, an increase from 55 percent the year before. Security training or certification accounted for 12 percent of the total budget, compared with 8 percent in 2005. And 78 percent of those surveyed say management now considers information security a top priority.

"We are making real progress at reducing the number of breaches, but the threats are becoming more sophisticated," says Brian McCarthy, COO of CompTIA.

More than half (55 percent) of IT professionals surveyed reported spyware as a top security concern, followed by lack of user awareness for 54 percent. Nearly half say virus and worms continue to pose a threat, while about 44 percent cited abuse by authorized users as a key security challenge. Human error was reported as the cause of a security breach by 42 percent of organizations, compared with 59 percent in 2005. Other security challenges include browser-based attacks (41 percent), remote access (40 percent), wireless networking security (39 percent) and lack of enforcement of security policy (36 percent).

"Compared to last year, more than half of all organizations report that security threats associated with the use of handheld devices, spyware, voice over IP, wireless networking and remote/mobile access have increased significantly over the previous 12 months," the report reads.

The average cost of a security breach in 2006 was US$369,388 (Rs 147.75 lakh). CompTIA estimates the average costs savings of providing IT security training to staff could be $352,000 (Rs 140.8 lakh). CompTIA also estimates IT organizations can save Rs 262.4 lakh by having IT employees with security certifications.

—By Denise Dubie

M O B I l E using cell phones or text messaging in mid-conversation or during an appointment or meeting cracked the terrible 10 terrible 10 t rude behaviors list issued by Johns hopkins university.

the intrusive techie behavior is ranked 10th on the list, based on a survey conducted by the school's Civility Initiative of 615 workers and others in baltimore.

topping the Johns topping the Johns t hopkins list is 'discrimination in an employment situation.'

"the research suggests that people are bothered more by the transgressions of co-workers and strangers than by those of family and friends," says P.M. Forni, director of the Civility Initiative, in a statement. Future research will be designed to learn why this is the case, he says.

For what it's worth, many rude cell phone users are at least aware of their shortcomings. Cell phone users acknowledge that the devices encourage them to drive dangerously and behave rudely. but they also said the devices are increasingly hard for them to do without, according to a national survey last year of about 1,500 people, half on cell phones and half on traditional phones, conducted by the Pew research Center, associated Press and aol.

one etiquette expert has even established July as national Cellphone Courtesy Month to try to address the issue of mobile rudeness. rounding out the Johns Hopkins top 10 list:

Erratic/aggressive driving that endangers others. taking credit for someone else's work. taking credit for someone else's work. t treating service providers as inferiors. treating service providers as inferiors. tJokes or remarks that mock another's race/gender/age/disability/sexual preference or religion.Children who behave aggressively or who bully others. littering (including trash, spitting, pet waste).Misuse of handicapped privileges. smoking in non-smoking places or smoking in front of non-smokers without asking.

—by bob brown

Cell Phones GivingRise to the Rude

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C O M M U N I C A T I O N S any large technology rollout first requires consideration of the people issues, as well as the technical. that goes double for unified communications.

Companies adopting unified communications, especially those replacing conventional PbX boxes with server-based software, run the risk of igniting open warfare between telecom and It departments that are already jostling over pecking order and job security in the new world order.

"this is going to be a wonderful battle," says barry Marks, an analyst at IntelliCom analytics llC. "In the long term, the voice guys will always have a place, because voice is still a mission-critical function. but will voice guys

rule the day on business decisions? no, because those decisions are moving up the value chain to the CIo or Coo."

"We hear lots of discussion at conferences from customers wondering which way to go," said Kim akers, general manager for unified communications at Microsoft, which recently rolled out its office Communications server 2007.

telecommunications teams whose job has been to ensure that telephones and related systems, such as voice mail and fax, remain running 100 percent of the time, have traditionally operated autonomously from It. that's partly because of history. at corporations older than 50 years, telecom departments often predate It ones. While most telecom departments have long ago

been outnumbered by their It peers, they have been able to maintain independence. some argue that running voice applications and ensuring voice uptime is enough of a mission-critical job that telecommunications specialists will always run them.

"the networking guys are more technical, while the voice guys are application-oriented," says Mark straton, senior vice president of global marketing at siemens. "I believe voice will stay with the application guys, to ensure quality of service and avoid latency and jitter."

but others say that voice's transformation via VoIP into just another data center-based application means that in most cases, It will win out.

"Who wins is very personality-dependent and on who is willing to cross-train," Microsoft's akers says. "but the end goal is definitely more software-centric."

— by Eric lai

Unified CommunicationsMay IgnIte Turf Battle

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A Hacker's Guide to MicrosoftS E C U R I T Y In August, a blogger using the handle 'Techjunkie' started a Microsoft Developer

Network blog called Hackers @ Microsoft that, he claimed,

would introduce the world to some of the ethical 'white hat'

hackers working there.White hat hackers are security

professionals who use many of the same techniques as the bad guys, but who learn how to break into systems for research purposes only. "The focus of this blog is likely to be a little different from most other blogs you'll see on blogs.msdn.com," Techjunkie wrote.

Then he went silent for a month and a half.This month Techjunkie resurfaced, saying he was dropping the

Hackers@Microsoft name. "There were some concerns raised that the average blog reading audience may not be able to discern the difference, and we may inadvertently associate Microsoft with the negative connotations of the word 'hacker' that is out there," he wrote.

Techjunkie didn't say whether the decision to drop the name came from Microsoft's marketing department, but if it did, he has

found a way to get even. "To alleviate that concern, I've changed the name of the blog to '%41%43%45%20%54%65%61%6d'," he wrote.

'%41%43%45%20%54%65%61%6d' may not be as memorable as Hackers@Microsoft, but it does mean something. It is code for 'ACE Team,' a reference to Microsoft's Application Consulting & Engineering Team, which does performance, security and privacy development work at Microsoft. They have a blog too.

Microsoft's PR agency says Techjunkie is, in fact, Ahmad Mahdi, a manager with the ACE Team. The %41%43%45%20%54%65%61%6d name was chosen to "better reflect the intent of the blog, its posts and content, as well as the work conducted by security researchers at Microsoft," a spokeswoman said via e-mail.

The debate over the term 'hacker' is long running and bitter. Originally used to denote someone creative who enjoyed building new things with computers, the term has also come to mean computer attacker in the popular culture. One security professional who also maintains a hacking blog said he understood why Microsoft may have wanted to drop the name. "Unfortunately, I think there's a bit of a stigma associated with the word hacker," said Robert Hansen, CEO of security consultancy SecTheory and also the man behind the ha.ckers.org website.

—By Robert McMillan

Vol/2 | IssuE/242 0 n o v e m b e r 1 , 2 0 0 7 | REAL CIO WORLD


F ive years ago, I rejoined the Department of Defense (DoD) High Performance Computing Center in Vicksburg in Missouri as its director. I had left two years earlier; having spent my entire

career there, I needed to have new experiences. But I also left because the organization was dominated by deep, long-standing conflicts between the IT staff and its outsourced contractors. It doesn't take long for that kind of environment to wear you down. My own attitude had worsened to the point that I was becoming part of the problem. It was definitely time to move on.

I had been an individual contributor with a minor leadership role — managing the small, in-house staff that oversaw the contractors. When the leadership of the supercomputing center's parent organization changed, I was asked by the director to return as the supercomputing center's leader. I wasn't the least bit sure it would turn out well. But I had voted with my feet once, and I was eager for the challenge of creating something better.

My team was full of talented, dedicated, hardworking people with extraordinary gifts that had not been cultivated. The role of the supercomputing center had evolved over the years, but the staff had not been realigned. Rather, as new tasks were assigned from the top, many staff members ended up with jobs for which they weren't well suited. But reorganizing them wasn't enough.

In the years before I left, we had spent a lot of time focused on the administrative activities endemic to large government programs and not enough time building teams, sharing ideas and focusing on the future. When I came back on board, we

Three Ways to Motivate Your IT Team To develop a team that can compete in the future, you have to help its members define a role for themselves, and then give them the tools to get there.

John E. West PEER TO PEER

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were competing for funds, new projects and recognition with five other DoD supercomputing centers. Although historically we had been in a strong position to win new work, that was starting to change. Most of the team needed training in soft skills that would help members communicate their ideas to each other and to our business colleagues. I needed to turn 100 complainers, watchers and waiters into leaders.

The guiding principle of my effort was to wake up and put to work the talent that I knew existed within both the in-house staff and the contractor organizations. My method was to set an example by modeling the three practices I knew the team needed to engage in to turn us around: good communication, decisiveness and attention to the basic skills necessary to succeed at any career.

1. Get Them TalkingThe first leadership trait I recognized we were sorely lacking was effective communication. The in-house and contractor teams had been isolated by conflict for a long time. Each side had critical operational and technical information the other side needed, but the adversarial culture prevented the smooth flow of that information. Neither side felt involved in what the other was doing, nor did either side feel any responsibility to make the other successful.

I instituted a series of regular tactical meetings at all levels of the organization, including daily and weekly operational meetings with the top leadership of the in-house and contractor staff. At these meetings I emphasized making daily decisions in the context of our longer-term goals, and we talked openly about problems and solutions. We solved problems as a team, picking solutions based on technical merit rather than which organization they came from.

This was an important step because it represented the first time in years that people had even been asked what needed fixing, let alone been given the opportunity to contribute to the solution. The youngest staff members were quickest to respond, and they rapidly started to model this leadership trait themselves.

The veterans in our organization took longer to adapt, and I had to earn their respect first. They wanted a better work environment as much as everyone else, but they adopted a ‘trust but verify’ attitude to my leadership. I thought this was fair, and to earn their trust I made my decision-making as transparent as I could. I also held myself accountable along with everyone else when things didn't go as planned.

2. Let Them Make DecisionsEmpowerment is a horribly overused buzzword, and I didn't ever use it with my team (the veterans would have mutinied). But empowering my staff — giving them authority to make decisions about their work — was the most valuable single thing I did to unlock the talent in my organization.

I knew from working with these people as a peer that they were incredibly talented and incredibly devoted. I also knew that they were far too reliant on a few leaders at the top to make all decisions. If we were to distinguish ourselves from our five sister centers and prepare for the future, we needed everyone's input and expertise. But I couldn't simply abandon the group to its own devices and expect good results. The team needed to be educated about what was important to the organization and how to exercise the freedom to make decisions that supported our goals.

I started with my core leadership team. As we faced decisions together in our daily and weekly meetings I would talk through my decision. If someone presented an issue I would always ask what they thought we should do. Then I asked a lot of questions that revealed the various angles I considered before making my decisions. These included questions about what other organizations were doing, what our user groups wanted or what we had done before in similar situations.

Each time we went through this exercise, the leadership team got better at answering the question, What do you think we should do? During these discussions, we often ended up back at the original recommendation. As the leadership team members gained more experience in this decision-making environment, they began to model the same behavior with their teams.

Today, decisions are made using this process even by the most junior staff members. As a result, the organization reacts much faster than before to changes in project requirements or business demands, and decisions that do need executive involvement are well-researched and ready to implement when they're presented for approval.

3. Teach Them Career SkillsThe last big piece of the leadership puzzle that I emphasized was basic career skills: writing, speaking and career management.

In IT we spend a lot of time on technical education. But we spend almost no time teaching people the skills they'll need


Empowerment is a horribly overused buzzword. But empowering your staff — giving them authority to make decisions about their work — is the most valuable single thing you can do to unlock the talent in an organization.



to actually succeed. Instead, we fall back on a Darwinian sink-or-swim approach. Those who can teach themselves basic business skills or who have natural communication abilities and good career instincts are able to advance. Those who don't, get stuck. This model is broken. It's like teaching someone to mix colors and expecting them to paint like Rembrandt.

Effective writing and good speaking skills are the easi-est for your staff to learn. My first step, which any leader can take immediately, was to demonstrate these skills myself. I made sure my writing, including e-mail, illustrated the easy, informative style I wanted my organization to adopt. I took the same approach to presentations and small group meetings.

I also directed a portion of my organization's train-ing budget toward formal training in these areas, giving those who weren't comfortable with learning under fire

a more controlled setting to develop speaking and writ-ing skills. One of the most significant results of this par-ticular step was that we all had a common vocabulary for discussing the direction that written reports and presentations needed to go.

I also wanted each member of my team to have clear career goals and a plan to achieve them. I felt this would lead to more motivated employees who had a clear understanding of why what they were doing for the organization was good for them personally. It's easy to convince people why they should take charge of their careers: either you make the decisions about where your career goes and end up where you want, or you end up with the career someone else thinks you should have.

But developing a vision for one's career is complex because our needs and interests naturally evolve over time. What you want today will probably not be what you want in five years, so you have to set out knowing that you'll change the plan over time. And for the most part we aren't taught to plan our careers; we are taught to enter the career assembly line in year one, take the promotions that magically come our way, and leave in year 30.

The approach I have taken is to work with my staff during performance reviews. I work to make all employees (especially the youngest) aware that they need to know what their next desired career step is and to honestly assess whether the skills they are learning will get them to that goal. As we plan together how to achieve that next step, we talk about career options, the assignments that will move them in various directions and the new skills they'll need.

This conversation helps them to put their career progression in perspective and has led to more than one significant change in direction for members of my team. For example, in the course of reviewing with one of my mid-level team members his average performance, we realized that part of the problem was that after 10 years in one role, he wasn't challenged by or interested in his job anymore. Simply having the conversation was the stimulus he needed to move from a middle-of-the-road staffer to an energized leader in a new role on the technical staff.

This approach works even with late-career professionals who aren't satisfied with where they believe they'll end up or who want to do something new and challenging before they check out.

My organization has been asked to change rapidly in response to changes in funding and in its mission over the past several years. Thanks to the groundwork we laid when I started as director, we were ready.

I think one of the best measures of success for a leader in a strong technical organization is that he or she eventually is able to move into a primarily strategic role. I'm gratified to be in that position with my organization today, thanks to a team that is empowered and motivated.

Once you have a team — not just a collection of individual contributors — that operates in an environment of free and open communication, you can lead people to make appropriate decisions on their own. They will accept the challenge of making your organization successful today. But if you want to ensure that your organization continues to succeed over time, and that you train its next generation of leaders, you need to get your team members to put themselves on a career path that they ultimately control. When they have their eyes on the future, the future of your organization will be in good hands. CIO

John West is the director of the Department of Defense High Performance

Computing Center at the US Army engineer research and Development

Center. He is the author of The only Trait of a Leader, a field guide to

success for new engineers, scientists and technologists. Send feedback

on this column to [email protected]



In IT we spend a lot of time on technical education. But we spend almost no time teaching people the skills that they will need to actually succeed: the basic business skills and effective communication.


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

Six Warning Signs It's Time to Look for a New Job

It’s easier for a CIO to make a career move from a position of strength (read: employed). So, use these ideas to assess your situation and whether it’s time to make a move now.

While it is never much fun to look for a job, it is far less enjoyable when you are unemployed. When you are out on your own, you are not as squarely

on the radar screen of recruiters, and you may have an air of desperation about you that can be pretty unattractive to a potential employer.

It is a far better strategy to start your job search early, even when the going is good — and interview from a position of stability than to wait until you ‘need the job’.

Here are five warning signs that it is time to dust off the Rolodex and update your résumé.

1. You report to the CFO now, Not to the CEO Once the CEO restructures and puts you under finance, he or she is sending a clear sign that IT is not strategic; it’s a cost center. Unless cutting budgets and watching your pennies is your thing, it is probably time to get out.

2. You've Gone as High as You can GoWhen John von Stein, currently CIO of Options Clearing Corporation, had been VP of IT at Cargill for several years, he knew that the next level up, the CIO role, was one that would not be open to him for some time. So, he assessed the likelihood of a move over to the business side as a division president.

"Since I came from the commercial side of business earlier in my career, I expressed interest in going back over to that side as a business unit leader," he says. "Not much materialized

Martha Heller CAREER COUNSEL

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there for me since most business units had their own pipeline filled with people already. After 18 months or so it became obvious that neither 'up' nor 'over' were going to work out for me at Cargill, so 'out' was the only alternative left."

3. Your Company Is on the BlockIf the parent company announces its intention to sell your division, your future will most likely take one of three paths: 1) In the typical cost-cutting that happens before a sale, you will be asked to downsize your organization.2) You will be asked to take a package and leave yourself.3) Or once the sale takes place, you will be replaced by the CIO of the acquiring company.

Of course, it is possible that the sale of your division will provide new opportunities for you in the acquiring company, but it is better to have a job search under way as you wait to find out.

Even in the event that if the acquiring company offers you a new job, you still need to think long and hard about whether you want to take it. Greg Bixby, now CIO of Capital Bancorp, was CIO of Republic Bancorp during its acquisition by Citizens Banking in 2006.

In the final phases of the acquisition, he was offered a role managing all of the back-office deposit operations, facilities and procurement. While this would have been a job on a larger scale than his previous CIO role, Bixby turned it down.

"After helping to build a company for 13 years and instilling my philosophy into how we managed technology, I realized that I was too attached and would not deal well with any loss of control," he says. "When a company merges, everybody is in turmoil. I reasoned that if I'm going to go through all of that change, I'd rather do it on my own terms. I'd rather go out and select a new company than have a company select me."

4. You are a Turnaround CIO In Maintenance ModeWhen I talk with CIOs who are ready to make a move, I often hear them say, “I fixed everything and now


3 0 n o v e m b e r 1 , 2 0 0 7 | REAL CIO WORLD

If your boss changes, the replacement may possess opinions that are anathema to your own, and it may make sense to begin a job search.

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I’m bored.” If you, like so many CIOs, are a change addict who gains gratification from bringing order to chaos, it is time to move on when you’ve steadied the ship and can put it on auto-pilot. In the best of circumstances, once you’ve turned around an organization, you are in a position to innovate and help grow the company.

However, not every company can invest in enough technology-driven innovation to keep you challenged, and not every CIO can handle slow, incremental growth. If you love a big mess, go find another one.

5. You Hate Your New BossIn order to work effectively, members of a management team need to have some rapport. Chances are that you took the job — in part — because you were excited to work with the person hiring you.

If that person leaves, and his or her replacement possesses characteristics and opinions that are anathema to your own, it may make sense to begin a job search. Perhaps you have thrived in a consensus-driven organization, and your new CEO’s command and control approach doesn’t work for you. As you spend the time doing your best to nurture the new relationship, you can evaluate new opportunities as they come along.

6. Your Industry Is FailingIt is a courageous move to stay with a company that is dying but cannot reinvent itself to survive. You will gain valuable perspective, build character, and have enough lessons learned to fill a book.

Once you’ve gained all that you can from helping a company try to survive in an industry that isn’t making it, you might consider moving to an industry in growth mode. (It’s much more fun.)

It is not unusual for a job search to take six months or more, particularly if you have geographic limitations or are targeting a specific industry or narrowly defined field. If signs point to a less than positive future in your current organization, start your job search now.

Ask anyone who has ever put in a disaster recovery plan: it’s a lot easier to plan for disaster than recover after it strikes. CIO

martha Heller is managing director of the IT Leadership Practice

at ZrG, an executive recruiting firm based in boston. reach her at

[email protected]. Send feedback on this column to

[email protected]


Innovative IT.

Transformative IT.

IT that drives the business forward.

Leading companies are marked by IT that works in true partnership with the business.

CIO Chief Innovation Officer

That partnership can provide new areas for growth and set a company apart from its competition.

Press Playto see CIOs discuss innovation within their enterprise

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Columns

How to Influence People Get executive collaboration by building alliances with the people behind the decision makers.

Smartly Tracking Time Should IT chiefs measure the time they, and their staff, spend on strategic initiatives, as opposed to mere support? Read more of such web exclusive columns at www.cio.in/columns

ResourcesWhitepaper: 10 Critical Factors for Configuration Audit and ControlLearn how CCM can be used effectively to ensure system management productivity, and help reduce costs...

Rapid Enterprise IT Prototyping and DevelopmentOne goal of the Agile movement is to replace a complicated process with a practical approach, focusing on stakeholders and developers.

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“Today, the CIO is part of our customer interface. Customers need to mesh with the top management before they invest timeand money. Meeting the CIO is important to gauge our technical capabilities.”

— Jayakumar Gopalancountry manager-operations, VWR Labs

“I would be very surprised if someone

rose through the ranks to the position of the CIO without acquiring [soft] skills.”

— Arun GuptaCCA and CTO, Shopper's Stop

Investments are made inIT only in terms of perceived profits. This makes it harder to justify soft skills.

N. KailasanathanCIO, Titan Industries

Cover Story.indd 32 10/30/2007 12:42:57 PM

There was a time when heads of technology were considered soft, too soft for business. They apparently lacked the basic skills to efficiently run businesses. They were part of a species that knew too little of the art of writing letters and memos, of team relations, of convincing customers. They spent their days and twilight hours in closed server rooms, surrounded

by humming units, with few business links and, in most cases, little business sense.Then, information technology became a buzzword and an important tool. So much

so, the tech head became a part of the company’s strategic management for one simple reason: IT had became a business driver. The role of the CIO changed from technology handyman to business manager and team leader. In some organizations, CIOs are the face of a company’s technology, and hence their level of competence — both with

Reader ROI:

Why soft skills are important

Where you should put your training rupees

The advantage of training by exposure

Cover Story | Management Skills

SoftSkills

Make HardSense By KaniKa Goswami

Mirror, mirror on the wall, who is the smartest of them all? Veterans and experts say CIOs with the most honed soft skills rise higher in their careers.

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machines and people — speaks for the organization’s competence. CIOs need to possess the skills a business manager, a leader and a C-level executive have, making soft skills a hard issue.

"Today, CEOs view the CIO as a partner and trusted ally who will help refine and redefine business processes rather than provide MIS reports alone. Hence, IS people at all levels have to increasingly understand business processes, talk business and be able to network and interact with business users in order to be successful. The CIO has to be at the forefront and lead this transformation,” says V.V.R. Babu, group CIO of the Rs 12,370-crore ITC.

Driving home this point is research from Stanford Research Institute and Carnegie Mellon who studied the skills that CIOs needed to become CEOs. According to the study, 75 percent of what makes a CEO a CEO are their people skills. A CEO’s technical knowledge contributes only 25 percent to their competency.

More telling, those who appraised CEOs-in-waiting attributed 85 percent of their chances of being promoted to attitude and personal compatibility. (Only 15 percent was attributed to their ability to present facts and figures.) Researchers also found that organizations lose about 15 percent of their pitches to a lack of interpersonal skills that technology partners and CIOs exhibit.

Sour GrapesDuring his career, Jayakumar Gopalan, now the country manager of operations for the Rs 14,000-crore VWR Labs, has seen the damage that lack of sophistication can wreak. At one power lunch with clients in a previous company, the CIO on the home team declared loudly that his wine tasted like 'sour curd.' “The top management of a prospective overseas client was there. The company lost the deal,” Gopalan says.

At another lunch during an international summit on infrastructure security, a CEO who requested anonymity, says he saw a proverbial piece of spinach stuck in a CIO’s teeth. “It must have come from the lasagna. He lifted his fork and deftly removed it,” he says dryly. A number of potential clients were present at the lunch, and the CEO is quite sure the incident was among the

reasons that the company the CIO worked for lost out to a smaller competitor during a networking session later the same afternoon.

Another CEO who prefers to remain anonymous says his CIO sits on a high horse when he talks to his team. “He is bossy and demanding. But his assertiveness means that he’s great at delivering project results,” the CEO says. “At the group company’s global office, he is acknowledged as an extremely competent CIO. But he is also very blind to his team, which has led to skyrocketing attrition in the IT department.” No one in the company put two and two together until a former employee decides to write an anonymous letter, says the CEO.

On another front, CIOs have to manage vendors and outsourcing teams, which require a high amount of communication and interpersonal management skills.

Clearly, as the line between technology and business increasingly blurs, it isn’t enough for CIOs to stay at the cutting-edge of technology and hone their business.

“The CIO is no longer a back office tech-geek. He is part of our customer interface today,” says Gopalan. “In most organizations, customers need to mesh with the top management team before they invest time and money with us. Meeting the CIO is very important to gauge our technical capabilities.”

Arun Gupta, CCA and CTO at Shopper's Stop who also holds business responsibilities in the retail chain, says training can help hone important skills and is a definite advantage, considering that the CIO role is moving away from technology and towards business. “Soft skills influence productivity and efficiency with improved customer satisfaction. The difference is between service and service with a human face that smiles,” says Gupta.

We Don’t need no educationMeshing and networking with clients, however, isn’t a function of most CIOs in non-IT companies, which makes advocating soft skills training here a hard sell. N. Kailasanathan, CIO of the Rs 2,090-crore Titan Industries, feels that in traditional manufacturing companies — where very little overseas travel is required — the need for soft skills like cross-cultural interaction isn’t as pressing.


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M.D. AgrawalCM (IT), Refinery Systems, BPCl

Hone your soft skills at sophisticated clubs Sharpen vendor skills through daily interactions

Team building and people skills can be gotten by routine discussions

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Babu agrees. “In IT companies, [a CIO] is on a line job, rather than a support job. In our kind of company, I don’t think any special emphasis is given to soft skills, except for maybe the ability to work in a top management group,” he says.

These arguments, however, do not cover the entire spectrum of a CIO’s duties. There is still the need to hone interpersonal and team building skills. In fact, overseas travel or not, some say there is a case for cross-cultural skills, given that CIO interactions are not limited by geographic boundaries.

“There is a natural inclination for people to move from a business-enabler function like enterprise IS to a customer-facing role in delivery organizations. Apart from this, the CIO’s role is becoming increasingly complex because they have to balance technical scorecards and people scorecards with equal panache,” says Hema Ravichandar, a strategic HR adviser. “CIOs also need to focus on retaining the talent within their teams. And with large IT organizations setting aggressive recruitment targets, enterprise IT departments are the first to suffer.”

It doesn’t make it easier that CIOs have the burden of justifying personnel expenditure to management, especially with IT seen as a cost center. “Investments are made in IT only in terms of perceived profits,” says Kailasanathan. “That makes it harder to justify expensive soft skills.” But in his opinion, IT is a service function and can only be successful if good communication skills are established.

Some others, however, don’t feel the need for soft skills training. Among these are senior managers and IT heads of PSU companies and non-IT companies.

“Trying to train a CIO in soft skills is a rather irrelevant idea,” says ITC’s Babu, who reasons that

a technical worker — in most cases, a programmer — rises to the level of a team head and later a CIO precisely because he or she has a considerable amount of the 360-degree soft skills, including interpersonal and communication skills.

Gupta of Shopper's Stop agrees. “I would be very surprised if people have risen up through the ranks to the position of the CIO without acquiring [soft] skills. I think what CIOs need are business skills, the skills of negotiation, customer management skills, an understanding of their market and its dynamics — so that he or she can help the company stay abreast with or ahead of competition,” he says.

Soft…Like a Sponge For CIOs like Babu and Kailasanathan, who are skeptical of investing in soft skills, the answers can be found in a middle — albeit soft — ground.

“All the social skills that I may need, I can learn from memberships to exclusive clubs or organizations,” says

M.D. Agrawal, chief manager (IT) at BPCL’s Refinery Systems. “And I can acquire my people skills, and vendor and team building skills with routine interaction.”

Absorbing soft skills through exposure seems to be an answer non-IT companies have turned to. “I don’t know if just training really helps. I think CIOs should have other perspectives. They should mingle with other people, go to clubs, mingle with fraternity who make a difference, attend social



Arun GuptaCCA and CTo, Shopper's Stop

Strategy. Look for the big picture. Impact and influence. Manage expectations and budgets.

Create effective teams. Team leadership and developing people is important

Build empathy with business. It is all about customer service.

Network. Working with people effectively is as critial as technology.

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Deliver projects that enable business growth Improve business continuity readiness Link business and IT strategies/plans

Tighten security and privacy safeguards

Improve the quality of IS service delivery while consolidating the IS organization and operations through robust IT governance and management processes

gatherings or work with NGOs. These help more than formal training,” says Kailasanathan of Titan.

These non-traditional and common-sense approaches, it seems, have been improvised to steer clear of the cost required to formally train employees. And in large companies — IT or non-IT — that have a few hundred IT employees, training can be expensive.

But is the cost of training CIOs a barrier?

According to Sudhir Udaykanth, the president and CEO of Edge Academy, a Bangalore-based training company whose clients include Adidas, AirTel, the Taj Group and the RBI, budgets for soft skills training worldwide stand at about Rs 40,000 per person per year.

“Training aimed specifically at CIOs is tough [to get],” agrees P. Vishwanath, a partner at Human Endeavour, a virtual firm that specializes in family business development, business mentoring, expert facilitation and strategic organization development. “Currently, Rs 1.6 lakh is what companies invest in induction training annually. Most IT companies invest between 2 and 3 percent of their revenues in training.”

Infosys spends about 5 percent of its revenues on training, according to COO S.D. Shibulal. (This works out to about Rs

657.45 crore for 80,500 employees, though this covers all employee training.) Infosys’ STAR foundation program lasts for four months, and about 12 days are allotted to soft skills training. The software major has invested Rs 41 crore on the Infosys Learning Institute.

In comparison, TCS spends about 6 percent of its revenue (about Rs 896 crore) on its training center and Polaris invests almost the same amount in its university called Nalanda.

Training GroundAt Polaris's Nalanda, for instance, all training needs — for individuals, projects and the organization —

are assembled every six months. Some of its courses are mandatory and these are normally linked to the company’s performance appraisal of its employees.

Nalanda’s courses are tailored to Polaris’ 100-5-7 initiative: to acquire 100 relationships by fostering five customer values (cost, quality, reliability, speed, flexibility) using seven business levers. The school also has a course on language and etiquette that includes training in foreign languages and cultivates cross-cultural sensitivity and customer-interfacing skills. It also has a series of leadership initiatives for its top and middle management.

With tight budgets, what do trainers recommend? Retreats, most agree, are effective to impart sensitive skills to CIOs and other executives. Outbound training, where gaming activity could impart experience-learning, is also an interesting option. Prasad M. Kumar, founder of Human Endeavour, says his experience suggests retreats work well but outbound programs tend to lose focus. “What happens with outbound is that people get caught up with the event, rather than what it is teaching. And it is easy to miss the message,” he says.

“With CIOs, it is usually business skills that need most training. At their level, outbound training makes more sense than working in the classroom,” says Gupta of Shopper's Stop. “I think


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The first skill is written communication. It is as important as oral communication Leadership and mentoring skills are both

extremely important Being able to structure mentoring will add value to a CIO’s leadership skills

Balancing these skills is another skill, since there could be multiple stakeholders and the CIO has to answer for technology, finance and infrastructure

CIOs should assimilate inputs on their soft skills from subordinates

Build leadership character Improve technical capability Focus on strategy, rather than ITSharpen interpersonal skills to create strong supportive teamsBring change from the front

Best practices for CIOs to become more effective with

their top management:

Spit& Polish

etiquette and soft skills can be acquired by exposure, while communication is a skill that really needs to be worked on. The most important skill going forward is 'customer skills,' which cannot be inculcated only by training. These are learnt on the job.”

CIOs, Kumar maintains, find it hard to articulate and reflect on their learnings. Consequently, “if the training programs are designed to keep expectations for fun and adventure, you get good results,” he says. Retreats, he says, are also extremely useful to create a relaxed environment, where people get to talk, build relationships and get to know their teams better.”

CIOs on Defrost VWR Labs, the US-based company that produces scientific products, prepares its CIO-level executives for non-IT skills differently. “The skills we impart to people at the CIO level include grooming, business protocol, leadership skills and presentation skills,” says Gopalan. “At that level, a person starts to feel he doesn’t need to learn anything. They might not say it but their attitude and body language does. The training is aimed at changing this mindset.”

Vishwanath and Kumar of Human Endeavour have worked with senior technology management teams at companies like Satyam, Motorola, Dell, and Texas Instruments. They say they do as many as three retreats a year for the CIO-level executives. These executives are “self-opinionated, very intelligent” and “know how to hold an argument,” Kumar says.

“It’s difficult for them to give in or give up. If you preach, they will not be convinced. They will question you, and hence everything you teach. They are critical and only if you have a fairly strong experience as an anchor can you answer their queries and doubts. You have to be very articulate and convincing,” says Kumar.

With training, most companies identify a change in the attitudes of a CIO. Apart from learning to communicate better, they learn to choose their battles, and they learn to trust and delegate. “Because we have suddenly grown, the art of delegation is important,” says Gopalan of VWR Labs, a client of Human Endeavour.

“Our IT team has learnt diplomacy. Our CIO is able to better articulate with overseas counterparts,” says

Gopalan. “They are more confident, given a cultural situation, of what we are trying to communicate and how they are doing it. They haven’t just bettered their soft skills but also their credibility,” says Gopalan.

Some organizations like Infosys, Polaris and Mindtree have training modules focused on specific skill enhancement, identified after a 360-degree appraisal that takes into account both technical and non-technical skills.

“With technical and business knowledge, organizations must provide CIOs with soft skills training that will equip them to create mentally agile and adaptable IT departments and marshal resources. The soft skills

must prepare leaders to inspire their teams, be conceptualizers and take ownership for their teams,” says strategic HR adviser Hema Ravichandar.

Kumar of Human Endeavour says almost 70 percent of what his trainers use in development of a skill is through exposure to that skill. Twenty percent comes from feedback and 10 percent from coaching. But coaching is crucial, he adds, when it comes to developing financial skills, writing accounting tables, business processes and making ROI estimates.

The image of the man with a tough exterior and a soft heart has lost its appeal. Hard as nails on the inside, draped with Hermes silk is the vision of the new C-level executive. And the best way, experts agree, to create this man is with a combination of classroom training for theory such as financial planning and interpretation of accounts, and structured training for the soft

skills. Communication can be acquired on the job, and team building becomes an ongoing exercise.

Practice makes perfect. It's what Muhammad Ali did, even if he wasn't the perfect symbol of refinement in his days as a boxer. His famous words, ‘Float like a butterfly, sting like a bee,’ might be just the way forward for a CIO to make an impression. CIO

Kanika Goswami is special correspondent of CIO India. She can be CIO India. She can be CIO

reached at [email protected]


hemaRavichandarStrategic hR adviser

Leadership skills Effective team management Influencing skills

Conflict resolution

Learn delegation


Emotional intelligence and ‘soft’ skills are must for today's CIOs. Research shows it's your soft skills and emotional intelligence (EI) that determine everything from whether

you get promoted, to how happy you are at work. Luckily, with knowledge, awareness and practice, you can boost your EI.

What Are EI And Soft Skills?Like Web 2.0 or SOA, soft skills and EI is defined differently depending on whom you're talking to. The term ‘soft skills’ tends to be the more inclusive and casual of the two. Soft skills are one's interpersonal and intrapersonal skills, including friendliness, effective communication, persuasiveness, etiquette and everything in between.

Emotional intelligence is essentially soft skills' more scientific and researched counterpart. Like the soft/hard concept, ‘emotional’ is both complement and contrast to the ‘intellectual’ or cognitive aspects of intelligence. Both emotional and intellectual aspects of the brain matter, but scientists are finding that emotion influences

everything from intelligence to life experience much more than previously thought.

Emotions at WorkAlthough we may think we shouldn't bring our emotions to work, the truth is a bit different. For one thing, people want to hire, promote and simply be around people they like, those who are confident, even-keeled, optimistic, committed and trustworthy. Think of a boss you loved and one you hated and think why. Chances are, in neither case was technical ability the determining factor of how you felt, says Daniel Goleman, co-chairman of The Consortium for Research on Emotional Intelligence in Organizations. "One had EI and the other didn't."

Scientists continue looking into the nuances of EI in the workplace, but by the late 1990s research had established its baseline importance. For example, one-third of the difference between average and top performers was due to technical skill and cognitive ability while two-thirds was due to emotional competence.

By Diann Daniel

Technical knowledge might find top spot in a CIO's must-have list, but if you thought emotional intelligence and soft skills are not part of your resume, think again.

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Ways toboost your

emotional intelligence

In top leadership positions, that difference was four-fifths. In another study of a global food and beverage company, divisions led by emotionally intelligent senior managers (as measured by Goleman's research tools) outperformed yearly earning goals by 20 percent. "If you look at specific abilities, competencies that set star performers apart from average ones, technical skill is not even in the top three," says Goleman.

Think about what you have seen at work. "A lot of people write code," says Richard Boyatzis, chairman of the department of organizational behavior at the Weatherhead School of Management at Case Western Reserve University in Cleveland, Ohio. "But who gets listened to? Who is asked to work on the product development team? It's not the brainiest, but the person who works well with others." Start talking C-suite and the soft side matters even more.

"A lot of promotion is based on technical ability," says Jim Clemmer, leadership consultant and speaker, but "the higher on the ladder you go, the more important soft skills and EI becomes."

None of this implies that everybody should be exactly the same or that you must be ‘touchy-feely’ or even that you need to be an extrovert (although some outgoingness helps to connect with others). Not everybody will have the same strengths in the same way. As Boyatzis notes, "There is an intervening issue called style."

Components of EISelf-awareness: Being mindful of one's moods, emotions and drives.Self-regulation: The ability to think before acting and control negative impulses and moods.Empathy: Being able to put oneself in another's shoes.Social skill: The ability to build and manage relationships and influence others.Motivation: Drive that is internally generated rather than resting on external rewards or financial compensation.

"At its most basic, emotional intelligence is, literally, the intelligent use of emotions," says Boyatzis.

That may sound easy, but when harried by deadlines and traffic or faced with your own or someone else's unpleasant emotions,

being emotionally intelligent can be easier said than done.

Structured programs exist to boost EI. They typically include a special 360-degree review or observations of you by specialists, as well as targeted workshops. The Emotional Intelligence Consortium is a good resource for EI research data, including programs that focus on boosting an organization's emotional intelligence. But other endeavors can help you in the quest to use your emotions intelligently and strengthen your soft skills. Here are four:

Take ResponsibilityThe cornerstone of EI and soft skills is responsibility. Everybody has met the manager who is always looking for someone to blame, who micromanages or who condescends. These folks lack the most foundational tool at your disposal — taking responsibility, says Christopher Avery, Cutter Consortium senior consultant and author of Teamwork Is an Individual Skill. Responsibility is not simply paying your bills on time or managing a staff of 10. It is, in Avery's terms, the internal process of taking ownership to the extent you can, for the situations in your life and creating the best from that. Why, you may ask, in this age of layoffs and mergers, would you want to take ownership of situations you likely had no hand in? In a word, power. In the 1959 classic Man's Search for Meaning, Viktor Frankl wrote, "Everything can be taken from a man but the last of human freedoms—the ability to choose one's attitude in a given set of circumstances, to choose one's way."

Being in denial, blaming, justifying, feeling shame, quitting or feeling obligation are all ways of abdicating responsibility, but they are also what humans are hardwired to do when something goes wrong, says Avery. Recognizing this gives power, because it means that although those reactions might be natural, you have the choice to move away from them and on to ownership. So when

your brain flashes, ‘It's all her fault,’ or, ‘I'll do it because I have to,’ you simply recognize these thoughts for what they are and move on to a more powerful position.

Becoming responsible is quite simple, but that doesn't mean it's easy. Avery has a three-step model: commitment, awareness and situation examination.1 Commit to operating from an outlook of

responsibility. Each morning determine that you will take responsibility throughout that day and remind yourself at scheduled times, especially before entering what you suspect may be a difficult situation. Creating a new habit must be constantly encouraged and reinforced to become second nature.

2 Practice noticing when you are blaming, feeling shame or in other ways acting, thinking or feeling irresponsible. This can be difficult, says Avery: "The ego doesn't want us to see all the parts of our character."

3 Examine each difficult situation objectively — what is happening and what your role is in it, and determine how you can act more responsibly.Committing to these practices will change

your relationships and promote respect — both from yourself and from others.

Take a PublicSpeaking CourseLearning the nuances of public speaking is one of the best ways to improve your EI and soft skills, says Clemmer. "The ability to verbalize, persuade and influence are tightly interwoven in what is at the heart of emotional intelligence and the work of influencing or relating to others," he says.

There's the self-management aspect, of course, in that you must manage your own feelings, such as nervousness. In addition, practicing public speaking can be an exploration into your personal style and what works best for you, including what audiences you are most comfortable with. For example, someone who is analytical and serious is likely to have more comfort and influence using his own personality style as a base, rather than trying to be funny.

Perhaps surprisingly, public speaking can also help you become more attuned to others. "Advanced presentation skills will

Management Skills

Reader ROI:

What constitutes emotional intelligence

How to keep emotions under control at work

Why people need people

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teach people how to tune into audiences better, it forces you to empathize, to ask questions," says Clemmer. You'll learn how to make it more about them and less about you. A good presenter is tuned in to the audience, so you will learn how to meet listeners where they are and how to guide them where you want them to go. Important skills for any manager.

Practice Yoga and MeditationAt the heart of emotional intelligence is At the heart of emotional intelligence is mindfulness, and mindfulness is at the heart mindfulness, and mindfulness is at the heart of yoga and meditation. At their most basic, of yoga and meditation. At their most basic, both of these disciplines use attention on the both of these disciplines use attention on the breath as a tool to enable relaxed awareness, breath as a tool to enable relaxed awareness, focus and objectivity. Stress, fear, anxiety focus and objectivity. Stress, fear, anxiety and other negative feelings impair focus and other negative feelings impair focus and decision-making capabilities. The brain and decision-making capabilities. The brain literally works differently under stress.

Picture a lake during a storm. On a sunny clear day, you can probably see right through the water to the bottom of the lake. But on a stormy day, the water is choppy and the view to the bottom obscured by waves. Simply put, "When you are stressed, you don't have access to most of your brain," says Boyatzis. "That's why things like meditation become so important; it allows movement across the brain." When you are calm and happy, says Boyatzis, you can function at a much higher level, you can process difficult concepts, you can sense things at a wider distance, you are more open to experiences and you can multitask better. "Just the opposite is true when you are stressed."

When you are stressed or negatively emotional, you tend to be reactive — that is, more likely to act on a negative impulse. Meditation and yoga train you to notice a thought or feeling without becoming

attached to acting on it. Say you begin to move into a difficult yoga pose and all you can think about is how difficult it is and your whole focus starts to concentrate on how your muscles are resisting (which just makes them resist more). The yoga teacher might direct you at that point to remember how your muscles felt loose and relaxed in the previous easier pose. Simply thinking of it in this way can profoundly change your experience of discomfort. And becoming adept at short-circuiting automatic — but not necessarily wanted — responses can have payoffs at both work and home.

Take an Improv ClassComedic improvisation relies on listening Comedic improvisation relies on listening and building off others. These skills are and building off others. These skills are underrepresented in the workplace, says underrepresented in the workplace, says Chet Harding, co-founder of the Improv Chet Harding, co-founder of the Improv Asylum in Boston. "Corporations are built Asylum in Boston. "Corporations are built on 'yes, but...I'm listening but I'll use my on 'yes, but...I'm listening but I'll use my idea anyway.' Or, 'I'll look like I'm listening idea anyway.' Or, 'I'll look like I'm listening but I'm really waiting for you to finish so I but I'm really waiting for you to finish so I can talk.'" To show the power of emotional can talk.'" To show the power of emotional intelligence and to develop it in corporate employees, the Improv Asylum offers special training. "A lot of what our training

shows is how you come up with ideas that are bigger and better than what you could [come up with] working alone." At the end of the class, he says, participants create a scene. It becomes clear that the idea came from no one person, and it's better than any one person could come up with on their own.

From the outside, the exercises can seem a bit...well...silly. One of the first exercises is about the power of yes. Participants form a circle and switch places by allowing, or not, another to take their spot. The caveat is that if one person says 'yes,' he must quickly find another spot before the person he said yes to arrives at his spot. Harding says that people quickly form strategies, and one emerges especially fast: "If you say yes to me, I tend to come back to you. I won't if you say no, because I'm just wasting my time."

Beyond that, lessons surrounding the way someone says no (if it's necessary) emerge as well. "Especially with customer service, you may have to say no, but how you say it is crucial." Instead of saying, "No, there's not," when potential customers worried that, "There's too much caffeine in that," the answer can be, "I hear that a lot, but it turns out it's about the same amount of caffeine as a cup of coffee."

Another exercise demonstrates 'questioning something to death.' Participants quickly see that when brainstorming is halted by questions with the 'that won't work' undertone, ideas quickly die before they bloom. The Improv exercises illustrate what may not always seem obvious and what gives emotional intelligence such importance — people need people. Says Boyatzis, "Fundamentally you can't do much in life alone." CIO

send feedback on this feature to [email protected]

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ThE EI quoTIEnT

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Sam Walton didn't care much for technology. The legendary patriarch of Wal-Mart Stores was well-known for his lack of excitement about 'computers', as he called the company's IT systems. “Truthfully, I never viewed computers as anything more than necessary overhead,” he wrote in his 1992 memoir, Made in America. “A computer is not — and will never be — a substitute for getting out in your stores and learning what's going on.”

If Walton were alive today (he died the year his book was published), he might have said: "I told you so."

Many still consider Wal-Mart's pioneering, IT-driven supply chain to be the world's most efficient, and the company's technology standards still command respectful attention from its thousands of suppliers. But the Rs 1,396,000-crore retailer is stumbling, and IT has played a role in its woes.

Last year, the Bentonville, Arkansas-based behemoth sold its stores in South Korea and Germany (incurring a Rs 4,000 crore loss in Germany alone), reportedly due to its inability to adapt to the local cultures and unseat established players. At home, Wal-

Mart twice reduced the number of new US supercenters it planned to open this year — the second time, in June, by 30 percent. In August, the company reported that it had missed second-quarter profit estimates and warned that its profits would be lower than expected for 2007.

Wal-Mart executives blamed this slump on the effect of high energy prices on its low-income core shoppers, as well as the company's failure to move to new high-end apparel and home-decor merchandise. Analysts blame Wal-Mart's inattention to customer service at home, merchandising mistakes and its insensitivity to local markets abroad. Meanwhile, Wal-Mart has struggled online. Its website lags behind competitors like Amazon and Target, and recent marketing experiments using social networking technologies have achieved mixed success. The company has even suffered in its sweet spot, with serious setbacks to its deployment of radio-frequency identification (RFID) tags throughout its supply chain. (Wal-Mart declined repeated requests for interviews with CIO. The company's performance, said President and CEO Lee Scott in a press release, “is not what we expect of ourselves, and not what our Il

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Where and hoW did Wal-Mart lose its technology advantage? By Thomas Wailgum

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shareholders expect of us.” He said management would spend the rest of this year “focused on inventory improvements, delivering quality products at low prices, and store execution at the highest standards.”

at thE CRoSSRoaDSWal-Mart today is caught between two worlds: Sam Walton's, where a zealous commitment to 'everyday low prices' is enforced (despite Walton's skepticism about 'computers') by IT-assisted decisions made in Bentonville, and a new global marketplace in which the retailer's sheer size is not as big an advantage as it once was. Competitors such as Target and Tesco can match Wal-Mart in technological sophistication and surpass it by innovating in new retailing segments with higher-margin goods.

“Wal-Mart was making their margins on sourcing and great technology systems, but everyone has got that now,” says Patricia Edwards, a portfolio manager and managing director at Wentworth, Hauser and Violich who focuses on retail.

The question for Wal-Mart CIO Rollin Ford is how much the legendary IT infrastructure and supply chain systems that turned Wal-Mart into a juggernaut (it has nearly 2 million employees and 6,775 stores worldwide) can help right a listing ship. The command-and-control, technology-enabled culture that allowed Wal-Mart to flourish may not help it to maintain its market dominance. Greg Buzek, president of IHL Consulting Group, which advises retailers, says that store managers say in key areas where Wal-Mart has tried to grow, such as in apparel sales, the company has relied too much on centralized decision making — for example, letting corporate systems override local input about what items to stock.

Further, analysts say Wal-Mart's reliance on homegrown systems — and its conviction of their superiority — needs to change. Ford and his team, they say, must bring in best-of-breed commercial applications, such as BI and price-optimization tools, that can help it compete with rising retail superstars such as Target, JCPenney and Tesco. “We cannot overestimate how much packaged software can help them right now,” says Paula Rosenblum, an analyst and managing partner with Retail Systems Research.

In fact, it does appear that the big ol' dog is learning new tricks. In 2006 Wal-Mart bought retail applications from HP and Oracle, and quietly contracted with a social networking company, Bazaarvoice. It's clear that just squeezing more pennies out of the supply chain won't cut it anymore.

“For years, Wal-Mart was held up as a shining example of cutting-edge thinking in retail technology,” says Edwards. “But today, when I hear about a retailer doing something cutting edge, it's never Wal-Mart being talked about.”

thE GooD olD DaySIt's hard to imagine Wal-Mart as a scrappy underdog, but that's what it was in the

1960s and '70s. Sam Walton was heralded as a modern-day Robin Hood, building his discount chain for the cost-conscious masses.

Despite Walton's aversion to technology, he assembled a team that was certain IT could be a game changer — and wasn't afraid to challenge his Luddite views. “Sam was smart enough to know we needed technology,” recalls Bob Martin, who as CIO from 1985 to 1993 and a member of the Wal-Mart executive committee from 1985 to 1999 gets much of the credit for Wal-Mart's IT innovations. “But he made sure the technology never got in the way of keeping our people.”

The emphasis on developing top management talent extended to the IT department. Just as GE is known for turning out CEOs, Wal-Mart has produced several of today's top technology leaders. Randy Mott, who succeeded Martin, was CIO of Dell and now HP; Kevin Turner, who followed Mott, is COO of Microsoft. Rick Dalzell, who as VP of IS developed Wal-Mart's data warehousing systems, is retiring this year as CIO of Amazon.com, where he is credited with creating Amazon's legendary e-commerce engine and CRM system for gathering and analyzing customer and sales data.

“They are the kind of people that flourished in a competitive environment where innovation was a premium, where risk was allowed,” Martin says. “We all had one mission: to be number one. We were not caught up in our own egos.” Says Turner: “We believed in the power of the team to do extraordinary things.”

That team had a killer instinct. Mott says his 22 years at Wal-Mart nurtured his competitiveness. “I hate to lose,” he says. Martin, meanwhile, pushed his troops hard. “Tough love,” Turner calls it. Martin concedes as much. “I guess it's part of my DNA,” he says. “It's a quality that when it's governed well is a good quality. To a large extent, it's a culture of Wal-Mart.”

With that culture in place, Wal-Mart IT emerged as a major influence not just in retail but also in the supply chain, B2B communications and data processing fields. “They didn't make a move without everyone in their industry and beyond copying them,” says John Fontanella, VP of research at AMR Research. “So many ideas that are commonplace today came out of Wal-Mart at that time.”

For example, Wal-Mart was an early adopter of bar-code scanning and was the first retailer to use satellite technologies that enabled daily inventory feeds into its distribution systems. It also pushed the envelope on data storage in a corporate environment (cataloging more than 100 terabytes — a huge amount of data for the time) and exhorted the retail industry to adopt

electronic data interchange (EDI) for purchase orders and invoices.

But it was the joint effort with Procter & Gamble in the late 1980s to develop a continuous replenishment system


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that enabled Wal-Mart to transform supply chain management. Beginning in 1992, Wal-Mart's Retail Link system integrated point of sale (POS) and store-shelf data to automatically trigger manufacturing orders to its suppliers when stocks were low. Wal-Mart eventually mandated that its top 2,000 suppliers integrate with Retail Link, and everyone got on board. It was a sign of Wal-Mart's growing power, though its ability to dictate to its partners was never universally applauded. “Command-and-control works in general,” says Bobby Cameron, a principal analyst at Forrester Research. “The gorillas dance together, but the monkeys dance to not get stepped on.”

Martin recalls that the mandate worked because suppliers got something in return. “We let our suppliers have access to the same data [about sales] that our buyers did,” he says. In fact, even though management sought to keep its control of IT firmly centralized, Martin, and later Mott and Turner, always sought buy-in for new projects from the bottom up. “We'd start with the customer and work backward,” Turner recalls.

IT would generate a great idea, and “they'd bring it all the way down to the store managers, even to the associate level,” concurs analyst Fontanella. “Everyone had to buy into it. There was no innovation that they did that was thought up at the corporate level and forced down into stores.”

That culture of enterprise-wide buy-in, combined with a surging belief in using IT to drive the business, recalls Mott, “really allowed us to play a role and to think about IT a little ahead, if not a lot ahead, of some other companies in our time.”

thE RFID ExpERImEntInside CIO Ford's IT department today, success on such a grand scale has been harder to come by. Ford, a logistics and supply chain expert who has been with Wal-Mart for 20 years, took over in 2006 from Linda Dillman, who was reassigned as executive vice president of benefits after four years as CIO.

Ford inherited an organization that was in the throes of a bleeding-edge supply chain experiment, which many analysts say distracted the group from concentrating on other pressing needs, such as enabling Wal-Mart's new merchandising strategies. The signature of the Dillman era was her ambitious program to put RFID tags on a percentage of the products Wal-Mart's suppliers shipped to its distribution centers. The idea was to streamline the supplier-Wal-Mart pipeline and solve the age-old out-of-stock problem. Unlike bar codes, RFID tags don't need to be 'seen' to be tracked, and wireless technologies monitoring RFID-tagged stock can provide unprecedented visibility into warehouse and store-shelf inventories.

The initiative, begun in 2003, was applauded for its vision, but also criticized for its technological shortcomings, a lack of a defined ROI and the financial burden it placed on suppliers, many of whom didn't even know what RFID stood for. Even now, it's hard to call RFID ready for prime time. A 2007 survey by CompTIA, the IT trade association, found that nearly 70 percent of surveyed organizations believe there's an insufficient pool of RFID talent to hire. Simon Ellis, the former supply

chain strategy director for Unilever North America, one of the eight Wal-Mart suppliers that joined the company's initial RFID push, says he “felt very strongly as far back as 2004 that consumer-packaged goods was probably an ill-conceived early adopter industry for RFID.” Ellis now leads the supply chain strategies practice at IDC's Manufacturing Insights (IDC is a sister company to CIO's publisher). “The margins are simply not big enough, and there's an enormous amount of complexity,” he adds.

Most suppliers have done the minimal amount of work necessary to satisfy Wal-Mart's mandate, and their only ROI is the ability to

keep Wal-Mart's business. “Wal-Mart failed to work with suppliers to establish a strong value proposition,” says Fontanella. “They were thinking the value of RFID was self-evident. What they found out was that most suppliers didn't feel that way.”

As a result, Wal-Mart has achieved less than it hoped. Only 3 percent of Wal-Mart's 20,000 suppliers are reported to be using RFID. And the retailer has acknowledged that it failed to meet its own goal of deploying RFID in 12 of its 137 distribution centers by the end of 2006. Wal-Mart brass has claimed the initiative was always focused more on getting benefits from store-level RFID systems, rather than from the distribution centers (in May, the company reported RFID had reduced out-of-stocks in stores by 30 percent). But analysts dismiss that claim. “They thought that it would grow much faster,” says AMR's Fontanella.

Dillman, the public face of Wal-Mart's RFID revolution, joined Wal-Mart in 1991 and became CIO in 2002. When she was reassigned, there was speculation that Wal-Mart executives were discouraged with the RFID project's progress. Ford has affirmed Wal-Mart's commitment to RFID, although he has also acknowledged that there's much work to do. No one knows yet if the RFID project will, in time, turn out to be this generation's Retail Link.

At the same time, analysts say, Ford must turn his attention to new solutions that the business requires. The RFID project “distracted them from the need to become more granular in their merchandising assortments,” says RSR's Rosenblum. While IT focused its energy on the supply chain, the business desperately needed help with its new product initiatives and customer relationship strategies. “The object of the game is to align IT with the business, and IT was aligned with business of the 1990s,” says Rosenblum. “In 2006, Wal-Mart decided that it had to shift its priorities and IT couldn't jump fast enough.”



Wal-mart acknoWledges its failure to put rfid tags on some of its products. only 3 pERCEnt oF ItS 20,000 SupplIERS are reported to be using rfid.

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It'S a nEW, WEb 2.0 WoRlDWal-Mart is struggling to build an online presence. It ranks 13th in Web sales volume among retail businesses, according to industry watcher Internet Retailer, even though, according to Web data analysis company Alexa, Walmart.com is the third most-popular retailing website based on number of users (behind Amazon.com and Target.com). “I know that Wal-Mart is not as proud as they would have liked to have been with online retailing,” says former CIO Martin. “The challenge is huge.”

One challenge for Walmart.com is similar to what it faces in its stores: a disconnect between what Wal-Mart is selling and what its customers want to buy. If its core, low-income shoppers aren't buying more upscale clothes and home decor products in the store, they're unlikely to buy them online. “I don't think their original shopper is an online shopper,” says Rosenblum. That means Wal-Mart has to market online to new customers with higher incomes.

Edwards notes that, to date, Walmart.com “is not a huge business for them.” But it should be, she says, because such trends as 'clicks leading to bricks' (shoppers researching online and buying in stores) and new forms of customer relations and marketing are Internet based. In fact, a multichannel approach to selling to Wal-Mart's customers could have a huge impact on the bottom line. “Any time you can get a consumer that shops multiple channels with you, that consumer is much more loyal to your brand,” Edwards observes. For example, she notes that Nordstrom customers who shop in multiple channels spend four times as much with the upscale retailer as single-channel shoppers. “I would be surprised if the same was not true for Wal-Mart,” she says.

Last year, according to an internal Wal-Mart marketing report obtained by corporate critic WakeUpWalMart.com, GSD&M Advertising, a marketing and media consultancy, urged Wal-Mart to start utilizing online marketing strategies such as blogs to reinforce the values of its brand (such as its no-hassle return policy) and promote its new products (including high-end consumer electronics such as HD TVs).

Wal-Mart seems to have taken GSD&M's advice. With a revamp of the site in late 2006, Wal-Mart introduced several new features, among them the ability for customers to review and rate products.

That's key for Wal-Mart. According to a recent opinion poll conducted by market researcher Vizu and Bazaarvoice, nearly 80 percent of US shoppers consider it important to read customer reviews before making a purchase. A Bazaarvoice spokesperson confirms that Wal-Mart is one of its clients, but says the company is bound not to talk about its relationship. Nevertheless, the fact that Wal-Mart is trying to promote community among its customers suggests executives recognize the need for change.

More evidence can be found in the August debut of Wal-Mart's 'Roommate Style Match' group on Facebook, the popular social networking website that caters to 34 million teenagers and college students. Wal-Mart's hope was that college students would talk up and buy back-to-school products via Facebook and Walmart.com. Some of the early Facebook comments, however, had less to do with futons and pillow cases than with unionizing Wal-Mart workers and the death of small US businesses. Typically, such comments would put Wal-Mart on the defensive. This time, a company spokesperson told Reuters: “We recognize that we are facilitating a live conversation, and we know that in any conversation, especially one happening online, there will be both supporters and detractors.”

Despite the negative feedback from Facebook users, this new attempt to play in the fields of Web 2.0 has so far gone more smoothly

than Wal-Mart's summer 2006 foray. Then, Walmart.com tried to emulate MySpace, another social networking site, to engage its teenage customers. Critics bashed Wal-Mart's creation, The Hub, for closely monitoring the site and using “fake kids who talked

about the clothes they were buying at Wal-Mart,” according to Techdirt.com, a corporate intelligence and analysis website.

“The G-rated site with limited functionality had all the makings of a politician wearing a backwards baseball

cap in a bid to win the youth vote,” it wrote. Wal-Mart quietly shut down the site in October, just 10 weeks after launch.

Meanwhile, Wal-Mart.com has gained success with a new online service called Site to Store, which

allows customers to order products from Walmart.com and have them shipped to their local Wal-Mart

store for free. (Other retailers, including Best Buy and Circuit City, already offer this service.) During the four-month rollout that began in March, more than 500,000 units were shipped via Site to Store, saving customers more than Rs 20 crore in shipping fees. More than 50 percent of orders came from customers making their first Walmart.com purchase, according to Wal-Mart. “Customers are clearly responding to the idea of purchasing online items that are not available in our Wal-Mart stores,” said Mike Smith, Walmart.com's senior director of operations, in a press release.

IT's role in facilitating this customer-centric endeavor is critical — especially because Walmart.com has been knocked for customer service. In the 2006 edition of 'Top 40 Online Retail Satisfaction Index' by ForeSee Results, Walmart.com ranked 33rd in terms of overall customer

satisfaction among online holiday shoppers, and its overall satisfaction score was unchanged from 2005.

It'S CuStomER-FoCuSED aGEnDaThere's no magic to what CIO Ford must do to help Wal-Mart execute its new merchandising strategies and goals for growth, say analysts. First, IT should move ahead with its nascent plan to adopt


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Contrary to the command-and-control of Walmart, former CIO Kevin turner always sought buy-in for new projects from the bottom up.

Feature -01.indd 46 10/30/2007 3:13:10 PM

best-of-breed retail technologies where these can quickly benefit the business.

For example, Wal-Mart is known for its ability to collect data. Now, analysts say, it's imperative that IT enable merchandisers and buyers to use it to make better decisions.

“We know retailers collect this information and we know that Wal-Mart throws it out on Retail Link,” says Rosenblum. “But mashing it up and actually coming out with intelligent merchandising decisions based on that is the next wave.”

Retailers are known to prefer homegrown systems, Rosenblum says, and Wal-Mart is no exception — especially given its size. “They were just too big to run a lot of this packaged stuff,” she says. Recently, however, the major software vendors, including HP, IBM and Oracle, have developed sturdier applications that could scale up. Earlier this year, Wal-Mart implemented Oracle's retail price optimization application and HP's Neoview data warehousing platform to crunch the data Wal-Mart collects in its 4,000 US stores. (Neither vendor would divulge any details of its respective partnerships.)

The Oracle tool is going to be important, say analysts, if Wal-Mart continues to expand its presence in the higher-end apparel market, where products have shorter lifecycles. The price-optimization application will allow Wal-Mart to understand when to mark down clothes that are not selling. Edwards says Wal-Mart had trouble last year moving some of its more upscale apparel. “Cheaper clothing isn't enough anymore — it needs to be cheaper and stylish,” he says. “In that vein, having good systems and data gathering isn't enough. A retailer must be able to not only gather the data but also interpret it and act on it appropriately.”

HP's Neoview tool can provide business intelligence from all kinds of customer purchasing information, which in turn can help Wal-Mart stock its stores based on what sells locally, says Rosenblum.

IT can do little about some negative aspects of customer service that have caused analysts to question Wal-Mart's practices: messy stores, curt cashiers and poorly stocked shelves. Judging customer service can be subjective, admits analyst Edwards, but she says Wal-Mart has not kept pace with competitors such as Target and Costco. “Up until very recently, Wal-Mart seemed to believe that low prices were all that mattered,” she notes. “A quick walk through the shoe department, for example, would have convinced you that a bomb had gone off, throwing shoes everywhere. Shelves weren't well stocked. The store was dirty, the bathrooms especially. And the checkout lines were legendary — not in a good way.”

But IT can help with some retailing basics that, according to Sahir Anand, an analyst at AberdeenGroup, Wal-Mart has had trouble with of late: ensuring that POS systems are continually updated; that price checkers and interactive kiosks are up and running at all times; that checkout experiences are speedy and that associates are ready, willing and able to guide and motivate customers to use all these tools.

“Technology and customer service go hand in hand,” Anand says. “Only when in-store customer-service tools are working properly will customers see Wal-Mart as responsive.”

Wal-Mart's future success depends upon IT's ability to deliver the applications and systems that the giant needs to compete today — just as it did a decade or two ago. Rosenblum says that although the current IT regime hasn't directly contributed to Wal-Mart's troubles, “it is fair to say they didn't anticipate the shift [in retailing]. And they didn't realize that [retail software] and hardware had matured enough to where it could support them.”

Now, more than ever, Wal-Mart has to tap into Sam Walton's legendary gumption, his knack for seeking out partners when he needed expertise he didn't have, and rely on some of those good ol' 'computers.' CIo

send your feedback on this feature to [email protected]


though it became a global company long ago, Wal-mart has historically run its operations from its bentonville, arkansas headquarters. but management experts say the command-and-control approach practiced by many companies — which leaves little decision making to local store managers — won't cut it in today's partner-driven world.

When you are big and global, there are "more vulnerabilities and points of disruption" to your operations, says hau lee, the thoma professor of operations, information and technology at stanford university's Graduate school of business. Companies have to adjust by balancing local flexibility with centralization.

If a shipment is delayed in a foreign country, for example, local managers are in a better position to respond than managers back at headquarters. lee says: "but the local actions and decisions must come back to a centralized system." top execs still need to be in the loop.

For retailers, enabling local decision making gives store managers the ability to react to what's selling and work with its suppliers more efficiently, says bobby Cameron, a principal analyst at Forrester research. store managers can "continuously shift the product mix in specific stores and in specific classes of neighborhoods to reflect each location's particular retail interests," Cameron notes.

analysts attribute Wal-mart's retreat from south Korea and Germany, for example, to an insistence on doing business the Wal-mart way. Cameron says Europeans may not have wanted to adopt Wal-mart's It standards because they prefer industry standards and common interfaces that work for different business process models.

"It is now a global conversation," Cameron says. "and as a company like Wal-mart becomes part of global networks — and no longer is the dominant player that tells everybody what to do — they are more brokers than in command."

—t.m.


Think Globally, buT leT ManaGers DeciDe

Feature -01.indd 47 10/30/2007 3:13:11 PM

e-Learninge-LearningSeeds of

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at

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by

un

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Enter Malappuram. Albeit a backward area in Kerala, it has one of the highest density of computer-literate citizens in any district. With nearly 350 active e-kendras or computer education centers, to address more than 1,000 families, the district is proof of

the success of Project Akshaya.Kerala’s department for IT is hard at work on information and

communication technologies (ICT) initiatives, with an eye on its 65 lakh potential users. However, poor levels of computer literacy would render any e-governance plans ineffective.

The Akshaya initiative was launched in November 2002 primarily to address the need for e-literacy. This would simultaneously ensure connectivity and seek to create demand for computer services. The pilot project took off in Malappuram in 2004. And interestingly enough, since then, all the e-learning has begun with a computer game!

In the first hour of every computer class, learners across age groups use a mouse to move a basket on the screen and collect falling mangoes. Designed to improve mouse control and acquaint users with the hardware, the computer game makes the 15-hour training module fun and informative. “The computer classes got well accepted,” says Anvar Sadath, manager (e-governance) of the Kerala State IT Mission. “We don’t tell learners that they are using a mouse or a monitor. In time, they achieve a level of comfort with the computer. We then introduce them to the infinite possibilities of the Internet,” smiles Sadath who is also the director for Akshaya.The initiative had been envisioned to set up multipurpose

community technology centers called e-kendras, and provide services to about 3,000 families. In the first phase, 500 such centers were set up. Apart from being computer education centers today, these are also active community centers that facilitate e-governance services.

The pilot in Malappuram evolved so because of public-private partnerships (PPP). Each center has

Computer Literacy

e-LearningHow good is e-governance if citizens aren’t computer literate? In a bid to make technology more relevant to the rural population, Kerala’s State IT Mission is determined to spread computer awareness.By KaniKa Goswami


Reader ROI:

Generating public interest in computer services

Why public-private partnerships work for e-governance

Expanding influence of local IT programs

five computers and other infrastructure installed at a cost of up to Rs 4 lakh per center, located within a 3-km radius of every household.

Furthering the IT AlphabetThe second phase of the initiative in July 2005 entailed building a wireless network to enable G2C, G2G, B2B and B2C services to complement the e-literacy plan. Around the same time, collection of utility bills as well as issue of documents related to tax, which were earlier done at FRIENDS (Fast, Reliable, Instant and Efficient Network for Disbursement of Services) centers, was integrated with Project Akshaya. Till date, about 1,200 centers have come up across the state. Six more districts are expected to be covered by the yearend with the number of e-centers slated to touch 3,000.

Each Akshaya e-kendra is a self-sustaining unit with the computer literacy initiative as an assured source of revenue. To leverage commercial interest and attract investors, the government advertises details of the courses at the centers. The investments, as current operators point

out, have not been huge, but the benefits are significant. K. Sakeer, an entrepreneur who set up an Akshaya e-kendra, invested Rs 1.5 lakh. Another operator in Malappuram, K. Sethumadhavan, says:

“I set up this center with the support of a bank apart from other borrowings.”

The government initially spent up to Rs 4 crore to create awareness among entrepreneurs and interested parties. Malappuram received an investment of Rs 6 lakh, apart from the support of local bodies towards training operators. Further, the Kerala IT Mission has invested up to Rs 5 crore for software development. Each e-kendra employs up to 4 people, creating about 2,400 jobs. The project promises to attract more entrepreneurs.

The state government has taken active interest to create awareness, says Sadath.

“We state the specifications of courseware and arrange IT melas. These are attended by software and hardware vendors; interested parties discuss the details and entrepreneurs buy what they need,” he adds.

Computer literacy courses are subsidized by the government, which pays e-kendras Rs 80 per citizen after the training. Apart

from this, the trainee pays a fee of Rs 40 to the e-kendra. “For scheduled and backward castes and tribes, the government undertakes the entire fee,” says Sadath. The remaining infrastructure costs are borne by entrepreneurs. The course modules are provided by the Kerala IT Mission, which also oversees software development.

From the revenue generated, Rs 5 per BSNL bill goes to the state government, which is passed on to the entrepreneur. For other utilities too, customers pay a service fee of Rs 5. “The transactions are very transparent. All payments are routed through our banking partner. The entrepreneur has fixed and overdraft accounts there. So, as soon as a payment is made, the amount is credited to the respective account,” he adds.

The e-Knowledge CurveThings appear organized today on the Akshaya front. But a politically-sensitive state like Kerala has the tendency to generate opposition against such ambitious e-government projects. Sadath agrees, “The challenges had more to do with changes in attitude. Initially, we faced a lot of

opposition because the state is still fighting to provide clean drinking water and other basic amenities. So, there was a feeling that spending on computer education isn’t justified.” Public reluctance to attend the literacy program became a challenge.

“Their question was: why should we learn computers?” he recalls.

The Akshaya team began to tackle these apprehensions after a series of meetings with stakeholders. Sadath attributes the success in convincing the public to the local bodies. “Governments at the local level took up the cause. Their members started campaigning, and we were able to carry out target-specific implementations,” he explains. For instance, the IT Mission team made customized ICT programs for fishermen and farmers. Another barrier to change was language, for which the State IT Mission developed multimedia course formats in Malayalam.

In 2004, an Internet connection was something to dream about as there were 2 lakh people on the waiting list for a BSNL landline connection. “So, we

Computer Literacy

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“With 345 functional e-centers today, we have an average of three centers per local body.”

—anvar sadathManager (e-governance)

Kerala state It Mission

installed a robust IT infrastructure in Malappuram, The government spent Rs 3 crore, and it’s now among the world’s largest rural broadband networks,” says Sadath. Without that, Akshaya may not have been so well-accepted today.

During the first phase of the rollout, owners of the e-kendra also had a stake in ensuring continuous awareness of computer learning. “Kerala is one of the most aware states in India,” asserts Sadath. “Parents are educated, and so they want their child to get better education. I informed people that without IT, everybody today is as good as illiterate,” he explains. The support of locals, he adds, has been instrumental in increasing demand at e-centers.

With the first phase of Akshaya operational, the original plan did undergo changes. Initially, there was one e-kendra for every 1,000 families; now, each center caters to 2,500-3,000 families. The sustainability of the e-kendras is still in question, but the entrepreneur community in Kerala has taken the plunge. Technologically, almost all barriers have been overcome and the project is regarded a success.

Still, more than three years after the success of the pilot project, the number of e-centers has reduced to 345. There are various reasons for this, says Sadath. “Almost 200 e-centers either closed down or have merged with the nearest centers,” he points out. In real terms, six e-centers per local body area were not found to be sustainable. So, nearly 60 of them closed down. With 345 functional e-centers today, we have an average of three centers per local body, Sadath says.

An e-center provides a host of services today, including: E-payment: Citizens can pay bills of agencies like the state electricity board, BSNL, among others.

E-krishi: Online posting of farmers’ products, query from experts, a recommendation system for farmers, e-library, etcetera.

Basic e-governance functions: Online complaint mechanisms with access to different authorities, printout facility for application forms from government

websites, government data entry works like land record digitization, etcetera.

Nationalized Banks’ Digitization services: S i g n at u r e s c a n n i n g, data entry, and small software building.

Computer courses: Windows and Linux, Malayalam version of MS Office called e-Vidhya, Linux-based applications, and MS-Office.

Web development for social and commercial agencies.

Sakeer, one of the successful Akshaya entrepreneurs in Malappuram, says: “The challenge was lack of knowledge in the public about ICT. But, the response of the locals in Malappuram has been very good. In fact, I started making profits two years after setting it up.”

However, Sethumadhavan thinks it’s too early to expect profits. “The project is still at a nascent stage. When the central government launches ICT projects across the country, we will be the first state with e-literacy in all districts. Akshaya’s maturity and experience in the area could then help make it profitable, he believes.

Beyond e-LiteracyGoing forward, Akshaya seeks to provide an even wider umbrella of services, in the expectation that Kerala will have at least five computers per village with minimum connectivity band of 256 MB. The infrastructure is in place; all it needs now is better utilization for citizenry.

Akshaya is ready to offer services, including an agriculture information system that provides a framework to connect farmers with public research institutions to share technical information and knowledge. Health data is also available to locals through dedicated kiosks.

Advanced computer courses on CDs for students from classes I to X, and resource CDs of IT@School programs are also becoming available at the e-kendras. In addition, there are counseling opportunities related to job and career prospects.

Resource CDs on four major subjects — health, agriculture, education, acts/rules— in Malayalam are available at the e-kendras. As a second level to the basic computer education that the e-Kendra provides, the Computer Society of India issues merit certificates that are recognized by the Kerala government.

In addition to basic computers, there are courses for willing students in garment making and toy manufacture in association with the National Institute of

Design in Ahmedabad. This is aimed at providing self-employment opportunities to local women.

The e-learning project in a literate state like Kerala has brought definitive change in the way governance works, and Akshaya has a lot of momentum in its favor. Malappuram has at least one computer literate person in every home.

This offers a ripe opportunity to see how much difference IT can make in the lives of society, if used in a proper governance context. “In my view, I can make this facility indispensable for society. IT has ensured that they get all services here, including consumer goods,” notes entrepreneur Sethumadhavan. “Akshaya has become a nodal center for development of our people’s standard of living,” he adds. Advanced online learning for employment like medical transcription will start soon at Sethumadhavan’s center. “I can make my village one of the first digital villages, and assure speedy and transparent services from government offices. A first step that I intend to take is to create a local body portal for our people,” he says.

It is such enthusiasm among entrepreneurs that could ensure the efficacy of e-govern projects. After all, IT is merely an enabler of lofty ambitions. CIO

Kanika Goswami is special correspondent of CIO India.

Send your feedback on this feature to [email protected]

SNAPSHOT AkshayaNATURE OF PROJECT PPP

No. OF e-KENDRAS 1,200

REVENUE (May 2007) rs 82.2 lakh

PEOPLE TRAINED 6 lakh

COMMUNITY CENTERS 150


Computer Literacy

Govern Main.indd 51 10/30/2007 2:43:52 PM

More Room For Less MoneyBy Galen Gruman

Storage | When Marty Garrison became CTO of ChoicePoint three years ago, the storage situation was messy. That’s no small matter at a company that manages 1,600 crore records, such as background checks and insurance applications, eating up two petabytes of storage — that’s 2,048 terabytes. And growing. Like many IT leaders, he faced lots of data in lots of silos. “Storage had grown organically by project, and it was not managed in terms of cost. So we had eight to 10 SAN [storage area network] infrastructures as islands, none of which could talk to each other. We couldn’t share storage space across islands, and we couldn’t tier our data,” he recalls.

The silos meant there could be no cost efficiencies from bulk purchases, from better utilization of the existing storage capacity or from a unified management approach that would lower staffing needs. So Garrison created a central, common storage architecture and strategy. He removed storage management responsibilities from local Unix administrators and hired dedicated storage experts to manage responsibilities globally. He consolidated the SANs into one, reducing management costs and allowing more efficient data utilization.

Smart CIOs use techniques like

tiering and iSCSI to consolidate and

simplify storage. They’re saving

money right now and they’ll save

more in the future.

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

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Essentisl Tec.indd 52 10/30/2007 12:48:06 PM

He pared down the vendors to just a couple for each type of technology. That let him simplify management and buy in bulk, to get greater discounts. When you buy hundreds of terabytes of storage each quarter, Garrison says, “it really does drive costs down.”

He also introduced tiering, which uses cheaper, slower drives for data that doesn’t need the highest level of availability. “Before that, we had done no performance testing to determine service requirements. The staff played it safe and got Tier 1 Hitachi and EMC disks for everything,” Garrison recalls — at nearly double the price per terabyte as Tier 2 or Tier 3 disks. Altogether, he has slashed storage costs by 40 percent, both on the disks themselves and management overheads. And he hasn't significantly grown his staff despite escalating storage requirements.

Garrison is now exploring new ways to keep costs in check, including storage virtualization and single-instance storage. “Now it’s time to go into the next phase,” he says.

You must move to a simplified storage architecture to reduce total cost of ownership, analysts say. Even as the cost of new storage media decreases at up to 34 percent annually, the cost of rising capacity and service level demands can exceed 60 percent, says Stewart Buchanan, a research director at Gartner. “Enterprises need more business discipline in IT asset management of storage,” he says.

Lay the Right FoundationThe good news: CIOs have more storage choices, and more mature choices, than they did just a few years ago. Some

approaches that were once novel and untested, such as tiered storage and its related archival approach of hierarchical storage management, are now proven, says Nik Simpson, a storage analyst at the Burton Group consultancy. This is also true for the use of SANs.

One increasingly popular category of savings comes from replacing tape backup with disk backup (also called virtual tape libraries), says Dave Dillehunt, CIO of the integrated delivery network FirstHealth of the Carolinas. Tape capacity has not kept up with hospital storage requirements — about 185 terabytes at FirstHealth — and physically managing the tapes has become too burdensome, he says.

A caveat: one danger in relying on disk-based backup is the temptation to keep the data online (which can overload storage networks, because people will use the data if it is available). That’s why Dillehunt keeps the disk backup disconnected from the rest of the network. If your storage needs are modest, tape does continue to

make sense because the medium cost is so much less, notes Rich O’Neal, senior vice president of operations at the online rewards-tracking site Upromise. That’s the case for his 4 terabytes of data.

Of the established approaches, tiering offers the most significant bottom-line benefit, says Gartner’s Buchanan. It not only lets you increase the amount of cheap storage relative to expensive storage that you use but also forces you to understand the service levels for all your data. Then you can reduce costs by deleting or at least not backing up unneeded data. You can move rarely used data to offline storage to keep

network traffic under control. And you can begin to manage demand by users, by showing them the entire data lifecycle costs for their requested applications. “Tiering lets you find the total cost of ownership of your storage,” he says.

A good target: keep 30 percent of your data in Tier 1 storage and the rest at lower tiers, advises Burton Group’s Simpson, though the exact ratio depends on the performance and availability requirements for your data. It’s critical for the CIO to make sure that business takes responsibility for its data demands. “It’s not the role of the storage team to define the data requirements — that has to go to business management,” Buchanan says. But the CIO has to lay the groundwork by having effective asset management in place and exhibiting efficiency.

Cost Benefits Through iSCSIAmong newer technologies that can help reduce storage costs, the most notable in recent years is iSCSI. A type of storage that connects drives to each other and to servers using a simple, easy-to-manage protocol, it lets organizations of all sizes deploy SANs. Before iSCSI, the major SAN option was fibre channel, but “fibre channel is not suited outside larger enterprises,” Simpson notes, because of its complexity and its high management cost.

A danger in relying on disk-based backup is the temptation to keep data online. This can overload storage networks because people will use the data if it is available.

By 2011 nearly 2/3

of enterprise storage will

be optimized for capacity rather than

performance.source: iDC

ESSEnTIAl technology

REAL CIO WORLD | n o v e m B e r 1 , 2 0 0 7 5 3VOl/2 | ISSUE/24


The simplicity and fit of iSCSI for a larger range of organizations make it the fastest-growing interconnect technology for storage, reports IDC (a sister company to CIO’s publisher); the research firm expects 25 percent of all external storage sold in 2011 to be iSCSI-based.

Regional accounting firm Schenck Business Solutions dropped its EMC fibre channel array three years ago because of its complexity, replacing it with an EqualLogic iSCSI-based SAN. “We had struggled with configuration and day-to-day usage,” recalls CIO Jim Tarala. Since then, the company’s storage capacity has increased about 330 gigabytes to 20 terabytes. But he’s got a handle on overall cost. “We spent approximately 120 percent of what we did on the EMC gear (330 gigabytes) to get the EqualLogic (20 terabytes) and our management costs are a maximum of 60 to 65 percent of what they were previously,” Tarala says. He expects to upgrade the storage to 30 terabytes soon.

Associated Bank had a similar experience. In 2005, it needed to rethink its storage strategy to prepare for volumes of expected image data such as electronic check images and customer records since the bank was implementing a program to let customers start an application at one branch and finish it at any other. When the storage initiative began in 2005, the bank had about 20 terabytes of data; it now has 300 terabytes.

The bank built its SAN using iSCSI arrays because it wanted an IP-based network to take advantage of its staff ’s existing networking skills, recalls Preston Peterson, the assistant vice president of infrastructure design. Still, just in case fibre channel becomes necessary later on, the bank made sure its Compellent storage arrays could support both fibre channel and iSCSI.

The move to iSCSI did raise questions, notes Kory Kitowski, the bank’s vice president of IT. For example, engineers from Microsoft and other vendors weren’t familiar with iSCSI, so they questioned unfamiliar server and SAN settings when installing or troubleshooting their

own products. Internally, despite having IP-savvy IT staff, the bank still needed to reeducate the storage administrators. “We went through a major paradigm shift,” Kitowski says.

But the result was a 30 percent overall savings to what they had expected to spend using traditional SANs, Peterson says.

Even within large enterprises, there’s no longer a need to rely solely on fibre channel, says ChoicePoint’s Garrison, who uses either iSCSI or fibre channel, based on the specific storage’s availability needs.

Prepare for the Next WaveAs enterprises get these structural changes in place, both Simpson and Buchanan advise that, for further savings, CIOs should begin looking at two emerging technologies: network storage virtualization and single-instance storage. Network storage virtualization moves management out of the arrays and other disk hardware, and implements it as part of the SAN’s operating environment. This lets IT treat all the disks as a virtual resource pool.

Single-instance saves on storage by keeping just one copy of data in your frontline systems (such as application servers), substituting pointers to the source for any copies, while the related deduplication technology saves just one copy of a file or data block during backup or archiving and substitutes pointers for any later copies found. Long available for e-mail servers, single-instance technology is becoming available as a feature both in backup and archival systems and in frontline storage systems, notes Burton Group’s Simpson.

But several factors limit these technologies’ adoption, says Gary Fox, national practice director for the consultancy Dimension Data.

Fox says that network storage virtualization technology proves complex to manage, despite vendors’ characterization of it as plug-and-play.

As for single-instance storage technology, data loss worries surround the pointer

approach; most companies are in pilot mode for it, Fox says. Also, the technology comes primarily from startup vendors, though Fox expects that to change. Still, despite its nascency, “We see a lot of interest from clients,” he says. After all, they also foresee continued unbridled storage growth. CIO

Galen Gruman is a frequent contributor to CIO us. send

feedback on this feature to [email protected]

ESSEnTIAl technology

Many of the technologies to support

structural storage efficiencies are widely

available, such as storage area networks

(SAns), disk-to-disk backup (also called virtual

tape libraries) and tiered storage. “You can

use your existing vendors for these if you don’t

want to work with a startup,” says nik Simpson,

a storage analyst at the Burton Group.

Providers of both fibre channel and iSCSI

products include 3Par, Compellent, EMC,

Hewlett-Packard, Hitachi Data Systems,

IBM, network Appliance (netApp) and Sun

Microsystems. leftHand networks and

Symantec offer software for such networks,

while Sanrad offers an appliance to interlink

the two technologies. Providers of iSCSI-only

SAns include Equallogic, Isilon Systems and

Pillar Data Systems.

For the recently emerged area of network

storage virtualization, mainstream providers

include EMC, HP, Hitachi, IBM, lSI, netApp

and Sun. “netApp and Hitachi are at the top

of my list, and IBM is a reasonable third,” says

Simpson. Software-only providers include

DataCore Software, FalconStor Software,

Incipient and Symantec.

In the also emerging area of single-instance

storage and deduplication, leading players

include Data Domain, Diligent Technologies,

EMC, ExaGrid, FalconStor, netApp, Quantum

and Sepaton.

—G.G.

A Fast Guide to Big Storage Providers

VOl/2 | ISSUE/245 4 n o v e m B e r 1 , 2 0 0 7 | REAL CIO WORLD


Wiping Out Legacy Support Big IT has got you by the short hairs and it isn't about to let go.by Christopher KoCh

Pundit

I.T. managemenT | With CIOs paying upto a quarter of their ERP installation costs on support, you’d think the market was ripe for competition. Most third-party mechanics would be happy to get half that much per year — especially if they didn't have to put money into research and development to develop new software. But it hasn't happened.

I can't prove it, but my guess is that competitive markets for support and maintenance have not emerged because the most likely entrants in the market (the big consulting and outsourcing firms) have deep sales relationships with vendors, and have been focused on selling and installing the

stuff — much more revenue per consultant that way. They also don't want to jeopardize those relationships by competing with the app vendors on the biggest cash cow the vendors have: support and maintenance.

But now that fewer people are buying and upgrading, you'd think someone would take a chance. Back in early 2005, I blogged about a small startup called TomorrowNow, which comprised former PeopleSoft developers that seemed to offer a glimmer of hope for CIOs trying to save a dime on legacy support.

Too much of a glimmer, it seems. Perhaps seeing the potential of a robust market for third-party support of enterprise software (as in destroying its comfy profit and R&D

margins), SAP purchased TomorrowNow in 2005 and pointed it at archrival Oracle. TomorrowNow began signing up customers of um… legacy software makers like PeopleSoft and J.D. Edwards that Oracle swallowed up in an acquisitions binge that shows no signs of abating. These customers, mostly in smaller companies, had no intention of upgrading software and were happy to put it up on skids by agreeing not to change or upgrade it, and let TomorrowNow handle the problem.

It was a powerful competitive tool for SAP because, interestingly enough, TomorrowNow did not have any SAP customers on its roster. Go figure. And TomorrowNow customers

had a lovely option: they could move to SAP software at a reduced price. TomorrowNow CEO and founder Andrew Nelson was able to suppress a laugh when he told me in an interview recently, "We hope to one day provide support to SAP customers." Sure.

But then something happened that made me wonder whether CIOs are going to be locked with their peace signs forever. Last month, Oracle filed a suit against SAP, alleging that an employee and/or employees had used IDs and passwords of Oracle customers to download — firehose is more like it — software like bug fixes and documentation about how to service Oracle's growing catalog of enterprise software

acquisitions like Peoplesoft. If true, it's slimy stuff and would raise an interesting question: Were these employees simply being lazy, or were they being desperate?

ERP software is insanely complex stuff. To support something that complex, you really have to know what you're doing. In fact, some would argue that you need to be able to look at the source code, the lines of programming that explain how software is constructed and that power its execution. It's certainly easier to fix problems when you know how the core was built. That's one reason that Microsoft recently decided, after resisting for years, to let developers peek at the source code for

Windows so they could better design their software to work with it — anything to keep developers from writing software for Linux, for which the source code is freely available.

But there is no open source enterprise software that can put the kind of pressure on SAP and Oracle that Linux did with Microsoft. If a viable third-party market doesn't emerge for enterprise software soon, then CIOs could be stuck looking through that grimy enterprise software windshield for the foreseeable future. CIO

(Concluded)

send feedback on this column to [email protected]

If a third-party market doesn't emerge soon, CIos could be dealing with enterprise software for the foreseeable future.

ESSEnTIal technology

REAL CIO WORLD | n o v e m b e r 1 , 2 0 0 7 5 5Vol/2 | ISSUE/24

ET-Pundit.indd 55 10/30/2007 12:49:27 PM

COMMUNICATION TIPS

B y M a r g a r e t L o c h e r

IT’S A bATTlefIeld OUT There.

B y S t e p h a n i e o v e r B y

Vol/2 | ISSUE/245 6 n o v e m b e r 1 , 2 0 0 7 | reAl CIO WOrld

Who Do You Think You Are?Don't fall too far into one of these roles when pitching ideas to C-level executives.

CIOs adopt a variety of personas when they pitch ideas, says Jeff Thull, author of Exceptional Selling and president of the Prime Resource Group. Instead of helping to prove their case, these personas often create barriers to effective communication. “When you add in the IT personality,” says Thull, “discussion can quickly devolve to an ‘I’m right, you’re wrong’ debate.”

Here, according to Thull, are five personas CIos adopt that can cause other C-level executives to react negatively.

The TeenagerMost of our behaviors are learned from interacting with our families. If you ever watched an older sibling try to get Dad to lend him the car, you saw a presentation that included healthy servings of self-justification and whining. According to Thull, the less sophisticated a person is about communication, the more he draws on these learned behaviors. CIos should be careful to avoid the whiny note when explaining their ideas, and they need to communicate the value proposition for the whole business.

The ParentThe flip side of behaving like a teenager is acting like the parental unit. Do you remember how Dad and Mom either tried to bribe you into cleaning your room or threatened you in the thundering tones of absolute authority? CIos need to remember that a) they’re speaking to adults and b) they have no special position or authority inside the boardroom. Neither wheedling nor bribery nor thundering is going to work.

The ProfessorA lot of IT people assume the role of professor. They act as if they have all the

answers, and they get frustrated when the student (say, the CFo) isn’t learning fast enough. Impatience with your peers is always a mistake. If you’re trying to convince someone that a new approach or project has merit, present the value proposition, outline the risks (fairly), and then shut up. let your peers connect the dots. They’re usually just as smart as you are.

The PolicemanIf you assume an accusatory tone when speaking with your peers, at best they’re going to feel defensive and at worst downright annoyed. If something is going wrong, start by asking a question. What do they think is the problem? Making it a conversation will prevent people from feeling attacked or lectured. Remember: No one handed you a badge when you became CIo.

The DoctorIf you must assume a persona, this is probably the best one. Prior to prescribing a course of treatment, a doctor makes sure the patient understands what’s wrong. If your peers aren’t aware that there’s a problem, they won’t be receptive to the cure. Someone with high cholesterol doesn’t know it until he sees the results of the blood test, so it’s important that CIos have metrics to make their case. But don’t carry this persona too far. Your peers will not wait months to see you or sit in your waiting room while you practice your putting. CIO

margaret Locher is a freelance writer based in boston.

Send feedback to [email protected]

Endlines.indd 56 10/30/2007 12:50:41 PM

cio november 1 2007 issue

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soft skills dont

variety of soft skills

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