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Technology for Growth and Governance
May | 07 | 2010 | Rs.50 Volume 05 | Issue 18
Stay Up And Running | Will the CIO Lose the C? | Do IT Yourself
n o i t a v o Inn t e r s t a M
ease r c n i o t s way e iv t a v o n sed in educe costs u o h w s r O d n a 10 CI s t fi o anies pr p m o c ir e for th PAGE 22
BEST OF BREED
Method in the
Madness Page 13 Volume 05 | Issue 18
NEXT HORIZONS
A 9.9 Media Publication
A Question of Answers
Dancing
Harakiri on
Page 44
Page 10
Elephants
the Net
editorial Rahul Neel Mani | rahul.mani@9dot9.in
Innovation: Think tomorrow. Not yesterday!
M
arketing Guru Theodore Levitt once said, “Just as energy is the basis of life and ideas, the source of innovation, so is innovation the vital spark of all human change, improvement and progress.” Innovation means different things to different people. In order to get a grip on an acceptable definition, I posted the following on my LinkedIn network: “How do you define innovation?” Many responses were run-of-the-mill or ‘book-
editor’s pick 10
ish’. Just as I was on the verge of giving up, I got an interesting comment from my friend Charley Socci. Socci works as Network Manager in International Rescue Committee (IRC). IRC is a non-profit organisation that provides emergency relief, rehabilitation, protection services and advocacy to refugees, displaced persons and victims of oppression and violent conflict. I narrate it verbatim here: It is a proverbial truth that there is nothing new under the
Harakiri on the Net
The creator of 'Suicide Machine', Gordan Savicic, believes that connectivity and the social experience offered by web2.0 companies go against the grain of human freedom.
Sun. I firmly believe in it. As a music student in the 80's, I had an ensemble class filled with students of varying levels of skills, talent and interests. One day the professor came and singled out a particular group of guitarists who were playing with extreme lack of enthusiasm. He said, "You know, I heard you rehearsing the other day and you sounded great. Today you give me this lacklustre, non-committed performance. Why aren't you bringing the same drive and enthusiasm to this performance?” These guitarists could have been anybody. They could be managers walking into a team meeting in an organisation. Where is the passion? Why did they define their extracurricular practice in one light with one approach, and then come into their business (the class) with a
tired, dull, stale approach? Socci went on to say, “I think innovation is learning to integrate all facets of life with all facets of business." This is my belief too. Successful innovation comes by learning to use what you've got in a way you probably already thought of, but discarded just because some part of your mind said, “that isn't supposed to work that way.” This issue of CTO Forum recognises ten innovations by CIOs who didn’t allow sloth to numb the innovative part of their brain. More power to them...
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Vo l u m n 0 5 | I s s u e 18
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Cov e r D e s i g n: an i l vk , i m ag i n g: San tos h ku s h waha
Conte nts
CTOForum
22 Cover Story
22 |Innovation Matters
Column
04 | i believe: IT is For BUSINESS Hilal Khan Head, Corporate Strategic Information Systems, Honda Motor India on wearing more than one hat at the workplace.
A collection of stories on innovation that started as bright ideas and were turned into fruitful products by dedicated teams.
56 | View Point: Do The NEw Marketing to the media savvy digital native. By RICHARD GOUGH
Features
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Copyright, All rights reserved: Reproduction in whole or in part without written permission from Nine Dot Nine Interactive Pvt Ltd. is prohibited. Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd, C/o K.P.T House, Plot Printed at Silverpoint Press Pvt. Ltd. TTC Ind. Area, Plot No. A-403, MIDC Mahape, Navi Mumbai 400709
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44 | NEXT HORIZONS: DANCING ELEPHANTS The big daddies of today's corporate world will fall unless they adapt themselves to the changes. By FAISAL HOQUE
Volume 05 | Issue 18 | 07 MAY 2010
www.thectoforum.com Managing Director: Dr Pramath Raj Sinha Printer & Publisher: Kanak Ghosh Publishing Director: Anuradha Das Mathur Editorial Editor: Rahul Neel Mani Editor (Online): Geetaj Channana Resident Editor (West & South): Ashwani Mishra Assistant Editor: Aditya Kelekar Principal Correspondent: Vinita Gupta Correspondent: Sana Khan DEsign Sr. Creative Director: Jayan K Narayanan Art Director: Binesh Sreedharan Associate Art Director: Anil VK Manager Design: Chander Shekhar Sr. Visualisers: PC Anoop, Santosh Kushwaha Sr. Designers: Prasanth TR & Anil T Chief Photographer: Subhojit Paul Photographer: Jiten Gandhi
10 A Question of Answers
10 | Harakiri on the Net The creator
of 'Suicide Machine', Gordan Savicic, believes that connectivity and the social experience offered by web2.0 companies go against the grain of human freedom. 13
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RegulArs
01 | Editorial 06 | Enterprise Roundup 52 | book review advertisers’ index
13 | BEST OF BREED: Then & NOW SOA and the Cloud A comparison of SOA and cloud computing.
53 | HIDE TIME: Kinshuk Hora, Head of IT, INdia subcontinent, glaxo smithkline consumer healthcare
IBM REVERSE GATEFOLD EMC IFC SAS 5 MICTROSOFT INSERT 09 IBM IBC CANON BC This index is provided as an additional service.The publisher does not assume any liabilities for errors or omissions.
advisory Panel Ajay Kumar Dhir, CIO, JSL Limired Anil Garg, CIO, Dabur David Briskman, CIO, Ranbaxy Mani Mulki, VP-IS, Godrej Industries Manish Gupta, Director, Enterprise Solutions AMEA, PepsiCo India Foods & Beverages, PepsiCo Raghu Raman, CEO, National Intelligence Grid, Govt. of India S R Mallela, Former CTO, AFL Santrupt Misra, Director, Aditya Birla Group Sushil Prakash, Country Head, Emerging Technology-Business Innovation Group, Tata TeleServices Vijay Sethi, VP-IS, Hero Honda Vishal Salvi, CSO, HDFC Bank Deepak B Phatak, Subharao M Nilekani Chair Professor and Head, KReSIT, IIT - Bombay Vijay Mehra, Former Global CIO, Essar Group Sales & Marketing VP Sales & Marketing: Naveen Chand Singh National Manager-Events and Special Projects: Mahantesh Godi (09880436623) Product Manager: Rachit Kinger Asst. Brand Manager: Arpita Ganguli Bangalore & Chennai: Vinodh K (09740714817) Delhi: Lalit Arun (09582262959) Kolkata: Jayanta Bhattacharya (09331829284) Mumbai: Sachin Mhashilkar (09920348755) Production & Logistics Sr. GM. Operations: Shivshankar M Hiremath Production Executive: Vilas Mhatre Logistics: MP Singh, Mohd. Ansari, Shashi Shekhar Singh OFFICE ADDRESS Nine Dot Nine Interactive Pvt Ltd C/o K.P.T House,Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd C/o K.P.T House, Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Editor: Anuradha Das Mathur C/o K.P.T House, Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Printed at Silverpoint Press Pvt. Ltd. D 107,TTC Industrial Area, Nerul.Navi Mumbai 400 706
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The author has over 18 years of experience in information systems.
PHOTO BY dr lohia
I Believe
By Hilal Khan Head, Corporate Strategic Information Systems, Honda Motor India
IT is for Business
[and not the other way round] Business is becoming more dynamic and challenging and it’s not enough to facilitate business using IT. It’s important to use IT to give business the competitive edge. I strongly believe that IT is for business and business is not for IT. In the fast changing world, it’s important to have speed to deliver solution, while at the same time maintaining agility. We are used to talking about the complexities of technology, but technology is more or less tested and the challenge lies somewhere else. For me the challenges lie in people management, expectations man-
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current challenge people management, expectations management, change management and conflict management
agement, change management and conflict management. In the fast changing business conditions, top management is always concerned about Return on Investment. While discipline on RoI is warranted, it’s important to differentiate the more-or-less routine technology initiatives from the strategic ones. There's another aspect: RoI for the solutions and systems which are basically business enablers must be termed as cost of doing business. However, the solutions that determine the competitive edge for business must be looked from the RoI perspective. In our industry, we get an opportunity to work with employees from different departments. Wearing the technology hat is not enough. Our functional and business knowledge should be equally good. Our ability to sell the concept to the business owners, create acceptance, build teams and bring in the right technology is put to the test. Respecting individuals and using a mix of young blood and experience is the key to successful IT deployments. In Honda, PDCA (plan, do, check and action) and QCDMS (quality, cost, delivery, management and services) is central to all evaluations and implementations. One should not try to be the leader in the market to deploy a specific solution or concept for the sake of technology. We need to understand the business case clearly and establish the relevance to business before deciding on the implementation of a particular technology. At times, the ability of the partner (vendor) to sell and their ability to implement do not match. The partner community must understand that unless they have conviction, focus, commitment and capability, they should not try projecting a solution.
story Inside
Enterprise
Many Indian SMBs are researching how managed printing services may help save costs. Pg 9
Round-up
Managed Services eats into Strategic Outsourcing Market in India. Wipro
leads the market with highest market share. the it managed services market in India is expected to reach US$3.8 billion in 2013 from US$1.6 billion in 2009, growing at a CAGR of 22.8 percent, higher than the growth rate of overall IT services market, highlights the latest “Indian Managed IT Services Market” report from Springboard Research. The report noted that although Managed Infrastructure services dominate the market in 2010, the highest growth will be in Managed Application services with a CAGR of 26.2 percent from 2009 to 2013. Springboard found that the managed services model has rapidly and significantly begun to encroach upon
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traditional strategic outsourcing engagements. 66 percent of CIO’s surveyed plan to adopt and engage with a managed services model rather than strategic outsourcing due to perceptions of “convenience” with managed services. Another key reason as stated by CIOs for adoption of managed services over strategic outsourcing is access to best of breed services without the fear of losing control of IT. The Springboard report has also analysed and ranked vendors on user satisfaction and market share. HCL Infosystems leads in user satisfaction survey while Wipro Infotech is the leader in market share.
Data Briefing
$3.8b expected size of IT managed services market in India BY 2013. —Springboard Research
E nte rpri se Round -up
They steve Said it jobs Apple has not included flash in iPad and there has been a lot of debate on the reasons for this omission, Apple has finally decided to end this discussion by issuing an explanation. Steve Jobs, CEO, Apple has this to say on the issue.
HP launches mission-critical converged infrastructure. Also launches AllianceONE, new solutionsbased alliance partner program. hp has announced new HP Integrity solutions. Built on a new HP Blade Scale Architecture that spans servers, storage and networking, the Integrity solutions are designed to provide mission-critical Converged Infrastructure. This represents the first major architectural upgrade for Integrity Superdome in a decade. The architecture allows clients to deploy, automate and manage a complete range of applications side by side, within the same enclosure, and using the same components, tools and processes. With a single management environment, clients can maintain consistent control of the entire IT infrastructure. HP claims that the new Integrity portfolio includes servers, software and services provide up to 450 percent improvement in infrastructure reliability over previous generations with the new HP Integrity Superdome 2. Built on the unified Blade Scale Architecture, Integrity Superdome 2 delivers more than 100 new missioncritical innovations. It also claims improved performance and lower total cost of ownership. HP Converged Infrastructure is built on a standards-based architecture across Microsoft Windows, Linux, HP-UX, OpenVMS and HP NonStop platforms.
Quick Byte on AIM Market
“We also know first hand that Flash is the number one reason Macs crash. We have been working with Adobe to fix these problems, but they have persisted for several years now. We don’t want to reduce the reliability and security of our iPhones, iPods and iPads by adding Flash.” —Steve Jobs, CEO, Apple
As per Gartner, revenue in the application infrastructure and middleware (AIM) software market totaled $15.9 billion worldwide in 2009, a 2.8 percent increase from 2008, according to Gartner, Inc. In 2008, worldwide AIM revenue grew 7.1 percent and totaled $15.5 billion. cto forum thectoforum.com
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E nte rpri se Round -up
Our customers who are using POWER 6 are showing interest in P7. Soon we will close our first P7 deal. The transaction to P7 can be done in real time (without bringing down the system) with the help of a virtual server. How would you differentiate your product from HP’s offerings? P7 systems have been optimised on the IBM stack, including DB2, WebSphere, Domino and Rational. As a result, they represent the tailor-made infrastructure for our industry framework solutions. The systems offer differentiated performance for specific workloads. For example, 18 HP DL380's running SAP can be replaced by just 2 IBM P7 780's, with improved performance at a lower costs. P7 systems offer 71 percent better price/ performance than comparable Sun SPARC systems, and 500 percent better price/ performance than HP Integrity Systems. P7 systems are 4 to 68-times more energy efficient than comparable RISC and EPIC servers from Oracle/Sun and HP.
IBM's new processor to have more capabilities. Satya Sharma, IBM Fellow and CTO, IBM Power Systems talks to Vinita Gupta.
what has made IBM to launch POWER7 processors? POWER7 (P7) and the other systems we will roll out this year will give us a clear advantage by asserting our leadership in business IT infrastructure. IBM is shifting the conversation from capacity to capabilities; from general purpose to workload optimised. IBM's power processor based servers will radically alter the price/performance characteristics of data center servers and the P7 is better than the previous generation of
power servers as it provides 4x capacity of previous servers, 4x virtualisation capability and 2x-3x times the energy efficiency. Which verticals are you targeting? In India, the transactions rate will be doubling in next two to three years and P7 can manage millions of transactions in real time and analyse the associated volumes of data typical of emerging applications. We will target BFSI, Telecom, Government sectors and even the outsourced data centre companies.
Linux adoption growth rates
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4.7
4.6
4.2
North America
EMEA
The Asia Pacific region’s Linux adoption growth rate has accelerated over the last one year and now represents 5.1% of the total server market.
Asia Pacific
5.1
South America
Global Tracker
What role has IBM’s Indian R&D centre played in the development of P7? India Systems and Technology Group (STG) lab has made significant contributions to P7 program developing and enabling key hardware and software functions. Major contributions were in terms of hardware design and verification of various components of P7 processor, platform bring-up, enabling soft functions through Power Firmware, AIX and Linux, hardware systems test and platform management. The Bangalore P7 team partnered with IBM U.S and IBM Germany teams, making very significant contributions to the overall processor design and validation. What is the investment made by IBM in such workload optimised systems? IBM is investing a significant portion of its $6B/year in R&D in such workload optimised systems. We are working with our clients, ISVs, BPs to provide innovative systems to address emerging business opportunities and further accelerating our share gains this year. IBM invested $3.2 billion in P7 systems over the last three and a half years.
E nte rpri se Round -up
PHOTO BY PHOTOS.COM
Indian suppliers make a mark in HR Outsourcing. Investments in tech platforms to grab opportunities picking up.
a recent study by Everest Group on the HR outsourcing supplier landscape highlights that Indian suppliers are increasingly making their presence felt in the HR outsourcing space. The study, Global Multi-process HRO Supplier Landscape – A Case of Survival and Growth in a Multifaceted Market highlights that the Human Resources Outsourcing (HRO) supplier market is at its healthiest in 18 months, characterised by mar-
ket stabilisation, more clear value propositions, and defined target strategies that present a strong environment for a wide range of buyers. Given the lean period of 20082009 in new deal signings, buyers may find better deals as suppliers aggressively seek to add more clients, according to the study. The study further highlights that in 2009, suppliers’ market presence strategy refinements led to acquisitions, withdrawals from
the multi process HR outsourcing (MPHRO) market and entries of new players. To gain new business, many suppliers also refined offerings to include the emergence of more single-process solutions to attract entry-level buyers seeking quick savings and to gain entry in emerging markets such as the Asia-Pacific region. Highlighting the implications for Indian suppliers, Gaurav Gupta, Principal & Country Head (India), Everest Group said, “As the global supplier landscape undergoes this transition, Indian suppliers, a relatively newer entrant into HRO, have started grabbing opportunities. The Indian suppliers are increasingly finding success with buyers that are looking for a cost-effective HR outsourcing option and want to take a phased approach to HRO. While most of the deals signed by Indian suppliers are smaller in size compared to the market average, there is an opportunity to expand the scope as some of these deals mature. However, to achieve that and realise greater success they will have to continue to make targeted investments in their HRO business to expand their capabilities. — By Nilabh Jha
Fact ticker
IT services rule. Indian
ICT spending to grow at 14 percent in 2010. IT Spending in India will reach $67 billion in 2010, an increase of 14.1 percent from 2009. The IT market in India is expected to grow 11 percent from 2009 until the end of 2013, with IT services growing faster than all other segments at 17.6 percent. Telecommunications will have the slowest
growth, increasing 9.1 percent during the same period. “India's economy recorded GDP growth of more than 6 percent during the recent global economic crisis,” said Aman Munglani, principal research analyst, Gartner. “Its growth, and the growth of India's IT industry, have been
driven largely by domestic consumption, which has left India less exposed than many emerging markets to global economic cycles”. The domestic IT services sector, at $6.1 billion, accounted for more than 10 percent of the overall domestic ICT market in India in 2009, and is expected to witness the strongest growth at 17.6 percent among the four sectors through 2013. Gartner estimates the domestic IT
services market in India will grow 17.6 percent, accounting for nearly 19 percent of the overall domestic ICT market in India by 2013. According to Gartner, India continues to be a vastly under-penetrated IT market relative to its potential. The Indian government's focus on infrastructure projects with IT dimensions will be a strong driver for overall IT growth within the country.
green talk
M
anaged printing growth is spearheaded by cost cutting actions, says AMI study Small and medium businesses in India (SMBs) are increasingly feeling the importance of managed printing services: 18 percent of these SMBs are using managed printing and publishing services. India medium businesses (MBs or companies with 100 - 999 employees) are more inclined to use managed printing services than small business (SBs or companies with 1-99 employees). According to New York-based Access Markets International (AMI) Partners many India SMBs are assessing their printing needs and researching how managed printing services might be able to help them meet these requirements. “As more and more companies throughout the world become cognisant of the necessity to ‘Go Green,’ managed printing services help ensure considerable environmental benefits by 'right sizing the fleet and optimising deployment’.” “Organisations are using managed print services (MPS) to curtail hardcopy (printer, copier, MFP and fax) investments,” says Priti Verma, Research Analyst for Research and Consultancy at AMI-Partners, Bangalore. “As more and more companies throughout the world become cognizant of the necessity to ‘Go Green,’ managed printing services help ensure considerable environmental benefits by 'right sizing the fleet and optimising deployment’.”
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A Question of answers
R o l f K l e i n w채 c h t e r
Productivity: I am a lot more productive in front of my computer since I got rid of my Facebook account.
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G o r d a n S av i c i c
A Question of answers
Harakiri Gordan Savicic | Suicide Machine
On the Net
The creator of 'Suicide Machine', Gordan Savicic, believes that connectivity and the social experience offered by web2.0 companies go against the grain of human freedom. In an interaction with Rahul Neel Mani, Savicic talks about what motivated his team to design the noose that would allow users to strangle their virtual identities. Social Networking sites are all the rage with a huge section of the population. What prompted you to create a Suicide Machine and say "liberate yourself from the energy sucking socialnetworking profiles"? We (the guys from moddr.net, Danja Vasiliev, Walter Langelaar and Gordan Savicic) organised a Web 2.0 Suicide Night in Worm (a club venue in Rotterdam) where the idea was to collectively delete your social network profiles. Just grab a drink, fill out some forms and do away with your Web 2.0 alter ego. Later, I started scripting some python scripts and made the whole process automatic. We, at moddr, are experimentalists of everyday technology and critical media thinkers with an artistic
practice. Basically, our lab consists of some very geeky fine-artists. The suicide machine is, of course, a radical solution for the by now popular term "unfriending," which became Oxford word of the year 2009. I actually noticed that I was spending lots of time reading news feeds from people I didn't know so well and sometimes I would procrastinate on Facebook for hours. Since the time I got rid of my Facebook account, I feel much more at ease about social interaction and am a lot more productive in front of my computer. Web 2.0 is thought of as a great leveller. Social networks are being considered as the best thing which can bring people
together. Yet there are security and privacy issues that are scaring people away. In your view, how serious are these concerns? There are, for sure, many nice things to be said about staying connected with friends and family living abroad using facebook and similar sites, but (most of) the users are not fully aware of the privacy-tradeoffs. Those services will hold your collected information forever on their servers and use the acquired data for targeted marketing analysis or crossselling it to third-party companies. You've said: "Seamless connectivity and rich social experience offered by Web2.0 companies are the very antithesis of human freedom. Users are
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A Question of answers
G o r d a n S av i c i c
entrapped in a high resolution panoptic prison without walls, accessible from anywhere in the world". But without these sites, how would human beings connect? Do you suggest some techled alternative? There should always be space enough for technological alternatives. Nowadays, one might say that you seem suspicious without even having a Facebook account. If the “medium is the message”, then we should be more aware of the implications of centralised systems where social connectivity became a medium on its own. We advocate connectivity among people, but are more fascinated by protocols and topologies offered by peer-to-peer solutions.
networks if someone wants to? The machine consists of a tweaked Linux server running apache2 with python modules installed. Selenium RC Control is used to automatically launch and kill browser sessions. Each user can watch her suicide action in real-time via a VNC remote desktop session, displayed on our website via a flash applet rendered live into the client's web browser.
Enterprises are using Web 2.0 as a tool to enhance productivity and are encouraging their employees to be active on social networks – Facebook and Twitter, to name a few – to stay connected. Why do you think this trend will die and something else will emerge? We don't necessarily believe that these platforms should die out. We aren't conservative either but there is a common theme inside those platforms which we wanted to address with the suicide machine. We want that users should know that they are voluntarily contributing to these networks with their own personal information and the same is being stored on external servers. In other words, the software is no longer stored on the user's hard disk. The antipode to centralised Web services is nothing new, per se. Each node is a node is your node. Usenet existed long before (1979) and offered almost all services which are now available from commercialised services. It is a distributed system not owned or controlled by anyone. How does the technology of suicide machine work? Can you explain the process? What are the ways to return to the social
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“ We want the users to know that they are contributing to social networks with personal info that is stored on external servers.”
Facebook has reportedly blocked your IPs and is not letting you get people to commit suicide. What is your strategy to bypass this? We can redirect our Web traffic through a network of proxy servers which are spread around the world. By doing so, Facebook can't track back the requests coming from Web 2.0 suicide machine that easily. After we got banned we've started a call on our page asking people to provide reliable proxy servers and we were overwhelmed by the amount of answers we've received. What are your suggestions to the companies who want to use Social Networking as a "productive" tool to enhance collaboration and productivity? Social marketing is not just about starting a fanpage on the Facebook. Companies have realised by now that the Internet crowd can get easily angry and backfire if their product is bad or the company treats their customers badly (United Airlines break guitars, for example). Usually
things I Believe in ocial media S services hold your collected information forever and use it for marketing analysis or crossselling. Nowadays, you are suspicious without even having a Facebook account. If every employee updates their tweets through the day, companies will have a hard time making use of this data.
company communication is happening within locked-up systems and not in publicly available social networking sites. If every employee updates their tweets throughout the day, companies would have a hard time making use of this data. There has been a growth in the technology for information sharing but not a commensurate increase in focus on educating users on what information they should share. What will be your ultimate aim with this kind of effort? We are currently working on our bootable Suicide Machine release so that everyone can download a fullyworking version of the machine and launch it from their own computers. We believe in sharing knowledge and by giving away our source code for free we hope that the project will continue to live on in the Internet.
—rahul.mani@9dot9.in
FeatureS Inside
Best of
Breed
Then and Now: SOA & Cloud Computing A look at their similarities and differences. Pg 14
13.4%
Stay7.3% Up & Running A sound DR plan can help you win new 4% and nice PR too. Pg 16 business
11%
9.7% 8.1%
11.8%
ILLUSTRATION BY PC Anoop
3.5%
Method in the Madness
1000 Open source development is chaotic. Or is it? IBM learns how to gain influence. Data Briefing
developers are working on developing every LINUX kernel. (source: LINUX FOUNDATION)
By Sean Michael Kerner
T
en years ago, IBM had a single mission for Linux: Make it better. Now in 2010, IBM has a decade of experience in working to do just that, and is sharing its knowledge about how companies and developers can better participate in the Linux community. Speaking at a keynote session at the Linux Foundation's Collaboration Summit, Dan Frye, vice president of open system development at IBM, provided his insights into some do's and don't when trying to work with Linux.
For IBM, one of the hardest lessons it had to learn was one about control. Mainly, there is none. "There is nothing that we can do to control individuals or communities, and if you try, you make thing worse," Frye told the audience. "What you need is influence. It goes back to the most important lesson — giving back to the community and developing expertise. You'll find that if your developers are working with a community, over time they'll develop influence and that influence will allow you to get things done." Frye noted during his keynote that an early ques-
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B E S T OF B R E E D
o p e n s o u r c e d e v e lo p m e n t
tion that IBM asked internally about Linux was how it could control a chaotic development process. As it turns out, Linux development isn't a chaotic process, though it may appear that way to some looking from the outside. Joining the Linux community as a participant in a broader ecosystem also proved to yield a key lesson for IBM. "It's easy to form a community around yourself," Frye said. "It's much harder and more valuable to participate in a community that you do not control -- it took us time to learn that." Frye recalled that a few years back, IBM wanted to push its own Linux scalability effort. That initiative didn't work out, as IBM did not get any community input for the project. The problem was that IBM didn't know how things worked in the Linux community, Frye said. For example, he said, someone would send a note on a mailing list about an IBM effort, and then the IBM people in turn would have a team huddle to determine a response. Frye noted that it would take IBM a lot of time to respond, and by the time it did, the interested community individuals would be long gone. "We spent far too much time behind the IBM firewall, discussing things, and we tried to polish our external communications," Frye said. "So we banned internal IBM communication on the Linux kernel. Anyone working on the kernel at IBM was not allowed to
talk to anyone else inside the company. All communications had to be external." That effort led to IBM having more success in dealing with the community. In addition, IBM learned that it doesn't work to make large code donations, either. Frye stated that it's far more effective to start working inside of a community and then deliver incremental pieces of work. While IBM discovered that it can't control the process, Frye noted that it is possible to work on the things that were important to IBM even within the community model. "It is perfectly acceptable to scratch your own itch," Frye said. "You can work on the things that are important to you and your company, and things will work out." The other lesson that IBM has learned is that it's the end result that matters in Linux, and not who runs a project or starts a particular effort. "It does not matter whose code is eventually shipped," Frye said. "If your folks drop code and someone takes that code, rewrites it and makes it better, that is fine." —ÂS ean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.
Then and Now: SOA and the Cloud
A comparison of SOA and cloud computing shows a few similarities between the two. By Regunath Balasubramanian
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Illustration By Santosh Kushwaha
W
hile the haze around SOA is yet to settle, organisations are still toying with the concept and asking fundamental questions around its need, perceived benefits and application. In the meanwhile, another cloud is being formed over SOA that of cloud computing. How do the two relate? Are they parts of the same paradigm shift or only vaguely related? This article analyses and compares SOA and the cloud from different perspectives. The terminologies used to discuss SOA and cloud computing and the breadth of what they
cover is often interpreted as per-need. One often sees the paradigm stereotyped to a manifestation or specific implementation: SOA to Web services for example or cloud to comput-
ing units. The definitions below attempt to create a generalisation of terms and thereby create broad applicability of the technologies, patterns of usage and deployment scenarios. SOA - Service oriented architecture is an architectural approach for constructing software systems from a set of building blocks, called services. Services differ from components as services are autonomous, defined by their interface, loosely coupled and often support multiple technologies in integration. SOA adoption requires a methodology where these services are developed in tandem by both IT and the business. SOA adoption also requires a governance process where services
SO A r e v i s i t e d
are defined, changed, modified, combined, versioned, reused and orchestrated to support ever-changing business. Cloud computing - As defined by Gartner, cloud is a style of computing where massively scalable IT-related capabilities are provided as a service using Internet technologies to multiple external customers. IBM describes it as an emerging computing paradigm where data and services reside in massively scalable data centres and can be ubiquitously accessed from any connected devices over the Internet.
Provisioning of Services
B E S T OF B R E E D
Provisioning of Cloud Computing Infrastructure
Initiated by one project/program with the intention of being used by others.
Often initiated to meet specific project/program needs. Others may follow suit.
Service created by using components from diverse platforms and technologies or from other services.
I nfrastructure may be created and administered through Web-Services.
I nfrastructure may be created and administered through Web-Services. Strong governance needed throughout Service Lifecycle.
No concept of Life Cycle. Governance required to regulate employing cloud based infrastructure.
ervice may be deployed on a cloud based S platform.
loud leverages specific software packages and C hardware deployment configurations.
Drivers With SOA and cloud computing, cost reduction and business agility are common drivers, yet the benefits are achieved in different ways. Cost savings is a medium- to long-term driver for SOA as cost savings occur only when reuse of services reach levels where the cost of building the service can be offset. Don’t make the mistake of expecting cost savings in your first SOA project. Your costs will in fact be higher. On the other hand, cost savings are immediate when a cloud based infrastructure is leveraged appropriately. While rationalisation is also a common need of SOA and cloud computing, the targets vary: business functionality in case of the former and infrastructure that is used to deliver them in case of the latter.
Stakeholders Specific stakeholders of an organisation are common to both SOA and the cloud and may have significant interests (see the chart below for details). This refers to select members of the IT organisation CIO, delivery teams and data center personnel who work to implement services and maybe host them on the cloud infrastructure. It’s worth mentioning that failed initiatives
Stakeholders of SOA
under both these paradigms are mostly people related, as both require strong processes and governance frameworks to be put in place. While technology related challenges do occur, they are usually overcome eventually. Maturity levels of an organisation in using IT and prior demonstration of agility in adopting IT related changes is a good measure of appetite and indication of outcome for such initiatives.
Provisioning and lifecycle Services often are created to meet tactical needs and evolve into enterprise class as use and reuse grows. Service lifecycle management governs this evolution and is also essential to provide a roadmap and sustenance to enterprise services. On the other hand, it’s simpler to procure and use cloud services. Life cycle challenges for cloud users are mostly limited to compatibility between upgrades, which again is often addressed through SLA guarantees from the service provider. When it comes to managing the two classes of assets, there are differences. However, synergies exist in the way one is used to manage the other and vice versa akin to a process running on an operating system that may itself be a collection of the running process instances.
Stakeholders of Cloud Computing
ponsored by business and implemented by CIO S organisation, sometimes both by latter
Sponsored and implemented by CIO organisation
Requires active participation from business, IT and data centre operations
equires active participation from IT and data R centre operations
Often flows from strategic initiatives and mandates in the organisation
Presently more often used to meet tactical and very specific needs
Ubiquity of technologies like HTTP, XML and the Web services standards that emerged, henceforth, have lead to them being used as preferred implementation platforms for SOA and administration of cloud infrastructures. (See the chart above for details).
Paradigm focus In order to determine how to meet internal vs. external needs, enterprises commonly focus on SOA and cloud computing as paradigms. These include the business opportunities that each enable for the other. Security concerns are often overlooked when deploying SOA services and overstated when using the cloud. The reluctance to move critical systems to the cloud is the biggest limiting factor for its adoption. Industry-wide mindset shifts are needed to create the wave of cloud adoption. SOA is off the hype curve. It is becoming a viable approach for implementing enterprise applications. There are many lessons learned from successful and failed initiatives. Cloud, on the other hand, is still up there in the hype curve and can go either way. The synergies between the two weigh slightly in favour of SOA as the cloud can really further the reach of services beyond the enterprise and open up new business opportunities. Many of the regular concerns are getting trivialised, such as SLAs being met due to rapid growth of a customer base and upfront investments in infrastructure in an unknown market for services offered. —R egunath Balasubramanian leads the Architecture Services group at MindTree and is a practicing architect. He is an advocate of open source both in use and in contribution. He blogs frequently at mailto:http://regumindtrail. wordpress.com.
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Stay Up & Running
A sound disaster recovery plan can help your business overcome disasters. And also help you win new business orders and nice PR. By Nilabh Jha
O
ver the past few years, disasters and emergencies have garnered much attention. From the disaster that did not occur, Y2K, to the attacks on the World Trade Centre, the blackouts in 2003, the multiple cyclones, and flood in Mumbai or droughts in other parts of the world, to the recent volcanic activity in Iceland, it seems like a steady drumbeat of bad headlines have caught the world's attention for the past few years. Organisations are also facing the problem of data loss due to other man made disasters. After a disaster, many businesses struggle to remain afloat. A sobering statistic from the Bureau of Labour Statistics (USA) indicates 43 percent of businesses never reopen following a disaster and 29 percent more go out of business within two years. Even if the firm is large enough to survive, losses quickly mount, and this pressures the firm to resume operations as quickly as possible. For example, Wal-Mart had 126 stores closed during Katrina, and this does not include the losses from stores looted after the storm or delayed in reopening (Wal-Mart Facts, 2006). Media reports in the wake of the hurricane indicated telecom losses crossed $600 million and the cost of loss of business due to interrupted economic activity might be $100 million per day. As the magnitude of risk that disaster poses is quite huge, organisations are increasingly treating BCP and DR as a core part of business planning. According to a recent study by Allied Business Intelligence (ABI) Research, the global business continuity (BC) and disaster recovery (DR) market is predicted to grow from $24.3 billion in 2009 to more than $39 billion in 2015. The study covers the worldwide market potential in both enterprise and small- to medium-sized businesses (SMBs). There are several reasons for this growth in BC spending. Some of the BCP tools are becoming less expensive and so there are now more cost-effective solutions available for the users. The predicted growth in purchasing DR and BCP products may also stem from the fact that having a DR plan is simply becoming second nature for many companies who see the importance of fully protecting their data.
Industry Trends A recent report by Ernst and Young says that CIOs will increase focus on Business Continuity Plan (BCP) / Disaster Recovery Plan (DRP) next year with 35 percent CIOs listing this as a prime con-
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sideration for them. About 73 percent CIOs selected BCP/DRP as a high priority area for them this year. This is well supported by their response on security as well as their feedback to our team members when we met them. Interestingly about 80 percent of companies with annual revenue less than 500 crore have listed this as an important priority. This indicates that DRP/BCP is becoming an overall
IT Priorities for CIOs 2.2% 12.6%
16.4%
13.4% 7.3% 4% 11%
9.7% 8.1%
11.8%
3.5%
IT Cost Reduction IT Shared Services Green IT ERP CRM/BI/DW E records management IT governance IT consolidation Information security Business Continuity/ Disaster recovery IFRS enablement by IT
Importance of Business Continuity Planning / Disaster Recovery Planning 3% 7%
17% 38%
35%
Less Important Moderate Very Important Most important N/A Least important: 0% Source: Ernst and Young
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Importance of BCP/DRP for Small & Large Companies
Revenue
Revenue < 1000Cr
Least important Less Important Moderate Very Important Most important N/A
500-1000Cr 100-500 Cr Revenue < 100Cr 0%
20%
40%
60%
80%
Percentage of respondents
100% Source: Ernst and Young
priority for the industry and not just for large companies. The other reason, of course, is that these companies had not invested in this area in the past and in the current context would like to look at such investments. 85 percent of the BFSI companies listed this as a priority area. This is in line with their business requirements and the need to constantly innovate to meet their high business continuity requirements. About 65 percent of consumer products companies have listed this as a key priority with only 29 percent CIOs listing this as “most important”. Significantly all the companies in media and entertainment vertical listed this as their important priority. “BCP and DR are two different things. BCP by itself covers the entire spectrum of the business cycle or touch points within an organisation. It revolves around people and processes. DR is the technology piece and is a subset of BCP. In these times, there is a strong need for enterprises to have a robust BCP/DR plan in place that is tested on a continuous basis to handle disasters of all kinds and minimise any negative impact on the employees and the bottom line,” says K M Asawa, DGM, Projects and IT Infrastructure, Bank of Baroda. According to another study by ABI Research, Business Continuity/ Disaster Recovery, the global business continuity (BC) and disaster recovery (DR) market is predicted to grow from $24.3 billion in 2009 to more than $39 billion in 2015. The study has been observing the market trends for business continuity and disaster recovery since 2004, and covers BC and DR in hardware and software services, as well as trends in both enterprise and small- to medium-sized businesses (SMBs). "With the advent of cost-effective software products, BC/DR is within the reach of just about any organisation, large and small," said Paul Kirvan, secretary of the Business Continuity Institute and a business continuity consultant. "Web search tools can uncover many tools and templates to facilitate this process. Simpler DR/BC processes are likely to continue as people decide, for whatever reason, to launch a BC/DR activity. They are not experts in the process, and will look for the cheapest way to put something in place." According to Kirvan, companies who recognise the importance of protecting their staff and business processes, the company's image and competitive edge, and getting the company to resume normal operations after a disruption, then BC/DR plans are recommended. Kirvan also predicts that "in the next five to seven years, BC/DR is
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likely to be as important a business activity as filing tax returns. This will be largely due to the presence of globally accepted and, probably [in this country], mandatory standards and regulations that underscore the need for BC/DR initiatives." In conclusion, there are many options now available to help your business continuity planning efforts. It is critical to spend some time researching the tools that are available to support your efforts. There is the potential to save thousands of dollars annually, which would be better spent on mission related activities.
Ways to Build a Business Case for Business Continuity To win support for a business continuity plan, emphasize ways it can give your company a competitive edge! The importance of business continuity planning is a no-brainer– if you’re a security leader who already thinks in terms of security and risk, that is. But convincing business executives, who typically think in dollars and cents, of such a plan’s criticality may be a tougher sell. While the fundamental importance of business continuity is fairly obvious, the reason to spend lots of money on it may not be. If you want to make an effective business case for business continuity, you need to make its effects tangible, before disaster strikes. That means emphasising not just the criticality
2009 AT&T Business Continuity Study Key Findings 2009 IT Spending Trends and Investment in New Technologies. Two-thirds (65%) of all executives indicate that their companies will be investing in new technologies for 2009. Investment tends to focus on new equipment and a variety of software, storage and security upgrades. When looking at IT spending trends for this year, forty percent of executives surveyed indicated that their IT budgets are expected to be lower this year than in the previous two years, while nearly one-fourth (24%) indicated that budgets will be higher. Interestingly, companies with business continuity plans in place are significantly more likely than those without plans to anticipate budget increases (32% compared to 11%).
Mobility Considerations Emerge. Sixty-seven percent of executives indicate that wireless network capabilities are part of their business continuity plan. Furthermore, nearly half (46%) stated that mobile devices play a major role in their plan’s considerations. Social Networking Heightens Security Threats. Three out of four executives surveyed are concerned about the increased use of social networking capabilities’ potential impact on network security. Forty-four percent allow employees access to such social networking sites. However, hacking still continues to be listed as the biggest security risk to companies (30% compared with 3% for social networking).
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of risk mitigation, but also the business value and competitive edge that a strong business continuity plan can provide. “Far too often business continuity is thought of as an expense, overhead, or something we have to do to please the auditors,” says Jack Smith, vice president and manager of global IT business continuity at ABN Amro in Chicago. “Look at it as a business opportunity and a competitive advantage instead.” Of course that’s easier said than done. But here are a few tips to get you started. 1) Use regulatory compliance to your advantage. Regulatory requirements are the obvious place to start in gathering support for business continuity planning. In certain industries, regulations will define your business continuity strategy. Especially if your company is in the healthcare, financial services or insurance industry, the need to comply with regulations may dictate your thresholds for recovery. Regulations can be an asset when you’re trying to get buyin from the board of directors and other executives, says Jim Grogan, vice president of consulting product development for SunGard Availability Services, a business continuity services provider. Educate yourself about the regulations for your industry–both ones that are in existence and those that may be on the horizon. 2) Aim to create a business continuity plan that reflects your company’s culture. As you get started, step outside of yourself and your own ideas and appreciate that business continuity means different things to different people, Smith advises. The type of business continuity plan you design and how you sell it will be influenced by your company’s culture and organizational structure. Understanding this cultural landscape will help you craft a plan that is less likely to meet resistance from other parts of the business.
“Take a look at the various departments that make up the business,” Smith says. “What are their priorities? What business functions are the most important? That’s a great place to start.” 3) Encourage grass-roots support by meeting individually with people in different business units. A good business continuity plan is one that creates alignment among security, IT and corporate strategies and policies. Do the groundwork for that by meeting with the people in individual business units, says Grogan. Try to understand the mindset of the business unit leaders and their expectations for business continuity. There is typically a huge disconnect between business unit and IT/security executives, and they need to be on the same page. If you don’t have executives who believe the program has value and meets with corporate needs, you will probably never get funding for your plan in the first place. 4) Stay flexible. Encourage and teach executives that business continuity plans are not one-size-fits-all. Asking for support for a business continuity program doesn’t mean you’re asking the business to treat every application and piece of infrastructure the same way. Creating a blended solution helps the business become confident they are spending money wisely based on business principals and policies. Threats can come from anywhere on the Internet, which dictates the need for constant monitoring and revaluation of plans once they are in place. 5) Find ways that business continuity can add to the bottom line. Finally, try to approach business continuity as a way of doing business–not as an add-on. One way to get executives to see that is to convince them how having a strong plan in place protects the
The Basic Approach There are four main planning phases for developing business continuity plans – (1) Pre-planning and data gathering, (2) data analysis, (3) planning, and (4) exercising and deployment. Each phase is equally important and hence it is critical that planners take a systematic approach to completing them. The following diagram highlights the key steps related to each planning phase:
Pre-Planning and Data Gathering
Data Analysis
Planning
Exercising and Deployment
Perform a Risk Assessment and develop strategies to mitigate Manageable Risks.
Perform critical path analysis and determine interdependency-related potential single points of failure.
Form BCP teams including Emergency Management Team and Emergency Operations Teams.
Train Teams and Develop Program to perform regular exercises and plan maintenance activities.
Perform Business Impact Analysis, prioritising all functions and resources
Perform personnel, records, vendors, and resources analyses, using business case analysis tools to make good planning decisions.
Develop overarching plans, including escalation procedures for plan activation, crisis management, communications, succession, delegations of authority, and plans for managing operational reconstitution.
Integrate technologies to more effectively manage the immediate disaster aftermath, such as notification systems, and redundant vital records systems.
Develop business unit plans that include specific instructions for time-sensitive functions in some form of alternate capacity.
Utilise creative workplace strategies in your business continuity plans, including remote access to work servers, teleworking strategies to maximise offsite productivity, and alternate site strategies to accommodate staff who must be onsite during and after a disruptive event.
Report findings to Executive Management and facilitate subsequent analyses
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Design specifications based on planning parameters for facilities, personnel, and technology.
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Plan Deployment Solutions – Do’s and Don'ts for [Cost] Effective Planning There are several do’s and don’ts I would recommend for your organization to ensure that planning efforts result in an actionable Business Continuity Plan, without blowing the budget or making it impossible to justify expenditures. This article intentionally does not promote any one solution, but instead highlights areas of concern. The following table highlights some considerations that might help guide your organization’s business continuity planning staff:
Do’s
Don’ts
If available and cost justified, use Risk Management Software to help track and manage risks. From a cost benefit perspective, most organisations will opt to not mitigate all risks after the risk assessment. Risk management tools can be helpful to maintaining a structured approach to mitigating vulnerabilities.
Do not pay thousands of dollars annually for Risk Management Solutions. Facility and risk tracking tools are available for hundreds per month.
Use a web based Business Impact Analysis (BIA) tool. A good BIA tool should result in cost savings by expediting the data gathering and initial analysis, and by facilitating automated updates in future years. Deploy a web based business continuity planning tool, if your cost benefit analysis supports that it would be beneficial for plan management. Use Affordable Notification Technologies. This is an area of great potential savings for most companies. For a few dollars a month you can now have a basic voice-to-text and text-to-text notification capability, compatible with most smart devices. Implement effective backup and recovery strategies. Cron jobs can be used to schedule automated recovery tasks; commercial vendors can be a good backup option, depending on security architecture and needs. Additionally, there are now Network Attached Storage (NAS) systems that have become an affordable, faster, and less cumbersome alternative to tape backup. Implement Remote working Strategies – VPN technologies are inexpensive today and cloud computing makes it safe and reliable to store large quantities of data. Additionally, ensure that personnel who are authorized to Teleworking have the equipment and passwords they need, and are trained on how to work remotely.
bottom line. Having a good business continuity plan can even help win over new business. Being known as the one company that has proven to be resilient out of a slew of competitors does bring in new business. “Staying up when others may be down is good business– not to mention good public relations.”
CTO Check-list After you have convinced everybody about the need for business continuity planning, its time to prepare a check list. Here are some questions you can ask to create your own, unique-needs list: 1. What are the risks? Many threats exist that can jeopardize your ability to continue to stay up and running – indeed, to be in business. Workplace violence. Natural disasters. Pandemics. Terrorism. Everyday emergencies. All
Do not use a “BIA Application” that primarily includes questionnaires that could easily be generated in MS Word. Ensure that your tool has the analytic capability you need. Do not use a “Business Continuity Planning Tool” that primarily does basic plan storage, even if it has a notification capability built in. BCP tools should allow you to build strategies, tie in with BIA data, and help process owners prioritise actions. There are many options available at over $20,000 per year that can do none of these. Interestingly, there are several better options for $10,000 or less. I would generally recommend a tool that has both the BIA and BCP capability integrated. Do not pay thousands per month for an emergency notification capability, without considering lower cost options. There are multiple leading companies in this field that sell very sophisticated notification tools at pricey annual subscriptions. Most companies do not need them. There are alternatives for a few dollars a month. Do not pay a vendor thousands for backup and recovery services. Use backup and recovery vendors for disk or tape backup if you need it. Consider providing separate virtual backup, possibly using a remote data centre to improve the chances of data survival in a major event. Do not rely on a VPN strategy without testing. Ensure that there is enough bandwidth to allow authorized users to telework.
of these threats are realities of doing business in the 21st Century and when these threats occur, even at one office, they can prevent your company’s ability to operate and serve customers. 2. How trained are your managers? Each office should have a Crisis Leader (often an office manager) trained in emergency preparedness whose role is to lead local staff and operations, implement business continuity contingencies, and communicate with leadership. Crisis Managers should replace current floor marshals and fire captains (who are generally volunteers and not assigned on their ability to lead) and are placed on each floor (one Crisis Manager per 10 to 15 employees). 3. Do you provide preparedness information and tools to every employee?
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Easy-to-use emergency response tools will support fast and accurate decision making by your leadership and crisis teams. These can be deployed as mobile applications and up-to-date flip charts, guides, and wallet cards that list specific threats and how to respond. Leading corporations are using preparedness Web portals and smart phones to deliver best-in-class information, tools, training, and text messaging alerts. These tools can be used at work, at home and abroad to assist them in making it through an unpredictable crisis or disaster. 4. Are you current on today’s threats? Instituting a compliance and testing program will ensure your company maintains an up-to-date and effective level of response 24/7. Threats constantly change, which means you need to stay current on today’s threats, future risks, and know how to respond to them. Partnering with experts and reliable information sources will ensure you stay ahead of the curve. 5. Have you selected, installed and implemented new technologies to help? You can utilise cost-effective, SaaS-based portals to easily train management, store critical documents, and send out alerts. Be sure each member of your crisis team can access your preparedness information, protocols and business continuity plans from any computer with an Internet connection as well as their mobile devices. This is just a general start to a check list for doing business in the 21st Century. Your leadership, employees and customers are counting on you.
Best practices in business continuity Best practices in business-continuity planning have less to do with technology than with process. Planning for a single challenge, such as Y2K or contact centre recovery, is insufficient to protect your business on an ongoing basis. Making planning part of the ongoing business process is the way to avoid an emergency-based riskreduction program. Best practices for business continuity boil down to a commitment to an ongoing business process: The board of directors should review the business continuity program annually. Directors have responsibility for protecting corporate assets and safeguarding long-term survival of the organisation. If the board does not demand and monitor business-continuity planning, sustaining a program will be difficult. A distinct staff, with associated bud performs the businesscontinuity activities as a continuous process. Someone must have business continuity in his job description, even if it is a part-time responsibility. While the business-continuity planner is responsible for the activities of the business-continuity program, the department managers are responsible for the recoverability of their own department’s data. Department managers, not contingency planners, should report the status of their recovery plan to executives. The cycle begins with a business impact analysis (BIA), followed by a review of the recovery plan to see if it meets BIA requirements, followed by a technical review of the plan to see if it contains all the information to support the recovery strategy. This is an iterative pro-
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The board of directors should review the BCP/ DR program annually. They have responsibility for protecting corporate assets and safeguarding long-term survival of the organisation. cess with a minimum of an annual cycle. The BIA process has to be internalized and continually renewed or it will fail. The business-continuity function spans all aspects of the organization. All business processes must be recoverable (eventually), regardless of their dependence on technology. The recovery strategies should focus on the business process and not on the technology components of the process. Typically, it is a people problem first, and a technology problem second. The organisation maintains a comprehensive backup policy that includes all vital records. Much of an organisation’s recovery still depends on paper records, especially work in progress. The organisation should be aware of the location of vital records and have an adequate protection program in place, including fireproof cabinets and offsite duplication. Recovery strategies are in lace and are based on the impact that the loss of a business process would have on the organisation. A BIA will point toward an appropriate recovery strategy. This strategy should reflect the level of business risk associated with the loss of each business process addressed in the plan. A recovery strategy testing program is in place. Test executions of the recovery strategies should be conducted regularly, at least annually, to verify that they work, to ensure that they are sufficiently documented and to train staff in their execution. If backup tapes are involved for a technology test, the test is done with tapes from offsite storage only. Test manual business processes using a structured walk through technique. Finally, the recovery manual that documents the program should be reasonably current, available under any circumstances and structured so that an outside technical expert, unfamiliar with the organisation, could execute recovery strategies. The issue with the format of the recovery plan is not whether it is Web-enabled or not, the issue is if the content is current and if there is access to the content. —nilabh.jha@9dot9.in
All stories on innovation start from that eureka moment. But that's just the beginning. For successful innovation requires rigorous discipline and a systematic approach to turn bright ideas profitable. That is precisely what most of the Indian enterprises featured in this story have done.
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is de in 24 | No More Delanysce
nfide 26 | C for Co Net 28 | A Safety rative Culture 30 | Collabo ening Sales 32 | Strength Intelligence ic p o c s o id le 34 | Ka g the Hurdle 36 | Crossin Concerns 38 | Remote Model 40 | A New of Ideas 42 | Basket
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Fact Sheet
tangible be More produc nefits: tive hours pe employee. r Better cust omer satisfa ction. Timely exec utio and report de n of batches livery.
ead, ingh, VP & H Parvinder S k Life Max New Yor
NOMORE Delays
A malfunctioning application threatened to derail Max New York Life Insurance's processes. By Aditya Kelekar
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photograph BY Subhojit Paul
ver since the Indian economy opened up to private insurance players, Indian insurance companies have been competing fiercely. According to IRDA (Insurance Regulatory and Development Authority), the insurance sector is a colossal one and is growing at a speedy rate of 15-20%. The competition heated up in the last couple of years when recession set in and customers became guarded about the investments they were making. In such times, insurance companies can ill afford a dissatisfied customer. At Max New York Life Insurance, the M-fund application threatened to do exactly that. The application calculates the NAV (Net Asset Value) and is used to describe the company's current asset and liability position. Max New York Life Insurance Company is a joint venture between Max India Limited and New York Life International, the international arm of New York Life, a Fortune 100 company. Incorporated in 2000, Max New York Life started commercial operation in April 2001. The Company's paid up capital as on 30th April, 2009 is Rs 1,968 crore. The company has multi-channel distribution spread across the country. Agency distribution is the primary channel complemented by partnership distribution, bancassurance, alliance marketing and dedicated distribution for emerging markets. The company currently has more than 10,454 employees. Parvinder Singh, the company's VP & Head – IT Services, notes that a glitch in the M-Fund application would cause a lot of hardships. During the application processing the company would face many functional/ technical issues in production databases which would have to be addressed by taking
backup of current production system and restoring this database on a different location (production replica). After the problem was rectified, the production database would be accordingly updated.
Overhauling the system This method of resolving the problem was hardly conducive to supporting robust internal processes. “During this whole process M-Fund application was down which would
in “A glitch the M-Fundn applicatio would cause a lot of s” hardship
lead to delays in batch processing and NAV calculation,” says Singh. That would result in delay in reports delivery to the business which in turn delayed business decisions. “Employee dissatisfaction was growing,” Singh recalls. The company would have to repeat the whole process every time it encountered this issue. What was worse, due to non-availability of NAV, it was not possible to describe the company's current asset and liability position. This would lead to delays in internal NAV processing for customers, and so the company risked facing financial/legal action. To overcome these problems and save time, Singh and his team created an online replica of production database, which was logically equivalent to production and was always in sync with production. “Whatever data changes are carried out on production are also replicated on this replica,” Singh says. “Now whenever there is an issue, we need not create a replica of production database as it is already in a state ready to use,” Singh says. There are other advantages with this approach: Issues can be fixed and tested on on-line replica and after successfully testing the same, the same can be applied for production. Also, additional data or structural changes on replica database that need to be carried out can be rolled backed so that it can re-start syncing with production.
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olkata-based FMCG player Emami acquired Zandu Pharmaceuticals Works in 2008 for Rs 750 crore. The challenge was to align and integrate Zandu and Emami business processes and make a single, centralised system for the entire organisation. Zandu was running on SAP 4.7 E and Emami on SAP ECC 5.0. “I had been advised not to take up the project of consolidation by many people and they said that outsourcing would be a better option. Even the management had asked to look at a consultant for the integration,” recalls Vikram Saxena, Group CIO, Emami Group. Hawks were circling around. Many large service provider companies were eyeing this opportunity. Some of them started approaching Saxena saying they wanted to be a partner in Emami’s consolidation journey. Many of these companies said that the chances of a consolidation working out if Saxena tried to centralise systems using his internal IT team was 50:50. Almost all of them said that there was a significant risk involved.
My journey, my way Saxena started studying the Zandu IT systems and the way they operated their
“there were delays whenever an issue related to the ERP was raised” 26
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C for Confidence After Emami acquired Zandu Pharmaceuticals, it created a centralised ERP system without seeking external help. By Ashwani Mishra
business. Zandu had its corporate office in Mumbai with four manufacturing locations spread across India. The IT team from Emami visited the factories and corporate office and studied the differences between Emami’s business transactions and the way Zandu conducted its operations. After studying the processes for three months, Saxena initiated a discussion with various business heads at Zandu and briefed them on the findings that involved operations, MIS reporting and daily transactions. “We found that the business processes at Zandu were not up to the mark and we had to find a way to make them better,” says Saxena.
Zandu’s SAP was under maintenance support with Wipro who had also configured the ERP. Saxena found that there were delays from Wipro whenever an issue related to the ERP was raised. He decided to provide remote support to Zandu SAP landscape located in Mumbai through Emami’s team based out of Kolkata. Once the support was established, the maintenance deal with Wipro was terminated. Saxena says that this support model helped in two ways. One, the company saved Rs. 25 lakh (the cost of the AMC with Wipro). Second, it increased the efficiency of the systems.
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Fact Sheet tangible benefit s: Legal compliance Centralised control and one system for the en tire organisation Approximate saving s of Rs. 75 lakh
p CIO, xena, Grou Vikram Sa oup Emami Gr
Ensuring a smooth pass Though discouraged by service providers, Saxena remained undeterred. A blue print of the consolidation process was created that also took into account the various changes that users at Zandu would confront. Saxena also showcased how the Emami systems were configured. The IT team at Emami conducted around 25 to 30 review meetings involving functional heads from both the companies. After getting their go ahead, the process of integration took off. In the next two months, the process was completed. The management took a decision that the merger was to be completed on 31st March
2010. On 1st of April, 2010 the consolidated application had to go live. “The biggest task for us was migration of the master data, and ensuring proper entry of the financial data as well as correct representation of the data pertaining to materials,” says Saxena. To address this, a team of eight people developed around 100 odd programs for the extraction, validation and upload of data that needed to be covered into Emami’s SAP server format. Once the consolidation was over, the IT team ran an entire end-to-end testing cycle to find if there were any gaps in the process. The team decided to carry out the clos-
ing of Zandu’s fiscal year 2009 reports within Zandu’s existing systems and only then migrate all the data into the new, consolidated system. By April 15th of this year, the team was able to extract the balances, upload, verify and execute all data on the integrated application. Saxena recalls that in a Rs. 100 crore inventory, there was an error of seven rupees that was due to an incorrect rate calculation. “Otherwise the migration was 100 percent successful,” he says. He adds that had Emami opted for a partner during the consolidation phase it would have cost it a minimum of Rs. 40-50 lakh.
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A Safety Cognizant created a homegrown BCP solution to mitigate risks associated with their business. By Ashwani Mishra
net
ver the past few years many enterprises have had to weather natural calamities such as cyclones and floods and have also needed to come to grips with deadly terrorist attacks, all of which have interrupted business activity. Such events have heightened the awareness for a need for Business Continuity Planning or BCP. This was no different for Cognizant which runs close to 6, 000 projects at any given point of time. “Though we had various departments and projects creating their individual BCP, compliance to the process was very low. We were always prepared for such events but still our preparation was less than complete,” says Satish Das, CSO and AVP-ERM, Cognizant. This gap led to the initiative of creating an in-house online BCP portal. The need for building this portal in-house also arose from the fact that the company felt that none of the BCP solutions meet their requirements. “Whatever we found in the market was too complicated,” says Das.
Looking inside So in June last year, Das and his team started to build the BCP portal. It would be an
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“We created our own BCP portal as we found that existing BCP solutions in the market were too complicated"
online system, where project teams could register and create project specific BCP documents. The portal was synchronised with the central PeopleSoft system. This proved beneficial as all projects and project member details were populated automatically on project registration. After six months, the portal was completed. The portal has a simple form based structure, wherein some details are captured from PeopleSoft directly and the rest are provided by the BCP coordinator. It is upwardly compatible with PeopleSoft and any change in project allocation trigger an e-mail to the project manager to validate the initial settings. Project managers can now assign BCP coordinators from within their team who will in turn undertake the entire process of creating the business continuity plan, and
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heet S t c Fa s:
fit ene ion le b municat review b i g tan uced com creation, Red for BCP CP cycle pproval. , as the B t a n e d n m t a inves use Zero uilt in-ho emic b n s wa ated Pa d r Integ onse Plan Resp
PHOTOGRAPH BY GIREESH
Satish Das, C SO and AVP -ERM, Cognizant.
get the same reviewed and approved using the online workflow system. The system has been designed to also support automatic document versioning whenever the plan is updated and the same undergoes the document review process. Das terms it as an expert system, wherein various combinations of project demographic location and network architecture are captured to verify the feasibility of the desired Recovery Time Objective (RTO) and Recovery Capacity Objective (RCO). Another aspect of the portal is the reporting and dashboard system, wherein senior management and vertical heads can view all their projects listed for a facility/ location/ country and set priorities for recovery in case of any undesired events. “In case of an emergency, the corporate BCP team can directly evaluate the priorities
present in the system and recover the same, thus preventing any last moment confusions and hassles,” says Das. Further the dashboard can also provide the list of projects for a specific facility with respect to the RTO/ RCO/ size and various other key factors, thus providing a clearer picture for recovery.
Reaping the benefits The online portal has reduced communication cycle for BCP creation, review and approval. Das shares that prior to the deployment of the portal, the company used to take around 13 to 15 hours of time to build a BCP plan for any project. This time has now come down to two hours. The portal also aids in easy generation of BCP metrics and reports as well as remote accessibility for information. Today all the information is available in a digitised format
and can be pulled out of the portal from anywhere and at any time. However, there were some challenges in terms of acceptance of the portal, Das adds. Many projects that had already completed the process offline over the years were reluctant to undergo the online process. “We had to organise several sessions and BCP camps with project managers to help them understand the benefits and the thought process for converting the entire process online,” says Das. Another challenge was branding of the portal within the organisation. To address this, Das and his team created awareness amongst associates through various mediums such as mailers, posters, intranet websites, workshops etc. about the ease of using the portal and the flexibility it provided to business.
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Fact Sh eet
tangib l Dissem e benefits : in employ ation of inform e Provid es at all levels ation to e to learn training and o p Increa new skillsets portunity se emp loyee p roducti vity
, IT, sundar, GM n a ly a K A P dia Bank of In
hough Bank of India had the best of technology and processes in place, it wanted that important information be circulated within the bank and reach employees at the grass-root level. In addition, it wanted to ensure that the employees assimilated and used this information for business growth. The bank was also interested in improving the skill sets of the staff deployed at field levels by constantly updating them with the latest products, services, technological enhancements, as also the revisions in directions or instructions etc. It also wanted
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to ensure that the productivity of staff increased regularly. â&#x20AC;&#x153;All these factors were a major concern for the top management as business was not growing at the anticipated pace. The productivity/ skillsets of the personnel was also not
to the mark,â&#x20AC;? says PA Kalyansundar, GM, IT, Bank of India.
A star is born The bank decided to create and provide a single, integrated location where employees
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h
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Creating a
Collaborative
culture
Bank of India created a collaborative environment that led to an increase in employee productivity.
photograph BY Jiten Gandhi
By Ashwani Mishra
could efficiently collaborate, find organisational resources, search for corporate information, manage content, etc. This took shape in the form of an application called StartDESK that uses SharePoint application. StarDESK translates to Search top article announcement, Read news, Discuss Express, ShareBlog, Know each other. The application comprises discussion boards, blogs, surveys, circulars, videos, downloads, manuals, internal announcements, RSS feeds for live business and national news, live broadcast, knowledge refresh, etc. Currently, more than 500 people are regularly blogging via the discussion board, viewing and downloading circulars, etc. In addition, the IT team also created an online training portal that integrated with StarDESK. With a single sign-on, employees can get access to e-learning portal. This portal is available anywhere any time. Hence users find it very convenient to go through the e-learning modules from home. The bank has been using this portal
“With the creation of our in-house portal, we have witnessed increased employee awareness and eagerness to learn new skills.”
to train newly joined officers. “Initially the users took some time to adapt to the training portal but today it has gained momentum,” says Kalyansundar. Senior bank officers have been assigned to play the role of a trainer. These personnel assign tasks, trainings and assignments to the learners. These assignments are to be completed in a specific time-frame. Only after a certain number of modules have been completed are the employees permitted to go to the next level of training. E-Learning courses are also created for taking career-advancement exams. A dummy environment of the exam is created and valuable self assessment is provided. “This training portal has been developed by us and the content that has been uploaded is prepared by bank officials, making it a complete in house development,” says Kalyansundar. He adds that in the future it plans to integrate the scores obtained by employees with their HRMS application.
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Strengthening
sales
Essar Steel increased its customer base by tweaking existing applications. By Ashwani Mishra
uring the recessionary period when exports took a beating, Essar Steel had to counter issues of margin and volume. “Our top and bottom lines took a hit during the prime period of recession and the company was facing stiff competition from domestic players as well as from cheap imports. All these combined had an adverse impact on our customer base, return on investment and sales volume,” says Suneel Aradhye, Chief Information Officer, Essar Steel Limited. Essar Steel has always been a pioneer and trendsetter in providing innovative solutions to serve the customer better. The group has many firsts to its credit: Essar Hypermart is the first and largest retail chain for steel product with pan India presence to directly cater to the end consumer. Essar Steel Hypermart was projected as the growth engine for selling volumes in domestic market during recession. Increasing the customer reach, ability to sell loose sheets and also sell the material on credit was considered key to increase sale volumes via Essar Hypermart. The company wanted to implement channel financing and Letter of Credit (LC) Module in their
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“The system helped our Hypermart to analyse sales with respect TO various customer classes”
ERP, which was meant to cater to ‘Cash and Carry’ sales only. “We did not want to compromise on our business model and did not want to sell loose sheets as it would affect our operational efficiency and create audit challenges,” says Sandeep Paliwal, Head IT – Sales & Marketing Org, Essar Steel Limited.
A new model Essar Steel was using retail specialised software JDA for its retail business. JDA had to be significantly customised to meet the requirements of excise tracking, handling multi-level taxes and needed to be tightly integrated with Essar Steel SAP for consolidation of financial accounting. Essar IT team developed a new module in JDA for LC lifecycle management and channel financing and integrated it with
et Fact She tangible benefits: Substantial increase in sales volume by extending credit line to end customers with zero business risk Increase in sales by 78 percent (crossed 1.1 million tons) over sales in FY 08-09 Complete end to end control and visibility over sales and stocks
photograph BY Jiten Gandhi
fficer, ation O m r o f In Chief adhye, r A l e e Sun ited. teel Lim Essar S
the Sales Order Desk Application (SODA) module, facilitating LC entry/ amendments, generating performa invoice as per industry practice, sales order and invoice modifications, Bill of Exchange (BOE) creation and LC tracking reports and complete end-toend LC tracking. During the same time the Essar management decided to set up Dealer Owned Dealer Operated Stores called Expressmart to increase their reach to the interiors of India and directly serve the end customers. Expressmart was coined as a single brand steel retailer operating within defined territory. “We wanted strict control on pricing by Expressmart dealers and did not want to lose sight of secondary sales and stocks,” says Paliwal. Essar Steel Hypermart leveraged the exist-
ing JDA system for the Expressmarts channel as well. Now the Expressmarts are able to raise excise/ commercial invoices to their customers from JDA. This system enables Steel Hypermarts to give real time visibility on the stock and sales of Expressmarts and customers catered by them. This was integrated with SAP BI (Business Intelligence) to enable effective analysis and slicing and dicing of Expressmart data. “Further, this has also helped our Steel Hypermart to analyse the sales figures with respect to the various classes of customers, and hence plan and target promotions based on the customer database, sales trend, season of sales etc.,” says Aradhye. JDA was customised to simplify the menu and many of the transaction processes keeping in mind that the main users at Expressmarts were traders who were not
tech savvy. Computer-based training and self installing CDs were created for easing the JDA client installation and usage by Expressmart users. With the LC and channel financing module in place, and the enabling of a separate sales channel in the form of Expressmarts, the company has enhanced the customer reach, achieved higher sales and plans to establish a robust supply chain based on the projected trends. Essar has already rolled out more than 100 Hypermarts and more than 400 Expressmarts. Expressmart Channel has helped the company achieve 40 percent of the current Hypermart sales. In this financial year the company has set a target of reaching 1.8 million ton, an increase of more than 50 percent from current sales.
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Kaleidoscopic
Intelligence Yes Bank created its own BI solution that helped them increase productivity and share key data at all levels. By Ashwani Mishra
es Bank wanted a data warehouse and business intelligence (BI) solution way back in 2006. But when they started scouting for such solutions in the market, they found that these solutions came at a huge price. In addition, the time to implement these solutions was extremely long, which the company felt was completely unacceptable in a scenario which necessitated a dynamic response to the ever-changing market conditions. “It would have taken us two to three years to implement the entire solution and reap business benefits. Also there is a
constant need to liaise with implementation partners/vendors for enhancements and changes,” says Surendra Shetty, Chief Technology Officer and GEVP-Banking Solutions, Yes Bank. Though the various business groups
“Productivity gains of approximately rupees five crore have already been realised using our in-house BI solution” 34
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required a BI solution, the same was not affordable given the emphasis on reducing costs. In 2008, the bank decided to grow its business and entered into other areas of banking such as retail, SME, etc. This was the time when the heat of economic meltdown was strongly felt by companies across the globe.
Challenges galore Yes Bank was facing multiple business challenges with respect to obtaining business intelligence reports. Foremost, the data stored in multiple places did not facilitate information sharing within various departments. “This decentralisation lead to different
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manner empowering them to take on-time, well-informed business critical decisions,” says Shetty.
A new dimension The entire development of the BI solution was done in-house using Yes Bank’s existing resources and extended to production within two months. The platform was hosted on shared infrastructure with zero additional hardware costs. It also built the in-house capability for all future enhancements and re-alignment with the bank’s strategy. Based on the requirements, a data warehouse was created where the information : s of the bank's various it ef le ben t of BI applications was tangib e developmen s In-hou integrated. A complete n solutio ity gains of ve tiv fi c s u e hierarchy was developed d e ro p P ru imately approx lised to provide role based a crore re ings of around m access to Kaleidoscope. v u a n s per an Cost 70 lakh The new BI solution rupees did not restrict access to a few key stakeholders, all end-users including those at the lowest level were empowered with relevant information. Surendr The bank realised taking the necessary a Shetty , Chief T and GE action post getting the information was echnolog VP-Ban y Office king Solu as important and so the BI solution has a r tions, Ye s Bank. feature that stands out from those used by the rest in the industry—Actionable BI. “It is no use disseminating information if the users do not act upon it. The information in Kaleidoscope is integrated with actions to make sure that users act upon the information,” says Shetty. Post deployment of Kaleidoscope Yes the entire data was available on the FTP management culture, different priorities Bank saved on eight full time, high cost site, anyone could access it,” says Shetty. among our units and different levels of resources that used to generate these To address these issues, the bank information maturity,” says Shetty. reports. They have been now moved to other created the Business Intelligence Center In addition, more than 250 plus reports functions within the bank and have resulted of Excellence (BICoE) that included and MIS were being generated by the in savings of around Rs. 70 lakh per annum. technology and business users. The BICoE bank daily. The source for these reports Shetty adds that the bank has seen huge conceptualised Kaleidoscope –Yes Bank’s was discrete systems. Each department productivity gains and no longer do the in-house BI initiative. maintained its own database, which resulted users need to manually collate and verify the “Kaleidoscope aimed at providing in inconsistencies. A lot of effort was wasted data from across systems. “With the current financial, operational, risk and regulatory in resolving these inconsistencies. content that has been built up, productivity and productivity related information and The final consolidated reports for all the gains of approximately rupees five crore analysis relevant to various stakeholders branches of the bank were sent in mails, have already been realised,” he adds. in the bank in a completely automated which was an information security risk. “As
photograph BY Jiten Gandhi
eet Fact Sh
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G has a strict credit limit for its customers. Once the company sells its goods to a dealer/ distributor, the credit limit for that dealer/ distributor is exhausted. The dealer then makes a payment by cheque to the bank, which would take a couple of days to clear from the bank before reflecting in LG’s accounts. “Unless we realise the money paid by a customer, the credit limit for that customer is frozen. So we cannot make any fresh sales to them until we receive the money,” says Daya Prakash, Head - IT, LG Electronics. The process of account reconciliation, which involved the money received by the bank from the customer and the bank sending the details to LG and finally LG making an entry into their systems, was time consuming. Since it was not an online process the customer credit limit could not be adjusted. LG used to get data from these banks once in a day and then the company would make entries of the list of customers who paid money against the goods that were delivered to them. “There were some banks who shared their infrastructure with us on a daily basis for the transactions while there were others who found it tough to do so,” says Prakash. LG is the market leader in the Rs 65,000crore consumer electronics and home appliances market, with operations in 39 branch offices and eight regional offices across the country. The company's dealer/ distributor network is 12,000 plus strong, and with each of these dealers having banking accounts
crossing the Hurdle
LG automated its transaction process with banks for streamlining its sales process. By Ashwani Mishra with various banks in the country, making a manual entry into the ERP system was not an easy task. There was always a probability of a double entry within the ERP system. For a company as large as LG, the problem of reconciliation of data thus achieved a
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serious overtone. “We needed a system to help us get over these challenges and this is where the concept of a Host2Host (H2H) came into existence,” says Prakash.
Fast track approach LG designed H2H, an integrated end-toend with various banks that it works with. However, initially it deployed this mechanism with the bank that handled around 60 percent of LG’s transaction. The technical team at LG worked with the technical team of bank and created a push and pull kind of mechanism. So, now, the moment a customer makes a payment to the bank against the material
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Fact Sheet
tangible be nefi Increase in oper ts: ational efficiency Online bank / cu stomer account receiva ble reconciliation Savings of arou nd hours in a calen 2000 mandar year
- IT, ash, Head Daya Prak nics LG Electro
or good received, LG gets the information from the bank that reflects in their ERP and accordingly the credit limit of the customer gets adjusted. Simultaneously, a receipt for the customer is generated from the ERP automatically. In this process LG created a virtual account code for its customers. When data from the banks reach the ERP of LG about
a customer payment, it is parked into a temporary location instead of hitting the account directly. â&#x20AC;&#x153;Here we perform data validation and only then the customer account is credited. We do this because once an entry is done in the main ledger, it is difficult to rollback the entry,â&#x20AC;? says Prakash. Also, as there is no manual entry involved,
the chances of error or duplication do not exist and there is not risk involved. LG achieved savings of around 2000 manhours in a calendar year by using H2H process. It also realised monetary benefits of rupees 48 lakh per annum in the form of manpower costs that was earlier involved in making entries into the system and conducting the payment reconciliation.
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Addressing
Remote
concerns
Standard Chartered Bank partnered with DHL to deliver services efficiently in far off locations within the country. By Ashwani Mishra
tandard Chartered Bank had some customers in the FMCG and manufacturing sectors that had branches located in remote locations of the country. It wanted to extend its operations to these areas to meet customer requirements and increase its customer base and revenue. “For such customers, the transaction processing cycle for documents was more than that for tier one or tier two cities,” says Sarabjit Anand, Head Information Technology - India, South Asia and GSSC, Standard Chartered Bank. Trade transactions between the bank and customer required physical documents for verification. It was a challenge to accommodate urgent transactions within the window available for customers. If any discrepancy existed within the document there was a lot of to and fro that happened as the bank had to send the document back to the customer, get the error rectified and get it back. This resulted in delays. To address this concern, the bank came up with an idea. It had an existing service in the
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“With doorstep trade service, we have improved our turnaround time by 50 to 60 percent"
form of a kiosk deployed at customer locations. Customers would deposit their documents and then it would reach the bank. The bank took cue from this service and made it into a mobile offering for customers.
At your doorstep Standard Chartered was using DHL as their service provider. All import/ export related documents couriered to banks and a third party was done through DHL. Thus the idea of Doorstep Trade Service (DTS) was conceived. DTS was a low-cost, highly scalable service to improve bank’s customer reach, especially in smaller cities and industrial/commercial belts on the outskirts of large cities. “Customers no longer need come to the
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Fact Shee tan g t Inc ible b
re e by 5 ase in t nefit Incr 0 perce urnarou s: n e Incr ase in nt turn d time cust ease in re omer venu base e
photograph BY Jiten Gandhi
Sarabji t Anan d, Hea South d Infor Asia an mation d GSSC Techno , Stand logy ard Ch India, artered Bank
bank. Instead it is the bank that goes to their doorstep,” Anand. The bank deployed a computer terminal, printer and scanner in the DHL van and put some standard encryption solutions to secure data transfer. The mobile van visits the client at their location and scans the necessary documents required for business. So instead of the previous practice of sending
the hard copies by courier, time and effort is saved by scanning it and sending an e-copy using GPRS connectivity to bank. The process has eliminated back and forth of documents. The efficiency has been 100 percent as only the correct documents are now received by the bank. In addition, the turnaround time has improved by 50 to 60 percent.
Since the pilot was launched in October 2009, the service has been offered to six customers. “Customers have leveraged the ease of this model to moved to more value-added and complex products,” says Anand. Standard Chartered plans to roll out this service in more locations and customers.
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Fact Sheet tangible benefits: Streamlined storage requirements Acquired new customers (35 percent new customers and 65 percent repeat customers) Capex savings of Rs 50 lakh
President, IT, BLV Rao, Vice rises Infotech Enterp
A New
model
By reorganising its existing storage infrastructure, Infotech Enterprises created a new business model for its customers. By Ashwani Mishra
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yderabad-based Infotech Enterprises, a technology solutions provider that offers Engineering Services and Geographic Information Services (GIS) had storage boxes that seemed to be forever bursting at their seams. The firm caters to the manufacturing, aerospace, transportation, telecom, utilities and government sector. Managing the storage requirements for its numerous projects was quite a challenge. Data received by the company from customers was huge and was required to be preserved, processed, analysed and finally archived securely on a heterogeneous storage platform. Many of its customers demanded innovative solutions for storage with dynamic changes like high-performance, quick recovery of data, low cycle times, faster delivery, reduced efforts and costs. Forecast for various storage projects were unpredictable most times, hence managing costs was a challenge. “We were unable to deliver solutions fast and within expected timelines and the costs were high. It was difficult to attract customers and achieve profitability,” says BLV Rao, Vice President, IT, Infotech Enterprises.
PHOTOGRAPH BY SURESH
Streamlining the boxes The IT team studied the existing storage environment in detail. It decided that the existing 12 storage systems that included EMC’s SAN, NAS storage systems with total capacity of 110 TB had to be consolidated. The team reorganised the data into different parts. This reorganisation was based on how critical the data (high, medium and low) was for the company and what data was required only for archival. The consolidation was to be carried out
using high-speed, high capacity fiber fabric and 10g LAN with network virtualisation. High performance and grid computing systems were optimised for storage needs like file servers, applications, process data and analysis. Tiered storage architecture was deployed depending on the importance of data and performance needs. Encryption technologies were used. This saved storage space by 28 percent. Low cost storage is now used for retrieving back up/archived data for verification and compliance processes.
“By g inin l am e str ge our stora , ent environm d ve we achie capex f savings o h” Rs 50 lak
Central management of storage with periodic reviews helped a great extent to achieve optimisation, faster delivery, security of data, scaling up for demanding needs, reducing capex, managing project costs effectively and TCO. “More than 20 projects can now start simultaneously without any storage investment,” says Rao. With this approach, an additional capacity of 18TB was delivered to the business resulting in capex savings of around Rs 50 lakh. A lower TCO meant an increase in the overall profits for projects, some of it in the range of 12-18 percent. Timelines were ahead of schedule, and this empowered teams to focus on other projects. By optimising and virtualising servers, network and storage, the overall performance of storage system was up by 22 percent; at the same time higher scalability was achieved and data security was beefed up. The IT team used automated monitoring and control systems as per ISO 27001 and ITIL standards for compliance. “Our customers can now get storage solutions at cost-effective rates at a faster pace with the ability to scale up and also retrieve data in lesser time,” says Rao. Needless to say, by streamlining its storage architecture the company found more favour with its customers. Rao says that it acquired new customers soon after the change.
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Basket of
ideas
Let no idea go waste was Escorts' moto. Their new application was designed to ensure that. By Aditya Kelekar
hat happens when employees come up with smart ideas that never make it to the serious discussions in the boardroom? Frustration? Disenchantment? A happy-go-lucky employee may forget the whole episode but those who like to take their work seriously are bound to feel miffed. Loose Control At Escorts Agri Machinery Group (Escorts AMG), Vipin Kumar had a similar belief, knowing full well that employees' inputs could go a long way in making techni-
cal improvements in the manufactured products. The Escorts Group is among India's leading engineering conglomerates operating in the high growth sectors of agrimachinery, construction and material handling equipment, railway equipment and
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auto components. Escorts AMG has three well-accepted tractor brands. “We thought it was very important to automate and effectively manage every step of the Engineering Change Authorisation (ECA) Process,” says Kumar. The process starts from the point an employee gives some idea for product improvement, which then must obtain a series of approvals from the commercial department and the technical department, after which the idea gets translated into product development. This required the creation of an electronic, workflow based, engineering change management system (ECA Tracker) for the
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eet h S Fact ts:
liance nefi e be ess comp l b i c tang oved pro ycle time. Impr rocess c boration ors and p ced colla a-generat n e Enha een the id s y of betw ea-ratifier repositor of id le e and d a sing espectiv pted e te irr Crea as given a was acc e e id id ll e a her th whet cted. e r or je
photograph BY Subhojit Paul
Vipin Kumar , Head IT, Esc orts Agri Machin ery Group
ECA process, which would be effective, secure, easy-to-use, affordable and easy to implement. Earlier, Kumar notes, the whole process of idea generation and its subsequent treatment was manual. â&#x20AC;&#x153;Due to this, some of the ideas given by employees were lost and not recorded for later retrieval,â&#x20AC;? says Kumar. The manual process of approval was also not efficient and it was not possible to trace the status of the idea at any given point in time, he says. Any idea which was not approved was lost as there was no recording of the idea in any database for future retrieval.
An idea machine The stakeholders of the ECA process felt that an Automated ECA tracker would facilitate tracking of this complex process and output measurement. Based on the stakeholders' recommendations, the ECA application was to be designed. The application required one programmer and one programmer analyst who worked for four months to complete this activity. In addition, the user teams from different departments involved in the process discussions gave valuable feedback/suggestions at each stage of the project. The key features of the software, which
came to be known as the 'ECA Tracker' included routing of ideas for approval, tracking of tasks and providing status reports at every stage of process. The application provided for attaching/linking documents and allowing secure electronic login to the document control system. The application also provided automatic e-mail notifications to all stakeholders. The reasons provided by the commercial and technical teams for accepting/ rejecting ideas are recorded too. Finally, it creates a repository of all ideas given irrespective of whether they are accepted or rejected.
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NEXT
HORIZONS
Are you fast enough?
Agile companies have what athletes and soldiers call “situational awareness"
ILLUSTRATION BY pc anoop
B Dancing Elephants
The big daddies of today's corporate world will fall unless they adapt themselves to the changes. By Faisal Hoque
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usiness leaders often like to describe their organisations as being 'agile' and 'adaptable' and include these terms in their business plans and strategic initiatives. In most cases, though, it's often little more than just a vision. Agility is something that requires planning and needs to be an integral part of the business and management processes to be effective. It is philosophy and action. And most of all, it requires courage and commitment. But what does "agility" really mean to business, and how does it help achieve higher levels of efficiency and success? Innovation once took years to result in new technologies and marketable products. The use of radio waves to detect metallic objects and enable long-distance communications was first theorised in 1904. Three decades later, the theory resulted in the first practical application of radio detection finding. By the beginning of World War II, the United States, United Kingdom, France and Germany had their own versions of radio detection and ranging―what we now call “radar.” Radar opened the door for the accidental discovery of using microwaves for cooking and, in 1947 the first microwave
AG I L E E N T E R P R I S E S
oven was installed in a Boston restaurant. Contrast the evolution of the microwave oven with Google. The Internet juggernaut didn’t invent search technology, but did see the need for a better means for organising and finding Web-based information. Founders Larry Page and Sergey Brin initially took their concept to Yahoo! founder Jerry Yang, then the master of the nascent Internet, offering him a way to provide a negative connotation. The distinction is a better search service to his millions of important. Agility is all about the ability to users. Yang was impressed by the idea, move quickly to introduce new products, but didn’t see the practical application. He revamp business processes and create new told the Google boys to prove themselves business models. Resilience provides the independently; the idea being that Yahoo! ability to bounce back when you are hit by would simply buy Google if it showed signs unexpected threats. of commercial success. We all know how that story is playing out. Constant change is the new dynamic of Agility is Survival the global economy, and makes agility even Companies don’t survive unless they’re more necessary than at any point in busiagile and innovative. Even multibillion-dolness history. Consider the following: lar powerhouses must recognise when they Only 74 of the original 500 companies need to shift their focus in order to adopt in the S&P Index are still on the list 40 new technologies, products and businesses. years later a mortality rate of more than Agility is the catalyst. Survival is enabled. 10 per year. Success is the result. The average life span of an S&P 500 comAgile companies have what athletes and pany has steadily decreased from more than soldiers call “situational awareness". They 50 years to fewer than 25. put themselves both in a position to observe Projecting forward, it’s likely that only what’s happening and have the wherewithal about one-third of today’s major corporato act upon intelligence. Agile companies tions will survive as significant businesses establish formal relationships outside of for the next quarter century. their walls with customers, partners, supGiven such high stakes, it is not surprispliers and the public. These relationships ing terms like agility, resilience, adaptability are their antennae to the world, sensors of and innovation reverberate are change, either opportunistic or commonly heard in corporate threatening. Internally, they tap boardrooms and executive the minds of their employees suites. Most people acknowledge in ways other companies do not that agility is the key to capitalisand use technology to track what Years or less. ing on innovation and achieving is going on in near real-time. the average life success in the fast-paced and Customers are the ultimate
N E X T H OR I Z O N S
“Agile companies establish formal relationships outside of their walls with customers, partners, suppliers and the public.”
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rapidly evolving marketplace. span of an S&P reality check. No company today However, there’s no common would say that its customers 500 company. definition for what agility means were not its top priority. The in practical terms. Agility probreality is that most companies ably has as many definitions as ignore their customers. The means for implementation. For the purpose best example of that willful ignorance is the of our discussion, we define agility as "the US airline industry. Challenged by security ability to see and seize opportunities in the requirements, rising fuel, equipment and marketplace". Resilience is the flip side of labour costs, most of the major U.S. airlines the same coin: "the ability to react to unexhave cut back on amenities and features pected changes". while increasing fares and levying fees for Agility is proactive and has a positive everything from preferred coach seating to connotation. Resilience is reactive and has blankets and checked bags. Needless to say,
passengers aren’t thrilled with these charges or the declining level of service. Customer satisfaction ratings with the US airlines have steadily declined since 2001. While nearly all airlines are struggling, those that have paid attention to customer satisfaction and improvised ways of compensating for cutbacks are capitalising the pain of their peers and attracting disenfranchised customers. Southwest Airlines, a company known for basic amenities but attention to customer service, out paces the rest of the industry by a wide margin 79 points on the American Customer Satisfaction Index. The industry average was 62 points in 2008. Agile companies turn customer dissatisfaction into a competitive advantage. And smart companies are using new and innovative methods and tools to measure customer affinity and satisfaction. FedEx, for example, launched a Webbased tool that allows customers both senders and receivers to track in real time the progress of package delivery in its system. Netflix, the Web-based movie rental company, and Amazon, the world’s largest online bookseller, both utilise complex algorithms to determine customers’ preferences, community recommendations and user interaction with the website to predict movie interests and make purchasing recommendations.
New Tools, New Thinking The public is increasingly a source for inspiration and agility. In traditional product and marketing models, companies would assemble focus groups in their target marketplace to determine if they had the right look, features and messaging to sell the product. In today’s Web-based economy, companies are leveraging Web 2.0 applications and social networking tools—such as Linked In, Facebook and MySpace—to
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N E X T H OR I Z O N S
AG I L E E N T E R P R I S E S
solicit consumer feedback and input during the design and marketing phases. Savvy companies are even using social networks and the general community to solve some of their most perplexing problems during product design and development. Others are using open forums, such as the LinkedIn professional community to pose questions to peers to solve immediate tactical and operational problems. Employees often are the best source for intelligence that leads to innovation and agility. Google, for instance, encourages its employees to explore new ideas by providing them time and funding for side projects. Unfortunately, most organisations are structured and have cultures that discourage employees from contributing from the bottom up. In the Information Age, when more and more employees are knowledge workers and are better educated than ever, this is a waste. Employees are closest to the customer and know intimately the strengths and weaknesses of business processes. Moreover, today’s employees are networked with peers in other companies as never before. It is a reality at many firms today that their most important resource walks out of the door every weekday at 5 PM. Agility, then, begins with awareness: What are competitors up to? How is the market changing? What new technologies are coming along? Most importantly, what are customers thinking? What do they need? But success also requires innovation in services and products, and the continuous improvement of business processes within and across firm boundaries. These two mandates are mirror images. Innovation of services and products cannot occur without well-defined and aligned processes; nor can business processes be improved without attention to changes in customer needs. Agility is a new paradigm for the production and distribution of services and products. It achieves economies of scope rather than economies of scale. To be agile, firms must serve ever-smaller niche markets and individual customers without the high cost of customisation. Being agile requires the ability to sense-and-respond, and those capabilities are shaped by designing and managing business processes and technology enablers together. Enterprises have three requirements for achieving agility:
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Sense-and-respond capability - To respond to changes in their environment, firms must facilitate learning from various processes. This learning must operate at different levels and within different areas of the firm and should be based on recurrent sense-and-respond cycles. Business technology can facilitate these learning processes by supporting the collection, distribution, analysis and interpretation of data associated with business processes; and generating response alternatives, decisions on appropriate courses of action, and orchestrating selected responses. Improvement and innovation emphasis Business agility combines improvement and innovation responses. Opportunistic firms emphasize improvements, but often fail to foster innovations. They follow best practices, listen to the customer, and are good at improving current capabilities. Innovative firms, by contrast, are focused on innovating processes through new technologies, services and strategies. They generate “next” practices, but have a limited focus on fine-tuning current operations. Fragile firms lack both the ability to iden-
To be agile, firms must serve ever-smaller niche markets and individual customers without the high cost of customisation.
tify and explore opportunities, as well as the ability to innovate. When market pressures are high and the environment is turbulent, the ideal is an agile firm that combines improvement and innovation initiatives to constantly reposition itself. Agile firms are able to improve existing practices and innovates new ones. Distributed and coordinated authority Agile firms must adopt radically different forms of governance and translate their mission and objectives into information that can easily be interpreted by constituents. These firms must replace traditional command and control approaches with mechanisms that facilitate coordination within and across locales. These mechanisms must provide individuals, groups and units with the autonomy to improvise and act on local knowledge, while orchestrating coherent behavior across the firm. Processes—the assignment of task and responsibilities— must be supplemented with personal accountability. Regardless of where one begins the journey toward agility, a converged management of business and technology often plays a critical role in establishing the strategic position required to adjust or change, based on unforeseen market circumstances. Agile organizations have the processes and structures that indicate what is going on both internally and externally, as well as the mechanisms established to act quickly on that knowledge, as needed. Such actions incorporate agility as part of an organisation’s DNA.
—Faisal Hoque is the founder and CEO of of BTM Corporation (www.btmcorporation.com). A former senior executive at GE and other multi-nationals, Faisal is an internationally known entrepreneur and thought leader. He has written five management books, established a non-profit institute, The BTM Institute, and become a leading authority on the issue of effective interaction between business and technology. BTM Corporation innovates new business models and enhances financial performance by converging business and technology with its unique products and intellectual property.
hiddentangent Geetaj ChannanA geetaj.channana@9dot9.in
The author is Editor (Online), CTO Forum
Resurrection of the Tablet. iPad may
have sold like hot cakes but the jury is still out on what should be the perfect tablet. Windows XP Tablet PC Edition was launched for the first time in 2002 but it did not become commonplace till its 2005 avatar. Even then, it was portrayed as the laptop killer with handwriting recognition that improved with every update. But, the whole thing never took off. Probably its biggest USP of handwriting recognition was its biggest problem too. The argument of being able to write on your computer sounds so compelling – but why does it not work? Firstly, people who have some experience with computers can probably type faster than they can take notes on their notepad. Secondly, the fiddly stylus is hardly a desirable input method. Also, the touchscreens and the software at that time were not up to snuff. A lot of business users were pretty happy using their notebooks and did not opt for the snazzier tablet. So what is different in the tablets now? For starters, they are not positioned as notebook alternatives, but devices that complement the notebook and a smartphone. They are the new in-between devices, they have much better capacitive touch screen
options and some have given up on handwriting and styli. Let us start with the Apple iPad, which is one of the latest in this category. Apple has dabbled with the idea of a tablet for a long time, but never launched it. Finally, what they have is a device that is bigger than a phone but smaller than a notebook, does not have a keyboard or any extension ports and runs on software devised for phones. People have described it as a device that an executive will take on vacation where he wants to work a bit. It provides just enough functionality to run your business and be updated on the latest happenings while enjoying a host of multimedia features. Also, it has a beautiful 9.7 inch touch screen that does not require a stylus and has a software keyboard that pops up on the screen whenever you may need it. To say the least, the magic of Apple has worked in favour of the once forgotten tablet. They have sold more than a million iPads within a month of its launch. That hasn't silenced the sceptics, though. They think it is still a while before Apple should start counting their chickens. The product
“There seems to be a lot going on to find a device that will bridge the divide between the ubiquitous mobile phone and laptops.”
will need to survive the initial hype. Another device is the home-grown Notion Ink Adam. Running on the tablet edition of Google’s Android operating system, this tablet boasts of a 10.1-inch display with multitouch capabilities and full highdefinition multimedia playback and connectivity through 3G and Wi-Fi networks. Though it is still in the works, it has generated a lot of interest around the world. Not everyone wants to be in this space, though. Microsoft is said to have called off their ambitious project – codenamed courier – that was a notebook like device with touchscreen and stylus capabilities. They have other touch-based projects running in their labs, but have to find a niche and a quick distribution model. Nonetheless, there seems to be a lot going on to find that one device that will bridge the divide between the ubiquitous phone and laptops. The questions now are – do we really need something to bridge this gap and what is the right solution for it?
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Do IT
Yourself Microsoft recently launched its much awaited Visual Studio 2010 and .Net 4 frameworks for developers. S Somasegar, Senior VP, Developer Division of Microsoft spoke to Rahul Neel Mani about the new features of Visual Studio 2010 that will better enable developers in building applications.
In what way is Visual Studio 2010 (VS10) going to be different in what it offers to a CIO? Whenever you talk to an organisation, it will first start talking about a set of business priorities. They want IT to be a strong enabler in fulfilling those with a highly reliable, scalable and available infrastructure. People prematurely jump to the conclusion that it is all about a robust infrastructure and thus forget the role of developers who develop the business applications which fundamentally run the business. Companies today need a strong combination of developers and IT professionals to run an effective IT organisation, which in turn, will enable you to achieve the business priorities. Today, the biggest challenge facing any CIO is to understand the business priorities from his CEO, then translate them smartly into IT priorities and also create an IT organisation to deliver on those priorities. Secondly, the CIOs are always challenged with the finite resources available at hand to accomplish infinite amount of task to deliver against the business priorities. CIOs are always puzzled how to put their top resources to work on the top business priorities. Typically a CIO will have three distinct groups in his IT organisation – the project management group, which studies the business priorities and decides what applications
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to develop. Second is the development group, which builds these applications. Third is the operations group that creates an infrastructure, deploys these applications and maintains them. Unfortunately, each of these groups operates in silos. There exists a ‘Chinese Wall’ between these groups. Microsoft, with its unique capabilities, offers products targeted at various groups. We have products which are targeted at the project management, development and IT operations groups. There is a choice of Project Server, VS on Team Foundation Server, and Systems Centre. If we can figure out how these technologies can talk to each other and integrate seamlessly, it can help immensely rather than working in silos. Visual Studio 2010 helps the IT organisations to get rid of ‘no repro’ (no duplication) scenario. It helps the developers and T pros connect in a seamless way so that they don’t do ‘back and forth’ for any sort of
S Som a se gar
DOSSIER Name: S Somasegar Designation: Senior VP, Developer Division Organisation: Microsoft Corp. P RESENT Job Role: Leads the teams for Microsoft .NET, Silverlight, Visual Studio and Expression Studio. Also oversees Microsoft India Development Center.
application debugging. Microsoft wants to create a deep level of integration between the Team Foundation Server and Project Server for exchanging information, interface better and understand how best they can work to address the business priorities. How have software architects, developers and the software testing community received VS10? Microsoft is embracing UML (Unified Modelling Language) – the most widely used modelling language among software architects so that they are able to use their app skills in the VS 2010. In many organisations architects and developers are different set of people but in some they are the same. Microsoft has developed one set of code understanding tools for the architects to enable them from the stage of designing an application and all the way to the stage of deployment. VS 2010 is going to take away a lot of pain as its tools will run against the legacy infrastructure and help the architectures and developers alike in understanding the nuances and prepare for the future. We want to provide end-to-end testing tools for the community starting from test case management, manual testing, functionality testing, stress testing, load testing, test case prioritisation etc. All these functionalities are embedded in the VS 2010. We are also working on something called Virtual Lab Management, which lets you create virtual test environment without bothering to create a physical one. All of the major Microsoft partners will be enabled to offer this service to the users. What are those critical facets that CIOs, architects,
developers and testers need to be aware of? The good news here is that CIO doesn’t need to worry at all because he doesn’t need to use the tool. They should just be bothered about aligning IT with the business priorities. But I would certainly advise the developers, architects and testers to seriously think about the entire application lifecycle management (ALM). They may be responsible for only a particular part of ALM but if you don’t think about the entire life cycle of an application the chances of getting a bad outcome are far more. One doesn’t need to create brouhaha about just their function. How will VS 2010 help in taking away the load of Application Lifecycle Management (ALM) from an IT organisation? I would like to refer to my earlier comment on business priorities and applications needed to fulfil them. ALM starts from the time when CIOs think about the business priorities. VS 2010 helps the developers and IT organisations from the initial stages of applications designing, to development – all the way to deployment. It effectively enables us in thinking about ALM from the day one.
“The project management group, the development group and the operations group often work in silos”
No Holds Barre d
This time you worked with some preferred partners during the development stage of VS 2010 and there are already 50 partners ready with their applications. Can you elaborate more? Yes, it was a purpose-built exercise and the response was fantastic. Unlike previously, more than 50 partners are ready with their applications developed over VS 2010 at the time of the launch of the product. Jetbrains, a partner of Microsoft, has a fantastic tool which performs a bunch ‘refactoring’. Earlier Jetbrains would take a good 3-4 months to develop these tools after we announced the launch of Visual Studio. But today, their refactoring tool is ready along with the launch of VS 2010. It happened because we involved them from the day one. Second example is Microfocus, which was very keen on creating an extension to VS 2010 to enable COBOL developers to be able to use Visual Studio. Their solution is also ready today. This time we very proactively involved our key partners so that they can also launch their products and tools alongside us. As a visionary, how do you see VS 2010 changing the way the world develops business tools? Microsoft has a vision to provide its users the platform technologies, software and a set of applications that will help companies envision a ‘connected experience’. Visual Studio 2010 and .Net 4 frameworks are the core technology pieces which will help make the vision come true. We are delivering on our promise to make the life of developers and architects easier.
—rahul.mani@9dot9.in
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THINKINGBEYOND CHRIS CURRAN | chris.curran@diamondconsultants.com
Chris Curran is Diamond Management & Technology Consultants’ chief technology officer and managing partner of the firm’s technology practice. He writes the CIO Dashboard blog at www.ciodashboard.com
Seek and ye shall find
Recognising the business process experts is key to answering the two important questions facing CIOs in organisations. A few days ago, we had a great chat with Marc Cecere, Forrester’s CIO and IT organisation expert on the trends and changes we are seeing in IT organisations. The great thing about talking with analysts is that it forces you to summarise your thinking. In gathering our thoughts, we think two types of questions are currently driving re-evaluation of IT organisation structure: 1. How can we improve our business operations using technology? 2. What does IT need to do to best support recent business strategy changes? Interestingly, both of these questions have emerged as a result of the recent economic downturn and pending recovery, albeit at different times in the cycle. Improving business operations with IT got attention first as each and every part of the business has been under the microscope over the last couple of years. Supporting business changes is a more recent topic as corporate
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leaders are setting new courses to emerge stronger and CIOs are seeking to understand how to best support the changes.
Improving Business Operations Where do the business process experts live in your organisation? We’re not talking about the people who are experts in operating the processes every day but those who truly understand the processes that make things run – both the individual processes and the overall “operating model” or how they all fit together. Some manufacturing firms and those with a strong quality culture have organisations focused on process design and management in addition to line process experts. Some others have added a process view into their business and/or enterprise architecture planning and measurement. However, we suspect that for a majority of companies, some of the best process design,
“Companies are exploring the Tech+Ops organisation model too”
analysis, troubleshooting and management skills live in IT. Many investment banks, where IT is also the product manufacturer, recognised the Ops and Tech synergies long ago and have combined the two into a single organisation. Companies in industries seeking more operational efficiencies have started to explore this combined Tech+Ops organisation model too. We have seen early signs of this trend in Health Insurance, P&C Insurance and Financial Services industries where IT also has a significant role in manufacturing. There are many implications of this combined organisation but the most significant is how to maintain the focus on innovation as the process/ops emphasis will surely drive attention to efficiency and productivity. For organisations in which IT is only expected to drive internal innovations, this model may be a perfect fit.
o p e r at i o n s
Supporting Business Change As organisations prepare for another growth cycle, they will at a minimum need to change some of their metrics and some will re-evaluate their fundamental strategies, like the way one of our global clients did. This have traditionally grown with a North American dominated strategy. Contemplating their next wave of growth, the CEO knew that each region would need their own goals and leadership to drive it. As a result, they have a new set of regional organisations. What should be IT’s response? They could stand put, assuming that they already know their global businesses and are serving them well or they could re-organise to get physically closer to each business and configure each regional IT team for its mission – rapid growth, agility, operational efficiency, etc. Whenever the discussion centres on the age-old “centralized or decentralised” organisation trade-offs, we always come back to one question. Does the IT organisation already operate well using a single set of management and operational processes? If so, then decentralisation of some parts is an option. If not, then trying to drive fundamental standardisation in a decentralised organisation is a non starter. The organisation must already know how to work together before it starts to separate itself. We would love to know how the trends in your industry are causing you to re-think your organisations – or not.
T H I N K I N G B E YO N D
Will the CIO Lose the C?
Get some spine. CIOs who are only order takers and not demand shapers may lose their job.
there is some disturbing new data for the role of the CIO. Half of our Diamond Digital IQ Survey respondents said that more than 30% of the dollars spent on IT is done outside of IT. Power in any organisation usually follows those who can create new revenue and value, but our survey shows that 75 percent of the CIO’s innovation role is internally facing. We think these different indicators point to a weakening of the CIO role at the very time when technology is reinventing marketing and competition more than ever before. How can they be losing power and influence at the very time that they should be gaining it? iPhone apps are changing our expectations of mobile capability; Facebook has 400,000,000 users; Coke and Pepsi have embraced social media as a new means to get their message out; massive data mining is creating new insight, and data visualisation is making these insights more usable — and the pace of change is increasing!
Could there be a better time to be a CIO? We believe that one of the key problems is that the CIO is the only member of the executive team who is both a staff executive, serving providing support for all the other functions of the company, in a manner similar to the director of human resources, and also a line executive — akin to a vice president of manufacturing. We feel it is this dual role, of staff executive and line executive — a Jekyll and Hyde of the organisation — that confuses the goals and roles of the CIO. Also, most firms are seeing a whole new wave of technology affecting marketing, service, sales, and brand. Everything, from iPhone applications
to social media points to the fact that the CIO should have more influence than ever — because technology is more important than ever to the creation of revenues and profits. But, if the CIO is not willing to clearly explicate his or her role as the person who not only helps to drive down costs and automate all parts of the business but also as a line executive who runs the factory and helps to find new customers and serve them even more profitably, then their role of the CIO will be split up and the “administrative” tasks will be given to an executive who is not a C-level player, but who is likely to report to the CFO or to the Chief Administrative Officer — as internal staff functions ought to. The line responsibilities will migrate to other line executives who have profit and loss responsibility — running divisions, product lines, or geographies. What’s a CIO to do? First, CIOs must articulate their contribution to both the staff and line roles. Those CIOs who remain innovative and create demand are the ones who will continue to earn the C part of their CIO title. In our sample, only 25% of CIOs were involved in the creation of market-facing innovations. It is these executives who will continue to have a seat at the executive table. This seat at the table is important because we find that those CIOs who are involved in the strategic planning of the organisation are more likely to drive business success. Put another way, it's hard to be a successful CIO if you are only an order taker and not a demand shaper. So, now is the time to see how much you are contributing to growing the top line, and expanding the bottom line — unless of course you’d like to lose your C.
“Those CIOs who remain innovative and create demand are the ones who will continue to earn the C part of their CIO title”
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Author: Jim Collins
Hide time | BOOK REVIEW
“Dashed hope follows dashed hope follows dashed hope yet again”
How the Mighty Fall And
why some companies never give in Jim Collins’ latest book focuses on how companies fail, but it also offers a ray of hope for companies that are looking to rise after a fall. Great institutions, like great individuals, can fall and recover, he says. “As long as you never get completely knocked out of the game, there always remains some hope.” In this work, Collins introduces a five-stage model to explain how companies fail. While the first two stages talk about the roots of corporate decline, the rest three dwell on management response to internal troubles. How the Mighty Fall differs from his earlier works Good to Great and Built to Last in that it focuses on companies that fail - his previous two books were about the ascent of companies. The author examines 11 companies that moved through the five different stages. He also contrasts the failure at these companies with the successes of their rivals, to arrive at a conclusion indicated earlier in the
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book, aptly summarised by quoting Leo Tolstoy: "All happy families are alike; each unhappy family is unhappy in its own way." Collins says that companies, in the current context, are like families. In fact, the book draws inspiration from Collins’ mentor and Stanford professor Bill Lazier who used to tell him: “Don't try to come up with the right answers; focus on coming up with good questions.” The big companies that were studied include Bank of America, Merck, Motorola, Hewlett Packard, Zenith, Texas Instruments, IBM and Circuit City. They were analysed either for their failure or success. The stages are classified as hubris born of success, undisciplined pursuit for more, denial of risk and peril, grasping for salvation and capitulation to irrelevance and death. In the first stage, companies that grow overestimate their merit and succumb to arrogance. And from there, they try to pursue more scale, more growth and more acclaim - they
ABOUT THE REVIEWER
Ullekh NP is consulting editor, CFO India. He has earlier worked with news organisations such as Mint, DNA, The Hindustan Times and India Today. Over the years, Ullekh has written on a wide range of subjects including politics, business, advertising, art, travel, culture and people.
indulge in overreaching. In the third level, these companies, ignoring internal warnings, discount negative data. As a result, they head to the stage four in which they desperately look for silver bullet solutions. It is at this stage that companies look for inspiring leaders as saviours or go for massive restructuring. There’s an interesting comparative study in the book of the fall of Hewlett Packard under flamboyant Carly Fiorina and IBM’s revival when low-profile Louis V Gerstner, Jr was at the helm. The author argues that “grasping” can produce a brief improvement, but its results do not last. “Dashed hope follows dashed hope follows dashed hope yet again,” he writes. The book provides a good read, but at least a few readers may ask why some authors sound like prophets when what they do is write about growth in good times and about decline in bad times. Maybe Collins has an answer.
Hide time | CIO Profile
Life is Beautiful Kinshuk Hora
Head of IT, India Sub Continent for GlaxoSmithKline Consumer Healthcare
The man and his lens: After he has had his fill experimenting with the camera, Kinshuk digs deeper by further reading on photography, updating his photographs online and so on. There are quite a few photographers whose work has impressed him – CartierBresson, Raghu Rai, Tarun Khiwal, Atul Kasbekar, Daboo Ratlani & Rajesh Bedi. Once on a shoot: On one of his weekend shoots, Hora and his photographer gang were shooting in Chandni Chowk when an old
woman arranging her spices shop on the footpath seemed an interesting subject. “One of my friend started taking her photos and she gladly posed,” Hora says. “When we started walking, she got up and started shouting and demanded money. It was a tough time getting out of the situation!” Let the music begin: Kinshuk listens to a variety of music: pop, rock, classical and his language of music is equally varied: Hindi, English, Arabic, Creole (Mauritian language)
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07 MAY 2010
photos by Subhojit Paul
india is a country where favouritism is rife, Kinshuk Hora's views on separating the wheat from the chaff comes as a breath of fresh air. “If I must regard someone with respect, he or she must earn the respect,” says Hora. As the Head of IT, India Sub Continent for GlaxoSmithKline Consumer Healthcare, Hora has to steer his team through IT challenges without losing focus on customers and without compromising on compliance. He believes that a good leader must be enthusiastic about his or her work or cause and also about the role of a leader. “People will respond more openly to a person of passion and dedication,” he says. There are other attributes that Hora considers important to be in a good leader — having an exemplary character and being tolerant of ambiguity and remaining calm and composed. When it comes to decision making, the most important lesson for Hora was the one he learned during his college days. While doing MBA from Mumbai University, Hora learnt about Kepner Tregoe’s Decision Making System. “This simple structured method of thinking literally helps in all situations by identifying the root cause and attacking it,” he says.
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Snap Shot Serious and sober? If that's the image you cut of Hora from the above description, it couldn't be further from the truth. Hora is a fun-loving person who makes sure that the workplace too is amply sprinkled with fun. “There is only one life and it’s beautiful – live it and enjoy it,” he says. “Being happy doesn’t mean that everything has to be perfect. It means that you start to look beyond the imperfections.” Hora loves to travel and see different places. He had wanted to be a photographer when he was in school, but only recently has been able to pursue his interest in photography seriously. He now devotes his weekends to a photography class conducted by a renowned photographer. Over the years, Hora has dabbled with different pursuits in life: transcedental meditation, buddhism, ornithology... you name it. While leafing through books on bird-watching at a bookstall, he met a military officer, a meeting that blossomed into a friendship over time. Hora learnt that his jawan friend had fallen into bad company and was hooked on to LCD, an addiction that threatened to snuff the life out of him. The jawan was in the habit of attending the Sunday mass at church. On one such occasion, as the jawan walked up the steps of the church, he found that a young lady who was by his side was moving away from him. He knew his breath still stank after a night of several rounds of drinks, but when the girl flinched, the message couldn't have been clearer. The jawan locked himself in a room for three days and vowed to give up his drug-taking, which he did. “If you have the will power, it's possible to do anything,” Hora says. Once a heavy smoker, Hora stopped smoking the day he called quits. —Aditya Kelekar
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The long, winding road... Watching a movie is Kinshuk's favourite way of unwinding. His personal DVD & Blu Ray collection has reached 200+, he boasts. He also loves driving and hates to be chauffer driven. “I love to go on long drives with wife and son in my SUV,” he says. Never give up... Hora's favorite movie is “Gorillas in the Mist”, starring one of his favorite actresses – Sigourney Weaver. It tells a true-life story of naturalist Dian Fossey and her work in Rwanda to save mountain gorillas. “She was completely dedicated to her work inspite of the hardships and threat to her life,” Hora says. She was finally murdered by poachers in 1985. Excellent example of “Love for a Cause” The heart of the matter... Hora is married to Supriya, a fashion designer with expertise in western women’s wear. They have a son Karttikeya who is 12 years old. On weekends the three, who live in Delhi, go mall hopping and shopping with a movie thrown in sometimes.
VIEWPOINT Richard Gough | richard@gough.net
Do the New. Marketing
to the media savvy digital native.
In 2008 the teenager Charlie McDonnell amassed thousands of fans with his "Charlieissocoollike" video blog on YouTube and was asked to appear on television with Whoopi Goldberg after blogging about "How to be English". The teenager, from Bath, Somerset, began filming the blogs in his bedroom in April 2008 and had no idea that anyone outside of his friends and family would log on. But his tongue-incheek videos provoked a massive response and by August 2009 he had over 174,000 fans who subscribe to his regular blog updates. In October 2009 Charlie was a guest of Google UK presenting as part of their Day in a life series. One of the interesting insights Charlie made was about his [media] consumption trends as a "digital native". He explained how he tried not to follow traditional media sources like the BBC but instead follows blogs of people he is interested in which tend to present stories he will be interested in. This of course means that we have a gen-
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cto forum 07 MAY 2010
thectoforum.com
eration that don't always follow conventional media routes and therefore provide marketing audiences that present new opportunities for Cloud and Web 2.0 led companies willing to reach their audiences through new media routes. In 2008 managers at CNN spoke about the future of television and how it is changing. YouTube is mentioned in the article as being a champion of online viewing. The Google-owned site now features professionally produced videos from CBS, TNT and others. YouTube should present an alarming sign to all TV media and at the same time should force them to come up with new solutions. YouTube needs to remain easily accessible in order to not be threatened by the rapidly evolving technology. It needs to focus beyond PC screens and onto other video displays: mobile phones, handheld players, and most important, the living room television. A recent survey of 14-19 year olds showed that they would be
About the author: Besides being an enthusiastic photographer, Richard Gough is a senior IT professional who has extensive experience in IT Operations Management, Service Delivery, Information Security and Programme Project Management working at the executive board level.
willing to substitute up to a quarter of their current TV viewing with amateur videos if the clips were easily accessible on TV. Another threat is the fact that the popularity of YouTube far outstrips its revenue generation. As Google Chief Executive Eric Schmidt once insisted, â&#x20AC;&#x153;YouTube ultimately will be very profitable. The challenge is finding the right business models, which is why Google is experimenting with ways to present ads that are more localised and entertaining.â&#x20AC;? Other threats involve continental competition like MyVideo and Dailymotion. Cloud computing is not just about using technology within the Internet, it is also about embracing tools and techniques that live within the Cloud to enhance our business success. When it comes to marketing, understanding your younger audience like Charlieissocoollike will clearly go a long way in helping create your media presence be it online or through more traditional routes.