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CTO FORUM

Technology for Growth and Governance

December | 21 | 2010 | 50 Volume 06 | Issue 09

THE STRATEGIC CIO | IS DLP FIT FOR YOU | CIO = CAREER IS OVER?

R E P P U U SS AAGER N N A A M AKKES M TTA HT G I I L L FF

ITH W S E I A SER HERE RE R U A UE OPART W s SHAGE 28 N I O I T C ND F ES. | P ON WE CE SECOT SET O NC TH EREN PERIE X DIFFHEIR E T

MORE THAN

Volume 06 | Issue 09

200 CIOS SHARE OPINIONS

A 9.9 Media Publication

ON HOW THEIR ROLES ARE CHANGING

EDITORIAL RAHUL NEEL MANI | rahul.mani@9dot9.in

Mission Accomplished…

Tough but not impossible

recall a famous quote from Margaret Thatcher that went, “Look at a day when you are supremely satisfied at the end. It's not a day when you lounge around doing nothing; it's when you've had everything to do, and you've done it." In one line, it was a ‘Mission Accomplished.’ I am referring to the ‘mission’ that we set for ourselves. Part of the mission was to convince 25 senior IT leaders andthe CIOs from India State of and abroad to contribute their exclusive opinions for the S TAT E - O F - T H E - I N D I A N - C T O S U R V E Y

COVE R S TO RY

Indian CTO

two issues of December 2010. Despite the paucity of time, I am glad that the community didn’t disappoint at all. I and my team mates met or spoke to these CIOs to get their views on a set of topics at the heart of the transformation that their roles are surely undergoing. Surprisingly some of the discussions went much beyond the scope of work. Sunil Mehta, CIO of JWT hosted lunch at his office for our meeting with him. Prashun Dutta, Senior Executive VP of IT at Reliance Energy

Stepping into 2011, CIOs are faced with great opportunities, and some nigglin g problems, as our SECOND STATE-OF-T HE-INDIANCTO SURVEY found. The bottom line is, speak and do more business, less jargon, move ahead with a positive note.

EDITOR'S PICK 45

he role of the CIO is rapidly evolving. From the 'MIS guy' of close to a decade ago to a business support functionary – CIOs are fast becoming important business enablers. The ones who are thinking and articulating business are finding themselves on management committees, and even the board – they're becoming instrumental in shaping the futures of their companies. Gone are the days when the CIO's utility was only in 'keeping the lights on' in the organisation. Granted, the largest chunk of her budgets and a big share of her day is still given over to ensuring everything is up and running – however, that belies the complete makeover, nay down-to-the-core transformation her role is undergoing.

Closer to the Top CIOs mostly don't report to the CFO any more. Only 40 percent of our respondents did that, clearly reflecting their coming into their own. This depicts a more strategic role of IT in an organisation, rather than being only an expense. If the CIOs report to a managing committee/ CEO or COO, then their role is more towards growing the business or making a positive impact in some way. Also, slowly the penetration of IT in the business has increased multifold and so has the understanding of the CIO of the business processes of the company. S/he is one of the few people in the com-

report in to? Who do you

40%

43% CEO

CFO

18% Other

THE CHIEF TECHNOLOGY OFFICER FORUM

CTO FORUM 21 DECEMBER 2010

State of the Indian CTO

Stepping into 2011, CIOs are faced with great opportunities, and some niggling problems. The bottom line is, speak and do more business, less jargon, move ahead with a positive note.

surprised us by bringing along his CFO Madhukar Moolwaney, and touched off a fine discussion on how they work together. Madhukar gave us a candid perspective on how finance and IT work at Reliance Energy. Sandeep Phanasgaonkar, Group CTO and President of Reliance Capital gave us valuable insights on how to be different in the crowded marketplace. (All of the above and many more are featured in this issue). The second part of the mission was honestly tougher. We had set a goal to get a minimum of 200 qualified responses for our second annual CIO Survey which ran for nearly 16 days. In all, we got 235 duly filled responses and after weeding out the irrelevant ones, we reached 185 – close to the target (and much better than the 110 in 2009). From the beginning to the

end of the mission there were moments of limitless frustration. As Martin Luther King (Jr.) had said, “we must accept finite disappointment, but never lose the infinite hope.” We didn’t give up and the final outcome is heartening. I want to use this opportunity to thank all the CIOs who devoted time to write for us and who trusted our ability to use them sanely. I am sure you’ll like the hard work put in by the team CTO Forum. In the end, I would like to wish my friends and the entire community a very happy and meaningful 2011. Let’s keep the dialogue going.

THE CHIEF TECHNOLOGY OFFICER FORUM

CTO FORUM 21 DECEMBER 2010

DECEMBER 10 THECTOFORUM.COM

COV E R D E S I G N: AN I L T

CONTE NTS

20B COVER STORY

20B | Super Manager Takes Flight We continue our series with the

second part where a different set of CIOs share their experiences.

COVER STORY SURVEY

45 | STATE OF THE INDIAN CTO 2010 Speak and do more

business, less jargon, move ahead with a positive note, suggests this year's survey

16 | BEST OF BREED: IS DLP FIT FOR YOU?

Certainly if your customer base, trade secrets, or your employees are important for you. BY ROBB RECK

46C | TECH FOR GOVERNENCE: HOW TO KILL IT WORKER ENGAGEMENT

46C

Mistakes that can derail engagement among your IT teams BY JUDY WHITE

REGULARS

01 | EDITORIAL 10 | ENTERPRISE ROUNDUP

20 MENTOR’S VIEW

20 | A Time to Be Like Janus? Open new

frontiers to conquer and help businesses succeed as you assimilate the lessons of the year gone by

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COLUMN

6 | I BELIEVE: THE STRATEGIC CIO It means technology heads speaking business and business heads taking on the role of technology strategist. BY MANISH CHOKSI

62 | HIDDEN TANGENT: SO NEAR – YET SO FAR. Switch-off for an hour! BY GEETAJ CHANNANA

64 | VIEW POINT: THE NEXT THING I LOVED TODAY Dell’s Social Media Command Center BY STEVE DUPLESSIE

FEATURES

51 | NEXT HORIZONS: CIO AS TRANSFORMATION LEADER It's time to start thinking about how you can emerge as a change leader in your enterprise. BY DON REISINGER

www.thectoforum.com Managing Director: Dr Pramath Raj Sinha Printer & Publisher: Kanak Ghosh Publishing Director: Anuradha Das Mathur EDITORIAL Editor-in-chief: Rahul Neel Mani Executive Editor: Geetaj Channana Resident Editor (West & South): Ashwani Mishra Senior Editor: Harichandan Arakali Assistant Editor: Varun Aggarwal Correspondent: Nipun Sahrawat DESIGN Sr. Creative Director: Jayan K Narayanan Art Director: Binesh Sreedharan Associate Art Director: Anil VK Sr. Visualiser: PC Anoop Sr. Designers: Prasanth TR, Anil T, Joffy Jose Suresh Kumar, Anoop Verma NV Baiju & Chander Dange Designer: Sristi Maurya & Charu Dwivedi Chief Photographer: Subhojit Paul Photographer: Jiten Gandhi

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ADVISORY PANEL Ajay Kumar Dhir, CIO, JSL Limited 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 (9818860797) GM South: Vinodh K (09740714817) Senior Manager Sales (South): Ashish Kumar Singh GM North: Lalit Arun (09582262959)

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THE AUTHOR HAS close to two decades of IT management experience with Asian Paints, one of the largest manufacturer of decorative and industrial coatings.

PHOTO BY JITEN GANDHI

I BELIEVE

BY MANISH CHOKSI Chief – Corporate Strategy and CIO, Asian Paints

The Strategic CIO

It means technology heads speaking business and business heads taking on the role of technology strategist. CIOs are not in the same mould today as a decade ago. The inflection point came when the evolution of technology and changes in the way business uses technology started coming together – requiring IT leadership to display much greater understanding of business. Even if one used home-grown or package software, most of the skill sets used to do IT projects require today a fair amount of understand-

CTO FORUM 21 DECEMBER 2010

THE CHIEF TECHNOLOGY OFFICER FORUM

CURRENT CHALLENGE THERE IS DEFINITELY AN EXPECTATION FROM THE CEOS, THAT YOU ACTIVELY PARTICIPATE IN CONTRIBUTING TO THE BOTTOM LINE AND WITH INNOVATIONS TO BOOST THE TOP LINE

ing of business processes, change management, transformation and the ability to continuously work with the business to be able to implement these projects successfully. Today in a lot of companies the CIO and the IT head has moved from reporting to some support function such as the head of the corporate centre or CFO to being actually a member of the strategic management team. This is the next level – the strategic CIO needs to understand the business that he is in, the business drivers, the growth drivers, and there is definitely an expectation from the CEOs, the MDs that you actively participate in contributing to the bottom line and with innovations to boost the top line. The other evolution, is that a lot of companies are considering putting people in the role of the head of IT with 'non-tech' background. They bring their own flavour to the job. Even within our company, I wear a dual hat, responsible for strategy and IT. Clearly many more CIOs sit on the management councils today. So what next? The CIO's role will remain in the change management arena, Choksi feels, but “more CIOs will have a seat at the table.” Their technology roles will be taken on by others while the CIO gets embedded in every part of the business. There will be a significant increase in the non-technology background joining the IT enterprise and “you will also see the reverse, with people who have learnt a lot about technology, learnt new skills, processes, going back to business, making a difference.” Does he see CIOs becoming CEOs? “I'd say the reverse is also possible. The CEO of a services company could become CIO in much larger corporations” in different sectors. Similarly, the CIOs could increasingly take on business leadership roles including that of the CEO.

LETTERS CTOForum LinkedIn Group FOR UM

SPEED

A while back one of my bosses used to say Technolo maxim. “Stay foolish, Stay nervous.” gyGreat for wth and Keeps you nimble footed looking Gro for oppor opporGoverna tunities to cash in on. Opportunities are not nce in the realm of business development alone but also in back end functions like ours. Look for opportunities to team up with your peers in the business. We spotted an opportunity to help the company’s sustainability agenda. We pushed a telepresence and videoconferencing agenda. You will be surprised with the offtake of telepresence. Our top management have used it well, and overall we have saved around Rs. 2.6 million in one month along with the environmental benefits that come along with it. We have also taken the oppor opportunity to work with our services sales team to build a model for a pre-sales bid from an IT stack point of view. This model works well —Tamal Chakravorty and we are able to capture project manageCIO, Ericsson India ment details for all the managed services or outsourcing bids. Outsourcing is a good way of freeing yourself up to spend more time in the business to look for these opportunities.

OVING DATA GOVE IMAGING : ANIL T

Absolutely pertinent in today’s world. Speed is all about decision making, quicker turnaround time and be able to deliver applications or infrastructure or maybe a new service at breakneck speed. That’s only possible if you have expert bodies within your function to take charge and accomplish. Speed comes from simplicity. If the architecture is December simple to create and use then new services | 07 | 2010 Volum | 50 e 06 | can easily be bundled on top of it. ThereIssue 08 fore, skilling on architecture designing and ability to understand is important for a CIO. An example of speed is our in-sourcing of various contracts from our service operators. We have modularised work space design, far end design and basic support services. It is like a quick call-off when we are given information on a new deal that our company may have signed up. The whole setup process is only about 1 month, barring a few cases where PC/laptops may get delivered late. We have our Citrix farms and applications ready to in-take more numbers at the click of a button.

“Stay foolish, Stay nervous.”Great maxim. Keeps you nimble footed looking for opportunities to cash in on.

IMPR

RMAR KETS

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THE CHIEF TECHNOLOGY OFFICER FORUM

YONE

| GET EVER

07 DECEMBER 2010

AND SUPE

OPPORTUNITY

5. If used at users’ homes it also means cost of connectivity to your office systems and therefore service desk calls being generated 6. Printing costs for these additional machines 7. Monitors, spares, licenses If you put all of these together you will realise that for 25% additional machines you are actually spending 25% costs over and above what you should pay for servicing users. Of course, all users are VIPs and need these machines, but if you ask them for justification and find ways to meet their require-ments you will see most of them returning the assets. We have found a way of doing this effectively. We have transferred all the assets to the employee’s name and he remains liable till the day he resigns. This makes him actually think about the implications of owning more compute assets – fear of loss is too large for him to overlook. Compounded by the fact that the unit heads or cost centre heads get reports on how much more they spend for these 'extras.' This is just a small example, you may find more such examples, which you may have overlooked.

CE | OF PRIVA TE JETS

All IT managers have these three skills. Remember the day when your management or boss never expected a certain percentage cut in costs from you? At least I can’t remember that day, maybe one day we will only be expected to spend, so I see nothing difficult in doing this. But what is challenging then to attain this objective? A normal process of cost cutting, which is budget versus actual status, and driving

your teams to get good negotiations is not the only route to reach this goal. It is understood and expected of you to do it. Business expects you to deliver cost cuts through a systematic process of reviewing all your deliverables, costs of the delivery and if that is actually core to running your IT function. There are times you will be surprised that it will throw up compelling cases to cut costs further. So this is actually a drill down into how you run a function and see if you can further scavenge left-overs that are unimportant but eat into your resources. In my current company I realised that the PC to man ratio was at 1.22 which means every man has 0.22 machines more than he should get. If you multiply the number of heads with this ratio you will find that the costs hidden in this are as follows: 1. Cost of hardware (leasing cost of outright purchase cost) 2. Depreciation for outright purchase cost 3. Cost of asset reconciliation or physical verification 3. Cost of service 4. LAN ports

S P I N E

RNAN

COST

In order to deliver the most on the three fronts a CIO is always familiar with – cost cuts, speed and opportunities – keep it simple. BY TAMAL CHAKRAVORTY

CTO

009 and a good part of 2010 was a year of great revelation. For the first time in my career I realised that IT plays a significant role beyond just productivity or tooling, a goal entrusted to us to help the company stay competitive in the market. The adage so true for IT professionals – to seek opportunities, cost cuts and speed – turns out to be truer now than before. I would also add another principle, which is simplicity, to complicate the 3 point agenda even further: It does not need a lot of skilling/ re-skilling yourself to be able to match up to these expectations of the business in trying times. What are the traits that a CIO has to deal with agility, frugality and opportunity: I work for a telecom service provider so my examples will pertain to the telecom service industry in general, but can be used elsewhere as well.

CTO FORUM 07 DECEMBER 2010

CIOS HAVE BECOM

ON THE SAME

E SUPER-MANA OF IT AND BUSIN GERS ESS FOR THE ENTERPRISE IT LEADE . 25 OF THE TOP THOUGHTS RS SHARE THEIR OVER TWO SPECI YEAR-END ISSUE AL S. | PAGE 28

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KEY COMPETENCIES WHICH CAN MAKE CIOs BUSINESS LEADERS

1. Engage with the enterprise across layers and industry 2. Listen to customers to gain insight into their success. Every individual finally needs an answer to What's In It For Me? 3. Challenge conventional wisdom, expense, with a view to transform, not for the heck of it 4. Communicate, if you don't open your mouth, you might as well go back to programming or fixing the projector

Join close to 500 CIOs on the CTO Forum LinkedIn group for latest news and hot enterprise technology discussions. Share your thoughts, participate in discussions and win prizes for the most valuable contribution. You can join The CTOForum group at: www.linkedin.com/ groups?mostPopular=&gid=2580450

Some of the hot discussions on the group are: Does a CTO needs to be an expert on "security"? is network and information control part of that security matter ? Of course, need to ensure that network communications will support the appropriate security protocols for the business. In addition, administrative access to network security and should be aware that, increasingly, these baseline capabilities must be built into organization that IT connects to the business network.

—Ashfaque Ahmad K. GM Information Technology RR Group Are CIOs the right architects of Change Management? If yes, How? A CIO is a bridge between IT and Business. He has to understand what changes will bring value to the organization and how it will impact other resources i.e process, applications, IT and People (Organization). This is the basic quality which has to be in a CIO.

—Sanjay Dhulia Sales Manager- India at Ids Scheer

CTO FORUM 07 DECEMBER 21 NOVEMBER 2010 2010

THE THECHIEF CHIEF TECHNOLOGY TECHNOLOGY OFFICER OFFICERFORUM FORUM

http://www. thectoforum.com/ content/lessprivacy-bettersecurity

BEYOND THE SUPPORT. IT can be a profit centre instead of just a cost centre.

“One needs to move away from quantifying the return, but look at qualitative improvement of the business process execution that IT is able to bring out.” To read the full story go to:

WRITE TO US: The CTOForum values your feedback. We want to know what you think about the magazine and how to make it a better read for you. Our endeavour continues to be work in progress and your comments will go a long way in making it the preferred publication of the CIO Community.

Information is the lifeblood of not just corporations but organised crime terrorism, says Steve Durbin of the Information Security Forum in conversation with Rahul Neel Mani. The ISF’s released its Threat Horizon Report, and Durbin says we may have to give up some individual privacy in return for responsible governance and security.

OPINION

ARUN GUPTA, Group CIO at Shoppers Stop

Send your comments, compliments, complaints or questions about the magazine to editor@thectoforum.com

CTOF Connect

CHANDRASEKARAN N SPECIAL DIRECTOR - IT ASHOK LEYLAND

http://www.thectoforum.com/content/ business-analytics-roi

FEATURE INISDE

Enterprise

Cloud, Mobile Computing and Social Networking to Form New IT Industry. Pg 12

ROUND-UP

Enterprise SaaS Revenue at $9.2 Bn

Initial concerns on security, response time and service availability reduced WORLDWIDE SaaS revenue within the enterprise application software market is forecast to reach $9.2b in 2010, up 15.7 percent from 2009 revenue of $7.9b, research firm Gartner Inc., said. The market is projected for stronger growth in 2011 with worldwide SaaS revenue totalling $10.7 billion, a 16.2 percent increase from 2010 revenue. "Initial concerns about security, response time and service availability have diminished for many organisations as SaaS business and computing models have matured and adoption has become more widespread,"

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says Sharon Mertz, research director at Gartner. The composition of the worldwide SaaS landscape is evolving as vendors continue to extend regionally, increase penetration within existing accounts and "greenfield" opportunities, and expand their solution offerings, either organically or through acquisition. "There is increasing involvement from executives in purchasing decisions, as well as greater participation from IT in the purchase process due to larger deals, and a higher requirement for downstream integration," Mertz said.

DATA BRIEFING

14% MARKET SHARE OF INTEL IN WORLDWIDE SEMICONDUCTOR MARKET SOURCE: GARTNER

E NTE RPRI SE ROUND -UP

THEY MARC SAID IT BENIOFF Marc Benioff, CEO of Salesforce.com, has struck back at Microsoft during Salesforce.com's annual conference, Dreamforce, in San Francisco, calling the company an "evil empire." Microsoft sued Salesforce.com earlier this year claiming it had infringed nine patents. The case sought to prevent Salesforce.com from providing some features for its CRM software that Microsoft claimed it had patented.

IBM to Build IG3's Bangalore Data Centre Data centre to be one of the largest in the Asia-pacific region IBM and Indian Green Grid Group (IG3), a physical and IT infrastructure provider, have entered into an agreement under which IBM will design a data centre for IG3, the companies said in a statement earlier this month. The centre will cover approximately 850,000 square feet, according to the statement. IBM and IG3 also signed a marketing alliance agreement that will focus on the development of the managed services and joint go-to-market strategies to acquire customers for services such as IT hosting, business continuity and disaster recovery. “We are excited to sign this agreement with IBM, which will give us a competitive edge to deliver scale and scope for our customers. With IBM’s global expertise in designing highly effective Green Data Centres and IG3’s experience in developing large scale secure business infrastructure, we will be able to offer our clients the best possible data centre services in India,” S. Thiagarajan, CEO of IG3 said in the statement.

“Not everyone wants us to have this fun. The old industry is trying to do everything they can to stop this. We call it FUD. One company in particular has gone all out because they're nervous. They don't want us going into the cloud. Microsoft sued us. They tried it, they lost. We prevailed and succeeded”

—Marc Marc Benioff CEO, Salesforce.com

QUICK BYTE ON GROWTH OF INTERNET IN AMERICA

Forrester expects that 2m new households in US will be Internet connected by the end of 2010, and that 82% households will be online by 2015. Broadband will have reached 5.5 m new houses by year end, meaning that more than 90% connected houses will have access to high speed Internet by the end of 2010. THE CHIEF TECHNOLOGY OFFICER FORUM

CTO FORUM 21 DECEMBER 2010

E NTE RPRI SE ROUND -UP

Cloud, Mobile Computing and Social Networking to Form New IT Industry.Transformative

technologies make critical transition AS A WAVE of disruptive technologies has emerged and evolved, forged by the pressures of a global economic recession in 2011, and certainly beyond, IDC expects these technologies – cloud services, mobile computing, and social networking – to mature and coalesce into a new mainstream platform for both the IT industry and the industries it serves. "In 2011, we expect to see these transformative technologies make the critical transition from early adopter status to early mainstream adoption," said Frank Gens, senior vice president and chief analyst at IDC.

Spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organisations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. mid-size firms by year's end. Meanwhile, the more nascent private cloud model will continue to evolve as infrastructure, software, and service providers collaborate on a range of new offerings and solutions. Meanwhile, the vendor battle for

GLOBAL TRACKER

Vulnerability Management Trends

More than 85% have compliance mandates like PCI DSS. Half reported

compliance takes up to 50% of their work week.

85%

50%

SOURCE: EEYE 2011 VULNERABILITY MANAGEMENT TRENDS REPORT

CTO FORUM 21 DECEMBER 2010

THE CHIEF TECHNOLOGY OFFICER FORUM

two cloud "power positions" will be joined to determine on whose cloud platform will solutions be deployed, and who will provide coherent IT management across multiple public clouds, customers' private clouds, and their legacy IT environments. Mobile computing – on a variety of devices and through a range of new applications – will continue to explode in 2011, forming another critical plank in the new industry platform. IDC expects shipments of appcapable, non-PC mobile devices (smartphones, media tablets, etc.) will outnumber PC shipments within the next 18 months – and there will be no looking back. While vendors with a PC heritage will scramble to secure their position in this rapidly expanding market, another battle will be taking place for dominance in the mobile apps market. The level of activity in this market will be staggering, with IDC expecting nearly 25 billion mobile apps to be downloaded in 2011, up from just over 10 billion in 2010. Over time, the still-emerging apps ecosystems promise to fundamentally restructure the channels for all digital content and services to consumers. Meanwhile, social business software has gained significant momentum in the enterprise over the past 18 months and this trend is expected to continue with IDC forecasting a compound annual growth rate of 38 percent through 2014. In a sure sign that social business has hit the mainstream, IDC expects 2011 to be a year of consolidation as the major software vendors acquire social software providers. Meanwhile, the use of social platforms by small and medium-sized businesses will accelerate, with more than 40 percentof SMBs using social networks for promotional purposes by the year's end. As the new mainstream IT platform coalesces in the months ahead, IDC expects it to lay a foundation for IT vendors to support, and profit from, a variety of "intelligent industry" transformations. In retail, mobility and social networking are rapidly changing consumers' shopping experience as they bring their smartphones into the store for onsite price comparisons and product recommendations. In financial services, mobility and the cloud are bringing mobile banking and payments closer to reality. In the healthcare industry, IDC expects 14% of Americans to use a mobile health application in 2011.

E NTE RPRI SE ROUND -UP

Salesforce.com Releases Enterprise Database for Cloud Aimed at helping developers focus on building apps

SALESFORCE.COM, the enterprise cloud computing company, has launched Database.com, the world’s first enterprise database built for the cloud, the company said in a statement earlier this month. Database.com is built from the ground up to power new enterprise applications that are on the cloud, mobile and social. It is open for use with any language, platform and device. It enables developers to focus on building applications instead of tuning, maintaining and scaling databases.

“We see cloud databases as a massive market opportunity that will power the shift to enterprise applications that are natively cloud, mobile and social,” said Marc Benioff, chairman and CEO, salesforce.com. Database.com is open. Developers can write their applications in Java, C#, Ruby, PHP and other languages.They can run their apps on any platform Force.com, VMforce, Amazon EC2, Google AppEngine, Heroku or Microsoft Azure. And their apps can run natively on any device, like an Android phone, Blackberry, iPad, or iPhone. These apps can all call the Database.com APIs securely over the Internet. These can be small apps needed by only a few users, or massive apps capable of scaling to support hundreds of thousands of users. “We’re seeing a rise in popularity of cloud enabled database management systems (DBMSs) that remove the complexity of software and hardware, and deliver automatic scalability, tuning and back-up. To truly see adoption in the enterprise, however, cloud enabled DBMSs need to support both the speed, ease and elasticity of the cloud as well as the relational, security and transactional features required by enterprises," said Donald Feinberg, VP and distinguished analyst, Gartner. "The platform shift to cloud, mobile and social applications will continue to accelerate,” said Sohaib Abbasi, chairman and chief executive officer, Informatica. “These modern applications require the next generation of cloud databases and cloud data integration. To facilitate this shift, Informatica is announcing the expansion of Informatica Cloud to integrate data from both traditional on-premise databases and the new, innovative cloud-based Database.com service.”

FACT TICKER

3Q Server Sales Rose 13.2%, IDC Says Demand improved around

the world

ACCORDING to the IDC Worldwide Quarterly Server Tracker, factory revenue in the worldwide server market increased 13.2 percent year over year to $11.8 billion in the third quarter of 2010 (3Q10). This is the third consecutive quarter of year-overyear revenue growth and the fastest quarterly revenue growth since 2000, as market demand continued to

CTO FORUM 21 DECEMBER 2010

improve around the world. Server unit shipments increased 13.1 percent year over year in 3Q10; however, server shipment growth moderated slightly over the strong 23.1 percent year-overyear shipment growth reported in the second quarter of 2010. Volume systems experienced the sharpest improvement with year-overyear revenue increasing 22.8%, the

THE CHIEF TECHNOLOGY OFFICER FORUM

fourth consecutive quarter of positive growth for the segment. Demand for high-end enterprise systems continued to be soft, as revenue declined 10.4 percent when compared to 3Q09. This is the eighth consecutive quarter of contraction in the high-end enterprise server segment of the server market. "The server market experienced its strongest growth in 10 years in the third quarter of 2010," said Matt Eastwood, group vice president, Enterprise Platforms at IDC. "All geographic regions exhibited positive growth for the second consecutive quarter."

GREEN TALK

GREEN SOLUTION TO TRAFFIC HEADACHE

Korean information-technology service provider, LG CNS, has developed a solution to traffic headaches in mega-cities like Beijing and Seoul, leading to 16 percent more use of public transportation, 6 percent less carbon emission, and 24 percent traffic reduction, the company said in a statement earlier this month. In these cities, the deployment of the LG CNS transportation payment system – a unified fare payment technology based on Smart Card - has had a drastic impact on transportation. Rising urban traffic congestion has led to huge demands for higher efficiency in public transit, which in turn has resulted in improvements for the passengers, easing of taxpayers' burden, and reduction of carbon emissions. Examples include the one-fare system across all bus, highway and train systems, real-time bus information, and free transfers across all systems. The LG CNS Smart Card is an all-in-one solution for traffic industries. The system is useful for ticketing as well as many other purposes such as data collection, and can be used in conjunction with credit card companies, banks, and mobile services.

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FEATURES INSIDE

Open vs. Commercial Security Pg 18

ILLUSTRATION BY BINESH SREEDHARAN

Is DLP Fit For You? Certainly, if your customer base, trade secrets, or your employees, are important for you. BY ROBB RECK

CTO FORUM 21 DECEMBER 2010

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ake a moment to consider the most valuable assets your company has. Think about what you have that sets you apart from your competitors. Is it the cutting edge product you sell? Is it the high quality employees you employ? Is it the secret recipe for your delicious salsa? Is it your loyal client base? Go ahead and give it 30 seconds or so. I'll wait. If somewhere on that list of valuable assets you included your customer base, trade secrets, employees, or your products, then Data Loss Prevention (DLP) might be for you. Each of these assets can be compromised if the wrong data gets out of your company. If a list of your customers gets into the hand of a competitor it could mean a significant hit to your bottom line. Your secret recipe getting into the wrong hands could lead to copy-cat products, or it may end up on a blog and we'll have everyone making your product at home. Personnel data loss could lead to employees losing trust, or a loss of morale ("John down the hall is getting paid HOW MUCH?!"). If your source code gets into the wrong hands, or the specifications for that widget you build is leaked, your product isn't going to be worth the price tag you've attached to it. Data Loss Prevention (DLP) solutions are centered around the idea of identifying what data needs protecting, how that data should be allowed to move, and then ensuring those rules are followed. DLP technologies have the ability to work with data sitting at rest on your servers, in use on a system in your organisation, or in motion as the data are sent out via the web, removable media, or printer. The most important step to a successful DLP program is determining what data your company needs to protect. For large organisations this is a big job and can seem overwhelming. Fortunately, quality DLP products have tools to assist you

SECURIT Y

in this discovery phase. You can identify particular servers or folder locations that are considered sensitive, and the DLP solution will learn those files and protect them. Or you can give the DLP system a set of rules and the system will crawl your network and find where all the sensitive information is saved. Once you have determined what constitutes sensitive information in your company, it's time to start watching how that sensitive information is moving around. DLP solutions come with a monitoring feature that will watch for sensitive data as it's bounced around your network and, most tellingly, as it exists your network. This type of monitoring is going to uncover all kinds of ugly truths. If you're not using a DLP solution to prevent it, your payroll/HR department is probably emailing out payroll and employee information. Your developers are probably emailing around source code. Your accountants are probably emailing out financials. Odds are they are not doing this maliciously. They have simply found the path of least resistance, and since nobody has complained before, why wouldn't they? Thanks to our monitoring, we now know that more sensitive information leaves our organisation than we thought possible. On the bright side, we know who is doing the sending, what kind of data is being sent, and where the data is going. With that knowledge we can create high quality standards that address how data should be shared and transmitted in our environment. Instead of one-size-fits-all standards created for companies across multiple industries, we have the ability to create standards that directly address the kind of sensitive information we deal with, the kind of applications we support, and the business realities we face. DLP standards should specifically detail what data may be transmitted out of the company, by whom, by what means and to what destinations. Standards do not need to specify technol-

BEST OF BREED

security numbers to the web ogy used. They lay out the rules is probably a good idea if we the business wants to enforce, are an organisation who holds which can be done through any customer or patient sensitive number of technical means. ORGANISATIONS information. But if our payroll We now have (1) determined FEEL DATA system requires that HR enter what constitutes sensitive information in our organisaLEAKAGE CRITICAL employee's SSN's as a part of the on-boarding or benefits tion, (2) better knowledge of DAMAGE THEIR enrollment processes, that DLP where data is on our network, REPUTATION rule could cause business inter(3) better metrics on how that ruption. We can identify this data is being sent (the who, issue and allow an exception for how, and where), and (4) we posting SSN's to that site. By finding this have crafted high quality standards that type of issue during a monitoring phase we directly address our company's reality. All avoid a work disruption and bad press that of this value is delivered without DLP ever goes along with it. having blocked a thing. When we have completed the monitoring Next we want to convert those DLP stanphase, it's time to flip the switch and start dards into rules on the DLP device itself. I blocking inappropriate information. This won't get into detail on this process, as it stage contains a new set of benefits to the will vary depending on the DLP solution organisation. Most obviously, we are improvyou choose. But getting the rules properly ing security by preventing sensitive data from entered and appropriately configured it exiting the organisation inappropriately. But essential. You may want to get the assiswe also receive assurance and compliance. tance of the vendor or a consultant either Assurance means that not only are we for the configuration, or to check over your secure, but we can provide evidence to back work after you're done. it up. DLP provides assurance because we An important step, before we turn on all can look into the data that's been transmitted these rules and start blocking, set all the and confirm that the things that are getting blocking rules in a monitor or alert mode. through are what we allow. We can generate One of the worst things we can do for the reports that we can hand to IT, HR, Legal, or health of a DLP project is start blocking user Audit that show all of the types of data we are activity before the system is properly tuned. blocking from exiting the network. If the first thing leadership hears about our Compliance is a primary driver in many new DLP solution is how it stopped a major organisations, and will often provide the deals from closing, we're going to have a funding for DLP projects. Several of the very tough time ever getting real leadership security standards require on-going monibuy-in for the technology. toring of traffic that travels across our netThat's why, before we go live, we will works. DLP can provide that insight, and spend a significant amount of time in monimeet many compliance requirements. tor mode seeing what the rules WOULD do While DLP systems are a relatively new if they were actually turned on. By watching addition to the overall IT landscape, there are what would have happened we can look for mature, well-proven solutions available now. false patterns and figure out how to allow DLP can move a company from assuming those exceptions through the system withthey know where their data is, and that it's out turning off the DLP protections overall. being used appropriately, to a place where they A filter preventing the posting of social know exactly where their sensitive is, who is using it, and where they are sending it. Any company who has valuable data should look long and hard into whether a DLP solution might be right for them.

Assurance means that not only are we secure, but we can provide evidence to back it up

73%

â&#x20AC;&#x201D; Robb Reck is an Information Security practitioner. This feature is published with prior permission from Infosec Island www.infosecisland.com

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CTO FORUM 21 DECEMBER 2010

BEST OF BREED

OPEN SOURCE

Open vs. Commercial Security

Whether software is open or commercial the quality in relation to security defects isn't different. BY RAFAL LOS

in relation to security defects isn't much different.

ome of the issues brought from my article on Small Office, Big Problems, including whether Open Source software is "more or less secure" than commercial software, or whether small offices (specifically medical practices) are at a higher risk than larger ones simply due to their operating model.

But commercial vendors have accountability

ILLUSTRATION BY BINESH SREEDHARAN

It's not really about security That's right, unless a piece of software explicitly says its aim is to be more secure then whether it's open source or a commercial software package doesn't matter. Software can be written securely (or conversely, insecurely) by an open-source project (as my post points out) or a commercial vendor - it's all a matter of priority. Most software is written for a specific purpose, and whether its written for a doctor's office, or the International Space Station... the purpose is the goal. If the goal isn't to write secure software, then odds are security gets little or no attention on matter who wrote the code. On that note, how many pieces of software have you ever seen that had the primary marketing pitch as "security"? More to the point how many of those software packages have sold high volumes in the mainstream (non-specialty) market? The answer is probably either none, or almost none for most people. Software sells because of features. Features are most-often the widgets, gizmos, and do-hickeys that cause us security folks sleepless nights. This cycle is unfortunately self-perpetuating and unfortunately unless there is a compelling event somewhere that causes a shift in the development mentality this will continue. Software will continue to have security as an after-thought, with most software being written to get people to buy for the cool shiny buttons and widgets. So you see... at the end of the day, it's really not about security. Whether software is open-source or commercial I think the quality

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While this may be a common mis-conception, I just don't see it as holding any water in an argument. Sure you can hold a commercial vendor accountable for a piece of software being riddled with security defects that lead to a massive breach, but ultimately what matters in the court of public opinion is that you got breached. The software is simply a vehicle for the breach, often barely mentioned (if ever). A medical practice that suffers a significant data breach of their patient health record system makes the headlines and the evening news, while the software (and whether it was open source or commercial) rarely gets a mention. Odds are that you may be able to sue a commercial organization for the bugginess of their software package, but make sure you read the fine print on the EULA (End User License Agreement) which dissolves all liability from the vendor and places blame for nearly everything back to the user of the system. If you bought it, implemented it, it's most than likely your fault. If anyone has any evidence of this being otherwise (legal cases, press clippings or anything) I'd love to see it! The one angle I will add to this on the open source front is that open source software rarely has a central support model (although this is not completely unlikely). When you pull down an opensource package the general feeling (whether it's true or not is another topic of debate) is that you're on your own. Sure there are forums, community bulletin boards, and sometimes entire companies set up to answer your questions - but those are either sparsely read, or pay-for which defeats the purpose of being "free". Open source software does have plenty of accountability, if you look to the right packages though. I can name several packages that

OPEN SOURCE

have great accountability (Ubuntu anyone?) and responsiveness as well as community support. The issue here is that you have to make the effort to look... which leads me to my final point.

So what's the real issue?

80% OF COMMERCIAL

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security, much less advanced software security assurance or security testing. Even if they hire a consulting firm to implement the software and there happens to be line-item for security somewhere... which is rare... it's a virtual guarantee that that software isn't properly vetted or patched. If an SMB finds a package that suits their needs, without having to spend a lot of money you can bet that package will get deployed no questions asked. What the security ramifications are ...only the patients may one day find out the negative impacts of that decision.

APPS TO USE OPEN It turns out that the real issue isn't really Open Source SOURCE BY 2012: vs. Commercial software at all... at least not really. What this conversation really devolves into is, shockingly, GARTNER cost. The reason smaller business tend to go open source and end up being more risk-prone all comes down to the cost of doing business. So what's the solution? Small business look for ways to cut corners any way they can to We've even had a few conversations around the solution... whether it stay competitive and stay ahead of their competition. This, after makes sense to have a PCI-DSS -style requirement for medical practices. all, is the true spirit of small business. Delivering customer value Maybe the answer is yes, as much as we in the security community are at a lesser price, with a "small business" feel is what attracts many opposed to this idea generally on principle. Will it raise the bar on secucustomers in the first place. These types of Small to Medium sized rity, or simply add more red tape? Do you believe compliance makes the Businesses (SMBs) are rarely found spending $100,000 on a comworld safer by raising the bar or simply gives the lawyers work? mercial software package, plus support when the payback (ROI) is I think we need to educate, educate, educate. Educate SMBs on either >3 years or maybe never. the dangers of the lapses in security. This can only be done by reguUltimately, the issue is cost. SMBs tend to download and set up lation, unfortunately. Once we educate, we can then audit against what ever is cheapest, that will still get the job done in some valuable regulations to make sure there is at least a baseline out there. If way. If an open source package does the job, and is easy to deploy every SMB took at least minimal steps to investigate the software - but has a ton of security bugs - they'll deploy it. Why you ask? they're deploying "for free" - they would probably realize that free Because odds are they won't ever know about the security bugs... isn't really free... and there's a cost of doing business which must be SMBs rarely spend the cash to investigate the risk they're bringing addressed now - or the customer [or patient] ultimately pays later. on board their business when they adopt new software, because that â&#x20AC;&#x201D; Rafal Los is a Security Evangelist, Blogger, and WebAppSec SME at HP Softcosts money. Further, a typical SMB won't have domain expertise in ware. This feature is published with prior permission from www.infosecisland.com

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MENTOR’S VIEW VIJAY SETHI | VICE PRESIDENT IS & CIO, HERO HONDA MOTORS LTD. guesteditor@thectoforum.com

DOSSIER COMPANY: Hero Honda Motors Ltd. ESTABLISHED: 1984 IS A JOINT VENTURE OF: Hero Group, India and Honda Motor Company, Japan PRODUCTS: Two-wheelers NETWORK: 4500 customer touch points across India

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V I J AY S E T H I

MENTOR’S VIEW

A Time to Be Like Janus?

Open new frontiers to conquer and help businesses succeed, even as you look back and assimilate the lessons, especially from the failures, of the year gone by.

PHOTO BY SUBHOJIT PAUL

y the time this issue reaches you, it would be the new year. 2010 is behind us and 2011 is ahead of us. As one year comes to an end and another starts, I am reminded of TS Eliot's “For last year's words belong to last year's language, and next year's words await another voice. And to make an end is to make a beginning.“… that is what each one of us needs to do. Perhaps we should also be like Janus, the two-headed Roman God — looking simultaneously into the future and the past, as we leap into the month of January, his namesake. As we analyse the year gone by and review what we achieved, what we missed, how we fared against our goals, our promises, our commitments, whether we like it or not, the result will be a mixed bag. Even as we celebrate the successes, the reasons for failures will vary — either the goals we set were unreasonable to begin with or (we feel) the circumstances were not favourable or (in many cases) because our own planning and efforts

were not adequate. We need to consider the lessons from these while planning new initiatives. As CIOs, we need to see what business and society expects of us going forward and plan accordingly. As a starting point, we need to see what is happening in the economy and society today where IT could play a significant role. In my view the top five areas where IT will play an important role in 2011 will be influencing end-customer behaviour, tackling the ‘consumerisation’ of technology, beating the pressures of cost and innovation, improving compliance, and finally, managing the new, central role that IT will play in growing the business itself. In doing this, “You can't expect to meet the challenges of today with yesterday's tools and expect to be in business tomorrow.” Therefore, we will also need to look at new tools and technology trends, and the three technologies that can’t be ignored are social media, cloud computing and virtualisation. We as CIOs can't ignore these

trends and while developing our strategies for 2011. Again, like Janus, we should look back and learn from what went right and what didn't go as expected. We also need to consider the implications for our people, our processes and our technological infrastructure as it stands today. For example, one of the major implication I see of this ‘IT Consumerisation’ or of ‘social media’ is that we need to reconsider what we have always thought as the ‘Best Practices in IT Management,’ review our ‘IT Policies and processes,’ our ‘Information Security policies and processes’ as users become more demanding for autonomy, and technology savvy. Similarly, the way IT is structured may need to be changed. Another thing I feel we need to do in the new year is what Woody Allen, the film maker and actor, said: “Summing up, it is clear the future holds great opportunities. It also holds pitfalls. The trick will be to avoid the pitfalls, seize the opportunities, and get back home by six o'clock”… This is very true for

THE CHIEF TECHNOLOGY OFFICER FORUM

each one of us because each one of us also needs to ensure a work-life balance for ourselves, our teams and our users. To sum up, for 2011, can I say we as CIOs need to transform our IT functions from being a technology provider to an enabler of business transformations and organisational success. We need to shed our old skins and prepare for the future. In the end, I would like to thank each of the contributors to this issue — I found each of the articles and opinions very insightful — and I also thank Rahul and the CTOF team for this opportunity to be a guest editor for these two issues and for all their support and backend work … I enjoyed this role a lot and must confess that personally I learnt a lot. Thank you everyone, and wishing you and your family a very Happy and Prosperous New Year. Best Wishes —Vijay Sethi Vice President IS and CIO, Hero Honda Motors Limited.

CTO FORUM 21 DECEMBER 2010

20A

PRESENTS

20B

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he t h it t w e s s t rie eren s. e s r ff e i u c d o n a rie ue ere e n i p t h x n e o w r c t i We nd par re the a o h c s e s Os I C of

T ILLU STRATION BY ANIL

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CTO FORUM 21 DECEMBER 2010

, s s e n i s u B e Help th

H elp s e v l e s The m I

have a client who is in the distribution business. Their volumes are declining and they are struggling for survival. For over 50 years, they believed they were in the business of moving goods from point A to point B. Courtesy of the Internet, and some very crafty competitors, they have discovered that they are in the business of creating a marketplace. This company, like many of yours, is working hard to reshape what they sell and how they sell it to compete in 'The New Normal' that consulting firm McKinsey's Managing Director Ian Davis said will be very different from the business environment before the financial crisis, in an eponymous March 2009 note. And trying to do so within the context of very strained resources. “In the new normal, the mind-set for success will emphasize a bottom-up search for value through experimentation with customers and partners,” said Michael Chui, a Senior Fellow of the McKinsey Global Institute, separately, in a November 2009 article, 'Time to Raise the CIO's Game.' Success requires innovation – and new sources of innovation capacity – across, up, and down our organisations. This has profound implications for what is needed from IT. The current IT organisational model is predicated on the assumption that IT is a specialised resource that

20C

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The assumption that IT is a specialised resource that needs to be managed and provisioned centrally is breaking down in light of the competiti ve and economic realities and the emerg ence of tech-friendly employees and easier-t o-deploy-and-use technologies. BY SUSAN CRAMM

needs to be managed and provisioned centrally. This assumption is breaking down in light of the competitive and economic realities and the emergence of tech-friendly employees and easier-to-deploy-and-use technologies. Everyone hates the current IT system – business and IT leaders alike. Business leaders hate that no matter what they ask for, it’s always too little, too late, for too much. According the Corporate Executive Board2, “less than 25 percent of business leaders rated their organisation’s IT function as effective.” IT leaders hate that no matter how hard they work – and work to improve how and what they deliver – it’s never enough. On average, only 29 percent of the IT spend is available to develop new capabilities with the balance required to maintain and operate the existing systems. What got us here isn’t going to get us there. It’s ludicrous to think that 5-10 percent of the company’s employees who work in IT can keep up with the IT needs of the

90-95 percent of employees who reside outside of IT and work with IT. It’s time to unleash the capacity for innovation by tapping in to the 90 percent. Consider that: The 90 percent is the source for innovation. They are close to the customers and involved with dynamic and unstructured activities and data where they need to make decisions and redefine processes and approaches in real-time given the situations at hand. The 90 percent is increasing tech-friendly. This is an “app for that” generation that has very high expectations for what technology can do and how quickly it can be delivered. This generation knows how to manage their passwords, procure and provision technology, trouble shoot their systems, and increasingly, how extract information, design new reports, configure the business rules in an existing application, build approval work-flows and project workspaces, analyse business processes, and manage vendors

“Business leaders hate that no matter what they ask for, it’s always too little, too late, for too much.” —Susan Cramm

Leadership Coach at Valuedance

and projects. According to my research, CIOs estimate the 20-25 percent of the current IT workload could and should be done by the 90 percent. Within the 90 percent there are quite a few “power users” – researchers forecast that, by 2012, “end user developers” will outstrip “real developers” by a factor of 4 to 1. Unlike their predecessors, this generation will not stand and wait in governance lines for their share of the IT pie, but will take things in to their own hands. The 90 percent have always wanted more direct control over IT. In spite of IT’s best efforts to better manage demand and improve delivery, the counterparts in the rest of the business continue to create “shadow” IT organisations, select technologies without involving IT, and contract directly with vendors. It’s no surprise that the 90 percent wants more control over IT. After all, they run the business and should have control over all the key factors that drive their success – money, people, processes, and technology. Instead of delivering IT “to” the organisation, IT needs to be delivered “through” the organisation. Manage-

ment of the IT assets should be delegated across and down the organisation similar to how management of financial and HR assets have been delegated. Doing so requires accountability, authority and ITsmarts. IT needs to be a permanent part of every employee’s job description. The 90 percent must be held accountable and have the authority to support and exploit their systems, understand customer needs and how the business is performing, think deep-

ly about how value can be created, devise experiments and leverage approved tool-sets for rapid prototyping, and share and build upon the innovations of others. In addition, employees need to be smarter about how to fulfil their responsibilities in managing the IT asset. According to my research, only 10 percent of organisations are IT-smart with only 26 percent of business leaders believing that they are smart about IT. IT’s new mandate is to help the business help themselves. This mandate includes four key responsibilities: 1) Ensuring that the IT asset is well managed at an enterprise level by clearly defining authorities and accountabilities and supporting policies and processes, 2) Provisioning commodity services that benefit from scale economies, 3) Enabling the IT capabilities of the 90 percent through education, coaching, and innovation platforms, and 4) Ensuring supporting architectures and infrastructures that facilitate enterprise wide integration and agility. Realisation of the new IT mandate will occur over time, with each organisation proceeding according to its size, industry, and aspirations. IT leaders who adopt a “wait and see” stance will find their organisations marginalised. But many CIOs understand that, “If IT doesn’t do something, they will do it without us. IT can try to control everything, look upon this whole arena as anarchy and try to stifle it, which will guarantee that IT will lose.” As we all know, within every challenge is opportunity. Tapping in to the 90 percent will expand the capacity for innovation across the enterprise. And in doing so, the role – and impact - of IT will be elevated and expanded. Contrary to what many believe, the future of the IT organisation and profession is bright – for those who choose to make it so.

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Right s n i a r B ht Place

in the Rig

If you are reading this article people probably have you down as a left-brained techie. Labels are dangerous. As a consequence of that label, people will believe you are intelligent, diligent, weak on social skills and lacking in creativity. After all, they'll say, that is how you necessarily have to be to do a technical job well. They are wrong, of course. Technical roles require and benefit tremendously from creative thinking and significant social skills. Anyone who has worked designing systems knows that creativity is the bedrock of superior design, better delivery and lower cost. Again, what is the likelihood that a person who has built a career delivering large-scale change did so lacking in social skills? Quite bleak, I would say. The world-view of left-brained technical people extends, unfortunately, to technical people

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CIO 3.0

A CIO requires bo th le brain and right-bra ftin functionality to a h igh degree to be suc cessful. BY ALAGU BALA RA MAN

“Techn require ical roles tremen and benefit d creativ ously from e and sig thinking n social ificant skills.” — A lag VP u & Proce ss Arch Balarama n itect at Britann ia Indus tries

themselves. As a result, many of them concentrate almost exclusively on building analytical skills, technical skills and acquiring technology information. Don’t mistake me. These are vitally necessary, but they are not sufficient. A CIO requires both left-brain and right brain functionality to a high degree to be a success. Right-brain capabilities are not something people are born with or mysteriously acquire when they chose their line of work, but they are developed just as you would have developed your left-brain capabilities over years of study in school and college, and by practicing it over your

COVE R S TO RY

career. Right-brain capabilities can also be developed by systematic study and practice. By developing whole brain functionality, that is balancing both the right and the left brain, people in technical roles can become far more effective. How does one develop right-brain capabilities? Create the time and space to try out new things: IT shops work under immense pressure to deliver service levels 24x7. This places a premium on attending to the urgent, often referred to as the 'tyranny of the urgent.' The result is procrastination of what is important. Stephen Covey addresses this in his book First Things First. Prioritisation helps identify what needs to be done. You and your managers need to create the time and space for people to work on what you know needs to be done. This requires re-thinking how the team is structured and how effectively responsibilities are delegated or outsourced. Create a culture that celebrates experimentation and change Shift the culture from one exclusively focused on stability and risk avoidance to one of experimentation and continuous improvement. Encourage experimentation and create safe environments for people to try things that are new. Create a culture that maximises the value of failure. Evaluate such exercises on learning and not on delivery metrics. Create space and sessions where idea generation is encouraged. As the Nobel Prize winner Linus Pauling said “The way to get good ideas is to get lots of ideas, and throw the bad ones away.” To create many ideas create triggers for ideas. Organise visits to other organisations, design workshops to generate ideas, create as many points of interaction between people in your team and others as possible. Increase the credibility of the exercise by allocating a small amount of your budget to experimenting. Continuous improvement has a focus on numerous incremental solutions, each of which permanently fixes a problem. Cumulatively this series of course corrections leads to dramatic performance changes. It forces people and teams to be dissatisfied with the status quo. Give it structure by adopting methods like TQM or Michael Hugos’ concepts of an agile enterprise. Create your own toolset for encouraging right-brain thinking There are numerous tools that have been created that help individuals and teams to adopt whole-brain thinking in a systematic manner. These include mind mapping and the De Bono’s Six Thinking Hats system. Fostering a whole-brain thinking approach, you will find that work becomes more open, creative and effective. In all this, people will enjoy themselves more and will contribute in ways you hadn’t anticipated. Moreover, these techniques are not rooted in the field of technology and can be applied in diverse management situations helping to develop managerial skills in yourself and your team. So try a walk on the right side. Isn’t it time you decided that you don’t want to be labelled? THE CHIEF TECHNOLOGY OFFICER FORUM

CTO FORUM 21 DECEMBER 2010

Are you an

t u p t Ou ? O I C n drive CIOs must be sick of hearing about “business-IT alignment.” Has there ever been another department so ruthlessly grilled about the value it is (or is not) delivering? What's the reason for it? I strongly feel that this statement is not very valid for certain industry sectors like telecom or financial services. It could be somewhat true for certain types of industries like FMCG or manufacturing which are the so-called traditional industries. In my opinion, any function of a corporate is as ruthlessly reviewed as the IT function be it finance, marketing, sales or for that matter a network team in a telecom company. There are questions around capital expenditure, value derived out of that and the return on investment. I feel it is a very biased opinion and the CIO is made a scapegoat. If we talk of a decade ago, this statement would still have been closer to reality. Those were the times when IT was essentially reporting to a CFO and was considered a pure back-end function. But today even the CIOs working for conventional industries carry a revenue responsibility. They bring ideas to the table. They are equally responsible for innovation. Now I will address the core aspect of the question. The Business-IT alignment

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Amrita Gangotra, Direct or IT, Airtel asks CIOs if they want to remain the ‘Input-driven’ negotiatin g costs with vendors or adopt the ‘O utput-driven’ IT model where they ju st check the service availability and devote more time for strategy and in novation.

should not be viewed as an irritating factor. This is an important fact while you are automating the processes and systems for achieving better efficiencies. Aligning an IT process with the business will always be paramount for the success of a CIO. Besides just alignment there are other things that need to be looked at. The quotient of innovation, systems efficiencies, features of empowerment are also being brought by the CIO. You think there have been seismic changes in the thinking of corporate honchos and how they look at the CIOs today? There has been a significant shift in how a CIO is looked at across all industry verticals including some of the most advanced sectors like telecom and BFSI. Very few CIOs

report to the finance function now. A lot of companies now have CIOs in the board. There have been a few instances where CIOs have become business heads. So, there’s an overall acknowledgement of the role of a CIO and the difference s/he brings to the table. I will not shy away from stating that there is a marked difference between the services and the manufacturing sectors. Service industry has a different outlook of technology than others. What automation and IT enablement can possibly do to the services industry is far higher compared with the other industries. The current challenges for CIOs include the rationale that the role has both TACTICAL responsibilities for complex technical environments,

CIO 3.0

COVE R S TO RY

is not able to comprehend these trends, then s/he is not playing a strategic role. A portion of the CIO’s time must be spent on knowing how the world is evolving with the help of technology and therefore, how a CIO can imbibe some of those relevant solutions to help the business grow. This doesn’t mean a CIO shall completely lay off his/her operational ability which s/he has committed to. A CIO has to execute the annual technology plans too. It simply means striking the right balance.

—Amrita Gangotra Director IT, Airtel

as well as those of a STRATEGIC business leader, perhaps making it unique at the C-level. What should be done? I would again go back to my original point that in different industries it is looked at differently. In a telecom companies like ours, the focus is not on technology implemented year on year. We focus more

Why do you think the role of a CIO in companies other than services companies is not so evolved? In cases of the verticals other than Telecom, BFSI or a BPO the CIOs are mostly found bogged down with operation aspects or executing projects one after another. This is not because of any inability of a CIO but certainly due to the non-responsive approach of those traditional organisations. In my opinion, a CIO has to spend a lot of time on thinking and providing strategic inputs. They can find ways to do it. One way of looking at it is total outsourcing of IT and managing it through tight SLAs. This can provide a lot of time to think strategy. Another way is to have a strong second line which can take the responsibility of operations to free the CIO for other business work. THE CHIEF TECHNOLOGY OFFICER FORUM

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PHOTO BY SUBHOJIT PAUL

“The quotient of innovation, efficiencies, features of empowerment are being brought by the CIO.”

on the technology road-map for three years and how that will bring about the change in business processes. For example the current roll out of 3G networks is closely linked with applications being built by the IT team to go with it. As a CIO I have to be very vigilant of the competing industries like Media, Internet companies (like Google, Amazon etc.) to provide the strategic inputs to my organisation. The end goal is to help the organisation achieve an edge over the competitors. In Airtel we have a monthly session called “technology Hour”. This session is led by me (as a CIO) to address the C-level executives of the company on how the technology world is evolving and how it is shaping the future of the telecom industry. Some of those trends and technologies are certainly fit to be imbibed immediately while others are observed over the period of time till they reach a maturity level. For example, a topic of great interest is enterprise B2B social networking. The C-level executives are very keen to know how those practices can be brought into the company to benefit the business. If a CIO

If we take “Technology Hour”, as you mentioned, what kind of questions do the CXOs raise when you are talking about the developments around the world? Frankly, the debate can go anywhere because it is not aimed at reaching a conclusion or decision. The “Technology Hour” in the company is more for enabling the CXOs on how technology is moving. We generally pick up a topic which is soon going to affect our industry/company. Topics can range from mobile commerce, mobile advertising, social networking – anything. We, as a group, do discuss about imbibing some of those new things to augment the business and at the same time provide a delight to the customers. The crux is that unless you, as a CIO, instigate these strategic discussions, you won’t be able to leapfrog.

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CIO 3.0

Even if the CIO wants to operate at that level, there are certain factors pulling him/her down? What could be those factors? The biggest factor that pulls down a CIO is how he executes IT internally. It’s up to a CIO to decide what is important for him/her. Is it governance or the operational aspect? A CIO has to decide whether s/he wants to go for an ‘input’ driven model or an ‘output’ driven model. Ideally a CIO should be adopting an output driven model where s/he is not bothered about the inputs. All they need to look at is the output. A CIO can’t be always getting into technological specification. Indeed, s/he has to be nimble enough to know what’s going on. On the other hand it is imperative to have a minute understanding of the business aspects. A lot of CIOs shy away from this. They hesitate in contributing towards creating value for the organisation. If a CIO doesn’t care about the ‘inputs’, won’t it affect the governance? No. Let me substantiate this with an example. Airtel has risen from the ground zero. Today we work on absolutely formal SLAs with our outsourcing partners. Even the content in those SLAs has changed. Earlier they were more to do with downtime, uptime, boxes etc. Today the SLAs are all about ‘Service Management’ which means a service provider is held accountable for the service outage and its impact on the customers. This is the best example how an output-driven IT can save time for CIOs to think strategy. One can argue that Airtel is a total outsourcing story but this has nothing to do with the environment. It is about the change in thinking that is must. What does it take to strike the right balance between tactical and strategic roles? CIOs have to educate themselves and utilize that education to get into business roles. It is more an outlook and willingness to learn and imbibe those lessons. There are a lot of challenges that one has to face. Business people think they know the best and thus can resist your entry. But a CIO has to build the credibility over a period of time. But you have to have the grit and determination to take that challenge. It won’t come to you on a platter. If we, as CIOs, don’t evolve soon, there is a great chance of being marginalized.

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c i g e t a r t S e Th

r e l b a En ess, and in s u b r u o y d n ta rs Unde creating in le ro e v ti c a n a y pla eds to do e n it t n e m n o ir v n e the rm yourself fo s n a tr l 'l u o y d n a well, business to r e d a le h c te m fro h Uppal, s je a R id a s r, e d a le ger for IT a n a M l ra e n e G f Chie ia Ltd., in d In i k u z u S ti ru a at M an interview with ali. Harichandan Arak

he first thing in this debate very clearly is that the role of the CIO is no longer that of a technology provider – that part is taken for granted. The whole idea today is 'how can we help business, add value to the business?' To do that, first, the CIO has to understand the business in detail. The expectations are, understand the business and help create the environment for the business to go about its task in a better manner. If a CIO is able to do that, he'll be treated as a strategic partner. This wasn't the case earlier with the maturity of technology not at where it is today. IT is moving away from the transaction-based model towards a strategy-

CIO 3.0

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“The expectations are, understand the business and help create an environment for business to go about in a better manner.” —Rajesh Uppal

Chief General Manager for IT at Maruti Suzuki India Ltd

based model. That's the change happening and therefore the need has arisen for the corresponding changes in the role of the CIO. Consider the example of Maruti itself – we have a huge network of dealers of some 1,100-1,200 showrooms. Five years back, since the technology wasn't mature enough, the networks weren't matured, we were dependent on getting data, compiling it at the end of the day, end of the week and so on. Today we manage it in real time and if you want to take some decisions at the country level, I can deliver that to you on your cell phone. That means, where do you invest in marketing for instance, comes from realtime information from across the country. Clearly, since the technology is available now, this kind of work can be managed and has boosted our ability to take quick decisions. The issue is IT, many years back, always used to be a back-end, some-

where in a corner. Today IT is part of the decision making process at the board level. This change has happened because businesses have realised that IT has to be involved right from the beginning and in all the processes involved. Businesses are realising that this is something that is critical for them. Correspondingly, the role of the CIO is getting more integrated with business, than as a service provider. The whole involvement with making of strategies and their implementation, that intertwined dependency is growing fast. The foremost idea is, understand the business in which you are: that knowledge or reading or analysis is critical for a CIO to have. You should be able to understand the context in which your business colleagues are talking about. Leadership skills are something that CIOs have to consciously make the effort to acquire. If you are managing people, technology, relationships with vendors, this journey of leadership development has to be undertaken – you don't have a choice so long as you want to function and grow as a CIO. Also unlearn some of the hardcore technical ideas – delegate them, outsource them – and move towards a business enterprise and business entrepreneur environment.

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Pushing IT

e d i s t ou “The CIO needs to move to a role where he drives strategic decisions, where he drives change management.” —Sunil Rawlani

Former CIO, HDFC Life

he growth of IT outsourcing and BPOs was the first wave of IT in India. The second wave will have two components. First, promoting infrastructure management, in terms of extending that to cloud services. Second, an IT-BPO combination wherein IT would just be a part of a business process outsourcing deal. It would be left to the service provider to worry about what system or core applications to use. A Remote Infrastructure Management provider may do a better job than an in-house team because to do it in-house, you need a very skilled IT team that can handle all kinds of downtimes. With SLAs and service guarantees, you can get better value from a RIM provider.

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CIO 3.0

If CIOs want to gro w, they must recognise that the career path itself has changed. Th ey n business and con eed to drive sid in all areas where er outsourcing it will add value to their mandate, sa ys Sunil Rawlani, Former CIO, HD FC Life

Ultimately all decisions are business decisions. I think outsourcing starts from how strategic a view of IT do you see. How do you see it as a part of your core business? Do you see IT contributing to the top line instead of just adding to the bottom line? Does IT have the potential to do business transformation? Can IT bring about paradigm shift? Therefore the strategic nature of IT would determine what remains in-house and what is outsourced. Everything strategic remains in-house and everything non-strategic is outsourced. At HDFC Life, we were at the cusp of deciding whether to go for total IT outsourcing or not. What I find is that total IT outsourcing from leadership domain where somebody comes and adds value comes when the contract value is extremely high. So they say, for example, that 'I will derive my IT revenue from your business revenue. You outsource IT to me, we'll measure your business revenue, if I have skin in the game (this is the terminology used these days) and if you make incremental revenue then I make revenue and if you don't make any incremental revenue then I don't make anything.' My only worry is that we don't get skinned in this process. If we're making good revenues, then the IT cost that the service provider is recovering could be far higher than the IT cost we would've incurred had we been running it ourselves. At the end of the day, the objective of running a business is not revenue maximisation, it is profit maxi-

misation. That's what you want, so if you're paying something about which you're not clear, then I think the biggest challenge in outsourcing is trust. If you're doing a contract for 3 or 5 years, then at least the vendor should exist for at least 3-5 years. We've seen big time takeovers happen and then major changes take place. One way is to have the connect with the top management of the service provider so that even if these things occur you have faith in doing a long term contract. Second is how do I cost such a contract. What is the value that I bring to you. Suppose HDFC Life was to contract to IBM or Wipro, there is an expectation from the customer that the vendor should make an investment because there's a reference value to the whole deal. Frankly at HDFC Life, when we started in first three years, I got a lot of value out of contracts because we were first movers and there was referencing value at it. So we took huge discounts by being the first movers. Apart from the fact that Airtel or two others have total IT outsourcing, it is still quite new. So I think there is some amount of risk-taking ability that the companies have that are doing this. You shouldn't assume that HDFC Life is a business of Insurance so they are taking the risk â&#x20AC;&#x201D; it's a completely non-risk business. What we're doing is complete science and it's computed to the last bit. I think it is all about three things: cost, trust and the ability to execute it.

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When I outsource my total IT to you, my expectation is I want you to take the lead on what to do next because IT strategy is yours, business strategy is mine. So then you decide that you have an engagement model, where you have outsourced but you are telling them what to do. I think if your knowledge is high then the revenue based model should be more win-win and fair because it actually measures the value addition and then pays based on value. Total IT outsourcing should be there only when there is volume. Also, the deal should not be less than five years. I think gradually consumerisation of technology will take place. A ten-year old today is almost as knowledgeable about technology as my managed IT help desk. The awareness and usage of technology for a business user is far higher. Their appetite to put up with IT, which is going to be like a bottleneck or hurdle, and run past them, is going to be very low. So unless you have a strategic contribution of IT that you need an IT team, which understands the business, is able to propagate perennial business issues being addressed with the usage of IT and working with outsourced service providers, there is no role of in-house IT. The CIO needs to move to a role where he drives strategic decisions in the organisation, where he drives change management. Traditionally project management was something where IT used to be very strong. Business functions didn't really know how to do project management. Now IT is in a good position to do project management for business projects. With the change management you do, you should be able to help business deal with change in general. Effectively the information should be centralised so that you're able to have people use information that is collected, processed, disseminated in ways that the business actually is able to make progressive use of. CIOs won't be managing technology any more. Technology would be in the background. CIOs need to ensure that technology issues don't affect the business. So either you have that capabilities or you outsource it. The business needs to have confidence that if something goes wrong, you'll be able to fix it. CIOs' objective is to move into the business role.

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Technology as a

Business Enabler Technology will always be a support function, says Mani Mulki, CIO, Pidilite Industries Ltd. What has changed is the nature of that support â&#x20AC;&#x201C; from merely having the systems up to enabling complex business processes that directly affect profitability, making IT investments truly a business objective.

hatever people may say, the IT Department is still a support system. A major portion of this support, 60-70 percent of the IT budget, goes into maintaining and sustaining existing systems, and that is expenditure. As with any expenditure, any organisation would look at containing its cost. That said, the level of understanding of the top management towards technology has changed. While at a certain level it is looked upon as an expense, there is a far greater thrust on using technology than there was many years ago. This is because the success stories of how technology has enabled business benefits. The top management is also not IT agnostic as it used to be. Thatâ&#x20AC;&#x2122;s why projects that involve technology are not looked upon as IT projects, they are looked upon as business projects. Investments in technology driven projects are more prevalent now, than in the previous years. The CIO has to play a very important role is making this possible. He must be able to

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CIO 3.0

articulate the business benefits in a language that the top management can understand – that is half the job done. Its like a business investment for which the driver is the CIO. The use of technology is also adding to the top and bottom line of the organisation. This is what differentiates one organisation from the other too. The prime example that comes to my mind in this case is Walmart. The amount of real-time processes they have enabled by using technology in their supply chain is humongous. This is a fantastic case study in itself. Using technology they have made their supply chain efficient while saving huge amounts of money, this has helped them in reducing the selling price of their products too, which has resulted in the generation of more revenue. Another example of technology that is a game changer for the banking industry are the ATMs. This also, while changing banking from ground-up, has been enable by the use of technology. Also, in my previous job, at Godrej, we spent a large sum of money connecting our distributors. It took me a while to convince the management, but the objective was pretty clear – it was to be able to ensure that information that took a month to generate each time, was available daily; the inventory should be halved and the stock-out would reduce from 15 percent to almost zero. That is how there would be an impact on the bottom line of the organisation. For all technology investment, there must be a business objective. Once those business objectives are set, then it gets driven by business. Business then also takes the pains to assign necessary budgets and resources for it. For instance, this particular initiative was led by a senior sales person, who was chosen from his sales position for this initiative – and it delivered. When you have one initiative that brings such business benefits, that is when the management becomes aware of the power of tech-

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“For all technology investment, there must be a business objective. Only then it gets driven by business.” —Mani Mulki

CIO, Pidilite Industries Ltd.

nology. But, it has to be accompanied by a business case before the investment is made. Also, to make this a success, the CIO must report to the MD or head of business. Until a decade ago, the IT department was part of the finance department. That’s when it was looked only as an expense and a support function. But in the current scenario it is not possible, since the CFO’s mindset is only of cost savings. There are certain aspects of business benefits that can be envisaged only at the MD’s level. Then it is like any other business decision where the investment is being quantified by tangible returns. But, sometimes the CIO needs to be a part of the management committee too. This is in verticals where technology can be a game changer, such as telecom and banking. Here technology can change the rules of business and take business to a different level altogether. THE CHIEF TECHNOLOGY OFFICER FORUM

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Make P&L

t x e N r You Love CIOs must stop being cost-centre managers, suggests S anjay Jain, Group CIO and Head of Global Transformation Practi ce at WNS Global Services. They should learn the art of P&L (Profit an d Loss) management, he says .

Apart from being a CIO you play other leadership roles in your organisation. What made this change possible? Frankly, I didnâ&#x20AC;&#x2122;t join WNS as a CIO. Prior to my career with WNS, I had always been either a Chief Operating Officer (COO) or a President of an organisation. One of the predominant reasons of assuming the role of a CIO in WNS was my technology background. In my previous roles, I had worked on the challenges those organisations faced on the infrastructure and automation fronts. So, the then CEO of WNS asked me to take on the CIO role to fix a variety of issues the company was facing. I actively ran the IT organisation as a CIO for 18 months before again taking up the leadership role. A few years ago we figured out that the BPO industry had to evolve.

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There was a great momentum towards setting up a global transformation practice within the BPO industry. WNS, being one of the finest and strongest BPO organisations in the world, didnâ&#x20AC;&#x2122;t want to lag behind and thus it was decided that I shall lead that practice within the company. So, in addition to the business role, I continue to oversee the CIO function. Unlike the popular practice where CIOs take on business responsibilities, I agreed to be the Group CIO and also lead a business practice. We have a well structured IT team at WNS. There is a CTO who takes care of the everyday infrastructure and internal automation needs, and there are other function heads who report to the CIO. When CIOs are found grappling with a lot of operational issues,

finding little time for innovation, strategy or business, Where do they go wrong? It is a grave issue, which a majority of CIOs are facing even today. I think organisational planning, long term vision and a good organisational structure play a crucial role. As I explained briefly, WNS always had the appropriate number of functionaries to take care of the operations, automation and other such issues giving a lot of room for the CIO to strategise and be an integral part of overall business transformation. I am keen on citing examples from my own organisation as these are low on theory and high on practice. In the larger interest of business, a CIO has to give away his transactional role to someone else. CIO, to me, is not expected to be a transactional manager. Going forward, this will be truer. In the

CIO 3.0

case of WNS, I never got fully involved in transactional issues. I always ensured that a bunch of competent professionals took care of various functions that IT runs here including telecommunications, WAN and Networks, Data Centres Security and Desktop infrastructure. As a CIO I always had a window to review each of these functions but because we have created a good, near foolproof structure it always gave me room for concentrating on strategy, business and innovation. That’s a lesson CIOs should always keep in mind. They must spend time in creating a layered IT organisation which has competent people handing operational issues and the CIO should think about business. It still looks theoretical. If we go out and see a lot of CIOs would

“Organisational planning, long term vision and a good organisational structure play a crucial role.” —Sanjay Jain

Group CIO and Head of Global Transformation Practice at WNS Global Services

not get convinced with it. There are constraints all around. How would you break it down further? If strategy is jargon that CIOs tend to get confused with, I will further break it down into sub-strategies for their benefit. It is as simple as creating IT strategy which is

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‘purely’ aligned with the goals of the company. We shall spend more time thinking what our company is trying to achieve. I will cite another example from my own experience. A few years ago, the strongest unique selling proposition (USP) for offshore BPOs was ‘cost arbitrage’. Companies like us were primarily getting brisk business because we promised to deliver the same work at lower cost. Then the industry was hit by the economic downturn as a result of which this cost arbitrage became a commodity. Now the clients were not buying our solutions and services because we were able to offer then cheap. They started expecting benefits beyond that. The ‘specific’ challenge before us was how to deliver benefits beyond cost arbitrage – better and faster services. That’s where a CIO with business acumen plays the most critical role. The technology, process automation and analytics – all important components of a CIO’s arsenal are the only ways to deal with the demands mentioned above. My role as the manager of ‘Global Transformation Practice’ simply defines this whole equation. The strategy was driven by our understanding of business and how to deliver on the client’s expectations. As a CIO and a business leader, I was expected to make this happen. There’s a very clear message here for CIOs (BPO and non-BPO both). The second part of this story as to how we dealt with the situation is even more interesting. We created unified group which was to deliver all services and solutions to the clients till the time their processes were fully integrated with our systems and we hand them over to the operating teams internally. This involves inputs from a lot of sub-organisations which include teams handling process automation, consultancy, technology and analytics. All of these functions were unified into one group which is called ‘Global Transformation Practice’. This strategy has worked successfully. Our growing THE CHIEF TECHNOLOGY OFFICER FORUM

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CIO 3.0

market share is the biggest testimonial of it. The third part of this is client service deliver and monitoring. This work is done by five groups namely Business Advisory and Consulting Group, Solutions Group, Process Excellence Group, Process Transition Group and Technology Services Group. All these groups are led by Senior Vice Presidents who report to the Group CIO. Apart from it, as I explained earlier, we have a group led by the CTO which looked at the internal technology deployments. The message that I want to convey here is that apart from just the strategy, a CIO needs to create the right organisational structure. The fourth part of it is creating the ultimate collaborative environment so that the groups mentioned above can deliver the promised services to the clients. We worked diligently on this and it was supported by the HR framework to appropriately 'incentivise' the efforts. Each of these functions has bi-monthly review meetings with the Group CIO in which we discuss issues in depth. This may sound like a very typical BPO scenario but with minor tweaking most organisations can benefits from this structure. What you described above is an ideal state. Generally we don’t find this happening. What are the challenges? The challenge arises from the lack of P&L (Profit and Loss) management expertise. The CIOs generally have been cost centre managers. As soon as you put the revenue targets and responsibility to grow or enable business beyond process automation and infrastructural support, the lack of experience and inability to handle such stuff pose serious issues. That’s why it is necessary that a CIO exposes himself to major business functions like sales, operations, consulting, marketing etc. This ‘rounded exposure’ to business has worked wonders for me and I am sure it will work for other CIOs as well. What’s your final recommendation to the CIOs? My recommendation would be that CIOs should get exposed to business. They should take the responsibility to deliver business SLAs/ outcomes instead of delivering IT outcomes. The moment a CIO graduates from keeping the servers and data centres up and running to delivering the invoice to the client at the right time, 80 percent of transformation is already achieved.

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Tale of

T wo Li v e s

usiness Getting IT to help b lead two requires the CIO to g business lives – one, speakin olleagues ss c fluently with busine n 'getting o g in v ri th r e th o e and th hnology c te f o ' s rd a n in e into th Sandeep s y a s ,' s ie h c e 't e with th sident re P – r a k n o a g s a Phan Officer, n o ti a rm fo In f ie h and C Reliance Capital.

CIO 3.0

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“IT started-off being a black box, but it is now very much out on the field, more aligned to the business.” —Sandeep Phanasgaonkar

President and Chief Information Officer, Reliance Capital

ness domain. Increasingly that difference is going away where IT was considered separate from the business. Hence, while the alignment dialogue is becoming serious, it is becoming serious from a different point of view where the question is that if you are going to use IT to create a differentiation, if you are going to use it for manufacturing it is going to contribute to the top line and bottom line. Those are the kind of conversations happening. To summarize, IT started-off being a black box, but it is now very much out on the field, more aligned to the business. Hence the alignment dialogue and conversation is more in terms of making effective use of IT to provide product and services to the customer.

Can you imagine people talking about “aligning” accounting and finance to the business? So why do we constantly fret about “business-IT alignment”? I think there is a lot of history to this. IT has always been pretty complex and deep. It is an independent study in itself. You became an IT person after you did a lot of studies of all aspects of it like hardware, software, networks etc. for a long time. You had other colleagues who did not understand IT at all. If you start from the era of mainframes and mini computers and all, IT was kept in a separate data centre; it was at first 'back-office,' but it gradually started coming into the front office and started becoming closely aligned to the field, directly touching customers, and each and every aspect of the business. As long as it was in the back office, it was always considered separate. That was the time it was considered separate and not aligned to business. Today IT is being used to manufacture products, deliver the product or service, to provide customer service, to connect with all the members of the eco-system – therefore it is very much in the busi-

Do you think there can ever be total alignment? I don’t know why there is such a view or such a strong feeling on alignment per se, since if I look at my own organisation, I do not think there is a single activity that I do that does not have business acceptance. Every project goes through the review process of whether it is something that is going to help our business, serve our customers better, create a differentiation or creates efficiency. Only core technology decisions that I take are technology upgrades, fine tuning on the hardware/ software etc. By and large, all IT decisions are business decisions. Most IT leaders are becoming more and more business aware, today you cannot perform an IT leadership function without knowing your business before hand. The business alignment issue crops up if you have an IT leader who does not understand the business well enough. For example if you are in a conversation with a business leader who says that I want to be able to deliver this product or service with this cost, with this turnaround time, with this differentiation and capability – if that understanding does not happen or if the product is not delivered or does not meet the customer’s requirement, then you see a gap in what IT delivers and what business wants and you see a problem in the IT-business alignment. THE CHIEF TECHNOLOGY OFFICER FORUM

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CIO 3.0

Do you think business has trust in IT and vice-versa? How does trust develop when you meet as strangers? You start of by testing each other out, but over a period of time a relationship develops depending on what you deliver, if you deliver that on time in the right cost and as per requirements. That is how trust develops. For instance, if the organisation is going through financial turbulence, do you understand that – how well are you able to adjust your IT shop accordingly to meet the requirement? Similarly, if there is a Is it more of a communication —Sandeep Phanasgaonkar sudden requirement to drive home problem or something else? President and Chief Information Officer, a certain advantage, or a first mover It is always a communication problem Reliance Capital capability and you respond very quickly because only when you are able to understand to what the sales department or the well, you are able to take the requirements CEO wants, or if there is a need to fix something quickly and put them back and create a technology or and you respond quickly to that – then the whole trust element a solution that meets those requirements. Today for IT leadership, develops. Then even the budgets that you are asked for are thought communication is the key. That is the only way you get a seat at the of as genuine, they are perceived to be for things that will impact table, that is the only you are able to articulate what you can do for the top line and bottom line. Trust is finally a question of time, business and what the business wants you to do. responsiveness, delivery and understanding.

Increasingly IT leaders are required to develop skills which enable them to understand the business and business leaders better. The language of business and business leaders is always something that you have to latch on to pretty quickly because there are a couple of key requirements that emanate in every discussion. If you are able to deliver on that then you have done well. If you do not understand the language of business leaders, then there is a gap and an alignment issue.

“It is important that business leaders start to understand technology.”

Don't Cut Off

Your Roots To become business lead an effective e tap his roots, nr, a CIO must and ensure th ot jettison it, at strengthens btechnology usiness. S R BALASUBR AM ANIAN

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lot has been said and written about the CIO and the way he should conduct himself. Stung by the fact that a CIO is usually not considered for the CEO’s position, debate has revolved around getting the rightful position on the Board. Often viewed as a techie, the CIO today tries to project a profile of being business savvy. There is no doubt that a CIO has to understand the business his organization is in for being effective with his solutions, but should that stir up his peace and poise is the question. Let us look at some of the facts. A CIO is a functional head like all the others, like the CFO, CMO, Chief of operations etc. Heads of Finance, Marketing, or Operations often end up in the Board or as CEOs because they play a part in running of the business and help in taking decisions, but their strength comes from a deep understanding of their area, say knowledge of the customers and the markets, or ensuring continuous feeding of products to the markets, or of arranging finances and of financial analysis of companies' performance. They still perform as effective functional heads and continue to do so till they land up in the hot seat at the top. The CIO similarly is a functional specialist and has to excel in his line of activity and provide solutions to business that only he can. He has a great advantage that as a part of his job he has to provide technology solutions to practically

CIO 3.0

every area of the organization. When he carries out a study for each functional area, he would get into the depth of the processes for adding value through effective automation. He therefore becomes aware of all aspects of business and is in a great position to participate and be called for important business discussions. Now he should use this knowledge to select the technology most appropriate for the solution being worked out. Though he would have technologists working for him, whether they are network specialists, server/storage experts of software engineers, it is the CIO who is in charge. The CIO explains the context, gives appropriate directions and guidance for their work. The work often involves inputs from all these areas and the CIO therefore chairs such meetings and co-ordinates the working of the team. Business requirements and technology solutions are not different ends that are to

sation with techies I want to sink my fingers into the deep innards of the technology. This dual life is what most of us try to lead, but we understand what the situation demands. It is important where you are having a conversation and communicate in that manner. For this to work, should it be driven by business leaders or technology leaders? Technology has become all pervasive, I have a feeling that IT people have started crossing the line of control and have started becoming more domain knowledge oriented in terms of insurance, banking or telecom, along with technology architectures and systems. They are more business aware. Somehow I think, on the other side, the learning is not happening. I think that that is unfortunate, because technology really helps you create a differentiation to deliver a service and products. It is important that business leaders start to understand technology. It is not something that can be delegated to the IT person, say boss, you deliver on it. Everybody, your customers, partner and yourself are using it – you must understand its potential and limitations. And then, see how it can be used for business. Maybe this generation of senior business leadership may not be able to do that, but I think, the current generation that is getting into the workforce is IT savvy. They will have more trust in the capabilities of what IT can deliver.

“The CIO is a functional specialist and has to excel in his line of activity”

be worked separately but are intertwined. In my opinion, a CIO cannot position himself as a business leader and just delegate technology selection to a group of 'techies.' That would be suicidal. We are aware of the strong selling skills that technology vendors practice and are smart enough to sell any piece of technology claiming to be the best fit. It is here that the CIO comes in to assess the appropriateness of the solution and to ensure that they are not carried away by a great technology but sees its value to the business. He cannot and should not lose his roots. In my opinion, the CIO has to shrug off his complex and feel proud of being a technology head. He can’t be a CEO unless he proves himself to be a good CIO. He must ensure to give precedence to business good and makes technology subservient to business. He would then be the executive most sought after and would be an appropriate choice to lead the business.

—S R Balasubramanian

Exec. VP IT at Godfrey Phillips India THE CHIEF TECHNOLOGY OFFICER FORUM

CTO FORUM 21 DECEMBER 2010

PHOTO BY DR LOHIA

CIOs want to use business to deploy technology rather than deploying technology for business. True? It is quite true. I remember in my previous company, which was one of the largest BPOs, there was a network outage. The people who attended to the outage got immersed in the sheer complexity of the problem, they got a lot of joy in terms of fixing that problem. They did not understand that there was a customer at the other end waiting for this thing to be fixed as quickly as possible. For him it was just a black box, he just wanted the service to resume. Techies are always fascinated by technology, I am also a techie, those are my beginnings, but as I became a CIO I became more business-aware and understanding what the business wants. So yes, that balance has to be struck. Overall in the organisation you would find that the senior IT leadership is more business aware. They start becoming more business aware as they are exposed to leadership meetings etc. But, at lower levels, you need people who are fully technical in their outlook and orientation. To communicate with that person you need to be a geek to ensure that he delivers effectively on what he is supposed to do. That balance has to be struck. I have two lives – if I have to explain a problem to the business or a solution to the business then it is communicated in business speak, on the other hand there is one part where-in in a closed door conver-

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n a s a O I C

r o t a Innov “IT is in a strategic position to see through possible gaps in the business and say where business can be enhanced.” —Sunil Mehta

Senior Vice President and Area Systems Director (Central Asia), JWT

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Every CIO has to be an innovator but just innovating is not sufficient. The CIO needs to have a sense of what can be implemented and keep the lights on at the same time. You need to innovate in such a way that finally the lights should be on. Whatever you innovate should be an implementable exercise which is something that the company thrives on. Innovation doesn't mean that the idea is never thought of by anyone in the world. It could be something that may perhaps not been done in your industry. Something that you have imbibed from some other place which can be customised for your industry, would still be considered innovation. Typically these days, people look at innovation pertaining more to gadgets than processes. And I think it is a lot to do with the processes of the company because finally that is what gets translated into your top line and bottom line growth in every possible way. People should

CIO 3.0

Being an innovato r is much beyond doing so mething new. CIOs need to put themselves in CEO's and CFO 's s looking at innovati hoes before on, says Sunil Mehta, Senior V ice and Area System President sD (Central Asia), JW irector T

look at efficiency building rather than just cost savings. You need to do both these exercise in tandem. Innovation goes not just in terms of operations of the company, you also need to take a 360 degree view of where the innovation fits in. You shouldn't be innovating just for the heck of it, if it is not required and if it doesn't derive a proper ROI. Though I don't believe in RoI but it is important many a times. When it is a huge implementation which you may want to call as an innovative exercise to, for example, transform the entire company, then people would surely look at RoI. However, when there are small things that you are keen on tweaking or innovating for better processes where you don't have to deploy too much funds, those are the things that you do as a continuous exercise and those innovations never end. It is the CIO's responsibility that at least the teams implement these small innovations on a daily basis. CIOs are not required to personally switch the lights on and off but at the end of the day if something goes wrong you're accountable for it.

Centre of the Arena In our company, IT plays a crucial role in our worldwide operations. Across the com-

pany, people have recognised the role that IT plays in building the company's infrastructure and help it grow. When we say IT enables, which is true but in many a case, you are not enabling business but also driving it. There are various instances of how IT teams have taken initiatives and come up with new ways of working which have driven the business in new ways. Senior management of our company emphasises that the IT team takes a part in not just enabling but driving the business. IT sits at the centre of the company and has a 360 degree view of the entire company's operations. Who would know better how each department functions than IT. You'll often see that certain departments do not interact with other and do not know how the other departments function. IT is thus in a very strategic position to see through possible gaps in the business and say where business can be enhanced, and suggest to the management ways that can help the company grow better.

RoI Versus Innovation If you look at RoI from a senior management point of view, RoI and innovation are connected. If you look at it from an implementation point of view, it may not be connected. When innovation is driven only through RoI, then RoI can be a deterrent. Something which is necessary and without which my business can suffer or I lose competitive advantage â&#x20AC;&#x201D; in areas like these RoI driven

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decisions can be a deterrent to innovation. If I just go on the principal of RoI, if I have to do something, I'll have to take a quick call and say, 'this is not budgeted and this has no RoI,' but if I don't do this I might lose business or I'll not be able to sustain continuity of clients for businesses for long. So I bypass RoI principals many a times and tell the company that this initiative is not cost driven, it is more of an investment, which is future safe and which is definitely going to help the company grow. We have a very simple thumb rule â&#x20AC;&#x201D; if we don't do it somebody else would do it and that may mean loss of business opportunity. Also, in our business, we are very much client driven. Therefore, we also respect their views. Sometimes there are demands from clients that we have to do certain things which may not have been a part of the scope of business we do with them. But to make sure that the client relationship is intact and it helps us as well as the client, we also make very strategic investments and at that point of time we don't look at RoI. RoI is very critical when you look at large projects, be in terms of cost or time frame. The moment you're able to show a quick payback to the management, we don't see RoI as a deterrent as management would look at the figures and approve that. CIOs need to understand the company and CFO angle in the importance of RoI. You may not require it all the time, but you should be ready with RoI to justify the investments. We were the first ad agency in the world to implement CRM and that point of time, we didn't seriously look at RoI because we weren't sure how much business we would derive from this. But we knew for sure that if we do this we will have a strong strategic advantage. The kind of features that the system had were very strong for business. We knew for sure that if we were to implement such a system, we'll be able to run our business much more efficiently. Since nobody had deployed in our industry, there was also a risk element to it and we said that if we don't do it now, somebody else will and we won't be able to sustain our client relationships. After implementing CRM, we were able to retain all the clients. This is an example of a large project that could've been critical but we took a strategic decision and went ahead on that. It paid THE CHIEF TECHNOLOGY OFFICER FORUM

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CIO 3.0

back in less than two years while in large implementations people look at five years or more of a payback period. To us it was not the RoI that was important but retaining the client was more important for us. We went to new clients showing that the kind of tools we run and the kind of benefits they'll provide them. So people were very happy to come with us.

Risks in Innovation If you're a first mover in a technology deployment, then there are no standard tools available that would work in every market across the world. Some may work in local market, the global media doesn't operate in a standard way. If you were to embark on something that hasn't been done before and you feel that this is the best way forward, how to go about doing that would be risk oriented any case. But at the same time if you don't take a risk you'll never be able to do it. There are times when you have to seriously think if there are ways to mitigate that risk. As part of the team we make sure that every user is able to add value to our clients. If we are able to do that and generate something of that value, the risks would automatically be mitigated. So far we've been lucky because we were successful in whatever risky innovative projects we entered into. I do not look at standard processes and standard implementation as risk oriented. Even if they are large in nature, I find them very common. When we implemented ERP 11 years ago, it was unheard of in our industry and when we took the risk of implementing it and were successful at it, it gave us the courage that if we could do one, let's attempt the next and so on. We are embarking on something of that magnitude again and hopefully we would be successful. Not that it hasn't been implemented before but the way we'll implement it, is going to be innovative. Hopefully, we see that scale up globally but initially we'll try to make it successful in India. Financial risks would be a part of the business in any case and apart from that you just want to make sure that your company's image is not compromised in case the project fails. A CIO should be like an entrepreneur and if he does that and looks at things from the CEO's point of view and see how the project will impact the company as a whole and from CFO's point of view in terms of budgets, costs, savings, then you have made it and you will make sure that risks in every step are mitigated.

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Being

Board Ready their deep CIOs must exploit nabling -e IT f o e g d le w o n k domain een as processes to be s says business leaders, roup CIO, G y, th ra a s a h rt a VSP & M&A, e c n a in F â&#x20AC;&#x201C; P V . c Exe dra Ltd. in h a M d n a ra d in Mah richandan a H h it w w ie rv te in in an Arakali.

hy this debate about CIO required to be Board Ready? CIOâ&#x20AC;&#x2122;s profile should be considered as best platform as compared to other functions because he understands the function of the entire company more in depth than any other function/ independent body. You may ask me why ? And the reason is that the function is made up of processes and CIO

CIO 3.0

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“I believe the time is ripe for the next big change in the board, as in the next decade the breakthroughs will come through IT.” —V S Parthasarathy

understands processes best because he configures these processes in “business blueprinting” and that is the central part of any IT system. Therefore the question to ask is – * Is he leveraging this knowledge of processes to provide breakthrough solutions to business? * Is he leveraging this knowledge to be a counsel for business in formulating strategy? * Is he leading projects of BPM (BPR through IT) rather than just providing products like SAP for ERP platform? Hence the question here is - Are we ready and able to take a General Management role? If you aren't doing that; would you like to take up - Cross-functional projects, which would take you away from the pure IT function to helping people define how something is done? Are you leveraging IT as business enabler? Because all functions are made up of processes. If you have done what's called business blueprinting in IT terms, you'll know every function and you'll know exactly what those processes are. The question is - Are you leveraging your knowledge of the processes to give breakthrough solutions. Can you be a Karta of the business? Instead of telling your business colleagues which software package is better for a supply chain process, for example, can you tell them, 'I'll give you a complete

solution that will improve your supply chain efficiency, cut down cycle time, and increase productivity.' This is the latent need in the organization. You being a business manager, not just an IT manager puts you in better stead. Because you're helping the company solve a problem, it will give you better positioning vis-a-vis simply saying that one or the other software programme will do the job. Finally, just think about what is good (for the CIO and the company) that the CIO inherently is equipped to deliver. Initially the CEO and Board Ready person came from Engineering/ Operations background. Later as the ‘Finance” function took centre stage, this function became a necessary constituent of the board. Secretarial and legal support was required for a board to function and effectively execute its responsibility so this function got a seat on the board. I believe the time is ripe for the next big change in board as in the next decade the breakthroughs will come through IT. And hence the CIOs would be seen as a necessity for board induction. When I came to FES (Farm Equipment Sector, a unit of Mahindra), they said 'come in as change manager, running performance management systems, and because you're a CA, would you like to have any finance functions?' I told them I didn't want any finance functions because this is a big job, but I want IT with me. I want to be head of IT and performance management. They asked me why, and I said, if I have to do this change, nothing other than IT can do this and without IT you can't embark on this momentous journey. When FES created its first board like structure I believe my nomination came because I leveraged IT to deliver breakthrough results in both change management and business results. Post some more business roles I am now in corporate as the Group IT Head. I am on the board of around 10 companies including listed entities. I am also a member of the GEB of Mahindra Group. THE CHIEF TECHNOLOGY OFFICER FORUM

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PHOTO BY JITEN GANDHI

Group CIO, Executive Vice President – Finance & M&A and Member of Group Executive Board, Mahindra and Mahindra Ltd.

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CIO 3.0

Krishna and

Arjun

The tech warrior that is the CIO derives discipline from the CFO's thrust on due diligence and in return the CFO gets to see first hand the benefits to the organisation that only the power of technology can deliver, say Madhukar Moolwaney, Senior Executive VP (Finance) and Prashun K Dutta, Senior Executive VP (Corporate IT) at Reliance Energy CIOs thrive on change, whereas CFOs crave order. What do you think about this statement? PRASHUN DUTTA (PD): All generalisations are inaccurate. The CFO’s job demands some amount of order, so he has to be a stickler for rules. I think from my point of you I have never really had an issue with our CFO. He has been very supportive in most of our projects. He was actually the project director for the SAP implementation upfront. MADHUKAR MOOLWANY (MM): Reliance Infrastructure Limited: I would like to take it to the Indian mythology – where CIO is the Arjuna and Krishna is the CFO. Krishna’s job is to guide and advice Arjuna so that he does not overstep in certain issues. Ultimately the CIO is the warrior who has to fight, achieve and win certain goals. But, as Krishna I have to keep giving him advice or holding him back, that’s the equation. Definitely, he has his own objectives or guidelines from the management – it is obvious that he will be aggressive. But, as the CFO, I would support him in all his functions but always with a word of caution.

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Senior Exec Prashun K Dutta utive VP (Cor porate IT), R eliance Ener gy

When you say caution – where does it emanate from? MM: I would always attach caution to the numbers involved. Whatever is being done by anybody, I always ask them to convert it into figures or numbers. That’ll always give you an impact of what they are planning to do. Once they start looking at numbers they would themselves start questioning – are they doing the right thing? Are they doing something that they should not be doing? Would this work, Prashun, in a technology implementation – look for an RoI? PD: What I think, Madhukar definitely does is that he forces everybody to be disciplined. This may not be in giving an ROI figure but adhering to certain practices and norms; getting the support of the CEO for getting a sanction etc. I personally feel that ROI is a very misleading indicator, as there are many other factors not that easily apparent. There are second or third order benefits that accrue out of any system implementation. These are totally unforeseen at the early stage of implementation. I think ROI is a weak measure. This is not something that I

Madhukar Moolwaney

nce Energy Senior Executive VP (Finance), Relia

have felt today, I have always felt this way. There are many projects that I know – some among the biggest in the country in the private sector – that would not have been sanctioned if we had computed ROI. Madhukar, do you agree? MM: I would definitely agree. Technology is something where you make investment looking at the future. You cannot it into rupees. There are too many intangible benefits that accrue, which he will agree we have seen in our organisation. In some of the cases, we’ve had a pay back in less than 1-3 months, but, if we have a huge capital investment, then you have to look at various numbers and risks that are involved with it. How do you nail down the details, and the risks, of such a project?

MM: We discuss a number of areas – the risks are highlighted and categorised on a comprehensive list. We're both part of a risk management committee and we maintain these risk registers and review them every quarter. This is at such a high level that it goes to the audit committee also. All those risks are then evaluated and then classified into various categories. Whether it is an ongoing project or in the construction phase, all these things are done. PD – How do you mitigate a risk? Every project has a risk involved – there is no doubt about it. For instance, let's take a very recent project that has just started. This is on consolidation and IFRS preparation. Obviously there is risk because IFRS is becoming mandatory, there is very little skill in the country or in the company and we had very few options on who to engage. THE CHIEF TECHNOLOGY OFFICER FORUM

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In such a case you get more people involved who understand IFRS. It has taken us close to 18 months to set up this team and get the project rolling. In this team we have people who are actually from all parts of the organisation. We have mitigated risk in various ways – by calling in experts, consultants from abroad etc. You have to constantly think of mitigating risks, and as he says that the top management of the company are seized of the matter. The hands that sign the cheques are the ones that run the business – True/ False? PD: Reliance is fairly gung-ho about technology, and they expect technology to deliver, so it isn't on the periphery. While Madhukar does sign the cheques, everybody is involved in arriving at the project or arriving at certain expenditure. I do not think he has ever put any hurdles our way. MM: I always believe that my function is a support function to the organisation and I do not consider myself to be the last word. If you have done your job, all your papers are in place and you have followed all the terms and conditions of the contract, I do not see any reason why the payment should be withheld. My accountants have been told not to raise objections for the sake of raising objections. They should work with an open mind and not in silos. The objective should be very clear – the benefit of the company. They should not be showing their power on emails to the colleagues and hold (back) proposals. PD: Also, in any project he is as much a member as anybody else. Suppose there is a project for some particular part of the company. As a senior member of the company he is responsible for even developing the project, so, it is not that one fine day we send a proposal asking for a sign-off. He is always aware of the project, its goals and how it is fitting into the overall organisational goals. What do you do when you know a particular technology will help your business, but you don't have the money for it? PD: This is what I mean when I say that I have had ample support from him. He has said go ahead we’ll see how we organise it. We will probably need to run it through some

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“Krishna’s job is to guide and advice Arjuna so that he does not overstep in certain issues.” —Madhukar Moolwaney Senior Executive VP (Finance) Reliance Energy

“ROI is a very misleading indicator, as there are many other factors not that easily apparent.” —Prashun K Dutta

Senior Executive VP (Corporate IT) Reliance Energy

director and tell him that we are diverting funds from X to Y, but between the two of us we manage things. But, we’ve never had this problem, I cannot complain that any project of mine has been held up because of lack of funds. It has been held up because of (lack of) consensus on a particular issue, or the bigger bosses did not have the time to look at

it, but never because of finance. MM: Budget is a document that is prepared internally by human beings and approved by humans. It is not the kind of document that you cannot modify. My only of word of caution to people who say 'sorry, budget provision is not there' is that I am clearing it but make sure you do not commit this mistake again. If you have certain plans in mind, please put it in your budget. But, I will never say that budget is not there, I cannot do it. Yes, if genuinely I find that the proposal is not worth considering, I may say that lets re-visit and defer it for some time. If it is a proposal that needs to be implemented, budget has never been an issue. What is the CFO’s advice to the CIO and vice versa? MM - When it comes to giving advice, I say, whatever you are acquiring or buying, is it the best in the world in the present circumstances available; is it scalable and are we paying the right price for it? If there is something better that is available, are we satisfied – if he says I am satisfied, then it is fine. PD – The CFOs must get into managing the organisation. Once you start getting into managing the organisation, you understand the role of IT. Why is it that he is involved with IT? It's because he is a part of the management of the organisation. You are not merely an accountant who keeps track of income and cash flows – you are actually involved in why the project is getting delayed, why am I not able to get these five clearances from the government – then you understand the value of IT. They do not need to understand the bits and bytes, but they need to understand the power of technology. Once they use the power of IT, and they know what IT can do, then conflicts diminish. The CIO and CFO need to unite their objectives through an understanding of what the organisation needs. That is the sum and substance of the relationship. MM – I keep giving this example. In Mumbai, we have increased our consumer base by 30 percent, in absolute numbers it can be 7 lakh customers. My distribution cost has remained the same per customer. Straight efficiency can be seen, just by bringing in technology. Handling additional 7 lakh customers with the same cost is not a joke.

S TAT E - O F - T H E - I N D I A N - C T O S U R V E Y

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State of the

Indian CTO

Stepping into 2011, CIOs are faced with great opportunities, and some nigglin g problems, as our SECOND STATE-OFTHE-INDIANCTO SURVEY found. The bo ttom line is, speak and do more business, less jargon, move ahead with a positive no te.

port in to? e r u o y o d Who

40% CFO

43% CEO 18% Other

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pany who touch all aspects of the business – be it the supply chain, marketing, sales, production, HR, finance or strategic decision making. That CIOs are increasingly sought out by their business counterparts to help make business decisions is clearly reflected in what we found: 65 percent of our respondent CIOs say they are on the management committees of their organisations. On the other hand the verdict is still out on IT being considered a cost centre in the organisation. About half the CIOs say that IT is still a cost for the company, while for the other half it is either not considered a cost centre or they are undecided. In comparison with last year’s survey, this is a six percent increase in companies that consider IT as a cost centre.

Ineffectiveness While CIOs are moving up the ladder, there are various reasons why they are still ineffective. Compared with last year, when the largest reason for ineffectiveness was the IT budget (26 percent), this year the largest reasons have emerged to be 'Aligning IT with business goals' and 'Disconnect with other C-level peers in the company' (31 percent). Understandably lack of budgets was a major concern in every area during 2009, but 2010 shows that CIOs still do not understand business that well and cannot communicate well with their peers. As you would see in the cover story, all the senior

Is IT still considered a cost centre in your company?

15% Maybe 48% Yes

37% No

Who is responsible for taking IT investment decisions in your organisation?

An ad hoc group

36%

A cross functional IT steering committee

53%

Top level executive committee

the Are you part of utive c company's Exe / Board? am Management Te

6% No defined group

CIOs featured in the story stress on the importance of communication skills in the CIO. They must speak to the business in the language that they understand and not in IT jargon, which will be dismissed without much thought. As Sandeep Phanasgaonkar, CIO, Reliance Capital says in his opinion article, “CIOs have to play a dual role and speak two different languages. They must speak the language of business while speaking to business leaders and while speaking to their technology managers they must get their hands dirty and translate that business into a language of technology that the IT managers can understand.”

Signs of Resurgence Jobs and budgets are probably among the most significant indicators of what companies think about their prospects. On the job opportunities front, there have been many more movements in the CIO space this year than the last. At 10 percent of our respondents, the number of CIOs who are less than a year into their jobs this year is more than tripled from last year. This indicates a lot

Which of the following would you rate as the top CIO priorities for the year 2011? 77% Strategic planning and aligning IT with organisational goals

58% Integrating systems and processes

56% Implementing security and privacy measures

42% Lowering costs

29% External customer relationship management

30%

35% No

Knowledge management

26% Optimising IT Supply Chain

65% Yes

32% Project management improvements

44% Staff development and retention

7% Other

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S TAT E - O F - T H E - I N D I A N - C T O S U R V E Y

Does your IT organisation regularly measure customer satisfaction with IT services?

15% No 30% Yes both

internally and externally

52% Yes with

internal employees

31%

you What do think are rs the barrie to the ness effective Os of the CI office?

company Disconnect with other C-level peers in the

24% Poor vendor support

21% Inadequate IT budgets

46%

Aligning IT with business goals

29% Unrealistic user demands

32%

Pace of technology change

3% Yes with external

customers and partners

now looking to IT even more as they expand their operations in anticipation of better times.

Compared to 2010-11, what trend do you expect in the budget of 2011-12?

17% Remain the same

77% Increase 6% Decrease more opportunities in the market. Last year a very healthy 69 percent of CIOs thought that IT budgets will go up in the next year, and this year the mood is even more optimistic: 77 percent of our respondents think that their IT budgets will see an upward trend in the coming year â&#x20AC;&#x201C; indicating that the economy is looking up and is demanding more investment. We might cautiously say that this is an indicator of good times to come. This may also indicate that, pushed into action by the economic downturn last year, companies have latched on to the power of technology to save costs and unlock capital. Therefore they are

Which of the following spheres occupy the maximum time of a CIO? 80%

Priorities The top three IT priorities remain unchanged from last year. Strategic planning and aligning IT with organisational goals, Integrating systems and processes and Implementing security and privacy measures are still the top three priorities for CIOs as they were in the last year. Aligning with the priorities, CIOs still spend most of their time dealing with business executives (80 percent of our respondents), which is 1.5 times more than the time spent on dealing with their teams or vendors. This represents an increased thrust in aligning IT closely with the business to ensure better returns.

Dealing with business executives

50% IT staff and team building

51% Dealing with partners and vendors

21% External partners and customers

3% Other

CIOs are no doubt growing in their role, budgets are on the rise and so are the opportunities to shift from one company to another, in pursuit of bigger challenges, so things are looking up. What we'd like to see in 2011 is a clear sense of the resolution of the age-old debates of business IT alignment and the need for better communication with c-level peers that still plague the community. Perhaps one is being a tad too optimistic, but we hope that the community will take heart from the positive sentiments in the market and methodically work through these problems in the coming year. â&#x20AC;&#x201D;Geetaj Channana THE CHIEF TECHNOLOGY OFFICER FORUM

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MISTAKES

FUZZY COMMUNICATION and squelching of disagreement FAILURE TO ask for inputs. IGNORING THE needs of front-line management.

PHOTO BY PHOTOS.COM

HIGHLY DISENGAGED workers. TOO MANY surveys, not enough action.

HOW TO KILL IT WORKER ENGAGEMENT Here are five management mistakes that are guaranteed to derail engagement among your IT teams. BY JUDY WHITE

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Engaged employees feel valued and are

willing to put forth their best efforts, thoughts, and initiatives. These employees serve as dynamic role models for others. When an employee believes that he or she creates real value and helps drive performance for the company as a result of his or her demonstrated expertise, there is a measurable difference in performance. Even better, there are real dollar results attached to what some might consider the "soft" side of management.

For example, in a 2008 study by global consulting firm BlessingWhite, electronics retailer Best Buy reported that stores in which employee engagement is increased by a mere tenth of a point on a five-point scale typically see a $100,000 increase in sales for the year. Yet, it would seem far too little attention is being paid to employee engagement. The Conference Board Inc., a non-profit research group, conducted a 2009 survey found that workers in less than half (45 percent) of the 5,000 US households surveyed were satisfied with their jobs. This is a sharp decline from the 61 percent who reported being satisfied with their jobs in 1987, when the first survey was conducted. The Conference Board survey identified many job issues covering all occupations that could directly result in a decline in employee engagement, productivity and retention. A 2008 study conducted by BlessingWhite, meanwhile, found that only 29% of North American workers reported that they were fully engaged in their present workplace. Savvy CIOs must consider how well their current approach to engagement is aligned to their workforce and rest of the organisation’s business strategy. How often are you measuring your IT employee engagement strategy against business results? Annually? Monthly? Weekly? Not at all?

Other questions to ask yourself: What is actually being measured? Will these metrics continue to matter in the near future?

How important will these be in the long run? How will IT’s engaged talent create the production of high-value products and services? What will be the relative impact on the social, environmental, and brand image for the overall business? Since engagement is rooted in relationships, it is not something that can be mandated, forced, or trained in a seminar. Building a community based on effective two-way communication -- where there is open, honest exchange of ideas, information and learning -- is central for engaging IT professionals. It's equally important to empower your IT professionals through continuous learning, not only about the tech choices that are available, but also about the business environment in which their users operate. The transformational CIO will focus on turning his or her IT department into high-value integrators for the enterprise, strengthening internal business relationships and increasing collaboration across organisational divisions. The benefits that may be derived from such openness and transparency include strengthening core capabilities, increased learning agility and knowledge transfer, early- stage talent or succession planning, and cost efficiencies.

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change, bringing clarity of organisational strategy and IT objectives to your team through aligned, focused, and unfiltered communication is essential. Failure to ask your IT professionals for their input. Are your IT workers seen, heard and valued for sharing ideas and putting in a stellar performance? Or, do your IT employees feel isolated and unheard? How well do you encourage respectful push-back? Ignoring the needs of front-line management. It's crucial to understand how these jobs may need to be redesigned to meet future conditions. Redefine responsibilities and expectations so that your frontline teams are not focusing primarily on fixing problems and auditing the work of others. Instead, reward those who anticipate problems and act as coaches to their direct reports. Highly disengaged workers have already quit, but they just won't leave. While this often represents a small percentage of an IT workforce, its impact can be costly to the rest of the organisation. Such workers often influence the attitudes of those around them. Too many surveys, not enough action. Gaining key insight into your people-management and engagement drivers is critical. But, it is essential to turn that information into action through which you can move organisational and IT strategy forward and cultivate real results. Mistrust breeds when employee feedback is collected and limited action follows. The most successful organisations integrate talent engagement through business strategy and ensure it maintains a continuous priority throughout the year rather than hyping up an annual event that yields no effective or lasting engagement. A multi-faceted approach to IT employee engagement can ensure that CIOs and IT leadership proactively address issues while strengthening engagement muscle within their organisations. — Judy White, SPHR, GPHR, HCS is President of

Here are five mistakes that are guaranteed to derail engagement among your IT teams:

The Infusion Group, LLC, a people management consulting and coaching firm.

Fuzzy communication and squelching of disagreement. Given the speed of IT THE CHIEF TECHNOLOGY OFFICER FORUM

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CAREERS

CIO = Career is Over? Not Hardly

CIOs need business acumen that rivals CEO.

or some, the role of CIO is the career peak; for others it's just an outcropping on the side of the mountain. Career advancement for the one is a matter of holding and defending the position. For the other, it's about anchoring a cam in the next crack of opportunity and muscling past icy obstacles. But in either case, standing still is not an option. "This job is not for someone who is slow to learn or adapt," said Phil Garland, a partner in PricewaterhouseCoopers' Advisory practice who also serves as the National CIO Advisory Solutions Leader. For those looking to scale higher than the top IT job, the way forward calls for a whole new skill sets and business acumen that rivals that of a reigning CEO (even if the CEO seat isn't where the CIO's aspirations sit). The five career paths that currently lay ahead of CIOs all require far more than a mastery of technological wizardry and more than a touch of Midas talent.

ILLUSTRATIONS BY PHOTOS.COM

The CEO career path While plenty of CIOs will likely aim for the CEO seat, that target is exceedingly difficult to hit. "Frankly, we rarely consider CIOs for the top leadership position," said Chuck Pappalardo, managing director of Trilogy Search Non+Profit, an executive recruitment firm based in the San Francisco Bay Area. "This is not yet a typical career progression model or prevalent trend. It could be, however, as I believe there's still a gap in communications and understanding among executives in the C-suite." The key to landing a seat in the top chair is to first stand in the center of the action. "If CIOs spend more of their time understanding what their companies are trying to communicate to customers as well as time listening to company customers to understand how that messaging

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BY PAM BAKER

matches the customer experience, I suspect over the next five years we will see more CIOs break into CEO roles," said Pappalardo. The key steps you need to master on the path to becoming CEO are repositioning IT from cost center to profit center; know and understand operations on par with the COO; be able to clearly define ways to meet company goals, and be comfortable presenting and/or arguing a business case with other executives or the board of directors. In other words, "move in tune with the company's business rhythm and flow," said Pappalardo. But be prepared to climb to the CEO position by way of an indirect route. "The likely path would be to a COO role leaning on skills for continual process improvement and overseeing initiatives supporting business priorities," said Tom Silver, senior vice president of North America at Dice.com, a leading tech job website. "However, this would likely be considered a lateral move with the benefit of more business experience allowing CIOs to shed the tech experience-only tag." It's much easier to move from the COO position, rather than

CAREERS

the CIO position, to the CEO slot. But there are other successful side-routes available as well. "It's possible for CIOs to move over to lead sales or marketing functions, which are the most likely paths to the CEO role, if the employer's primary product is being sold into technology departments."

Diverging paths

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a few who tried some of those paths and did not fare as well," he said. In any case, CIOs generally find it easier to avoid typecasting and career stagnation by leaving their present employer and moving to a different company. But don't jump ship too quickly; look around and carefully inventory your best opportunities for advancement first. "CIOs may want to target companies they've done business with and have a clear vision of what those companies/vendors could do better," advised Silver.

Not everyone thinks being CEO is the ultimate career DATA CENTRE pinnacle, anyway. So for those of you looking for someEXPENDITURE thing else, the way forward is full of diverging choices. Take Ilan Levy, for example, he was the VP of InformaFrom fixer to rainmaker tion Services (as the CIO title did not exist then) at Sony Canada The one step all these career paths require is a change in perception from 1988 until 1994. From there he became senior managing confrom the CIO as a tech problem-fixer (be that to fix broken tech or fix sultant at the Boston Consulting Group for two years, then a serial broken knowledge of new tech) to that of rainmaker. If the goal is to entrepreneur and now finally an angel investor. He says that upon move to CEO, then the CIO must provide a track record in produclooking at his own (and others') "After CIO" career paths, he sees ing profits. If the goal is another C-seat in the C-suite or as a consulfour distinct destinations separate from the CEO route: tant, then the CIO must prove relevant to operations and innovation. 1. A role with greater scope within the same company, a competitor If the goal is to teach, then the CIO must prove to be a master of or another company in the same or similar industry. This could be tech details and trends. COO or head of Logistics or Sales, for example. Even while working to increase visibility and change perceptions 2. A senior consulting role in a technical or strategic consulting of the top IT role, CIOs must also make sure the basics are covered. firm. "No matter how elegant the future strategy might be, the CIO will 3. Entrepreneurship as in starting a business or joining a startup. not survive if the business is in jeopardy because of a shaky IT foun4. Teaching at a university. dation," said Garland. The key to choosing one path over another lies in understanding that there is not one mountain to scale but an entire mountain range A prolific and versatile writer, Pam Baker's published credits include numerfrom which to choose. Decide which pinnacle you want to reach ous articles in publications including Institutional Investor magazine, CIO. first and then go for it. However, if you don't succeed or you simply com, NetworkWorld, ComputerWorld, IT World, Linux World, Internet News, decide that mountain top wasn't quite what you imagined it to be, LinuxInsider, CIO Today Magazine, NY Times, and Knight-Ridder/McClatchy there's nothing stopping you from taking one of the other paths too. newspapers. She is a member of the National Press Club (NPC), Society of "I know of people who were successful in all four paths. And I know Professional Journalists (SPJ), and the Internet Press Guild (IPG).

Succeeding in the Face of Change

Reinventing yourself is the only way forward.

uilding a company that is structured and organized to continuously transform itself as opportunities and threats appear is somewhat of an urban legend these days. This nirvana-like company repeatedly maintains three characteristics: 1. Ongoing assessment of activities: elimi-

nating those that donâ&#x20AC;&#x2122;t serve the core business strategy; 2. Continual refinement of activities for greater efficiency and productivity; and 3. Redirecting resources to new products, processes and business models. Building an organization that fits that mold is not easy. Growth through innova-

BY FAISAL HOQUE

tion must become part of an enterpriseâ&#x20AC;&#x2122;s soul. Bringing in a charismatic leader might help the transformation, but the change management skills they bring to the table will certainly be necessary to make the journey successful. More important, however, a new way of doing business must be baked into the comTHE CHIEF TECHNOLOGY OFFICER FORUM

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pany’s management systems and business processes. This means new organizational structures, the creation and sharing of new kinds of information, and new decision-making processes. Only in this way can growth through innovation become repeatable. Companies that have mastered this trifecta are prepared for whatever the marketplace brings, and it should be obvious that this state of being is more than a mindset or a clever mission statement. By the time a mission statement is crafted and distributed, the competitive environment has often shifted; leaving good intentions in the dust. There is no doubt that a company embarking on a transformation requires a clearly articulated strategy, but this state of continuously sensing and responding requires several management disciplines to achieve this overhaul. The three critical types of transformative practices -- innovation, efficiency and abandonment -- are threatening to some. Although each is considered positive in the abstract, they are often greeted with fear and loathing. Consider what individuals, divisions or entire corporations might say about:

Innovation – “We have to meet this quarter’s numbers or we’re toast.” “That’s a tiny payout for a three-year horizon.” “You know most new products and most new businesses fail.” “How are we going to fund it?” “That’s not one of our core competencies. That’s not who we are.”

Efficiency “Eliminate that, and the customers will complain.” “They’re asking us, the employees who do the real work, to bear the burden.” “That’s not the way we do things around here.” “You can’t cut your way to greatness!”

Abandonment “I’ve spent 10 years on this. The margins may be low, but they’re reality, not a dream.” “What will we tell the customers?” “We should ride this sure thing a few more years.” “I might lose my job.”

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By the time a mission statement is crafted and distributed, the competitive environment has often shifted, leaving good intentions in the dust Most organizations are not set up to challenge these forces of inertia. The habits that make companies successful can sabotage them in the face of disruptive innovation. What is called for is a new business model, one that incorporates innovation, efficiency and abandonment.

Enterprise-wide Transformation is an enterprise-wide activity, and the first step is to get a clear picture of the entire enterprise. First, this picture can be created with an effective strategic enterprise architecture (SEA). SEA has two parts: a business architecture describing business strategies, operating and organizational models and processes; and a technology architecture describing the infrastructure, applications and data needed to achieve enterprise goals. Companies should create a current state SEA and a desired future state SEA. A second source of information will provide more guidance: strategic investment management portfolios of all of the firm’s assets and activities. Among the types of portfolios that can be developed are asset portfolios (financial, human, intellectual property, business technology, physical), program and initiative portfolios, potential new product, process or business model portfolios, and risk portfolios.

If an SEA can effectively answer what are we trying to do and how, and investment portfolios can respond to what we have and need, then an enterprise can begin to address some outstanding and fundamental issues, such as: Is this the right set of customers? Why are we doing this? Could we do it more efficiently? Do we have unused assets that could be applied to a new initiative? Is this operation still part of our evolving mission? Can we outsource this? Do we have the people and skills we need? How can we develop a new product to attract new customers? Do we have the right infrastructure? A transformed company develops the management capabilities required to answer these questions. And it is those answers that provide clear visibility of where a company is today, and more importantly, where it wants to be tomorrow. Faisal Hoque is an internationally known entrepreneur and author, and the founder and CEO of BTM Corp. His previous books include Sustained Innovation and Winning The 3-Legged Race. BTM innovates business models and enhances financial performance by converging business and technology with its products and intellectual property.

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FEATURES INSIDE

Launching into the Cloud – A Vendor’s Perspective Pg 53 Show Me the Money. Make a strong case for your ideas. Pg 58

ILLUSTRATION BY BINESH SREEDHARAN

C CIO as Transformation Leader It's time to start thinking about how you can emerge as a change leader in your enterprise. BY DON REISINGER

IOs are positioned to play an integral role in corporate strategies as enterprises develop plans to emerge from the Great Recession. The key is knowing how to accomplish transformational change that fulfills the strategy of your CEO and fellow C-suite executives while keeping the business running. It's time to start thinking about how you can emerge as a change leader in your enterprise. Your ability to offer several ways to deliver on enterprise transformation goals could boost not only your own career, but also the livelihoods of your team members Market research firm Gartner recently the CIO Advisory: Top 10 Questions You Need to Ask When You Are in the Midst of a Strategic Change. This set of 10 guidelines and action items to give CIOs and other IT leaders the tools you need to lead the transformation of your enterprise. As Gartner points out, IT departments can be a “key enabler or a key constraint.” “When organisations have to navigate a business transformation, the IT organisation is usually in the middle of it in some way, either as a key enabler or a key constraint,” said Jorge Lopez, vice president

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and distinguished analyst at Gartner in a prepared statement. â&#x20AC;&#x153;CIOs rarely have a leadership position in a change of this scale, and they need to prepare more vigorously to ensure that IT does its job to advance strategic change." Gartner has identified 10 questions for CIOs to ask when they are in the midst of a transformation in which a focus on strategic change could help. The questions and action items are broken down into three sets: contextual, implementation and organisational. What type of change is happening? CIOs must begin by planning ahead for the contingency that a strategic change effort is or will be under way, according to Garnter. Likely causes of a strategic change might include the creation of new ventures, dealing with innovation and change, managing mergers and acquisitions and addressing new competitive pressures. CIO Action: Write down the top three most likely major changes ahead in your business and industry and lay out all the different areas of the IT organisation and of the business that would be affected and require IT action in order to succeed. Take the list and prioritise it according to the impact it could have on the business.

Who is driving the change?

The preferred sponsors of a major change would be the CEO and, alternatively, an executive who is on the top management team, including the COO and the CFO. If the change is restricted to a particular business unit, the top manager in that unit is the preferred sponsor including public pronouncements of the CEO to investors, board of director expectations set by the CEO, letters and announcements made to shareholders, information gained from competitive intelligence, as well as public competitor announcements and analytical conclusions drawn by financial analysts covering the company. CIO Action: Keep up to date about viewpoints both inside and outside of the company, as it can be useful to have alternative scenarios at hand should conditions shift. What are the constraints to the change? In the midst of any new idea, the forces against the successful execution of the strategic change are always in place. Gartner advises CIOs to ensure they are a part of the coalition driving the change and work to expand it further to improve the chances of success. CIO Action: As you arrive at a list of the key tasks for the IT organisation in a strategic change, look to the different constraints within your organisation. Line up actions in your project plan to eliminate the constraints.

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What is the deadline for the change? In most cases of strategic change, there is a "window" for execution for the achievement of the goal. This can be impacted by a number of factors

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How complex is your infrastructure? One of the greatest issues in managing strategic change is the complexity of the IT infrastructure from applications to the distributed systems supporting business units. CIO Action: Take inventory of how many different applications

and technology platform stacks you have in your organisation. Map how many of the applications actually have large redundancy of capabilities that can be consolidated, and calculate the cost savings and other benefits to enhance future change. Where are your people? CIOs need to focus on the process by which people actively take on a change in the environment to which they have become accustomed. In any given organisation, approximately 10 percent of employees normally reach out for change, while another 10 percent fully reject any change. CIO Action: Identify the top 10 percent change-seekers in your organisation and put them into roles where they can have considerable influence in effecting future strategic change.

What is the impact on stakeholders? During a strategic change, many stakeholders are affected -- from the executives who support the change, to the knowledge workers who must shift to a new way of doing things. Identifying these stakeholders is crucial to understanding how to move the strategic change forward. Once the stakeholders are identified, the impact of the change on each of them must be understood in very personal terms. CIO Action: Build a formal view of the organisational structure that should exist after the change, so you can get a clear picture of the individual fates of the stakehold-

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ers moving forward. How are decisions made during a strategic change? The decision-making process is different during a strategic change, as governance structures made prior to the change are redesigned and rebuilt to reflect the future realities. An example is the temporary team built to assist in the integration of two companies during a merger. CIO Action: To have some influence on a decision, take a look at the decisions to be made and list all the stakeholders who either will find themselves impacted, or have information, perspective or expertise about the decision. Reach out directly to those who are in that circle, and make it clear that you want to know which way the decision appears to be heading and

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what you can do to either ments. Ensure that you are accelerate its outcome or help plugged into the committee that revive the initiative if it is controls decision-making on rejected. process redesign. What is the impact on key What are the mind-sets of the OF EXTERNAL and mission-critical processes? organisation, and what do they IT SPEND IS Clearly the impact to missionneed to be? One of the difficulcritical processes must be ties in strategic change is the ON CLOUD taken into account for the resistance of some managers to COMPUTING change to succeed. Among the idea that cultural mind-sets those processes are change are to be taken seriously, and processes, such as identifying, yet it is the management of this designing, and implementing that most determines the sucnew systems, plus processes associated cess or failure of a strategic change. with sales, service and support. CIO Action: When thinking of mind-sets, CIO Action: Identify the mission-critical make sure that the new mind-set is mateprocesses most likely to be affected by the rially different from the one you want to change, and redesign them as required by displace. the business and other external require—From CIO Insight

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Launching into the Cloud – A Vendor’s Perspective

ILLUSTRATION BY PHOTOS.COM

Everyone's talking about cloud computing and what it means to consumers but what about the other end of the pipeline? BY IAN GOTTS

ooking at the resignation letter on my desk, I don’t understand how we got it so wrong. He was our top salesman and was the most vocal about offering a cloud solution alongside our existing product. And now he’s joining our biggest competitor, who haven’t even considered the cloud. Why? Execution was clearly the issue. The strategy was correct but our implementation was a disaster as new issues kept surprising us. We underestimated how this new offering would confuse customers. We thought they understood cloud computing. But it simply stalled sales. They assumed they needed less consulting support and projects started to fail. The help desk was swamped and customer satisfaction scores went through the floor.

But the worst was the sales cannibalisation and changing salesmen’s compensation to be tied into our annuity model. This seemed to be the last straw for our salesmen. If they can’t make money, they will go somewhere where they can. 12 months ago, before we launched our cloud computing strategy we were on the top of our game. Now we are fighting for survival. There are so many questions, with hindsight, we wish we’d asked. Could this be you? As a successful software vendor, are you on the brink of making the same fateful mistakes? Or are you a start up with a great idea? Building on a cloud platform may be a no-brainer but what else do you need to consider to be successful? Much has been written about cloud computing from a customer’s THE CHIEF TECHNOLOGY OFFICER FORUM

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or technology, and mostly from a security, perspective but little has covered what it is like from the independent software vendors (ISV) viewpoint, particularly those migrating from an on-premise model.

Cloud is here to stay Cloud computing seems to have struck a chord in a way that ASP, On Demand, SaaS and all the previous incarnations never have. Every analyst is blogging and tweeting about it, there are a slew of conferences and a surprising number of books have already been published. That means it is more than just the technology folks who have heard about it and the benefits. Now that business and consumer worlds are familiar with the concepts and that is driving demand for ISVs with cloud offerings. The cloud computing evangelists would have us all believe that this is the only future and someday soon all software will be delivered as a service. And looking at the huge investments that some of the largest gorillas in the IT industry are making, maybe they're right. A 100% cloud world may be true for SMBs but for large enterprises, they will continue to run their core applications such as SAP and Oracle in-house for years to come. Independent software vendors (ISV) require a hybrid model with some clients 100% cloud, others using it as a platform for pilots/ early stage projects and then a migration in-house, and finally straight on-premise purchases. Life for the ISV has just got more complicated not less.

Benefits and risk – two sides of the same coin Putting aside the hyperbole that always goes hand-in-hand with new ideas in IT, there are many sound reasons to consider the cloud. Here are a few: Enterprise capability at commodity costs - By providing the service to multiple customers, utilising a common centralised infrastructure and a multi-tenant approach, you can achieve economies of scale and therefore provide the service at a reduced cost compared to an on-premise solution. This means that you can then scale down to reach the long-tail. Also, by outsourcing the infrastructure there will be the potential for internal cost savings. Before, you needed to knock out a software release every six months or so. Now you are responsible for a service that needs to be available 24/7/365. Are you adequately funded, resourced and prepared to do that? Do you have the management and technical skills to handle it? Speed of availability vs. implementation - With the service already installed and waiting for use, much of the traditional time taken for customers to plan, install, configure and deploy is removed. But don’t confuse availability with their ability to use the service. Simply making the service available, unless it is very simple and of a very narrow scope, will result in chaos. Implementation from a process perspective will be critical for successful projects, which will in turn reduce churn and increase your annuity revenue. Ignore this at your peril. Anywhere access - Clients can access the service using any device: PC, tablet or smartphone. A hybrid model may answer the question, “What happens when not connected to the internet?” By providing synchronised copies of data. But this has implications on the archi-

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ISVs require a hybrid model with some clients 100% cloud, others using it as a platform for pilots/early stage projects and then a migration in-house, and finally straight onpremise purchases tectural complexity of the solutions you need to develop. Always up to date - The centralised management of the services makes it easier for you to deploy updates and once deployed all users will have access to the new capabilities. This also provides the opportunity to have more frequent release cycles, which leads to a more rapid introduction of improvements, bug fixes and enhancement requests. This means that you can move to truly agile development but this may be a very different way of working. Go to market - Despite all the hype, the dominant delivery model for software is still the on-premise one. This means that there may be resistance from customers to adopt the service. You could be too early. Or you may need to offer both a cloud computing service and an on-premise solution. For cloud, the presence of industry heavy weights such as Google, Oracle, Microsoft et al, reinforces the validity of the market. Maturity will come, but until it does there are opportunities for new start-ups to steal a march on existing players – namely you. Commercial arrangements The traditional on-premise world was simple: customers paid for a perpetual license for the software and some form of optional annual ‘support and maintenance agreement. But the vast majority of the costs were up-front as part of the implementation project. With cloud computing things are changing fast. There are different charging models varying from free or ad-funded with little or no support through to managed services with on-going annual, quarterly or monthly costs. You will also find the customer negotiations on SLAs will be far harder. Before they wanted the software to work. Now they want it to work and be available, which is now your responsibility. Your customers will hold you accountable no matter who you have outsourced elements to. Annuity revenue stream and motivating sales teams - The appeal of long term annuity revenue is compelling as a long term employee or shareholder but they will be far less excited about the P&L, balance sheet and margins all of which are far worse than the traditional on-premise models. Career-minded sales teams are used to making big ticket sales and seeing equally large quarterly bonuses. They will not be motivated

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needed to run Nimbus is on the Salesforce.com platby promise of a far lower annuity commission stream, form; Salesforce.com for Sales, Marketing and Support, locking them into the company for years even though and Force.com to develop apps for HR, asset managethey will be better off in the long term. ment, business excellence, R&D management, PR, and One product or two? One company or two? - Should you be developing a new cloud application or migrating OF CURRENT SAAS finance using FinancialForce.com. The benefits are a single integrated system eliminatyour existing offering? Do you need separate developREVENUE CAN ing messy, error prone and expensive integrations ment, marketing and sales teams who can openly comBE CONSIDERED between disparate applications. The business continupete? The answers to these questions are strategically ity and security built into the system is greater than we important but will be driven by your market and existAS CLOUD could reasonably afford to put in place. ing customers and the long term opportunity you see. COMPUTING But it is not just about cost saving. The opportunity to Not theory – a practical example - Nimbus, where I expand into new markets and territories without infraam founder and CEO, has been offering its process structure investment is huge. This strategy made our 40% year-onmanagement system as a cloud offering for five years -- long before year growth possible. it was called cloud. But we operate a hybrid model. Many clients, including Nestlé, SAP, Accenture, and Best Buy Europe have used the service to get business projects going quickly with a view to So to cloud or not to cloud? migrate in house after 18-24 months. Others are happy with our With all this in mind, should you give cloud computing a wide long term hosting solution. berth? It depends. Everything we do in business (and life) carries a The ability to offer a hosted service, particularly when selling to risk. The key is to understand the risks that we are taking, and the business users is critical. It can take as much as six months out of associated rewards so we can make informed decisions and put the a sales cycle and there are some other, unexpected benefits. Profesappropriate risk management strategies in place. Critically however, sional services teams can work remotely with clients reducing travel there is a fundamental difference between risk management and costs but also the stress and fatigue of constant travel. This can risk aversion, with the later typically leading to stagnation, decay and super-charge implementations enabling RBI (return before investfailure. ment) rather than just ROI. Ian Gotts is the founder and CEO of Nimbus. He is the author of On the flip side, Nimbus has been a cloud customer using Salessix books and a prolific blogger force.com for the last seven years. Now every operational application

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Show Me the Money

When you address people's pain and use the power of certainty, you make a strong case for your ideas.

BY DANIEL BURRUS

oday’s technology is nothing short of amazing. As a CIO or other top level IT professional, this presents an interesting dilemma. On the one hand, you see so many technological opportunities for your organisation, from new ways to communicate with customers to new revenue streams, that the possibilities for business growth seem endless. On the other hand, each technology comes with an expense. And when budgets are tight, selling your ideas to the CEO, CFO, or board can seem near impossible. Unfortunately, in most companies, IT is seen as a cost center rather than a revenue

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generator. From a financial and business perspective, cost centers need to be controlled. As such, IT budgets are usually fixed and firm. No matter how wonderful the newest technological revolution is, no matter how many features and benefits it offers, if it’s over the allotted budget, chances are slim that you’ll get to implement it. In addition, no matter how excited you get about the new technology, often your enthusiasm is not contagious. Company leaders who do not have a technology background simply don’t get excited about technology, no matter how revolutionary it is. In some cases, the non-IT people don’t understand the technology, and in other cases they only

see the expense associated with it. But let’s face the reality of being a CIO: When you have a new technology that costs money but will save the company even more money, you need to be able to sell that. When you have a new technology that costs money but will save the company time (which will ultimately save money), you need to be able to sell that. When you have a new technology that costs money but will create a new revenue stream for the company, you need to be able to sell that, too. This brings us to the real question: In an era of budget, time, and labor constraints, is it possible to sell your ideas, your innovations, and your new technology finds to the

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CEO, CFO, board of directors, or whoever is in charge of the final decision? The answer is: Yes! You can sell your ideas up. It simply depends on how you frame the opportunity.

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Perception is everything First things first: When you’re selling your technology ideas up, don’t talk about technology. While that may sound strange, it’s the primary sales rule that most IT people break. Remember that IT and technology are what you love, not what everyone else loves. And when you’re selling your ideas to non-technology people, you can’t focus on your preferences. Rather, you have to focus on the other person. Here’s how you do that: Tune into the pain of the person you’re talking to. Forget about yourself and how excited you are about this great new technology. At this point, you and your likes are not important. If you’re going to sell your idea, technology, or concept, you have to understand where the other person’s personal pain is. For example, maybe they’re dealing with an upset board or stockholders who don’t like last quarter’s results. Or perhaps they have to reorganise. Or maybe sales are down or they just lost the head of marketing to a competitor. Do your research and uncover the main challenge they’re dealing with right now. Once you know the other person’s pain, you can position the idea, technology, or concept you want to sell as something that can solve that pain. In other words, you have to show the CEO, CFO, board, or whomever you’re selling to that there’s a direct payoff to them if they approve your idea. So if you know that the CEO’s greatest pain is the fact that the sales team isn’t communicating with marketing or manufacturing, resulting in lower sales and poor customer experiences, then you have to look at the new technology you’re proposing and figure out how it can ease that pain or even solve that problem. As you do this, state it clearly. Don’t make anyone guess or come to their own conclusions. For example, you could say, “I know you’re dealing with [lagging sales, poor internal communications, customer complaints, etc.]. I’ve come across some things that I think can help you overcome those challenges. Obviously, I want to help the

CTO FORUM 21 DECEMBER 2010

THE CHIEF TECHNOLOGY OFFICER FORUM

If you’re going to sell your idea, technology, or concept, you have to understand where is the other person’s personal pain company succeed and grow, so let me tell you about what I’ve found.” Then talk about the new idea, technology, or concept in terms of solving the current problem only. Don’t go into all the functions, features, or costs. That’s an entirely different conversation you have later. Right now, you’re simply getting the decision maker on board with the idea, technology, or concept and in agreement that it will solve his or her problem. Solve the predictable problems in advance. As you have this discussion and talk about how the idea, technology, or concept can be the solution to their pain, you’ll also have to address the most common objections. So plan for them in advance. In other words, get into the other person’s shoes and figure out what his or her objections are likely to be. Pre-solve those objections before you have the discussion. For example, if you’re talking to the CEO about your solution but you know budgets are tight, you can safely deduce that he or she will say, “This sounds great, but the CFO won’t approve this right now.” However, because you’ve anticipated the likely objections, you would reply, “I’ve already

run this by the CFO because I knew it was important. I already have an okay from him, which is why I’m coming to you now.” Of course, before going to the CFO, you would have identified his greatest pain and presented the idea, technology, or concept in a way that solved that challenge. And likely, the CFO’s pain is different from the CEO’s pain. However, if what you’re proposing is really a solution and not a fad, and you showed how it supports the organisation’s strategic imperatives with a good ROI, you will have a receptive CFO. Additionally, remember that the technological understanding and literacy of C-level executives varies considerably. Some are very tech-savvy, while others don’t have any understand of anything technology-related. That’s a problem to address while you do your homework. How tech-savvy is the person you’re selling your ideas to? Is he or she seeing technology as a solution or a problem? Does he or she see technology as a cost to be controlled or as a strategic investment? The goal is to overcome the potential blocks before they arise. Solve the predicable problems before they happen and you’ll eliminate objections before they’re presented. Don't skip

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this step, because the objections will come. You need to be prepared and have your homework done in advance. Use the power of certainty to your advantage. When you’re selling your ideas, the people you’re talking to are thinking risk: personal risk, financial risk, reputational risk, etc. You have to alleviate their fear of risk. How? Remember this: Strategies based on uncertainty have high risk, while strategies based on certainty have low risk. Therefore, before talking with the other person, ask yourself, “What are the things I’m absolutely certain about regarding this solution? What are the current hard trends? Where is the industry, company, economy, etc. going, based on what we are certain about with this solution as well as without this solution?” Identify the things you’re completely certain about. This is not a time for “if,” “maybe,” or “might”. Only address the things you know for sure. It’s about what will happen versus what might happen. In a world filled with uncertainty, what are you certain about? Make your list of hard trends; the things you’re certain about. For example, smart phones and smart pads (such as the iPhone and iPad) are gaining more popularity every day. Is this a trend that you know will continue, or will people eventually trade in their new smart phones and go back to the traditional cell phones of yesterday? The answer is obvious. People won’t go back. So look at the current technologies available and how people are changing behaviors based on their use. Look at the sales trends. Look at your customers. Look at the economy. Look at everything around you and get clear on what’s a hard trend and what’s going to pass. Additionally, look at the strategic imperatives of the company and the current plan. Determine if your proposed solution is an accelerator or a brake. Obviously, you want to show how your ideas, technology, or concept can accelerate the plan and the results of the plan. You want to show how your solution can help increase sales, increase innovation, increase product development, etc. Again, this can’t be a “maybe". It has to be something you’re certain about. Then, after talking about the pain and how you’ve solved it, and after overcoming the objections, go into your list of certainties. You could say, “Here are things I’m certain about in the marketplace and in our

company ... . Based on this certainty, here is why implementing this technology or solution is low-risk and a winner.” You’ll find that this approach is a powerful sales tool.

What about cost? Sometimes, cost really is an issue, especially these days with many companies streamlining both budgets and staff. So it’s quite possible that you can go through all the steps outlined here, only to have the decision maker say, “This sounds great. But we really don’t have the money to fund it.” At that, your reply should be, “What would it take to get the funding?” And then be quiet. Throw the objection back at them and then listen. After a short silence, they’ll tell you exactly what needs to happen. Interestingly, people always manage to find money when they’re excited about an opportunity. You’ve probably seen this in your own life. Your teenager wants a car and asks you to buy it. You say “no” but that you’ll match whatever money they save to buy the car. A few months later, your teenager has saved a substantial amount of money (by teenager’s standards). With your matching money, he or she has enough to purchase a quality used car. Or maybe an unemployed friend learns of a business opportunity that requires an initial investment of several thousand dollars. Even though they are unemployed and have limited cash at their disposal, they often find

Look at the sales trends. Look at your customers. Look at the economy. Look at everything around you and get clear on what’s a hard trend and what’s going to pass

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the money to invest in the new business. So when someone says, “We don’t have the money,” it doesn’t really mean that there’s no money. It simply means that what you’re offering isn’t a priority, doesn’t have urgency, and isn’t relevant to them. Therefore, ask yourself, “Have I made this idea, technology, or concept a priority? Have I made it urgent? Have I made it relevant?” If not, then you’ll likely hear the default answer of, “We don’t have the money.” However, if you have made the idea, technology, or concept a high priority, urgent, and relevant, then all of a sudden the other party can, “Shift some things around.” As other things become less important and your idea becomes more important, the money is suddenly available. So you have to place your idea, technology, or concept at the top of the list of priorities and then show the CEO, CFO, board, or decision maker why it’s there.

An anticipatory approach This approach to selling your ideas up is a switch for many in IT, because even after all these steps and all these discussion points, our passion for technology often over rules and we slip back to a discussion of the new tool’s features instead of what it will do for the listener. It’s important to remind yourself well before the meeting that if you haven’t done the groundwork to get the other party excited or on board, you’ll likely go nowhere. As you’re busy talking about features and benefits, the other person is thinking about costs, risks, ifs, and maybes. That’s why you need to solve all those things ahead of time. This is really just an anticipatory approach to selling – you’re anticipating the problems, the rejections, the objections, and the concerns so you can overcome them easily and turn them around. Anyone who has worked with C-level executives knows that leaders get excited about many things, but they’re working with the weight of costs, controls, and constraints on them. Therefore, you need to challenge those costs, controls, and constraints. Instead, make what you offer about priority, relevancy, and strategic imperatives and you’ll get your ideas sold. Daniel Burrus is the founder and CEO of Burrus Research, a research firm that monitors global advancements in technology driven trends.

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CTO FORUM 21 DECEMBER 2010

HIDDENTANGENT GEETAJ CHANNANA geetaj.channana@9dot9.in

THE AUTHOR IS Executive Editor, CTO Forum

So Near – Yet so Far Switch-off for an hour! ABOUT three months back, I was travelling to Amritsar to visit the Golden Temple. While on the train I saw a young couple sitting together with their eyes tightly glued to their respective iPads. They were either travelling from the US or were from a considerably rich family since both of them had an iPhone 4 too and international airline baggage tags on their suitcase. In the close-to-four-hour journey from New Delhi to Amritsar – both of them hardly spoke to each other. Even if they spoke, it was for comparing scores in the games that they were playing on their mobile devices. Or, it was at times for sharing something that the wife read on her kindle application. Personally, I look forward to holidays to spend more time with my wife. In our daily lives we barely get a couple of hours together each day. The rest are either spent at work or working, eating or sleeping. Holidays give us a good chance to talk and to catch up on things that we have missed sharing in our daily lives. But, this makes me think, is it really worth it, all this technology?

CTO FORUM 21 DECEMBER 2010

Another time, I went to dinner at a nice Italian Restaurant in Khan Market in Delhi. There too, I saw the same thing happening. A young couple on a date was sitting across the table, playing games on their respective iPhones as they waited for their food to arrive. Aren’t dates supposed to be romantic, with the guy trying to make the girl laugh? Not in this case, apparently – again they were speaking to each other only to share their digital accomplishments or to exchange scores. At least they were not fighting with each other, since they were on speaking terms. Any passer-by, however, would have thought they have come to dinner after a big fight, because they hardly spoke. Do we really want our lives to be like this? It is iPads and iPhones for the couples mentioned above, it could be a Blackberry or an Android device for you. Without even knowing, accessing these devices while your loved ones are around, you are being an irritant. They probably do not express the irritation because they love you too much for that. So, I have decided to switch off all

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"For some, their Blackberry is more like a crutch for a person without a leg."

my devices for at least one hour in the evening when I am with my family. Yes, work is extremely important, but so is the time with our families. Just try doing it once and you would realize how liberated you feel for that time. It is just amazing not to have any buzzes or rings to announce emails or BBMs while you are talking to somebody at home. For some, their Blackberry is more like a crutch for a person without a leg. Enough or more people are suffering from Blackberry thumbs – a repetitive strain injury cause by pressing buttons on a mobile device. If you are addicted and you are not anywhere near the conditions mentioned above, its high time you checked yourself. Switch off for an hour! Definitely worth a shot! You may even try it as a new year resolution. Do write to me with how you felt after making this small adjustment.

VIEWPOINT STEVE DUPLESSIE | steve.duplessie@esg-global.com

The Next Thing I Loved Today Dell’s

Social Media Command Center

AGAIN, a plan simplistic in its brilliance, but brilliant it is. Dell built a command and control center to monitor social situations relating to it or its competitors. That’s not a big deal in and of itself. What is a bigger deal is that Dell put a couple dozen people from all disciplines of the company outside of that control center to respond to or elevate/navigate things that someone should be paying attention to. It hit me immediately. I use Twitter as a time saver. Not all do, as we know. Sure, I get bored and tell you about my new cowboy boots (bought some today, make me a good 2″ taller!), but I don’t expect anyone to care. I use Twitter to shorten my time to knowledge of things going down that I care about. It takes work, but I know if a “movement” is afoot much faster via Twitter than any other medium in my world. Good, bad, or ugly–it has become a sentiment indicator in my world. I know who’s in play, who’s in trouble, who’s got a product problem, and who just said something moronic faster than

CTO FORUM 21 DECEMBER 2010

most. The trick is who you listen to and where. I’m in the information business. So is Dell. So are you. Dell figured this out. It isn’t just trying to force its view (don’t say anything bad about me or I’ll sue your ass!), but take the good, bad, and ugly–sort the wheat from the chaff, learn from it, and react. In almost real time. Apparently Michael was smart enough to figure out that this could be an invaluable time saver years ago and now it’s being mainstreamed philosophically throughout Dell. I’ll see him later on and find out if this is true. Then I’ll tweet about it! I happened to be there right before it was announced today, so I got a sneak peak. It’s really impressive. What’s most impressive is that it is NOT used exclusively to cover up, shoot the naysayers, or flood the world with retweets of “I love my new Inspiron!” (although they surely will remind us of that). I saw them scouring the social scene for “intelligence”–how the world is feeling about Dell or competitors–in almost

THE CHIEF TECHNOLOGY OFFICER FORUM

ABOUT THE AUTHOR: Steve Duplessie is the founder of and Senior Analyst at the Enterprise Strategy Group. Recognised worldwide as the leading independent authority on enterprise storage, Steve has also consistently been ranked as one of the most influential IT analysts. You can track Steve’s blog at http://www. thebiggertruth.com

real-time. It’s fascinating. Genius. It’s a competitive weapon. Dell will know things faster than those who don’t use the social world for intelligence gathering. Fact. I’d rather know the facts, good or bad, faster rather than slower. FYI, Michael (which is what I call him as we’re BFFs that follow each other on Twitter), is a year younger than I am and we both are married with four kids. So, other than the fact that he is a foot taller and worth $20B more than me, we’re pretty much twins. P.S. Take note: you cannot succeed in attempting to do this if you “outsource” the responsibility to an agency. You have to commit your OWN people to act. You can have others/tools “listen,” but you have to commit your own people to respond and to act. If you don’t, you are full of shit and the world will know. You are wasting your money.