21st june 2010 by ctof magazine

S P I N E

CTO FORUM

Technology for Growth and Governance

NEXT HORIZONS

Out of the Storm PAGE 32

BEST OF BREED

THE GREEN WAVE | HEAD IN THE CLOUDS | OUT OF THE STORM

Top 5 Places to Virtualise PAGE 15

Mutual respect and friendship between the CIO and CFO can take an organisation to new heights| PAGE 18

A QUESTION OF ANSWERS

Volume 05 | Issue 21

Protection from the Malware Torrent PAGE 12

A 9.9 Media Publication

June | 21 | 2010 | Rs.50 Volume 05 | Issue 21

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

The quintessential tug-of-war!

Would CIOs and CFOs ever give up their control over IT investment for larger interests?

here seems to no end to the tug-of-war between the CIO and the CFO for control over IT investments. Ironic, since at this moment, what is driving companies is business performance which demands a closer relationship between CIOs and CFOs. Historically, CFOs have believed that they know the pulse of the business better and are therefore keen to keep a close watch on it... and so the tussle continues. A recent Gartner-Financial

Executives Research Foundation (FERF) survey throws more light on this. The survey shows the CFO is increasingly becoming the top IT investment decision maker in many organisations. According to the survey, more IT organisations report to the CFO (42 percent) than the CEO or any other executive. (In our view, however, in the context of Indian businesses, more CIOs report to the CEO than they did two years ago.) The survey also reveals that in

EDITOR’S PICK 32

Out of the Storm

CIOs have weathered the uncertainties of 2009 skillfully. A special report on their preparedness for this year's challenges.

75 percent of the firms, CFOs play a vital role in determining IT investments. What does this suggest for the future? Will the role of the CIO reduce in the organisation especially if technology is seen as just a cost centre? Each time the focus shifts to cutting costs, there is the risk of the CFO having a greater influence on technology strategy than the CIO. But most of this is simply conjecture — and thankfully so! The majority view is that there is merit in striking a balance of power. You need a savvy CIO who understands technology and business, and a CFO who understands the merit of technology for business, and they need to work together. If the current economic climate forces the CIO and CFO to work together, it will certainly pave the way for a win-win relationship – for

them and for their organisation. And in such a scenario questions like who should a CIO report to or who should decide on IT investments will become irrelevant. In fact, reporting to the CFO could prove very useful if the CFO has a deep understanding of IT's value. This issue of CTO Forum highlights the opportunities where CIOs and CFOs can work together to address common business goals. The story is substantiated with cases where CIOs and CFOs have joined hands to build greater business agility through technology. As always, I will appreciate your views and comments on the story.

CTO FORUM thectoforum.com

21 JUNE 2010

VO L U M E 0 5 | I S S U E 21

JUNE 10 THECTOFORUM.COM

C O V E R D E S I G N : A N I L T | P H O T O B Y: S U B H O J I T PA U L

CONTE NTS

CTOFORUM

18 COVER STORY

18 |Bonhomie

COLUMNS

04 | I BELIEVE: WISE BY FAILURES Sharat Mathur, GM - IT, Centre for Railway Information Systems on learning from failures.

While the classic debates on reporting structures and budget cuts haven't ended, smart CIO-CFO pairs have brought about big changes. All starting with a good relationship.

52 | VIEW POINT: HEAD IN THE CLOUDS The cloud is just an enabler to a solution. BY STEVE DUPLESSIE

FEATURES

Please Recycle This Magazine And Remove Inserts Before Recycling

COPYRIGHT, All rights reserved: Reproduction in whole or in part without written permission from Nine Dot Nine Interactive Pvt Ltd. is prohibited. Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd, C/o K.P.T House, Plot Printed at Silverpoint Press Pvt. Ltd. TTC Ind. Area, Plot No. A-403, MIDC Mahape, Navi Mumbai 400709

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32 | NEXT HORIZONS: OUT OF THE STORM A special report on CIOs' preparedness for the challenges of 2010. BY HONORIO PADRON AND ERIK DORR

VOLUME 05 | ISSUE 21 | 21 JUNE 2010

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 Editor (Online): Geetaj Channana Resident Editor (West & South): Ashwani Mishra Associate Editor: Dominic K Assistant Editor: Aditya Kelekar Principal Correspondent: Vinita Gupta Correspondent: Sana Khan DESIGN Sr. Creative Director: Jayan K Narayanan Art Director: Binesh Sreedharan Associate Art Director: Anil VK Manager Design: Chander Shekhar Sr. Visualisers: PC Anoop, Santosh Kushwaha Sr. Designers: Prasanth TR, Anil T & Suresh Kumar Designer: Sristi Maurya Chief Photographer: Subhojit Paul Photographer: Jiten Gandhi

12 A QUESTION OF ANSWERS

12 | Protection from the Malware Torrent. Juan Santana, CEO of Spain-

based Panda Secruity on emerging security threats.

REGULARS

01 | EDITORIAL 06 | ENTERPRISE ROUND-UP 37 | HIDDEN TANGENT advertisersâ&#x20AC;&#x2122; index

15 | BEST OF BREED: TOP FIVE PLACES TO VIRTUALISE Knowing where

49 | HIDE TIME: DEEPAK CHAUHAN, CIO, ZEE NETWORKS likes to

to start is important.

travel, swim and spend time with his family.

IBM REVERSE GATEFOLD AIRTEL IFC SIGMABYTE 09 IBM IBC MICROSOFT BC

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

ADVISORY PANEL Ajay Kumar Dhir, CIO, JSL 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 Asst. Brand Manager: Arpita Ganguli GM South: Vinodh K (09740714817) Senior Manager Sales (South): Ashish Kumar Singh GM North: Lalit Arun (09582262959) GM West: Sachin Mhashilkar (09920348755) Kolkata: Jayanta Bhattacharya (09331829284) PRODUCTION & LOGISTICS Sr. GM. Operations: Shivshankar M Hiremath Production Executive: Vilas Mhatre Logistics: MP Singh, Mohd. Ansari, Shashi Shekhar Singh OFFICE ADDRESS Nine Dot Nine Interactive Pvt Ltd C/o K.P.T House,Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt Ltd C/o K.P.T House, Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Editor: Anuradha Das Mathur C/o K.P.T House, Plot 41/13, Sector-30, Vashi, Navi Mumbai-400703 India Printed at Silverpoint Press Pvt. Ltd. D 107,TTC Industrial Area, Nerul.Navi Mumbai 400 706

CTO FORUM thectoforum.com

07 MAY 2010

I BELIEVE

BY SHARAT MATHUR GM-IT, Centre for Railway Information Systems (CRIS) THE AUTHOR HAS close to 25 years of experience in managing IT functions across sectors including the Ministry of Railways and Container Corporation of India.

Wise by Failures

Learn from your failures. Don't just preach, practice it! ALL ORGANISATIONS face the occasional failed project. IT projects are especially prone to failures. Normally we do not reject the developed system outright as a failure, but an IT system that does not meet its goals in terms of functionality or performance has essentially failed. So when should we call a system a failure? To my mind, when the costs of

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CURRENT CHALLENGE CONVINCING PEERS THAT IT IS ESSENTIAL TO APPRAISE SUCCESSFUL PROJECTS

developing and deploying the system exceed the benefits obtained from it. Isn't is easier to just sweep the failure under the carpet? The only reason to flag is to, of course, learn from our mistakes. Otherwise we are doomed to repeating our mistakes. For example, a common reason for the failure of ERP systems is to neglect the data masters during the preparatory phase, ignore the need for a sufficiently skilled domain team, and avoid the hard work of mapping system processes to actuals. But look back in time and recall all those instances when we have seen these same mistakes repeated in different units of the same organisation, leading to similar projects failing in each unit. The cost incurred on a formal post-project appraisal should be treated as an investment for the future. By appraising failed projects, we learn what not to do the next time around. But by appraising successful projects, we learn what to do, and what to do better next time. In fact, if appraisal of failed projects is rare, an honest appraisal of successful projects is even rarer. Usually, when an IT system is successfully implemented, we all pat ourselves on the backs and convince ourselves that our brilliant analytical ability and diligent hard work was entirely responsible for its success. However, a formal post-project appraisal might throw up a set of fortuitous circumstances that actually led to the success. Such an appraisal, honestly done, would reduce the chances of a costly failure later on. While I advocate third-party project assessment, I feel that the first formal assessment should be a first-party one. That is, the agency or department responsible for the implementation of the system should assess its own work against objective criteria. A humbling experience perhaps, but essential to ensure future success.

LETTERS CTOForum LinkedIn Group Join close to 400 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?gid=2580450

One of the hot discussions on the group are:

REVENUE-DRIVEN CIO I read your cover story of the June 7 issue Wealth Weavers. 'Revenue-driven CIO' is a totally different game. The KRAs change from service delivery to bigger numbers like top line, bottom line, revenue per employee, profit per employee, etc. The challenge in this new game is sustenance. Competition is with big daddies of the game and any CIO who still manages to create a niche and win the game deserves special attention of the CEO. ASMITA JUNNARKAR, Chief Information Officer at Voltas Limited

GETTING RECOGNITION On the subject of your June 7 cover Wealth Weavers: Any portfolio without revenue becomes more like a support team. A CIO with direct revenue relation will always have better recognition. VISHWAJEET SINGH, National Manager - IT at FCm Travel Solutions

“Wealth Weavers was interesting indeed but I'm in a dilemma. At a recent CIO conference a consultant advised CIOs against business-speak, saying it could land CIOs in the political arena of the corporate battle. Could someone guide me how to convert IT from a cost centre to a profit contributor without getting into political controversy?”

How do you treat your vendors – like a partner, a service provider, or a mere salesman? In IT, it is all about partnerships. We will not be able to satisfy our end customers unless all pieces of the jigsaw puzzle fit together perfectly. A closer comparison is with an orchestra or a stage play. The end result is totally dependent on each participant performing its role as per the plan. If all partners work towards joint objectives, we will never have to open the contract papers for missing deliverables or SLAs.

—Asmita Junnarkar Chief Information Officer at Voltas Limited. In today's business world the use of words like service provider, system integrator etc. are no longer valid. The complexity and specialisations required in any industry are challenges that need "collaboration" with specialists for continued success. I have followed one simple golden rule - there is no "I” and “You" with those who work with you - even though they may be from different organisations. Only genuine collaboration and partnership bring success. I consciously avoid using the word "vendor" in all my interactions.

—KR Sreenivasan CIO and CQH, Tata Capital Limited.

The creator of 'Suicide Machine', Gordan Savicic, believes that connectivity and the social experience offered by web2.0 companies go against the grain of human freedom. In an interaction with CTO Forum, Savicic talks about what motivated his team to design the noose that would allow users to strangle their virtual identities. To read the full story go to:

thectoforum.com/ content/harakirinet

OPINION

SENSE OF DIRECTION

Speed is of essence, but of little use unless you are headed on the right path.

MADHAVAN MK, Head Projects and Infrastructure, Information Technology at IndusInd Bank.

“I believe it is essential to maintain the delicate balance between being futuristic and delivering fast enough before the requirements change in the future” 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. Send your comments, compliments, complaints or questions about the magazine to editor@thectoforum.com

CTOF Connect

AMRITA GANGOTRA Director IT (India and South Asia), Bharti Airtel

http://www.thectoforum.com/content/sensedirection

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STORY INSIDE

Enterprise

CIOs need to move to cloud computing in a phased manner. Pg 8

ILLUSTRATION BY SURESH KUMAR

ROUND-UP

SaaS on an upswing. Gartner says that

75 percent of Asia-Pacific organisations will increase SaaS investments in 2010.

BY THE END of 2010, 75 percent of Asia Pacific organisations will increase their software as a service (SaaS) investments, according to a survey conducted by Gartner, Inc. Of the organisations surveyed, 80 percent were currently using SaaS for enterprise applications such as ERP and CRM, with the remaining 20 percent planning to use it in the next 12 months. According to Gartner analysts, SaaS has become more widely accepted in the Asia Pacific region in the past two years, with initial concerns about security, performance and availability gradually diminishing as SaaS business and computing models become

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more mature. The top five most commonly used SaaS enterprise applications, in order, are: financials (accounting); e-mail; sales; expense management; and customer service and support. However, acceptance of SaaS remains uneven throughout the region. Respondents in Malaysia, Hong Kong and Singapore have used SaaS the longest. SaaS uptake in India is newer, with more than 80 percent of respondents using SaaS starting to use it in the past two or three years. About 50 percent of China-based respondents have been using SaaS for four years or more.

DATA BRIEFING

DECLINE IN INDIA PC SOFTWARE PIRACY RATE IN ONE YEAR. THE RATE IS NOW 65%. SOURCE: BUSINESS SOFTWARE ALLIANCE

E NTE RPRI SE ROUND -UP

THEY MARK SAID IT ZUCKERBERG

ILLUSTRATION BY PHOTOS.COM

During a conversation with Walt Mossberg, principal technology columnist for The Wall Street Journal; Mark Zuckerberg, co-founder of Facebook talked about many things, including privacy. He also talked about how personalisation of products is direction were most websites and applications are going. He said:

Telenor Norway selects TCS to modernise its IT . TCS makes further headway in the Nordic region TATA Consultancy Services, an IT services, business solutions and outsourcing firm has announced that it has signed a multi-year outsourcing contract with Telenor Norway. The contract comprises application maintenance and development services and will involve a modernization of Telenor’s Norway’s application portfolio across its OSS, Fixed, Mobile, Datawarehouse and Accounting system domains. "By implementing this measure we are making the necessary adaptations to provide our customers with improved and more innovative services in relation to capacity, speed and stability, as well as better quality in both voice and data, and to facilitate current demands for accessibility," said Ragnar Kårhus, CEO of Telenor Norway. Recently, TCS had been ranked as the number one service provider in the Nordic region by an EquaTerra survey in which leading CIOs and CXOs in the Nordic region had rated the company ahead of all other providers in terms of customer satisfaction, quality, flexibility, risk and innovation. “Our selection by Telenor to drive this modernisation demonstrates the headway we have been making in the Nordic market and highlights our strong telecom domain expertise,” said A.S. Lakshminarayanan, Vice President and Head of Tata Consultancy Services, Europe.

QUICK BYTE ON BOTNETS

“My prediction would be that a few years later we’ll look back and wonder why there was ever this time when all these websites and applications weren’t personalised in some way. The world is moving in this direction where things are going to be designed around people.” — Mark Zuckerberg

Recent studies by RSA show that 88 percent of the Fortune 500 companies may be affected by botnet activity from computers compromised by the Zeus datastealing Trojan. In previous episodes, the botnet has triggered the infected computers to render themselves unbootable. CTO FORUM thectoforum.com

21 JUNE 2010

E NTE RPRI SE ROUND -UP

Bill Padfield, Global CEO, Datacraft Asia.

Hype vs. reality. Bill Padfield, CEO

of Datacraft Asia talks to Vinita Gupta about the cloud computing model. WHAT factors should a CIO take into account before adopting cloud computing? As a CIO one needs to demystify the myths and reality of cloud computing. Many CIOs view cloud computing as their salvation in the current economic downturn, as it promises to deliver IT services to subscribers at a lower cost. Before signing up for ‘services in the cloud’, organisations should distinguish the hype from reality. CIOs need to move to cloud computing in a phased manner. It is not easy for an enterprise to move all its applications from the installed model to the cloud; they would have to decide on what applications work best for them. There are several important items to consider when evaluating cloud solution like:

GLOBAL TRACKER

CTO FORUM 21 JUNE 2010

What are the challenges faced by CIOs when it comes to adopting cloud computing? While CIOs agree about the benefits of cloud computing, they have concerns about cost and flexibility, in particular about security, compatibility with existing applications, lack of a migration path from existing applications to clouds, freedom of choice, federation of internal and external resources, lack

Deloitte's 2010 financial services global security study

Identity and access management have moved to the top of the security agenda. 8

How much work will my IT teams have to perform? How do I scale the solution when my organisation grows? Does a global network and dedicated backbone make a difference for my worldwide operation?

thectoforum.com

Only somewhat confident in their ability to thwart attacks that originate internally Very confident in their ability to thwart attacks that originate internally Very confident in their ability to thwart external attacks

56% 42% 34%

of SLAs for policy-based management, and interoperability. The good news is that these challenges can be resolved using a cloud computing approach that includes computing, network, virtualisation and storage resources. Who are your customers in India? Cloud computing has been offered as the solution to a wide variety of IT issues: reducing costs, improving efficiency and promoting collaboration. Yet acceptance of cloud computing, especially on the part of corporations and other large enterprises such as government agencies, has been slow in coming. Currently there are various verticals looking at cloud computing. Amongst them prominent four verticals are-– Financial services, media and communications, manufacturing, travel and transportation. We have set of around 200 clients and have worked with the likes of HSBC, State Bank of India and Bharti Airtel. We also cherish a great relationship with SBI as we manage the banks entire IT network in India and abroad. What are the company’s future plans? India provides the largest business for Datacraft across Asia in terms of revenues, profits and people. India counts 23 percent of Datacraft’s estimates at $700 millions. We are eyeing large multi-hundred million dollar transformational deals in the mid-term future. We are looking to move into providing full IT outsourcing solutions in the next 3-5 years. Also, this year we are looking to increase our India headcount by 20 percent across our seven offices in India. — vinita.gupta@9dot9.in

E NTE RPRI SE ROUND -UP

Benefits of infrastructure management solutions. Quest Software's MD says the Windows user base is growing.

Windows user base is increasing in India. We have close partnerships with Microsoft and know who their largest customers and ensure that we help them. Some organisations have both Windows and open source environment in place. We help these organisations to manage their environments and can help them monitor applications running Linux. Why would CIOs look at your virtualisation management solution? All core application providers will provide basic manageability. Large organisations have mixed environment and that’s why they require specialised vendors. We are educating the CIOs to look at virtualisation management as they can benefit from reduced costs and increased flexibility that it provides.

KRISHNAN THYAGARAJAN Managing Director at Quest Software talks to Vinita Gupta about infrastructure management solutions.

Why do CIOs need database and application management? It is very crucial for CIOs to keep their database running; if the database is down then the company risks losing business. The technolo-

gy provided by Quest Software helps the companies to keep the systems running by monitoring and solving the problem. We have technology to manage multiple databases from a single monitoring system. Quest Software provides Windows Infrastructure Management. How is the Windows user base doing in India?

FACT TICKER

PC shipments sales grow. IDC study also finds a

rebound in SKUs On the heels of an exceptional fourth quarter in 2009, global PC shipments followed suit with YoY growth of 27.1% in the first quarter of 2010. A measured, albeit sometimes bumpy economic recovery quashed earlier fears of consumer fatigue and led to a renewed projection for strong 2010 growth of 19.8%,

according to the IDC Worldwide Quarterly PC Tracker. Unlike most of 2009, the recent market recovery has also seen a small rebound in higher priced SKUs as Mininotebook PCs (also known as netbooks) became less of a driver of volume. Growth was positive across both mature and emerg-

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Are you looking at offering your services over the Saas model? Presently we do not offer services over the Saas model but we are in the process of looking at how we could deliver the solution as a service. Probably by the end of this year we will provide some of our technology offerings as a Saas model.

ing markets but emerging regions saw a record high 37% YoY growth in the first quarter. The strong surge in volume brought a corresponding slowing of price declines over the past year. Going forward, Mininotebook PC volume growth is expected to moderate, and its share as a percent of the total PC market is expected to stay under 12%. Desktop PC volume should grow over 8% in 2010 thanks in part to favourable comparisons to a dismal 2009 but also due

to business replacements and the popularity of All-inOne PCs. The main driver of growth will come from notebooks. Emerging regions are still expected to anchor much of the growth, growing 26.6% in 2010 on the strength of strong Portable PC sales. Mature markets should see 2010 come in at 13.6%, with desktops rebounding slightly in 2010 over 2009. Portable PCs will remain the growth drivers across segments, reaching nearly a 70% share of PCs by 2012.

GREEN MILESTONE

he Green Grid, the IT industry’s leading voice for advancing energy efficiency in data centers, today announced that in an unprecedented global effort, the consortium along with the U.S. Department of Energy’s Save Now and Federal Energy Management Programs, U.S.Environmental Protection Agency’s (EPA) ENERGY STAR Program, European Union Code of Conduct, Japan Ministry of Economy, Trade and Industry’s (METI) Green IT Initiative, and Japan’s Green IT Promotion Council (GIPC) have collectively reached an agreement on the guiding principles of data center energy efficiency metrics. This agreement represents a significant achievement, as these organisations continue working to ensure data center efficiency metrics, measurements and reporting conventions can be applied with clarity and consistency at the global level. As the basis for these guiding principles, The Green Grid and the above mentioned organisations have designated Power Usage Effectiveness (PUE) as the industry’s preferred energy efficiency metric. The group will leverage the guiding principles to help drive a universal understanding of energy efficiency metrics. A global task force of representatives from each of the above mentioned organisations will continue to move this initiative forward.

A QUESTION OF ANSWERS

PERSON' S NAME

TRIMMING THE COSTS: Cost optimisation is the main driving factor behind clients opting for IT services hosted in the cloud

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J U A N S A N TA N A

A QUESTION OF ANSWERS

Protection from the Malware Torrent JUAN SANTANA | CEO, PANDA SECURITY

As cloud computing makes inroads around the globe, new security issues keep emerging. In an exclusive conversation, Juan Santana, CEO of Spain-based Panda Security shares his thoughts with Dominic K. How has the global information security market evolved in Spain in the last couple of years? The market has evolved positively, not just because security is now a commodity both for companies and home users, but also because, despite the recession, the market has grown. When times are hard, people tend to protect what is really important or valuable. Consequently, in Spain, the traditional security market has grown between seven percent and 10 percent, in line with analystsâ&#x20AC;&#x2122; forecasts. I also believe that over the last two years there have been major advance-

ments in terms of the quantity and quality of new protection technologies. There's no doubt that the most significant development has been the new model wherein security solutions offer protection from the cloud. We too have introduced similar products in the market. Although we are still in the adoption phase of these new technologies, we have already witnessed a positive reaction from the market and migration from traditional security solutions has started. This has been the case around the world, with minor differences in the speed of adoption, depending on the technological maturity of the

market in question. In this area there hasnâ&#x20AC;&#x2122;t been a great deal of difference between Spain and other European countries. Perhaps Spain has been a bit slower in this adoption process, but following the main trend nonetheless. How do you compare Indian security trends with those in Spain? Market trends are initiated by the most mature markets, such as India, a country with a great tradition in technology. There are some markets where the adoption is quicker, as is the case with some of the Indian

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A QUESTION OF ANSWERS

J U A N S A N TA N A

tory. With this system we resolve two problems: on the one hand we are able to protect, practically in real time, our corporate and domestic users from the vast amount of new threats that appear every day, and it has also allowed us to develop and launch the first solutions to deliver protection from the cloud, consuming less than 50 percent of the resources used by traditional solutions. We have responded directly to real market needs and been innovative while developing the solutions. Throughout the company’s 20-year history, there have been plenty of examples of leading the way.

“The most significant development has been the new model wherein security solutions offer protection from the cloud”

enterprises where there are highlyskilled technicians and researchers. Moreover, India is a relatively small market, compared with some others, but it is growing fast. According to Gartner, the Indian market currently has more than USD140 million of potential and it is the fastest growing cloud computing market in the Asia Pacific Region. Analysts say that by 2012, India-centric IT service companies through their cloud service offerings will represent 20 percent of the leading cloud aggregators in the market. If you compare this data with Spain, the opportunities in the Indian market are bigger, even after accounting for India's larger size. What according to you is the state of cloud-based security? Cloud-based solutions have adapted to the way the antivirus industry

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has changed and evolved in recent years. In 2001, we barely received 15 new viruses every day. The Internet boom as also the fact that hackers have now turned very professional has led to the emergence of a highly lucrative criminal business model that has created a situation wherein security companies now have to deal with more than 55,000 viruses every day. This is a challenge that has been addressed in different ways. We always had a strong commitment to technological innovation. As far back as 2006 we realised that traditional security systems would be unable to keep our clients protected against the vast and increasing amount of malware in circulation. So we developed and launched what we call Collective Intelligence, an automatic system able to detect, analyse, classify and disinfect 99.4 percent of all new malware we receive at PandaLabs, our global anti-malware labora-

THINGS I BELIEVE IN There have been major advancements in terms of the quantity and quality of new protection technologies The opportunities in the Indian market are huge Hacking has become a highly lucrative criminal business model

What are the latest technology trends in security space? I agree with Gartner regarding the latest technology trends in the security space, as well as with its predictions on which ones will be more relevant for the near future. According to Gartner, the technologies that will undergo the most radical transformation in the next five years will be Web 2.0, cloud computing, Internet TV, virtual worlds and Service-Oriented Architecture (SOA). Regarding security itself, cloud computing is one of the 1,650 technologies that will define future trends. It is clear that cost optimisation is the main driving factor behind clients opting for IT services hosted in the cloud. That’s why it is one of the technologies expected to mature most rapidly and to attract many new players into the arena. There will be a clear migration in the industry towards cloud computing and more specifically the SaaS model delivery. In fact, it is predicted to grow at around 40 percent for the coming years. Also we do believe that all the security add-ons, such as protection related to data leakage, ID corporate protection, etc., that traditional products are currently including, will also shift to the cloud.

— dominic.k@9dot9.in

BEST OF

BREED

FEATURE INSIDE

The Green Wave Much needs to be done to cut down on carbon emissions Pg 16

ILLUSTRATION ANIL T

C Top 5 Places to Virtualise

Getting started with virtualisation needs a good understanding of knowing where to begin. BY PAM BAKER

ommon wisdom has it that virtualisation is the best course to improve scalability, continuity, performance, and resource efficiency on everything from desktop to servers to storage. In practice, however, that is easier said than done. Part of the difficulty lies in knowing where to start the process and how to contain the risk and where to stay physical. The typical response to the pressure to cut costs and increase efficiency is to create virtualised environments in order to appear proactive in leveraging the new trend. Such an approach, however, can be more harmful than helpful. “One of the main problems with virtualisation, today, is that many organisations use server virtualisation to reduce server sprawl,” said Jeff Holland, a technical architect for Systems Alliance. A haphazard approach without benefit of a strategic virtualisation plan merely leads to more sprawl — this time in virtual machines (VMs). “When there is no procedure for deploying these virtual machines, IT deploys a new VM to support a lightweight application that could have been easily deployed on an existing server,” explains Holland. So where are the best places to begin your company’s migration to virtualisation? Here are the

“There are implementation areas likely to incite nightmares should you tread unprepared”

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BEST OF BREED

V I R T U A L I S AT I O N C H A L L E N G E S

top five places, in no particular order: New application “virtualise first” approach: “Every new application should be virtualised unless there is a good reason not to do it,” advises Renata Budko, co-Founder of HyTrust. “Another area that fits virtualisation perfectly are ‘cookie cutter’ infrastructure pods, such as retail branch environments. Once such environments are virtualised and consolidated it's easy to replicate them into similar installations elsewhere.” Test and development: “They are ideal for sandboxes since they can be setup quickly and managed outside of production IT systems,” explains Swastik Lahiri, lead principal at Technisource. “Plus, it doesn't have the long lead procurement times that are often the case with physical hardware.” The same reasons why virtualisation is a good fit for test and development environments “makes it attractive for proof of concepts and rapid prototyping,” he said. QA and engineering departments: “We manage about 50 virtual servers for our QA environment alone, and are able to ramp up all the servers required for a new project and recycle the servers from old projects in a matter of minutes rather than days,” said Jenson Crawford, director of Engineering at

Fetch Technologies. IT’s goal, Systems with minimal prohe says, is to virtualise 100% of cessor utilisation the company’s servers. “This Systems with minimal RAM has paid off fabulously, as the requirements QA and engineering staff are Systems that do not require OF VIRTUALISED able to deploy and manage servlarge quantities of drive storage SERVERS WILL BE ers as needed, reducing our Redundant or warm-spare time to deliver software.” servers LESS SECURE THAN Low risk services: Move the Occasional- or limited-use THE REPLACED easy stuff such as Web servers, servers PHYSICAL SERVERS print servers, file servers and Systems where many partialsingle-system applications first. ly-trusted people need console “Co-locating these environaccess. ments on virtual machines delivers quick While these top five uses of virtualisation wins in business continuity, agility, resource will help you work forward in a relatively efficiency, and of course cost savings -- both pain-free manner, there are areas likely cap-ex and op-ex,” explains Andi Mann, to incite nightmares should you tread vice president of Product Marketing at CA unprepared. Technologies Virtualisation and Service “The worst targets are the least stanAutomation Business Unit. Moving low-risk dardised, since they are subject to potential services such as HR systems onto virtual architectural changes that require a lot of remachines is “a great next step into producwork after each modification,” warns Kelly tion virtualisation.” Herrell, CEO of Vyatta. “Re-worked designs Systems with low predicted requirements: are one thing; re-worked virtual designs Obvious system candidates to be virtualised compound the challenge.” can be rapidly determined by their low and predictable requirements, said Dave Sobel, —Pam Baker's published credits include: CEO of Evolve Technologies and Microsoft's NetworkWorld, NY Times, and McClatchy news2010 MVP for virtualization. Here is his papers. She has also authored several analytical partial checklist to get you started: studies on technology and eight books.

60%

The Green Wave

Much is being done to cut down on carbon emissions, but more remains to be done.

BY ADITYA KELEKAR

he images evoked by the global warming cynics are all too terrible: a hot, hungry world with large parts of the current landmass submerged under the oceans and those still above facing terrible droughts or floods. But this whole controversy around green technology and the climate change catastrophe it is supposed to stave off begs a couple of questions. If the world is heading towards such a disastrous state, why aren't the governments of all nations taking some drastic steps? Surely, if the entire world is imperiled, wouldn't it be better for nations to dictate to its industrialists about the caps in power consumption that they must adhere to ?

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GREEN IT

BEST OF BREED

Cleaner generation The answer to the first question is a pointer to the progress, or the lack of it, made by the developed-developing world combine. The MIT's Information Services & Technology has Kyoto Protocol, to which most countries in issued a few guidelines for Personal Computer the world are signatories, mandated that by energy savings 2010 industrialised countries bring down their collective greenhouse gas emissions by 5.2% from the 1990 levels. No commitOver the years, several myths have created barriers to energy saving actions. Some of ments in capping emission levels were the common ones are explored below: expected from developing countries such as Myth: Screen savers save your screen. India and China. Fact: Screen savers were originally developed to prevent the permanent etching of a As a result, there has been little incenpattern on older monochrome monitors. The same protection occurs when you place the tive for cleaner energy generation plants monitor in a low power "sleep" mode. Avoiding the use of screensavers on LCD and CRT in India; fighting the war on this front displays can reduce power usage while away from your computer by 30-75 watts. is as important as being energy-efficient Myth: Computers have a shorter life when you turn them on and off frequently. in consumption. The North East still Fact: Hard disks in PCs older than 10 years did not automatically park their heads when remains largely untapped when it comes shut off, leading to disk damage from frequent on/off power cycling. Newer PCs are to harnessing the rivers for hydro power, designed to handle over 40,000 on/off cycles, a number unlikely to be reached during an among the cleaner sources of power genMIT computer's typical four-to-six-year life span. eration, experts opine. Myth: Turning your computer off uses more energy than leaving it on. The progress on cleaner energy developFact: The surge of power when a computer is turned off lasts a few seconds and is ment efforts in the developed world has insignificant compared to the sustained energy used in keeping it on during periods been mixed. In Germany, for example, the of inactivity. share of electricity from renewable energy has increased from 6.3 percent in 2000 to about 16 percent as of this year, overshootUsers, though, are most likely to buy new infrastructure only when ing the target of 12 percent that it had set for itself. their refresh cycle so warrants. However, this has not happened without government intervention: Smart choices that save power can seemingly go against the a law that required businesses to buy energy generated from renewgrain of conventional convenience. When Prasenjit Mukherjee, able sources first before buying energy from non-renewable sources GM – IT, Reliance Energy, decided to replace their ageing printers, contributed in a big way in achieving this target. they replaced many personal printers with a few network printers Interestingly, most experts agree that the United States has fallen that moved to power-saving mode when not in use. “This move has far behind other countries in promoting clean energy. Recently, Bill helped us save power,” says Mukherjee. Gates and other corporate figures who have formed the American However, unless the hardware becomes obsolete, there is little Energy Innovation Council (AEIC), pointed out in a detailed report motivation for technology decision makers to bring in energy-effithat America's current energy strategy is hurting the economy, the cient infrastructure or to ensure that power-saving guidelines are environment and national security. The group suggested the governfollowed. For one, the CIO's KRAs are not linked to the energy bills, ment devote more money to fuel alternative energy. or more specifically, the reductions or increases therein. The group sees the energy challenge as more serious and much The government too has been shirking from playing its part of worse than most people realise, predicting a burden that will become promoting conservative use of energy in businesses. “I don't think more costly unless the US can change its current energy policies. the government is doing enough to support the cause of green techIn its findings, the group pointed out that the nation spends $80 nology. It should provide incentives for the usage of green equipbillion a year on military research and $30 billion a year on health ment, given the shortage of electricity generation in our country,” and medical R&D, but only around $5 billion each year on new says Shyam Kalambi, Head - Information Systems, India & ASEAN. energy R&D – a budget that dwarfs in comparison to budgets for The biggest gains in energy-efficiency are coming from virtusimilar purposes allocated by many other countries. alisation projects where the main intention is reducing the server Indeed in a recent book titled The New Polymath, the author, Vinfarm. “Virtualisation and consolidation of servers is bringing in a nie Mirchandani, includes the lack of agreement around sustainlot energy savings,” says Nareshchandra Singh, Principal Research ability among the “wicked problems” of our time, those that remain Analyst at Gartner. unsolved despite ample technology progress.

Energy Myths Busted

Energy efficient consumption Meanwhile, vendors have jumped on to the green-selling wagon. Campaigns for servers, cables, printers – all are awash in green.

—Aditya.Kelekar@9dot9.in

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Vijay Sethi, CIO, Hero

Honda Motors asks his CFO: Is IT a support function or a business enabler?

Ravi Sud CFO, Hero Honda Motors, replies to his CIO: IT is a very important business enabler!

S K Joshi CFO, BPCL feels that even in difficult times pruning IT budget is not the only option

Alok Nagpal Sr VP - Finance

Delhi Integrated Multi Modal Transit System Limited says that where IT plays a strategic role, the CIO should report to the CEO

V Balakrishnan

Mukesh Kumar Sr

Partner & CIO, Polaris Software Lab: IT operations can create large unexpected risks

VP - IT, Oberoi Group says that more and more CIOs are reporting to CEOs

Robin Banerjee CFO,

Suzlon says that it is easier for the CFO to add value to the CIO's function

Umesh Khandelwal CIO,

BMW feels the CIO should report to the CEO and not the CFO

C I O - C F O R E L AT I O N S

COVE R S TO RY

While the classic debates on reporting structures and budget cuts haven't ended, smart CIO-CFO pairs have brought about big changes. All starting with a good relationship.

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C I O - C F O R E L AT I O N S

FEATURE

The Yin & Ya ng Irrespective of together tirelesthe reporting structure, the C sly in order to m IO eet the organis -CFO team needs to work ational goals B y Geetaj Cha

nnana

PHOTO BY MEXY XAVIER

hile speaking to a CFO, I asked him if the CIO makes his job easier? “I do not know about that, but I certainly make his job easier” was his reply. When I asked the same question to yet another CFO, he had an altogether different take. He thought that IT was driving the finance and growth in his company. Just like the relationship between two different sets of friends cannot be the same, similarly, the relationship between a CIO and CFO and the reporting structure cannot be generalised. It depends on various factors. Some of these factors are: Organisation size: The first factor is the size of the organisation and its growth path. If it

is a smaller organisation and does not have technology as its priority, the IT head may report to the CFO. This is mainly due to the fact that technology is not a core business enabler and is just a support function for the organisation. On the other hand, if the organisation has a progressive outlook and is growing pretty fast, IT becomes one of the biggest business enablers and is responsible for the growth of the organisation. In such a case, the CIO should report to the CEO as s/he needs to be aligned with the business goals and should know what is the direction that business is taking to enable the business to grow faster. Market conditions: If the market environment is not good and the company is look-

ROBIN BANERJEE. CFO, Suzlon. The CFO has the bird’s eye view of the organisation.

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ing at saving costs then the structure of CIO reporting to the CFO makes a lot of sense, as both can work together to find ways to save costs for the organisation. While being interviewed by his CIO for this story, Mr Ravi Sud, CFO, Hero Honda Motors mentioned the merits of making intelligent purchase decisions. “During the downturn we invested heavily in an IT application to help us save costs,” he said. Legacy: Technology implementation in organisations started off as computerisation of accounts. Some companies are stuck with the CIO reporting to the CFO structure of the bygone days. In reality IT has evolved into something much larger – providing services to each employee in the organisation. Umesh Khandelwal, CIO, BMW India, agrees with this view. “It is important that the CIO should report to the CEO and not the CFO, as IT is not part of finance, but it is its equal,” he said. However, there are some who have an opposite view and feel that the CIO should report in to the CFO. Robin Banerjee, CFO, Suzlon holds such a view. "The CFO has the bird’s eye view of the organisation," Banerjee says. "Hence, it's easier for him to add value to the CIO's functions." Verticals: Users in different verticals have different expectations from IT. Many a companies in the manufacturing sector, on the other hand, do not see IT as a big business enabler but as a support function only. This is the case when the role of an IT head is restricted and the executive reports to the

C I O - C F O R E L AT I O N S

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Who does the CIO report to? Others

Chief Admin 2% Officer

16% COO

42%

CFO

33%

UMESH KHANDELWAL. CIO, BMW. IT is not part of finance, but it is its equal.

CEO

Participation of CFOs in IT decision making 41% 34%

finance head. In telecom and technology companies, the IT head’s scope of operation is large and thus the reporting generally has a CIO - CEO direct link. Top management outlook: Though this may not be openly discussed in forums, it is one of the important factors in defining the role of IT and its reporting structure in the organisation. If the top management is from the brick and mortar generation, it is sometimes difficult for them to fathom the benefits that IT can bring to the table and, thus, they do not give it much importance. New age entrepreneurs, who have grown in the technology era are more comfortable around computers and understand its potential in enabling better business. In these companies you would see a separate

What relationship do you share with your CFO? CIOs response: 60

60% Part of One Management Team CIO-CFO follow ‘one-businessone-goal’ approach Always talk of IT-Business alignment Relationship is transactional, when required, we speak

50 40 30 20 10 0

20% 15% 5%

IT portfolio that is working closely with the CEO in enabling better business processes for the company. Irrespective of these factors and the reporting structure, the CIO and the CFO must work together as a team. For working together it is extremely important that there is no communication gap between the CIO and CFO. Also, there must not be any hidden surprises in store. There should always be an element of respect for each other and the system should be transparent at all levels.

Reporting to the CFO Communicating correctly becomes even more important when you are reporting to the CFO. Not just that, you need to understand other aspects of the business too. It is extremely important to understand what is more important – the technology or the information it carries. With increasing operations it is easy for a CIO to be consumed by the technology and forget the information that flows through the wires. The CFO, conversely, does not understand technology and thus is focused only on the information. Though some CIOs may feel the pinch and think that this is a hurdle in their operations, it can prove complementary to their role and give them a perspective that is more organisational centric. “The CIO should focus on both things equally – without one the other cannot be enabled or monitored. It is important to monitor the information flow with the right IT tools”, says Mr Ajay Khanna, Head IT,

20%

5% Main decision maker

Key recommending/ sponsoring executive

Minor role

Do not participate

SOURCE: FERF AND GARTNER

Volvo Eicher Commercial Vehicles. As a CIO, you must have visibility and communication channels with the end users of your technology. Think of the users, how you could increase their productivity, how your systems could make them delighted. It is about looking beyond the regular tech stuff that you are surrounded with. It is about aspiring to be a senior business leader in your organisation. Finally, whatever the case may be and to whomever the CIO may report, it is important that both CIO and CFO work as a team in the organisation. "In most organisations, the CFO and CIO work together daily to finance IT and provide information that supports financial processes, but there is also an opportunity for them to form a powerful alliance that generates more value for the enterprise," says Bill Sinnett, director of research at Financial Executives Research Foundation. The results of their study on CIO-CFO relations, carried out in partnership with Gartner, are depicted in graphs across this article.

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My Trump Ca rd CIO-CFO INTE RVIEW

In a one-of-its-k Motors India ind feature, the CIO of He the company, Vijay Sethi interviews Ravro Honda organisation, a's CFO on the critical role o i Sud, f IT nd how he use s IT to solve oth in the er problems

PHOTOS BY SUBHOJIT PAUL

CIO What according to you is the key role of IT in the industry and the economy? CFO If you see the last decade and a half, the global economy has integrated. The concept of decoupling of one country from others in the world does not exist anymore. If somebody sneezes in the US, we get a cold in India. That is why I am a very strong advocate of coupling. The world is becoming one, as far as business is concerned. It is boundry-less. This is where IT is the biggest enabler – it reduces the boundaries and makes the systems seamless. For instance, in our case, starting from the time we supply the goods to the time the money reflects in dealer accounts, the whole process is seamless and fully automated. There is hardly any human intervention, irrespective of the location of the dealer. IT has simplified to an extent that we do not have to bother about the nitty-gritties. But, it is important that you have good processes and controls to ensure that you can get the most out of IT. CIO Once every year we discuss the annual IT budget requirements in details and then follow up with monthly reviews. In my three years experience in this organisation, I have noted that you have not cut even a single rupee. What are the criteria that you keep for sanctioning IT budgets while consolidating the budget requirement across the company? CFO I do not think of IT as an expense, I think of it as an investment. If you invest correctly, it will definitely pay back. It may

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VIJAY SETHI. CIO, Hero Honda Motors. In tough times, do you cut IT budgets?

not be in the next three to six months, but definitely in the next couple of years. Whenever there is a crunch, CFOs cut costs. When they have to do this, they look at their biggest expenses. When you look across the board, what are the expenses that appear noncore – advertisement, brand building and IT. In reality, IT is actually the function that can help you save costs across the board. During the 2008-2009 time period, when we were going through the downturn, we made one of our largest investments worth more than 70 crores in a DMS. I would rather use IT to enable me in looking into my processes further where I can cut costs smartly. For instance, I can use my dashboard to look into travel and conveyance expenses of every single employee – this enables me to ensure that there are no inappropriate expenses. We could also use IT to cut travel costs by using solutions like video conferencing. CIO Let's talk about things in Hero Honda: how does IT enable in achieving top and bottom line targets and how does it help in CSR?

C I O - C F O R E L AT I O N S

CFO As far as top line is concerned, it is basically concerned with growing your business on a sustainable basis. To achieve this you must understand customer requirements so that you are able to direct your internal processes and R&D, you are able to cut short the time to market and launch your product. You also need quick and accurate feedback. If something is going wrong you should be able to rectify it soon. This is where IT has helped Hero Honda cut short the gap between its customers and suppliers and brought them closer to

the company. This directly affects the top line of the business. CIO Let's come to the CSR part â&#x20AC;&#x201C; how has IT helped to help the environment or community? I know you have a personal interest in this and this is something you have initiated. CFO Needless to RAVI SUD. say, we all must CFO, Hero Honda Motors. take care of the I would rather use society and the IT to enable my processes. environment. As a small initiative, we analysed the number of cheques that we issued as an organisation. We issued 34,500 cheques in the financial year 2008-9. We aimed to reduce them to zero and were able to bring the number down to 9,600 a year in the last fiscal. This has been largely due to the efforts of the IT department. CIO There is a debate that goes on in IT circles: is IT a support function or is it a business enabler? What are your views? CFO According to me, IT is a very important business enabler rather than just a support function. It is often IT that helps discover new strategic options, though it is up to the management to use these options. For a manufacturing company, we have grown pretty fast in the past decade. Timely IT investments has contributed a lot to make this happen. CIO Managing risk for the company is one of your important portfolios. How does IT help you there? CFO We are developing a software that would help us in setting controls that meet all these statutory requirements. For instance, if an employee has to deposit the EPF by a certain date of every month, he would need to submit the scanned copy of the proof of submission when he is asked for it by the software. Otherwise, his senior would be immediately alerted of the failure. This will ensure that we are as close to compliance as possible in all regions. CIO From your perspective, how important is it for the IT head to be financeand legal-savvy?

COVE R S TO RY

CFO According to me, all of these are specialised areas. If you ask me, whether I have expert income tax knowledge, I would reply in the negative; I only have working knowledge. Similarly, all senior people in the organisation should have working knowledge of parallel specialised areas. When I am making a presentation to the core group they should understand terms like EBIDTA (Earnings Before Interest, Taxes, Depreciation and Amortization), profit after tax, operating margin, return on capital employed and return on equity. Basic knowledge is very important. Similarly, I must know a few fundamental things about IT. CIO There is another debate that goes on in IT circles â&#x20AC;&#x201C; should a CIO report to a CEO or CFO. What do you have to say? CFO The assumption is that IT should report to the CFO because it started as the computerisation of accounts. But, IT is not only computerisation. It is an integral part of the system that needs the undestading of business needs and strategy. According to me, reporting to the CEO is a much better option. It is also better because many CFOs do not go out of their domain. Many CFOs are just accountants (CIO says: just like many CIOs are IT managers), there are very few people in the industry who look beyond their function. According to me, it will restrict the CIOs role if he reports to the CFO in the current environment. Fifteen years back when it was just the EDP it made sense, because accounts was its only user. I have had EDP heads report to me at that time only because I was the only person being affected by the systems the most. CIO Finally, what should the CIOs do to ensure a great relationship with the CFO. CFO Unfortunately, the CIO from my company does not drink (laughs). We must have a good time together, meet more often and have a smooth relationship. On a more serious note, they should communicate openly and transparently with each other. That is the biggest driver for any good relationship in an organisation.

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C I O - C F O R E L AT I O N S

Should CIOs Report to THE CFO ANG LE

CIOs Need to Stay

Close to CFOs

Clarity on the b essential if the usiness's financial plans is CIO must impro ve processes.

PHOTO BY SUBHOJIT PAUL

he relationship between CIOs and CFOs has the potential to impede or accelerate overall business performance. CFOs have gained significant influence over IT, particularly in technology deployment. The evolving role of the CFO is to multitask between business strategy, finance, risk management and IT. His job has always centred on information, and the role today has evolved from being a topranked accountant to a top-ranked strategist. In an ideal world, the CIO and CFO must work as partners. However, since technology decisions have a huge impact on the organisation, CFOs must take charge of the key decisions, as they can see a wider horizon of the enterprise. Information Technology is about information, and CFOs are the key users of information, be it financial analysis or MIS, CRM or ERP. CFOs understand the business best, and should be versed in technology to work as a decision maker for IT investments. Wherever required, CFOs must upgrade themselves in technology to take informed decisions. One advantage of CIO-CFO reporting structure is that it helps bring cost discipline to IT spending, and focuses IT initiatives to business needs. Nevertheless, CFOs should not overstate their own technological importance, but give enough freedom to CIOs to take pure technology related decisions. On the other side, CIOs should not perceive CFOs as an obstacle. CFOs sometimes regard IT as a support function only, underpinning the true importance of being a business enabler.

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ALOK NAGPAL. SVP - Finance Delhi Integrated Multi Modal Transit System Limited CFOs understand the business best

There have been conflicts on leadership issues and disagreements on how to collaborate. A genuine collaboration turns differences to everyone's advantage by eliciting fresh ideas. CIO not working closely with CFO may not have a clear view of the firmâ&#x20AC;&#x2122;s overall operations, financial controls and resource utilisation. Therefore, cost leaders with a CIO-CEO reporting structure are likely to underperform relative to cost leaders with a CIO-CFO reporting structure. Some believe that CIOs are better off reporting to CEOs because they have more power, can be more creative, experiment with new IT initiatives, and have a role in strategic planning. Whether the CIO reports to the CEO or CFO is a measure of the relative power and importance of the CIO in the company. The

CIO reporting structure depends on how critical IT is to the companyâ&#x20AC;&#x2122;s strategy. The companies with a strategic IT orientation can have their CIO report directly to the CEO (with CFO concurring on the financial impact of IT decisions), whereas companies where IT has primarily operational role, CIO may report to the CFO. Reporting to the CFO can be more attractive if IT is in an immature state; if the CEO is very outward facing or has too many direct reports; or if the CFO has a broad scope which includes a deep understanding of IT's value. Reporting to the CFO is less attractive for a CIO if IT-intensive transformation is very dynamic; or if the CFO is focused on finances and therefore less strategic. The views expressed are those of the author and do not necessarily reflect the views of his employer.

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CEOs or CFOs?

MUKESH KUMAR. SVP - IT, Oberoi Group. CIO reporting to CFO is a thing of the past

that would help the business gain a competitive edge over others. In either case, the CIO is not restricted to finance and hence CIO reporting to CFO is a thing of the past. The number of CIOs reporting to CEOs these days is growing and this change in the reporting structure is indicative of the growing importance of CIOs. As for finance, it has a role to play to ensure a decision is financially sound. CFOs also have to understand that not all future directions are ROI driven. Some of these decisions are based on a leap of faith. A classic example is ERP implementations. Hence

! n i s d a e H n o i t c n u F e h Get all t LE THE CIO ANG

t , it's importan to rt o p re y a IO m e Whoever the Ces with a steering committe that he engag

T is no longer a support function in an organisation. Gone are the days when technology was used for accounting purposes only. Over a period of time the role of Information Technology has changed drastically. Today IT is an enabler of all functions. It is also strategic to business growth, though its impact depends on the industry vertical it is servicing. For those industries where revenue streams are enabled through technology, IT/CIO plays a direct role in business growth. In other verticals too, it promotes business growth by creating / enabling opportunities for re-modelling. Also, IT is not just a reactive and book keeping function. It is more directly related to day-to-day business functions and decision making. Important functions like marketing and materials expect IT to provide

actionable data for better management of their functions. Just take the example of a CRM database which pulls data from various sources. Being aware of the various interfaces of different applications and the latest technologies to gain access to new and useful customer data puts the CIO in an excellent position to judge which would be the application that would be a good fit for the business. For these functions, IT provides definitive insights into the supply chain, stock management and demand forecasting, enabling decision makers to take more informed decisions based on intelligent analysis of data and trends. The materials head can drill down to every component level to derive cost benefits from technology. The marketing head can get better insights into the customer data for planning his activities

finance is not fully aligned to the business impact IT can deliver. Should CIOs report to CEO? This actually depends on the individual leaders. Does the CEO find that the Information Technology head has a good amount of potential to achieve the enterprise's business goals? If yes, then the CIO should directly report to him. If no, then CIO should actually be responsible to a management team consisting of all function heads. In this way, the CIO will be able to better understand overall business objectives and at the same time identify those areas where IT can enable business objectives. To me, a CIO can report to anybody purely for administrative reasons but for functional reasons he should be aligned to CEO and/or steering committee.

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Why CFOs Look at THE CFO ANG LE

In Joint Owner ship, We Trust An IT steering properly assescommittee alone can s IT projects

ill around the late seventies and early eighties, Information Technology in businesses referred to systems engaged in process controls and transaction processing. The use of personal computers was in the nascent stage. Over the last two decades, there has been a quantum leap in the use of Information Technology in businesses. Today it represents an essential part of every business irrespective of the size of the businesses. Investment in Information Technology has become an important component of corporate budgets. Many a time, the IT budget becomes the first casualty whenever the business is passing through a difficult period.

PHOTO BY JITEN GANDHI

Information Technology â&#x20AC;&#x201C; a cost centre or a value centre In managing IT budgets a key question that needs consideration is whether the technology function is a cost centre or whether it is in the nature of a value centre. If IT is perceived as a cost centre, decisions on IT budgets end up being taken in isolation and, in difficult times, the IT budget undergoes downward revisions. Many companies view IT as a key business enabler and with that in mind, IT budgets are decided keeping in mind the value that IT can bring to the business. Under this approach, the quantum of IT budgets is purely driven by the nature of IT projects and its benefits in terms of enhancing the business capabilities. It is essential to have a holistic approach to spending on IT. While the costs involved are more or less clear, it is critical to esti-

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S K JOSHI. CFO, BPCL. IT spending should have ownership from business

mate the benefits. Further as technology exists to support business, it is essential for the IT spending to have the ownership and commitment of the business. It is therefore a good idea to have a IT steering committee with representation of all key stakeholders who can be involved in the process of drawing up the IT budgets. The top management can also look at funding of the IT projects as corporate initiatives. The funding can be recommended by the IT function (with strong justification from the business) to the CFO. This has two advantages: IT departments takes the responsibility of overall enterprise IT architecture. Individual businesses need not worry about detailed aspects of funding (handled by CIO and CFO).

As long as the IT budget making process involves all the stakeholders viz IT function, businesses and corporate finance, the scope for pruning of budgets is almost non existent. This will also encourage IT function to go in for cutting edge technology which can bring value to the organisation. While the risk factor associated with a new technology would still be there, it would also give the organisation a strong first mover advantage. Pruning of IT budgets is therefore not the only approach even in the most difficult of times. If the CFO is satisfied that there is significant value for business, he should not seek to reduce IT spending but instead use it as an effective business tool for driving value for the customer.

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Pruning IT Budgets? V BALAKRISHNAN. Partner & CIO, Polaris Software Lab. IT operations can create large unexpected risks.

to every telecom service, thus creating a large potential liability. The networks could be insecure leading to leakage of company confidential information, or, worse still, creating third party liabilities involving customers' sensitive information. Every device or connection added to the network could act as a potential compliance timebomb, if not handled appropriately, and it makes sense to ensure we buy exactly what we need to buy. In most enterprises, a hard pressed CFO who is given the mandate to improve the bottom line first looks at the IT depart-

d e k c o C s r Ea LE THE CIO ANG

FO critical to the C ry e v is s ie it v ti ac b on the CIO's ta a g in p e e k Why

PHOTO BY AAHANA MAHTANI

FOs have a big responsibility within in an enterprise – they are responsible for the tracking of enterprise assets and liabilities, income and expenses, profits and losses, not to mention risks. IT assets and operations impact all these elements – often disproportionately, and in unplanned ways. Hence CFOs have a special 'attachment' to IT budgets and spend a lot of time tracking them! IT assets possibly have the fastest 'real' depreciation compared to most other assets. They get obsolete very fast, and replacements come with better performance at lower costs, at a rapid pace, resulting in rapid erosion of 'value' of any IT asset. CFO's have to worry about ensuring that the enterprise does not collect assets to fill a future museum – only such assets that the company really needs for today's use and those that are likely to give a fast and defi-

nite ROI need be bought. When an enterprise acquires an IT asset, the asset comes with a long tail – the future maintenance and operations expenses. Unless we spend on maintenance in the form of AMC or upgrade contracts, the value of the IT assets drops rapidly. So the CFO is concerned about the TCO during the lifetime of the asset and not just the capital cost. IT operations have the potential to create large unexpected risks and liabilities to the company – You could run into a huge unexpected telephone or data bills due to genuine use, or otherwise. Your IT staff could be installing expensive software or they may be installing pirated versions of some software, the latter creating potentially large compliance risks that could wipe out most of the profits of the company. The telecom department could be violating legal requirements that comes attached

ment. First item on the list is telecom – every CFO knows the telecom rates have been dropping over years and would like to prune the telecom budgets to take advantage of this dropping tariff. The next item is AMC. AMC keeps going up for obsolete hardware and it makes economical sense to get replacement hardware at much lower cost with 3 to 5 years warranty. As a rule, several capex investments have the potential to save a large opex, and every opex item needs to be scrutinised to see if replacement by an up to date capex item would lead to significant reduction in maintenance and operations costs. IT has played a big role in cost reduction and performance enhancement; but, at the same time, every CFO wants to ensure that every new technology investment fits within the the company's budget plans and that the company's profits are not eroded. Thus the need for every IT expense to pass the CFO's close scrutiny.

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COVE R S TO RY

C I O - C F O R E L AT I O N S

ANALYST OPIN ION

Striking a Ba lance Active engage decision makinment between the CFO and th g process can help overcome e CIO in the many hurdles

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he CIO's role, which has evolved over the years, has been the subject of discussion and debate in the corporate corridors. The role and function of technology within the enterprise has changed, and, accordingly, the scope of the job at the helm has also changed. Traditionally, technology was deployed for producing MIS. The IT function was considered as the custodian of the company’s information

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resources. MIS itself was seen as an output of financial reports and general ledger. Thus, the reporting of a CIO into the CFO was seen as a natural extension. However, today, the role of CIO is not limited to managing information resources. Information is now much more freely available, and the tools to create and edit them so widespread that the custodian model has become outmoded. Technology is now seen

as a tool for automation, primarily enabling effective decision making. It now provides an enterprise with the tools to collate, harness and leverage knowledge rather than just data. The CIO is therefore a critical contributor to the development of the organisation’s strategy, a valued member of the “C” suite, a leader who is able to lead and support major change in organisational processes, manage teams of high-performance

C I O - C F O R E L AT I O N S

technology staff, and is an astute judge of the potential of new technologies.

The CIO-CFO debate The divide in the roles between the CFO and the CIO is sharper now than before. CFOs typically have the task to look at business plans and the operational goals of the organisation, and accordingly build budgets with capital allocation plans. The CFO is driven by metrics and measures investments by their returns; technology is seen as a cost centre and in the process the element of subjectivity has a likelihood of being lost. On the contrary, CIOs are inundated with information on trends related to the latest technology and contemporary tools. Quite naturally, on many occasions, in the quest to latch on to the latest technology, the ‘return on the investment’ viewpoint does tend to take a backseat. Both these, however, are quite natural and logical from their respective standpoints. The key question, therefore, is how to strike a balance, and, more importantly, what is it that the balance should ultimately result in.

Need for a balance As roles and responsibilities converge, the key to mastering this challenge lies in achieving greater alignment and transparency between IT innovation and business strategy. This balance should achieve the fol-

lowing three results for an enterprise: A Balance between short and long term objective of enterprise: Short term technology investments should not be held back in the quest for ROIs and payback periods. Similarly, it is important not to forget about return on investment, payback and total cost of ownership ratios for long term technology investments. The aim is to enable CFOs to make faster and more informed decisions through improved visibility of metrics. B Determining the ROI of technology investment: Finance managers are now increasingly seeing business returns on all assets of the enterprise – be it tangible or intangible, while IT managers talk of moving technology from a cost centre to becoming a strategic asset and value creator. The essence of the solution therefore is to come up with a useful ROI calculation that identifies all the sources of cost (hardware, software, training, downtime, etc.) as well as all of the sources of benefit (direct savings, enhancements to productivity and improvements to quality – i.e., customer satisfaction). Fortunately, experienced CFOs do understand the challenge of getting a real ROI estimate. A good strategy is to engage the CFO and the finance function in coming up with the appropriate matrix. C Balance between the roles of CFO & CIO: It is important to understand that the purpose of the existence of these roles has different origins. Each role depends on the

V RAMKUMAR. Global HeadBusiness Technology Practice, Cedar Management Consulting.

COVE R S TO RY

The role of CIO is not limited to managing information resources. Technology is now seen as a tool for automation, enabling effective decision making. It now provides an enterprise with the tools to collate, harness and leverage knowledge rather than just data. other for effective execution of the responsibilities, even while one is not a subset of the other. It is true that in the current economic scenario where the focus is on cost cutting and improving efficiency, the role of a CFO has a much larger connotation – CFOs must take ownership of the financial health of the organisation. The CIO’s role, on the contrary, has a more technical orientation; nonetheless, it too focuses around the same objectives – improving efficiencies and quality of decisions through effective automation, quality of MIS and timeliness and accuracy of information. In many ways, therefore, even while both of these roles are support functions, they reflect the two sides of the same coin. Both roles are complimentary, and both are in existence to support the larger objective of the enterprise. More importantly, the ‘end-objective’ of both the endeavours – be it the technology investment itself or be it the measurement of its return – are in the larger interests of the enterprise. Hence, the key to the success of a balanced model is in ‘active engagement’ of both the CFO and the CIO in both the decision making process and in the process of relevant measurements of their utilities.

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S TORY NA M E

SECTION NAME

THE JOURNEY AHEAD Ray Ozzie recently made a comment that Windows Azure will be setting the stage for the next 50 years of business for Microsoft. What is the broad framework and roadmap that Microsoft has in mind to launch its cloud services? I can relate to where Ray is coming from. He said something four years ago when he laid out Microsoftâ&#x20AC;&#x2122;s vision for the cloud. They actually called it software + services. That was the defining moment wherein we envisioned cloud services. Windows Azure has been one of the key focus areas since then. There will be several others areas but Microsoft has a long-term commitment towards cloud. The cloud platforms will provide simplicity and ease of use for the users. The only difference is probably we would see changes sooner in the cloud given that there is a certain catalysing effect cloud has on IT adoption.

Vikas Arora, Group Director, Cloud Services, Microsoft India speaks to Rahul Neel Mani on Microsoft's late entry into the cloud platform, how Azure compares with Amazon's products, Microsoft's future in the cloud and other possibilities in cloud computing.

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Microsoft is a late entrant in the cloud space. What was it that compelled the corporation to jump on to the cloud and offer Azure as an offering? There is a misconception. It is true that our arrival is late but we have been talking about our cloud vision for the past several years. A classic example is Microsoft Online Services. It has been around for about six years. It offers basic email services and that has now moved on to what we call Business Productivity Office Suite (BPOS). Xbox Live has also been around for five-six years and I think the defining point of that service is it is consumed on a device. Several other services that we have been delivering conventionally

VIK AS ARORA

till now will come through cloud. Alongside Windows Azure, we shall start extending our collaboration product suite - Exchange, Share Point, Live Meeting and Office on cloud. On the database front, we basically extend the SQL Server to the cloud integration layer. We are quite experienced in delivering services using the cloud. All we want now is that every Microsoft product should have a cloud version.

DOSSIER NAME: Vikas Arora DESIGNATION: Group Director, Cloud Services ORGANISATION: Microsoft India

What is the roadmap for your company? What is the state of preparedness as of now in term of platform consolidation? Our portfolio is across the three broad layers of the cloud — infrastructure, platform and software services. The ‘dynamic data centre tool kit’, which is essentially the platform for setting up a private cloud, allows our partners and customers to set up a secure cloud. We have added capability in the system centre. We have already demonstrated our virtualisation capabilities. Basically, the product line is ready for setting up the cloud — both in the private and public cloud environment. Second thing in our portfolio is platform-asa-service (PaaS), which is Windows Azure or SQL Azure. This is a set of products which will allow developer companies to have an operating environment in the cloud. These products will continue to support building and deploying the applications. The third platform is the software as a service. Microsoft will offer Exchange online, Share Point online, and Live Meeting online. As I said, Microsoft is late in entering the cloud race. The buzz around Azure was much delayed in comparison to EC2 of Amazon. Will Microsoft have something to offer that is better than the others? We have already started coming across several independent articles that have rated Azure the most influential product in terms of its

platform capabilities. The competitive platforms, for example, Amazon, provides compute and storage capabilities in a highly virtualised environment. Is that a true rational database capability? Yes, if you are running in a virtualised environment! But who manages it? You yourself manage it like you do it for your own data centre. When we talk about a platform like Azure, it basically takes away a lot of that and allows you to focus on your applications. You can define how the application should operate, how you would take back ups, how you would patch things... The service takes care of everything that you need. You don’t require IT people managing this environment. Azure as a platform provides a lot of simplicity in deployment and managing operations for an application environment, which Amazon doesn’t provide. Maybe it is not their focus area. What do you think are some of the exclusive benefits of adopting the cloud? It makes sense for users to adopt cloud based applications when they want real benefits in terms of return on investment and total cost of ownership. Cloud applications have kind of on/off characteristics. For some applications like data warehousing, there is very intense use for only three or four days in a month, and once that period is over, the application and the associated infrastructure is not required. These are seasonal or completely unpredictable peak loads.

“We have actually seen traction for the Azure platform in both large corporates as well as small businesses.”

NO HOLDS BARRE D

In these scenarios, it makes sense to harness the cloud because it gives you an instant RoI. The Azure platform provides both: capabilities suitable for web applications as well as batch applications. We have actually seen traction in both large corporates as well as small businesses. Coca Cola is a great example of a large company which is using email application on the cloud and a couple of more workload applications. We have just launched it in India and there has been a phenomenal response. We have got more than 500 customers already. Lavasa city is an example of a customer using the email application. The companies are moving their commodity workload applications like email and chat on the cloud to free up a lot of their IT capacities to do some real application work. You can expect them to run pretty reliably like they used to do in the Exchange environment. Other thing that people are using it for and which we realised when we launched the trials, is Live Meeting. You suddenly see lot of value in cutting down your phone calls and actually have a richer collaboration communication happening because people are being able to share the Word, Excel, Power Point applications over a Live Meeting link instead of having to email big attachments all across. Both small and large businesses are inclined to move these commodity workloads on to cloud like Business Productivity Office Suite (BPOS). Then there is a third trend where CIOs are increasingly looking at optimising their data centre investments. They started out with virtualisation but now that whole thinking is moving from virtualisation to private clouds. In such a scenario, there may not be significant cost advantages but there would be efficiency advantages. Most large enterprises which have already made significant data centre investments are excited about the private cloud. —Rahul.Mani@9dot9.in

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HORIZONS

HONORIO PADRON SAYS

“Coming out of the recession, it is critical for G&A leaders to understand what has structurally changed in the business climate.”

ILLUSTRATION BY PHOTOS.COM

A Out of the Storm CIOs have weathered the uncertainties of 2009 skillfully. A special report on their preparedness for this year's challenges. BY HONORIO PADRON AND ERIK DORR

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s companies slowly emerge from the recession, they are encountering fundamental changes in the global business environment. These changes will have far-reaching implications for the way IT services are provided and funded and the manner by which IT performance is assessed. Against this backdrop, IT’s strategic priorities for 2010 are to retool the IT organisation to support the business in an environment of high risk and volatility and accelerated globalisation, and the need for innovation. This must be done with resource levels that have been permanently reduced. Participants in this Key Issues Study report that their top priorities are demand and project portfolio management; transformation and optimisation of their service delivery model, talent management, and continued cost reduction. CIOs report their chief initiatives in 2010 include infrastructure virtualisation, function reorganisation, application portfolio consolidation and improving portfolio management capability. Talent management, though a high priority, lags in execution.

The “New Normal” and its implications for 2010’s IT agenda 2009 will be remembered as a year of unprecedented economic extremes. Fol-

CIO CHALLENGES

FIG. 1 Today's "new normal" business environment has major implications for the way IT operates Enterprise strategic implications

Responding to globalisation megatrends

Moving from multinational operating models to a truly global operating model

8% 15% 6% 11%

Predictive in strategy Foresight to sense threats and opportunities Predictable in operational excellence Ability to execute efficiently and effectively

Two key attributes of agility of 2010: predictive and operational excellence

1 2 3 4 5 1 Anticipating and responding to risks and new demand drivers 2 Dynamic EPM to rapidly redefine and cascade performance goals 3 Retooling labour to multi-skilled global resource pools 4 Building a sustainable and globally-competitive cost structure 5 All built and maintained within a holistic and flexible operating model

Support and drive innovation Support and drive operational efficiency improvement Improve enterprise risk management capability Accelerate speed of execution

Reorientation of the business support organisations to enable the enterprise in the “new normal”

demand, etc.) vary widely. Uncertainty about future conditions increases business risk, which in turn has repercussions for IT. Importance of new markets to growth: There is widespread agreement that growth opportunities in emerging economies outstrip those in developed Western economies. Companies failing to adapt to and capitalise on this changing pattern risk falling behind.

10%

14%

18%

20%

6% 11%

7% 5%

These results show that organisations are considering significant change 6%

18%

20% 4% 23%

22% 8% 13%

73%

59%

54%

47%

39%

Policy / strategy is set globally

Technology support is global

Reporting is integrated globally

Talent is managed globally

Global process standards are heavily utilised

Global processing centres or Centres of Expertise used

NOT LIKELY TO DO THIS FOR AT LEAST 5+ YEARS

PLANNING ON THIS WITHIN 3 TO 5 YEARS

CONSIDERING THIS

PLANNING ON THIS WITHIN 2 YEARS

SOURCE: THE HACKETT GROUP 2010 KEY ISSUES STUDY

IT implications

SOURCE: THE HACKETT GROUP

FIG. 2 Movement to a single global operating model across the functions

7% 10% 4% 5%

Operational implications

Decisive in direction to re-set goals and drive transformation

Business Environment "The new normal"

lowing the near-collapse of the global financial system in late 2008, 2009 began with a sense of impending economic doom. However, by late 2009 the stock market was enjoying its biggest rally in 70 years, marking a shift toward cautious optimism about the return of growth in 2010 and beyond. There is no question that 2009 was the ultimate test of the quality of business leadership. For most executives, shifting from full crisis mode at the start of 2009 to planning for recovery by the year’s end was a novel, even unprecedented experience. Those who could manage the transition have come out of the recession stronger and more competitive, having permanently improved their cost structure and operating models. By contrast, those who fail to learn and apply lessons learned will find their competitiveness eroded to the point that they will jeopardise the future viability of their companies. Coming out of the recession, it is critical for G&A leaders to understand what has structurally changed in the business climate, and what the implications are for business support organisations and their specific function. The most important of these structural changes are characterised as follows: Increased business volatility and risk: Opinions about the future volatility of key economic indicators (housing prices, interest rates, commodity prices, consumer

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Acceleration of innovation cycles: Cycles of creative destruction are integral to the valuecreation process. When business uncertainty is high, this process tends to intensify, performance gaps between “winners” and “losers” widen, and industries restructure at a faster pace (consider how the auto industry’s lingering structural problems led to drastic industry restructuring in the space of a single year). The key to survival under such circumstances is innovation, not only in product and service offerings, but in business models and processes. While the above-mentioned changes represent macroeconomic shifts, they have major implications at the enterprise level, as well. Specifically, thriving under “new normal” conditions require two essential capabilities: Being predictive in strategy: Strategy is based on implicit or explicit assumptions about the future. In a high-risk, high-volatility environment, having a strong predictive capability provides a performance premium, creating an incentive for companies to improve this capability. Companies that base their strategy on a linear extrapolation of the past, on the other hand, will falter. Additionally, the tolerance bandwidth for errors and corrections has been significantly reduced. Being predictable in operational execution: When the rate of external change is

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accelerating, the penalties suffered due to inadequate or slow response times increase. Sometimes this will be an opportunity cost (i.e., missing out on a market opportunity), and sometimes a direct cost (i.e., continuing to go down an unprofitable path). Our evaluations and modelling indicate that companies with predictive strategy capability but lagging predictable operational execution will have a harder time competing in a global marketplace. These trends characterise the context in which business support functions including IT will operate. Since the function’s value and performance will be measured against these trends, there are some very specific emerging operational requirements for IT organisations. (To ensure that these capabilities are robust enough to enable systemic change, they must be implemented against the background of a holistic Service Delivery Model.): Improve the organisation’s ability to anticipate changes in the external environment through stronger business intelligence capabilities. Create a dynamic enterprise performance management (EPM) capability that permits rapid adjustment in goals, strategies and tactics. Attract new talent in the right location, at the right time and for the right price. Continuously improve IT’s cost structure. Redesign IT’s operating model for maximum flexibility and responsiveness to change, leveraging new technologies and provisioning models. Meeting these requirements involves enabling the business to accelerate its speed

of execution, improving its risk-management capability, supporting innovation and improving operational efficiency. All of the aforementioned requirements can be met only if IT is able to provide better information on a timelier basis to the rest of the enterprise and helps drive higher levels of automation and analytical capability throughout the value chain. Consequently, IT’s role in determining how well companies perform is more important than ever in the “new normal.” Given the pervasive role of technology in society today, this should come as no surprise. While even five years ago some companies still relegated technology issues to a team of specialists operating in relative isolation, today technology is an integral part of business operations and a crucial enabler of adaptation and change.

FIG. 4 Estimated percentage of resource cuts made

FIG. 5 Percent of G & A organisations considering

during 2009 that will be permanent

FIG. 3 Estimated change in revenue and IT

resources, 2009 vs. 2010 2009

2010

4.0%

2.0%

1.0%

-4.0% -5.3% -7.3% Number of IT staff (FTEs) annual change

IT operating budget annual change

Company revenue annual change

SOURCE: THE HACKETT GROUP 2010 KEY ISSUES STUDY

deployments of more technology to improve their performance 71%

54%

60% 43%

Underlying all of the developments on the preceding pages is the finding that functional organisations including IT are rapidly moving from being run based on a national or multinational model to being managed/ operated globally. This acceleration of the globalisation trend will be the most significant driver of structural business changes.

Recession fallout: The IT resources squeeze One of the premises of this research is that IT priorities for 2010 are shaped by an expectation of a return to modest growth in 2010. This widely shared assumption is borne out by Hackett research (Fig. 3). Companies participating in our study reported average revenue declines of four percent in 2009 but expect four percent growth in 2010. Participants also indicated IT resources were cut back in 2009 at a faster rate than actual business declines (7.3 percent vs. 4.0 percent). However, during the recovery, IT resources are expected to grow at a slower pace than business volumes. The net impact: a reduction of IT resources relative to business volume during both phases in the cycle. In other words, some IT resources cut during the recession will be permanent (Fig. 4). This situation further increases and extends the gap between supply and demand for IT services. The cutback in IT resources does not mean demand for IT services will be reduced commensurately. In fact, G&A functions as well as operations, sales and marketing are looking to IT for help delivering on management’s mandates for efficiency. The net result is a genuine IT resource squeeze. In the short term, many companies have responded with unsustainable practices such as deferment of technology refresh or postponement of application rationalisation initiatives. In 2010, the IT strategic priorities and agenda will be highly influenced by this resource squeeze.

Business realities are shaping IT strategic priorities

IT staff (FTEs)

IT operating budget

SOURCE: THE HACKETT GROUP 2010 KEY ISSUES STUDY

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IT responses

All G & A responses

SOURCE: THE HACKETT GROUP 2010 KEY ISSUES STUDY

To understand study participants’ top priorities, it is essential to first understand the broader business issues driving these priorities as well as the IT resources squeeze: Demand management - Companies report that their top priorities in 2010 are

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effective management FIG. 6 Top priorities and initiatives for IT organisations in 2010 and prioritisation of IT priority issues, 2010 IT top initiatives, 2010 IT demand, and the closely related issue Internal infrastructure Effective management 91% 78% of improving capacity virtualisation (servers, and prioritisation of IT demand storage, desktop) planning and portfolio Create agile IT service delivery 82% management capabilImplementating project portfolio model without taking on new fixed cost 67% management processes ity. This finding is 64% Continue to drive out IT cost consistent with what Changing IT departmental 67% one would expect in structures, management Create career advancement 64% ? structures and reporting lines opportunities to keep top talent view of the IT resource squeeze. Consolidating business Improve IT capacity planning and 64% 67% application portfolio around portfolio management capability Companies fully common ERP suites understand they DEMAND MANAGEMENT COST CONTROL operate today in an PEOPLE / TALENT SERVICE DELIVERY MODEL environment in which SOURCE: THE HACKETT GROUP 2010 KEY ISSUES STUDY demand for IT services far outstrips supply capacity. The ability to tion. Companies with internal virtualisation manage demand, plan capacity and implefinancial crisis, companies must tune up experience are in a better position to leverment an agile solution strategy is critical their practices to actively manage the risk of age off-the-shelf external virtualised infrato business survival. talent loss through a comprehensive talent structure offerings as they mature. Cost control - Finding ways for IT to furmanagement strategy. Project portfolio management: Companies ther reduce cost is a top priority for 2010. [A comment on the talent issue: For years, are widely implementing project portfolio However, most companies have pulled companies have ranked talent as a key issue management, or PPM, to address demand back from last year’s “survival” mode and across all of the G&A functions, including management capability. Most already do are now searching for a more balanced IT. However, we have observed very few some form of PPM, so the emphasis for approach. In Hackett terms, this includes actual implementations of talent manage2010 is on improving processes and capapreservation or restoration of best practices ment programs. Even good, formal recruitbilities, as well as expanding the scope of in effectiveness as well as efficiency. ing strategies that would give companies an initiatives governed by the PPM process. Agility and service delivery model - Anothedge in attracting top IT talent have been Note that this initiative does not imply er high priority is optimising the IT service few and far between.] companies are accelerating implementing delivery model to increase agility without dedicated best-of-breed PPM tools. Such taking on new fixed cost. This priority is 2010’s top IT priorities implementations require large investments directly related to IT organisations’ need to Infrastructure virtualisation: Ongoing Hackthat are hard to fund under current ecocreate a more scalable and variable capaett research continues to show that virtubility and cost structure in the absence of alisation remains the primary technology nomic conditions. The foremost focus of investment funding. One of the lessons of architecture-based initiative aimed at keepthis 2010 initiative is therefore on improvthe economic crisis is that a rigid cost strucing IT infrastructure costs in check. Despite ing process, governance and skills. ture cannot handle unanticipated, major focus in the trade press on “external cloud” IT reorganisation: Repeated, painful downrevenue fluctuations. offerings, virtualisation for most compasizings have forced many IT organisations nies entails building “internal clouds.” to rethink their organisation structure, Study participants have achieved dramatic reporting lines, span of control, etc., in Talent management improvement in utilisation of resources, order to reduce headcount. In 2010 and As companies downsized in response to the while the speed and flexibility of infrastrucbeyond, IT organisational changes will recession, IT talent management and holdture resources has improved as well. be more related to service delivery model ing onto top talent gained in importance. This improved technical capability has (SDM) optimisation. Organisation structure Luckily for most companies, the weak job resulted in improved services agility, elimi(along with governance and service placemarket convinced many top IT staff to wait nating the need for large capital outlays as ment) is at the heart of the SDM design. out the recession where they were. Having well as introducing variability to infrastrucThe 2010 study finds that 67 percent been put under tremendous stress over the ture cost. There is still a question as to the of companies plan to make such organipast year, the risk is high that IT’s top perimpact on long-term total cost of ownersational changes in the very near future. formers will leave when the labour market ship (TCO) of virtualisation strategies. But Moving to common standards, including improves. Though the mass exit of retirvirtualisation is now a mature architecture shared services, is currently by far the ing baby boomers from the labour market approach and is rapidly growing in adopmost popular enterprise initiative. In IT, may be less of a concern than before the

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this “leverage movement” will advance rationalisation strategies, especially in application portfolio management. Business application portfolio rationalisation around a common ERP: Migrating a fragmented application portfolio to a common ERP platform has been on IT’s agenda ever since ERP become the transactional platform of choice for large and midsize companies. Although most have by now settled on a company ERP platform standard, migration of operating companies, individual functions and end-users onto the chosen platform is ongoing. Indeed, application portfolio rationalisation continues to be one of the main issues Hackett Group clients struggle with. At the same time, application portfolio complexity is one of the metrics most highly correlated with IT performance, so the payoff from complexity reduction is significant. For example, Hackett data indicates that world-class companies have just half the

number of applications per 1,000 end-users as companies in the peer group.

a broad range of strategic IT issues, ranging from application management to enterprise architecture and IT governance.

Strategic implications

Honorio J. Padrón III, is global practice

The financial crisis of 2008-2009 accelerated several ongoing IT transformation trends. These changes are leading to a totally different business environment, and thus an equally different IT environment. Specifically, structural changes in the global business environment will have far-reaching implications for the way IT services are funded and provided, and how IT performance is assessed. The days of undertaking multiple strategies in the absence of a unifying service delivery model are over. In practical terms, companies need to define their strategic IT priorities and corresponding initiatives for 2010 and beyond to reflect changing business priorities.

leader, IT Executive Advisory. Mr. Padrón’s career spans 30 years in business technology management, enterprise business transformation, shared services, outsourcing, and customer experience engineering. He has held senior executive positions in government and at a number of Fortune 500 corporations, including CEO of Exelon’s Business Services Company, Inc.; CIO and EVP of CompUSA; CIO and SVP of PepsiCo Restaurant Group. This feature was first published on www. cioupdate.com

Editor's Note: This clients-only report was first produced in January 2010 and is being

—Erik Dorr is senior research director. Cur-

reprinted here with permission from The

rently, he advises Hackett Group clients on

Hackett Group.

HIDDENTANGENT GEETAJ CHANNANA geetaj.channana@9dot9.in

THE AUTHOR IS Editor (Online), CTO Forum

Stress-free communication. Have new mobile technologies really made life better?

THE other day I saw a commercial of a leading mobile device manufacturer on television. It talked about how you can be connected all the time with your family and your office because of the number of email accounts you can configure on your phone. It supposedly gives you all that you want in life because of that.... Huh, really? I have been using push mail for a couple of years now. But, there was a period of four months in between when I broke my Blackberry and had to switch to a basic mobile phone. Now I am back to using a smartphone since the last 45 days. I have already started missing those four months of my life. I would check office mail when I was in office, and social network when I had the time and not when somebody else pushed a message at me using Facebook or Twitter. Also, these are supposed to be productivity boosting devices, but have they really boosted productivity? Definitely yes, as far as my work is concerned, but I genuinely think my stress levels have increased. I am always juggling between my profes-

sional and personal lives. I get personal messages at work and professional messages in my family time. The same is probably happening to your employees. Their stress levels are constantly on the rise because of the constant pounding of information. For most, it is an instant sense of achievement of being able to finish a job even when they were doing something else – but we forget that the ‘something else’ that we were doing is being affected in more ways than one. The act of juggling may increase the quantity of work done, but certainly reduces its quality. To understand how much it can affect you, try speaking to two people at the same time and hold a meaningful conversation. You would not be able to. To ensure that your employees are able to limit their stress levels, it would be great to promote some Blackberry etiquette in your organisation. It will not only help the users themselves in reducing their stress levels, but also help make the lives of others ‘physically’ around them simpler.

“The act of juggling may increase the quantity of work done, but certainly reduces its quality. ”

Here is a short, five point Blackberry etiquette guide: 1. No rings please – Try and avoid using loud ringtones. Though you may love your ringtones, people around you may start hating you for it. 2. Not the headset – You must not use the headset during office hours. It is quite funny to see somebody talking almost to himself. Even worse is when they switch conversations from speaking to a person to speaking into the headset without warning. Plain rude! 3. Mail filters – You can filter the mails that you get on your Blackberry. Depending on your profile only a small number of mails may require your immediate attention. 4. No talking when you eat – Didn’t our mothers tell us this? Do not talk or text on your phone when you are eating or in a social gathering. 5. Holster your guns – When you have a blackberry, you end up using it compulsively — avoid it. There is nothing more annoying that speaking to a person who is fiddling with his phone. Not very difficult to do, right? I am starting from today, are you?

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DECISION-MAKING

POINTS

TESTS TO PROTECT DECISIONS FROM BIAS THE FAMILIARITY TEST: Is the person experienced? THE FEEDBACK TEST: Was there reliable feedback in the past?

ILLUSTRATION BY PHOTOS.COM

THE MEASUREDEMOTIONS TEST: Are the emotions in similar situations measured? THE INDEPENDENCE TEST: Inappropriate personal interests can cloud judgement

WHEN INSTINCT

TAKES OVER To protect decisions against bias, we need to know when we can trust our gut feelings. BY ANDREW CAMPBELL AND JO WHITEHEAD

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DECISION-MAKING

One of the most important

questions facing leaders is when they should trust their gut instincts—an issue explored in a dialogue between Nobel laureate Daniel Kahneman and psychologist Gary Klein titled “Strategic decisions: When can you trust your gut?” published by McKinsey Quarterly in March 2010. Our work on flawed decisions suggests that leaders cannot prevent gut instinct from influencing their judgements. What they can do is identify situations where it is likely to be biased and then strengthen the decision process to reduce the resulting risk. Our gut intuition accesses our accumulated experiences in a synthesised way, so that we can form judgements and take action without any logical, conscious consideration. Think about how we react when we inadvertently drive across the centre line in a road or see a car start to pull out of a side turn unexpectedly. Our bodies are jolted alert, and we turn the steering wheel well before we have had time to think about what the appropriate reaction should be. Given the powerful influence of positive and negative emotions on our unconscious, it is tempting to argue that leaders should never trust their gut: they should make decisions based solely on objective, logical analysis. But this advice overlooks the fact that we can’t get away from the influence of our gut instincts. They influence the way we frame a situation. They influence the options we choose to analyse. They cause us to consult some people and pay less attention to others. They encourage us to collect more data in one area but not in another. They influence the amount of time and effort we put into decisions. In other words, they infiltrate our decision making even when we are trying to be analytical and rational. This means that to protect decisions against bias, we first need to know when we can trust our gut feelings, confident that they are drawing on appropriate experiences and emotions. There are four tests.

1.The familiarity test: Have we frequent-

ly experienced identical or similar situations? Because our subconscious works on pattern recognition, familiarity is important. If we have plenty of appropriate memories to scan, our judgement is likely to be sound; chess masters can make good chess moves in as few as six seconds. “Appropriate” is the key word here because many disastrous decisions have been based on experiences that turned out to be misleading—for instance, the decision General Matthew Broderick, an official of the US Department of Homeland Security, made on August 29, 2005, to delay initiating the Federal response following Hurricane Katrina. The way to judge appropriate familiarity is by examining the main uncertainties in a situation—do we have sufficient experience to make sound judgements about them? The main uncertainties facing Broderick were about whether the levees had been breached

“This means that to protect decisions against bias, we first need to know when we can trust our gut feelings.”

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and how much danger people faced in New Orleans. Unfortunately, his previous experience with hurricanes was in cities above sea level. His learned response, of waiting for “ground truth,” proved disastrous. Gary Klein’s premortem technique, a way of identifying why a project could fail, helps surface these uncertainties. But we can also just develop a list of uncertainties and assess whether we have sufficient experience to judge them well.

2.The feedback test: Did we get reliable feedback in past situations? Previous experience is useful to us only if we learned the right lessons. At the time we make a decision, our brains tag it with a positive emotion—recording it as a good judgement. Hence, without reliable feedback, our emotional tags can tell us that our past judgements were good, even though an objective assessment would record them as bad. For example, if we change jobs before the impact of a judgement is clear or if we have people filtering the information we receive and protecting us from bad news, we may not get the feedback we need. It is for this reason that “yes men” around leaders are so pernicious: they often eliminate the feedback process so important to the development of appropriate emotional tags. 3. The measured-emotions test: Are the emotions we have experienced in similar or related situations measured? All memories come with emotional tags, but some are more highly charged than others. If a situation brings to mind highly charged emotions, these can unbalance our judgement. Knowing from personal experience that dogs can bite is different from having a traumatic childhood experience with dogs. The first will help you interact with dogs. The second can make you afraid of even the friendliest dog. A board chairman, for example, had personally lost a significant amount of money with a previous company when doing business in Russia. This traumatic experience made him wary of a proposal for a major Russian expansion in his new company. But he also realised that the experience could be biasing his judgement. He felt obliged to share his concerns but then asked the rest of the board to make the final decision.

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S OA

4.The independence test: Are we likely to be influenced by any inappropriate personal interests or attachments? If we are trying to decide between two office locations for an organisation, one of which is much more personally convenient, we should be cautious. Our subconscious will have more positive emotional tags for the more convenient location. It is for this reason that it is standard practice to ask board members with personal interests in a particular decision to leave the meeting or to refrain from voting. Also for this reason, we enjoy the quip “turkeys will not vote for Christmas.” A similar logic applies to personal attachments. When auditors, for example, were asked to demonstrate to a Harvard professor that their professional training enabled them to be objective in arriving at an audit opinion, regardless of the nature of the relationship they had with a company, they demonstrated the opposite.

If a situation fails even one of these four tests, we need to strengthen the decision process to reduce the risk of a bad outcome. There are usually three ways of doing this— stronger governance, additional experience and data, or more dialogue and challenge. Often, strong governance, in the form of a boss who can overrule a judgement, is the best safeguard. But a strong governance process can be hard to set up and expensive to maintain (think of the US Senate or a typical corporate board). So it is normally cheaper to look for safeguards based on experience and data or on dialogue and challenge. In the 1990s, for example, Jack Welch knew he would face some tough decisions about how to exploit the Internet, so he chose experience as a solution to the biases he might have. He hired a personal Internet mentor who was more than 25 years his junior and encouraged his top managers to do the same. There are no universal safeguards. Pre-

mortems help surface uncertainties, but they do not protect against self-interest. Additional data can challenge assumptions but will not help a decision maker who is influenced by a strong emotional experience. If we are to make better decisions, we need to be thoughtful both about why our gut instincts might let us down and what the best safeguard is in each situation. We should never ignore our gut. But we should know when to rely on it and when to safeguard against it.

— Andrew Campbell and Jo Whitehead are directors of London’s Ashridge Strategic Management Centre and coauthors, together with Sydney Finkelstein, of Think Again: Why Good Leaders Make Bad Decisions and How to Keep It From Happening to You (Harvard Business School Press, 2009). Copyright © 2010 McKinsey & Company. Reprinted with permission.

The SOA Corridor Having the correct processes in place is important to ensure SOA governance. BY REGUNATH BALASUBRAMANIAN

he first thing most people in IT leadership think of at the mention of SOA governance is the service registry because software vendors have successfully promoted the view of automating SOA governance through their respective products. Effective SOA governance requires more than just a service registry and, in fact, is much more dependent on people and processes than on technology solutions. SOA governance and consequently, the service registry, are merely enablers for SOA adoption. It is therefore logical to consider the drivers for SOA adoption and how they are realised through governance and the service registry. The foremost drivers for SOA are integration and reuse. The latter, when measured, is an indication of success of the initiative. Common challenges to reuse are fulfillment of business functionality, service level guarantees for hosted services, service ownership, incentives for reuse, and available service information. A multi-level and strong governance framework is needed to address these chal-

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SOA

Existing IT governance decisions

SOA governance decisions

IT principles – for example build vs. buy

SOA principles – for example service reuse strategy, packaged SOA products

IT architectural decisions – technology platform rationalisation, vendor roadmap

SOA architectural decisions – implementation technologies, vendors SOA infrastructure – local and enterprise services, leveraging business models (eg SAAS)

IT infrastructure – data centre vs. Hosting

Service portfolio needs and ownership

Business application needs IT investment and prioritisation

Service candidate funding and prioritisation

Enterprise information model, MDM, tools

Canonical data model, data services, tools

lenges with the service registry servicing mostly the information needs of the framework. This article identifies the core elements of SOA governance and discusses how and where a registry may be used in the service life-cycle. SOA and IT governance: The strategic nature of many SOA programs implies the need for strong governance. SOA governance is in fact an extension of IT governance: Enterprise IT principles and governance decisions drive SOA principles and decisions as SOA is but one of the many solution architecture paradigms used to produce an enterprise’s architecture deliverables. The governance framework is, therefore, mostly an extension of the responsibilities of existing stakeholders with the exception of a dedicated SOA centre of excellence created for large SOA initiatives. Core elements of SOA governance: Almost all SOA governance aspects may be articulated into the three core elements (This categorisation gives a bird’s eye view of decisions to be taken and managed in SOA adoption.):

Element

Scope

Organisational structure

Decision rights of stake holders at various stages of service lifecycle such as — nature of service behaviour, need for interface changes, vocabulary standards, service specification, SLAs, funding and incentives for use. The decisiosn rights are complemented by clearly defined responsibilities for each stakeholder.

Joint processes

Processes to guide service lifecycle management – budgeting, discovery, development and deployment and compliance. Often includes assessments and updates to in-use SDLC processes.

Relationship management (internal teams and partner organisations)

Partnership mechanism for communication – for example preference for SOA in RFPs, service catalog information and service level metrics to services users. Conflict resolution and stakeholder involvement.

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Software vendor literature emphasises technology solution capabilities and seldom address the people and process aspects of governance. This gap has a profound impact in achieving reuse, which, then, negatively effects ROI measurements for SOA adoption. Multi-level SOA governance: SOA governance has multiple implementation levels; each mandating involvement from distinct groups of stakeholders. The table below summarises the typical levels and the related governance activities that are performed: The various groups defined in governance activities need access to different sets of information on deployed and available services at different points of time. Service specification documents explain the externally visible features of the service to a service consumer and are mostly limited to the interface details (WSDL documents in case of Web services). Better and more comprehensive service specification documents may additionally define service level characteristics like reliability, policies, and state. Service specifications focus on describing the service in its static form but fall short in providing a real-time view of the deployed service being used as a reusable asset in the enterprise. The service registry addresses this shortcoming. The service registry - The service registry has at least two anteced-

“Software vendor literature emphasises technology solution capabilities and seldom address the people and process aspects of governance.”

ents: first is the document repository and the second a UDDI registry. The term service registry may be a misnomer since the registry is also a repository of service meta-data. A service registry is quite useful in the following stages of the service lifecycle as an information store of service meta-data:

A case for standards Work is underway by consortia like OASIS, IEEE, W3C, IETF and WS-I, to define standards and specifications around SOA. While some may view it as standards overload, there undoubtedly is a case for defining guidelines on service specification and service life-cycle processes. Best practices for using service registries in SOA governance and feature-set specification of a service registry are useful too. Standards, specifications and guidelines when defined, provide a good framework for using the service registry in SOA governance and consequently realising the benefits of SOA adoption.

—Regunath Balasubramanian leads the Technical Achiever Program at MindTree and is a practicing architect. He is a big advocate of open source. This feature was first published on www.cioupdate.com

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CIO DISCUSSIONS

Event

Security is a TOP PRIORITY Audience in Delhi taking notes

Geetaj Channana, Editor (Online), CTO Forum, Setting the tone of the discussion in New Delhi

Audience in rapt attention

TVS Murthy, Global Delivery Head, Information Risk Management Advisory Practice, TCS and Bobby Jacob, Solution Architect, Novell answering questions

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uring the past decade, organisations have invested millions in their security and compliance management programmes. Unfortunately, the reality is that they've spent too much but still do not have adequate security or may be still struggling with regulatory compliance issues. Since mixed IT environments are a reality in most organisations, CSOs have many issues in harmoniously integrating people and technology. Solving this challenge is quite a task! Realising the need of the hour, CTO Forum, along with Novell and TCS, organised a series of roundtable discussions in Delhi and Mumbai which witnessed Heads of Security sharing their experiences and deliberating on new and alternative approaches.

CIO DISCUSSIONS

Panel of experts emphasising the need for customised security solutions

Breaking the ice before the session

Most delegates said that high costs have been a major deterrant to implement new security measures. The entire industry has witnessed major cut backs on security budget during the downturn. On top of that, the evolution of internet and multi channel access points has increased the risks associated with Internet use. The general concern among the top Security Heads attending the event was that there were many serious security risks in an environment of heterogeneous IT infrastructure. Therefore, there is a need for a solution to integrate various IT systems and make it work as a single entity without compromising on the business needs. Bobby Jacob, Solution Architect, Novell, pointed out that while implementing security one encounters a dilemma when taking decisions on what needs to be secured and to what extent. He said that it is important for the security solution vendors to understand the needs of each industry and address these concerns depending on their significance for that specific company. TVS Murthy,Global Delivery Head, Information Risk Management Advisory Practice, TCS, discussed the solutions provided by Sentinel, the Security Incident and Event Management Solution, which takes care of the key business concerns like cost optimi-

Expanding horizon by networking with the peers

Bobby Jacob, Solution Architect, Novell, explaining the importance of integration in Security solutions

sation, fraud detection, compliance, risk reduction and real time monitoring. In larger organisations, implementing governance and appropriate control measures pose major challenges. It was observed by most of the delegates that

Ashwini Mishra, Resident Editor (West and South), CTO Forum, introducing the panel in Mumbai

employees often ended up being the weakest link in the security. And since most of the security solutions use technology, the resolution of this problem falls under the purview of IT. In such cases governance and identity access management needed to be integrated to provide a comprehensive solution. A layered approach to security was the best option, experts from Novell and TCS felt. Overall the discussion was very interesting and provided deep insight into the use of customised security solutions.

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CIO DISCUSSIONS

Event

Unified Storage Architectures Rahul Neel Mani, Editor â&#x20AC;&#x201C; CTO Forum, introduces the panel to the participants.

All the panelists look attentively as V. Subramanium, CIO, OTIS makes his point.

K N Prakash, Head IT, LG Soft shares his thoughts on the subject

Participants glued to the riveting conversation between the panelists

t is a no-brainer when we say that there is information overload in the world. But, have you ever imagined, by how much? There was 5.2 million Terabytes of data generated in the world till the year 2003. By the year 2008 we were already creating 511 million Terabytes of data every year. And, in 2009 we created 1 Zetabyte or 1 billion Terabytes of data. This information overload is being fuelled by consumers and enterprises alike. Be it Facebook that hosts more than 40 billion photos to Walmart that carries out more than a million customer transactions every hour.

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CIO DISCUSSIONS

Surajit Sen, NetApp replies to queries from the other panelists and participants.

Technology leaders are working on providing solutions for this data explosion through various means – with one of the important ones being Unified Storage Architectures. CTO Forum tied up with NetApp to host a series of events on the said topic in Delhi, Mumbai and Bengaluru. Focussed at IT managers the events had CIOs from leading companies in these cities discussing on this topic. The subject sparked engaging conversations between the CIOs themselves, the editors and panelists from Netapp. The discussions spanned across topics including migration, virtualisation, unstructured data and more. While talking about the challenges that an organisation faces in the current environment, Syed Ahemed Infrastructure Head, ING Vysya, said, “ The three areas where we face challenges are in the area of availability, performance and security. Any of these cannot be compromised whether it is a bank or any other institution. To be able to say that the data is available 24x7, you are looking at classifying data, being able to manage and then recover. While the need is increasing for innovations in managing data, it is also important to secure the ever increasing data store. But when you come to security there is always a trade-off between the amount of security and the level of performance that architecture can deliver.” Answering to a question on migration being a challenge for organisations Ravinder Vaswan, Head IT operations, TI, said, “If you talk from the migration perspective it is a bigger challenge because we do not have any standard tools. If you talk about movement in heterogeneous environments, no vendor gives you a specific migration tool that can help you move this data.” Replying to the queries Syed Masroor from NetApp said, “When you are migrating data you are bringing in newer applications and newer services too. So, the challenge exists at various levels – application, connectivity, user experience and storage. So its possible to do a migration which is a lot less

Winners of Blackberry Smartphones

Chiranjeev Singh, NetApp, answers to queries from CIOs and other participants.

Delhi - Chiranjeev Singh, Netapp presents the Blackberry to Praveen Kumar, Avantha Technologies

Bengaluru - Syed Masroor, NetApp presents the Blackberry to S Sunder Raj, G.T.R.E

Mumbai - Surajit Sen, NetApp presents the Blackberry to A.Venkat Krishnan, Mahindra Ugine Steel Co.Ltd.

painful, it involves using the right services. There is definitely a cost to that, but the cost has benefits.” The Delhi event started off with a question on the panel’s view on the future of storage architectures. Parvinder Singh, VP & Head - IT Max New York Life, said, “Taking the long term into consideration storage architectures should be able to give you a consolidated view of things.” Continuing to answer the question, Mr. Vijay Sethi, CIO, Hero Honda Motors said, “The problem is not really in the structured part of the data, that is taken care of; but the major challenge comes from how do you take care of your unstructured data. Right now, we have to manage the SAN, NAS and DAS separately; I should have a single console from where I should be able to manage all these things.”

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THINKINGBEYOND CHRIS CURRAN | chris.curran@diamondconsultants.com

CHRIS CURRAN is Diamond Management & Technology Consultants’ chief technology officer and managing partner of the firm’s technology practice. He writes the CIO Dashboard blog at www.ciodashboard.com

5 Things I’ve Learned About Twitter

Virtual conferencing, making new contacts, job hunting – all with tweets. But not all CIOs are clued in yet. I STARTED the CIO Twitter Dashboard a year ago as an experiment to see what IT leaders were doing and saying with Twitter. Since then, it has grown to about 200 strong. While there are many more IT leaders and experts using Twitter, I have kept this list focused on CIOs or those who are the senior most IT leaders in their organisation – please let me know who I’ve missed and I will update it. A year ago, there were a few directories out there, but none were moderated and, as a result, filled with consultants (guilty!) and former CIOs. Since then, Twitter introduced their lists and several good CIO/IT leader inventories have emerged, like Abbie Lundberg’s. With all of the interest in social media and enterprise collaboration, you would think that more CIOs would be actively experimenting and learning with the major channels out there, especially LinkedIn, blogs and Twitter. But, in our latest Diamond Digital IQ study, we found that fewer than 10% regularly use Twitter and only 20-30% actively use blogs and LinkedIn.

Here are some observations based on a year of studying CIOs on Twitter: 1.CIO topics are very well-represented, largely through pointers to blogs and news. Twitter can be used to access the latest news and opinions on everything from cloud computing to the iPad’s impact on the enterprise and everything in between. Once you find a few people whose opinions you value, like Peter Kretzman, following them and their tweets really helps to home in on good content. A significant volume of CIO-related traffic is job related, maybe 10-20 percent. Some are senior IT leaders searching for a new job and some are leaders looking for people to join their teams. Demonstrating Twitter’s sharing ethos, John Moore, a Boston-based software CTO, sponsors a job sharing “event” every Wednesday. People with jobs share them by adding the #work wednesday tag to their posts. 2.Many CIOs have protected their Twitter streams which greatly limits the ability to be discovered by others you don’t know and puts a burden on you to manage your

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Many CIOs have protected their Twitter streams which greatly limits the ability to be discovered by others you don’t know

followers closely (not to mention, totally missing the point of Twitter!). There are many tools that can be used to filter out unwanted followers tweets, like Tweetdeck, which is my tool of choice. 3.One of the most interesting uses of Twitter is to hold a virtual conference or chat. I participated in one a few months ago on IT project success and failure using TweetChat. 4.Perhaps the most important to me personally has been the ease with which I have found opinionated and deeply experienced people to discuss the CIO/IT issue of the day. I’ve met and formed relationships with people like Peter Kretzman, Michael Krigsman, Andy Blumenthal, Abbie Lundberg, Chris Potts and Steve Romero and have met all but Peter and Andy face to face. I think that more CIOs and IT leaders are using and getting professional value from social media than they were a year ago. But, the value to most leaders is still unclear. Do you think this will change or will Twitter become the next MySpace?

THE TRUTH ABOUT EA

T H I N K I N G B E YO N D

The Truth About EA

Busting 5 enterprise architecture myths. FIRST the five myths: 1.EA is what IT uses to plan its technology 2.You can’t measure it 3.Architects only pontificate, they don’t work 4.EA doesn’t work with an SDLC 5.If you subscribe to SOA, you don’t need EA

EA is what IT uses to plan its technology A few years ago, I worked with an insurance company to review its enterprise architecture strategy. The acting CIO was led to believe that they were ready to embark on a multiyear business process and technology replacement and asked for an independent blessing. Their chief architect and team had spent almost a year developing a report that charted their technical architecture standards – Web technologies, integration standards, development tools, databases, etc. – without any business input, business priorities, business functions, or even hard schedules! First thing’s first – a good EA program starts with a representation of what the business units and functions want to do (objectives, metrics, a strategy of some kind) and uses it as a basis to understand what business capabilities are needed and then build an business and technology blueprint and plan. It’s much more than technical planning and standards. When technology leads, it’s not enterprise architecture.

You can’t measure enterprise architecture Why don’t your constituents get excited with your EA dashboard that reports things like “number of gates passed” and “number of applications

using our ETL standards?” Maybe it’s because they don’t care? What can and should be measured is progress in delivering the prioritised business capabilities developed during planning. Once the capabilities are delivered, the relevant business metrics are also measured. If your approach is properly business driven and you measure and report against those business capabilities, not only can you measure the delivery of them, your business partners will demand it. Not to say that the other internal EA operational things shouldn’t be measured, just keep them to yourselves to learn about and tune your processes. When EA is not business driven, you can’t measure it or what you measure is meaningless to the business.

organisations like The Open Group and the US government are in the frameworks and processes that help us boil down extremely complex business models into more manageable pieces. The risk with yet another set of processes is that they exist off by themselves, rather than integrated into our day to day work. EA processes should live in two places, right after the high-level business strategy directions and priorities and embedded in the program, project and SDLC management processes to ensure that the cross system blueprints are implemented in each initiative as envisioned. So, for EA to work, it MUST not only work with the SDLC, but all other program and project level processes and methods.

Architects only pontificate, they don’t work

If you subscribe to SOA, you don’t need EA

Another by-product of the technology-only approach is that architects don’t become critical resources that drive new ideas and solve business problems. In one financial services company, this led to a team of over 20 who only met with vendors, did some technology prototypes and wrote white papers. Many of these architects had deep knowledge of the business and legacy technology environments but were wasted in a function that few knew about or got value from. The companies that do architecture best “staff” the majority of the architects to projects as core team members. This way, they are on the ground adding their expertise every day.

It is tempting to try to adopt an architecture model like SOA (or cloud computing for that matter) and try to have it dictate many of your architecture decisions. But if business leads in EA, it will dictate the appropriate styles and models of computing. Choosing an SOA model will only address a small portion of the overall technical architecture and may not be needed or relevant for some business areas in the overall EA blueprint. These myths highlight two primary errors in attempts to apply EA: 1.Technology, not business driven 2.Separate, not integrated set of processes, people, tools EA often fails to reach its potential because so much emphasis is put on “EA” itself and not on its outcomes. Focus more on solid, collaborative business planning and let EA fade into the background.

Enterprise architecture doesn’t work with an SDLC Much of the value of the formalisation of enterprise architecture by

The companies that do architecture best “staff” the majority of the architects to projects as core team members

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Author: Vinnie Mirchandani

HIDE TIME | BOOK REVIEW

“Average time from question to answer is <30 mins.”

The New Polymath. Our

sustainability problems may soon vanish if the Innovation Renaissance seen on the horizon is to be believed in. THE New Polymath, by Vinnie Mirchandani, is an ambitious, wide-ranging and celebratory exploration of technology innovation in the 21st century. The book epitomises the title (a polymath is someone who excels in many disciplines) in taking on the distinct, though certainly overlapping, disciplines of infotech, cleantech and healthtech – and all the various technologies and practices that support them. It evokes the spirit of polymaths throughout history (Sir Isaac Newton, Benjamin Franklin, Hypatia of Alexandria, and the ultimate polymath, Leonardo da Vinci) and seeks their equivalents in our own times in both individuals (Bill Joy, Nathan Myhrvold) and organisations. It sets up a parallel between our age and the 14th century, when the Late Middle Ages, or Dark Ages, gave way to the Renaissance, or rebirth. Mirchandani is hopeful that we are entering another Renaissance. There is much to like about The

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New Polymath. It denounces, in no uncertain terms, the idea that there’s a lack of innovation going on; the book is a veritable firehose of innovation examples, presented by someone who knows what it takes to make innovation happen inside organisations large and small. What I like most about the book is Mirchandani’s premise that we are in a kind of modern day Dark Ages with the potential for another great Renaissance. He outlines the paradox that we have so far been unable to solve the “wicked problems” of our time despite great technology abundance. He focuses his argument on the enormous waste in technology spending ($3 trillion a year on information technology and telecom; printer ink for $5,000 a gallon; support and maintenance agreements that amortise to over $10,000 for every 20-minute help-desk call); the lack of agreement around sustainability; and the lack of access to healthcare for many people around the world.

ABOUT THE REVIEWER

Abbie Lundberg is President of Lundberg Media and a business technology analyst, editor and professional speaker with 21 years experience reporting and commenting on the use of technology in business. She led the award-winning CIO editorial team as Editor in Chief from 1995 through 2008.

But Mirchandani fails to address one of the greatest barriers to solving these problems: the market forces that drive the majority of our technology innovation. As long as consumers demand and are willing to pay for the next new advance in entertainment and convenience and stockholders demand the greatest possible returns, that’s where the innovation focus will be – not on solving the big problems that the average consumer is able to ignore from the comfort of his own couch. Perhaps the problem is less one of ability and more one of priorities, focus and resolve. Each chapter of the book concludes with a recap of its main points – which is good, because the examples are many and diverse, and the recaps create a sense of order and progression to the book’s themes. The final chapter brings these all together into ten grand challenges for readers who want to develop their own ability for compound technology innovation.

HIDE TIME | CIO PROFILE

One Life. Make the Most of it DEEPAK CHAUHAN

CRAZY deadlines. Gruff bosses. No appreciation. An all-too familiar workplace setting. No wonder many employees buckle under pressure or choose to leave. But Deepak Chauhan, CTO, Digital Media, Zee Network doesn't want any of that to happen to his team. He realised the value of talent many years ago when he had his own startup providing services and consultancy in the open source domain. “I realised that unless I had good talent I wouldn't get business.” In larger organisations we take this for granted, Chauhan observes. Chauhan's entrepreneurial background has also given him fiscal discipline – a trait not very common among professionals in this field. “I needed to have the financial plan for the month ready in the first few days of the month,” No matter how the company was performing on other parameters, if the working capital was not arranged, operations would grind to a halt. Those lessons have shaped Chauhan's mentality in his current role. “I always think from a business perspective before implementation any technology,” says Chauhan. “The advantage of technology is that you can deploy it in multiple ways but the challenge is in deploying it in a cost effective way that doesn't compromise on

IF MUSIC BE THE FOOD OF LOVE: Chauhan likes to play soft gazals to unwind. His favourite album is Jagjjt Singh's Khwahish. His favourite movie is Guide, for the good music and Waheeda Rahman. THE CLASSIC IN HIS MIND: Reading is another of Chauhan's favourite hobbies. He found The Last Mughal by William Dalrymple quite fascinating. “It's a well

researched book on the aftermath of 1857 Mutiny in India, the event that altered the British policy towards India.” FEELING THE PULSE: In the course of traveling and meeting new people, Chauhan has one ear cocked to what people have to say about Zee. “This is always there on my mind when we redraw our strategy,” he says.

its scalability,” he says. In 2007, during a lean period in his business operations, Chauhan closed down his operations to join the Zee Group's entertainment arm Digital Media Convergence Limited (DMCL) as its CTO. It fell to Chauhan to launch

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PHOTOS BY JITEN GHANDHI

CTO, Digital Media, Zee Network

HIDE TIME | CIO PROFILE

Snap Shot the group's video portal www.mypopkorn.com and also to establish a Web 2.0 and mobile presence for the company. Chauhan ensured that the company's brands are equally enjoyed on the Internet as well as the broadcast space. Critical times can throw a strain on the organisation. Recently, as DMCL went through some internal restructuring, Chauhan faced a tough test — of putting to rest the rumours that were floating around regarding the company's future. Although he had several projects on his plate, he made sure that communication with his team members got the appropriate attention. Chauhan would have regular briefings with his team members, so necessary, as he puts it “to get rid of their fear” about what direction the company could possibly take. Explaining the changes in the context of the long-term plans would help dispel many of the fears, he says. “Lack of transparency creates more questions than answers.” Chauhan finds it very important to identify and work with the right kind of partners to leverage on available strengths. Chauhan's team has partnered with Adobe to share knowledge and improve each others processes. “We are privy to their new developments and latest innovations in the pipeline which help us to chart out our long term plans,” says Chauhan. Chauhan may have taken several strides over the years, but there was a time when he had stumbled. Back in seventh grade, he failed an exam. Till then, Chauhan had never been a star performer, but the red ink and the associated stigma jolted him. “That moment was an eye opener. My killer instinct took over,” he says, as he set out to prove himself. The event proved to be a gamechanger as his grades steadily improved then onwards. —By Aditya Kelekar

CTO FORUM 21 JUNE 2010

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Out to have a good time. Chauhan likes going out on long drives with his family. Chauhan's wife, Swapna, a teacher by profession, and his school-going son, Sunchit, share his passion for traveling. This May they toured to remote places in Himachal Pradesh — Saharan and Narkanda, staying in small camps in the midst of nature. “The road to Jalori pass is absolute heaven,” he says. My family, my life. Weekends are reserved for his family, Chauhan says. “I manage my work schedule so that weekend is not disturbed. I have a very supportive family who leave me to my work on weekdays but demand my time on weekends.” Chauhan likes going with his son for a swim and also plays squash with him. Bouncing back. Chauhan believes in If you are not making mistakes, then you are not doing anything. I am positive that a doer makes mistakes, he says.

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

Head In the Clouds.

ILLUSTRATION BY ANIL T

The Great Value Question

THE clouds are just that, cloudy. Hard to figure out what anyone is talking about, or why. I’m here to help. Until the market BELIEVES that it A: has a problem that needs to be solved and B: requires the cloud to be the answer to that problem, there will be no real business. The good news, is I believe that reality is coming, and there will be legit business opportunities here. For the big dogs, like EMC, they (smartly) want the cloud to be private, because the private cloud is really “IT”–and they do well when IT is buying stuff. They want to arm the public cloud providers, who are essentially the IT departments of service providers, where (stunningly), EMC does well. For the small guys, the problem is the same, but they can’t really afford to wait around for the market to figure out their relevance. Nasuni, Cirtas, TwinStrata, and StorSimple I know. Gladinet and CTERA are in the space, but I’m less

CTO FORUM 21 JUNE 2010

thectoforum.com

familiar with them. You will hear from more larger players shortly. All of these guys want to be the “gateway” to the cloud. All of them sound cool in my opinion. Not all of them will make it. What each will need to do is to tell you, very specifically, what problem they solve that you are willing to part ways with your money to do so. Until then, they will be cool, and no one will use them. Each needs to realise that “cloud” isn’t a solution to a problem. It’s a means–or an enabler–to a solution. What each needs to focus on is the actual problem. When I read through StorSimple’s site, I see reference to Microsoft apps, like Sharepoint. They should spend time on that space and in identifying that problem. There are lots of Sharepoint users, and lots of problems. Show me how your gizmo/ cloud combo solves those problems. I love the Nasuni play–they effectively give you an endless Filer. They (as do most) cache locally on premise, present a file system, and then age files out to the cloud(s) all

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

de-duped and economical. If you think about it, it’s the perfect tiering model. Why would you ever put any more file data on your SAN (which people do) at 10X the price? The block equivalents, like TwinStrata, do the same thing–but the interface is iSCSI. Backup seems to be a nice app for them to focus on. The trick is to find the applications that are causing pain, and explaining how these solutions ease that pain. If there is no pain, it won’t matter if it’s cheaper, better, or faster. If you have a SAN or File environment and can’t afford (economics) or can’t sustain (management) it, those are problems. If you need/want to back up to a dedupe target but aren’t going to pay for Data Domain, that’s a problem with a solution. Focus on the problem, not on the solution. A solution without a problem is like when people advertise Pampers diapers to me. I’ve had chemo, radiation, and a vasectomy. If I need diapers, it will be Depends, not Pampers.