CIO June 15 2013 by Sreekanth Sastry

VOL/08 | ISSUE/08 AVINASH ARORA, Director ICT, New Holland Fiat India, proposed a radical change to the way the company supplied tractors to dealers and used three different tactics to get the idea sold.

BUSINESS

TECHNOLOGY

LEADERSHIP

MID-YEAR REVIEW SURVEY: THE TRENDS CIOs DIDN’T SEE COMING

The

Perfect

Pitch The three buy-in challenges most CIOs don’t like talking about—and how to beat them. Page 36

JUNE 15, 2013 | `100.00 W WW.CIO.IN

VIEW FROM THE TOP S.Y. Siddiqui shares IT’s role in retaining talent at Maruti.

FAST COLORS Asian Paints gets sales data analysis 14 times quicker.

Page 68

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FROM THE EDITOR-IN-CHIEF

PUBLISHER, PRESIDENT & CEO Louis D’Mello ASSOCIATE PUBLISHER Rupesh Sreedharan, Sudhir Argula E D I TO R I A L

A [Not So] Grimm Tale New ideas and new ways will flourish only when your workmates are willing to fail as well. Many moons ago, in the fair land of Bengaluru, fire was used only for boiling the beans that gave the kingdom its name. The king promised a big reward to anyone who would use it otherwise. Now there lived in the kingdom a band of intrepid souls, hard-working men and women, calling themselves the Titans. They declared that they were willing to undertake the enterprise. We shall make trinkets with it, they said. Trinkets that tell the time. Before long, they succeeded in doing so and were indeed rewarded by the king. But even as he did so he set them a new task. The trinkets, he said, must be made of gold as well, and not just tell time. The Titans swore to do so, but wondered how. To this end, The Titan elders sent word to each group that worked on the trinkets; to those who stoked the fires, and those who sold them, and even to those who shaped the baubles. All new thoughts, big and small will be rewarded, they said. And, the thoughts did flow, first rapidly, then more slowly. But a time did come when the elders realized that only a few were thinking new thoughts. So they helped the rest of the Titans to improve their thinking and set them challenges to do so. Along the way, they also passed on lessons to all Titans big and small, elder and young, on why it was also important to fail and learn from it; to not be afraid to think new thoughts. They found that gold could only be melted in hard, black crucibles of carborundum and succeeded in shaping the gold into beautiful ornaments. But the crucibles had to be discarded after a while, with gold trapped in them, that could just not be removed despite many attempts. One fine day, a young Titan called Rajsekhar rented a dragon from one of his neighbors who used the dragon for stomping roads into shape. Riding the dragon, Rajsekhar crushed the crucibles into fine dust, from which the gold could now be melted out—all five kilos of it! The elders were happy, not just because they’d succeeded in getting all Titans to think new thoughts, but also because they realized that good ideas were not the preserve of only the most qualified of their tribe. Here begins another story…

EDITOR-IN-CHIEF Vijay Ramachandran EXECUTIVE EDITOR Gunjan Trivedi, T.M. Arun Kumar ASSOCIATE EDITOR Yogesh Gupta DEPUTY EDITOR Sunil Shah ASSISTANT EDITOR ONLINE Varsha Chidambaram SPECIAL CORRESPONDENTS Radhika Nallayam, Shantheri Mallaya PRINCIPAL CORRESPONDENTS Gopal Kishore, SENIOR CORRESPONDENT Anup Varier, Sneha Jha CORRESPONDENTS Aritra Sarkhel, Debarati Roy, Eric Ernest, Ershad Kaleebullah, Shweta Rao, Shubhra Rishi CHIEF COPY EDITOR Shardha Subramanian SENIOR COPY EDITOR Shreehari Paliath COPY EDITOR Vinay Kumaar LEAD DESIGNERS Jinan K.V., Suresh Nair, Vikas Kapoor SENIOR DESIGNER Unnikrishnan A.V DESIGNERS Amrita C. Roy, Sabrina Naresh SALES & MARKETING PRESIDENT SALES & MARKETING VP SALES GM MARKETING MANAGER KEY ACCOUNTS

SENIOR MANAGER PROJECTS MANAGER- SALES SUPPORT ASST. MANAGER PRODUCTS SR. MARKETING ASSOCIATE MARKETING ASSOCIATES

PROJECT CO-ORDINATOR LEAD DESIGNERS DESIGNER

Sudhir Kamath Parul Singh Siddharth Singh Jaideep Marlur, Runjhun Kulshrestha Sakshee Bagri Ajay Chakravarthy Nadira Hyder Dinesh P. Dilip Gopinathan Anuradha Iyer, Benjamin Jeevanraj, Lavneetha Kunjappa Rima Biswas, Saurabh Patil Jitesh C.C., Pradeep Gulur Lalita Ramakrishna

EV E N TS & AU D I E N C E D EV E LO P M E N T SR. MANAGERS PROJECTS Ajay Adhikari, Chetan Acharya, Pooja Chhabra, MANAGER Tharuna Paul SENIOR EXECUTIVE Shwetha M. PROJECT COORDINATORS Archana Ganapathy F I N A N C E & O P E R AT I O N S FINANCIAL CONTROLLER CIO SR. MANAGER ACCOUNTS SR. ACCOUNTS EXECUTIVE MANAGER CREDIT CONTROL SR. MANAGER PRODUCTION SR. MANAGER IT

Sivaramakrishnan T. P. Pavan Mehra Sasi Kumar V. Poornima Prachi Gupta T.K.Karunakaran Satish Apagundi

All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher. Address requests for customized reprints to IDG Media Private Limited, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027, India. IDG Media Private Limited is an IDG (International Data Group) company.

Vijay Ramachandran, Editor-in-Chief vijay_r@cio.in 2

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

Printed and Published by Louis D’Mello on behalf of IDG Media Private Limited, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027. Editor: Louis D’Mello Printed at Manipal Press Ltd., Press Corner, Tile Factory Road, Manipal, Udupi, Karnataka - 576 104.

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contents JUNE 15, 2013 | VOL/8 | ISSUE/08

Case Files 50 | Asian Paints IN-MEMORY COMPUTING How Asian Paints used in-memory computing to make analyzing sales data 14 times faster—empowering the company with unbeatable agility and real-time insights—to stay ahead of its rivals and hold a permanent spot at the top. By Debarati Roy

92 | Thermax HOSTED SHARED DESKTOPS If energy major Thermax wanted to innovate and stay ahead of competition, it needed to protect its intellectual property. Hosted Shared Desktops helped it get there. By Sneha Jha

94 | NABARD

3 6

DATACENTER Stuck with legacy infrastructure, NABARD was battling downtime and struggling to support business growth. How the bank's IT head changed that. By Shweta Rao

COVER PHOTO BY SRIVATSA SHANDIL IYA \ COVER DESIGN BY UNN IKRI SHNAN AV

36 | The Perfect Pitch

6 8

COVER STORY | BUY-IN A look at some of the buy-in challenges that most CIOs don’t like talking about—and how to beat them. By Eric Ernest

88 | Clueless in the Boardroom FEATURE | CIO ROLE Boards of directors still don’t understand the role that IT can play in driving business innovation. It’s the CIO’s job to change that. By Kim S. Nash

54 | Fast Food Gets Personal FEATURE | INNOVATION The future of burger joints and smoothie bars involves customer-friendly technologies that will make fast food more of a service and less of a destination. By Kim S. Nash 4

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

VIEW FROM THE TOP: “IT has contributed greatly by automating the idea-collection process, thus aiding innovation,” says S.Y. Siddiqui, COO-Admin (HR, Finance, IT, Company Law & Legal), Maruti Suzuki.

VO L/8 | ISSUE/08

DEPARTMENTS 2 | From the Editor-in-Chief A [Not So] Grimm Tale By Vijay Ramachandran

8 4

Security Budget | Defending Funding Big Data Analytics | A Big Boost to Security

95 | Essential Technology Cloud Computing | Seven Deadly Cloud Sins Vendor Management | Cloud Matchmaker

84 | McSupply: On Top of the Food Chain CXO AGENDA | SUPPLY CHAIN Amit Jatia, Vice Chairman, Hardcastle Restaurants—the company that manages McDonald’s in South and West India—shares the IT secrets behind the company’s complex supply chain. By Shubhra Rishi

Columns

16 | Alert

98 | Endlines Mobility | Apps and Oranges By Lauren Brousell

20 | For Their Eyes Only FRANKLY SPEAKING Most governments and some commercial organizations are tapping their inner Big Brother. Are technological advancements and legislative indifference pushing privacy to extinction? By T.M. Arun Kumar

29 | Social Upliftment THINK TANK Without a digital media strategy, your organization is shooting in the dark. And it’ll continue to do so till your competition beats you. Here’s how to take your social media strategy to the next level. By Jonathan Hassell

27 | Augmented Experience LEADING EDGE Much like many technologies that have gained traction in the recent past, augmented reality also packs in a lot of potential. Here’s why CIOs should consider adopting it before it’s too late. By Gunjan Trivedi

VOL/8 | ISSUE/08

2 3

EXECUTIVE COACH Professor of Leadership, Hal Gregersen explains how organizations can foster a culture of innovation even at grassroot levels, through regular practice.

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VO L/8 | ISSUE/08

E D I T E D B Y V I N AY K U M A A R

NEW

HOT

UNEXPECTED

Stay Car-nected Always “Just the nature of the driving experience, how it works and the requirements for recharging and for car management, essentially, electric cars have to be connected,” says Matt Hatton, director at Machina Research. Like many operators, Vodafone has increased its focus on machine-to-machine

communications, and connecting cars is a part of that push. Vodafone also recently announced MyPark Space, an intelligent parking guidance system that keeps track of available parking spots via M2M communication. Parking spaces must first be equipped with sensors and a network connection, which together can tell a cloud-based system when a space has become vacant. Using the MyPark Space app, drivers can locate a parking space close to their destination, and then hurry to snap it up. “In terms of connected cars overall, the momentum is certainly growing. Top-end marks like BMW and Audi are increasingly getting to the point where all their vehicles are going to have some form of connectivity,” Hatton says. —By Mikael Ricknäs

TRENDLINES

C O M M U N I C A T I O N S Connected cars are becoming increasingly common around the world. In India, owners of Mahindra Reva’s e2o electric car can now check their battery charge, control airconditioning, lock or unlock doors and locate the nearest charging station from their smartphones. The car also alerts its owner if the parking brake is off or a door is left unlocked, according to Vodafone, which is supplying the machine-to-machine communication services for the e2o. The e2o is the first Indian car, among the few worldwide, to allow car owners to communicate with their cars at anytime from anywhere, claims Mahindra Reva. The company thinks that connecting cars will improve both convenience and security.

Detector Sniffs Out Mobiles Without SIM

VOL/8 | ISSUE/08

The Manta Ray could also have a role in espionage, detecting phones hidden in hotel rooms or even classic miniature “bugs,” though that’s not the company’s target market, says Schober. On a more pedestrian scale, it could be used in high schools where cell phones aren’t allowed. Metal detectors can’t distinguish between cellphones and other objects made with metal, and some phones have only small amounts of metal to be detected, says Schober. Conventional phone detectors only work when phones are turned on because they depend on sensing the cellular signals coming out of the phone. The Manta Ray uses neither of these techniques. Instead, it identifies specific components that are found in all cell phones. Schober wouldn’t name those components or say much else about how the Manta Ray works, other than that it uses an algorithm developed by Berkeley Varitronics to discriminate between phones and other substances nearby. — By Stephen Lawson REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

ILLUST RATION BY MASTERF ILE.COM

S E C U R I T Y Turning off cellphones or even locking them in metal boxes won’t be enough to keep them hidden with a new phone detector. The Manta Ray, made by Berkeley Varitronics Systems, can find phones through walls and other barriers even if their batteries and SIM cards are removed. The materials that the handheld detector can penetrate include aluminum, brass, copper, concrete and plasterboard, according to the company. The Manta Ray is designed for use in locations where phones are forbidden. A major market for such phone detectors is in prisons, where inmates often attempt to smuggle in handsets, but restricted sites also include sensitive government or corporate facilities that want to prevent unauthorized photography or electronic transfer of secrets, according to Scott Schober, president and CEO of Berkeley Varitronics. Instead of using invasive pat-downs or less-discriminating metal detectors, guards could do quick scans with the Manta Ray, which has a range of about six inches (15 centimeters), he says.

S P A C E Virgin Galactic is now one flight closer to space tourism after launching its first rocketpowered flight of a space vehicle. The company, which is looking to be the world’s first commercial spaceline, is in the final phase of vehicle testing after launching its SpaceShip Two. On the day of its launch, SpaceShipTwo lifted off aboard its carrier craft, dubbed WhiteKnightTwo. After 45 minutes and at an altitude of 47,000 feet, SpaceShip Two was released from its carrier and its pilots ignited its rocket. The rocket engine burned for an expected 16 seconds, propelling the spacecraft to an altitude of 55,000 feet. Virgin Galactic reports that during the rocket burn, the spacecraft went supersonic, achieving Mach 1.2. “The first powered flight of Virgin Spaceship Enterprise was, without any doubt, our single most important flight test to date,” informs Virgin Galactic founder Richard Branson. “Today’s supersonic success opens the way for a rapid expansion of the spaceship’s powered flight envelope, with a very realistic goal of full space flight by the year’s end.” Branson also goes on to call the test flight “history in the making.” The entire flight test lasted a little more than 10 minutes, and ended with a smooth landing. “The rocket motor ignition went as planned, with the expected burn duration, good engine performance, and solid vehicle handling qualities throughout,” says Virgin Galactic president and CEO George Whitesides. “The successful outcome of this test marks a pivotal point for our program. We will now embark on a handful of similar powered flight tests, and then make our first test flight to space.” Virgin Galactic is also planning on making its first space flight before the end of this year and is already taking reservations. People can sign up to be what the company calls Pioneer Astronauts, which would enable them to be among the first 1,000 people to go into space with the company. It also requires a full upfront payment of $200,000 (about Rs 1.1 crore). Virgin Galactic notes on its website that these seats are nearly sold out. Those interested also can sign up for the Spaceship Charter program, which costs $1 million (about Rs 5.48 crore) and gets the buyer an exclusive flight with five friends.

— By Sharon Gaudin

Robots Learn to Fly R O B O T I C S Researchers at Harvard University’s School of Engineering and Applied Sciences have developed an insectlike robot that achieves flight by flapping a pair of tiny wings. The robot is small enough to sit on the tip of a finger and weighs 80 milligrams—roughly 1/30th the weight of a US penny coin. Its wings, which have a span of 3 centimeters, can flap at up to 120 times per second. The robot, which is described in a paper published in Science, was partially funded by the National Science Foundation and the Wyss Institute for Biologically Inspired Engineering at Harvard. Because it’s so small, technology for the robot didn’t previously exist. “We had to develop solutions from scratch, for everything,” states Harvard Professor Robert J. Wood. “We would get one component working, but when we moved onto the next, five new problems would arise. It was a moving target.” For example, while large robots run on electromagnetic motors, they are impractical at this scale because of their size, weight, and power consumption. So, to control the flap of the wings, the team used piezoelectric actuators, which are ceramic devices that expand and contract with the application of electricity. The robot represents more than a decade of work by several teams of researchers. It can be traced back to work done by Wood when he was a graduate student at the Berkeley Biomimetic Millisystems Lab. The California lab was working on similar technology. Next, the researchers hope to develop more aggressive control maneuvers and then to progress to untethered flight. Currently, a fine cable carries power and control signals to the flying bug, but researchers are hoping to develop a tiny brain and power source that will enable it to fly without wires. Harvard University’s Office of Technology Department is already working on commercializing some of the technology used in creation of the robot. —By Martyn Williams

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IMAGE COURTESY: P CWORL D.CO M

TRENDLINES

2013: Space Odyssey

New Age Beer Buddies Budweiser is trying to make it easier to make friends—Facebook friends— when you’re drinking beer. The company’s Brazilian development team has come out with the Buddy Cup, a beer glass with an embedded chip. When two Buddy Cups are clinked together, they automatically send friend requests to the users’ Facebook pages. “Budweiser loves to share its great times with its fans,” says Manuel Rangel Machiavello of Budweiser Brazil. “The Buddy Cup brings together the in-bar experience with Facebook, the most used social media channel for our consumers.” According to Budweiser, users scan a bar code on the bottom of the cup and provide information from their Facebook profiles so the cup can connect to their Facebook accounts. “We did a first pilot event here in Sao Paulo to test the prototype,” informs Machiavello. “It was an instant success, and we had the chance to register users’ reactions as well. Lots of friends were made that night. Based on the positive reactions, we are looking at taking this to bigger events in future.” Budweiser’s smart beer glass comes on the heels of Google’s plans to develop smart eyeglasses.

SOCIAL NETWORKING

India Inc. has woken up to the capabilities of social media analytics. Here are the five key drivers increasing its adoption.

INTERNET

Brand recognition

Understanding customer behavior

Understanding customer requirements

Acquiring new customers

Efficient and effective recruitment

Source: Ernst & Young

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IMAGE COURT ESY: MACWO RL D

So(Spe)cial Media

As developers create tiny computer devices like smartwatches, one question they face is how to make tiny keyboards usable. Researchers at Carnegie Mellon University say they have a solution to that problem. They have developed what’s called a ZoomBoard, a technology that enables users to tap the screen once or twice to enlarge an individual key until it’s large enough for the user’s finger to press accurately. “You aren’t going to write a novel, but it gets the job done,” says Stephen Oney, graduate student at Carnegie Mellon Human-Computer Interaction Institute. “This opens up new possibilities for devices such as smartwatches, which generally lack any means of entering text, as many aren’t powerful enough for voice recognition.” Companies including Google, Apple, Samsung, and Microsoft are thought to be working on smartwatches. The smartwatches would join what may be a growing family of wearable computers, such as Google’s upcoming Glass— computerized eyeglasses that can take photos and video, send and receive e-mail, and post updates to social networks. With wearable computers small enough to fit on the face of a watch, however, the keyboard would need to be equally as small, making it difficult for users to type an e-mail message or the address for GPS. The Carnegie Mellon researchers decided to get around this problem by enabling the screen to zoom in much larger, making particular keys large enough to press accurately. According to the university, capital letters can be typed by momentarily holding a key. A swipe to the left deletes a character. A swipe to the right types a space. An upward swipe calls up a secondary keyboard of numbers and other symbols. “Users can enter about 10 words per minute at high accuracy on a keyboard the size of a penny,” informs Chris Harrison, a graduate student working on the project. “That’s plenty fast enough to dial a phone number, or enter ‘where is pizza?’ or get ‘directions home.’ A lot of people are banking on voice for text entry on very small devices. But sometimes you need to enter something discretely and without a big fuss.”

ELECTRONICS

TRENDLINES

—By Sharon Gaudin

Small Keyboard for Smartwatches

—By Sharon Gaudin REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

Google Glass: Smarter Than You Think

TRENDLINES

G A D G E T S Google envisions a future when your computerized glasses will turn on your coffee maker even before you roll out of bed. Google last month filed a patent application with the US Patent and Trademark Office for technology that enables Google Glass to control everyday devices, such as a garage door opener, a refrigerator with a control interface, a home alarm system or a copy machine. So, someday, Google Glass might just fire up your coffee maker, if Google sees its vision through. “A wearable computing device may facilitate the wearer’s operation of or understanding of a particular device,” the company wrote in the application. “The target device could be any electrical, optical, or mechanical device.” The patent application also notes that Google Glass could enable the user to provide input, for example, to an outdoor lighting system, or receive instructions on how to operate the system or a status update from the system itself.

Google Glass, which is still in the development stage, are computerized glasses that enable users to take photos, shoot video, pull up maps, and share images and information on social networks. A transparent interface over the right eye shows options, and the device is manipulated using voice control, gestures and touch. At the South by South West (SXSW) conference in Texas last month, Google showed how Glass can use apps, such as one for the New York Times, as well as Skitch, a free app that acts as a collaboration tool that enables users to mark up images with arrows, shapes and text. Timothy Jordan, a senior developer advocate at Google, demonstrated Glass at the conference, and showed a large audience how he could use Glass to send e-mail, take photos, post updates to Google+ and hear a language translation. Also last month, Google issued a call for people to apply to be part of a group of a few thousand who will initially test Glass. Called “explorers,” the testers were asked to tell Google how they would use the technology. The application deadline has passed and Google says it has received an army of applicants. —By Sharon Gaudin

C O M P O N E N T S Scientists have taken the next step in the evolution of the computer chip, developing self-healing integrated chips. A team of researchers at the California Institute of Technology (Caltech) said they now can envision smartphone and computer chips not only defending themselves but also repairing themselves, recovering from trouble—like total transistor failure—in microseconds. The scientists reported that they destroyed different parts of their self-healing chips, which were running power amplifiers, with a high-power laser and then watched the chips automatically develop a work-around to bypass the damage in less than a second. “It was incredible the first time the system kicked in and healed itself,” said Ali Hajimiri, a professor of electrical engineering at Caltech, in a statement. “It felt like we were witnessing the next step in the evolution of integrated circuits. We had literally just blasted half the amplifier and vaporized many of its components, such as transistors, and it was able to recover to nearly its ideal performance.” Self-healing chips in tablets, smartphones and laptops would be a big advance, according to Dan Olds, an analyst with The Gabriel Consulting Group. “This new technology could help to keep performance at a high level by routing

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

around internal components that have failed or are getting long in the tooth,” said Olds. “But programming this capability and implementing it on a large scale could be a pretty complex and expensive undertaking. They’ve put together an interesting demonstration project, but it’s a long way from being placed in any actual device.” He also noted that there are self-healing systems today on high-end servers. “They can either soldier on through any hardware or software error or very quickly recover from a failure,” said Olds. “This is usually done through having the system deconfigure failed components or start using spare parts in the system. It looks to me like the Caltech guys are applying these concepts at the chip level rather than the system level.” According to Caltech, the scientists used numerous on-chip sensors that continually monitor temperature, current, voltage, and power. The sensors then feed that information into the central processor, which analyzes the device’s performance and calculates if anything needs to be repaired. However, the processor does not use algorithms that have been told how to respond to every possible problem. It would be difficult, or even impossible, to predict every possible problem. Instead, the processor is built to draw its own conclusions. —By Sharon Gaudin

VOL/8 | ISSUE/08

IMAGE COURT ESY: TECHHIVE .COM

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Cybercrime: The Bad Guys Rule

TRENDLINES

Indian cyber criminals have gotten better at their game, taking cybercrime to new heights. While the watchdogs of the Web are staring at certain defeat.

If you thought the good cops—by now—would have invented new weapons to throw the bad boys of the cyber world out of business, you couldn’t be more wrong. The bad guys are winning this one year after year. According to a study by PwC, cybercrime in India has increased from 966 in 2010 to 2636 in 2013—that’s a whopping 173 percent jump. Piggybacking on the usual suspects—like hacking, phishing and skimming—and new threats like corporate espionage, cyber criminals are making merry. In addition, hacktivist groups such as Anonymous have become more prominent in India. There has been a 282 percent rise in the number of website defacements as a result of such attacks from 2009 to 2012. Another new trend, corporate espionage, is emerging as a significant threat in cyberspace. And social media is a haven for such crimes. Seventy-three percent of top officials in various companies say they have been victims of corporate espionage through social media in 2013. And that’s not it. Phishing scams are giving the BFSI sector sleepless nights. While the number of attacks has reduced, the amount the sector is losing because of them has increased—from Rs 36 crore in 2011 to Rs 52 crore in 2012. If cyber criminals keep at it, cybercrime’s graph will continue to be impressive. Watch out.

PROVIDE proactive education and training to employees. Also, setting up a cyber intelligence team will help you analyze situational awareness.

RESPOND to data breach allegations, develop effective web applications, and implement enhanced information security policies to mitigate the risk of cyber attacks.

CREATE a cyber incident response team through which an incident spotted anywhere in the business can be tracked. Identify technical and human resources to respond to both internal and external cyber crime incidents.

While You Were Sleeping… ...Number of Cyber Crimes Increased

2636 2130

...Number of Hacking Cases Shot Up

966

510

2011

2012

2013

2010

2011

2012

73%

Of top officals in Indian companies were duped by corporate espionage.

1169

983

1791

2010

1450

2013 SOURCE: PWC INVADING PRIVACY REPORT

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CUSTOM SOLUTIONS GROUP VMWARE

CLOUD CORNER Thought Leadership

VDI: Balancing End User Needs and IT Security DAVESH SHUKLA CIO & VP-IT, Delhi International Airport (GMR)

Desktop virtualization provides mobile users with the flexibility to work from remote locations, thereby increasing productivity. It also ensures data security. One of the busiest traffic hubs in Asia, the Delhi International Airport (DIAL), handles 46 million passengers every year. There can be hardly any room for error. That’s why it was important for us to create a robust, flexible, and secure IT environment. At DIAL, managing desktop PCs was becoming increasingly difficult because of new risks surrounding security, remote connectivity, and adhering to data retention and protection regulations. Therefore, six months ago, we embarked on a strategic initiative to consolidate our suite of legacy machines and systems. We decided to turn to desktop virtualization as it would strengthen our

IT environment. It would provide our end-users the flexibility to connect anywhere, anytime and, in turn, improve their productivity. At the moment, we are looking at virtualizing only our non-mission critical applications. If this proves to be successful, we will move to virtualizing our mission critical applications. Once our users are happy and stakeholders comfortable, the next step would be to move this virtualized environment to the cloud. This would ensure that we give users even greater flexibility than they would get in a local virtualized environment.

T. SRINIVASAN Managing Director, VMware India & SAARC

VMware Horizon Suite provides IT with more management control and flexibility with less complexity and security risk. It also enhances end-users’ experience. Enterprises are caught in a desktop dilemma. On one hand, IT organizations face pressures to control costs and ensure compliance, manageability, and security. On the other, end users increasingly require the freedom and flexibility to access data from multiple devices and locations. This dilemma can drive up costs, impact security, and overwhelm IT resources. It restricts IT’s ability to respond quickly to dynamic business needs. That’s why organizations are looking for an agile, adaptive approach to computing that enables IT to balance business needs with that of end users. To achieve that, VMware Horizon Suite provides a complete end-user computing solution to en-

terprises. IT admins can enjoy more management control and flexibility with less complexity and security risk. Also, end users get a better and more productive experience. The suite addresses the challenges of organizations that are looking to reduce risks, mitigate concerns about centralized management of physical machines, and lower device-management costs. It also helps reduce risks and costs associated with the consumerization of IT such as unauthorized data sharing, rogue cloud-based applications or complex IT management, and implement Windows migration strategies to optimize longterm end-user licenses and usage.

alert

ENTERPRISE RISK MANAGEMENT

Defending Funding A

IMAGES BY PHOTOS.COM

sk any cybersecurity specialist what their biggest challenge is, and you will get a variety of answers. But upon further investigation, you may be surprised to learn that the unanimous pick for the biggest challenge is simply getting the funding to implement a security program. Little information or guidance is available to prepare one for the dreaded budget discussion when new or continued funding is necessary to maintain a strong cybersecurity posture. Having established cybersecurity programs in two government organizations, the US National Park Service, and now at Los Angeles World Airports, I have experienced a full range of discussions with a variety of financial teams. In all cases, good communication was the critical ingredient for success. Most budget requests are accompanied by an ROI analysis. This

request. If the first time they see you, your hand is out looking for funding, your chances of success are drastically reduced. 2. Avoid using scare tactics. They may work at first, but eventually, if you are successful in keeping your organization safe, this tactic may actually backfire. Your financial officer will only see that they provided funding and nothing happened. 3. Establish your cybersecurity credentials within your organization. It is important for both you and your security team members to acquire security credentials, such as the Certified Information Systems Security Professional (CISSP) and the Certified Information Security Manager (CISM). This gives your

is the language your financial team understands and with which they are most comfortable. A positive ROI is usually the difference between a positive and a negative decision on funding. However, simply providing a welldefined ROI doesn’t always guarantee success. There are a number of additional considerations when approaching senior management and your financial team for funding. 1. Set the foundation for security funding before you need it, and keep it strong. If you haven’t established a good working relationship with the financial decision-makers in your organization, you are already behind the curve. It is far better to have that relationship in advance of a budget

FINDINGS

Menacing Mobility With users increasingly preferring to access the Internet through mobile devices, the number of mobile threats has risen in tandem. The results are alarming.

Mobile Threats in 2012

25%

Traditional threats

15%

Track user Send content Reconfigure device

32%

Steal information

13% 8%

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59%

Of the world’s total mobile malware to-date came into existence in 2012. SOURCE: Symantec

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For more information Call : 1800 425 8970 email : marketing_in@trendmicro.com VOL/8 | ISSUE/04

Delhi : 91-11-42699000 Mumbai : 91-22-28395776 Bangalore : 91-80-40965068 www.trendmicro.co.in REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 1 3

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ENTERPRISE RISK MANAGEMENT

financial team confidence that you have the expertise to identify the risks and are able to plan and implement a security program that meets the threats facing your organization. 4. Relate your security risks to the business. Identifying the technical aspects of advanced threats will be almost incomprehensible to your senior management and financial decisionmakers. Relating the threats to the impact on the business is far more meaningful. For example, if you rely on the Internet for sales and you have to shut down your Web portal, the specific cause is not a priority to senior management. The fact that you had to shut off your primary business conduit is the critical point. 5. Outline the need in plain English. Never speak in technical terms to senior management or your financial team. In order to establish a strong communication channel, you need to have two-way communication about security issues, not a one-sided description of technical challenges. Frame the discussion with language that everyone can understand. 6. Develop a plan that meets the security needs but also considers financial constraints. Remember that very few organizations are free of financial constraints. It is

unlikely that your organization has unlimited funds. You can show your understanding of their constraints by doing a little research on organizational funding practices and demonstrating your desire to make reasonable requests. They will likely appreciate your desire to understand the constraints in their job and will be more willing to assist you in performing your job. 7. Once you get the funding, follow the plan you outlined. You can build trust with your financial officer by using the funding exactly the way you had outlined in your presentation. Nothing reduces the confidence in your approach more quickly than saying you need the funding for one thing and then spending it on something else. And, if changes become necessary, do consult with the financial team. Never surprise them with expenditures for things on which they have not previously been briefed. 8. Provide constant feedback on the security program. Bring the financial team into your world as much as possible. Don’t wait until you have an emergency and need immediate funding. Continually provide information to the financial team regarding the state of the cybersecurity world and your organization’s place in it.

9. Use outside resources to support your request. If you are met with skepticism on your funding request, suggest that you bring in an outside cybersecurity expert to develop an independent third-party analysis/audit. Or bring in peers from other organizations in your vertical and have them conduct a peer review on your security operation. An “outside” opinion often seems to have more weight than that of internal staff. 10. Always emphasize cybersecurity is not an IT but an organizational risk management issue. Of all the considerations, this is perhaps the most important. Cybersecurity is not only addressed through the IT department, but also through human resources in the form of personnel policies; your legal counsel through the enforcement of policies; and your senior management team, who must always insist that employees follow company policies and rules and who may be accountable to stakeholders and/or compliance organizations to meet laws and requirements. CIO

Dominic Nessi is the Chief Information Officer for Los Angeles World Airports. Send feedback to editor@cio.in

[ON LAST MONTH’S $45 MILLION GLOBAL ATM HEIST]]

“It’s t’s extremely important to have better security protocols. Embracing encrypted chip technology in lieu of the current magnetic stripe is the need of the hour. For timely detection of such frauds companies should deploy an online fraud management system that sends alerts in case of suspicious transactions.” — SATISH WARRIER, CISO, GODREJ INDUSTRIES

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ENTERPRISE RISK MANAGEMENT

A ‘Big’ Boost to Security

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appearing on various parts of the seen Web, from Chinese blogs to Russian forums, as well as the unseen Web, is of great value to financial institutions. In order to help address these problems, Digital Shadows has developed an analytics platform that sorts through unstructured or semi-structured data from 60 million sources in 25 languages, using an algorithm to determine what information might present a risk. “You bring all of that data in and we run our analysis which uses a lot of natural language processing to identify from all of this unstructured material where the risk such as confidential documents are,” says Paterson. “It is semi-structured data, in that you might have information on who posted

Please Raise Your Voice

ig data analytics can help banks protect themselves from cyber-criminals accessing confidential information appearing across the Web, financial tech start-up Digital Shadows claims. With the rise of social media and mobile computing, banks are seeing more company information posted online than ever. This could lead to reputational damage, or, more worryingly, the publication of information that could lead to a security breach, and has led to concerns from US bank regulators. Using information from the bank or its suppliers, there is potential for criminals to collate information to support an attack on a bank’s IT infrastructure. “In particular from a hacker’s point of view, they are getting more and more sophisticated and targeted in their attacks, and to do that they have to perform reconnaissance. It is the first stage of the attack where they begin to research the attack,” informs Digital Shadows CEO, Alastair Paterson. “It’s a bit like ‘casing the joint’. If you are a cyber-criminal, you have to case the joint looking at all the little bits of information that companies expose, so that you can design an attack that will succeed from the outside. So the whole model [of bank security] has gone inside-out.” Also, the avenues for data to leak through banks’ defenses have increased. As Paterson mentions, a quick Google search of ‘confidential not for distribution file type:PDF’ unearths a flood of results that were not intended to be publicly available. He adds that, in addition to confidential material leaving a bank’s clutches, the discussion of a particular bank in the far flung reaches of the ‘dark web’, which acts as a criminal underground, could contain information that may relate to an imminent attack. Paterson states that gaining an overview of the vast amount of information

it and the date, but the bulk of it is a load of text, so you have to teach the computer to spot the risk in all of that unstructured data, and that is where the natural language processing comes in,” he says. While there are already social media monitoring platforms used by banks, performing these tasks individually is a human-intensive process, Paterson adds, meaning that the ability to provide an overview of a wide variety of threats has caught the attention of major financial organizations. “These banks are being attacked every day, so they are interested in any information and tools that can help them,” he says. CIO Matthew Finnegan is a reporter at Computerworld UK (CIO’s sister publication). Send feedback to editor@cio.in

Barclays Wealth & Investment Management is using Nuance’s FreeSpeech voice biometrics solution to automatically confirm and identify customers, instead of using security questions. Often referred to as ‘knowledge-based authentication’, security questions can be time-consuming and frustrating for customers. Also, even when a customer is successful in answering all the necessary questions, if they call back a few minutes later, the process has to start all over again. Now, when a customer calls in to Barclays to access their account, they engage in a 20 to 30 second conversation with a customer service agent, during when Nuance FreeSpeech compares the customer’s voice with their unique voiceprint on file. The tool then silently signals to the Barclays representative when the customer’s identity has been verified. If it is not verified by the system, Barclays’ agents can revert to a traditional, knowledge-based authentication process. FreeSpeech has been received well by both Barclays’ employees and customers alike. Since its introduction, more than 84 percent of Barclays’ customers have enrolled in using the new technology, with 95 percent of them successfully verified upon their first use of the system.

— By Derek du Preez

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

TM Arun Kumar

FRANKLY SPEAKING

For Their Eyes Only Most governments and some organizations are using IT to play Big Brother. Are technological advancements and legislative indifference pushing privacy to extinction?

n the movie Ocean’s Eleven, there is a scene towards the end when Julia Roberts tells Andy Garcia, “You of all people should know that in your hotel there is always someone watching.” How ironic that what happens in reel life is transpiring in real life. For those of you not fully acquainted with the latest happenings, here is a primer on some recent revelations. The US government, through a top-secret programme called PRISM, has got direct access to the servers of Internet giants such as Apple, Google, Microsoft, Yahoo, Skype, AOL, Facebook etcetera, which allows government officials to collect material—including search history, e-mail content, file transfers, live chats, and more. Not just that. There is also a top-secret court order compelling telecom provider Verizon to turn over the telephone records of millions of US customers. These details were revealed by the UK newspaper The Guardian. And what is interesting is that this program is not something new. It has been in existence since 2007. It’s just that we are finding about it after six years. Though all the companies whose servers are being tapped for private or confidential data—according to The Guardian— vehemently deny knowledge of any such program, the fact is that with or without their knowledge, such an operation has been going on for the last six years. However, make no mistake. This kind of snooping is not just limited to the US government—which ostensibly in its quest to gather all possible information to track terrorist activities is—trampling all over an individual’s privacy. Almost every government worth its salt does similar things. The only difference is that while some are sophisticated and

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TM Arun Kumar

FRANKLY SPEAKING

secretive in their approach, others, like the Indian government, are simply blatant and arrogant about it. And we would be naïve to believe that only governments engage in these kinds of activities. Businesses are not far behind and are equally guilty of the same. However, what makes this kind of a “Big Brother” activity possible is the advancement in technology, which enables faster, easier, and ironically, even secure communications. At the same time, the very technology also provides governments or big businesses with deep pockets and even deeper connections with access to personal and private communication details of unsuspecting citizens. This was highlighted about a dozen years ago in 2000 by A. Michael Froomkin, professor of Law at the University of Miami School of Law, in a paper aptly titled The Death of Privacy?, published in the Stanford Law Review. In his paper, Froomkin states, “The rapid deployment of privacy-destroying technologies by governments and businesses threatens to make informational privacy obsolete.” He goes on to describe a range of current technologies and activities to which the law has yet to respond effectively, which include routine collection of transactional data, automated surveillance in public places, and deployment of biometric technology among others. He concludes by saying, “Given the rapid pace at which privacy-destroying technologies are being invented and deployed, a legal response must come soon, or it will indeed be too late.” And since the paper was published, the use of technology to monitor, track, and analyze almost every movement and communication of people has only increased. Just imagine the number of cameras that are installed at airports, traffic signals, inside and outside public and private buildings, the various databases like National Population Register, UID, and wiretaps like Radia tapes. And surely, there are more such examples. But, in which direction have the legislations progressed since then? Unfortunately, in the exact opposite direction. Governments are only enacting laws that require citizens to divulge more data or give the government the right to snoop—such as the FISA Amendments Act in the case of the US government. So, with the progress in technology, which admittedly no one should grudge, and no hope in sight as far as laws and regulations are concerned, what hope does the common man have about protecting his or her individual privacy? Well, the answer is simple—in today’s world there is no such thing as privacy. It's dead. You can only run, but can’t hide. Remember, there is always someone watching, and perhaps even listening. CIO

Arun has covered the IT industry in India since the time 80386 was cutting edge, MS DOS was the predominant desktop OS, and Internet was still a few years away. Follow him on twitter @aruntm

JUNE

1 5 , 2 0 1 3 | REAL CIO WORLD

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Hal Gregersen

EXECUTIVE COACH

Practice Makes Innovators If you thought innovation is the work of a genius and only gifted individuals can be innovators, think again. The truth is anybody can innovate, all it takes is practice.

A ILLUST RATION BY MAST ERF IL E.COM

s part of the research for our book, The Innovator’s DNA , Clay (Clayton M. Christensen), Jeff (Jeff Dyer) and I started out by identifying what makes the world’s best innovators who they are. We spoke to leaders at companies like Amazon, Apple, Google, Skype, and the Virgin Group, and uncovered five discovery skills that distinguish innovative entrepreneurs and executives from ordinary managers. These skills are: Associating, questioning, observing, networking, and experimenting. It’s a mix of these skills that makes innovators. Essentially, innovators ask provocative questions, challenge the status quo, and look to change the game. Some of them are deep observers, while others are talkers who go out and network for new ideas by talking to people who do not think or act like them, in order to get different perspectives. Then there are experimenters who just do things by trying out new ideas. When we act that way, we think differently or associatively. This is important because, according to our research, there are very few innovators who are capable of both getting a new idea and also implementing it. This is why they need to interact with people who have the exact opposite inclination: Delivery skills and execution. We found that innovators hooked up with executors and worked together by honoring and respecting each other’s skills to make a good idea deliver great impact.

Innovation is Top Down Based on our research data, we figured that innovative companies are led by innovative leaders who spend twice as much time as their peers, practicing the skills I just

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REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

Hal Gregersen

EXECUTIVE COACH

mentioned. A CEO of a non-innovative company spends on an average two months a year, engaging in these discovery skills, whereas a CEO at an innovative company spends four. For instance, Steve Jobs, who lived to be 56 years, spent at least 18 years of his waking life actively trying to get new ideas. It is distinct traits like these that make innovative companies. First, their promoters and senior leaders are innovators themselves. They hire inventive and innovative people. They expect innovation to be everybody’s job and make it a point to reward ideas that have created value. They train their employees to be confident and capable of asking more questions and observing more carefully. These companies then build innovative processes into their systems. Amazon, for example, has a systematic method for reducing the cost of experimentation by encouraging people to ask better questions and training the entire organization to do it. At least one-third of their R&D investments are made in disruptive innovations. They encourage employees to take risks. They have organizational processes that embed this into their system. Collectively, this sets a context where people at the very top do innovation themselves and encourage others to do the same.

issues. Take time to think associatively about the data you will have collected and come up with some creative new ideas that show potential for solving the strategic challenges. Innovation is all about CIOs’ blocking out time in their personal CIO schedule to do this homework. Then at the next C-suite meeting, they will have developed an idea about a strategic issue that everybody is grappling with and they will rely on first hand data to influence others more successfully. And the final piece to consider is taking the time to figure out how IT can contribute to the solution. The best CIOs in the world who make strategic contributions at their organizations do this naturally. So, the ones who don’t will have to force themselves to regularly schedule innovation time into their calendar and make this a more natural, productive process. If the CIO’s discovery and innovation work focuses on solving an existing strategic issue that people haven’t solved yet, others will definitely find value in their ideas. The last thing senior

The average CIO has trapped himself in his own little box of non-creativity. That comes from a history of rising up to an IT function which promotes, rewards, and pays for getting projects done.

Get Out ofYour Box The average CIOs have trapped themselves in their own little box of non-creativity. That comes from a history of rising up to an IT function which promotes, rewards, and pays for getting projects done. While CIOs must get projects done, they also need to make a valuable contribution to the company’s C-suite conversations on decision-making. What I suggest you do to become an even more innovative CIO is to think back about the last C-suite meeting you were part of and recall one or two of the key fundamental and strategic challenges for which there’s no solution yet. These could be opportunities or challenges, but focus on strategic issues that are bigger than just IT. Next, think through your own schedule and figure out when and where you are going to actively engage in an activity like catalytic questioning. Write down nothing but questions, as many as you can, about the strategic issue to help you change your questions, and ultimately ask more productive questions than you have in the past. This is critical because it’s only when you find the right questions that you will surface the right answer or new solution. Take time to make observations related to the strategic issue by just systematically watching what’s going on inside and outside your company. Indulge in conversations with people who do not think like you and come from a very different background, then talk to them about the critical strategic 24

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

executives, especially CIOs, should do is to wait for someone else to come and ask them to innovate. Part of the role of being a C-suite player is actively contributing to new strategic directions. Also, almost every idea that holds the power to disrupt comes from living at the intersection. Silos do not deliver disruptive ideas. This is a unique situation where IT folks have the natural opportunity to cross silos, and this is where they can play a powerful role in taking advantage of the information that comes from a variety of data sources. What we find from our data is that ideas generated in the field bring much more empowering energy and impact than those created in cubicles or offices. Of course, every new idea will face some resistance, but when CIOs work really hard at leveraging their innovation skills to make it smarter and less risky, they will be far less willing to give up on it. In the end, if CIOs don’t innovate, others won’t either. When they do innovate, they set the stage for others to do the same, at any level of the company. CIO

As told to Anup Varier Hal Gregersen is a Senior Affiliate Professor of Leadership at INSEAD where he pursues his vocation of executive teaching, coaching, consulting, and research. He is co-author of the book, The Innovator’s DNA. Send feedback to editor@cio.in

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Gunjan Trivedi

LEADING EDGE

Augmented Experience Much like many technologies that have gained traction in the recent past, augmented reality also packs in a lot of potential. Here’s why CIOs should consider adopting it before it’s too late.

IMAGE BY MAST ERF IL E

n 1977, the President, Chairman and Founder of DEC, Ken Olsen said, “There is no reason anyone would want a computer in their homes.” I am no Olsen. Nor am I even attempting to brand myself in that league. But I still had a similar doubt when I began hearing a few years ago about this extended concept of amalgamating virtual information with a real world image seen through camera lens. They called it Augmented Reality (AR). In fact, despite AR going through sine curve on its hype cycle, especially due to the Google Glass project, the jury is still out on its uses and misuses. Going beyond the initial wow factor and its clear impact on end-user information consumption, I too had no practical reasons to believe that any IT leader would have its use at an enterprise for any productive or commercial purpose, especially from the Indian corporate context. Until early this year. At one of our events, the CIO of Stumpp, Schuele & Somappa Springs, Sri Karumbati showcased his experiments with AR and changed my equation with this concept of mixing visualization with imagination. Karumbati demonstrated the practical uses of AR that he had proposed his organization to adopt, using a suite of applications his team had developed. He seamlessly went from running the full contextual 3D walk-throughs for buildings under-construction on his laptop, to using any image being ‘seen’ through his tablet as a base marker for a 3D, and interactive image of a vehicle. aHe also used the same tablet to display the required information as soon as the device looked at a car engine. He mentioned that such AR applications are being

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Gunjan Trivedi

LEADING EDGE

considered visual reference points in various production, designing, and training environments. Evidently, this 40-minute session piqued the imagination of the CIOs assembled, and soon, we were all talking shop in terms of the enterprise-level application of AR in the real world. And, that’s where the conversations got their own lives. As a matter of fact, it seems that a few organizations have already begun reaping its benefits. Editor of Cutter Benchmark Review, Dr. Joseph Feller shares a few success stories on his blog. He mentions that over the past few years, leading toy manufacturer Lego has rolled out interactive AR kiosks with a monitor and camera at a number of retail outlets. When customers hold up a Lego box set to the kiosk’s camera, a 3D image of the completed model built using the box set’s parts appears, along with a live video of the customer holding the box. Rotating the box allows the customer to view the model from different angles. The kiosks not just allows customers to look inside the box, but also envision the potential use of the product. Reports suggest Lego experienced 15 percent increase in sales with this tool. AR promises to increase the collaborative effectiveness as teams can view and manipulate a single set of data. Imagine scanning a project room’s door to get real-time update on a particular project’s status, rather than disrupting the work going on inside by popping in and asking about it—or

adding yet another message to the project manager’s inbox. Or imagine scanning a physical document to drill into the reference material behind it, generating a digital version of the document highlighting changes since the last revision, or calling up contact information and a real-time calendar for the document’s author, Feller states. In fact, media reports suggest that companies like Gravity Jack have developed an indoor AR office, which could be accessed from the cloud. This elevates BYOD to an entirely different level. If you realize, this is not entirely a new technology. Just as RFID, NFC, QR codes and other such technologies, AR seems to be experiencing spikes in its practical applications for quite a few years and is yet to take off in full swing. In my opinion, this is a great opportunity for early-adopters to take AR off the back burner even before it matures and presents itself as an important technology for businesses to favorably consider. But not before CIOs can articulate a convincing answer to the question that an engineer at IBM had posed on seeing a microchip in 1968: “But ...what is it good for?” CIO Gunjan Trivedi is executive editor at IDG Media. He is an awardwinning writer with over a decade of experience in Indian IT. Before becoming a journalist, he had been a hands-on IT specialist, with expertise in setting up WANs. Reach him at gunjan_trivedi@idgindia.com

Jonathan Hassell

THINK TANK

Social Upliftment Without a digital media strategy, your organization is shooting in the dark. And it’ll continue to do so till your competition beats you. Here’s how to take your social media strategy to the next level.

t's a different world out there. It’s a world where digital media—social media platforms such as Facebook and Twitter, plus other digital avenues such as YouTube, Instagram, Pinterest and others—has become increasingly important to brand awareness. Frankly, too many companies are entirely reactive when it comes to these platforms. There is no comprehensive strategy and no cohesive plan to interactions across all aspects of digital media. Let your organization be different. Start by establishing a new digital media strategy or updating an existing one. Here are some key points to consider as you build your plans.

Follow the Customer

ILLUST RATION BY MASTERFILE

What's most important about a digital media strategy is to know where your customers are. It does your business no good whatsoever to have a presence in a place, a network or a community where your customers are not looking. Worse, it could indeed be detrimental to those folks who aren't your customers but who see your unresearched and unstrategized presence in these incorrect places and networks. Your brand runs the risk of seeming out of touch and dense. It is paramount, then, to find out what sites, forums, and social networks your customers frequent. When examining those places, ask yourself and your digital media team the following questions: • Do people look for engagement from your company on those places or forums, or are they on those sites primarily to interact with other users? • How do your customers behave on those sites? Have they come for product support, to seek out advice or ideas, or primarily

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Jonathan Hassell

THINK TANK

to rate your product and recommend it—or complain to others about it?

Understand the Power of Referrals The real power of digital media takes the reach and the influence that traditional media has had and distributes it among your customers, their friends, your prospects, their families, and even complete strangers. This power to build awareness, to hold conversations, and to shine light on companies and products magnifies and multiples with each passing interaction. This is really what ‘going viral’ means: Something is passed from person to person, building a popularity snowball that reaches proportions that in the past only the most costly, sophisticated traditional media campaign could have hoped to achieve. This distributed influence is powerful. In the world of digital media, it can turn with you-or against you-almost in the blink of an eye. Every move your company makes and every headline your organization generates can trigger a reaction. For teams without a plan to manage this reaction, it can be simply overwhelming. What's worse is that a lack of engagement with that reaction can develop into another reaction itself, on the order of "Why is ABC Corporation not listening to its customers?" To guard against this phenomenon, develop an engagement plan with your digital media team that includes factors such as the following: • The tone of your interactions with customers and visitors, whether it's short, conversational, casual or more formal • The level of engagement with your visitors, including whether you are having a conversation or sharing their content or simply pointing them to existing resources such as customer service and technical support • How you will approach negative posts and manage the negative reactions that will surface

method has worked well for a while in controlling messaging and ensuring less potentially offensive or tone-deaf communications are released. With social media, however, things are less buttoned-down, which creates more room for error. It's important to be careful that the overall reality of current events, the environment and the "mood climate" are all taken into account when considering new, untested plans and strategies. For example, it's advisable not to run promotions when natural disasters strike, and sometimes, it's unreasonable to continue to post to social media when tragic events like the Delhi rape case or Sandy Hook massacre happen. Take care to consider what’s happening in the world at the moment. Otherwise your brand could have a reaction disaster on its hands.

Know What to Avoid While building a list of things to do in digital media is important, there are also a couple of points to avoid. Here are two very big don'ts to add to your list. First, don't be cheap. Social and digital platforms, especially consumer services that are free to join, often evoke thoughts in executives such as "Free advertising!" or "This shouldn't

To be seen as a real social media contender, you have to be disruptive. Turn customs on their heads. Create powerful energies that run against what is seen as normal.

Create a Disruptive Strategy In this day and age, falling in line with another brand's digital media strategy is only half the battle. To be seen as a real contender—a brand, company or product on the cutting edge— you have to be disruptive. Turn customs on their heads. Create powerful energies that run against what is seen as normal. Be especially eager to embrace changes, and even powerful disruptions, if they are implemented with a view toward enhancing or improving customer experience. At the same time, being disruptive involves taking risks. Traditionally, corporations have run their communications through public relations and advertising departments. This 30

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cost much." This is the complete wrong way to approach digital media. While you won't have a budget in the millions like you did with traditional television and radio advertising campaigns, you do have the cost of being unique, attentive and interactive. This means you'll need a staff, a marketing budget and tools such as analytics software to adequately service digital media properties. The primary goal should be to be effective, not just to serve your customers in social media at the least possible cost to the exclusion of quality. A good balance point to target: As good as it can be while spending the money most efficiently. Second, don't force it. The allure of being seen as cutting edge, "with it" and hip to the social and digital media scene can be very strong—and it can often result in strategies and concepts aimed at nothing more than achieving that one viral video. While you can be innovative and disruptive, you must try to avoid doing things only for their potential social media value. CIO

Jonathan Hassell runs a social media consulting firm, 82 Ventures. Send feedback to editor@cio.in

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May 2013

ASSOCIATE SPONSORS

PSE Summit, organized by CIO magazine was an exclusive gathering of IT leaders from various larger Indian public sector enterprises. The event focussed on IT usage and its impact on business and productivity and it helped CIOs and heads of IT to leverage their domain expertise and provide fresh impetus to their Event Report Presented By IDG Events

Event Report

TARGETING

EFFICIENT & PROFITABLE GROWTH Public sector organizations are increasingly driven to improve operational efficiency, share information and integrate processes, all of this on a shoe string. At the CIO PSE Summit 2013 – CIOs from various PSEs came together to understand how this can be achieved. By Ershad Kaleebullah

here are myriad pressures that Public Sector Enterprises (PSE) face today ¬¬— cost optimization, growth mandates, financial inclusion, increased compliance, and, above all an economy that seems to have lost momentum. The role of the CIO in this sector has never been more in the spotlight. At the second edition of the CIO PSE Summit organized in Bangalore, CIOs from the public sector diaspora came together to experience interactive sessions that explored various technology issues ranging from cloud computing to managed document services (MDS) in depth and had real takeaways from the same.

last four years, the best thing that has happened to enterprise IT, including the public sector, is the slowdown because it got CIOs thinking in terms of higher justification rigor.” A large part of the cloud infrastructure has a very high degree of automation and a low degree of people dependency. On the other end of the spectrum is the massive shortage of workforce with the right skillsets to make a smooth transition to the cloud. “While the intention to move to the private cloud is very strong, I believe the foundational gaps hamper and slowdown the adoption,” he said. Hence, outsourcing as a strategy crops up as one of the solution.

State of the PSE

Vijay Ramachandran, Editor-in-chief, IDG Media, set the tone for the event by talking about the State of the CIO research conducted by CIO magazine twice a year, every year. He delved into three mega technology trends that are affecting Indian organizations today –cloud, business intelligence/analytics and bring your own device (BYOD). He described how these megatrends are impacting how CIOs are deploying IT solutions in their organizations. Talking about how the slowdown in the past four years has affected IT spends across verticals, Ramachandran said, “In the

“Indian enterprises are highly under-invested in technology. ” Vijay Ramachandran,

editor-in-chief, IDG Media

Vendor penalties included in the SLAs were solely to ensure efficient service and not to fill our pockets. Aniruddha Sinha, GM-IT, Air India

Governments are resorting to the cloud to counter technology barriers and tackle issues of greater magnitude. Rajesh Rajan,

associate director, PwC

Lessons from Air India’s Outsourcing Journey Air India’s (AI) tryst with outsourcing, despite a strict mandate to work with Indian vendors, started in the early 90s because local vendors did not have the resources or the wherewithal to handle massive applications that could perform synchronized real-time computing, catering to the airline industry. Talking to his peers and enthralling them with the candid tale of AI’s journey to an outsourcing model, Aniruddha Sinha, GM-IT, Air India said, “Attrition of skilled workforce was also a big problem for us. We were just turning into a training centre for these professionals before they moved on to greener pastures. This is another reason why we resorted to outsourcing IT for all the core business functions.” Elaborating on service level agreements (SLA) to ensure flexibility in the outsourcing contract, Sinha stated that he included a provision in his agreement to review the terms of the SLA at the end of every year. “Service level penalties were added to the SLA to ensure that vendors would adhere to the 99.97 percent uptime Air India expected,” says Sinha. Currently, Air India has two datacenters—one in Mumbai and the other in Delhi—and some of its applications are

maintained in a private cloud, where the implementation of applications and the maintenance of the private cloud are done by outsourcing partners.

Developing a cloud strategy

Adoption of cloud computing is on the rise in most private corporations and the buzz around this technology is at its peak in 2013. “It is inevitable that governments across the globe would adopt a focused cloud solution for the day-to-day functioning of various public sector initiatives,” said Rajesh Rajan, associate director, PwC. “In the USA, the adoption of the cloud by CIOs working for the public sector is happening at a much faster rate than their counterparts in private sector organizations. This can be attributed to the fact that the public sector wants to cut spending,” he added. Governments of the world are adopting the cloud because it helps in accelerating innovation by increasing experimentation cycle and improving time-to-market, offers inexpensive and flexible options to and thereby promoting an increased focus on customer engagement, encourages green IT and helps in reducing costs by sticking to the pay-per-use model.

Event Report

Video ubiquity is our vision. We want everybody to use video. Balaji Iyer, GM, India Innovation Center, Polycom

Many CIOs from the public sector overlook the computer peripheral aspect of IT solution strategy. K. Bhaskar,

senior director, OIS, Canon India

For many countries and their respective governments, including the USA and UK, the main driver for cloud adoption policy was a reducing the budget of their IT spends. However, this is not the case with India. “The initial idea was to share datacenter resources across different states in India or in short optimum utilization of the existing infrastructure,” said Rajan. Rajan advocated trials of a few successful implementations of cloud strategy from global peer governments. Some of them are a consolidated app store for all the states, a comprehensive security framework for better compliance and SaaS based e-mail applications. “We are currently waiting for the Ministry’s approval on the ‘cloud adoption implementation initiatives’ paper. India is at the 11th position among governments across the world based on ‘cloudreadiness’, according to our research.” Understanding the difference between cloud computing services and outsourcing is the key for the public sector to address issues of procurement and contracting before settling on a particular model of cloud or the vendor providing the solution.

Productivity Woes

The public sector in India has been an active user of video conferencing solutions. It helps in improving productivity in any organization to a large extent. However, the raging myth that it only helps in cutting travel costs is highly untrue. Balaji Iyer, GM, India Innovation Center, Polycom, showcased a recent Wainhouse research report which implied that video conferencing solution helps in recruiting,

time to market, sales, training, downtime and travel. He quoted the example of an Indian pharmaceutical company (name undisclosed) and how they utilized video conferencing solution for training purposes. “Video conferencing should not be confined to usage for a select set of people rather organizations should ensure mass adoption,” said Iyer.

Managing Information and resources

An area of concern for public sector enterprises is printing services as the cost of printing is often a significant burden. Usually, the extent of this burden is rarely clear, and often goes unnoticed. According to a recent IDC study, worldwide, two to three percent of a company’s turnover is spent on printing alone. Hard copy and electronic documents remain integral to today’s business communication. In fact, document production is a significant business expense - costing up to 3% of revenue. “The difference between the private sector and public sector CIOs is that the latter is not completely exposed to Managed Document Servces (MDS),” said K. Bhaskar, senior director, OIS, Canon India. MDS is nothing but the outsourcing of the management and continual optimization of your document output fleet and related business processes. In short, it lets you refocus your attention on the core business without worrying about the smaller aspects of the business. With increasing compliance and governance regulations, the volume of information created, captured, and circulated has increased. As a result, not only are cost and sustainability of printing facilities affected, but also security of information. “With MPS, CIOs can use the print assets more effectively as well as being able to measure costs, contain them, gain control over the printed output and increase information security. Organizations can also help employees to improve productivity and reduce its carbon footprint at the same time,” said Bhaskar.

Inspiring Stories

Understanding the deeper meaning behind tales from history can be quite challenging, yet interesting. For the esteemed IT leader community present at the event, Ramachandran shared four stories from history with ‘innovation’ and ‘strategy’ being the key takeaways. “CIOs in India are very good at constantly adjusting to change. However, this is not always great for a growth strategy,” said Ramachandran. Reecalling a conversation with a For full coverage on CIO, he said negotiating with the speakers, sessions business for budget is like squeezand glimpses of the ing lemonade. “You need to squeeze PSE Summit, visit the lemon in order to make it but if www.ciopsesummit. you squeeze too hard then it turns com bitter,” he added,

Discussion

“It is essential for the CIO to innovate to stay relevant to the business.” Prashant Mascarenhas, GM, HCL Technologies, India

Mission Transformation In the rat race to keep up with the latest advancements in technology and provide IT services that cater to business demand and pace, CIOs today are looking at adopting a mix of IT delivery methods to meet their users’ demands. By Ershad Kaleebullah

ransformation of IT is essential to sustain efficiency and legacy infrastructure is putting the brakes on business demands. The challenge however, arises when a tussle for choice between building an entire datacenter in-house, outsourcing the whole hog or finding some middle ground to create an efficient, scalable and always available delivery platform confronts the IT leader of the organization. To explore the options that CIOs have to tackle this challenge, CIO Magazine along with HCL Technologies, spoke to a gathering of senior IT leaders from the various public sector industries in India. The discussion revolved around what it takes to create a hybrid IT delivery environment and how different delivery options can be managed in a unified, simplified way. They also discussed how to create an IT delivery road maps that incorporate and anticipate users’ demands. One of the key concerns among the CIOs was that of data consolidation. K R Gururaja Rao, Chairman and MD, Gujarat Informatics limited, said that most applications in his

organization are developed and hosted in silos. “We are facing the problem of consolidating the data and optimising the capacity of the datacenter,” he said. IT leaders working for the public sector in India continue to hesitate while adopting new enterprise technology. Corroborating this point was Aniruddha Sinha, GM-IT of Air India. “CIOs should leverage new technologies like the cloud and social media among others, to stay ahead of the competition. However, they should also exercise caution while experimenting, he advised.” The thin blurry line between managed services and outsourcing is difficult to identify for any IT leader. Identifying the need for the right type of services is vital. According to Prashant Mascarenhas, General Manager, HCL Technologies, India, the exclusions in scope of a managed services or an outsourcing solution is what constitutes the thin line. “For example, in case of managed services the assets required to deploy the solution like the hardware or the software lies in the hands of the organization and only the services take prominence,” he clarified.

Cover Story

Buy-in

A look at some of the buy-in challenges that most CIOs don’t like talking about—and how to beat them.

ith the way the role of the CIO has been changing over the years, all the recent talk about IT being seen increasingly as a strategic partner to business must be like music to CIOs’ ears. From having the reputation of being cost centers to being considered equal partners of the business is a very significant achievement for any IT leader. But getting to this stage has been easier said than done. To achieve this status CIOs have branched out from being knowledgeable about technology to being masters of business relationships as well. Various studies have shown the more a CIO is able to influence his peers in the C-suite, the more likely he will be successful in getting his initiatives accepted—especially when such ideas impact functional areas outside the IT realm. To be able to influence stakeholders and win over their peers, CIOs will need to be more politically savvy and focus on relationship building and fostering better links with relevant stakeholders. And given that CIOs interact with a wide swathe of an organization, the opportunities available to them to win friends are numerous. Yet the truth is fewer CIOs than before are going this extra distance and that’s begun to show up in the way their managements think about them. According to CIO research, in the last year, the number of Indian CIOs who are considered competitive differentiators have shrunk from 27 percent of all CIOs to just 14 percent. It’s this ability to influence—and how CIOs can go about doing that we focus on. Given the rapid changes occurring within organizations and business’ increasing dependence on technology, there has never been a more opportune time for CIOs to build influence. From what we have heard from your peers, several common challenges and solutions seem to run through various CIOs experiences. Read on to find out more.

By Eric Ernest

Reader ROI: How to get management to listen to you. Benefits of establishing relationships. How to gain credibility from the management’s perspective.

Three

Buy-in

Challenges All CIOs Face 36

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Buy-in

Avinash Arora, Director ICT, India and Southeast Asia, New Holland Fiat India, convinced management to completely change the way they supplied tractors to dealers.

Buy-in

Challenge 1: Changing the Status Quo When faced with change it is easy to understand why resistance is the first reaction most people have. Resistance to change has always been a natural human reaction to any disturbance in their environment. Studies have shown that people would rather risk their lives than face change. Take, for example, heart patients who would rather die than change their diet. This individual resistance is amplified when you consider an entire organization’s perspective to change. The reasons for such mistrust of organizational change are plenty. It could arise from an earlier experience with failed projects that didn’t satisfy the intended target audience’s expectations or from the memory of a long-drawn out process that wore everyone out. Implementing a project within one’s section of an organization is hard; encouraging another business unit to adopt your ideas is

Farhan Khan, AVP-IT, Radico Khaitan, believes in tailoring his pitch depending on the audience, a refreshing change in a world where the same presentations are re-used indiscriminately.

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difficult on a whole new level. At New Holland Fiat India, Avinash Arora, director ICT, India and Southeast Asia, encountered such resistance when he suggested changing the tractor company’s existing dealer-distribution system. Under the earlier system, tractors were delivered directly to dealers from the company’s plant in Greater Noida as and when a customer placed an order. The process was time-taking, to say the least. “If half a month is lost in getting a tractor to the dealer, a customer may switch preference,” says Arora, outlining why it was important to streamline the process. In addition, because tractors had to be moved across state lines, they attracted sales tax. Arora suggested putting up a system that could manage depots at different locations across the country. In his vision, the set up would only require renting a fenced property to store tractors and minimal manpower to handle day-to-day operations, such as securing tractors and updating inventory. The only IT infrastructure required at the depots were a desktop with an Internet connection and a printer. But this represented a massive shift for the company’s workforce who were used to being physically present at a location to carry out their work. Moreover, the company’s executives were still not convinced of the expected results of this project. They held the notion that this project would somehow require more infrastructure than Arora believed—and all the associated overheads. They turned down Arora’s proposal. One of the management’s main grudges, as Arora puts it, was “how could IT possibly suggest a business solution?” And associated teams, such as the finance and marketing teams, just couldn’t quite get around the fact that their members could work remotely. “Your idea looks good on presentation and what you have spoken about is nice. But it’s wishful thinking,” was what, as Arora says, one of the company’s president’s said on hearing his proposal. The president then cited a similar implementation the company had carried out in Europe—one which had failed. Arora wasn’t surprised by the reluctance he met, and he tackled it head on, adopting a two-pronged approach. First, he presented his case to management through the lens of the project’s low cost. He told them that he would only need to spend on setting up meager IT infrastructure. “So even if you provide me with a maximum of Rs 1 lakh, I’m ok with that,” Arora remembers telling his management. It’s a figure, Arora says, that’s “peanuts” from management’s viewpoint. Second, Arora understood that if he was just able to get the proverbial foot in the door he would be able to convince management of the project’s viability. All he needed was to get the ball rolling

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and he knew the project would come to life. For this, he had to show them that his ideas worked, even on an experimental basis. In fact he had such a firm belief that his approach would work and bring the company a number of benefits that he even suggested, only half jokingly, that he would leave the company if his experiment failed. “I said, ‘if it’s a failure, I will face the consequences.’ I told them that if it fails I won’t come back, and that I will quit the company,” he says. Arora was able to cement the feasibility of the project by tying it into every management’s general aversion to expensive projects. Second, by staking his credibility, management was able to see that Arora was completely convinced of the project, and therefore was that much more willing to let him test out his solution. His project was carried out successfully, without the need to set up extra infrastructure at these locations, apart from renting some fenced property to store the tractors. It’s a figure, he says, that isn’t large because he rented land far from a city’s center, where it was cheaper. Moreover, it didn’t even require the physical presence of different members of various teams such as the sales and finance at those sites. The move also ensured that sales tax didn’t have to be paid for tractors as now they were being transported to depots as stock product. The overall savings he gained per tractor amounts to around Rs 800. If you win one you make it easier to win the next one. “The moment you replicate the initial success then the business takes you at your word from then on,” Arora says.

Challenge 2: Business Doesn’t Believe IT Knows its Processes CIOs know that getting their ideas accepted by people who are impacted by change—without ruffling any feathers or stepping on any toes—is as important as getting their initial project accepted by management. This is something that Perfetti Van Melle’s, head of ICT, Basant Chaturvedi understands and practices. During one company meeting, his peers in supply chain and sales complained about the amount of work involved in planning dispatches of Perfetti Van Melle’s products. At that time, dispatch data was manually fed into Excel sheets, resulting in a significant time gap between planning dispatch and its execution, with the plan taking almost a day to put in place. Having around 100 trucks that need to dispatch products to 38 locations, the consequent work in manually filling out an Excel sheet was humongous.

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Basant Chaturvedi, Head-ICT, Perfetti Van Melle, stresses the importance of talking to various stakeholders individually before presenting an idea formally.

Chaturvedi suggested that automating this system would solve their problems. While the solution itself was straightforward, the way to obtain consensus proved trickier. An environment, which is not automated and needs various point of views to be incorporated for automation, needs lots of brainstorming and acceptance of idea by functional team. To smooth things over, he started off by including major stakeholders in the decision-making process. “You have to involve all key stakeholders from day one, from the conceptualization stage itself. You have to ask for their views first before giving your own. Then you have to see how to marry both your ideas so that both parties are on board with the proposal,” says Chaturvedi. Moreover, when meeting with stakeholders, it’s important to meet them individually and informally, as opposed to formal settings, because, as Chaturvedi puts it, they tend to “guard themselves,” at formal meetings and might not be too amenable to accepting ideas. REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

Buy-in

Once in an informal setting, Chaturvedi suggests letting the other person talk and provide their ideas. The CIO’s role here, he says, is to be a good listener and to fill in certain blanks that stakeholders might not have touched upon. Having followed this consultative approach, Chaturvedi was able to get over the management’s initial opposition and have the dispatch automation project up and running. With the new automated system in place, Perfetti has been able to reduce the time required to generate dispatch plans, and maximize space utilization within each truck. Chaturvedi also took the important step of making sure he— and his team—were aware of how other teams in the organization worked. He did this by sending IT team members to go and observe the work of other teams for about a week. It’s a practice they carry out at least once a year, he says. During this time, IT team members are considered a part of that target team, whether it’s finance, sales, supply chain, etcetera. They spend their time understanding

Susheel Navanale, Group CIO, TATA Global Beverages, had to convince one of the company’s subsidiaries to invest in a project it couldn’t see immediate value in.

how a target team works and what challenges they face and how technology can help them. This reinforces the perception that the IT team is part of the overall organization and builds a sense of unity among various teams. More importantly, a sense of reciprocity is established. Now if the CIO were to requisition resources from those other team, leaders would be much more willing to help. “By binding with the function itself, we are showing that the IT team is not anything different. We are here to do what that (target) team is doing and we are doing it with them,” he says. He adds that this will help CIOs get a holistic view of all the teams within an organization and be aware of the interdependencies of every team. This is a vital skill to have especially when CIOs are trying to suggest ideas to other teams or attempting to fill in gaps in ideas proposed by others. Another IT leader who found himself in a similar position is Farhan Khan, AVP-IT at Radico Khaitan. The alcoholic beverage manufacturer has a business committee that meets at least once a month to talk about various projects. At one such meeting, one of Khan’s business peers spoke about how hard it was getting to manage the company’s logistics costs given the rising price of diesel. Others business leaders suggested that they hire consultants to advise them on this issue. Khan suggested that IT could handle the problem and run a proof-of-concept; if then the business wasn’t happy with the results they could do things their way. “Let us prove ourselves. If we can’t, you are free to hire anyone you want. But at least give us a chance. We will prove that we have the ability,” Khan told the committee. Khan’s suggestion was to implement a transportation management system (TMS). The challenge, Khan learnt, was that the company found it hard to tell if it was using every truck—that its thirdparty logistics partner sent out—optimally. Of course the initial stumbling block came in the form of doubts of IT’s business knowledge. “You guys have no supply chain experience. How can you add value to it?” was the response from the business. Not one to be swayed by such hurdles, Khan took to marketing his project to change their minds. Khan wanted to implement the TMS module from SAP. Since SAP was already being used by the IT team for over 10 years, all they had to do was add in a new module. So Khan gave presentations to his business committee members about using this module. Khan points out that during the meeting he spoke purely in business terms. Moreover, he also said that he tailored his presentation style according to who he was talking to. “When you are talking to the MD or the chairman, you have to keep everything simple, provide the conclusion up front, and take a results-oriented

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approach,” says Khan, adding that for such a scenario a one-slide presentation is adequate. But, he points out, that when talking to the business head of a concerned team, it’s good to make sure that they know that the CIO is aware of all that is relevant to their business. That means CIOs are required to talk more in depth. Just as Chaturvedi pointed out, Khan also believes in the idea of meeting stakeholders informally. “In an informal setting people will be more receptive to the ideas you are pitching,” says Khan. Khan went ahead and meet concerned officials and was able to sell the idea to them. When the next business committee meeting came up, these officials championed Khan’s solution, thereby giving further credibility to Khan’s project in the eyes of the committee. He was also able to get the approval of the chairman, who told him that “if you (Khan) are confident, we will invest in your project. So you can go ahead.” Their confidence in Khan was well placed, as after the solution was implemented, Radico Khaitan was able to save around Rs 7.5 crore.

Challenge 3: Projects Whose Benefits are Not Obvious

any resources with IT; third, they feared that their operations would be disrupted; and finally, the business benefits, they said, were not too clear to them. Navanale emphasizes the importance of addressing such concerns immediately. As he would require the best resources from the subsidiary’ functional team to be part of the project core team, he suggested that he would backfill those resources as a part of the project cost. This meant hiring temporary staff, so that the team’s business wouldn’t be disrupted. In trying to convince the team to adopt this system, Navanale showed them the costs they wound have saved if they moved to SAP, a potent argument in this day and age. He pointed out that just the cost of upgrading their existing ERP and the hardware it worked on, would be substantial and not in line with the IT strategy and roadmap. Navanale also took to what he calls “socializing” to positively influence the major stakeholders to his point of view. “You can’t just jump in front of a committee, at the last minute, and expect to get the necessary approvals,” he says, emphasizing the importance of meeting with the stakeholders beforehand, a strategy Chaturvedi also pointed out. Keeping concerned folk updated on a project is also of vital importance, he says. Moreover, it’s at this stage that CIOs should be able to discern the traits of each of the business peers he has to meet so that he knows how he can interact with them, whether informally, formally and so on. This is the kind of political-savvy Navanale advocates CIOs should have to be able to influence their peers. This knowledge of a person doesn’t need to come from a CIO’s personal interaction with business people alone. In Navanale’s case he uses the knowledge of his direct reports who are assigned to various functions throughout various geographies to get a better picture of people he would have to deal with. “You have to get to know the pulse of the concerned people,” says Navanale, to be able to effectively influence them. “You have to tune your antenna to their different characteristics.” Another method Navanale used to influence management is to get the key business sponsor to talk about the benefits of implementing a solution he thought of. For instance, when he was trying to get approval to rollout SAP to Australia in the previous year, he took a senior stakeholder to the capital expenditure committee meeting and had her present the case rather than do it himself. Having a business person promote an idea, he says, lends more credibility to a project and got Navanale’s project cleared. Navanale reiterates the need to get proper business sponsorship, as without it CIOs should not bother going about promoting it, a view which Chaturvedi also echoes. CIO

Given the rapidly changing environment, there has never been a better time for CIOs to build influence.

In today’s tough economic times, any project that is to be implemented has to be justified by the returns it provides—a hard process in itself. Now consider that not only are you the CIO who is trying to get your suggestion across to another team, but that this project has no immediately tangible benefits. A tough situation for any CIO to face given that the target team you are approaching will most probably dig their heels in and refuse to change their current way of working. At TATA Global Beverages, group CIO Susheel Navanale, faced such a scenario when trying to implement a global SAP instance at one of the group’s subsidiaries abroad, which was using a legacy ERP solution. The Indian multinational beverages company, which recently reported a profit of Rs 663 crore, has been growing through a spate of acquisitions across different geographies from Russia to the United States. With units located across multiple geographies, Navanale’s team identified the need to roll out SAP as in important step towards standardizing processes throughout the company and being able to centralize data so that it could be retrieved easily. The IT roadmap is aligned with the company’s five-year business plan, and is validated every year to make sure that the alignment remains. When Navanale approached this subsidiary with the proposal, they were, unsurprisingly, not enthusiastic about it. They laid out their reasons why they had to put off moving to SAP. First, their business was not yet ready for the move, then they had a people bandwidth and availability issues that would not allow them to share

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Buy-in

Eric Ernest is correspondent. Send feedback on this feature to eric_ernest@idgindia.com

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

STEPS TO UNLOCK CLOUD SUCCESS Implementing a cloud strategy doesn’t stop at just choosing a technology. It is also about the process. Here are 10 steps to create a successful cloud computing strategy.

By Brandon Butler

ne of the toughest parts about implementing a cloud strategy isn’t just choosing the underlying technology to power the deployment; it’s also to do with having the processes in place to manage an effective migration to the cloud, says Thomas Bittman, a cloud analyst for Gartner. “While cloud technologies are just now maturing, that’s one of the easier challenges to solve,” Bittman said during a webinar sponsored by Gartner discussing how to build private clouds. Embracing the cloud can be a transformational shift in the way IT services are delivered to the business, bringing with it benefits

around agility of applications and having IT that is customized to the needs of the business. But getting to that optimum point is about more than just what virtualization technology will be used or what public cloud provider will be hired. Itâ&#x20AC;&#x2122;s also about having the processes in place to execute the strategy effectively, Bittman says. Private clouds are the first step many organizations will take in their cloud

strategy. Itâ&#x20AC;&#x2122;s critical, Bittman says, for IT to consider why the cloud is being embraced before executing on the strategy. Most commonly, private clouds are used to deliver server virtualization automatically, giving businesses the benefit of more efficient hardware, automatic provisioning of resources, all with the security of the system being on the companyâ&#x20AC;&#x2122;s premise with native security features in place. But there still

needs to be a reason for the business to invest in a private cloud, and to determine that, the IT team needs to work with the business units to determine what problems they face and how IT can be used to solve them. Once a reason for using the private cloud has been justified, the next step is building the cloud infrastructure. And for that, Bittman has 10 elements to making private cloud computing successful:

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Leadership

Deploying a cloud strategy requires having someone that understands the needs of the business and the IT shop. The IT department’s job is to serve the business, so IT must understand the needs of the business and create solutions that will address the business’ concern. There also needs to be buy-in at the highest leadership levels of an organization to embrace a cloud strategy, Bittman says. If IT leaders arent able to convince management about their cloud strategy—and how it will benefit business—it’s bound to fail.

Define Your Services Upfront

A crucial element for deploying a cloud strategy is understanding the problems the business faces so that IT can create strategies to solve those problems. The key to doing that is to understand the services that are offered. But Bittman says not everything is optimized for the cloud: Private clouds are usually best for servicing recurring business needs that are dynamic. “The cloud isn’t for the once-every-10years ERP system you’re installing; it’s for what comes in once a week or several times a week,” he says.

Evaluate Alternatives

Bittman recommends researching the solution that will create true valueadd for your business. In many cases, that may end up being at the platform-as-aservice level, he says, where applications are customized to the needs of the business while taking advantage of the benefits of a cloud environment. “You’re not going to differentiate your company by using SaaS or even IaaS,” Bittman says, because almost every company will eventually be using some of those services. “You differentiate by using new

Maruti’s Azure Test Drive Rajesh Uppal, Executive Director-IT and CIO, Maruti Suzuki India, talks about the automobile company’s hybrid cloud strategy and why Windows Azure works well for them.

Large corporations tend to stick to private cloud services. Maruti has taken a different approach. Why? I believe that the cloud is just like any other technology, it’s not a new phenomenon. To answer your question, the first phase of our cloud strategy did involve the implementation of a private cloud. In 2005-06, we hosted a private cloud for all our dealers in the country and started providing paid services to them. That first phase was a learning platform for us. Later, we moved to a public cloud. We have a lot of small companies that support our business, and IT solutions had to be implemented for the entire value chain—Maruti’s extended enterprise. This is because a weak link in the value chain could be a disaster for the business. The two areas I have been focusing on very strongly are applications for customers and suppliers. For this, a public cloud is being planned. At the end of the day, a hybrid cloud strategy works best for a company like Maruti. Why did you choose to move some part of your applications to the Windows Azure platform? Can you share with us what really motivated you? Moving customer-facing applications to the public cloud was part of the strategy. Also, managing an in-house infrastructure for customer applications is a tedious task. We looked at a platform like Azure, where management of the infrastructure is left in the able hands of the experts at Microsoft. The opera-

tions team worked with the Windows Azure team and chalked out a business case to understand the value proposition of using such a solution. Security and manageability were two of the main drivers behind choosing Windows Azure. Using a solution like Windows Azure has resulted in significant savings for Maruti. We were also able to move 23 applications to the Windows Azure platform in three weeks flat. How should CIOs be looking at cloud and make it part of their roadmap? Adopting and implementing a cloud strategy means you are embarking on a new journey. You don’t have to move everything to the cloud. Taking one calculated step at a time will work. The application architecture of your business should allow that flexibility to integrate with other business applications. Also, keep an eye on business value at each step. How did your customers react to the cloud solutions? An internal benchmarking exercise conducted prior to the implementation of the public cloud for our customers revealed that there has been a significant benefit from moving to the cloud. The benchmarking exercise revealed that customers were flexible and supported change. This is great for Maruti, considering that we also managed to lower our costs, increase management efficacy, and be more agile during peak loads.

applications that are written specifically for your needs that scale dynamically.”

Create Metrics

A successful cloud deployment is about optimizing a business practice so that it is being done more efficiently than before. How is that done? Metrics allow for quantitative evaluation of a strategy. While cost is a natural metric to measure, customer satisfaction and speed of delivery are other metrics that can be used. The most important metric, Bittman says, is the one that is most critical to the business unit.

Develop a People Plan

A cloud deployment will in many cases change the roles of IT workers, Bittman says. Cloud architects and orchestration specialists are needed to build and manage a private cloud and service managers are needed to ensure the cloud is delivering what’s needed. Meanwhile, traditional IT roles or maintaining legacy infrastructure will not be needed as much as new roles are created.

Viraj Patel, AVP-Technology, BookMyShow, says Windows Server 2012 has provided the organization with a strong security posture and an agile virtualization environment to win the confidence of its customers.

Tell us something about BookMyShow’s experience with running Linux on the Microsoft platform. We use Linux n2n, and fortunately, Microsoft officially supports it. Most of our servers are Linux severs, and we are running them smoothly on Hyper-V. Also, since our Linux implementation on Hyper-V is fully-automated, all that needs to be done to get a new server is just pick a template and deploy the server. Our team carried out a speed test and found that we could deploy 8 Linux servers in an hour. This POC proved that the virtualization platform can be fully automated.

Build a Business Case

It’s critical for IT to determine where the business has the biggest bottlenecks that would benefit from the cloud. Once that’s determined, start small and grow into a cloud deployment. Typically that means automating virtualization features to create a private cloud, or using a public cloud for development and testing.

Windows Server 2012 : Creating a Safety Net

Have a Management Plan

Bittman says the future of IT is a hybrid world where a variety of services will be used: Private cloud will be combined with public clouds to create a hybrid cloud, while traditional

Why did you choose the Windows Server 2012 Hypervisor to tackle your downtime and storage challenges? A detailed demonstration by Microsoft made us realize that Microsoft Hyper-V is a topclass product. When I saw its technology roadmap with regard to the features Microsoft will incorporate, I was convinced it was the best product for us in the long term. Also, our core technology stack runs on Microsoft. My team is comfortable with the UI of Microsoft products. This was a key point, which worked in Microsoft’s favor. Cost was another crucial factor. As a server OS, how is Windows Server 2012 helping you address your business challenges? First off, it’s a highly secure OS. Security is critical for us because, ultimately, customers have to be assured that their transactions are secure. Since the operating system is the base of everything—and if the OS itself is not secure—it’d be difficult for us to convince management of the security of applications we develop internally. A strong security posture helps us achieve a high level of trust within the company and among customers.

How does Microsoft’s System Center 2012 make managing your day-to-day tasks easier on a virtual infrastructure? Earlier, we had a physical infrastructure which was a nightmare to manage. Because ours was a collocated environment, there was always the fear of having to rush to the datacenter in case of any issues. However, that’s not the case with System Center 2012. When compared with a physical environment, it makes life very easy. How did Microsoft help you resolve the challenges of storage, workload, and hardware on the database management front? Initially, our database was running on Microsoft SQL Server 2005. We later upgraded to 2008 R2. Our first database server was like an entry-level server, but today, it is monstrous, running a 400 GB database. We have been coordinating with Microsoft for our database and application development. We have visited their Bangalore center a few times and coordinated with their technical architect to figure out ways to improve application performance.

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Private Cloud: Fast and Flexible Jins Varghese, Director, IT and Hosting, Talisma, talks about why he chose to create the company’s private cloud using Windows Server 2012 and how it’s benefited the company.

Why has Talisma adopted Windows Server 2012 to build its private cloud? At Talisma, we decided not to pay another vendor for software licenses and leverage an existing investment by entering into an enterprise agreement on Windows Server 2012 and Hyper-V. We built a private cloud model for our production and development environments. Its adoption has not only ensured higher availability, but has also guaranteed a faster, more efficient disaster recovery process. Both these benefits have, in turn, created a proportional hike in customer satisfaction levels. Considering that you are one of the early adopters of Windows Server 2012, how easy—or difficult—was it for you to implement and roll out your private cloud based on Windows Server 2012? Cloud computing cannot be passed off as a fad anymore and today private cloud models have gained greater interest over public cloud models. Even as an early adopter, we faced a few hiccups in terms of configuring storage. But nonetheless, it was a fairly uncomplicated deployment of the private cloud infrastructure within the organization. We were able to get four blades and two clusters up and running in a matter of four weeks. What kinds of applications and workloads are you running out of your private cloud? We are currently running a number of applications and workloads out of our private cloud environment. The applications

range from file and print, SharePoint, development and QA virtual machines with Windows to Visual Studio and SQL. In the near future, we also have plans to migrate other core infrastructure components such as active directory, DNS, DHCP, Exchange and Lync onto our existing private cloud environment. What level of improvements in efficiency have you seen as a result of this implementation and what are some of the key business benefits that you have achieved? There has been a significant improvement in our efficiency through increased virtualization. As a result, we are able to run an average of 25 virtual machines (VMs) per host. Also, the time required to deploy new VMs has gone down by 20 percent. As a result of this private cloud rollout, planned downtime associated with VM and VHD migration has reduced to zero. You are also adopting Windows Azure. So, what kinds of applications and workloads are you moving to Azure and how are you going to integrate them with your private cloud? While the private cloud model at Talisma is being used for our corporate IT services, Windows Azure is being deployed for hosting where we have rapid deployment requirements. Therefore, at this time, we do not have any immediate plans of integrating Windows Azure with our existing private cloud model since both of them are being used for different purposes.

infrastructure will continue to be used on-site for certain applications. IT should be the broker of those services to the business unit, delivering the service based on the business use case and the service offerings.

Have the Right Technology in Place

While business processes are critical, technology cannot be ignored. Fundamentals of the technology plan include access management—meaning who has access to what services—and a service governor that will manage the resources that are delivered through the cloud. There are a variety of vendors like Microsoft that will help enterprises and SMBs manage their cloud deployment.

Mind the Processes

Business needs evolve, and IT needs to be able to change with it. “As you build private clouds, look ahead to what’s next,” Bittman says. The future of cloud, he says, is a hybrid model that uses both a private and public cloud resources.

Start Small, Think Big

“It’s daunting, so be cautious of how you deploy your cloud,” Bittman says. Learn by experimentation, monitor the usage and feedback, identify needs within the business and architect IT solutions to solve those specifically. “We can’t design everything perfectly from the ground up, so start small and build from there,” Bittman says.

Revolutionizing Hybrid Cloud Technology Srikanth Karnakota of Microsoft India explains how Microsoft’s latest upgrades—the Windows Server 2012 R2, System Center 2012 R2, and SQL Server 2014—are transforming the dynamics of the hybrid cloud. Srikanth Karnakota is Microsoft’s India country head for its Server and Cloud Platform business. In this role, he is responsible for P&L, strategy and marketing of Microsoft’s Cloud and Server platform business. In his earlier role at Microsoft, Karnakota incubated start-ups and the venture capital engagement arm of Microsoft India.

What are the most prominent features included in the latest upgrade of Windows Server 2012 and System Center 2012? With Windows Server 2012 R2 along with System Center 2012 R2, customers can gain all the Microsoft experience behind building and operating private and public clouds, delivered as an enterprise-class, simple and cost-effective server and cloud platform. These products break down boundaries between customer, service provider, and Windows Azure datacenters to enable a true hybrid cloud. One outstanding feature is that the Windows Server enterprise-class virtualization platform is the same across clouds, ensuring easy workload portability between on-premises Hyper-V environments and Windows Azure Virtual Machines (VM). A new Windows Azure management pack for System Center also enhances unified management across on-premise and Windows Azure virtual machines and storage resources. The new SQL Server 2014 comes with native in-memory computing capabilities. How is this technology different? SQL Server 2014 will deliver a powerful set of capabilities for mission-critical workloads, business intelligence (BI), and hybrid clouds. Everything is in-built and easy to use, with a low cost of delivery. Through the new functionality present in SQL Server 2014, customers will experience improved performance, increased availability and disaster recovery, and simplified deployment of hybrid scenarios to Windows Azure. With our in-memory benefits built in, there is no need to buy a separate product, re-write

We have included significant features and enhanced Windows Azure Infrastructure Services to bring true cloud economics to customers and give customers more options in building hybrid clouds.

SQL Server applications, refresh hardware or learn new skills. Also, unlike competing products, SQL Server 2014 allows customers to select specific tables to store in-memory with those stored outside, ensuring greater flexibility and efficiency. Can you tell us why the latest enhancements in the Windows Azure platform are attractive for customers? We have included significant features and enhanced Windows Azure Infrastructure Services to bring true cloud economics to customers and give customers more options in building hybrid clouds. We have introduced per-minute billing for Web Roles and Worker Roles, versus being billed by the hour. In addition, when customers shut down their VMs, the billing meters stop as well. We are also adding a new security option that lets customers control in-bound traffic to their VMs. Microsoft claims Windows 8.1 to be a more business-friendly OS. What makes it so? Windows 8.1 will build on the innovative Windows 8 platform to offer businesses the best business tablet solutions and the most powerful and modern operating system for all of their computing needs. Our technology investments for business customers, with Windows 8.1, include devel advancements in user-experience, development platform, manageability, security, mobility and networking; along with our continuous commitment to compatibility, performance, and reliability.

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Case File | Asian Paints

Fast

Colors olors How Asian Paints used in-memory computing to make analyzing sales data 14 times fasterâ&#x20AC;&#x201D;empowering the company with unbeatable agility and real-time insightsâ&#x20AC;&#x201D;to get ahead of its rivals and hold a permanent spot at the top.

Reader ROI:

How in-memory computing provides competitive edge

B Y D E B A R AT I R O Y

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The power of real-time analytics

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n a quaint, little paint shop in Bangalore, Kumaraswamy, an Asian Paints dealer, sells about 15-25 cans of paint, on an average day. But in peak festive seasons like Diwali, that number should obviously skyrocket, right? Wrong. The maximum number of paint cans, says Kumaraswamy, that exit his shop are in the month of April. Why? Because May is a popular wedding season. That’s just one trend not many know about. Kumaraswamy reveals some more. “People have moved from bright, loud colors to more pastel and neutral shades. Also, the demand for smaller cans has gone up because now people like to experiment with two or three color combinations in a single room,” he says. Kumaraswamy might be just one of the many dealers that Asian Paints has. But imagine what would happen if the company could churn enough intelligence from all these trends—to determine, for example, what products are trending, which ones are doing well in which area or what products sales should push—in real-time. Wait. Asian Paints is actually doing that. Armed with the power of in-memory computing, Manish Choksi, president, Home Improvement, Supply Chain and IT, Asian Paints, has empowered his organization with real-time data that can give competition a run for its money. But to get real-time data, Choksi would have to do away with the company’s old ways of working and replace it with a fresh coat of speed.

In a Blue Funk Asian Paints is the largest paint company in India and it has about 650 sales officers and an extensive network of around 30,000 dealers. These sales officers are the single point of contact for all dealers. It’s their responsibility, for example, to ensure products and services are delivered on time. “A significant part of our business is based on how we associate with our retail channel,” says Choksi. Asian Paints’ transaction system has extremely granular pieces of information at a dealer level like what products are being sold, what’s the credit situation in the market etcetera.

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Different Shades of Speed In-memory computing has speeded up Asian Paints’ ability to derive insights, giving it an edge over competition.

14x

Asian Paints can now analyze sales data 14 times faster than it could.

20 seconds: The time it takes the company to drill down almost two years of historical data.

95%

Of performance improvement in the system’s ability to extract data.

1:6

The size of data stored in the company’s business warehouse is just one-sixth of what it was earlier.

3,600

The types of paint material that Asian Paints can now analyze to get insights in real-time.

The sales officers are connected with the enterprise information systems—through their tablets—and are able to fulfill the informational needs of the dealer. The dealer would typically want to know information on stock availability, existing schemes, delivery status, etcetera. This data is available on the tablet. Apart from this, the sales officers also capture all dealer issues which immediately get escalated to the right people within the organization. Also, the sales officers get a good view of the latest sales and targeted sales.

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Case File | Asian Paints

The need for real-time visibility of sales has been a demand on IT for quite some time from the sales team—especially from sales managers at regional, divisional, and head office levels. Visibility of sales data on a real time basis does allow sales officers to take quick action and help improve sales. But to be able to comprehend the significance of this information and take informed decisions in real-time, Asian Paints would need something smarter than conventional ERP and BI systems. Especially during peak seasons. “Typically, during peak-load times, we had to temporarily shut down generating reports for our sales people because the processing load on the ERP platform was fairly significant,” says Choksi. But these peak-load seasons were also hectic times for sales officers and dealers. For example, while the end of the month was choc-a-bloc with financial closing cycles, it was also the time when sales officers would need information on how they were faring on sales deadlines. Having access to critical information—like what products were selling best or which customers, regions or dealers were more likely to buy more— could help them meet their targets. Similarly, festive seasons are times when Asian Paints runs a lot of campaigns. Unless sales managers are aware of things happening at the dealer level, they would have no clue on how well a particular campaign was doing. This impacted their ability to decide whether they could extend the duration of a specific campaign or spread it across geographies. And that was something Asian Paints couldn’t do. The company was using an SAP Business Warehouse (BW) and Choksi had already spent around 18 months to make BW the enterprise database at Asian Paints. Initially, he hoped to leverage this data warehouse with various front-end tools to enhance visualization of various functions like ageing of billing analysis (ageing is a technique for evaluating the composition of a firm’s accounts receivable to determine whether irregularities exist). “But that was not happening on BW because the systems were neither scalable 52

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With in-memory computing, we, for the first time, experienced the business benefits of having the capabilities to analyze large sets of data in real-time. If an average query was taking x times earlier, it’s 14x times faster now. —Manish Choksi, President, Home Improvement, Supply Chain & IT, Asian Paints

nor powerful enough to include pulling out “As we move from a regional sales manager and analyzing large sets of data in real-time,” to a divisional sales manager—who handles a large number of dealers—the volume of says Choksi. queries increases manifold and the amount of This deficiency meant that despite information going back and forth within the having a BI suite, there were limits on how system increases substantially,” says Choksi. many queries—related to product sales and Also, generating sales reports based on performance—business users could feed a query would take time, which meant that into the system. For example, users could not slice and dice data at the most granular level Asian Paints was losing priceless hours in which it could have already taken action. even when information was available in the If the company wanted to widen the gap database, due to a lack of powerful systems between Asian Paints and its competitors, which could process information that fast.

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Case File | Asian Paints

it would have to devise a way to get all that data in real-time.

Gray Matter What Asian Paints needed was a double coating of horsepower to spruce up its systems. It needed a system that could leverage its enormous data set to help business users analyze granular data without the need to prebuild analytical views. All in near real-time. In no time, Choksi stumbled upon a relatively new technology in 2011 that could perform real-time complex analytics and update every single transaction in a way never thought possible in financial applications: In-memory computing. Taking on the fact that the more the data, the slower the retrieval process, in-memory computing eliminates the “go-get-data” stage by keeping relevant data loaded into the RAM. This is what enables the retrieval and analysis of data in real-time. Clearly, only in-memory computing could help Choksi achieve the real-time power that he was gunning for. But back in 2011, he had limited options for an in-memory computing solution. He chose SAP HANA because it fitted seamlessly into Asian Paints’ SAP landscape. “Choosing any other in-memory option would mean that our SAP BW would not run with that technology. We would have to adopt a new data warehouse and it would not be cost-effective,” says Choksi. SAP HANA fitted into Choksi’s roadmap. But the best things in life don’t come easy, and certainly not cheap. To offset the huge initial capex that HANA demanded, Choksi devised a plan. “Not every function requires the kind of firepower that is HANA’s USP. By adopting HANA only for selected functions that would benefit the most, we were able to offset the initial investment required,” says Choksi. “It also allowed us to get a deeper understanding of the relatively new technology while addressing the most pressing business needs”. Asian Paints deployed an additional instance of BW running on SAP HANA without disrupting the Enterprise BW that was set up earlier. In this layer, HANA

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largely works as an accelerator which just accelerates the content available in the BW for information consumption. A third layer which is called the Enterprise HANA, is the pure in-memory computing layer of HANA. Users directly access data through the applications built on top of the Enterprise HANA layer. Choksi says that by creating this threetiered arrangement, the systems at Asian Paints have become more complex. But as long as the larger organizational goal is achieved, neither Choksi nor his team

Asian Paints can now analyze information on 30,000 dealers, 125 product codes, 3,600 kinds of material and combine it with historical data to get insightful information—in real-time—and at any level. mind the challenges associated with it. “With the three-tiered approach, we have complicated IT’s life a bit. But, in the bargain, we have optimized the manner in which people are consuming the information along with cost benefits,” he says. That apart, Choksi knew he would have to deal with another problem: Inadequate in-house skill sets. But limited in-house skills were just a part of the problem. The POC stage also required Choksi to carefully deploy his existing limited resources in the most optimal way to accommodate the frequent software updates that came along as the technology matured and molded itself

to Asian Paints’ needs. Also, applications that needed to be custom-built to suit the organization’s specific requirements were built in-house by the IT team at Asian Paints.

Pink of Health Armed with unmatched horsepower supporting the backend, today Asian Paints is galloping with faster response times and decision-making capabilities. “If an average query was taking x times earlier, it’s 14x times faster now,” says Choksi. With in-memory computing, sales officers at Asian Paints can now drill down almost two years of historical data at the most granular level with sub 20 seconds performance time. The system’s ability to extract data has seen a 95 percent performance improvement. “We can now analyze information on 30,000 dealers, 125 product codes, 3,600 kinds of material and combine it with historical data to get insightful information—in real-time—and at any level,” says Choksi. Along with that raw power, Asian Paints has witnessed the additional benefit of data compression which will help the company lower its storage costs further. It has also seen a compression ratio of 1:6, which means the data size in the new BW on HANA system is just one-sixth of what it was earlier. Above all, this is the first time the company is in a position to offer its sales officers a compelling value proposition wherein one can process data at an extremely granular level and that too in almost real-time. With conventional systems, one could either choose large, detailed data sets, or fast processing with smaller data sizes. “With in-memory computing, we, for the first time experienced the business benefits of having the capabilities to analyze such large sets of data in real-time,” Choksi says. That is still a dream many organizations are chasing. For Asian Paints, it’s already a reality. CIO Send feedback to debarati_roy@idgindia.com

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Innovation

Fast Food Gets Pers nal

Innovation

The future of burger joints and smoothie bars involves customer-friendly technologies that will make fast food more of a service and less of a destination. By Kim S. Nash

from mealtime to mealtime. Once, a fast-food restaurant’s menu differentiated it from competitors. “Dude food” one-upmanship a few years back brought us delights like Hardee’s Monster Thickburger (up to 1,400 calories) and Red Robin’s Whiskey River BBQ Burger (1,100 calories). Now IT is the differentiator. But customers expect more technology to be involved in dining out than simply posting pictures of their entrees to Tumblr. They want faster, more accurate ordering, e-coupons and more options for payment, says Darren Tristano, a consultant at Technomic, a restaurant industry research firm that recently surveyed 500 consumers about technology priorities. “Consumers are forcing restaurants to move faster than they traditionally have,” adds Robert Notte, CTO at Jamba, a $226 million (about Rs 12,430 crore) chain that makes healthy (and not-so-healthy) smoothies. “It’s important to be willing to take risks.” The valuable breakthroughs will come when restaurants get ahead of customers, creating all-new ways of interacting. International markets, school cafeterias, military posts and crowded cities are laboratories for innovation. Along the way, these companies are rewriting organizational boundaries and rejecting old notions about fast-food business models. Not every gee-whiz experiment will succeed, of course. But where they do, IT will differentiate those restaurants from rivals, says Dennis Lombardi, executive vice president of food-service strategies at WD Partners, a restaurant design and development firm. “It’s all about trying to influence how the consumer moves.”

ou’re walking down a busy sidewalk to an early meeting when your smartphone dings. A message pops up, noting you haven’t stopped for your usual egg sandwich and latte. A mobile app tells you the nearest Dunkin’ Donuts is three blocks over. Another app brings a coupon for breakfast at a McDonald’s around the corner. You decide. With a few taps, you order, specify a pick-up time and pay, never breaking stride. That evening at your favorite burger chain, you approach a counter-mounted iPad to order. The system recognizes you from identity data radiating from the phone in your pocket and automatically displays only the foods you like. A smiling avatar on the screen welcomes you. Having checked your purchase history and the store’s inventory, she makes an offer. “You’re due for a reward,” she says. “How about our new Megaman Cheeseybeef for $2? Dessert’s on me.” How can you resist? If You Want Something Done Right... The future of eating out lies in today’s experiments Paper hats and penciled tickets may have disappeared at Burger King, Domino’s, McDonald’s, Wendy’s and long ago, but fundamentally, ordering fast food hasn’t the many other companies in the $707 billion (about Rs changed much since Ray Kroc opened his first McDonald’s 38,885,00 crore) worldwide fast-food market. restaurant in 1955. But standing in front Restaurant chains want to use technology— of a uniformed cashier reciting a list of Reader ROI: theirs and yours—to create an intimate numbered meals no longer cuts it. Scratchy How IT can improve customer experience. Your personal device speakers at the drive-thru are worse. customer experience and the restaurant’s own systems for No one’s gone digital across a whole How mobiles are providing sensing, analyzing and transacting will chain yet, for several reasons beyond the competitive advantage to exchange data, for your convenience and obvious expense. Franchisees, for example, restaurants their profit. Fast food becomes not so much aren’t necessarily required to do what the The importance of IT in a destination but a service that follows you corporate entity does, and consumers in marketing

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Innovation various markets may not be ready for big change. Older patrons aren’t as eager as Millennials for capabilities like Web pre-ordering and PayPal-based checkout, Tristano says. Still, customers view Web, mobile and even phoned-in orders as fast and accurate, he says. Restaurants that use IT to improve ordering will have an advantage in cultivating the happy, frequent visitors they need, he says. At Jamba, which has nearly 800 stories worldwide, Notte is supporting various electronic payment systems (such as Google Wallet and PayPal) in certain US markets, and is piloting mobile and tablet ordering at seven stores in California. Jamba recently released a smartphone app that, in future versions, will use NCR’s Aloha Connect tools to link to its point-of-sale system so customers can order, pay through PayPal and designate a pick-up time. When they get to the store, they can skip the lines. The idea is that with one tap—not multiple cards and pieces of paper—customers can pay, redeem coupons and collect loyalty points, Notte says. “No more Costanza wallet,” he laughs, referring to the Seinfeld episode where George’s overstuffed wallet throws out his back and then blows apart in the street. Mobile payment “is not going to explode overnight, but we’ll be in a great position to support it as customers start to adopt it,” Notte says.

Robert Notte, CTO, Jamba Juice, says consumers are forcing restaurants to move faster than they traditionally have. That’s why CIOs should be willing to take risks.

At Domino’s Pizza, which launched online ordering in late 2007 and its famous pizza tracker in 2008, more than one-third of pizza sales originate online. Now the $1 billion (about Rs 5,500 crore) company wants to move more customers to mobile. Domino’s already has mobile apps and a website optimized for mobile devices. This year, CIO Kevin Vasconi and CMO Russell Weiner aim to add features such as access to a CRM system that will remember regular orders, addresses and other details without the customer having to type them in every time. Fields will pre-populate and the system will do automatic error checking, which makes the user experience a competitive differentiator, Vasconi says. Then there are profits to think about. “We like people on mobile platforms,” he says. “Customer satisfaction is higher, cost to serve is lower and [average sales] tickets are better.” Vasconi declines to discuss why that’s the case at Domino’s. But research from Intuit about the financial services industry suggests that mobile customers are more engaged with the company, more loyal and tend to use more of the services offered. In full-service restaurants, too, customers are interested in doing their own ordering, says Patti Reilly-White, CIO of Darden Restaurants, which owns the Olive Garden and seven other chains. Pilots of Web and mobile ordering are under way at several Olive Gardens in eight markets. “Finding ways to make [dining] more convenient is important for our guests,” says Reilly-White. “We don’t want to miss out.”

Cheeseburger in Your Own Paradise Missing out is partly what motivated Burger King to start delivery service in 2011. Sales had been flat or down for the past few years and Wendy’s was about to overtake it as number two in fast food. Burger King’s comeback effort includes expanding the menu, remodeling restaurants and opening more stores internationally, including in Africa, China and Russia. Delivery is getting special attention from Burger King CIO Kelly Maddern. Fast-food companies have done delivery in many countries for a long time. Mopeds and bikes outfitted with insulated bags adorned with corporate logos swarm the streets from Shanghai to Manila to Moscow. But in the United States, burger and chicken delivery is a departure that demands new thinking. In addition to figuring out how to keep fries from getting soggy (a job for “packaging engineers” with degrees in such things), fulfilling Web orders requires a call center and a different workflow inside the restaurant. Also, labor costs jump, as Burger King acknowledged in recent financial documents. Even so, Burger King is aggressively rolling out delivery service, adding at least 15 locations to the 47 stores in four states that already deliver. The menu is limited to mainstays—including Whoppers, of course— and special bundled deals for families. The $2 billion (about Rs 11,000 crore) company hopes to increase sales

VOL/8 | ISSUE/08

Innovation and get closer to individual customers, Maddern says. With a $10 (about Rs 550) minimum and an average $2 (about Rs 110) delivery charge, the average order value for delivered food is higher, she says. Burger King is working with EMN8, a software, marketing and consulting company, to run the bkdelivers.com e-commerce site. Customers who set up loyalty accounts can ask the system to remember order histories for quick reorder. Today, Burger King awards a free sandwich after every fourth order. In the future, Maddern plans to cross-sell and upsell with recommendations that pop up on the website as customers click around. The EMN8 software is also capable of calculating a customer’s lifetime value, which considers both sales history and costs incurred in support calls. Wait—tech support for buying a hamburger? As fastfood chains offer mobile and Web options, they will also have to help customers navigate the brave new world.

Pink Slime and Toxic Chickens Some restaurants are using IT to show customers the source of their products, making their supply chains more transparent. They’re responding to growing consumer demand for information about where food comes from, but they also see how social media spreads ugly stories and magnifies the damage they do. KFC, the chicken chain owned by Yum Brands and a long-established player in China, is still hurting from the “45-day chicken scandal.” Last fall, reports accused KFC’s local Chinese suppliers of pumping illegal drugs into their birds to make sure they grow fast—from hatch to slaughter in 45 days. The stories dominated China’s media, including its microblogging service, Sina Weibo. Consumers criticized KFC and warned each other not to eat there. A popular TV news show investigated the allegations, as did China’s food and drug administration, finding that some farmers abused antibiotics and KFC suppliers bought affected chickens. KFC has denied intentional wrongdoing and vowed to improve its supply-chain practices. CEO David Novak addressed the controversy in February, telling Wall Street analysts he expects sales to drop this year. Because China accounts for 42 percent of KFC’s profits, the whole company will be affected. “We don’t know how long it will take us to recover,” he said. “This onslaught of negative media coverage [has] been longer lasting and more impactful than we ever imagined.” Last year, McDonald’s struggled with the “pink slime” controversy. Celebrity chef Jamie Oliver talked about how last-stage beef remnants are used in hamburgers in the United States, after being processed with chemicals illegal for consumption in some countries. The $27 billion ( about Rs 148,500 crore) McDonald’s, being the largest purveyor of burgers around, quickly became a target of consumers’ outrage. Twitter and Facebook lit up with angry talk, and one unappetizing image of an oozing pink mass

was repeatedly shared. McDonald’s soon announced it would no longer use this kind of beef filler, saying the decision had been in the works since 2011. The company considers social media a risk to its business and warns investors of the peril in its financial documents. “Transparency, processing—all those things are becoming incredibly important. Restaurants are going to have to answer those questions,” says Tristano. “Some can and others won’t.” McDonald’s Australia can and does. Rather than reacting after stories circulate, Macca’s—as McDonald’s is nicknamed by Australians—has created an application to show the curious public more about its ingredients. Not meals in general, but the very burger or fry someone is about to bite. Using the TrackMyMacca’s iPhone app, a customer scans an augmented reality trigger on the package of her food. The app transforms data points from Macca’s supply-chain systems about farms, suppliers, ingredients, date, time, weather, location and other variables into an animation that incorporates the faces and voices of real farmers. The text that accompanies the visuals is by turns wry and informative. “We were very conscious of being entertaining in an adult way,” says Shamini Nair, national marketing manager for McDonald’s

Restaurant chains want to use technology— theirs and yours—to create an intimate customer experience. Your personal device and the restaurant’s own systems for sensing, analyzing and transacting will exchange data, for your convenience and their profit.

VOL/8 | ISSUE/08

Australia. “The Simpsons was the inspiration,” she says, referring to the animated TV comedy known for sharp social commentary. The app isn’t comprehensive. It provides history for just five products—the most popular ones, Nair says. Since its launch in January, the app has seen 45,883 unique downloads. The project took more than a year. “We didn’t anticipate it would be so long, but it needed to be to deliver accurate information,” she says. Her digital business group worked with an outside ad agency as well as internal IT, supply chain, quality assurance and legal, among other departments. McDonald’s outlets around the world have asked for details about building the application, Nair says, including Canada, the UK, the US, and Turkey. Building something similar, she says “would take commitment, but I would love to see it happen.”

Robot Restaurant With all the super-efficient electronic ordering soon to come, bottlenecks will move from the cashier to the kitchen. But IT advances behind the counter will help, says Lombardi at WD Partners. Restaurants will be able to attach intelligent sensors to kitchen equipment to monitor use. Analyzing the data in real time REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

Innovation will show how well the crew is working, he says. He envisions a time when video will be integrated in all zones of the kitchen. When sensors detect a cook isn’t operating the grill well or someone is making shakes wrong, a pertinent training video will launch on a nearby monitor to review procedures. Such a system could also keep statistics on which workers trigger which videos, information that could be handy in performance reviews. At Red Robin, CIO Chris Laping launched an interactive, gamified training program last year on iPads. Employees go through food preparation, menu and customer modules, using text, images and animations. For example, waiters act out real-life scenarios by clicking on animated customers. If someone orders a margarita, the waiter must ask for proof of age, politely. “This allows them to practice. You don’t want to piss off a live guest,” says Laping, who is also senior VP of business transformation. New cooks try techniques and recipes virtually as well. “You’re not throwing out food while practicing.” Sensors on storeroom shelves, meanwhile, could track inventory against sales, using formulas to watch for problems. One does not want to run out of pickles, after all. The system could send a text alert to inform the manager of that and other troubling circumstances. A Wendy’s franchise in Minnesota, for example, runs video displays

Royal Treat for Loyal Customers The rewards program at Red Robin Gourmet Burgers reflects how modern consumers blend online and offline activities. In the original e-commerce model established in the late 1990s, companies fought to get people to shop on the Web. Now, some companies realize consumers don’t live their lives in one realm or the other, says Chris Laping, CIO and SVP of business transformation at Red Robin Gourmet Burgers, the $977 million (about Rs 53,735 crore) chain of 473 casual-dining restaurants worldwide. Members of the RedRoyalty program receive free food and discounted meals, as you may expect from a loyalty program. But they also get Facebook credits through virtual currency from a company called Plink. Customers register with Plink, and when they eat at Red Robin, they earn credits to use on Facebook to play games such as Farmville. “The demographic data on those games is startling,” Laping says. “Not young kids, but decision-makers of the house.” That’s just the kind of person Red Robin wants to visit the restaurant. “Facebook credits are an incredible motivator to get off the computer and go spend money at brick-and-mortar places,” he says. “We’re rewarding people with what they’re interested in.” A wave of experimentation is washing over the dining industry, Tristano says. “This is the time to evolve.” — K.S.N

in the kitchen and a back-office dashboard to monitor sales, costs and labor metrics in real time. Smart mechanization and operations monitoring, Lombardi says, will not just recognize that something is amiss but will also seek out likely causes. Backroom technology will affect the customer experience as well, through digital signage. Today, some chains use electronic menu boards at the counter and in the drive-thru lanes. Unlike the traditional cardboard, wood and metal signs, digital signs can be programmed to change as the day passes. Panels can be reserved for promotions, entertainment or information. But responsive digital signage is the future. That is, by integrating point-of-sale and inventory systems with outside variables such as weather and community events, digital signs can flash instant promotions. Say chicken sales have been down all day and, as the dinner hour approaches, so does a snowstorm. A manager may decide to offer a family-meal special, suggesting customers bring home a hot dinner to ride out the weather. The digital sign can display suggested product bundles in one panel with regular storm reports in another. “Informative messaging that’s changeable is powerful,” says Jack Clare, CIO of Dunkin’ Brands. He predicts it will be among the near-term IT investments restaurants make. Further down the road, drive-thru systems could be equipped with voice recognition, negating the need for a dedicated person in a headset. Since the systems will have to recognize only 200 to 300 words common in the fast food setting, Lombardi says, they will converse not only in multiple languages but also in dialects. But surely voice recognition won’t replace “the singing drive-thru lady” at a Popeye’s in Louisiana known for greeting customers with song. Perhaps the ultimate end for some chains will be to go restaurant less. Well, to a certain extent. Jamba, for example, has installed JambaGo self-serve machines that supply smoothies to over 400 sites. The machines dispense smoothies in Jamba’s usual flavors but with ingredients specially formulated for vending machines. Customers pay by walking over to a cashier, but in the future Notte envisions a fully automated vending machine that takes mobile payments. The company wants to install JambaGos for 1,000 more sites this year and is hiring sales managers for “non-traditional development.” They will target schools, hospitals, stadiums, airports and other locales where having a full-size store may not make sense. Red Tomato, a pizza place in Dubai, United Arab Emirates, has shrunk the store footprint to just 2 inches. Red Tomato gives customers a magnet shaped like a pizza box to stick on their refrigerators. A customer uses a mobile phone to configure the magnet, specifying a favorite pizza and toppings, along with payment data to keep on file. Any time he wants pizza, he presses the button on the magnet, which alerts Red Tomato by sending a Bluetooth signal to the customer’s smartphone. The customer receives a text message confirming the order and the pizza arrives soon after. No call, no clicks, no problem. CIO Kim Nash is a senior editor. Send feedback on this feature to editor@cio.in

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

VOL/8 | ISSUE/08

Mid-Year Report Card

Mid Year

eview 2013

CIOs didn’t see this one coming. Riding on the optimism of 2012, IT leaders expected 2013 to be the year of the upturn. That was not to be. The slowdown had never eased. In fact, it has had a bigger impact—than CIOs imagined—on their roles, how business views them, and their mobility and cloud computing strategies. No. of CIOs who were considered competitive differentiators in 2012

27%

No. of CIOs who are considered competitive differentiators in 2013

14%

94% 59% Expected Say Compensation to Change in 2013

Compensation Changed in 2013

Survey Methodology The Mid Year Review Survey 2013 was administered online over four weeks in April and May, 2013. Over 230 IT leaders participated. Fourteen percent of respondents were from organizations with annual revenues below Rs 500 crore, 28 percent between Rs 500 and Rs 1,999 crore; 30 percent from enterprises between Rs 2,000 crore and 9,999 crore; 27 percent from organizations over Rs 10,000 crore; and one percent from NGOs/non-profit organizations and government departments. All responses were gathered using a secure server with all individual data kept confidential. The degree of error is +/- 5.3 percent at a 90 percent confidence level. VOL/8 | ISSUE/08

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

THE CIO AND THE DEPT Your Compensation

67%

Six months ago, a majority of CIOs expected their compensation to change. They couldnâ&#x20AC;&#x2122;t be more wrong. Their estimate is off by a whopping 35 percent.

Of CIOs in organizations above Rs 10,000 crore say their compensation has changed, compared to 50 percent of CIOs in organizations between Rs 2,000-9,999 crore.

94%

73%

Of CIOs in the IT/ITeS sector say their compensation has changed, compared to 51 percent in the manufacturing sector.

59% 2012

2013

Expected

Changed

Major Challenges

Top Challenge by Industry

Delayed decisions from business continue to be the biggest challenge for CIOs. Governance risk and compliance is the new entrant in the list of top three challenges this year.

BFSI, IT/ITeS, and manufacturing are in line with the major challenges of 2013, but the auto sector faces a unique challenge.

2011

2012

2013

Auto

User resistance to new technology

Delayed decisions from business

BFSI

Inadequate in-house skill sets

Deploying too many technologies

Inadequate in-house skill sets

IT/ITeS

Unrealistic business/ staff expectations

Inadequate in-house skill sets

Governance risk & compliance

Manufacturing Inadequate in-house skill sets

Delayed decisions from business Governance risk & compliance

CAPEX-OPEX Break-up

Job Satisfaction

The capex-opex estimate is bang on. CIOs are parking more money on opex, a trend that started in 2012.

Compared to six months ago, the number of CIOs saying they are satisfied/very satisfied has fallen by 5 percent.

57%

Just moved, canâ&#x20AC;&#x2122;t say

2% 4%

57%

54%

Not satisfied

1% 2%

% 31

% 29

Satisfied, but looking to move

47%

2012 Estimated Opex

Satisfied/ Very satisfied

2013

2012

Capex

84%

Of CIOs in organizations above Rs 10,000 crore say their budgets have changed, compared to 70 percent of CIOs in organizations under Rs 500 crore. 60

% 63

2012

43%

% 68

44%

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

2013

Job Satisfaction by Industry A majority of CIOs in the auto sector say they are satisfied/very satisfied with their jobs. They were the most satisfied in 2012 too. AUTO

BFSI

IT/ITES

MANUFACTURING

75%

60%

69%

64% VOL/8 | ISSUE/08

THE CIO AND THE BUSINESS How Business Views You Surprisingly, ITâ&#x20AC;&#x2122;s image as a competitive differentiator has taken a severe beating. The number of CIOs who say they are percieved as competitive differentiators has dropped by 13 percent. 39% 2011 2012 2013

35% 31% 28% 27% 28%

27%

20%

17% 14%

14%

Cost center

Valued Service Provider

Trusted Partner

Horizon of Your Business Plans

Competitive Differentiator

OVER 80 PERCENT OF CIOS SAY THEIR BUSINESSES AND ORGANIZATIONS BELIEVE THE NEXT YEAR WILL BE VERY CHALLENGING. BUT ONLY 22 PERCENT OF CIOS HOLD THE SAME VIEW FOR THEIR IT DEPARTMENTS.

What Impacts Your Organization

A majority of CIOs say the horizon of their business plans is between six to 12 months, which is same as six months ago.

40% Slowdown of the Indian economy

2013

2012

25% 16%

13%

19%

71%

Six months and under Six to twelve months

Global recession

19%

20% Policy paralysis of the union government 8% Depreciation of the rupee

62%

6% Growing threat to enterprise security

More than twelve months

2% Younger people entering the workforce

Business Focus

Business Focus by Industry

Business has taken a step backwards. More number of CIOs say their business has increased focus on operational impact. 61% 58% 57% 51% 51% 49% 2012 44% 2013 39%

The good news is except for CIOs in the manufacturing sector, all other sectors have increased focus on customer and strategic impact.

18% 18% Operational impact

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Customer impact

Financial impact

Strategic impact

Security impact

Auto

Customer impact

BFSI

Customer impact

IT/ITeS

Strategic impact

Manufacturing

Operational impact

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

THE STATE OF CLOUD COMPUTING Route to the Cloud The private cloud has gained ground. But the public cloud still has only a handful of takers. A majority of CIOs in organizations under Rs 500 crore say they will take the public cloud route.

Under Rs 500 crore

Rs 500-1,999 crore

RS 2,000-9,999 crore

Rs 10,000 crore

Private Cloud

44%

55%

49%

53%

Public Cloud

20%

15%

14%

10%

Hybrid Cloud

36%

30%

37%

51%

Of organizations that currently use cloud computing or are considering its use will take the private cloud route—a 20 percent increase from last year.

Cloud Governance

IT Architecture and the Cloud CIOs seem to be more open to the cloud. The number of CIOs saying they don’t have IT architectural capabilities has come down by 10 percent. 38%

The number of CIOs saying they do not have or need cloud governance framework and policies has fallen by 12 percent.

28% We don’t have any such capabilities

22%

29%

32% We have foundations for core capabilities

10%

2012 2013

35%

9% 12%

14% Our cloud architecture is integrated with our enterprise architecture

15%

Are defining business-IT engagement policies Have rolled out policies for some services

2013 Policies are well-established

ABOUT 48 PERCENT OF MANUFACTURING CIOS SAY THEY AREN’T SURE ABOUT THEIR COMPANIES’ LEGAL OBLIGATION CONCERNING THE CLOUD. ONLY 20

10% 8% 10%

PERCENT OF IT/ITES CIOS SAY SO.

Public Cloud Concerns by Business Perception

31%

41%

Have a formal governance framework Do not have or need governance

2012

Public Cloud: Top 5 Concerns

Cost Center

Vendor lock-in

Valued Service Provider

Unauthorized access to or leak of customers’ information

Security defects in the technology itself

Trusted Partner

Unauthorized access to or leak of proprietary information

Unauthorized access to customers’ information

Competitive Differentiator

Integration of cloud data with internal systems

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

Unauthorized access to proprietary information Integrating cloud data with internal systems

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WHERE MOBILITY’S HEADED Mobility Platforms That BlackBerry’s popularity in enterprises is slowly fading is no surprise. But iOS is gradually making its presence felt in Indian organizations. The number of CIOs leaning towards iOS has jumped by 11 percent in six months. 82% 73% 65% 65%

72%

55% 44%

16% BlackBerry

iOS

Windows Mobile

Of CIOs say their mobile strategy will not be based on a single operating system.

2012 2013

31% 33%

Android

10%

Symbian

9% 5% None

Support for Employee-owned Devices

Top 5 Mobility Drivers

Despite BYOD, more organizations have prohibited personal devices. That’s true for most CIOs in the manufacturing sector.

BYOD security needs was in the top five list of investment drivers in 2012, but it has finished in the 12th spot this year.

16%

No support

Rank in 2012

2013

12% Personal devices prohibited 14%

33% 44% Limited support

11% 7% No defined policy 11% Support only devices provided by organization 13%

Workforce becoming increasingly mobile

Increased focus on innovation at organization

Senior management need access to business critical information

Increased availability of devices

60%

25%

2012 2013

10% Support all devices

Employees and customers demanding real-time information

Of CIOs say they expect to complete mobility, device management, and mobile apps initiatives this fiscal.

Mobile Risk Six months ago, 54 percent of CIOs said mobile risk was somewhat or extremely high. That has fallen by 8 percent. 47%

MDM Strategy Six months ago, 40 percent of CIOs said they don’t have an MDM strategy. Surprisingly, that number has gone up by 8 percent.

VOL/8 | ISSUE/08

34%

Yes

18%

48%

20%

No No, but considering

32% 34%

12%

Extremely high risk levels

2012 2013

2% 2% Somewhat high risk levels

Neutral

Somewhat Extremely low risk low risk levels levels

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

EMC’S BACKUP TAKES GODFREY PHILLIPS INDIA FORWARD One of India’s largest players in the cigarette industry, Godfrey Phillips India, realized it needed to spruce up its IT systems. To do that, it needed a robust backup and recovery solution. That’s when EMC stepped in.

Company

Godfrey Phillips India

Industry Manufacturing

Headquarters New Delhi

Godfrey Phillips India is one of the largest players in the Indian cigarette industry with an annual turnover of over Rs 3,598 crore (estimated 2012-13). Apart from cigarettes, it has also tapped into tea, pan masala, and confectionary segments. A flagship company of the diversified K. K. Modi Group, Godfrey Phillips India’s operations primarily span the country with prominence in northern and western parts of the country and recent forays into West Bengal and South of India. The company manufactures some of the most popular cigarette brands in the country like FS1, Four Square, Red and White, Cavanders, Tipper and North Pole. Additionally, Godfrey Phillips India also manufactures and distributes the iconic brand Marlboro under a license agreement with Philip Morris. The company’s concerted efforts in its tea brand, Tea City, has led to successful launches of products like Symphony and Super Cup. It has also forayed into the highly competitive confectionary segment

CUSTOM SOLUTIONS GROUP EMC

Deploying a robust IT platform for Godfrey Phillips India was a part of our longterm strategy and hence, backup and restoration was one of the key areas that demanded immediate attention.” D. VENKATA RAO CIO, Godfrey Phillips India

with Fundamint and FundaGoli. Godfrey Phillips India has also spread its footprint into international markets. Today, its international division collaborates with some of the top players in the international tobacco industry.

GROWTH PANGS To be a successful player in the international market, The company has created a strong IT strategy under the leadership of its CIO D. Venkata Rao. Backup and restoration were a key part of this strategy. Rajesh Bawa, head of IT Operations and Infrastructure, Godfrey Phillips India knew he would have to do away with outdated and obsolete systems—like the company’s traditional tape-based storage system. This led to time-consuming backups which stretched

to as long as 24-48 hours. Another problem was that restoring data took a long time, affecting business continuity. That wasn’t it. Due to business expansion, Godfrey Phillips India had to deploy a fleet of new systems and applications. The company’s IT unit had to allocate resources quickly, efficiently, and manage its costs. With 90 percent virtualization, the company was able to achieve most of it, but it came with a caveat. “Virtualization is a very stable platform and downtime is very minimal. But, in case of a disaster, the backup and restore window was huge. Also, the system wasn’t able to backup or recover data completely,” says Bawa. After analyzing these problems, Bawa realized Godfrey Phillips India needed to achieve four goals:

Employ a tape strategy for off-site and on-site backup which need to be stored for a longer period, have shorter VM backup windows, have the ability to restore data instantly, and introduce deduplication technology into its backup infrastructure. Apart from these challenges, there was another issue that Bawa had to consider. Godfrey Phillips India was expanding its datacenter by adding Enterprise Application and High Performance database (EXADATA)—for data warehousing and OLTP applications—which needed to be backed up. Therefore, as the number of critical applications and high performance databases grew, Godfrey Phillips India was compelled to look for a faster backup solution.

GETTING DOWN TO IT Fortunately for Bawa, finding a solution partner wasn’t that difficult as he could rely on Rao’s guidance to choose the right technology and provider. After evaluating a few vendors, Bawa realized it would be wise to turn to EMC to solve the company’s problems.

From a business continuity point of view, I think we have chosen the right solution. In the last one year, we have also observed that we’ve been able to restore critical data quickly and very effectively.” RAJESH BAWA

DGM-IT Operations & Infrastructure, Godfrey Phillips India

Godfrey Phillips India was already using a bulk of EMC solutions for storage, backup, and virtualization. That’s why it made sense to opt for EMC’s DataDomain deduplication solution as well. “We chose DataDomain because the features it had were as good as EMC’s Avamar solution,” says Bawa. While the company had been using EMC’s Networker as its backup and recovery solution, Bawa says it wasn’t enough to keep up with its SLAs. “We needed a solution which could meet our SLAs, which was to institute a 100 percent backup process for approximately 25 TB of virtual and physical machines within a 12-hour window,” says Bawa. But the backup window for even 10-12 TB of the company’s critical applications was consuming more than 12-16 hours. Clearly, this wasn’t going to help the company fulfill its needs. In order to achieve this, the company needed to implement a source-based data deduplication process. A source-based deduplication process deletes multiple instances of the same data and acts on the data at the client level. In a virtual environment, deduplication can be a powerful tool which can eliminate the need for snapshots, clones or even thin provisioning. It can also provide organizations with faster backups, improved bandwidth, and better storage utilization. Therefore, it made perfect sense to use EMC’s solution for data deduplication. Also, the solution had a better compression rate than other solutions. For Godfrey Phillips India, it all fell in place. Since the company was already using EMC’s Networker backup solution, marrying it with EMC’s DataDomain deduplication technology gave Godfrey Phillips India a huge advantage. DDBoost, a feature in DataDomain, served as a plug-and-play solution for Godfrey Phillips India’s existing backup environment. This way, the company would be able to enjoy the perks of deduplication without having to revamp its backup infrastructure. To accommodate the new solution for their virtual environment, Godfrey Phillips India had to upgrade EMC’s existing Networker edition from version 7.0 to 8.0. Earlier, for guest-level backups, the Networker backup software would interact with every VM and initiate a backup of its file system, application, or database over LAN. With EMC’s DD Boost, the deduplication process gets distributed to the backup server or application clients, ensuring quicker and a more efficient backup and recovery process. This means the DataDomain technology with DDBoost performs deduplication at the client

CUSTOM SOLUTIONS GROUP EMC

machine and transmits only unique data for backup, eliminating data redundancy, and ensuring a drastic reduction in the VM backup window. Similarly, for VM image-level backups, thanks to DataDomain, EMC’s Networker now backs up VMs over SAN to DataDomain VTL (virtual tape libraries), and then moves it to tape to save a copy offsite. Also, with DDBoost, the Networker only sends unique data segments to the DataDomain system. This dramatically increases the overall throughput and reduces the amount of data transferred over the network significantly. This drastically brought down the backup window for the company’s virtual machines. Earlier, depending upon the size of the VM, incremental backup of each production VM would take minimum three hours to a maximum eight hours. Now, it hardly takes a minimum of 15 minutes to a maximum of 1.5 hours for each backup.

Bawa says, with EMC’s DataDomain with DDBoost, he has seen his backup window reduce for all critical applications such as ERP. Now, the backup process starts from 8 pm and ends by 6 am— slashing the 48 hours of backup time to a mere 8 hours. In addition, Bawa was able to protect his company’s business-critical data and meet its SLAs. The deduplication technology helped Godfrey Phillips India protect more backup copies, which could be immediately restored when needed. Today, one year, since the implementation of D2D2T, Bawa and his team have been successfully able to execute backup onsite on D2D and offsite on tapes and have automated daily health or recovery checks on protected backup data. “In the last couple of years, we have realized that we have chosen the right solution,” says Bawa.

Cloud and Big Data: Opening New Doors Vikas Arora, Global Services Leader, EMC India & SAARC, says cloud computing and big data are encouraging and increasing the adoption of consulting, residency, and education services. What are the new trends in IT today that have the ability to transform business? Digital information in India is expected to grow from 40,000 petabytes to 2.3 million petabytes, twice as fast as the worldwide rate from 2010 to 2020. Enterprises will be responsible for the storage, protection, and management of 80 percent of the digital universe’s data. This liability will only increase as social networking and Web 2.0 technologies continue to impact enterprises. The cumulative effect is driving enterprises to transform

themselves, their infrastructure, and their skills. This is where EMC is playing a key role with a comprehensive portfolio of cloud computing, big data, IT solutions, and world-class services portfolio including consulting and education services. How is EMC helping Indian organizations compete with their global counterparts? EMC has transformed globally from a pure play network storage provider to an end-toend enabler of cloud, big data, and trusted IT solutions for enterprises. We believe

EMC has transformed globally from a pure play network storage provider to an end-to-end enabler of cloud computing, big data and trusted IT solutions for enterprises.” VIKAS ARORA

Global Services Leader, EMC India & SAARC

that we are best positioned to help companies tap these opportunities. The launch of Pivotal and Security analytics solutions by RSA are two such examples. We are also partnering with a strong local ecosystem of service providers like Netmagic, Tulip and CtrlS among others to bring cloud computing to enterprises. We are also investing in building a skills base in the country with our open education curriculum on cloud computing and big data as well as the EMC Academic Alliance Program. How is the adoption of technology services shaping up in India? We offer an entire range of our services in India as we see an increased response from our customers. With cloud and big data, we will see an even larger adoption of consulting, residency, and education services. Moreover, as India-based operations increasingly become the hub for offering IT services worldwide, more cutting-edge work will lead to the creation of best practices globally.

VIEW

from the TOP

S.Y. Siddiqui, Chief Operating Officer Administration (HR, Finance, IT, Company Law & Legal), Maruti Suzuki, says IT plays a key role in driving innovation and retaining talent within the company.

Powering the

Pit Stop BY GUNJAN TRIVEDI

Maruti Suzuki has an uncanny ability to prove its critics and skeptics wrong. Its COO-Administration (HR, Finance, IT, Company Law and Legal), S.Y. Siddiqui credits this to its leaders’ ability to unlearn and re-learn, and the company’s consistent focus on human capital. Today, he is furthering this capability by ushering in a culture that builds, trains, and retains its talent pool. In this excerpt from a conversation with Siddiqui, he shares how he plans to develop Maruti Suzuki’s talent pipeline, manage a workforce that spans three generations, and foster a culture of shared leadership.

CIO: In your previous organization, you got the opportunity to meet Jack Welch, who believes in creating a talent pool. What did you learn from him?

What do CEOs and other C-level executives expect from you? Read all about it in VIEW FROM THE TOP. Visit www.cio.in/ceointerviews

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S.Y. Siddiqui: I did get a chance to learn from Jack Welch when he did an advisory exercise for corporate restructuring at the top management level for my previous employer. Welch followed one simple principle: Each leader must build a talent pool. He expected leaders to spend time building talent for their companies. Interestingly,

in comparison, I have seen many business leaders who are least concerned about this critical component. Unfortunately, we find that leaders are usually in a tearing hurry to speak, to guide, and to give solutions without listening to their people. To a great extent, perhaps, a basic understanding of your team is where some of the answers lie. That understanding, in my experience, typically is more with leaders who have the ability and patience to first listen to the views, ideas and problems of their people. At Maruti Suzuki, we have a workforce that spans three generations. All the three

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S.Y. SIDDIQUI EXPECTS I.T. TO Help employees drive innovation Enable anywhere, anytime training

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Lead other functions when required

have different expectations with respect to job roles, view points, stress, challenges, rewards and recognition, compensation and benefits, and their careers. There isn't a one-size-fits-all solution. For example, the young generation needs stretch assignments. Give them an assignment that allows them to stretch, that gives them a little liberty and empowers them to experiment, and they will be the most excited lot. The first generation, on the other hand, strives for recognition.

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How do you ensure employee engagement given such diversity? We donâ&#x20AC;&#x2122;t look at engagement practices from the perspective that they will help us meet our business targets; that is, we will only get to our targets if employees remain engaged in their work. Instead, we look at improving the work environment leading to employee ownership and commitment so that we become an employer of choice. Therefore, I encourage a culture of sensitive listening and appreciation,

one that is flexible and supportive and always considers various flavors of rewards and recognition, compensation, psychological impact, job excitement, and more, in terms of engagement. It is not a short-term package. It is, in fact, all about helping the organization and its employees identify with each other. This is the shift we have made in the last five years, a shift towards bringing in a perspective of teamwork and ownership, which is the hallmark of the Japanese way of functioning.

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You manage a whole range of functions. How do you maintain the right balance? Across the 30-odd functions at Maruti Suzuki, there is one common understanding that each function requires from its top management: Leaders should clearly share their mission, broad direction for each function, and the roadmap for the future. This is what binds us together as a corporate organization. We have an IT-enabled business plan and budget formulation process that takes place around February-March, where we define a three-year rolling strategy. It comes ground-up to each functional team and then to the top management, which defines the base assumptions of annual production volume, operating profits, material, and manpower costs among others. This becomes our guiding Bible. Quite naturally, this is an opportunity you offer to each functional team to gain a company-wide overview of the key business goals. Each team comes up with its set of top priorities for the period, which we review at the top level. I always encourage a decentralized and empowered approach in management. The functional heads manage their roles rather independently. I come in only at the board or policy level, whenever the functional heads require such an intervention. At our Annual Admin Business Vertical Convention, we share this company direction with everybody who exists with us. And then, once in six months, we check whether we are going in the right direction and share details with our team members. Then we interface at the board level to have an integrated view at the top. Within each business vertical, there is a decentralization identity. We follow an issues-based, shared leadership style at Maruti Suzuki. In certain issues, our IT head Rajesh Uppal leads and the rest of us follow, while in other situations, another functional head takes control and the rest of us follow. This model has worked 70

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One of IT’s great contributions to Maruti Suzuki was automating the idea-collection process, which is fundamental for innovation. —S.Y. Siddiqui

well for us to a great extent and has been successful in developing, engaging, and motivating our talent pool. It has also helped me maintain my management priorities and balance effectively.

In that case, how did you change the finance function, which works with a singular focus? If you look from the top, there are two primary functions of finance. One is the management function, which defines business and its effectiveness in terms of managing cash flow, finances, and return on investment. For instance, we tell the business how to spend so that the same Rs 100 crore can maximize the return. Or how to go about pricing four variants such that the top variant gives you a profit, while the bottom brings in customers.

Finance gives this kind of management advisory support. The other function of finance is control. And control comes through accounting processes, including audit. People are allergic to audits because they always ask uncomfortable questions. However, in the last five years, people have started looking forward to the audit team because I have added the previously mentioned management advisory role to the audit function, thereby moving finance away from the unappealing image of being only a controller. This helps, say a general manager, understand what risk management capabilities to acquire in his functional area. This way, audits have become an acceptable management capability than a mere checking and questioning function because it is now part of the functional team’s DNA. In fact, we are pushing the concept of adding pre-audit as a core component of management functionalities. I believe the real role of finance will come along positively if you combine these two facets well.

Ideas from employees have helped you save costs. How do you inculcate innovation right to the roots? Frankly, many companies have tried to adopt this, but only a few have succeeded. Our chairman, R.C. Bhargava once explained its success mantra to me. When this concept of seeking ideas from all quarters of Maruti Suzuki came up in 1983, employees were given rewards if they even made the effort to think and write a suggestion—a practice maintained till date. If you recognize this effort, as a leader with the ability to listen and appreciate, it will become part of the culture. Whenever I spend time with, let’s say, the IT team and politely check the number of suggestions per employee, I am not asking them what we have accomplished. I am only asking for the right attitude. Our population has touched over 9,400

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employees, and with our recent merger with Powertrain, it is likely to reach over 12,000. Believe me, either this potential is going to be completely unused as is the case in 99 percent of companies, or they all will really be part of this culture of innovation. It is in the hands of leaders to create this kind of a climate, guidance, and enablement. Only then can this funnel be created and maintained. I'll give you an example. One good contribution from the technology team was automating this idea-collection process. The IT team has created a portal for employees to access. If a particular team has done something extraordinary, the knowledge is open for all and can be replicated across other teams as well.

Japanese and government companies are mostly protocol-oriented. How do you innovate in this case? I agree it was indeed tough to bring about that mindset. We wouldn’t have initially succeeded because we were neither a Japanese company nor a player in the private sector when we began this exercise. It did require certain incentivization. The top leadership role, in this regard, was critical to our success. At that time, each suggestion fetched Rs 2, which was of value to an ordinary employee. An attempt to deliver 10 to 12 such suggestions would easily generate extra cash for employees. Over time, the fusion between Maruti and Suzuki happened, and this process became part of our culture. Somewhere, the real engagement kicked in. Perhaps, leading by example, Suzuki became the benchmark as there was a tendency to compare us with Suzuki plants with regard to our ability to produce quality products and the aspect of building strategy on actual ground. Hence, 15 years on, this structure and incentivization got into this culture. Later, acceptance emerged from all sections of employees and it became a huge strength for us.

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Your roadmap suggests training over 3.5 lakh workers. Why such a strong focus on training?

SNAPSHOT

Maruti Suzuki

you require then?

As a company, our top-level deliberations were that someESTABLISHED: where, we would need to chal1981 lenge the status quo. So, we HEADQUARTERS: needed to create our own talNew Delhi ent pipeline. We are now manA big learning for me SALES TURNOVER: aging 10 ITIs ourselves. We from Dr. Vijay GovindraRs 39,495 crore have strong relationships with jan, the world-renowned EMPLOYEES: engineering colleges across thought leader, was that 12,000 the country, and we are looking at effective leaders do three PLANT LOCATIONS: developing connects with IITs. things in life: Simply manGurgaon, Manesar But these are not for our age the present; develop present needs. This is for what the capability to selectively we would need in the future. delete the past, which is Considering our experience, quite difficult if you have we’ll expand to over 50 ITIs in the next two a renowned legacy like us; years. We’ll also adopt instructors’ schools. and forecast and define the future. I We are also in the process of setting up our believe that if you don’t do this visioning, own training academy at Maruti Suzuki. you’d be taken by surprise. I found this However, we see physicality posing a concept extremely powerful. challenge. We look at speed to market and At Maruti Suzuki, we have been doing when we launch a new car, we need to train certain things successfully for the last about 40,000 people. How can we achieve 30 years. But, is success guaranteed if that without engaging with 10 different we continue the way we have been doing agencies and running pan-India training things for the last five years for the next projects? Very clearly, uniformity takes a five years as well? I think not. beating here. So, the vision for the future is The business climate has changed that irrespective of location, trainees should phenomenally and a great shift in the have easy access to this real-time training Indian demography is going to demand infrastructure. a different kind of leadership. In my Since technology is the center-point here, opinion, in order to identify the future, and we follow a shared and issue-based you would need to challenge the status leadership approach, we decided that Rajesh quo by deleting the past selectively, (Uppal) would lead this exercise. To a great creating new space, and doing new things. extent, we have evolved this into a kind of One thing that we have realized is exactly capability, which in terms of sheer content what Welch suggests: Create a talent pipeline and research is the best in the world. It is for sustained future business success. quite contemporary and fully IT-enabled. Typically, the demand for talent in With the Web broadcast studios, or our our country has increased, but supply production shop-floor simulations, or lines have been reasonably insufficient. self-learning management modules, we HR managers are happily getting into can deliver any training anywhere on the recruitment firms and poaching people, virtual platform. CIO losing them, and again very happily poaching them back without caring about developing their own talent.

How do you plan to recruit and groom the workforce

Gunjan Trivedi is executive editor. Send feedback to gunjan_trivedi@idgindia.com

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First Edition: April 2013

In its first edition, the CIO Leadership Agenda broke new grounds by engaging a select CIO audience in packed sessions of its two-day agenda. The event experience showcased leadership strategies and also provided an opportunity for CIOs to learn, network and unwind with their peers.

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LEADERSHIP IS INFLUENCE

The two day CIO Leadership Agenda helped CIOs reinforce their understanding of the fundamental link between IT and the overall functions of the organization. It also examined the best practices of top global companies, and their successes in creating value through information systems. At the CIO Leadership Agenda there were no attendees, only participants. By Gopal Kishore

he role of a CIO is becoming more important than ever. It is no longer just about managing the information technology infrastructure, but rather about architecting the business strategy and organization for the information age. To help CIOs reinforce their understanding of the fundamental link between IT and the overall functions of the organization, CIO Magazine introduced the CIO Leadership Agenda, a program designed with the IT Leader in mind. Key components of this program included identifying, weighing, and communicating the strategic competitive advantages shaping the minds of information technology leaders today. The curriculum was a blend of functions and evaluated leadership from an innovation and business perspective. The frameworkâ&#x20AC;&#x2122;s components identify and evaluate the advancement of business value and the strategic effort of information systems and pioneering methods for integrating information technology into the structure

and culture of an organization. Emphasis was placed on maximizing an organizationâ&#x20AC;&#x2122;s current assets, in addition to redesigning the organizational infrastructure, strategy, and culture.

The business does not expect CIOs to invent new technology, but to use existing tools and technology to address business problems. Vijay Sethi, Vice President and CIO, Hero MotoCorp Watch full video on: www.cioleadershipagenda.com

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CIOs can accelarate innovatioon by building an idea pipeline to improve their idea velocity.

Rishikesha Krishnan, Professor of Corporate Strategy and Policy at IIM-Bangalore

Demystifying Innovation Innovation is the first thing on not just the CIO’s list, but also the CEO’s list. Innovation can enable organizations to seize competitive advantage and increasingly, the business is looking at the CIO to drive innovation in the organization. Organizations that can continuously innovate and execute can greatly improve their chances of achieving long-term success and this has become an expectation rather than a consideration. So how do CIOs create the processes, structures and practices to build an innovation engine that drives business growth? At the CIO Leadership Agenda, Vijay Sethi, Vice President and CIO, Hero MotoCorp., in an extremely interactive session, demystified innovation and helped CIOs understand what can be achieved using technology, and sometimes, without using technology. “The key is to understand the difference between invention and innovation. The business does not expect CIOs to invent new technology, but to use existing tools and technology to address business problems,” said Sethi. “CEOs do not expect IT to come up with breakthrough innovation. It is the build-up of incremental but continuous innovation around existing technologies and business models that can transform the way a company does business,” he added. According to Sethi, while CIOs are most comfortable coming up with a technology solution to a business problem, sometimes, the answer may be much simpler. Providing examples of keeping innovation simple, Sethi said that he had introduced the annual IT report which is the report card of IT in his company. “This not only enables transparency, but also helps to keep the employees motivated,” said Sethi. Another example was having the IT team take up a pledge to fulfil their responsibilities and safeguard the stakeholders’ interests. “The two examples did not involve any tools and technology, but has created a better process in the IT team,” he added.

Moving from Jugaad to Excellence

with innovation, and therein lay the danger, warned Rishikesha Krishnan, Professor of Corporate Strategy and Policy at IIM-Bangalore and Vinay Dhabolkar, Founder of Catalign Consulting and authors of ‘8 Steps to Innovation: Going from Jugaad to Excellence’ a “how-to” guide for innovation leaders undertaking this journey. According to them, jugaad is old hat. It has done little for India in terms of innovation, as India ranks 64th in the Global Innovation Index. “In today’s globalized marketplace, it is increasingly difficult to survive with just quick fixes or creative improvisation. Indian companies have no option but to move beyond jugaad towards a more dependable and systematic process of innovation,” they said. Debunking the myth that that innovation begins with creativity, they observed in their research that most innovations begin with curiosity. “This was true for James Watt, Gandhi and Mark Zuckerberg and for many other innovators,” said Krishnan. They propose that building a challenge-book – a place where one can list the problems they are curious about – is a good beginning. Incidentally, the challenge book is the second step in the 8-step approach. According to them, the sources of curiosity include feeling the pain, sensing the wave and seeing the waste. They expanded on what kind of pains, waves and waste that a CIO would come across while building the challenge book. As part of his session, Krishnan spoke on building a systematic innovation capability. “CIOs can improve that capability by building an idea pipeline, improve their idea velocity and hence, improving their workable idea average,” he said. “This must help you wade successfully through various factors like socio-economic environment, government policy, technology trends that influence one’s innovative capabilities.” Dhabolkar, on the other hand, spoke to CIOs on better ways to select ideas and then ways to efficiently pitch them. “The three principles to pitch idea effectively are curiosity before content, options before solution and demonstrations are the best communication,” he said.

The three principles to pitch idea effectively are curiosity before content, options before solution and demonstrations as the best communication. Vinay Dhabolkar, Founder of Catalign Consulting

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Evaluating Data centre Investments Cost , scalability, power and location are the factors for CIOs to consider when building Vs outsourcing the datacentres. Sunil Gupta, President and COO, Netmagic

Leading by Example The most effective CIOs build strong partnerships with their employees and partners and lead by example. In his keynote session at the CIO Leadership Agenda, N. Kailasanathan, former CEO at Titan, spoke to CIOs on the transition he underwent to move from a CIO role to become the CEO of one of India’s leading watch manufacturers. Kailsanathan dug into four decades of experience to speak on how he managed a successful overlap between IT and business. “When one transforms from a business line head and assumes total business responsibility, one no longer thinks with a bird’s eye view,” he said. “I ensured that my team saw through every new responsibility and every new project we took up. Hence, I ensured to see through projects like .Net, cloud, Java implementations and generally kept in touch with developments. With my efforts to extend IT to retail and online connectivity to corporate, IT security and IT, in general, gained importance at Titan.” Speaking on attaining business excellence at the workplace, Kailasanathan said that it can be done only by understanding the real meaning of ‘process’ along with assessing its implementation and improvement requirements. “CIOs today must get into business details on a day-to-day basis. Financials are important, but nothing beats a CIO’s need to focus on metrics,” he advised.

Mobility as a trend is accelerating faster than anyone had predicted.

Vishal Khare, Director-Corporate Sales, Citrix Systems Watch full video on: www.cioleadershipagenda.com

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A successful leader is always ahead of the game, and one way to do this is to know everything that is happening in his data centre. Sunil Gupta, Executive Director & COO at Netmagic helped CIOs develop a financial model and framework for evaluating their data centre investments. Gupta presented a simple approach to the participating CIOs to assess the true total costs of building, owning, and operating data centre facilities. “I think three factors can help every CIO to choose between building their own datacentres and outsourcing that capability. They are cost and scalability, power requirements and location availability,” he said. CIOs also learned how to apply appropriate cost modelling while engaging all relevant stakeholders. Speaking on the workshop, Gupta said that the exercise would help CIOs present a business case for their data centre strategy and help them evaluate capacity and capabilities to build an optimized data centre strategy. “There is a 15 percent CAGR growth in server

CIOs today must get into business details on a day-to-day basis. Financials are important, but nothing beats a CIO’s need to focus on metrics. N Kailasanathan, Former CEO at Titan Watch full video on: www.cioleadershipagenda.com

shipments worldwide and even higher in India. CIOs must factor this while mapping out their data centre requirements. CIOs must consider building a captive data centre if their long term requirements are more than 250 racks and have the capacity of building a dedicated building for the purposs,” he concluded.

Business Transformation with Mobile Work-styles Mobile work-styles deliver organizations the flexibility to operate in a world that is hyper-connected and always on. They also enable people to strike a better work-life balance, giving them the ability to work from anywhere, unrestricted by location, time or device. Vishal Khare, director-Corporate Sales, Citrix Systems, explained how organizations that support mobile work-styles will be more agile than others. Quoting IDC’s research, Khare said that by 2015, the world’s mobile worker population will reach 1.3 billion, representing 37.2 percent of the total workforce. “This trend is accelerating faster than anyone had predicted,” he said. According to Khare, mobility is dominating most CIOs’ mindshare, and the need

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of the hour is enterprise mobility for all apps and data on any device. While a user demands freedom to access all apps and data from any device and location, the business wants to ensure that there is no compromise on security and compliance. In order to meet these demands, CIOs need to take a balanced approach. “The solution is to have an enterprise-grade mobile device management (MDM) tool that provides users with a choice to bring their own device, but also manages the data on those devices, at the same time. There are several ways in which CIOs can control the applications on the device and how they interact with each other. By using sandboxing, CIOs can easily separate work and life on any of these devices,” Khare informed.

Shape Your Cloud, Your Way Businesses are moving to the cloud in accelerating numbers. Business users recognize cloud advantages that help speed innovation, accelerate business processes, and reduce time to revenue. However, CIOs faced with the challenges associated with the rush to cloud-based services, are concerned about how IT can maintain adequate security, ensure service levels, integrate cloud-based services with existing traditional IT systems, and provide governance across the entire IT value chain. R Balasubramanian, National Business Development Manager, Cloud Solutions at HP spoke about how CIOs can address these concerns. The most important thing is to ensure the decisions that CIOs make today about cloud technology suppliers don’t prevent them from innovating in the future. “It is important to chart a roadmap which can provide a secure, predictable cloud-based service through a Converged Infrastructure. Your IT staff can consolidate physical and virtual server, storage, and network assets into pools of virtualized resources,” he said. These resource pools can host sets of infrastructure services, which typically map to application services, including complex multitier and multi-node applications. IT personnel can flexibly provision and re-provision services, and can confidently optimize the underlying resources for performance, resiliency, and efficiency, he added.

It is important to chart a roadmap which can provide a secure, predictable cloudbased service through a converged Infrastructure. R Balasubramanian, National Business Development Manager, Cloud Solutions, HP

One way to dissolve negative thoughts is to focus on breathing techniques on a daily basis

Smitha Murthy, Senior trainer, APEX, The Art of Living

Outlining HP’s offerings in this space, Balasubramanian said that the CloudSystem Matrix is Infrastructure-as-a-Service (IaaS) for private and hybrid cloud environments, allowing users to provision infrastructure in minutes for physical and virtual. “This offering includes a self-service infrastructure portal for quick auto-provisioning, along with built-in lifecycle management to optimize infrastructure, manage the resource pools, and help ensure uptime. Using included Cloud APIs, you can easily customize the operating environment to your specific requirements, enabling chargeback and billing integration, integration into approval processes, and other process automation tasks. Matrix is integrated by design with broad support of heterogeneous environments, and it offers cloud-bursting to a variety of public cloud providers including HP Cloud Services,” he said.

Mind Matters Apart from technology and leadership, the CIOs also had an opportunity to learn how to de-stress. Stress is one of the key factors which leads to burn out and reduces productivity. Smitha Murthy, senior trainer of APEX (Achieving Personal Excellence), a corporate initiative of The Art of Living, spoke to CIOs on importance of insights and focus on goals while showcasing various ways to reduce stress. Murthy’s session involved knowledge sharing on the human self, intellect and mind. “Humans eliminate 80-90 percent of impurities from their body via the respiratory system. It is imperative then that we learn how to strengthen these aspects. The more energy we expend unnecessarily on negative thoughts, the more difficult it is to tackle important issues,” she said. “One way to dissolve negative thoughts is to focus on breathing on a daily basis,” she added. Educating CIOs on various methods to develop a sense of focus, Murthy urged CIOs to adopt quick daily drills to de-stress. “Increased competition, inter-personal relationship problems or miscommunications can cause a lot of unrest in the mind. Apart from this the odd working hours, which lead to unhealthy lifestyle and food habits, take a toll on our body,” she said. She also said that healthy diet at timely intervals and adequate sleep are extremely important.

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On the sidelines of the CIO Leadership Agenda, we spoke to several CIOs to understand their journey in three key areas – cloud, mobility and the datacenter. By Gopal Kishore

INCREASING AGILITY AND REDUCING COST Now that the dust has settled from the initial cloud excitement, IT is realizing that its main task remains unchanged, that of delivering reliable services in a cost-effective way. What has changed significantly is the way lines of business think about IT services. According to Ashwani Tikoo, Head – Technical, CSC India, ‘time to market’ has become synonymous with ‘time to revenue, and is seen as the key driver to the cloud. However many CIOs were of the opinion that in addition to heightened expectations, the overall technology context has become much more complex. Business now expect to consume services from in-house IT departments the same way they do from cloud providers— with similarly fast response times to requests for services, agility to deploy new applications in response to business trends and opportunities, and the ability to turn services off when they are not needed. So cloud changes everything for IT. “Effective cloud computing doesn’t happen instantly. Cloud is a journey, and IT needs to know where it’s going—

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what the requirements are, and what the goals are. The journey itself can be divided into identifiable steps,” said V Ramachandran – Country Manager – Cloud Solutions, HP India.

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ENABLING MOBILE WORK STYLES The evolution of mobile work styles has made it increasingly important for people to be equally as productive on the go as they are in the office. The consumerization of IT is fueled by employee mobility but is also creating chaos for enterprise IT. Bring your own device (BYOD) programs, application proliferation, data synchronization and sharing services are leading to a mix of devices, applications and data that are difficult to control, secure and manage. However device, application and data chaos were the biggest challenge to a mobile work style. “The challenge is in controlling and securing data arising from multiple, uncontrolled endpoint devices, poorly written and/or malicious applications and readily available consumer datasharing applications,” said Prashantha Ghoshal, Director ITES, Geometric. “By resolving the device, application and data chaos created by consumerization, Citrix is enabling mobile work styles for users while providing IT with control and management capabilities. CloudGateway with Receiver and ShareFile

enable quick and effective access to the enterprise resources that people need in order to stay productive on the go from any device. It also helps to support IT efficiency, information security and regulatory compliance,” said Kaushal Veluri, Director–Channels & Alliances, Citrix India.

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LEVERAGING HYBRID DELIVERY MODELS

CIOs today are feeling the pressure to provide IT services that keep up with the business, and are looking at creating a robust, scalable datacenter and adopting a mix of IT delivery models to meet their users’ demands. According to Sanjay Marathe, CTO, Zensar Technologies Business growth comes from a relentless focus on customers and business innovation – and IT must do its part. High performing businesses need to respond quickly to market changes, improve operational efficiency, and accelerate growth. “To do that, they are increasingly looking at hybrid delivery models for datacenter infrastructure to

become cost efficient, flexible and scalable,” said Sunil Gupta, President and COO - Netmagic Solutions. “Therefore, CIOs are rethinking their IT strategies to improve business processes, cut costs and make sure their organizations are future-ready. Outsourcing all or part of an organization’s IT infrastructure, operations and applications is just one option in the CIOs tool kit for moving to the next generation of IT - and bringing IT in closer alignment with these business objectives,” he added.

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The CIO Leadership Agenda is to help CIOs transition to the role of business leaders. This edition helped CIOs to unlearn certain things and prepare them to interact with business. Vijay Ramachandran, Editor – In – Chief, IDG Media

This platform is the perfect mix of technology and business transformation. The event was organized very well and it was a brilliant experience. Rohan Deshpande, CTO, Ogilvy and Mather

This is a place to meet the finest IT minds in India. I had an opportunity to interact, introspect and be inspired by our peers and industry leaders. Prashanth Ghoshal, Director, Global IT Services and Solutions, Geometric

We got to meet a lot of CIOs and the networking was excellent. I was able to place a face to the names that I am familiar with, but never had an opportunity to interact with them before. Priya Narayanan, DGM – IT, Cairn India

It was a great event with the right mixture of content in terms of learning, networking and taking a break. V Ranganathan Iyer, AVP - IT and CIO, Jay Bharat Maruti

The role of the CIO is moving beyond just keeping the lights on and is set to become that of a true business leader and the CIO Leadership Agenda will help us to get there. Mahesh Kumar, CIO, Aurobindo Pharma

The biggest takeaway was having understood the expectations that the executive management has from the changing role of the CIO. Sanjay Marathe, CTO, Zensar Technologies

The sessions on innovation were extremely good. Jitendra Jadhwani, CIO, Tata Motors Finance

HEARD @ The event provided as great learning opportunity from experts as well as peers. Ashwanti Tikoo, Head – Technical, CSC

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Interview | Amit Jatia

McSupply: On Top of the

Food Chain

BY SHUBHRA RISHI

Amit Jatia, Vice Chairman, Hardcastle Restaurants—the company that manages McDonald’s in South and West India—shares the IT secrets behind the company’s complex supply chain.

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CIO: Most people suspect that McDonald’s supply chain is complex. But can you size the challenge for us?

AMIT JATIA: McDonald’s uses 8,5009,000 buns, 3,000-3,500 kilograms of tomatoes, 2,000 kilograms of iceberg lettuce and 5,500 slices of cheese. These are delivered to 255 restaurants across India using 60-70 refrigerated trucks. The produce is sourced from 40 different suppliers based across the country. The supply chain begins at the grassroot level, with suppliers receiving crop directly from farmers. Crop is then processed and dispatched to distribution centers, in special multi-chamber, temperature-controlled trucks, which ensures that the quality of supplies is not compromised. Supplies are stored in rooms with different temperature zones and are finally dispatched to McDonald’s restaurants based on specific demand. McDonald’s expectation of ‘Cold, Clean, and On-Time Delivery’ plays a very

vital role in maintaining the integrity of products throughout the entire cold chain. It can’t be easy to do in a country that loses about Rs 3,57,500 crore worth of produce a year due to inefficient supply chain systems.

A lack of quality infrastructure is a significant challenge in India, and is something we had to grapple with when McDonald’s set foot here. The supply chain of India’s food retail sector has been ridden with inefficiencies and wastage due to the presence of a large number of intermediaries, a lack of infrastructure, and complicated laws. India spends close to 13 percent of its GDP on logistics, which is far higher than the efficient level of eight percent. McDonald’s changed the face of Indian supply chain systems and logistics when it entered the market 16 years ago. The McDonald’s team spent six years—and invested around Rs 450

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Jatia’s Agenda: To ensure that McDonald’s 255 restaurants in South and West India never run out of fresh, quality-tested produce—ever.

Interview | Amit Jatia crore—to set up a food supply chain. We pioneered the use of cold storage or the cold chain management system at a time when supply chain infrastructure, quality food suppliers, and the retail environment, as a whole, was seriously underdeveloped. But developing this area was of paramount importance because it formed the foundation of our business. Over the years, this has brought about a veritable revolution, immensely benefiting farmers at one end, and giving customers food products of the highest quality, at great value. We have been able to both cut down on operational wastage, and maintain freshness and the nutritional value of raw and processed food products. This has involved procurement, warehousing, transportation, and retailing of perishable food products—all under controlled temperatures. Over the past decade-and-a-half, we have seen the industry slowly but surely moving towards more efficient and smarter systems. What role does IT play in managing your cold chains in India?

company to identify where and when the temperature of a product rose outside of preset parameters, and take immediate preventative action. Customers worldwide want confidence and assurance that their food is safe. Therefore, we ensure that each burger undergoes over 40 separate tests throughout the food chain to ensure that the food served is inspected for safety. With the traceability system firmly in place, customers can rest assured about the quality of food at McDonald’s. How do you ensure that all your suppliers and partners focus on quality as much as you do?

IT plays a crucial role in our supply chain. We have traceability systems to record the movement of the ingredients that go into making each and every burger. ”

When we first came to India, it was imperative that we establish a cold storage and supply system that would allow for the quick and efficient movement of our products across the country. We invested over $4.5 billion (about Rs 24,750 crore) to set up a cold chain that is today the very backbone of our business. A lot of research and experimentation went into ensuring that all quality parameters were met. This is where IT played a very crucial role. Noteworthy here are the technologies used to monitor fluctuations in temperature on trucks while transporting goods, forecasting software, and systems for product traceability. Today, all our stores manage their supply chain requirements directly with distribution centers through specialized software, wherein daily requirements are 86

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Our supply chain starts with a handshake rather than a written agreement because it works on the concept of a three-legged stool. This approach encourages treating all the three legs—the company, its franchisees, and supply partners— equally. Each of the three legs is important to support the weight of McDonald’s. This unique operating structure means that McDonald’s and its partners work on value-based relationships and reap sustained and profitable growth. This subsequently translates into mutual benefits. It enables McDonald’s and its partners to benefit from long-term sourcing strategies, predictable and competitive pricing, maintaining food safety and quality standards, and ensuring a sustainable supply chain. We have a dedicated team of seven to eight members at McDonald’s that manages all national supply chain functions. This team works closely with our suppliers across the country to ensure the smooth and uninterrupted supply of produce.

managed independently by individual stores and distribution centers. In what other ways are you using IT to enhance your supply chain?

The use of IT is almost indispensable to the enhancement of our supply chain. The traceability system is a good example. McDonald’s has introduced traceability systems to record the movement of each ingredient that goes into making a burger at McDonald’s. Products can be traced back to each step of the production and transportation process. Using traceability systems, we can track the temperature and location of any product being supplied to a restaurant anywhere in India, in real-time and with complete accuracy. The system allows the

How do you ensure you fulfill your most important KPI: No item should ever be out of stock?

Our supply chain is structured in such a way that our restaurants are never out of stock. This translates to 100 percent availability of our permanent menu and promotional

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Interview | Amit Jatia items. As in most aspects of business, we forecast and plan supply chain capacities and output requirements well in advance— in five year terms. Advance planning, combined with our forecasting software, help us achieve this. For instance, when we undertook our capacity and expansion planning, our software helped us understand where new processing plants should ideally be based.

Was there a need to revamp the menu while targeting tier-2 cities? How is it different from the scene in tier-1 cities?

What steps did you take to ensure McDonald’s India’s supply chain met its global standards?

Our menu remains the same across the country. Menu innovations like the McSpicy range, the Piri-Piri shake fries, and the introduction of paneer for vegetarians were launched nationally, and are available at all McDonald’s restaurants in India. Today, the McAloo Tikki Burger is one of our most popular and largest-selling products. Its huge popularity can be gauged from the fact that we What challenges did you face in convincing export the McAloo Tikki to the Middle East farmers to grow the crops you wanted? The company had to convince farmers to to help the large Indian diaspora there feel use new seeds and agro-technologies. We connected to its roots. We Indians just love to eat. Over the identified progressive farmers and chose to work with them to get the produce we required. years, there has been a steady increase in the Our experts offered them technological number of people eating out of home and support and helped initiate crucial knowledge- experimenting with cuisines. Having said that, sharing on effective agro-practices such as however, culturally, Indian customers still like raised-bed and drip irrigation technologies. to go with what they feel is familiar in terms We even armed farmers with seed technology of taste. Therefore, it is extremely important for global organizations like McDonald’s to and assisted with crop issue management. To ensure that our buns are up to par, we be able to cater to the unique food habits of tied up with farmers who could provide the Indians while offering them an international specific kind of wheat needed to create our dining experience. All of our products, whilst buns, and the fact that our suppliers dealt with ‘localized’ to suit the local palates, will always be uniquely McDonald’s. the farmers directly helped us.

That has been one of our top priorities since day one. We have transferred state-of-the-art food processing technology to pioneering Indian enterprises who, today, are an integral part of McDonald’s cold chain. We have ensured that this dedicated supply chain enables Indian suppliers access to the latest in food processing technology, management practices, and advanced agricultural inputs. Prior to launch, all our products are certified by an independent quality lab, and all products served need to pass global quality parameters. All our suppliers have to meet McDonald’s international standards. In fact, when we started, we had OSI International teams (OSI supplies food products to foodservice and retail brands) work with and transfer knowledge to local suppliers to ensure unparalleled quality. CIO

Send feedback on this interview to shubhra_rishi@ idgindia.com

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CIO Role

Clueless in the Boardroom Boards of directors still don’t understand the role that IT can play in driving business innovation. It’s the CIO’s job to change that. By Kim S. Nash

Reader ROI: Why it’s your job to educate your Board on IT How to build credibility with your Board The importance of building relationships with sales and marketing teams

J U N E 1 5 , 2 0 1 3 | REAL CIO WORLD

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CIO Role

ven as companies are relying more on technology to come up with innovative business models and fresh ideas for finding new revenue, many boards of directors don’t understand enough about IT to keep up. Few CIOs sit on boards and, according to PricewaterhouseCoopers, just 1 percent of directors have any technology background at all. Discussion of IT issues in meetings around the mahogany table can be measured in minutes. There’s a dangerous lack of confidence in the board’s digital literacy, revealed in CIO US’ exclusive survey of 250 IT leaders. Sixty-four percent say the board “doesn’t do its homework” about technology matters and 57 percent say directors rely heavily on what they read in the press to evaluate IT strategy. Some 40 percent say board members “don’t really care about IT.” The Board Institute in the US, which educates and evaluates directors about corporate governance, finds that just 6 percent of companies have a board-level technology committee, where directors are assigned to focus on the strategic use of IT. Vastly more common are boards that confine IT to the audit committee, where the outlook is not proactive or innovative, but risk-averse: Protect against security threats, comply with regulations and manage the risks of big projects and technology spending. When it comes to strategic IT, says Susan Shultz, CEO of The Board Institute, “Directors are not informed.” CIOs can change that. In fact, as senior officers with fiduciary duties and as strategists responsible for corporate growth, CIOs must change that. A board that holds a narrow, defensive view of IT leaves the company vulnerable to competition, says Evelyn Follit, a former CIO of Radio Shack who has served on the boards of six companies. An undereducated board can also stymie innovation, says Helen Cousins, CIO of Lincoln Trust. “If they don’t know about technology,” she says, “they can’t imagine what I’m imagining.” But you have to be smart about making change. Boards are longestablished institutions with norms and conventions that date back to the days of the 13 colonies. Each has its own quirks and politics. Understand that the prime duty of a board is to oversee what the executives are doing on behalf of the stockholders. Directors don’t want to compare Amazon’s cloud to Google’s. They want to know whether—and maybe a little bit of how—to use cloud computing to create a more valuable company. CIOs should avoid technical terms but be able to explain technology. Anticipate the directors’ questions and artfully lead them to the ones they should be asking. And listen so you can learn, says Walt Hauck, former CIO of Dun and Bradstreet. Attend dinners and outings when invited, but know that it’s not a schmooze-fest. Directors are “very serious and very focused on my business and they expect me to be the same,” Hauck says. “This is not casual. It’s not coffee.”

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Directors are not informed. CIOs can change that. In fact, as senior officers with fiduciary duties and as strategists responsible for corporate growth, CIOs must change that. Don’t Get Preempted Boards are beginning to realize they need to pay more attention to IT. Sixty percent of directors surveyed by PricewaterhouseCoopers say they want to devote more time to IT issues next year. Just 36 percent said so last year. They have general notions about topics they should take on, such as cloud computing, social media and mobility. But they don’t know what they don’t know, says Don Keller, a partner at PricewaterhouseCoopers’ Center for Board Governance. CIOs “should give them a framework to discuss IT,” he says. Boards aren’t used to spending much time on technology issues. Traditionally, they’ve been more concerned with executive compensation, legal exposure, CEO succession planning and financial issues. When a CIO is invited to present to the board, it’s usually for 30 minutes each fiscal quarter, according to the survey. Use your brief time in the board’s presence, plus some background research, to assess the weak spots in the board’s IT knowledge, Follit advises. Prepare a short briefing paper on a single emerging technology and convene small private gatherings to talk about it, away from the formal board meeting. Some directors can be reluctant to reveal to peers that they don’t understand a topic, she says. At Lincoln Trust, Cousins recently spent time discussing predictive analytics with board members, explaining how it’s possible to identify the financial firm’s most valuable customers and realign account managers to better serve them. The board is now interested in the lifetime value of a customer, seeing that information as a way to position Lincoln Trust for the future, she says. If CIOs don’t use their precious half-hour effectively, they may get preempted. When directors don’t trust themselves or the CIO to evaluate the company’s IT situation, they call in an expert. Last year, 26 percent of boards hired outside consultants to help them evaluate major projects or the overall performance of the IT function, according to PricewaterhouseCoopers. That’s up from 15 REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

CIO Role widespread shift in the traits companies want in directors. Just 30 percent of directors surveyed by PricewaterhouseCoopers find IT expertise a “very important” attribute in new directors, and 31 percent are not seeking technology experience at all. They rank five other kinds of knowledge as more important, including industry and financial experience, and international business backgrounds. Directors can arrive with unhelpful biases, says Jim Noble, senior vice president of IT at Talisman Energy, an $8.3 billion (about Rs 44,000 crore) oil company. Perhaps they once suffered through a bad experience with SAP or Oracle enterprise software and automatically criticize a similar project. “They’ll say, ‘We did it at my company and it was a disaster,’” he says. “The number of times I’ve heard that!” Truly stifling, however, was Noble’s experience with the board of a large global consumer products company. As CIO, he would attend board meetings and events and afterward receive an e-mail or a phone call from a certain director offering suggestions or asking Beware the Politics questions. The director’s comments were astute; he was a successful Boards can be slow to change. For example, although boards may entrepreneur in the telecommunications industry. see that business strategy intertwines with IT, there’s been no When the CEO found out, he sent an e-mail to Noble and the rest of the 10-member senior team saying that communications with board members must go through him, Noble recalls. “He felt he was being endEvelyn Follit, Former run,” he says. “The structure of the company was very CIO, Radio Shack—who hierarchical. To reach down a couple of levels was seen has served on the board as rather odd.” of six companies— But Noble experienced the opposite when he says some CIOs can’t was CIO of what was then AOL Time Warner. The maneuver in this new world, “where they have co-CEOs at the time, Steve Case and Gerald Levin, to know an awful lot encouraged senior leaders to interact with the board— about business.” and then some. Netscape’s founder, wunderkind Marc Andreessen, was brought in as CTO and the company created a technology advisory group that included media and IT vendor hotshots. “The board and executives knew that old business models weren’t sustainable and were open to a lot of ideas,” he says. “That’s the best board atmosphere I’ve seen.” percent the year before. Responsible directors know that to carry out their duties to the company, they must seek outside help when necessary, says Joseph Grundfest, a professor of law and business at Stanford University and a former commissioner at the Securities and Exchange Commission. “It’s common for boards to bring in lawyers or investment bankers for expertise. There’s no reason they can’t bring in outside [IT] consultants.” But for the CIO at that company, Follit contends, it’s a bad sign. A board that brings in a consultant is dissatisfied with the CIO’s ability to explain how IT decisions affect, and are affected by, corporate strategy, she says. In the intimate and intense setting of a board meeting, a keepthe-lights-on kind of CIO can’t disguise that limitation with a veneer of business lingo. Follit runs an executive coaching business and sits on the board of TECO Energy. “Some CIOs can’t maneuver in this new world, where they have to know an awful lot about business.”

What You’ll Face Some boards want to hear more about technology, but some don’t. Fourteen percent of directors in PricewaterhouseCoopers’ study never meet formally with the CIO. What a board wants from a CIO depends on what’s going on at the company. Patti Reilly-White, CIO of Darden Restaurants, usually presents to her board about once a year and attends dinners and retreats. But she anticipates seeing the board more often for the next couple of years as Darden invests $200 million (about Rs 1,100 crore) to build and implement a new technology platform. The $8 billion (about Rs 44,000 crore) company, which owns Olive Garden, Red Lobster and six other chains, plans to unify IT across its brands and install mobile ordering and other services at its restaurants.

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CIO Role Given the size of the investment, Darden’s chairman and CEO, Clarence Otis, “provides input and guidance” about this critical project, which is intended to leapfrog competitors, Reilly-White says. Otis, who sits on Verizon’s board, “has the vision and is driving what we should be going after,” she says. Expect to meet with the board more often when there’s a crisis or corporate transformation going on. American Airlines is trying to right itself after filing for Chapter 11 bankruptcy protection last year. Maya Leibman has attended the board’s monthly meetings since being appointed CIO of the $24 billion (about Rs 132,000 crore) airline in January. Leibman has presented to the directors three times, twice on information security and once on the replacement of a key system. American Airlines director Stephen Bennett, former CEO of Intuit, asks salient questions, she says, such as about the kind of testing her IT group conducted on the new software. “Many on the board are tech-savvy,” she says, “but he has insights that others don’t.” Having a technology expert on the board sharpens a CIO’s business wits and usually makes for an intellectually strenuous meeting, says Hauck, formerly at Dun and Bradstreet. The $2 billion (about Rs 11,000 crore) company’s board includes Austin Adams, former CIO of JPMorgan Chase, Bank One and First Union, plus a former Hewlett-Packard executive. Naomi Seligman, founder of The Research Board, an influential CIO think tank, retired from the board last year. Dun and Bradstreet is one of relatively few companies with a board-level technology committee. There are only 12 in the Fortune 100. Establishing a technology committee signals that the board is ambitious about IT, says Estelle Metayer, founder and president of Competia, a competitive intelligence consultancy. Financial services firms, where IT and business are nearly indistinguishable, are more likely to have such committees than companies in other industries. Other forward-thinkers with boardlevel tech committees include FedEx, Pfizer, Procter & Gamble and Wal-Mart. Metayer predicts that more companies will join in because IT is pervasive but also because directors are taking a larger role in assessing corporate health as well as in shaping strategy. These duties require directors to be conversant in IT issues, she says. “If your board is stacked with retired CEOs, lawyers and auditors, they’re probably not questioning technology strategy well,” she says. “When technology is [covered by] the audit committee, it’s being overseen, but no one’s gaining foresight.” Among other tasks that Dun and Bradstreet’s technology committee performs is keeping tabs on MaxCV, a $160 million (about Rs 8,800 crore) transformation project started in 2010 to create a

A board that brings in a consultant is dissatisfied with the CIO’s ability to explain IT’s business impact. A keep-the-lights-on CIO can’t disguise that limitation with a veneer of business lingo.

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real-time “data supply chain” with Web applications and interfaces. But the committee and the full board wanted to know much more about Hauck’s work than project management reports can reveal. They delved into his approach to staffing and his views on business. Directors also looked for evidence that he collaborated well with peers, especially the heads of sales and of product development. Hauck says that when he attributed some of his own success to those colleagues, for example, and when employees of one group take jobs in either of the two others, he was able to show the board that he could cul-

tivate healthy relationships. Adams, in particular, drilled Hauck on talent, not wanting IT to be caught short of staff during a future merger, for example. “He says, ‘I need you to have five guys as good as you. If you don’t, then you’re not doing your job as a leader for this company.’” A board firing on all cylinders will challenge you—not necessarily because directors doubt your knowledge (though they may), but because they want to test your thinking, Noble says. But a CIO shouldn’t feel threatened by a grilling from directors, he says. “They keep you real. They keep you connected with the marketplace.” Besides, a CIO should be used to that dynamic by now. The position reports to a CEO, COO or CFO and usually has various steering committees guiding decisions and plans, he says. “The IT function isn’t autonomous by any means.”

The Internal Consultant To be in its best fighting form, a corporate board may well need a technology committee and deep engagement with the CIO, says Metayer, the competitive intelligence consultant. Some companies, such as Dun and Bradstreet, are already there. Others remain calcified in old ways. Most are somewhere in the middle. One $5 billion (about Rs 27,500 crore) healthcare company has no technology committee on its board, but the board calls on the CIO often to make presentations or answer ad hoc requests, says the CIO, who asked not to be quoted. The board has asked for her views on topics such as new industry partnerships and startups, the company’s competition and what it needs to stay strong into the future. That the board consults the CIO about such core issues shows that both it and the IT leader are enlightened, Metayer says. “I don’t know any company not struggling with some technology issue. Diversity of thought at the board level is an important way to approach those struggles.” CIO Kim Nash is a senior editor. Send feedback on this feature to editor@cio.in

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

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If energy major Thermax wanted to innovate and stay ahead of competition, it needed to protect its intellectual property. Hosted Shared Desktops helped it get there. BY SNEHA JHA The Organization: It’s hard to find a company like Thermax that piggybacks on innovation, so much so, that 30 percent of its revenues depend on it. The company’s thrust on innovation is a diktat from the top. Thanks to that, today, Thermax is one of India’s leading providers of energy engineering solutions. Headquartered in Pune, the Rs 5,375 crore company provides engineering solutions to a range of companies, in the areas of heating, cooling, power, water, and waste management, air pollution control, and chemicals. Thermax’ international operations are spread over Southeast Asia, the Middle East, China, Africa, Europe, and the US. The Business Case: For a company that thrives on innovation, protecting intellectual property is an imperative. “There’s a probability of business risk if the engineering drawing models are copied or IP confidentiality is compromised. In this eventuality, the monetary loss to the business could run into millions of rupees. Moreover, it is a matter of our reputation. That’s why we wanted to proactively block any security leakage,” says Anil Nadkarni, CIO, Thermax. In addition, the company also wanted to upgrade its IT infrastructure and replace 1,000-1,500 traditional desktops. This twin need—to strengthen the company's security posture and create a robust infrastructure—pushed Nadkarni to turn to a Hosted Shared Desktop (HSD) solution. The Project: A fairly under-rated concept, HSD is a server-based virtualization solution where multiple users access a single shared desktop, unlike VDI, where every user has their own virtual machine. The beauty of HSD, says Nadkarni, is that it allows you to share your resources. “Had we taken the traditional VDI route, each CPU would be able to handle only 15 VDI users comfortably. But with HSD, the same CPU can handle upto 50 users. The USP of the solution is that all the resources are shared, and unused memory

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is allocated to multiple users as and when needed. But we have restricted HSD to 40 users per CPU,” he says. Another benefit that tilted the scales towards HSD was costs. Unlike VDI, HSD doesn’t need a dedicated SAN, which is why it works out to be a much cheaper solution. After zeroing in on HSD, Nadkarni did a POC and found that his ERP was working too slowly on the virtual platform. He tweaked his ERP with the help of his OEM and then knit together a project team. In a few months, he rolled out the solution to 50 users from the boiler division in Chinchwad. The company has migrated 850 users from the manufacturing facilities of Savli and Chinchwad onto the HSD platform. In addition, some sections of users from other parts of the country have also been added. The Challenges: But the project wasn’t devoid of challenges. In the initial stages of the deployment, Nadkarni struggled to get user acceptance as users were reluctant to share their personal space. To keep them happy, Nadkarni decided to provide 5 GB of personal space to every user for storing their private information. Thermax has also made most of its non-engineering apps available to users through this solution. The Benefits: Today, the project has strengthened the organization’s security posture. "Since the virtual desktop HSD solution transfers only the screen images to the end point and not data, security is ensured. We have also disabled USB ports and print screen options to secure our data further," says Nadkarni. Apart from that, the project has also increased employee productivity by 30-40 percent. Now that employees can gain anytime, anywhere access, they are able to accomplish more work, expedite decision-making, and be more flexible. Nadkarni is convinced that this will make his organization more attractive to potential

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Anil Nadkarni, CIO, Thermax, deployed Hosted Shared Desktops, instead of taking the traditional route, to create a secure and less expensive IT infrastructure.

candidates and improve the quality of the organization’s employees. It has also made the organization BYOD-ready. The company has started encouraging employees to bring their own tablets to access their virtual desktops and work on various non-engineering apps from anywhere, anytime. “Once the HR drafts a BYOD policy, it will see a more aggressive adoption. Today, I am

technically ready with a BYOD framework in place,” he says. Not only that, it has also speeded up software deployment across the organization. “This is a centralized solution so rolling out software is much easier now. Recently, we upgraded our instant messaging software. We were able to finish it in five minutes,” says Nadkarni. CIO Send feedback to sneha_jha@idgindia.com

REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

casefiles

NABARD

Stuck with legacy infrastructure, NABARD was battling downtime and struggling to support business growth.How the bank's IT head changed that.

BY SHWETA RAO

The Organization: National Bank for Agricultural and Rural Development (NABARD)—which monitors rural co-operative banks in the country—has played a phenomenal role in empowering rural India. Today, NABARD caters to almost 3 crore farmers across the country. The Business Case: The bank has a multi-layer rural co-operative credit structure with 31 main state co-operative banks controlled by 28 NABARD regional offices. But in 2000, NABARD began

By migrating to a new datacenter, K.R. Bhat, GM-IT, NABARD, has ensured 99.75 percent uptime.

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losing market share to commercial banks, thanks to a lack of a sophisticated IT infrastructure. “The legacy facility was built for the purpose of housing a mini-computer in the 1990s. Six years later, only basic applications like accounting, MIS, and intranet were running on new servers,” says K.R. Bhat, GM-IT, NABARD. Soon, the legacy servers began to break down. NABARD hadn’t figured out any backup server options yet. “One day, one of the backup servers was down. The server supported applications which didn’t have another backup,” says Bhat. Worse, NABARD’s data backup problems had begun to reach its end customers too. Sometimes, outages spilled over two days, and this began to have an adverse effect on business. “We were slowly failing to retain even old customers as it became difficult to sustain the growing loan demands in the farming sector,” says Bhat. But the economic boom in subsequent years helped NABARD’s business grow. Its IT department though wasn't able to keep pace. The Solution: Bhat decided to upgrade to a tier-II datacenter to resiliently serve the rising needs of the business. But that wasn’t going to be easy. NABARD works with stringent financial, and more

importantly, time constraints. “Our first and most important condition during the RFP process was that the new datacenter had to be built and operationalized within 75 days of order confirmation. Not surprisingly, many bidders found the goal difficult to meet,” says Bhat. But through a rigorous process of technical and financial evaluation, Bhat zeroed in on his current service provider. The datacenter solution was designed with a planned PUE of 1.59 maximum IT load, which is well below the average datacenter PUE range of 1.8-1.89, identified by the Uptime Institute in 2011. This means power savings alone will pay back the entire cost of the datacenter in 11-15 years as compared to average datacenters. The Benefits: The new datacenter has taken NABARD’s uptime to 99.75 percent. It also enables NABARD’s employees to reduce up to 60-70 percent of their current workloads. Now, NABARD’s co-operative banks can expand their customer reach and improve their volume of business, while reducing cost of operations with quicker turnaround times. Today, NABARD’s IT team is strong enough to sustain growth for the next 30 years. CIO

Send feed back to shweta_rao@ idgindia.com

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A CLOSER LOOK AT CLOUD COMPUTING

Cloud computing has definitely grown to be a trustworthy technology over the years. But it isn't entirely there yet. CISOs and security buffs round up seven security sins that can undermine cloud computing's benefits.

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Seven Deadly Cloud Sins BY DAVID GEER

CLOUD SECURITY | Automation, cost savings, and data redundancy窶馬o wonder cloud adoption is tempting. Today, CISOs can rest easy knowing there is no vice in moving to the cloud to reap these rewards. But what may keep them up at night is not knowing how many missteps the enterprise is making in the process. Here are seven security mistakes organizations tend to make when moving to the cloud.

Failing to Check IDs at the Door The only secure way to log in to the cloud is through enterprise ID management systems. Though many cloud services permit just about anyone in the organization to sign themselves up, create their own IDs and passwords without registering these with the enterprise, and then connect these credentials to personal e-mail addresses, that does not mean that IT or the business should let it happen. "While it is easy to start out this way, failing to integrate with enterprise IMS will leave the organization open to leaks, policy violations, and ultimately the inability to secure the cloud," says John Thielens, CSO of Axway. Similarly, some companies that are deploying IaaS do so rather quickly to address complaints that their IT departments are slow and unresponsive. But this approach bypasses governance, allowing unguarded access to cloud servers. REAL CIO WORLD | J U N E 1 5 , 2 0 1 3

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And what if it is a customer-facing cloud service? What is the access model? "How will you integrate it to allow user sign on that is similar to, say, the single sign on model you have internally," says Julie Talbot-Hubbard, CISO for The Ohio State University.

Demands for Secure APIs Go Unheard When a company moves to the cloud, users will require APIs so they can uniquely leverage the company's services. The cloud brings internal services and capabilities closer to the customers who will want to access them. API-based integration enables that. Mobile developers use APIs to build valuable ecosystems on top of companies' business information. "If the developers monetize that, those revenues can cut into your value chain and you should have a share of the proceeds via a developer portal for APIs," explains Thielens. Having said that, API keys—which developers use to access the API services —have been compared to passwords. Know

may not be the best choice down the road. "Applications can even reach the point where it is economically more sound to move them back out of the cloud and into the enterprise again," says Thielens.

Thinking You’re Outsourcing Accountability The company can outsource some of its infrastructure to the cloud, but it cannot completely outsource its risk, accountability, and compliance obligations. Enterprises require a certain amount of transparency into the cloud provider so they can own the risk models and mitigate enterprise strategies. These needs suggest the cloud provider that he may or may not be suitable for the company since some are more accessible for assessing and managing risk. "You don't want to sign off on the cloud provider taking on all of the risk," says Thielens. The cloud provider certainly cannot own or care about your risks like you can. In an example from last year, those who had all their services in the cloud in a single Amazon E2C Availability Zone had severe

Dropbox, SharePoint, a little extra computing oomph from Amazon— your organization may already be using cloud services without IT's knowledge. It is as easy as entering a credit card number! what happens if you lose your passwords? CISOs using cloud service APIs need a solid security plan for protecting API keys.

downtime issues. Those who shouldered some of the risk were able to recover more quickly.

Bonded by Cloud Vendors

Bypassing IT and Security Departments

As cloud services evolve and new vendors and approaches pop up, the cloud's old guard such as Amazon and Facebook are turning best practices into standards and products available on a smaller scale, according to Thielens. With everything still changing and evolving, the best cloud approach today 96

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It is easy to sign up and get into the cloud with various providers and applications large and small without any technical knowledge. Dropbox, SharePoint, a little extra computing oomph from Amazon—your organization may already be using cloud-based services without IT's knowledge or involvement. It

45%

Of Indian CIOs say they haven't devised security measures for the cloud. SOURCE: CIO RESEARCH

is as easy as entering a credit card number! "The thinking is that they can bypass the long queue of IT projects and requirements and become productive," says Jerry Irvine, CIO, Prescient Solutions and member of the National Cyber Security Task Force. Unfortunately, this approach brings many new security, performance, and fault tolerance issues. By implementing corporate solutions with no IT involvement, users potentially create conflicts with existing systems, configurations, and applications. For these very reasons, all cloud adoption needs to be subject to risk assessments, contract review, compliance checks, and internal policy checks. When no one from IT, procurement or legal is involved in moving to the cloud, the organization can lose all of its governance of related data, applications, services, and infrastructure, says Talbot-Hubbard.

Overestimating Cloud Security In the rush to adopt cloud services and realize the potential savings they may give, notes Steve Durbin, global executive vice president, Information Security Forum, companies are concentrating on the functionality of the cloud services and failing to ask questions about the way cloud providers deliver security across their services or how that security can be checked. This happens when companies assume that because cloud service providers service multiple companies, they have a larger security department and stronger policies, processes, and procedures.” That is often not the case," says Irvine.

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ESSENTIAL technology

PERFECT PARTNER

Often, cloud service providers will attend to the basic levels of security in-house and depend on automated security applications and platforms to fulfill the bulk of their security practices. Other cloud providers may outsource higher levels of security that are outside their core expertise to third-party providers. But the security services of these thirdparty providers may not be included in the contractual requirements and SLAs that the cloud provider shares with the customer. "You have to require the service provider to maintain specific security functions, document security tasks, and provide copies of all security policies and practices as well as security reports," says Irvine.

Failing to Understand the Costs

Cloud Matchmaker VENDOR MANAGEMENT | The Asia Cloud Computing Association (ACCA) has launched the online version of its Cloud Assessment Tool, a powerful new tool designed to help businesses choose the most suitable cloud provider. It provides a standard framework that allows IT users to measure their requirements against vendor offerings. The vendor-neutral framework—the first of its kind—will help enterprises make informed decisions as they consider migrating their data and applications to the cloud. Martin Backstrom, chief technology advisor, PLDT Group, says the Philippines telco had benchmarked its cloud services with the tool. "We find it very useful in conversations with potential cloud customers," he says. "It clarifies our capabilities in an objective way and helps customers understand what to consider when migrating to the cloud. It creates a trust-mark for cloud services." ACCA is also working with partners in the financial services and insurance industries. Bruce McKernan, CIO of Sun Life Asia, says: "I see that the Cloud Assessment Tool could significantly reduce the time and effort (and thus money) required when moving to the cloud. It provides a standard and vendor-neutral framework for evaluating cloud services, which is something that is missing today." ACCA CEO Per Dahlberg says the organization was developing end-user guidelines and use cases to help create clarity around the assessed platforms. "This will also provide users with information on how the tool applies in some industries and to different services and platforms." The CAT framework is organized into eight performance categories spread over four service tiers, mapping operational parameter values against key criteria. "This helps end-users define and prioritize their own requirements and assess service providers' offers quickly and objectively," Dahlberg says. It would also eliminate subjectivity and interpretation from the evaluation process for both service providers and application developers, he adds. — Computerworld Philippines staff

IMAGE BY MASTERF ILE

When cloud providers put their wares on display, they often showcase basic offerings for the sake of cost comparisons by potential customers. "Unfortunately, after engaging a service provider, companies frequently determine that additional services, software licenses, and even hardware licenses are required to perform all the IT tasks to which the business has grown accustomed to," says Irvine. Companies underestimate cloud costs even further due to an unrealistic expectation as to the number of internal IT resources that they will need after pushing applications to the cloud. "Depending on the type of cloud service being offered, the number of resources required internally may not change at all. In fact, many of our clients who engage in cloud computing have no decrease in the internal IT department at all," says Irvine. In any case, the likelihood that a company will outsource 100 percent of its applications and systems into the cloud is minimal. Even businesses that push many of their systems to a cloud solution still have requirements for internal infrastructure and workstation engineers. "As a result, IT department costs are only minimally affected," says Irvine. CIO

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* BY LAUREN BROUSELL

On-time delivery is important for all companies that ship their products to customers, but that’s especially true for businesses that traded in fresh and perishable products. So Edible Arrangements, a maker of fruit bouquets and gift baskets, developed a mobile website that lets each store track orders, monitor delivery routes and oversee employee schedules. The mobile site is accessible through a smartphone browser and serves as a dashboard of real-time updates for franchisees, delivery drivers, and employees. The real-time data allows users to make changes on the fly, such as re-routing orders through another store if one store is backed up. Store owners can also check to see which employees clocked in and when. Edible Arrangements has completed a pilot test involving 15 to 20 users and has rolled the mobile site out to all 1,000 franchisees last month. The site improves efficiency because “we don’t bombard [users] with e-mails or texts,” says Matt Bailey, VP of operations. “It’s a dashboard of key indicators.”

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PHOTO BY MASTERFILE

Apps and Oranges