April 15 2006 by Sreekanth Sastry

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From The Editor

I’ll bet you there are just a handful of enterprises that aren’t into customer relationship

Business Connect Customer relationship management is more than a technology. It's a strategy.

management (CRM) in some way. It’s hardly a sweeping statement to observe that those at the helm of IT strategy at most medium-to-large organizations typically have applications and tools in place to take care of CRM requirements. But, I’m not so sure whether they all have a clear strategy in place to extract the full value from CRM systems. A recent Gartner report was very specific on the tactical nature of CRM applications. “CRM is not a technology or a software package—it is a strategy. To implement the strategy, organizations use tools and technologies…in the form of CRM software packages to solve specific business problems related to interactions with customers.” The reason for emphasizing this is because CRM in its truest sense isn’t about issues relating to sales or marketing or support management. In its basic form CRM is only about ensuring how your organization can reduce customer pain points, enhance customer commitment and loyalty and thus increase profitability. An IT head at an apparel company recently told me that if anything the best driver of a CRM strategy was not technology, it was revamping business process efficiencies and beefing up Pushing the technology revenue. He maintained that pushing the case and not a business technology case and not a business case for case for implementing a implementing a CRM system is guaranteed CRM system is guaranteed to sink any such initiative. to sink any such initiative. Technology is therefore more a means to an end when it comes to CRM. So, setting the strategy and the business goals for CRM becomes a key issue. Technology then goes on to facilitate the chosen strategy. This is also the reason why it becomes important for a CIO to not only ensure management buy-in when pushing CRM tools and technologies, but also to get a business sponsor on board. While management buy-in ensures commitment from other executives as well, getting the end-user department’s support is vital for such initiative to succeed. On page 32 we look at how Airtel’s technology executives managed to do this and more while deploying CRM. Let me know what you think about it and more importantly, your experiences in helping your colleagues manage customers. You can catch me at vijay_r@cio.in

Vijay Ramachandran, Editor vijay_r@cio.in

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content APRIL 15 2006‑ | ‑Vol/1‑ | ‑issue/11

Executive Expectations View From The Top | 42 Ashwin Dani, VC & MD, Asian Paints, talks about how robust supply chain management keeps the company from painting itself in a corner. Interview by Gunjan Trivedi

Peer-to-Peer Playing Nice in the IT Sandbox | 28 Building a leadership team that trusts one another should be your first priority as the new boss. Here’s how one CIO pulled it off. Column by Becky Blalock

Career Counsel Airtel has employed CRM to consolidate heterogenous systems and boost customer loyalty.

3 2

Serenity Found | 24 Here’s how to inoculate yourself against stress and burnout (once you understand the difference). Column by Dr. Steven Berglas

P hoto by Sr ivatsa Sh an dilya

IT Management IT Value

COVER STORy | Customer Relationship Magic | 32

Cove r: Imaging by b in esh s reedh aran

By pulling CRM from its bag of tricks, Airtel consolidated business and and took its relationship with its customers to the next level.

The IT Worst Case Scenario Survival Guide | 46 IT is a risky business. Here’s how to avoid some common catastrophes and increase your chances of success Feature by Dan Tynan

By Rahul Neel Mani

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content

Essential Technology | 62 Network Devices | The Network Teamster

By Fred Hapgood Pundit | Is Open Source Really Just as Good?

By Michael Jung

From the Editor | 8 Business Connect | Customer relationship management is more than a technology. It's a strategy. By Vijay Ramachandran

Inbox | 16

R.S. Sharma, Principal Secretary IT and CEO for Jharkhand Agency for Promoting IT (JAPIT) is introducing the state's IT to big boys club.

5 8

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Govern Rx for Risk | 52 As it revamps its workflow processes, the FDA is relying on technology to reduce the risk that unsafe substances-such as the pain reliever Vioxx—will get into the market.

2 4

Feature by Allan Holmes

Slow Start, Fast Recovery Strategy | 58 Barely six-years-old, the state of Jharkand is catching up fast to the likes of Andhra Pradesh and Karnataka, which boast of India’s more familiar egovernance implementations. CIO interviews the person responsible for this achievement—R.S. Sharma, Principal Secretary IT and CEO for Jharkhand Agency for Promoting IT (JAPIT). Interview by Rahul Neel Mani 12

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reader feedback

“Unless CEOs takes a strategic view of IT and involve CIOs, the relationship between the CEO and CIO will continue to be a date going nowhere.”

From Tactical to Practical I hope Turning IT Doubters into True Believers (April 1, 2006) will go some way in changing the perception of IT in India Inc.! In the Indian scenario, barring a few exceptions, many CIOs feel like secondclass citizens in the absence of direct and regular interaction with the CEO. CIOs dealing with a technically challenged CEO have a unique set of issues to contend with. Unless CEOs take a strategic view of IT and involve CIOs in the corporate vision, the relationship between the CEO and CIO will continue to be a date going nowhere. A key obstacle to improving the CIO-CEO relationship is the need to change the CEO’s perspective of the IT leader’s value to the enterprise. In today’s business environment, it’s vitally important for the CIO to become a true business partner of the CEO and CFO. Together, these three executives can drive significant strategies that benefit their company. Sharp CIOs make it a priority to get under the hood to discover what drives the company. Every industry has areas where technology can be leveraged to improve profitability and productivity, provide a competitive edge, or create value. While some CEOs share the view that IT should be strategic, a significant number still 16

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look at the CIO role as a support function. This disconnect becomes a problem when it leads CEOs to conclude that IT doesn’t need to be involved in the creation of long-term business plans. When CIOs are left out of these discussions, they miss a chance to showcase their capacity for creativity and innovation, making it even more difficult to prove their strategic worth. Despite being at the top of the IT food chain, they’re still functional executives. At best, CIOs find a tactical role because they are accountable when a virus hits or a project derails. The problem with all this is familiar: When CEOs don’t view IT as strategic, they don’t invite CIOs to the planning table. CEOs need to extend a mentoring role towards for advancing the ideas generated by the CIO and the IT department. In my experience, a place in the corporate power structure often depends upon effects to the top line and bottom-line made by contributors. Despite the enhancement of operational efficiency, strategic inputs to streamline business processes and direct boosts to productivity What Do You Think? We welcome your feedback on our articles, apart from your thoughts and suggestions. Write in to editor@cio.in. Letters may be edited for length or clarity.

etc., no CIO can match the volume contribution of powerful functional heads. In such an organizational structure CIOs will continue to be treated as secondclass citizens. The problem has more dimensions in Third World countries due to the difference of how CEOs are viewed in the West and in India. As CIO of a leading power utility with IT deployments in process, quality, cost and competitive advantage, I feel Indian CIOs, especially in core sector industries, need to cover the lost miles by enhancing their strategic worth in the perception of CEOs. This will enable them to truly act as change agents who will embrace innovation in large Indian corporates. I’d also like to request CIO to launch a survey on Indian CEOs/CFOs/senior functional heads to ascertain their views, perceptions, and expectations about the role of CIOs in their respective organization and industry. Watch out and compensate, however, for the well-known gap between ‘preaching and practice’. Subra o DaS SubraT CIO, Calcutta Electric Supply Corporation

More Hr, Please The cIO 5 newsletter is aptly named. It also quite good; the selected stories aren’t run-of-the-mill, but dig deeper. I feel, however, that the selection leans towards the technological. They can be balanced with articles in areas like, HR and IT management issues, commercial issues related to Indian IT like VAT, service tax and personalities. V balakriSHnan, CIO, Polaris Software Lab

editor@c o.in Vol/1 | ISSUE/11

new

hot

unexpected

Cost Cutting r e P O r t IT managers who focus on cutting costs and driving efficiencies risk working themselves out of a job, according to two recent reports. Instead, technology leaders need to create value by generating revenue. “If you’re 50 years old and you think you’re going to be working for 15 more years in IT and your work is based on cost reduction, I’d be worried,” says Rob Austin, a professor at Harvard Business School and a Cutter Consortium Fellow. In a report for Cutter, Austin says the belt-tightening of the past five years has pushed IT leaders too far into the cost-cutting role. Now, they need to encourage innovation and budget for projects that could create new revenue sources. The problem is, they don’t know how. According to a recent study by Mercer Delta Executive Learning Center, today’s enterprise leaders— not only CIOs—have been bred to cut costs. Now that there is nothing left to cut, they are having trouble creating value. From a survey of 223 senior executives in 44 countries (16 percent of whom are CIOs), Mercer Delta identified four key challenges to generating revenue that business leaders face: Increased competitive pressure, the need to respond quickly to changing market conditions, the need to innovate and the need to satisfy customer expectations. Nearly one-third of respondents said their companies do not understand well the leadership capabilities required to overcome these challenges.

MANAGeMeNt

Although 72 percent said their companies plan to close these leadership gaps, only half of the executives surveyed have made sufficient investments to do so. “Companies that recognize that their leaders are a source of competitive advantage are making sure that leadership development is an important investment area,” says Tom Knighton, partner at Mercer Delta. Cutter’s Austin says one way IT leaders can adopt a moneymaking mind-set is to list the ways IT could help their company generate revenue and then educate senior management. He recommends remaining open to suggestions from employees. “These people have the motivation you need to tap to create novel and valuable outcomes,” Austin says.

ILLUSTRATION By y UNNIKRISHNAN AV

No Longer Cuts it

— By Susannah Patton

Popular Apps May Compromise Security Big-name companies like America Online Inc. (AOL) and Adobe Systems Inc. could do a better job of writing secure software, according to a recent report by two Princeton University researchers. The researchers looked at a number of popular applications, including AOL Instant Messenger and Photoshop, and determined that many of them made changes to the operating system that could allow attackers to bypass some Windows security mechanisms. “Vendors are making mistakes when they write programs for Windows,” said Sudhakar Govindavajhala, a Ph.D. student and one of the paper's authors. An attacker would first need to gain access to a local account on a computer to take advantage of the problems described in the paper, Govindavajhala said. “These attacks are not exploitable over the Internet, but if someone can get a handle of your machine, then one can do interesting things.” — By Robert McMillan

Security

ILLUST RATION By BIN ESH SRE EDH ARAN

NEW

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ILLUSTRATION by BINESH SR EEDHA RA N

Emp l o y m e n t Drop software piracy by 10 percent and you will see two million more jobs and Rs 607,500 crore in contribution to the Asia Pacific’s GDP by 2009—according to projections by a global study conducted by the Business Software Alliance (BSA) and IDC. A further Rs 58,500 crore in taxes and Rs 463,500 crore in revenues to local vendors is also to be expected, should the projections turn out accurate. This is based on a 10-point drop in piracy from 53 to 43 percent for the IT industry, which is projected to grow 34 percent till 2009 at current piracy rates. With the 10-point drop, it could grow by 59 percent instead. Amongst the nations in the region, Japan and New Zealand score the lowest piracy rates, at 28 and 23 percent respectively. The chief offenders count Vietnam, China and Indonesia amongst them, at 92, 90 and 87 percent respectively. Singapore sits in the middle with a 42 percent piracy rate. The benefit to Singapore’s IT industry, with the same 10 percent

trendlines

Piracy Plunders Jobs drop in piracy, would have its IT industry grow by 25 percent, with 3,700 jobs, Rs 3,465 crore in contributions to the GDP, an additional Rs 607 crore in taxes and Rs 2,565 crore revenue to local vendors. Though piracy rate is on the high end in the Philippines at 71 percent, it is ahead of most nations in the Asia Pacific in legislation, with the Pilipinas Anti-Piracy Task Force and Copyright Amendment Bills, to name a few. Singapore and Australia have free trade agreements and intellectual property legislation in place, leading the way in legal developments. Could legislation be the answer to the continuing problem? Marcel Warmerdam, Research Director at IDC believes so. He says, “Governments should play an active role in combating piracy and supporting the IT industry. They have the influence to increase public education and awareness, as well as dedicate resources to step up enforcement endeavours.” — By Victoria Ho

Defeating the

Customization Argument manag e m e n t CIOs know that too much customization and a hodgepodge of IT products will boost costs. Yet, when business managers have argued that their particular group has unique needs requiring yet another custom system, CIOs haven’t had a strong counterargument in favor of standardization. But a study of 250 companies by benchmarking firm The Hackett Group may provide the ammunition CIOs need to defeat the

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customization argument, says David Hebert, IT practice leader at Hackett. The study found that companies that fail to reduce the complexity of IT spend 30 percent more on finance operations and 18 percent more on human resources functions, per employee, than companies that have successfully battled the complexity monster. Why? Overhead costs are much higher at companies that have more than ten finance applications or lack

a global standard for HR apps. IT costs go up because there are more hardware and software vendors to deal with, more customer and supplier databases to manage and integrate, and more incompatible data. IT organizations that keep a lid on complexity spend 15 percent less than their peers and operate with 36 percent fewer staffers, while bringing in projects on time and under budget 25 percent more often, Hackett found. — By Mitch Betts

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Look Back for Keys to

Vendors’Future IT COMPANIES This year marks a decade since the Internet bubble started inflating. Today, with IT spending on the rise again, “we’re entering a new 10-year period that I suspect will wind up being even more important than the bubble was,” observes Mark Stahlman, managing director of equity research with Caris & Co. IT industry analysts believe the dominant vendors then—such as IBM, Microsoft and Cisco—sowed the seeds for how they would fare in the future in they ways they responded to the dotcom boom and bust. IBM, observes Stahlman, has been resilient. Ten years ago, as it was being outpaced by other companies as a technology innovator, it sought refuge in the services market. After the bubble burst, IBM was able to capitalize on CIOs’ need to cut costs by outsourcing. Now that IT spending is picking up again, the company is reemerging as a technology maker, with an emphasis on high-end servers, mainframes and semiconductors. Meanwhile, it is re-purposing services as boosters to its hardware and software sales. Microsoft’s overreaction to the Netscape threat landed it in antitrust court and caused it much damage, says industry analyst Rob Enderle of Enderle Group. On the other hand, Enderle says, Microsoft succeeded at building a credible suite of server software, which it lacked in 1995, enabling the company to become “solidly entrenched in the back office.” Today, the company faces another challenge: The need to reinvent itself for the new wave of software as a service, says Amy Wohl, president of Wohl Associates. Google is a particular threat because it can use its dominance in search engines to offer Web-based software as a service to consumers and enterprises, she says. Cisco opted to grow through acquisitions and alliances, broadening its scope in networking and later entering new markets, says Frank Dzubeck, president of Communications Network Architects. But now, Cisco plays in so many markets—networking, voice over IP, security, storage and services—that it risks clashing with IBM, Microsoft and other partners in the marketplace.

— By Juan Carlos Peréz

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When employees leave, how can the company make sure all that expert knowledge doesn't walk out of the door with them? r e V i e W Companies that learn how to transfer employees’ expertise and make that transference a priority will not see their intellectual capital exit when employees retire, transfer or take other jobs, say the authors of a new book, Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom. Dorothy Leonard, a Harvard Business School professor emerita, and Walter Swap, a former dean and psychology professor at Tufts

BOOK

University, based Deep Smarts on a dotcom-era study they did on Internet entrepreneurs and coaches. What the authors conclude is that becoming an expert can take up to a decade of focus, hands-on participation, feedback and reflection. In other words, deep smarts can’t be acquired in a weekend workshop or during a thrill-a-minute dotcom gold rush. So what can an organization do to transfer its employees’

deep smarts effectively? The authors advocate for the use of knowledge coaches, who can be anyone with expertise to share. Because deep smarts are the product of hands-on experience, the authors prefer the Socratic method of teaching (one-onone questioning and dialogue) to lectures and seminars. And they recommend the use of simulations (from role-playing and case studies to virtual reality games) as a way to permit

learners to fail—and thereby learn—without repercussions. Included are real-life stories and case studies—an Indian entrepreneur’s attempt to emulate Staples in his homeland, for instance, or NASA engineers’ disbelief—even after it was proven—that insulating foam could have been responsible for the Columbia tragedy. These examples lend a rich context to the discussion. — By Diann Daniel

Fingerprinting Advances Could Bolster Network Security New technology for matching fingerprints for security purposes is proving about as reliable but much more efficient than traditional techniques, according to a new study by the National Institute of Standards and Technology. NIST studied the use of ‘minutiae templates,’ which are mathematical representations of full-blown fingerprint images that are seen as being much easier for vendors of biometric security systems to exchange with each other. The study involved use of a new standard for minutiae data that makes data exchange simpler than when proprietary techniques for converting fingerprint images to minutiae data. The templates are also a fraction of the size of a fingerprint image, reducing the

ILLUST RATION By BINESH SREEDHARAN

techNOlOGy

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need for storage on smart cards and other such devices. Fourteen vendors of fingerprint technologies participated in the Minutiae Interoperability Exchange Test (MINEX), which was sponsored by the US Department of Homeland Security and the Department of Justice. The group said that performance depended on how many fingerprints from a person were being matched, with systems using two index fingers accurate more than 98 percent of the time. Research on fingerprinting for computer security has also been a concentration of scientists at the University of Buffalo, who earlier this year released results of their work on how big keypad sensors need to be and how complete fingerprint images need to be to provide security.

Meanwhile, plenty of work remains to be done on fingerprint technology as news regarding the hacking of a Microsoft Fingerprint Reader showed earlier this year.

— Network World

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treNdliNeS

Knowledge Transfer Tips

Deep Smarts By Dorothy Leonard and Walter Swap Harvard Business School Press, 2005, Rs 1,437.60

Attending the soccer match between Manchester United and Beijing Hyundai last summer, some fans got a taste of the future: Mobile ticketing. Some supporters received their tickets as a two-dimensional bar code via SMS, which was then scanned by a bar-code reader upon their entrance to Beijing’s Workers’ Stadium. Is this a future view of Beijing’s 2008 Olympic Games? One company certainly thinks so. To Beijing-based Emma Ticket, a subsidiary of Emma Entertainment Holdings HK Ltd., ticketing in China isn’t about slips of paper or long lines of crazed fans camping out in front of stadiums. “We are an IT company, and this is a technology play,” said Jonathan Krane, Emma’s chief executive officer. Outfitting Beijing’s Workers’ Stadium, a 60,000-plus seat venue with which Emma has an exclusive ticketing relationship, meant first setting up a VPN (virtual private network) link from the stadium to the company’s ticket system hosted in Singapore. The company also set up a 20-person call center in Beijing. Unlike fans in China, Chinese fans don’t normally camp out for tickets nor do they buy tickets online. Most book by phone, then pay cash when the tickets are delivered. It could also make a difference to security. China’s police often deploy hundreds, even thousands, of officers for security at concerts and sporting matches. Krane sees this hands-on approach to security as an opportunity for Emma. Using bar-coded tickets and access control equipment, Emma can provide real-time reporting on exactly how many people are in the venue, even down to which seats are or should be occupied. The company chose bar codes over RFID (radio frequency identification) and swipe cards for a simple reason: Cost. “As a business, what is the cost of a bar code versus a magnetic stripe versus RFID?” Krane asks rhetorically. Bar coding also helps reduce loss from a prevalent China market problem: Fake tickets. Using techniques ranging from high-quality copiers to even applying black-market holographic stickers, fakes are usually made either by scalpers or by attendees themselves. But creating a bar code that will match a unique ID in the system is far more difficult, Krane said.

treNdliNeS

Chinese Ticketing Firm Takes on Fakes

earthquake

early warning System

i N N O VAt i O N

60,000plus tickets.

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IMAGING By B IN ESH SREEDHARAN

The Beijing’s Workers’ Stadium has an exclusive relationship with Emma that has a potential for

Researchers in Japan, one of the world’s most earthquake-prone countries, have developed a network that can provide several seconds’ warning that violent seismic shaking is about to commence. The network, coordinated by the Japan Meteorological Agency (JMA), is expected to go into full operation later this year. It could provide anything from a few seconds’ to a minute’s warning of a major earthquake—long enough to bring trains to a halt, cut off gas supplies or stop factory production lines. How much warning people have will depend on how far they are from the earthquake; locations nearer the epicenter, which are likely to be shaken the most, will get the least warning. But researchers agree that any warning is better than none. Earthquakes generate two main types of waves, called primary waves (P-waves) and secondary waves (S-waves). The P-waves travel at about twice the speed of the S-waves and are typically weaker. But by quickly detecting, measuring and analyzing the P-waves using a network of sensors, researchers can estimate the earthquake’s source and strength. This data can help researchers predict when the potentially destructive S-waves will be felt and how strong they will be. Several companies have developed systems for homes and offices that use the JMA’s data to generate warnings and distribute them via the Internet. One of the simplest comes from Tecs, which developed software that can be installed inside some Canon photocopiers. The software uses the copier’s network connection to maintain an Internet link with a server containing data from the JMA. When an earthquake is about to occur, the software can sound an alarm and also flash warnings on PCs connected to the office network, says Shouji Nihei, a Tecs employee. — By Martyn Williams

SeNSOrS

Dr. Steven Berglas

CAREER COUNSEL

Serenity Found Here’s how to inoculate yourself against stress and burnout (once you understand the difference).

e all know that CIO stands for ‘Career Is Over.’ The wag who coined that acronym was undoubtedly referring to the burnout factor that comes with the job and the consequent short tenure of the average CIO. I’m not talking about the difficulties inherent in systems design and development or data center operations but, rather, the misery of working unnoticed and unappreciated until something breaks down. That’s when the CIO must explain to senior executives that their company is being crippled by aging systems, why their equipment must be retrofitted and/or replaced, and why spending money on IT is a fact of life in the 21st century. And even if the executives can hear and understand the bad news, the CIO is still vulnerable to being axed when the problem can’t be solved fast enough or the technology can’t be aligned with corporate goals within an arbitrarily-imposed budget. That’s your world, and given its pressure-packed nature, you will likely suffer some considerable stress or experience burnout at some point. Thus, it is of paramount importance that you know the difference between the two.

Pouring Gasoline on a Fire Illust ration ANOOP

Everyone knows that working too hard is stressful and can lead to burnout. But CIOs in senior management positions may also suffer burnout if they’re doing nothing more than watching the divisions they built run themselves! I call this state of being bored witless ‘supernova burnout.’ Strange as it sounds to someone working to exhaustion, doing nothing—at least nothing intellectually challenging—can

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Dr. Steven Berglas

CAREER COUNSEL

CIOs are very vulnerable to stress. Their systems are prey to hackers, viruses and bugs and can crash for myriad reasons, all of which contribute to a lack of perceived control. be as disruptive to your mental health as working 14 hours a day like a rented mule. If you don’t know the difference between stress and burnout, the danger is that you may end up pouring gasoline on the fire. For example, interventions that are ‘just what the doctor ordered’ for stress (rest and relaxation) can exacerbate feelings of burnout. The CIO who is suffering supernova burnout, a term I coined to describe those who’ve achieved success—say, by playing a critical role in the leadership of a company—needs new challenges. Sending him to a resort for three weeks of downtime is robbing him of what he needs: A healthy challenge. It is likely to drive him mad. On the other hand, the rented mule who’s working 14-hour days and has no control over what he does (he’s rented, you see) needs some R&R (rest and recreation).

Good Stress and Bad Stress is a word that is constantly misused. In engineering, stress refers to a force applied to a structure, a bridge or a material such as concrete or bone that causes change (strain, cracking or ‘failure’) in the integrity of the material. This would suggest that psychological stress is a force lurking outside us, like fire, something that would have a uniformly adverse effect upon anyone who comes in contact with it. But stress does not lurk outside. In fact, psychological stress exists almost entirely in the eye of the beholder. People will experience stress only if they view something as posing a threat of harming them in a physical or psychological way. I, for one, experience threat (and stress) at the idea of standing atop an icy mountaintop on two slats of fiberglass and contemplating what I’m going to have to do to get down to the bottom. Of course, those of you who enjoy skiing find this exciting. And there you have another wrinkle in the stress nomenclature. Psychologists call your elation of being atop a mountain contemplating your rapid descent eustress, the ‘good’ stress that people derive from confronting and overcoming challenges. The way I help clients understand stress is to quote a great thinker, Epictetus, who did his thinking in 40 B.C.: “Men are disturbed not by things but by the views they take of them.” What Epictetus didn’t know was that there is one factor that regulates how much or how little our views of things are likely to result in feelings of stress. Psychologists call it ‘perceived control.’ It’s perceived, rather than actual, because you don’t have to be ‘in control,’ you just have to believe you are in order to have it work wonders. 26

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Let’s go back to the mountain. I view skiing as stressful because I have no idea how to do it. On the other hand, I know how to box, so I’ll happily climb into a ring with most anyone. For most people, that would be stressful, but I perceive myself to be in control when I box so I experience no stress when sparring.

The Etiology of Burnout CIOs are very vulnerable to stress. The systems they work with are prey to hackers, viruses and programming bugs and can crash for myriad reasons, all of which contribute to their lack of perceived control. Corporate officers above the CIO often don’t understand the systems the CIO controls, so they may do things out of ignorance that do major damage. This lack of control causes countless symptoms (from hair loss to impotence), but the most common are irritability, poor concentration and a general sense of malaise. Christina Maslach, a pioneer researcher on burnout, claims that burnout derives from a disconnect between what people are and what they do. To her, there is a spiritual underpinning to burnout: It represents a deterioration in values, dignity, spirit and will—what she calls ‘an erosion of the human soul’—that occurs when our careers cause us to feel chronically exhausted, cynical, detached from work and increasingly ineffective. Unlike the person experiencing stress, the person suffering burnout is not anxious but, rather, detached—from work and from his colleagues. You’re suffering burnout when you’re ‘going through the motions.’ My burned-out clients, all C-level executives, tell me, “I’m in it only for the money.” The other signs of burnout are watching the clock, being passive-aggressive to higher authorities, or fantasizing an escape from work that involves seeing the company suffer when you’re gone. (“We never appreciated Jones’s contribution until...”) The CIO is a prime candidate for the generic form of burnout not because he has protracted emotional demands but because the efforts he expends are not fully valued or appreciated. In effect, the CIO can grow alienated because his contributions go unnoticed. When you have to tell your superiors what those contributions are, the resultant praise (if it comes) loses much of its value. Praise is a funny thing; when you solicit it, it’s worthless. The CIO who has to explain what he’s done is often in the position of bringing pearls to swine and wondering, ‘Do I belong here?’ That’s disheartening, demoralizing and a precursor to burnout.

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Dr. Steven Berglas

CAREER COUNSEL

The other reason CIOs are vulnerable to burnout is that because the corporation is now completely dependent on the technology the CIO provides, he must oversee ever more extensive and complex networks and systems. The responsibility for developing a company’s IT architecture and integrating new technologies is the CIO’s, yet many companies claim to want their CIO to also be a strategic thinker involved in business plans and projections. Far too often this message is not consistent: Although they’re put on corporate leadership teams and told to maintain a strong position there, in the event of a technological snafu, CIOs are returned to their technical role and expected to serve a support function. The problem boils down to the fact that a CIO may actually do four jobs: Strategic planning, IT planning (such

To inoculate against CIO burnout: No CIO can suffer burnout if he awakes in the morning to clear and achievable goals. as creating architecture), IT oversight and supervision of IT operations. It’s an ambiguous life and one fraught with anxiety (the dominant symptom of not working with clear expectations). Thus, I would wager that most CIOs suffer burnout more than stress. Although the workload is enormous (stressful), they never know when those they are trying to please will be pleased (leading to burnout).

Doctor’s Orders To inoculate against CIO burnout: No CIO can suffer burnout if he awakes in the morning to clear and achievable goals. What CIOs must do is break the job down into components and appoint subheads for each department that reports to them. This does several things to remove ambiguity—and it makes the value of the work more obvious. In bureaucracies, naming and defining connotes importance. By creating a CTO who reports to you and oversees IT planning, you explain what you are overseeing. Similarly, having a head of IT operations who is there so you’re not pulled from a board meeting the next time a snafu occurs lets the world know you’re more than a technician. You can say, “Fenton’s my guy for system breakdowns.” The other thing to do is advertise how you cannot do things without departments. If you see a demand coming—that is, if a new, potential stressor is about to be put on your plate (“Say, Jacobs, my buddy at Systek is outsourcing his IT jobs offshore. Can you look into that?”), be certain to say, “We’ll need a department of “Offshore Employment” to do that given the legal, economic

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and governmental issues involved. If you tell Kane in HR, I’d be glad to set that up.” To treat CIO stress: From what I know of CIOs, those currently experiencing stress most likely believe they should have more control than they actually do. This belief often comes from self-imposed pressure to legitimize their role. Many CIOs believe that if they are not Superman—if they cannot handle whatever they’re asked to do—they will somehow jeopardize the status of their department. Poppycock. Lou Gerstner parachuted into IBM and gained points by saying, “Hey, I’m a brilliant manager but I don’t know about computers.” Roberto Goizueta (former CEO of Coke) gained respect when he said, “Hey, launching New Coke was a big disaster, my fault and I’m sorry!” Vulnerability can be a sign of strength. False bravado is a sign of childish machismo. If more CIOs asked for help, empowered their staff and got work done more efficiently, their departments would flourish. It would prove that they are great leaders.

The One-Eyed Man You may wonder, “Where’s the ball-squeezing exercise for stress?” or “How about getting closer to my staff on a retreat to end burnout?” Stress and burnout do not get treated with ‘toys’ or ‘quick fix’ interventions; situation-specific strategies arrived at through a thorough analysis of your situation work best. It’s not just walking on eggshells that has you upset. After all, most CIOs can solve the problems they’re called upon to address. What gets your goat is not being understood in time to fix those problems or, if you do, not being seen as a hero. Even if you escape the ax, you might want your career to be over rather than live with a Sword of Damocles over your head all the time. But if you tell yourself you’re a one-eyed man in the land of the blind, that the blind will one day appreciate you, and that on some days you won’t kill yourself to meet all the demands foisted upon you and instead you’ll let the blind bump into walls and suffer contusions, you’re coping. No squeeze balls, no tricks, just what Epictetus said: A different view. CIO

Dr. Steven Berglas, a psychiatrist, is an executive coach and consultant based in Los Angeles. He spent 25 years on the faculty at Harvard Medical School. His most recent book is Reclaiming the Fire: How Successful

People Overcome Burnout. Send feedback on this column to editor@cio.in

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Becky Blalock

PEER-TO-PEER

Playing Nice in the IT Sandbox Building a leadership team that trusts one another should be your first priority as the new boss. Here’s how one CIO pulled it off.

ike other IT departments, Southern Company’s IT organization has faced its share of challenges. We’ve seen declining budgets, tight labor markets and multiple hurricanes in our service territory. We’ve handled these challenges while providing excellent services and products. That would not have been possible without an effective senior leadership team that works well together. I’ve worked on many teams during my 27 years with Southern. Some of the teams had brilliant people who didn’t trust one another. Those teams accomplished very little. In contrast, I’ve been on high-performing teams with people who were less gifted in intellect, but who trusted one another and worked together toward a common goal. These teams consistently delivered better results and left a legacy of great relationships. A trusting team is what I set out to build when I became senior VP and CIO of Southern.

But it Took Some Time and Effort

Illust ration SHANITH

Southern’s IT senior leadership team is made up of five regional CIOs, one VP of operations and six departmental directors. These leaders span four states and a 120,000-mile service territory. When I was appointed, I knew there were teamwork problems. I also knew the IT staff was shell-shocked from having four CIOs in six years. Five years prior, I had served on this team as CIO for Georgia Power, one of Southern’s five operating companies. So I had some personal insight into what the senior leadership team faced. The first thing I did as the new CIO was to hold one-on-one meetings with my direct reports. I wanted to learn about each of these individuals, and I wanted them to learn about me. We 28

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Becky Blalock

PEER-TO-PEER

discussed their most recent performance assessments. I tried to learn what motivates them, and I also asked for each report’s advice. Where should I focus my attention for the first 100 days? What do I need to do to help you be successful? A common concern team members identified was lack of trust. Some members of the IT senior leadership team felt their opinions were not respected. They cited examples of other team members reviewing notes or checking BlackBerry handhelds while they were speaking. Others said that ideas they shared in meetings sometimes fell on deaf ears until another member repeated the idea and received credit for it. Another problem was that team members often worked independently of one another. A few years ago, for instance, the generation side of our business, which builds and operates the company’s power plants, needed an asset management tool. A software solution was chosen and implemented for that part of the

Teams that trust one another and work together toward a common goal consistently delivered better results and left a legacy of great relationships. business. Soon after, Southern’s transmission organization, which is responsible for planning, building and operating transmission lines and substations, decided to look into the same kind of tool. If open communication had been commonplace on the IT team, we might have been able to purchase a tool that would have met the needs of both organizations. Even though these issues existed, I knew we could become an amazing team. So we conducted a survey to address issues the senior leadership team had identified. I asked team members to rate colleagues on their levels of trust and respect and how open and receptive they were to one another’s ideas. The survey not only allowed members of our team to judge one another but also to judge the team as a whole. The first year we conducted the survey, the IT senior leadership team scored a 6.2 out of a possible 10 points. We realized there was a lot of work to do. As a result of that survey, we decided to focus on five core teamwork principles: Making one another successful, trusting one another, communicating proactively, treating one another with respect and becoming more open to feedback. I then concentrated on developing just such an environment.

years. With such a stable workforce, Southern can be a tricky environment to enter at a senior level. While searching for the right candidate for our application services director, I spent a lot of time asking for input from customers and colleagues. There were certain skills I was looking for that nobody in our company possessed. I wanted someone with experience in intellectual property and outsourcing. At one point, one of my peers asked me what I was doing and why I was taking so long. That extra work, however, seems to have paid off. Currently, half of our IT senior leadership team consists of women, and we also have racial, religious and geographic diversity. We grew up in different states and countries and have a variety of educational backgrounds. Some of us aren’t ‘technologists.’ Instead, we are business people who have learned how to run IT. The differences we bring to the table sometimes mean we have long, heated discussions. But once we make a decision, we know we’ve viewed the problem from every possible angle. I also instituted weekly teleconferences, monthly face-toface staff meetings and an annual team-building event for the IT senior leadership team. When I first joined the team, the weekly conference calls of our far-flung leadership group lasted about 10 minutes and were limited mostly to personnel discussions. I raised the bar on what was expected in these calls. Now, our calls last an hour and we talk about new technology choices, business goals and how our teams can collaborate on projects. At our annual team-building offsite, we discuss strategy for the year and make time to get to know one another. Because members of the IT senior leadership team work in groups that support different functional organizations, it is easy for one member of the team to feel in the dark about a decision. With these meetings, we render decision-making very transparent. Team members evaluate their peers twice a year on how well they exemplify the five core leadership principles. Each person knows teamwork is a component of his performance evaluation that is tied to pay. But pay is just one of the incentives I use. During my ‘getting to know you’ sessions, I asked each of my direct reports which incentives work best for them. I’ve tried to reward each according to his preferences for leadership development, speaking opportunities, executive face-time and so on. As a result of these changes, our scores on the teamwork survey have improved. By June 2005, our teamwork score was 8.25. We’ve come a long way. Yet, being perfect is our goal. And I will continue to learn how best to motivate my team and improve the way we work together in the future. CIO

The Right Kind of Team While the majority of our leadership team was already in place when I became CIO, retirements and promotions gave me the opportunity to bring others onto the team. The average tenure of our workforce is 19 years. Within the IT department it is 16.7

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Becky Blalock is senior VP and CIO of Southern Company, where she is responsible for IT strategy and operations. Send feedback on this column to editor@cio.in

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Amrita Gangotra, Group Chief, IT Solution Engagement, Bharti Tele-ventures, built a CRM system that ensures both customer loyatly and growth.

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Cover Story |CRM

Airtel, a telephony superbrand, is well on its way to mastering the art of managing customers. The journey has been evolutionary and CRM now gives them the power to study the lives of its customers and offer them personalized services. By Rahul Neel MaNi & SuNil Shah

ImagIn g by b In ESh SrEEdharan

PhotoS by Sr IVatSa Sh an dIlya

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subconsciously he knows that this is Airtel’s waminathan Iyer, a jet-setting moment of truth. If he doesn’t get what he wants executive from Chennai, is in New he’ll switch to a competitor; it's a test being Delhi for a critical board meeting. replicated, in one form or another, in the hectic Atypically, it is an eleventh hour call lives of millions of Airtel’s customers. Urgency and it’s going to be a couple of days was the norm in their lives and Airtel would do before he can get back and lasso his project out well to keep up. of bureaucratic quagmire. Snowed in with work, Five minutes and much button-punching later, he has completely forgotten about an overdue Iyer’s found a way to make his payment. Airtel’s cellphone bill—until his boss reminds him that Customer Relationship Management (CRM) system it's imperative he be reachable on his phone. He not only allows him to make a payment in Chennai, has spent a restless night imagining the tellingbut also to locate an Airtel outlet nearby. off he’ll receive when his service disconnects him. CRM's more than a test for Airtel, India’s As he drives to the meeting he works himself into largest mobile service provider— a tizzy, taking for granted that it’s a lifeline. Airtel’s CRM is Airtel’s gargantuan operations Reader ROI: roping in more business in a game will not stop to help one person. Why it's critical to involve that's getting hard, everyday, As a last resort, Iyer makes a end-users in CRM design just to stay in. CRM, mere jargon frantic call to Airtel’s helpline— Why getting business for most until recently, is now 121. As an Interactive Voice sponsers pays dividends bandied in junior management Response (IVR) leads him Why CRM ob jectives have to conversation and has become through a maze of possibilities, translate into measureable business goals crucial for many businesses. From his impatience builds and REAL CIO WORLD | A P R I L 1 5 , 2 0 0 6

Cover Story | CRM “When we created Airtel’s macro vision of CRM, we aspired to provide a single-window of service throughout the 23 circles across the country. Centralized and integrated were definitely two pillars we were looking for,” Gangotra says. Today it’s integration and centralization distinguishes Airtel’s CRM from other run-of-the-mill deployments, adds Gangotra. Manoj Kohli, President Mobility, Bharti Televentures, Airtel’s holding company, believes CRM was not built merely as a tool but to be part of Airtel’s culture. “It reflects Airtel’s brand message: Think fresh, deliver more.” Delivering more was the driving force when Airtel made a call to deploy a composite tool that would serve millions of its customers. Anurag Parashar, Head of Customer Service Delivery, Bharti Televentures, says it was essential for them to have a standard platform. “Why shouldn’t a person from Assam, holidaying in Kashmir, be able to make payments?” he asks rhetorically. Airtel would make that possible and it would be among mobile telephony’s pioneers to make it the norm. But before it could achieve this, it had to create a system that kept records of a customer’s portfolio, profile, payment history, etcetera. Airtel also made a crucial decision at this stage. It chose to take an interest in the lives of its customers. And that , it found, made all the difference.

managing customer transactions to cross-selling, up-selling and preventive security, CRM does it all. And, at Airtel, executives struggle less as they fight customer churn, build loyalty and find new avenues to sell value.

I Don’t Want Excuses

InfograPhICS: VIkaS kaPoor

Wise maxims like ‘The customer is king’ and ‘Customer service is critical’ have created who want solutions pronto. But ‘right-away’ solutions weren’t always something Airtel could provide admits Amrita Gangotra, Group Chief, IT Solution Engagement, Bharti Tele-ventures, who led the CRM initiative at the company. As Airtel grew a national footprint, it cobbled together a number of local players, spreading into new circles (23 today), and accumulating a number of different systems. In the resultant chaos, it was hard to service customers across circles, let alone implement an idea pan-Airtel. Delays in service, or worse a lack of it, were fraying the image Airtel’s brand managers were busy creating. In the time between a first call to the resolution of a query or a problem, Airtel’s brand image grew clumsier. It was evident that without an integrated and a centralized CRM system it would be impossible to process data and manage Airtel’s humongous customer base.

CRM's Road to

Happy Clients

Activation

WELCO

ANDI

Bil l

Activation

Welcome Process Prospecting

Operations

Acquisition

PEggIng ThEIR CLIEnTs

InvITIng ThEm InTO ThE fOLD

gARLAnDs AnD BOuquETs

airtel's ability to chart out an average lifecycle allows it to market additional services. the Crm is divided into operations and analytical. operations deals with bill tracking, etc

this stage combines provisioning and verification. airtel activates a customer's account and makes a first rating of him or her based on their application.

airtel's well-planned welcome process includes a visit from a service representative and a call informing clients of the airtel help line: 121. at the end of this stage, their first bill is generated.

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Cover Story | CRM

ExpressYourself When Iyer dialed into Airtel’s CRM, he set off a chain reaction that activated one of the CRM’s two modules. Airtel’s CRM consists of two parts explains Gangotra: Analytical and operational. The operational CRM makes sure everyday customer transactions hum along efficiently and the analytical module pieces together data based on customer habits that can help market a variety of services. The analytical module sits on a data warehouse, which contains customer profiles, usage patterns, demographics, revenue per customer, and other information. After Iyer’s frantic call, for instance, Airtel offered to bump up his credit limit but also urged him to move to a talk plan that involved a higher monthly rental, cheaper talk time and smarter roaming rates. In the main, however, CRM is associated with retaining and servicing customers. “Few people harness the potential of CRM to crosssell and up-sell,” says Gangotra. “Market analytics of a ready customer database can do wonders in converting prospective customers into real ones.” Understanding what a prospect is looking for is key. It was towards that end that Airtel sought to integrate all its processes across multiple functions with a centralized CRM.

Feeds from different areas within the company made sense, especially when business intelligence (BI) was applied to the data. Identifying prospective customers was made easier and BI ensured that whenever a customer interacted with one or multiple touch points, an auto alert was sent to a customer service representative who then made an up-sell or cross-sell bid. And customer relations has to make every contact count. Airtel’s customer privacy policy forbids them to solicit a customer beyond a fixed number of times. Thanks to CRM, up-selling is now both more focused and accurate. “With such a narrow window, we have to make sure we score every time. We use CRM analytics to generate accurate leads from a customer database. If, for example, someone uses ten minutes worth of international dialing a month, we’re going to try and capitalize on that information and make a cross-sell that will allow him to use the service more. It’s win-win,” says Parashar. The CRM also serves to segment customers, thereby helping Airtel proactively identify the needs of its customers. “There are well-established events or stages in customer’s lifecycle that clue us into his or her needs. For example, the aspirations of a corporate customer are very different from those of a retail customer. The former segment is attracted to our Blackberry offer and the

Final Bill

Disconnection

n Collectio

Base Management

analytics

Churn

Retention

CRm gETs InTO ITs ELEmEnT

A sLIPPERy sLOPE COnquERED

airtel makes its first collection. It marks the start of up-selling and cross-selling. the analytical module, which forms the basis of marketing, steps in. Crm has to make every attempt count since clients can be approached only a fixed number of times.

this stage may see an airtel client wishing to leave. to keep churn down, airtel uses retention policies and loyalty processes to bring clients back to the fold. many clients are won back.

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Cover Story | CRM latter can’t get enough Hello tunes. One segment could be happier with an eBill, while another likes regular paper invoices. But we couldn’t have differentiated one group from the other without CRM,” Kohli says. From the company’s standpoint, it is also hard to overstate how far a little CRM can go in addressing an exchange of information between Airtel and its millions of customers. Its power to trigger off an SMS to large defined chunks of users is formidable—something even law enforcement agencies have picked up on.

‘Your Anytime, Anywhere Customer Service' Iyer's frantic call didn't raise an eyebrow at Airtel, which receives thousands of queries everyday, many in the we hours of the night. Airtel’s CRM system is closely linked to a host of other back-end systems. Once a customer is acquired, information to serve him better is available with the front-end (help desk)—the doorway to the CRM system. The people manning

How Airtel Chooses its Wands If you thought they were taught how to select technology at Hogwarts, think again. Airtel follows a standard procedure for all technology deployment decisions. In order to decide on commercially-available, off-theshelf packages, the company’s technology team has to first select the top-three products that have success stories in the telecom vertical. It then looks at parameters such as the financial viability of a vendor, their support network, a track record of problemresolution times and the technology’s future. Last but not the least, the product’s features and functionalities are taken into consideration. Then, the matter is referred to what Airtel calls an architectural board. The board evaluates the product in a simulated architectural set-up and watches closely for the products ability to integrate with other products and applications. It is also tested for its open standards. In this process, the company also looks at scalability issues. It’s only at this stage that an agreement is sent for a final sign off by the architectural review board. — R. M.

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the doors have access to a customer’s file which makes it possible for them to field queries of varying natures. If an agent is able to help a customer in the first go, it is called a ‘first time resolution’ and the call is closed. Calls that require specialized help are escalated, by the CRM, to appropriate departments. Given that the CRM is centralized and supports workflows specific to queries, problems are fixed fast. But it has meant a lot of scripting on the CRM system. “The beauty of this solution lies in the amount of automation that is built into the CRM system,” says Parashar. Automation has also made self-service possible. The eCRM allows customers to access some information and is moving towards making interaction possible, doing away completely with a human interface. “We are trying to give the IVR more intelligence to make information available as a self service. Some of our work includes speech recognition, which will enable the IVR to take on more natural languages,” says Gangotra. It’s hard for Airtel’s customers, both internal and external, to wrap their minds around the worth of the CRM. They envisage a morning when they awake without the CRM and stop dead in their tracks. That’s because the CRM crunches millions of transactions, all of which generate data that has a specific place in the system. Some of the areas where the system has brought change include customized and simplified bill formats, payment collection centers, network deployments, and the activation process. Now, its just as hard to remember the days when customers agreed to wait or call back for an answer to their queries. Whether customers need to increase their credit limits or merely check the status of an additional offering like voicemail, agents manning the call centers and hooked on the CRM react quicker because they have customer history and credentials ready. Parashar, like his colleagues, cannot imagine life with the CRM. “Ultimately, it boils down to an ability to attend to millions of customers. Ninety-nine percent of complaints that find their way into the CRM can be resolved in a first call.” he says. The CRM doesn’t only reduce back-end traffic, it also regulates it. Service requests, like issuing a duplicate bill, that are sent to the back-end now have a cut-off time. If a request is not attended to and breaches a pre-set time limit, it is automatically escalated to a superior authority. According to Parashar, neither networking issues nor problems related to coverage area are referred to the backend anymore. Customers, of course, benefit the most. “Customers moving between circles,” reveals Gangotra, “best show up the advantages of CRM. Immaterial of where they are, they can dial a number and access the CRM or speak to a call center agent who is logged on the system.” According to her, almost all customer information is available online, enabling the company to answer queries 99 percent of the time. Data collected by the CRM also

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Cover Story |CRM helps Airtel take defensive action against customers they suspect are either misusing Airtel's services or aren’t planning to pay for them. Airtel, however, apprently lives by the saying, offense is the best form of defense. CRM is at its best saving Airtel from defecting customers. Frustrated clients are likely to make a last call and give the call centre a piece of their mind before announcing (sometimes triumphantly) that they’re switching to another operator. This is where the CRM steps in. “We use the CRM tool to intelligently suggest appropriate products to them so that they continue with us,” says Parashar. Since Airtel adopted CRM for its postpaid customers, they have experienced considerable savings in the form of fewer calls, a tremendous reduction in churn, increased productivity and further revenues from value-added services. Parashar claims that there’s been a cross and up-selling revolution in Airtel. “The efficiency is enormous. We would have collapsed without the system,” says Kohli.

Press One for Acceptance With any technology worth its acronym, IT managers realize that implementation is less important than getting the user community to adopt it and Airtel’s CRM was no exception. Given that users are forced to work harder to create processes and reengineer systems around the new implementation, chances are user bodies aren’t going to initially accept an IT implant. Gangotra backed her chances with groundwork in the form of a vision. She says that a broader vision is required before implementing new technologies. The vision includes a blueprint of how different lines of business and ranges of products, across various phases, will react to change. She came up with a three-step program to implement new technologies, one which she applied to the CRM system. First, technology, equipment and technical evaluation must be driven firmly into the ground, she says. Without these, gap

“With such a narrow window, we have to make sure we score every time. We use CRM analytics to generate accurate leads from a customer database. We’re going to try and capitalize on information.” — Anurag Parashar, Head, Customer Service Delivery, Bharti Televentures

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Cover Story | CRM The best buy-in in the world, analysis is impossible and hordes though, won’t cure teething of ill-fitting customizations will problems and Gangotra’s lay siege to the implementation. team saw their blueprint to Once a blockade is the end by training users. constructed, internal reContinuous training, they structuring can begin. During realized, was among the most the process of reengineering, the direct ways to ensure that the IT department looked carefully CRM was used. At that point, at issues surrounding scalability, more focus was placed on the business growth and market quality of training. Even bestand regulatory environments. in-class products have been Feedback was received at the — Amrita gangotra, group Chief It Solutions known to fail graduation end of every major pilot when Engagement, airtel because of poor training. users registered their problems A lot of the IT department’s and suggestions. These were success came from a general rolled into Airtel’s strategic consensus that CRM was roadmap. Once the processes mission critical to the were reengineered with the company. “The kind of new changes, user validation virtualization that’s required was sought. is humongous. We realized “ The commitment to we couldn’t afford to have reengineer has to come from a few front-end agents and users—not really the information a few sales guys attached technology community. It’s selfto number of customers.” evident that buy-in has to come says Gangotra. from users. And they must also understand that they have to build efficient processes around that product,” says Gangotra. Fortunately Parashar, who represents customer service The CRM mission at Airtel delivery, agrees with her. Among is far from over. According the first successes of Airtel’s IT to the company, another team was finding a business underutilized area of interest, sponsor. CRM was sponsored by which they have their eyes the customer service department on is customer profile and who recalls that aligning both history management. IT and business was critical. “There’s a lot I can do if I So critical, in fact, that internal know that my customer is in a users were temporarily taken off specific age group, belongs to their normal jobs and dedicated to certain economic strata, likes the project till it was declared a successful implementation. to listen to music and has a precise usage pattern. It’s possible to These embedded staffers started a process of osmosis and customize service according to his or her taste,” says Parashar. as a result, Parashar’s team realized that they needed to And Airtel would like to offer its customers personalized reengineer their processes to accommodate the CRM. “It was services like never before. Especially clubbed with the user department that took a call,” says Parashar. research—an example of which Parashar shares. He “We’ve had success because internal users demanded says studies have noted how older people have a higher the automated channels from us. They figured that IVRs propensity to churn if they live with younger people. It’s were more accepted in many markets. They even asked us the sort of insight that can save Airtel a lot of money and for more automated processes,” Gangotra concurs. With heartburn if it’s tied in with the CRM. each circle required to sign off before the deployment could Personalized service, it is hoped, will also help the go live, the project could have been grounded a number of company retain more customers for a longer period. times. But, once again, the business sponsor took charge Unlike the hotel industry, which handles small numbers, and lined up the 23 circles. it is tougher for Airtel to offer personalized services with

“Few people harness the potential of CRM to cross-sell and up-sell. Market analytics of a ready customer database can do wonders in converting prospective customers into real ones.”

Customer Freedom

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Cover Story | CRM

nine neat spells for CRm success It looks magical, and you doubt you can replicate it. Worry not, here’s how to do it. DEfInE yOuR vIsIOn. y you must develop a clear vision of how you want to manage customer relationships, and then cultivate strategies which translate to definable and measurable action. sPELL mEAsuRABLE BusInEss gOALs. Corporate vision and strategy, once defined, result in specific and measurable goals that help you track where you are in your plan, and how well your strategy is working. gET suPPORT fROm mAnAgEmEnT. before embarking on a Crm program, make sure you have the full support of the company’s top executives. fleshing out clear objectives that can be achieved from Crm will further your bid for general consensus. remember the successful execution of your strategy will need the alignment and integration of multiple departments. sTOP AT nOThIng TO gET EnD- usER Buy-In. Implementing a Crm program without buy-in from all concerned departments

will lead you absolutely nowhere. don’t railroad them, individual departments are going to suffer disruptions and inconvenience as their workflows are changed. Convince them instead of the benefits of the program. note: buy-in needs to be maintained over the life of the program. InvOLvE EnD-usERs In CRm DEsIgn. It’s important to ensure active participation of end-users while you’re designing the Crm. no program or solution implementation can succeed if those on the front-line refuse to accept it. TALk In ThEIR TOnguE. business goals drive solution functionality. Clearly define functionality requirements based on business needs, rather than technical interests. keep in mind, however, that while a technological implementation is built around business needs, a cost effective program will also allow for changing work practices to suit the capabilities of you technology.

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TAkE A PhAsED APPROACh. a big bang opening might be good for movie premiers but they can live with creative license—you can’t. Complete the Crm process in multiple steps. let each step be guided by business priorities, financial constraints, your people and the maturity of your processes, and—most important of all—what you learnt from the last step. mEAsuRE REsuLTs. Set benchmarks and targets and measure your progress against them. the metrics should focus on business value or placeholders for value.

TRAIn AnD COmmunICATE Effective Crm is about people, process, and technology. People need

18.4 lakh subscribers in Delhi alone. Airtel aspir es to provide personal service to crores of its customers through CRM analytics. “Without a CRM, we can’t even think of attempting this,” says Gangotra. Another front is integrating mobility, landline and broadband customers and serving them through a centralized CRM. Today, landline customers aren’t in the loop about the other services Airtel offers. “Integration of these three areas is vital,” says Parashar. Airtel would also like to see the CRM help them with self-service. They want

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to understand how Crm will change processes they are used to. It is a good idea to remind yourself that, often, a Crm program will make many processes explicit for the first time. If end-users do not know how to use a solution properly or feel that they can’t keep up with it, they have a tendency not to use it as much. Consequently, the solution will fail to deliver its true potential and that affects you.

— r. m.

to empower their customers by enabling them to interact with Airtel in a way they want. “If the customer wants to deactivate a certain service at 2 AM, we’re going to facilitate that process. We want the CRM to be intelligent enough to interact with our customers,” says Gangotra. It’s the sort of intelligence and service the Iyers of the world would have once called magic. CIO

Bureau Head North Rahul Neel Mani can be reached at rahul_m@cio.in

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VIEW

from the TOP

Ashwin Dani, VC & MD, Asian Paints, swears by accurate demand forecasting, powered by robust supply chain management. Dyed in IT, the multinational stays miles ahead of the competition.

View from the top is a series of interviews with CEOs and other C-level executives about the role of IT in their companies and what they expect from their CIOs.

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Colors of

Success by Gunjan Trivedi

Among the largest performers in the Indian paint industry, Asian Paints’ association with IT is over three decades old. Capturing precise information faster has been the paint company’s core mantra. This has enabled it to rank amongst the top-ten decorative coatings companies in the world. The Rs 2,560-crore multi-national harnesses a robust supply chain system to automate a wide spectrum of functions and increase demand forecasting accuracy. Ashwin Dani, Vice Chairman & Managing Director, Asian Paints, lays credit for the company’s growth rate at IT’s door. Even before the paint’s dried, he is already on his way, extending the supply chain to include the company’s entire force of 18,000 dealers, using it as a binder between people and teams.

CIO: How is IT contributing to Asian Paints’ top-line and bottom-line? Ashwin Dani:

Paint is a workingcapital intensive industry. Our primary focus has always been to cut down on our working capital. The result of

our endeavor reflects in our balance sheets. I have always held the opinion that IT is core to our organization. The application of technology ultimately helps us in better ROC (return on capital). Capturing accurate information is key to maintaining our lead in the market and IT helps us do this and enables us to serve our customers much better.

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Asian Paints VC & MD Ashwin Dani expects IT to Improve return on capital Uniformly integrate internationally acquired companies

PhotoS by FOTO CO RP

Keep their service levels the highest in the industry

At Asian Paints, technology helps us control inventory anomalies. It allows an enhanced integration of manufacturing operations between multiple plants. If a particular plant faces problems while carrying out a manufacturing task, the production plan is easily migrated to another plant, thereby servicing our customers better. This also means that we donâ&#x20AC;&#x2122;t face a situation where we are out of stock. Our systems help us optimize the consumption of raw materials at our manufacturing units. We can analyze

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our inventory levels to forecast market demands and reorient our production plan so as to match our output rates with the requirements of the market.

How much credit would you give IT in furthering Asian Paintsâ&#x20AC;&#x2122; market leadership? Our association with IT dates back to the 1960s. I still remember when International Computers India Manufacturing (ICIM)

first introduced mainframes in the country, one of the only two computers sold was bought by Asian Paints. The other went to Godrej. In the late '60s and early '70s, we wrote applications to meet our internal requirements. We stressed on capturing accurate sales statistics. We had 15 different products in the market, which constituted about 85 percent of our turnover. We wanted to know how these products were doing per salesman, town, dealer, branch and state. This information was collated and later

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View from the Top

processed by the applications we created that ran on the mainframe computer. Despite a 25-day lag in generating the reports, we managed to arm ourselves with the sales statistics, which, in turn, helped us focus on problem areas and attack specific issues. We were the only paint company in the country equipped with market information this accurate. I remember our competition being clueless. Our long-standing commitment to technology is evident by the fact that in the late '70s we were the first paint company to install a computerized color matching machine and I was the first trained computerized color matcher in the country. It cost us almost Rs 20 lakh in those days and I remember having to put my neck on the line to get it. The technology gave us an edge over the competition. But the point is that we put faith in technology ages before our competitors had even started to show interest in IT. Even when they did, our organization had maintained a clear advantage because we had kept innovating with technology.

Has the early adoption of SCM and ERP technologies been an advantage? Over the years, and with the phenomenal growth of our market share, we realized our home-built applications had limitations. The algorithms used were not as intricate and as mathematically advanced as some of the fully-dedicated software available in the market. We decided to purchase a supply chain management solution from i2 Technologies; first to optimize our supply chain and then to further decrease our working capital. We benefited tremendously from the SCM and within 12 months of its deployment, we rolled out a SAP ERP. We decided that we needed to take the risky path of integrating our mammoth applications and bought a SCM first and then backward interfaced it into the ERP. 44

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“Ultimately, every thing is built on previously available information. As long as we do a good job capturing data precisely, we are able to better forecast requirements” — Ashwin Dani

Behind all this, we always stressed on providing better service to our customers. Our service levels are the highest in the paint industry, giving us a clear advantage over our nearest competitor. The early adoption of SCM and ERP technologies gave us a better head-start on our competition. However, this was true even when we worked on indigenously developed

software. In fact I feel we had a greater headstart then on our competitors. Now, with the advent of easy-to-deploy and ready-made applications, the competition has been able to gain on us. I have to accept that the relative advantage of our ERP application has started to diminish. Nevertheless, despite similar software and systems available in the market, I believe it is the superior quality of our people that is deriving us maximum advantage from these technologies. Equipped with better tools, the productivity of employees at Asian Paints has increased manifold. It has made their approach in meeting the company’s objectives more focused. And the biggest advantage we draw is our capability to forecast demand accurately.

Can you elaborate on your experience with demand forecasting? Demand forecasting has worked very well for us. Every subsequent forecast is better than the last one because we have better insight from past data. Ultimately, every thing is built on previously available information, and as long as we do a good job capturing data precisely, we are able to better forecast requirements. Accurate demand forecasting helps us tremendously in targeting the kind of markets that have specific needs, and enables us to avoid situations where we are either out-of-stock or we’re wasting resources on inventory. Let me give you an example. In certain pockets of Maharashtra, during a festival known as Pola, when farmers celebrate their bullocks by painting their horns, there is a requirement spike for 50-100ml packs of a particular shade called deep orange. Accurate and precise demand forecasting enables us to develop a relevant manufacturing plan during this specific period to meet the demands of this market. Under, over, or erroneous manufacturing harms sales in those regions.

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View from the Top

Similarly, there are fluctuations, around the year, for various products depending upon different factors such as seasonality, festivals, etc. Accurate and robust demand forecasting helps us to further augment our market share by clueing us in on market trends.

To what extent has technology influenced the organization’s B2C initiatives such as the Colour World chain of tinting machines or your website? With Color World, we provide a large range of colors to our customers. With this initiative, we have been able to derive better insights in the choice customers make—specifically, what kinds of shades they are choosing. Our customer-facing initiatives have helped us capture this sort of information, which aids us in streamlining our products and optimizing them according to the market. It has brought us closer to the customer. We have extended this facility to customers, as well, through our website. Customers can learn the costs and volumes associated with personal paint jobs. We also recommend color schemes among customers who take a further interest and provide electronic pictures of their properties. We have deployed the Asian Helpline, our call center, which assists customers in many of these activities, in addition to helping them locate the nearest Colour World dealer. Currently, we are revamping our customer-facing processes using various technologies such as a SAP CRM platform as well as customer extensions such as a sales force automation application, especially in areas like home solutions. This initiative integrates Asian Paints with our partners such as painters, dealers, interior decorators, and architects in order

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SNAPSHOT to offer customers turnkey our supply chain capabilities solutions to undertake their to these dealers so that they paint jobs. can check their accounts and Turnover: We are also working on stock status online and can (2004-2005) Rs 2,560 crore creating a back-end between request more products from Colour World units and the the stock keeping units. Employees: 4,500 organization’s systems. In the IT Staff: first phase of this initiative, With the 40 the online system for dealers organization IT budget: is being deployed, which extending its 0.75 percent of net will offer accounting details presence to over sales and will have a provision to 23 countries, Manufacturing have a customer’s grievances Plants: redressed. The subsequent how critical is 30 in 22 countries phases will provide technology to Dealers: information regarding the your plans? 18,000 dealers in availability of our products India at stock-keeping units. We We have already moved Stock Keeping extend the SCM to our sales our acquired companies onto Units: force as well. We have plans a single SAP ERP platform. About 1,500 in India to equip our territory sales This gives uniformity across CIO: in-charges with mobile the organization and helps Manish Choksi communication devices such us to integrate acquired as PDAs. They will have access companies with Asian Paints to immediate information seamlessly. This move helped regarding stock and payment us manage the shorter and schedules of dealers. varied deadlines while filing accounts with We are also planning to automate and local authorities at various international Web-enable product requests and invoices. locations. With the reduction in import We have already IT-enabled the supplier-side duties, we are planning to reduce our of our business and will soon extend these manufacturing locations. We would prefer capabilities to our dealers. In short we’re regional manufacturing units rather than attempting better supply chain integration. country-specific manufacturing locations. At the same time, distribution will be countrywide. The better integration of processes In what way will IT act piggybacking on technology will help us as a growth catalyst in manage manufacturing locations and the Asian Paints’ foray into distribution chain much better. CIO

Asian Paints

the smaller, semi-urban markets?

By and large, we don’t service towns which have a population less than 15,000, unless there are requirements from certain pockets or clusters of villages. Nevertheless, with the improvement in communication infrastructure, dealers in the smaller markets are now able to connect to the nearest stock keeping units. We are planning to extend

Senior Correspondent Gunjan Trivedi can be reached at gunjan_t@cio.in

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IT is a risky business. Hereâ&#x20AC;&#x2122;s how to avoid some common catastrophes and increase your chances of success.

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IT Management

The

worst case scenario

survIvAl

GuIDE

IllUSTraTIon S by H arSHo

April 15, 2006 You’re lost in the IT wilderness, starved for funding and thirsting for recognition. As the infrastructure sinks slowly under your feet, alligators crawl out of their corner offices to snap at your heels and marketing weasels begin gnawing at your flesh... When you’re that far up the proverbial creek, and neither bailing out nor soldiering on seem like workable options, it’s easy to imagine that no one else in IT has ever been in such an impossible situation. You’d be wrong about that. According to research by The Standish Group, one out of five IT projects fail outright, and more than

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half come in late or over budget. Why? The standard answer from the business side, ‘It’s IT’s fault,’ conveniently ignores equally likely causes: Bad requirements management, poor business planning, lousy communication, or the dreaded ‘scope creep.’ Here, we’ve identified five of the most common scenarios in which projects fail and what IT can do to avoid them. The stories you are about to read are true, although company names have been obscured to protect the guilty. Some date from the technology-at-any-cost ‘90s, while others are ripped from today’s headlines. But their lessons are timeless.

Scenario 1: utsourcing Run Amok

Back in the mid-’90s, a large vending machine services firm wanted to save money by centralizing its operations, so it hired a Big Five consultant to implement a Rs 90 crore ERP system. Big mistake. “Turns out, the consultant’s dream was to build a management information system from scratch because he thought he knew how to do it better than anybody else,” says Bob Price, former CEO of Control Data and author of The Eye for REAL CIO WORLD | A P R I L 1 5 , 2 0 0 6

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decentralized business model. It ultimately solved the problem by putting sales and inventory management back out in the field but handling customer data centrally. 3. Avoid proprietary technology. The ERP system was not only a custom job, it was written in an obscure version of ALGOL (Algorithmic Language)—a programming language the consultant loved but nobody else knew how to use, according to Price. 4. Manage it closely. Even the most minutely detailed consulting agreements can’t cover everything, especially as changes or clarifications are needed. Consultants can be very useful, Price says, but you need to state in no uncertain terms what you want them to do, and manage them very closely. Innovation: Recognizing Possibilities and Managing the Creative Enterprise. The result was a near total meltdown. Prices in the ERP system didn’t match those in the catalog, so customers refused to pay. The centralized system made it too expensive to collect from individual buyers, so revenues dropped. Mid-level managers who were never consulted about the system revolted and left in droves. The firm’s president lost his job over the fiasco, and his boss, the CEO of the firm’s parent company, ultimately resigned. What if the consultant you thought was a godsend turns into Godzilla?

1. Assess your internal talent. Nobody in the organization really understood the project, leaving the consultant totally in charge. If you don’t have the necessary expertise in house—or are unable to hire it—don’t take on the project. “It’s better to do business in a poor way,” Price says, “than undertake something you don’t understand and end up not doing business at all.” 2. Match the solution to your business. In this case, the firm was trying to force fit a centralized structure on an extremely 48

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Scenario 2: he Incredible Expanding IT Project

Three years ago, a major West Coast tech services company decided to roll out a Web-based content management system to handle its internal communications. But inexorably, the features list began to grow. Could they use the same system for customer support? Sure, said the systems integrator. How about selling research reports to clients? No problem. The budget for the project rapidly climbed to Rs 450 crore. The catch? The systems integrator was also the software vendor who’d built the content management system. The vendor had never met a problem their software couldn’t solve—for millions in additional development fees, naturally. “By the time they contacted us, the company had spent closer to Rs. 1,260 crore, and the percentage of test cases that actually worked was zero,” says George Kondrach, executive VP of Innodata Isogen, a content supply chain consultancy.

Innodata recommended scaling down the project and bringing in third-party software to handle jobs the content management system wasn’t designed to do. Kondrach says Innodata could have fixed the problems for about Rs 45 crore, but that would have meant the client would have had to admit failure. Instead, the client continues to spend millions each year trying to make the system work. How do you keep a project from spiraling into unfathomable depths?

1. Be vendor agnostic. Hiring an integrator with a vested interest or one whose expertise is limited to a single vendor’s products is a recipe for disaster, Kondrach says. Any proprietary solution can limit options later. 2. Know thy software. Understand the difference between a software feature and a new product category. Do not attempt to use one system to do the work of five different applications. 3. Don’t bury your mistakes. Admitting failure early is one the best things you can do. “Don’t euphemize a project that’s failing as ‘making progress’ or ‘iterative development,’” says Kondrach. “It’s better to acknowledge that your initial design decisions are not workable.”

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IT Management

4. Know when to give up. “Don’t throw good money after bad,” says Patrick Gray, president of Prevoyance Group, a New York-based consulting firm. “It’s painful, but it’s still better to waste Rs 450 crore than Rs 900 crore.”

Scenario 3: he Hacker from Hell

2. Check your backups. Organizations should verify their code before they back it up or restore it, says Pironti. The easiest way is to create a hash from compiled code before it’s put into production, then do the same thing before each backup. If the hashes aren’t identical, the code has been tampered with—and the organization will discover it within hours, not months. 3. Audit processes. Most organizations need to do a better job of logging system activities and correlating them into events. By establishing a range of what ‘normal’ transactions look like, organizations can more easily respond to anomalous behavior.

4. Plan for small disasters. Most enterprises have their own worst-casescenario guidebook on how to handle huge disasters but don’t have a clue what to do if just part of their system—such as a Web site—breaks down. They need a plan for every part of the puzzle, says Pironti. 5. Think business, not IT. Organizations should approach security and continuity with the idea of doing whatever it takes to keep the business going—even if that means reverting to pen and paper, says Pironti. “If institutions looked at things from the perspective of business processes and not technology, they would develop much better vulnerability management plans,” he says.

Last year, the Web site of a large financial services firm was hacked. Acting quickly, the company took down its primary site and brought a duplicate one online with virtually no service hiccups. But what the firm didn’t know was that the attacker had planted malicious code on the site months earlier—enough time for his backdoor to be propagated into all the site’s backup sets. So when the second site came online, the hacker continued accessing user accounts. The firm had to go completely offline for several When it comes to IT projects, nobody bungles things better than Uncle Sam. hours while it identified and fixed the problem. By relying on a single The FBI’s ‘Virtual Case File’ The IRS’s ‘Business Systems application or platform for core Price tag: Rs 765 crore Modernization’ business functions, you create The replacement for the Fed’s antiquated Price tag: Rs 36,000 crore and counting a single point of failure, says case management system fell victim to After abandoning a Rs 15,300 crore John Pironti, principal security massive scope creep, caused in part by modernization project in 1997, the IRS embarked consultant for Unisys. In this changes to the FBI’s mission after September on a 15-year, Rs 36,000 crore plan that quickly case, the same flawed code was 11 (having five CIOs in four years probably grew even more troubled than its predecessor. used in the firm’s primary and didn’t help). Last year the Feds scrapped the After numerous personnel changes and some backup Web sites—which the VCF project in favor of a new SOA-based plan scathing GAO reports, the project might finally be hacker happily exploited. called Sentinel. getting on course, if not on budget. Then again, it’s not like they’re going to run out of money. How do you keep hackers from The FAA’s ‘Advanced Automation finding your Achilles’ heel? System’ Department of Defense’s ‘Business Price tag: Rs 11,700 crore Systems Modernization’ 1. Diversify platforms. This early attempt to modernize the nation’s Price tag: Rs 85,500 crore (2004) Enterprises need to put their air traffic control system crashed before it A May 2004 report by the GAO found the project core business functions on ever took off. In 1994, the FAA wrote off an to be “fundamentally flawed ... and vulnerable to multiple platforms and keep estimated Rs 6,750 crore of the expenses fraud, waste, and abuse.” The DOD’s IT roster data synchronized among them. and tried to salvage the rest. The AAS itself includes over 200 systems for managing So, for example, if the Windows was merely part of a 25-year, Rs 202,500 inventory and 450 for personnel, but all come in platform is compromised, the crore overhaul that has been fraught with the same color: Green. organization can fire up the Linux every ill known to IT. — D. T. implementation and operate with minimal interruption.

Infamous IT Meltdowns

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IT Management

Scenario 4: oftware of the Damned

Back in the late ‘90s, a large, Midwest maker of consumer products thought a new ERP system would be just the ticket. All the top executives signed off on it, and the IT department got busy. Many months and Rs 180 crore later, the project was finally done— and users wouldn’t go near it. “When they finally flicked the switch, they had a near-total rebellion from their users,” says Phil Bloodworth, US leader of the IT Effectiveness practice at PricewaterhouseCoopers (PwC). Nobody had bothered to talk to the people who were supposed to use the thing. Some modules were retrofitted for use in other departments, but the bulk of the system was abandoned. How do you keep your expensive project from becoming a lifeless zombie?

1. Talk to users. The bigger the project, the more important communication becomes, says Joel Koppelman, CEO for Primavera Systems, a maker of project management software. “The project itself may be done perfectly, but if the people are not prepared for the change, it will fail.” 2. ‘Socialize’ the project. Have users help spec out the project and evaluate candidates, advises Bloodworth. “Get everyone to buy in 50

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by asking them what their needs are, what the current system does well and what it does poorly, and what’s required for the job.” 3. Avoid ‘Scope Creep.’ Keep the feature list in check by putting a price tag on every change request. “A user or manager’s request for a ‘critical’ change may become less critical when it is determined the associated change would burn Rs 7.65 crore,” Gray says. 4. Keep training. “You need ongoing training, both before and after you convert to the new system,” Bloodworth says. “Tell users, ‘That [old] report is now this new report; your new screen will look like this.’ 5. Break it down. “Multi-year, monolithic IT projects are a sure-fire recipe for failure,” says Michael Hugos, a former CIO of an Rs 36,000 crore distribution cooperative and author of Building the Real-Time Enterprise: An Executive Briefing. “The key to success is breaking big projects into smaller, self-contained pieces that can be put into production within threeto-nine months.” The business side can see what it’s getting for its money—and bail on the project if it fails to meet expectations.

Scenario 5: he IT Department Tied in Knots

PwC’s Bloodworth says he was once called in to consult with a large, Midwest entertainment company where

technology was viewed as a necessary evil, unconnected to the company’s core business. Even seemingly simple changes required huge lead times. The backlog on pending projects was enormous. Nothing ever got done, and IT was viewed as a dismal failure. But Bloodworth discovered the fault lay not with the tech department but with how the company managed—or rather, mismanaged—projects. There was no process for approving projects, prioritizing them, or determining which projects were too old or marginal to pursue. “We found a portfolio hundreds of projects deep,” he says. “IT just focused its resources on whatever group shouted the loudest.” How do you cut through the tangle of demands and make IT functional again?

1. Speak truth to power. “You need to have someone in the organization with the ability to take a step back and say, ‘This is out of control; we have a problem we need to fix,’” says Bloodworth. “If no one’s willing to step up, you may need to bring in an outside consultant who can tell the CEO, ‘We have a governance issue, and it starts with you.’” 2. Limit the number of decision makers. One of the first things PwC did was build an executive committee to approve IT Vol/1 | ISSUE/11

IT Management

projects, along with a second-tier steering committee for day-to-day management—and made everyone accountable for cost. “Putting in a formal process really helped them,” Bloodworth says. 3. Analyze the portfolio. Scrap anything that’s old or not aligned with core business goals, then prioritize what’s left. 4. Elevate IT’s stature. IT has to be about more than keeping systems glued together every night, says Scott Christian, a director in PwC’s IT Effectiveness practice. To create

an environment where tech is viewed as vital to success, organizations must empower techies to be strategic thinkers and not just order takers. They may also need to parachute in a CIO who’s a businessperson first and a techie second. CIO

When Nature Strikes Failed projects are nothing compared to what natural disasters or man-made calamities can do to your business. as an IT pro, you’re expected to protect your organization’s technology assets and help it recover as soon as possible. Here’s how to prepare and prioritize: Priority #1: People. “It’s a cliché, but it’s true: y your employees are your most vital asset,” says John laye, author of avoiding Disaster: How to Keep your y business Going When Catastrophe Strikes. That means knowing where your employees are and how to reach them quickly. Smart companies also distribute emergency guidebooks and train employees so people know what to do without waiting for instructions.

Priority #2: Data. “you you can replace hardware servers, y wires, and even buildings, but you can’t go out and buy new data,” notes Sami akbay, senior director of marketing for GoldenGate Software, a San Francisco firm that provides disaster recovery services for Fortune 500 companies. Daily backups and off-site storage are a good start, but backup sets must also be safe and accessible. Test backups periodically.

Priority #3: Software. Identify the applications most vital to getting the business back up—such as Hr, payroll, or e-mail —and give them top priority, says roy Jackson, vice president of IT consulting for CaS Severn in laurel, Md. Make sure more than one staffer can operate them if needed. “We find in many

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organizations that only a single administrator knows how to start, stop, or run a critical application,” he says. If that person is unavailable, your organization could be dead in the water.

Priority #4: Hardware. If your datacenter is wiped out, you’ll need another—and fast. Companies like agility recovery Systems and SunGard availability Services can have replacement systems available within a few hours. If you’re in a business where timely transactions are critical, you’ll need a duplicate datacenter on ‘hot standby’ ready to take over when the first one fails.

Priority #5: Facilities. a backup datacenter or storage facility only 50 miles away isn't any good if you're dealt a Katrina. “remember to have enough geographic distance between your primary and secondary environments,” advises GoldenGate’s akbay. “Ideally it would be in another state entirely.” none of this advice is any good unless your staff is ready to go when the worst happens. The key is making the disaster a “rehearsed event,” laye says. “If you’re prepared then it doesn’t have to be a catastrophe.” — D. T.

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Govern

As it revamps its workflow processes, the FDA is relying on technology to reduce the risk that unsafe substances— such as the pain reliever Vioxx—will get into the market.

n Feb. 8, 2001, a US Food and Drug Administration advisory committee met to discuss a study conducted by the pharmaceutical giant Merck that showed a disturbing increase in heart attacks and strokes among patients taking the arthritis pain reliever Vioxx. It appeared that FDA reviewers, before pushing Vioxx through its fast-track approval process in 1999, may have overlooked data from Merck’s clinical trials pointing to potentially fatal reactions to the drug. Three years later, public pressure and a high-profile lawsuit forced Merck to pull the drug off the market. Meanwhile, the case unleashed a storm of criticism against the FDA’s approval processes, in particular its ability to assess all the information relevant to a specific medication before clearing it for public use. In the past two years, the agency has watched as drugs it approved for multiple sclerosis, diabetes and cholesterol were recalled by pharmaceutical companies. And the FDA has been

R for

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forced to issue increasing numbers of warnings for newly approved drugs that have turned out to have dangerous side effects, including most recently three drugs for asthma (Advair, Serevent and Foradil), which the FDA warned could cause severe asthma attacks and possibly death. According to a report by the Government Accountability Office, more than 5 percent of all drugs approved between 1997 and 2000 were withdrawn for safety reasons. These withdrawals concerned drugs that got the green light during the period after Congress passed a 1992 law that encouraged faster drug approvals and resulted in a 200 percent increase in the rate of such withdrawals from previous years (the FDA disputes the study). Last November, FDA scientist turned whistle-blower David Graham told a Senate committee that his agency, under pressure to grant fast drug approvals, is “incapable of protecting America against another Vioxx.” Criticism has been aimed at the FDA’s inability to properly manage the risks inherent in its business processes, but it may as well be targeting the agency’s IT and the workflow the systems support. During the period in the late 1990s when many of the recently problematic drugs were being approved, the agency was under intense pressure from pharmaceutical companies and patients to fast-track potentially lifesaving medications. But it was saddled with decade-old information systems

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Reader ROI:

How FDA is using technology to manage drug approval risks How IT and business leaders address enterprise risks Why CIO’s should assess risks outside their organization’s control

BY ALLAN HOLMES

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that made it difficult for FDA scientists to access all the information they needed to make decisions quickly. The disconnect between new business processes and old IT magnified the central risk facing the 100-year-old agency: Moving too slowly or too quickly could cause injury or even death. The FDA’s high-wire act requires it to balance the demands of manufacturers and patients with competing demands from the general public to make sure the products are safe—while maintaining the trust of all these constituents. In the past, the FDA has hired more scientists and other support staff to keep it in balance, but, increasingly, FDA managers are concluding that IT has a central role to play in managing the agency’s enterprise risks. “This agency is all about risk management,” says acting CIO Fred Farmer. “Everything has a side effect, even an orange. And so when a drug comes through here, it’s always a balance between what good is it going to do versus what harm it could possibly cause.” Neither FDA officials nor agency critics attribute the Vioxx disaster to ineffective IT. But in 2002, as the controversy over the FDA’s fast-track process was building, the agency embarked on a full-scale modernization of the systems used to accept, store and manage electronic applications for new drugs and medical devices. Most of the FDA’s effort focuses on consolidating redundant systems throughout the agency’s eight ‘centers’—the divisions responsible for approving products within the agency’s jurisdiction. These products include not only drugs, medical devices and food, but also so-called biologics (such as vaccines), veterinary medicines, cosmetics and radiationemitting products (such as mobile phones). The agency also conducts food inspections and issues regulations for food labels. FDA officials believe that decreasing the number of systems the agency must maintain and establishing data standards will help scientists share information more quickly and easily. With better access to information, they will make faster decisions. Already the new systems—and workflow processes that have accompanied them—are showing results, says Stephen Wilson, acting director of the FDA’s Office of Business Process Support the Center for Drug Evaluation and Research (CDER). For example, the agency can 54

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DA managers had not considered IT to be a central component to balancing the competing imperatives of caution and speed. IT was more of a support service. now track a patient’s reactions to a new drug during a clinical trial, increasing the likelihood that adverse effects will be investigated by the FDA. In the past, it could take weeks, if it was possible at all, to locate an individual’s file. “IT allows you to be more comprehensive and to act more quickly, which lowers the risks all the way around,” Wilson says.

A LEGACY OF RISK The FDA’s jurisdiction covers nearly every product that Americans ingest or apply to their bodies; its regulations affect 25 percent of the US economy. Therefore, any delay in getting these products to consumers has a financial impact on manufacturers and sellers, as well as on the health and satisfaction of the public. On the flip side, FDA officials need to conduct scientifically sound reviews in order to understand a product’s adverse effects. But the thoroughness of these reviews can slow down the approval process. Before Congress mandated fast-track drug approvals, reviews averaged about 15 months for high-priority drugs (those like Vioxx believed to have the potential to have an immediate and marked improvement in public health) and more than two years for standard drug applications. For years, the FDA leaned on its reputation for taking things slowly to protect public health. But in 1992, after years of complaints from pharmaceutical companies and the health-care industry that the FDA didn’t move fast enough, Congress told the agency to put a premium on speed. That year, lawmakers passed the Prescription Drug User Fee Act so that the FDA could charge drug companies fees for new drug applications. The agency used the money to hire more reviewers and to invest more in IT to speed up the drug approval process. Paper applications for new

drugs—stacks of some reached as high as six feet, brimming with stats from clinical trials— were part of the problem. Previously, top FDA managers had not considered IT to be a central component to balancing the competing imperatives of caution and speed. IT was more of a support service, and scientists didn’t question what the department delivered. Meanwhile, IT planning or buying decisions were primarily made by the IT directors in each of the eight centers. The higher profile centers, such as the CDER, which handles drug approvals, got more money and better equipment. But still, the FDA ran mostly on disparate legacy systems. The FDA hasn’t tracked how much of the Rs 675,000 crore collected in drug fees went to improving IT, but after 10 years, technology still wasn’t helping FDA scientists with decision-making. The agency wasn’t even keeping up with the basics. Former CIO Jim Rinaldi recounts that when he got to the FDA in 2002 he found 1,800 new PCs owned by the CDER that had been sitting in a warehouse for nine months, still in their boxes. In a 2002 survey by the inspector general of the Department of Health and Human Services, 58 percent of the CDER scientists said they did not have enough time “to conduct an in-depth, science-based review” for drugs that were put on the fast track. Around the same time, new approaches to treatment were affecting how the FDA did its job. The boundaries between drugs, biologics, medical devices and other FDA-regulated products were beginning to blur. For example, a stent designed to keep an artery open is coated with a medication that keeps blood from clotting. Is it a drug or a medical device? The expertise to review such a product resides in two separate centers, the CDER and the Center for Devices and Radiological Health.

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But they operated on different IT platforms, used different network technology, ran multiple versions of Oracle databases (with different data standards and nomenclature) and had their own security measures. The systems couldn’t communicate, and thus, the scientists couldn’t create the workflow necessary to do a thorough review of products that fell into multiple categories. Under Rinaldi, the agency spent the first two years of the modernization project focused on reducing costs by revamping the IT organization and its business processes. In 2003, the FDA created a central Office of Shared IT Services, consolidating 15 contracts covering such services as help desk and desktop support. And in March 2004, the IT function was completely reorganized, so that the CIOs in each center reported directly to the FDA CIO, giving the agency CIO more control over technical standards and purchasing. While these steps did nothing to directly address the FDA’s workflow problem, Rinaldi (who left the FDA last summer to become CIO at NASA’s Jet Propulsion Laboratory) realized that consolidation

“We weren’t thinking of risk management explicitly, [but] we more implicitly,” Rinaldi says. “The way we thought about it was, we knew IT was central to getting the right information to the right person at the right time. Only later did we realise that what we were doing was actually mitigating risks.”

A MORE EFFICIENT WORKFLOW The FDA had the foundation of a new workflow in a series of electronic applications for new product approval that it launched in the 1990s. But the forms weren’t standard across the agency (manufacturers submitted their data using only paper forms). Meanwhile, there was no common system to accept and route the applications to the members of an FDA review team, and no concrete plans to create an automated workflow. The Center for Biologic Evaluation and Research (CBER) was one of the most advanced, in that it accepted electronic applications in PDF form and had the beginnings of an automated workflow process. Reviewers

he agency is just beginning to assess how it can use IT to address risks to its mission that come from outside its walls.

could accomplish more than cutting costs. It could also mitigate the risks in the approval process that derived from incompatible systems by enabling new, integrated workflow processes. The media was hammering the agency about its Vioxx oversight. From his discussions with the center directors, Rinaldi concluded that the agency’s legacy of incompatible systems was preventing it from taking full advantage of technology to reduce review times and provide more efficient access to the clinical trial data the scientists needed to make decisions on a drug’s safety.

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who worked for the biologics center could access the applications online, but members of the review team from other centers had to manually thumb through printouts of the files to find what they needed. Other centers relied even more heavily on the old manual processes. “That really slowed things down, and made it more likely that [reviewers] were getting out-of-date information” from the paper files they accessed, Rinaldi says. Given the beating the agency was taking, it was easy to get the center directors to agree in principle that they needed to automate their workflow processes in order to take

advantage of the electronic application. The risk mitigation argument carried the day. “Those in the centers who dealt with reviews every day were the ones who really got risk management, and how to make IT a part of it. It was obvious we had to start with how work flows through the centers,” recalls Rinaldi. Now came the hard part: Devising a workflow that could be used by every center. Rinaldi could not simply transfer the workflow system from the biologics center to the drug evaluation center because the biologics center’s workflow system could not be scaled to handle the drug center’s workload. Rinaldi knew that if he tried to force the biologics center’s solution onto the drug center, he risked creating a system that provided less functionality and that would not be robust enough to cut review times and provide better information to scientists. Early in 2003, as the IT department reorganization was proceeding, Rinaldi and Farmer (who was director of IT programs at the time) convened a meeting with representatives from the FDA’s centers to begin defining a common workflow. The group spent the first two hours in ‘spirited discussion,’ pointing out how each center’s workflow processes were unique, recalls Leonard Wilson, the chief business enterprise architect at CBER, who is responsible for implementing it’s managed review process. At one point, Wilson recalls, he noticed that each center performed the same tasks—they just called them different things. Once Wilson pointed out the similarities in the centers’ processes, the next hour of discussion focused on identifying the steps in the workflow process the centers had in common. And so on. “We had become inefficient in many areas because we simply had local language barriers,” Wilson says. That discussion led to two IT initiatives: The development of a single intranet based on enterprise technology standards, which is currently being rolled out, and the beginnings of an FDA-wide automated workflow system, which is still under development. The point of the workflow system is to give each center the components to create a workflow of its own, but still be able to integrate them. One component that Wilson is helping to develop is a standard webpage for scientific REAL CIO WORLD | A P R I L 1 5 , 2 0 0 6

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and regulatory reference information. When it’s completed (it’s now being prototyped), a reviewer will be able to select the type of product the application is for, then determine how to proceed with the review. Having this functionality, Wilson says, will make it easier to train new reviewers because the workflow process will be simpler and standardized. That in itself should enable the FDA to conduct reviews and grant approvals more efficiently, thereby giving scientists more time to do their analysis instead of doing paperwork.

MANAGING WHAT THEY CAN’T CONTROL It’s too early to measure the impact of the FDA’s latest investments on its approval process. When it comes to drug approvals, the FDA has reduced the median time to review a priority drug from 15 months in 1993 to just under seven months in 2003, but IT contributed little to those gains. Farmer and the top managers in charge of workflow processes in the FDA’s centers believe IT has the potential to shorten the approval time more, while reducing the risk that they will approve products that have dangerous side effects. Meanwhile, the act of pulling together managers in each center has led the FDA to expand its idea of how to manage business risks using IT. Before the Vioxx fiasco, IT was expected to manage only the risks to its own operations—to guard against system failure, data loss and security breaches. The problems with the drug approvals got the agency focused on how technology could mitigate the risks inherent in its own business processes. The next step, which the agency is just beginning to assess, is how it can use IT to address risks to its mission that come from outside its walls. “This is a very common reaction to managing risks,” says Bob Charette, an enterprise risk management expert with consultancy Itabhi. “You manage the risks that you perceive to be in your control, not the ones you perceive are out of your control.” And yet, good enterprise risk management requires identifying and deciding what to do about external risks. For instance, the agency is developing an auditing application through which

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im Rinaldi, FDA CIO until 2005, concluded that the agency’s incompatible systems were preventing it from providing scientists with efficient access to clinical trial data. FDA auditors could match the data filed by a pharmaceutical company to the data the company keeps internally. Such a capability could discourage pharmaceutical companies from hiding or changing data that may hurt the chances for a drug to be approved. (In December, The New England Journal of Medicine posted an online editorial claiming Merck had withheld data on heart attacks in Vioxx trials that would have raised warnings about the side effects of the drug.) “What that gives you is more ability to look at all the information in a more comprehensive fashion and bring forth questions,” according to CDER’s Stephen Wilson. One promising idea, according to pharmaceutical industry experts, is a system that would track the performance of drugs once they are on the market. Adverse effects from drugs in a clinical trial may seem statistically insignificant in a sample of 3,000 people, or the trial may not test for a particular side effect. But, as was the case with Vioxx, once a drug is on the market and 80 million people begin taking it, new or more pernicious side effects become noticeable. Using an automated system, the FDA could more easily collect reports of adverse effects from health-care professionals so that warnings could be issued or drugs withdrawn from the market more quickly. The idea for such a system has been discussed for years, but it wasn’t until 2002 that Congress directed the FDA to dip into the application fees paid by pharmaceutical companies to develop it. An aftermarket tracking system might also illuminate ways the agency could improve the drug approval process, says Scott Gottlieb, a physician and deputy commissioner for medical and scientific affairs at the FDA. Such a system could gather data in real-time

from electronic health records, flag possible correlations between drugs and adverse effects, and rapidly report those to FDA officials. Because the system has such potential to mitigate risks beyond the FDA’s control, Charette thinks the agency should have made it a priority much earlier. Organizations need to identify the five biggest risks they face and tackle those first. The biggest risks tend to be systemic ones—risks that affect the entire organization but are perceived to be out of its control. “You don’t build security into a system after it’s [done],” Charette notes. “You build it in on the front end. It’s the same with enterprise risk management. You consider [risk] when deciding what systems to build and what business processes to automate.” Gottlieb agrees that the FDA could have pushed harder, but cites such obstacles as a fragmented health system (in which there is little automation of health records), the need to protect patient privacy and a lack of funding (five years ago, the FDA estimated the system would cost Rs 900 crore) as reasons why the agency has put off this development. Now, however, it is looking into tapping health insurance databases to search for drug effects and has begun to research system requirements. Rinaldi says there was no way he could even begin to convince FDA managers that an aftermarket IT system could help them until he fixed the atrocious state of IT throughout the agency. That was a bigger risk to the enterprise, he says, because it threatened scientists’ ability to do their jobs quickly and thoroughly on every review. Says the CDER’s Stephen Wilson, “We’re just beginning to look over the hill now to see what is possible.” CIO Send feedback on this feature to editor@cio.in

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11/16/2011 11:56:19 AM

R.S. Sharma, Principal Secretary IT, Jharkhand, has his foot on the pedal as he drives the stateâ&#x20AC;&#x2122;s IT infrastructure ahead.

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Interview | R.S. Sharma

Slow StaRt,

FaSt RecoveRy StRategy by Rahul Neel MaNi

A fairly new competitor on the IT track, Jharkhand has already proved itself in the first e-governance laps. R.S. Sharma, Principal Secretary IT and CEO for Jharkhand Agency for Promoting IT (JAPIT), is doing what it takes to get Jharkhand into top shape and make e-governance effective, accessible and friendly.

P hotoS by Sr IVatSa ShandIlya

CIO: Jharkhand is a fairly new state with a growing IT infrastructure. What are some of your early initiatives? R.S. ShaRma: The Jharkhand IT department has identified three areas for investment. The first is an IT policy framework. In December 2004, we announced an IT policy to govern both investments and projects in the state. Under it is a subset: The optical fiber cable policy, which gives an operator a single-window right of way. The second area we have decided to focus on is a State Wide Area Network (SWAN). Many states, abiding by government guidelines, have invited RFPs (Request for Proposals) to appoint a SWAN consultant. We’re the only state that has appointed a consultant, and we have already received his report. Based on it, we’ve signed on an operator who has put in place some of the structure for SWAN. It’s an ambitious e-governance project and we’re ahead of many of our peers. We have also taken Vol/1 | ISSUE/11

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Interview | R.S. Sharma on a number of initiatives How are you encouraging which focus not on the IT industry to set up the ‘e’ but on the ‘g’ of shop here? e-governance. We’ve Largely, the ITeS industry pondered over the areas has been popular in India’s in which citizens struggle metro cities, which have SNAPSHOT with government services seen tremendous strain and we’ve prioritized on their infrastructure those bits first. and have little or no scope Among the advantages for further development. 2005-06: rs 50 crore of being a young state are The cost of living in greenfield projects. You these cities has gone up, 2006-07: rs 175 crore don’t have legacy baggage growing traffic is creating to work with. In addition, a development bottleneck, we have our own money and human resources is to spend on IT unlike a looming challenge. The other states which depend middle level—B and C on outside sources for class—cities like Ranchi or State Wide area funds. About three years Jamshedpur, which have network ago, we began with a sufficient infrastructure in State-wide optical meager Rs 14 crore. This terms of reach and human Fiber network fiscal’s budget is Rs 50 resources can open better State and district crore and next fiscal we opportunities for ITeS data centers have been allocated Rs 175 companies. The middle Infotech city in crore. We are spending cities boast tremendous ranchi our funds judiciously educational institutions. IIIt for the state on key IT infrastructure There are lots of coal and projects that will help steel companies that need the state grow at par trained manpower, a need with other states known which could be fulfilled for their e-governance if ITeS companies work implementations like Andhra Pradesh here. Through our IT policy, we also offer and Karnataka. ITeS industries self-certification in many areas like labor laws, pollution and other What are the highlights of your IT regulatory and non-fiscal incentives. Last Policy and how do they differ from but not the least, we propose tax holidays as fiscal incentives. those in other states? There are three underlying features to our IT policy. The first is human Where is Jharkhand in the attempt to resource development. It is a problem have an optical fiber backbone? we want weeded out at the school level. We are not trying to create a Second, we want to provide incentives backbone ourselves. We have neither and assistance to entrepreneurs who the bandwidth nor the skills. We have, want to establish IT or IT-assisted however, facilitated the process for industries in the state. Third, the operators who are willing to lay fiber. policy attempts real e-governance, We’re not charging a penny for a ‘right which involves citizen-to-government, of way’, unlike other states which government-to-government and levy taxes or charge royalty. In fact, government-to-business activities. we have already signed agreements The IT policy aims to promote the state with Bharti Televentures, Reliance as a rising destination for IT-enabled Telecom, Power Grid Corporation, services and to create skill sets here, TCIL and others. It is part of our thrust which can be absorbed either by the to proactively promote infrastructure government or by private industries. providers here.

State It BudgetS:

top-fIve projectS:

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Will various government departments across the state be connected?

This is precisely what we expect SWAN to do for us. We have plans not only connect various government departments, but also to provide vertical connectivity straight down to the block and panchayat level. Connectivity will also be provided to state organizations. We have already selected a Bangalore-based operator, United Telecom Company, which will work with us on a BOOT revenue model. The total cost of the project, so far, has been Rs 100 crore, which does not include bandwidth charges. That will necessitate Rs 150 crore over five years. Once we get down to the block and panchayat level, there will be an additional expenditure of Rs 46 crore. Which applications are you going to run on this infrastructure?

Although it is not common knowledge, we have already computerized many government departments including treasury, transport, commercial taxes, property registration, municipal corporations, the consumer forum and employment exchanges. It took us twoand-half years, which is impressively quick compared to other states. We are now working on projects that deal with land records, scholarship distribution, the legal department and the integrated child development program. More importantly however, we are aware that putting up expensive e-governance infrastructure is worthless without an appropriate amount of application traffic. It is similar to creating roads where you could spend crores but nor recover your money if there aren’t enough vehicles plying on it. So, we created applications earlier, which were based on client-server architecture. Now, in a SWAN environment, these are being converted into three-tier Webenabled architecture. We have deployed a number of software programmers and system analysts to convert these into Webenabled applications, which will ride on this infrastructure. We have already tendered out PKCs ((Panchayat Panchayat Knowledge Centers), which are the equivalent of

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Common Service Centers in other states, to work on a Public Private Partnership (PPP) model. We have agreed with the Government of India to come up with a sustainable revenue model, even if we have to provide subsidies initially. Are these projects going to be run with the same level of enthusiasm that they were conceptualized?

That’s a important question. I started using computers 21 years ago when I was a district magistrate. We used them to feed data for gun licenses in the district. I was painfully aware that once I left, the computers would be discarded. Now, sustainable revenue models will ensure that doesn’t happen. One of the best things about the PPP model is that it works around profitability and sustainability. For example, we recently handed out a computerization project for registration in which rates quoted in the tender were on a per-page basis. When it is complete, anyone who wants to register land will have to pay the person running the center. This model has built-in sustainability. Now, more and more projects are built on solid commercial fundamentals. What guidelines have you given entrepreneurs to ensure lasting sustainability?

An important factor is drafting RFPs and SLAs. The government has to play an active role here because we can’t enforce them among CSCs operators. For SWAN, we added a clause that forced service providers to pay a penalty if they don’t deliver in time—the penalty applied to everyday of delay. If we assure them guaranteed revenue on quarterly basis, they have to guarantee delivery of services.

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We are centering on initiatives that focus not on the ‘e’ but on the ‘g’ of e-governance. The role of the department of IT should be to provide a standard template for such SLAs. We aren’t used to making agreements, for us drafting a contract is a serious game. How much success have you met in this endeavor?

Without going into the details, I can tell you that the government is making strides in this direction. The National Institute of Smart Governance is preparing model RFPs and SLAs to help various states. It is a measure of recognition of the problem: In most cases funds are a non-issue. It’s managing contracts and floating RFPs that’s of critical importance. What were the challenges you faced with BSNL?

My experience with them hasn’t been very good. We leased a 2Mbps line from them that worked only 80 percent of the time. If they can’t manage one line, how are they going to provide me 95 percent uptime for the entire state? Our operator, United Telecom, complains that he doesn’t get the agreed bandwidth. That’s an issue. We asked the ministry of IT, the controlling authority of the telecom department, to give us a solution. BSNL should, at the very least, provide us

minimum service levels. It’s another problem that in states like Jharkhand other operators don’t have connectivity to all the blocks. Also, BSNL won’t give me a discount if I buy a few lines from them and a few from other operators. These are some of the issues that are holding up SWAN. And the other hurdles?

Selling e-governance. We are trying to push process reengineering, but it is hard to get the departments to agree with us. There are people who don’t want legacy processes to be uprooted. But we are persistent in our attempt to sell these ideas to them. Poor service is among the primary reasons people are dissatisfied with the government. It is vital to improve our delivery system. But selling this is a sizeable challenge. Still, we are moving in the right direction. What are your first objectives for the next fiscal?

We would like to extend the reach of e-governance to newer areas. We have critical pilots currently being tested and we will replicate them in other areas. We want to establish an infotech city in Ranchi. We also want to establish an IIIT (Indian Institute of Information Technology) here. CSCs are being pushed up on our list of priorities. Currently, we have about 30 CSCs. We want to put non-governmental information on them and make them financially viable. CSCs are the immediate challenge. CIO

Bureau Head North Rahul Neel Mani can be reached at rahul_m@cio.in

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technology Illustration by UNNIKRISHNAN AV

From Inception to Implementation — IT That Matters

Are you fast on your feet? CIOs will need to polish their charioting as networked devices begin to proliferate.

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The NetworkTeamster BY FRED HAPGOOD

| CIOs were invented because the boundless promise of IT generated an equally boundless swamp of confusion and technical perplexity. Ever since, CIOs have been by nature at least one part geek and proud of it—although that reputation sometimes has been a bit of a handicap when navigating the corporate ladder. Several events on the horizon, however, suggest that the tone of the job may be changing. For better or worse, CIOs might be turning into people people. If so, their ladder skills might be in line for an upgrade. Ironically, part of this trend is driven by the fact that networks are being transformed from systems with people at their nodes to systems whose primary role is the interconnection of physical devices, from locks and lights and cameras and motors to vehicles and bar-code readers and on and on. These new architectures are usually called device networks, or, in aggregate, ‘the Internet of things.’ The attraction driving this reconstruction is the promise of a huge increase in the flexibility and productivity of operations. Security cameras are an example. Today, in most cases, a guard sits at a desk, casually watching a half-dozen monitors—and that’s it. Maybe once a month he sees something worth noting. Network the same feed, however, and sales can use it to assess

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the effectiveness of floor displays, personnel can monitor employee performance, facilities can watch the progress of cleaning and repair work, and so on. Suddenly, the system is contributing 7/52, if not 24/7. This point can be illustrated equally well with almost any other sensor or actuator, such as keycard readers, vibration sensors on motors, or motion detectors controlling the lighting and heating in bathrooms. Of course, any CIO worth his reserved parking space will see an underside immediately. Device networking is not new. Twenty years ago people started hooking printers to the Net. What a nightmare that was. All the drivers had to be coded by hand. It took five years to get the technology in shape. Isn’t device networking going to be a thousand times worse? The devices will face the same authentication and security any human user would, plus they will need to be maintained. Given that physical access to a lot of these devices will range from limited right up to impossible, how are those issues going to be handled? Compatibility is sure to be another headache. Devices will come in dozens of kinds, with several manufacturers for each. All these varieties, together with their upgrades, plus all the new devices no one has thought of yet, are going to need to interact seamlessly. The network specs are not even the same: Humans like lots of bandwidth but usually can tolerate reasonable latency; devices generally require very little bandwidth (except for cameras) but do best with low latencies (since they are interacting with machines).

Solutions for the Dancing CIO But the modern startup culture is working quickly, and many initiatives are afoot to automate or simplify these problems. Solutions are already being installed. Recently, Saddle Creek, a logistics provider with warehouses around the country, networked all its bar-code readers (handheld, truck-mounted and wearable), enabling any manager anywhere in the enterprise to

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From Reliable to Convenient Where device networking is concerned, convenience necessitates reliabilty. New technologies usually go through two phases. First, people look for reliability; once that is achieved, they buy convenience. Often, years separate these two stages. Device networking is so complex that it requires the two to develop in tandem. This is one technology in which convenience is reliability. Today the first phase is being attacked by a number of middleware programs that might be thought of as operating systems for device networks. These address such issues as scalability, connectivity and maintenance. (Their sector name is mesh computing.) They come in three general flavors: Proprietary (MillennialNet, SensiMesh), open-source (TinyOS) and ZigBee, the product of an industry consortium of the same name numbering nearly 200 companies. ZigBee 1.0, which was announced in June 2005, is optimized for allowing a large number—thousands—of extremely low-power devices to communicate wirelessly. Sample applications that might run on ZigBee include room-by-room sensing of utility consumption to allocate costs more precisely and improve conservation, and use of wireless monitors to define security perimeters as needed. Convenience programs run on top of these standards. These programs, for instance, might be tools that sort devices into functional groups, so that all devices that perform one type of task can be addressed with a single command (‘Turn off all the valves!’), or compression algorithms that decipher sensor data locally and transmit just the necessary bits, thus avoiding the need to pump huge amounts of trash over the network. (Especially useful in the case of cameras.) Until recently, most user companies wrote their own convenience programs, but today vendors are beginning to enter what appears to be a growing market.

— By F.H.

monitor the status of the equipment. The company uses technology from Wavelink to monitor device and network performance, download and install patches and upgrades, and control security definitions. Kathy Fulton, manager of technical services at Saddle Creek, calls this ‘distance management.’ “The need for onsite technical support has been taken out of the equation,” she says.

The New World of CIO Politics Beyond this mountain, however, lies another. The essence of device networking is moving static, single-constituency data feeds and control loops across borders, vocabularies and cultures, both inside the enterprise and up and down the value chain. Changes like these pose problems

of recruitment, education and trust. These problems are political, not technical. Earlier in this decade the Iowa Department of Transportation (IDOT) encountered these issues when it decided to renovate Interstate 235, the freeway running through the center of Des Moines. Highways have been enthusiastic users of IT since the ‘60s, when roadbed traffic sensors started to control traffic lights. By the 1970s, highway construction projects routinely incorporated full-fledged star networks, with communications running back and forth between a control core and an ever-expanding list of peripheral devices, including dynamic signage, cameras, weather sensors and electronic toll collection. All this experience has made highway engineers early adopters in the device REAL CIO WORLD | A P R IL 1 5 , 2 0 0 6

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essential technology

networking revolution. Thus IDOT decided to make I-235’s new intelligent transportation system (ITS) into a data-sharing platform that would accommodate the full range of devices and users, both current and potential. In this system, emergency vehicle call centers anywhere would be able to route responding units through the lowest traffic densities using images from surveillance cameras as guides. Citizens, even in other cities, would be able to consult the output of traffic-mapping algorithms. Interfaces would be open and standardized, so new applications could be snapped into place. IDOT representatives began visiting the potential user groups, explaining the new

would have had no way of doing that.” (The result is available at www.i235.com)

Why the CIO Leads Under device networking, every data feed and control loop becomes a product or service that can be sold, bartered or used to sweeten some other deal. Suppose you have equipment that draws a lot of power but has some flexibility as to when it operates. If the control loop for that equipment is networked, you might be able to interest the local utility in trading a break on energy prices for the right to turn it on when utilization is lowest. Suppose your own product is a machine.

your company is inspired by the example of the security cameras. How are you going to tell security that control of ‘their’ cameras is being taken away? Nilsson suggests putting it another way. Instead, argue that since networked devices tend to be self-maintaining, device networking tends to liberate the department traditionally responsible for maintenance. Second, once a device is networked, pressure starts building from all directions in the enterprise to upgrade the devices and add to them. In other words, networking devices usually leads to a larger system of higher quality, which is better for everyone,

Under device networking, every data feed and control loop becomes a product or service that can be sold, bartered or used to sweeten some other deal. CIOs have to be responsible for identifying, creating, packaging and selling these deals. system and its possibilities. Often they ran into education issues. One 911 center, for instance, said that while the system looked nice, the center was too busy to take on responsibility for managing another data input. The IDOT team members asked if they could come to watch operations. At one point, an IDOT rep noticed that the call handlers routinely ran searches in the data banks of the county assessor’s offices to find photos of the property at the origin address of a call (to be able to tell responding units about building entrances). Michael Jackson, special projects engineer and manager of the project, jumped on the analogy, arguing that IDOT’s system was just like that, only with a traffic situation instead of a building. The center thought it over and today is a happy user of the technology. “You have to get your feet in the door,” Jackson says. “Without putting a guy in there to watch how they did business, we 64

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If you build networked performance sensors into each one, every day, all the machines you have sold could e-mail you descriptions of their condition.

The Future of the CIO Someone has to be responsible for identifying, creating, packaging and selling these deals. In theory, it could be anyone, but CIOs are probably the ideal candidates because, in most enterprises, they will be the only managers who are both network-centric and have a holistic view of the enterprise and its value chain. Fredrik Nilsson, general manager of network camera maker Axis Communications, points out that we already have at least one illustration of the argument: The central role of CIOs in the implementation of IP telephony. As the IDOT story suggests, these implementations require an appreciation of human sensitivities. For instance, suppose

including security, which will get coverage of areas it never had before. Nilsson says that usually once such points are made, even people losing departmental control of their devices are happy to participate. Of course, the proposition has to be made the right way. After all, consensus is built one yes at a time. Not every CIO will be up to the level of diplomacy required. Those who are, though, will be like mini-CEOs, practicing the kinds of skills that should give them a straight shot to the top. CIO

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Pundit

essential technology

Is Open Source Really Just as Good? Is the open-source question really about just as good at half the price? Or are the people who invest in it, looking elsewhere? By Michael Jung

| One of the great things about being a VC is that I am always meeting new and exciting companies that are focused on changing the landscape of enterprise technology. So how do you actually meet these companies, you might wonder? There are literally thousands of startups, all vying to be the next big thing. Amongst VCs, everyone has a different approach, but we’ve often found our best investments when we do two things: Define a trend where innovation creates a disruption in the status quo, and listen intently to what customers (or prospective customers) are saying and doing. In the enterprise, there is probably no greater disruption than what is going on with open source. The momentum of Linux, Apache, JBoss and MySQL is accelerating, which I am sure you already know. I won’t bore you with the myriad issues around deploying open source related technologies in the enterprise, whether that be about licensing, security, manageability, etc. I’ll leave that to the folks that are paid to write about

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When we VCs look at companies that are building their businesses based on an open source strategy, we ask: What’s the ecosystem that they’re trying to build?

this stuff. But I will leave you with one thought, which is this: If you can buy something that is at a minimum just as good as the alternatives at half the price (or less), why wouldn’t you? After all, we’re talking about technology, not luxury cars here. The nuance with open source is whether that ’something’ is really ’just as good’ as the alternatives. Bill Hilf, the head of Microsoft’s open source strategy (yes, they do have an open source guru), I think put it correctly when he pointed out hat purchasing technology (software in his case) is more than just buying some code; it’s really the ecosystem that you are buying. ’Just as good’ as doesn’t only mean feature parity, it means that the technology you deploy has a healthy ecosystem that keeps it going, and that you have the requisite skills in your company to use it to its greatest advantage and least headache. So, when we look at companies that are building their businesses based on an open source strategy, we ask the following: What’s the ecosystem that they’re trying

to build? Will there be lots of people who will know (or want to know) how to work with the technology, are there vendors who can provide great support, and is there a path of innovation that will help the ecosystem grow? If you can answer all of these questions affirmatively, then you have a business, not just a bunch of freely licenseable code. In the end, the great thing about this open source trend for you as the customer is twofold: First, existing vendors have to seriously rethink how much they are charging for their products, and two, long term, it means that companies will compete not only on features, but also on service and support. That’s never a bad thing. CIO

Michael Jung heads JPMorgan Partners’ Technology Council, an IT executive group, and is on the boards of four technology startups. Send feedback on this column to editor@cio.in.

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