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From The Editor

Size impacts everything. From what you do to how you do it. In organizations

Champion Growth CIOs need to gain an increasingly more strategic role.

that are trying to accelerate growth, you and your team play a key role in providing the infrastructure and the tools to do so — nothing ensures business buy-in better than the threat of losing out on opportunity.

However, dealing with unpredictable demand and the bottlenecks that it can create, while testing a CIO’s understanding of the enterprise and all of its processes, can also stretch him to breaking point given the limitations of budget, time and manpower.

Apart from calling for a shift in gears, it’s imperative that CIOs take a lead in pushing a growth agenda. For one, rapid advance is guaranteed to change the dynamics of your company (and thereby your department). Second, this provides a good opportunity to change the way that your department is perceived by top management and develop from a support role to one that directly drives business strategy.

This issue’s cover story (page 36) looks closely at two web-based organizations on a growth curve, and how their CIOs took on scaling up and out. Interestingly, in both cases, the close cooperation required meant that both IT and business teams gained a greater Scaling up provides a good understanding of the road ahead and of each opportunity to change the other’s needs and capabilities. way that your department In these days, when outsourcing of many is perceived by your top functions both core and context is a reality, management. what can your team evolve into? Referring to the IT organization of the future, columnist Susan Cramm (Page 28) says that it’s instructive to study the evolution of the financial organization within the enterprise as an indicator of how IT will evolve.

Fundamentally, the roles of the two organizations are similar, and Cramm stresses that finance has figured out how to gain an increasingly more strategic, trusted adviser role while at the same time delegating day-to-day decision making and responsibility for finance throughout the organization.

This is the reason why I think CIOs should be the champions of growth in organizations, more so than even the folks in sales or marketing. That’s the key to getting out of being backroom boys and playing a more tactical role.

I’m interested in knowing how you have handled scaling up the scope of your organization’s operations. Send in your thoughts to vijay_r@cio.in.

Vijay Ramachandran, Editor vijay_r@cio.in

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content JUNE 1 2006‑ | ‑Vol/1‑ | ‑issue/14

Executive Expectations View From The Top | 48 A.M. Naik, Chairman and MD of Larsen & Toubro, on employee-oriented IT solutions that can make companies globally competitive.

Interview by Gunjan Trivedi

Executive Coach the worst job in i.t. | 28 CIOs risk losing their staff unless they communicate better.

Column by Susan Cramm

Applied Insight Vibhore Sharma, Sr. VP (Product & Technology) of Nauri.com (left), and Anand Mittal, COO of People Interactive, stress on dynamic scalability plans.

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P h oto by B hagirat h

Scalability

COVER STORy | Step On IT | 36

COMPETITIVE ADVANTAGE | 32 If a product or process allows you to differentiate from your competitors, it’s ‘core’.

Column by Geoffrey Moore

Enterprise IT The Enterprise gets googled | 52 Google has demonstrated how Web computing could make a CIO’s life much, much easier.

Feature by Ben Worthen

more »

Cover: Imaging by b in esh s reedh aran

I

Planning Web-based scalability enables CIOs to not just accelerate along its growth path and attract more users, but also spark off a spate of innovations. Who better to learn from than Naukri.com and Shaadi.com?

Feature by Sunil Shah & Balaji Narasimhan

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content

(cont.) dEpArTmEnTS Trendlines | 17 management Report | Big Company IT on a Mid-Market Budget Leadership | Why Women-CIOs are Rare Infrastructure | Land of the Wired metrics | The Impact of Software on Profits RFID | More Chips on the Cards in China Technology | Super-fast Computer Gets Faster book Review | On Shared Goals in your Company security | Building an Army of Cyborg Bugs Robotics | Empowering Robots

Essential Technology | 67 Virtualization | Service-oriented Architecture

By Galen Gruman pundit | Could ‘ Found Code’ Cripple

Your Company?

By Christopher Lindquist

From the Editor | 8 Champion Growth | CIOs need to gain an increasingly more strategic role.

By Vijay Ramachandran Ram

Inbox | 16

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NOW ONLINE For more opinions, features, analyses and updates, log on to our companion website and discover content designed to help you and your organization deploy It strategically. go to www.cio.in

c o.in

Govern EmpOWERInG ChAnGE | 60 North Delhi Power Limited has demonstrated through performance how a government agency can be transformed when processes are powered by information systems. For NDPL, it translated into reduction of AT&C losses and several other benefits for citizens in the region.

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Feature by Rahul neel mani

CITIzEn CEnTERs DRIVE E-GOVERnAnCE | 64 The Kalyan-Dombivli Municipal Corporation (KDMC) has been honored with several state and national awards. R.D. Shinde, Commissioner of the municipal body, tells CIO about what has made KDMC's citizen service centers one of the coveted models of the National e-Governance Plan.

Interview by nagesh joshi 12

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reader feedback

interesting and covered a good range of issues, some with real examples. The panel discussion also went off well.

My only suggestion is that the panel discussion should be made a little more interactive with CIOs in the audience participating by sharing their experience or thoughts. If necessary, let the session start a little earlier in the evening.

Security Event

The cIO focus - Security event was excellent and I feel that the panel was able to influence the audience. This is evident from the percentage of the audience who changed their opinions about outsourcing security in their organization. The presentations were extremely good, especially the one on application security. CIOs definitely gained from this event by networking with their peers and sharing ideas.

S.B. Patankar Chief Technology Advisor, BSE

Thanks for the wonderful CIO Focus - Security event. I enjoyed participating in the panel discussion on ‘Should Security Be Outsourced?’ and also unwinding after a long week. I think the event provided a good perspective on security. Even the other presentations were good, particularly the session on application security.

For evening meetings like this, all sessions should be crisp and concise — and that objective was met. aBnaSh Singh Group CIO, Mphasis

S.r. BalaSuBramanian Senior VP, ISG Novasoft Technologies

The response from the CIO community to the CIO Focus - Security events was heartening.

We see the event as part of a bigger, more holistic approach to content. That’s why the event had a companion Black Book, a Security Special issue of CIO apart from focused content on www.cio.in. Look forward to the CIO Focus– Storage in early June.

— Editor

great Effort Given that so many magazines and forums are already around, it must have been difficult for the Indian version of CIO to launch. But I think a great effort has gone behind this endeavor, and it has succeeded. I am also impressed with CIO’s commitment to the CIO community in India. I subscribe to many magazines, but CIO is among the best, and I make sure never to miss reading it. I think every CIO in India can find some information or issue that is relevant to his or her organization or industry. CIO also helps in introducing senior IT people, their experience, and the kind of challenges What Do You Think?

Thank you for inviting me for the panel discussion on the merits of outsourcing security. The seminar was well-attended and was also well-organized. The topic was current and, therefore, generated much interest. The sessions were 16

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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.

editor@c o.in

“cIOs should have the courage to take the onus for a subordinate's failure, but also give credit for individual achievement.” they face to the community. A small section on people movement might help in tracking peers in the CIO community.

Sachin Jain Head IT, EValueserve

anatomy of a ciO Here are some of the aspects of a CIO I think CIO, as a magazine, should address.

CIOs are the link between business and IT. They need to be conversant with business processes and decide what will be the best technology for the business.

They need to be visionaries and strategists to keep track of emerging technologies.

They need to be a part of all crossfunctional teams that work on process improvement, and they should know the pulse of business and the environment in which it works. They should play a key role in standardization and integration.

They should be part of business process re-engineering and change management teams, and be involved in all Web initiatives. They should also be able to motivate their people, and have the capacity to retain high-quality IT professionals.

They should not be averse to taking risks. They should have the courage to take the onus for a subordinate’s failure, but also give credit for individual achievement. c. r. narayanan Head-IT, Alstom Projects India

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IT departments in mid-market companies provide many of the same services as those in large enterprises, but without access to the same resources. In a recent series of reports about IT management in small and mid-market businesses, Gartner suggests that CIOs in these companies can overcome limitations such as smaller staffs and budgets through methods such as recruiting versatile employees, providing staff with training and other “soft” benefits, and disciplined budgeting.

John Bace, VP and research director of public policy and IT at Gartner, recommends “versatilists”: self-starters who are good at collaborating with others and who are willing to learn multiple technologies. “They’re more useful to the organization as they bring a portfolio of skills rather than one finely honed expertise,” he says.

Outsourcing also increases flexibility and the range of skills available to a company, as well as increasing its ability to scale projects up or down as business conditions change. However, the Gartner report also notes that mid-market CIOs are reluctant to outsource because they don’t understand how they will save money.

Meanwhile, cross-training internal employees in a variety of skills is a way to make the most of what you have. This can include rotating job assignments, as well as courses from vendors and professional

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The Mid-Market’s Management Priorities How smaller companies rank their priorities compared with large enterprises

organizations. “This gives employees the chance to feel that they are maintaining their professional edge,” says Bace. Soft benefits such as training also help attract and retain staff in the absence of higher salaries. Other perks, such as flexible work hours, “keep employees from focusing solely on the bottom line of their paycheck”, he adds.

One area where mid-market CIOs excel is in budget management, Bace says. Careful budgeting ensures credibility with senior management and increases the probability of getting extra funding for key IT initiatives like improving the business skills of IT staff— the number-one IT initiative for mid-market CIOs, says Gartner.

— By Katherine Walsh

Women-CIOs are rare It’s harder for women to become CIOs than it is for them to achieve any other executive role, according to researchers at the University of California, Davis. A recent study by the university’s Graduate School of Management found only four female CIOs at the 200 largest public companies headquartered in California.

Although there are few women in Clevel jobs at any of the 200 companies, 32 percent have female executive officers and 66 percent have women as directors. The women who hold the top IT jobs at the companies

IL LUSTRAT IO N by UNN IkRIShN AN AV

Leadership

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surveyed are Mahvash y yazdi, CIO of Edison International; Jennifer bolt, senior VP and CIO of Franklin Resources; Maria Fitzpatrick, CIO of Mercury General; and Dawn Martin, CIO of Westcorp and WFS Financial. The percentage of women who are CIOs is similar elsewhere in the US, says kim Elsbach, co-author of the study.

She cites a study by InterOrganization Network that found only two women out of 100 CIOs in Massachusetts.

June Drewry, CIO with the insurance company Chubb, says there’s more to the problem than discrimination — including career decisions women make and how well-known they are to upper management. One part of the solution, she says, is for companies to take steps to cultivate more women as leaders through leadership development and mentoring programs.

— by Maggie Locher REAL CIO WORLD | J U N E 1 , 2 0 0 6

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trendLines

Land of the Wired The U.S. has regained its position as the most wired country, according to a report by the World Economic Forum (WEF).

The WEF’s Global biannual 'Information Technology' report measures the information and communication technology readiness of 115 countries. Countries are ranked on more than 5 dozen factors, including their communications infrastructure, level of government regulations, quality of schools, availability of venture capital, and the level of business and government usage of the latest technologies. These factors compose what the WEF calls a networked readiness index.

Irene Mia, senior economist at the WEF, says the index, by identifying a country’s strengths and weaknesses in IT, helps governments prioritize their development efforts. “The report provides the perfect platform for publicprivate dialogue and [emphasizes] the importance of ICT [information and communication technology] for [a country’s] development.”

The U.S. rose from fourth place in the WEF’s last ranking, published in 2004.

It continues to be a leader in technological innovation, which the WEF report attributes to the quality of the universities and cooperation between its research and business communities.

U.S. companies are more decentralized and better managed, according to a study by John Van Reenen and Raffaella Sadun of the London School of Economics that is part of the WEF report. Unsurprisingly, in industries that rely heavily on IT, U.S. companies have Rank Country Score had greater productivity gains than their European counterparts.

1 United States 2.02 Singapore, which held the top spot in 2 Singapore 1.89 2004, dropped to second place this year.

3 Denmark 1.80 The city-state has ranked among the top 4 Iceland 1.78 three most-wired countries in each of the 5 Finland 1.72 past four years, the report says, because 6 Canada 1.54 of its economy, its commitment to higher 7 Taiwan 1.51 education, and government support for 8 Sweden 1.49 the latest technologies. The government of 9 Switzerland 1.48 Singapore recently launched an effort to 10 United Kingdom 1.44 upgrade its broadband infrastructure and 40 India 0.23 deploy a national wireless network (see “Broadband for Everyone—in Singapore”).

50 China –0.01 Denmark, Iceland, Finland and Sweden have also occupied places in the top 10 for the past five years. They share characteristics similar to those of other IT leaders, the report says. Top-notch universities and flexibility of government regulations in these countries have created an environment that encourages innovation, deployment of emerging technologies and new business ventures.

— By Katherine Walsh & Nancy Gohring infrastructure

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Measuring the IMPaCT of SofTware on ProfITS There’s more than one way to measure the impact of software investments. Take the dispute between SAP and Nucleus Research over a study by Nucleus that challenges SAP’s claim that its customers are “32 percent more profitable” than companies who don’t use its software.

Nucleus analyzed 81 public companies that use SAP and found that they are, on average, 20 percent less profitable than peers that don’t use SAP products.

The research company collected return on equity data from SAP customers’ financial reports gathered from bloomberg.com and compared the findings with industry averages provided by hoovers.com, a business information website. Among the SAP customers included in the research are Anheuser-busch (above average), DuPont (below average), Ericsson (above average), kraft Foods (below average) and Volkswagen (below average).

William Wohl, a spokesman for SAP, says the study misrepresents SAP customers’ profitability in three ways: The sample size encompasses only “a quarter of 1 percent” of SAP’s customer base, and thus is statistically invalid; Nucleus’s comparisons to industry return on equity averages are inappropriate because they don’t compare companies to their peers; and its method for calculating those averages is misleading.

— By Al Sacco

Metrics

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The United States tops the world in deployment and use of IT

trendLines

More chips hips

on the Cards in China The Chinese government has so far issued 102 million of the cards, and plans to issue more than 300 million per year for the next several years, the ministry said in March.

In-Stat estimates that 100 million RFID tags were sold in China during 2005.

The company expects the number of tags shipped annually in China to rise quickly in coming years, hitting total sales of 2.9 billion tags by 2009. ID cards are expected to account for most of the tags used through 2008, at which time demand for RFID tag use in retail stores is expected to dominate the market, In-Stat says.

ILLUSTRATION by UNNIkRIShNA N AV

China’s Ministry of Public Security, which oversees the country’s police force, plans to issue more than 1.3 billion new resident ID cards with radio frequency identification (RFID) chips, according to In-Stat China, a market research company.

Based on the number of cards to be issued, the rollout represents one of the largest RFID projects in the world, according to Anty Zheng, research director at In-Stat China.

RFID tags can send and receive data over short distances. As a result, an RFID reader that is within roughly 8 to 12 inches of a card can read the data on it, Zheng says. The cards are used to store basic personal information, such as the cardholder’s name and birth date.

rfid

—By Sumner Lemon

Super-Fast Computer Gets Faster t e c h n o L o g Y IBM has developed technology to speed up the way large computer networks access and share information, with implications for solving problems such as issuing tsunami warnings and improving medical research.

Under a project code-named “Fastball,” IBM’s ASC Purple supercomputer—the third most powerful in the world—has been able to achieve 102GBps of sustained read-and-write performance to a single file. That’s the equivalent of downloading 25,000 songs in a second over the Internet, according to the company.

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IBM’s General Parallel File System software was used to manage the transfer of data between thousands of processors and disk storage devices. IBM said it had to enhance the software in several areas to handle such fast data rates. For example, it added new capabilities to orchestrate the flow of data between all of the hardware components in the system.

“If they all go real fast at the same time, you get a traffic jam and performance goes down,” says Chris Maher, director of highperformance computing development for IBM’s Systems and Technology Group.

ASC Purple is housed at Lawrence Livermore National Laboratory. IBM supplied the computer to the U.S. Department of Energy and the lab for use in nuclear weapons research. In the Fastball demonstration, 1,000 clients requested a file at the same time. Through virtualization, the software then spread that file across hundreds of disk drives.

Maher says this kind of computing could be used for applications such as a tsunami warning device that would scrutinize huge amounts of information from the ocean and analyze it quickly, or for homeland security, to scan images of people and match them against large databases. Other applications could include medical research and online gaming.

—By Shelley Solheim

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Alignment explores what can happen when you measure progress towards shared objectives within your company.

B o o K r e V i e W Robert S. Kaplan and David P. Norton developed the Balanced Scorecard as a method for executing strategy and measuring value. By identifying business goals, the actions required to achieve them and metrics for determining whether they are met, companies can align their financial management, customer activities, business processes and organizational development.

In Alignment, their fourth book, the authors contend that the Balanced Scorecard approach

should be used to align large, diverse corporations. Plenty of companies have done this, judging from the many examples (including Ingersoll-Rand and Hilton Hotels) that Kaplan and Norton use to illustrate their argument. Less well-tested at this point is the use of the methodology to foster better collaboration between companies and external stakeholders, such as boards of directors, investors and trading partners.

For CIOs who have used the Balanced Scorecard to manage IT value at the business-unit level,

US Seeks Army of Cyborg Bugs s e c u r i t Y The concept of soldier ants may not be far away from a U.S. Department of Defense proposal to field an army of remote-controlled insect-cyborg scouts.

The hybrid Insect Micro-Electro-Mechanical Systems (hI-MEMS) program is the responsibility of the Defense Advanced Research Projects Agency (DARPA), which recently announced that it was soliciting research proposals on the technology. These insects would be outfitted with sensors and a wireless transmitter that could enable them to send data on conditions in places inaccessible to human troops. The goal of the program is to produce a sensor-enabled insect with a 100-yard range that could be placed within five meters of a target using electronic remote control and, potentially, Global Positioning System (GPS) technologies.

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the book provides fresh thinking about how IT contributes to the overall enterprise. In short, say the authors, IT must innovate, by providing products and services that help business units differentiate themselves to customers. But for such valueadded contributions, it could be more cost-effective to outsource IT, Kaplan and Norton suggest.

At the heart of the book is a simple idea: that alignment is created when different units within a company have shared objectives and agreed-upon ways to measure progress toward

those objectives—the elements that make up the Scorecard.

Balanced Scorecard devotees will be familiar with the complexities of developing Scorecards and “cascading” them throughout an organization. A chapter on this subject offers useful examples of companies that worked through this process based on their corporate structures, cultures and the prior experience of business units with their own Scorecards.

—By Elano Varon

The technical specifications around the cyborg-insect project have not been determined, said a DARPA spokeswoman. however, she said it may be possible to use the insects as “micro unmanned air vehicles” to go into areas that humans can’t reach or that are too dangerous. For example, the insects could collect signatures of explosives inside buildings or caves and transmit relevant data back to their operators, she said. There’s some interest in using radio frequency connectivity to enable the insect’s sensors to report back to the operator, the spokeswoman said.

The use of insects for fact-finding tasks isn’t new, according to the DARPA proposal. Previous research found that feeding, mating and temperature-change responses prevented the insectsubjects from “performing reliably”. The hI-MEMS project could correct these irregularities by using some sort of reliable control interface that would be inserted into the insect at selected stages of its development.

— by Marc L. Songini

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trendLines

If You Want to Play, You Have to Keep Score

By Robert S. Kaplan and David P. Norton Harvard Business School Press, 2006, Rs 1,680

empowering robots Commercial computer hardware is the key to building a reliable robot, from fast processors to cheap flash memory and high-capacity hard drives, according to robotics experts.

Products such as the Cell processor, developed for Sony’s Playstation 3 video game console, will provide the processing power needed to bring robots to a mass market, said Colin Angle, CEO of iRobot, during a conference at Boston University. (iRobot m a ke s Ro o m b a , a robot vacuum cleaner, and PackBot, a military robot that disables booby traps and land mines.)

Another crucial ingredient for robotics design is wireless technology such as WiMax, important for robots to be able to exchange video and other data with their owners. “The core of a robot could ultimately be a cell phone,” Angle said. Mobile phones combine many factors of robotic design, including geolocation and broadband networking.

Robots serve niche markets, with annual sales of about $5.5 billion for industrial robots (the type that automotive companies use to weld and paint cars) and about $1 billion for robots used in education, entertainment and cleaning homes. The robotics industry could grow by finding applications in new sectors, said Dan Kara, president and cofounder of Robotics Trends, a research company.

For example, at least five companies have built robots to mow the grass outside their owners’ homes. Once these companies develop better battery life and safety procedures, they could capture a portion of the $23 billion lawn-care market. roBotics

Have The Last Word on Security The Black Book on Security is brought to you by CIO in association with its partners, Microsoft, Syntax Soft-Tech, Interface Connectronics, ISACA and PricewaterhouseCoopers. Published exclusively for attendees of the CIO Focus Security seminars recently held in Mumbai, Delhi and Bangalore, this is a great opportunity for you to gain more insight on the subject.

Download your copy for Free! Visit www.cio.in

Published in association with:

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Susan Cramm

EXECUTIVE COACH

The Worst Job in IT Change is unstoppable, and CIOs are climbing aboard. Nice for them. But they risk losing their staff unless they communicate better.

F

Illust ration Unnik rish nan A.V

or as long as I can remember, there has been a tacit understanding that the worst job in IT is that of the CIO. While many IT professionals do their work guided by the principles articulated in the old engineering adage, “Cost, quality and time — pick two,” CIOs are expected to deliver on all three.

Well, the times, they are a-changing. It recently occurred to me that the only thing worse than being in charge of an IT organization is not being in charge. Right now, driven by their need to respond to the business’s heightened expectations of what IT can and should deliver, and their own understanding of changing business and technology imperatives, CIOs are shaking up their departments, changing the rules of governance, architecture, process, costs and staffing under which they operate. CIOs are turning up the heat on their organizations to make it all happen.

It’s not a whole lot of fun being on the receiving end of all these demands. That hit home for me last week while facilitating a planning meeting. The strategic challenge came down to this: how can an overburdened IT staff deliver while operating under instructions to offload their work to external providers when the governance, architectural and process mechanisms that would support it effectively are not in place?

This challenge is shared by most IT organizations and, in many ways, it’s hampering their ability to execute. Everyone knows that work would be a lot easier and would get done better, faster and cheaper if one’s own people were on point. Most IT professionals understand that organizational and sourcing changes are necessary to position their departments for the future, but there’s little enthusiasm within the IT department for this transformation because the changes are being done to them, not for them.

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Susan Cramm

EXECUTIVE COACH

A Day in the Life Imagine what it’s like to work in a typical IT organization today. Due to increased demands and headcount constraints, people are busier than ever. Jobs aren’t as much fun as they used to be because individuals have less control over how their work gets done. People are expected to transfer work that they understand and enjoy to outsiders. Many feel that they spend their days helping to ensure the success of their external service providers while simultaneously sabotaging their own.

To many, it feels like they are being asked to prepare the instruments of their own demise: “Get your work well-defined, organized and managed so that we can give it to somebody else.” While they’re busy reshaping their organizations, many CIOs are neglecting one of their fundamental leadership responsibilities: to help their people envision the future and their roles within it. It’s not sufficient to articulate the promise of tomorrow in terms of the marketplace. To resonate, visions and strategies must relate to the realities and concerns of the individual laborer in the IT fields.

For many leaders, this lack of sensitivity to the needs of the individuals within their organization is not just an oversight; many of them are unable to articulate what they have not yet fully internalized. On a typical day in the typical IT department, life is about execution, not reflection, and staff interactions focus on the near-term ‘how’ rather than the more meaningful, but less immediate, ‘What about me?’

The Leadership Challenge Leaders cannot afford to let individuals answer the ‘What about me?’ question on their own. Without a clear picture of the future and their role within it, people will assume that the future doesn’t include them. The best and brightest will survive, but they will not necessarily remain with the organizations that need them.

Solid, long-tenured professionals with the intellectual capital necessary to keep things running may stick, but without the sense of connection and engagement necessary to protect the organization’s long-term health.

One of the ways leaders can answer the ‘What about me?’ question is through storytelling. Stories add meaning and context to work. What’s needed is a cogent tale explaining why IT’s future is brighter now than at any time in the past.

I do, in fact, believe that the future of IT is brighter than ever, and I’ll share my version of the IT strategic story in another column. In the meantime, take a look at Mark Walton’s book, Generating Buy-In: Mastering the Language of Leadership, and begin crafting a story for your staff that articulates how IT will exceed the expectations of the enterprise while ensuring the success and satisfaction of all those involved.

Reader Q&A Q: Can you suggest references that address the IT organization of the future and indicate how others have defined and communicated this to their teams?

A: I’m not aware of any great references for the IT

organization of the future. Although researchers and academics seem to agree with CIO Executive Editor Christopher Koch’s statement that the future IT organization will be “smaller, more distributed and dependent on a tightly-integrated supply chain of vendors,” there seems to be a lack of agreement as to the competitive importance of IT and the role that IT should assume vis-à-vis the business.

I think it may be most instructive to study the evolution of the financial organization within the enterprise as an indicator of how IT will evolve. Fundamentally, the roles of the two organizations are similar, and finance has figured out how to gain an increasingly more strategic, trusted adviser role while at the same time delegating day-to-day decision making and responsibility for finance throughout the organization.

Q: Stress for the workers on the bottom of the pyramid is not new. What reduces stress for the CIO is that the CIO has some control over his or her life. I can see why being called on to outsource your own work would be stressful; you’re being forced to give up what control you now have. But let’s not feel too sorry for the inhouse IT workers. Those they are outsourcing work to are IT workers too. At least the in-house people have the security of old-fashioned jobs.

A: The point of the article isn’t to feel sorry for the IT

workers; it’s to remind leaders of their responsibility to give people a sense of optimism for the future and an understanding of what they need to do to play a part in it. By imparting this information, they help people take back control of their work, and reduce the stress in their lives. CIO

Susan Cramm is founder and president of Valuedance, an executive coaching firm in San Clemente, Calif.

Send feedback on this column to editor@cio.in

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Geoffrey Moore

APPLIED INSIGHT

How to Find Your Competitive Advantage If a product or process allows you to differentiate from your competitors, it’s 'core'.

For Domino’s Pizza, delivery is core.

W

Illust ratIon B In esh sreeDharan

ith global competition invading more and more markets, established companies are fighting tougher and tougher battles against commoditization. Whether their niche is business process outsourcing, consumer electronics or air travel, management teams are asking themselves: how can our company continue to differentiate itself from our competitors?

The short answer is, either with customer service or radically lower cost. In today’s economy, both paths demand innovating with IT systems in ways that the competition will find difficult to copy.

Despite the seeming obviousness of this idea, however, relatively few companies are making it happen. There is a persistent problem in the relationship between the IT department and the rest of the corporation that blocks the effective use of IT capabilities when it comes to differentiating core products and services. Allow me to suggest an approach to breaking through this barrier.

The challenge, in essence, is to align IT investment with business priorities. The problem is that businesses are remarkably foggy on what their priorities are. Ask any consultant. When consultants interview the executive team individually and ask each person what the corporation’s overall strategy is, they receive many thoughtful answers. Unfortunately, these answers rarely converge. The dirty secret is that most corporations do not have a unified corporate strategy. So, in effect, we are asking IT to align with something that does not exist, and we should not be surprised when the results are poor.

Obviously, the long-term fix for this is to align the corporation around a single strategy. But that’s not in IT’s

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APPLIED INSIGHT

power to accomplish. What IT must do instead is determine the pecking order of power among the various competing corporate strategies and align itself with the most powerful first, then the second most powerful, and so on. There won’t be enough resources to fund everyone’s strategy, so it is important to get to the most important ones first. Of course, if you are lucky enough to work for a corporation that does have a unified strategy, you can probably stop right there.

But let’s say you are not so lucky. Now what? The first step is to sit down with the executive in charge of the highestpriority operation or P&L and have a heart-to-heart about the following questions: When you look at our corporation’s performance in the marketplace, what companies represent our stiffest competition? (List two or three. Then, answer the following questions for each competitor.)

1. What are they so good at?

2. Is our goal to equal or beat them at that?

3. Is there some other thing that we do, or could do, that they in turn would find hard to compete with?

4. Is it our plan to commit significant resources to such an activity?

Once you get those answers, find out how the executive would define: Your company’s primary competitive differentiator today; Its best chance for equal or greater differentiation tomorrow; and The most important business initiatives underway to create that future competitive differentiation.

Stop there. Once you have this input, thank the executive for his time and explain that you would like to think about the IT implications of this strategy and come back with a plan to maximize the value from IT investments going forward. Back in your office, gather your best and brightest around you for the following exercise, which we will call core/context analysis.

Identifying Your Core Functions In this exercise, something is core if, and only if, it contributes to the corporation’s primary effort to create competitive differentiation. All other activities, by definition, are context.

For example, at Southwest Airlines, low-cost fares are core, and customer amenities are context.

Conversely, at United Air Lines customer amenities are core, and low-cost fares are context. At Domino’s Pizza, customer delivery is core whereas, at Pizza Hut, it’s context. At Volvo, safety is core; at Ford it is context.

Now, many context activities are extremely important, even if they are not differentiating. So to make sure we register this dimension as well, we also ask whether a given activity is mission-critical. Mission-critical activities may be core or context; their key feature is that falling short in their execution has severe negative consequences. For example, not losing 34

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IT must gauge the pecking order of power among various corporate strategies and align itself with the most powerful one, then the second most powerful strategy, and so on. customers’ luggage is a mission-critical task for all airlines, but core to none. Same goes for building a safe car; at Ford, hybrid fuel economy may be core, but the consequences of unsafe vehicles are totally unacceptable.

In light of this model, the most important processes to support are those that are both core and mission-critical.

Even here, there is a subtlety that can be lost. Often, the goal of minimizing mission-critical risk can be at odds with increasing competitive differentiation. For example, suppose you could ship an ugly iPod by Christmas but would risk missing the holiday sales window to make a beautiful one. It is crucial that differentiation be given the priority. That is, if style is core (and at Apple it surely is), then one cannot sacrifice it despite the risk. The reason is simple: Without competitive differentiation, the entire corporate strategy is bankrupt.

This doesn’t mean you can abrogate your responsibility to manage mission-critical risk, only that you must go out of your way to make sure it does not interfere with creating core processes. IT can help you create new core initiatives, but they are not always understood to be strategic at first.

Investing According to Analysis Creating new core is the domain of pilot projects and skunk works.

Typically, the company is still incubating the new capability, not exposing it yet to the marketplace at large, and not expecting significant revenue from it in the short-term. That’s why it is not yet mission-critical. But it is incredibly strategic, particularly if you can shorten a new product or service’s time to market.

Here’s where IT may be able to make a big difference, whether it is via converged communications and computing systems that speed collaboration, beta customer feedback systems that shorten cycle time, or supply chain management that supports rapid prototyping. But if IT resources are allocated by revenue contribution, then this quadrant will always get short shrift, and the company will lose precious time to market in an act of false economy. (That’s why it’s so important to allocate resources based on a core/context analysis.)

By contrast, putting IT in service to mission-critical context makes all kinds of sense to everyone involved. If competitive differentiation is not a key goal, then standardization is a great alternative, and nothing imposes standardization better than IT systems. Moreover, once processes have been standardized,

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APPLIED INSIGHT

of Dealing with Darwin (Penguin, 2006). Send feedback about this column to editor@cio.in

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| ESSENTIAL TECHNOLOGY | GOVERN | TOP VIEW | COLUMNS | FEATURES

Geoffrey Moore is the managing partner of TCG Advisors, a consultancy that specializes in business strategy. He is also the author

RESOURCES

WebExclusive

they can be reengineered to extract resources either through automation or eventual outsourcing, thereby freeing up those resources to be invested in core activities.

The key here is to recognize that if a process is missioncritical but not core, then there is nothing to gain from differentiating its outputs. Therefore, user requests for non-standard output need not — indeed, should not — be prioritized because they are not strategic.

For example, users often argue that since the systems are being charged back to their budget, they should be entitled to get what they want for their money. Not so. It is not their money; it is the company’s money, and they have a fiduciary responsibility to get a good return on it.

There is more strategic value in standardizing missioncritical context processes because it frees resources to invest in strategic differentiation elsewhere.

Finally, that leaves processes that are neither core nor mission-critical — facilities management, training seminars, office supplies procurement and the like.

These cry out for outsourcing. Here, IT can make the biggest contribution by preparing the processes for service-level management. That is, prior to transferring the work to another party, IT can first determine what the standards of acceptable work product are, establish metrics that track to those standards, and even pilot those metrics while the work is still in-house. Then, when the work is outsourced, the company has a lowtouch, high-reliability mechanism for ensuring vendor performance.

The goal of all this analysis is to fund next-generation innovation by migrating resources from context to core. This not only improves returns but also helps reduce resistance to change, since the resources being transferred are often the very people who would otherwise be obstructing innovation.

The biggest challenge is extracting resources from mission-critical activities. The key to success here is to win the line-of-business executive sponsor’s support for standardizing these processes. That can be done if you can demonstrate how IT can redeploy those resources in support of core initiatives. Armed with this analysis, you now can go back to the business executive with a plan designed, first, to accelerate initiatives targeted at competitive differentiation and, second, to manage risk while freeing up resources for next-generation innovations. CIO

NEWS |

Geoffrey Moore

Resources Complete Data Protection Strategy Building a robust data protection strategy is now a business requirement.

IT Consolidation Drivers and Benefits Organizations are finding themselves in a position where consolidation does not necessarily The Software Risk A steel perimeter around your infrastructure isn’t enough to protect you from the real IT security threat; your software. Does your software meet your security standards? Read how the answers to seven key questions can help you.

Download more web exclusive whitepapers from www.cio.in/resource

Features Captain Contingency MIT logistics expert Yossi Sheffi talks about what companies can do to recover quickly from almost any type of disaster.

Lessons from the Front Lines The right deployment strategy can dispel lingering fears about voice and data convergence.

Read more of such web exclusive features at www.cio.in/features

Columns How to Corral Security Consultants Set clear ground rules before you engage outside experts--or be ready to clean up a mess.

The Key to Innovation: Overcoming Resistance CIOs should be investing less time in brainstorming good ideas and more time in targeting the sources of resistance to change.

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Vibhore Sharma, Sr. VP (Product & Technology), Naukri.com believes that a high rate of innovation is essential to stay ahead of competition.

Reader ROI:

How scalability can bring CEOs and CIOs closer Why ‘shifting bottlenecks’ is a scale problem and what you can do about them Building for tomorrow 36

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P E T S Cover Story |Scalability

ON

T I

Imaging by b ines h s reedh aran

I

Photo by Bhagirath

By Sunil Shah & Balaji Narasimhan

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A decade ago, growth was the primary challenge for online businesses. Today, portals like Naukri and Shaadi have serious numbers to speak of. While scalability measures in this period of growth were inevitable, CIOs must now plan for it if they are to retain users, attract new ones, and take their Web services to the next level.

It is a promise to live up to tomorrow's demand. Are you ready for it?

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Scale Game

I

n 1997, Naukri.com was an idea whose time had come.

It was primed to catch a growth wave as corporate India shed its post-liberalization pains, and looked forward to creating great companies built on qualified people. The Internet was spreading, email was gaining currency, and business had begun to see the Net as a workable sales channel.

For Naukri, a job portal that had started off in India, the environment — internal and external — posed challenges aplenty. The competition wouldn’t relent, even as late as May 2004 when Monster.com acquired JobsAhead.com for close to Rs 40 crore. In the early years, there were also constraints on budgets and resources. Still, Naukri’s IT team remained determined to up the ante and support the business through rising, albeit unpredictable, growth that saw it become a Rs 45.11-crore company by March 2005. Since then, its parent company, Info Edge (India), has even acquired Jeevansathi. com. As it looks to consolidate the market and grow in size, its biggest challenge is scalability: the ability to maintain the website’s reliability and performance to cope with simultaneous and increasing traffic that hits its server.

But, as Vibhore Sharma, Senior Vice-President, Product & Technology, Naukri.com, admits, the portal “didn’t have a well worked-out scalability plan” to begin with. It was seven years of firefighting for the job portal, building scale along the path.

Most requests made on IT until 2004 were on-demand and, as problems were tackled on an immediate basis, planning went straight out of the window — not the best scenario for a CIO who has a promise to keep to business. One must remember, though, that for first-generation online services like Naukri, scalability and planning were inextricably linked: demand begot scalability, and the planning would follow.

“Those years were very stressful, and we lost a lot of sleep,” recalls Sharma. “We asked ourselves whether there weren’t better ways of doing this [scaling]. We’d come back to work everyday and it was the same problem, but of a different magnitude,” he says.

With no scalability plan, CIOs are left with a yawning gap to fill. Scalability isn’t merely salting away empty sockets for new machines. There are a number of associated questions: How far must one look ahead in a dynamic world? Which technologies to plan for? What repercussions will hardware plans have on software requirements? How many sockets to invest in? What about devices? How much margin for error do you leave in relation to management forecasts?

Naukri has learnt a great deal from the days of 'ondemand' scalability. Today, it looks ahead with more confidence — on the back of a plan. Although they still believe in having a ‘dynamic’ process, the IT and business

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sides have developed a greater understanding of Naukri’s roadmap as it has evolved over time.

Evolving on the Job Sanjeev Bikhchandani, founder & CEO of Naukri.com, started the business in a servant’s quarters at his father’s house. The idea was based on an observation he had made during his years at GlaxoSmithKline, “You’re always looking at a job, even when you’re not looking for one.”

Naukri’s proposition was simple: create a platform that would bring together recruiters and people looking for jobs.

It was built on a model that had worked in other countries.

Using the Net to slice the fat off operating costs made sense — if enough of your target audience had access to the Net to give the business critical mass.

One of the first successes Bikhchandani had was putting together a list of 5,000 jobs when the website was launched. He also tried to ensure that over 70 percent of his corporate clients were non-IT companies; this drew a lot more attention from the average surfer. At first, the platform offered its services to recruiters for free. By late 1997, Naukri decided to make a commercial push. For a fee, recruiters could post ‘for-hire’ ads on the portal. Naukri would later offer them password-based access to its resume database, Resdex.

Trouble, however, was headed Naukri’s way. As it focused on ramping up operations, the dotcom bust was sneaking up on it. As the meltdown spread to India in 2001, Naukri’s business proposition was up against pink slips that companies were ordering by the box. If companies were only firing, what was Naukri going to sell?

Naukri.com in Numbers Turnover(Rs in crore) per annum

2004-2005

45.11

2003-2004

19.96

2002-2003

SOU rCE: N aUkr I .CO m

Playing the

9.08

2001-2002

3.79

2000-2001

0.96

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Cover Story | Scalability In the absence of a working model in India and low Internet penetration, second-guessing the future of Naukri and other Indian online companies became a spectator sport for everybody. However, backed by numbers and funding from ICICI Venture Capital, Naukri stuck out its chin. The meltdown would prove to be a blessing in disguise.

“As a result [of the meltdown], we didn’t really have time to spend our money foolishly. We put it in the bank and decided to build the business the slow, hard way — by adding new technologies, servers, products and branches,” recalls Bikhchandani. Their success in this period would also be built on the insight that as companies fired people with certain skill sets, they were also hiring people with other skill sets — albeit in smaller numbers. Leveraging IT, Naukri fulfilled this recession-induced need to hire selectively, at cheaper rates and faster. The meltdown also gave Naukri respite from the capital-rich (threat of) foreign players.

During this period, Naukri’s IT team readied itself for the boom that was to follow. Four years of optimizing existing systems on-demand had ensured that they had tightened every last screw. “It used to be, ‘Now we have to do something.

Optimize the application, optimize the hardware, optimize the OS, optimize whatever you can but meet the scalability demand',” recalls Sharma. As systems came under pressure, it began to show on the database. “Before we used MySQL [as a database], we were on an xBase file format, which is pretty Neanderthal as formats go,” says Sharma. “We’ve moved from living in the short-term to a more long-term view, and we’re also scaling out as opposed to scaling up.”

Linear Scaling to Combat Spikes IT is as central to Naukri’s business as are its customers.

While its model is built to serve both recruiters and jobseekers, it’s the recruiters who pay. A lion’s share of Naukri’s revenues are generated from Resdex, although the company also earns through ads on its website and, more recently, from job-seekers who want their resumes highlighted.

According to Sharma, with about 9,000 recruiters and millions of job-seekers running their fingers down Naukri’s databases, it is hit by about 7 lakh to 8 lakh searches everyday.

The bulk of these searches comes from job-seekers who are around 25 to 35, work on dial-ups, and look out hurriedly for the next middle-management job. They form a bunch that won’t put up with high latency. A Boston Consulting Group study states that “28 percent of Web users do not return to a company’s website if it does not perform sufficiently well, and a further 6 percent do not even go to the affiliated retail store anymore”. It was imperative for Naukri to be able to scale up to users’ demands, or risk losing them.

“The way to scale up,” says Bikhchandani “is to produce an architecture where you just bung in another box and you’ve got more capacity.” Scalability issues, Sharma agrees, occur at the architecture level. A performance bottleneck

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Knowing where the next

bottleneck will crop up works on gut feeling and experience.

— Vibhore Sharma, Sr. VP (Product & t technology) of naukri.com

only occurs because of architectural constraints, he adds.

It was critical to balance a linear equation linked with performance, which entailed keeping an eye on a number of variables. Something like this requires CIOs to know their systems well enough to tell how a small tweak will affect the rest of the system. Constant vigil, though, isn’t always enough. The challenge of scaling out, after determining the most crucial impact areas on an application, is waiting for unexpected areas to become a problem as the areas “you thought would be impacted work smoothly and something else becomes a bottleneck.”

Part of the problem lies in being unable to tell how many people are going to be accessing the website. “Right now, let’s say, we have about 8,000 recruiters — that’s 8,000 passwords [to Resdex] out there. We can’t say to what extent REAL CIO WORLD | J U N E 1 , 2 0 0 6

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Cover Story | Scalability passwords will be shared. Will 8,000 go up to 16,000?

Will recruiters start working 16-hour shifts? In the last six months, for example, the number of searches on Resdex has doubled for a given 24-hour period,” says Bikhchandani.

Knowing when to throw another box into the mix is also crucial. “The drawback [to this strategy] is that it isn’t very economical. You reach a point of time when you tell yourself it’s too expensive, and you go back to the drawing board and see how you can reduce cost,” he says.

Typically, CIOs are averse to myopic budgets, especially in relation to scalability. Such budgets don’t give them room to plan ahead. As a result, scalability plans can be limited.

Ironically, the fallout is that this also makes it impossible for them to buy in bulk — which is one of the advantages of planning ahead — and save their enterprise money. Until 2004, shortage of funds meant that Naukri’s IT team had to make do with what they had. “It was like making a featherweight boxer fight a heavy-weight round,” says Sharma.

“We had to load him with everything possible. And with the

Sometimes, CIOs have to use intuition while choosing a technology for the future meltdown, we were working with constraints that meant that we were bound to hit a bottleneck.”

The bottleneck proved to be the database, which is at the heart of Naukri’s business.

Scaling-up for the Long Haul “One of the most crucial reasons for the shift [in database] was development turnaround time. At that time, it was hard to get people to code for the Web in C++. Each change would take 3 to 4 days to implement. [After the change,] turnaround time got better and so did our rate of innovation. And we could take these innovations to the market faster," says Sharma.

But changing databases mid-stream or any sort of architectural re-structuring is a last-resort exercise. Sharma warns of changes or product enhancements that require more from the system that was envisaged. The idea is to push back architecture re-engineering as much as possible without interfering with business. “I wouldn’t say we look at a six-month scenario because the site is a huge animal. It’s not something you want to revisit time and again unless it’s imperative to go back to the drawing board,” he says. But, about four years ago, that’s exactly what they did. Naukri moved to a Linux, Apache, PhP, MySQL stack from a set-up that had Linux, Apache, C++ files compiled as CGI, and data that was stored as flat files.

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The road to MySQL was fraught with uncertainty.

Scalability is like a game of dice — sometimes CIOs have to take their chances with an unknown technology. Despite research and a keen understanding of technological trends, choosing the right technology for the future does require intuition.

When Sharma led his team into the change, MySQL was an unknown quantity. Their first application didn’t succeed. His advice to those attempting it is to watch out for keeping datatypes in sync and how new platforms treat indexes.

Once the IT team had the new database in place, the rate of innovation rose considerably. This led to the possibility of value additions and more services like search facilities and the use of SMS. Don’t forget, the primary reason why both recruiters and jobseekers prefer Naukri is its fresh content: new CVs and new jobs. Getting these to them in an order they appreciate can be tough when you have 90,000 jobs and 5.5 million resumes to organize. And new innovations at Naukri aim at taking the drudgery out of a search.

Currently, some of that innovation is aimed at recruiters.

Mobile-interfacing access to its services is an important area. “Recruiters using Resdex can contact a candidate [directly from the database] using SMS. This reduces hiring turnaround time considerably,” says Sharma. From introducing a ‘walk-in interview’ category to its website and using short-code messaging, Naukri’s innovation is aimed at increasing customer interaction and building loyalty.

According to Bikhchandani, “If you look at figures from the Internet and Mobile Association of India, the online recruitment market was worth Rs 145 crore last year. Naukri makes about Rs 75 crore.”

But, the price for loyalty is high. Naukri, on an average, receives 7,000 new resumes a day in addition to 15,000 which are modified everyday (modified CVs carry more relevance in searches), which is a lot of fresh material for recruiters and a lot of reason to stay loyal. But it’s also left Naukri’s search engines wheezing.

Applying the Basics Those who plan to scale and do it well have a checklist.

Sharma’s list includes demand forecasting, spelling out new processes, number of new employees, number of new locations Naukri is going to, and product innovations in the pipeline.

Scalability plans are also based on historical data. It’s the CIO’s only guide of how his system will react if new architecture is implemented on-demand to meet sudden developments. Historical data also gives more depth to a “business empowered roadmap”. This, in turn, will answer questions like where the company is introducing innovation and how these will impact areas at the architecture level.

Architecture-building is successful if CIOs can look ahead and estimate how applications in a given architecture will introduce bottlenecks, says Sharma. Such an approach requires CIOs to know their system inside out.

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Banner left | Banner right “It is key to know which areas will be impacted by new additions,” says Sharma. “It will tell you what sort of impact introducing new applications can have and give you an understanding of where you can bump into performance bottlenecks. There aren’t pre-defined matrixes to check a plan’s solidity. Knowing where the next bottleneck will crop up works on gut feeling and experience... It’s what the tech team calls ‘the bottleneck-shifting syndrome’.”

Shifting bottlenecks can potentially cause a rift between the IT team and management, which doesn’t see their problem going away no matter how many resources they throw at it. According to Sharma, IT should be able to forecast where the next bottleneck will occur. This is not so easy to do consistently. “The problem we face from a business perspective,” says Bikhchandani “is that predicting traffic is very poor at our end. We are unable to predict how many visitors will come or how many new CVs will be uploaded six months from now.” But Sharma’s team manages to stay ahead of the tide by buffering. “If, for example, we advertise the walk-in interview facility, we’ll add 10 to 15 percent over the number of visitors we’ve been told to expect.”

The makeshift arrangement works primarily because, as an organization, Naukri lives off the pulse of its market.

Having its ear so close to the source of its earnings requires that it needs to be quick to respond to the market. This is among the reasons why Naukri doesn’t freeze a scalability plan longer than one year. “Since growth is driven largely by the market, we’ve had a very reactive philosophy to scalability right from the beginning,” says Sharma.

But a one-year horizon also means they don’t give themselves much respite. The constraints on budget, time and manpower (two of which are planning functions) clubbed with limitations of the old platform can cause frustration, Sharma says. “In the last five-to-six years, I have never been able to say, ‘This is taken care off’,” he adds. Yet, he says that given a choice, he would make the same choices he’s made, considering the escalating degree of application complexity and factors brought about by rising Net penetration and the user’s understanding of the Web. It helps Naukri that business and IT are on the same page. “If everyone believes in the same thing, if everyone in the operation believes that, all said and done, performance is crucial, getting buy-in is easy.” In effect, planning for scalability is like a hard candy — it can break a tooth but it also represents one of the sweetest parts of a CIO’s job: planning the company’s future riding on top management’s vision, which makes it a sure-fire ticket to the boardroom.

The Road Ahead While online companies hosted in the US use on-demand partners who provide them with more power or storage for a fee, Naukri has never had to resort to such an expensive alternative. In fact, the job portal continues to invest in IT talent. “In the last two years, we’ve moved into investing a 42

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Best Practices Keep the demand in clear focus: Knowledge of demand helps anticipate the quantum of traffic. For instance, in a period after you advertise your Web service, expect page views and demand to go up.

Maintain a Diary: Track and record how your system reacts to various tweaks. This diary will be useful when you decide to restructure the architecture, given that you can’t simulate a system test.

Don’t be a Hanger-on: Drive unity between business plans and IT. It is important for everyone to be convinced of the same goal. It also builds credibility and makes buy-in easier.

Maintain a Buffer: It’s a fender that will cushion your system if an inaccurate management forecast sends it into a crash.

— S.S.

lot in product and technology. Today, I’d say there is possibly an equal balance between product and technology on one side and sales on the other side,” says Bikhchandani.

Industry watchers now point to the threat of media houses getting into the online recruitment market. Spanning the print ad and online market gives media houses that much more clout. At last count, TimesJobs.com (Times Group) was running third and catching up with Monster.com and frontrunner Naukri — using tactics that smack of a price war.

Naukri’s response to this is innovation and expansion.

“As far as we in technology are concerned, our rate of innovation has to increase. The only way we can stay ahead of the competition is by our products,” asserts Sharma. This demands intense scale-planning if Naukri is to do it right and take their business to foreign markets — it recently opened an office in Dubai. Reports in the media even suggest that Naukri is planning an IPO. Sharma’s attitude towards scalability is backed by Bikhchandani, “During the meltdown, planning was about minimizing cost and giving an acceptable level of service.

Today, we want to be a world-class site and give world-class experience.” His mandate to IT is, “Do what it takes, we’ll review budgets later.”

In the end, business in the online recruitment market will look to IT to act as a differentiator and an indispensable support to new ideas. But planning cannot wait. After all, that’s what scalability is all about: making a promise that IT can keep. CIO

Copy Editor Sunil Shah can be reached at sunil_shah@cio.in

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Cover Story | Scalability

Built

to Last

Shaadi.com’s emphasis on innovation and emerging technologies in its process of scalability has led to an architecture truly built for tomorrow.

M

P hoto by K AP IL

arriages may be made in heaven — but they have to be managed on earth. It’s a home truth that holds true for scalability, too, if a Web service is to successfully handle thousands of concurrent users.

Insofar as marrying scalability with an online business’s growth is concerned, few in India know better than Shaadi. com. From a mere 1 lakh page views per month in 1997,

Shaadi's traffic is more or less even. We handle the consistent

growth with proper monitoring of resources used.

— Anand Mittal, COO of People Interactive 44

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the company has grown at a staggering pace and today boasts of 300 million page views per month. Don’t forget, Shaadi.com has added a host of features to its matchmaking experience in the same period, like Shaadi SEAL to provide proof of screening. In fact, for a company that has helped over 550,000 people tie the knot — that's 75 marriages per day — its need to scale up is also evident in its offline service, Shaadi Point, which is aimed at a non-Internet savvy audience.

Inevitably, along its growth path, Shaadi.com has had to scale up its IT infrastructure to keep pace with demand and its own requirements. The objective has been to develop “the ability to expand a computing solution in the most costeffective manner to support the ever-increasing demands, volume and complexity without impacting performance”, as Anand Mittal, COO of People Interactive (the parent company of Shaadi.com), puts it.

In the past seven years, it has done so with an emphasis on user-based services like search features and multimedia offerings, as well as security and disaster recovery. It’s unsaid that to achieve the desired result of reliability and performance, it has had to study architectural prototypes and consider the demands of emerging technologies to achieve this. It all leads up to the need for a scalability plan.

However, planning is never easy for website services, and is often done in phases or in relation to performance. This was particularly apparent during the dotcom boom when companies couldn’t be sure if they were going to sink or swim ahead of the pack.

Shaadi.com began with a shared hosting environment in 1997 and, a few months later, moved to a managed hosting environment with dedicated servers. This component of an online company’s scalability plans is invariably outsourced today as third-party companies manage several aspects of the website, including hard disk space and bandwidth. So, when Shaadi.com opted for Rackspace in 1997, it would accrue of the latter’s services such as 24x7x365 uptime, 100 percent live support team, and a guarantee of replacement of malfunctioning hardware within an hour. “Storage and bandwidth are no longer issues and are available at very low costs,” says Mittal who also heads IT at Shaadi. com. This has allowed Shaadi.com to focus on valueadditions and innovations for the website like video clips of prospective brides and grooms. So, even as its managed hosting services provider looks into the server’s primary ability to scale well, Shaadi.com innovates on its own by using video clips aggressively, thereby keeping a level of control on bandwidth usage. This is critical for users who don’t always have the benefit of top-notch connectivity.

Growing With Demand For a marriage portal like Shaadi.com though, its database — the unglamorous meat and potatoes part of the business — is just as critical for performance. Shaadi.com ensures its

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databases are scalable by using several clustered database servers. All the other important functions on the portal like mail, chat and ad server are based on multiple dedicated servers. This provides two distinct advantages. First of all, the failure of a single server will still enable the site to keep running thus providing business continuity and, second, scalability can be managed by determining the area where the bottleneck is apparent, and solved by adding more servers there. In tandem with this, Shaadi.com uses hardware load balancers to streamline operations. It has even gone to the extent of relying on solid state flash memory in lieu of hard disks to enhance reliability. The system can thus handle approximately 2,500 concurrent users.

Interestingly though, for a website whose page views are exceedingly high, the matchmaking portal does not experience ‘peak’ traffic as do cricket portals during an India-Pakistan match. “We do not have spikes; traffic is more or less even… We handle the consistent growth with proper monitoring of resources used,” says Mittal.

This does point to a need for CIOs in similar businesses to forecast demand. Shaadi.com has been fulfilling this on the back of the following parameters: Number of concurrent users: It indicates the load on the server.

B andwidth usage: Two-thousand concurrent users may pose lesser constraints on bandwidth than just a thousand users if the former are checking out lowgraphics pages and the latter are playing video clips.

C PU and memory usage: One of the key issues with optimizing speed is to determine which aspect has to be speeded up. For instance, spreadsheets are traditionally math-processor and memory intensive, while databases could do better with a larger hard disk. Identifying this area is crucial for making better predictions on resource requirements in the future. Most of this is outsourced by Shaadi.com to Rackspace, but company officials still need to get the right estimates.

D isk space: This is closely tied in with business strategy and plans at Shaadi.com. For example, consider what might happen when the portal introduces video clips — will 1,000 users post their video clips online, or will 10,000 do so? While hard disk space is quite cheap today, the forecast estimation is still necessary because a full hard disk might crash the site.

Cost benefits: This is the part that CFOs are most interested in.

The aforementioned parameters apart, Web portals also seek to study the demands of emerging technologies to create a robust system. Typically, one would test the solution to get an idea of how it might work in real life conditions. This is handled with the aid of system load testing to determine the maximum load that the components of the system can take. While enabling Shaadi.com to get an idea of the capabilities of the system, this type of testing also helps in 46

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What to Watch Out For Four pointers for IT and business to remember: What is the bottleneck? Identifying the core problem area (or areas) is crucial to enhancing scalability. Depending on the need, you might need to add servers, or simply do with adding more RAM or even an extra hard disk. There could also be situations where the application software, the database, the middleware or the operating system itself is the bottleneck.

What are the patterns? In case you are running a job portal, you might find that traffic peaks in the evenings, when people go home or to a cyber café to log on to your site. Identifying the specific area enables you to forecast trends. For this, you must keep a careful check on your website-access logs.

How good is your Plan B? You must know how fast you can get you website back and running if your site gets overloaded and crashes.

Ensure you maintain a disaster recovery site.

What else matters? Scalability isn’t just about adding a fatter pipe or another 10 PCs to the server farm. It also implies flexibility of elements on your website; do you need to redesign your website considerably to add more features? If so, you are anything but scalable. “Scalability could also mean the ability to handle additional business scenarios without having the need to customize/ re-develop additionally,” says Srinivas Katta, GM (Technology) for Changepond Technologies, which manages the FIFA website.

— B.N.

forecasting. For instance, if the system is geared to take on 2,500 concurrent users today and if the maximum number falls way short, the IT team needn’t plan an upgrade in the near future. Similarly, system performance modeling is also used to determine maximum performance and compare it with real performance.

The Business Imperative Vibhas Mehta, Business Head of Shaadi.com, says that the company is “focusing on new business development across all brands and companies, and also looking at acquiring new businesses in order to expand the present offering.” In the larger context, Mehta stresses on organizing the fragmented marriage industry in India and professionalizing the related offerings. ShaadiTimes.com, its wedding and relationship portal launched in 2003 and which offers advice, content and services related to marriage, was a step in this direction.

To enable fruition of these business plans, the business department requires the IT team to provide support for

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Cover Story | Scalability various back-end functions like database management, payment gateways, server load balancing, tracking of marketing campaigns, and server uptime, amongst others.

Since Shaadi.com is a tech-savvy company, business needs also demands that state-of-the-art technology is provided, and this has the happy side-effect of ensuring that buy-in is easily attained.

However, the IT-business link will not work if it is one-sided. It is imperative that the business department provide the IT group with information to make scalability effective. “The product team helps the IT department with product specification, business requirement and market trends and projections, based on which the IT department creates tools to better the process and product/services,” says Mehta. This keeps things on an even keel because the projections provided by the business side enable better forecasting and decision-making. This seamless interaction between the business and the IT groups has gone a long way in ensuring that scalability works. Users are also happy with this arrangement because the business team also shares customer feedback with the IT team, which also improves CRM. Now, we come to the sticky issue of ROI. According to Mittal, it is difficult to measure because some parameters are only measurable in the long term, while others are not measurable at all. There is also the issue with intangibles like customer satisfaction, which don’t lend themselves to measurement. Shaadi.com calculates the immediate benefit and the benefit accrued over a period of time is referred to

The Demands on

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as 'payback' time. While the aforementioned factors deal almost entirely with the technical aspects of a system — these, in turn, are concerned with the number of users, multimedia applications, and the like — it is also important for the IT people at Shaadi.com to keep an eye on the strategic directives emanating from the board, which are not perceived to have much to do with technology itself.

A case in point is Shaadi Point, the brick-and-mortar version of Shaadi.com. With it, Anupam Mittal, the chairman and managing director of People Interactive (I), wants to take Shaadi.com beyond the Internet and set up around 500 Shaadi Point centers across India within the next three years. People use Shaadi Point to have a nonInternet-based access to the facilities of Shaadi.com, such as face-to-face meetings. It has also found good backing among the traditional folk who are not so adept with marriage on the Internet. While this component of Shaadi’s business doesn’t have much to do with technology in the traditional sense, the Shaadi Points across India will have access to the same databases that Shaadi.com has. Who knows, one day, the hits on the database from the Shaadi Points could account for more than the number of hits on Shaadi.com?

The possibility isn’t so far-fetched because Anupam Mittal has envisaged Shaadi Point as a way of reaching out to the non-Net-savvy audience, and is expecting it to contribute Rs 100 crore to the bottom-line this year.

Such a scenario demands that the databases be a lot more robust. Shaadi.com is undergoing a metamorphosis and is converting itself from a dotcom player to one that wants a big chunk of the marriage market — IT related and non-IT related — which is pegged at around Rs 70,000 crore per annum in India. As recently as March 2006, it attracted an $8-million investment from venture capitalist WestBridge.

As the focus of the company changes on the back of such investments, the IT team is also scaling up to meet the demands of the future.

The demands hardly worry Mittal, who says his focus is on being the first to offer the best of new emerging technologies and modes of communications like voice, video and SMS to users. He and his IT team will be busy, marrying technology with the requirements of the millions of aspirants who visit Shaadi.com. CIO

Special Correspondent Balaji Narasimhan can be reached at balaji_n@cio.in.

Share Your Opinion Log on to our website to read about the issues faced by Shaadi. com vis-à-vis innovative services like Smart-Search. do write in to editor@cio.in about the scalability path you’d prefer.

Would you opt for a long-term plan? If so, how will you ensure it is dynamic? Would it be easy for you to convince your management?

Share your thoughts (or fears) on this with your peers.

c o.in REAL CIO WORLD | J U N E 1 , 2 0 0 6

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Engineering Global Success

by Gunjan Trivedi Consider the sheer size of manufacturing and engineering conglomerate Larsen & Toubro, and IT acquires a different meaning altogether. Armed with more than 19 ERPs running within the group and a dedicated IT subsidiary, A.M. Naik, Chairman & MD of Larsen & Toubro, considers IT as one of the foundation stones of the behemoth’s worldwide growth. Naik encourages L&T to harness IT in an innovative fashion to enjoy complete control over supply chain management and product manufacturing, and thereby derive optimum returns.

CIO: As one of the earliest IT users in India, what has L&T’s experience been?

A.M. Naik:

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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I equate L&T with a fourwheeled car that has human resource and information technology as its front wheels, and training and engineering technology as the rear ones. For me, IT is about improving systems and increasing productivity to enable a company to become globally competitive. And L&T has been a pioneer in the usage of IT. Our association with IT dates back to the late 1960s, when we deployed Unit Record Machines. The organization has been using different technologies progressively over the years, such as the 1401s in the early 1970s, Honeywell Bull

in the 1980s, and IBM mainframes in the early 1990s. We ran our payroll, suppliers' accounting, inventory and costing systems, all developed in Cobol, for a very long time.

Thereafter, L&T’s systems underwent a major transformation between 1991 and 2001 with the implementation of ERPs for all our businesses.

We have been successful in our implementations and have improved them consciously with a progressive approach to upgrades and other enhancements. The four wheels work in close tandem to keep the enterprise on the right track of growth.

This is, however, not moving at the speed I wish it would. Nevertheless, I am indeed pushing them to get into levels of overdrive.

P hoto by Sr ivatsa Shandilya

A.M. Naik, Chairman and MD of Larsen & Toubro, sees IT as the critical means to increase productivity and engineer successful global competitiveness.

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View from the Top

A.M. NAIK EXPECTS I.T. TO: Improve HR processes and, thereby, the productivity of all employees.

Enable engineers and customers to experience different aspects of a plant and equipment during the design stage itself.

Provide complete control over supply chain management and product manufacturing.

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View from the Top

Your corporate endeavors have a reputation of being among the first or largest in India. Can you tell us about similar successes in the area of IT usage?

There have been many firsts along our IT journey as L&T has focused on being at the forefront of tapping IT for business. For instance, we implemented SAP in 1992, four years before it actually began to make inroads into Indian markets. In the same year, we implemented SAP R/2 on our mainframe. In 1999, our Electrical & Electronics Business Group implemented SAP R/3 in a big bang mode. It covered all the modules and end-to-end business processes, encompassing multiple manufacturing locations, product lines and distribution points at a time when there were prevalent doubts about ERP implementations ever being completed successfully.

Between 1999 and 2001, we successfully rolled out ERPs for all our divisions, choosing the ERP that best suited their business. Our total tally stands at 14 SAP installations, one Baan, two JDE, one Oracle and a homegrown EIP (Employee Information Portal) for the Engineering Construction & Contracts division. This proved that successful ERP implementations were possible, and that they could be completed on time. The implementation of SAP Product Lifecycle Management for our Electrical & Electronics Business Group and the SAP CFM (Corporate Finance Management) deployment for the Corporate Treasury are some more examples of L&T’s first-of-its-kind successful implementations in Asia. We have also done an RFID pilot project at our Engineering & Construction division to explore its potential.

We have been using IT to reach newer levels of managing customer relations. We can now broadcast the real scenario of a product, being manufactured at various stages at a factory shop-floor here in India to our customer sitting in the US We continue to harness IT at a rapid pace while constantly trying to derive the optimum from our investments.

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“To be globally competitive today, IT has to be an integral part of your strategy.”

— A.M. Naik How instrumental has IT been in L&T’s transformation into a multinational?

We have used IT to improve our supply chains, manage customer relationships, manage projects, and reduce inventory through better logistics planning. We use IT also for collaborative engineering, intelligent reporting and better designing. State-of-theart IT also sends positive signals to employees about the company’s focus on improving their productivity by giving them the right tools and helping to keep motivation levels high. If you want to be competitive, IT has to be an integral part of your strategy for on-time completion of projects. Even where labor is cheaper, having control over supply chain management and product manufacturing while being globally competitive is of utmost importance.

How much has the deployment of e-commerce and e-engineering solutions contributed towards L&T’s global competitiveness?

L&T’s adoption of IT is not restricted to business solutions. Very early on, we

completely did away with the draftsmen’s drawing boards and moved all our drawings and engineering to software. We have used the most up-to-date applications for design, upgraded them from 2D to 3D, and added simulation and walk-throughs. With design being one of the most vital stages in the product lifecycle, addressing this area is of maximum benefit to L&T’s operating divisions like heavy engineering, electrical & electronics, and machinery & industrial products. We have not only been able to reduce the time-tomarket, but have also been able to provide the best of designs in every area.

Now, we are even considering implementing a virtual reality center to enable our engineers and customers to simulate and experience various parameters, components and aspects of the plant and equipment, right at the beginning, during the design stage. This will help reduce errors and cycle time and enhance customer delight.

Our e-commerce initiatives have enabled us to connect better with our suppliers, contractors, stockists and distributors. We are now able to reach our global suppliers from different parts of the world, conduct auctions and optimize competitive prices.

What market differentiation or advantage does L&T enjoy with its dedicated IT subsidiary?

When I became the CEO in 1999, I was on the boards of about a dozen subsidiaries.

When I got to know of the horror story of our 3,500 employees leaving L&T during the last decade to join various IT companies, I realized that, to defend my business, I had to energize our IT subsidiary, which was supposed to wind up after the Y2K exercise.

I decided to resign from the chairmanship of all the other subsidiaries except L&T Infotech. With this, I have been able to capture my talent pool, which I would have otherwise lost to the market.

We now enjoy an advantage with L&T Infotech by virtue of its parentage

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View from the Top

SNAPSHOT

operating division and its major business units have their own IT departments.

Each department is headed Turnover: Rs 13,965 crore by an IT professional who (2004-05) functions as the CIO of Employees: that division. Besides these 19,848 business unit CIOs, we also Point of Presence: have a corporate CIO. The role 20 locations in India of the CIO at each business Present in unit is to remain very closely 45 countries aligned with the business, manufacturing identify niche areas where IT How beneficial is it works: can provide specific solutions to first implement 12 to generate a competitive technologies within business advantage and enable the divisions: the group and then business to perform better.

6 offer them in the The role of the corporate Group CIO: CIO would be to synergize the market?

V.K. Magapu IT efforts of all the businesses, By first implementing identify areas of optimization technologies within its group, L&T has the opportunity, with the help of to leverage the volume, provide technical its wholly-owned subsidiary, to be amongst direction, and to connect with the overall the leaders in using cutting-edge technology vision and goals of the company. The CIO for its growth initiatives. This was clearly should be a visionary who is passionate about highlighted in our first ERP implementation, the business. He should be able to connect our early PLM initiatives and other niche with business managers, users and service IT solutions like CFM, RFID, etcetera. This providers, and be capable of managing and affords us the advantage of undergoing the driving change. If he does all this, I believe, the testing phase, as it were, at a very early stage IT-business alignment and value realization from IT will improve. I would also like the CIO in the lifecycle of a project.

Leveraging our expertise and exposure to to be well-focused on information security, these solutions helps us position it better to compliance and other governance issues. I customers. Customers are looking for real believe IT should increase the productivity world experience, and testing these solutions of all employees significantly by providing in our backyard gives us the right capabilities systems that are highly reliable and userin terms of domain knowledge, to position friendly. I make sure our CIOs develop a them better to customers. It is a win-win special focus on this. situation for L&T and L&T Infotech. on domain expertise and knowledge coming in with the people from L&T joining the subsidiary. With the subsidiary, we have the ability to experience the effect of deployment of cutting edge IT solutions in our backyard lab, if you will, before implementing it for an external client.

Larsen & Toubro

What, in your opinion, is the role of a CIO in such a diversified conglomerate?

L&T’s businesses are organized around six operating divisions with multiple strategic business units within them. Each of these businesses is distinct and has unique requirements. Accordingly, each

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How crucial is it for business to have the CIO integral to the core management team?

It is very important for the CIO to know the direction in which his business is proceeding and the strategic plans for growth, expansion and focus. The CIO also needs to know the top concerns and issues that the business is facing. He needs to

know which areas are affected — whether it is service and complaints, market share, profitability, project execution delays and risk management, or employee attrition.

Unless the CIO is keyed in on these aspects, he cannot make a useful contribution to it.

So, it is important for the CIO to be integrated with the core management team and improve the alignment between business and IT.

Going forward, what role do you see IT playing in L&T? As we see the demand for talented professionals increasing, so are wage bills.

As India’s competitive advantage through labor arbitrage decreases, we have to improve our productivity significantly. IT is the way to increase the productivity.

As I mentioned earlier, IT and HR are two of the core wheels through which we drive change at L&T. IT has the potential to also significantly improve our HR processes. I also want IT to bring in greater integration in processes, systems and optimize the availability of real time information dashboards for senior management. With more efficient internal use of business intelligence, I want the L&T Group to sharpen its relationships with our own customers, analysts and other stakeholders.

We are getting better at implementing and using the solutions by taking care of technical, human and process issues. In retrospect, I feel there is further scope to leverage the implemented ERPs to add more value continuously. We are on a major drive to increase our usage of ERPs and other business applications through a systematic usage study and implementation of corrective actions to enhance the productivity of our people. We have seen a steady increase in our investments in IT, and we are committed to supporting these investments with an eye to consistently deriving higher value. CIO

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

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Enterprise IT

The Enterprise Gets

Can you imagine an IT environment without applications to roll out? y you’re going to have to if Google’s plan to conquer the enterprise works.

BY BEN WORTHEN

ILLUST RATION by J INAN K. V IJAyAN

On Feb. 14, 2006, many Google email users received an unexpected Valentine’s Day present. When they logged in to their accounts, there it was: instant messaging, fully integrated with their e-mail system.

Gmail users could now chat in the same browser window as their inbox. Just as with e-mail, the system would save a transcript of every chat and, better yet, the text of archived transcripts would be searchable. There was nothing to download, nothing to install.

It was technology magic.

This was another overnight success for Google, the company everybody loves (with the exception of a few countries, some municipal governments, and a host of proto-competitors such as Microsoft, IBM and Yahoo). Over the past few years, Google has released a series of Web-based 52

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applications that have raised the bar for its competitors, just as its search engine did when it burst onto the scene at the end of 1999. When Gmail debuted on April 1, 2004, for example, it gave users a gigabyte of storage — 10 times as much as Yahoo and Microsoft’s free e-mail services.

Google releases its products with little fanfare, labeling them beta versions and leaving them that way for years. Yet, its desktop search, map, e-mail and other services are among the world’s best and most popular applications. And whether you know it or not, your employees are probably using them.

But Google is not just a search company or an applications company. A company that can scan billions of web pages for a handful of words in less than a second (a search for

Reader ROI:

Google’s strategy for taking over enterprise computing Why moving from the desktop to the Web will improve IT How Web computing will change the IT governance model

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PhOTO by RO N hO LTZ

Enterprise IT ‘CIO magazine’ returned almost 28 million results, prioritized by relevance, in 0.14 seconds) deserves to be acknowledged for what it really is: a supercomputer.

“What Google recognized was that, if they built their own system using cheap, off-theshelf PCs and ran their own operating system” — the Google File System, a highly customized version of Linux — “they could afford limitless expansion,” says Chris Sherman, executive editor of Searchenginewatch. com. In order to build the best search engine possible, Google connected thousands, then tens of thousands, of servers. And at some point that infrastructure and the possibilities it afforded became the company’s primary focus. What followed was a series of services that took advantage of Google’s ability to process transactions at a speed and scale never before achieved. And these Web-based services don’t require users to download a thing. Google provides the computing power.

All you need is a browser.

“What Google has that’s extraordinary is not search but the highly optimized computing platform,” says Sue Feldman, VP of Content Technologies Research at IDC (a sister company to CIO’s publisher).

That platform has Google poised to lead the Web computing revolution that everyone in the IT industry has been talking about since the 1990s.

Google’s platform, along with the others bound to follow in its w ake will, over time, move computing to the Web and away from the desktop. As this happens, IT will get better — applications will be easier, faster and cheaper to use—much as it did when it moved off the mainframe 20 years ago.

“We’re still far away from a holistic Web computing solution,” says Brian Shield, CIO of The Weather Channel. “But the pieces are not that far away. We’re not far from fostering greater productivity with Google’s name on it.”

The move to online computing will change the relationship between CIOs and users.

Just as accessing applications over the Web will give CIOs more flexibility to find the best fit for their businesses, their employees will enjoy that same flexibility in finding the applications that are best for them. In the Google-future, IT will be more scalable, agile and cost-effective. But it will also be

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less controllable by CIOs. This will require CIOs to adopt a new mind-set for how they manage the use of IT in their company. Those who succeed will be free to focus on driving innovation; those who fail will be fighting a battle they’re destined to lose.

“CIOs need to understand that it is a whole new world,” says Feldman.

Inside the Googleplex Web computing could make a CIO’s life much, much easier. Applications will be hosted by third parties that can support an almost unlimited number of users and store almost unlimited amounts of data. CIOs will no longer have to maintain large databases or expensive desktop software. And because these applications live on the Web, your employees will be able to access them with any device that supports a browser.

In this environment, upgrades are easy.

Instead of an IT department pushing out a patch to every user, or installing software from a CD onto machines one by one, the application provider updates it once, and everyone gets the new version the next time they log on.

That’s what Google did when it integrated chat into Gmail. CIOs will no longer have to buy large, packaged applications, like an ERP system, with hundreds of functions they’ll

never use. Online applications will allow them to pick and choose the services they need. And because there are no legacy investment costs in each service, switching between services — and providers — will be easy. You just point your employees to another website.

Sounds great. So why isn’t everyone doing it?

“Building a suitable Web computer is really hard to do right now,” says Paul Kedrosky, executive director of the William J. von Liebig Center, a venture capital firm that commercializes technologies developed at the University of California, San Diego.

“But it was also really hard to create a single-circuit board. Then it turned into a commodity.” Like the circuit board, most experts believe Web computing will also turn into a commodity.

But today, Google is the only company that’s got it. (For companies that are close, see box: Google’s Progeny.) And the reason for that is under the hood.

Google started out with two advantages.

First, it was a technology greenfield, unencumbered by a legacy architecture.

Second, its founders were cash-poor grad students who needed to make their system run with tools they could afford. Google cofounders Sergey Brin and Larry Page taught

Our infrastructure has incredible reliability and scalability, and the cost per user is incredibly low.”

— Dave Girouard, General Manager, Google Enterprise Division

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Enterprise IT themselves how to turn cheap, off-the-shelf PCs (which, legend has it, they liberated from the Stanford computer science department’s loading dock) into powerful servers. And they connected these servers to one another with Linux, a free operating system that they customized over time to meet their needs.

By 2002, Google’s homemade, commoditybased servers outperformed comparable equipment from IBM that cost Rs 81,000 for 360 gigabytes of storage; Google spent about Rs 45,000 for the same amount.

Google treats its infrastructure as a closely guarded secret. It doesn’t allow outsiders into its data centers, so any description of the company’s infrastructure is an educated guess. Philipp Lenssen, who runs the Google Blogoscoped website, says that the last semiofficial count of the company’s servers was 100,000. Stephen Arnold, an independent consultant and author of the ebook The Google Legacy, suspects that it is now more than 150,000, spread across 24 data centers — making Google the third largest server manufacturer in the world, according to Arnold. The power per dollar that Google is able to achieve compared with its competitors explains the speed of its Web searches, the 2.5 gigabyte inboxes it gives each Gmail user, and other storage-intensive initiatives, such as Google video, which essentially invites anyone to upload a video ONto Google’s servers.

“Our infrastructure is an important competitive advantage for us,” allows Dave Girouard, General Manager of Google’s Enterprise Division. “It has incredible reliability and scalability, and the cost per user is incredibly low.”

Googled your company won’trun on the Web tomorrow, but now is a good time to prepare for the day it will.

The shift to Web computing is already happening, even if it may not be noticeable in your workplace. Near-ubiquitous high-speed Internet access is giving your company’s employees access to Web-based applications at home. Inevitably, they will find and use the applications they like best. Soon CIOs will be faced with a choice, says Dave Girouard, General Manager of Google’s Enterprise Division. “The CIO can be the source of the tools, or he can take the hardball approach and try to shut them down.”

The thing is, says Girouard, people are going to use them either way. history bears this out. “A lot of the innovation that ends up in front of CIOs starts off in a user’s home,” says Paul Kedrosky, Executive Director of the William J. von Liebig Center, a venture capital firm. “Think back 20 years ago. The rear guard action would have been to make sure that my users aren’t buying PCs when I am not looking.”

CIOs who don’t want to be marching in the rear of change can start taking small steps today. h&R block CIO Marc West says that CIOs should think twice about every client/ server application they install. “If you are a PeopleSoft customer who’s going to have to upgrade to Oracle, you should be seriously questioning that investment,” says West. “Do you need to keep all that information in one application? Maybe some things don’t belong in PeopleSoft.”

As Internet-connected devices like PDAs and cell phones become more popular (and IDC research shows that they will soon outnumber PCs), employees will demand access to information through them. And since these devices aren’t powerful enough to run client/ server applications, it will be up to CIOs to provide Web-based applications for those employees or risk, as Girouard says, “losing their constituencies.”

Or, as Sue Feldman, IDC Vice President of Content Strategies Research, puts it, “CIOs have to become part of the network.”

— b.W.

Behind the Fun and Games Given the combination of Google’s secrecy and its relatively anodyne media image — which the company works hard to foster with its “Do No Evil” corporate motto — it’s no surprise that people looking at the company just see a search engine, some snappy consumer applications and no coherent commercial strategy. “But what you see on the surface is just what they choose to show you,” says Lenssen. “It’s like they are holding a magnet beneath a table. All you see is a metal ball moving around on top.

Because you can’t see the magnet, you assume the ball is moving randomly.”

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Less colorfully put, because Google’s strength lies not in the applications it shows the world but in the architecture it doesn’t, the company’s business strategy is not readily apparent. But according to Lenssen, people who look at Google and see nothing more than random growth are making a big mistake.

Most of the high-tech industry is just starting to realize this. “IBM executives in the early 1980s didn’t understand what Microsoft was,” says Arnold. “Now Microsoft is in the same spot, and they are

trying to understand what Google is. And they’re having a hard time.”

Arnold, who has spent the past year performing competitive analyses of Google for large technology companies, says, “People don’t want to believe things that run counter to their vested interest.” Meaning, in this case, a way of computing that is not dependent on the client/server architec ture. “They refuse to recognize that a search engine with ads has got something different enough to alter the rules,” he says.

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Enterprise IT But it does. Google has slipped under the radar as a potential enterprise computing powerhouse because it hasn’t tried to compete directly with Microsoft or any of the other big technology vendors. Google could offer an unlimited number of applications on top of its infrastructure. The ones it has chosen to unveil — search, e-mail, maps, blogging tools, chat — aren’t exactly Office.

But Google has all the pieces. Gmail contains many of the rich text features, such as font selection, highlighting and alignment, found in Word; the Google search bar can perform the same mathematical functions as Excel; and Picasa, Google’s online photoediting service, has some of the presentation capability of PowerPoint.

Google hasn’t integrated these features into something that approximates a Google Office for one reason: It doesn’t want to.

Why compete directly with a company that has more than $30 billion in revenue and a monopoly on the desktop?

But there’s another reason: Google isn’t designed organizationally or philosophically to compete with Microsoft; it’s designed to bypass it. Since its applications live on the Web, they aren’t dependent on an operating system the same way desktop applications are.

“Microsoft in the 1980s allowed you to do tasks on a desktop that you could previously only do on a mainframe,” says Marc West, CIO of the brokerage firm H&R Block. “They took computer power and moved it to the desktop. The same play is happening here. With the Web, you can

self-select applications and piece them together into something you use. That’s the difference between an operating system and an operating environment. You move from client/server to client/Web.”

Google Eyes the Enterprise Web-based applications have taken off in the consumer world because of the penetration of high-speed Internet access.

Just a few years ago, work was the only place where people could use high-bandwidth applications. Today, more than 70 percent of Internet-connected homes have broadband.

Furthermore, coffee shops, airports and even entire cities now offer high-speed wireless.

Not only do near-ubiquitous connections have implications for how people consume technology, they also have ramifications for the nature of the new workforce.

“The wall between consumer and worker is dropping,” says Google’s Girouard.

“People can work from anywhere. There’s a real blurring of the line.”

In the office, CIOs control the applications workers use. Usually these are client/server applications that have been chosen because they conform to a set of business requirements and meet the needs of the greatest number of employees. But outside the office, the users are in control, and users will choose whatever applications they feel make them more productive, says Steve Mullaney, VP of worldwide marketing for Bluecoat Systems, an Internet security company. “And, as a user, I like that my IT department has nothing to do with it,” he adds.

n the Google-future, IT will be more scalable, agile and costeffective, and promises to make a CIO’s life much easier.

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The Web applications that your company’s employees are using at home are raising their expectations for the applications they use at work. “People are people,” says Girouard. “They don’t turn into information scientists when they show up at work in the morning.” Google believes that people no longer make a distinction between work and home when it comes to their expectations for technology, and its strategy for moving into the enterprise is based in large part on this analysis. “Why, for example, should I have two different calendars?” asks Girouard (one for work and one for home). “There are a lot of opportunities for us there.”

Google is getting ready to chase these opportunities. The enterprise division accounts for less than one percent of the company’s revenue today, “but over the next five to 10 years, we will become a big part of Google,” says Girouard.

John Battelle, publisher of Federated Media and author of The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture, thinks five to 10 years is a conservative estimate. He points to the Google Pack, a suite of Web and desktop software capable of updating itself that Google released in January 2006, as a sign that Google understands that its future is a software company.

“I would be stunned if in the next year they did not make a lot of noise in the enterprise space,” says Battelle. “It is just too big to ignore.”

Googling the Workplace Today, Google’s enterprise division has two products — corporate versions of its search and map tools — and just over 2,500 customers. But the unit has opened support operations in the United Kingdom and Japan, and is growing its support group in California.

“Business intelligence is the place where Google has a foot in the door,” says The Weather Channel’s Shield.

Google’s enterprise search application indexes information on a user’s desktop, the company’s servers and, of course, the entire Internet. CIOs can configure it so that different users have access to different information. Google’s enterprise search tool doesn’t distinguish between the information REAL CIO WORLD | J U N E 1 , 2 0 0 6

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Enterprise IT on someone’s desktop, the company’s intranet or the Internet as a whole when it returns results: information appears in the same browser window regardless of the source. “They are blurring the line between the inside of the company and the Internet,” says Shield. “It’s preparing you for the Web computing model.”

Girouard isn’t shy about talking about this. “When a CIO puts in an application,” he says, “the user has no other choice.”

Conversely, Girouard believes that the home scenario, where users choose the applications they want, is a better model, and he thinks it will find its way into the workplace. That’s a major shift in the way IT departments operate, but “CIOs need to be OK with some chaos,” Girouard says.

“They’re too concerned with security and locking information down, but those aren’t the things that will make a company great for the next 20 years.

“My message is: think about the innovation engine in your company and what’s driving it. What environment are you putting in place to make your company a place where people can innovate?”

According to Girouard, some of Google’s products that could be configured for businesses in the near future include Gmail, the blogging tool Blogger, Talk (an instant messaging and VoIP service) and Orkut, a social networking tool that helps connect users with similar interests.

In fact, Google announced in February that San Jose City College is currently testing a corporate version of Gmail that’s hosted by Google but gives the college’s network administrators all the controls of an in-house application. More generally, Girouard says, “We let things take root and mature on the consumer side. And where it makes sense, we’ll bring something over to the enterprise.”

At its core, however, Google’s enterprise strategy will remain viral. It won’t try to convince CIOs to replace the applications they already have with Google versions.

Instead, Google will continue to produce products that people like using and will use — at home and at work.

“It will happen without people noticing,” says Girouard, prophetically. “People look for a eureka moment but things 56

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Google’s

your search for online computing platforms beyond Google ends here — four Web domains that provide similar services .

Google right now is the biggest Web computing platform out there. but there are smaller companies that have built open-source distributed computing platforms of their own and are using them to offer services targeted to businesses. They include: Rearden Commerce Rearden’s portal lets users do everything from buy plane or concert tickets to send packages. It enforces corporate policies when a user is at work (such as no first-class tickets for trips less than eight hours), but lets them decide for themselves when they are wearing their consumer hat.

Employease A Web-based human resources application. The company has direct connections with most payroll and benefit providers. It has 1,000 customers and manages close to 700,000 records.

Workday PeopleSoft founder Dave Duffield’s latest venture. The not-yet-live company is building out its platform and will offer ERP-like features in an on-demand environment.

Salesforce.com The popular CRM tool has 20,000 customers. It runs open source, but doesn’t have the distributed platform. Salesforce has had difficulty keeping up with its growth, experiencing increased downtime this year.

—bW

just seep in. That’s what’s happening here. ”In other words, one of these days you could wake up and find that most of the applications your company uses are provided by Google.

That’s a vision bound to keep most CIOs on edge (see You’ve Been Googled).

“It’s hard to figure out if they’re your best friend or your competition,” says Shield.

But Girouard doesn’t want to alarm anyone. “Legacy applications don’t go away overnight,” he says. “We aren’t telling CIOs to get rid of your mainframes or get rid of your client/server [systems].”

“We want CIOs to think about the new areas that they could be investing in. We will start them down that path.”

The Naysayers Say Their Nay It may not be Google that ultimately brings CIOs to the brave new world of end-to-end Web computing. Consumers and businesses have vastly different needs. A consumer application doesn’t need to comply with Sarbanes-Oxley or a corporate travel policy.

Making an application that can account for these and other business needs takes an understanding of the market it is catering to.

“Google has the platform, but they don’t have any expertise,” says H&R Block’s West. “That’s their challenge. The platform allows them to bring more horsepower. Now they need to make something that businesses will buy.”

West acknowledges that many of Google’s

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Enterprise IT com to enable real-time search across those companies’ applications.

Adam Sohn, director of global consumer marketing for Microsoft’s MSN, is dismissive of his budding rival. “The golden halo around them doesn’t guarantee them success in the software business,” he says, Microsoft’s indisputable might lending weight to his words. The software giant has not yet decided whether to wage an all-out war with the upstart. If it does, Microsoft has a pretty good track record in these fights. (Raise your hand if you’re still using Netscape.) And Microsoft knows it’s in a fight. Last year, Bill Gates told Fortune magazine: “They are more like us than anyone else we have ever competed with.”

High praise. But unlike Microsoft’s previous competitors, Google’s applications are not wedded to the Windows operating system, so Microsoft cannot use its monopoly there to limit access to Google. “They cracked the one thing that Microsoft has not cracked: They have a Web-capable platform,” says

consumer products are better and easier to use than their enterprise counterparts. And if Gmail was able to address the archiving, monitoring and reporting requirements that the Securities and Exchange Commission has for financial services companies, then West would probably buy it. But until that day comes, he has no choice but to stick with his legacy client/server e-mail application.

If Google keeps its consumer focus, it may never acquire the business skills to satisfy customers like West. “Consumers aren’t yelling for the kind of protection that businesses require,” says IDC’s Feldman.

But Girouard says that Google created its enterprise division to make its consumer products more appealing to businesses. And, he says, Google is partnering with companies in the corporate space, such as consultancy BearingPoint, which started an enterprise search practice in February that will use Google’s technology. In mid-April, Google announced partnerships with enterprise software vendors Oracle, SAS and Salesforce.

West. “Microsoft does not have that.”

But even if Microsoft prevails — or if Google simply implodes on its own, done in by growth, internal squabbling or hubris — the model will survive and thrive.

Applications are destined to move to the Web. Perhaps not all at once, and maybe not even quickly (after all, companies are still running Cobol applications on mainframes), but Google has demonstrated that the Web computing model is viable.

“Google is a great search engine,” says West. But, he says, its real legacy will be that it pioneered a new approach to computing, “combining Web services and cheap hardware to deliver on a massive scale. In the process, they changed the way consumers approach technology.”

And that’s going to change everything for CIOs. CIO

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e-governance

T

erry Paulson, the widely-acclaimed author and motivational speaker once said, “Don’t struggle against change; learn to use it to your advantage.” North Delhi Power Limited (NDPL) did just this when it took over from the ailing Delhi Vidyut Board (DVB) about four years ago. The shift is a lesson in change management — and for NDPL, it has brought down its aggregate technical & commercial (AT&C) losses from over 50 to 22 percent.

NDPL was the fruitition of the government’s decision to privatize the distribution of power in the north Delhi region. The company is a joint venture between Tata Power Limited and the Government of National Capital Territory. The JV gave NDPL jurisdiction of over 520 square kilometers and 0.9 million consumers.

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Anil Kumar Sardana, Managing Director, NDPL, recalls the period when DVB was on its last legs. “The people, the processes and the premises were no better than the wreckage of a plane crash. We were asked to collect the debris and put it together,” says Sardana.

DVB, according to Sardana, was brimming with gross malpractices and irregularities.

Employees ensured records were not kept since these would make some of them vulnerable. Sardana also recalls how people thought IT was an infringement of their freedom — the freedom to allow middlemen and brokers to provide connections on behalf of the department and receive kickbacks.

The DVB didn’t have a single good example of benchmarking against other agencies. Sardana says there wasn’t even

an interest in benchmarking its processes.

“When we took over from DVB, I saw little or no interest within the company to adopt change management so that we could reach a point where benchmarking was possible,” says Sardana.

To make matters worse, sections of the DVB ran off just two desktops, which made processes largely manual. Akhil Pandey, Principal Executive Officer and IT Advisor to NDPL, says the manual systems also opened the DVB to corruption, which made buying a power connection a punishment.

“The absence of IT systems meant there weren’t any controls. The errors committed in billing and payment far exceeded the limits of toleranace,” says Pandey, who has been an integral part in bringing about change management.

The lack of IT hit customers hard, but it took a larger toll on the company in terms of revenue leaks. “If we go back 10 years, each utility showed losses of between 16 to 18 percent. We labeled these AT&C losses.

This means the bottom-line for us was what we collected from consumers minus the top -line — what we spent to distribute power,” explains Sardana. The Transmission and Distribution (T&D) losses during the DVB regime were as high as 53 percent.

The problem had become so acute that the NDPL couldn’t find an error-free and tamper-proof billing software that would plug the existing malpractices.

“The average error rate in billing in most developed nations is three-to-four percent.

When we took over from DVB, it was over 30 percent — all because of a lack of a proper IT infrastructure,” rues Sardana.

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Illustration by Sasi Bhaskar

How North Delhi Power Limited turned around an ailing government department by introducing IT and a unique style of change management.

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e-governance DVB to NDPL: Starlight to Sunlight The NDPL was tempted to attack the problems of dilapidated infrastructure and the inherited losses of 52 percent head-on, but it realized that its first goal was to build trust among its consumers. This meant ensuring as few electricity failures as possible. It also aimed to make power affordable. The NDPL’s top management figured that without an effective and ‘forceful’ use of information systems, they wouldn’t be able to achieve any of their goals.

They began by roping in KEMA, a USbased consultancy, which advised NDPL on how to create a world-class power distribution infrastructure beside an information system architecture. “The aim of using IT has always been two-fold at NDPL. We wanted to improve our internal workflows and applications, and wanted to be a fully transparent organization,” explains Pandey.

The NDPL decided to work only with IT-enabled processes and initiatives. “Topmanagement strongly encouraged the use of IT to achieve both commercial and operational efficiency. They also emphasized on the need of IT in areas with maximum

change quickly. “BPR coupled consumer interaction,” says with massive amount of Pandey. The objective was training and re-training is the simple: to minimize the reason for the success we see human intervention. today at NDPL,” says Pandey.

From day one, NDPL SNAPSHOT The strategy worked. Soon decided to capture data from NDPL after IT-enabled processes the point of origin. However, Turnover (2004-05) were introduced, the mindset under DVB, employees hadn’t Rs 1,578 crore of workers changed. “Whether ever seen an MIS report and Employees it was forced on them or they were reluctant to the idea.

3,700 volunteered to adopt it, we Part of the NDPL registered made the employees realize prescription was to ask its consumers that the processes were not employees to aim at becoming 9.1 lakh in their minds; they were in a process-oriented company PEak Load the machines. That’s when by using IT. It discouraged 1100 MW change management started people from working with Energy happening,” says Sardana. data that wasn’t thrown up requirement Sardana equates IT with by the system. “IT was the (FY 2004-05) 5,600 MW the cockpit of an aircraft. Just backbone of all changes that as the cockpit commands an were brought about at NDPL. entire aircraft, NDPL wanted Without the judicious use of IT to not only streamline workflow but also IT, I am sure we wouldn’t have met this much command various processes. The NDPL success in so little time,” says Pandey worked on two roadmaps: the roadmap for According to Sardana, NDPL encouraged IT and the roadmap to automation. “These people to use PCs and told them that with two documents were cast in stone. From the more hands-on experience they would beginning, the company decided to follow become more professional. The change these two roadmaps to realize their change management strategy worked on a ‘Pull management goal,” says Sardana.

Theory’ where people, seeing others, adopted

“We made employees realize that processes are not in their minds — they are in the machines,”

P hoto by Srivatsa Shandilya

— Anil Kumar Sardana, MD, NDPL,

Photo by Bhagirat h

“IT was behind all the changes at NDPL. We couldn’t have met this much success without it.”

— Akhil pandey, Principal Executive Officer and IT Advisor to NDPL 62

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e-governance Internally, with so many loose ends, NDPL started with the most painful area: an ERP system. “Our immediate need was to get a workable ERP that would give us respite from manual processes. We engaged TCS who gave us a product called ‘Energize.’ It fulfilled our basic requirements in relation to purchase, store management, inventory and human resources,” says Pandey.

The new ERP moved the company from a two-desktop set-up to a structure where no employee could work without a PC and every document was digital and traceable.

The second task facing the NDPL was to provide accurate billing to 9.1 lakh customers.

“We couldn’t get a meter-reading and billing software that had provisions to counter the tampering of meters, and malicious individuals trying to rig data,” says Sardana.

The NDPL developed its own software and implemented it across all 150 points of presence in its jurisdiction. All points were networked by a fiber optic network, leased lines or wireless connectivity. It is a ringbased network to minimize the risk of failures.

The network runs with the help of over 50 servers. During the DVB days, 30 percent of all bills sent to consumers were provisional.

Billing errors are now down to two percent; the international norm is three percent.

A large part of NDPL’s losses came out of billing errors. “Making correct and timely bills was enabled by IT. And IT also helped to distribute new connections,” says Praveen Chorghade, Head of Operations and Maintenance at NDPL. Today, NDPL shares data transparently with close to a million subscribers, where billing is concerned. It also offers its billing software to other power distribution companies around the world that face similar problems.

Another concern was increasing efficiency in the exchange of information between consumers and NDPL. IT helped NDPL get information to its consumers and receive complaints using 22 networked customer care centers which are operational 24/7. The DVB received 10,000 calls every day, few were attended. Today, 99 percent of calls made are attended and problems resolved.

“Consumer response is essential. For example, if consumers don’t have supply and don’t know where to go, it is difficult to proactively reach out to them. IT has played

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NDPL — Then and Now 2002

2006

AT&C losses

52-53 percent

22 percent

Customer calls attended satisfactorily

Less than 20 percent

99 percent

Internet payment

Not enabled

Enabled

Bill Information on the Net

Not available

Available

Networked customer care centers

Nil

22

Payment avenues

20

1,100

Turnover

Rs. 1,100 crore (2002-03)

Rs 1,578 Crore (2004-05)

a tremendous role in enhancing consumer experience. NDPL call centers receive complaints and the IT-enabled systems flash these immediately to officers concerned using SMS,” explain Chorghade. “The systems also enable us to track complaints that are pending.”

An added advantage is that with the help of IT, consumers can now calculate their power consumption every month based on usage, which leads to energy-saving and safety tips — all Web-enabled.

IT has directly impacted revenues in other ways. It has enabled the organization to set up Automatic Meter Reading (AMR) at remote locations for its high-volume users. “Today, 55 percent of NDPL’s revenue comes from its AMR, which is rare for this industry. ” The NDPL also tied up with CitiBank, ICICI, HDFC and other payment gateways to make it easier for consumers to pay their bills. Although it is hard to put a figure to it, the DVB’s payment system — which saw consumers standing in queues — lost the company a considerable amount. “We are now trying to install Automatic Cash Receiving machines where a consumer can pay and get an instant receipt,” says Pandey.

Spreading the Light Sardana feels strongly that without IT, they couldn’t have got a noticeable reduction in AT&C losses. Earlier, losses were labeled T&D (transmission and distribution) losses, which normally describes the difference between the units supplied and what the company billed consumers for. But

under the manual regime, employees of the DVB could bill consumers and reduce the difference between units supplied and billed for. In short, the losses could artificially be lowered.

IT changed that. It also helped create a proud workforce. “It brought satisfaction among employees, and a satisfied person at work is a better person at home,” says Sardana. “It helped NDPL produce proactive, transparent citizens,” says Pandey.

This change of attitude among employees extended beyond the office and into their homes. NDPL’s office computers are used to train their children after 7 PM every day and on holidays. “We want to catch them young. Six hundred have been trained so far,” says Sardana.

Sardana now wants IT to enable NDPL with strategic enterprise management and a balance scorecard system to increase productivity. NDPL is now working on an integrated platform which will enable management to trace employees through a unique employee code for all his activities.

“The ‘K’ number for consumers and a unique employee code shall ideally become the two pivots on which IT shall revolve,” says Sardana. “We’re bringing all our IT partners to the table and negotiating for this platform.

We want to build that kind of artificial intelligence to take the change to the next level,” concludes Pandey. CIO

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

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Taking Technology The Kalyan-Dombivli Municipal Corporation (KDMC) began to provide IT-enabled services to its citizens much before other municipal bodies. Commissioner R.D. Shinde reflects on its success and about the next level of challenges.

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Interview | R.D. Shinde

The work of the KDMC, a pioneer of e-governance at the municipality level, forms part of the Rs 20,000crore National e-Governance Plan, one of whose thrusts is to construct 100,000 citizen service centers or as Citizen Facilitation Centers (CFCs) as the KDMC calls it. The financial well-being of these centers, which form the bottom of the e-governance pyramid, is crucial to the overall success of the plan.

The twin-city’s CFCs are making day-to-day citizen-government interaction quick, transparent and convenient. Shinde is convinced that IT can make large differences at the local-administration level.

CIO: What challenges do you face as Commissioner of the KDMC?

R.D. ShInDe: Kalyan is called the dormitory town of Greater Mumbai because its residents commute to Mumbai everyday. Being a dormitory township, the twin-city puts tremendous pressure on the citizen infrastructure of the KDMC. The challenge is to provide infrastructure to an everincreasing population.

central railway line and has huge potential for growth in the field of construction. Since, it is considered the best dormitory town for Mumbai, several residential complexes are coming up. We expect this to increase our revenue from property tax. Technology will make recovering taxes fast and efficient.

On another front, we recently introduced a payment gateway facility to enable citizens to make Web-based payments to the corporation. We have tied up with IDBI, ICICI and HDFC. As an administrative person who believes in IT, how do you calculate return on IT investment?

We have already received full returns on the investment made in developing software for the CFCs. The government of Maharashtra has given us Rs 2 crore as royalty for our intellectual property, which we developed with ABM Knowledgeware. This has been instrumental in the entire recovery of our investment in the CFC project.

The government has started replicating KDMC’s e-governance model in 245 municipal bodies across

to the People P hoto by Ka PIl

Managing finances has also been a sizeable test.

Earlier, the Kalyan-Dombivli area housed major chemical and pharmaceutical industries such as Century Chemicals and National Rayons, which were a huge source of revenue in the form of tax. However, in 2003, the Maharashtra Industrial Development Corporation was taken off the KDMC map and declared part of a separate village. This put KDMC in a financial crunch. The immediate revenue loss to us was about Rs 50 crore. This affected several capital investments the that KDMC wanted to make, especially developing roads and other citizen facilities.

How are you overcoming financial challenges?

That’s where IT helps. We are looking at ways to collect property tax efficiently. Kalyan is a key junction on the

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the state. Already the Nagpur Municipal Corporation and six other bodies including the Pune Cantonment Board have launched similar e-governance projects.

Have CFCs impacted revenue collection?

Definitely. We have been able to recover our dues only because CFC branches were available at the ward level — there are six CFCs across KDMC limits. During the 2005-06 fiscal, property tax collection was Rs 56 crore, which represents close to 85 percent recovery. For water tax, recovery has been 95 percent. This has been possible only because CFCs make it more convenient for citizens to pay their bills.

Today if someone says, “I don’t know how much my outstanding property tax is, but I would like to clear it”, we can help him. Using a unique citizen REAL CIO WORLD | J U N E 1 , 2 0 0 6

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Interview | R.D. Shinde number or an address or name, we can locate his account number and inform him how much he owes the government.

How do you explain the success of the CFCs, given that close to 85 percent of e-governance projects in India fail?

The key issues with e-governance projects are that there are too many alterations to the original plan or that solutions aren’t properly tested at the pre-implementation stage.

Fortunately, our CFCs are designed so that there’s hardly any scope for large alterations.

city engineering and town planning modules are yet to be implemented fully.

How do you plan to take this success forward?

CFCs automate, integrate and simplify the citizen-to-corporation interface. Now, we are taking town planning and revenue collection to the next level. We are undertaking a GIS (geographic information system) project, which is quite large. The KDMC will map out the entire Kalyan-Dombivli area through georeferencing and satellite imagery.

with our MIS. This will facilitate increasing our revenues. We expect a 30-to-40 percent increase in our property tax revenue, at least. The software part of the GIS will cost between Rs 30 lakh-40 lakh. The cost of the other components is still being assessed.

Are there other projects in the pipeline?

Yes. We plan to deploy an HR package that will cover all 5,500 employees of the KDMC. We also plan to invest in a biometric authentication technology, which we will link to employee attendance. We are inviting

The key issues with e-governance projects are that there are too many alterations to the original plan or that chosen solutions are not thoroughly tested at the pre-implementation stage.

The system allows for addition, not deletion.

CFCs have also been successful because of their comprehensive nature. The services they cover include the issuing of birth and death certificates, goods licenses, market licenses, water connections and complaint redressal, among others. It also covers administrative jobs such as giving permissions to citizens, scrutinizing proposals and building approvals, issuing NOCs (no objection certificates) for different licenses, etcetera. The health department is covered, but not to a great extent. The 66

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A ground-level city survey is already taking place. KDMC’s city surveyors are physically measuring every structure in the twin-city area. Around 20 percent of survey work is done. Each building is being categorized, whether they are residential, commercial, industrial or agricultural. This will help us assess property purpose-wise. If a building is being used for a commercial purpose, then we can double our revenue from it — compared to a residential property.

Both the satellite images and the data coming from the survey will be integrated

tenders for biometrics consultants. We’re introducing biometrics to prevent employees from cheating over their attendance.

Swipe cards have been used in the government, but they can be inter-changed.

With a combination of a thumb impression and a swipe card, the scope for such irregularities can be reduced. It will also act as an internal security measure. We intend to complete all these projects by end of the current financial year. CIO Senior Correspondent Nagesh Joshi can be reached at nagesh_joshi@idgindia.com

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Essential

technology Illustration by Sasi Bhaskar

From Inception to Implementation — I.T. That Matters

To gain the business-IT alignment promised by service-oriented architecture, CIOs have to focus on process and architecture — not just technology.

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SOA's True Challenge

BY Galen Gruman ARCHITECTURE | The term 'service-oriented architecture' (SOA) hadn’t gained currency in 2002 when TrueCredit, a subsidiary of the TransUnion credit verification agency, began deployment of an enterprise-wide portal. CIO Scott Metzger’s goals were simple: identify the business processes and the IT functions to be delivered through the portal, and reuse software wherever possible to reduce development cost and speed deployment.

But Metzger soon realized that the effort was something more than this one application; it was an excellent excuse to begin mapping out the company’s most important business processes to create an architecture that would let IT develop and modify the supporting applications easily as business needs changed. Call it SOA or whatever you want, says Metzger, but for him, the shift in thought that began with the portal application was a turning point in IT’s relationship with the business. “[We have] a much closer relationship with business [now]. It’s a great way to unify the organization,” he says. A March 2006 survey by CIO and Computerworld shows that 77 percent of enterprises adopting SOA seek greater business flexibility.

In his eureka moment, Metzger also realized a key strategy that has guided his SOA effort ever since: “It’s not a technology road map but a business plan. Find a way to articulate REAL CIO WORLD | J UNE 1 , 2 0 0 6

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the actual business process independent of any technology. That will best protect your SOA investment in the long term.”

Since 2002, Metzger has built a common portal and services manager to deliver the company’s various services — including credit processing, payments management and credit monitoring — both internally and to external customers.

The importance of process in SOA means CIOs should be addressing architectural issues at the same time that they consider purchasing or implementing SOA infrastructure, says Ron Schmelzer, a senior analyst at SOA research firm ZapThink.

“You can purchase an SOA infrastructure, but it won’t be as useful as it can be unless an architectural plan driven by business process is in place,” he adds.

That focus on process rather than on specific technology is what lets an SOA deliver on its promise of true IT-business alignment. But it also introduces new challenges for CIOs — challenges that stretch IT’s abilities in areas that have been chronically underdeveloped: process and architectural planning. Their staffs will also be stretched. In short, CIOs who expect that they can do SOA the same way they’ve always done technology implementations risk being blind-sided.

Challenge 1: Deploy in Pieces, but Create a Long-term Plan An SOA involves years of effort to get its ultimate result. That’s why respondents to the CIO/Computerworld survey cited the challenge of shiftin g to an SOA architecture while meeting current business needs as the top concern (63 percent).

The trick is to not deploy SOA all at once, because by the time most “big-bang” efforts are completed, the business needs may have changed and much of the implementation will be outdated, says Sandra Rogers, program director for SOA, Web services and integration at research company IDC (a sister company to CIO’s publisher). Instead, create the architecture and deploy specific 68

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SOA’s Technology Underpinnings Although service-oriented architecture (SOA) is not about technology, technologies can help you deploy an SOA. While there are many good products available, the market is just beginning to mature, notes Ron Schmelzer, a ZapThink senior analyst. That’s why so much of the supporting systems for SOA efforts today rely on human effort, such as having a project review team that knows what services already exist and can be used for a proposed new project. Still, a few technologies are emerging now to help ease the SOA effort: 1. Enterprise Service Bus (ESB): A variation of an application server or EAI platform, an ESB orchestrates the communication among services, as well as with the user and any data sources. “SOA in today’s world is very message-centric,” says Sandra Rogers, program director for SOA, Web services and integration at IDC. Some large enterprises will have an appropriate messaging system in place, she says, but most will need to upgrade their systems to adopt current standards and move beyond simple data transfer and application integration.

2. Service registry or repository: This database system tracks the various service components available for reuse and publishes available services to business analysts and external partners so they know what’s available. For example, Sprint Business Services makes its registry available via the Web to encourage use of its services, notes Vijay Musuvathy, manager of solution architecture. Unlike a traditional database, a registry must also store the context of the service, which defines when and how it should be used, in the form of metadata.

3. Master data management systems and metadata repositories: These two categories of products help enterprises manage their data in the same distributed, composite way that they’ll manage business logic through SOA services. This ensures that data’s meaning is understood by all services that use it, so no hidden assumptions end up corrupting the results that services deliver when using or generating the data.

4. User interface management: In a few years, “the biggest development will be the whole user interface space,” says IDC’s Rogers. As more services exist in everything from Web portals to office tools, “everything will be a producer or consumer of a service,” and managing the user interface across everything will require a service-oriented approach as well, she says. The emergence of asynchronous Java and XML (Ajax) “is a start but it’s not enough” for SOA’s broad reach, Rogers says.

— G. G.

services in phases, perhaps by focusing on one application domain at a time or choosing projects based on business urgency. “You can build incrementally,” says Suzanne Peck, CTO of the District of Columbia. In 1999, Peck began reorganizing 370 legacy systems into nine functional groupings in preparation for a new SOA. The services include both new code and Web services-based interfaces to legacy code, as well as new composite applications.

But until you develop the underlying architecture, you can’t build anything.

“How you’re going to manage version 2 [of your services] and beyond is important to think through upfront,” says Metzger. “It’s important to understand how volatile a particular business process is.”

Any organization implementing an SOA should create a basic architectural model for a manageable piece of the business, and

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then apply that model opportunistically to individual projects, using them both to test the model and to deploy the SOA in pieces, says ZapThink’s Schmelzer. That architecture includes identifying all of the business processes, the interactions among them, the specific applications and functions (existing and needed) to deploy them, and the flow of business logic and data to execute the business processes. Identifying these pieces lets you understand common functions that can be standardized across all processes, as well as identify the compliance, security and management requirements.

Be prepared to spend up to a year doing the initial business process and architectural analysis, advises TrueCredit’s Metzger. But that extra time spent upfront will pay off exponentially, he says. Today, new services at TrueCredit have only a sixweek development cycle. At the District of Columbia, some services are delivered in as little as 12 weeks. (More complex ones take four to six months).

Challenge 2: Take Governance Seriously Because SOA is ultimately about creating and managing IT processes in support of business processes, governance is critical.

“Development organizations are used to building applications, but now they are assembling parts,” says Dennis Gaughan, research director for IT governance at AMR Research. And that development has to be done in a standard way — which can rub developers the wrong way. “SOA takes a lot of the control away [from individual developers], so you get resistance,” says John Stubbs, CIO at Sony Pictures Entertainment, the distribution arm of Sony. Sony Pictures’ SOA efforts have resulted in a common service for managing the licensing rights of movies and TV shows across several lines of business (including DVD sales and theatrical releases) affecting 39 business units (like legal and marketing). The IT group is now using the SOA to deploy common Web services for its SAP Financials processes like accounts receivable.

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The CIO will need a development staff that is comfortable with both business processes and the services approach to developing applications.

A way to enforce the SOA principle of reuse is to have a review board that evaluates new applications to ensure they are really needed. Sony Pictures and TrueCredit both use such a board. The review board should include the CIO or CTO, chief architect, key technology and process experts from IT, and key business analysts, says IDC’s Rogers.

Challenge 3: Rethink Your Talent Pool In addition to architecture staff that develop and manage the SOA’s big picture, the CIO will need a development staff that is comfortable with both business processes and the services approach to developing applications. And business experts who can partner with IT on process identification and implementation are also critical — the CIO’s organization can’t do it all.

“Retraining, hiring and redeploying are all needed,” says Rogers. With these in place, most CIOs will bring in some key hires experienced with SOA and retrain the existing staff in SOA-oriented thinking. “It’s an ongoing process, so start out small and do a lot of retraining,” says Metzger.

Challenge 4: Apply SOA Principles to Your Data Too The importance of treating data — not just application functionality — as a service is often overlooked in initial SOA efforts, says ZapThink’s Schmelzer. In an SOA, multiple services residing in multiple applications might combine to execute a business process. If each service uses different data sources, or even the same data source in different ways, the results

might not be what you expect, he says.

For example, Metzger enforces strict separation between services that access and store data and those that act on the data, such as performing calculations. He also keeps presentation services — those that format the data for the user or for reports — separate from other services.

This helps ensure that all services have the same context for a specific piece of data.

The Payoff: Real BusinessIT Alignment All of these challenges underscore how different SOA is from traditional enterprise technology efforts. The CIO must put the technologist's hat to the side and become an advocate for business processes.

Better knowledge of those processes leads to better technology design, which reduces the cost of maintaining existing systems — something that now accounts for 70 percent to 80 percent of IT budgets, says Schmelzer.

“We’ve been talking for years about IT-business alignment,” says Rogers. An SOA lets you actually achieve that goal — if you can develop the architectural vision and execute on it over the long term. The process is not easy, but early adopters like Peck, Metzger and Stubbs would never go back to the traditional IT approach. “A lot of [D.C.] government would not work without SOA,” says Peck. CIO

Galen Gruman is a San Francisco–based freelance writer. Send feedback on this feature to editor@cio.in

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