CIO June 1 2007 Issue by Sreekanth Sastry

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From The Editor

I’ve lately been discussing the changing role of the IT department with your peers

Go Beyond the Tactical

Where do you draw the line?

— is it becoming more strategic or is it heading toward a day when IT is treated more as a matter of course and back-office function? So it was interesting to read Sun Microsystem’s CIO Robert Worrall’s views on how virtualization and a service approach are likely to not just transform datacenters but also the IT teams that run them. In a recent Inner Circle newsletter, Bob points out that inefficiencies dog most IT departments. “Applications are too complex and too expensive to maintain. Datacenters and servers run at only a fraction of their total capacity — unless there is a sudden spike in demand or month-end processing. All of this adds up to spiraling energy costs thanks to a new generation of IT-savvy consumers who expect service levels that drive most CIOs crazy,” he feels. Aware that he is going to be accused of being alarmist, he is quick to observe that while IT won’t disappear immediately, “the IT department of tomorrow must find Business transformation is a creative way to face these challenges. what IT teams need to work Trying to solve them with the same old on if they want to continue thinking is a recipe for frustration and to be relevant. failure. Instead of trying to keep up, we need to think differently — by anticipating and planning for where the industry and our customers are headed.” Bob believes that CIOs and the IT teams that survive and prosper will be those that will turn off apps, shut down their networks and datacenters and in turn buy all of these as services from partners. I’m not fully convinced that this is the future that IT departments have in store for them. Still, as a CIO Advisory Board member told me, these are pointers to what is changing and what might be. “We’d better quickly figure out how to quickly get beyond worrying about CPU utilization and security policies,” he added. Nicholas G. Carr who wrote Does IT Matter feels that the bigger issue is that “of all ‘C-level’ positions, the CIO post remains the least well defined and the most prone to identity crises.” Business or technology? Where do you draw the CIO line. Business transformation is where I feel it’s at. Where do you think your department is headed? Write in and let me know your thoughts.

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

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From The ediTor

For a long-time print warrior, an endearing aspect of joining CIO is the allegiance of you

Reading a CIO’s Mind You have the answers that can shape our content.

— the reader — to journalism’s oldest form. Each of you probably has different reasons to do so, but I would like to believe there is something to be eventually said for holding a magazine in your hands — getting literally the touch and feel of it, instead of reading from a screen 15 inches away. Print’s ubiquity could be its greatest strength as it battles other media. What other media can you tuck under your arm and take to almost anywhere and use without fear of running out of batteries? Having said that, a lot of us get a lot of information online and probably would be unable to live without the Net. Our endeavour at CIO is similar. We would like you to believe you can’t live without getting your hands on an issue of CIO, besides catching up with the critical information updates and resources we provide online on a daily basis. CIO truly is a magazine of the CIO, for the CIO and by the CIO. I would like to emphasize on the latter — by the CIO. You can and should drive the content we finally India is experiencing torrid deliver. We already have an editorial growth, which means explosive advisory group consisting of top CIOs, growth of companies and IT academicians and pundits that guides — and challenges. us in our task. I expect to meet many of you this month when we host our regular conferences in Mumbai, Bangalore and New Delhi. Still, we like to have your ear, so to say, to understand the issues that are important to you. Finally, I would like to know the real you. You are surely not like the CIO in many Western countries that suspect, or fear, the acronym stands for ‘Career Is Over’. India is experiencing torrid growth, and is likely to do so for many years to come. That means an explosive growth of companies and IT, and, of course, significant challenges, too. My guess is, there has never been a better time for CIOs and the wannabes. But I often wonder if the majority of the Indian CIOs are merely techies in pinstripes, or ones that read the pink papers and plan an executive MBA. You have the answers. What you reveal will significantly enhance the value of the magazine you read. So, do write in.

Bala Murali Krishna Executive Editor balamurali_k@cio.in 10

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content JUNE 1 2007‑ | ‑Vol/2‑ | ‑issUE/14

P hoto bY SrIVatSa Sh andIlYa

From left: Manish Choksi, chief of corporate strategy & CIO of Asian Paints; Sumit Chowdhury, CIO of Reliance Communications; Subrata Banerjee, CIO of Bharat Aluminium; Probir Mitra, sr. GM-IT of Tata Motors; and Anjan Bose, CIO of Haldia Petrochemicals

Leadership

Think Tank

COVER stORy | tHE ARt Of InfLuEnCE | 30

Put PEOPLE BEfORE PROCEss | 25 To reap the benefits of globalization, companies must adapt their business processes to the needs of local employees.

CoVEr: ImagIng bY bIn ESh SrEEdharan

Without it, you'll never get anything done. Five CIOs share their tried-and-tested techniques of exerting influence with management and your colleagues to ensure that the growth of the IT organization is synonymous with that of the enterprise. feature by Balaji narasimhan f

3 0

Column by M. Eric Johnson

Career Counsel A MAttER Of sCALE | 28 You are a mid-market CIO ready for a larger stage. Before you send your résumé to the Fortune 10, you may want to ask yourself a critical question: how scalable are my skills? Column by Martha Heller

Open Source sOLD! On OPEn sOuRCE | 42 An open source-based infrastructure helped a mid-sized auction house compete with the industry heavyweights. feature By Meridith Levinson f

more » 12

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content

Essential Technology | 56 Data Mining | Treasure Hunt

By Galen Gruman

From the Editor | 4 | Where do you draw the Go Beyond the tactical t line? By Vijay Ramachandran Reading a CIO’s Mind | You have the answers that can shape our content. By Bala Murali Krishna

Inbox | 18

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 CAPItAL BID | 48 Encouraged by the success of an e-Tendering system, the Municipal Corporation of Delhi plans to digitize more of its operations, and install an e-Procurement system. feature By Kunal n. talgeri f t

RuRAL InDIA’s tORCHBEARER | 52 Few have done more to bridge India’s digital divide than Dr Ashok Jhunjhunwala. Today, he is at the forefront of creating an international wireless standard most suited to India as well as setting up ATMs custommade for India’s hinterland. Interview by Kanika Goswami & sunil shah

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2 5

ADVISORY BOARD Ma nagemen t

Publisher & editor N. Bringi Dev

COO Louis D’Mello Ed itoria l Editor-IN-CHIEF Vijay Ramachandran

Executive Editor Bala Murali Krishna

Bureau Head - North Sanjay Gupta

Special Correspondents Balaji Narasimhan Kanika Goswami

Senior Correspondent Gunjan Trivedi

Abnash Singh

Advertiser Index Airtel

16A

Group CIO, Mphasis Alaganandan Balaraman Executive VP (IT & Corporate Development), Godfrey

Akamai

Phillips Alok Kumar

AMD

APC

Global Head-Internal IT, Tata Consultancy Services Anwer Bagdadi Senior VP & CTO, CFC International India Services

Chief COPY EDITOR Kunal N. Talgeri

SENIOR COPY EDITOR Sunil Shah

Arun Gupta Customer Care Associate & CTO, Shopper’s Stop

Avaya

4&5

D esign & P ro ductio n

Creative Director Jayan K Narayanan

Designers Binesh Sreedharan Vikas Kapoor; Anil V.K. Jinan K. Vijayan; Sani Mani

Arvind Tawde VP & CIO, Mahindra & Mahindra

President & CIO — IT Applications, Reliance Industries

Unnikrishnan A.V. Girish A.V. MM Shanith; Anil T PC Anoop; Jithesh C.C. Suresh Nair, Prasanth T.R

Photography Srivatsa Shandilya

Production T.K. Karunakaran

T.K. Jayadeep

Marke ti ng a nd Sa les VP, Intl’ & Special Projects Naveen Chand Singh VP Sales Sudhir Kamath brand Manager Alok Anand Marketing Siddharth Singh Bangalore Mahantesh Godi Santosh Malleswara Ashish Kumar, Kishore Venkat Delhi Nitin Walia; Aveek Bhose; Neeraj Puri; Anandram B; Muneet Pal Singh; Gaurav Mehta Mumbai Parul Singh, Chetan T. Rai, Rishi Kapoor Japan Tomoko Fujikawa USA Larry Arthur; Jo Ben-Atar

Singapore Michael Mullaney UK Shane Hannam

Events General Manager Rupesh Sreedharan Managers Chetan Acharya Pooja Chhabra

Emerson

Dagmar

Ashish K. Chauhan

C. N. Ram Head–IT, HDFC Bank Chinar S. Deshpande

IBM

42 A & B

CIO, Pantaloon Retail Dr. Jai Menon

Interface

Microsoft

2,20 & 21

Director (IT & Innovation) & Group CIO, Bharti Tele-Ventures Manish Choksi Chief-Corporate Strategy & CIO, Asian Paints M.D. Agrawal CM–IT, Refineries, Bharat Petroleum Corporation Limited

SAS

IBC

Rajeev Shirodkar VP-IT, Raymond

Wipro

6&7

Xerox

Rajesh Uppal Chief GM IT & Distribution, Maruti Udyog Prof. R. T. Krishnan Professor, Corporate Strategy, IIM-Bangalore S. Gopalakrishnan President, CEO and Joint MD, Infosys Technologies Prof. S. Sadagopan Director, IIIT-Bangalore S. R. Balasubramnian Group CIO, ISG NovaSoft Satish Das CSO, Cognizant Technology Solutions Sivarama Krishnan

All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher. Address requests for customized reprints to IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. IDG Media Private Limited is an IDG (International Data Group) company.

Printed and Published by N Bringi Dev on behalf of IDG Media Private Limited,

10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. Editor: N. Bringi Dev. Printed at Rajhans Enterprises, No. 134, 4th Main Road, Industrial Town, Rajajinagar, Bangalore 560 044, India

Executive Director, PricewaterhouseCoopers Dr. Sridhar Mitta MD & CTO, e4e S.S. Mathur GM–IT, Centre for Railway Information Systems Sunil Mehta

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

Sr. VP & Area Systems Director (Central Asia), JWT V. V. R. Babu

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reader feedbaCk

Change the Equation CIOs will feel endangered (Threatened Existence, May 1, 2007 2007) as long as they continue to report to finance. They will remain focused on costs and very controloriented. Their outlook now is 'You will get this application and this laptop, but not that one or the desktop', and so on. Why? It’s because their CFO expects them to control costs. CIOs who report to the CEO feel empowered because he sees the business from all angles — not just the finance perspective. My experience very clearly shows that, as long as a CIO is under the aegis of finance, he will slowly but surely start feeling out of place as business grows. A control attitude does not go hand-in-hand with a growth attitude. There are also instances of IT leaders who begin in a hived-off company within the organization, and have the mindset of the business' CEO. As long as the CIO can think and act like a CEO of his own small little business, his career will not be over. But for all this to happen, he needs to be part of the boardroom agenda, maybe by reporting to the CEO. Typically, business managers are getting more tech-savvy these days, so they seem to think they know more than the CIO. But that’s not always true. A CIO has seen vendors, knows their ways of working, and has grappled with the pressures and demands of business that a business manager hasn’t seen yet. So, it will be difficult for such a 18

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person to handle crisis. A CIO, on the other hand, can deal with all this. Yes, in an outsourced environment, it is scary that a CIO can be outsourced as well. But then, I would ask: “How many companies outsource product development? How many outsource R&D by 100 percent?” Not many. So, I still believe that business wants at least one person to head IT operations who uponn whom they can train their guns, when in trouble.

as long as a CIO is under the aegis of a finance person, he will slowly but surely start feeling out of place as the organization and its business grows.

Tamal ChakravorTy CIO, Ericsson India

The late knights I have come across many CIOs at seminars in Delhi as also from other parts of the country who talk about late nights at the workplace ((Are You Working Tonight, May 15, 2007 2007). I often wonder whether they say it out of pride to emphasize their importance in the organization concerned, or to assert that they are busier than their peers, or if they are genuinely sharing a concern. The traditional role did incorporate this problem: of limited processing capability, which forced CIOs to carry out data processing, report printing, etcetera, into the night. However, the situation is very different today. I have never believed in sitting late, and neither have I asked my colleagues to practice this habit. If we plan our work well, most of the tasks can get done in our regular working hours. Occasional What Do You Think? We welcome your feedback on our articles, apart from your thoughts and suggestions. Write in to editor@cio.in. Letters may be edited for length or clarity.

editor@c o.in

pressures do get us into office at odd hours, but that is a necessity of the situation — to meet a deadline, or occasionally the trait of assuming responsibility or keeping our word to complete a task at hand. CIO is one of the functional heads in an organization and I do not see why he should feel discriminated. True, organizations today are dependent on technology, and we find people more demanding than before. But there are methods to take care of these issues, such as outsourcing. A CIO’s task is to set up a support organization and ensure that it works — it is rather disappointing to see some CIOs entertaining calls from users reporting one breakdown or the other. Shouldn’t he set up a helpdesk instead? It is time that CIOs move away from daily operational work, concentrate on larger organizational issues and work on strategies. Involvement in day-to-day operations may make him visible, but his utility to the organization gets severely limited. Feelings of burnout are illusionary. As is often said, ‘problems’ are God’s gift to humanity. They give us an opportunity to solve and win over them; ‘stress’ on the other hand is self-inflicted. S.r. BalaSuBramanian Executive VP, ISG Novasoft

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new

hot

unexpected

Bangalore is bursting at its seams. Figures in the media suggest that 550,000 vehicles have been added in the past year and vehiclecapacity ratio stands at greater than two, which means that roads in Bangalore hold more than twice the numbers of vehicles than they were desgined for. In 2005, Bangalore Traffic Police put the handheld Simputer in the hands of sub-inspectors and inspectors, hoping to punish errant drivers and ease traffic flow. These helped the cops identify new and repeat offenders, and issue challans challans, bringing in Rs 13 crore in revenue during the first eight months of 2006. However, the Simputers lacked real-time access to databases. To remedy this problem, the traffic police force is now introducing 250 Blackberry phones, each between Rs 8,000 and Rs 10, 000. “We expect this new system to help substantially in curbing the traffic offences in the city,” says M.A.

e-GOvernment

Saleem, DCP-traffic (east division), Bangalore. “This will initially cover three to four basic offences like wrong parking, no helmet, and jumping red lights. Over a period of time, it will cover more offences.” The aim of the exercise is not merely to increase revenue. “Our main contention is that with access to a database that is being updated constantly, we have a better chance of catching repeat offenders, expounding licenses, and in case of many repeats, even impounding vehicles,” explains Saleem. The Blackberry-weilding cops are being trained by Thematics, the software provider that helped develop the Automation Enforcement Center. “We have to see how this works, then maybe increase the range or the scope,” Saleem says. From paper challans to Blackberrys, the traffic police in Bangalore is using the city’s IT savvy to restore saner traffic and its credibility. Encore’s Simputers, distributed to the traffic police by the Confederation of Indian Industry, will now be used at the police stations to access information. — By Kanika Goswami

IllustratIon by unn IkrIshnan aV

Men withh Black

The R.O.I. Of AccelerAtion Web O p t i m i z a t i O n you would expect akamai technologies president and CEo Paul sagan to throw up figures that show how much speed his technology can bring to your website. but sagan prefers to talk about the real roI that his technology brings to the table — something the CIo can use while discussing site optimization with his board of directors. “I always invite companies to look at their market share both before and after using our technology, so that they can see for themselves what value we are providing,” he says. this method seems to have worked with the 2,300 customers of akamai, 18 of which are based in India. “thanks to akamai’s technology, friendster.com saw its market share

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triple and ebay saw its sales zooming by 15 percent,” he points out. one of akamai’s Indian customers is rediff.com, whose Cto Venki nishtala says: “akamai’s solutions have stood us in good stead, especially during the World Cup, where traffic surges from several hundred megabits to gigabits.” site optimization, sagan explains, falls under two broad categories: sites that are seeking more revenues and sites that want to change processes in order to reduce costs. With e-commerce sites, he says, speed is crucial. “Four to five years ago, people were willing to wait for seven seconds for a page to download. today, this figure is down to four seconds.” What this means for the CIo is this: if an e-commerce site takes over four seconds

to load, then the user is likely to lose patience and go to a competitor’s site to do business — a powerful argument while asking the board of directors for more powerful web servers. sagan also has some interesting tips for CIos. “no CIo can optimize the net on his own, so he shouldn’t even try,” he says. he also feels that CIos should never discuss with the board of directors things that are not of interest to them. “the board of directors is not interested in the number of lines of code it took to write a solution — they want to know about how the solution has improved profitability,” he says.

— by balaji narasimhan REAL CIO WORLD | j u n e 1 , 2 0 0 7

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a p p l i c a t i O n s Web analytics tools, traditionally stand-alone products used to measure website hits, are increasingly being integrated with other key tools to become the ‘brains’ behind enterprise marketing efforts, according to a report released recently. Phil Kemelor, an analyst at CMS Watch, a consulting firm that evaluates content management technologies, says the company’s survey found that many large companies are integrating Web analytics tools into applications like e-mail campaign software and keyword bid-management tools in the hope of using them to plan, run and adjust Internet marketing activities. However, the Web Analytics Report also concluded that many workers involved in such efforts lack the expertise and training to use the tools effectively, he says. The report is based on CMS interviews with customers of 13 Web analytics suppliers and tests of the tools they make, he adds. “Companies know that they have to constantly measure their campaigns,” he notes. “Some of the more interesting or more sophisticated use of analytics are actually having analytics fuel business rule-driven marketing,” he adds. For example, some companies are using Web analytics tools to import results into an e-mail campaign application that will kick off the next campaign automatically using rules based on results from the first campaign, says Kemelor. But the report found that many companies are unable to take full advantage of tools they are buying. “There are certain tools that are probably not used to their full potential because the customers don’t have the right resources or their people aren’t savvy enough to really use the tools. It is almost like buying a Ferrari and driving it like a Honda Civic,” he says. To avoid such pitfalls, Kemelor suggests that companies decide which users will access Web analytics tools and then work with those users to come up with their specific needs. Then, he says, a company can ensure that it buys the right tool for its needs. He also found that for several of the products he tested, users have to buy multiple different modules of the software to get it to work like it does when a vendor demonstrates it to potential customers. Finally, Kemelor says, companies must closely evaluate the tools — like e-mail marketing applications — they hope to integrate with.

—By Heather Havenstein 22

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to Love Lean I.T. When Pat Quinn became VP of Is & technology at acuity brands lighting two years ago, his team gave him a gift: a clock, set to count down a period of 18 months — the longest any of his predecessors had lasted. the lighting division had gone through five It t leaders in as many years before Quinn. Quinn now views the gag gift as a trophy. and he credits his longevity to It’s embrace of lean manufacturing principles. In 2004, acuity brands got a new CEo and a new mandate: get lean. the CEo sought the benefits some manufacturers had gleaned from embracing lean principles — business performance improvement tools introduced by henry Ford and perfected by t toyota, designed to improve quality, cost and delivery in manufacturing operations. Quinn was charged with providing systems to enable manufacturing changes. but as he learned more about lean tools and techniques for cutting waste and enabling continuous improvement, he saw that It t could benefit from them as well. “Eliminating waste doesn’t just apply to scrap metal. It can mean eliminating the waste of intellectual property or human resources or anything else,” he says. the It t team was skeptical. “they could see how lean was valuable for everybody else, for manufacturing or finance or anyone they viewed as transactional,” says Quinn. “but It t saw itself as creative and worried that lean would suppress that creativity.” Quinn understood. “We’re not creating widgets,” he told his employees. “but when you create, for example, a software product, there’s still tremendous waste. and creating a process framework doesn’t have to depress creativity.” It conducted intensive five-day events aimed at bursts of business process improvement . the It t team of 150 began to see potential efficiency and quality improvements in areas from software development to network management. results have ranged from finally weaning the company off IbM mainframes in use for 20 years to transitioning corporate headquarters (and 175 call center agents and 25 apps) to VoIP in less than two months. today, the continuous improvement piece requires heavy training t and more involvement by Quinn than he anticipated. “two two years in, t we’re at a pretty good point in the journey,” he says. “there’s no way we’re there yet. but if you ask someone from t toyota, where they’re 40 years into the journey, I don’t think they see an end in sight either.” i.t. manaGement

Illust ratIon by an Il t

as Marketing Tool

trendlines

Web Analytics

Learning

—by stephanie overby Vol/2 | I ssuE/14

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trendlines

Why Small Loans Need Big i.T. Fly off the handle when you lose reception on a mobile device? Get angry when your e-mail server hums a little too slowly? Well, try laying out an It infrastructure when your primary clients live in some of the world’s most remote villages. Jiten Patel, CIo of non-profit Finca (Foundation for International Community assistance), faces just this challenge. Finca gives small loans — usually rs. 3,600 to rs. 9,000— to the “poorest of the poor” to start micro businesses. the businesses usually center around village marketplaces and sell baked goods, fresh produce or crafts. With 500,000 members, Finca operates in 21 countries spanning latin america, africa and Eurasia. Women make up between 85 percent and 90 percent of its loan recipients. When Patel joined Finca about a year ago, a local administrator was individually managing It within each member country. a 15-year-old legacy system was failing to reliably handle the weekly transactions. “It was struggling with the kind of volume we’ve been receiving,” Patel says. also, rural i.t.

when a local server crashed, it was difficult to get an It repair person onsite. after traveling extensively, looking for ways to streamline, Patel decided to base It operations in three central locations. Working with a soon-to-be-announced vendor, Finca will set up a system in which customers will upload data from village branches to the three hubs. Patel’s first inclination was to set up a Web-based solution for uploads. With a lack of telecom and computers in those remote areas, however, he is now thinking smart cards might be better. “Given the vagaries of the environment, we need to have an offline mode,” Patel says. he is also considering using an asP to further streamline operations. “When you operate in a non-profit environment, you have to be extra mindful of every dollar spent. In our case, that dollar can be utilized in making a micro loan to a customer,” Patel says.

—by C.G. lynch l

security Remember when thumb sucking was considered an innocent activity, except that you might need braces? Today, you need a lot more than a mouthful of metal to protect from thumb sucking. Thumb sucking is one of the latest in a new genre of IT terminology: wacky security threat terms. Security vendors and others are relying on double entendres for this new collection of buzz words that succinctly refer to the latest threats, with the hope that creating memorable tags will raise awareness. Most of these terms refer to practices that involve misuse — such as taking an innocent thumb drive and turning it into an instrument of crime by using it to steal data. Hackers too have a number of terms to describe how they pass their time, an exhaustive list of which can be found at www. ccil.org/jargon/jargon_toc.html While thumb sucking is one of the most recent terms to emerge, it may not be the

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wackiest of all — below are some of the more popular phrases that we have compiled into the Dictionary of Wacky Security Threat Terms, First Edition. This edition does not claim to be complete, and we invite wacky terms not listed here. phreaking (pronounced freeking): freeking): According to the New Hacker’s Dictionary, this is the 'art and science of cracking the phone network' or breaking the security of any communications network. pharming (pronounced farming farming): A related term that describes the act of redirecting visitors from the Web site they intended to visit to a bogus one. Slurping or pod Slurping: Using a detachable device (usually an iPod) to steal corporate data, much like thumb sucking. Snarfing or Bluesnarfing: Using a Bluetooth connection to steal data from a wireless device. Not to be confused with Bluejacking, the relatively innocent pastime

of embedding a greeting into Bluetooth phonebook contact that pops up on the contact’s phone. Spamdexing: The practice of creating Web pages simply to increase page rankings in search engines by, for example, stuffing them full of keywords. A similar phenomena are splogs, blogs that exist only to point readers to Web sites. While neither of these practices pose security threats yet, they annoy and confuse Web site and blog visitors. —By Cara Garretson REAL CIO WORLD | j u n e 1 , 2 0 0 7

Il lustrat Io n by MM shanIt h

thumb humb Sucking, Sucking, Slurping, Snarfing...

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to Smart

OutbOund COntent ManageMent Strategy

summary stats on the prevalence of server virtualization implementations.

how tall do you stand in your virtualization efforts? are you leading or trailing the other fish with your server virtualization plans? t take a look at this snapshot of your peers’ deployment and management progress: v i rt ua l i z at i O n

No one should treat outbound content management as a panacea. “But it is a good first-line defense,” says Richi Jennings, lead analyst for e-mail security at Ferris Research. Where do these tools fit into your overall security strategy? A comprehensive plan includes these five steps:

s t r at e G y

IdentIfy confidential information, whether confidential for legal compliance reasons or because it involves company trade secrets.

educate employees about desired behaviors regarding sensitive data. This involves creating policies, communicating them and reinforcing them. Lock down information when possible. Encryption is an important aspect of security for data at rest, says Bowers. Blocking potential physical exits for data — from locking down USB ports to blocking file-transfer ports on the network — also reduces risk. uSe outbound content management as a supplement. It provides a potential safety net if other steps aren’t sufficient, says Jennings. —By Galen Gruman

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72% of us companies today 67%

with 10,000-plus employees use server virtualization

72%

Manage access to sensitive information, reducing the pool of users to those who need it and can be trusted to guard it, says Jennings. This requires knowing what information you have, what protection it merits and who should have access to it — something many large companies do not have a good handle on because they have so many offices and data stores, notes Security Constructs consultant Tom Bowers.

67% of companies with 1,000 to 9,999 employees also do

50%

of today’s virtual servers support production workloads (everyday business apps and core It infrastructure)

15% of enterprise It groups

are creating a ‘virtual computing team’ to manage this effort

source: IDC

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StepS

Virtualization height Chart

M. Eric Johnson

Think Tank

Put People Before Process To reap the benefits of globalization, companies must adapt their business processes — and systems — to the needs of local employees and customers.

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Il lusTraT Io n by bIn esh sreedharan

lobalization beckons with the promise of leveraging the world’s workforce while capturing global markets. Yet, realizing the value of global product development, manufacturing, sales and service is fraught with challenges that few companies have mastered. Nevertheless, the rewards are potentially huge if processes and technology can be transformed to exploit global capabilities. Matching capabilities with the highest-value location provides productivity rewards, while reaching global customers offers new fuel for growth. However, broken processes torture many global initiatives, creating complexity and requiring expensive human coordination. Consultants and vendors argue that standardizing business processes to eliminate that human glue is the solution. But it’s difficult to transform processes without destroying the advantages that global partnerships provide. Many companies acquire local partners to expedite entry into an emerging market only to find that assimilating them into the home office’s sales process strips the local partner of its cultural advantage. Process transformation often results in rigid systems that leave both team members and customers feeling numb rather than empowered. Finding the balance between process standardization and people empowerment is the trick. While process transformation has been simmering in many companies for a decade, globalization has foiled best practices that work within the United States. Bringing East and West Coast design centers into a common development process is one thing. Adding Shanghai is another. Companies must adapt their processes quickly or be trampled by competitors who are more savvy globally.

M. Eric Johnson

Think Tank

Why Global Collaboration Fails The human element kills many transformation efforts. Transformation projects that attempt to roll up the work of global teams into standard processes may miss the unique requirements of different regions and ignore the trust people require to collaborate effectively. While the rise of outsourcing has led some to argue that any work can be anonymously interchanged, human beings drive global teams to solve problems and find success where others fail. For example, at Align Technology, which provides plastic aligners used to straighten teeth, the human element became critical to process transformation when existing practices could not accommodate the company’s growth. Align had a distributed manufacturing process involving dental technicians and orthodontists in Costa Rica — who developed treatment plans for the patients of doctors in the United States — along with manufacturing facilities in Mexico. The ability to ship images of a patient’s mouth between locations allowed Align to mass-customize treatments using highly skilled yet lower-cost labor. Align knew that a tool for sharing patient information and a simple customer-facing process would be a prerequisite to nurturing collaboration with doctors. So, the company developed software that allowed doctors to visualize treatment plans and share them with patients while collaborating with design technicians and manufacturers. But as Align grew, this process strained the company’s ability to provide consistent treatment plans and reliable product delivery. The Costa Rican technicians cherry-picked the easier jobs, causing delays for more difficult treatment designs. In addition, without one-to-one matching between doctors and technicians, the doctors did not build a rapport with a single design collaborator. As the number of cases submitted increased, each doctor spent more time with a new technician communicating his or her design preferences. As an interim remedy, Align assigned process monitors and expediters to keep patient data moving and improve service. But this was a costly fix, and it ultimately failed because the increasing workload outstripped the expediters’ ability to prevent process failures. The resulting frictions undermined the doctors’ trust in the process, turning them to Align’s competitors and causing Align’s growth to slow down.

technicians with specific doctors. With improved consistency and reliability in the production process and one-to-one rapport with technicians, the doctors gained trust in the process, making them more willing to partner with Align. Similarly, BAE Systems Regional Aircraft found that effective global processes must maximize contributions from all participants. The U.K.-based company provides postsale support for regional airlines (including Emerald Airlines, Swiss and Air Wisconsin) operating more than 1,100 aircraft around the globe. Among its activities, BAE Systems develops maintenance procedures for each plane model. These procedures evolve as experience with each aircraft accumulates.

Projects that attempt to roll up the work of global teams into standard processes may miss the unique requirements of different regions. Updating the procedures was labor-intensive, typically involving long meetings at BAE Systems headquarters in Scotland, where company representatives, aircraft operators, and regulators gathered to discuss and approve changes. The process was often bogged down by small issues, each of which required discussion. As a consequence, fewer new maintenance procedures were approved, making the planes more expensive to operate. To enhance the productivity of these meetings, BAE Systems introduced collaborative software into its review process. The software allows discussion of proposed maintenance changes online as a stream of individual items, rather than discussing a large group of items at once. In this way, the group achieves wider participation from the far-flung operators while reducing the time involved. The group still meets face-to-face but uses the meetings to debate the more complicated changes. BAE Systems is better able to capture the customer voice, improving safety and reducing the total cost of ownership for its airplanes. The lesson is that process transformation must enable — not automate — collaboration. The companies that master this challenge will reap the rewards of globalization. CIO

Support People, Not Process To remedy these problems, Align invested in a process execution system to ensure consistency and move cases swiftly. The transformation reduced cycle times and achieved near-perfect shipment reliability. But more important, the company also used the system to enable closer relationships between doctors and technicians by automatically matching 26

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M. Eric Johnson is director of the Center for Digital Strategies at Dartmouth College’s Tuck School of Business. Send feedback on this column to editor@cio.in

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Martha Heller

CAREER COUNSEL

A Matter of Scale You are a successful mid-market CIO who is ready to apply your IT leadership talents on a larger stage. But before you start sending your résumé to the Fortune 10, you may want to ask yourself a critical question: how scalable are my skills?

s anyone who has implemented enterprise systems can tell you, if you ignore the scalability factor, your system won’t last three years. Given that you probably want your next CIO role to last at least that long, it is helpful to understand what you need to think about before moving to a larger organization. To get that perspective, I spoke with CIOs who have taken this path and made a successful transition. They offer this advice: Prepare for the size question. Before you worry about succeeding at a larger company, you should focus first on making it past the hiring committee, many of whose members may be concerned about your ability to scale. In November 2006, Todd Thompson left his role as CIO of Rs 7,650-crore airline JetBlue to assume the same job at Starwood Hotels & Resorts Worldwide, the Rs 27,000 crore hospitality company. As he expected, the interview team focused on his ability to succeed in a larger organization. “My answer was that at JetBlue, where I grew a team of 70 to 200, I proved that I could scale very effectively,” he says. “I also made the point that there are some complexities in an airline environment that make a Rs 7,650-crore company feel a lot bigger from an IT perspective.” CIO Jonathan Manis moved from Provena Health, an organization of six hospitals and 16 long-term care facilities, to Sutter Health, which, with 26 hospitals, is one of the nation’s largest non-profit healthcare systems. Like Thompson, he also fielded questions about scale. “I knew that if they didn’t ask it they were thinking it, so I decided to address the issue head-on,” he says. “I talked about my military experience in terms of geographical dispersion

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Martha Heller

CAREER COUNSEL

and span of control and related it to the Sutter role. They’re thinking, ‘How does this guy go from Rs 4,500 to Rs 31,500 crore'? I wanted to get it out on the table and out of the way.” The takeaway: focus on points of relevance between your experience and the new role. Show how much more important these points are than sheer numbers. Sharpen your influencing skills. In April 2006, Eric Goldfarb left his position as CIO of PRG-Schultz International, a Rs 1,350 crore crore financial services firm, for the CIO role at BearingPoint, which has Rs 15,300 crore in annual revenue. Since BearingPoint is not the first large company Goldfarb has worked for, he has learned to observe differences in culture and management style and shift his focus accordingly. A major part of the CIO’s job in any company is to be aware of the technologies available in the market and to use them to improve efficiency or profitability. “In a smaller company, you walk in, talk to the owner, and get approval for a technology investment,” says Goldfarb. “In a large company, where the magnitude of risk for every IT decision is much greater, you can no longer rely on a handshake to get project approval.” To win approval in such a setting, you may have to get support from your colleagues in sales and finance and even get a nod from a board member or two. That’s easier to do when you’ve taken the time to build strong relationships with key stakeholders and decision-makers. “When you sit down with your CEO, the first thing he will ask will be who you talked to about the project,” says Goldfarb. “You want to have a good answer. Or, better yet, have the CMO walk in as well and echo what you say.” The takeaway: in a smaller company, your relationship with your boss is the key to gaining approval of a big IT decision; in a larger company, you rely on your circle of influence. Shorten your horizons. “It seems almost contradictory,” says Goldfarb, “but larger, public companies tend to have a shorter-term planning horizon than smaller, privately owned companies.” With shareholders hanging on every earnings report, he says, “the executive team spends more time on month-to-month, quarter-to-quarter planning” than on longrange goals. Your strategic planning efforts can no longer rely on ROI that is three years out; you will need to build shorterterm savings into your plans. The takeaway: shifting your focus from the forest to the trees can be a major adjustment and one worth anticipating before you start the job. Adapt to a new management style. In many smaller companies, the original owners are still running the show, often with the siblings, cousins and friends who have been there since the early days. In a larger company, most members of the executive team gained their experience elsewhere. “You might have a CMO who got her MBA and then worked her way up the food chain at a few different major companies,” says Goldfarb.

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In a smaller company, your relationship with your boss is the key to gaining approval of a big IT decision; in a larger company, you rely on your circle of influence. The takeaway: if you are accustomed to working with executives who grew up inside the company, you need to learn to function in a more formal management structure. Upgrade your communication abilities. It is hard enough to establish clear and consistent communication in a company of 9,000 people, the size of JetBlue. When you move to a company of 145,000 people, as Thompson did when he went to Starwood, the challenge is enormous. “At JetBlue, we were geographically centralized. I could walk around the floor and talk to people to learn what’s going on,” says Thompson. “Here, we are international and spread out. I have to communicate more formally and think a little harder about how to get the word out to all of those people.” Sutter Health’s Manis moved from an organization that had around 12,000 employees to one that has 43,000 with hospitals that range widely in geography, size and culture. He managed 200 IT employees at Provena; at Sutter he manages 550. “The diversity of the organization is a challenge,” he says. “Our hospitals are spread out through Northern California, and they range dramatically in size. When I am addressing the entire organization on physician order entry, I need to reference the small hospital up north as often as I do the progressive physicians in downtown San Francisco.” The takeaway: understand your many constituencies and tailor your message and its delivery in order to develop effective and consistent communication with all of them. One point all three CIOs agree on is the need to be patient. Your natural desire when walking into a new job will be to establish change and credibility right away. Manis suggests you resist that inclination. “In a smaller company you can step in, assess the situation and take action pretty quickly,” he says. “But in a larger company, you want to take your time and evaluate what you’re stepping into. Don’t expect to come in and be a miracle worker.” CIO

Martha Heller is managing director of the IT Leadership Practice at ZRG, an executive recruiting firm based in Boston. Send feedback on this column to editor@cio.in

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The ArT A r of rT o

Influen c BY BALAJI NARASIMHAN

never get anything done. Without it, you'll

Five CIOs

share their tried-and-tested techniques of exerting

influence with management and colleagues

to ensure that the

growth

of IT is

in the best interests of the enterprise.

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n ce

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hanakya’s Arthashastra talks about four ways of dealing with people: saama (by cooperating with them), daama (by buying them off), bheda (by instigating differences) and danda (by cracking down on them). every CIo has his own style of functioning, and this determines the way he exerts his influence on the management, his peers and the end-users. In the following pages, five CIos share with us the methods they employ in order to accomplish their goals. Clearly, their styles are vary. Probir Mitra, Tata Motors’ senior general manager for IT, believes that a CIo should offer the management a very strong business gain. on the other hand, reliance Communications’ Sumit Chowdhury says he pre-sells his ideas to business teams before presenting them to decision-makers. Some people have more issues persuading end-users, as opposed to the management. Consequently, Bharat Aluminium’s Subrata Banerjee does rigorous studies on end-user perspectives before implementing any new technology. Manish Choksi, chief of corporate strategy and CIo of Asian Paints, believes in solid reason and logic, and says one must be very, very successful with the first project. If you achieve that, you become a trusted service provider to the user community, he asserts. finally, there is Anjan Bose, who believes one needs to get tough at times in f order to succeed. Bose, CIo of haldia Petrochemicals, says he tries to convince people but at times he simple has to conquer them. Many CIos keen on getting heard by the board Reader ROI: might wish to remember the words of former U.S. Vice Situations in which President hubert humphrey, who pointed out that CIOs must influence the right to be heard does not automatically include colleagues the right to be taken seriously. In other words, you Strategies for persuasion are taken seriously only when you are influential.

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Cover Story | Integration

all their skills to influence CIOs should summon

management.â&#x20AC;?

â&#x20AC;&#x201D; Manish Choksi,

Chief-corporate strategy & CIO, Asian Paints

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Win Early Credibility

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implementations. “But it is your own skills that you have to use to influence the organization,” he points out. Choksi’s clinching argument was this: If both ERP and SCM were deployed simultaneously, the organization could become more responsive. Looking back, he says, “If you were to look at the success of both these implementations, you will see that it reflects on our balance sheets. We went from having debts to having no debts at all.” In fact, Choksi thinks Asian Paints has been able to pay for its international acquisitions because of the growth spurt provided by the synchronized implementation of the SCM and the ERP systems. The biggest advantage of this successful implementation was that both the management and the end-users developed a great deal of confidence in the IT group. The IT team enabled Asian Paints to grow bigger and this pleased the management, while the end-users felt they could raise their performance. This initial success, says Choksi, helped the IT team gain a lot of influence with the company’s decisionmakers. “Whatever you take on first, if that is very, very successful, and delivers good benefits, then you have established yourself as a trusted service provider to the user community,” he points out. When that happens, he feels, you are not just brought in to implement IT — you are there at the conceptualization stage itself. But the pace of IT progress has to be sustained if influence is to be maintained, believes Choksi. In the case of Asian Paints Home Solutions, he points out, everything was run on an IT platform from the first day itself. Thanks to the credibility and the influence that the IT team had developed within the company, “users were confident that, without the IT platform being available to them, they would not be able to scale that far,” he says. Choksi also points out that his team was involved in the conceptualization of the project from the very beginning.

P hotos by Sr ivatsa Shandilya

anish Choksi, chief of corporate strategy and CIO at Asian Paints, says his company is more working capital intensive as opposed to being asset intensive. A decade ago, when Asian Paints decided to improve the working capital efficiency, it examined options such as borrowings or dilution of directors’ holdings. Since these were considered inappropriate, it decided to embark on a third alternative: improving the operations-related efficiencies. “When you try to look at improving operational efficiency in a working capital-intensive company, clearly, the area of supply chain management comes first,” he says. One has to look at how IT fits in with the strategy of the company, and should not include technology for the sake of technology, Choksi adds. Typically, IT problems tend to arise even when a lot of planning goes into a project. “Around 1999, we were trying to put together an SCM system, and we didn’t feel that we would need an ERP,” he recalls. But when the need for ERP was felt, the IT group had to exert a significant amount of influence with the management in order to convince the top bosses that Asian Paints should deploy both ERP and SCM at the same time. The process was made difficult because the combination of ERP and SCM came from two different vendors—the ERP was from SAP and the SCM was from i2. These were Asian Paints’ first investments in packaged solutions, and the management was naturally skeptical about the ability of the IT group to implement two different packages from two different vendors, and integrate them into a seamless system. The management had a variety of questions for the IT team. Would it fit into the environment? How much customization was required? How long would the implementation take? To convince them, Choksi used data from various sources—for example, from the vendors themselves and additional data about other

Imaging by an il t

What you do first, and how you do it, determines the influence you will command with the management team.

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Cover Story | Leadership

Pre-selling An Ide d A de

there is much you can do before the management meets to vote on your projects. y you can win the approval of business groups.

Propose a technology project and

the business case, with an ROI model, to convince people.” — Sumit Chowdhury, CIO, Reliance Communications

hen reliance Communications' CIo Sumit Chowdhury and his team embarked on a large project that involved self-service in telecom, he faced a variety of issues. for one, selfservice in telecom is not very prevalent across the world, and his company didn’t have any ready module. So, he needed a plan to sell the idea to the management. “In India, the take-up rate of selfservice has been very low in many sectors,” he notes. But this didn’t deter Chowdhury. “We took a chance and put a business case together,” he recalls. The vision was large and included all the customers, dealers, employees and partners. once the project was completed, all these stakeholders could use the self-service portal. It was not just for reliance Communications—it would be available to the entire AdA Group, allowing people to pay electricity and telecom bills, or even buy insurance. The impact would be huge because the group would get a unified view of the customer as opposed to a stand-alone view relevant to one group company only. But, to get the project off the ground, Chowdhury had to convince a lot of people in several departments. Various issues, ranging from the choice of technology to setting the requirements, were involved. There was also the big

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question of communicating with the business groups—an area where Chowdhury was able to exert his influence. “My background is in consulting, and I have done a lot of work in selling solutions to a lot of telecom clients,” he says. “So, I used my consultant selling approaches to propose a solution and the business case, along with an ROI model to convince people about what would happen if they were to go ahead with the technology that I had proposed.” Chowdhury also talked about how the day-to-day processes would change, and focused on the expected efficiency gains. Summing up, he says: “Rather than making it a technology sell, I converted it into a business sell because my background is in helping the business.” A key thing Chowdhury did was pre-sell the idea to the business teams before the executive meetings happened. Therefore, when the executive meeting took place, the business groups were all supportive of his ideas. “You have to pre-sell the idea, and not try and sell it in the meeting in which the decision is taken,” he avers, citing past successes. This is important because you have to gain the mindshare of the decision-makers much before the sale is actually made, says Chowdhury. While pre-selling an idea helps, it is not all. Chowdhury encountered a situation, in which many people wanted to have mini portals, and were not keen on the idea of a unified self-service portal. “Everyone wanted their own little space and wanted to go ahead and give the work to one small little vendor, who was going to build a small little self-service portal, instead of looking at it from across the enterprise,” he says. So, Chowdhury had to convince them about the advantage of having a common view of the customer, and the clarity it would bring to the group. While he managed to convince the business groups that the unified model was the best, some were still skeptical about the scope and size of the project, and how it would be deployed. There were also fears that if a unified self-service portal was created, their position would be diminished. “So, I had to put a solution in place in such a manner that they would not lose power,” he says. He did this by creating a delivery and deployment architecture that enabled people to get the feeling that though they were part of a larger framework, they still had their own little space. What are the lessons Chowdhury has learned from this project and others on how he can influence decisions? Firstly, he says, you need to win the respect of the business groups, and this is only possible when you learn to talk their language. Secondly, you have to quantify gains in a realistic manner, he says. “If the ROI has to take 12 months, then let it be 12 months. Why do you have to say that it is three months?”

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The Influence

Continuum Your work isn’t done even after people agree to your ideas.

n his book, Managing the Dynamics of Change, Jerry Jellison, a social psychologist and professor at the University of Southern California, outlines a five-step process for executives to use their influence to improve the chances of change. He calls the process the “J curve”, which describes how strategic change affects productivity: lowering it at first, then later raising it. Following are the stops along the J curve and Jellison’s advice for what CIOs can do to influence the outcome of any project. The plateau. Colleagues are comfortable with existing systems and processes, and resist new ideas. Method of influence: Inform business leaders and the CEO that change will temporarily decrease productivity and morale, but both will improve over time. Identify the smallest barriers to change and remove them. The cliff. A new system or process has been deployed. Users are making mistakes, and new processes are not fully understood. Staff and business leaders are highly resistant, and fear of failure is common. Method of influence: Walk users through new procedures in minute detail. Communicate that mistakes are expected. The valley. Users are beginning to learn from mistakes. Although these users are becoming familiar with new processes, it’s hard for business leaders to see the improvements yet. Method of influence: Point out small successes. Acknowledge criticism, and follow up with suggestions for improvement. The ascent. Employees begin to praise the system, and productivity nears predeployment levels. Method of influence: Reinforce reasons why the system was put into place, and publicize progress. The mountaintop. Employees become proficient with new processes, and productivity surpasses past levels. Method of influence: Don’t gloat. Encourage colleagues to think strategically about how processes can be improved even more. Use your success to influence future change. — Allan Holmes

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Put

People First Technology can sometimes be dehumanising. CIOs would do well to remember that it is people who use it. ubrata Banerjee, CIO of Bharat Aluminium (Balco), says there are two kinds of people in his organization — “youngsters who are very tech-savvy, and the older generation who don’t want to change.” He has used two distinct management styles to win over the two groups. “I have faced a lot of resistance to change from the older people. They are always asking: what is there in this for me?” he says. Banerjee responded by making a thorough study on end-user perspectives. On several occasions, he has had to prove to end-users that the IT plans he has implemented are for their own good. One case he remembers well is when he had to put an IP-enabled closed-circuit television monitoring system in the plant. This was a case when the resistance to change came from end-users. “The management had approved the plan—in my company, when you prove your credentials, the management gives you money very fast,” he says. Banerjee just has to prove the business case and the payback to the management before getting this go-ahead. When he tried to use the CCTV, people were worried they would be monitored. Banerjee then had to take pains to convince them that this was not the case. “There was huge resistance even from the middle management,” he recalls. So, what did he do? “I implemented the CCTV in prototype mode, made some recordings, and then I demonstrated that it would be used to monitor processes and not people,” he says. As an example, he cites this—if he has to delegate a task to an expert engineer but replace the person at a later date, the CCTV coverage can be used to coach a newcomer. In this way, Banerjee demonstrated how the CCTV footage could be used as a teaching aid. But an important deliverable for Banerjee was a system to monitor employees. “In summer, people normally try

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j u n e 1 , 2 0 0 7 | REAL CIO WORLD

and avoid our furnace areas, and my monitoring system also enables us to determine if people are tending to the furnaces properly,” he points out. There was also a security angle to the CCTV system, which enabled Banerjee to persuade end-users about the need for the project. “In a plant, there is always some danger of falling parts, and thanks to the CCTV system, we can monitor this and ensure greater security for people working in the plant,” he reasons. Asked what is important while trying to influence matters, Banerjee says that communication is most important—if the end-user knows what the IT system is going to do for him, then resistance to change is lowered. There are issues even when IT is seen to be doing too much. If you talk about production or inventory management and improvement through IT, then the relevant managers don’t approve because they feel that IT is taking the credit away from them, says Banerjee. When they begin to feel that management perceives that the software and not the people are doing the work, they refuse to use the system. Banerjee cites an inventory management system he introduced. Balco used to store huge inventories, causing waste and loss. He modernised the system. Now, no stock is held for a period greater than 90 days. While this was appreciated by the senior management, Banerjee faced problems lower down the line. “You can’t go and say that inventory management has been streamlined by the ERP system,” he points out, because this can make some people feel bad. Therefore, Banerjee pushes the idea that it is the people—and not the software—who ensure greater efficiency. This is another way in which he drives influence— by stressing on the importance of people. “Otherwise,” he feels, “people will not use the system.”

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end-users, especially the

older ones, need a lot of persuasion when it comes to accepting

new technologies.â&#x20AC;?

â&#x20AC;&#x201D; Subrata Banerjee, CIo, bharat aluminium

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Cover Story | Leadership

Keep pAT Going AT IT Perseverance is key, no matter how big you are. If at first you don’t succeed, try and try again.

at times, you have to conquer people.”

I try to convince people, but

— Anjan Bose, CIO, Haldia Petrochemicals

aldia Petrochemicals CIo Anjan Bose says his company is destructured, and once it has “a strategy in place, individual process owners…are given a lot of autonomy.” This seems to work for haldia, which has revenues of rs 9,000 crore and a workforce of less than 900. haldia is so IT-enabled that it has become a core component of business strategy. Bose’s company has an IT infrastructure that spans real-time databases, transactional data, and decision-making tools. one thing that differentiates haldia Petrochemicals, says Bose, is that while most companies use their warehouse merely as a storage location, haldia uses it as a tool that enables it to sell items at the most opportune moment—and IT plays a key role here. for this, he says, a major recent initiative aims to make the plant work on auto-pilot. “We are still far from this, but this is the direction in which we are moving,” he says. one big advantage Bose enjoys over many other CIos is his added position as the head of hr. “Very few people like to confront the CIo and the head of hr,” he avers. Bose says he can catch people during their “weaker periods, during the appraisals,” and influence them to push his IT agenda. But he doesn’t do it in high-handed fashion. “I try to convince

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people, but at times, you have to conquer people,” he says pragmatically. While he enjoys unusual influence, Bose admits challenges in pushing IT projects and says he needs to find new ways and means to push them when investments get struck down. Bose gives the example of a project involving a linear programming tool. “When we said that this is costsaving, people didn’t believe us, and so pushing the idea took time, and went on for around six to nine months,” he recalls. But he persevered in the hope of convincing the head of marketing about the savings. Bose says convincing people in this case took a lot more time because the linear programming tool was very complex. “These tools are normally not acknowledged in the IT industry,” he rues. So, how did he get buy-in? “We have a method called the ‘keep going at it’ method,” he says. “If you fail the first time, you go the second time. If you fail the seventh time, go the eight time. If you fail the 20th time, go the 21st time.” Thanks to this approach, Bose managed to implement the linear programming tool, and expects to generate savings of over Rs 1 crore per annum. Another example of how he influenced decisions concerns a SAN. “We wanted to implement SAN for messaging. Unfortunately, the non-IT people equated SAN with a bunch of disks, but we didn’t try to convince them that SAN was more than a bunch of disks,” he says. Somebody even suggested that, instead of a SAN, the company should put data on a CD and have a CD-changer, which can be bought for around one percent of the cost of a SAN. Consequently, Bose says, he was not able to able to get SAN approved during the last budget. Instead, they got a CD-changer with around 20,000 CDs. But one day, the person managing this task woke up and said it was not working. Therefore, the SAN issue was reopened. SAN will soon become a reality at Haldia Petrochemicals, says Bose. “Last year, I failed, but this year, I managed to get it,” he says.

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Research, Research

and

Research Smart CIOs learn which IT projects to push because there are always too many around.

o Probir Mitra, senior general manager (IT) of Tata Motors, IT is an integral part of his company—not something desirable, but something essential. “We cannot imagine any function in our company that can exist without IT support. It is a part of the bloodstream of the company,” he says. While this helps him play an influential role at Tata Motors, it also means that he has to constantly keep an eye on the business goals and objectives, and align these with IT. “It is not just one project—the influence is across several projects,” he says. For instance, if one considers engineering automation in the basic IT services vertical, the company has always had a very strong CAD/CAM base for product design. But, over the last two years, it has made significant inroads into computerized process engineering for digital manufacturing. Tata Motors also has made a major business decision to exit an older legacy product data management system in favor of a modern PLM product, which is used extensively in all the new projects. Additionally, all the legacy product data is being converted to the new PLM system. This, Mitra says, gives better visualization of data, besides enhancing collaboration with vendors. How did he get such new systems in place? “Always go to management with a very strong business gain,” says Mitra. “There are always several potential IT initiatives, and we choose, among all these potential initiatives, that initiative which presents the strongest business gain.”

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Implementation of any IT solution involves

changing mindsets

and business processes,

more than just the technology.”

— Probir Mitra, Senior GM-IT, Tata Motors

for this, Mitra does a lot of research. even then, sometimes the management raises some doubts for which the IT group doesn’t have an immediate answer. In such a case, the IT team goes back to the management after more research. Mitra encountered such a situation with regard to a homegrown solution for connecting with vendors, called Value Chain Management (VCM). “VCM was a very stable product,” Mitra recalls, “and it was operating for many years. We wanted to switch over from this system to a SAP solution.” At that point, the management expressed some concerns because the system was so deeply

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ingrained into the day-to-day working environment. A lot of questions were raised about the switchover. Mitra responded by explaining that the existing solution was on a technology platform that would become difficult to sustain after some time. he also pointed out to the management that rebuilding the application on a totally new platform would be costly. The management also was made aware that the SAP solution would possess a richer set of useful features. The management was convinced and, once the implementation proved to be successful, the faith in the IT team increased. What has Mitra learnt about influencing the management? “The implementation of an IT solution is around 30 percent about the software, hardware and the networking. The remaining 70 percent concerns the mindset change and the business process change,” he avers. As long as CIos remember this, Mitra says, they have a much better chance of influencing the management. he also feels the CIo should start by exerting his influence at the “working level” before moving his way up to the board, though there are exceptions. Mitra recalls a time when his company was looking for a Business Intelligence (BI) solution and he had to pick one of two competing analytics products. he used customary research before approaching the management with a lot of analyzed data. Mitra looked at the robustness of the database that had to support the analytics, the solutions platforms, and the output generated from the BI software. The IT organization also worked out the TCo of the BI software before seeking management approval. “In the process, we also showed them samples of analytics generated by the BI software, and told them that if we have the BI solution, this is what we will get, and if we don’t use the BI solution, then what handicaps the company will face,” he says. This approach, he feels, works well while trying to influence the management. CIO Special correspondent Balaji narasimhan can be contacted at balaji_n@cio.in

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Reader ROI:

Why Bonhams opted for an in-house system, instead of licensing enterprise software How IT gives enterprise new leverage in the marketplace How agility translates to customer satisfaction

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5/28/2007 11:51:39 AM

By Meridith Levinson

On Op e n S ou rc e An open source-based infrastructure helped a mid-sized auction house compete with the industry heavyweights.

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advance on $1,400?” The auction representative on the phone with the remote buyer (a Paris-based fine art dealer) whispered to his bidder that someone in the room bid $1,400. Did the dealer want to bid $1,500? Yes, and the rep raised his paddle. But the buyer in the room still wanted the painting too, and bid $1,600. The buyer on the phone bid $1,700. “I have 17 on the phone. Any advance on $1700?” the auctioneer asked, her eyes scanning the room for last-minute bids. No movement. With a rap of her gavel on the podium, the auctioneer announced: “Sold for $1,700 to bidder number 2812”, and then she quickly moved on to the next painting. And just like that, in two days, Bonhams showcased 1138 and sold 930 lots of merchandise, which is nearly 80 percent more than the average number of items Sotheby’s puts on the block during one of its two-day sales.

Selling more items at a lower cost is Bonhams’ strategy for competing with Christie’s and Sotheby’s — the number-one and number-two powerhouses respectively in the $6-billion art and antiques auction industry. The privately held Bonhams, which conducted over $400 million in auction sales in 2005, hopes to increase its small fraction of the market (currently 6 percent) by establishing itself as a mid-tier player and broadening its audience beyond the blue bloods who patronize auctions. REAL CIO WORLD | j u n e 1 , 2 0 0 7 4 3

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Il lustrat ion by ANIL T

I.T. Fuelling Growth Il lustrat io n by MM Shanit h

hortly after 10am on an April Sunday, eager auction-goers began bidding on more than 1,100 items — paintings, furniture, decorative pieces and vintage couture — that London-based auction house Bonhams had put up for sale in its Los Angeles showroom. An image of a Jules Lefranc oil painting depicting Parisian rooftops with the dome of Sacre Coeur cathedral in the background was projected on two Sony flat-screen TVs at the front of the room. “Let’s open the bidding for this item at $350,” announced the auctioneer, a rosy-cheeked woman with frosted blond hair. Immediately, a prospective buyer discreetly raised her paddle to bid on the painting, valued between $800 and $1,200 (all dollars are US). “Three-fifty in the back,” the auctioneer called. “Let’s go to four.” Another bidder raised his paddle. “Four hundred in the centre of the room. Go $450,” the auctioneer called. The bidding continued fast and furiously in $50 increments until the auctioneer hit $1,000, whereupon she began increasing the bids by $100. “Do I have $1,200?” the auctioneer asked. A man seated toward the back of the room waved his paddle. “Twelve hundred in the back of the room. Go to 13.” An art collector representing a buyer on the phone raised his paddle on behalf of his bidder. “Thirteen on the phone. Go 14,” said the auctioneer. The buyer who bid $1,200 raised his paddle to bid $1,400. “Fourteen hundred is bid in the room. Go 15,” the auctioneer announced. A hush came over the gallery. Was that it? Was the bidding out at $1400? The auctioneer asked: “Any

Open Source Although Bonhams has a long way to go before it poses a serious threat to Christie’s and Sotheby’s, it has made progress toward increasing its business. And IT — specifically a strategy of building an open source infrastructure — has helped support and fuel that growth. Bonhams’ sales have grown from a reported $64 million in 2000 to more than $400 million. Its customer base has tripled to 1.3 million. With the art auction industry on fire again after a three-year downturn, industry watchers say Bonhams stands to gain market share as collectors who wish to capitalize on the surge put their pieces up for sale. The secret sauce behind Bonhams’ bid to grow and flourish is a home-grown auction management system, which runs on Linux and powers almost every aspect of the auction house’s business, including

occupying the company with an expensive, time-consuming software implementation. By keeping expenses low, Whitehead says, Bonhams can sell its items at lower prices than the more exclusive auction houses do while maintaining a reasonable margin. “We have kept our processing costs so low that we are able to sell $10 items and make money off them just as we will make money off multimillion-dollar items,” Whitehead says.

Auction Wars Despite its revenue gains, Bonhams is still a distant third behind Sotheby’s and Christie’s in market share and auction sales. (Sotheby’s, for instance, earned $2.75 billion in auction sales last year.) Bonhams achieved its third-place status largely through a series of mergers

Bonhams' IT director Roland Whitehead says his Linux servers are so reliable that he needs only two systems analysts to support them.

functions as wide-ranging as property management and CRM. Bonhams' IT director Roland Whitehead says he built this core system internally rather than install ERP and CRM applications in order to keep Bonhams’ costs down. The trading system, he says, has supported Bonhams’ growth from 200 employees and 200 annual auctions in 2000 to 800 employees and more than 700 auctions a year today without 4 4 j u n e 1 , 2 0 0 7 | REAL CIO WORLD

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and acquisitions that coincided with the economic downturn in the US. The art auction market, which was scorching during the late 1990s, took a turn for the worse in 2000 when the US equity markets imploded. Suddenly, all those Internet tycoons who were rich on paper no longer had the funds to invest in Rothkos and Pollacks for their post-modern offices. During that downturn, Brooks, a small yet highly profitable auction house that

specialized in classic cars and motorcycles, went on a buying binge. Robert Brooks, the founder and chairman of the eponymous auction house, wanted to give Christie’s and Sotheby’s a run for their money and set out to acquire all the auction houses in his path. He started in 2000 with Bonhams, which the Bonham family had been running since 1793. In late 2001, Bonhams & Brooks merged with Phillips, then the third-largest auction house, to form Bonhams 1793 (the Phillips name was lost in the shuffle). In August 2002, Bonhams 1793 acquired Butterfields, which was the largest US West Coast-based auction house, and now has salerooms in San Francisco and Los Angeles under the name Bonhams & Butterfields. What all of these companies that Brooks acquired had in common were financial troubles. Bonhams’ auction sales were stagnant. Phillips had all but collapsed under the weight of its previous owner, the French luxury goods conglomerate LVMH, which spent hundreds of millions of dollars between 1999 and 2002 in what was ultimately an unsuccessful attempt to compete with Sotheby’s and Christie’s at a time when they were embroiled in a pricefixing scandal. And eBay, Butterfields’ previous owner, nearly put the fine art auction house out of business by driving its customers to the Web. The challenge, then, in addition to restoring all these companies to profitability, was to get them on one common trading system. “You cannot have four different auction systems with four different accounting processes, four different administration processes, and four different ways of handling goods and keep a handle on the business,” says Malcolm Barber, Bonhams’ CEO of US operations.

Why Build a System In-House? Bonhams’ management team wanted a user-friendly trading system that would provide accurate sales, stock and customer information and would make the production of catalogues easier. Whitehead decided to build the system in-house because, having worked with packaged applications like SAP, which Sotheby’s uses, and Siebel, which Christie’s

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Open Source uses, he didn’t think they were flexible enough. He knew those packages would require heavy customization, and with that customization would come increased maintenance fees, which Bonhams couldn’t afford. Given Whitehead’s training as a naval architect and product designer and the half-decade he spent from 1986 to 1992 using computers to develop World Cup racing yachts, he felt he had the know-how to develop a lower-cost system that would be more targeted to the auction industry than shrink-wrapped software. “The cost of tailoring such [enterprise software] packages is so high. If you have the right mind-set, the right skills and the right tools, you can develop a solution at a fraction of the price [of the packaged applications] that is significantly better, and that is what we’ve done,” says Whitehead. Bonhams’ IT director also wanted to build a single system that encompassed as many activities and business processes in which the auction house engages as possible so that he wouldn’t have to patch together a bunch of disparate systems. So the system he built also includes functions for print production, managing and valuing the properties that Bonhams puts up for sale, and customer relationship management. Whitehead, who has hired IT staff from Sotheby’s and Christie’s, notes that his competitors have to integrate a bunch of systems to get the functionality they need because one packaged system doesn’t do it all. In fact, Sotheby’s expenses grew so high by 2003 that the company outsourced the management and maintenance of its mainframe systems and laid off six IT workers as part of its cost-cutting effort, according to a report from Wedbush Morgan Securities. By contrast, Bonhams’ IT costs have dropped from $3.5 million in 2001 to approximately $1.6 million today because it’s running fewer systems and using open source. Whitehead says his Linux servers are so reliable that he needs only two systems analysts to support them. Whitehead’s decision to build Bonhams’ core trading system in-house flies in the face of conventional IT wisdom. “The default best practice across the industry is, it’s better to buy than build,” says Randy Heffner, an analyst with Forrester Research. Heffner

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says most companies choose to implement packaged software because they don’t want to spend time and money on an activity that isn’t a core competency. Bonhams chose to swim against that tide.

Deployment: Apache Web Server and Formatting Objects Processor (FOP), MS Internet Information Services, Excel

distributed computing architecture using Sun’s Solaris operating system; running A3 on a bunch of small servers rather than one large server would prevent it from crashing if the system was hit with a barrage of transactions. But Whitehead discovered that the cost of licensing technology from Sun for that kind of distributed computing architecture was prohibitive. So instead he chose to go with Linux. And IBM, eager to enter the Linux market, made Whitehead an offer he couldn’t refuse on its x series servers. Whitehead also uses Apache Web servers, Tomcat, the open source version of the Java servlet, FOP, an open source typesetting system, and many other open source applications. Whitehead is a strong proponent of open source because, he says, it’s such a reliable operating system. “The cost benefits of deploying on Linux are dramatic,” Whitehead notes, adding that running A3 on Linux costs less than half of what it would cost to run it on Solaris. With the architecture in place, Whitehead and his programmers began developing a framework for storing and displaying information in A3. The framework establishes the user interface for A3 and manages all the business rules that dictate how A3 works. The application has programming logic for all manner of activities, from authenticating users to tracking properties, mining customer information and producing reports on sales activity. The application interface is stored in a database so that developers can reuse it quickly and easily when working on enhancements to A3. Whitehead originally planned to launch A3 in the summer of 2002, but the pace of acquisitions and the need to build the acquired companies’ processes into A3 slowed down the project. A3 went live six months after originally planned, in January 2003. Whitehead has said that A3 cost approximately $800,000 to develop.

OS: Redhat Linux, MS Server 2000

Agility for Customer Service

The Open Source Stack Whitehead and two developers began building the system, dubbed A3, in May 2001, well before Brooks’ acquisition spree was complete. The IT director first had to decide which database software would form the core of A3. He opted for software and development tools from vendor Progress for two reasons: they were less expensive than Oracle, and more scalable and reliable than Microsoft. He also liked the software because it provided a single programming language for three separate activities — coding the database, programming the business logic and writing the programs that deliver content to the Web. “That means less [for developers] to learn, fewer errors and less time spent debugging code,” says Whitehead. He originally wanted to deploy Progress on a

Bonhams’ Stack Database: Progress Enterprise Database Development tools: Progress OpenEdge, MS VisualBasic, Runtime Revolution

Hardware: IBM System x

Whitehead says the way the system has been designed makes adding new features a breeze for developers because they don’t have to write a lot of new code. Forrester’s Heffner REAL CIO WORLD | j u n e 1 , 2 0 0 7 4 5

5/28/2007 11:51:51 AM

Open Source agrees. “There are ways for enterprises to design applications that are flexible by doing good design and analysis up front, like it sounds like Bonhams has done,” he says. The ability to add new features to A3 quickly helps the company provide better customer service, Whitehead says. For instance, last March a customer asked one of Bonhams’ appraisers to provide him with a report detailing the value of his collection in a different format than the auction house

A3 has also sped up the creation of catalogues, which play a key role in encouraging people to attend auctions. Carolyn Mani, who’s in charge of Bonhams & Butterfields’ Sunset Estate auctions, says it took only a week and a half to create the catalogue for an 1100item auction that took place in Los Angeles last April. She says publishing catalogues using the old DOS-based system under eBay took twice as long. “With the push of a button, A3

How the Houses Compare

Auction Fever

A side-by-side comparison of Bonhams, Sotheby’s and Christie’s, the three biggest auction houses worldwide. Bonhams

Sotheby’s

Christie’s

>$400 million

$2.75 billion

$3.2 billion

Market share

43%

50%

Employees

800

1,443

1,800

Auctions per year

>700

350-400

Approximately 1,000

Salesrooms (global)

IT Staff

118

N.A.

IT Costs

$1.6 million

$59.4 million

N.A.

Core System

SAP

Microsoft, Oracle and others

Dates back to

1793

1744

1766

2005 auction sales

usually provides.The customer wanted the pictures of the items in his collection in a different order, and he wanted more information in the report. The appraiser told the IT department what the customer wanted. Within an hour, one of the developers produced the appraisal just as the customer requested and added the extra functionality to A3 that would allow appraisers to customize the formats of other appraisal reports. All the developer had to do was modify an existing query and produce a new report layout that could be processed into the required format. Unlike making changes to a packaged application, no big change documents had to be written up, and no consultants needed to be retained. 4 6 j u n e 1 , 2 0 0 7 | REAL CIO WORLD

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Bonhams’ top executives seem impressed by all this newfound IT agility. “When we ask things of IT that will help us drive the business forward, they come up with answers pretty quickly,” says CEO Barber. And when he wants to know what goods have been consigned, which are ready for sale and how each department within the company is doing, Barber turns to A3. “When you’ve got offices all over the world, it gives me a comforting feeling that I can get an overview [of the entire business] very quickly,” he adds.

sends the entire [catalogue] file in Word form to our desktop publishing system. A3 also publishes it to the Internet simultaneously, so even before I have a printed catalogue, my sale is online with photos and descriptions,” says Mani. Bonhams can even react more quickly to changes in regulations. Earlier this year, the British government passed a new law called the Droite de Suite, which guarantees that living artists earn a percentage of the sale price when their work is resold (say, if a collector who purchased it in a gallery decides to auction it). Within 24 hours of the law being enacted, Whitehead’s team wrote functionality into A3 that would release proceeds from the sale of a work to the artist.

At the Los Angeles estate sale in April, Bonhams’ “sell more for less” strategy was very much on display. While heated bidding drove up the prices on some items, including a sterling silver flatware set that was valued between $2,500 and $3,000 but sold for $6,500, plenty of items went for a song, including a Federal cherry bedside table appraised for as much as $600, which sold for $80. Ellen Sinaiko, who attended the estate sale with her miniature Dachshund, Ernie, says it was one of the best auctions she’s ever attended because it was affordable and because the customer service was so good. She says she spent about $900 on furniture, costume jewellery and a collection of tobacco jars. “Truthfully, I was bidding because it was so cheap. It was such a bargain,” she says. “Where else could I get four Pennsylvania Dutch dining room chairs for $80?” Sinaiko adds that she’s attended Sotheby’s and Christie’s auctions, but prefers Bonhams’ events because they’re more hospitable. “The people who work there are so friendly. They really make you feel like you’re welcome in their house. You don’t get that feeling at most auctions like Sotheby’s and Christie’s,” she says. “They really have a big attitude.” CIO

Send feedback on this feature to editor@cio.in

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11/16/2011 11:56:19 AM

Reader ROI:

Comprehensive automation of governance Need for a reality check of IT benefits in processes Training users from scratch

j u n e 1 , 2 0 0 7 | REAL CIO WORLD

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5/25/2007 7:48:45 PM

e-Tendering

By Kunal N. Talgeri

s s e c , c u s tem n e th sys atio y b ing or ork d r orp w e e e g d a r Ten al C now nsiv u co s e- icip s to ehe em. n E f it un lan pr yst o e M i p com t s th f Delh ds a emen o war cur to -Pro e

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REAL CIO WORLD | j u n e 1 , 2 0 0 7

Illust ration by PC A no op

A little turn

of phrase on astronaut Neil Armstrong’s famous proclamation once he set foot on the Moon may be one way of describing the spirit with which the Municipal Corporation of Delhi (MCD) has approached e-governance. A small step for e-governance, but a giant technology leap for municipal corporations. Two years ago, when the MCD’s engineering department introduced an e-Tendering facility, it marked a departure from the traditional, paper-based system of tendering at one of the largest municipal bodies anywhere in the world. With due respect to Armstrong, it wouldn’t be an exaggeration to say that the task of change management in such a large government organization has been more difficult than a walk on the moon’s surface. Or as he put it after the moon landing, “a giant leap for mankind.” The MCD has a staff of over one lakh across a host of departments — 107 offices in 12 geographic zones — that cater to 1.4 crore citizens. Three years ago, not all of MCD’s offices had an Internet connection and computers. Neither did it have it’s employees’ willingness to move to a technology platform for operations. Yet, the same officials who experienced the challenging migration to IT-enabled mechanisms today believe that the job is only half done. Figures suggest that the e-Tendering process has achieved significant time- and resource-efficiencies. For instance, over 30,000 tenders have been transacted through the e-Tendering system by MCD, making it one of the world’s highest volumes in numbers by any government organization. But MCD officials are not satisfied with what they have achieved in their efforts to fully automate the procurement 49

5/25/2007 7:48:51 PM

e-Tendering The e-Tendering system has process. Ask Arun Kumar, enabled MCD to post and an executive engineer at amend tender documents, MCD who has become the and view and compare bids face of the IT initiatives online. This has substantially in the corporation. “The eSNAPSHOT reduced administrative costs Tendering mechanism has Municipal and eliminated the difficulties not yet improved the time and Corporation associated with paperwork. process efficiencies as much of Delhi Earlier, a contractor would as we would like,” he says Budget Rs 6,000 crore have had to make three modestly. “This is because visits — at the very least only the part of the system Population 1.4 crore — to collect his tender that concerns tender receipts application form and submit has been automated, with Divisions 12 the required documentation. great success. So, while this Many times, contractors portion has been simplified Offices 107 have missed a deadline by a for the contractors and for few minutes because of the us, the approval cycle needs Staff 1.3 lakh distance they’ve had to travel, to be automated,” he says. recalls P.K. Khandelwal, Once this is done, the process Automated functions superintendent engineer at efficiencies will follow. Citizen Service MCD. Taking the process Towards the end of Bureaus online has resulted in a level this year, the engineering Health Information playing field for contractors. department is looking to Systems Transparency is the biggest announce EDIS, or the Property Tax benefit of the system, asserts engineering department Management eTendering Arun Kumar. information system, which Contractors can now will develop the fully electronically download and automated tool and integrate upload tender documents, track the status it with the existing e-Tendering system. of tenders and receive e-mail alerts. Wipro has also ensured that the payment gateway and issuance of digital certificates provide secure online payment options to the suppliers or contractors. The e-Tendering system itself has helped “The implementation was done in a MCD take huge strides in the preliminary phased manner,” recalls Srivastava. First, stages of procurement. And it hasn’t the tender purchase and download was walked the road alone. In May 2005, it made compulsory through electronic outsourced the project to Wipro, which route. Then, the bid preparation and has now implemented similar systems for submission were made compulsory for all the Madhya Pradesh and Chhattisgarh tenders above Rs 30 lakh. The value slab governments. A similar project in was reduced subsequently, he says. The the Karnataka State Police Housing application service provider set up the Corporation (See Savings Up For Auction, infrastructure to install and enable the CIO, January 1, 2006) has been widely electronic procurement system. documented. Second, it maintained an online/offline “Governments are making process and backup at the disaster recovery site, and structural changes more responsive and ensured proper backup of each tender, transparent in their functioning. The enabling easy access and avoiding data loss adoption of e-Tendering is a major step in in case of server failure. And third, it has this direction,” says Dr Anurag Srivastava, provided onsite and telephonic help desk VP for consulting services at Wipro services with 24x7 service. “Currently, the Infotech. “Organizations like MCD are at data center and backend facilities are being the forefront of adopting e-Tendering in provided by the corporation, and Wipro is their operations,” he adds.

Well Begun Is Half Done

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engaged in maintaining and supporting the application hosted at the corporation’s data center,” explains Srivastava. The data center has been leased from the Centre for Development of Advanced Computing (CDAC), adds Kumar. The implementation has not been limited to roads and construction. “Following the early success in the engineering department, e-Tendering has been proposed for all types of products and services across all zones covering departments such as education, conservancy, sanitation, health and horticulture,” says Khandelwal. According to one member of the Wipro team in Delhi, the corporation has reduced the tendering cycle by 66 percent and increased the number of transactions it can conduct each week. Arun Kumar puts this statistic in perspective. While the figure is accurate, it doesn’t reflect the process efficiency in its entirety, he says. “Earlier, several contractors showed interest in the tender notices that we put up, but the number of final applications was still limited,” he explains, attributing the absence of deserving candidates to cartels among contractors, coercions faced by some competitors, and difficulties posed by physical distances. “There used to be several complaints — lodged with the anticorruption cell and the economic offences wing — of a nexus between contractors, and of their musclemen putting pressure on other potential suppliers to withdraw their tender applications,” he adds. Now, contractors can be sure of privacy and confidentiality of their tender proposals and simply upload their tenders online before the deadline. The security is based on the digital signatures and public key infrastructure technology to provide authenticity, integrity and nonrepudiation to electronic documents (See Secure Gateway). “The issuance of digital certificates is unique to each individual and is issued by SafeScrypt/Tata Consultancy Services (certified authorities under the IT Act 2000),” explains Srivastava. During this data transfer, the data is encrypted with the digital certificate of the Web server and can be decrypted only by the same authentication.

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e-Tendering

Secure

Gateway

As an application for citizens, e-tendering began to capture the imagination of government departments at the turn of the century. In 2002, the Departments of Public Works and Main Roads in Queensland, Australia, suggested the idea of an electronic mechanism to evaluate tender proposals but were wary of its security and legal implications. To address these issues, the Cooperative Research Centre for Construction Innovation produced a report identifying the potential security threats at every stage of the e-tendering process. “The threats can be classified under integrity and confidentiality violations, masquerading or impersonation, time integrity violations, non-verifiable evidence, repudiation and denial of service,” the report said. The observation is universally relevant. It is an area that Wipro believes it has addressed at MCD on the back of technology. Says Anurag Srivastava, VP of consulting services at Wipro Infotech: “We have a public-key infrastructure in place for securing the system, facilitating authentication of users, confidentiality and integrity of the information, authorization, non-repudiation of

Reining In the Users Adapting to the technology platform was no mean feat for users. While the MCD is yet to develop its own IT team, it went about change management by constantly engaging users with a range of technology-enabled functions using the prowess of IT vendors. Since Wipro came on board in 2005, it has trained 300 users and 2,000 contractors. The MCD, on its part, put basic infrastructure in place, providing Internet connections in each of its offices and the wherewithal to bring all users on to one network. In 2003, it brought Hyderabadbased ECIL-SARK Systems to train Citizen Service Bureau users on latest technology in urban planning. Simultaneously, by engaging internal users in newer IT-enabled functions such as property tax management, MCD began to rein in the change. “At the beginning, only 70 percent of the engineers at MCD were willing to even touch the computers,” recalls Arun Kumar. It took about six months for them to accept the change, adds Khandelwal.

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transaction and issuance of digital certificates in compliance with the IT Act 2000.” The digital signature on an e-document is the hash value of a message, when encrypted with the private key of the person concerned. In effect, the digital signature of a person varies from document to document, ensuring the authenticity of each word of critical documents. This is complemented by the publickey infrastructure that brings in the capability to manage, store, distribute and revoke documents. The new system doesn’t accept multiple tender forms and is impartial, says a member of the Wipro team in Delhi. Arun Kumar, nodal officer of e-tendering at MCD, believes that security challenges keep rising by the day. “For something like hacking, we – at MCD – keep developing our security capability even as miscreants keep coming with new ways to access the information. It is hard to get a one-point solution. But we have a good security infrastructure in place,” he says. — K.N.T

Even for the application service provider of the e-Tendering facility, the challenge was huge. “The training is an ongoing activity throughout the contract period of three years,” says Wipro’s Srivastava. Initially the Class III and above contractors were invited to participate and subsequently all the contractors were invited through newspaper advertisements. The training consisted of a PowerPoint presentation in Hindi and hands-on training under the guidance of our trainers. User manuals and help files are also made available on the portal for anytime reference by users. The training has been as critical to the success of the system as the technology. With the electronic system, it now takes an average of 30 days to process a tender as against 90 days in the traditional method. The approval cycle, spanning two to three months, remains the biggest challenge in designing the comprehensive e-procurement tool. “The approval cycle is still a manual process — when the certifying authority checks the veracity of documentation with the Central Public Works Department and

financial concurrence. Even the preparation of tender estimation is still manual,” rues Arun Kumar. “We have started the trial run of the software to streamline this,” he adds. If the results are good, it could be integrated with the e-Tendering system next year. For now, the transparency and equal terms for all contractors are the biggest takeaways of the implementation. “It has reduced the subjectivity in the process of selection,” says Kumar. “Every contractor, in and outside Delhi, can now participate in the procurement process without the physical barrier and the intrusion of department officials has come down considerably. That’s how subjectivity has reduced,” he explains. It has been an eventful year for MCD — from the traders’ protests last year against sealing of shops to its recent elections. On the technology front, however, the progress and change within the government organization has been silent but steady. CIO Chief copy editor Kunal N. Talgeri can be contacted at kunal_t@cio.in

REAL CIO WORLD | j u n e 1 , 2 0 0 7

5/25/2007 7:48:59 PM

To r Dr Ashok Jhunjhunwala is leading a consortium of manufacturers, R&D players, government officials and members of the academia to introduce a new international wireless standard that will take into account the needs of India.

Rural India’s

o rchbearer Few have done more to bridge India’s digital divide than Dr Ashok Jhunjhunwala. Today, he is at the forefront of creating an international wireless standard most suited to India as well as setting up ATMs custom-made for India’s hinterland.

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So, what are today’s challenges?

The key today is a similar problem but for broadband. How do you get broadband

across? If you have copper, you can do it with DSL. But what if you don’t have copper? Today’s quest is: can we do broadband wirelessly? We have developed products like broadband corDECT, a product that we have just launched. We are also working on next generation wireless products. We are working on solutions that go beyond WiMax to try and bring broadband to people’s homes — at a much cheaper price, while providing true broadband.

Dr AshOk JhunJhunwAlA: We started the development of corDECT 12 years ago. At that time, India had barely eight million telephone lines and (has) added about one million a year. We wanted to see India have 100 million telephones at the earliest. One of the reasons why India wasn’t getting those phones was because the capital and operational expenditures of telcos were so high that the revenue needed to break even was as much as Rs 1,500 a month (per rural home). Very, very few people in India can afford that. There was no question of reaching 100 million lines in that situation. When we started analyzing this, we found that the local loop — the line between

the exchange and someone’s home — was the primary cost. We realized we needed to replace the copper local loop with something else. Going forward, we saw that a wireless local loop was our solution. But people said wireless was expensive. At that time, it was. We argued that it needn’t be expensive if it was done correctly. That was when we conceived of the corDECT wireless loop. We proved that wireless was the way to go in the future, and then mobile and everything else came along. I think wireless brought down the cost of local loop by a factor of four or five. Earlier, the capital expenditure was Rs 40,000. But all this is history.

Are you starting a new wireless standard? Is it necessary?

We have created a centre called Centre for Excellence in Wireless Technology. It is currently located in IIT Madras, and they are working on the next generation of wireless technology. There is also a consortium REAL CIO WORLD | j u n e 1 , 2 0 0 7

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CIO: Your wireless initiative to bridge the last mile in rural telephony, corDECT, is a success. Where are you going from here?

imagin g by Un niKriShnan av

BY KANIKA GOSWAMI & SUNIL SHAH

Interview | Dr Ashok Jhunjhunwala we have created that is called Broadband Wireless Consortium of India (BWCI). BWCI is working on next generation of broadband wireless standards. There are three broadband wireless standards that are emerging in the world. One of them is from the WiMax family, another is 3GPP, and the third one is 3GPP2. We are working on all three standards. And we are trying to define and Indianize a standard that is suitable to our broadband requirements. We are working on these standards, on the IPRs of these standards and on the technological applications for that standard. The most interesting thing is that we are approaching this with a consortium. Almost all Indian operators are involved; so are Indian manufacturers, the companies that make chips, the government and the academia. This will be an international standard, not an Indian standard alone. India will have its inputs into this international standard; it will be made in tune with India’s requirements. Won’t widespread adoption of the new standard be hard to achieve?

No. This is a worldwide standard. Once it is an international standard, almost all the companies in the world will participate in it. This is a standard beyond 3G. The standard up

to 3G is done, and Indian inputs have largely not been taken. Today, we want to make sure that we are the major players in the world. We want to make sure that our inputs are taken in for the next generation of standards. When will this standard take off?

The process is ongoing. You will see standards evolving continuously. I think it will take two years to mature totally. Towards the end of 2009, you’ll see the technology starting to come into its own. Do you think the government should play a larger role in nurturing new standards?

The government is already playing that role in the BWCI. It should not play an overbearing role, though. The operators and chip manufacturers should take more responsibility, so should the R&D players and the academia. They should come up with what the next generation’s standard should be if it is to succeed commercially. The government should help ensure that India’s needs are understood and that sufficient funds are pumped into R&D, so that we can create our own IPRs and don’t pay too much in royalty. The government should also help in coordinating the spectrum. I think, the government is playing all these roles.

Are manufacturers driving this campaign or is it still the academia?

Today, I think the BWCI has major R&D players, major chip manufacturers and almost all operators. Going back to corDECT, there has been a gradual slowdown in its adoption. Can you explain this?

CorDECT has played a historical role. It has played its role and the job has been done. Today, broadband needs to be done. Today, for basic telephony, you can use corDECT, mobile or you can use wire. Now, the race is toward broadband. In the same spirit, rural ATMs, which appear to answer all the problems of rural areas, aren’t seeing widespread adoption. Why?

It is taking time because, initially, we tried to make it different from the regular ATM. We tried to make it, so that the ATMs didn’t have to interact with switches. But banks find it hard to integrate with that type of system. So, we changed tracks and said that we would make rural ATMs interact with switches. We’re testing it today and hopefully, it will be complete and ready in a month.

If you want to accelerate growth in rural areas, the question is: How? At this point, ICT becomes very important.”

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Do you think e-governance projects aren’t fully utilizing the technological products your team has created?

I feel that e-governance has been slow in the country. It should have first enabled connectivity. It should have been the first player to provide initial revenue to those who could provide connectivity. e-governance projects have also been distributed unevenly. Some places benefitted, some did not. In some places, a good district collector will make things work for a short time and then, suddenly, all his work disappears. I don’t think that e-governance has done enough. Today, the NEGP (National e-Governance Program) is trying to correct this but it still isn’t doing enough. What is missing? What will it take for e-governance to fulfill its promise?

There are two approaches: bottom (up) and top driven. Companies like n-Logue (n-Logue manufacturers corDECT and was set up by the TeNeT Group, a team of professors at IIT Madras, led by Jhunjhunwala) are bottom driven. It is a very tough thing to do. And from the top, there is the government in the form of the DIT (Department of Information Technology). The two work independently. So, the top doesn’t have an understanding of what it takes and the bottom players don’t have the ability to scale. Unless they join hands, things won’t work. Do you think e-governance will ever bridge the gap between rural and urban India?

I think this will happen. It has taken time. You should look at e-governance from two perspectives. One, providing government services; second is helping the spread of ICT, which can then be leveraged for other things. Both these roles already exist, and I am reasonably pleased with what Aruna Sundararajan (CEO of the Infrastructure Leasing & Financial Services’ Common Services Center project) is doing at the DIT, or what R. Chandrashekhar (joint secretary, DIT) are doing. Things will move forward. What are the repercussions of the gap being closed too slowly?

I think that India, overall, is accelerating very rapidly. To be more precise, urban India is changing very rapidly, rural India

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is changing very slowly. And, shift from urban to rural areas? then there are other realities. Can ICT be an enabler? For one, 700 million people live in rural areas. Two, television To quote you, “Apparently has spread, so people in rural technical decisions areas can see the advances that concerning IT regulation, SNAPSHOT are taking place in urban areas. bandwidth allocation, pricing TeNeT Group Three, we are a democratic mechanisms, transmission country, where everyone has standards, etcetera, can have FACuLTY: one vote. And rural people start profound effects on whether 19 members to ask: why are we moving or not IT benefits ordinary DOMAIN ExPERTISE: slowly? Why should this Indians.” Can you elaborate? teaching & training continue? Can I use my vote That is an old quote, but still research Product to change that? This creates valid. If your policies are such development political upheaval. that they try to give as much incubation of Unless you can pull rural telecom as is needed to the technology firms areas with you, you will not see top few, then ICT isn’t going ASSOCIATED political stability. And if you to reach a wide audience. On INSTITuTIONS: 23 want to pull rural areas with the other hand, while pricing, you, the immediate question you can bear in mind that there APPLICATIONS: rural atm, medical is: how? At this point, ICT are people in the economically diagnostic kit, becomes very important. So lower strata who cannot afford online tutorial, indic do roads and electricity, but much. You should be asking: computing, and video-conference ICT is even more important. can I ensure that people who It can help to start the process cannot afford much are able of changing India and the slow to use this [IT], while not growth in rural areas can be accelerated. This denying the best to those who can afford the is what needs to be done. You don’t have a most. Every choice should be inclusive. If choice on that. your policies, prices and choices are not made right, then growth largely takes place in the economically higher strata, and percolates Where can ICT applications be used down slowly. On the other hand, if you do immediately? it right, growth can start in the middle and These are technologies that are enablers. spread both ways. At the end of the day, what do you have to provide in rural areas? Education, healthcare and livelihood opportunities. By the latter, I How do you drive innovation in yourself mean strengthening agriculture, setting up and in your team? new enterprises like rural BPOs. These are One of the things we have been able to do the kinds of things that are needed. We also in our group, especially at IIT Madras, has need to provide microfinance in villages. And been to be able to attract young people and get work is going on in all these directions. We are them to do very hard work. We’ve created an already working with banks to do this. environment, in which they try to do things that are impossible. We guide and enable them with all kinds of knowledge and tools that can A lot of people don’t intuitively understand get them to try and achieve the impossible. At the link between ICT and rural GDP. the same time, we ground them in the realities ICT can create business and sources of of India and try to get them to see the needs livelihood, and help set up companies. For of this country. That is what motivates them. example you could set up BPOs in villages. And, we are able to push them again and That would increase the GDP of villages. again and in large numbers. CIO You could help increase agricultural growth in villages — that too would help increase GDP of the area. You could enable all kinds of Special correspondent Kanika Goswami can be manufacturing. Just like manufacturing has reached at kanika_g@cio.in. Senior copy editor Sunil shifted from the West to the Far East, can it Shah can be reached at sunil_shah@cio.in REAL CIO WORLD | j u n e 1 , 2 0 0 7

Essential

technology Illustration by PC Anoo p

From Inception to Implementation — I.T. That Matters

A slew of new enterprise search options can be found at every price, including free. What do you really need to discover true value?

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Treasure Hunt By Galen Gruman data mining | Who wouldn’t like to out-google Google? Given the sophistication of today’s

consumer search tools, many CIOs have users (and maybe even the CEO) banging on the door asking why valuable corporate data is still locked away in various places and unsearchable. Trying to capitalize on this need, a bevy of vendors are introducing or revamping enterprise search offerings. Most recently, IBM and Yahoo teamed up to create free, downloadable enterprise search software — the OmniFind Yahoo Edition — to compete with Google’s Mini device for enterprise departments and small to midsize businesses. (Mini search software comes in a preconfigured appliance, starting at Rs 89,775.) All the flavors of search can be overwhelming. But for enterprises hoping to improve worker efficiency and business processes, it’s vital to understand what the current crop of low-cost, middle and high-end search options can and can’t do. The free OmniFind Yahoo Edition (designed by IBM to get a foothold in the enterprise search space, with the hope of selling product upgrades and services later) certainly has its limits. But Eric Brierly, CTO at Decision Critical, a company that provides online access to medical training and continuing-education programs for hospitals, nurses and doctors, was able to use it for more than just adding public search capabilities to the

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company’s website (which is how many entry-level search tools are used). Still, it took some tweaking. Decision Critical hosts training modules for its customers; each customer has access rights to different modules based on what the customer has licensed or provided. That requires Decision Critical to create and maintain separate Web-based course catalogues for each customer. Brierly has long wanted to simplify the maintenance of course pages and their HTML links to course details, and give clients better keyword searching options. When OmniFind Yahoo came along as a free tool, he decided to see if it might solve his problems. One key limitation of tools such as OmniFind Yahoo is that they index only HTML pages and common document formats such as Microsoft Word, Excel

Bad Search CostsYou For several reasons, CIOs should find search investments easier to justify than they would have a couple of years ago. Despite today’s sophisticated IT efforts, many enterprise managers say simply getting to the right information can be difficult. “Enterprises see Google [search on the Web] and say: ‘I want some of that’. The search box is now a dominant method of getting access to data outside the enterprise,” says Whit Andrews, a research vice president at Gartner. An Accenture survey released in January 2007 reveals that US and UK managers spend up to two hours each day searching for information, and more than half the information they obtain has no value to them. In addition, 45 percent of respondents say it’s a big challenge to gather information about what other parts of the company are

Managers spend up to two hours each day searching for information, and more than half the information they obtain has no value to them. and PowerPoint documents, and Adobe PDF files. They can’t catalogue the contents of databases, ERP systems or other corporate information resources. Brierly extended the free version’s capabilities by creating hyperlinks from the HTML course ‘start’ pages to SQL queries that returned the course details as HTML snippets. Thus, Decision Critical tricked OmniFind Yahoo into indexing its database content. One result: “There are no more broken links, since each link is based on what the search engine actually finds,” Brierly says. But this approach would not work for other corporate information stores, Brierly acknowledges. That’s just one reason why many enterprises end up using a higher-end tool for missioncritical search needs, says Matt Brown, a principal analyst at Forrester Research.

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doing. Only 31 percent said that competitor information is hard to get. Another motivator: compliance requirements are making business and IT executives seek tools to find information quickly for regulatory filings, government investigations or discovery in legal cases, says Forrester’s Brown. That’s resulted in specialpurpose search tools for, say, transaction log files and voice-mail analysis. But enterprises should be careful not to adopt search in a piecemeal way, Brown advises. “The industry competition has made it difficult for buyers to have a cohesive strategy. For example, Google’s offering is designed to be provisioned by a layperson, so companies end up with a lot of Google appliances churning away at indexing,” he says. (Google’s newest version of the Mini, 2.2 can index up to 50,000 documents in its Rs 89,775 entry-level

version, or up to 300,000 documents in its top-of-the-line Rs 4.04 lakh version. IBM OmniFind Yahoo Edition can index up to 500,000 documents.) Besides wasting network resources, naive deployment of entry-level search tools can both expose private information and hide available documents, says Gartner’s Andrews. That’s because such search engines will scan all servers and documents you point them to, and a server may have data that had been secured by obscurity — no one knew it was there, so it was safe — that is now available in the search engine. And these low-cost engines rarely offer accounts-based access that could restrict access to specific documents based on who’s doing the search, he says. Conversely, a naive setup could miss some servers with documents that you want to be accessible.

Craft a Cohesive Strategy A cohesive search strategy does not mean that enterprises need to have a single search platform or a single content index. “It’s OK to have several implementations for different purposes and business units,” Brown says — though the enterprise should map out distinct needs, to ensure that information that should be widely accessible isn’t mistakenly compartmentalized. For example, it makes sense to have an independent search engine for a company’s public-facing website, to ensure that internal data is not included, and it can make sense to have specialty search engines for log analysis. But it typically doesn’t make sense for sales and customer service to have separate search platforms, since that lets customer information fall through the gaps of the two systems. That realization led communicationsequipment manufacturer Harris to implement several search technologies, each handling distinct tasks, says Janice Lindsay, director of supply chain management. For example, Harris uses a Google search engine to give employees access to documents and intranet HTML pages, so employees can do quick searches on specific information. But REAL CIO WORLD | j u n e 1 , 2 0 0 7

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when the company decided to use search to help ensure that product engineers and manufacturing staff could find which parts had the best prices and highest quality ratings and came from preferred suppliers, it developed a search platform using Endeca’s high-end search technology. That’s because the engineering search needs to direct engineers and others to the best or preferred answers to questions such as: “What components meet these engineering requirements?” The results returned are filtered and ranked based on as many as 200 criteria, Lindsay says. The search engine taps into ERP, manufacturing, product design and other systems, as well as into some supplier systems and industry databases to have the context needed for the search engine’s rules to make the recommendations. The need to integrate with other enterprise systems is a sure pointer toward mid-range and high-end search offerings, analysts Brown and Andrews say.

Centralize and Conquer Many organizations have multiple search technologies in place, but they’re not coordinated. At best, this wastes network and IT resources. At worst, it results in a fractured view of information, compromising product and service quality. With engineers spread throughout the world, engineering consultancy Arup was concerned that a team working in one office might not know about design approaches being used in other offices, creating uneven quality across locales. So seven years ago, the company brought in a basic search engine. “We immediately drowned with information overload, and people questioned the search results’ validity,” says Tony Sheehan, group knowledge manager. Arup tried again, this time using the high-end Autonomy search platform. The new system can tap into the company’s databases, financial and human resources systems, and free-form content, either directly or via add-on software. This unified search platform made critical 58

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business sense, says Sheehan. The result: engineers now share the same knowledge no matter where they are based, providing a consistent global level of quality, he says. National Instruments faced a similar problem. “Our search tools grew over time as the company was learning what search could do,” says Jeff Watts, the instrumentation maker’s former search and communities manager. “With multiple systems, there’s no source of complete information, plus you end up with specialized employees whose knowledge is lost as they leave the company or rotate to other departments,” he says. When the company decided to standardize its Web presence across the globe — providing a single platform that could support multiple languages, local product catalogues and online customer self-service — it also took the opportunity to standardize its internal search platform using a high-end Fast Search & Transfer system. Law firm Morrison & Foerster knew from the beginning that it wanted a centralized search platform to avoid just such fragmentation, says CIO Jo Haraf. So the thousand-member firm took its time to find a tool that met its needs, rather than deploy interim technologies, she says. The firm ultimately selected mid-range solution Recommind because it could do what Haraf calls “grey-area search” — that is, it has the ability to pull in results suggested by, but not explicitly within, the search query — which for a law firm provides a real edge in finding unexpectedly related cases. Notably, Arup, Harris and National Instruments all realized that they needed to impose their own context and organizational structure to search results to better tune them to their business needs — even though the mid-range and highend systems can infer context as part of their indexing. For example, National Instruments imposed structure and context on its information to help searches across multiple systems more easily find similar information.

Where Search and BI Blend High-end search platforms such as those from Endeca Technologies and Fast Search & Transfer are beginning to blur the lines with business intelligence (BI) systems. Some bring in analytics capabilities and let you save searches, essentially creating canned reporting capabilities from what started as free-form searches. What does this kind of capability look like in action? Communications equipment maker Harris uses Endeca’s search platform to bring ‘BI 2.0’ capabilities to its supply chain management system, says Janice Lindsay, director of supply chain management. That means using analytics and business rules so that search steers decisions - such as recommending preferred suppliers, or advising engineers that a part is near the end of its lifecycle. These analytics also help engineers predict costs versus budget as they investigate parts and manufacturing approaches, and help monitor compliance to goals such as choosing parts with lower defect rates.

Take Search Further What would these search users like to do next with search for their enterprises? Sheehan is considering implementing search actively, not waiting for users to ask questions. The idea: the search engine pulls relevant information into a window as the user types. Morrison & Foerster’s Haraf has looked at such active search capabilities, but rejected the then-current offerings because they interrupted users’ work with alerts. But a non-invasive approach that suggested relevant cases or subject experts as an attorney was writing a brief or memo? “That would be interesting,” she says. CIO Galen Gruman is a freelance writer based in San Francisco. Send feedback on this feature to editor@cio.in

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