CIO February 15 2007 by Sreekanth Sastry

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From The Editor

For the past few weeks I’ve been asking CIOs about how they go about justifying

Buy, Buy IT? Are CIOs condemned to hard-selling IT to management?

IT investments and come up with a convincing argument for their management to bite into. I was curious about how this process panned out (or whether indeed there was a process involved). A couple of them discussed how they went about building justification models; I know of at least one CIO who has a complex spreadsheet with twenty-plus parameters to convince the gentlemen in the boardroom. But what the responses distilled down to was that getting the purse-strings opened required everything from soft-soap to hard-sell. A bunch even told me that what worked for them in a pinch was pulling out the hoodoo of downtime, business disruption and related costs. In my bid to find out more, I spoke to people on the vendor side of the fence as well. Did they have any means or methods or mechanisms to enable CIOs to win over the suits? Well, as Getting the purseit turned out, a few of them seemed to be on strings opened for an the ball and talked of benchmarking within IT investment seems to verticals, best practices, maturity models and, require everything from yes, even RoI justification. But here too there soft-soap to scare tactics. were a bunch who said that the best argument was (you guessed it) the cost of downtime. And then I met a CIO of a manufacturing organization who told me that over the past few years, while working his way through revamping his organization’s IT infrastructure, he’s gone way past sinking his time and effort into convincing the bean counters. His way is to put the onus of securing financial buy-in on business function heads — by making them initiate the projects. The process goes a bit like this: Biz Dude: We need a new merchandising system to tap in to our below-the-line customers. CIO: Sure thing. By the way, what exactly do you want us to do? Biz Dude: Hey! I don’t understand this tech stuff. You write out the tech specs. That’s your expertise. CIO: I’ll depute one of my people to work with you. But the specs — you put them together. And, once that’s done — you go to the CFO. We’ll back you 100 percent, but it’s your project after all. What I like about this process is that it involves a business champion providing a business justification for a project. What do you think? How do you go about securing business buy-in for IT projects? Write in and let me know what works for you.

Vijay Ramachandran, Editor vijay_r@cio.in

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content FEBRUARY 15 2007‑ | ‑Vol/2‑ | ‑issUE/07

Compliance

Executive Expectations

COVER STORY | Rx FOR COMPLIAnCE |

VIEW FROM THE TOP | 40 Kishore Biyani, CEO, Future Group & MD, Pantaloon, on how he banks on IT in a business where one mistake can be lethal.

Ph OTO by Sr IVATSA ShAn dIlyA

Compliance doesn’t have to be an end in itself, but can be a journey towards bettering security, standardizing records, and enabling real-time access to medical data. Feature by Kunal n. Talgeri

COVEr: ImAgIng by bIn ESh SrEEdhArAn

A bITTER PILL TO SWALLOW |

It’s All About The Execution ARE YOu In COnTROL? | 28 Innovation demands discipline as much as it requires freedom. Column by Michael Schrage

Less than 25 percent of US doctors use some form of electronic health records — surprisingly little for one of the world's most stringent countries to practice medicine in. Here's some of the problems it faces as it puts together a system that will correct the situation. by Allan Holmes

Interview by Gunjan Trivedi

Business Intelligence SMALL & SMART | 44 BI isn’t just for the big guys anymore. As applications grow cheaper and easier to run, CIOs of smaller companies are using it to drive innovation and create competitive advantage. Feature by Allan Holmes

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content

Essential Technology | 59 Open Source | Why CIOs Don’t Care About It

By Bernard Golden New Tech | Sci-Fi Tech By Michael Fitzgerald

From the Editor | 3 Buy, Buy IT? | Are CIOs condemned to hard-selling

IT to management? By Vijay Ramachandran

Inbox | 16

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 LOUD AND CLEAR | 50 Lokvani, a kiosk-based online system, has empowered the citizens of Uttar Pradesh with relevant information and has brought transparency in the way local administration operates. This is how it was taken from Sitapur to 70 districts of the state.

2 4

Feature by Gunjan Trivedi

Course Correction | 54 Indu Kumar Pandey, additional chief secretary IT, Government of Uttarakhand, feels that e-Governance is capable of ensuring transparency and rooting out corruption. Interview by Balaji Narasimhan

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Advertiser Index

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reA der feedbAck

Anatomy of a Business CIO A way ahead for Indian CIOs to be business executives first and technologists second may be specialist MBA programs â&#x20AC;&#x201D; these could be extremely useful under certain conditions. I believe that there is no substitute for experience and there is no one-size-fitsall curriculum, given the fact that there is a wide diversity in the needs of various verticals in business. Speaking from personal experience, the needs of technology in the services industry differ widely from those in the manufacturing sector. The cost acceptability/feasibility varies and, hence, dictates some strategies. While the basic infrastructure needs are similar, the application stack will have different priorities. For example, CRM could be the edge provider in the services space, while SCM and planning would be far more relevant in the manufacturing space. This means that the competencies and understanding requirements would vary substantially. But an understanding of basic financial statements and ratios are common. Having said this, one can give a more definitive opinion if there is greater clarity on the method of dissemination of the curriculum, the flexibility in choosing the content, 16

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duration, periodicity, etcetera. I feel that the group of IT leaders that is assembled is equally important. If there is wide diversity in the profiles it may not be as beneficial as it would be with greater similarities in the group. I say this from my experience in ISB and others campuses like the London School of Economics. The concept is desirable and is needed to revamp the archetypal Indian CIO. The desired benefits may not be necessarily achieved for all. In fact, it could be probably more effective for technology managers at lower levels, where the absorption rate and proclivity to openness would be higher than a geek of greater vintage who has become a CIO. RAjeev ShIROdkAR VP-IT, Raymond

Leveraging Relationships I agree with your views that a CIO should report to the CEO of an organization. It is directly proportional not only to the impact of IT in an organization, but also enables IT as a business driver. It creates a strong working relationship between the CEO and CIO, and also paves the way for strong working partnership with other CXOs in pushing businessdriven, IT-enabled solutions in an objective and focused way. It creates a strong IT culture within the organization, so that IT can be leveraged for business needs and for IT to be aligned with business, in terms of processes, technology and people. v. SuBRAmAnIAm, v

"cIOs should report to ceOs. Their relationship not only enables IT as a business driver, but also paves the way for strong working partnership with other cXOs. " Spreading the Word I am currently editing a book entitled Indian Railways: A Journey Towards Modernization and Profits. In my effort to compile a meaningful collection of articles, on the above subject, I read with great interest one of the articles in your magazine titled On the Right Track (part of the cover story: Lessons Learned from the Verticals, November 15, 2006 2006), which provides a lucid account of how the Indian Railways have tried to take measures to computerize tickets for the unreserved class. I am convinced that including this article in my book will contribute significantly to its qualitative content, and would be highly indebted to you if you consider this request to grant us permission for reprint of the article in the book I'm working on. dR RAShmI jOShI Faculty, ICFAI

CIO, Otis Elevator Company (India)

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

Corrigendum The introduction to Ones to Watch (January 15, 2007) was incorrectly attributed. It is written by Steff Gelston, and Allan Holmes gave inputs for Master Class ( January 15, 2007). The errors are regretted.

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new

hot

unexpected

E n e r g y C o n s e r v a t i o n The next step that Phil Nail, the IT manager of Internet services provider AISO.net, intends to take to improve the energy efficiency of his data center is to put a layer of dirt on the roof. It’s called a ‘green roof’ and it involves putting about three to four inches of dirt on the roof and planting bush-type, drought-resistant plants. It will cost the Romoland, California-based firm about Rs 13.5 lakh to cover 2,000 square feet over a data center that houses about 300 servers. But Nail believes his green roof may cut data center cooling needs by half. For those who need convincing of the effectiveness of dirt to cool data center servers, Nail’s advice is to stick their hands in some. “It’s cool down there,” he said. Nail is ahead of most in adopting green technologies. His firm already uses solar panels that generate 12 kilowatts electricity, enough to power his servers and lighting. But California wants to see many more companies add solar power to the mix and began offering a Rs 112.5-per-watt tax rebate for systems of up to 1 megawatt in size.

(Continued on Page 18)

Illustration by pc anoop

Greenery on Your Roof? Cool.

Radio Interference is Good!? A University of Illinois researcher is trying the wireless equivalent of making a silk purse out of sow’s ear. The National Science Foundation has awarded a 5-year, Rs 1.8crore grant to explore ways of using radio interference to actually improve wireless communications. The grant was made to Daniela Tuninetti, assistant professor of electrical and computer engineering at University of Illinois at Chicago. Her goal is to establish the theoretical foundation for turning the concept into a reality. “I’m proposing that we think of interference as something potentially useful in a wireless channel, if appropriately exploited,” she said in a statement from the university. Radio interference “is not just noise. It’s structure — it’s a communication going on between a pair of devices,” she said. Her goal is to investigate whether, by making the interference partly understandable by other transmitters, the radios can cooperate in “collaborative communications.” i n n o vat i o n

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Tuninetti will explore the idea of pooling the various capabilities of infrastructure and mobile device radios to create or sustain a signal in locations or at times where it would otherwise be weak or cut out entirely. Another potential benefit would be to enhance the bandwidth of a signal in a given place or time, or even to optimize the signal if a handheld’s battery is weakening. The project will deliver several results: develop new coding and signal techniques to improve the overall capacity of a wireless system; and designing distributed multi-access and routing protocols. In doing so, she plans to illuminate what tradeoffs might be needed to achieve these improvements, and indicate directions for research on a host of practical issues such as whether the techniques will scale in large nets and nets with larger numbers of users.

—By John Cox REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 0 7

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Solar Warms Up (From page 17)

Square-faced Life PartnerS r E p o r t Forget what your spouse looks like? Having trouble remembering you’re married? there might be a good reason for that: 65 percent of pc users spend more time in front of their monitors than interfacing with their spouses. a recent survey of more than 1,000 americans 18 and older with pc and broadband Internet access, shows 84 percent of respondents say they are more dependent on their pcs “in their everyday lives” than they were three years ago. the increasing dependence on technology is partly to blame, according to industry research firm Kelton research, which conducted the survey on behalf of automation vendor supportsoft. the cyber stress study, conducted between December 2006 and January 2007, also found that while pc users admit to making quality time with their desktops a priority over human interaction, it’s not always fun. In fact, the average respondent reported experiencing computer problems eight times over the past three years, or about every four months. the survey found that the average american is spending about 12 hours per month working on fixing problems on their home computer. lastly, 52 percent of those polled said their most recent experiences with computer problems incited feelings of “anger, sadness or alienation.” “as computers become increasingly pervasive in our lives, our relationships with them can begin to seem almost as important as a relationship with a significant other. When problems then occur with the computer, it often leaves people feeling frustrated or helpless,” said Dr. robi ludwig, renowned psychotherapist and host of the learning channel’s reality series “one Week to save a Marriage” in a supportsoft company press release.

Illustrat Ion by un n IK rIsHn an aV

ManagEMEnt

—by Denise Dubie 18

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Its California initiative has budgeted Rs 13,050 crore for incentives over 10 years. Globally, solar energy use is an approximately Rs 67,500 crore industry. But research firm IDC in Framingham, Massachusetts, estimates that US spending accounts for only about 10 percent of the global market. “For most companies to invest in what is perceived as novel energy technologies is a tough sell,” said Nicholas Lenssen, an IDC analyst. “Most companies want a two- to three-year payback. But, by and large, there isn’t a whole lot of interest in onsite generation.” The costs are often high, making incentives critical. For instance, a solar-power-based 500-kilowatt system would cost about Rs 15.75 crore based on an estimated cost of about Rs 315 per watt to buy and install it. California’s credits can cut that cost by about Rs 6.75 crore, and federal tax credits would reduce it by another Rs 4.5 crore or so, according to Rhone Resch, the president of the Solar Energy Industries Association, a Washington, D.C.-based industry group. Resch estimates that the bottom-line cost of system would be about Rs 5.85 crore. Any return on investment depends on how much a user is paying for electricity, although Resch said a six- to eight-year payback for a large user would not be unusual. And since a business would likely finance the project, it could generate a positive cash flow from the investment immediately, he said. Another green approach was taken by Alan Hirsch, executive vice president of Sea Gull Lighting Products LLC in Riverside, New Jersey. Last fall, he completed a 500kilowatt system that provides 20 percent of the power needs for a 500,000-square-foot warehouse Monday through Friday. On weekends, the panels can provide all of the power needed. The solar panels take up about 60,000 square feet on his warehouse roof. Hirsch’s company is using SunEdison LLC of Baltimore, a solar services company that installs the system and continues to own it. Sea Gull, however, pays a rate for the electricity it uses that’s below what it would pay if it bought from a local power provider, he said. As long as the price of electricity doesn’t go down, Hirsch said, the agreement with SunEdison makes sense. “I don’t know of anybody who thinks electricity is going to be cheaper,” he said. —By Patrick Thibodeau

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trendlines

SAAS:

Who’s Happy, Who’s Not User satisfaction with software-as-a-service (SAAS) is starting to slip, but customer interest in it continues to grow, according to survey results released by the Cutter Consortium, an IT research and analysis firm. “We believe our survey clearly shows that SAAS will become a dominant force in 2007,” writes report author Jeffrey Kaplan, who runs the consulting firm THINKstrategies and is affiliated with Cutter. Kaplan performed a survey via the Web, and got responses from 88 IT professionals within end-user organizations. Thirty-one percent were already using SAAS, the same as in the previous year’s survey, but another 43 percent are now considering SAAS, up from 34 percent the prior year. Kaplan found satisfaction rates of 90 percent among users last year, and 80 percent this year. “I was a little surprised we saw the level of slippage we’ve seen,” Kaplan says. The diminished satisfaction represents a “warning sign for both users and vendors,” he says. Users need to make sure they don’t have unrealistic expectations, and must evaluate Saas

System shutting down Files missing

Please contact your administrator

Network managers in the know realize application rollouts, major upgrades or widespread patching can wreak havoc on performance, but a new survey finds that even minor day-to-day infrastructure changes can send performance plummeting. The survey, conducted by King Research and Usermonitoring.org, polled more than

Illust ration by ANI L T

IT M a i n t e n a n ce

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the capability of vendors before selecting a service, he says. He notes, however, that some drop in satisfaction is natural.“Whenever a market grows, customers arrive with different sets of expectations. Sometimes, those expectations may not be realistic,” he says. “The other part is a larger number of providers emerge and their ability to deliver a consistent quality solution will also vary.” The primary motivations for users who adopt SAAS are the ability to accelerate deployment, elimination of infrastructure costs, and a desire to have internal IT and application staff focus on more strategic projects, Kaplan writes. SAAS is generally reliable and functional, but some customers are disappointed in the cost, he says. “Some customers had an expectation in terms of cost savings that may not have been realized,” he says. “In fact, some SAAS applications do require a certain level of preparation and integration, and even data migration that could result in some additional costs from a consulting third party.” —By Jon Brodkin

Sweating the Small Stuff 200 IT professionals about the impact change has on Web-enabled applications. The results show application patches (close to 40 percent) and day-to-day infrastructure changes (about 37 percent) caused the majority of unplanned outages. While respondents said they are aware large planned changes could cause outages, the survey found that smaller changes seem to have the same impact. “Slightly more outages were caused by application patches and infrastructure changes than by either the release of a major application upgrade or the rollout of a new Web app,” the report reads. “This result appeared to indicate that minor changes are just as risky as major application releases.” Another finding shows that an ongoing problem in IT shops persists. Ideally, network managers would like to spot the performance problem before users and customers notice

the service degradation. Yet this survey shows 72 percent of respondents find out about poorly performance applications from user reports and complaints. About half the survey participants use service-level measurement tools to validate when a problem has been corrected, and about one-fourth said that “they assume problems are corrected if they don’t hear further complaints.” Some 37 percent of survey respondents reported that they rely heavily on expert opinion to diagnose the cause of performance problems, while 22 percent use internally developed diagnostics tools and 21 percent use commercially available tools. “IT continues to rely heavily on end users to validate that problems have been corrected with fewer participants reporting the use of measurement tools,” the report concludes. —By Denise Dubie

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BY diann daniEl

trEndlinEs

More Security on Less Funds cIos must educate the business side, emphasize security technology integration.

Best practices

remains a pressing objective for enterprise IT, according to a recent survey by Forrester Research. But as for the funding to tackle this priority, CIOs must find ways to do more with less. Among IT decision-makers at companies of more than 20,000 employees, 67 percent called significant security upgrades a priority or a critical priority in 2006. And at companies of 5,000 to 19,999 employees, 63 percent of IT execs said the same. The conundrum: despite management’s high expectations for security, the budget to achieve security goals has shrunk. Information security’s slice of the IT budget fell to 7.8 percent in 2006, from 8.9 percent in 2005. That drop was more significant when looking only at North American companies — 6.9 percent in 2006, down from 8.3 percent in 2005. (Forrester surveyed 1,214 North American and European IT decision-makers.) Why the drop? For one, upper management continues to be skeptical of security investments, says Khalid Kark, senior analyst at Forrester Research. Security technology is mature enough that business executives expect standardization, measurement and accountability, which is tough since security risks and ROI are hard to quantify, Kark says. To help reduce costs, IT security execs should prioritize integration and seek product suites that provide a single dashboard view of myriad technologies or inputs, he says. But don’t ignore the important role that people and processes play either, says Kark. “There’s a huge risk reduction if you educate employees.”

iMproving sECurity

create a proactive and holistic security strategy. First, examine how breaches actually occur, then base product purchase decisions on that information. (Forrester found a gap between installed security products and how data breaches occur.) second, create a security awareness program; many breaches are due to ignorance. third, identify and shore up vulnerable points in the company workflow.

Market information security to upper management. When briefing management regarding data breaches, show the value of security and the consequences of unmitigated risk. also, be vocal about the current and future threat landscape: don’t wait until you need funding for a specific project to begin talking about it.

translate ranslate security’s value into financial terms. For example, one company converted blocked spam into money saved by figuring out how much time (in terms of wages) unwanted e-mails would cost each employee.

Security Spending Falls the percentage of the overall It budget that cIos get for security has dropped. 8.9%

2005 2006

7.8%

note: Forrester research survey base of 604 to 840 executives per year, at north american and European enterprises.

Upgrades Remain a Top Priority significantly upgrading the security environment is an It priority, cIos said.

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The bigger the company, the greater the concern 59%

63%

of cIos

67%

of cIos

Employees 1,000 to 4,999

of cIos

Employees 5,000 to 19,999

Employees 20,000 or more

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Mike Hugos

Total Leadership

Ticktock,Ticktock The best leaders know not only what to do, but when to do it. That includes choosing the right time and place to introduce new technology.

uring the past 15 years, I have participated in the rollouts of three technologies that fundamentally changed the IT infrastructure of the companies that employed them: client/server architecture, Web-enabled e-business and wireless mobile devices. In the process, I’ve developed strong analytical skills that I use to investigate the situations and circumstances that lend themselves to the introduction of new technologies. I’ve also developed an intuitive sense about these things that complements my analytical side. Leading a company through an IT-driven transformation requires knowing more than what a technology is capable of. The tricky part is knowing when the right time is to introduce it and where in the organization to implement it in order to demonstrate its value. My analytical side is good at figuring out when something should be done. Then, based on this analysis, I develop a gut feeling for where it should be done. Making the right call about when and where to introduce new technology is one of the ways you solidify your position as a leader in your company. I use two indicators to determine when the time is right. And I determine where to introduce a new technology by using what I call the ‘operational art’.

The Right Time to Act The first indicator that the time is right to introduce a new technology is when you see clear evidence that it can deliver significant returns. If it’s a reduction in operating costs you’re targeting, for example, you would look for more than incremental savings. Because there is always risk associated with implementing new technology as well as time and money 24

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Mike Hugos

Total Leadership

involved in installing and learning to use it, whatever benefits you achieve must exceed the risk potential and cover the deployment costs. The second indicator of when the time is right for a new technology is that it provides your company with a new way to do business and generate revenue. An example of this is Web-enabled e-business technology, which offered companies the potential to increase sales without hiring more salespeople or building new physical locations. But a lot of companies got their timing wrong when they decided to start selling online, because most customers were not ready to actually use the technology. It wasn’t until several years after many companies had installed e-commerce systems that they began to generate significant revenue; companies spent large amounts of money before it was possible to realize much new revenue. Most companies don’t have the appetite to carry the risk of an unproven technology for long. As a leader, it’s critical that you know whether your company is one of them. It may be central to your company’s business model to be a first mover or a technology innovator; in that case, you’ll time your investment early. But if your company is happier being a follower, it’s better to wait until you have clear proof that a new technology not only can but actually will deliver the expected benefits quickly.

The Right Place to Start Once you’ve determined the time is right to introduce a new technology, your next step is to decide the best place to use it in your organization. This requires you to understand the operating model of your company and how it uses technology to support those operations. Understand what operations will benefit the most from a new technology and then weigh the risks involved with the introduction of this technology against its potential benefits. Select an operation where the risk is manageable and where there will also be big rewards. This selection process is not entirely an analytical one. There is also a strong element of intuition involved, based on your assessment of potential impacts that a new technology will have on the operations where it could be used. This combination of analysis and intuition is what makes up the operational art. It’s the ability to know where a tactical move (such as introducing new technology) will produce a strategic result (such as the realization of significant new revenue or cost reductions). I employed this operational art when I introduced the BlackBerry into my company. I implemented it first with the company’s national account sales team instead of providing it to my own IT staff or other internal people. The vice president of sales said his people could use them to increase sales. This would have a bigger impact on our company than would be gained by providing it to our internal staff to increase their productivity. 26

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Most companies don’t have the appetite to carry the risk of an unproven technology for long. As a leader, it’s critical that you know whether your company is one of them. Plenty of people in the company wanted this technology, but as the IT leader, I had to make the call. I figured the sales team was the most motivated to use it productively instead of fussing over its shortcomings. The first generation of these units had plenty of limitations. They had low-resolution screens. It was cumbersome to open and scroll through emails. As phones they were bulkier than cell phones. I felt that the internal staff would be more prone to fixate on these limitations, and as a result, the project wouldn’t generate the returns I knew were needed to prove the concept. The salespeople were highly motivated to overlook the limitations and exploit the opportunity the technology provided. They could use it to stay closer to customers and thus earn more money for the company. The likelihood of success made the BlackBerry project worth the risk, and the returns more than covered the cost of installing and learning how to use and support the technology. Once we had moved up the learning curve and the devices had improved, we rolled it out to my own IT staff and other internal users. Winning CIOs make use of their analytical skills to see when a new technology has promise. They understand how their companies make money and what the cost factors are in their companies’ operating models. Then they develop their practice of the operational art — that blend of business knowledge, street smarts and technical savvy — to determine where to best introduce new technology. This is how they guide their companies through the process of selecting and deploying the latest technologies. CIOs who learn to excel at this become indispensable players, and they become leaders in the transformation of their organizations. CIO

Mike Hugos is a partner in AgiLinks, a software company specializing in agility training and the development of agile supply chains. He is a former CIO of Network Services and author of Essentials of Supply Chain Management. Send feedback on this column to editor@cio.in

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Michael Schrage

It’s All About The Execution

Are You in Control? Innovation demands discipline as much as it requires freedom.

mbrace change. It's one of those awful, managerially correct Hallmark aphorisms celebrated in corporate-speak PowerPoint propaganda. The Give-Change-a-Hug crowd swears that successful change management requires welcoming arms and open minds. They’re wrong. Skepticism is best practice. Enterprise change hugging should be done with the same level of care as swimming with sharks or playing with porcupines: it’s going to hurt no matter what you do. Change management is pain management. Tiny process nicks and subtle service cuts can lead to organizational inflammation and septic shock. But, hey, no pain, no gain, right? IT’s accelerated innovation rate has spawned an enormous body of change management literature for CIOs. Almost all of it addresses how to turn change management into a reliable, robust and cost-effective process. Change is not an event. Change management — like pain management — is really process management, and change leadership is really process leadership. That’s true for people, systems and apps. So, where does successful process leadership come from? An IT Process Institute study provides compelling if counterintuitive insights that ring disturbingly true. Ordinarily, I dismiss self-reported IT shop surveys as self-serving drivel — for example, “Do you have a formal change management process?” “But of course…doesn’t everyone?” “Are you a good boy?” “Yes, Mommy.” There’s good reason why so many CIOs view quasi-academic IT research with contempt. This survey was different. Questions were ruthlessly specific and difficult to cheat on. Inconsistent or contradictory answers would quickly surface. This survey had baked-in, value-

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Michael Schrage

It’s All About The Execution

added skepticism. Moreover, the researchers had selected key performance metrics that would quickly separate the weasels from the winners. I bit. The findings quantified distinctions between IT shops that live for the average and the few that take process leadership seriously. Elite IT performers weren’t just two or three times better than median performers — they were seven or eight times better. High performers — roughly 13 percent of the 98 sampled — contributed on average eight times more projects, four and a half times more applications and software, four and a half times more IT services, and seven times more business IT changes. They implemented 14 more changes with half the failure rate. We can quibble over the specifics, but that misses the central point: there were undeniably huge performance differences between the top quartile and the quartiles below. Why? What were the essential ingredients for process leadership?

most important. We’ve made it OK to scramble top coders to make swarms of not-quite-legit last-minute fixes. Think about that. Then ask: when was the last time your shop audited the impact of unauthorized changes? Take the next step: when was the last time your organization disciplined or dismissed the perpetrator of unauthorized changes? The survey identified a variety of high-impact controls — call them lean controls — that gave IT leaders greater leverage over their process investments. But the dominant finding was that unauthorized changes were a root cause of under performance. IT shops that refused to take that shortcut had the best chance to be elite.

How the Elite Innovate

A conversation with Gene Kim, one of the lead researchers, revealed that the elite performers didn’t treat these controls as behavioral constraints but as platforms for innovation. Controls aren’t straightjackets; they can be trampolines. By honoring controls, their developers had greater flexibility in process management because disciplined design and test proved more agile, robust and maintainable than unauthorized change. Their high-performance culture was a high-controls culture. Best practice was synonymous with best controls. Is that true for your firm? How would you know? The good news, says Kim, is that these controls are straightforward and easy to understand. What’s more, elite performers had IT budgets roughly three times larger than median performers. Kim believes that “high performers have continually earned ever increasing budgets because they deliver ever increasing value to the business. The budgets of medium and low performers shrink or are only grudgingly increased by skeptical and suspicious CFOs who see IT managers failing to deliver projects and keep IT services running consistently.” The more I talk with CIOs, the less confident I am that IT appreciates the role of controls in empowering leadership rather than imposing micromanagement. The IT Process Institute’s results should provoke some rethinking about basic systems change management assumptions. The great systems software sage Fred Brooks was right: here are no silver bullets. But some ammo delivers far greater bang for the buck than others. CIO

The key discriminator between the best and the rest was that elite performers rigorously monitored and punished unauthorized changes. They had situational awareness of change.

There was a simple, powerful and persuasive answer: foundational controls. That is, strict rules that clearly governed how change would be defined, monitored and thus led. Top-tier performers weren’t change embracers or innovation huggers. They identified and enforced ‘process commandments’ that constrained wasteful behavior while reinforcing productive discipline. The researchers had picked a unit of analysis illuminating the core process values of their surveyed firms. Inspired by MIT’s research on lean manufacturing, the IT Process Institute surveys zeroed in on the controls, not the metrics, the elite used to define and assure process discipline. Two controls towered over all others in impact and importance: do you monitor systems for unauthorized changes? And are there defined consequences for intentional unauthorized changes? No ambiguity or nuance here. The key discriminator between the best and the rest was that elite performers rigorously monitored and punished unauthorized changes. They had situational awareness of change. The moment I saw this, a myriad of unresolved IT observations crystallized into clarity. What kills us is not our failures of planning, analysis, design, testing and deployment. It’s not the work we’re supposed to do that undermines our productivity; it’s our black market economies of unauthorized changes — no matter how well intentioned or essential. We misunderstand the true enterprise costs of change. Enterprises reluctant to punish unauthorized change agents guarantee dysfunctional cultures of lax discipline and process subversion. What makes this insight managerially excruciating is the simple truth that, in so many IT organizations, unauthorized fixes are sometimes the best and

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Michael Schrage is codirector of the MIT Media Lab’s eMarkets Initiative. Send feedback on this column to editor@cio.in

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co m

ImagIn g by b In esh sreedharan

Photos by srIvatsa shan dIlya

Sangita Reddy, executive director-operations of Apollo Hospitals Group, says the company is 100 percent HIPAAcompliant in everything it does in India.

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compliance doesn’t have to be an end in itself, but can be a journey towards bettering security, standardizing records, and enabling real-time access to medical data.

f r o mpliance B y K u n a l n . Ta l g e r i

Reader ROI:

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t was in Hyderabad, a little over a year ago, that Craig R. Barrett articulated a surmise usually uttered in hushed tones in IT quarters around the world. “Healthcare is the last unconquered bastion for the IT industry because technology deployment is very low in the area,” he remarked during a panel discussion. The chairman of Intel was comparing the condition of global healthcare to more robust and IT-enabled sectors like the financial services. In the US itself, REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 0 7

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Cover Story | Compliance where technology has truly penetrated in healthcare, fewer hospitals fully complied with the Health Insurance Portability and Accountability Act (HIPAA) in 2006 as against the previous year, according to a survey by the American Health Information Management Association. The IT deficiency in healthcare that the Intel chief noted is far more pronounced in India. Still, on that December day in Hyderabad, one person made a retort to Barrett’s observation that put technology-usage-in-healthcare in perspective. It came from another panelist: Sangita Reddy, executive director operations, Apollo Hospitals. “If you take a look at the high-end technologies in healthcare, doctors are so savvy — they use technology well. When you give users appropriate applications, they can be very good at it,” said Reddy. It’s true. IT deployments have come a long way in Indian healthcare — albeit in the private sector. On the back of international accreditations and the success of its hospital information systems (HIS), the Rs 662.7-crore Apollo Hospitals now plans to integrate all its systems, across 42 hospitals and multiple locations, to a common platform. Fortis Healthcare is also on a massive drive to standardize data across its organization, and Max Healthcare too is developing a more robust and HIPAA-compliant HIS. In evolving IT systems of this order, private healthcare providers have voluntarily put themselves on the path of compliance with global standards, most of which aren’t mandated in the country. “We are not a local player anymore, so why have systems that are not globally compliant?” asks Reddy rhetorically. That said, the challenges accompanying

Compliant IT processes bring with them standardized data, enabling more efficient systems. — Suneeta Reddy, Executive director-finance Apollo Hospitals

compliance for an IT organization are immense. It calls for large upfront investments in electronic medical records (EMR) and technologies to protect medical records, including remote monitoring systems, intrusion detection and auditing software. More crucially, it calls for process reengineering to standardize data and adhere to an industry standard that can, over time, enable patient-owned data on any platform. Currently, India lacks an industry standard vis-àvis electronic documentation of patient records. And if the HIPAA scenario in the US has proved anything, it is that compliance begins with an industry standard. “Any standards adopted by the industry will ultimately benefit the patient. In medical emergencies, for instance, medical data could be ported from the ‘point-of-store’ to the ‘point-ofcare’,” says Pradeep Vaidya, head-IT, Wockhardt Hospitals. In effect, a patient should be able to access his medical records, regardless of the healthcare provider he consults. Reddy concurs with Vaidya on the importance of an industry standard: “As Indian healthcare gets more IT savvy, unless we’re careful, we are in danger of creating islands of automation with multiple standards that don’t talk to each other,” notes Reddy. “So, we have been asking the government to help evolve standards for all healthcare service providers and practitioners at all levels,” she adds. India’s oldest private healthcare provider isn’t sitting on its hands waiting for an industry standard, but has begun to self-medicate compliance — a trend that is spreading contagiously. Apollo’s IT team approaches compliance proactively, not just as an end in itself, but as a journey towards bettering security, standardizing its records, and enabling real-time access to medical data. With its compliant processes, Apollo Hospitals believes it is ready to collaborate and compete worldwide, vindicated by international accreditations like the Joint Commission International (JCI). The mindset is not unique to Apollo in the Indian context. Wockhardt Hospitals and Max Healthcare are Health Level 7 (HL7)-compliant and Fortis is also seeking the JCI tag.

A Long, HArd roAd The first challenge that compliance has traditionally thrown up is ensuring user buy-in. And the task of data standardization is a microcosm of this challenge. “If I take a high-level concept like an interoperable standards-based network for the secure exchange of healthcare information, it needs to be present at all levels: from the general practitioner and diagnostic centers to specialists and hospitals,” says Reddy.

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How has Apollo Hospitals managed to change its immediate surroundings and beyond? Structurally, Apollo has consolidated HR and IT under operations. “These are the two critical pieces in the whole exchange of information,” notes Reddy. Apollo backed the restructuring with a partnership with a vendor, thereby ensuring that the corporate IT team, comprising Apollo’s ‘knowledge people’ — not technology savvy people — can focus on the needs of internal users and those arising from the patient community. Ram Mohan Kasi, manager-IT & systems, has seen the IT organization evolve in his 14 years with the Apollo Group. “Doctors are more IT-savvy today. In the initial stages, about a decade ago, we in the IT team would tell them about the systems. Now, the expectations have reversed: it’s the doctors who contribute to the process,” he says. The IT organization at Apollo has periodical meetings with individual departments for inputs. “We enquire about current pains in the existing systems, related problems, and their expectations from all the Apollo centers. This information is consolidated, and we then work on the systems,” explains Kasi. Typically, the IT team provides a questionnaire to customers and employees, the IT department’s internal customers. “This is the moment of truth within the IT organization,” says Binod Samal, VP-corporate (IT & systems) at Apollo Hospitals. “The inputs are consolidated in every department, which flow up to the department head, and upward. It helps determine issues and their severity,” he adds. The process is diverse in terms of how wide the net is cast for user involvement, even in ideation. “The core IT team has about 30 people,” says Sangita Reddy. “We then have seven committees for clearance of functionality and specifications. Each of these committees has four to six people. Overall, there are about 120 people involved in building specifications,” she explains. It's a number that’s large enough to ensure they cover all their bases and yet small enough not to choke the requirements process. At Fortis, its new business excellence and intranet projects (See ‘Data on the Same Page’) are aimed towards standardizing data and creating awareness of new processes. Initiatives like these contribute towards change management, which is essential for achieving compliance.

dAtA CureS The primary driver for compliance at Apollo Hospitals has been business strategy. Over the past five years, India has emerged as a medical tourism destination. In addressing the needs of these patients effectively, Apollo Hospitals found a trigger to voluntarily move towards compliance. Further, with an ITES company like Health Street in its fold, the Apollo group got its first taste of compliance based on foreign legislation. “Health Street requires us to work for the healthcare industry in the US. We have

WhaT Wha T is your posiT posi Tion on complying WiTh

gLobAL normS? Pradeep Vaidya Head-IT, Wockhardt Hospitals

“We are not following hIPaa as the nature of our business at this time is pan-Indian. however, our hIs software is health level-7 (hl7) and dICom compatible.”

Manish Gupta CIO, Fortis

“From a business standpoint, hIPaa has to be adhered to. We comply on similar lines, though the regulations in India do not mandate it.”

Amit Kumar Senior VP-technology, Max Healthcare

“We are to integrate all our hl7-compliant devices with our hIs system. one of the things we are waiting for is an industry standard for hIs systems.”

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Cover Story | Compliance fine minds here working with large healthcare systems, university hospitals, and three of the top five insurance companies there,” says Reddy. The BPO firm works with this clientele, understands what they are doing in deploying IT and how they are using data mining tools, and then either helps them build solutions or does plain business process outsourcing. “We comply with HIPAA hundred percent. Not just with Health Street, but with everything we’re doing in the Indian environment. We’re accepting HIPAA as a standard,” states Reddy. In effect, it follows HIPAA processes by controlling access to patient records. “If we are putting patient data on the Web, we ensure that it is unidentified or in a secure environment,” she elaborates. At a lower level, Apollo Hospitals sees compliance as a prime driver for capturing, managing and using data better. After all, the most visible change that HIPAA mandates has been the shift from maintaining paper records to a digitized format. “With appropriate IT deployment, you can reduce

rework, capture data better, minimize errors and, therefore, have better quality healthcare,” asserts Reddy. One such automated process, for instance, begins from the time a patient registers and is admitted to the hospital. The patient’s record is available to a doctor by the time the patient reaches the doctor for consultation. After the checkup, if the doctor recommends further investigation at the hospital, the results for the doctor’s use are captured. Even a prescription is captured in the system, which reaches the pharmacy, while consultation details reach the billing department. “In the healthcare space, any manual step in processes brings with it the potential for error, says Samal, “We constantly analyze processes to determine how many manual steps we can reduce, and how much we can digitize. We have done this across the length and breadth of our enterprise.” Apollo’s other investments vis-à-vis compliance has been on the process front, courtesy its international accreditation. The JCI accreditation called for adherence with 1,033 measurable standards, each of which relates to a clinical or administrative statute. “We ensured that we performed according to the required standard — and this performance was measured over a period of time across all clinical settings,” says Dr K. Hari Prasad, CEO of Apollo Hospitals, Hyderabad. The benefits of compliant IT projects extend beyond healthy ROI, says Suneeta Reddy, Sangita’s sister and the executive director-finance at Apollo. “With regard to IT, I have to say that it is so basic to our infrastructure that we don’t look only at ROI. We look for the value it provides to patients, and internally,” she says. From a finance perspective, Suneeta Reddy says that compliant processes provide the benefit of standardized data, enabling internal systems to do what users, in administration, want it to do. Whether it is capturing revenue, looking at financially weak areas or providing parameters to look at better performance, the answers lie in standardized data.

WHo PreSCribeS ComPLiAnCe?

An international accreditation serves as a tool to track and benchmark improvements in clinical standards. .— Dr K. Hari Prasad, CEO, Apollo Hospitals, Hyderabad.

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Manish Gupta, CIO of Fortis Healthcare, a leading player, has been more measured about compliance. “We have to look at financial and security compliance. Right now, however, there are no regulations that mandate compliance with something like HIPAA,” he says. Despite this, Fortis possesses the wherewithal to undertake self-compliance and is already digitizing a large portion of its medical data. Gupta points out the irony that the law still mandates maintenance of patient records on paper. His wry observation is on the reference to technology in the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. Technology is almost relegated to an afterthought. “Efforts shall be made to computerize medical records for quick retrieval,” it states. The preceding items in the regulations in relation to medical records mandates every physician to maintain medical records pertaining to indoor patients for three years from the date of

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IT used to be 1 percent of our operating budget. Today, it’s 4.5 percent of our operating budget.

commencement of treatment in a ‘standard proforma’ laid down by the Medical Council of India. The data attributes — to be maintained in paper records — include details of diagnosis, investigations advised with reports, follow-up, observations, apart from patient name, age, gender, address, occupation, date of first visit, clinical note (summary) of the case, etcetera. Unsurprisingly, technology is yet to capture the imagination of primary healthcare — a stronghold of the government — largely due to poor government spending in national healthcare. According to a CII-McKinsey report titled Healthcare in India: The Road Ahead Ahead, government spend on healthcare is 1.1 percent of India’s GDP, compared to Brazil that spends 6 percent of its GDP and Thailand that spends 5.7 percent. With poor political and legal will behind data maintenance, technology is unlikely to be a focal area of growth in public healthcare. On the other hand, private healthcare providers have expanded into secondary and tertiary healthcare, thereby contributing the most to healthcare: to the tune of 5 percent of GDP. And IT deployments are a factor of the private healthcare providers’ growth story. Apollo Hospitals has an IT budget of Rs 13 crore, and has managed ROI in many projects over not more than three years. Says Sangita Reddy: “IT used to be 1.5 percent of our project cost. Today, it’s 2.5 percent of our project cost. IT used to be 1 percent of our operating budgets. Today, it’s 4.5 percent of our operating budget. So, the importance of IT in terms of financial investment is high.”

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For its nationwide HIS project, Apollo has now earmarked Rs 11.25 crore. “The expenditure this year will not reflect our normal spend on IT,” says Suneeta Reddy. “It also means that for the next three years, we won’t have to spend that much except on maintaining and upgrading the new system. It seems like a large upfront expenditure, but we are confident of recovering much more than we would have spent over a three-year period. The returns will be in terms of savings on cost, avoiding duplications, and having betterinformed managers,” she adds.

toWArdS SeCure emr With the growing gamut of medical insurance companies today, the Indian healthcare scenario bears a resemblance to that of the US in pre-HIPAA days. In an article titled A Look Behind the Scenes of HIPAA, the legal and regulatory counsel for American Psychological Association, Doug Walter spells out what really triggered HIPAA and compliance in the US. He says: “HIPAA legislation and rulemaking, including development of the privacy rule, have much to do with the emergence of managed care organizations (MCOs) in the early 1990’s as the primary payers for health care. Unlike insurers in the fee-for-service system, MCOs began demanding broad access to patient records for payment and administrative purposes.” The growing number and clout of medical insurance companies, who will demand access to patient records as the MCOs in the US did, could lead to more compliance. REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 0 7

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Cover Story | Compliance J. Rajagopal, executive VP and head global life sciences & healthcare, TCS, recognizes the increased coverage by private medical insurance an area of growth. “You really cannot have healthcare without medical insurance. You can’t just have providers, you also need payers.” “It is beginning to happen in the country,” he adds, an observation that’s echoed in an Ernst & Young 2004 report on

healthcare. “Factors like privatization of medical insurance,” the report says, “are making the market more attractive for international and national corporate players.” At present, only 1 to 2 percent of the entire population is medically insured, according to Aditya Bahadur, executive officer at the Confederation of Indian Industry. “And more than two-thirds of the population pays out of their pocket — there is a huge disparity,” he says. With greater presence of medical insurance players in the market, security and scope of patient information and the efficacy of access to such records will become imperative. “For lack of an industry standard in the US healthcare sector, came the HIPAA. It covered privacy and the fact that information should be portable. India is now adopting a more common set of standards and we want to create a network where people can seamlessly exchange information,” says Sangita Reddy. HIPAA called on the Department of Health and Human lood sugar’; ‘blood-sugar’; ‘blood glucose’; ‘serum glucose’ … Services to standardize electronic patient health a hyphen here, a preposition or synonym there — and what you have and financial data and to set security standards to in your database is three to four unique attributes, all of which refer to protect ‘individually identifiable information’. the same subject. as manish gupta, CIo of Fortis healthcare, puts it, an eCg can In the meantime, the more proactive hospitals be referred to in different terms by different healthcare professionals. in India move ahead on compliance, driven by the Private hospitals have discovered the complexities such a situation brings while needs of their patients. The most important thing tracing patient records. With a vast number of people adding and processing in healthcare is right information available on time inputs on medical cases across various healthcare centers, data standardization at the site where you need to make the medical has become imperative to efficient electronic medical record systems. It’s a goal decisions, says Reddy. Compliance has proved common to both Fortis and apollo hospitals. to be a trigger. As her deputy, Binod Samal puts Forbes, or Fortis business excellence in systems, is the healthcare provider’s it, “The dream is: anywhere across the globe, if new project towards standardizing, updating, cleaning and controlling databases anybody needs healthcare service from a hospital, across its hospitals. “We want to standardize titles. the second step — and for this, it should be available — and provided. That you we’re actually using some cleaning tools — is to identify the value of that data, so cannot do, without IT.” CIO that we don’t get into duplicated-data situations,” says gupta. apollo is going about its standardization processes by bringing doctors and It folks from its hospitals on the same page. says binod samal, vP-corporate (It & systems) at apollo hospitals: “We have embarked on a massive standardization exercise within the hospital chain, and formed expert groups that have doctors from various hospitals who arrive upon a standard manner in which to do things — how the tests are named, how the departments are titled, and so on.” apollo has also been automating processes to minimize manual intervention and for intra-hospital portability of data. For instance, discharge summaries and all lab requisitions are It-enabled: the hIs has been interfaced with the lab systems, so that when lab requisition data is keyed into a workstation, it goes straight to a additional inputs on hIPaa by susannah Patton lab. Post-test, the lab reports are sent directly back to the ward. In doing so, at least three key medical personnel and over five steps have been bypassed. over seven Chief copy editor Kunal N. t talgeri can be reached at years, the hospital has mapped and automated 240 such processes. Share Your opinion at Fortis, gupta sees data standardization as a stepping stone toward standardized processes, which will be driven by business. “not all steps are Itmost organizations are on the road to compliance with one regulatory standard or another. Would you take the apollo driven. the reporting in employee-based processes — whether it’s billing or hospitals route and embrace compliance even if you were medical — also needs to be standardized.” there is a new intranet portal on the not mandated by law to do so? Would it be easy to convince anvil too, which, he believes, will be a useful tool in standardizing administrationyour management to do so? share your thoughts (or fears) on this issue with your peers. Write in to related data — and to spread awareness. editor@c o.in — K.n.t

Bringing Da DaT Ta T a on The

SAme PAge

‘b

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By AllAn HolmeS

For one of the world's most stringent countries to practice medicine in, the US uses surprisingly little IT. This leads, directly or indirectly, to 225,000 deaths a year. Here are some of the problems the US faces as it seeks to put together a system that will correct the situation.

Bitter Pill to

Swall ow A

ccording to a recent study by Massachusetts General Hospital and George Washington University, less than 25 percent of all US doctors use some form of electronic health records (EHRs) in their practices. Far fewer — only around 10 percent — have fully operational health information systems that collect patient health data, manage information such as orders for lab tests and prescriptions, and provide decision support. Meanwhile, many of those healthcare facilities that are deploying EHR systems are having difficulty making the systems work. In November, an internal report by Kaiser Foundation Hospitals that was leaked to the press detailed hundreds of technical problems with the Rs 18,000 crore enterprisewide EHR system supplied by the vendor Epic Systems. By 2009, the project, called HealthConnect, is supposed to provide doctors access to records for all 8.6 million Kaiser patients. But the system has suffered from excessive downtime, according to the report. In addition, users experienced problems accessing certain applications that allegedly did not scale well to Kaiser’s vast network. Three days after the report became public, Kaiser CIO Cliff

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Cover Story | Compliance Dodd resigned, although the company won’t comment on any connection with the troubled project. Yet health policy experts say EHRs are what’s needed to reduce the 225,000 deaths a year due to medical errors and adverse effects of mistakenly prescribed drugs, among other ailments of the healthcare system. From 2004 until last year, David Brailer, a physician and the first national coordinator for health information technology, led a Bush administration initiative to persuade the nation’s 885,000 physicians and the management of approximately 5,000 hospitals to invest millions of dollars in electronic health information systems and connect them to form a national network. Brailer readily acknowledges the challenges of convincing clinicians to change long-standing business processes, of delivering an ROI, and of ensuring interoperability among doctors’ offices and hospitals on a grand scale.

Meanwhile, John Glaser, CIO of Partners Healthcare System, and Hilary Worthen, a physician and senior director of clinical informatics at Cambridge Health Alliance, have labored for years in the trenches to deploy EHR systems. Partners is a network of 7,000 physicians and 10 hospitals, including Massachusetts General, a teaching affiliate of Harvard Medical School. Cambridge Health Alliance includes 25 outpatient centers and three hospitals in the Boston area. The organization records some 600,000 outpatient visits and 20,000 hospital discharges a year. Most of its patients are low income or face language and cultural barriers to accessing health care. CIO brought Brailer, Glaser and Worthen together in a conference call and via e-mail during October to trade their insights about managing the transition to EHRs successfully.

CIO: Why do we need EHRs? David Brailer: There are a large number of issues that have reliance upon accessible use of EHRs. First, there are efforts to get more affordability of healthcare services that are based on having information that can allow better decisions to be made. Second, dealing with the quality of care crisis, which is the direct outgrowth of physicians not having the information they need to provide proper healthcare. Our efforts to try to improve monitoring at the national level of bioterrorism are hampered because [such monitoring] relies upon a very antiquated paper-based system. And finally, the growing need for consumers who recognize that their information should follow them to help improve care. So all of these vectors have come together, resulting in a major change in the trajectory of healthcare IT. John Glaser: We will have computer physician order entry by the end of this year in all of our academic and community hospitals. [These are systems physicians use to store and manage patient information and to order tests and prescriptions.] We have some early efforts on giving patients access to their data and some early, early efforts in genomic or personalized medicine that use EHRs to support research in genomic-based diseases. It remains a challenge to implement these things. The process redesign is hard. It can be hard to persuade physicians that this is really important to do. Nonetheless, we are shifting — because I think people understand the need to 38

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sign up — to an emphasis of effectiveness of use. Often, the physicians will still ignore the guidance that we give them. So, they have ‘adopted’ it, but they are not using it well, and, as a result, the data is incomplete. It’s inconsistent and we are seeing very uneven performance gains. Adoption is a major issue. The Massachusetts General/ George Washington University report shows that doctors are not moving to EHRs as quickly as previously thought.

Brailer: If there is anything that we try to do it is to have a physician realize that this is not an easy process. The issues that really matter here are changing how doctors do what they do, in collaboration with other parts of the healthcare system, from pharmacies and labs in hospitals to nurses, front desk clerks and others. That whole workflow, obviously, must change to achieve the kind of high performance healthcare system that we want, and it goes far beyond loading software. Hilaryworthen: I am not surprised at the gap between the number of places with a partial implementation and those few with a full one. The most sophisticated parts of EHR functionality are those that support critical multidisciplinary workflows, often involving multiple departments. You can implement the more basic EHR functions and still have people happily working in their silos, but to do the hard stuff, people need to change their entire way of thinking to a much more collaborative, system-based Vol/2 | ISSUE/07

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Cover Story | Compliance approach. From what I see, this poses a much deeper challenge than just getting docs to use a computer. Convincing people to do the optimization [of business processes] and to help them understand [how EHRs work] are the big challenges we are facing now. The whole idea of process improvement is something that clinicians do every day. They are trying to improve the process of getting patients to take care of their diabetes, for example. But when you start to articulate it in business terms, it doesn’t instinctively grasp clinicians’ interests. We are working pretty hard to try to get doctors and administrators to understand each other’s languages and to collaborate in the way to make those workflows affected by EHRs much more reliable and accurate.

worthen: The leadership of our organization has understood that it is very hard to measure the ROI in strictly dollar terms. If you look at the better quality of care that we can practice, if you look at the better clinical outcomes and so forth, you can’t necessarily translate those immediately into dollars. So they have not been very demanding compared to what they would probably want to see if we were to get a new machine of some sort.

CIO: What about the money?

Glaser: The 10 percent figure means that advanced features will lag in adoption as long as there is little incentive for doctors to use those features and incorporate them into their daily practice. But, the first thing we have to remember is that sometimes we label users as resisters and sort of cast them as being 4year-olds who need a nap. Frankly, we are asking them to do tasks they didn’t do before. The way we get them through this is to engage them quite extensively in decisions of how we implement. You do as well as you possibly can on the software to make it as feature rich as possible. You try to make it as reliable as you can. We’ve also begun to work with some insurance companies so that if you are a physician who is using this and you are using it well, there’s additional money you will get from the insurance company that can sort of make the economics better. As we see with Kaiser’s electronic health record implementation, there are significant technical problems to overcome too.

Brailer: Major corporate change projects of any sort tend to be complex and full of surprises, and Kaiser’s is no different. Someone has to pioneer the EHR in large corporate settings, and it might as well be Kaiser. worthen: I am not unbiased, since our organization is an Epic customer too. There are certainly a lot of examples out there of robust Epic implementations. When you add up the number of sites and the hours affected [by system downtimes] — given the scale of the implementation I am not sure anyone can do much better. That said, the scale of Kaiser’s project is indeed enormous, and that level of complexity is likely to uncover unforeseen issues. I’m not sure it means that organizations tackling a less ambitious implementation need to alter course.

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Glaser: The advice that we would give is to plan out the nature of the mission, realizing there are limits to what you can do. Depending on your market, deploying an EHR is becoming something you have to do competitively. I think for a larger organization you can get an ROI. It takes a lot of work to get it, but you can get it. I do think there is a need for capital contributions for smaller organizations, which don’t have much in operations to begin with. It’s harder to get these ROIs. There are no clerks to [lay off] and not all that much process to make more efficient. Brailer: We should bear in mind that, particularly in physicians’ offices, the discussion about ROI is often moot. I say that because providers with EHRs bill markedly more. Doctors call this ‘better charge capture’. Payers [such as Medicare and insurance companies] have a less friendly way of viewing this increased payout. But whatever it is called, when EHRs go in, billings increase. I think doctors’ groups have appropriately said that with these technologies, doctors have the ability to provide more documentation and to support and justify their work. But in the end, Medicare and other payers look at the money, and this is causing them to take a negative view of the financial promise of health information technology. In their view, these tools may or may not save money in the long term from safer care, but they are certain that they cost them a lot more in the short term. Medicare and other payers pay for the volume of procedures doctors provide, not for quality or efficiency. Therein lies the challenge for IT. We can push IT a long distance, but the transformation will only occur when there are market fundamentals aligned toward quality. CIO Send feedback on this disussion to editor@cio.in

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Shopping for Intelligence

BY Gunjan trivedi The corporate credo of Pantaloon, ‘Rewrite Rules, Retain Values’, is core to the story of the rise of Kishore Biyani, CEO of Future Group, in India’s organized retail sector. As his business grew, he rewrote the rules of conventional wisdom and adopted an approach of making quick, maverick decisions. He trusted IT to help him make these decisions, provide him information and keep him from making the same mistakes. Now, Biyani has embarked on a journey to achieve a holistic view of his customers.

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

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Kishore Biyani: I am of the opinion that while you are small, you can take decisions based on instinct and gut. But, as you grow larger and begin to scale up, decision-making has to become scientific and you need to be in control of your processes to take informed decisions. In this scenario, I believe that IT gains paramount importance in organized retail. Without IT, you cannot make accurate decisions and hence cannot scale up. It’s that simple.

Is it better to get systems in place and then scale up or grow quickly and iron out problems along the way? It’s difficult to have a clear-cut answer to this. Either way, you still need information. The extent of its granularity, accuracy and timeliness depends on the degree of your technological sophistication. If you look at the western world, it has achieved a certain level of advancement in technology. They will readily spend millions of dollars to achieve an additional 0.1 percent efficiency. In India, we are at a different

CIO: How is the Future Group planning to ride the scale juggernaut?

Imagin g by unnikrishn an av

Kishore Biyani, CEO, Future Group & MD, Pantaloon, says that in a business where one mistake can be lethal, he banks on IT to make informed decisions.

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Kishore Biyani wants I.T. to: Help make informed decisions Build competitive edge and core competencies Support the organization on hectic days like a large sale

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stage. We are learning as we grow. I feel that you should not become a slave to technology. It should not dictate how you should do business. You should keep on learning, changing and adapting as you grow. I believe that one should always first discover how best to do business before getting into technology.

How does IT help you make quick decisions? I look at information technology as a tool, which, coupled with human interpretation skills, can help arrive at the best decisions quickly. I credit human intervention equally here, because IT can only help you get information. Interpreting information into tacit and explicit knowledge that will benefit the business can only be done by humans. If you think that technology alone will help you do good business — it’s never going to happen.

You've said that the key differentiator between winners and losers in organized retail is inventory management... Retailing is all about inventory management. All the decisions I talked about earlier are either on the consumer or the inventory side. The speed at which you can rotate your inventory is critical to the success of a retail business. I believe that IT is a life-support system for us. We have to manage many SKUs (stock keeping units) and we also need information of each and every aspect of our business. IT helps us keep a tab on all the areas of our businesses. However, there are instances when even the best technologies fail to deliver. Since last year, for example, we have started hosting a mega sale for products at reduced prices in our hypermarket retail formats (43 Big Bazaar, 65 Food Bazaar and 5 Fashion Station outlets) around Republic Day. 42

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How does IT help the Future Group reduce time-tomarket?

“With technology, nothing is short-term. To witness its impact on business, look at the medium and the long term.” — Kishore Biyani Between January 26 to 28, 2007, we virtually sold thirty percent of our stock. Worldwide, I believe, no system can support the selling of more than two to three percent of stock a day. Even with the best systems in the world, it is impossible to sell one-third of your stock in just three days. Systems like autoreplenishment did not work during the three maniac days we had. These systems will replenish once or twice a day, but in those three days, we replenished our shelves ten to twelve times a day. During those three days, we were forced to set our systems aside and work manually because of the kind of speed we needed. During those three days, even customers behaved irrationally. Hence, we also had to perform irrationally. IT can only do things logically but when business starts to behave illogically, IT has to take a backseat. Nevertheless, I sincerely feel that advancements in technology will definitely help us gain some sanity in the future during such maddening days.

This is more of a human journey. It is the journey of thoughts to ideas and ideas to prototypes. During this process technology doesn’t play key role. IT takes over when the process to prototyping rapidly kicks in. Once we perfect the prototypes, then it is the role of IT to rapidly replicate the prototype and push it to production environment. What we have seen worldwide is that even the fastest ‘Mind to Market’ fashion retailers, such as Spanish retail giant Zara, are not very high on technology deployment. They have perfected their own way of doing things, riding on fundamental IT infrastructure.

A few years ago, Pantaloon worked on a roadmap that required a Rs 100 crore IT investment over three years. How has this impacted business? With our earlier investments in technology, we have better control and grip over our business. Our accuracy and control over information is now also far greater. Based on this, we are now working on something that will increase our investments even more. We are going to pump in upto Rs 400 crore more in technology as we plan to build a retail backend-technology services company. This will help us digitize our processes across businesses and move them to a common, shared backend.

Do you think RFID can deliver higher operational efficiency and impact customer satisfaction? I think RFID can change the way we do business. It has strong potential and nobody can ignore it. We ourselves are looking at different options of how we can use RFID at various levels in our businesses. Even

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though what we are doing with RFID is at an experimental stage, we see a lot of promise in the technology. It is capable enough to get deployed on a large scale. In fact, until now, we were looking at RFID in isolated environments. I feel, to harness its potential, we should start to look at the technology with a holistic approach. We are now drawing up a roadmap of RFID so it can be used across various aspects within the organization.

How soon do you think such technology will start impacting your business? With technology, nothing is short-term. In order to witness its successful impact on business and its benefits, its roadmap has to be spread across the medium and the long term. As far as RFID is concerned, I think, within six months we should start to deploy RFID at the consumer business level.

Do you prefer investing in proven technologies or do you also look at the cutting-edge? We are, honestly, open to both. Right now, we are looking at certain high-end, interactive technologies for our retail media vertical, which are cutting-edge. On the other hand, in the retail merchandizing environment, we prefer systems and technologies that are tried, tested and proven. It all depends on the domains.

Are you looking at predictive analytics and similar technologies to analyze customer behavior? Predictive analytics and artificial intelligence are subjects that really excite me, and are something we would love to deploy in our business. As human beings, we would love to have the power to predict the future. We want to understand quite

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a lot about our customers’ behavior in terms of what culture or caste or location or profession make people buy the goods that they do. We want to analyze a lot of behavior patterns. Though we do a lot of analyses, of now we are nowhere near — in terms of AI — to where we want to be. Once we consolidate all our consumer data at the group level, we will try to introduce predictive analytics and AI to help us foresee trends more precisely.

SNAPSHOT

that the enterprise does not repeat them. In our business even a single mistake can be Revenue: lethal. Without technology Rs 2000 crore you are prone such mistakes. (2005-2006) Hence, it is critical to have a Employees: technology roadmap in-sync >14,000 with the business roadmap. IT Staff: Since technology >85 at HQ witnesses so many disruptive (central role) innovations, we have to be >250 in store careful while drawing a (support) tech roadmap. Therefore, Locations: we decided to build a basic, Over 180 transactional platform to IT Budget: operate within SAP for our Rs100 crore over three years businesses and then construct technology blocks above The Groups' CIO: Chinar Deshpande it to help us have a holistic 'Vision 2010' aims view of our group in terms at expanding its of data and information. retail business Future Retail Services is a exponentially. How will you part of the new vision we have created: to build a backend for our design services and ensure that the IT vision of business process outsourcing that will take the organization is in-sync care of our accounting and finance, customer with this plan? relationship management and a lot of other processes across our various verticals. ‘Vision 2010’ is a roadmap we have defined In a nutshell, I believe, no businesses can in terms of the revenue and categories of run without information technology. IT is a businesses we would want to achieve. We loosely-defined term as it can equally stand want our group’s revenue to be close to Rs for business apps or communication systems 30,000 crore by 2010-2011. More specifically, or networking infrastructure. Irrespective of we would like to have our food business and its definition or role, I can’t see any business fashion retail vertical to generate revenues running without a certain amount of IT. CIO close to Rs 10,000 crore each, and the rest will be pooled in by other businesses. As far as technology is concerned, we are currently trying to build a robust technology vision that will allow enough scalability. I believe that technology can be effectively used to build a competitive edge and core competencies. It is much like the plumbing of a building. Even though we forget about it once we’ve put it in place, it remains of paramount importance. To me, technology is all about collecting, disseminating and sharing information. It aids informed decision-making, and helps the organization Senior correspondent Gunjan Trivedi can be identify mistakes, rectify them and ensures reached at gunjan_t@cio.in

Future Group

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By AllAn Holmes

Business intelligence isn’t just for the big guys anymore. As applications grow cheaper and easier to run, more mid-market CIOs are using BI to drive innovation and create competitive advantage.

Boebel believed that a business intelligence (BI) application Chris BoeBel, the direCtor of information could help unlock future growth for the Buffalo-based technology at Delta Sonic Car Wash Systems, had a big company. A BI system could feed data on product sales and sales job on his hands. customer response to discounts back to the finance and Delta Sonic executives knew they could run the chain marketing departments so that executives could zero in on of car wash and convenience stores more efficiently. They what worked and what didn’t. also wanted to boost sales. But they had But Boebel (pronounced BAY’-bill) knew few tools with which to pinpoint their bestReader ROI: winning approval from the business for a BI selling products, most-popular car washes, What to consider before application would require a deft negotiating top marketing promotions and the impact investing in BI touch. Some business unit managers were of those promotions on sales in other parts Tips for getting business buy-in likely to view BI as too expensive and elaborate of the business. For Delta Sonic to keep a solution for a mid-size company. Many Delta growing, such insight into the business and Why good data can make or break a BI application Sonic executives were wedded to decades-old, its customers was critical. 44

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Business Intelligence mostly paper-based reporting systems and would need to buy in to the promise of the new technology. Boebel would also have to overcome the sentiment that BI was only for the big boys — megacorporations with nationwide or global operations that manage tera- or petabytes’ worth of information. But after months of attending BI conferences, talking with numerous vendors and creating a presentation that showed how a simple BI Web tool could help the car washes to staff more efficiently, Boebel was ready. His careful research and early test results helped him line up support with the CFO, operations manager and some key business unit leaders to argue for a bigger investment in BI. In 2004, he got an OK from Delta Sonic’s family

owners to invest Rs 112.5 lakh in Cognos’ 8 BI application; this was a large investment for a company with annual revenue of Rs 900 crore, as reported by Hoovers. In the spring of 2006, after deploying some simple analysis of convenience store sales — showing which promotions were increasing beer sales and why, and which brands of cigarettes were the biggest sellers — Boebel and his team expanded the system to other business units such as the car wash and oil change business. The information gleaned from the convenience stores and car washes — based on knowing which promotions work best and generate sales of other products and services plus the ability to better track cashier statistics to prevent losses — have returned enough to

recover half of the initial investment. “It’s really paid off,” Boebel says. Delta Sonic is part of a growing trend. An increasing number of small- and midmarket CIOs are justifying the cost of BI applications to the business by showing how the insight into customer behavior that these tools provide can be harnessed to drive incremental revenue to the bottom line. Also driving the adoption of BI by this market are less costly applications. BI no longer requires an expensive and complicated set of solutions to access and organize the necessary data, database and storage applications. “It's a significant IT investment,” says Jim Baum, president and COO of data warehouse appliance provider Netezza. Instead, the new

smart tools

How to Pick Them

What to think about when looking at BI platforms and applications.

Before inviting the first BI vendor in to give a pitch, CIOs at a small- or mid-market company should ask themselves one question: how will my organization use the data that a BI application will provide? Organizations answer that question in one of two ways, says Leslie Ament, practice leader and director of customer intelligence research at Aberdeen Group. And the way you answer that question will direct you toward the type of BI investment you may want to make. Some organizations plan to use business intelligence to support strategic decisions, such as developing new products or corporate performance management initiatives. Others may want to use the data for operational decisions, such as for sales, marketing, customer service, procurement or production. Little more than half of all organizations that use BI do so to support strategic decisions, according to Aberdeen. The two most widely supported business activities for which organizations use BI are sales and business development, and customer support. Whether you use BI for strategic decision support or to streamline operations, either approach is valid. Recent vendor product offerings mean it doesn’t have to be expensive, with some applications costing in the mid-five figures. “Small- and mid-market players believe that BI has a high cost point for 46

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entry and that you need a lot of horsepower,” Ament says. “That’s not necessarily true.” BI applications are becoming less expensive because vendors are introducing scaled-back versions that don’t require so much computing power. Cognos, for example, last year introduced its Cognos 8 BI application, which provides organizations a chance to choose different levels of offerings. For strategic decision support, Ament recommends looking into BI platforms. Vendors offering these services are Business Objects, Cognos, Microstrategy, Oracle/Siebel, SAP, SAS, SPSS and Teradata. SAP, SAS and Teradata work with indirect partners in providing solutions to the midmarket, Ament says. To support front-office activities, she suggests operational reports and/or dashboards by Maximizer, NetSuite, Sage, SAP, Siebel and Salesforce.com. All except Maximizer offer lower-cost Web-based applications specific to the small and mid-market. However, says Ament, “These are not pure-play BI platform vendors. They are CRM application vendors that provide operational reports and dashboards specific to marketing, business development/sales and call center activities.”

— A.H.

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Business Intelligence BI tools can provide an appliance-based approach that works with existing IT, which is easier to operate and maintain — and cheaper, he says. In short, BI isn’t just a technology for megacorporations anymore. “BI is showing signs that it is picking up for the mid-level market,” says Greg Belkin, a research analyst at Aberdeen Group. “The mid-level market is under a lot of pressure to think out of the box so it can compete against the big guys.” For the mid-level market — companies with revenue between Rs 450 crore and Rs 4500 crore — making an argument for BI can be harder than at larger companies. BI can be a relatively large investment (the investments for the small- and mid-market companies CIO spoke to were in the low six figures). It demands a serious time commitment from a smaller IT department that is likely already overtaxed. But the business case for BI can be compelling, say small- and midmarket CIOs. While there is no research on BI’s returns in the mid-market, anecdotal evidence from IT executives suggests that careful investments can pay off. They say a successful implementation relies on four ingredients: negotiating up front with business colleagues about how to invest in BI; establishing quick wins to build trust; giving users a stake; and making sure data is clean before launching an app. In that way, these IT leaders have established BI applications that are beginning to generate more ways to drive sales and curb costs. “It’s taken us time to get people used to it, but it has been worth it,” Boebel says. “It’s really beginning to show up in sales and cost savings. More will come over time.”

How BI Helps You Grow One of the most difficult transitions for mid-market companies is making the leap to become a large business with more than Rs 4,500 crore in revenue. Investing in bigger staffs to support that level of revenue, managing an increasingly large geographic area and competing against businesses that have even larger budgets and better a brand name are just some of the challenges. So, some mid-market CIOs have turned to BI

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as part of a strategy to grow and compete as their companies bump up against bigger and better-financed operations. At Delta Sonic, for example, business executives wanted a better idea of what was — or wasn’t — driving sales so that strategic business decisions were no longer a case of trial and error. Executives at Clif Bar, a Rs 2,160-crore manufacturer of nutrition and snack bars, began considering BI after its two largest competitors were acquired by multibillion-dollar global corporations. Blue Mountain Ski Resort got into BI after an investment company bought it and planned to more than double its size by investing nearly Rs 4,500 crore into the business over five years. And the mid-size financial services firm JBHanauer saw BI as a key to its survival as it watched other mid-market financial institutions go out of business or get bought by the large financial houses. “We’re one of the last surviving middle players,” says Charlene Barnes, CIO and executive vice president. BI, she says, “is strategic to keeping us alive.” Given today’s competitive environment, BI and data warehousing consistently top the CIO’s priority list, according to a July 2006 survey of CIOs by Merrill Lynch. Companies are also creating more and more data. Netezza’s Baum says his clients’ data doubles every year. And with more customer data from e-commerce activities, and technologies such as RFID providing more specific data on individual consumers, companies have information mountains to mine for what drives sales. For mid-market organizations, using a spreadsheet to inform strategic business decisions just isn’t cutting it anymore.

the most important steps in convincing the business to embrace BI is to start off with a relatively small investment, show a return and then expand the program from there. It’s the plan he followed when 50 percent of the ski resort was purchased by Intrawest in 1999. (The Fortress Investment Group purchased the resort in 2006.) Blue Mountain has multiple lines of business, from hospitality services to retail to equipment rental. Intrawest’s ambitious plan for Blue Mountain included raising

Start off with a relatively small investment, show a return and then expand the program from there.

Getting Business Buy-in BI can be complicated and expensive. So for mid-market companies, with smaller IT budgets and staffs, convincing the business to invest in a BI application can be daunting. That’s why John Gowers, director of IT for Blue Mountain Ski Resort, says one of

the number of skiers visiting the resort on an annual basis from 3 lakh to 7 lakh, increasing lodging units from 200 to 1,400 and taking the number of restaurants and boutiques from a handful to as many as 70. To manage that kind of growth and complexity, Gowers knew he needed BI applications to collect some basic information to manage the company’s revenue and investments. He wanted to help the business determine which investments were yielding acceptable rates of return, how sales of certain products and services affected the sales of others at the resort and how to manage an expanding inventory of capital, including equipment and accommodations. REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 0 7

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Business Intelligence In February 2002, Gowers began working with Datavision to construct a simple BI tool to track property management and pointof-sale transactions. He kept costs down by using an older, free version of Datavision’s Applix TM1. Using Applix as the back end, Gowers paid Datavision Rs 18 lakh to build an ETL (extract, transform and learn) interface tool to manipulate and display the data. The application allowed the resort to track sales such as ski rental revenue, beverage purchases and the number of lodging nights paid, on a per-skier basis. Sales could also be tracked by day and time. In the past, the resort had no way to measure sales other than in the aggregate, and those sales were stored in disparate business unit databases. This meant it took days, sometimes weeks, to collect, collate and distribute the data to executives. The resort thus had less time to develop special marketing campaigns to drive business during slow periods or to respond to unexpected upticks in business. Within months of implementing the BI tool, Gowers was able to show the restaurant, ski rental and lodging businesses when

intelligence. In 2005, he used this earlier success to persuade business unit leaders to invest Rs 22.5 lakh in a more up-todate version of Applix to make it easier to incorporate new products and services. The updated system soon paid off. For example, the ski shop typically would run out of ski boots on weekends, limiting revenue from lift ticket sales and ski rentals. Simply put, the resort had too many big boots and not enough mid-size boots, which resulted in fewer rentals. The shop needed to shift its boot buying patterns to meet demand. But how best to do that? Gowers turned to the updated BI application. He ran an analysis of the rental data to determine how to pay for more purchases of the mid-size footwear by reducing purchases of large-size boots. The project started last winter, and by the end of the season, the ski shop had increased rental revenue by as much as 15 percent without raising its boot budget. By not turning away skiers, Gowers says, the resort had more satisfied customers, which certainly means more repeat business.

A key ingredient to getting buy-in is giving BU executives, mid-level managers and salespeople access to results. their sales dipped or increased. Working with marketing, these businesses could now increase sales by knowing when to push incentives to customers. Sales for the resort’s hospitality business have increased 67 percent in the past four years, an increase Gowers attributes in part to better business 48

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“In that particular case we showed a quick return,” he says, “generating more revenue by making more intelligent decisions on how to run the business. As you do that, everybody begins coming to you with ideas, which only builds more support.”

Empowering the User A quick success can showcase the advantages of BI. But an essential ingredient to getting buy-in is making the results accessible to business unit executives, mid-level managers and frontline salespeople so they feel empowered by the new technology. For Clif Bar, that meant finding an application that sales reps could easily use in the field, says Richard Boragno, VP of finance, accounting and IT. It also had to provide a simple sales story to help the company build more intimate relationship with clients. Working with Clif Bar’s sales reps, Boragno searched for a Web-based BI application they could take to grocery store clients to show how each Clif Bar product was selling, how individual sales tracked over time and how sales per customer broke down in real time. The application had to have a simple interface that had a few easily understood icons. Sales reps couldn’t be fumbling with the application in the field, where they typically had little time in front of clients and little tech support. “They had to be able to fully understand it in about a two-hour training session,” Boragno says. He also asked two sales reps to help evaluate the vendors competing for the contract. “You have to look at it through the lens of a sales rep,” Boragno says. “You’re trying to solve their pain. To know what you are solving, you need to analyze their symptoms, understand what they need. If it is too complicated to use, it will lead to confusion and distrust” of the IT department’s ability to deliver. In 2002, on the recommendation of the sales force, for Rs 38.25 lakh, Boragno chose to buy the enterprise search application FAST Radar, supplied by FAST. The application provided sales reps with historical and realtime sales for each grocery store outlet Clif Bar supplied. The data allowed reps to show clients how many Clif Bars they were selling over specific time intervals and which were selling the most, allowing Clif Bar to keep those bars on shelves to increase sales for Clif Bar and the grocery store. As a result, Clif Bar reduced its sales forecasting variance from 30 percent to 15 percent. After a decline in

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sales in 2004, the company rebounded in 2005 with a 25 percent increase in sales, which Boragno attributes partly to the new BI system. That success led Boragno last year to expand the FAST application to include the ability to input expense forecasts to support the quarterly sales forecast process. Doing so ended the use of Excel templates, saved time and eliminated errors. By combining the reps’ sales forecasts with historical sales figures that are matched with promotions and adjustments for seasonal sales, the finance department cut the amount of inventory on hand from 77 days to 35 days, saving Rs 9 crore a year in reduced spoilage and interest costs. What did Boragno learn from the experience? “Don’t get all the bells and whistles right away,” he says. “Keep it simple. Choose [an application] that can grow with you.”

Keep the Garbage Out A BI application is only as good as the data it is using. If a company’s data has errors or differing nomenclature and standards for products, then be prepared to spend a lot of time cleaning up the database. Last year JBHanauer’s Barnes began implementing a BI application to track financial adviser and firm performance. It also allowed branch managers to track how different investments were selling at their office. Barnes knew clean data was critical to the effort and that there were inconsistencies in JBHanauer’s database. For example, the firm had classified the various categories of municipal bonds, corporate bonds, preferred securities and other investments in different ways based on who conducted the transaction. Also, trades that had been canceled were being counted as having gone through, exaggerating the number of buy orders. While cleansing data, Barnes suggests CIOs work with business unit heads to determine how much data should be included in analyses. Is it of value to

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Business Intelligence Just how much the system will improve JBHanauer’s bottom line and keep it competitive with the multibillion-dollar investment houses remains to be seen. But Barnes notes that in October, when the application was launched, JBHanauer had its best month in 18 years. Was it a result of a good marketing, a hot market or a direct result of the BI application? It’s too soon to be sure, but Barnes does know this: the BI application “did allow us to know this simple fact [immediately].”

Innovation Time

include two years’, five years’ or 10 or more years’ worth of the data? “Those kinds of things turn into significant challenges,” she says. “It makes you analyze just how far back to go when including historical data. Is it helpful to go back a million years?” Barnes recognized that the inconsistent data could undermine the BI initiative. After a thorough manual analysis of any common discrepancies, the data was cleaned up automatically. Barnes says the process took two programmers two months, a significant amount of resources for a company JBHanauer’s size. But it was a task that had to be done to make the application useful. In November 2005, Barnes purchased the Cognos 8 BI package for an undisclosed sum, and in October 2006 the first phase of the application launched across the company. Now, every morning when branch managers turn on their computers, the first application they see is a report on the previous day’s activity in their office. Managers receive five separate reports, including a 45-day moving average on sales, which categories of investments are selling the best, how each financial adviser is performing and how the office’s performance compares with other branches’. Branch managers use the reports to understand their product mix and identify selling problems or opportunities. “They are asking questions that they’ve never thought of asking before,” Barnes says.

Success generates enthusiasm and, therefore, support for BI throughout the company. Once that happens, it’s time to start thinking out of the box. At Delta Sonic, Boebel is looking to incorporate outside sources of data into the BI application to help the company manage staffing more efficiently. He hopes to include National Weather Service forecasts as one of the factors store managers use to plan staffing levels. For example, by knowing when and how much snow is forecast, as well as how long temperatures will remain below freezing (which means salt stays on the roads longer and cars remain dirty longer), Boebel can correlate that data with past statistics on car wash sales and snowfall to determine the number of cars that will likely come through Delta Sonic’s car washes, avoiding the prospect of having too many workers or not enough. Boebel has many other ideas for using BI. The only thing holding him back, he says, is convincing managers to use the application more. “But that will come in time as we show what can be done,” Boebel says. “This is just the start.” CIO

Allan Holmes is Bureau Chief,Washington.Send feedback on this feature to editor@cio.in

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Information & Communications Technology

Loud & Clear By Gunjan Trivedi

a kiosk-based online system has empowered the citizens of uttar Pradesh with information and brought transparency to the way local administration operates.

Illustrat Ion by MM shanIt h

Hargaon is a remote village in Sitapur district,

Nirmala was pleasantly surprised to find that her decade-long problem was resolved in 18 days. On March 5, 2005, the kiosk Uttar Pradesh. Nirmala Devi, a resident of the village, lost her owner told her that her complaint was resolved and a cheque of husband in 1990. And it was six years before she got family pension Rs 1,02,357 in her favor was dispatched. Her complaint (No. 6,289) granted, which included arrears of Rs 12,000. Just when she was one of the 25,000-odd grievances redressed by the district thought the ordeal was over, the corrupt and notoriously lethargic administration of Sitapur that year, powered by an online system bureaucratic machinery of the state kicked in, depriving Nirmala to bring citizens closer to government. of her dues for close to a decade. This kiosk-based online system, designed to be Despite her innumerable trips to government Reader ROI: the voice of people calling out to the government, is offices and a February 2004 Allahabad High Court The value of adopting fittingly called Lokvani. It has empowered citizens with order in her favor, the money wasnâ&#x20AC;&#x2122;t disbursed. A and adapting an ICT information and brought transparency in the way year later, the High Court order lapsed. project local administration operates. The success in Sitapur, Just when Nirmala had lost hope, she learnt of a How an e-governance a district of 35 lakh people whose prime occupation series of kiosks that had opened across the district. project can be turned is agriculture, has led the state government to deploy In despair, she decided to try it and, for a sum of Rs into a profit center such systems across almost half of the 70 districts of 15, filed her complaint against accountant Umesh Winning the confidence the highest-populated state in India. Mishra on February 15, 2005 at the kiosk. of users

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Information & Communications Technology

Reaching Out Lokvani was introduced in Sitapur when Amod Kumar, district magistrate (DM) of Faizabad district in UP, was the DM of Sitapur. The erstwhile system to report grievances had time-consuming and laborious processes, whereby citizens had to physically visit government offices. Whether it was to obtain documents, such as birth certificates and domicile certificates, or to file complaints, the transactions took hours and several visits. “Administratively, it was a mess,” recalls Kumar, who is also an IIT-Kanpur alumnus. The District Administration and the National Informatics Centre (NIC) then

talking to one of my peers in Rajasthan, who introduced me to the concept of a G2C e-governance initiative called Janmitra in the Jhalawar district,” he recalls. Kumar decided to deploy a similar system in his district to increase the efficiency of the local administration. A team of sub-divisional magistrate (SDM), the district informatics officer (DIO) and a block development officer (BDO) was constituted, and sent to Jhalawar in Rajasthan and Dhar in Madhya Pradesh to study the feasibility of e-governance initiatives Janmitra and Gyandoot. “After analyzing such projects, we decided to go ahead with a similar implementation in Sitapur, with applications developed

On its launch in November 2004, Lokvani saw only 100 complaints over 30 days. In nine months, the figure shot up to 31,000.

combined to ride on information and communication technology to extend the government’s reach to citizens. “The reach of government to citizens is obviously better in urban areas than in rural areas. Since it was a challenge for the government to physically reach the grassroots, we offered to leverage IT to effectively impact the citizens in the remotest of rural areas,” says S.B. Singh, state informatics officer, NIC-Uttar Pradesh. Though Kumar has received kudos for conceiving the idea, he attributes it to a phone conversation in mid-2004. “I was 52

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at the district level of NIC,” recalls A.P. Singh, DIO, NIC-Sitapur. “Initially, we replicated the existing systems without too many innovations. We merely plugged the loopholes identified in the systems at Rajasthan and MP. This was to effectively decrease time and effort to develop and implement such a community-driven system, based on public-private partnership,” says Kumar.

Turning It Around The NIC developed and improvised a version of the front-end application used in

Gyandoot and Janmitra projects, written in ASP, before hosting it online. The application was back-ended with a SQL server to take on mammoth loads of data. After analyzing the feasibility reports of other G2C projects, the Lokvani team, headed by Amod Kumar, decided to Webenable the project rather than host it on an intranet. “Initially, the servers were based at the district level. However, looking at the power, interconnectivity and other infrastructure issues, the application and server were shifted to the NIC datacenter at Delhi. The management of systems still reside with NIC Sitapur,” says A.P. Singh. The pilot of Lokvani ran in the fag end of 2004 at 13 kiosks, or Lokvani centers, disseminating information on various government schemes and a handful of citizen services such as grievance redressal, status of allotment of fair price shops (the public distribution system of food and other essential items), and details of work done under Member of Parliament Local Area Development initiatives. The kiosks were supposed to log on to the Lokvani website, designed in Hindi for simple navigation. The profit-driven business model of Lokvani has been a public private partnership, developing a fleet of private entrepreneurs owning and managing kiosks, and charging citizens a nominal fee for their interactions with government to avail of various services. Owners of cyber cafes, PCO booths, photo studios who already had a computer and internet connectivity, were encouraged to register as franchisees with the Lokvani Society paying Rs 500 — now, Rs 1,000 is required to register as a franchisee — and offer fee-based government services with their regular business. On its launch in November 2004, Lokvani saw only 100 complaints coming in from the entire district over a month. By August 2005, the number of kiosks increased from 13 to 42 and the number of complaints had skyrocketed to 31,000odd, of which almost 25,000 had been addressed and resolved. Currently, there are close to 80 kiosks in Sitapur district, and about 500 kiosks running in 30-odd districts out of a total of 70 districts in UP. “Statewide, we have handled close to

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180,000 complaints resolving almost 88 percent of the same,” says S.B. Singh of NICUP. “Sitapur alone received about 80,000 grievances at the rate of about 115 each day. The district administration has been able to resolve 96 percent of complaints,” adds A.P. Singh, DIO at NIC-Sitapur. Today, a citizen can not only file his complaints but also verify or request for his online land records, submit RTI applications, request for various certificates, obtain online status of arms licenses, tenders, and information on government schemes and development works. Undoubtedly though, of all the services across Lokvani centers, the public grievances redressal has become an instant hit. “A complaint now usually has a turnaround time of about 15 days, as compared to the endless scenario earlier,” points out S.B.Singh. A complainant, with the help of a Lokvani kiosk operator, logs on to the website and submits his or her complaint in a prescribed format. The electronic information and relevant supporting documents are then sent across to the Lokvani district center for further processing. The complaint reaches the DM’s office as well. Based on proper attribution and delegation, the complaints are marked for specific officials with certain instructions. Within a stipulated amount of time, the official concerned is supposed to facilitate further action reports and remark on the complaint registered with Lokvani. The officials, who have direct access to the website, do the needful online itself. Others interact, based on printouts of such complaints, with the relevant departments and the Lokvani district center. “The status of complaints is closely monitored by the DM’s office, and the complaints are color-coded as per the time-schedule they are running against,” says S.B.Singh. The status is updated regularly on the Lokvani website and the complainant can track his grievance.

Teething Troubles No large-scale projects, in government or the private domain, have come without implementation challenges. Lokvani

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was no different. However, didn’t have valid reasons a lot of planning during the or had further complaints design phase helped Kumar of wrong reporting, faced and his team anticipate the the music,” recalls Kumar. deployment blues. SNAPSHOT The first step to Lokvani: Sitapur introduce effective change Number of Kiosks: District level: 8 management for Lokvani The project has been Tehsil level: 15 began at the planning receiving accolades. Last Block level: 19 meetings at the DM’s office. year, Lokvani won the Town level: 10 Nyaya panchayat In order to inculcate a government’s Golden Icon level: 36 sense of ownership among award, instituted for the Total kiosks: 88 the officials in the core best e-governance initiative (December 2006) Lokvani team, Kumar stuck in the country. Complaints to acquiring consensus Taking a cue from Sitapur, Redressal * on various aspects of the the UP government has received: project. As a result, core decided to adopt the system 80,938 officials were involved in across the state. Within Redressed: the planning and designing Sitapur, the reach of Lokvani 77,434 (96 %) *December 2004– phase. The suggestions were is being extended from subDecember 2006 either accepted or rejected division and block levels to with adequate justification the nyay panchayat level. “At and with general agreement. other levels, no support is Officials were sent to NIC given to kiosk owners who in batches for development of technical need to invest about Rs 70,000 to open skills and training. “This way, I could centers. But at the nyay panchayat levels, a handle change management right from 50 percent subsidy is being considered for the beginning,” he says. village entrepreneurs,” says A.P. Singh. He also decided against providing Until now, Lokvani has been subsidies or incentives to run the kiosks. instrumental in publishing information “Instead, the private entrepreneurs and helping citizens interact with the were charged a registration fee to government through its grievance redressal run the services,” he smiles. The PPP system. Going forward, Lokvani hopes to model, without financial aid from the have additional interactive technologies, government, turned out to be a success such as IVRS, SMS and websites, to reach because it ensured sustainability of the government. the project and enabled kiosk owners “Lokvani is just the tip of the iceberg. to evangelize the initiative in their More such community-based, selfareas. Further, the reach of FM radio in sustaining G2C and G2G projects rural areas was leveraged to increase should come up to dramatically improve awareness of Lokvani. the efficiencies and productivity of Another challenge was to manage government. All interactions should be government employees. Due to moved from the physical environment to lack of IT awareness and rampant virtual world because this is the only way malpractices, certain officials proved to to make our governments efficient and be impediments for Lokvani. “When I corruption free,” Kumar believes. CIO realized that handling such employees is going to be a tough job, I decided to apply a carrot-and-stick approach. The performing officials were suitably and publicly rewarded, and defaulters were asked to explain their situations at the 11 o’clock-review meetings I held every Senior correspondent Gunjan Trivedi can be Tuesday. Defaulting officials, who reached at gunjan_t@cio.in

The Road Ahead

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Course

Correction In November 2006, the National Informatics Center (NIC) expressed its displeasure with Uttarakhand’s e-Governance efforts — no applications were running on hardware procured for crores of rupees. But Indu Kumar Pandey, additional chief secretary IT to the state government, tells CIO that he is determined to convert failure into success and make sure that e-Governance impacts people’s lives.

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Indu Kumar Pandey, additional chief secretary IT, Government of Uttarakhand, feels that e-Governance is capable of ensuring transparency and rooting out corruption.

CIO: NIC says that while the government of Uttarakhand has purchased Rs 14.2 crore of IT equipment, departments such as social welfare, urban development, food and civil supplies, among others, don’t have software applications. What is the government doing about this? Indu Kumar Pandey : The government has taken some measures to address this situation. Among this, the Government has constituted a committee — headed by the

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additional chief secretary and principal secretary (IT) — to vet all purchases of hardware and software in the state. The committee will report to the Apex committee of IT in the state. We are also in the process of shifting hardware and software to departments where they can be used more immediately. And we are ensuring that departments with e-Governance applications that have hardware supplied to them are being taken up on priority basis.

Imaging by an il t

By Balaji Narasimhan

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Interview | Indu Kumar Pandey Tell us about a few successful e-Governance projects that have been implemented in the recent past?

and how do you see them improving the lives of the citizens of the state?

Uttarakhand already has a number of successful eGovernance projects, some of which are government to consumer and others which are government to government In the G2C category there are Citizen-centric, touch-screen land record applications in district headquarters, tehsils and on the Web. We have automated some transactions between the transport department and citizens. For example, getting a driving license, registration, road permits, and paying taxes have been automated. Another process that has been computerization and automated is registering property at the sub-registrar level. We have also put up right to information websites of government departments through which citizens can obtain at least basic information. We have also set up the Uttara portal and set up information kiosks. In the G2G category we have computerized the treasury department, the pay and accounts office

The IT department is focusing on building a state wide area network (SWAN), common service centers (CSCs) and a state data center. We are following Government of India guidelines. We also have nine World Bank funded eGovernance applications that will be ready to be rolled-out by that time. Once we have the IT infrastructure in place, future projects will be taken by different departments as mission-mode projects of Government of India. The target is to have the SWAN, CSCs, and e-Governance applications in the departments of social welfare, urban development, public works, agriculture, personnel and schools (e-learning) running by the end of 2007. Given the difficult terrain in the state, what problems did you face in setting up SWAN? How useful are technologies like optical fiber cable and wireless in local loop?

The SWAN is in the process of implementation. The terrain is a major problem and it is proposed to have

Only when it is found that the expectations of citizens are met will a phased roll out of pilots be carried out. computerization, and have implemented MIS projects in various departments.

a hybrid network comprising optic fiber, wireless and VSAT technologies.

According to the National Institute for Smart Government, only around 15 percent of e-Governance projects succeed in India. What do you think of this situation? How can it be improved?

Along with Singapore-based IT solutions firm CrimsonLogic, you have embarked on a large project to build a citizen data vault (CDV) that will store statistical and biometric data of the state’s 80 lakh citizens. Can you elaborate?

The strategy now is — instead of making large scale IT investments at one go in a project — we start pilot implementations, evaluate their success and subsequently scale up in a phased manner. The strategy is: “Think big, start small, scale fast if successful,” otherwise go back to the drawing board. What e-Governance implementations do you have you for 2007? When do you expect them to be complete

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The project will cover the urban population of Uttarakhand in the current phase, which is approximately 22 lakh across 63 urban local bodies. The broad objectives are: Build a data model for the state Conduct multi-purpose household survey to collect data for Central Data Vault (CDV) Load the data collected through multi purpose house hold survey on to the CDV

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Interview | Indu Kumar Pandey Provide a data integrity manager with a rules engine for resolving conflicts in data entering the CDV Clean and migrate existing departmental data selectively to the CDV Provide secure system of transactions for e-Governance applications The project will capture photographs and biometric details of adults. Each household will have to fill an elaborate a 10- page form. The forms will then be validated by ward members and also — on a sample basis — by the directorate of economics and statistics. The CDV will help in correct the delivery of welfare schemes and provide information to a citizen for licensing, billing, permits, admissions, selections and such other purposes. Uttarakhand appointed IIT Roorkee to conduct a people response assessment exercise. They found that citizens’ expectations were different from what bureaucrats wanted. How do you propose to tackle this disconnect?

Before the start of the World Bank projects, we took up a detailed exercise. At every stage, all the stakeholders — be it citizens or government officials — were involved in these projects. We are now reaching the pilot implementation stage. The gap between the aspirations and delivery will again be looked into after the pilots are done. Only when it is found that citizens’ expectation are met will a phased carried out.

such initiatives have also ensured increased revenue to the government, apart from providing information — which by itself curbs corruption. SNAPSHOT

Uttarakhand Completed Projects:

Touch-screen based land records applications Automation of transport department

Uttarakhand is aiming for computer literacy and has decided to establish computer labs in all 871 government and aided inter-colleges in the state. What is the progress on this front?

Almost all the colleges have been covered by establishing computer labs at least up to the high school level. The status will further improve in the next year. In 2004, Uttarakhand (then Uttaranchal) opted to use open source technology. How has the experience been?

Property registration

Open source is less expensive, allows for the free distribution of software Projects in 2007: and provides for greater flexibility and State Wide Area interoperability. Open source fully supports Network vendor-neutral open standards, which can Common Service maximize interoperability between agencies, Centers departments, and government entities. State Data Center However, the government officials who are Land Records: in the process of imbibing a culture of IT would, Pre at least in the initial stages, require some kind computerization: of handholding and external support to use 70,000 copies/year open source technology in their day-to-day Post activities. But a lack of support — which is computerization: not easily available for open source software 7 lakh copies/year — may lead to confusion and helplessness. So, the government has chosen to use a judicious mix of platforms and technology options. The strategy has been to ensure that all the roll out be applications are able to talk to each other using industry standards such as XML, and SOA architecture. CIO Uttara portal

It is a common assumption that e-Governance can introduce transparency and fight corruption. What is Uttarakhand’s experience?

e-Governance is definitely capable of ensuring transparency and rooting out corruption. The experience in treasuries and the payroll system has been definitely encouraging for the government. In this regard, the NIC figures available after land records were computerized were an eye-opener: approximately seven lakh copies of Records of Rights were distributed through computers in the last year, compared with just 70,000 copies in the previous year, when they were manually distributed. Similarly, automation at the sub-registrar’s office has ensured automatic calculation of circle rates during property registration, thus ensuring transparency. Automation at the transport department has minimized the role played by middlemen to a very large extent. All 58

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

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Essential

technology Bendable displays? Mindreading PCs? Some futuristic technologies are closer to fact than fiction.

From Inception to Implementation â&#x20AC;&#x201D; I.T. That Matters

Sci-Fi Tech By Michael Fitzgerald

New Tech | Today's science fiction often becomes tomorrow's reality. Science fiction writers presaged flight, nuclear weapons, cyberspace and computer viruses, among other changes. "It's good for CIOs to read science fiction," says Paul Saffo, a Silicon Valley technology forecaster. Read what your new hires are reading, he says, "and you'll get a sense of what they'll want to build when they're middle managers." Should any sci-fi technology ideas be on your radar now? Check out these five visions that are moving into the real world.

Roll-up Displays Why theyâ&#x20AC;&#x2122;re cool: Resize at will. What CIOs could love: Reduced eye strain, saved desk space. Displays offer fertile ground for imagination: just envision miniature flat panels that you could slap on objects as if they were stickers, for instant displays. On a more practical level,

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essential technology

wouldn’t it be nice to have a way to instantly make your cell phone display bigger? This would probably involve building a display that could bend or even roll up. That last concept might seem completely outlandish — displays consist of glass and other substances that are not inclined to bend. Yet such displays have been demonstrated by the likes of Philips and Xerox and might not be far away from market. A typical flat-panel display features several layers, including a glass substrate with a transistor backplane that includes semiconductor, insulating and metal layers. A liquid crystal is sandwiched between this and a color filter layer. To make a display bend, you need more

Cognitive radio could produce a faster and more reliable wireless network than today’s,creating higher bandwidth by adapting to spectrum conditions. flexible materials, such as plastic in place of glass, and in some cases, organic semiconductors. Such materials form the basis of prototype 2- to 4-inch displays that have been built for the US military by Universal Display, L3 and Xerox’s PARC subsidiary. These displays — made on stainless steel foil — curve around the wrist for improved mobility. Meanwhile, Philips and PARC have both demonstrated flexible displays, some made using printer-style jet arrays, for use with cell phones and other handhelds. Robert Street, a PARC senior research fellow, says that the company’s jet-printed arrays and rollable 60

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displays are in early prototype stages — mostly because of manufacturing challenges and the need to develop manufacturing equipment.

Co gnitive Radio Why it’s cool: Makes smarter use of wireless spectrum. What CIOs could love: Faster and more reliable wireless networks. There’s plenty of unused wireless spectrum out there that corporate nomads would love to utilize. Yet it isn’t available to clogged parts of the spectrum. Cognitive radio — using software algorithms that help it immediately find an open spectrum anytime the normal frequency is filled — could solve the problem. Cognitive radio could produce a faster and more reliable wireless network than today’s, creating higher bandwidth by adapting to spectrum conditions. For instance, the cellular network sees heavy usage during commuting hours, and more calls might be completed if cell phones could just jump outside the allotted spectrum at those times. Spread-spectrum technologies already exist in wireless communications, routing packets in new ways. Triband cellular phones that automatically switch to new network technologies show how cognitive radios might function, as do phones that automatically switch from a cellular network to a Wi-Fi network. “The basic core technology exists to do cognitive radio — we know what the algorithms are and how to implement them,” says Krishnamurthy Soumyanath, director of Intel’s Communications Circuits Laboratory. But real cognitive radio is not yet ready for the real world. A practical problem is power consumption — hopping between spectra requires more power than mobile devices have to spare. Soumyanath thinks the power problem will keep full-fledged cognitive radio from reaching the market before 2010.

Magnetic Memory Why it’s cool: Uses electrons' spin state of to store data. What CIOs could love: Fast speed, low power requirements.

Sci-Fi To-Do List for CIOs: 1. Read Accelerando, by Charles Stross: a peek at how nanoinformatics and other developments will change society over the course of the 21st century. 2. Read Rainbow’s End, by Verner Vinge: life in 2025, with ubiquitous information banks, networked clothing and ‘silent messaging’. 3. Visit Second Life (www.secondlife. com): this virtual world, which is becoming a corporate water cooler for the younger set, hosts consultant meetings, press conferences and an active industry of designers marketing avatar outfits. — M.F.

Quantum computing — the idea that PCs could use quantum mechanics to move beyond today’s system, where every bit of data holds a 0 or 1 value, to a system where bits could hold an unlimited number of values — is still far, far in the future. But elements of it are emerging now. MRAM, or magnetoresistance random-access memory, is the newest example. MRAM works by using the spin state of electrons to store data. Instead of Os and 1s, MRAM stores data by writing to the up or down state of the electrons. MRAM could become a kind of supermemory, one with the density to hold a great deal of data, and one with no moving parts. And MRAM has the blazing speed of random-access memory but doesn’t lose its data when power fails. It sounds fantastic, but elements of magnetoresistance have been in hard drives for years, and Freescale Semiconductor recently began shipping a commercial version of a 4-megabit MRAM chip. That’s a tiny amount of memory compared with the latest flash memory, but producing a commercial MRAM device is still a milestone. MRAM will probably hold appeal right now for markets that use embedded memory, like

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essential technology

smart cards. As capacity grows, you’ll see more products using MRAM. Separately, IBM researchers recently said they have successfully stored data on a single molecule by taking advantage of spin — a step toward computing at a molecular level. It won’t be an overnight sensation, but researchers say the work will prove quite useful 15 years from now: that’s when many believe conventional memory techniques will run out of gas.

Holographic Hard Drives Why it’s cool: Holographs. Need we say more? What CIOs could love: Huge capacity. Blazing data transfer rates. Photographs contain huge amounts of data: that’s the starting point for thinking about holographic storage. Light on photopolymers (in effect, film) creates three-dimensional patterns that allow for data storage below the surface of a medium — allowing tremendous amounts of data to be stored in a fixed amount of space. And, because it can write to perhaps a million bits of data at once, a holographic hard drive works much faster than today’s mainstay drives. Thought implausible as recently as five years ago, holographic storage is starting to debut. InPhase says it will ship a storage system based on holographic technology, primarily for archival storage uses. This would feature holographic versatile discs (HVDs) that hold 300GB of data, or roughly 35 hours of broadcast-quality TV (or 25 minutes of HDTV), according to InPhase. That’s 64 times what a DVD can store. If holographic storage, first proposed more than 40 years ago, finally becomes mainstream, it may eventually replace DVDs as the preferred disc type. But before that can happen, costs will have to drop sharply: the InPhase system looks to cost Rs 6.75 lakh, plus more than Rs 5,400 for a disc. But by 2010, one disc could hold 1.6 tera bytes. A consortium called the HVD Alliance says it expects data transfer rates to equal 1Gbps, far faster than current DVD rates.

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Ray Kurzweil: What’s Next Ray Kurzweil’s vision of the future is radically different from today — his book The Singularity Is Near spells out a prediction, among others, of our future as cyborgs. He spoke with CIO about scifi changes that he imagines within two decades. Good news: he says your CIO job isn’t going away. “In the second decade of this century, we’ll have full immersion virtual reality, as if you and I were sitting with each other. So we’ll be able to visit with each other, either in large meetings or Internet encounters, in this way pretty ubiquitously. “It’s already coming. I give about a third of my speeches using a virtual reality technology called Teleportec. It appears to the audience that I’m there, and I can move around, I’m life-size, I’m highresolution. It looks like I’m there, people have been fooled. And I can see them and point at people and establish eye contact. “Also in the second decade, computers will disappear as physical objects. We won’t be carrying around these rectangular displays. They’ll be built into our glasses and written to our retinas. The electronics will be in your clothing or your belt, we’ll be online all the time with very high bandwidth communication. We’ll have to work out some way to communicate to the system, but it’ll have good speech recognition. “Will we still need CIOs? CIOs are very well-positioned, if you take a broad view of information as I do. Everything of importance is information. Even if you’re a steel company it’s the information the executives deal with and need access to. So managing information is going to be where it’s at.” — M.F.

While initial HVDs will be writable only once, researchers expect holographic storage will eventually gain the same read/ write ability as CDs and DVDs.

Neural Interfaces Why it’s cool: You are now entering the Matrix. What CIOs could love: No more carpal tunnel syndrome. And no more wondering what the boss really thinks. CIOs had better hope for the success of holographic data storage: it might be the only way to store the mountain of data produced when you can connect your brain directly to the network. With neural interface technology, which connects the human brain to the computer, people will be gathering, managing and storing a vast amount of information, says Brock Hinzmann, technology navigator at SRI Consulting in Menlo Park, California If that sounds way too much like jacking into the Matrix (or like the original

cyberspace novel, Neuromancer), then brace yourself — because it’s already happening. As was first published in research this year, a paralyzed man used ‘BrainGate’ to control a mouse cursor, play a video game, change channels on a television and perform other functions. BrainGate is an implanted neural sensor, a 4-by-4-millimeter chip with 100 electrodes that sits on the surface of the brain in the area of the motor cortex, interpreting brain signals. Developed by Cyberkinetics Neurotechnology in Foxborough, Massachusetts, it’s currently in early clinical trials. Plenty of work remains for neural interface technology, but more basic kinds of neural interfaces — such as cochlear implants, which improve hearing beyond normal human capacity — have already become available. CIO

Michael Fitzgerald is a freelance writer based in Millis, Massachusetts. Send feedback on this feature to editor@cio.in

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Pundit

essential technology

Why CIOs Don't Care About Open Source It might not be the obvious big ticket, but it’s only a matter of time. So, sit up and listen. BY Bernard Golden

Open Source | I recently gave a presentation at CIO on ‘Making Your Organization Open Source-Ready’, which focuses on understanding the difference between proprietary and commercial software, developing a license and use policy, ensuring an architectural policy so that open source activities are consistent with enterprise architecture, and so on. During the lively discussion, one question, posed by CIO editor Chris Koch, really struck me: "Why," Chris asked, "are so many CIOs completely uninterested in open source? In survey after survey, open source comes up extremely low as an important issue. It's a bimodal distribution — some CIOs are very pro open source, while many (or most) others dismiss." I've thought about the question quite a bit since the presentation, and I thought I'd offer some reasons why CIOs aren't very interested in open source along with a perspective about why they're missing a sea change that will metamorphose their way of doing business. Here's why CIOs don't care about OS: Spend small, think small. Organizational interest inevitably revolves around the spending of money. Initiatives that require significant budgets get everyone's attention. Smart people see leaders spending a ton of time thinking about an initiative and recognize that's their promotion vehicle. Open source, by contrast, typically requires 90 percent of the budget for proprietary 62

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Not caring for open source is failing to exercise technology leadership, which is one of the prime duties of the top job.

software, so it doesn't have the high profile of being discussed endlessly. While the proprietary vendors love this, it is extremely threatening to IT organizations, as they are steadily being milked by vendors and fail to exercise vigilance in seeking out new ways of getting the job done. I've worked in IT organizations that had end users choose to use outside service providers because they offered much less expensive solutions; IT can fume all it wants, but if its solution is the official, expensive way, it can expect attacks by open source-enabled end user initiatives. They aren't told to pay attention. The old cliche was "Nobody ever got fired for buying IBM." Today's cliche is "We only buy products from companies in the upper right quadrant." There's only one problem with that approach. OS products and companies don't play in the analyst-approval game. With open source not present in the analyst game, CIOs never hear about the products when they read their analyst subscriptions, go to conferences, or get briefed. In general, analysts are trailing indicators about new, disruptive entrants into markets, and this is doubly so for open source, which operates by a completely different set of rules than incumbent vendors. They're fighting the last war. The 90's were all about replacing creaky, obsolete, home-grown apps with packaged software. IT organizations suffered through years of poorly performing, functionally deficient,

extended rollouts of enterprise apps. Now that CIOs have finally got these under control, they want to focus on optimizing them. There's only one problem with that approach: it misses the software revolution going on under their noses. It's reminiscent of the PC revolution — compared to the then-existing hardware infrastructures, PC were laughable little toys. IT organizations instinctively resisted the introduction of PCs, worried about their poor security, end user customizability, and, above all else, lack of centralized IT control. Guess what? PCs entered through every pore in the organization, driven by end users revelling in the new form factor that made previously unobtainable apps available at dirt-cheap prices. IT finally assented to the inevitable. Open source represents just the same kind of economic transformation, only this time it's worse: the barbarians are attacking from the inside. IT employees are typically introducing open source into companies, often with no awareness at all by upper management. Failing to come to terms with this software revolution will be a career limiting move. Bottom line: there are lots of reasons CIOs don't care about OS software. Not doing so, however, is failing to exercise true technology leadership, which is, after all, one of the prime duties of the top job, right? CIO Bernard Golden is CEO of Navica, an open-source consultancy. Send feedback on this column to editor@cio.in

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