May 1 2008 by Sreekanth Sastry

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From The Editor-in-Chief

“Those who are skilled in combat do not become angered, those who are skilled at winning do not become afraid. Thus the wise win before the fight, while the ignorant fight to win” — Zhuge Liang

Wisdom knows no limitations, specially not those of time. I’ve reflected upon this

Win Without a Fight Let simplicity guide your strategic outlook and see the difference.

many times over the past few weeks that I’ve been reading a translation of a Chinese epic. The Romance of the Three Kingdoms is a 14th Century historical novel, which deals with China of the 1st and 2nd century A.D. Much like the Mahabharata, the Romance of the Three Kingdoms is a complex tale with hundreds of characters and many sub-plots. One of my favourite sections deals with the Battle of the Red Cliffs and the role played by Zhuge Liang, a key military and political Groom your team, keep your strategist. Liang is also described as a strategies simple and delegate mathematical and mechanical genius (the while staying in control — invention of a multi-shot crossbow and a that’s an ancient Chinese path grain transporter are attributed to him). to success. Through determined effort and the able handling of people, Liang was able to help the Shu Han empire defeat an army four times bigger at the Red Cliffs. I’ve found valuable management lessons in this for everyone — me and you included. His first precept is to employ capable people, assign them tasks they are best suited to and then evaluate them without allowing personal prejudices to get in the way. He next focuses on uniting the hearts of his troops before entering a battle. While Liang is all for gathering intelligence and puts a value on information, he puts equal emphasis on ensuring that his troops are aware of his aims and that his instructions are clear and easy to understand. Interestingly, one of his recommended strategies is to reach out to as many people as possible and avoid indulging in needless conflicts. He also avoids making unnecessary enemies. Liang’s other diktat, that can make a significant difference to anyone’s efforts, is to take full responsibility for all endeavors. Over the distance of the centuries the veracity of Liang’s advice calls out to us: stay focused on goals, delegate to capable people, keep your directions simple and clear, reach out and build bridges with people and take the lead in everything. Do you think Zhuge Liang’s strategy will work for you? Write in and let me know.

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

M A Y 1 , 2 0 0 8 | REAL CIO WORLD

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cont n ent nt n nt may 1 2008‑ | ‑Vol/3‑ | ‑issue/12 Money is just paper. nowhere is that saying more true than in the newspaper business. of the 15 million readers who pick up one of the 2.25 million copies of Hindustan Times, few know that 80 percent of the cost of producing that paper is the paper itself. But it’s a figure that weighs heavily on the minds of Ht Media’s management. Mainly because they have millions of rupees worth of paper sitting around in their warehouses. Five years ago, Ht Media’s inventory of paper was worth rs 150 crore — and they were making about rs 550 crore. With such a large chunk of their funds wasting away in warehouses gathering dust, no picture of ‘dead’ money could have been more accurate.

And five years ago, the Delhicentric paper needed that money bad. The paper’s management wanted to push the Hindustan

Times brand into the heavyweight league. They wanted more publications, more mediums, more languages, and more

Mohit Agarwal, CIO, Sharad Saxena, Executive Director, Operations & HR and Harish Nagpal, AVP-Materials & Production of HT Media narrate how slashing paper inventory freed up funds for the company’s expansion.

Inventory Management

IT management

COVER stORY | PAPER Cut | 22

20 mInutEs tO suCCEss | 40 There are things you can do in just 20 minutes that can have a meaningful and positive effect on your IT organization.

HT Media’s warehouses were full of money. Paper money. If the media house could slash its paper inventory, it could free up funds for expansion. It would take grit and determination.

I P hoto by dr LLoh oh I a

geographies. They wanted to go national but needed the financial resources to fuel their ambitions. Every time they crunched figures looking for something to squeeze, they bit down on their Rs 150crore inventory like a rock. It was a rock that defined their horizon and they were going to flatten it. If they were going to fix the inventory problem, management needed accurate

CoVE Co VEr: r: dESI d ESI gn by bI b I n ES ESh h S r E Edharan E dharan

Feature by Kanika Goswami

2 2

Feature by stephanie Overby, CIO & CIO.com

Peer to Peer thE hARD sELL | 20 Small company CIOs get the brush-off from vendors. But if small and mid-market businesses have money to spend, why don’t the big vendors want it? Column by michael Gaskin

Alignment EDuCAtInG BusInEss LEADERs | 48 Business people don’t need to know about IT. But, what they don’t know can hurt them — and you. Here’s how to educate business people without alienating them. Feature by michael Fitzgerald

more » 4

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content

Essential Technology | 52 BPm | Be Responsive and Stand Out Column by Michael H. Hugos Alignment | Building the Store of the Future Feature by Laurianne Mclaughlin

From the Editor-in-Chief | 2 Win Without a Fight

By Vijay Ramachandran

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

Case study RIDInG hIGh On tEChnOLOGY | 30 With its countrywide reach and ever-increasing business, it was getting increasingly difficult for Hero Honda staffers on the field to geth their hands on meaningful information on time. Till a unique SMS implementation came to their rescue.

2 0

Feature by Kanika Goswami

Executive Expectations VIEW FROm thE tOP | 34 Anupam Mittal, Chairman & MD, People Group, says that even in a business in which IT and business overlap completely, customer focus is critical. Interview by Gunjan trivedi t

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ADVISORY BOARD

Advertiser Index

Abnash Singh Ma nagement Publisher Bringi Dev President & CEO Louis D’Mello Editor ial Editor-IN-CHIEF Vijay Ramachandran

CIO, Mphasis

assistant editors Balaji Narasimhan

Gunjan Trivedi

Special Correspondent Kanika Goswami

Chief COPY EDITOR Sunil Shah Copy Editor Shardha Subramanian

Alok Kumar

Anwer Bagdadi

APC

Senior VP & CTO, CFC International India Services Arun Gupta

Emerson

Customer Care Associate & CTO, Shopper’s Stop

VP & CIO, Mahindra & Mahindra

Intel

Creative Director Jayan K Narayanan

SENIOR Designers Binesh Sreedharan Vikas Kapoor, Anil V.K Jinan K. Vijayan, Jithesh C.C Unnikrishnan A.V, Suresh Nair

Ashish K. Chauhan President & CIO — IT Applications, Reliance Industries

PC Anoop, Prasanth T.R Vinoj K.N, Siju P MULTIMEDIA Designers Girish A.V, Sani Mani

Photography Srivatsa Shandilya Production T.K. Karunakaran

T.K. Jayadeep

Ma rk eting and Sa l es VP Sales (Print) Naveen Chand Singh VP Sales (Events) Sudhir Kamath brand Manager Alok Anand Sukanya Saikia Marketing Siddharth Singh, Priyanka Patrao, Disha Gaur Bangalore Mahantesh Godi Santosh Malleswara Ashish Kumar, Kumarjeet Bhattacharjee, B.N Raghavendra, Delhi Pranav Saran, Saurabh Jain, Rajesh Kandari, Gagandeep Kaiser Mumbai Parul Singh, Rishi Kapoor,Pradeep Nair, Hafeez Shaikh Japan Tomoko Fujikawa USA Larry Arthur; Jo Ben-Atar Events VP Rupesh Sreedharan Managers Ajay Adhikari, Chetan Acharya Pooja Chhabra

Interface

IBC

C.N. Ram Head–IT, HDFC Bank

Designers MM Shanith, Anil T

AMD

Global Head-Internal IT, Tata Consultancy Services

Arvind Tawde Des ign & Production

Vice President, Britannia Industries

Resident Editor Rahul Neel Mani

ADC Krone

Alaganandan Balaraman

Itanium

8&9

Chinar S. Deshpande CEO, Creative IT India Dr. Jai Menon

Microsoft

IFC

Group CIO Bharti Enterprise & Director (Customer Service & IT), Bharti Airtel

RSA

SAS

Manish Choksi Chief-Corporate Strategy & CIO, Asian Paints M.D. Agrawal Dy. GM (IS), Bharat Petroleum Corporation Rajeev Shirodkar VP-IT, Raymond Rajesh Uppal Chief GM IT & Distribution, Maruti Udyog Prof. R.T. Krishnan Jamuna Raghavan Chair Professor of Entrepreneurship, IIM-Bangalore S. Gopalakrishnan CEO & Managing Director, Infosys Technologies Prof. S. Sadagopan Director, IIIT-Bangalore S.R. Balasubramnian Exec. VP (IT & Corp. Development), Godfrey Phillips Satish Das CSO, Cognizant Technology Solutions Sivarama Krishnan

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

Printed and Published by N Bringi Dev on behalf of IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. Editor: N. Bringi Dev. Printed at Rajhans Enterprises, No. 134, 4th Main Road, Industrial Town, Rajajinagar, Bangalore 560 044, India

Executive Director, PricewaterhouseCoopers Dr. Sridhar Mitta MD & CTO, e4e S.S. Mathur GM–IT, Centre for Railway Information Systems Sunil Mehta Sr. VP & Area Systems Director (Central Asia), JWT V.V.R. Babu

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

Group CIO, ITC

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new

hot

unexpected

IllUST raTIon by UnnIkrIShnan aV

Five IT Skills Doomed to Death I t M a n a g e M e n t Technical skills may never die, but areas of expertise wane in importance as technology advances force companies to evolve and IT staff to forsake yesterday's craft in favor of tomorrow's must-have talent. Here are five high-tech skills that don't demand the pay they once did. Plain old HTML As companies embrace Web 2.0 technologies such as AJAX, demand for skills in HTML programming are taking a back seat. According to Foote Partners, pay for skills in technologies such as Ajax and XML increased by 12.5 percent in the last six months of 2007, while IT managers say they don't see a demand for technology predecessors such as HTML. Legacy programming languages Skills in programming languages such as Cobol, Fortran, and more don't rate like they once did. "The Cobol people that had a resurgence with the Y2K bug aren't in demand," says John Estes, VP of strategic alliances of Robert Half Technology, an IT staffing consultancy. "Certain other applications such as Delphi and PowerBuilder, [which were] very big in the '90s, are no longer in demand." NetWare Operating system know-how continues to be in top demand among hiring managers,

but expertise in Novell's network operating system NetWare isn't keeping up with other technologies in the same area. Networking software such as NetWare isn't near what it was in the '90s. Non-IP network IP and Internet skills usurped non-IP network expertise and know-how in technologies such as IBM's system network architecture (SNA) continue to rank among the lowest-paying skills. PC tech support CompTIA reports that hardware skills and knowledge, including expertise with printers and PCs, are on the decline in terms of demand. "The 'move, add and changes' PC tech function isn't quite what it used to be," Robert Half Technology's Estes says. —By Denise Dubie

Quick take

G.S. Ravi Kumar on Meetings Many IT executives tend to spend too much time in meetings. Should CIOs look at ways in which they can get more value from meetings, even if they are lengthy and have too many participants? Balaji Narasimhan spoke to G.S. Ravi Kumar, CIO, GATI, and this is what he had to say:

S ta f f M a na g e M e n t

Too many people in a meeting make it difficult to manage. What do you think is an ideal number? In my view, the best way to decide this is to determine the role that the participants have to play. Do they have any direct contribution to make to the meeting? If yes, then that person needs to be present. More than numbers, you should formulate the participant list based upon requirements. Also, the number of participants will depend on the nature of the meeting — is it a strategy, product, or review meeting? This plays a role in the number of members.

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What are your main requirements to ensure a useful meeting? The objective has to be very clear. You have to work out a plan of action. Then comes the agenda along with the names of people and the timelines. These days, since meetings are not always face to face, selecting the mode of the meeting is also important. How do you ensure that you don't have too many meetings on one subject? During the first meeting, you should define the objective, prepare the minutes and the review mechanism. If you can get this done, then you can avoid further meetings by getting updates over e-mail.

Ravi Kumar

How can you use meetings to build consensus? It should be conducive for participants to raise their views. This should be supported by data — otherwise, you end up making generic statements. It also helps if participants come up with solutions instead of just problems. REAL CIO WORLD | M A Y 1 , 2 0 0 8

A Seat at the

Support or Tech? As business needs grow — requiring software and third-party services — outsourcing among Indian enterprises is becoming a reality. Fewer companies can now afford to take their vendor relationships lightly. Sunil Shah asked your peers what they thought was more important: a vendor’s technical skills or its support.

Voices

“I choose the second option: lower on the technical skills but all there with support. Failures occur at anytime, despite the best tech. When something fails, I expect support. It's a major thing. ”

trendlines

K. Vasudevan Sr. Manager Information Systems, Indian Oil Corporation

“I choose support. The cost of downtime is much higher than the cost of the supremacy of a technology. A vendor who can provide support, can think in our shoes in a crisis, is the best vendor.” S. Sridharan VP-IT, Orchid Chemicals & Pharmaceuticals

“Skills or support? Can I add one more option? Price. I think it is an important criteria. That said, even if an investment is on the higher end of the spectrum, quality and on-time support are important. Even if I get 10 percent less features on a solution, I look forward to getting a 100 percent support.” Lend Your

Mahesh Manchi Chief Systems Officer, Zenta 12

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Voice

Write to editor@cio.in

M A Y 1 , 2 0 0 8 | REAL CIO WORLD

Leadership Table IT executives say that top leaders see their work as central to innovation, according to a survey by Harvard and Sloan business schools. As the role of technology becomes undeniably more important within business, senior management has begun recognizing technology as central to innovation and competitive advantage. That is the main result of an online survey of 175 CIOs from around the world by The Center for CIO Leadership, in collaboration with Harvard Business School and MIT Sloan Center for Information Systems Research (CISR). Harvard hosted the survey online and IBM's Center for CIO Leadership provided support for the research. Eighty four percent of respondents believed that technology was significantly or profoundly transforming their industries, but that their companies were only fairly effective at taking advantage of the potential this transformation presents. With this change, more CIOs are sitting at the executive table and maintaining an active role in strategic business decisions. Eighty percent of CIOs responded that they are a valued member of the senior leadership team, and 69 percent indicated they have significant involvement in strategic decision-making. The survey’s findings show how CIOs have gained significant influence over their organizations’ strategic decisions. These CIOs also contribute to strategic planning and growth initiatives, gain the commitment of senior management, and earn their trust. Companies with a strategic CIO tend to use IT more extensively to innovate new products and services and share technology more effectively across the enterprise. According to the CIOs surveyed, their priorities include improving external partnerships, developing IT talent, and extending collaboration across their business. Also, organizations whose CIOs are involved in the decision making process demonstrate higher levels of IT-enabled business model innovation, IT-enabled product/service innovation and shared infrastructure and services. The survey’s findings show that CIOs involved in the strategic process also have a list of skills that set them apart. These skills include leadership, relationship management and resourcefulness. The survey concluded by stating, “In a competitive environment where IT infrastructure and process automation are CIO 'table stakes', it is incumbent upon IT executives to have an impact on their organizations’ capacity to innovate and grow.” —By Jarina D'Auria

S u rv ey

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Gran and d Cha halllen lenges ges of Tomor morrrro ow processors that are a bit slower but solve problems faster by dividing tasks into smaller individual processes. "Key issues will need to be addressed, like effectively breaking up processes into specific subprocesses, determining which tasks can be handled simultaneously by multiple processes," Gartner writes. Natural computing interfaces. The goal of interacting with computers without a mechanical interface is a longstanding one, but obstacles remain in developing the ability for computers to detect gestures. Automated speech translation. Some rudimentary automated speech translation systems have been created, but "the complexity extends further when translation and output is required to a target language that is understandable to a human," Gartner says. Persistent and reliable long-term storage. To have reliable storage that can last 20 to 100 years, researchers will have to overcome challenges related to data format, hardware, software, metadata and information retrieval. Increasing programmer productivity 100-fold. Today's programmer is a shell of his future self â&#x20AC;&#x201D; or at least that's what Gartner is hoping. The output of

each programmer will have to increase dramatically in order to meet future demands fueled by increasing reliance on the fruits of software development. The simple reuse of code will help, but optimizing the ability to reuse code has its own challenges, such as making it easier to find software modules quickly. Identifying the financial consequences of IT investments. "One of the most perplexing challenges faced by IT leaders has been to convey the business value of IT in terms readily understandable by business executives," Gartner notes. No standard way of measuring IT value exists today. Gartner's challenge to the industry is to find a model that can measure value consistently, similar to how financial accounting measurements are standard across public companies. Ideally, Gartner says IT shops should be able to tell business executives "If you invest in our IT proposal, you will see an additional Rs 1.2 earnings per share directly attributable to this project by the third quarter of next year."

trendlIneS

Storage Gartner has identified seven technologies that will 'completely transform' business over the next 25 years. "Many of the emerging technologies that will be entering the market in 2033 are already known in some form in 2008," Gartner said recently. Each of the seven technologies represents a 'grand challenge' for IT researchers and CIOs. Gartner defines an IT grand challenge as "a fundamental issue to be overcome within the field of IT whose resolutions will have broad and extremely beneficial economic, scientific or societal effects on all aspects of our lives," the analyst firm writes. Here's a rundown of Gartner's seven technology grand challenges: Eliminating the need to recharge batteries for wireless devices. The future holds portable computing devices that are charged remotely, rather than with a wire, or devices that are simply powered by a remote source, making the use of batteries unnecessary, according to Gartner. Parallel programming. Speed advances in computing are starting to come with multicore processors which, instead of speeding up a single core, use multiple

â&#x20AC;&#x201D;By Jon Brodkin

to error is human human error tops the list of security threats, according to a survey by consultancy Deloitte of more than 100 technology, media and telecommunication companies worldwide. What concerns companies most? Misbehaving employees: 91 percent said possible employee misconduct related to information systems worries them. SecurIty

kEy y CaUSES For SECUrITy Fa F IlUrE r

75%

hUMan Error hUM rror- 75%

48%

oPEra oPE raTIon raTI onS S laPSES- 48%

TEC EChnology hnology laPSES- 48%

28%

ProblEMS EMS WITh ThIrD ParTIES- 28% Source: Deloitte

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REAL CIO WORLD | M A Y 1 , 2 0 0 8

BY Margaret locher

Boards Should Walk the IT Strategy Talk

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corporate boards think it's importance has increased over the past few years â&#x20AC;&#x201D; but they need to start taking action to prove it, says research from Deloitte. Only 11 percent of boards discuss IT at every meeting according to Deloitte's study, The Board and Information Technology Strategies. Twenty-two percent of the 455 respondents, all directors of companies with revenue of $1 billion (Rs 4,000 crore) or more, said that they blame IT strategy for the companies' inability to achieve its goals. Fifty-two percent said their board won't spend any more time on IT over the next three years than it does now. Kenneth Porrello, a principal with Deloitte Consulting who directed the survey, says, "The thing that was most frequently cited as preventing boards from spending more time on IT was lack of time. Compliance matters have been a major factor in the increase of demands on boards." Communication problems contribute to the divide: directors are not often receptive to CIOs because of lack of exposure, Porrello says. CEOs and CIOs need to determine whether their boards are spending enough quality time talking about IT, and if not, how they can make time to do so, he says. CIOs need to find opportunities to interact with their boards, to build a better understanding about what the board cares about, how the members communicate, what type of information they value and how they like to interact with management, Porrello says. "Build an understanding of the 'personality' and the culture of the board. Also, work with your CEO and other members of the management team to understand their longer-term plan and approach for working with the board so that you can mesh your efforts with theirs." Aligning IT strategy with overall business goals is key. No matter how thin board members are stretched, they are passionate about wanting to contribute to strategy and business performance, Porrello says.

Best Practices 1

Review your board's activity with the CEO. Take stock of the board's past actions related to IT governance. Figure out how IT issues have been addressed in the past. ask how often the board discusses IT and how much time is allocated.

Offer suggestions for how the board can approach IT more effectively. Don't complain that the board isn't doing enough for IT â&#x20AC;&#x201D; present ideas for how they can do more. Then you and your CEo can refine how the board engages in IT matters.

Be as involved as possible. learn more about your directors personally. keep the lines of communication open so you can develop working relationships and get things done.

Disconnect Between Wishes and Actions Directors say there's room to improve business/IT strategy alignment: Not at all aligned or no IT strategy:

But too few boards get hands on with IT strategy: 16% Not at all involved 14% We're completely

We're well or very well-aligned:

and actively involved

66%

Somewhat aligned:

27%

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69% Somewhat involved

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Videoconferencing? Oops! conferencing equipment. "We painted the walls a couple different colors before we settled on light blue," he says, adding solid colors like green also work well. Be careful with plasma TVs and videoconferencing. "While plasmas look very nice, you have to stretch the image and the images can quickly get burnt in unless you turn the sets off every night," Soto says. Instead, he recommends LCD TVs, which he warns have tradeoffs. "The screen images don't get burnt in, but they do have a little delay and less color." While Soto might be ahead of the learning curve, a 2007 study by the Nemertes Research Group showed that the industry isn't far behind. Not only had more than two-thirds of respondents already deployed IP video to connect room-based systems, but, like Soto, almost 50 percent were evaluating or deploying high-definition and telepresence for those systems. Nemertes credits this uptick in interest — only 22 percent had room-based or desktop-based in 2005 — to a growing comfort level with videoconferencing among business units.

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C o mm u n i c a t i o n With the rise in adoption and availability of enterprise videoconferencing systems comes a warning from IT pioneers: thinking this technology is simply plug-and-play will lead to disaster. "If you're going to spend all that money on videoconferencing, especially HD, which isn't cheap, don't cut corners. Otherwise users will turn videoconferencing off and you'll do damage to your business," says Sergio Soto, videoconference technician supervisor at commercial real estate information provider CoStar Group in Bethesda. "You don't want to say to your users, 'Here's a camera and you might look fuzzy.' Take the time to get the [broadcasting] room ready, determine the right lighting, make sure the sound is good and that you have enough bandwidth," Soto says. In fact, Soto found out early on that something as seemingly mundane as wall color in a conference room can have a profound effect on the user experience. "We noticed that the person on-camera was getting washed out by the white walls and that the camera would start to focus on other things," he says. This distracted users and posed a threat to his company's significant investment in high-definition

—By Sandra Gittlen

Give me More Say Data Centers

Nearly half of IT professionals admit that they've run out of space, power or cooling capacity at their data centers, according to a recent survey. This is among the startling findings of a new study called Lean & Green: Reducing IT Energy Drain for Business Gain, conducted by the Business Performance Management (BPM) Forum. The study surveyed 150 IT professionals to discover the issues surrounding the use of green technologies in data centers. Three-quarters of respondents gave their organizations a 'C' grade or worse for ability to control IT energy consumption.

Il lustratio n by BINESH SREEDHARAN

Storage

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Almost two-thirds admitted they have no green plans for their data centers. Forty-six percent of respondents also reported that they had run out of space, power or cooling capacity. "The biggest surprise for us was the gap between intent and activity," said Derek Kober, director at the BPM Forum. "It is a bit of double whammy, energy costs are rising rapidly, and data handling costs are also rising. We see that two-thirds of companies do not have a plan in place to address their growing energy needs." "One of the things we think is that awareness is not out there of energy saving technologies," he added. The survey found it is not cost prohibitive to operate an environmentally sound data center, and green tech can save money in the long-term. Over 20 percent of respondents thought they could save Rs 4 lakh or more a year reducing server and network storage energy consumption. Six percent thought they could save over Rs 40 crore annually.

"It's this cost savings that accompanies green computing that is driving the train," says the report. The power consumption of data centers has been an issue for a while now. Almost half of those polled said IT energy consumption increased in their organization last year, even as the cost of energy rose. And the study drove home the costs of running a data center. Nearly 20 percent of those polled in the survey spend over Rs 4 crore a year on IT energy consumption, and 8 percent spend more than Rs 40 crore. "Enterprises are going to have to deal with the looming data center environmental crisis in the short term, particularly with increasing server sprawl and power consumption spiralling out of control," says the study. "Companies must decide the best way to do this in terms of cost and environmental benefits." —By Tom Jowitt REAL CIO WORLD | M A Y 1 , 2 0 0 8

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Online Banking

Gets Bonus From Users

M o b i l e A new survey of 3,578 IT managers suggests that wireless and radio frequency (RF) mobile technology proficiency will grow in importance over the coming five years to become the number one most valuable IT skill. The survey was commissioned by CompTIA and conducted late last year by market research firm, The Center for Strategy Research. To qualify as an 'IT Manager,' respondents, who participated in the survey via phone or online, had to have hired and/or managed at least three IT employees for companies with staffs of 10 or more. And the survey base was composed of at least 250 IT managers from each of the following 14 countries: Australia, Canada, China, France, Germany, India, Italy, Japan, The Netherlands, Poland, Russia, South Africa, the United Kingdom, and the United States. Currently, the three leading IT skills are security (74 percent of respondents ranked the skill 'six' or 'seven' on a scale of one to seven), general networking (66 percent), and operating systems (66 percent), according to the survey. But mobile and wireless skills are expected to grow most in importance over the coming five years to become the number one most valued skill set, the survey found. (In all but two of the respondents' countries — South Africa and France — IT managers said wireless skills will increase the most to 2013.) Though the survey didn't drill down into the specifics of what was meant by 'wireless and RF frequency technology' skills, CompTIA spokesman Steven Ostrowski said the phrase encompasses all the ways companies are using wireless, like smartphones and handhelds and related support, Wi-Fi networking and RFID implementations. Those most likely to predict that wireless will be the most important skill in five years were IT managers in the healthcare industry (63 percent), followed by IT managers in the education space (63 percent). Auto/manufacturing-sector IT managers were less likely to predict such strong growth in the importance of such skills.

When it comes to using online financial services, users are more satisfied with the online experience offered by banks than by credit card or investment firms, according to a survey. Online banking scored 82 out of 100 points, up from 78 points last year, while credit card and investment Web sites both scored 75, according to the 2008 ForeSee Results/ Forbes.com Online Financial Services Study, which employs the methodology of the University of Michigan's American Customer Satisfaction Index (ACSI). The online banking score rivals the satisfaction score of 83 for online retail, the highest scoring category measured by ACSI, said Larry Freed, president and CEO of ForeSee Results and author of the study. The organization surveyed 1,600 people between March 7 and March 25. This was the first year the study surveyed users of credit card and investment Web sites. "Online banking is setting the bar for online financial services," Freed said. "Improving customer satisfaction is an effective way to move customers to the most cost-efficient channel. It's smart business." User satisfaction with online banking is up because banks have found the winning formula for providing value, convenience, information and transactional features online, the report said. Over the years, banks have managed to convince a large number of customers of the convenience, value and security of banking online, it said. Credit card and investment firms, however, have not yet achieved that winning formula, Freed said. In fact, the lower score for credit card Web sites indicates that credit card companies are not using their Web sites to improve their overall business operations, the report said. Although credit card companies do not usually have strong relationships with their customers, the study suggests that if they invest in improving their users' online experiences, they could increase customer loyalty, Freed said. Investment firms are still having trouble providing users with a convenient and easy-to-use Web site for what are often complex financial transactions, he said. "Financial services firms should resist the temptation to cut investment in the online channel in times of tight money," Freed said. "Our research suggests that, if anything, a commitment to improving satisfaction with the Web channel can improve both overall loyalty and the bottom line by moving customers into the most cost-efficient service channel."

—By Al Sacco

—By Linda Rosencrance

Internet

Il lustration by B IN ESH SREEDHARAN

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Wireless Running for Top Spot

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Michael Gaskin

Peer-to-Peer

The Hard Sell The big vendors beat down the doors of large companies to get business, but a small company CIO gets the brush-off. If small and mid-market businesses have money to spend, why don’t the big vendors want it?

n the movie The Empire Strikes Back, you may remember, the great sage, Yoda, tells Luke Skywalker, "Size matters not." But according to a group of IT leaders who met recently for the CIO 08: The Year Ahead conference (run by CIO's publisher), size certainly matters when we attempt to engage large information technology consultancy firms. These vendors don't seem to want to do business with small to midsize organizations, even though we have money to spend.

Ways Vendors Blow Their Sales Pitches One IT leader who came from a large shop before landing in his current role said it was difficult to get phone calls returned from the once "cozy" vendor — whose sales reps were eager to talk to him when he commanded a larger budget. Another observed that the talent his vendor provided was "green." Finally, a few expressed disbelief at vendors' pricing; it appeared these vendors were geared only for large organizations with large IT budgets.

Vendor Help Wanted

Il lustratio n by ANIL T

I have experienced some of the same frustrations. For two years I have been employed as the director of information services at the non-profit Sequoia Community Health Centers. Sequoia's primary purpose is to provide outpatient care to the most disadvantaged citizens in the Fresno area. In 2006 alone, Sequoia healthcare professionals saw more than 37,000 patients. Because we rely on grants and government funding, it's more difficult for us to fund strategic IT projects than 18

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Michael Gaskin

Peer-to-Peer

Just because we're a Rs 100-crore organization, that does not exempt us from the same challenges of larger organizations. Although our Rs 10-lakh budget may not seem like a lot to IBM, imagine if they had many customers of our size. it is for for-profit organizations; however, that does not mean IT gets a pass on providing outstanding technology to our colleagues. IT must provide strategic value to the organization and must be nimble enough to respond to changes in our organization. Sequoia's IT team has nine members. With such a small shop I have to spend a great deal of my time maintaining operational excellence. However, my role must move from an operational one to one that is more strategic. During my first year at Sequoia I concentrated on improving the processes that affect operational excellence. With these processes largely working, I must now spend my time providing a technological vision for Sequoia. Because I am a member of the Executive Leadership Team (the primary operational management body), my CEO also expects not only technical vision but business vision as well. As an example of this push to address strategic concerns, language was inserted into Sequoia's five-year strategic plan that mandates that a disaster recovery plan be completed by December 2008. As you can imagine, creating a fully functional disaster recovery plan requires an enormous amount of time â&#x20AC;&#x201D; and, as I noted above, I've been focused on operational excellence, not long-term strategic planning. To provide me with more time, my CEO authorized me to hire an IT manager in early 2008 to maintain operational excellence. However, even if I had a fully trained IT manager in place already, I do not have the expertise to create a plan that can withstand the scrutiny of auditors and Sequoia's board. I felt an experienced consultancy could help me develop the disaster recovery plan, and so late last year I attempted to engage IBM. But the cost was out of Sequoia's reach. I was surprised at IBM's lack of interest in Sequoia. I had a budget of $25,000 (Rs 10 lakh) and wanted to give it to IBM. Yet it was clear from talking with my IBM representative that Sequoia (because of our size) was not the right fit for IBM. Herein lies the problem. Just because Sequoia is a Rs 100crore organization (in revenue), that does not exempt us from some of the same challenges that larger organizations endure. Although $25,000 may not seem like a large amount to IBM, imagine if they had many customers similar in size to Sequoia.

What Would Yoda Do? Not only are the IBMs of the world leaving money on the table, they're also risking future sales. The IT leaders at

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small organizations will in many cases be employed by larger organizations someday. Why alienate them? Vendors could engage IT leaders in small organizations now and build brand loyalty. How could they make such a business model work? Let's imagine (with apologies to George Lucas) what Yoda might do if he were running a large consultancy. For one thing, I'm sure he would have a dedicated group of Jedi Knights sworn to serve those in technological need. These Knights would not be Padawan Learners (the Jedis in training) but rather full-fledged Jedi Knights with at least a few years of experience behind them. As the IT leader of the smaller organization moves to larger organizations (or expands, as Sequoia is expanding) Yoda would have another group of Jedi who could handle more complicated problems. The handoff would be seamless, quite possibly keeping the same Jedi Master account manager in charge. Yoda would also have a menu of consulting options that could be utilized for smaller organizations. These menu items, such as disaster recovery, could be geared in price and scope to fit organizations of different sizes. By having a menu of consultancy options, IT leaders of smaller organizations could plan and budget for these expenditures more easily.

May the Vendors Be With Me Certainly the struggles of a multinational corporation are far more intense than my own, but I can learn from them and apply their tried-and-true management principles to Sequoia. That's why I spend time sharing information with other CIOs. But to help me implement those best practices, I'd like access to the same expertise that my colleagues at larger companies have. That is out of my reach budgetwise. But it doesn't have to be. CIO

Michael Gaskin is director of information services at the non-profit Sequoia Community Health Centers in Fresno and is a member of the CIO Executive Council. Send feedback to this column on editor@cio.in

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N. Dean Meyer

Applied Insight

How to Tell Your Boss There's No Free Lunch You’ve been asked to do a project that’s not in your IT budget. Time to muster your diplomatic skills and help your boss decide which other projects to give up instead.

Illustration by pc ano op

our budget is decided and it'll be a stretch to deliver all that's expected of you with such limited resources. Then comes the 'unfunded mandate' — that project that you don't have money or staff for, but can't say no to. "Sure, we understand it's not in your budget. But we need it," your boss tells you. You smile, grit your teeth. Oh, in that case, I guess all my staff will work for free to get it done, you think. Not! "You're an exec. I know you can find a way to do it," he continues. Now there's a great pep talk. "It's not like we have a choice," you hear next. "This comes from the top." Ah, well then, no problem, since it's mandated by someone up top who can create hours and money out of thin air! Whether a business unit went off and bought a system that needs IT support, or the company decides to expand operations into a new region (with the consequent need for a network and e-mail), unfunded mandates are common and they all add up to the same thing. People, whether your boss or your clients, expect something for nothing and blame you when you can't deliver. And the best thing you can do is to get them to decide which other projects to delay.

How Not to Respond You can't say no. No matter how unreasonable it seems, this unfunded mandate really is important to the executives at the top. Perhaps it's a real mandate coming from government regulations or law. Maybe it's imperative because of the business landscape. In any case, it's not negotiable. 20

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N. Dean Meyer

Applied Insight

A good leader knows that it's not right to simply pass an unreasonable mandate down to subordinates with the same insensitivity as that which was imposed from above. The ramifications of that poor choice are obvious. Staff individually set their own priorities, choosing which other commitments they'll postpone in order to fulfill the mandate. As a result, other projects fail randomly. Maybe everything comes in late. Maybe staff cut corners on quality. Or maybe they completely fail to deliver on some promises. Meanwhile, the CIO loses respect among her staff and builds a lot of animosity because she hasn't protected them from unreasonable demands. Setting one's staff up for failure is not going to get the job done and â&#x20AC;&#x201D; if this needs to be said â&#x20AC;&#x201D; it's not nice. Another response, hardly better, is to instruct staff to sacrifice sustenance activities like training and process innovation projects. One may think giving up training or process improvement is only necessary to satisfy a temporary, short-term exigency. But the truth is, this is a slippery slope. Do it once, and you'll have reinforced the belief that your organization can absorb more work without more resources. You'll be expected to do it again and again. As a result, there will never be enough time for anything but urgent projects.

The Solution: Act Like a Business If you think of IT as is a business within a business, the IT budget doesn't really belong to the CIO. Instead, it's a prepaid account-money put on deposit with the IT organization in order to buy products and services throughout the fiscal year. I am not talking about chargebacks. I'm simply describing a governance process that matches expectations to available resources. As a business, IT has many expenses such as compensation and vendor services. IT earns revenue to cover those expenses by delivering the products and services that clients choose to buy. Clients use their prepaid account to pay for those purchases. And the cost of their purchases cannot exceed the resources they have in that account. Typically, clients make purchase decisions through a committee with a name like 'IT steering committee' using a process such as portfolio management to decide what to buy with that prepaid account. An unfunded mandate can't force IT to do something for free. That's impossible. Nothing is free. Rather, an unfunded mandate forces clients to use their prepaid accounts to buy something they didn't intend to

The only reasonable way a CIO can respond to an unfunded mandate is to present the situation to the clients and let them either find more funding or decide what IT products and services they'll do without. Of course, this is myopic. Any IT organization that's willing to do without training, innovation, process improvements, client relationship building and other 'keep-the-businessviable' activities is only postponing its inevitable demise. Over time, IT becomes difficult to do business with, inefficient and out of date. Another possibility that's not much better is for the CIO to decide which client projects to postpone or cancel. A CIO may be honest about his or her decision, explaining to clients that the unfunded mandate has bumped their priority on the organization's resources. However, although open communication protects the integrity of the organization, it doesn't do much for its customer focus or client relationships. It's like saying to a client: as your CIO, I have decided that the project you requested isn't all that important to the enterprise. Worse, if decisions are made behind closed doors and clients don't know what's going on, IT gains a reputation for being untrustworthy. So what else can a CIO do? The answer is found in the business-within-a-business paradigm.

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buy â&#x20AC;&#x201D; something they don't necessarily want. As a result, less remains in the prepaid account. It's up to clients to reset priorities and decide what they won't buy to pay for the unfunded mandate. Remember this: unfunded mandates force the hand of the clients, not the IT organization. The only reasonable way a CIO can respond to an unfunded mandate is to present the situation to the clients who control the prepaid account, and let them either find more funding or decide what IT products and services they'll do without. CIO

N. Dean Meyer writes the Beneath the Buzz column on cio.com. Send feedback on this column to editor@cio.in.

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T aring Inve n Te The success of Project Light depended heavily on planning The CosT of bad InvenTory ManageMenT

isruptions can provide insight into how efficient your inventory management system is. loose systems can hamper companies, says David Simchi-levi, a professor at MIT. For example, lightning struck Philips Semiconductor’s factory in 2000, sparking a fire that shut down production of its radio frequency chips, which Nokia and Ericsson used in their cell phones. Within days, Nokia’s systems detected a slowdown in incoming parts and alerted plant managers, says Simchilevi. Nokia's phones were quickly redesigned to use another companies’ chips. But Ericsson didn’t respond for four weeks, partly because its inventory systems weren’t programmed to spot risks early. Ericsson lost market share that it never regained. By the end of the year, it was out of the phone business. Inventory management can change markets. — Kim S. Nash

HT Media’s warehouses were full of money. Paper money. If the media house could slash its paper inventory, it could free up funds for expansion. It would take grit and determination. by KaniKa Goswami

oney is just paper. Nowhere is that saying more true than in the newspaper business. Of the 15 million readers who pick up one of the 2.25 million copies of Hindustan Times, few know that 80 percent of the cost of producing that paper is the paper itself. But it’s a figure that weighs heavily on the minds of HT Media’s management. Mainly because they have millions of rupees worth of paper sitting around in their warehouses. Five years ago, HT Media’s inventory of paper was worth Rs 150 crore — and they were making about Rs 550 crore. With such a large chunk of their funds wasting away in warehouses gathering dust, no picture of ‘dead’ money could have been more accurate.

M A Y 1 , 2 0 0 8 | REAL CIO WORLD

And five years ago, the Delhicentric paper needed that money bad. The paper’s management wanted to push the Hindustan Times brand into the heavyweight league. They wanted more publications, more mediums, more languages, and more geographies. They wanted to go national but needed the financial resources to fuel their ambitions. Every time they crunched figures looking for something to squeeze, they bit down on their Rs 150-crore inventory like a rock. It was a rock that defined their horizon and they were going to flatten it.

Squeezing Money from a Rock Is Not Easy IF THEy WERE gOINg to fix the inventory problem, management needed accurate

PoISE UNdER PRESSURE Given a newsp ensure the upgrade's three-day downtime even one day of revenue.” figures; they wanted to know how many tons of paper their presses ate up a day. Only then they could calculate how much they needed for a month’s inventory and how much they could divert for expansion. But, records of newsprint were kept

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ap di

e ntoryy Down

wsp me

the upgrade's groundwork, says Sharad Saxena, ED, HT Media

aper's 24x7 environment, Mohit Agarwal, CIO, HT Media, had to work hard to did not affect the media house. “It was important that we did not lose

on multiple Excel sheets — not conducive to quick math. Worse, consignments of newsprint came in rolls — between 500 and 3,000 to a consignment. No one knew how much each roll weighed. This meant that no one could

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accurately tell how many tons of paper HT Media consumed in a day. And since paper is priced on a per ton basis, there was no way HT Media’s financial controller, Pradeep goel, could know how many tons of paper — and its price — the media house needed

for a 30-day inventory. Bottom line? He couldn’t tell how much could be freed up for expansion. Inventory was a problem Harish Nagpal, AVP-Materials and Production, HT Media was conversant with. “Newsprint is received in reels whose weights were taken as averages (consignment weight divided by number of reels). This made it difficult for auditors to tally our figures with actual stocks. Inventory (reels) comes in weighing between 250 to 1,000 tons and we take an average, but how could the auditors certify an average as our physical stock?” he says. And the math got fuzzier with multiple sources of paper changing their prices. “Average costing was done at the month end, all in moving averages. Every month, all purchases were added to opening stock and taking current rates, consumption was charged. We couldn’t do it on Excel,” he continues. Evidently, the problem was not going to be bulldozed away. Inaccurate inventory and consumption figures made for inaccurate procurement and production planning — Nagpal’s job. “We had inventory ranging between 30 and 180 days. Since most of our inventory is imported newsprint from North America and Europe, we need lead times of about 45 days to ensure shipping. The lack of planning

hit us hard,” says Nagpal. The only available solution? Play it safe and overstock. In the meanwhile, Nagpal spent a lot of his time justifying the messy situation at every year’s stock audit, at the end of March. Mostly in vain. Despite his best efforts audit reports carried the same comment: 'could not verify the factual

Reader ROI:

The importance of upgrading your ERP to slash inventory How to implement an upgrade without halting business Why linking your different business can produce business opportunites

stocks because the company does not maintain records according to accounting standards.' It was a report card that would haunt the company.

You Can’t Report the News in South India, if You are in North India THE cOST OF HT MEDIA’ EDIAS EDIA’ inventory explains why the Web, with its low overheads, is threatening newspapers in other pars of the world. Already magazines in the US (including sister publications of CIO) have

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PhoTo By DR lo hIA

Cover Story | Inventory Management

hT MedIa Flagship products: Hindustan (hindi)

Hindustan Times headquarters:

New Delhi Reader Base:

150 lakh Revenue:

Rs 800 crore Employees:

3,000+

gone completely online. While the industry in India is still doing well, many newspapers are readying for the change and are making investments online. In 2000, few media organizations could afford to have a laissezfaire attitude with the Internet because the Web was taking away their primary source of income: ads. Between 2000 to 2003, ad spend in print dropped consistently as those funds were diverted to the Web. And HT Media was also feeling the heat from new entrants. Local language papers were picking up steam, so were other mediums including radio and TV. These mediums were poaching their ads — from having 75 percent of the ad market in 1995, print went to owning only 41 percent in 2005. This spelt bad news for

Can You Feel the Squeeze?

cA RToo N By Pc A Noo P

SnapShot

HT Media, which reportedly made 79 percent of its profits from ads in 2005. The challenge before HT Media was to give its advertisers an audience that was spread out across multiple geographies

and mediums. This is what probably drove Shobhana Bhartia, vice chairperson and editorial director, HT Media, to put the company through a major re-structuring in 20002001. The idea was to spread

cIo:

Mohit Agarwal

Consensus Under Pressure

Executive Director operations & hR:

The behind-the-scenes story of how Mint was brought out.

Sharad Saxena

53,00,000 The Hindu

61,00,000 The Hindustan Times

71,00,000 India Today

The Times of India

135,00,000

top 4 English publications

Source: Indian Readership Survey 2007 , Round 2 24

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art of hT Media’s expansion program was launching its business paper, Mint, in collaboration with the Wall Street Journal. To facilitate the exchange of content, hT Media wanted to deploy Eidos — an editorial system to create a converged newsroom to supply content to Mint. The software would provide an end-to-end workflow from booking advertisements to final page production. It was the backbone on which Mint's success depended on. But Eidos needed to be done quickly. There were exactly three months from concept to the launch of Mint. The software needed to be accompanied by a central cMS that would push content to the paper’s website. To meet the stringent quality requirements and their deadline, the IT team realized it would need clout and plenty of teamwork. They needed participation of every function and the clout of

managing editor behind them. They also brought heads of business operations to the table to avoid bottlenecks in defining the scope of Eidos. Another challenge the Mint project faced was matching hardware delivery with application software project execution. “This required an amazing amount of collaboration between the hardware and application software people,” says Mohit Agarwal, cIo, hT Media. The hardware partner chipped in by providing demo boxes to enable the application vendor to start working on its configuration. Training was also planned around this. The application partner put in extra resources 24x7 for the final deployment once the hardware was delivered. At this stage, precisely-defined business requirements and well-defined practices helped.

—K.G. Vol/3 | ISSUE/12

Cover Story | Inventory Management out into every direction, on every medium. To do that, HT Media needed a lot of money. So it turned to the market. But to go public its financial figures needed to be readily available and audited on a quarterly basis — not something the organization could do with its current systems. The expansion also brought scalability problems out of the woodwork. HT Media’s asset management and circulation systems were adhoc and had no proper accounting processes. HR processes, too, moved at a sloth’s pace: payroll took 12 days. “In terms of asset management we were very poor. y year-on-year, we would spend more than Rs 100 crore for capital expenditure, and this was increasing with our growth. The controls were mainly manual, or local accounting packages used in different locations. We had no formal system of indenting, purchase order (PO), or gRN (goods removal note), which could give us a complete trail, the location,

44 MInuTes The amount of time the average urban adult spends reading dailies and magazines. It has gone up from 41 minutes in the last survey. In rural India, average reading time has fallen from 36 to 35 minutes daily. Source: NRS 2006

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BUSINESS ChaMPIoN Sharad Saxena, Executive Director, Operations & HR, HT Media knew that the upgrade would mean a big move for everyone. But he didn't let that deter him. "This is the biggest implementation in India, if not on a few continents. The team did a very good job." or the capitalization of fixed assets and transactions with the market,” says goel. There was a solution to all these problems: upgrading their ERP system. going from SAP R/3 4.6c to SAP Ecc6.0 would create accurate data, bring the organization on the same page and give it the sleek streamline of a professional enterprise. But Sharad Saxena, executive director, operations & HR, HT Media, knew it was going to be a big move. It would require throwing 100 legacy systems overboard. And no one else in the media space in India had done an implementation on this scale. But he knew it was the road to expansion so he picked up the phone and called Mohit Agarwal, cIO, HT Media.

Sure, But Can WeShut the Paper for Three days? THE PLAN WAS to upgrade to SAP Ecc6.0 and extend the ERP’s coverage from a few finance apps and media planning to the entire business. There was one hitch. The upgrade required three days of downtime. In the world of newspapers three days is three lifetimes — the death of Mother Teresa barely made two days. And every day down meant losses in revenue. “This [downtime] was unheard of and unacceptable from a business perspective,” recalls Agarwal. But after six weeks of evaluating options to work

around the 72-hour blackout, it became clear that there was no other feasible option. It did not help that the IT team had little credibility with management. “HT Media had a legacy of making significant investments in IT without reaping business benefits.” says Agarwal. “Among top management there was a lot of cynicism towards IT projects and their ability to succeed. This made them more reluctant to invest further in IT projects.” cost was certainly a factor. The Rs 10-crore price tag brought to the fore one of the hardest balancing acts in IT. “Accuracy can be increased. But an increase in accuracy means a greater cost. To lower cost, one must sacrifice accuracy,” says Pankaj chauhan,

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Cover Story | Inventory Management project manager, Siemens Information Systems (SISL), the project’s technology partner. A centralized system, chauhan says, can balance these two conflicting objectives. “It can help increase accuracy, and minimize the cost of control and reporting,” he says. So the upgrade, nicknamed Project Light, was kicked off in June 2006, with a team of 22 people from all the paper’s departments and 23 members of SISL. As with all ERP projects, it became apparent that dissimilar processes across locations was going to be an issue. To convince disparate units to accept a common process, they had to first understand the system, and then agree to become a part of it. It was a problem that everyone foresaw. “Invariably when you roll down these modules, people take priority. The real character of the organization comes across when your modules can support your people,” says Saxena. Support it did. A large amount of training was needed for people working across smaller towns, especially those in operations at 17 procurement and inventory locations,says Agarwal. In Nagpal’s team, members of the materials and production department had to put in two- or three-tier training programs to ensure everyone was familiar with the new processes and their function in the larger whole. “We trained over 400 people for almost a year. It was expensive,” says Agarwal. Some departments, however, looked forward to the change. The finance department, which would be one of the major beneficiaries of the new systems, “were actually excited, 26

since [the new system] would give them respite,” says goel.

a Big Jump Requires a Long Run Up THE ARcHITEcTURE too would prove to be new ground for the organization. “We have deployed a unique Fujitsu Netapps Flexframe architecture. It’s basically a virtualization technology used for SAP. Project Light makes us the first media house in India to be on SAP Ecc 6.0 deployed on SAP certified Flexframe 4.0. It’s also the first major deployment

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of Flexframe 4.0 in the world,” says Agarwal. To get the benefits HT Media wanted, it would have to do some serious jumping. “We were on Oracle 8i, we were moving to Oracle 11 and were, effectively jumping three versions of SAP,” says Agarwal. The jump would require a long run up. “We had to go through sessions of testing and simulations and had a test cycle of six to seven months," he continues. "When we implemented it, it had to work." “In an implementation of this type, the focus had to be on

groundwork planning,” says Saxena. “For all who joined the team from operational end, they had a very clear-cut objective: roll this down and develop more people to take this on.” Simultaneously, work on planning the three-day ERP blackout started. The only approach that would work was to involve each function that would be affected — no matter how unwieldy the collaboration got. The challenge of downtime took up a huge amount of energy to resolve,” says Agarwal. Most important on the implementation team’s agenda

asset Management Gets Better! a Too often asset management is lost in a netherworld where obligations and hopes go to die. That’s beginning to change.

t many organizations, asset management beyond basic procurement gets placed on the back burner. There seems to be a holding pattern that many companies fall into, in which their IT assets are: Not fully visible, and so Inventory is incomplete, so costs and maintenance owners are not defined, so Money is spent on redundant investments, while requirements for new investments are dealt with reactively, and even worse changes to infrastructure are done at the peril of e n d a n ge r i n g service performance, while risking compliance, and the security of the infrastructure. one EMA consulting client unearthed a firewall device which they thought was in ‘test’ but was actually serving

nuMbers froM The survey: 37% said asset management and service planning are managed separately. 34% said asset management and service planning are managed together. 29% manage services and assets separately, but planning to bring them together in the future.

Source: EMA research

a critical role in production. luckily it was discovered in time. The ease with which basic inventory updates get overlooked is especially evident when devices, network and systems, etcetera, reside outside hQ, or data centers. But there are signs of progress. EMA is researching

how asset management and financial planning are becoming better supported with change management, analytics, and visibility into app usage. here are new and interesting data points from EMA research across 290 mid-tier enterprises: 30% said they were organized separately by domains for asset management. 21% handled apps and systems together, but network and telecom separately. 18% had integrated network, systems and apps, but managed telecom separately. 28% replied that they had a central asset management and financial planning organization that cuts across all of IT. And that’s a sign of progress.

—Dennis Drogseth

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Cover Story | Inventory Management

Rank (Figures in lakh) Dainik Jagran

211.65

Dainik Bhaskar

209.58

management, production, circulation and customer relationship management (cRM), HR, enhancements on the advertising side — basically every module that was planned. Of course, there were surprises. In an industry where raw materials go from the warehouse to the consumer in a single day, the supply-chain is vulnerable. “Once printing is complete, you’ve got different routes which the paper will be distributed. The issues around route-planning were probably not foreseen at the planning stage and we met some setbacks,” says Venky Venkatesh, head of circulation, HT Media. However, given the scope of the project, it was a setback business agreed to live with. “This is the biggest implementation in India, if not on a few continents. Media operations, especially

newspapers, are more complex in India than anywhere else,” says Saxena. “I think the team did a very good job because of the planning that went into it.”

There Were Challenges all around round and Then There Were None LIkE THE PROVERBIAL TAILOR that killed seven flies with one stoke of rolled up newspaper, Project Light took out multiple business problems. Inventory and procurement were among the biggest beneficiaries of the new, streamlined system. “From a financial objective, newsprint is a big area. If you look at our inventory management in terms of (controlling) the cost of newsprint, I’d say our inventory management is the best in the country,” says Saxena.

Eenadu

138.05 lokmat

108.56 Amar Ujala

108.47

hindustan

104.37

Daily Thanthi

103.89

Dinakaran

96.39

Rajasthan Patrika

93.91

Malayala Manorama

84.09

Source: National Readership Survey 2006

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FaCING ThE hEaT Until Project Light, Harish Nagpal, AVP-Materials and Production, HT Media, spent a lot of his time justifying dissimilarities in stock. "Newsprint is received in reels whose weights were taken as averages. But how could the auditors certify an average as our physical stock?" REAL CIO WORLD | M A Y 1 , 2 0 0 8

PhoTo By DR lohIA

Who’s read The MosT?

was to identify alternate — even manual — processes for the 72 hours. At the same time, Agarwal and his team carried out dry runs of the changeover so that when the moment of actual change took place, it would take off uneventfully. D-Day came on 23 June 2007. And, it went by smoothly. “We took a business downtime during the lean days of Saturday and Sunday. We asked the ad department to prepone their ads. A manual process was set up in parallel so that we didn’t lose last-minute ads. There was a lot of co-operation from the advertising side, which was our biggest consumer,” he says. “It was important that we did not lose even one day of revenue.” All the planning paid off. Today, SAP 6.0 binds 17 locations and 30 sales offices. The upgrade covers finance, material

Cover Story | Inventory Management “Tracing inventory is much easier. Now at the flick of a switch, our head of purchase and supply chain can view the whole chain across India and decide the movement of goods according to production needs,” adds Agarwal. “We have complete inventory control now.” But have they cut their Rs 150-crore inventory? Not really. In fact, it's gone up. But that’s because the media house has expanded. “Because total production has gone up, our consumption of newsprint has increased almost three-fold over the last three years. costs have gone up correspondingly but that’s not due to inefficient processes. The new system has added hugely to process easier to control the assets of the efficiency, thus driving intangible Rs 800 crore enterprise. And benefits in terms of reduction in the IPO raised Rs 400 crore for wastage,” says goel. the organization. HR too has Importantly, the media house reduced the number of days it has reduced its paper inventory takes to create payroll. to 30 days. The upgrade has ensured a It has also injected more decrease in administration and grease into its presses. Because operating costs of 100 legacy of its short deadlines, business systems — some on technologies operations need to be planned. “If as obsolete as FoxPro. This was you need to plan your print order a big drain on resources because for the day, it has to come at a as Venkatesh points out: “Data specific time in the evening,” says was maintained on spreadsheets. Agarwal. “Earlier this was done There was no platform where primitively: on spreadsheets you could put all your data. Now and via email. Today, from PO you can.” planning to printing, one single platform has been created and this has eliminated irrelevant interfaces.” It has also made daily billing more transparent. In addition to solving the PROJEcT LIgHT DIDN’T just problems of inventory, Project remove inefficiencies — it also Light also fixed duplicate created new opportunities. f i n a n c i a l Most directly in databases. the advertising Join the Conversation It made the department. Have you slashed your department less “Earlier when inventory? Lucky you. Now cluttered and we got ads from how about sharing some of your hard-won insights? its staff more a client who had Write to productive. It’s offices in different editor@cio.in cities, we had no also become

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d a y s way of knowing whether the same ad was being put out in another city. Now, we do know and offer them corporate deals,” says goel. Agarwal says the upgrade has given the company an edge over competition. “There is more real-time exchange of information across the units,” he says. The organization’s cRM initiative too has taken off after the project. “We have a large reader base, and this system

Surprise! We Brought Some Money

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35%

The amount by which the price of newsprint has risen in the last seven months. Source: HT Media

helps us capture all queries and complaints in a standard format. Now stakeholders are expected to provide solutions. Post-SAP, our complaint level has come down by 60 percent. This is a key benefit,” points out Venkatesh. It's a benefit Agarwal is bringing home. He says that they have set up a call center to deal with SAP-related problems. “It has started handling all our complaints for Delhi and Mumbai. In the next six months, it will be rolled out for 15 or 16 more locations,” says Agarwal.

We Know Where to Go From here WITH cORE BUSINESS processes up and running on SAP 6.0, Agarwal is shifting his attention to extending the benefits of the upgrade to HT Media’s huge network of distributors. The need to maximize on Project Light’s momentum is a sentiment that is shared by the business. “I’d like to develop this more. We also need to prepare our business intelligence warehouse for when it will be needed,” Saxena says. key to that strategy is to keep talent inhouse. And Saxena has a plan. “Our go-forward for them for the next 12 to 18 months is to keep them focused on the BIW. There will be a lot of processes and new applications that will be developed and added to it. This is a continuous process. We need to keep raising the bar,” he says. CIO

Kanika Goswami is special correspondent. Send feedback to this feature to kanika_g@cio.in

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Case File

With its countrywide reach and everincreasing business, it was getting increasingly difficult for Hero Honda staffers on the field to get their hands on meaningful information on time. Till a unique SMS implementation came to their rescue.

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Case File

By KaniKa Goswami

he year 2001 saw the world’s largest manufacturer of two-wheeled motorized vehicles create history. It sold 1.3 million bikes in a single year. That’s a number most companies would be proud of. But if Hero Honda wanted history to repeat itself, pride would not be enough. Not when you are a company with a nationwide network. A company that has held the top spot for five consecutive years, a company that has formed a habit of making and breaking records. Definitely not, when you are Hero Honda. Started as a joint venture in 1984, between the Hero group of India and Honda of Japan, today the organization caters to a customer base that’s over 20 million and counting.

this kind of delay. “We wanted information to be available to decision makers when they needed it. Since everyone carries a phone these days, you can push that information with a critical alert, to the right person. The objective was to equip people with information even when they are not in office or where they are not able to access the Internet,” says Vijay Sethi, CIO of Hero Honda. Till a little while ago, most marketing personnel who visited other offices found it hard to obtain real-time sales and distributor data from their office. Critical information like that can affect business decisions and Hero Honda’s market credibility to a large extent. Something had to be done. And fast.

Creating a Short Cut

The solution, as Sethi and his team discovered, lay in an SMS-SAP implementation that would ensure that the requested information is available in real-time and the With such a large customer base spread across all speed breakers were eliminated. (See On Fifth Gear) geographies, it was becoming almost impossible for The SMS-based solution allows a Hero Honda Hero Honda to afford real time availability of important staffer to share information with the company’s information. If a customer had to lodge a complaint of a servers irrespective of his location. This information defective part for his bike, he would have to walk into a is flashed to key personnel’s mobile phones Hero Honda office. His complaint would then be entered nationwide, removing the need of their logging onto into a SAP system; personnel from the office would call the website. the relevant distributor or service engineer and tell them This ensured that communication needs were resolved about the defect. quickly. Says Sethi, “Now, the moment the It doesn’t end there. The distributor or complaint is entered in SAP from anywhere engineer will then check his stock, and Reader ROI: in India, an SMS gets sent directly to the revert to the office. The office will check for Why it is important to dealer. All the intermediary people have replacement stock, and then go back to the speed up communication been removed. We have done away with all distributor or customer over the phone. How to keep information at the time spent waiting for access or calling And finally the desired part was sent. your fingertips up somebody who can help provide the The whole process used to take a few days. How innovation can customer with a solution.” Hero Honda had to look for a solution to fix improve productivity

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IllUSt ratIon by bIn ESH S rEEDHaran

Speed Breaker Ahead

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Case File Termed a SMS PUSH-PULL service, the solution uses three main core application elements — a SAP Handler, a SMS Handler and a DB Handler. “Basically all the transactions happen on SAP R3, whether it is related to production, sales or anything else. Technically, there is a remote function service, which goes to SAP, picks up the data from SAP, pushes it onto the SMS server and using the SMS gateway, we push it to the individual on his or her mobile phone. We are doing both the push and the pull part,” explains Sethi.

Hero Honda PLAnTS:

EMPLOyEES:

4000

REvEnuE (2006-07):

10089 Crore

BIkE MODELS:

Information security is always a challenge. Every challenge brings with it a certain amount of risk. “The mobile number that we are feeding this particular piece of information can be pushed on to that particular mobile only or information can be received by that particular mobile only. Those things have to be defined, and require some administrative activity to be done at our end,” he says.

One for the Road

The project was implemented in two phases: 19 SMS push on December 2006 and SMS pull PROjECT COST: on March 2007, with a total investment of 7 lakh Rs 7 lakh. Implementing a project of this size was not MD: “The costs involved in the implementation an easy task, as Hero Honda’s sales force and Pawan Munjal have a well defined ROI attached to it. In fact, dealer network is spread in almost every city the cost can be broken into two parts, one is the cost of across the country. The process of integrating with SAP not getting information, and this is a major part. Second, and fetching on-line data was not a standard function. cost-savings by negotiating with the service provider, to However, Sethi says confidently, “The implementation add more value in terms of ROI. In addition, there are was very smooth. The only issue was, what kind of promotional costs in which we send as many SMSs as information was to be shared, and at what frequency. possible ,” says Sethi. Different people want different information every 10 or The infrastructure costs, (CAPEX) for this type of 20 minutes. So one has to maintain a delicate balance and solution were not huge. SMS charges are based on the for that, for the last two or three months we had to work usage, making the solution very cost effective. “Besides, on striking a balance — this kind of response, to this kind it has great ROI, since the marketing team is using this of people, at this frequency.” very effectively. So a project of this nature, wherein ROI is immensely attractive, the implementation costs cease to be accountable for efficiency after a point,” says Sethi.

Caution: Men at Work

Crossing Milestones

“Despite cost pressures on the automobile industry we still need to differentiate ourselves. Technologies like SMS are going to play a major role.” — Vijay Sethi, CIO, Hero Honda

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The biggest benefit from the marketing and sales perspective is that now all the field staff have real time information. Sethi points out, “Now they don’t have to return to ask the back office or any other department about the status of dispatch, we have everything available. It has helped us a lot in increasing the productivity and the guys in the field are really happy, since the most important information is at their fingertips and they don’t have to talk to anyone to get it.” The solution has helped dealers by assisting them to cull out any information from the database. “As part of our job, we spend a lot more time at Gemba (site of activity) than at our desk. This helps us to take decisions faster as we get the information real time. It is changing the way we work,” says head HR and strategic planning Anadi S. Pande. “Quantitatively, I don’t think I can give any figures at this point but qualitatively, it has done a lot. I constantly get requests from various quarters to increase the number of services. This is the word of mouth publicity that people are giving internally. I think it is a decent

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Case File

On Fifth Gear

The SMS-SAP push-pull solution provided Hero Honda with information at its fingertips.

3 2

Each incoming request for data first lands on a GSM reader which saves messages in a folder— to be dealt with on a first-come-first-serve basis.

The message is then sent to a SMS handler that checks the authenticity of the sender and whether he can make such a request. It also maintains a log.

The request is passed on to a SAP handler that maintains its own log and searches for the desired application. The request is then sent to an external ERP.

Users send messages to the company server, requesting for information, irrespective of their location.

The external ERP passes on the requested data back to the SAP handler.

Info graP HICS by an Il t

The data is routed back to the SMS handler which encodes it in SMS format. It is then sent to a SMS gateway and is delivered to a mobile phone.

hit with our people,” says Sethi. Another application of the service is intimation across the board to all the employees in case of any difference in planned and actual production. A business alert is generated immediately, and sent to concerned employees, informing them of the change in figures so everyone stays updated. The planned, produced, rejected status for production as well as the actual production data is sent as SMS at the end of the shift to all the concerned people, “ I get both real-time alerts and end of day operations status within a couple of seconds. In case of alerts I do not have to wait for someone to send me information. This system has improved our productivity a lot,” says Vikram S. Kasbekar, head-operations and supply chain.

not know as of today if this is possible or not, but that’s one technology I would like to implement,” Sethi says. Once the infrastructure is ready, the future plans are aimed at expanding the application to other areas. “I personally think that technologies like SMS are here to stay with the kind of mobile penetration in India. As a company, there are cost pressures coming into the automobile industry and our mantra would be, given these, how we differentiate ourselves from competitors. This particular technology is really going to play a major role, even in regular operations today, and also for the future not too far away,” says Sethi. Hero Honda will be proud of the fact that they chose to ride on a road less traveled. A road that paved the way for innovation. CIO

The Way Ahead “Over a period of time we also need to get into certain other technologies, like remote wipes, to ensure removal of data from sensitive areas. We have not yet done it and we do

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Kanika Goswami is special correspondent. She can be reached at kanika_g@cio.in.

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Business and IT

Tie the Knot By Gunjan Trivedi Traditional, arranged marriages over the Internet. Try selling that to conservative and technology-shy Indian parents. Laughable. That’s what the concept behind Shaadi.com must have seemed in the early 90’s. But Anupam Mittal, chairman & MD, People Group, isn’t someone to be taken lightly. Proof? He took the concept, nursed it through it first tentative years and into full bloom. Customer focus is his secret. His knowledge of his consumers makes it easy to see why he is taken seriously. It is this focus that has helped overcome low Internet and credit card penetration and the swift changes in technology. It is this focus that shows him gaps in his offering — that he plug quickly, as he did with the Shaadi.com centers. Technology, he says, is indispensable — but only if it is led by customer focus.

CIO: When you began Shaadi.com, the Internet was luxury in India. Didn’t it seem like battle you could not win?

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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Anupam Mittal: When we started, there wasn’t really much to lose. All we wanted to do was to be in the consumer Internet space. We set out to explore and try different things. That’s how Shaadi.com came about. In fact, when the company was started, I was not even in the country. I was abroad working for another company. Technically, we started Shaadi.com 10 years ago, but I think, for all practical

purposes, we really started focusing as an organization and building out with great purpose only around 2002. That’s when I started spending more time in the country and finally moved back to India in 2004. In last six or seven years, we went from Shaadi.com to Fropper.com. We launched Makaan.com more recently. A number of different and interesting business models came up. We also started Mauj Mobile along the way, which is a leading mobile VAS (value added services) player in the country with a strong mobile marketing business. Now, we are in the film production business. The journey has been exciting, painful, challenging, and frustrating at the same

P hoto by Srivatsa Shandilya

Anupam Mittal, Chairman & MD, People Group, says that even in a business in which IT and business overlap completely, customer focus is critical.

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View from the Top

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View from the Top

time. When I look back, 10 years have been a great journey. To me it seems so short. Through it all, I observed that technology has played a critical role in all the areas we are in. If convergence or digitization had not occurred around the time we started our businesses, then we wouldn’t have been able to do the things we have done. I must say that we have been very opportunistic in building our businesses. That said, if you ask me if I think about technology, my answer would probably be no. I think about my consumers, their behavior and what they want. But, I can say, without a doubt, that without technology we wouldn’t have been where we are today.

E-commerce has taken time to take off. Was that a major challenge to your business? No doubt poor connectivity, low bandwidth and a lack of credit card penetration were major challenges when we started our Internet-related businesses. However, when we started Shaadi.com, most of our revenue actually came from NRIs. The number of resident Indians who used the platform at that point was low compared to NRIs, thanks to India’s e-commerce-related challenges. Over the years, this has changed. A significant portion of our revenues come from within the country. But still the conversion rate in India is a major challenge as most Indians can’t pay online because don’t have credit cards. This continues to be an issue we grapple with. To tackle it, we introduced different modes of payment. We have tied-up with banks so that they can accept payments on our behalf and we pickup of payments at a customer’s doorstep. Nonetheless, the Internet adoption rate in the country is not something to be proud of. While plenty of people think that the Internet has come of age in India, it needs to be said that it’s only growing at 15 to 20 percent a year. This is not a healthy pace considering our vast population. I would have hoped that by this time we would have 36

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“I have observed technology's role in our business. I can say, without a doubt, that without technology we wouldn’t have been where we are today. ” — Anupam Mittal had more than 100 million regular Internet users. However, we only have about 30 million. This continues to be a challenge because you can’t scale up as fast as your global competitors unless you start to look at other businesses as well. I think there is a perpetual strain on the supply side of Internet access. On the supply side, companies are so busy supplying mobile phones connections that they don’t see a compelling business case to increase the supply of Internet access and broadband connections. Also, there are last-mile connectivity problems. Effective last-mile connectivity options such as Wimax are going to take time to materialize. On the demand side, people don’t really know why they should move to the Internet. That’s something the supply side needs to do something about. Unless a consumer understands why he needs access to the Internet in the first place, we will never see an uptake in its adoption.

Was this a problem you tried to solve when you were chairman of Internet and Mobile Association of India (IAMAI)? At IAMAI, we grappled with the low penetration of Internet in the country. While I was chairman, my agenda was very simple: make the organization as democratic as possible. As a body, the IAMAI had a mix of large, small and individual members. There were competing factions within the association whose interests were not aligned initially. From that perspective, we were quite successful in creating an independent association with a single-minded focus on driving Internet penetration and adoption in India ahead. We strongly believed that if that could be solved, all the other problems related to e-commerce would be resolved.

From new age media to entertainment, the People Group has done it all. How does technology tie it all together? When we started the websites, technology allowed us to take one user profile and market a service to it. For example, when we started Mauj mobile services, technology allowed the data to be consumer mobile phones. Mauj mobile is powering the mobile side of the business. We saw the opportunity to take Bollywood content to consumers on their mobile phones. As we started to understand that industry, we identified an opportunity to produce films as well. If you ask me how technology is common across all these companies, I’d say that we started these very companies because technological changes afforded us the opportunity.

But, despite this belief in IT, you later backed your online businesses with a brick-andmortar model. Vol/3 | ISSUE/12

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View from the Top

Frankly, I don’t spend time thinking about technology. I spend my time thinking about consumers, their requirements and how we we fulfill those. Deploying technology for the sake of technology doesn’t make sense to me. Let’s take Shaadi.com. What does the Internet do for the matchmaking business? Basically, the Internet takes away geographical limitations and content-spatial restrictions. This means that one can find a match anywhere in the world and can share plenty of content and data about oneself. It also enables communication in a secure and anonymous fashion, which is not possible via a newspaper or via any other media. Most of all, the Internet is cost-effective and efficient. But while it offers users these benefits, it also requires them to be at a certain comfort level with the medium. It is not like television. You don’t just switch it on. As a result, despite technological benefits, we could only reach a certain faction of the market. Especially because in our country, parents usually take matrimony-related decisions We had the option of waiting for parents to get comfortable with technology. Or, we could take technology to them. The Shaadi.com Centers, the brick-and-mortar model you refer to, are still driven by technology and powered by the website. All we have done is taken away the complexities involved with technology. Consumers come in for a matchmaking solution and that's exactly what we offer them. Technology remains in the backend and still gives us all the advantages we spoke about. We just extended our technology platform to the Shaadi.com Centers.

Will the increased adoption of Web 2.0 change your business model? The term Web 2.0 can be defined in two ways. It can be defined as interactive websites that use the latest technologies to allow collaboration. It can also be defined as websites with user generated content (UGC). I think, Shaadi.com is all UGC and has always been interactive. In terms of incorporating new

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technologies into our websites, we continue to do so pretty regularly. We are constantly upgrading our technology — if it provides more benefits to the end-consumers. Once people start collaborating in different ways, and different Internet applications are incorporated into the websites to enable such collaboration, more possibilities will open up. It can impact business but frankly I don’t see much change to our business model, in next couple of years. However, over time the Internet space could change. If it does change, we will embrace it.

SNAPSHOT

People Group Founded:

1997

Brands:

Shaadi.com, Shaadi. com Centers, Fropper. com, Mauj Mobile, Makaan.com

As your business grows exponentially, how do you deal with scalability issues?

We saw this sort of sudden growth in the early days of the Internet. It was a time when you planned for about Group Companies: People Interactive, a lakh users and you saw five People Infocom and million. They crashed servers People Pictures and choked bandwidth. We Business Domain: haven’t seen that in last few ITeS, communication, years. As I said, if you have the entertainment and new age media right infrastructure partner and responsiveness is good, Headquarters: Mumbai you can turn things around pretty quickly. We generally Locations: Seven regional try to provide enough room offices. Presence in to absorb surges in traffic. IT is the backbone UAE, UK and USA. Over time, we have learnt 150 Shaadi.com of your business. Centers in 90 cities in which marketing or branding How do you ensure India. activities will lead to surges in uptime? Employees: traffic. We proactively plan for 500 that. We like to start small and Ultimately, the kind of Growth Rate: scale as we grow further. Our technology infrastructure and 200% model for scalability is more solutions that one desires starts incremental. I also believe with the clarity of one’s objective. that unless companies adopt a Our objective is clear: we want managed-service model, it becomes hard to be in the top-five percentile in terms of to manage surges. speed, current usage, performance, etcetera. Once you have defined that, then it is really a question of a few things: first, finding the right How strategic is your CIO to infrastructure partner is critical. Our partners your business? have been around for six years now. Their services have been wonderful and have never The CIO plays a critical role for us. I may let us down. Once you have such a partner, not rate it higher than the role of a CFO but half the battle is won. would definitely treat it at par. We have been Second, you need to have the right without a CFO since the beginning. Though processes and systems to upgrade, control we have a head of finance right now, there and monitor your infrastructure. To have were a few years when we had done without a the right people for the job is key. The people head of finance. But without a CTO, we would you bring in to manage infrastructure at the have fallen flat on our face. CIO top level is critical. The person who manages People Interactive’s technology infrastructure has been here right from the beginning. So, he understands the intricacies of the organization Gunjan Trivedi is assistant editor. Send feedback to this and its technological needs. interview at gunjan_t@cio.in REAL CIO WORLD | M A Y 1 , 2 0 0 8

4/28/2008 4:04:21 PM

T SucceSS To Su There are things you can do in just 20 minutes that can have a meaningful and even a long term positive effect on your IT organization, your career, your technology knowledge, your management skills and your relationship with the business. We've gathered 18 of the best ideas we could find. By Stephanie OverBy, With the Staff Of CiO and CiO.COm

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Il lUS l UStrat trat I on onS S by U nnIkrIShn an aV

IT Management

ou look at your to-do list and everything seems hard and insanely longterm. Create a five-year strategic plan. Map out the skills your IT organization will need over the next 36 months. Sign that seven-year outsourcing deal. It's okay. You can admit it. Sometimes it can get a little overwhelming. Then there's your schedule. Project updates. Executive team meetings. Vendor visits. Tête-à-têtes with direct reports. E-mail. Presentations. There's just no time to breathe. The thought that you could possibly fit in anything else seems downright laughable. What you need is a 20-minute miracle. Of course, most big transformations take a while, but not all changes require a military campaign. There are things you can do in just one-third of an hour that can have a meaningful and, yes, even a long-term, positive effect on your life, your job and your enterprise. You could call a customer; you could downsize (and revolutionize) your weekly meetings; you could try out some Google Apps. We've gathered 18 of the best ideas we could find: quick yet effective tactics that can improve the IT organization, boost your career, add to your technology knowledge, sharpen your management skills and enhance your relationship with the business. Now all you have to do is free up that first 20 minutes to read this article. Let us know how these work out for you. And tell us about your own ideas for how to accomplish change in 20-minute doses. This could be the start of something...short.

The Mini-Meeting

If singles have figured out a way to condense that painful first date into eight minutes of intense

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communication, why not try the same thing with your IT meetings? Sit down right now and reschedule all your internal IT meetings for just 20 minutes. If that's too radical, do it for the get-togethers happening this week. Or, if you're feeling especially powerful, try it for your interdepartmental meetings. "There's only about 15 minutes to 30 minutes of true productivity in most meetings, even though meetings are typically set up for an hour," says Michael Hites, CIO of New Mexico State University, who once placed a 30-minute limit on all meetings. "The idea is that it forces you and your meeting buddies to prepare and focus." Hites found that shorter meetings were more effective and left more time to actually accomplish things. If you like that idea, consider this even more sweeping suggestion from Direct Energy CIO Kumud Kalia: cancel all recurring meetings with your subordinate staff. "Ask them to come to you with major issues, not every little decision," Kalia advises. —Stephanie Overby

Unmask Your Vendor

Ask your most important tech vendors to conduct an assessment of their relationship with your organization. "This requires minimal effort on the part of the CIO," says Chris Pattacini, vice president of outsourcing consultancy Nautilus Advisors, "but it can pay big dividends." Of course, there's a catch. Vendors might not be as honest as you'd like for fear the information could be used against them in future negotiations. Put the vendor reps at ease and make sure to invite them to rate not only their organization's efforts but yours as well. "The assessment can spark a great dialogue about innovation, relationship issues and other below-the-

radar opportunities for improvement," says Pattacini. To make sure the vendor representative follows through, give him an achievable goal and a deadline. Ask him to share his top three ideas for improving the relationship at the next client-vendor meeting, says Eugene Kublanov, CEO of globalization advisory firm NeoIT. —S.O.

Call a Customer (Bonus Points If They're Irate)

That's right — volunteer to contact a real, live customer. "Much of what IT is involved in directly impacts the business product and service and the end consumer/customer," says Jack J. Santos, CIO executive strategist at the Burton Group. Reach out to your closest contact in sales, marketing or customer service. Ask for a customer you can contact who's been outspoken in the past. It wouldn't hurt to pick a high-value or highly visible customer. "A positive exchange could create great buzz afterward which reaches other parts of the company," says Santos. Want to really wow people? Ask for an unsatisfied customer whose experience IT might have the power to turn around. The definition of customer will depend on your business. A hospital CIO might talk to a physician who's dealing with electronic records management or, if the organization is technologically sophisticated, a patient. Try a doc who doesn't normally interact with IT or a patient who has. This dialogue keeps you in touch with the real customer experience, says Santos, and it sends a message to the customer that the company cares. "It's perceived [by the customer] as astounding follow-up customer service." —S.O. REAL CIO WORLD | M A Y 1 , 2 0 0 8

IT Management

Life Without E-Mail

When it comes to personal communication strategies, IT workers usually follow their CIO's lead. So if the CIO is always forwarding e-mails, adding to the cc line, piling attachments on top of attachments, IT staffers are sure to follow. Or, if the CIO displays greater comfort messaging with her BlackBerry than in interacting with peers, staffers will model that behavior. To encourage more face-to-face interactions with internal and external customers, and to fight e-mail overload, CIOs should spend 20 minutes explaining to their colleagues and IT staffers why e-mail- free Fridays (or any other day of the week) is a good idea. And here's why: companies that swear by 'say no to e-mail' days (or even half days) find that it leads to more proactive decision making, better relations among co-workers and increased awareness of customer needs. Instead of an e-mail, staffers will pick up a phone or even drop by a customer or colleague in person. Intel discovered that its employees were wasting six hours a week on e-mail. So a team has been piloting a range of initiatives, one of which is 'Zero e-mail Friday.' According to one of the team leaders, Nathan Zeldes, the goal is to attack a 'cube culture' in which engineers, sometimes seated just a few feet from each other, rely on e-mail to exchange ideas. (The pilot finished in February and the team spent March collecting data, interviewing users and drawing conclusions.) Other companies, such as Deloitte & Touche and US Cellular, report success switching off e-mail for periods such as weekends. "All it takes," says Zeldes, "is one manager to decide to do something about it." What are you waiting for? —Thomas Wailgum

Say Yes to Staff Training

In 20 minutes, you can authorize a budget line for training or, even more quickly and inexpensively, send an e-mail to your staff to encourage 42

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them to pick up on something new. And tell them they are expected to spend one day a month learning. Make it an official day on everyone's calendar. "A lot of 9 to 5-ers out there don't have the time or interest to expand their horizons," says Julie Lerman, a Vermontbased .Net software consultant who is active in the computer user group community. In 20 minutes, you can take the first step to help those employees find out what they're missing and add critical skills to your organization. One no-cost way to do this is to encourage participation in computer user group meetings and industry associations. Lerman gives the example of some developers who attended a free, full day MSDN (microsoft developer network) training class, which showed off the new features in Visual Studio 2008. "These guys' eyes opened wide," says Lerman. "So now their interest has been piqued and it will be important for their managers to keep them looking for and wanting new information." —Esther Schindler

And Who Are You?

An impromptu chat with someone on your staff can make that person nervous and can seem contrived if you're not in the habit of doing it. So get in the habit. "Why are you wandering around?" asks Gerry McCartney, vice president of IT at Purdue University. "Because that's what a good boss does." Visits with employees let you gather intelligence about what's going on in your organization — as well as help you build relationships that make it more cohesive. "If you believe that your people are the key to your success, building a personal connection is an important piece of sustaining their commitment," says Tom Murphy, senior vice president and CIO with AmerisourceBergen. "It also gives you a view of organization realities that you don't necessarily get when dealing just with your direct reports." Just don't ask, 'How's it going?' Be specific," advises

Murphy. And whatever you say, make sure you mean it. "People know if you're genuinely interested in their opinions and observations," Murphy says. McCartney lays the groundwork for conversations with employees by spending a few minutes getting to know every new hire within his or her first two weeks on the job. "I think those folks are more inclined to talk to me later because when we met [there] wasn't a business agenda," he says. In fact, he makes it a point to engage employees in neutral situations, such as at an office luncheon. When he brings up work, McCartney asks his staff to suggest ways to make their jobs easier and to make themselves more effective. They might not have much to say the first time, he says. But if they get the idea that he's approachable, they'll feel more comfortable coming to him when they do have something important to say. —Elana Varon

Go for a Walk

You know walking is good for you. A regular, 20-minute jaunt can reduce your risk of heart attack, keep your weight down and help you manage stress. We're made for it, too. As James A. Levine, a physician and researcher with the Mayo Clinic, writes in a recent issue of the Mayo Clinic Proceedings, "Our bodies evolved to walk," but in the modern world, "we have forsaken our legs as a means of locomotion, work and leisure." Health experts advise walking at least 30 minutes a day, but "20 minutes is better than nothing," says Maggie Miller, senior vice president and CIO with Warner Music Group. Miller finds that a short run or a vigorous walk first thing in the morning helps her think more clearly and creatively. She'll also hit the pavement "when I'm mad about something." Her strategy: "Write the zinger e-mail and park it in my drafts box to simmer while I go for a walk in Central Park or, more likely, Riverside Park, which is quieter. By the time I get back I'll usually have worked out a way to

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IT Management

deal with whatever the issue is in a much more constructive and collaborative way." Now, get out of that chair. —E.V.

Knock on a New Door

In order to create an IT organization that provides strategic value, you have to understand how your business operates. "It always starts there," says Michael Jones, CIO of the National Marrow Donor Program. "I don't mean how IT operates in the business context; I mean how the business functions. What drives profit and revenue. What the business spends money on. Who your customers are. What requirements each person has." To find out, says Jones, "you need to talk to a lot of people, from the C-level down to the basement." Chances are you already check in regularly with a defined group of business executives. Why not use your 20 minutes to venture into uncharted territory and visit someone new? Don't go in with an agenda. Leave the strategic plan behind. And for goodness' sake, don't give a speech. Have a conversation. If the topic turns to business, ask questions. What's his or her job like? What's going well? What's not? What might make his or her job easier? Brian Tennant, CIO of Bethesda Luthern Homes and Services says a simple 'Whatcha workin' on?' can do the trick. "I ask people what they're doing and I gain a tremendous perspective on functions, roles, the work people do and the challenges they face," Tennant says. If your new friend asks about you, keep it brief but keep it real. That's what friends do. —S.O.

Should You Stay or Should You Go Now?

Good leaders, like good captains, often think their job is to carry on no matter

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what, even to the point of going down with a sinking ship. But sometimes the best thing to do is to find a lifeboat and paddle to an inviting shore. "If you find the job no longer excites you, it's time to seek another," says Steve Yates, KeyBank CIO. "When you find it grinding on you, you're done." It should take less than 20 minutes to see if you've passed the point of no return. Grab a pen and a pad of paper (yes, do it the old-fashioned way; it'll help ground you) and set a timer for 10 or 15 minutes. (Hourglasses are optional, but recommended.) Draw a line down the middle. On one side write the reasons you should stay; on the other, the reasons you should go. If your go list is longer than your stay list, it's time to go. Finding a new job is no harder than showing up for a bad one, day in and day out. "The CIO job is demanding," Yates says. "You have to feel good about coming to work to be able to handle all the twists and turns of politics, technology, organization change and more." If you've burned out, your people will notice sooner or later, and it'll only be a matter of time before the decision of whether to sail for new shores is taken out of your hands. —Al Sacco

Set Up a Facebook Account

eight retail shops in Louisiana, Texas and Mississippi — has maintained an account since the site opened in 2004. "We don't allow access at work," says Lappin, "but [my] people use it on their own time at home frequently." Lappin believes CIOs can learn from Facebook in order to build successful social network equivalents for employees behind the corporate firewall. "That," he says, "is a goal on our intranet down the line." —C.G. Lynch

What's So Funny About Company Peace, Love and Understanding? Many I.T. staffers don't have a lot of interaction with other departments. By inviting the head of finance (or marketing, sales or HR) to give an informal 15-minute presentation at your next staff meeting, your IT department can become familiar with the structure, needs, current initiatives and challenges of other groups within the company. There shouldn't really be heavy lifting on either side, as department execs tend to have canned presentations about their department and their current needs —presentations they often give to the board of directors or

Maybe you don't like Facebook. Maybe you think it's for kids. But maybe you're wrong and by being wrong you may be missing out on an opportunity to learn a little something about social networking. After all, with 64 million users, Facebook is the fastest-growing social network on the Web. The company claims that its over-25 demographic has grown the most rapidly. So take 20 minutes and set up an account. Mark A. Lappin, director of IT for Lee Michaels Fine Jewelry — which owns REAL CIO WORLD | M A Y 1 , 2 0 0 8

IT Management

within their own departments. The benefit to participating execs: the better IT understands their world, the better IT will be at servicing them, says Peter Kretzman, IT executive and author of CIO/ CTO Perspectives Blog. "These presentations may be the only structured opportunity that a lot of people in IT have been given to learn and ask questions about other company areas," says Kretzman. "Through these sessions, the exec in charge of those areas becomes more than just a name and a face, and real understanding and positive working relationships tend to ensue." He adds that it's often a reciprocal arrangement, one that offers a huge opportunity to evangelize what IT does and why. —Shawna McAlearney

Encrypt Now or Regret Later

Self-Knowledge is Power

When an employee or contractor loses a notebook PC and it turns into a data breach and PR nightmare, what are you going to say when your CEO asks why you hadn't encrypted the company's notebooks? That won't be fun. So start investigating encryption options. "A lost PC without encryption is truly getting caught with your pants down," says Forrester Research senior analyst Natalie Lambert. "However, you would be surprised at the number of businesses that have not encrypted their mobile devices." Price used to be a concern, but encryption technology has become practically a commodity item, Lambert says. —Laurianne McLaughlin

T w e n t y minutes is a perfect amount of time for some good, honest introspection. Gene Bedell, author of Three Steps to Yes: The Gentle Art of Getting Your Way and the upcoming The Millionaire 44

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in the Mirror, promotes the merits of structured introspection. "Sustained changes in behavior can lead to important improvements in things like career, company, work-life balance," says Bedell, a former IT leader at First Boston, among other companies. "A period of serious self-analysis is a good place to start." Find a quiet room where you won't be disturbed. Ask yourself if you're working toward something or just working. Do you want to be CIO of a Fortune 500 company? Do you want to start a business? Zone in on your passion, says Bedell. "It doesn't matter what you have your sights set on, but they must be set on something," he says. "If you don't know where you want to go, it's unlikely you'll succeed long-term." This step should take five minutes. If your goal is vague — grow, get promoted, make more money — spend the next five minutes seeking specificity. Throw out modesty and uncertainty. Someone's got to come up with the next Google or become the new CIO of GE. Why not you? The last 10 minutes will be the "10 minutes of truth," says Bedell. Ask

yourself what you're going to do when you leave this quiet spot in minute 21. Will whatever it is help you achieve the goal you just set? Or will you be just getting a job done, earning a paycheck? If it's the latter, you've still learned something important: you need to change. —S.O.

What Users Want

The Kids Are Real Smart

Are you sure you're making the right IT investments? Here's a novel idea: why not ask? According to David Hatch, research director at consultancy Aberdeen Group, IT management spends way too much time researching the latest technologies and virtually no time asking users what they want. There's a huge disconnect between strategic thinking at the senior management level and real-world usage and adoption among end users, he says. That's why Hatch recommends taking 20 minutes to conduct an informal, anonymous e-mail survey of all company employees that asks the following questions: Which of our apps are most useful to you? Why? (Be sure to provide a list.) What app is so critical that you simply couldn't do your job without it? Which app don't you use at all? Which app causes you the most problems? What new business application or capability, currently not provided, would instantly make your job easier and improve your performance? —Diann Daniel

Sure, your seasoned vets have great ideas but why not shake things up and ask the kids on your staff to come up with ideas to improve efficiency, quality or the workplace? Organizational newbies can have a unique

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perspective, says NeoIT's CEO Eugene Kublanov, but they're rarely tapped effectively. C-level executives rarely solicit or hear the ideas of their junior team members, says Kublanov. And that's a waste of a valuable resource. "Many technologies that started in the consumer or peer-topeer world, such as mobile technologies, video games and wikis, are making their way into the business realm," Kublanov points out. "Who better to provide input on how to apply these technologies to make business more effective than those for whom using these tools is second nature?" Of course, you don't want to look like you're going around the chain of command to solicit the input, so keep it casual, says Kublanov. Try something like, 'Hey, I'd like to get your thoughts on how we might improve efficiency in the organization. Think about it and get back to me with your top three ideas by next Friday.' This isn't pie-in-the-sky, do-gooder, morale-boosting theory. Kublanov and his clients have put it into practice successfully. "Some of the outcomes have included leveraging wiki tools as a more effective knowledge management system, distributing training videos on iPods and using social networking tools to create internal knowledge hubs," Kublanov says. Reward your young innovators by involving them in the implementation of their ideas. And "It never hurts to recognize the person for the idea in a group setting," says Kublanov. And a simple thanks from the boss goes a long way, too. —S.O.

Does Your Vendor 'Get' You?

Sharing your strategic plan with your vendors can help both of you. Maybe your plan relies on products that are going end of life. Wouldn't that be good to know? Maybe there are products in the pipeline that can better meet your

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future needs. How would you know that? First, invite your strategic vendors to an IT strategic plan presentation and allow time for a Q&A. Stephen Guth, executive director of the Vendor Management Office at the National Rural Electric Cooperative Association, says limiting the number of representatives from each vendor and targeting the key players, such as the account executive, his or her manager and an executive representative, is important. And the strategic plan should not be e-mailed or handed out to vendors; they may not read it, and copies are difficult to control. "Having a roomful of vendors listen to an IT strategic plan presentation, even when there is no product or service overlap," says Guth, "creates a sense of competition." All of them competing to help you. How can you beat that? —S. M.

iPhone Fun

Hugh Scott, VP of IS at Direct Energy, has a team that supports some 500 smartphones, all BlackBerrys. But at home, he's an iPhone convert. Why? Scott believes it offers lessons for IT people regardless of their chosen mobile theology. "The first thing is the sheer usability of the product," Scott says. "You don't even get a user manual with it. You can just figure out how it works. That's quite an important lesson for CIOs." Scott also says that Apple extended that usability well beyond the user interface, a fact that became clear when he activated his iPhone for the first time. "I had all my personal e-mail accounts on my [Apple notebook]. And after I set up [the iPhone], all of my e-mail accounts had all been set up. I was used to having to set up the POP [mail] address myself. But this thing figured it out on its own." And users will come to expect the same kind of ease from the technology they find at the office. Even with its advantages, Scott says he has no plans to migrate employees

from the BlackBerry's secure, enterprisetested RIM platform. But while he's not yet moving his corporate budget to the iPhone, his home budget is another story. "This Christmas I bought my wife an iPhone," Scott says. "We're a two iPhone family now." —Christopher Lindquist

Take a Google Test Drive

Okay, so it might be another decade before you use a productivity suite other than Microsoft Office. But if you're tired of paying the licensing fee for workers who use just a few Office features, it's worth taking a peek at the consumer version of Google Apps. By default, when you start a Gmail account, you have Google Apps. Try the docs and spreadsheets, calendar and Gmail chat functions and you might find the lightweight tools to be pretty helpful. Rebecca Wettemann, an analyst with Nucleus Research, says CIOs should have a Google Apps account if only to show their users that they know what's going on in the consumer space. "It can be a great way to gain credibility with a user base that sometimes sees IT as being all about servers and storage and not about software innovation," she says. For only Rs 200 per user per year for an enterprise version of Google Apps with Postini security for e-mail, you might find it a compelling option for 'nonpower users' of productivity applications. "As Google Apps' functionality grows, CIOs may want to consider migrating some users from Microsoft Office to Google Apps and showing the CFO a nice return on investment," Wettemann says. CIO —C.G.L.

Send feedback on this feature to editor@cio.in

REAL CIO WORLD | M A Y 1 , 2 0 0 8

Alignment

CIOs are expected to know all about the business they serve. Business people don't need to know about IT. However, what they don't know can hurt them — and you. Here’s how to educate businesspeople withouth alienating them.

EduCatE YOur BusInEss LEadErs By Michael Fitzgerald

It’s not enough for CIOs to be technology experts anymore; any they have to know the business, too. If the CIO 'doesn’t get it', he or she can get the boot. Yet that dual expectation doesn’t apply to businesspeople. They get a bye when it comes to understanding IT. Rare is the CEO who knows the difference between enterprise architecture and landscape architecture. “Businesses are confused about technology,” says Karim R. Lakhani, an assistant professor in technology and operations management at Harvard Business School. He says that many businesspeople suffer from — and tolerate — IT ignorance in part because IT discussions have traditionally focused on the technology itself rather than on how the product of IT — information — affects business operations. “CIOs should reduce the emphasis of the ‘T’ side and push the ‘I’ side,” he adds. It’s a forgotten part of the business in most organizations. The CIO has to step up — nobody else is thinking about it.” 48

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Reader ROI:

How the business’s lack of IT knowledge hurts profits Why businesspeople resist learning about IT Ways to create your own IT education program Vol/3 | ISSUE/12

Alignment

That might explain why only 29 percent of CEOs think their CIOs are proactive leaders in the business, though 59 percent are satisfied with the CIO’s performance, according to a survey by consultancy Forrester. “This is not a good sign for CIOs,” says Laurie Orlov, the Forrester analyst who produced that survey. “CEOs have low expectations, and IT is enabling those expectations.” CIOs need to educate their business counterparts about technology, but that is easier said than done. For example, last year Orlov produced a series of reports on how CIOs can educate their business counterparts. She says CIOs expressed strong interest in the topic, and she proposed running seminars for business executives. A CIO at a company she wouldn’t disclose hired her to come down and talk to senior management about her ideas. When the CEO got wind of the plan, he canceled the meeting. “He actually said it was a bad use of executive time,” she says, noting that the same thing had happened with at least one other CIO. “This is a political nightmare for CIOs,” she adds.

He knows that worrying about acronyms must look trivial to an outsider. But “it’s huge,” he insists. Here’s why: techno-talk “creates another language and a set of barriers between you and your business partners.” Acronyms don’t educate; they actually block education by creating arcane word barriers to real learning. Ford thinks that poor communication is the main problem between IT and the business. So he also works with his staff to talk about technology as simply as possible, focusing more on what the business can accomplish with it than on how it works. Ford wants them to do it consistently, too. In fact, whenever he’s discussing a new kind of technology or strategy, he spends a good amount of time with his staff developing a template for any presentation that will be made on the topic, to make sure the same format, terms and even pictures are used every time. He says that it’s a way of branding the IT strategy and subtly educating the business, because eventually the businesspeople see it often enough that they understand it — and can even do presentations themselves.

EduCatIOn EquaLs VaLuE

LEarnIng WIth BudgEts

value from imparting more IT literacy to businesspeople. Assuming that a company where IT and the business are aligned is also a company where the business side is more knowledgeable about IT and its strategic potential, the data is compelling. For starters, 45 percent of CIOs in aligned organizations expect they’ll create competitive advantages for their business in 2007, versus 30 percent of CIOs at unaligned organizations, according to the 2007 State of the CIO survey. Aligned CIOs say they spend only 21 percent of their time proving IT’s value, versus 37 percent for unaligned CIOs. (And there’s a nice personal benefit for aligned CIOs: they make about Rs 20 lakh a year more.) As the numbers show, better IT education of the business leads to alignment, which leads to better technology strategies, which lead to competitive advantage. CIOs need to connect the dots for their business executives and show them how IT education can impact their profits. Here are some examples of CIOs who have found a way to teach the business side a few technology lessons.

its case for what it wants to spend on technology (using the presentation templates his group has developed). He uses the budget planning period to help drill in what the business side needs to know about technology. “They get more tech savvy, to the point where they’re smarter about the implementation of technology within the business unit than we are,” Ford says. And when that happens, he gets to challenge his team and ask, “How come you don’t know more than they do?”

Thankfully, it’s becoming easier to show real, demonstrable

JargOn FrEE

At American Airlines, Monte Ford, senior vice president and CIO, bangs one drum over and over again with his staff: don’t use technology jargon.

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American’s Ford says he has each business unit present

InFOrmatIOn FLOWs

Thomas Cullen, CIO at Peet’s Coffee and Tea, says it’s important for CIOs to start education at the top of their organization. “It’s critical to get executive support,” he says. But simply trying to teach them how ERP systems work would be a disaster, he says. Instead, he delivers IT education to senior executives via carefully crafted discussions about information flows in the business. Cullen, who joined Peet’s in May 2006, set up a series of meetings with the CEO, the CFO and the vice president of operations to develop what he calls a ‘core process map’ for the business. It’s a blueprint that he will use to buy a new ERP system and set strategies for other IT needs down the road.

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Alignment

One of the surest ways to teach new skills is to immerse people in the environment you want them to learn about. One CIO has an rotation program where businesspeople are brought into IT and business units take on IT staff. The four (along with a consultant hired to help develop the map and bridge any communication gaps) met four times for about two hours over a two-month period in January and February 2007 to develop the blueprint. Each meeting focused on Peet’s current business operations, possible future improvements and how IT can support them. Now that the top executives at Peet’s are better educated about IT, Cullen feels ready to sell his strategy to executives lower in the hierarchy. He has created a curriculum for teaching lower-level employees how new systems will change the way information flows and how that will in turn change the way people at the company work. “I wanted to make sure the top people knew how difficult the change management is going to be — it’ll change the way people do their jobs and how some of these teams function,” he says. He has already met with top managers just below the C-level executives at Peet’s, get-to-know-you meetings that he will use to tailor his remarks about technology when he meets with them and their staffs.

Lab Time

At Austin Energy, CIO Andres Carvallo and his staff organize one- to two-day “visioning” offsites to talk about technology needs. Depending on the business unit, these happen either annually or every six months and are jointly planned by IT and the business units. Carvallo uses the offsites to acquire demo equipment and software from his vendors (at no cost) that he consolidates in a kind of central laboratory. “We take those tools and deploy them in a world with no constraints,” says Carvallo. For example, he might show executives what it would look like if, say, Austin Energy were truly paperless, or how work orders and customer notification would change if Austin Energy had fully deployed remote sensors in the field, connected to the company’s ERP systems. That lets him show the business side what exactly might happen with technology advances they perhaps have heard about from articles they’ve read, or industry conferences. He rotates executives through the labs roughly every 90 days, because he adds new pieces once every month or two. “The executives are running so fast they hardly ever get to stop and breathe and see the ocean at peace, so it’s important to bring them in there to have epiphanies,” Carvallo says. He keeps the epiphanies from spinning into unrealistic expectations by putting project requests through a rigorous vetting process that includes 50

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evaluation by a steering committee that ranks their importance to strategy and ability to satisfy regulatory obligations. Each request also needs a business sponsor and a commitment to funding.

Job Rotation

One of the oldest — but surest — ways to teach people new skills is to immerse them in the environment you want them to learn about. Monte Ford at American says that he has an informal rotation program in which he courts talented businesspeople and brings them into the IT organization for up to three-year stints while also negotiating with business units to take interested IT staff. When he brings businesspeople into IT, Ford likes to joke that he then gives them “full frontal lobotomies,” but the real key for American is that both IT and business executives learn how to work together more effectively. Swapping environments “feeds on itself and creates this sort of symbiotic relationship with the business unit and technology staff,” Ford says.

Obstacles Remain

Despite these examples of success, Forrester’s Orlov cautions that most CIOs will find it difficult to get their CEOs on board with a technology program. CIOs can’t simply ask their CEOs whether they want to learn more about technology. A more subtle approach is required. For example, a CIO might point out to one executive that her unit has lower customer satisfaction levels or higher people costs, and suggest a technology that might help. If that fails, a similar conversation with the CEO might help. Orlov says that business executives sorely need to learn about IT, given the waves of innovation happening in the field. She thinks businesses are falling behind a series of new technology curves, and cites things like the paucity of RFID sensors in place to help track processes and products. “A lot of CEOs just don’t have an appreciation of what IT can do for them,” she says. And if the CEO doesn’t want to know, “the CIO is going to be hard-pressed to get the CEO to do something for IT.” CIO

Michael Fitzgerald is a freelance technology writer. Send feedback to this feature to editor@cio.in

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4/28/2008 3:06:52 PM

Essential

technology At discount retailer Family Dollar, IT and the business worked side by side on a technology revamp so that their systems and their growth strategy could get along.

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From Inception to Implementation — I.T. That Matters

Building the Store of the Future By Laurianne McLaughlin Alignment | "Everybody knows retail IT is lean," says Josh Jewett, CIO of Family Dollar

Stores, a discount retail chain of more than 6,400 stores in 44 states in the US, competing wih the likes of Dollar Tree and Walgreens. Yet in this competitive business with historically tight margins, Family Dollar's business and IT sides have come together to do a major revamp of the company's IT. This includes a portal project that delivers daily business intelligence (BI) data — including sales trends — to store managers using a lean communications pipe for data (64Kbps frame relay lines). Those store managers used to wait for paper reports via snail mail. Also on the revamp menu: replacement of the point-of-sale system — the sacred cow that retail industry IT departments rarely advocate touching. What's the secret to making an IT overhaul on this scale work? Alignment. The changes began when IT and the business side crafted a vision of the company's 'Store of the Future' and then designed the technology framework that would be necessary to support it. So far, IT's keys to successful execution have been tight partnerships with

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essential technology

the business, strong executive support, a flexible consulting partner and a commitment to learning new IT skills as you go along, Jewett says. Keep in mind, Family Dollar implementing a portal project isn’t revolutionary, says Paula Rosenblum, an analyst and managing partner with Retail Systems Research, noting that in discount retail segments like party supplies, where she worked, business intelligence portals were common seven years ago. To be fair, no one company in Family Dollar's market segment stands out for being an IT guru, Rosenblum says, with the possible exception of Big Lots, which has done some innovative work with initial allocation of merchandise to stores (getting the right product to the right store in the first place, to avoid costly store-tostore product transfers that aren’t selling well in a particular locale), she says. But what's intriguing about Family Dollar and its discount store peers is the stunning volume of data with which they grapple, she says. "These guys are

information on what's selling and what's not. Every customer trip becomes precious." Family Dollar, a Rs 27,200-crore company founded in 1959 and based in North Carolina, is the kind of place you might go to pick up a case of Diet Coke and some chips, and walk out with those items plus a paper tablecloth and some Hanes socks. The store carries all name-brand merchandise, with most items ringing up at less than Rs 200. The typical store has six to eight employees, two to three cash registers, and 7,000 to 9,000 square feet of floor space. That store has to compete with other discount stores, supermarkets and drug stores. "In retail, there's been a blending of channels," says Jewett. "You can buy toothpaste at 7-11, Walgreens or Family Dollar." Even the mighty Wal-Mart is struggling to convince consumers that it's the place for these kinds of items. But Family Dollar is committed to an aggressive growth clip: in the five years that Jewett has been there as CIO, the company has added 250 to 500 stores per year; it added about 300 last year.

The 90's were all about the efficient supply chain. That's now table stakes. Today, it's about providing near realtime data on what's selling and what's not. Every customer trip is precious. mashing up some serious amounts of data," Rosenblum says, due to the sheer number of product SKUs in the stores. And due to the commodity nature of the products, "you need the ability to make intelligence out of it pretty quickly. You don't want to wait and see if a product will do better tomorrow."

From Folders to Portal "The 90's and early 2000's were all about efficient supply chain," she says. "Having an efficient supply chain is now table stakes. Now it's about providing near real-time

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When Jewett came on board, he learned the business side had four strategic goals that IT needed to help support: expanding in existing urban markets and improving store operations there; expanding the food assortment in locations carrying groceries; expanding the payment types accepted to include options such as food stamps and credit cards; and continuing to increase the number of stores. "We birthed the store of the future project because we didn't believe our existing technologies were necessarily going to drive those goals," Jewett says.

No. 1

The position BI and analytics holds according to a 2008 survey of 4,300 companies in terms of impact on business. Source: IDC

'Store of the Future'Template The 'Store of the Future' for Family Dollar — a technology vision that's been rolled out to about 750 stores so far and will hit another 1,500 in fiscal 2008 — looks dramatically different than from those in the past. The old stores were using a colorcoded paper folder system for tracking store management activities and using backof-store PCs running DOS with dial-up lines, Jewett notes. Good old three-ring binders were plentiful for requirements like training and hiring, he says. The replacement: the 'Red Zone', Family Dollar's new portal, sends key data from corporate to store managers using a lean bandwidth arrangement. ('Red Zone', selected as a name by Family Dollar employees, refers to the last yards before you get a touchdown in football; red is also the company's corporate color.) Store managers access that portal via the cash registers: "It's very important for the store manager to be at the front of the store," Jewett notes. A centralized Oracle database at corporate feeds the portal using BEA software in the middle. But since the stores only have a cost-minded 64Kbps frame relay line for data, Jewett's IT team and its consulting partner on the project, Ironworks, had to keep the flow of information in check. So they created REAL CIO WORLD | M AY 1 , 2 0 0 8

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operational data stores — lighter views of the data customized specifically to what district managers and store managers will need.

Daily, Actionable BI Whereas managers previously received bulky reports via snail mail from corporate on matters like loss prevention rates and top sellers at other stores, they now get daily, tailored updates via the portal. After nightly batch processing, the system preloads data pertinent to the region and/or the store for the manager's review the next day. "The goal is to give daily, actionable BI to that store manager," Jewett says. The store manager can track factors like their store's sales performance against plan, and when the next delivery truck will arrive, he notes. The portal system also helps maintain product ordering, track employee training and do employee screening and hiring. Kronos serves as a third-party partner to handle the hiring and employee onboarding process, which has now ditched the threering binder system to become nearly paperless, Jewett says.

even use a full-blown e-mail client. The portal handles most of the managers' needs. Overall, don’t be afraid of a direct approach when implementing a portal project like this one, Jewett recommends. A lot of companies choose to start a portal project with a "B" or "C" priority project, like distributing employee-newslettertype information, Jewett notes. Family Dollar went right for the "A" priorities, the business processes of the store managers and their district managers, he says. The IT team now does a new release on the portal every three to six months, adding sales indicators and alerts, for example, to product recalls.

Pulling the POS Plug An industrial engineering study on the store's checkout lanes was IT's ally here: the study convinced Family Dollar's business and IT sides to reduce the number of checkout lanes in the company’s designs for its store of the future. "That allowed us to redirect capital to the portal," Jewett says, as did ripping out the previous backroom PCs running DOS that were made

Both the business and IT sides of an organization need plenty of time to work with any new POS prototype and the early implementations. IT also has to decide to learn as it goes along. Providing some early ROI, the changes to the hiring and screening process have helped the company reach a goal of getting store manager turnover below 40 percent, Jewett says. The company has also improved training while cutting costs, and improved compliance monitoring, he says. What can other CIOs learn from this portal project? It certainly didn’t require cutting edge technology. The cash registers, in case you're wondering, run Microsoft Terminal Services software, which is thinclient software, and the store managers don't 54

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unnecessary by the new portal. In the process, stores got more merchandising space as well.

Pulling the Point-Of-Sale Plug As if the portal wasn't a radical enough change in itself, Jewett and his IT team are also overseeing a switch to a new pointof-sale system — the system that retail IT execs often dread touching, never mind ripping out. "You could have put in the portal without the POS system," Jewett says. "But

when we looked at the food strategy (and the company's looming need to do things like accept coupons), the old POS system couldn’t handle it." Also, the company needed to accept payment types like food stamps and credit cards. "You could carry milk without a new POS system," Jewett says. "But you couldn't buy it with food stamps." Merchandising strategy was also begging for more power: "We were going to need a platform for more efficient execution of markdowns," for example, Jewett says. Jewett and his team decided on a gradual POS rollout in concert with the store of the future revamp. First, they did one last upgrade to the legacy POS system, which was going to have to last several years for some stores until they got the new POS system. For that new POS software, Family Dollar chose technology from Triversity (now owned by SAP.) Jewett prototyped the Triversity application in test stores, slowly: "We studied it for a good year," he says. Production rollouts began in March of 2007 and was to reach about 750 stores by August, Jewett says. Lesson learned: the business and IT sides of an organization both needed plenty of time to work with the prototype and the early implementations, and IT had to decide to learn as it went, Jewett says. "The business wanted time to study it. And we in IT knew that was a whole new architecture and we needed to expand our IT skills back here." "As we've grown, we've developed some areas of expertise — project management, for example," he says. "That's helped us raise our process execution." So far, so good: no major glitches with the POS system, he says.

MakingAlignmentWork Today, Family Dollar accepts food stamps in the approximately 750 stores that have the Store of the Future setup. And it's testing credit cards in a limited number of stores.

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"What we've developed here is a flexible, scalable model in the data center and the store. I don’t worry a lot about what I have to do five years from now, I worry about a flexible architecture." Jewett almost makes it sound simple, the tight alignment between his IT group and the business necessary to keep a revamp effort like this one on track. But, he says, one key was that the store of the future vision got set and supported from the top, right from the start. "Our president and CEO definitely set the strategic agenda," he says. "We really worked collaboratively with the business every step of the way." Like many of his peers, Jewett uses direct relationship managers in IT to stay close to individual parts of the business. His advice to CIOs facing a major IT overhaul: focus on the business imperatives and building a strong team. "You need to build a team and maintain a team that will help build that agenda," he says. "It's all well and good to understand what the business wants but it breaks down if you don’t deliver." But he does more than talk about alignment. "Once a year, I make everyone in IT go work in a store," Jewett says. "The point there is we're here to serve them. It's a subtle but important point. They usually come back and say 'Wow, it's hard to be a store manager.'" And yes, Jewett goes too, most recently working at a store in Chicago for a couple of days. One other factor has helped Jewett and his IT team execute the complex revamp: they've used one consulting company, Ironworks, from the start of the project, with good results. "They're an expert in process," Jewett says. "Yes, they bring tech skills to the table. But they're helping us structure these efforts." How has he made the consulting relationship work over time? Pick a partner with whom you have good chemistry and, as CIO, get to know the consulting team personally early on. Jewett says, adding: "Being a known customer is very important.

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Five Ways to Faster, Smarter Data

In the effort to transform data into actionable information, many companies are turning to operational BI. This refers to applications that are used with a dashboard, to provide daily, hourly, minute-to-minute, or even up-to-the-second actionable information to a wide array of employees. Here are five things IT and businesspeople can do to improve data delivery. Explore Process Automation Opportunities Ask yourself: which tasks would benefit from automatic data collection and reporting? For example, one courier company turned to operational BI after realizing that weekly customer activity reports weren't a comprehensive solution. To see problems and opportunities sooner, the company implemented software that alerts account managers when a customer's behavior changes. Look for Decisions That Can Be Delivered Automatically Some financial service organizations use applications that automatically analyze fluctuations in currency rates and that automatically initiate trades based on those decisions. Identify What Information Employees Need to Succeed The employees who make or break your company are quite those working in the call centers or with customers. Ask yourself: what data do they need to upsell, cross-sell, deal with customer issues, recognize a valued customer — and your company's success. Identify What Tasks Feed Enterprise Success What employees focus on each day should support the company's strategic focus. Form a group composed of business and IT to determine KPIs . Another group of IT and business folks should be created to manage the day-to-day functioning, training and implementation of the BI tools. Create Strong Communications An operational BI implementation will have cultural issues. Like: what is the typical workday of an employee who will be using the tools? How much training will they need, both initially and ongoing? Communication is key to creating a culture that values and uses operational BI tools. — Diann Daniel

People get into the trap of the first call you make being about a problem."

Gross Profit Margin Rising Is the revamp making a significant contribution to the chain's bottom line? It's pretty early to judge, but according to fiscal 2007 results reported by the company in early October, Family Dollar's gross revenue is trending up: that's a good sign in what's now a tough economic climate in its market, with rising energy and gas prices, and the subprime mortgage crunch, Jewett says. Family Dollar's gross profit margin, as a percentage of sales, was 34 percent in fiscal 2007 compared to 33.1 percent in fiscal 2006. Sales in comparable stores (stores open at least one year) increased approximately 0.9 percent, according to the company. Net income for the fourth quarter of fiscal 2007 increased 17 percent to Rs 151.2

crore; that compares to Rs 129.2 crore in fourth quarter of fiscal 2006, according to the company. Sales for fiscal 2007 were approximately Rs 27,200 crore, about 6.9 percent better than fiscal 2006. The growth plan continues: during fiscal 2007, Family Dollar opened 300 new stores and closed 43 stores. It plans to open about 300 new stores in fiscal 2008. Capital expenditures for fiscal 2008 are expected to be between Rs 720 crore and Rs 760 crore. Jewett and his IT team stay ready for that growth by staying nimble: "What we've developed here is a flexible, scalable model in the data center and the store," he says. "I don’t worry a lot about what I have to do five years from now, I worry about a flexible architecture." CIO Laurianne McLaughlin is technology editor. Send feedback on this feature to editor@cio.in

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Pundit

essential technology

Be Responsive And Stand Out By fixing your systems to track your customer's problems, you differentiate yourself.That's good. By Michael H. Hugos BPM | We live in a global economy, where continuous incremental change is the name of the game. Gone are the days when companies could hope to prosper by just doing the same things and making the same products over and over. Successful products and services are quickly copied; they become commodities, and the prices companies can charge for them are continually ratcheted down. The best way to earn profits in this economy is for companies to differentiate themselves and their products to respond to ever-changing customer needs. Using business process management (BPM), a

top of the existing EDI and Web-based systems that customers used to place their orders. This system monitored incoming orders and alerted customer service people whenever there was a potential problem or a service opportunity. Here’s how it worked. There’s always a common set of things that every order has to have, such as a ship-to address, items, quantities and prices, but there is also a handful of things that are different for each customer. The BPM system allowed customer service reps to define what a good order looked like for each customer they covered. And reps had the power to

order or, if it was really strange, contacted the customer and handled the order manually all the way through. When you think about it, that’s what customer service is all about. Customers noticed the attention we gave them. They often paid a bit more for our products than what our competitors charged because they liked the personal attention we provided; it made our company easier to work with and worth more to them. Using BPM, we greatly increased the productivity of our customer service people by automating the handling of routine orders, and we focused their time

Using BPM, you can automate the handling of routine orders and focus your energy on orders that contain potential problems — and increase your value. company can pay attention to individual customers and increase the value of even the simplest products by wrapping them in a blanket of value-added services that respond precisely to customers’ needs. Companies can use BPM technology to leverage existing systems infrastructure and become much more attentive to customer needs. I was recently the CIO of a national distribution company that sold janitorial supplies and food-service disposables (stuff like floor wax, paper cups and plastic forks). We differentiated ourselves by layering a BPM system on 56

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change those order definitions without a programmer having to hard-code that logic into the order processing systems. So, as different customers came on or as their requirements changed, customer service people could update their own criteria for good orders. Then the BPM system screened the orders; if orders were good, they just flowed on through. But if an order didn’t meet requirements, the system trapped it, attached it to an e-mail and sent it to the rep responsible for the company that sent the order. The customer service rep either fixed the

and energy on dealing with the orders that contained potential problems. This increased the value they delivered, both to the customer and to our company, by orders of magnitude. The BPM system was installed quickly, and it delivered a great return on investment. It enabled us to stand out in a crowded market and gave our salespeople something to talk about besides price when customers asked why they should do business with us instead of with someone else. CIO Send feedback to this column on editor@cio.in

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