CIO July 1 2009 Issue by Sreekanth Sastry

leadership

VOl/04 | ISSuE/16

Business

Technology

RElIancE cOmmunIcatIOnS’ dr. sumiT duTTa chowdhury found ways to track ROI on a Web 2.0 based intranet.

Reliance Communications launches a new Web 2.0 intranet and improves productivity by 17 percent. Here’s how. Page 16

july 1, 2009 | Rs100.00 www.CIO. I N

View From The Top amway’s William Pinckney decodes the Indian consumer. Page 40

Fine-Tuning SecuriTy Going virtual helps universal audio protect its IP. Page 52

From The Editor-in-Chief

In large organizations, and particularly for their IT departments, it’s a bit like the

Silos of the Mind True change lies within.

quest for the Holy Grail. While it doesn’t involve either organized religion or exotic cults or a Dan Brown film deal, it does, however, entail a lot of people chanting the mantras of integration, while bemoaning the detrimental effects of silos and legacy. And, why is that? Well, what does a bank running a core banking system do when the 35 different applications that run its business do not speak to each other? The integration equation is simple: in order to make the right decisions quickly and efficiently, organizations need to unite the right people to the right information at the right time. A survey carried out by the Aberdeen Group a few years back, showed that 60 percent of the respondents said that “complete internal integration would give them a competitive advantage”. The only caveat was that “only if they managed to do it.” The reason for the rider is simple as well. While IT and communications have evolved, business processes are still in the Stone If the system is in essence Age of being tied to technology despite rotten, no amount of the best of intentions. providing a veneer of A good (or bad) example of this lies technology will resurrect it or in the area of e-governance. Indian keep it going for long. governments — local, state and central — pour over Rs 6,000 crore into IT annually. Yet, the official success rate of these projects is 15 percent, with a tad over 50 percent of projects a dismal failure. It becomes easier to understand this tragedy if we view e-governance as having less to do with IT and more to do with administrative reform. If the system is in essence rotten, no amount of providing a veneer of technology will resurrect it. As a CIO told me the other day, automating a bad process will still yield bad results. While technology helps, the bigger issue with integration is one of managing change and changing mindsets. Some of the CIOs that I’ve been speaking with these past few days are beginning to take on the challenge more holistically. An IT leader from a telecom company recently re-structured his department by seeding members of his team in all the other departments. This way they understand end-users and the underlying business processes better, and are at hand to suggest where and how IT can help create a more efficient process.

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

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content july 1 2009‑ | ‑Vol/4‑ | ‑issue/16

Dr. Sumit Dutta Chowdhury, CIO, Reliance Communications, and his team not only put in place an intranet based on Web 2.0 technologies, he also showed hard ROI figures — finally taking Web 2.0 beyond the realm of a soft benefit.

Web 2.0

Executive Expectations

COvER StORy my SpACE | 16

vIEW fROm thE tOp | 40 William S. Pinckney, CEO & MD, Amway India, shares what they got wrong, the changes they made, and how they plan to keep up their impressive growth trajectory.

When Reliance Communications started work on a revamped intranet based Web 2.0, it did it on the sly. That’s until the benefits of allowing over 60,000 staffers to customize their workspaces kicked in — saving costs on multiple fronts and increasing employee productivity.

I P hOtO by Sr IVAtSA Sh An dIlyA

1 6

feature by Gunjan trivedi f t

Interview by Sneha Jha

Productivity BLACkBERRy: thE NEW LAptOp? | 24 CIO columnist Galen Gruman thinks the BlackBerry leaves much to be desired. feature by Galen Gruman f

pLuS:

COVEr: dESI gn by AnI l VK

Why yOu CAN’t IGNORE thE BROWSER | 22 The new variety of browsers and an increased dependence on browser-based applications is changing how IT looks at the tool. feature by Juan Carlos perez f 2

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Peer-to-Peer It-BuSINESS ALIGNmENt ChImERA | 14 Faced by the pressure of shrinking budgets, IT and business departments are working together to deliver real results. Is constantly analyzing their alignment really relevant? Column by Arun O. Gupta

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Essential Technology | 60 Collaboration | Shattering Communication Barriers

Feature by Mike Heck Pundit | Will Open Source ERP Go Mainstream?

Column by Thomas Wailgum

From the Editor-in-Chief | 1 Silos of the Mind

By Vijay Ramachandran

5 2

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 File Fine-Tuning Virtual Security | 52 Universal Audio, a leading maker of music production and mixing tools, went almost fully virtualized to protect its valuable intellectual property. But it bumped up against the complex security problem of virtual switches. A chance meeting in a parking lot helped provide an answer.

1 1

Feature by Kevin Fogarty

Outsourcing | 28 How TO Save Money on Outsourcing Whether you’ve signed a contract with an IT-service provider, or you’re about to, keeping costs down is your first priority. Try these strategies to save on your outsourcing deal. Feature by Stephanie Overby Vol/4 | ISSUE/16

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6/30/2009 4:01:23 PM

Governing BOARD

Advertiser Index

Alok Kumar

Publisher Louis D’Mello

Global Head - Internal IT, TCS

Associate Publisher Alok Anand

Anil Khopkar

Editorial Editor-IN-CHIEF Vijay Ramachandran

Correspondent Sneha Jha

Chief COPY EDITOR Sunil Shah

Anjan Choudhury

Copy Editors Deepti Balani,

Shardha Subramanian Trainee Journalists

Priyanka Varsha Chidambaram

Product manager Online Sreekant Sastry D esign & Production

Creative Director Jayan K Narayanan

Lead Visualizer Binesh Sreedharan

CTO, BSE

President & CIO, IT Applications, Reliance Industries

Krone

IBC

Lenovo

SAS

President Corporate IT & Group CIO, Aditya Birla Group Donald Patra CIO, HSBC India Dr. Jai Menon

Girish A V (Multimedia)

Director Technology & Customer Service, Bharti Airtel &

SENIOR Designers Jinan K Vijayan, Jithesh C C

IFC

Atul Jayawant

Vinoj K N, Suresh Nair

Ashish Chauhan

Lead Designers Vikas Kapoor, Anil V K

GM (MIS) & CIO, Bajaj Auto

assistant editors Gunjan Trivedi, Kanika Goswami

Cisco

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

Group CIO, Bharti Enterprises

Unnikrishnan A V Sani Mani (Multimedia) Designers M M Shanith, Anil T

P C Anoop, Prasanth T R

Photography Srivatsa Shandilya

Production Manager T K Karunakaran

DY. Production Manager T K Jayadeep Mark eting and Sal es VP Sales Sudhir Kamath Senior Mananger Siddharth Singh, Assistant Manager Sukanya Saikia Bangalore Kumarjeet Bhattacharjee, Arun Kumar, Manoj D. Delhi Aveek Bhose, Punit Mishra Mumbai Parul Singh, Hafeez Shaikh, Suresh Balaji, Dipti Mahendra Modi Japan Tomoko Fujikawa USA Larry Arthur; Jo Ben-Atar Events VP Rupesh Sreedharan Senior Manager Chetan Acharya Managers Ajay Adhikari, Pooja Chhabra

Gopal Shukla VP - Business Systems, Hindustan Coca Cola Manish Choksi Chief Corporate Strategy & CIO, Asian Paints Manish Gupta Director-IT, Pepsi Foods Muralikrishna K. Head - CCD, Infosys Technologies Navin Chadha CIO, Vodafone Pravir Vohra Group CTO, ICICI Bank Rajesh Uppal Chief General Manager IT & Distribution, Maruti Udyog Sanjay Jain CIO, WNS Global Services Shreekant Mokashi Chief-IT, Tata Steel Sunil Mehta

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, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027, India. IDG Media Private Limited is an IDG (International Data Group) company.

Printed and Published by Louis D’Mello on behalf of IDG Media Private Limited, Geetha Building, 49, 3rd Cross, Mission Road, Bangalore - 560 027. Editor: Louis D’Mello Printed at Manipal Press Ltd., Press Corner, Tile Factory Road, Manipal, Udupi, Karnataka - 576 104.

Sr. VP & Area Systems Director (Central Asia), JWT T.K. Subramanian Div. VP-IS, UB Group V. K Magapu Director, Larsen & Toubro V.V.R Babu Group CIO, ITC

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new

hot

unexpected

IT Projects: Stalled and Forgotten and with the required features and functions). Nearly one-in-four or 24 percent IT projects were considered failures (cancelled before completion, or delivered but never used). The rest, 44 percent, were considered challenged: they were finished late, over budget, or with fewer than the required features and functions. Jim Johnson, chairman of The Standish Group, says this is the first increase in IT project failures he's seen "in a long time." According to The Standish Group's research, IT project success rates rose steadily from 1994 until 2000, when they dipped, and then began rising again from 2002 through 2006. Johnson says he was so surprised with the dip that he waited four more months before publishing the CHAOS report to

make sure its findings were accurate. He attributes the increase in failures to the recession. "People are more prepared to cancel projects than they were before," says Johnson. He admits that cancelling a project because funding has dried up or is limited is not always a bad thing. Johnson estimates that 20 to 25 percent of the failures during the past two years were caused by the economy forcing project cancellations, "but we're still trying to figure that out," he says. With project managers and business folk taking on more work due to layoffs, they have less time to devote to each project, says Johnson. Finally, the recession has engendered a risk aversion inside organizations that Johnson says has led them to overemphasize compliance and governance. And the longer a project takes, he adds, the more likely it is to fail. â&#x20AC;&#x201D;By Meridith Levinson

IllUST raTIon by anIl T

s t u d y Recession-related IT budget cuts and layoffs are taking a toll on IT project success rates, says the latest CHAOS report from The Standish Group. Specifically, 32 percent of IT projects were considered successful (completed on time, on budget

Quick take

Atul Kumar on Hardware Management d e v i c e s In the light of the current economy, enterprises are cutting back in several areas. However, the hardware budgets of a significant number of IT leaders have either remained the same or have increased. Kavya Balaraman spoke to Atul Kumar, AGM-IT, Syndicate Bank, to find out why:

Has your hardware budget increased? What are you spending on? Yes, our hardware budget has increased. Business is not down. We are opening more branches and we need new computers, modems, servers, etcetera. From a banking perspective, why hasn't the sluggish economy slowed you and your need for hardware down? The slowdown has had no effect on hardware. Business is still growing. I think consumers place more trust in public sector banks, as opposed to privately-owned ones. Therefore, we have to continue opening new branches. From an IT perspective, there is no slowdown.

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What has been your biggest hardware challenge? Getting support from the vendor within a specific timeframe is difficult. Vendors donâ&#x20AC;&#x2122;t deliver on time. Every product comes with a warrantee and well-drafted SLAs that promises to provide service at all times. However, these SLAs are not always followed. Clauses are properly laid out, but the support that is required from vendors is not. How do you get around this problem? If a vendor does not deliver on time, we tend to avoid pushing for penalties because this involves a tedious process of litigation. I think we should push harder to claim penalties. How do you save money on hardware? When it comes to saving money on the hardware that we purchase we buy products only when we need them and we buy in bulk, so that our costs are kept to a minimum.

Atul Kumar

(See also our hardware survey on page 50)

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Do you think the Economic Recovery Begun? b u s i n e s s i n s i g h t With the first inklings of a upturn on the horizon and renewed consumer interest after the general election, many are beginning to ask whether: is the downturn ending or is this a false sunrise? Kavya Balaraman to three of your peers to find out what they thought.

“It is too early to say for sure, but there are definite signs of recovery. However, there is still a long way to go. ”

trendlines

“It’s a bit early to talk about a recovery in terms of the general market. And as an insurance company, Reliance has seen better growth.” Sriram naganathan Chief Technology & operations officer, reliance General Insurance

“We have experienced some amount of recovery in the last two

months. The automobile industry, especially the two-wheeler segment, has grown 6 to 8 percent year on year. This growth could be improved if retail finance is made available.”

CIo, TVS Motors

Lend Your

voice

Write to editor@cio.in 6

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India's mobile connections are forecast to top 771 million by 2013 after growing at a CAGR (compound annual growth rate) of 14.3 percent from 452 million connections in 2009, research firm Gartner said. The total mobile services revenue in India is projected to grow at a CAGR of 12.5 percent from 2009 to 2013 to exceed US$30 billion (about Rs 150,000 crore), Gartner said. The growth will come from mobile services operators increasing their focus on the rural market, lower handset prices, and local companies entering the domestic mobile handset segment, the research firm noted. India is expected to remain the world's second largest wireless market after China in terms of mobile connections, according to Gartner. India had 404 million mobile subscribers at the end of April 2009. The country added 11.9 million new mobile subscribers in April, up by 45 percent from additions in the same month last year, according to data released by TRAI (Telecom Regulatory Authority of India). The growth in mobile subscribers in the country has not been affected by the economic downturn because Indian consumers see communication as a necessity, according to research firm IDC India. The PC market in contrast is subdued, and may see positive growth only by the third quarter of next year, IDC added. Growth in the Indian mobile market will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets, Gartner said. A number of mobile service providers are investing in adding new servicesto draw in more customers. Revenue from data services will contribute significantly to the overall growth of mobile services in India, with a CAGR of 16.8 percent from 2009 to 2013, Gartner said. The bulk of revenue will however continue to come from voice services. With the increased growth in data services, the percentage of revenue coming from voice will drop from 89 percent last year to 86 percent in 2013. Gartner forecasts a drop in ARPU (average revenue per user) and lower voice tariffs as competition heats up, and rural markets are targeted. —By John Ribeiro

t e l e c o m m u n i c at i o n

arvind tawde t Senior VP & CIo, Mahindra & Mahindra

t.g. dhandapani

New Season in India: Mobile Monsoon

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No Virtualization Skills? Start Now

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separate group dedicated to virtualization. Industry watchers say such an approach will enable a more seamless adoption of advanced technologies and broader communication among IT groups that, for the most part, still operate in silos. “Companies need to establish crossteam working groups to make decisions

In a few years, if you don’t know virtualization, your system admin skills are old. about buying infrastructure, setting it up and understanding how to optimize the environment,” says Natalie Lambert, principal analyst at Forrester Research. IT leaders say for now they have to dedicate resources to virtualization exclusively, but they can already see the writing on the wall — especially in smaller IT shops. “That specialized area of technology is going to be rolled into the systems administrator role,” says John Turner,

director of networks and systems at Brandeis University in Massachusetts. “But in a couple of years, there won’t be a need for specialized skills. If you don’t know virtualization, then your systems administration skills are old.” Analysts say IT leaders today need to strike a balance between dedicated staff and domain expertise. Those with smaller IT groups could put themselves at the risk of losing their virtual expert as well as the knowledge of how to intertwine virtualization with servers, storage, network or desktop know-how. “IT groups shouldn’t concentrate their virtualization expertise among few individuals. You could have one or two people that develop the expertise, and then you are at a greater risk of losing those people to other employers,” Gartner’s Holub says. “We are a few years off from virtualization being a standard skill, and it is hot and in demand right now. You don’t want to go too deep with just a few individuals, spread it out across several people,” he says.

trendlines

—By Denise Dubie

innovation’s Bottom Line How money is spent is a key metric for assessing the success of new ideas. Here are the top innovation metrics according to a survey from the boston Consulting Group:

Funds invested in growth projects revenue from new offerings allocation of investments across projects Projected versus actual performance average development time

65% 65% 62% 62% 60%

Source: boston Consulting Group

IT departments today may be looking to hire virtualization specialists, but as the technology becomes mainstream for servers, desktops, storage and networks, industry watchers and hiring managers say virtual know-how will become a standard requirement for many IT job candidates. “We see virtualization as having a significant impact on operations and infrastructure organizations in IT. Most will start dealing with the technology in a stovepipe fashion: server, desktop, network and storage,” says Ed Holub, research vice president at Gartner. “But organizations are beginning to treat virtualization more horizontally than vertically and pulling teams together to share that virtual know-how.” Ideally, organizations should be able to devote some of their network specialists’ time, for instance, to building a virtualization strategy in collaboration with server and desktop teams. “IT organizations will continue to need domain experts, not virtualization experts. Going forward, system administrators will be expected to possess virtualization skills,” says Andi Mann, vice president of research at Enterprise Management Associates. Jake Seitz, enterprise architect at The First American, developed what he calls a virtualization center of excellence when the company began putting virtual server and, now, desktop technology in place. He pulled IT staffers from several domains as well as dedicated a legal and financial expert to the group. The virtual team operates independently of other operations teams and their job is to own the virtual infrastructure. “For the most part, members of the virtual team are devoted to virtualization and they bring their domain expertise to that group, because each area has its unique nuances that need to be applied to our organization’s implementation,” Seitz says. Seitz is among the lucky ones whose organization is large enough to support a

v i rt ua l i z at i o n

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Slicing IT Up i t b u d g e t Forty-two percent of CIOs suffered budget decreases in the first quarter of 2009, and IT shops on average slashed budgets by 4.7 percent, according to new research published by Gartner. CIOs were expecting an average first quarter budget increase of 0.16 percent late last year, but were forced to cut costs as the economy worsened. Fifty-four percent of CIOs reported no change in their IT budget, while a scant 4 percent enjoyed an increase. Average declines of 7.2 percent were seen by those companies that reduced IT spending. Counting all companies, including those with flat budgets and increases, the average decline was 4.7 percent. "CIOs reported that renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions," says Gartner analyst Mark McDonald.

trendlines

Struck by the Slowdown 54% No change in IT budget 4% Increase in IT budget 42% Decrease in IT budget

Budget cuts spanned all types of enterprises both in terms of size, geography and industry. Healthcare organizations reported an average budget increase of 2.2 percent, but CIOs in every other major industry reported a decline in the first quarter, Gartner said. Ten percent budget cuts were seen in the professional services, telecommunications and high-tech sectors. An 8 percent budget cut was reported in manufacturing, and 4 percent cuts were reported at utilities and financial services organizations. Many CIOs say further cuts in 2009 are unlikely, and that they expect the economy to recover between the first and third quarters of 2010. But they are bracing for the possibility of further budget reductions. "The percentage of CIOs with a contingency plan for the remainder of 2009 has more than doubled compared with 2008," Gartner reports. "CIOs with additional contingency plans for 2009 are planning for the potential of renewed IT spending, as well as additional reductions. While 44 percent of CIOs do not believe they will need to tap into their contingency plans, those that do believe they will [expect to] do so during the next six months." —By Jon Brodkin 8

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No Cash to Store Hard times are driving large enterprises to patch holes in their storage architectures with systems designed for small and medium-sized businesses. That's why enterprise disk storage revenue fell 18.2 percent in the first quarter of this year, according to research company IDC. The drop in revenue from last year's first quarter came with what may be an even more sobering statistic: Demand for storage capacity grew just 14.8 percent in the quarter— the slowest rate since late 2002, according to IDC analyst liz Conner. Enterprises still need more storage, but they aren't willing to pay for it, Conner said. IDC expects the doldrums to remain through another quarter, with a recovery possible late this year or early in 2010, Conner said. revenue for all external disk storage, including directattached storage, naS (network-attached storage) and Sans (storage-area networks), fell at a slightly lower rate of 13.6 percent. Two of the seemingly bright spots in the quarterly report actually reveal gloomy trends. Sales revenue from entry-level storage systems, priced below $15,000 (about rs 7.5 lakh) per system, grew 9.9 percent. Much of this came from large enterprises buying these systems to meet immediate capacity needs rather than investing in the larger platforms they will eventually need, Conner said. There was also 14.5 percent growth in the price range of $300,000 to $500,000 (about rs 150 lakh to 250 lakh). However, many of the systems that sold in that price range were supposed to cost much more and were sold at a significant discount, Conner said. one product category that made genuine gains in the quarter was iSCSI Sans, which saw 40.5 percent revenue growth from a year earlier. Enterprises are finding that iSCSI Sans deliver much of the capability of traditional Fibre Channel networks for less money, according to Conner. Some are actually investing in storage gear that can use both iSCSI and Fibre Channel, so they can upgrade later. neither buying lower-end systems nor temporarily using iSCSI should cause enterprises any great management headaches, especially if they stay with one vendor, Conner said. Certain pairs of vendors also have good compatibility between their systems, though others don't, she said. —by Stephen lawson storage

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Missing: A Plan to Go Green is actually a reduction in energy costs that is viewed as a more beneficial outcome of a green IT implementation, rather than helping the environment, Springboard said. "Increase in focus on energy-efficient PCs, servers and storage systems seems to be the most common trend and it represents the majority of surveyed firms' green IT investments," said Silber. "Of the organizations that have plans to implement new green IT initiatives over the next year, the largest percentage have plans to invest in virtualization, whether it be for server, storage, or desktop." When asked for reasons for not implementing a green IT strategy, nearly one in five respondents felt that there was no need, while an equally significant fraction said that they had other priorities at the moment, said Springboard. For those willing to consider green IT, finding the right skills tops the list of challenges, ahead of implementation and budgetary concerns, the research house added. The survey was conducted in China, India, Australia, Singapore, and Malaysia. —By Computerworld Hong Kong staff

trendlines

IT Less than 10 percent of 1,200 surveyed firms across Asia Pacific have formally implemented a green IT strategy despite widespread awareness of green IT's ability to cut their carbon footprints and improve ROI, said Springboard Research. According to their survey, 60 percent of all firms without a green IT strategy in place plan to implement one in the next 24 months. Springboard's study also revealed that the economic crisis will have a limited impact in delaying green IT initiatives, with nearly a third of enterprises indicating their green IT plans will actually accelerate during the economic downturn. "Green IT may not have yet reached the level of a strategic priority for Asian enterprises, but it is growing in importance and we see the trend shifting from a movement to a market in the next two or three years," said Jonathan Silber, research manager at Springboard Research. "The good news is that both despite, and because of, the economic crisis, a considerable number of companies are recognizing the value and payback of green IT initiatives." Although enterprises regard social responsibility and business advantages as prime motivators for going green, it Green

Stunted Growth for Network Security IT m a n a g e m e n t The Asia-Pacific network security market is expected to grow by 6.5 percent this year, dropping nearly two-thirds from the robust growth in 2008. "Last year was perhaps too soon for the Asia-Pacific region to feel the full brunt of the financial meltdown. The final quarter however — typically the strongest quarter — was a tell-tale of what to expect in 2009, growing a dismal 1.5 percent over the third quarter of 2008," said the research company. According to Frost & Sullivan industry manager Arun Chandrasekaran, however, despite the weak sentiments and businesses exercising caution in spending, the commitment to network security investments remains strong. "Most companies recognize that the risks of not implementing adequate

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percent. This trend is likely to continue IT security far outweigh the cost of till 2015. investing in it," he said. The small and medium businesses "Amid pressure to control capex segment contributed slightly more and stretch every dollar, companies are than one-third to the total more likely to deploy the more revenues in 2008. Despite affordable converged security being one of the hardest hit, solutions," Chandrasekaran the banking, financial services added. "Adoption of managed The expected and insurance sector remains security services is also growth rate of the leading adopter of network expected to rise as companies APAC's network security solutions at 20.8 try to minimize purchases." security market percent of revenues in 2008, The growth in 2008 in 2009, down continued to come from the from 17.9 percent followed closely by service providers and the government epicenters of emerging markets in 2008. sector at 18.4 percent each. such as China, India, as well Chandrasekaran believes that the as ASEAN countries like Vietnam and banking sector will continue to be the Indonesia, all registering year-on-year biggest spender on network security growth rates of more than 20 percent. moving forward, mainly due to rising Firewall and IPSec VPN (Internet regulatory compliance. protocol security virtual private network) solutions continued to be the dominant choice, accounting for —By Zafar Anjum the bulk of revenues last year at 74.6

6.5%

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Sea Breeze Cools Datacenter Just off the North Sea coast in the United Kingdom, Hewlett-Packard’ EDS unit has built a datacenter that largely relies on cold sea air to keep servers chilled and — by doing so — cut the datacenter's cooling power needs in half. The expected reduction in electricity costs, from $15 million to $7.5 million (about Rs 75 crore to Rs 37.5 crore), is achieved through a combination of factors that may begin with a 12-foot raised floor, which is easily three to four times the height of a typical datacenter raised floor. The higher floor allowed designers to install fans 7.5 feet in diameter that bring in outside air to cool the 305,000 square-foot datacenter. The larger fans are more efficient than a series of smaller fans, said Ed Kettler, an EDS fellow. The chilled air moves up from the pressurized raised floor through vents into a cold aisle between the server racks, and then is removed via the hot aisle. The outside cool air can be used virtually year-round, said Kettler. This use of free air cooling is part of an overall approach in datacenter design intended to capitalize on environmental conditions in datacenter building. Google, for instance, has built a datacenter in Oregon, that uses hydroelectric power, and Microsoft has said that it intends to use outside air to help chill a massive datacenter in its building in Chicago. Datacenters and servers account for more than 1.5 percent of all the electric power consumed in the US, which is more than all the electricity consumed by all the televisions in the US, the US Environmental Protection said in a 2007 report on the power needs of IT. Other steps taken by EDS to cut power use include painting server racks, which are typically gray, off white — a far more reflective color that reduces the need for lighting. An intelligent lighting system that manages and focuses light where it is needed is also in use. —By Patrick Thibodeau

Social Networks Under Attack

trendlines

i n n o vat i o n

2 . 0 As more workers spend a greater part of their days on social networks like Facebook and Twitter, hackers have turned their energies toward spreading their malware across those services, harming workstations and company networks. That's the contention of a recent report measuring Web 2.0targeted hacks that occurred in the first quarter of this year and was conducted by the Secure Enterprise 2.0 Forum, an industry group aimed at enabling the safe use of social media in the workplace. Increasingly, hackers have turned their attentions away from e-mail, in part due to the fact that people spend more of their time communicating with friends, family and colleagues over Facebook and Twitter. In addition, the e-mail environment has reached a level of maturity that makes the new frontier of social networks more attractive to hackers and spammers, says David Lavenda, a vice president at WorkLightt. The list of security hacks on Web 2.0 and social networking sites were impressive, the report found. Nearly one-fifth were caused by authentication hacking (where someone is able to gather user names and passwords). Others included database hacking (21 percent), content spoofing (11 percent) and cross site scripting (XSS), an incident where malicious code runs on a webpage and eventually can enable phishing attacks. According to the report, nearly 30 percent of attacks lead to the leakage of sensitive information. Around 13 percent resulted in actual monetary loss, while more than 10 percent installed malware on computers or their corresponding networks. The report will likely fuel the resolve of CIOs and heads of technology that have banned social networks in the workplace. In the market, Lavenda says CIOs have been more willing to let employees use the tools, but have been at times reluctant, due to anecdotal stories about security breaches. The report, he says, will allow them to know what those threats are and make informed decisions about letting users access the sites. "Forbid it or not, most CIOs know users will find a way to use these tools anyway," he says. "This report moves the market forward because they know what the threats are and can see about addressing them. Once you know what the threats are, then you can go about mitigating them." Web

—By C.G. Lynch 10

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Brian Wells

Applied Insight

A Dose of Dashboards These eight steps helped the University of Pennsylvania Health System successfully set up dashboards to store patient data.

Illustration by unn ikrish nan AV

ospitals, medical centers and other health systems are increasingly using digital dashboard technology to provide relevant, up-to-theminute information to clinicians in a visually rich format to improve the quality of patient care. Designing and using clinical dashboards requires substantial physician involvement and a well-defined process. The University of Pennsylvania Health System or Penn Medicine is currently in the midst of developing the Penn Data Store, a data warehouse and series of individual dashboards, to serve our clinicians and researchers. The Penn story may be of use to you and your organization as you move forward in the world of dashboards. Our goal was to create a single data storehouse with all patient, administrative, financial and supply chain data mapped to a standard data model and vocabulary. We created a number of objectives in support of this goal in areas such as patient-care quality, safety, compliance, research and finance. After evaluating a number of choices, we decided to develop our dashboard using the enterprise edition of Oracle's business intelligence suite. We assembled a wide-ranging team and divided each dashboard project into the following phases:

Meet Users to Determine Data Needs Many users and potential users of dashboards aren't familiar with the systems' power and capabilities. They typically use non-interactive spreadsheets and graphs that present data in fixed rows and columns and lack the flexibility of Webbased tools.

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Applied Insight

The first step in this phase was to inform clinicians of the many additional possibilities that a more powerful tool offers. We did this by first building sample dashboards to demonstrate the tool's capabilities. We then asked the clinicians to identify several key measures, dimensions and filtering criteria for the dashboards they were interested in. For example, a key measure on our sample Medication Administration dashboard was whether the patient's medication list was reviewed with the patient during a visit. One user said he would be interested in seeing that dashboard display monthly and annual statistics, such as percentage of patient visits during which medication lists were reviewed, both for individual physicians and group practices as a whole. After gathering such input from users, we identified the source data and actions necessary for responding to each request and configured the physical layer accordingly. Next we demonstrated the graphical capabilities of the tool to our clinicians in order to help expand their thinking about how they could use the dashboards. One user wanted to make it possible for physicians and group practices to compare their performances on certain measures against those of their peers. The ability to summarize and access actual patient visit details was important for doing that. From a security perspective, however, patient names couldn't be displayed and physician names could be shown only to members of the same group practice. The user decided to use bar charts and organized the dashboard into pages that showed annual and monthly statistics by group practice and other metrics. Users could learn more by clicking on the bars in the charts or by clicking on a physician's name if they were in the same practice.

navigation through the dashboard pages. We also developed online documentation for each dashboard and for each page of each dashboard. The overview information for each dashboard is presented as the first page. Additional comments about a specific page of the dashboard are included on the appropriate dashboard page. That makes it easy for viewers to understand the aggregate data behind the dashboard pages as well as any data limitations

For dashboards to deliver the most benefit, users must agree on presentation standards before the design phase begins.

Design the Presentation Layer For dashboards to deliver the most benefit, users must agree on presentation standards before the design phase begins. It's crucial to achieve agreement on items such as color schemes, graphical objects and navigation standards so future dashboards will look, feel and behave consistently. This will improve user satisfaction and reduce training demands for each new dashboard. Designers must think carefully about the hierarchy of the data they want depicted in the dashboards and what levels of the hierarchy will be visible. In our example, the hierarchy is practice-physician-patient, in that order. Depending on a user's security status, he may or may not be able to see the patient data. Once the hierarchy and associated measures such as year, month and practice name were grouped into a dashboard page, we selected the graphical elements. We chose histograms, line graphs; pie charts and simple tables to present the data in an intuitive fashion that met users' needs and simplified 12

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and assumptions before seeing the particular data they're interested in. This helps avoid confusion or misinterpretation of the results.

Next, the Semantic Layer The semantic layer maps the presentation layer to the physical one. Developers prove their worth in the design of this layer. Defining patient populations by disease categories, grouping drugs hierarchically by therapeutic area and organizing physical locations are examples of the challenges that the semantic layer's designer faces. Users play a key role in formulating those definitions. In-depth knowledge of both the presentation layer design and the physical data models is essential.

Finally, the Physical Layer Try not to change the design of the physical layer. Whenever possible, avoid creating an entire new physical data structure, because doing so generates the need for additional extract, transform and load (ETL) steps each time the clinical data warehouse is updated. Redundantly storing data produces additional storage, backup and maintenance costs and opens up the risk that duplicate copies of data won't be updated with the same frequency as the original. If the designer and data architect determine that redundant structures are required, however, the designer should clearly document that need and ensure that the online documentation in the presentation layer reflects the redundant sources. The ETL developer will also need specifications for creating and maintaining these redundant sources. Finally, using realistic data volumes, simulate dashboard performance during this phase by executing typical data queries for each page, drill-down and filter selection.

Develop and Test All Three Layers Users who are new to the dashboard development process will likely need to see how the systems operate with real data. We

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Applied Insight

have found it useful to introduce clinicians to a working prototype to gain early feedback on the design. Regular weekly demo and review sessions then help developers refine and test the design. When you're engaged in this phase of the project, take care to manage scope creep, since participants might be tempted to request new capabilities or data that weren't in the original design. Put off responding to such requests until a subsequent release of the dashboard.

Perform Quality Assurance Here are several quality-assurance requirements we developed at Penn Medicine: Use data from the actual data warehouse, rather than simulated or test data. Include monthly and quarterly data warehouse updates during the QA process, especially when the data being used in dashboards will cross calendar months, quarters and years. A year-end data update would be ideal, but most projects can't wait that long. Compare dashboard data to the original source systems, to ensure that no translation or presentation errors were introduced during development. Test system performance and response times with large amounts of data to ensure that the dashboard responds effectively to users' needs.

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Conduct Pilot Tests Before making a dashboard available, we ask a small group of users to pilot-test it for a few weeks, as a short extension of the QA phase. If the pilot group recommends moving forward, we proceed to the general rollout. If the pilot group identifies problems, the development team resolves them.

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This phase involves these major components: User orientation: New users may need a brief training session. Those who have used dashboards in the past should be able to use the new dashboard with no assistance â&#x20AC;&#x201D; if the presentation layer was designed well. Support documentation: Gather design and operational specifications and post them on support sites. Help-desk hand-off: Write scripts and give them to the help desk for guidance in responding to support calls. This approach has met our needs. Our next focus will be on evaluating the contribution that dashboards make to our patient-care quality, safety and compliance goals. CIO

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Brian Wells is chief technology officer for information services at the University of Pennsylvania Health System. Send feedback on this column to editor@cio.in

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Arun O. Gupta

Peer-to-Peer

The Chimera of IT-Business Alignment Faced by the pressure of shrinking budgets, IT and business departments are working together to deliver real results. Is constantly analyzing their alignment really relevant?

Illustration by MM Shanith

ver the last decade or so, every CIO event, technology research organization, IT vendor and consultant has put forward a view on business-IT alignment. Like a self-fulfilling prophecy, the debate has also begun to feature on the CIO agenda. Professors, students and pretty much anyone with access to a slide deck have propounded their own theories on why business and IT are not aligned â&#x20AC;&#x201D; and how it can be fixed. Some have even gone as far as to create tools to measure its progress. However, although many prescriptions on how to fix this malady have been suggested, most of them lack both meaningful diagnosis and an analysis of the root cause. In the meanwhile, the onset of the economic slowdown, has created renewed interest in the subject. The words have changed, the debates have become more animated, and the context is only somewhat different but the message is the same: alignment needs to be found. Itâ&#x20AC;&#x2122;s come to the point where green IT, SOA and SaaS are discussed simultaneously in the same forum. All the talk brought about a saturation point, and little significance is given to either proponent or opponent, neither business nor IT. At a time when greater emphasis is being placed on quick results, both business and IT leaders are beginning to understand the necessity of working together effectively, and are taking active steps to do so. After talking to several CIOs, I have come to the conclusion that the continuing debate on business-IT alignment is no longer relevant.

Beginnings of a Myth Historically speaking, the perceived gap between IT and business emerged mainly due to poor communication between the two departments. In the initial stages of the evolution 14

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Arun O. Gupta

Peer-to-Peer

of the IT organization, an important challenge that many companies faced was translating what the tech guys said so that the other side of the table could understand. This failure to communicate gave birth to the hypothesis that there was a lack of alignment between IT and business. Subsequently, IT was labeled a service provider. As a service provider, IT was expected to be subservient to business and be at their beck and call. They could not challenge situations in which business leaders did not effectively communicate what they wanted, or failed to use solutions that were provided to them. The mediocrity of communication and the flawed solution that subsequently followed was frequently attributed to the IT department — immaterial of the fact that sales, marketing, or finance often ignored to align themselves with their service providers like transporters. However, over time, the language barriers started to disappear. On one hand, IT teams were beginning to learn the terms of business, and on the other, the business was growing more aware of the benefits of technology. The service provider tag was gradually replaced with the more weighty ‘business enabler’. The alignment paradigm continued to be discussed, although it was acknowledged that some improvement had been made. Various case studies were put together, which

literally installed in glass-houses. Expectation levels rose so quickly that most IT leaders had a hard time keeping up — the sudden change in role was not easy to adapt to. The agile among them, following Darwin’s theory of survival, were quick to respond and moved ahead of the learning curve. Many, however, were left behind.

The Irrelevant Alignment Discussion In today’s scenario, discussions around alignment are no longer as relevant as delivering real results. Faced with the pressure of smaller budgets, leaders from all functions are working together in cohesive teams and following a single agenda: survival. In companies in which IT and business departments shared common ground, early results have been extremely positive. In a few cases, IT leaders have been conferred additional responsibilities. With rare exception, they have been able to rise to the occasion and do justice to the expectations laid on their shoulders. While it may take another decade for consistent and explicit recognition or an automatic route to the board room, CIOs have already begun to work actively on engaging with business leaders on equal terms. Efforts are being made to move away from perceptions that are created by tags such as ‘service providers’ or

At a time when results are vital, the collaboration between business and IT is more likely to achieve success than a debate over a gap — real or perceived — in their relationship. detailed how some CIOs were creating environments that were conducive to alignment — and those who weren’t. Rarely however, was reference made to the challenges that IT faced. Frustrated, IT leaders either moved on greener pastures, or resigned themselves to their current positions.

Growing Out of the IT Role Over the last year, the uncertainties and challenges caused by the recession have brought IT to the forefront. Business leaders have opened their eyes to the potential of technology solutions to cut costs and boost revenues. Expectations rose to a point where IT leaders, who had an eagle’s eye view of the entire business, were expected to drive operational efficiencies and process improvements, and the alignment discussion was grudgingly set aside for later. Some companies also entrusted their CIOs with the objective of driving information-lead decision making. This new found visibility pushed many CIOs to jump at the opportunity to be seen as equals to their business leaders. IT reveled in its new role and endeavored to move ahead. While the pressure on budgets continued to grow stronger, the expectation to do more with less now had a different meaning. However, this was still new territory for IT. Revered for its technological skills, it was relatively isolated earlier and

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‘business enablers’. CIOs and their business peers are already working in tandem to create the progressive changes that their enterprises need. The consumerization of IT has also contributed towards bridging the gap between the two departments. Corporate IT is no longer the glass house that it once was. The sustenance and progress of this trend will now depend on individual IT leaders and how far they will push ahead with their advantage. Several CIOs are coming to the forefront by either moving laterally to other roles, or in many cases working hard on being recognized simply as good IT leaders. No longer constrained by the IT badge, moving up in the enterprise is now a matter of personal drive and choice. All the lessons on teamwork that were incorporated in our early education are now being applied to corporate entities. At a time when real results are considered to be of utmost importance, exploiting the collaboration between business and IT departments is much more likely to achieve success than discussing scenarios in which a gap — real or perceived — exists in their relationship. CIO Arun O. Gupta is customer care associate and group CIO at Shoppers Stop, a large Indian retail chain. Send feedback on this column to editor@cio.in

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Cover Story | Web 2.0

Normally,

intranets aren’t the stuff of CIO epiphany. Neither are corporate vision statements. But normal has never been the way Reliance Communications has played -- from when it launched its services that promised to make phone calls cheaper than sending a postcard to creating a Web 2.0-based intranet on a scale few people have seen. “We will offer unparalleled value to create customer delight and enhance business productivity.” That’s the corporate vision that spurred Reliance Communications’ CIO Dr. Sumit Dutta Chowdhury to use Web 2.0 technologies to give staffers a new Intranet, one which they could customize to their needs and boost

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PhotoS by SrivatSa a Shan dilya

By Gunjan Trivedi

Reader ROI:

Why Web 2.0 technologies doesnâ&#x20AC;&#x2122;t need to be a soft benefit. How it can enhance collaboration, improve employee productivity and cut costs What it can do to improve decision-making

Dr. Sumit Dutta Chowdhury, CIO, Reliance Communications, decreased server load by 40 percent and IT support calls by 25 percent with a Web 2.0-based intranet.

Cover Story | Web 2.0 productivity. He says he had two goals when he set out: get users to love the intranet and drive business productivity. “In addition to servicing millions of customers, we had to serve our own employees as well. They are very much our customers,” he says. But as a contemporary American author Sue Grafton says, “Ideas are easy. It’s execution that separates the sheep from the goats.” And Chowdhury and team were faced with the very real risk of looking like goats if they failed to overcome the new intranet’s big problem: its ability to handle the needs of over 60,000 employees. “Considering the scale at which we operate, there were two major issues. One, there wasn’t a single off-the-shelf product that could support this huge number. Two, since the old intranet had been around for over seven years, the newer platform had to be a ‘first-time-right’ product if it was to be successful,” Chowdhury recalls. What made their job harder was that the project was being run under the radar. With the high number projects already in the pipeline, Chowdhury and a 30-man team took time out of their busy schedules to get it off the ground. And intense brainstorming sessions and long hours of development later, the employees of Reliance

Communications tasted the first version of the new collaborative platform, christened ‘My World’. And they loved it. According to an internal survey, 98 percent of employees said that they were delighted with My World. It improved employee productivity by 17.6 percent and reduced the load on various application servers by 40 percent. “It was the computer that had alienated employees from one another. Now, it is the very same computer that has brought us back together. We can engage among ourselves much better,” says K.S. Kumar, head of administration and group CSR at Reliance Anil Dhirubhai Ambani Group.

Our Company, My Problems For a little over seven years, the employees at Reliance Communications used a static intranet-cum-knowledge management system they called Gyan Mandir or Temple of Knowledge. Every intranet-based application within Gyan Mandir had its own URL and unique login credentials. Although staffers used the same usernames and passwords for all applications, they still had to log individually to their applications. Post the much-covered Reliance Group split, the newly-formed Reliance

Communications underwent a complete re-branding exercise -- except for its intranet. “The look and feel of intranetbased application depended on who created it, what time it was created and who ran it,” recalls Ashok Shah, vice president of IT Business Excellence at the CIO Office. Reliance Communications’ backend ran on an IBM platform. The organization used Lotus Notes and a Domino-based workflow management system, and had a lot of trained Java developers working for it. Intending to tap into this in-house resource, Chowdhury decided to embrace a Web 2.0-based infrastructure to revamp the static Intranet. “We looked at a few products that were trying to do something similar. Though a lot of people talked about being Web 2.0, we didn’t find a fully mature, implemented system on a scale we needed. For a solution like this, the rubber really hits the road when you have over 60,000 users. IBM had three separate applications to make up for a single composite Web 2.0-based ecosystem. Hence, instead of going for the disjointed apps, we decided to glue all the Web 2.0 technologies together with knowledge management and single sign-on, and create a world of our own,” says Chowdhury. Google’s personalized and customizable interface, iGoogle, was chosen as a design framework for My World. The premise was straightforward: “Why should we determine what a person wants? Users can create their own intranet based on what they do on a day-to-day basis. They should be able to accomplish at least 90 percent of their jobs through one screen and not have to log into different applications,” he says. There were other reasons behind My World. “We wanted to achieve three targets with the widgets and dashboards. First, we

“The computer had alienated employees from one another. Now, it is the computer that has brought us back together with My World.” — K.S. Kumar Head, Administration and Group CSR, Reliance Anil Dhirubhai Ambani Group.

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Cover Story | Web 2.0 wanted to make the organization portable, where heavy files were not sent via e-mail. Second, we wanted to contain the distraction that comes with open access to the Internet. Instead of people spending time on the Internet, we would bring various features such as news and stock indices to people. Third, we wanted users to have single sign-on to various applications and leverage reports off dashboards rather than directly accessing application servers,” says Mahesh Patil, GM IT, Reliance Communications. While 30 people worked on getting the infrastructure ready and developing My World's user interface, the company ran a three-week campaign on the old intranet Gyan Mandir. Their efforts paid off quickly. In about three months the first version of the Web 2.0-based My World using Java, J2EE, .Net, Eclipse 3.5, HTML, XML, and AJAX with an iGoogle format was rolled out with 40 widgets in December 2008.

My World of Widgets My World was created with strong security features, rules, workflows and role-based access controls and a single sign-on. It offers architecture for employee participation, tapping collective intelligence and hosting user-created content drawing on easy-touse Web 2.0 applications, which encourages better communication and collaboration. My World integrates dynamic data from several internal systems, front-ending on a customizable interface. It combines the capabilities of wikis, blogs and file repositories to provide dashboards that aids business activity reporting, interaction, data searches, mentoring, training, and knowledge sharing. It interfaces with various apps and offers availability of realtime data. Moreover, My World accelerates shared business processes and mashups for better business insight and sharing costs. The My World tech team averaged about 30 widgets a month and today the intranet has over 200 widgets and dashboards. One of the key widgets is a virtual extension of user’s workspace called My Place, allowing geographically-spread teams to leverage business insight, share data and take betterinformed decisions. It is an online store with inbuilt access control mechanisms. Teams across Reliance Communications use My

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“The huge volume of users logging onto SAP created performance bottlenecks. Now reports are one click away.” — Mahesh Patil, GM IT, Reliance Communications

Place to store project-related resources (like documentation, reusable components, and schedule details) in a common ‘place’, which is accessible to all authorized team members. “This introduced tremendous savings in network traffic and storage space. Otherwise, people moved files via e-mail. It created havoc on the network,” recalls Shah. My World File Repositories allows secure replication and data backup of a user’s desktop files. Multiple folders can be uploaded in bulk and structured for easy access. This interface guarantees the integration of existing resources seamlessly with the least effort and low cost. Another widget is My Ideas, a platform where employees can freely contribute their ideas, suggestions or feedback while identifying new opportunities. My World Wikis, in the meanwhile, presents a collaborative and organized knowledge management database. This interface allows users to access or modify or link files, blogs, or other wiki pages. “The real concept of wikis has not been leveraged by

the business community yet. In fact, plenty of things like adding perspectives to reports or imparting training can be done,” says Chowdhury. “Tomorrow, while building reports, an employee can add his comments to the numbers he puts up, which a seniorlevel manager can right-click on and read,” says Chowdhury. “Moreover, best practices across businesses can be recorded and shared using wikis,” Shah adds. My Reports provides an aggregate of various data repositories to empower users to dynamically create data mashup reports. A business dashboard is available for every business vertical, operations team and support service. Monolithic reporting engines such as SAP, Business Objects, SAS and other third-party database applications, which used to have their own front-ends, have been moved to a Web 2.0 format. “In our environment with its multiple operations and projects teams, it becomes difficult to gather data at one place. A lot of structured information needs were REAL CIO WORLD | J U LY 1 , 2 0 0 9

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Cover Story | Web 2.0 met by reports pushed out via e-mail. This was complicated because users needed to track e-mails and this became hard within a few days,” says Nihar Rao, head of Wireless Operations, Reliance Communications. “Traditionally, there has also been a multiplicity of portals. Every time a new group head had something new to say, we created a new portal. Saying that it was cumbersome to find data is an understatement.” On another front, e-mails requesting approvals are re-directed to the My Approvals folder in the Lotus mail template, thus reducing the time taken to trace, approve or reject requests. “From midmanagement to the top, managers are all approving something or the other. These approvals used to come as e-mails. We developed a widget called My Approvals. Everything pertaining to approvals goes under this widget,” says Chowdhury. It’s a widget the staffers love. Within a month the core team figured that over 90 percent of approvals were transacted via the widget. Since users did not directly log into SAP, it brought down the load on servers, which brought down the cost of infrastructure. Convenience is a key ingredient of the widgets. There are workflows behind each application and now instead of showing up as e-mails, workflows appear in the widgets. These are better compared to the Gmail widget on iGoogle. A Gmail widget doesn’t show more than a set number of e-mails and any action on a listing leads a user to the main Gmail window. An e-mail widget on My World, however, is a full-blown e-mail client that allows users to scroll through all mail listings and enables transactions such as reply, forward, etcetera, from within the widget. Now users don’t need to access their original e-mail clients. My Services offers a customer self-service solution for online account management, e-commerce solutions and electronic bill analysis. Users get 24x7 online support. They can view their 20

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bill, pay them through various electronic payment gateways and raise and track online service requests. Then there’s the attendance check widget. This offers a single-click leave approval and attendance record view of direct reports, extrapolated from SAP at the backend. Earlier, managers were not sure about the location of their traveling employees. Now they can check it in the employee attendance report. The data is directly captured from the entrance points at offices where employees swipe their ID cards. “A lot of people used to log onto SAP and check whether the system was recording their in-and-out time correctly, since pay is dependent on this. The huge volume of users doing this created performance bottlenecks in the backend. And managers found it hard to track the attendance of team members in other locations. Now, they can get these reports with just one click,” says Patil. My Call allows users to set-up phone calls through a widget. A user needs to select his or her number (whether PSTN extension or

mobile number) and also specify the number to be called. The application enables the PBX to trunk the call. The My SMS widget allows employees to create groups or a personal directory of colleagues they need to SMS. Users then key-in their message through the widget, select the recipient’s number and the SMS is sent out instantly. The recipient’s SMS reply is received on the user’s mobile phone. The widget interfaces with the mobile billing system and bills the sent SMSes to the employee’s monthly usage bill. My World is a powerful content management hub that integrates with various business applications across the organization. It handles bulk document management and business mashups for internal stakeholders. Online capsules of the latest news related to business, sports, entertainment and informative videos on My World provide ready recreation and ensures ‘contained distraction’. Updated news feeds from external sources, media, sports, stock market, technology, finance, and other information on upcoming events keeps employee updated on external happenings, without directly logging onto the Internet. One of the widgets also enables users to figure out seat availability across all trains between a specified origin and destination stations or the PNR status of a booked ticket. All this information is captured from the Indian Railways sites periodically, reformatted, and displayed. “This feature is unique because even on the Indian Railways website seat availability can be checked only by train and not for all trains between

“We've seen a 17.6 percent increase in productivity. Basically, we have gained a day’s worth of work every week. This is the direct impact of My World.” — Dr. Sumit Dutta Chowdhury CIO, Reliance Communications

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Cover Story | Web 2.0 the two stations at the same time,” says Chowdhury. My Network, the social networking widget of My World, enables employees to connect with colleagues through the intranet by sharing profiles, buddy lists, blogs and scraps with a selected list of friends. “My Network is social networking site that simulates Facebook. It is a complete in-house social networking platform. A green Just like iGoogle (above), RCOM's My World gives users a choice of widgets and dashboards to work with. icon shows that someone is available and is using My World, at which point users work every week among 20,000-plus users. operations teams are not increasing their can call to a PC, a phone, a mobile, or e-mail, You can see the economic value add of the sizes while their transactional values are SMS or chat with a colleague,” says Patil. application. This is a direct impact of My increasing. We are going to launch IPTV In addition, its HR related widget called World,” states Chowdhury. and I can bet that the DTH and IPTV teams ePeople Solutions helps employees resolve All report generation activities under are going to work together and I will not be queries, monitors the status of a query My World has reduced a significant load required to add more people to launch the and get an online acknowledgement and from parent systems. These systems can new business. When we launched GSM, response from the concerned authority. now be used exclusively for core operations the CDMA teams did not add anybody increasing system productivity. It has in business operations. The same team reduced the load on various application handling CDMA is now handling CDMA Worldly Advantages servers by 40 percent as fewer servers and GSM operations,” says Chowdhury. The telecom major has always been avantare required to store consolidated data, Going forward, Chowdhury and his garde when it comes to technology. The resulting in lower power consumption. This team wants to roll My World out for the rest My World intranet has further enhanced has reduced disk storage, network traffic, of the group’s companies. My World has employee engagement, enabled efficient and backup costs. There is a 10 percent life of its own, he says. “It took some effort communication, introduced visible reduction in the number of applications and to go live. Now that it is live, we have teams knowledge sharing practices, offered flexible related maintenance costs and a 25 percent supporting and developing it. Bandwidth work models and brought in higher levels reduction in IT support calls. will be properly allocated to it. And based of community participation. My World has The green IT initiative of My World has on bandwidth we will commit to people on aided in showcasing integrated knowledge also helped the huge telecom organization how My World can be leveraged. If we want at an individual’s desktop. encourage a paperless environment thereby to do it for Reliance Capital for example, we Its dashboards provide quick and easy reducing communication and printing costs. would need to do a fresh Capex project, and access to the right information at the right Post an awareness campaign where users we will have to bring about 10 people to do time, empowering senior management to were shown that they were responsible for this project for another company. Going make prompt and better-informed decisions. the axing of about 1,800 trees, they saw a 22 forward, everything will be measured with In fact, My World helps senior management percent reduction in paper consumption. an ROI. We will use full Capex planning enable faster revenue realization, reduce My World increased the collective model for this,” he adds. CIO revenue losses, improve risk mitigation and knowledge capital and helped capture tacit enhance customer satisfaction. information from within the organization. “According to an employee survey, we Its features helped the organization save see a 17.6 percent increase in employee about 20 percent in training time and cost. productivity based on hours saved per week. Gunjan Trivedi is assistant editor. Send feedback on this “And by having these dashboards, the Basically, we have gained a day’s worth of feature to gunjan_t@cio.in

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Cover Story | Web 2.0

Why you Canâ&#x20AC;&#x2122;t Ignore the

Browser

The new variety of browsers and an increased dependence on browser-based applications is changing how IT looks at the tool. By Juan Carlos Perez

Organizations

The importance of browsers as an enterprise application

have traditionally devoted minimum attention to Web browsers, but IT departments feel that they need to change that hands-off strategy. In the past two years, a variety of factors have made browsers a much more important piece of business software for IT to deal with. One consideration has been the rising popularity of cloud computing in the enterprise, which has led CIOs to green-light the adoption of Web-hosted applications of various types, like office productivity, collaboration, and CRM. In addition, on-premise enterprise applications, whether in-house or commercial products, increasingly favor browsers as their frontend components. Last but not the least, is the rising range of viable Web browsers. Microsoft's Internet Explorer for a long time was the only browser option, but today there are significant user bases for Firefox. Forrester Research reports that IE holds 78 percent of the installed base, Firefox 18 percent, Chrome 2 percent, Safari 1.4 percent, and Opera 0.2 percent. Even within the IE family, fundamental changes in IE8 in many ways mean IT should treat it as a separate browser. The greater dependence on a larger stable of browsers, not to mention their numerous versions and plug-ins, complicates the environment that IT must manage, with greater impact on the business when compatibility or other issues arise. And the pace of browser updates is only adding to the pressure.

The challenges browsers represent

The Browser as an Enterprise App

Why itâ&#x20AC;&#x2122;s hard to use just one

"Enterprises need to think about the browser as a productivity tool, not as a transparent application. They need to look at browsers more strategically," says Sheri McLeish, a Forrester analyst.

Reader ROI:

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Cover Story | Web 2.0

"The browser is one of the most important pieces of software we have right now," says Andy Armagost, the Unix/Linux system administrator at Brigham Oil & Gas. The browser is the front end to various applications, including Yahoo's Zimbra Collaboration Suite, which is the company's main e-mail and collaboration platform. So it's not surprising that "a good portion of the help desks requests we get are related to browsers, like needing a particular plug-in to do something on a particular Web site," Armagost says. At Brigham Oil & Gas, the browser of choice is Firefox 3 because the IT department believes it offers better performance and is more secure than IE and previous Firefox versions. Thus, Brigham Oil & Gas has designed several of its in-house applications specifically for Firefox. Still, the IT department keeps an eye on the other browsers. It has to track and support IE, which is the only browser option for certain sites and Web apps that use ActiveX technology. And it tracks Google's Chrome; though still young, Chrome promises interesting improvements in performance and other areas, Armagost says.

Don't Ignore Browsers But Brigham Oil & Gas' hands-on approach to its users' browsers is the exception rather than the rule. A recent Forrester Research study found that 60 percent of enterprises are still using IE6, an "old" browser. These hands-off enterprises are depriving their time-strapped users from the security, performance, and functionality enhancements that newer browsers like IE7, IE8, Firefox 3, Chrome, and Safari 4 can offer, says Forrester's McLeish. That IE6 is by far the most widely used browser among enterprises reflects most IT departments' lack of interest in browsers. "There's a tremendous lack of education for employees from their IT departments around browsers," McLeish says. However, this laissez-faire approach toward browsers won't last long, McLeish says: "The rise of software as a service will force enterprises to at least come up with a browser strategy for their workforce."

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One Browser Won’t Fix It Keeping up with the latest about browsers, their different versions, and their plug-ins is getting harder, not easier. "You certainly have fragmentation and confusion in browsers today because you have a lot of innovation coming from the major browser companies," said Kris Tuttle, founder of Research 2.0, a research company that specializes in emerging technologies and investment. But standardizing on one isn't the answer to the diversity challenge that today's browser choices create. Even for a small organization like Research 2.0, Tuttle has found the need for all team members to use several different browsers for the various Web applications the company uses. Research 2.0's preferred browser is Firefox, which it uses for Google Apps and Gmail, its primary e-mail system. Employees also like Chrome, but other software and sites run only on IE, he said. "The fact is that you probably end up with Chrome, Firefox, IE, and maybe Safari on your machine, and you'll use [one or another] depending on the application," Tuttle says.

Browser Choice Hell The new multi-browser reality is a challenge for developers, particularly if they create public-facing Web sites or commercial Web apps. For example, Zoho, which sells a Web-hosted suite of communication and collaboration software for SMBs, has had to increase the time and resources it spends tweaking and supporting its apps for different browsers. "It's a constant effort and it's not insignificant," says Raju Vegesna, the company's product evangelist. "We need

Browser Share For May Internet Explorer

65.5%

Firefox

22.51%

Safari

8.43%

Chrome

1.8%

Netscape

0.74%

opera

0.72%

other

0.3% Source: Net Applications

to make sure our apps work perfectly not only with the different browsers and their versions, but also with their plug-ins." Guillermo Söhnlein, who is a consultant at Fortivo Consulting for a variety of technology startups, has seen the difficulty firsthand in some of the software developers he has worked with. "It puts a lot of added pressure on the application developers to make sure they have all the processes in place before they release the app and continually monitor the browsers after the app is released," he says. The difficulties not only hit startup software developers. A scan of known issues of Google applications shows how far-ranging the problem is. It reveals that when a Web application malfunctions, IT administrators and commercial developers have to do detective work to find out why a particular browser is misbehaving. For example, in the official ‘known issues’ page of Google Docs, one item titled ‘Document fails to load’ reads: "The latest version of Safari — 3.0.4 — for Leopard sometimes fails when loading a document. Betas of Safari work fine. We are investigating. Any information is welcome." Another item titled ‘Can't rename sheets within a workbook’ reads: "Firefox Skype extension often causes problems with renaming sheets within a workbook. As a temporary solution, you may want to uninstall the extension." The issue of browser variety is also very much on the radar at messaging vendor Zimbra, which stays in close contact with the browser vendors and gets access to early releases of new versions that normally aren't publicly available, says Kevin Henrikson, Zimbra's director of engineering. Zimbra handles the challenge by having its software detect the absence or presence of certain features in a browser, something Henrikson calls "feature sniffing." The company has created a database of browser capabilities and uses that to design software that can adjust its operations based on what is and is not available in a browser, without tying code modifications to a specific browser brand or version, he says. CIO Send feedback on this feature to editor@cio.in

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choice for the modern business user. But for anyone with extensive experience in pushing the limits of its portability (in coach, on the bus, anywhere power outlets come at a premium), the lure of the laptop may be losing its luster — especially in light of recent advances in netbooks. And while the wise foresee ARM-based netbooks running some flavor of Linux as the longterm solution for business users' portable computing fix, the (arguably) foolish among us hunger for even smaller devices. After all, today’s smartphones look more and more like computers, with keyboards, browsers, storage, pointing devices, and even applications. Not one to steer clear of a challenge or the chance to be labeled crazy by colleagues, I decided to spend a month seeing how far I could go toward replacing my laptop with one of the two more popular smartphones on the market, the BlackBerry 9000 (Bold) and the iPhone 3G. It seems as if everywhere I go people are constantly immersed in their Blackberry and iPhones. Surely, there’s more to them than e-mail and phone calls. I quickly learned the addiction of always-accessible By Galen Gruman e-mail, but even though the BlackBerry won’t replace my

The laptop-free promise of today’s nextgeneration mobile devices is put to the test. Can the BlackBerry beat the laptop? CIO columnist Galen Gruman thinks the BlackBerry leaves much to be desired. 24

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Illust ration by p c an oop

Portable yet powerful, the laptop has become the machine of

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Productivity

never came easy due to the Alt key’s tooclose placement, meaning that anything that required numbers or symbols had me going at a snail’s pace. Still, sending and replying to messages was a breeze, and I can see why so many businesspeople can’t E-mail: BlackBerry’s Key stop typing on their BlackBerrys. Business Benefit Addressing messages, however, exposed Research in Motion’s premier executive my first frustrations in forgoing my laptop BlackBerry, the BlackBerry 9000 (Bold), in favor of the BlackBerry. For example, offers a full QWERTY keyboard, midsize you can select someone from your address screen, built-in browser, the ability to run book as you type in an address, but the apps, and both 3G and Wi-Fi networking. BlackBerry doesn’t look up addresses of In other words, there's enough on paper people you’ve received messages from or to entice you to ditch your laptop, but previously responded to, so you have to not enough in practice to keep you from type those in completely. Those of us for regretting it. whom collaboration is key depend on the If anything, the BlackBerry is designed expediency of communication, and this primarily as a messaging device, and kind of extra labor adds up fast. it’s amazing how addictive messaging Also labor-intensive was keeping my on a BlackBerry can be. Too addicting, inbox free of unnecessary e-mail. Deleting in fact — over the course of the month, I messages is easy, but having to confirm had to develop a certain inner fortitude to whether you want to keep a deleted message consciously stop checking for messages and on the server each time is a real slowdown. attend to other concerns, like my family. Fortunately, there’s an option to stop that. Downtime on my train-and-bus What I couldn’t do was multiple-delete commute, where I normally catch up on messages unless they were contiguous, magazines, was no longer downtime. making it hard to get rid of the endless junk Neither were rides to and from the that streamed into my inbox. airport. Nor many moments standing in In fact, managing e-mails on the Bold line for coffee, groceries, and so on. ‘Going proved to be more of a pain than expected. smartphone’ kept me up with everything The lack of options for mail filtering or that was happening at the office and blocking spam on the BlackBerry is to be with colleagues, no matter the time zone expected for a mobile device, but timedifference between us. stamping messages based on when a Well, usually. Train tunnels between BlackBerry downloads them, not when stations had me riding out five-minute they arrived at the server, wreaked havoc connectivity gaps, thumbs poised on the on my message order any time I was not keyboard itching to reconnect to outside connected to the Internet, such as when world. And a trip to New York found me the battery died or I was on a without data service for a long plane. Choosing the Reconcile time, reminding me just how Reader ROI: option compounded the dependent on service providers Features of the problem, loading six months’ my always-on connectivity BlackBerry worth of archived e-mail addiction had become. What purposes the BlackBerry serves onto the BlackBerry — even I became proficient at twothough I had set a 30-day mail thumb typing in a matter Why it cant replace the laptop retention limit on the Bold — of days, although numerals laptop any time soon, I can see the pocketbased revolution coming where a device like it will edge aside a laptop for much of my day.

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all with the current date and time, burying real mail from that day beneath 9,000 ‘new’ messages. For many business users, organizing e-mail into folders is essential to remaining productive, as is the ability to sort e-mail based on rules — a functionality BlackBerry lacks. Using a BlackBerry Exchange Server to connect to my Exchange e-mail account for work meant my folder structure was replicated on the BlackBerry, and I could move messages to the folders without much trouble. But without Exchange mirroring the move on the server, I had to repeat that work back at my laptop. And once I moved messages on the laptop, they remained in the BlackBerry’s top-level index, keeping it cluttered. There is an option to actually move the mail, not just copy it — the BlackBerry is full of such options that are hard to know exist, much less find, even if you peruse the various setup options. Navigating folders on the BlackBerry was also painful. Getting to the folders requires several steps in the BlackBerry’s menu system (most things do, unfortunately), and once I was in a folder to see messages, I had to start at the top again to switch folders. Soon enough, I stopped using e-mail folders on the BlackBerry altogether. But the BlackBerry does offer worthwhile e-mail navigation. Press T to go to the top of your message list, B to move to the bottom, or U for the first unread message. Using a menu option, you can also search your messages by name, subject, message body, and e-mail account. I also set up my personal e-mail account on the BlackBerry, which provides a separate e-mail icon for each account so that you can switch back and forth easily. That said, if you've set up multiple e-mail accounts, the folders created for each share the same name, so you can’t really tell what REAL CIO WORLD | J U LY 1 , 2 0 0 9

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Productivity e-mail folder you’re opening. That confused me every time. The exception is an e-mail account set up through the BlackBerry Exchange Server, which establishes a root folder with a unique name. All in all, the BlackBerry sufficed for on-the-go e-mail. But its poor organizational capabilities for e-mail (particularly around folders) made it unsuitable as a message manager. You’ll still need a laptop or desktop for that.

Calendars and Contacts If you use BES (BlackBerry Enterprise Server), syncing the BlackBerry to your contacts and calendar is automatic, and thus easy. Yet the calendar proved to be hard to read and navigate, mainly because so much detail is stuffed into each entry. Of course, the BlackBerry’s lack of a true WYSWIG interface means that, even if some calendar information were hidden by default, you would have to wade through even more menu options to reveal it. Preferring too much information over more menu jockeying, I found myself thinking twice before opening calendar entries, relying instead on the title as a reminder. Where things get tricky is syncing contacts and calendar items outside of BES, at least on a Mac. The BlackBerry has no native sync capability with Mac (which I use), but you can download from RIM a free copy of PocketMac, which lets Mac OS’ iSync utility connect the BlackBerry to iCal and Address Book. All BlackBerrycreated calendar items are placed in an iCal calendar called PocketMac, and only iCal appointments set in that calendar are synced. But this is an iCal/iSync limitation that affects any device, not just the BlackBerry. But Apple is not to blame for an annoyance in the BlackBerry’s contacts manager. When getting an e-mail from a new person, I tried to add the person to my contacts list so that I wouldn’t have to type in the e-mail address in the future when composing e-mails. There’s a menu option to do so, but if the e-mail doesn’t include the person’s first and last name, you can’t save the new contact until you enter that in. It’s a requirement that shouldn’t be needed. 26

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Are You Ready to Ditch Your Laptop for a Smartphone?

ave you ever wanted to ditch your clunky laptop? Perhaps you were meeting a client for dinner or friends at a bar after work. Or you were trying to catch a flight in the morning and had to fumble with your laptop at the airport security check. Sure, laptops have become lighter and thinner. But they still need to be carried around. And this means checking it at coat-checks, making sure you don't forget it inside taxi cabs, and keeping a constant eye out for laptop thieves. Help is on the way: As smartphones grow in functionality, you might be able to forego the laptop for a smartphone. But before you get carried away, note that a smartphone can't replace a computer — at least, not yet. "Smartphones are still content consumption devices, not content creation ones," says Gartner analyst Ken Dulaney. "Every knowledge worker has to do content creation, so you've got to have a desktop or a laptop to do it." Today, a smartphone might be able to replace a laptop when you're on the road and then sync to a desktop at the home or office where you'll do most of your content creation. "That's a very valid scenario in some cases," Dulaney says. In the past, laptops replaced desktops even though desktops were cheaper and more powerful. Now desktops — thanks to smartphones — have an opportunity to turn the tables on laptops. That's what Don MacRae, a former investment bank executive and avid laptop user, hopes to do. He's dumping his laptop, buying a cheap PC and hoping his BlackBerry 8330 will handle his needs when he's on the road. "If you're going to be crunching numbers on Excel or writing documents all day, you're not going to want to do that on a BlackBerry," MacRae says. "But if you're managing people and on the phone a lot, or in sales and going on a quick overnighter to see a client, you could make a good case for traveling light with just a BlackBerry." It's still early in MacRae's experiment, but he can already see problem areas. For instance, he worries that he might need a document or e-mail from the archives that aren't on his BlackBerry. Or he might be unable to modify an important attachment. Dulaney says that MacRae's worries are the tip of the iceberg. Gartner recommends companies not to go this route, in part because users may run afoul of IT policies and face compatibility and performance issues. As to IT policy, Gartner tells companies to require users to view all company e-mails and attachments on a PC or laptop. That's because smartphones might not convert attachments properly. And as for performance, just try giving presentations on a BlackBerry. "Performance is going to be slow," Dulaney says, "and you won't be able to run all the software." And hiccups in a sales presentation can be deal killers. The biggest problem, though, concerns compatibility. "Compatibility is always a problem because of the nature of running different operating systems with different utilities on different platforms," Dulaney says. Data in slideshows, Excel spreadsheets and Word documents might be viewable on a smartphone, but the additional extensions and functionality may not be there. Even the viewing of Windows Office content can be tricky because Windows Office wasn't built to be scaled down and viewed on a small smartphone screen. "Sure you could hook up a keyboard, power supply and larger screen to an iPhone and run Office-in theory, but have you gained anything?" Dulaney asks. "You'd probably be better off with a laptop or netbook. The more you stay away from your desk," Dulaney says, "the more difficulty you're going to have." —Tom Kaneshige

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Productivity Documents and Apps: Awkward at Best E-mail is critical to business, but e-mail won’t do it alone. At least not for me. I work with documents — spreadsheets and text files, mostly — as well as with some online management tools. My BlackBerry has the DataViz Documents to Go software installed. Some carriers provide it at no charge; but for others it costs $70 (about Rs 3,500). I could open and edit Microsoft Office and PDF documents. (Note that the BlackBerry can’t display most formatting in Office documents, such as fonts.) They were a snap to open from e-mail attachments, even from zipped ones. Within the confines of the BlackBerry’s tiny screen, I could read documents, though zooming was awkward. The BlackBerry’s trackball is also hard to control, at times not seeming to move the pointer, other times zinging the pointer across the screen. I could perform basic edits, such as inserting text or deleting it, and apply basic formatting, such as boldface, to selected text. Through a somewhat awkward combination of menus and trackball highlighting, I could also cut and paste. Those who hope to write a report or re-work a spreadsheet on a BlackBerry will be sorely disappointed. It’s simply too hard with BlackBerry's limited UI and screen. And if you track revisions in Word, all that is lost when you save in Documents to Go, making it fine for touch-up and comment insertion, but not for real or collaborative work — you’ll need your laptop at the hotel and on the plane. As for using Google Docs, which we do at the office for shared planners, calendars, and working proposals, don’t bother. You can look at spreadsheets (one column at a time) and edit cells, and you can view calendars and edit individual events — with some serious effort. You can’t edit text documents. I surveyed several sales- and marketingoriented apps such as Salesforce.com and Salesplace. Clearly designed for a DOS-like environment, these formsoriented apps proved underwhelming. I had a lot of trouble with Salesforce, which was often not available and twice

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caused the BlackBerry JavaScript is disabled to crash and reboot by default, so be sure to (which takes forever). turn that on to use most Salesforce’s primitive modern sites. Second, interface requires endless navigation is difficult due menu selections, and to the tiny screen, limited registration and setups zoom-in capabilities, and are painful, and they the BlackBerry’s choice of required a reboot — both non-standard fonts. common problems with The columns Source: Gartner the BlackBerry. Salesplace view mode does help was easier to set up and somewhat, stacking all less menu-intensive, but also more limited of a page’s DIVs into a single column so in its capabilities; ultimately it was no that you don’t have to scroll sideways. better an option than Salesforce. The columns mode also tends to enlarge Clearly, access to customer information the text size, making it easier to read site and the ability to place orders is essential contents. Still, you need to have no other for salespeople on the go, and a mobile option for accessing the Web before you device should be handy for that. But the can consider using the BlackBerry’s BlackBerry’s slow performance — I felt browser on a regular basis. that I spent more time staring at the wait Of course, many sites offer a BlackBerryicon and progress bars than actually specific, mostly textual version. These using the applications — and awkward are essential to use the BlackBerry for app interfaces suggest a laptop or the Web. When I tried to check a JetBlue netbook is necessary for customer calls, flight’s status en route to JFK airport, the with the BlackBerry useful only as a standard Web page’s DIVs meant I couldn’t backup device. actually get to the flight-status part of the The apps available at the online page. Fortunately, many major airlines have BlackBerry App World store are not BlackBerry-enabled sites so that you can impressive, neither in breadth of offerings check flight schedules and so forth. nor (in my sampling) in capabilities. And These optimized sites are limited but they’re expensive. The store is hard to usable. Of course, having a site technically navigate, and there is no way to look up optimized for the BlackBerry doesn’t mean apps on a PC. App installation is also it is optimized for use: Yahoo’s BlackBerry awkward, with lots of confirmation page is so awkwardly constructed, for screens; some even required the BlackBerry example, that it’s not practical. be restarted. I quickly found myself waiting until Of course, downloading an app is one I had my laptop before using the Web — thing; being able to find it once it has except for specific transactions, such as been downloaded is another. Anytime I checking the status of flights or buses. wanted to use a downloaded app meant a treasure hunt was imminent. Was it in the Hang On to that Laptop downloads folder? The applications folder? If my fantasy of throwing the Bold The main folder? Any of the remaining against the wall is any indication, my seven folders? This got old fast. BlackBerry experience could be labeled a Worst, most BlackBerry apps proved to be disappointment at best. As a messaging pure torture, ones to use only when you can’t and travel companion device, it’s bearable. use your laptop (or netbook) or write yourself But the app and Web experiences are a note for handling later at your desk. painful to the point of being questionably relevant. Ultimately, I felt let down. And I eagerly looked forward to using my Web and Location Services: computer instead. CIO A Mixed Bag Accessing the Web on the BlackBerry is rarely a pleasant experience. First, Send feedback on this feature to editor@cio.in

139 Million The number of smartphones sold worldwide in 2008.

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Outsourcing

Ways to save Money on… Whether you’ve signed a contract with an IT-service provider, or you’re about to, keeping costs down is your first priority. Try these strategies to save on your outsourcing deal. By Stephanie OverBy In light of the current economy, you might have avoided

Reader ROI:

The advantages of a multi-sourcing strategy How increasing the scope of a contract can help cut costs Why exercising audits and benchmarking prices is important

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signing a new contract with your IT service provider solely to cut costs. Maybe you were seeking specific skills, or farming out non-core work to focus on strategic initiatives. But now, with your current contract in hand, you’re searching for savings under every possible rock. Alternatively, you may be looking to sign outsourcing contracts with new providers. Outsourcing experts, IT analysts, and optimistic vendors are predicting an increase in IT service deals during the second half of 2009. They foresee an uptake in outsourcing, driven by enterprises that are looking to increase IT efficiency and savings. Either way, under pressure to slash costs, you may cut the wrong corners and end up with disappointing results. The good news is, whether you're operating on a current contract, or you’re negotiating one now, there are plenty of ways to trim your IT services costs. Here are eight techniques that can yield significant savings.

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Outsourcing

Your existing Outsourcing Contract Try to enlist your service 1cost-cutting provider to identify new opportunities "Depending on how long your deal has been in place, you are likely to be in a situation where some of the employees of the outsourcer are more familiar with your technological environment and processes than internal enterprise employees," says Frances Karamouzis, research vice president for Gartner Research and Advisory Services. Ask your vendor to push accounting personnel for their best ideas on process and productivity improvements. Ask them to prioritize those plans that will

tend to produce savings in the current fiscal year, advises Karamouzis. The best outsourcing contracts generally contain provisions that require providers to work with customers in order to accomplish cost reduction, says Daniel Masur, a partner at law firm Mayer Brown. If your contract does not include any such provisions, create incentives, such as a formal agreement that offers employees with the best ideas a bonus or a small percentage of the savings, a credit for the outsourcer on the next invoice, or a gain sharing deal that will reward your provider with a portion of the savings achieved.

Your Next Outsourcing Contract 1 Be clear about scope

Before considering whether to start the outsourcing selection process, complete a thorough assessment of your IT portfolio to determine what can be outsourced, what can't be outsourced, and â&#x20AC;&#x201D; most importantly â&#x20AC;&#x201D; what shouldn't be outsourced. "Take a minute to step back and talk to your business customer about their needs and compare them with the IT services you currently offer," says Ben Trowbridge, CEO of outsourcing consultancy Alsbridge. "Doing so will provide you with greater insight into what IT services you should be buying from an external service provider."

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"Even if it is not provided for in the original agreement, gain sharing may be agreed to by both parties to fund projects, transformational activities, and cost saving initiatives that both parties are interested in, but that the customer is not willing or able to fund [on its own]," explains Masur.

Reap the benefits of 2 standardization and process maturity Remember those painful years your IT group spent toiling over process improvements so that you could work more effectively with your IT services provider? Well, put that CMM maturity level to good use. You may be able to move some work to a new, more cost-effective provider in an emerging offshore location with limited service level interruption. "One client was able to push for some very sophisticated development work to be performed by a firm in Pakistan, at a fraction

The emergence of scope creep during the outsourcing decisionmaking process is a major hindrance to finalizing a new deal efficiently and cost effectively, says Atul Vashistha, chairman of offshore outsourcing consultancy neoIT. "A thorough portfolio assessment also provides data that comes in extremely handy [later on]," Vashistha adds.

2 Adopt a multi-sourcing strategy

The competitive leverage you gain by signing on a small stable of preferred technology providers instead of a single vendor can not only reduce costs overall, it can also help to mitigate risk through redundancy and provide access to a broader or deeper talent pool, says Daniel Masur, a partner at law firm Mayer Brown. Such a multi-sourcing strategy may or may not cost more to manage. "But, if done right," Masur says, "it will offer benefits that more than offset any additional cost." If you do go the multi-provider route, you may want to create a service level penalty pool, says Marc Stark, a client executive at outsourcing consultancy EquaTerra. Each provider puts a certain percentage of their monthly revenue into a pot to pay penalties when end-to-end service levels are not met. In theory, service level penalty pools will help foster cooperation between the parties, though it's a difficult provision to get vendors to agree to, Stark says. REAL CIO WORLD | J U LY 1 , 2 0 0 9

6/29/2009 8:16:40 PM

Outsourcing of its outsourcer's cost," says Edward J. Hansen, a partner in law firm Morgan, Lewis & Bockius's business and finance practice. Hansen says the outsourcer and the Pakistani firm collaborated to ensure that the outsourcer could support the work after it was completed by the firm. Because both enterprises complied with established standards for integration, service was not compromised for the customer. Adds Hansen, "Without standards compliance on both sides there would have been serious SLA implications to this."

Increase the scope of the contract or extend the terms of the agreement. Re-examine your IT portfolio to see if cost savings might be achieved by transferring other functions to your outsourcing vendor. Or, consider extending your outsourcing deal beyond its current expiration date. Doing so may give you leverage to ask the provider for cost savings, says Masur, or

enable you to save money by renegotiating a longer deal.

your technology 4 Verify provider's performance

Vendors are facing the same tough times as their customers. Consequently, many providers are responding to the pressure by reducing headcount, underperforming, or shirking their contractual duties. Good governance is the key to holding the outsourcer accountable. "While closely monitoring the provider's performance may be time consuming and even costly, it is imperative that the customer make this investment," Masur says. "The time and cost associated with cleaning up the contractual mess that would almost certainly result from customer inattention would be far greater."

5 Turn down the volume

Do what you can to reduce your service volumes under your existing contracts.

connect your service lines to motivate your provider

Consider incorporating certain provisions in your contract that you allow to reinvest the savings in one line of service into spending on another line of service. For example, infrastructure savings in a particular line can be funneled into innovation or transformation in another area. If the outsourcing provider knows that it will win additional work, they will be more motivated to find and free up those additional infrastructure dollars, says Edward J. Hansen, a partner in law firm Morgan, lewis & Bockius's business and finance practice.

Efforts like application rationalization, whereby you analyze your existing application portfolio and decide which systems can be eliminated or consolidated, can lower your support costs. But be aware that any minimum volume commitments in your contract may mean you either have to maintain a certain level of business with your provider, or be bumped into a higher price bracket.

some, or all of 6 Renegotiate the contract

More than 40 percent of enterprises are discussing renegotiation with their outsourcer this year, according to a June 2009 Gartner report. "Not only are clients asking, but many are successfully negotiating different types of discounts," says Karamouzis. If you've been in your outsourcing relationship for at least a year, you should be renegotiating, too. Of course, there's one big caveat. "Be vigilant and make sure that

can oblige the vendor to prepare a proposal, at your request sometime in the future, identifying all viable means of achieving the desired reductions without adversely impacting business objectives or requirements.

5Keep it simple(r)

Include a contractual provision that obligates your outsourcing provider to reduce costs and charges in the future. The language should require the service provider to work with the client and/or other third parties to achieve reductions in the cost of service delivery, says Masur. You

Diligence in outsourcing negotiations is important, but don't over-engineer the contract. "Clients often ask for an extensive amount of service levels which they don't need and are not likely to monitor or measure," says Karamouzis. In the end, he adds, the client pays for all of those SlAs. What's more, you may not need solid gold service levels to support your business today. "Buyers of SaaS, virtualization, cloud computing, infrastructure outsourced services continue to pay on demand â&#x20AC;&#x201D; there are a host of new multi-tenancy, for service levels that are far superior pay-per-use models available to IT services buyers to those required by their business today that will lower your IT costs. customers," says Trowbridge. "But, "Clearly these come with compromises but if your objective is to save costs, research has shown that many clients report then it is best to align your service satisfaction with these models," says Frances levels with the needs of the business Karamouzis, research vice president for Gartner and not pay for something you don't, Research and Advisory Services. strictly speaking, need."

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compel your outsourcing vendor to cut costs in the future

new delivery methods 6 entertain

Outsourcing quality and service levels are not being sacrificed," says Karamouzis. This would ensure delivery at a reduced rate. You can ease the provider into lower prices by offering a quid pro quo. Consider options such as assuming more risk in certain areas like cost-of-living adjustments or currency fluctuation, or taking lower pricing now in exchange for increased pricing risk in the future, or looking into relaxing other contractual rights (like termination) for convenience on a temporary or permanent basis, says Masur. "Look for protections [you can relax] that seem less valuable, now that you know the provider better," he says. As an alternative to renegotiating prices, you might suggest altering the timing of charges to defer payment or ask for more productivity per provider employee. "If the discussion on renegotiating rates does not prove fruitful, challenge the service provider to find other ways to save your money," says Karamouzis.

gold, silver 7 Negotiate and bronze service levels Work with your outsourcing provider to create a tiered IT service offering, advises Masur. Then allow your internal customers to select the appropriate level of support and cost for their business units' needs.

your right to audit, 8 Exercise benchmark or walk away

An audit can uncover overcharges, while benchmarking can be used as leverage to negotiate lower pricing. "Typically, [the question of benchmarking] would arise after the customer obtained information that suggests that the IT service provider's pricing was above-market in at least

In other words, relax select service levels on non-mission critical operations in return for better pricing. If you think you need to negotiate rates for every job title that has a chance of working on your account, think again. "In application outsourcing, typically about five job roles deliver over 90 percent of the work. There is no need to negotiate thirty," says Karamouzis. But make sure to follow a structured negotiation framework to ensure that there are no loose ends left in the process, advises neoIT's Vashistha.

in outsourcing monitoring and governance software 7 invest

Few IT service providers are eager to include clauses that are customer-friendly, for example, the right to audit bills or benchmark prices, in their new outsourcing contracts. But, by including these provisions you can ensure that you have recourse in the future, in case you suspect overcharges or prices that may not be in sync with those of the market. Even if you never actually conduct an audit or bring in a third-party benchmarker, retaining these rights will give you pivotal leverage in the partnership. Also, investing in outsourcing governance software can help you in ensuring that you can continually evaluate provider performance going forward, advises Stan lepeak, managing 32

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certain areas," explains Masur. In such an instance, the customer asks the provider to respond, cautioning that if they are still not entirely satisfied that the prices are competitive, they may decide to initiate third-party benchmarking. "This often leads to a relatively candid discussion regarding pricing and, in many cases, it also leads to a price adjustment in at least some areas," Masur says. While you're at it, take another look at the work you're sending out the door. Selectively terminate services or contracts that are no longer required or are not considered critical, Masur advises. Consider insourcing or using another provider to perform in-scope work. You may be able to save money and obtain the same services from another provider or by handling them in-house. The suggestion that you might pull the plug could be a good bargaining chip to negotiate lower prices or greater productivity with your incumbent provider, adds Masur.

director of research for outsourcing consultancy EquaTerra. Finally, adds EquaTerra's Stark, understand any termination obligations or costs you've agreed to, so that you're not held hostage by the provider at the end of the deal.

a managed services model 8 consider

You should devote some time to determine the appropriate engagement model for your next outsourcing deal. More and more outsourcing clients are moving to managed services deals, according to neoIT managing director Sandeep Karoor. In the managed services model, the customer pays for IT services themselves at pre-agreed rates, rather than paying for manhours of labor. "The clients focus on outcomes rather than who does [the work] and where," says Karoor. That can free up the vendor to provide IT services at more competitive rates. CIO

Send feedback on this feature to editor@cio.in

Vol/4 | ISSUE/16

VIEW

from the TOP

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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Selling

Strategy by Sneha Jha Assumptions are dangerous. And when you enter a new territory, what you assume could cost you your business. When Amway launched commercial operations in India in May 1998, it brought with it a set of tried-and-tested business strategies. It offered products that had created waves in the international market. It put in place pick-up centers — like it had in other countries — where consumers could place an order over the phone or the Internet. But the Indian market wasn’t impressed. What sold in over 88 countries across the globe, didn't pass muster with the Indian consumer. Amway India realized that it had to go back to the drawing board. It needed a strategist who could shape the company ground up. With almost three decades of experience behind him, William S. Pinckney, CEO & MD, Amway India, was just the right man for the job. He tweaked the company’s marketing focus, nurtured brands in new categories and affected significant changes in its product portfolio. He also broke an unwritten rule in Amway's heritage in order to adapt to India: no advertising. Today, the Rs 1,128 crore company has shattered pre-conceived notions and has created a brand new strategy for growth.

CIO: What is Amway’s growth strategy in India? William S. Pinckney: We have devised a four-pronged strategy to drive growth in the Indian market.

First, we want to continue to expand our product range specifically in two categories: nutrition and cosmetics. Second, we want to continue to broaden our physical presence in India. Currently, we have about 127 touch points around

Photo by Srivatsa Shandilya

William S. Pinckney, CEO & MD, Amway India, shares what they got wrong about the Indian market, the changes they made, and how they plan to keep up their impressive growth trajectory.

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William Pinckney expects I.T. to: Help in the decisionmaking process Spur collaboration, innovation and productivity Provide a platform for competitive edge Vol/4 | ISSUE/15

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View from the Top

the country, 52 of which are full service and 75 are where we interact with our business owners to carry out transactions. In the next three to four years, we hope to grow from 127 touch points to about 300. Third, we want to build our brand more aggressively. That’s why we are looking at advertising. We’ve just finished an ad campaign on television and are planning to take it to the next level by focusing on specific products. Fourth, we want to increase our business owner network because they sell most of our products. It is a strategic imperative for our business model to provide free intensive training programs across the country for our business owners. For instance, last year we had about 29,000 training sessions that touched about 1.5 billion people. Building a huge agent base is the key to fortifying our distribution network.

Amway came to India in 1995, but started operations only in 1998. What delayed the launch? When an MNC launches its operations in a new country it needs to take permissions, identify partners, make investments and hire manpower. We were no different. In almost 90 percent of Amway’s markets, products are imported from our state-of-the-art manufacturing base in the US. But when we launched in India, the FIPB (foreign investment promotion board) approval required that we set up a manufacturing base in the country. We decided to do it through third-party contract manufacturers. But they didn't have the infrastructure to match Amway global standards. We invested Rs 151 crore to transfer technology from the US to third-party manufacturers. We manufacture our products through five third-party contract manufacturers in India. Today, we have three large global manufacturing divisions: the US, China and India. 42

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3,100 crore and is projected to expand to Rs 15,000 crore by 2012. This growth will be driven by segments like health, wellness and personal care.

“IT is the heart of Amway. It touches every element of our business strategy.” — William S. Pinckney

How do you think the market's dynamics have changed since your entry? There is a significant change in consumer behavior and consumption patterns. We believe in fair value exchange — the value that a consumer gets in exchange for the money he invests. The Indian consumer now appreciates the fact that quality comes at a price. The products sold by direct selling companies are of a superior quality compared to products available in the market. And if a customer is still not satisfied we have a money back guarantee as well. When we launched, we had only six products in our portfolio. Now we have 120. Our champion category is nutrition and wellness. Our market research shows that the interest for health products among Indian consumers is very high. This category needs a personalized channel of distribution that only trained Amway distributors can provide. It makes serious business sense to focus on these products. In 1998, when we entered India, direct selling was at a nascent stage, worth Rs 300-400 crore. Today, it is around Rs

What changes did you introduce to adapt to the Indian market? The first thing we changed was packaging. India is the only market in the world where you can buy Amway products across varied price points. In all other Amway markets, detergent is sold in a standard size: a one-liter bottle. But in India it is available in a variety of sizes: from 500ml to single-use sachets. In addition to our global brand, we introduced certain local brands in India. Since, the initial price points for our global brands were high, we decided to offer premium quality products at competitive prices. Last year, we forayed into the mass market segment with products like hair oil and shaving creams. These products compete with the market leaders in that segment and are available with the same look, feel, quality, and the same price points but with one differentiator: a money-back guarantee. I think we have adapted quite well to the Indian market.

Can you elaborate on your pricing strategy? In the direct selling model, you are selling your products through people and not through an organized retail network. This lends a definitive business advantage because you get an immediate feedback. Initially, when our independent business owners approached potential consumers with our products, they came back with some vital suggestions, which helped us enormously. But to post robust growth in such diverse market conditions we could not rely on Amway’s existing global product offerings. We misjudged the Indian market and came with our own assumptions.

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View from the Top

Our distributors told us that Indian consumers are a tad price-sensitive and pointed out that affordable prices could drive huge volumes and increase penetration in untapped markets. We had a long-term view of India and wanted to address more than the high-priced premium segment. It makes strong business sense to have products in the super premium, premium, economy and intervening segments. Consequently, we are adopting the multiple brand strategy in some product categories.

So, why do you feel the need to advertise in India? Traditionally as a direct selling company, Amway does not advertise. India is the only market in the world where we are advertising our brand. Feedback from our distributors told us that we needed to advertise to increase corporate brand awareness and visibility. Currently, we are advertising the Amway brand broadly. But by 2010, we will look at category-specific and product-specific advertising.

What has India taught you? When we entered India, we realized that the competitive landscape was very challenging and different. We knew that we would have to make our products affordable, address the right segment, widen our product offering, tweak our marketing strategies and adapt our existing categories to Indian needs. I think that being able and willing to adapt and listen to the market place and the business owners was crucial. We realized early on that we needed to do a good job of brand building and not merely depend on our business owners to create awareness for our brands. Our key learning was that once you try to establish a foothold in a new geography, you have to affect changes in your business structure and shift your focus because this helps you identify new business opportunities. I think we were fast and this gave us a competitive edge. 44

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How has the direct distribution model helped you outpace competition?

SNAPSHOT

spend so much time, effort and energy on training and educating our distributors. Headquarters: We have to keep them Gurgaon motivated all the time. That Established: is a very important part of Our USP is that we have a 1998 sustaining growth. high touch association with Revenue: Apart from that we are our customers. Credibility Rs 1,128 crore also aiming at opening more plays an important role in No. of Business distribution centers in tier our sales transaction. When owners: 5 lakh II and tier III cities. We have an acquaintance tells you been operating in India that he has used a product CIO: Sanjay Malhotra for over a decade and have and has benefited from it, grown from zero to Rs 1,128 you tend to believe him more crore. We have set ourselves than a salesperson behind a target of Rs 1,500 crore by 2010. a counter. Because its people selling to people, the value we bring to the table is much more than retail merchandising. How critical is your CIO to There are certain categories like nutrition, the business? wellness and cosmetics where consumers really appreciate having more information Our CIO, Sanjay Malhotra, has a robust before they buy a product. We can compete view of how our business is run. He takes with the traditional FMCGs because we keen interest in how we manufacture and connect with our consumers at a much sell our products. He helps us make our higher level. business model more agile and obviously And once the product is purchased they all of these are critical to our business. have 30 days to try and return the product He is a vital part of our strategic decision if they don’t like it. We also provide aftermaking process. sales services. The consumer knows that there is no risk involved. We have five What is IT’s role in Amway? lakh active and semi-active business owners. It takes more time for direct IT is the heart of Amway. Our selling companies to develop brand business strategy is built around it. IT loyalty among customers, but that loyalty helps us support and enhance decision also lasts much longer. making, collaboration, innovation and productivity — elements that provide a platform for competitive advantage. IT In this economic climate, plays a critical role in integration and how do you plan to remain competitive and aggressive? execution of strategy. Every transaction — from the products we sell to the time of the day they were sold — is computerized. In the direct selling business, you All the strategic decisions we make come are as good as the people selling your from data that we mine from IT. CIO products. It’s not difficult to attract new distributors but it is difficult to make them enthusiastic about this business model. Our distributors could be a 20-year-old student or a 60-year-old man. But what is important is that he is well informed Sneha Jha is correspondant. Send feedback on this about our products. And that is why we interview to sneha_jha@idgindia.com

Amway India

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EvEnt REPORt

Presenting Partner

finding Agility in your Processes

In an economy that is still under reeling the impact of the recession, clearly understanding and exploiting the potential of process management can contribute significantly to enhancing efficiency.

uccessful organizations have known all along that the formula for success is to adapt to change and ensure they are not left behind. However in today's scenario, the ability to transform quickly is also increasingly becoming an imperative. It is this speed-toaffect-change that is emerging as a key differentiator for smart enterprises, which are keen to exploit business transformation to earn unparalleled competitive advantage. It is thus a great time to discuss business process management (BPM) and find out what an organization can do with it, especially in terms of deriving more value from business transformation initiatives during the slowdown. A related event organized by CIO was attended by some forward-looking It leaders who discussed how BPM could help them in the current economy.

EvEnt REPORt

The Role of BPM in BuSineSS TRanSfoRMaTion Discussing BPM from a business context, Dr. M.A. Ketabchi, president, CEO & founder, Savvion, talked about its evolution, how to leverage its potential during the slowdown and how to fit it in different business landscapes. He also outlined how Savvion helps in BPM innovation and delivers powerful platforms for the growth of customers. He explained that BPM offers the ability to define, document and analyze business processes, which is an important aspect in capturing enterprise knowledge. It is also useful to effectively achieve ng compliance as well as clearly outlining processes in an effort to improve them. “BPM provides the ability to rapidly turn business processes into agile applications that provide visibility into operations," he said. "It also provides the ability to define, monitor and improve business processes by providing metrics around these processes.” Ketabchi said that BPM has now become a critical success factor for any organization and is a top agenda for many CIOs. "Sixty percent of the CIOs around the world continue to rank 'improving business processes' as their number one priority. Some of the other priorities, including reducing enterprise costs and improving enterprise workforce effectiveness can also be achieved through BPM. According to Gartner and Forrester, the BPM market is growing rapidly and will be valued at more than $ 6 billion by 2011." talking about the Savvion BPM suite, Ketabchi said, “We have very comprehensive BPM offerings; we have also developed verticalspecific industry solutions. Our products are known for their scalability, high performance and availability and are useful in terms of critical solutions. Our customer base sprawls across the financial and banking industry, telecommunication, high-tech manufacturing, logistics, healthcare, pharmaceuticals and BPOs.” Sharing some customer cases, he explained how Morgan Stanley had automated more than 200 of its critical business processes using Savvion BPM. “these processes expanded Morgan Stanley’s operations across continents including Europe, and Asia and countries like Japan and the US,” he said, adding, “another customer, Level 3 Communications, started with running their order processing operations based on Savvion, but quickly expanded its use to other operations as well. now it has become a process centric organization. Level 3 now has CEO sponsorship and business-It collaboration to embrace BPM.”

“BPM can rapidly turn business processes into agile applications that provide visibility into operations." dr. r. M.A. Ket KetAbchi President, CEO & Founder, Savvion

Ketabchi explained how a large segment of their product range was associated with business analysis. "Our business process solutions are utilized by application developers, in specific cases where the processes need to be automated," he said. "Once the processes are in execution business managers can monitor their performance. It helps them find bottlenecks and correct them.” He outlined the case of the Union Bank of California, which adopted BPA (business process automation) and achieved significant ROI by defining, aligning and re-engineering its processes. He also talked about Motorola. “the performance of Motorola’s global supply chain processes was below the market benchmark. By adopting BPM, today they run transactions worth a billion dollars through these processes. Motorola, in fact achieved the ROI in eleven days and reduced their buy-sell cycle from two days to four hours.” Describing how Savvion BPM Suite is used, Ketabchi said, “the ‘process modeler’ component allows one to define, simulate and document processes easily. While automating them, another component, the ‘process asset manager’ helps enriching the process at the phase of its execution, and provides business managers with complete visibility. We provide all the components to map the BPA, BPS (business process simulation) and BPI. the process modeler and process asset manager assist the BPA, while the BPM Studio and BPM Server enable the execution of business processes. the 'BPM portal' and 'business expert' components, on the other hand, assist in monitoring BPI. All the components are integrated and they can be deployed together at once or in any order as per a user's convenience. Given that BPM is independent of verticals, it was noticed that customers in a particular industry repeatedly use some components, modify certain processes, and define and utilize certain forms. "So, we captured all those components in the form of a reusable tier which we refer to as the business foundation for various verticals. this reduces the time, effort and the cost of turning a business process into an agile business application," he said.

Building The CaSe foR BPM In view of his BPM deployment experiences, Sandeep Phanasgaonkar, president & CtO, Reliance Capital, discussed methods of achieving operational excellence through BPM solutions. He said that he had his first interaction with Savvion BPM at a BPO with which he was formerly associated as a CIO. He said, “A BPO is a collection of several processes and operations. We expected BPM to re-engineer and drive efficiencies among these processes. the key factor that drove us to select Savvion was that we found the vendors to be well steeped in the science of BPM. the journey was not very smooth though; we faced challenges in terms of performance and integration. But we also experienced a huge amount of involvement from Savvion and their partners in India helped us implement this over time thus streamlining the whole deployment.” Further, he added, “At Reliance Capital, we felt the need to implement BPM to

EvEnt REPORt

achieve some crucial business goals. the first goal was to automate and optimize end-to-end processes, because in a finance company turnaround time to deliver a service is extremely crucial. We also wanted to reduce enterprise cost and improve workforce efficiency and business metrics. these were paramount factors in terms of pursuing operational excellence. A BPM platform allows you to model end-to-end process lifecycle management. the benefit of documenting a process is that it gives visibility to the inefficiencies of a process and what changes can be made to achieve the best results. BPM provides ease of integration and reuse, and it facilitates change management.” He explained that most businesses use multiple systems and several processes could lie outside core systems' capability. Processes and workflows need to integrate with multiple systems to provide a consistent tA tAt At (turnaround time). “So when you are providing service to the customer you have to provide a consistent tA tAt At and at the same time, the customer experience should be consistent across all touch points of the business. there has to be a capability to continuously improve processes, to change processes with different business models or new product launches. today, with the availability of mature SOA capability in terms of Web services, enterprise services bus, application servers, directory services and core systems with BPM workflow capabilities, BPM solutions play a vital role in integration. We move from discreet workflows and multiple handoffs to a more coherent and integrated framework with predictable tA tAt At ts. s. It is possible to create standard workflow offerings on a BPM platform and replicate them in different business situations. Modifications in workflows in a dynamic manner and the ability to make in-flight changes are the key benefits of the whole setup. these were the factors we looked at when selecting a BPM system.” He added, “I actually advocate certification of the people who are implementing the solution. Other desired factors were the solution’s user friendliness, ease of navigation, adaptability and scalability. You still have to performance test and volume test it to ensure that you have worked the logic out right. Savvion BPM suite enables interface to e-mails, directories, and systems. Savvion has a global presence along with Gartner ranking and recognition, and a large customer base. It also provides business activity monitoring capabilities, dashboards and alerting. Savvion BPM offers the possibility of converting a graphical model into an executable system.” talking about the benefits delivered by Savvion BPM, he said, “It has quick deployment time. Reliance experienced reduction in tA tAt Ats and increased adherence to SLAs after implementing BPM — it helped create a 86 percent reduction in time for policy issuance. Of course this was a combination of several other factors but BPM was a key part of the whole effort. Also ROI was realized in less than six months.” He said, “the objective to implement BPM was to bring experts together, break silos and encourage sharing of knowledge and the replication of standardized processes by providing a center of excellence.”

“documenting a process gives visibility on it's length, its inefficiencies and what changes need to be made." SAndeep phAnASgAonKAr President & CTO, Reliance Capital

“We selected processes that made business sense and promised to show tangible benefits to work with BPM." chAndrASeKhArAn MohAn CTO, Reliance Life Insurance

Realizing The full PoTenTial of BPM Chandrasekharan Mohan, CtO, Reliance Life Insurance, talked about how his organization leveraged BPM to streamline BPS and realize significant gains and tA tAt Ats. Recounting the organization’s journey with BPM, he said, “It began when AMP was merged with Reliance in 2006. We tried to find the best component that could give us business value, then realized that BPM as a governance element regularly automates processes and gives people the required visibility. We documented our processes for the first three months and came out with 120 processes running in the insurance organization. We selected some processes which run end-to-end and create business value. the process which we chose to be put up on BPM was 'proposals to issuance.' AMP, our acquisition, had many manual processes running across 100plus branches. the documents from each branch needed to travel via couriers. All the people involved in decision-making processes belonged to multiple geographies. now, the major challenge was a longer issuance process. the courier cost was humongous and some policies were misplaced. Also, the work distribution among teams was complicated.” Mohan said, “We approached Gartner for a solution. they suggested a framework and prepared a three-year roadmap to reach our goal, in which technology was the key element. the critical layer in the framework was BPM with vital components being the touch points for the technology.” He explained how the technology has been deployed, in Reliance Life Insurance. “It’s a multi-partner setup inn which Savvion is also a partner." he said. "In all this our motive was to move from a

EvEnt REPORt

two week tA tAt At to a day. We also wanted the database to be distributed and not centralized. to overcome the challenges posed by manual processing, it was decided to pursue workflow automation using BPM as a solution.” Further he added, “the fact that we were a startup at that point of time was a challenge because most companies that provided BPM solutions offered re-engineering a system. However, first we needed to build a structure. We started deploying Savvion BPM in September 2007. It was a three-month implementation process because we had to switch from a previously installed Documentum to Savvion. We tightly integrated this framework which helped us to reduce tA tAt At from two weeks down to a day. Once BPM was implemented end-to-end, the automation of processes took place in real-time, with more than a 1,000 agents working on the system.” talking about the benefits that the BPM solution delivered in this case, he said, “Reliance Life could easily move from a centralized setup to one that is decentralized, with the help of Savvion BPMS solution. the pace of change in business processes was managed well. In the tough economic conditions of 2009, we could move from a vendor-run urban BPO to branch operations and a rural BPO model in record time. this was made possible with the help of Savvion BPMS. When the meltdown began, we had pinned our hopes on BPM and it helped us to cut down the costs of our operations on a huge scale. We did not bring down It costs, but helped business bring down the cost of operations. While the market is down, we are confident that we have a system in place to support it.”

PaRTneRS in SuCCeSS Discussing some wide-scale BPM deployments, Suhrid Brahma, vP (It) Genpact, spoke about customer experience and leveraging the flexibility and scalability of BPM to optimize a wide range of processes. He also explained how this helped deliver better customer service and gaining competitive advantage. “We use BPM to run a few customer processes," he said. "the journey hasn’t been that smooth since it involved different types of implementations and It landscapes, where we had to introduce technology and expertise together and work around frameworks in an innovative way.” He added, “At Genpact, we chose accounts payable to

“With the help of BPM you can get inputs from multiple places, or eRPs in different formats." Suhrid brAhMA VP IT, Genpact

be one of the processes that was automated using BPM. So, Genpact’s accounts payable framework is powered by Savvion BPM Suite. the biggest challenge we faced in this process, and other core financial ones, was that no ERP was giving us an end-to-end view of the processes. Our objective wasn't to replace the system but to come up with a low cost and agile solution, which could sit on top of existing It applications and, most importantly, give an end-to-end view of the processes.” “Finally, we found that with the help of BPM it was possible to get inputs from multiple mediums, or ERPs in different formats," Brahma said. "Even if you have have multiple SAPs running across the globe, BPM will ease the accessability of data residing in these ERPs. now, we have the ability to garner inputs from almost any medium, whether it is paper, invoice, e-mail, fax or a supply portal. From there it gets to the core workflow engine. this is not about cost benefit alone, it is very critical from a controllership point of view. this is what Savvion BPM does for us: it gives us a complete view and helps in better decision making. In some cases, we have built interfaces with ERPs and are using EI framework to access data.” Broadly outlining the framework of Genpact ProFlow, he said, “Our basic practices are tied to Savvion. Genpact has run processes for global companies. We have insights and knowledge about their processes, and know what works best in practice. We also add some customer configuration depending on what kind of application the customer has and what kind of additional reporting and archival integration is needed to move forward.” Sharing some insights on customer experiences in the context of solution implementation, he discussed the case of a fortune 50 engineering and technology company. He said, “It was a challenging task because the customer was on a fragmented ERP environment and wanted to standardize their financial accounting process. the biggest challenge for us was to work with their existing It platforms without replacing anything. there were multiple mail rooms across the globe and we ensured that we got a standard fit. Savvion was flexible enough to take inputs from these downstream applications. We also had a preprocessing module which allowed the customer to process data from different types of feeds.” Brahma discussed another customer case in which a leading online auction company approached Genpact to improve their ‘procureto-pay’ process. He said, “the customer had some applications implemented on ERP and again we had to bring in BPM as a platform to work on top of these ERPs. this company was involved in buying and selling online, so the rules changed frequently. the challenge was to use our framework with a new ERP layer every time. So we decided to use Savvion with SAP and defined required algorithms and rules at that layer to standardize. the biggest achievement was getting a standard solution in this case.” He said that it was clear from the cases that they avoided replacing anything in a customer’s setup, because they had the agility to fit in their solutions while servicing their customers in different landscapes.

Hardware Bends to CHange Hardware Strategy

Despite a shortage of capital, the downturn seems to have had little impact on capital-intensive hardware purchases. For CIOs looking to invest in hardware, it is business as usual â&#x20AC;&#x201C; with a few minor changes. However, these changes, though small, could represent an important trend. Our survey of 113 CIOs points out what to watch for.

Credit Crunch

setting aside

How would you describe your hardware budget for 2009-10?

Marginally reduced 27.6%

Marginally increased 24.1%

energy: it's all green

Significantly reduced 18.1%

No change 24.1%

Significantly increased 6%

Of CIOs have dedicated more than 10 percent of their IT budget to hardware.

speed Breakers

What are the biggest challenges you face with your current hardware infrastructure? (IT leaders ticked all the applied)

56.1%

Disposing or recycling old hardware

50.9%

Inadequate security integration

Of CIOs say that energy efficiency is an important criterion for procuring servers. 50

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45.6%

Dealing with excess servers

43.9%

Replacing aging desktops

40.4%

Provisioning new systems

36.8%

Remote management Upgrading desktops

28.1%

12.3% Migrating to notebooks

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Hardware Choices

expiry date

Which of the following criteria do you consider critical when investing in hardware? (IT leaders ticked all the applied)

83.6%

Service and support 75%

TCO

72.4%

Performance

The number of CIOs who said that servers last between 4 and 6 years in their organizations.

69%

Reliability

63.8%

Scalability 44.8% Latest technology 39.7% Brand 6% Other

what Comes First?

your yardstick

Has there been any change in the evaluation criteria for hardware investment this year?

From a server processor perspective how critical are the following to you? (IT leaders ticked all the applied)

94.8% Performance

NO 61.7%

73.3% Total cost of ownership

yeS 38.3%

70.7%

Scalability

69%

Power consumption

62.9% CIOs who said yes pointed out that they considered going green and TCO pivotal aspects for investing in hardware. (going green: 56.4%, tCo: 28.2%)

Hardware Strategy

Presented by

Virtualization performance 36.2% Brand

Unveiling cHallengeS in Hardware Strategy

Fine-Tuning Virtual Security

Universal Audio, a leading maker of music production and mixing tools, went almost fully virtual to protect its valuable intellectual property. But it bumped up against the complex security problem of virtual switches. A chance meeting in a parking lot helped provide an answer. By Kevin Fogarty

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Case File

Illust rat ion by MM Shan ith

eing manager of IT and the guy responsible for security on that infrastructure — one that supports a company whose products are both expensive and almost entirely digital — made Joel Braverman extremely nervous. But, moving to a nearly fully-virtualized infrastructure in 2008 made him a lot more confident about both the physical and digital IT infrastructure at his (relatively new) employer: Universal Audio. To understand what Universal Audio, in Scotts Valley, California does, and its unique IT challenges, you first need to understand that for audiophiles, digital music doesn’t quite match the ‘warm’ quality that comes out of analog gear. Universal Audio is one of the leading companies selling digital products that emulate analog gear. And Universal’s technology comes as close as any, and far closer than most, to the sound of the original, according to music industry reviewers. “We sell the DSP boards, but we also do plug-ins that model the physical analog device and makes it sound 99.9 percent like what the original sounded like, even though it’s running inside a computer,” Braverman says. “One of the coolest things is one that sounds like the exact recording desk Jimi Hendrix made his recordings on. We sell that as a plug-in.” Universal Audio also sells software to emulate the custom studio gear of famous audio designers. Since, it’s all software; however, Universal Audio’s tech makes a hot target for thieves. “This industry has been struggling with hackers for 10, 15 years, and we’re almost the only one whose products have not been cracked,” Braverman says. “Our competitors’ stuff still sells, but a lot of music that’s based on plug-ins has been cracked. If you can get it for free, why would you buy it?”

Virtual Hi-fi Established in 1950, Universal Audio is a relatively small company — 60 employees, working on between 150 and 200 workstations. Audio engineers and coders use far more workstations per head than normal employees, or even normal programmers, Braverman notes.

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Two years ago, when Universal Audio hired Braverman as manager of IS, its whole back-end infrastructure was running on a set of rack-mounted desktops in an unsecured part of the company’s manufacturing unit. “They went down a lot, and they were just right there, where people could have come in and walked off with them,” Braverman says. “We figured, since most of those machines weren’t doing anything 90 percent of the time, we might as well virtualize them.” Braverman moved the IT gear to a new building with better physical security, then virtualized them in what was to be a carefully staged migration starting with a set of VMware ESX servers that mirrored the physical servers, as a disaster recovery solution. The plan was to gradually migrate applications as the implementation proved itself, until all Universal Audio’s production and Web servers were running on the VMware cluster with a SAN holding the data. “What really happened is we started running things on the VM system right away, or pretty soon after we implemented them because it was so much easier to do the updates and reconfigurations on the VMs,” Braverman says. “But we needed security products to protect the VMs. The virtual switches don’t really offer that much protection and you can’t see what’s going on inside the servers.”

Sound Security

Braverman bumped up against one of the biggest security problems with virtual infrastructures, says Neil MacDonald, security and infrastructure analyst at research firm Gartner. Virtual switches bounce packets from one virtual server to another in exactly the same way physical switches toss them around, but unless you think of putting a virtual sniffer on one of them, it’s almost impossible to tell what’s going on Reader ROI: inside one physical server supporting many How virtualization virtual ones, MacDonald says. eases manageability That’s a major problem for end-user Why virtual firewalls companies because alarms they have set up are important to notify them of intrusions from outside, or How they can protect server-to-server links that violate security or intellectual property REAL CIO WORLD | J U LY 1 , 2 0 0 9

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Case File compliance policies, often don’t work inside so someone in the banking sector might a virtual environment, he says. have more security concerns than we do,” “The ideal situation would be if physical Braverman says. “Essentially defending the security vendors had the same set of offerings borders was the main focus. We don’t have for the virtual world and you could just opt enough staff to do all the nitty-gritty and go SNAPSHOT for the environment you were supporting, through all the VMs to make sure they’re Universal but they’ve been really slow to do that,” all patched with the latest patches and that Audio MacDonald says. there aren’t any holes. This product notifies Established: 1950 “Juniper, Cisco, Microsoft, should all be in us of all the vulnerabilities that our systems there in that space. Instead it’s Altor, Reflex, have — that’s the biggest plus.” Employees: 60 Catbird and some other companies that have That’s not a small concern, MacDonald a relatively low profile are selling for $2,000 says. Configuration errors remain the biggest Headquarters: California something that might cost $20,000 in a source of vulnerabilities in virtual machines, physical form factor.” and precious few resources exist to help VM security companies are so little-known that security managers deal with the situation. Braverman hadn’t even heard of Catbird until one of “Microsoft and VMware have put out guidelines, Universal Audio’s engineers bumped into a Catbird but that’s pretty thin,” MacDonald says. “Most employee by chance in the parking lot of the office park vulnerabilities are introduced because someone makes a they both share. mistake. VMs have this opaqueness in the environment Catbird turned out to have the kind of VM firewall and so that if you don’t have the basics done right, you’re intrusion detection system Braverman sought. wide open.” Catbird’s vulnerability assessment can help, as can tools from Configuresoft and Tripwire that are designed to automate and lock down VM configurations, Installing Catbird gave Universal Audio virtual firewalls McDonald says. on each of its servers to help block the Web servers After going through initial assessments for Universal from the internal network, and to enforce security and Audio, Braverman says, he actually had to un-virtualize usage policies inside the network. Its intrusion detection some of the servers. The ERP software that the company system, which is based on the Open Source Snort (the uses doesn’t support VMs, and other servers held data gold standard of the technology) helped lock down that Universal Audio executives decided was too sensitive content inside the VMs and set alarms to keep hackers to put on a virtual network of six physical servers and 20 out of Universal Audio’s pool of IP as well. “Here we’re or so VMs. more concerned with protecting our intellectual property, Braverman declines to say how much he spent with his Catbird security investment, but he says it did justify the cost as a necessary addition The project helped Universal Audio save its resources and secure its virtual machines. to what was, overall, a cost-saving, productivity-raising project for the business. Braverman also learned about one ironic side effect of highly-virtualized The vulnerability The system ensures that environments. “Virtualization allows assessment tool alerts all the VMs are patched us to build a redundant network that’s the company of all the with the latest patches. firewalled and load-balanced with vulnerabilities in the system. switches and routers,” Braverman points out. “Now we get complaints when something does go down — even though it doesn’t really happen very often. When things went down all the time, no one complained because they It sets alarms to keep Based on Open Source, were used to it!” CIO hackers away from the intrusion detection the company’s IP and system locks down content protects intellectual inside the virtual machines. property. Infographics BY ANIL T

The Right Mix

Guarding Virtual Gates

Send feedback on this feature to editor@cio.in

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EVENT REPORT

Presenting Partner

ENAblING GROwTH

THROUGH AUTOMATION Smart CIOs recognize that IT process automation is more than just deploying a purpose-built tool. Driving automation and standardization of process workflows with specific business objectives requires buy-in from IT staff and CIO leadership. “IT brings to light the potential automation parts which can make processes more efficient." AjAy AAyy M. PPATI ATIl, VP - IT, Bharti Axa Life Insurance Company

“A revenue generation exercise is owned by business and a cost cutting measure is owned by IT." RAjEsH DOsHI, Director - IT, National Securities Depository

“In our case, the business communicates its needs and IT figures out the best way to fulfill them." VIsHAl VEER sINGH, AVP - IT, Franklin Templeton Asset Management

The rise of virtualization, policy-based networking, process standardization, process automation, and SOA has positioned IT at a critical inflection point in achieving business efficiency and effectiveness. As business leaders, CIOs must seize these opportunities. IT leaders gathered at a closed-door roundtable to discuss their plans to automate crucial processes and use them as a stepping stone to larger efficiency measures and establish a foundation for business growth. Talking about process automation and the role that business plays in it, Sarabjit Anand, head - IT (GSSC & Nepal), Standard Chartered Bank, said, “We first determine the business need for any implementation and then go ahead and execute it. We look at how people intensive the job is and its turn-around time (TAT). That’s how we ensue to continuously improve our processes.” Vizak J. Badhniwalla, Sr. VP – IT, Future Capital Holdings, said, “When business comes to IT with a request, we try to understand their needs and then prepare a case around it. We outsource our IT process automation function, and while explaining the case to vendors, we involve business people because they understand what the vendor has to offer and how helpful it would be to the business.” Pointing out how important it is to choose the right process for automation, C. Mohan, CTO, Reliance Life Insurance, said, “For automation, we choose business oriented processes because it would give a tangible ROI immediately.” Referring to the approach his company adopted to automate its processes, Suvanjay Kumar Sharma,

EVENT REPORT

“According to me,

automation is a function VP - (corporate strategy) & chief enterprise architect, Yes Bank, in which IT should play a said, “We formed an architecture proactive role." for processes based on their sATIsH KOTIAN, Head - IT, Dewan use and categorized them in Housing Finance Corporation to standard and non-standard processes. Here, the dynamic ones are not automated but are improved continuously. “Pursuing a greenfield This is how we control our project, business allowed IT environment and keep up IT to take the lead in “The way we use technology is with our competitors.” Ajay defining processes." going to determine our success in M. Patil, VP - IT, Bharti Axa dealing with our customers.” HARNATH bAbU, VP - IT, Star Union DaiLife Insurance Company, said, Ichi Life Insurance “Defining processes requires jAMEs RUssEll domain knowledge. So, ideally Director, MSM Sales & Software Consulting, South Asia, BMC Software business should define those processes, and then IT should “It’s essential to translate them. IT brings to light the potential automation parts which understand the business can make the process more efficient. needs, while defining the On the contrary, Satish Kotian, head - IT, Dewan Housing Finance processes for automation." Corporation, said, “Process is owned by the business, but in our organization automation is owned by IT. According to me, automation KEsHAV sAMANT, VP & Head - IT, is a function where IT should play a proactive role.” James Russell, Financial Technologies (India) director MSM sales & software consulting, South Asia, BMC Software, pointed out that all the businesses in BFSI sector are delivered on the Discussing the issue of making automation a business case, Vishal IT systems. “The better we deliver on those systems, the better hope we Veer Singh, AVP - IT, Franklin Templeton Asset Management, said, have of achieving our business outcomes. IT is the enabler, particularly “Basically the push comes from business.It communicates its in the world of finance. The way we use technology is going to determine needs and IT figures out the best way to do it.” Talking about the our success in dealing with our customers.” benefits that process automation offers, Joydeep Dutta, CTO, ICICI Sharing his experience, Harnath Babu, VP - IT, Star Union DaiSecurities, said, “A large number of our processes and spreadsheets Ichi Life Insurance, said, “A few months back our company was are automated. We have seen gains in documenting things and it mandated to go live in three months. But neither the processes nor has brought control in place. Automating processes has improved the systems were in place. In this case, IT took the lead and defined quality, speed of operations and cost reduction.” processes along with operations. We realized that IT can take the initiative.” Keshav Samant, VP & head - IT, Financial Technologies (India), said, “You can't leave much in the hands of business. In fact, if a process itself is inefficient there's no point in automating it. So, it’s a must to have techno-functional skillset in your team and let the business contribute to it. Also, IT can challenge it, if the need be. It’s extremely essential to understand what business wants.” Rajesh Doshi, director - IT, National Securities Depository, said, “BusinessFROM lEFT: sARAbjIT ANAND, Head - IT (GSSC & Nepal), Standard Chartered Bank, VIzAK j. bADHNIwAllA, case ownership comes with revenue Sr. VP – IT, Future Capital Holdings, C. MOHAN, CTO, Reliance Life Insurance, sUVANjAy AAy KUMAR sHARMA, VP generation exercise. If it’s a cost cutting (Corporate Strategy) & Chief Enterprise Architect, Yes Bank, jOyDEEP DUTTA, CTO, ICICI Securities. measure, then the case is owned by IT.

Essential

technology Illustration by MM Shanith

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

From highend suites to tabletop codecs, telepresence systems create a near face-toface experience at increasingly affordable prices.

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Shattering Communication Barriers By Mike Heck Collaboration | Well before the current world financial crisis struck, organizations have sought inventive ways to engage in face-to-face meetings without the need to travel. Companies have turned to services such as Adobe Acrobat Connect Pro, Cisco WebEx, Citrix GoToMeeting, and Microsoft Live Meeting as a means for workers in multiple locations to share presentations and otherwise collaborate. No question, these tools greatly reduce costly, productivity-sapping travel, with the added benefit of lowering a company's carbon footprint. Yet scratchy audio quality, out-of-sync slides, and tiny, Webcam-quality video often diminish these solutions' usefulness. Similarly, more traditional videoconferencing systems (which have been around for decades) suffer from low utilization rates â&#x20AC;&#x201D; partially because of complicated, unreliable technology.

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The door has now opened for telepresence solutions: a conferencing environment that seeks to mimic the in-person experience as much as possible. Several technologies make telepresence possible. Highdefinition video cameras and large, flatpanel monitors clearly display participants in life size. Optimized networks — making use of QoS (quality of service) and even application-aware protocol acceleration — help eliminate audio and video delay over long-distance and high-latency WANs. As such, participants can make eye contact with colleagues and immediately pick up on all-important visual cues — such as how someone reacts to an offer. Moreover, operating these systems can be as simple as using a television remote control or telephone.

Something for Everyone In general, telepresence systems fall into three configurations. First, there are formal group setups, purpose-built rooms that accommodate four to eight participants. Here you'll find warm wall coverings, soft lighting, three or four wallmounted monitors, and a conventional conference room seating arrangement. In

closely match expensive systems' picture quality and usability. Finally, there are classroom-style rooms that can hold 30 participants or more. These facilities, which are used by corporate and educational institutions alike, usually have multiple monitors or video projectors.

The Cost Of Collaboration Even with falling hardware costs, a telepresence system doesn't come cheap. A group system at a single site that can accommodate 18 to 36 users can go for $350,000 (about Rs 175 lakh). One reason for the expense is that you typically don't install telepresence systems in any old room. An immersive face-to-face environment requires special lighting, acoustics, and furniture, which all factor into the price. And that doesn't count in-house (or contracted) network and support costs. But before you despair, take a serious look at how much money you're spending on employee and executive travel among your various offices: airline tickets, food, accommodations, and the like. Factor in how much productivity is lost during travel, as well as how much time that travel can add to moving forward with a project or

Don’t despair at telepresence's cost. According to independent audits, Cisco’s customers,for example,recover their investments in six to nine months. use, it's as if remote participants are sitting across the table from you. Second, you'll find small-to-midrange setups, which comprise a single monitor and one camera, suited for handling one to four users. This option works well in executive offices, and some systems are mobile enough to be ferried among regular conference rooms. These less-costly systems work over existing networks, yet the picture and audio quality surpass that of early-generation videoconferencing solutions. None come with amenities such as plush suites, but they

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deal. In the end, you may find fast payback on your investment. For instance, Cisco representatives say that their customers often recover a telepresence investment in six to nine months, according to independent audits. Notably, there are ways to reduce telepresence costs, including equipment leases and renting time at conferencing facilities. If price is still a barrier, you could consider one of the lower-end, highperformance systems, which run for less than $10,000 (about Rs 5 lakh).

2.1 million

The number of airline seats telepresence will replace by 2012. Source: Gartner

Moreover, video chat applications are improving, too, though it's a real stretch to put them in the same category as fully developed videoconferencing solutions. Still, for little (or no) cost they let several people connect with very usable audio and visual quality.

TheTelepresence Players There are plenty of vendors out there offering telepresence solutions, all of whom offer a host of equipment packages and associated services. One of the leading telepresence vendors is Cisco, which should come as no surprise given the company's varied telecommunications products. Cisco's solutions combine high-definition video (720p or 1080p) and spatial audio — sometimes installed in custom rooms — into an immersive experience delivered over Cisco IP networks. The Cisco TelePresence solution is sold in five configurations. Each includes the endpoint hardware, management software, and multi-point switching capabilities. The latter permits large meetings plus interoperability with collaborative applications such as Cisco WebEx. (If you don't already use Cisco REAL CIO WORLD | J U LY 1 , 2 0 0 9

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routers and switchers, they would be an additional expense.) At the high end, Cisco TelePresence System 3200 ($340,000 or about Rs 1.7 crore) is a three-screen setup with two rows of tables. Providing full spatial audio and life-size video for up to 18 participants, it's typically used for large team meetings or distance learning. Cisco TelePresence System 3000 ($299,000 or about Rs 1.5 core), comprising three panels, includes a table that sits six on each side for team meetings. It easily fits into most standard conference rooms. Cisco TelePresence System 1000 ($79,000 or about Rs 40 lakh) is a singlescreen, free-standing unit, designed for small group meetings, but a larger monitor makes it suitable for general-purpose conference rooms as well. The just-released System 1300 ($89,000 or about Rs 45 lakh) boosts

using too much bandwidth; this helps to keep costs down. This is accomplished through QoS functions that are part of the Cisco networking components. If an outright purchase of a Cisco telepresence system isn't in the cards, you might consider renting a Cisco Public Suite, available in Santa Clara, California., Boston, London, and major cities throughout India.

Donning the HP Halo Halo has an interesting background. Pioneered at DreamWorks Animation, this solution was originally an in-house project for real-time collaboration between studios in California and Europe. HP then commercialized the system, which is offered in three packages: HP Halo Collaboration Studio, Collaboration Meeting Room, and Collaboration Center, all installed on your premises.

Telepresence needs lots of bandwidth. As a general rule of thumb,you need at least 1 Mbps for each video stream,or screen,at 720p resolution,and at least 4 Mbps per screen at 1080p. the screen size to 65 inches, includes three cameras, and accommodates six people. Finally, the Cisco TelePresence System 500 ($33,900 or about Rs 17 lakh) is an allin-one, single-screen system designed for one or two users in a private office. Cisco TelePresence Multipoint Switch and Manager applications help ensure a smooth meeting experience. For example, the Switch supports meetings of up to 48 segments (remote locations) and provides built-in security. Moreover, Manager integrates with Microsoft Exchange and Lotus Notes calendars for simple room scheduling. During meetings, an Auto Collaborate feature lets people in all rooms share images from a laptop or high resolution document camera. Significantly, Cisco delivers high-quality audio and video, with little latency, without 62

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HP manages Halo for you, with the idea that participants simply walk into a room and start collaborating. All Halo rooms operate over the Halo Video Exchange Network (HVEN), a dedicated fiber optic network with AES256 encryption. The main difference among systems is the number of participants supported and corresponding construction costs. Collaboration Studio ($349,000 or about Rs 1.75 crore), HP's ultimate solution, is built inside a dedicated space. It includes sound-absorbing wall coverings, broadcastquality video cameras, and executive table. Halo Collaboration Meeting Room ($249,000 or about Rs 1.25 crore), which easily sits six people, is usually installed within an existing conference room space. This lowers the cost, but you don't sacrifice industrial design. For instance, a specially

designed curved front wall (that holds four plasma monitors) helps keep participants' eyes trained on the meeting at hand. Halo Collaboration Center, available in two- and four-seat configurations ($135,000 or about Rs 67 lakh for the four-seater), is HP's smallest telepresence solution. Like the other setups, it's permanent, but designed to fit into an executive's office or small conference room. Standard components include a 65-inch plasma monitor, a 42-inch collaboration screen for data sharing, and one camera. Options include a lighting package and overhead camera. For all rooms, supporting equipment (including audio mixer, frame grabber, scan converter, and control server) is housed in a rack that's out of sight. This reduces noise and minimizes visual distractions. HP engineered Halo with several other important features. The proprietary threeaxis-control camera system automatically follows participants' head movement for better eye contact. Also, a secondary highdefinition collaboration channel lets you share presentations and video from laptops with high fidelity. Much like HP does with its personal computers, a custom graphical user interface (available in 15 languages) helps users connect to multiple locations with a few clicks. Finally, through an alliance with Tandberg, Halo rooms can connect to standards-based (ITU H.323, H.320, or SIP) videoconference meetings using the HP Halo Gateway. In addition to one-time room setup costs, Halo Telepresence Service is $18,000 (about Rs 9 lakh) a month (per meeting room or studio) or $9,900 (about Rs 5 lakh) monthly for each a Collaboration Center.

TelirisTelepresence Whereas some networking and technology manufacturers recently moved into the telepresence area, Teliris was in on the ground floor 10 years ago. As such, its current fifth-generation solutions are sometimes more innovative. For instance,

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the company offers optional multi-touch tables, easels, and walls to interact with content (video, text, photos, and files) using gestures. Standard features across the Teliris line include pod microphones (with advanced audio processing) and Virtual Vectoring technology that automatically moves cameras to maintain eye contact with all meeting participants. As with Cisco and HP, Teliris offerings span the range of price and size. Teliris Personal Telepresence ($32,500 or about Rs 16 lakh), a single-screen system for individuals or executive offices, offers broadcast-quality HD video (720p) on a 40-inch display. You can collaborate through picture-in-picture or hook up a second monitor. It also connects to standards-based telepresence and videoconferencing systems through the Teliris Telepresence Gateway. Teliris Express ($99,000 to $125,000 or about Rs 50 lakh to Rs 62 lakh) provides a two- or three-screen (46 inches, 30 or 60 frames per second) experience that fits into existing conference rooms and seats four to six participants. Teliris VirtuaLive Telepresence is the company's high-end, turnkey solution. Designed to handle 28 participants per room, everything is installed, managed, and supported by Teliris. When specifying meeting rooms, you can select three to six HD monitors (52 or 65 inches), number of seats and rows, and 60-fps high-definition video. Finally, Teliris Custom Telepresence, as the name implies, lets organizations customize a room for special environments, such as R&D labs, factory floors, or even oil exploration platforms. The company manufactures its own camera lenses and tracking systems to help ensure realistic eye contact and to capture non-verbal cues. Teliris' signal encoding and decoding handles both standard and high-definition video efficiently, which reduces bandwidth needs. And simple interfaces make easy work of participating in a meeting.

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Videoconferencing Comes of Age — For Real It feels like 1989 all over again. Wacky haircuts and big shoulders are back and geeks are waxing rhapsodic about the wonders of videoconferencing. Videoconferencing is the next new thing — for the third or fourth time since 1964. This time it's for real, though. Conferencing vendors say sales of their gear has skyrocketed — even as every other tech vendor reported gloom and doom. And 79 percent of the IT pros I work with say they're deploying videoconferencing. What's changed? Plenty. First, compression technology has got to the point where high-definition (HD) video can be transmitted across roughly the same bandwidth that was once required for its poor-quality cousins. Second, vendors have finally wised up and applied Hollywood lighting, camera placement and set design techniques, so that telepresence really delivers the sensation of "just like being there." But most importantly, now that we've spent a couple of decades internalizing the concept of virtual communications, we've gotten collectively more comfortable with remote interactions, which makes talking to a face on the screen really doesn't seem that unusual. From an IT perspective, though, the advent of video can be a challenge. First, there's the bandwidth consumption. So IT pros need to plan ahead, and make sure there's plenty of bandwidth available. There's also the problem of ensuring quality of service (QoS). An MPLS network will get you what you need on the WAN — but only about half of the folks we work with are deploying MPLS's QoS capabilities, because it can be tricky to set up effectively. To ensure effective QoS in the WAN, you need to map applications to QoS types — then make sure you've got adequate congestion control and QoS in the LAN. Finally, you need to think of managing and monitoring video traffic. Most organizations don't perform detailed analysis of WAN traffic at all, so managing video represents a bit of a sea shift in thinking.

—Johna Till Johnson

NarrowingYour Choices There's plenty to consider when shopping for a telepresence solution. Features vary from product to product. For example, you might need multiple cameras, but not 1080p high-definition video. This table will give you an overview of what each vendor delivers. Additionally, you should look for a telepresence solution that adheres to standards. For example, compatibility with H.323 (a recommendation by the ITU Telecommunications Standardizations Sector) provides interoperability with videoconferencing equipment from different manufacturers. As a result, your meetings and training sessions can include other institutions or business partners.

Finally, you'll need to make sure your network can handle the weighty bandwidth requirements of telepresence. A general rule of thumb is that you'll need at least 1 Mbps for each video stream, or screen, at 720p resolution, and at least 4 Mbps per screen at 1080p. Naturally, there are practices and products, such as traffic shaping and protocol acceleration technology, that can help you with that. CIO

Mike Heck is a contributing editor. Send feedback on this feature to editor@cio.in

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Pundit

essential technology

Will Open Source ERP Go Mainstream?

ERP is expensive as a one-time payment and as a recurring cost.The Open Source way used to be unpopular,but is it time to give it a re-look? By Thomas Wailgum Enterprise Applications | How about we play an ERP word-association game: I say ERP costs, what words come to mind? Expensive? Never ending? Increasing? Heartburn-inducing? How about cheap? Probably not. It doesn't take an economist to realize that IT needs to be doing everything it can to reduce ongoing expenses right now. Two of the chief responsibilities for CIOs in 2009 are increasing implementation speed and lowering costs. Does a massive, 18-month,

Those models included software as a service, Open Source tools and various in-house apps. With Open Source ERP, two CIOs I interviewed summed it up best: "Would I want to go Open Source ERP? I'm not so sure. I'm pretty conservative," said one. The other said, "It's not proven yet." Some time has passed since that survey, and IT shops might want to re-look at Open Source ERP options from Openbravo, Compiere, ERP5, Open ERP and xTuple (formerly OpenMFG).

Mitja told me something that is quite relevant to on-premise/traditional vs. SaaS vs. Open Source discussions today. "Users and business owners don't care whether it's Open Source or not," Mitja says. "They want something to solve their needs at the best possible price." When asked about the perception that Open Source ERP applications can't handle the complexity and scale of today's corporate environments, Mitja acknowledges that "the barriers to entry" have been higher for

Now is clearly not the time to be ordering up large portions of highly-caloric traditional ERP software rollouts. multimillion-dollar ERP rollout, with the odds of implementation and user acceptance stacked against you and 22 percent annual maintenance costs to boot, seem appropriate now? ERP industry guru Vinnie Mirchandani likes to say that there are too many “empty calories” in ERP spend, especially in SAP and Oracle maintenance fees. Now is clearly not the time to be ordering up large portions of highly-caloric ERP software rollouts. Now let's play word association with Open Source ERP. Are you thinking untested or unreliable or “not for us”? In late 2007, CIO surveyed 400 IT leaders about their ERP systems. Despite innovation, integration and cost issues, CIOs said they remained committed to on-premise, traditional ERP systems. Just 9 percent reported using an alternative ERP model. 64

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According to one ERP analyst, 2009 could be the year that Open Source ERP finally gets that second look. Cutter Consortium senior consultant Vince Kellen says that Open Source will get a "second chance to get a toe in the door" this year. "Initially, 2009 adopters will look for focused or niche applications, including office software for desktops, rather than rip-and-replace ERP swap-outs," Kellen notes. "However, I wouldn't be surprised if a few more early adopters attempt large-scale Open Source ERP." I spoke with Openbravo COO Josep Mitja. His company had published its ERP code on Sourceforge in 2006 (so it's had a couple of years to germinate), and today, Openbravo's ERP application has been downloaded more than 1 million times via Sourceforge. (It’s a 100 percent free download.)

Open Source providers like his. But, not surprisingly, he says that the collaborative environment in which the products have evolved and near constant feedback Openbravo has received have strengthened Openbravo's products. Of course, Open Source ERP applications, just like SaaS and other cloud computing-type solutions, are not the answer to all of ERP's woes — those complexity, cost and vendor lock-in issues that can be overwhelming. But Open Source ERP is now a viable and cost-effective alternative during these unpredictable economic times. Everybody's changing these days. But just how open are you to changing your IT strategy and software-buying habits? CIO Send feedback on this column to editor@cio.in

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