CIO July 15 2009 Issue

leadership

VOl/04 | ISSuE/17

Business

Technology

AEgOn RElIgARE’S srinivasan iyengar used a BPM tool to prepare his company for growth.

Building for

growth Fledgling insurer Aegon Religare is playing catch up with its rivals by using BPM to unite its processes and increase agility.

Page 18

july 15, 2009 | Rs100.00 w w w.C IO. I N

Cover-NEW.indd 1

View FrOm the tOp K. ganesh on IT, self belief, and entrepreneurship.

Brushing up On stOrage Asian Paints’ bold move to build more scalability.

Page 28

Page 36

Lenovo® recommends Windows Vista® Business.

LENOVO THINKPAD X301

BEST COMPUTING GADGET OF THE YEAR - NDTV TECH LIFE AwARDS 2009

The Lenovo ThinkPad® X301 notebook is the ultimate ultraportable for the office-goer on the move. The 33.8 cm (13.3) widescreen notebook that comes with an LED backlight display and an integrated DisplayPort provides a great viewing experience, while a host of other features makes it a delight to use. Now, protect and manage your business better while reducing costs with notebooks powered by Intel® Centrino® 2 with vPro™ technology.

Pick from a wide range of ThinkPad notebooks starting at Rs. 35,000.

1800 425 0045

www.lenovo.com/in

Not all the technologies listed with the bulb element may be available on some/all products showcased in this advertisement. Visual is representative. Lenovo is not responsible for any typographical errors in this advertisement. Microsoft, Windows and Vista are registered trademarks of Microsoft Corporation. Celeron, Celeron Inside, Centrino, Centrino Inside, Core Inside, Intel, Intel Logo, Intel Atom, Intel Atom Inside, Intel Core, Intel Inside, Intel Inside Logo, Intel Viiv, Intel vPro, Itanium, Itanium Inside, Pentium, Pentium Inside, Viiv Inside, vPro Inside, Xeon and Xeon Inside are trademarks of Intel Corporation in the U.S. and other countries. Lenovo, the Lenovo logo, New World. New Thinking. and ThinkPad are trademarks or registered trademarks of Lenovo. ©2009 Lenovo. All rights reserved. Prices are subject to change. Taxes and levies extra.

From The Editor-in-Chief

An editor I once worked for said that the only use he had for the HR department

Keep the Spark Alive HR begins in the department.

was making sure that the salaries were paid out on time, that the lights stayed on and that the rest rooms were kept clean.

Close to 20 years on, my friends in mainstream dailies assure me that HR still “didn’t get” either what editors were looking for in staff or how to keep journalists motivated.

What I found intriguing is that the same state of affairs exists in IT departments when I raised the issue with CIOs in an Open House on HR at the recently concluded CIO Leadership Summit. With attrition and people leadership one of their top concerns, it was clear that a CIO’s role was pivotal in keeping his department firing on all cylinders. And, boy did they come up with a ton of advice and suggestions.

Most IT leaders were of the opinion that few HR professionals understood either the IT department or its requirements. While, there was also broad consensus that ‘HR activities’ were best left to CIOs, the ‘activities’ varied widely.

Some believed that the way forward was to build bridges with senior management to ensure that IT was treated on par with Most IT leaders believe other frontline departments, since no that few HR professionals one liked functions that were not rated understood either the highly. Others felt that a CIO’s passion, IT department or its energy and vision needed to rub off requirements. on his team for them to keep the spark alive. This could go down to visiting team members and establishing connects with their families by jointly celebrating anniversaries and birthdays.

While it was felt by a few that some amount of attrition is healthy, since fresh blood brought with it fresh perspectives and ideas, a couple of CIOs suggested that a switch to rookies with a B.Sc or even BA degrees (instead of those with an engineering degree) had kept their turnover rates low.

There was also a word of warning for peers: never go into maintenance mode with IT projects. This, they felt, was the fastest way to de-motivate a team. A few even suggested using lean times to undertake smaller, more innovative projects to keep team members involved and productive.

I still think the most critical thought for CIOs from the Open House was this: “How many CIOs have we in turn fostered?” I wonder, what’s your answer to that.

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

2

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Content,Editorial,Colophone.indd 2

Vol/4 | ISSUE/17

7/13/2009 7:03:37 PM

Creating instant connection in HD Now it's easy to find common ground even when your workspace is the world. Make it a meeting of minds wherever you are - you won't miss a thing. Create an instant connection with the push of a button while keeping that all-important personal touch. With crystal-clear vision around the globe, it's easy to close the deal with Sony 1080 HD video conferencing system.

PCS-XG80

Because it's better than being there.

Video conferencing

A-31, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi - 110044 Phone : 011-66006600, Fax : 011-26959141, Email : bppmktg@ap.sony.com

For Video Conferencing Product Queries : Ravi Raju (+91) 9650044744, ravi.raju@ap.sony.com

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

Srinivasan Iyengar, director-IT & change management, Aegon Religare Life Insurance, spurred growth by ensuring that business processes were tightly integrated.

BPM

Case File

COVER stORY BuILDIng FOR gROWth | 18

BRushIng up On stORAgE | 34 Caught between an IT roadmap and a SAP upgrade, Asian Paints decided to create a better SAN platform. The result? A more stable infrastructure that will last for at least the next 24 months.

I PHoto by S RIVatSa SH an dIlya

New to an intensely competitive insurance sector, Aegon Religare was in danger of being overwhelmed.

But by aligning its business processes tightly it ensured a place for itself. What other companies preparing for growth can learn from this fledgling insurer’s structured approach to expansion.

Feature by sneha Jha

CoVER: d ESI gn by bI n ESH SREEd HaRan

1 8

pLus:

hOW tO tRIm YOuR Bpm BuDgEt | 26 The key to cutting costs of your BPM initiative is to detect and eliminate — or minimize — common BPM project budget-busters. Here’s how.

Feature by Clay Richardson

Feature by gunjan trivedi t

Project Management thE F WORD | 42 How failure teaches, motivates, even inspires.

Feature by Kim s. nash

Peer-to-Peer YOu KnOW YOu’RE OK, IF... | 16 You’ve landed the interview. Now, you’re probing to find out whether you would make a good fit. But how do you know if your potential employer is being evasive?

Column by Al Kuebler

more » 6

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Vol/4 | ISSUE/17

7/13/2009 7:03:43 PM

content

(cont.) dePaRTMenTs Trendlines | 11 survey | Where Are We Headed? | Rajesh Uppal on Inventory Management Quick take t | Voices Do Enterprises Have Too Many Apps? security | Your Defence Against Network Attacks It t Budget | Where’s the Money Going, Honey?

Opinion poll | Getting More from Your Customers Career | Moving Out, Moving Up Virtualization | Going Virtual: Not a Cake Walk security | Caught in the Act Energy | Datacenters Need to Chill Out Alternative Views | What’s Your Hiring Criteria?

essential Technology | 53 Enterprise Apps | Inching Towards Google Apps

Feature by C.G. Lynch pundit | Tracking the Needle

Column by Kim S. Nash

From the editor-in-Chief | 2 Keep the spark Alive

By Vijay Ramachandran

NOW ONLINE “CIOs work in an environment that is constantly changing. Therefore, CIOs cannot establish themselves in a comfort zone and work solely within it,” says K. Ganesh, founder and CEO of TutorVista.

2 8

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

executive expectations VIEW FROm thE tOp | 28 K. Ganesh, founder and CEO of TutorVista, says setting up several companies taught him at least two things: the importance of IT and of self-belief.

1 6

Interview by Kanika goswami

Cloud Computing FIVE CLOuD thInK thROughs | 38 Running an enterprise application on a public cloud isn’t as simple as it looks. Here are some practical guidelines to consider and questions to ask when buying cloud services.

Feature by Beth schultz

8

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Content,Editorial,Colophone.indd 8

Vol/4 | ISSUE/17

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

Senior Correspondent Kailas Shastry

Correspondent Sneha Jha

Anjan Choudhury

Copy Editor Shardha Subramanian Trainee Journalists

CTO, BSE

Chief COPY EDITOR Sunil Shah

Priyanka Varsha Chidambaram

Product manager Online Sreekant Sastry Design & Pro duction

Lead Visualizer Binesh Sreedharan

Lead Designers Vikas Kapoor, Anil V K

SENIOR Designers Jinan K Vijayan, Jithesh C C

Unnikrishnan A V

Emerson

7

IBM

BC

Krone

IBC

Lenovo

IFC

Ashish Chauhan President & CIO, IT Applications, Reliance Industries Atul Jayawant President Corporate IT & Group CIO, Aditya Birla Group

Siemens

1

Sony

3

Donald Patra CIO, HSBC India

Vinoj K N, Suresh Nair Girish A V (Multimedia)

4&5

GM (MIS) & CIO, Bajaj Auto

assistant editors Gunjan Trivedi, Kanika Goswami

Avaya

Dr. Jai Menon

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

Director Technology & Customer Service, Bharti Airtel & Group CIO, Bharti Enterprises

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 Marketing and Sales

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

10

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Content,Editorial,Colophone.indd 10

Vol/4 | ISSUE/17

7/13/2009 7:03:53 PM

new

*

hot

*

unexpected

WhE ErE E arEWE WE hEadEd?

One-third of 1,200 organizations plan to convert their application environments away from a traditional, client-server model to one based on virtualization and cloud computing over the next two years, according to a study by Microsoft. The study sought to broadly determine global IT spending priorities.

While the survey was far from comprehensive, it did uncover a few facts that serve as silver-linings. IT spending budgets will not be cut, with 98 percent

survey

saying they will generally maintain or increase their planned investment.

Nearly two-thirds say the economy has created reasons to invest additionally in one or more areas of technology. Fortytwo percent say they plan increased investment in virtualization, 36 percent plan increased investment in security, while 24 percent plan increased investment in systems management. And 16 percent plan to bump their current investments in cloud computing.

Given today's economic climate, much of the study produced results on spending priorities that you might expect. Security remains the top challenge, with 73 percent saying protection of consumer and customer data as the top priority. Fifty-five percent indicate that the economy has changed the role of IT in their organizations while 51 percent say that budget cuts

are the biggest barrier to innovation.

And innovation is taking a back seat to maintenance. In 2009, companies worldwide will allocate, on an average, 37 percent of their budget to innovation and 63 percent toward 'keeping the lights on.'

One area that won't be seeing the greenbacks is green IT, the study found.

While most of those surveyed (84 percent), said they considered green factors when making decisions about datacenters, when push comes to shove, a technology's green-ness is only a factor for 44 percent when deciding what to spend on. In other words, the study suggested that people like to think about eco-conscious IT options, but these have a reputation of costing more and they aren't willing to spend more for so-called green technologies, at least not in this economic climate.

—By Julie Bort

Quick take

Rajesh Uppal on Inventory Management a p p l i c a t i o n s Like most business processes today, inventory management is increasingly beginning to depend on IT. Kailas Shastry spoke to Rajesh Uppal, chief general manager-IT & CIO, Maruti Udyog, to find out how important inventory management can be to a manufacturing company.

What is the role of inventory management in your company?

At the outset, one must understand that an inventory management system is a combination of IT and manual decision-making. IT makes available critical information that can help management forecast sales, predict ups and downs in the market, and hence optimize stock movement as well as take counter measures. IT is actually an enabler in the process.

In a slowdown, how much more important are inventory management systems?

The technology that enables inventory management must be agile – and in a slowdown, it’s all the more important. You

Vol/4 | ISSUE/17

Trendlines - Alternative-NEW.indd 11

cannot afford to have a stock pile-up or an out-of-stock situation. Thus, the effectiveness and reliability of the whole inventory management process is obviously more important when the market is down.

How else does IT help in managing inventories?

Sales is one area where IT helps tremendously. For instance, our IT-enabled inventory management process gives us information on enquiry-to-sale conversion and how long it takes. This comes in handy in planning stock movement. Data about alterations in the number of enquires generated at dealerships indicate market moods, which is also vital for us.

Rajesh Uppal

Did it help you better prepare for the slowdown?

Yes it did. Within the flexibility and lead time limitation, we have been able to manage our inventory fairly well in the volatile automobile market in India last year. We could sense the slowdown and forecast accordingly. We didn’t have excessive inventories in any stage of our supply chain.

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

11

Do Today's Enterprises Have Too Many Apps?

S o f t w a r e IT is increasingly being viewed as a solution for every business issue but this appraoch can lead companies to accumulate a large amount of software, much of which may not be use. Kavya Balaraman spoke to three of your peers to find out if this was true:

“Yes and no. Some companies adopt technology at early stages and have a lot of unused software.

Newer companies are more prudent in their spending.” trendlines

G. Radhakrishnan Pillai CIO, SRL Ranbaxy

“Yes. The need for new software is driven by users. Effective solutions involving reasonable and practical software are not always implemented.”

Hilal Khan Head-IT, Honda SIEL Cars India

“I don’t think so. But, I believe that the business processes behind buying software are extremely important, and are ignored at times.”

Upal Chakraborty CIO, DLF

Lend Your

Voice

Write to editor@cio.in 12

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Trendlines - Alternative-NEW.indd 12

Your Defence Against Network Attack S e c u r i t y Gaining attention for advocating a practical shift in how IT leaders think about security, the Consensus Audit Guidelines offer 20 controls to measure and monitor IT-system and network security. Though worries about increased cost often accompany any notion of improving security, John Gilligan, a consultant who developed the guidelines, says he implemented a subset of the controls when he was the US Air Force CIO (from 2001 to 2005) and saved money on IT and risk management. Gilligan's recommendations include: Know your network. Inventory all devices on your network with an asset recovery tool. Record network addresses, machine names, the purpose of each device and person responsible for it. Encrypt this information. Likewise, devise an encrypted list of software authorized to run on your network. Periodically test your software inventory tool by deploying new software to see when it's detected. Note the delay; that's a vulnerable time.

Test and verify. You should test document and security settings on system images before deploying laptops, workstations and servers. Review sample systems once a month to see that settings are correct. Store master images on secured servers or offline machines.

Seize control. At network connection points, implement filters to allow use of only those ports and protocols with a documented business need. Use two-factor authentication and encrypted sessions on all network devices. Require people logging in remotely to use two-factor authentication, too.

Be suspicious. Set audit logs to record dates, time stamps and source and destination addresses for each piece of software. Devise profiles of common activity and tune logs to look for anomalies. Deploy firewalls to look for common Web attacks. Test source code for malware and backdoors before deploying.

Watch your back. Run vulnerability scans at least weekly (preferably daily). Compare sequential scans to ensure previous problems were addressed. Install critical patches within a week. Report daily on locked-out and disabled accounts, as well as accounts with passwords set to never expire or with passwords exceeding maximum age. Get explanations for these accounts. Check machines daily and push out updates for malware protection.

—By Kim S. Nash

Vol/4 | ISSUE/17

7/13/2009 7:05:35 PM

Where’s the Money Going, Honey?

Vol/4 | ISSUE/17

Trendlines - Alternative-NEW.indd 13

If you are to survive scrutiny by business heads, you must defend why you spent that money and demonstrate how it benefited the business. amounts, assessing the quality of operations for your IT organization in a more practical manner will be difficult.

A best practice is to separate both capex and opex into three categories: strategic, deferred and lights-on.

Capital expenditures that create future revenues should be bucketed as strategic. Capital projects that you didn't implement (due to budget cuts or other cost-containment reasons) but which are necessary for growth should be categorized as deferred.

Finally, spending as a part of annual refresh projects should be categorized as lights-on.

Operational expenditures should be treated the same way: Remember that all capital expenditures result in ongoing expenses.

Getting More From Your Customers At companies with the most advanced loyalty programs, shoppers increase their spending at higher rates.

How you categorize your expenditures can affect your company's valuation.

During an acquisition, for example, a significant amount of deferred capital spending may lower the company's overall value from a buyer's perspective.

A large amount of deferred capex indicates that the company's overall investment in technology has not kept pace with the company's business plan, corporate strategy or comparative industry capability. These technology costs could be assumed by the buyer.

No one is expecting to review an 'nth' degree of detail, but you have to choose the amount of detail that will give other business leaders confidence that they know the total cost-benefit of operations at a product or service level.

A sound and detailed budget provides an important lens into the performance of the IT organization.

For the CIO, financial management habits and overall acumen may be the tipping point in deciding whether he or she is invited to the party at the executive table or left in the dark.

trendlines

IT Budget Savvy business leaders will always support wise IT spending. Meanwhile, astute financial management of IT gives CIOs the flexibility to respond quickly to corporate actions such as the sale of a business unit or an acquisition.

This makes a properly managed IT budget one of the most important components in a CIO's arsenal. If you are to survive scrutiny by business heads, executive peers or potential acquirers, you must be prepared to properly explain each cost allocated, defend why you spent that money and demonstrate how it benefited the business. In this way, you provide a quantitative view of IT's value.

No doubt you agree, yet many IT budgets miss the mark. They are so fragmented that the details cannot be reconciled with aggregate line-items. In others, centralized costs are allocated equally across lines of business that use IT to different degrees and with varying benefits.

Many budgets don’t carry their forecasts beyond one fiscal year.

Nothing is more disheartening to a major investor or internal business head than to review a multi-million dollar IT budget that cannot be valued, explained, reconciled and forecasted.

That's no way to create confidence.

You need to structure your budget so that your expenditures can be fully explained and so you have enough flexibility to handle various corporate actions and reviews.

No matter how strategic IT is to your company, from an accounting or investment perspective, it's going to be treated as a cost center. Your annual opex will be rolled into the selling, general and administrative expenses part of the income statement. IT capex is capitalized on the balance sheet and amortized over the useful life of the investment.

Your IT budget is probably handled in a similar way. However, without the proper detail behind these gross

—By Albert R. Eng

Average yearly change in size of customer baskets: Loyalty Program Performance Best Average Laggards

Increase/ Decrease 19% 4% -2%

Source: Aberdeen Group

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

13

7/13/2009 7:05:36 PM

Moving out, Moving Up At barely 25 years old, the CIO profession is still young. We can't yet define a standard CIO career path, but we can identify some critical experiences. And working outside one's own country is one of them.

But life as an ex-pat CIO can be harder than it looks. You should know your personal limits. In 1997, Curt Petrucelli moved from Pfizer's US IT organization to run European IT in Brussels. "With the company globalizing, I realized that I could not compete for senior roles if I never left New York City," says Petrucelli, now US CIO of AstraZeneca.

"My first step was to talk with my family about location," says Petrucelli. "This way, when opportunities arose, I could be clear about my availability." Brussels proved to be the right fit for Petrucelli. He not only returned to the States with a broadened cultural perspective, he believes the experience was "one of the reasons I was hired for the AstraZeneca role."

trendlines

career

5 Tips to Go Global Be open to change.

Know your personal limits.

Learn the local culture.

Acclimate before you manage.

Question everything.

One piece of advice he has: Acclimate before you manage. "The first six months is a significant adjustment as your family acclimates and you do your new job and maintain ties back home," says Petrucelli. Ten years ago Pieter Schoehuijs left his job with IBM in the Netherlands and moved to Texas as Flowserve's IT director. "The culture of your company will be grounded in the culture of the country," says Schoehuijs. "Arrive a few weeks early and get to know the culture before you start work. There are cultural nuances that impact workforce management," he says. "If you don't get them right, you can cause problems."

Mike Capone, CIO of ADP, joined the company out of college and rotated through everything from product development to finance to IT before being selected for a team needed to integrate a large, overseas acquisition. He says a CIO needs to question everything. "You'll find some deep cultural assumptions about what you can do with your operations," says Capone. "People may assume a service doesn't sync up with a country's regulations, but have never checked. You may find a different answer."

—By Martha Heller 14

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Going Virtual: not ot a cake w walk alk v i r t u a l i z a t i o n Three years ago, Carnegie Mellon University opened the datacenter observatory – an answer to the ever-rising operational costs in IT. administrative expenses were spiraling out of control because individual research groups within the university were running their own IT infrastructure, characterized by short periods of heavy use followed by many hours sitting idle and wasting energy.

The solution was to build an administered utility that provides computational and storage resources to the university community. Besides improving administrative efficiency, the dCo helped control power and cooling costs while letting researchers focus on what they do best rather than worry about maintaining their own mini datacenters.

"We didn't have the name cloud computing [at the time] but as it turns out that's exactly what I was pitching to the university," says Greg Ganger, a professor of electric and computer engineering and director of Carnegie Mellon's Parallel data lab, a storage systems research center.

Building the dCo was not without its challenges, however. "We learned how hard it is to get people in the same space," says Ganger. "Each group had its own operating system that they had to have, and their own set of libraries and unique setups. Early on it was clear we had to use virtual machines." rather than using the expensive VMware virtualization tools, Ganger opted for open Source. about a third of dCo machines have been virtualized, making it easier to increase and decrease resources provisioned to each research group. overall, virtualization has been very useful but raised some interesting concerns, he says.

Virtual machines need lots of memory, Ganger notes. If VMs can be suspended when they are not in use, it's easier to provide memory to the VMs that need it. But suspending a VM can harm the application running inside it, if the application wasn't written specifically for a VM, Gagner says.

"If they have open network connections that are active, those connections will break [when the VM is suspended]," Ganger says. "We're trying to figure out how to have the capability to get stuff out of the way so it's not taking up too much memory."

Figuring out how to efficiently cool such large densities of equipment took lots of planning. "as a person who comes from a software systems background, it never occurred to me how much was involved in constructing a room like this, the power and cooling issues, the scale of the power and scale of computing involved," Ganger says.

—By Jon Brodkin

Vol/4 | ISSUE/17

7/13/2009 7:05:37 PM

alternative views B Y K a i l a s S h a s t ry

What’s Your Hiring Criteria?

Technological Skills vs Industry Experience

“There is no substitute for industry experience, you either have it, or you don’t."

with industry experience, he still needs to have a basic knowledge of the technologies we use.”

Mani B. Mulki Executive VP-IS, Godrej Industries

If I were to choose between two candidates, one with expertise in the technologies

It really depends on the job profile. If the task requires hands-on work — be

that we use, and another, who has years of experience in the industry, I would usually opt for the second choice. Of course, the candidate has to have a basic understanding of the technology we use.

Technical skills can always be upgraded. Recruits can learn on the job if they have an aptitude for picking up new skills. I believe that on-the-job learning is the most effective way of learning. Or recruits can take up courses, if they require more training. But there is no substitute for industry experience, you either have it, or you don’t. So, if a candidate is not super-specialized in a technology, that alone is not a make-or-break factor.

Here’s another reason. Some technologies will need to be customized to be deployed in a company anyway.

Since they are not really generic, one cannot expect to find candidates who can handle these jobs and deliver from day one. This sometimes ensures that learning on the job is a requirement, which makes it a no-brainer to choose a candidate with more experience.

My candidate would be someone well-rounded and would posses a willingness to learn new technologies.

Merely having a decade’s experience won’t do. Ideally, I would look for someone who is both experienced and has strong technical skills.

it hardware or software — I would choose a candidate who has expertise in that technology, either by virtue of a certification course or work experience. A typical job role where I would prefer technical expertise is network administration, e-mail or database administration. If the job role is essentially technology-based, something which impacts the day-to-day functioning of the organization, choosing someone with technical skills is an easy decision to make.

However, on the applications side and for businessfacing roles, I would certainly look for a candidate who brings years of experience in the industry to the table. In these roles, the job of IT goes beyond a tertiary function. It is more than 'support' to keep the organization running.

Here, IT will play a part in how the business is run. If my team has to make recommendations on how to improve business processes using IT, or if we are called to support a certain service, having a team of people who have seen how similar businesses are run is beneficial.

That said, even if I pick someone with industry experience (over another candidate who is less experienced but has technical skills), he still needs to have a basic knowledge of the technologies we use.

Vol/4 | ISSUE/17

Trendlines - Alternative-NEW.indd 15

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

trendlines

P hotos by Srivatsa Sh an dilya

V. Balakrishnan CIO, Polaris

“Even if I choose someone

15

7/13/2009 7:05:39 PM

Al Kuebler

Peer-to-Peer

You Know You're Ok, If...

You’ve landed the interview. Now, you’re probing to find out whether you would make a good fit. But how do you know if your potential employer is being evasive? Here’s one telltale sign.

M

Il lustration by unnik rishnan AV

y first clue that the job I was interviewing for could be something special was the absence of ‘the look’.

‘The look’ is my term for the facial expression that we’ve all seen when we’ve asked someone a question that they weren’t prepared to answer. They don’t want to seem surprised, dumbfounded or impolite, but they do want to buy a little time.

They seem to make eye contact with you, but you can tell that their mental focus is somewhere else. Usually, their full attention will be directed towards an urgent internal search for some cogent words that will seem responsive to the question that you just asked. The look is generally not accompanied by words, although you may hear some ‘hmm’s’ and ‘uh’s’. Neither will you see any nodding that would indicate a ‘yes’, nor head-shaking that would specify a ‘no’. Some variations of the look may include letting the mouth hang slightly open, or tilting the head a few degrees. Even with these disparities, however, the look is unmistakable.

I first noticed the look when I was a university instructor, asking a question that a student wasn’t prepared for. Later, as a manager, I saw the look from time to time on the faces of my employees. Once, I even saw it briefly when I asked my to-be wife’s parents for their daughter’s hand in marriage. That last example demonstrates that being at the receiving end of the look isn’t a bad thing in itself, since that turned out wonderfully for me. But here’s my advice to anyone who gets the look during an interview: run.

That Ominous Gape Before I tell you about the job interview in which my questions didn’t elicit the look, I should tell you something of my previous interview experiences. Early on in my career, I was afflicted 16

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Coloumn_1_Watch Out for the Look.indd 16

Vol/4 | ISSUE/17

7/13/2009 7:06:40 PM

Al Kuebler

Peer-to-Peer

by what is commonly called ‘the disease to please’, and wasn’t too critical about the conditions surrounding my prospective position. I viewed job interviews as my chance to find out how I could help the potential employer and to communicate my eagerness to do just that. If I got the job that I interviewed for, I would feel nice that the company wanted me, and would by happy — for a while.

A few of my early positions turned out to be very different from the impression that I’d received during the interview. Sure, some of these discrepancies were positive. On the other hand, most of them were negatives, and generally in big ways. Clearly, my expectations weren’t accurately lined up with the day-inday-out reality of the job. In retrospect, I can see that this was mostly my fault. During the interview, I didn’t particularly want to uncover aspects of the job that didn’t fit my idealized version of what I would be doing for the prospective employer.

It was slow in coming, but it finally dawned on me that it wasn’t enough that a prospective company wanted me. Not even close, actually, if I wanted a better match to my expectations. It struck me that during an interview, I would have to ask some probing questions as well. And if any of these questions prompted the look, I’d run — or at least, get out as quickly as possible without sacrificing politeness and professionalism.

Eventually, my career had progressed to a point where I was being interviewed by CEOs, chairmen and general managers of large enterprises for senior IT management positions. By then, I had learned to focus on the aspects of the job that were most important to me. I would set out to determine the general management’s outlook on IT’s contribution to the enterprise.

When it was my turn to ask questions, I would broach the topic by asking, “How does IT fit into your business strategy?” or, “How does IT help the firm to avoid cost, improve service and increase revenue?”, or even, “Do you have a strategic goal in mind for IT and its value proposition to the enterprise?”

Sometimes, the look wasn’t all I got in response to these questions. I even got replies like, “We don’t look at IT that way,” or, “IT is a necessary evil. It’s just techies with their toys, talking jargon and not understanding the business that pays their salaries,” or even, once, “They don’t know their place. We need someone to whip them into shape.”

Of course, I didn’t always feel like running out of an interview.

After all, if I was going to insist that my questions not be met with the look, I had to make sure that that insistence was reasonable.

Otherwise, I would never work in IT again.

This leader didn’t give me the look at all. He didn’t even miss a beat before replying that distributed systems were an important part of his strategy, because he wanted his employees to have better access to critical information. He felt that this would help them make the most effective business decisions possible, and therefore simplify customer interactions.

To which, I probably smiled and nodded. But inside, I was shouting, “Wow!” What’s more, he wasn’t done. “Think about it,” he said, “If our employees can’t responsively access information that they need to serve customers, they get defensive. And then our customers start to roll their eyes. That’s the exact opposite of the situation that we need to establish with our distributed systems function.”

Then, he said something that really had me hooked.

“Distributed systems are a critical link in the process of allowing our employees to respond quickly and creatively to our client needs. Why? Simply because an effective distributed systems environment integrates local data with a pull-down of centralized information from many sources. If we want to move fast, as a business, we must allow the edge of the enterprise to make as many decisions as possible. Empowerment is an overused word these days, but the last thing we need is to have every decision go up to some central point, and back down just

The look is my term for the facial expression we’ve all seen when we’ve asked someone a question they weren’t prepared to answer and want to buy a time.

Love At First Sight Once, in an interview, I asked a board chairman, “How do you see the distributed systems environment fitting into your business strategy?”

Vol/4 | ISSUE/17

Coloumn_1_Watch Out for the Look.indd 17

so that everyone’s backside is covered. That’s bureaucratic and glacially slow. Our employees can only be creative and responsive if they work in an environment that allows them to be. Having established such an environment, our customers will sense this, and our business will grow.

I was hooked predominantly because he had said that he wanted employees at the edge of the business to work ‘creatively’.

I already knew that this is one of the most powerful energy releasers there. I was on board within 60 days. Over several years, I was able to assist the chairman and his general management team to achieve the decentralized decision-making environment they had jointly committed to. While it took some time, and their continued support, their goal was eventually realized for each business in the enterprise.

My job expectations were exceeded. My sense of accomplishment and reward in that position was the highest in my career. But it took me a while to find, and it didn’t exactly happen by accident. CIO Al Kueblerhas been CIO at AT&T Universal Card, Los Angeles County, Alcatel and McGraw-Hill and director of process engineering at Citicorp. He is now a general management and IT consultant. Send feedback on this column to editor@cio.in

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

17

7/13/2009 7:06:40 PM

Gr Srinivasan Iyengar, Director-IT & Change Management, Aegon Religare, applied years of experience in insurance to pull off a successful BPM project.

Cover Story.indd 18

7/13/2009 7:49:06 PM

Cover Story | BPM

New to an intensely competitive insurance sector, Aegon Religare was in danger of being overwhelmed. But by aligning its business processes tightly it ensured a place for itself. What other companies preparing for growth can learn from this fledgling insurer’s structured approach to expansion. By Sneha Jha

BuildinG for

G rowth Reader ROI:

BPM’s role in spurring scale and growth How to get end users on board What to watch out for

Vol/4 | ISSUE/17

Cover Story.indd 19

choice begets commoditization, commoditization commands differentiation, and differentiation requires technology. It is a lesson Aegon Religare, a newbie on the Indian insurance block, counted on to take it far.

The company would need it. As the 21st entrant to one of the world’s fastest growing insurance markets, Aegon Religare was up against plenty of competition. The market was cluttered, commoditized, and some of the players were deeply entrenched and had decades of experience — all of which formed significant entry barriers. And the pack kept getting bigger and faster. “In the insurance industry, the last four to five years have been extremely top-line driven,” says Srinivasan Iyengar, director-IT & change management, Aegon Religare Life Insurance.

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

PhotoS By SrivatSa Sha ndilya i magi ng By BineSh Sreedhara n

Competition begets choice,

19

7/13/2009 7:49:09 PM

Cover Story | BPM But none of that fazed the company because they had a plan which would help them dart ahead of the competition. Part of it was to use their rivals’ deep-rooted processes and systems — inherited from years of use — against them. “Insurance is a processdriven business and these processes need to be efficient if you want to respond to market conditions quickly. Players need to adopt a laser-sharp focus on agility. BPM is your best bet if you want to achieve that level of process efficiency,” says Iyengar.

He should know. He’s spent 22 years in insurance and IT, most of it with companies such as ICICI Prudential and LIC. That grounding, combined with a penchant for start-ups (Aegon Religare is his third in a row) made it hard to disregard his advice. Not that the folks at Aegon Religare

toP 10 leSSonS

froM reAl-world BPM ProjeCtS do Start with an important process Establish a simple RoI metric for your initiative that is meaningful to your business Stop modeling and start implementing Insist on multiple iterations Use business process needs to compare offerings don't Try to fix your most complex process first or everything at once Go overboard with process performance metrics Wait for complete consensus on the new process before getting something up and running Allow scope creep—your first process should be operational within 60 to 90 days with an organized plan for future releases Focus on technology or assume BPM vendor offerings are all the same

20

Cover Story.indd 20

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

were planning to. Today, their experience demonstrates that BPM could just be the answer other companies are looking for as they prepare to expand and meet the imminent recovery head on.

Aligning Processes Business process management is an approach that combines software and policies with the aim of streamlining process flow among departments, thereby improving communication and efficiency.

Fundamentally, BPM identifies, documents, executes, monitors, and automates activities within an enterprise. On a practical level, it looks at business processes to design, re-use and exploit them to augment business agility and operational performance. It also helps bridge departmental boundaries and plug information gaps that might be limiting a company's effectiveness. BPM is critical to automate tasks, which leads to increased productivity. This, in turn, allows an organization scale up with ease.

“BPM wins the ‘triple crown’ of saving money, saving time and adding value. BPM delivers both short-term ROI and longterm value,” says Janelle Hill, research vice president at Gartner.

If you’ve heard this before, that’s because BPM has evolved from former process management theories and practices, such as total quality management (TQM) and business process re-engineering (BPR).

Today, organizations are increasingly looking at BPM to automate and optimize their most complicated and high-volume processes, slash costs, track and monitor performance and provide improved customer support. According to recent Gartner research improving business processes is the number one priority of CIOs this year — a position it has maintained since 2006.

However, deploying BPM can be an arduous task. Most companies that initiate one hit a roadblock when they have to align different departments because end users do not always see the value of the initiative.

Managing the change effectively is a major BPM issue. Integration is also a well-known challenge associated with the technology.

Despite these challenges, BPM is fast gaining traction as an enterprise-ready

technology. BPM suites (BPMS) will be among the fastest-growing software markets through 2011, says research firm Gartner, exhibiting a CAGR of 24 percent from 2006 to 2011.

“BPM can act as a catalyst that enhances agility and workforce effectiveness. In our case, the real business value of BPM resulted in improved business processes.

Given the phenomenal growth potential in the insurance industry, we wanted to scale our operations rapidly and for this we needed to maintain a keen eye on our business processes. BPM was an obvious choice. It not only helped us manage processes better but also speeded up information flow,” says Iyengar.

It is a view that his CEO shares. "We invested in BPM because, we saw the benefit in being able to streamline our processes and automate both routine and key activities," says Rajiv Jamkhedkar, CEO, Aegon Religare.

Growth Policy When the Indian government opened up the insurance sector in 1999, it stretched the contours of the insurance market dramatically. Foreign players that had waited for years to get a toehold in the giant opportunity that was India jumped and an industry that, until then, was dominated by four players, mushroomed.

The IRDA bill created new companies offering new products, who were serious about being taken seriously. All that activity created the fifth-largest market among emerging insurance economies — one that is growing at over 30 percent annually slowdown or not.

Aegon, a Dutch insurance major with a 160-year-old pedigree, wanted some of that action. But a 26 percent cap on foreign direct investment in the sector meant it had to find Indian partners. In July 2007, it launched Aegon Religare Life Insurance, in which Bennett, Coleman & Company had a 30 percent stake and Religare had 44 percent.

Aegon Religare started with an initial investment of Rs 350 crore and relied on Religare’s network of over 1,800 branches for distribution. In its first year, the fledgling insurer sold 23,000 policies and collected Rs 46.3 crore in premiums.

Vol/4 | ISSUE/17

Cover Story | BPM However, locating partners and getting the project off the ground was only the first of the new insurer’s problems. Life insurance premiums in India are expected to grow

by Rs 1,230,000 crore by 2010-11, if Aegon Religare wanted some of that goodness, it needed to be heard above the market’s clutter and commoditization.

As a late entrant, executives at Aegon Religare knew that they were at a decisive disadvantage. So, they quickly identified some factors that would help them create a space for themselves.

First, was the fact that with an insured population of just 4 percent, much of the market was untapped and was big enough for everyone. At the same time, thanks to a surge in disposable income, Indians were beginning to look at insurance not only as a tax saving tool but also as an investment option. According to Nielsen’s Life 2008 survey, life insurance has the highest penetration as an investment option, beating gold, property and fixed deposits. “The Indian insurance market remains both under penetrated and under-insured," says . "There is tremendous potential to increase the number of people who have insurance cover and increase the cover of existing policy holders. India remains a high potential; high growth market,” says Jamkhedkar.

This isn’t to say that Aegon Religare didn’t have plans to make it to the top of the insurance heap. To do that, the business had to make good in three areas: its agents, its partners and its customers.

It also needed to expand fast. "BPM helps rolling out new processes within a relative short time, especially when rolling out new initiatives becomes vital in a competitive world," says Jamkhedkar.

Top executives at the organization set themselves an ambitious target: to have a pan-Indian presence from day one.

Part of their inaugural day plan was to “launch with impact” at 25 locations. “We wanted to come to the market with niche products supported by a unique customer service proposition using technology as a differentiator,” says Iyengar.

Also core to their strategy was to have several channels. On the ground this translated in four channels that included the more traditional ‘tied agency’ (third-party

Vol/4 | ISSUE/17

Cover Story.indd 21

“BPM helps rolling out new processes within a relatively short time — especially when rolling out new initiatives is vital in a competitive world.”

— Rajiv Jamkhedkar, CEO, Aegon Religare. agents, a model that everyone in the industry uses), a corporate agency channel, the network of their mother company Religare, and their internal sales force. “We launched alternative channels from day one because we wanted to touch base with customers through multiple mediums,” says Iyengar.

However, like strands of wire in a cable, all these channels needed to meet at what they called the agency portal.

Simultaneously, the insurer wanted to create an efficient backbone for their customer-facing website. “We wanted to address the unmet needs of the Indian customer with a differentiated, customeroriented and quality product portfolio.

We wanted to develop products with distinctive attributes. Achieving product differentiation was a key business priority.

This was our long term objective and key motto,” says Iyengar.

It was a business model that looked great on paper. In reality, hundreds of separate process could get in the way of these three initiatives — making it hard for Aegon Religare to service its agents or customers easily, slowing down both employees and the organization.

BPM Cover Iyengar was quick to realize that the most immediate challenge was to create and implement a successful, efficient and sustainable BPM model, incorporating the integration of systems in real-time and data exchange across the IT infrastructure. The implementation, says Iyengar, was relatively problem-free, due mainly to a strong change management drive. And it greased the flow of information.

Take their customer portal for instance.

It’s where policyholders can get information REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

21

7/13/2009 7:49:11 PM

Cover Story | BPM

how to tAMe

Your BPM B

PM is an extremely hot area for vendors and IT consultants. Many CIos, however, are struggling with BPM initiatives today. An Aberdeen Group report states that getting business integration and workflow products to work is a challenge companies face. The result is islands of BPM functionality scattered through the organization, serving discrete functions.

Another survey stated that it was just difficult to make BPM work. The survey looked at how 125 product and service companies are using BPM to drive innovation, and found that they lacked the practices and vision to realize the full benefits of BPM investment.

Another problem is people. According to the Aberdeen Group survey of more than 160 IT and business executives and managers, the key challenges for companies deploying a BPM system have less to do with technology and more to do with people and processes. "Part of the solution is technical, but another part is organizational. This is where many companies stumble," states the Aberdeen report. "It takes highly capable BPM products, a willingness to take a hard look at business processes, and organizational maturity to succeed."

Thus, the top two challenges from the Aberdeen survey were organizational: justifying BPM investments and getting buy-in from business stakeholders.

Another survey from Virtusa and PRTM confirms how large organizational disconnects can get without business-side buy-in. In follow-up interviews with those who were surveyed, many indicated that they were investing in BPM initiatives even though projects usually lacked senior executive sponsorship. Just 24 percent of respondents reported having a VP or a senior executive in charge of BPM, and more than 40 percent said there was "no clear decision-maker in place to manage BPM programs."

Not surprisingly, the majority of those surveyed reported that their companies lacked a roadmap for deploying and capitalizing on their BPM investment. Fifteen percent said they had a plan for BPM that had stated objectives, and just 12 percent reported they used a defined roadmap for process improvements.

So how can a CIo tame BPM? The Aberdeen Group has several recommendations: Document Your Processes. "BPM is business process management, not an application," states the report. "Understanding your key business processes is the first step to any BPM implementation. Invest the time to understand the flow of information through your enterprise."

Hire HelP. P Best-in-class companies understand that management consultants P. are key to improving their businesses. "Engage a consultant firm early," notes the report, "in order to lay the groundwork for choosing a BPM tool."

Plan for enterPrise convergence. If companies are already using standalone BPM applications, Aberdeen recommends that organizations should explore ways to bring those applications together into an integrated system. "New development should be capable of integrating into the enterprise BPM solution.”

—Thomas Wailgum

22

Cover Story.indd 22

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

about their premium dues, policy details, unit fund values if they own unit linked policies, etcetera. “Customers can also pay their premiums online. Once logged in, a customer’s policy information is authenticated with backend systems. The portal is integrated with an MIS database, the company’s CRM, and a payment gateway, thus providing a single view of a customer’s policy holdings,” says Iyengar.

The efficiency that BPM introduced by linking all the backend systems together resulted in 20 percent fewer queries at the call center. Today, Aegon Religare’s call center receives only about 200 calls a day — 60 percent of which comes from new clients.

The technology also benefited all four of their agency channels. One of these was aimed at making the lives of its agents simpler. By employing BPM, the agency portal has become a single point of contact for its agent to track pending proposals (as customers wait for a medical examination, for example) and complaints or requests, among other things. Access to the portal is based on unique user-IDs, and is tightly integrated with backend systems. These include an operational data mart for policy information, the agency management system for agency and commission information, a CRM for all complaints and an MIS tool.

The portal helped reduce the number of calls to the call center and local branch offices. It also ensured that agents are paid more promptly, increasing their loyalty to Aegon Religare (many agents work for multiple insurance players). Previously, commissions were paid weekly following the submission of certain statements. Today, because everything is recorded via the website, payment cycles have shortened.

The portal also helps monitor and improve the process of getting new agents on board — a key metric in the insurance sector. This system, also called the sales management system, enables sales managers to help agents with the on-boarding process. Similar to a customer lead management system, it allows sales teams to record prospective agents, the conversion of prospective agents into company agents, and their productivity.

By putting the sales management system on a BPM platform, Iyengar gave the company

Vol/4 | ISSUE/17

Cover Story | BPM the ability to accurately track the number of prospective agents that the sales teams meet against their targets.

“With the BPM project, the agency portal has become a core information source for sales channels. It has helped us with performance and recruitment management which is critical for a new organization like ours,” says Sachin Jadhav, senior manager-IT, Aegon Religare.

Jadhav is referring to a key benefit: the BPM project brought down the time it took to recruit a new agent by two days and saved Aegon Religare Rs 3 lakh a year by trimming down the number of people at headquarters whose job was to monitor sales managers.

But these efficiencies didn’t come easy.

The Importance Of Change Management In their enthusiasm to build a robust sales management system for example, the IT group built complex validations and conditions into the tracking modules. These modules had complicated links to other screens within the sales management system and also interlinked with backend systems like the core agency admin and MIS system.

This made it hard for sales managers, who spent a lot of their time in the field, to provide daily reports.

“This was overcome by direct discussions with users, IT and the solution provider team and we made the system a little more flexible,” says Iyengar.

But it brings into focus one of the biggest hurdles in a BPM project: change management. Because a BPM deployment touches almost every department, it can be a political minefield.

Thinking ahead, Iyengar put together an eight-strong change management team to meet this challenge. It is a separate entity that reports to Iyengar and is responsible for understanding business needs and finding a solution. It also acts as a gatekeeper for the business architecture model and ensures that all changes are in conformity with architectural principles. Finally, it is tasked with ensuring that all process and documentation is followed judiciously by both the business and the technical teams and plays a pivotal role in leading and driving system testing and rollouts.

Vol/4 | ISSUE/17

Cover Story.indd 23

“Insurance is a process-driven business and these need to be efficient if organizations want to respond to market conditions quickly. BPM is their best bet to achieve that level of efficiency.”

— Srinivasan Iyengar, Director-IT & Change Management, Aegon Religare The change management team at Aegon Religare is divided into two groups: the sales and operations group. This split helps them have dedicated focus groups to interact and manage the two key business entities within the company and still be part of one cohesive change management team. Crucially, the team has members who are conversant with the domain, processes and systems.

During a pre-scoping stage, the team along with an IT project manager ensures that a vendor has the complete background on what is expected from the project and the documentation standards the vendor needs to abide by. During the scoping stage, the change management team ensures that business requirements were captured well by the vendor and that documentation is delivered to them. They challenge business

users to ensure clarity between ‘must have’ and ‘nice to have’, says Iyengar. They also explore key capabilities of a product or platform and evaluate new business processes to drive better results.

In a development stage, the change management team with IT project managers ensure that a business requirement development document is properly converted by the vendor into functional specs and also reviews unit testing cases.

Once a vendor delivers a system, the change management team is responsible for system testing. They also work with users to ensure that test scenarios and test scripts are well documented and review them so that user acceptance testing can be done as planned. After this point, they are responsible — with the IT project managers REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

23

7/13/2009 7:49:15 PM

Cover Story | BPM — for training and getting all sign-offs so that the IT project managers can implement the system on time The biggest advantage with the change management team is that it is a gatekeeper for the various changes that take place with business processes that have an impact on the system. “This enables us to ensure that we not only have a sound architectural plan but also that we are progressing in the right direction. Without the change management team, the BPM project would not have been possible,” says Iyengar.

Premium Benefits The BPM implementation brought a whole gamut of benefits to Aegon Religare’s business. It helped the organization become a high performance enterprise with a thrust on productivity, efficiency and seamless orchestration of people and process.

“This system has put information at the fingertips of those who need them within the organization. It has made life simpler for our business managers. And has reduced our time to market. We can now plan our business more easily,’’ says Jadhav.

In the absence of BPM this would have been hard to imagine. “Without BPM we would have had a tough time grappling with various business and technical challenges.

BPM has given us a competitive edge that will bolster our growth, enhance sustainable profitability, and integrate our processes better,” says Iyengar.

The agency portal, for example, has enabled business alliance partners (at Religare’s 1,800 branches) to keep track of the latest status of proposals, enabling them to get their work done without having to follow up with Aegon Religare. It is also directly responsible for the fact that agents make zero calls to the call center because they can interact with Aegon Religare via the portal. And the easy availability of information means that the insurer no longer has to post consolidated commission statements to 2,500 agents. This is expected to save Aegon Religare Rs 7.5 lakh in 2009.

By bridging together multiple departments, BPM has made cash collection more efficient, which means that they can work longer. The collection window, which used to close by five so that staff could 24

Cover Story.indd 24

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

unitinG it And BuSineSS

I

n 2007, NACCo Materials Handling Group (NMHG) — a manufacturer of warehouse trucks and forklifts — used a manual system of spreadsheets and signatures to track design changes in its production line. The company soon learned that its lack of an automated process was allowing for missed signatures, leading to some defective designs. Additional costs incurred from product recalls forced NMHG to explore a new option: product lifecycle management (PlM).

But the CEo was wary of the plan. "This was right on the heels of a painful and expensive SAP implementation, and our CEo was a little gun shy to spend a lot of money on PlM," says Bob Shallow, director of global product development processes, systems and operations. "So — almost by accident — we started talking about leveraging a [business process management] tool."

That move would save them millions.

Shallow, a veteran of Ford Motor Company, learned about a similar BPM operation there. So he and his team estimated they could meet about 80 percent of their needs at about 15 percent of the investment, resulting in a 200 percent RoI. With the PlM tool, the RoI estimate was in the 30 percent range. Their CEo gave Shallow's team the green light.

But when Shallow met with Gidu Sriram, NMHG's IT director to discuss logistics he met with opposition. "All we wanted was an opportunity to look at other alternatives to make an objective decision, rather than having someone tell us that this was the way to go," Sriram explains.

Sriram and Shallow agreed to hear presentations from both BPM and PlM vendors. After the meetings, everyone was asked for feedback, and BPM emerged as the overwhelming winner. Since they needed to demonstrate the business value quickly, both IT and business agreed on an aggressive schedule, completing the project in two weeks rather than the more-typical two months.

Most importantly, the business benefits were significant, with a savings of $2.5 million (about Rs 12 crore) by choosing the BPM tool over the more complex PlM system. NMHG is now able to bring products to market faster and eliminate recall costs. Soon enough, more BPM rollouts followed.

—Kristin Burnham

reconcile accounts, now stays open for an additional two hours a day. That works out to about a month more, every year across 51 branches. The extra two hours should conservatively make the company over Rs 6 lakh a year.

The flexibility of the BPM solution means that further applications and projects can be put into place on top of the existing platform, resulting in a sustainable long-term solution.

It's a benefit that CEO Jamkhedkar thinks the sector would do well to look into. "With

each insurance company having their offices and processes spread across many locations, maintaining consistency of processes, ensuring the timely resolution of issues and appropriate escalation are the key areas where BPM can help the industry," he says.

For now, he is focused getting his company to break even, which he says should happen in the seventh year — or earlier. BPM should bring earlier sooner. CIO Sneha Jha is correspondent. Send feedback on this feature to sneha_jha@idgindia.com

Vol/4 | ISSUE/17

7/13/2009 7:49:16 PM

Trendline_Nov11.indd 19

11/16/2011 11:56:19 AM

How To Trim Your

BPM Budget The key to cutting costs of your BPM initiative is to detect and eliminate — or minimize — common BPM project budget-busters. Here's how. By Clay Richardson

A Reader ROI:

The importance of process management analysts Why you should develop an agile mindset Why you should adopt tools to accelerate consensus at all levels

26

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Cover Story_PLUS.indd 26

ccording to The Economist, 2009 will be the year of the CFO. After reading Lucy Kellaway’s article in The Economist earlier this year, I can’t seem to get the image of a maniacal axe-wielding CFO, lopping off departmental budgets, out of my head. À la French Revolution, the mantra would probably be “off with their heads!” Except, with a CFO, it’s probably more like, “Off with their bloated budgets!”

In her article, Lucy promoted the CFO as "the new king" in the corporate world. For CIOs and the line of business managers, this means an even greater scrutiny on the justification of the value of new and existing business solutions, coupled with an intense drive to reduce development and IT operating costs. Fortunately for CIOs with existing BPM initiatives, CFOs understand the vernacular of process improvement and can easily wrap their minds around traditional ROI metrics for BPM — efficiency, productivity, cost control, etcetera.

This means your BPM initiative will probably not get the full axe from the CFO. Instead, a haircut or a little trimming might do.

“Where to cut, and where not to cut. That is the question.” Obviously, my Shakespeare is not what it used to be. Based on recent customer inquiries and interviews, Forrester found that many BPM projects exceeded their budgets due to: The blind leading the blind. Mismatched roles are a common and costly budgetbuster on BPM projects. A common example: when business analysts are assigned

Vol/4 | ISSUE/17

7/13/2009 7:18:35 PM

Cover Story | BPM

to lead process discovery. During the first phase of a BPM project, process discovery often sets the tone and pace of the entire project. If the wrong person, or personality type, is leading discovery, the impact will be felt across all phases of the project — and most importantly on the project timeline and expense sheet. Eliminate this budget-buster by recruiting and promoting analysts that eat, sleep, and breathe process.

Consensus log jams. Remember all that advice your BPM suites sales representative gave you on smashing department silos? As it turns out, killing the silos, or zapping the whitespace (or whatever else your rep said) is pretty hard stuff. Getting those nutty people in marketing to see eye-to-eye with the bean counting accounts payables team just isn’t that easy; and the time it takes to build process consensus across these disconnected teams is crushing your original project budget. Eliminate this budget-buster by embracing evolutionary requirements and adopting tools, such as process wikis, to accelerate consensus and buy-in at all levels.

Waterfall mindset. Recently, a friend who leads government BPM projects commented that “budgets don’t last forever.” This revelation made me think.

As a former lead on government BPM projects myself, I recall sitting through many requirements sessions waiting for the paint to dry — both literally and figuratively. As a staple on both commercial and government projects, the 'waterfall' methodology emphasizes defining all requirements upfront and locking them in throughout development.

This may sound like a great idea, until you realize that only 7 percent of requested requirements are actually used “all the time” after the solution is delivered.

So what about the other 93 percent of requirements, you ask? Another 13 percent are “often” used, and another 16 percent are used “sometimes”, according

Vol/4 | ISSUE/17

Cover Story_PLUS.indd 27

Vet Your

Vendor

With vendors hawking BPM of all stripes, you need to know what to look out for.

Verify that the vendor's BPM platform is truly integrated. Some vendor platforms have built bridges to modeling and simulation tools and call it BPM. Sometimes the reporting component is just an add-on. This 'bucket brigade' approach really slows down the iterative nature of a real BPM approach to process improvement.

Don't let technology preferences taint an objective comparison of BPMS features and capabilities. Thinking about a BPM tool based on Java versus .NET may be less important than basing one's decision on the BPM features required by business analysts for process modeling or the features required by workers to monitor and execute tasks. For example, don't fall in love with the flashiest rules engine. But don't get boxed in by your existing architecture or vendor partners when selecting a platform to drive process improvement across your organization. In fact, your BPM platform should be independent of legacy constraints so that you have the flexibility to replace source systems without affecting user-facing process automation.

Always take a good look under the hood. Different vendors take very different approaches to implementing common BPM features, such as how the process model is linked to lower-level implementations or how a user interface is constructed and integrated into the workflow. Some vendors provide better support for heavy business analyst involvement in constructing a BPM application (which does not require substantial programming expertise), while others require substantial programming expertise for even simple development tasks. Some vendors offer well-defined, easyto-use APIs to allow for custom integration to accomplish more unique requirements.

Delving into the details will help you understand exactly how a particular vendor's product will fit with the skills and capabilities of your organization and best meet your company's specific needs.

— By Mark Cooper & Paul Patterson

to Craig Larman’s Agile and Iterative Development: A Manager’s Guide. That leaves something like “a lot” percent that’s not used at all. If that’s not enough to make you scratch your head, then I recommend you get ready for that axe I mentioned earlier. Eliminate this budget buster by adopting an agile and lean mindset that emphasizes delivering value over delivering requirements. So, although The Economist predicts that 2009 will be the ‘Year of the CFO,’ the next several years will also belong to BPM. Just ask

the BPM vendors — they’re all crowing about how well they’re doing in the down economy. Cutting through the hype of BPM, pragmatic companies will continue to expand adoption and standardization of BPM usage throughout the enterprise.

However, to keep your BPM out of the CFO crosshairs, use 2009 as a year to go lean and prove the value that BPM brings to the company. CIO Clay Richardson is a senior analyst at Forrester. Send feedback to editor@cio.in

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

27

7/13/2009 7:18:37 PM

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.

28

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

View from the Top.indd 28

Beyond

Borders

By Kanika Goswami

Ever seen a tightrope-walker perform? Walking on a thin wire, risking his life, he literally lives on the edge. He knows that the distance between success and failure is one wrong step.

Tight-rope walking is definitely not for the faint-hearted.

Being an entrepreneur is a bit like that. Every decision they make is another risk. And every risk they take defines both them and their business. Meet K. Ganesh — risk-taker, an innovator and change maker.

In the wake of the dotcom bust, when Internet companies were pulling down their shutters, Ganesh set up CustomerAsset (now FirstSource), a BPO which he later sold to ICICI. Renowned as a serial entrepreneur, taking risks became a habit for Ganesh. A mechanical engineer, he ventured into financial services and then forayed into the BPO sector. And today as the CEO & Founder of TutorVista — an initiative which enables Indian teachers to tutor foreign students over the Internet, Ganesh has re-invented himself again.

In this interview, he says he knew that setting up a company with such an innovative concept would be difficult but not impossible. With operations in over 48 countries, Ganesh has taken TutorVista from just another innovative concept to a roaring business.

CIO: What inspired you to set up CustomerAsset?

And how did ICICI enter the picture?

K. Ganesh: In 2000, when the dotcom bust was at its peak, the importance of the Internet was being understood and put to

practical use. That’s when we felt that there would be a lot of demand for delivering services over the Internet. We formulated a strategy that involved hiring employees in India, hooking them onto the Internet and using them to provide customer services for enterprises in the US. Since the US was brimming with start-ups at the time, we saw a lot of

Photo by Srivatsa Shandilya

K. Ganesh, founder and CEO of TutorVista, says setting up several companies taught him at least two things: the importance of IT and of self-belief.

Vol/4 | ISSUE/17

7/13/2009 7:21:47 PM

View from the Top

K. Ganesh expects I.T. to: Be a platform for new business opportunities Move beyond its service tag Become an integral part of decision-making

View from the Top.indd 29

7/13/2009 7:21:49 PM

View from the Top

opportunities for our venture. Although theoretically the venture seemed sound, transforming it into reality proved to be extremely difficult. We had just started out when the dotcom bust took place.

A large number of dotcom companies in the US either ceased to exist, or started folding up. We had to re-think our entire business model.

Fortunately, by then, we had acquired $3.3 million (about Rs 1,650 lakh) as venture capital funding. We found ourselves in a strange position: we had enough capital in the bank, but did not have an adequate business model.

We had no choice but to slowly transform ourselves into a more traditional, brick and mortar company.

The ICICI venture took place two years into our program. They had decided to enter the BPO sector, but did not want to start from scratch and then build up their business.

We were a ready set-up, and presented an attractive acquisition target.

How difficult was it to let go of a venture and set up a new one?

Although selling a company may be profitable from a business perspective, it can also be very difficult. Starting an enterprise and building it into a business requires a lot of passion. Without that, it is difficult to succeed.

Which makes letting go of a company that you have built yourself very painful.

It was actually tougher when I sold IT&T to i-Gate in 2002. After that, letting go has become a habit. I am more reconciled to the idea now.

There are still times, though, when I wonder whether letting go of my company was the right move. After all, it isn’t just about selling your business — you also end up losing your employees and your first set of customers. After putting so much effort into building the business, it can be an emotional experience.

30

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

View from the Top.indd 30

When you started TutorVista, what challenges did you face?

“Technology is the foundation on which business is built.

When starting new ventures, familiarity with the product or technology is a great advantage.”

— K. Ganesh After running a finance company, what made you switch to education?

Technically, my background is in mechanical engineering. In fact, my foray into computers began when I joined HCL. Since then, I have dabbled in financial services and BPO. All my ventures have been different. I believe that I am a generalist. When it comes to setting up enterprises, I view my options with an open mind and pursue fields which I feel will bring profit. And that’s why I decided to launch TutorVista.

The field of education is new to me.

However, I work with a team that has a huge amount of domain experience. I have employed people who understand consumer Internet marketing, services and education.

I believe that when you are launching a new venture, domain expertise is critical.

We decided to launch TutorVista three years ago. We were working solely on the idea of bringing the first B2C company to India. Most IT service companies tended to be B2B, but we were planning to sell our brand directly to overseas consumers. It was a hugely challenging task.

Considering that such a venture was new to India, we had a lot of problems to deal with. We wanted to equip teachers in Class B and C towns to tutor students over the Internet. However, many of these teachers were not computer-savvy. We had to familiarize them with computers and the Internet.

We were also uncertain about the effectiveness of Internet services in many of the towns in which we were targeting teachers. Other than that, we had to persuade parents in the US to spend their money on a start-up that was based in India. The art of imparting knowledge is considered to be a very personal service; it is also difficult to gauge the quality of that service.

Persuading VCs to fund our enterprise was also difficult. In the first three months that I tried to raise money, I met with a lot of skepticism. In fact, one of the VCs actually advised me to begin my venture with a simpler model. I understood these apprehensions as we were the first B2C company that planned to operate from India. In fact, I faced the same difficulty when I was in the process of recruiting top management for TutorVista.

Were overseas students skeptical about learning from Indian teachers?

Before beginning this venture, I felt that most NRIs would be quick to accept the idea, but would form too small a market to build an entire business around. So, I

Vol/4 | ISSUE/17

7/13/2009 7:21:56 PM

View from the Top

spoke to about a 100 American students, teachers and parents in the US. I was more concerned about the reactions of American parents and teachers.

However, the response was extremely positive. Many parents were open to the idea of letting an Indian teacher tutor their children over the Internet. They seemed to have a lot of confidence in the venture.

Thanks to the IT revolution, Indians in the US are perceived as somewhat ‘nerdy.’

They were not concerned about communication gaps between their children and Indian tutors. As they pointed out, several American teachers from different parts of the country also spoke in varying accents. Their larger concerns revolved around whether their children would willingly accept learning through the Internet.

In fact, this doubt over the Internet as a medium of instruction proved to be a much bigger challenge than cultural issues.

Are you planning to innovate or re-invent TutorVista at any point of time?

At TutorVista, re-invention is a continuous process. This is actually the case with most new enterprises. While starting a business, it is very difficult to follow up on your original ideas. When put to practice, some of them work and others don’t. In the last three years, we have witnessed multiple rounds of re-invention at TutorVista.

When we first launched, we offered certain services. However, over time we have had to alter everything, including pricing, business models and our focus areas. These changes take place in terms of market offering, segmentation of the customer and back-end technologies.

For a start-up, innovation is not really a choice. It is only when an enterprise has established itself that it is faced with the options of innovating or continuing with older business models.

Vol/4 | ISSUE/17

View from the Top.indd 31

How does entrepreneurship apply to CIOs and how can they adopt it?

SNAPSHOT

to have the ability to re-invent yourself. There is a greater opportunity for this in fastNo. of students: growing industries, where < 10,000 pressure to stay at the top Employees: can force you to innovate and 1,150 Fortunately, CIOs work re-think ideas.

Headquarters: in an environment that is If not, there is a chance Bangalore constantly changing. As an that younger employees, with Countries: IT leader, a CIO is expected knowledge and skills which 48 to keep himself abreast of the are more up-to-date, could latest technological trends. actually move up faster. This At the same time, he must is something that all CIOs also have the ability to help his team adjust should keep in mind and watch out for. to new upgrades. Therefore, a CIO cannot establish himself in a comfort zone and You are a believer in work solely within it. psychocybernetics. What I believe that this ability to adapt and role does sheer belief play progress is an important skill from a in business? leadership perspective. Since IT is often regarded as a service rather than an actual I believe very strongly in the law of line department, it is true that some CIOs psychocybernetics. The power of perception have to operate within certain constraints. can have a huge impact on how things play However, there are many examples of out. TutorVista is actually a typical example CIOs who form an integral part of their of this. Three years back, nobody would organization’s think tank, and have used have imagined that a teacher sitting in rural technology to get ahead of competition.

India could tutor a student in the US in real Such CIOs often help extensively in coming time. We were faced with several challenges up with entrepreneurial ideas. and doubts. Today, however, TutorVista has It must also be kept in mind that reached a point where it has incorporated technology itself is the foundation on which a thousand teachers who are tutoring over business is built. When it comes to starting 10,000 children in 48 countries. new ventures, familiarity with the product In order to build up our business, we had or technology is a great advantage. to market our service to consumers over these 48 countries, hire teachers in India, What dangers do leaders and train and certify them. Considering that the average age of our teachers is 55 face when they are unwilling years, it is not easy to familiarize them with to adapt to new situations? computers and the Internet.

There are certain industries in which A venture of this kind was inconceivable you can survive simply with good three years ago. Today, it is possible because execution. These industries tend to be I believed that it was. CIO stagnant to a certain level. They can provide careers that are steady, if not particularly challenging. However, if the industry is going through a rough patch, you can easily become obsolete.

Changing and adapting is an integral Kanika Goswami is assistant editor. Send feedback on part of being a leader. It is very important this interview to kanika_g@cio.in

TutorVista

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

31

7/13/2009 7:21:57 PM

Reader ROI:

Why it pays to be flexible The importance of right-sizing storage How to build scalability

34

Case Study.indd 34

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

W

ay back in 1961, when American author Joseph Heller published his satirical novel ‘Catch-22’, he didn’t have a clue that he would be gifting the world an idiom that defined a no-win situation with self-contradictory circular logic.

A good 48 years later, the term proved a perfect label for the position Asian Paints found itself in. As the largest paint company in India and Asia’s thirdlargest, the Rs 4,400-crore organization grappled with low server utilization rates at its datacenter.

Server virtualization was an obvious remedy but to best leverage the technology, the company needed to move all its data — and how each application was configured to a server — to storage area network (SAN) arrays.

But, its three existing SAN arrays were unable to deliver the performance that the growing business demanded and were on the verge of running out of space. In fact, one of the SAN arrays at the DR site was already running at abysmally low levels and couldn’t have accommodated more data. To add to the chaos, Asian Paints’ SAN products were fast approaching their

Ph oto by Srivatsa Shan dilya

Manish Choksi, chief-corporate strategy & CIO, Asian Paints, revamped his entire storage infrastructure ensuring scalability for the next two years.

Vol/4 | ISSUE/17

7/13/2009 7:23:06 PM

Case File

Brushing Up

on Storage Caught between an IT roadmap and a SAP upgrade, Asian Paints decided to revamp its storage infrastructure and create a better SAN platform. The result? A stable infrastructure with better user experience and disk capacity that will last for at least the next 24 months.

By Gunjan Trivedi

end-of-life and the support terms with the vendor were up for renegotiation.

There was the easy option before Manish Choksi, CIO and chief of corporate strategy at Asian Paints, and his team.

They could plug more storage into the SAN and worry about the problem another day. But they chose to fix the root of the problem — despite the fact that it would force them to veer off their IT roadmap.

Two things drove their decision: they needed to virtualize their servers and upgrade their SAP ecosystem — and those couldn’t wait.

Instead of going down the easy but expensive route of adding storage to the creaking SAN arrays, Choksi advanced

Vol/4 | ISSUE/17

Case Study.indd 35

the overall SAN migration plan by a year, which was earlier scheduled to be carried out in 2008-09.

“Had it been a pure ‘size-and-capacity’ issue, we could have addressed it by just choosing piecemeal SAN additions. But looking at the manifold complexities, we thought a tougher stance would be more appropriate: an overall revamp,” he says.

Creating a New Palette Established in 1942 in a garage in Mumbai, Asian Paints is today the largest paint company in India. Being a highly trusted brand, the company knew it had to get its storage act together.

The company’s original IT roadmap had provisioned for a SAN upgrade in 2008-2009, but a sharp increase in data needs driven by business growth clubbed with the imminent expiry date of its infrastructure forced the IT team to re-think its plans.

The result of biting the bullet and advancing their overall SAN migration plan by a year saw the consolidation of the three SAN arrays into two newer SAN platforms, which packed fatter disks with better performance. This doubled the throughput of the storage ecosystem and ensured scalability for at least two years.

Out of Asian Paints’ three SAN arrays, two were on EMC’s Symmetrix platform and REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

35

7/13/2009 7:23:07 PM

Case File one on EMC’s Clariion line. Its no new storage environment primary datacenter at Mumbai meant no SAP upgrade,” housed the Symmetrix recalls Choski.

8830 array with raw storage There were other more capacity of 19 terabytes. The SNAPSHOT practical reasons for the choice.

SAN array, which was bought Asian Paints The existing SAN arrays were in 2003, hosted the databases already peaking in terms of Established: 1942 for SAP R/3 production, BW, I/O performance. And, the HR and CRM modules. chassis of these arrays were Revenue: Rs 4,400 crore Procured in 2001, the full or getting there, especially Clariion FC4700 with raw at the DR site, leaving no room Plants: 9 storage capacity of 2 TB was to add more disks. deployed at the primary Additionally, EMC, the Presence: 22 countries datacenter. SAP R/3 QA and SAN array provider, advised the i2 production databases the company to move to its ran on this array. The DR site at Hyderabad newer SAN platform, the DMX family, hosted a Symmetrix 8530 array with because the existing Symmetrix and Clariion about 10 TB of raw storage capacity. The arrays were going out of support shortly.

SAN array supported the DR-provisioned With the decision in, the IT team applications including SAP R/3 and BW. prioritized the upgrade and started carving “The Clariion FC4700 had reached its out a plan with the relevant size and roll out end-of-life in 2007 and the Symmetrix process. This decision-making cycle lasted 8000 series would get there in 2010. about three months because getting a rightHence, the book value of all thee arrays sized solution, which depended on multiple was zero,” says Kevin Hill, managerfactors in Asian Paints’ growth pattern, systems, Asian Paints. was key and needed to be a joint process And the telltale signs were there — between the company and the vendor. the storage ecosystem was creaking “EMC studied our storage patterns under pressure. Simultaneously the IT for two months during Diwali, when our team was ironing out plans to upgrade business hits peak, so that they could the company’s SAP environment. “We suggest a solution that would help us realized that the performance of the derive maximum benefits,” says Hill. storage ecosystem would become a big In terms of scalability, performance and sore point. Not only would it slow us redundancy, it is paramount to right-size a down on the server virtualization front, storage solution. If, for example, a chassis our SAP upgrade plans would also come is over-sized, high performance can’t be to a halt. Disparate SAN environments exploited because business demands would with inherent manageability challenges never stretch that far leading to a gross overmade the situation worse. Bottom line: expenditure in terms of price per gigabyte.

“We are being uncharitable to the firepower we have. We need to leverage our SAN ecosystem deeply and really push the throughput boundaries that it offers.”

— Manish Choksi, CIO & Chief-Corporate Strategy

The two month study resulted in interesting comparatives. “They have internal benchmarks of Symmetrix’s and DMX’s performance in specific environments.

Looking at these patterns, they can predict the kind of performance we would get on DMX. This served as inputs for our sizing exercise,” says Choksi.

But that was only the beginning of their challenges.

Touch-up or complete overhaul?

Once they had zeroed in on the solution, Choksi and his team had to decide how they would implement the SAN upgrade.

The conventional method is to migrate application by application. But because of the depth of inter-connections of the company’s applications, this approach would have caused plenty of disruptions.

Choksi decided to go with a complete rip and replace of their infrastructure. But the brute-force approach to migrate the SAN arrays would require the shutdown of all the company’s applications, taking the arrays offline, copying the data to the new disks and bringing the ecosystem online again. But once he explained the benefits of his approach to the business, he secured a 24-hour window of downtime.

“As SAP image stays the same as it is moved from one physical array to another, the timestamp relevancy, which helps figure out the integrity of data fed into the systems, is not required. This reduced IP conflict issues as well. For large, global entities the brute-force approach might not be a practical idea. But as we don’t run SAP outside India, it served us perfectly,” says Choksi.

The Symmetrix and the Clariion arrays at the primary datacenter were consolidated to one DMX array. The Symmetrix array at the DR site was migrated to another DMX array. The fiber-channel (FC) switches were also upgraded to fully leverage the 4Gbps throughput now available with the newer DMX platforms. The new arrays were populated with the required disk capacity to last for the next 24 months.

Perfect Coat “All the factors of new applications, their growth and the choice of the architecture

36

Case Study.indd 36

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Vol/4 | ISSUE/17

7/13/2009 7:23:08 PM

Case File

A New Stroke

The SAN upgrade provided Asian Paints with more scalability and efficiency.

Scheduled offline backups that once took more than 11 hours, now take only four hours.

Selected spindles in an array can be shut off to carry out upgrades without holding up AN entire array.

The new SAN platform has provided the paints major with enough disk space to last it the next 24 months.

we wanted, went into planning what size to opt for, what chassis to fit in and what scalability to achieve. Initially, we were looking at a two-chassis solution but we realized that it would not be cost effective to buy a second array. Hence, we consolidated the existing arrays into one and brought in a smaller-sized solution for the disaster recovery site,” says Choksi.

“On the 8000-series array, we can accommodate a maximum of 380, 146 GB, 10 KRPM disks. On the other hand, on the DMX4, we can now accommodate 360 units of 400 GB, 10 KPRM disks.

The DMX4 solution gives point-to-point connectivity within the storage box a much higher bandwidth. Initially, in Symmetrix, the path for the data to travel had certain bottlenecks. From any frontend port to any back-end disk, you now have a 4Gbps throughput compared to the 2Gbps throughput of the earlier platform.

Moreover, the earlier platform worked on SCSI disks while the newer DMX4 platform supports end-to-end FC disks,” says Hill.

With the new DMX4 platform, there is more scalability on the FC switches. The new switches can connect up to 64 hosts to the storage fabric with full redundancy.

Vol/4 | ISSUE/17

Case Study.indd 37

The new SAN arrays began to show benefits right from the word go. Scheduled offline backups that used to take more than 11 hours immediately dropped to nine hours. Today, it takes about four hours and incremental backup exercises are all online now. “Moreover, for any SAN environment disk changing — replacing disks that have gone bad or adding capacity — is a regular activity. With Symmetrix if I needed to add disks, I needed between a half-hour to an hour of downtime. Today, disks can be hot-plugged into the chassis and storage is instantly online,” points out Hill.

In addition, there are certain codes embedded on each disk that need to be upgraded when new software is introduced or maintenance takes place. In order to update such codes, the entire array had to be brought down. Now, selected spindles can be shut off to carry out an upgrade without holding up the entire array. This is crucial as each array runs about 200 spindles, and ensuring the high availability of mission critical applications while allowing seamless scalability is paramount, Hill says. “We have scalability built in for the next 24 months. At that point, we will have to add more disk space as our apps may grow. Tomorrow we might

want to do SAN virtualization because it could give us better performance with a higher number of apps being introduced which have higher data usage but lower number of transactions. We are also trying to get into things like managing application performance at the user level. In addition, we have not yet done much work in terms of understanding the quantum of electrical usage while shutting off spindles. This would be of amenable use when we would want to embark on a green IT initiative,” says Choksi.

That said he knows that there’s plenty in the here and now that could be taken advantage of. “We are being uncharitable to the firepower we have. People tend to utilize what’s best for them and leave out a lot of other things they don’t have time to utilize.

We need to leverage our SAN ecosystem deeply and really push the throughput boundaries that it offers,” he says.

From a shortage to untapped potential, what more could business ask for? CIO

Infographics BY Prasanth T.R

Replacing or adding disks can now happen in real time.

Gunjan Trivedi is assistant editor. Send feedback on this feature to gunjan_t@cio.in

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

37

7/13/2009 7:23:09 PM

Cloud Computing

Five Cloud

Running an enterprise application in a public cloud isn't as simple as it looks. Here are some practical guidelines on issues to consider and questions to ask when buying cloud services.

Think Throughs

By Beth Schultz

38

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Feature_2_Cloud Computing.indd 38

Vol/4 | ISSUE/17

7/13/2009 7:25:39 PM

Cloud Computing

Il lustrat io n by BINESH SREEDHARAN

any CIOs need more computing or storage capacity in their datacenters but face a capital expense issue. If you are one of them then a public cloud computing service makes a nice option. You get on-demand IT resources that are infinitely scalable and you pay for what you use.

But running an enterprise application in a public cloud isn't as simple as some providers might have you believe.

Buying a cloud service isn't just about the nuts and bolts of computing and storage, cautions Dave Powers, associate information consultant at Eli Lilly & Co., which has been using Amazon Web Services (AWS) since April 2008.

"It's about all of the Web services and capabilities built on top of the cloud that makes being able to spin up some computing, do some storage and then tear it all down very low-friction."

Before committing to a cloud services provider, IT execs should understand exactly what resources they have on hand, what they're buying, and how running on a public, shared server infrastructure will affect applications and business processes.

Tony Bishop, CEO of Adaptivity, a consulting firm specializing in nextgeneration IT infrastructure, puts it this way: "As much as cloud does away with the limitations of hardwired infrastructure, it doesn't alleviate the need for proper planning and IT integration discipline. It amplifies it."

Here are some practical guidelines on issues to consider and questions to ask when buying cloud services.

Are Your Applications Ready?

For Bernard Golden, CEO of HyperStratus, a consulting firm specializing in advanced

Vol/4 | ISSUE/17

Feature_2_Cloud Computing.indd 39

IT technologies, the top priority is figuring out whether an application needs modifications or a complete re-architecting for use in the cloud. "In some cases, your application architecture could even constrain your cloud options," he says. Golden uses this simplistic case as an example: "Say you have something running on an Alpha chip-based computer.

You're not going to find a cloud service that can run Alpha binaries."

Failure to rethink an application might even defeat the purpose of using a cloud service, says Eli Lilly's Powers. This was one of the company's first lessons learned as an Amazon Web Services user, he adds.

"At first, we literally picked up a workflow from our internal grid environment and dropped it into the cloud.

While that worked, we learned that we had constrained ourselves. In the cloud, we had this infinite amount of compute and storage, but our application, designed to run inside Eli Lilly's fixed-size computing environment, couldn't take advantage of it," Powers says.

Now, the Eli Lilly team might chunk up an application and move data into and out of the cloud in smaller, more consumable pieces, or it might store some data in the cloud, so an application Reader ROI: doesn't have to retrieve it from What to watch out for the enterprise datacenter, before getting into Powers explains. the cloud And, Powers makes The importance sure every cloud-destined of security application accounts for fault Where to look tolerance.

"If you're buying for answers

infrastructure as a service, you have to understand that a machine can go down at any time, and your application design needs to consider that," he adds.

Tom Nolle, CEO of CIMI, a high-tech consulting firm, advises that developers work through the deployment process before committing to a cloud. "You need a little flow diagram: Here's the cloud.

Here's my application inquiry going into the cloud. Here are the data sources needed to fulfill that request and here's where they flow and how they get moved.

Now I can see everyplace I have data flowing around, I have a vulnerability to network behavior and I can begin to manage the vulnerability."

Latency, response times, throughput -these are watch points across the network.

As Powers says, "We wouldn't want to be moving terabytes of data at a time in an interactive session for scientists; they wouldn't get the response times from the cloud they're accustomed to on the Eli Lilly network."

Where Is Your Data?

A cloud provider isn't going to share nitty-gritty network details -- nor should you need to delve into the cloud at such a granular level, experts say. "It's never going to give you exact addresses, hardcoded, but it will need at least to provide a broker mechanism that can tell you, 'I'll go get you that data, and I'll provide you the right data you're requesting for system-tosystem communications, based on your entitlement," says Adaptivity's Bishop.

In other words, you need to understand REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

39

7/13/2009 7:25:39 PM

Cloud Computing where your data resides in the cloud from a logical perspective. On top of that, you may want to work with a cloud provider who allows you to designate geographically where your data resides, Nolle says.

With the Amazon cloud, for example, you can select between Europe and US regions, then narrow the location even further by picking availability zones. Once that's settled, you can query your ISP and Amazon about their peering relationship in those zones, Nolle says.

"The point is," he says, "if you know roughly where something is going to be allocated in terms of cloud IP resources, then you can make some intelligent judgment about how your access to those resources could be influenced by your selection of provider, or at least to whom you would have to go to obtain some kind of performance guarantee."

How Is Data Being Protected?

Working with a cloud provider allowing geographic designations also can help assuage concerns over security and, especially, compliance. Eli Lilly's Powers spells out the challenge. "We need to be cognizant of where our data is because of regulatory rules that dictate where data may or may not live geographically," he says.

"In the pharmaceutical industry, one of the first questions people ask is about privacy and regulatory-type of requirements and the second is around security. Clearly, both are huge factors for us in determining what goes out into the cloud," he says. In fact, "we haven't unleashed everything that we'd like to yet into the cloud because we're still working out processes and classification of the data — whose eyes can see what," he says.

Meantime, meeting security requirements in the cloud means encrypting data while in transit and at rest, using secure protocols such as SecureHTTP, and vetting a provider's access control mechanisms, experts say.

You'll want to query providers about who, physically, has access to machines hosting your data. And, from an entitlement perspective, you need to specify who can make changes, update, view or otherwise manipulate your data — and have access to the audit trail, Adaptivity's Bishop says.

You've also got to cover disaster-recovery processes in your security discussions, advises Jim Kobielus, a senior analyst with Forrester Research. "A cloud provider should be telling you with high degree of detail how often it backs up data, where it's backed up, how it's protected from a security standpoint, and how quickly it can restore data if the main system goes down and it's restored to a hot failover system," he says.

What's Customer Support Like?

Many IT shops may not have time to deal with all the intricacies of a move to the cloud, so they'll need to seek out help, Kobielus says. This help might come in the form of pre-packaged application suites, for example, or assistance in porting data and applications to its cloud.

A provider might offer a CRM application suite, but what if a user would rather migrate from a premises-based CRM system to a cloud-based CRM service? "Will the cloud service provider help optimize, rewrite or tweak the Java code so it runs on its platform?" he asks.

For Animoto, a New York on-demand video production start-up, help for migrating the company's platform from a hosted environment to a cloud service was paramount, says founder Brad Jefferson. "We really wanted to do infrastructure as a utility, and not spend any time focusing on that — it's not a trivial task to implement against an Amazon Web Service or 40

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Feature_2_Cloud Computing.indd 40

Dangers

in the Cloud Security Standardization Has Not Come to the Cloud There is a huge body of standards, including services like SAS Interaction Management that apply for IT security and compliance, governing most business interactions that will, over time, have to be translated to the cloud, notes Josh Greenbaum, principal at Enterprise Applications Consulting.

But in the meantime, until security models and standards emerge for cloud computing architecture, most of the risk and blame if something goes wrong will fall directly on the shoulders of IT — and not on the cloud computing service providers.

Good Security Takes Time The cloud approach doesn't map naturally to how good security is typically designed, says John Pescatore, Gartner's chief security analyst. The area that worries Pescatore most is how quickly cloud-based services are updated and changed. "In the cloud, every two weeks we add a new feature, changing the app all the time. We are going back to the old Netscape days of pushing out new features real quick, and nobody has a security cycle that moves that fast."

In the near term, where security is core and mission-critical — the upper end of the enterprise, financial institutions, and the government — IT will have to add its own security layer. That means cloud computing won't be any cheaper than running the application in-house, says Pescatore.

"But a few years from now, strong security will be pushed down a layer, and there will be enough security baked in," he says.

But if larger enterprises can't yet rely on security in the cloud-provided security, smaller companies may actually get better security from the cloud, says Pescatore. One reason is that a cloud provider can invest more in security than any individual small business could, because the cost is applied

Vol/4 | ISSUE/17

7/13/2009 7:25:39 PM

Cloud Computing

across hundreds of customers. Another is that as soon as a cloud provider patches a security vulnerability, all its customers are protected immediately, unlike the case for downloadable patches that IT must apply itself.

Deploying the Cloud for Everything When do you deploy the cloud? Kristin Lovejoy, director of IBM's security, governance, and risk management division advises companies to adhere to Geoffrey Moore's consideration of "context versus core." This rule of thumb is: If the business practice is context and non-mission-critical, then always put it in the cloud. If it is context and mission-critical, it is likely you should make it cloud-enabled. However, if it is core and non-mission-critical, you may want to think about keeping it behind the firewall; if it is core and mission-critical, then definitely keep it behind the firewall, she says.

Control Over Your Data Most customers have little control over where their data is. But that's especially important for companies that do business across national boundaries, as different privacy and data management laws apply in different countries. Many banking regulators, for example, require customers' financial data to stay in their home country. Many compliance regulations require that data not be intermixed with other data, such as on shared servers or databases.

But this indeterminate location is beginning to change. For example, Google lets customers specify where their Google Apps data is stored, thanks to its acquisition of Postini, an e-mail security company.

Security experts agree that no matter how stringent a vendor's SLA or how strong its security technology, reducing risk in any environment rests with the individual company's willingness to audit what is and what is not working.

Greenbaum says we all have a bit of the “control freak" in us, trusting no one but ourselves. Perhaps that is a good thing, he says. When it comes to cloud computing, the experts fundamentally offer the same advice, which can be summarized by two very famous quotations, one an old Russian proverb that President Reagan liked to use — "trust but verify" — and the other by Intel's famous former CEO, Andy Grove — "only the paranoid survive."

—Ephraim Schwartz

Google App Engine. It takes time, and we didn't want to spend all our cycles implementing it ourselves."

Amazon partner RightScale, a start-up providing cloud computing management and support, did the heavy-lifting for Animoto — to great success, Jefferson says. After moving the Amazon's Elastic Compute Cloud (EC2) service, the company launched a Facebook application that quickly went viral and became a case study for cloud scalability.

When the Facebook crowd glommed onto Animoto's free, on-demand video -creation tool last April, the company saw requests leap from 25,000 in the first month to 750,000 in a four-day period. Behind the scenes, the number of servers processing videos grew from 100 to 5,000, and back down again as demand leveled off. EC2 never hiccupped, Jefferson says.

Testing the scalability of any cloud provider's infrastructure is a pre-buy must, HyperStratus' Golden says. "Promises of really elastic capability and responsiveness doesn't do you much good if you press a button and the new servers launch a day later. That might be better than what you've got, but that's not nimble."

Adaptivity's Bishop agrees. "You better be doing your due diligence, asking providers, 'How are you going to prove to me that you're delivering the service level that you're offering? What insight do I have? What tools and what kind of reporting do you offer? What kind of penalties are in place?’ A lot of these are what you'd find in an old outsourcing contract," he says.

And, if a cloud provider can't show real-time performance monitoring and performance statistics and deliver trended reporting, then don't buy into that cloud, Bishop says. But don't rely exclusively on the provider's management dashboard. "You want your own application, network and transaction monitoring tools so you can guarantee that the user is getting the experience you've contracted for or is used to," he says.

And, don't forget to ask a cloud provider about troubleshooting processes, says Chad Swartz, senior manager of IT operations for Preferred Hotel Group. Before signing on with Terremark Worldwide, Swartz says he got the answers to questions such as: "'If something goes wrong, who do I call?'

'When I call, what can I expect them to do?' 'Is support available 24/7?' "

What's My Exit Strategy?

Equally important, Swartz adds, is getting the answer to this question: what's your pull-out plan? In its contract, for example, Preferred Hotel Group specified how Terremark would need to help the company move its data and applications to another provider should it terminate the contract early.

Cloud decision-makers must consider application portability, too, adds Jeff Kaplan, managing director of Thinkstrategies, an on-demand consulting services firm. "If I put my data up, how can I get it back, especially if I've used a provider's preferred application development language? Don't paint yourself into a corner." CIO

Schultz is a freelance IT writer in Chicago. Send feedback on this feature to editor@cio.in

Vol/4 | ISSUE/17

Feature_2_Cloud Computing.indd 41

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

41

7/13/2009 7:25:40 PM

failure FAILURE FAILURE FAILURE FAILURE FAILUR e Failure FAILURE failure FAILURE FAILURE FAILURE f

RE

lure FAILURE failure FAILURE failure FAILURE

Failure Fa FAILURE Failure FAILURE failure FAILURE failure Fai failure FAILURE FAILURE failureFAILURE failure FAILUR

ure Failure

failure

failure Failure FAILURE How FAILURE

failure FAILURE teaches, FAILURE FAILURE Failure Fa motivates, even inspires.

FAILURE FAILURE Failure FAILURE FAILURE

FAILURE

RE

failure FAILURE FAILURE FAILURE FAILURE FAILUR

RE

failure FAILURE

URE

failure

By Kim S. Nash

Failure Failure FAILURE

failure FAILURE

failure Failure FAILU

Failure failure

Don Goldstein

learned a classic lesson when he joined an insurance company in the mid-1990s as vice president of IT. He inherited a data warehouse project intended to mesh information across divisions to provide a complete look at each customer. "This would be the thing that finally gave everyone what they had been looking for," Goldstein recalls. "Namely, how do we get all of our information to mean something?"

But too much data needed too much cleansing, he says, and the project plan allowed many months between deliverables. Along the way, business groups argued about who should update which information. "It just got way, way out of hand," he says. "It cost too much, took too much time. It didn't have a hope to work."

A data warehouse was finished, but for just one business unit. Users still had to ask IT to generate their reports. The project died soon after being delivered to the business unit, when key project members left and funding dried up.

The lesson he learned, of course, is that you can't boil an ocean. Ever after, says Goldstein, who is now CIO of CB Richard Ellis, a $5 billion (about Rs 25,000 crore) commercial real estate 42

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Feature_1_The F Word.indd 42

Reader ROI:

Why monitoring your IT team is important How to recognize a failure Importance of learning from mistakes

Vol/4 | ISSUE/17

7/13/2009 8:24:09 PM

FAILURE Failure

E failure

services company, his projects have had narrow and specific milestones managed by a group of IT and business people, each accountable for different aspects of the work.

"It seems simplistic, looking back," he says.

But the failure so affected him that he avoids the term "data warehouse." "So ominous," he says. You can almost see him shiver.

How you respond to failure — or any event that doesn't go as expected — shapes how you handle the next one. Early in her career, Twila Day, CIO of the $37.5 billion (about Rs 1, 87, 500 crore) Sysco food service company, had to find the skills and inner strength to handle a negative boss.

She's since applied the lesson to deal with negative people generally. "You learn more when something goes wrong than when everything goes right," she says.

Surviving failure not only teaches lessons but builds resiliency — a trait critical to handling the uncertainty we face today. In this economy, which yet shows no signs of great and lasting recovery, you want tested leaders cool enough to handle difficult, unpredictable days. Someone who has never failed is half as valuable as someone who has endured a "humbling experience" and learned from it, says John Puckett, DuPont's CTO of corporate IT and CIO of central research and development. Puckett's 42-year career includes the CIO post at Toysmart.com (a casualty of the dotcom bust) as well as vice president and general manager at Polaroid (whose business model was overtaken by the rise of digital cameras).

"You better hope your leaders have failures under their belts," he warns.

But failing now, however educational, could put your job and even your company at risk. With recent cuts in budgets and staff, choosing to do one project may mean choosing not to do another; mess it up and you let your company down twice.

Meanwhile, in some circumstances, failure may be beyond your control, yet you may have to clean it up anyway, notes Robert Fort, CIO of Virgin Megastores North America. The company is closing all of its US music stores because renting the real estate they occupy can generate more money for its owner than the retail outlets can, Fort says. Learning how to shut down a collapsed company is a new experience

re Failure e Failure

AILURE

ure FAILURE

re

Failure

URE

failure

FAILURE Failure

Project Management for him, he says. "I have the desire to do this with integrity."

He knows that how he handles failure will determine his future as a CIO.

Read Your People Carefully Faulty management of a PeopleSoft Financials project in 1997 is a mistake Steve Hanna can't forget. At the time, he was CIO of Host Marriott Services, a company that supplied concessions to airports and other venues.

To lead the implementation, Hanna and the company controller chose two up-andcomers: one from IT and one from the controller's staff. The team hired a good integrator to help, they held weekly status meetings and everything appeared to be going right, Hanna recalls.

But underneath, much was wrong. The day a critical piece was due, the duo told Hanna it wouldn't come in. "I asked, 'How far away are we?' They said, 'We don't know.'"

IT failures, like plane crashes, typically happen after a sequence of small problems culminate into a large, visible breakdown, says Michael Krigsman, president of Asuret, a consultancy that specializes in helping companies avoid project failures. "Usually

there was a triggering event and multiple other steps along the way that also failed," he says.

Even after Hanna and the two managers spent the next weekend dissecting their project documents and reports, as well as which code and modules had been developed, they couldn't figure out what had happened. "We ended up re-doing the entire project."

All along, it turns out, the project managers hadn't disclosed problems.

They'd hint at trouble, saying, for example, that they were late testing a piece of code but would make up the time on the weekend.

But Hanna, who is now CIO at Kennametal, missed the warnings. He says he should have sniffed out what they weren't saying by asking probing questions and watching body language.

"When you have executives trying to make a name for themselves, you have to fly low to the ground with them," he says. "It was probably the biggest mistake I've made in my career."

Sometimes you think you've put the right people in place only to find out you misjudged them, says Christopher Barron, SVP and CIO of CPS Energy, a energy and utilities company.

FAILURE

ure

Vol/4 | ISSUE/17

Feature_1_The F Word.indd 43

“You learn more when something goes wrong than when everything goes right,” says Twila Day, CIO of Sysco.

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

43

7/13/2009 8:24:16 PM

Project Management Last year, CPS Energy wanted to build a mobile application portfolio to give executives and key staff members access to corporate financial and operational data via smartphones and laptops. Barron assigned a tech whiz to the project that alienated the company's senior executives with his arrogance. "This person was unwilling to admit there were kinks that needed to be tuned and had burned relationships with people," he says. The project failed, Barron says, but not the effort. The company learned which technologies worked and has now put the application in production.

Barron also learned that he needed a different kind of project leader. He re-assigned the techie to an R&D position, from which he hands off implementation to someone else. To interact with the company's CEO, CFO and chief risk officer on the new system, Barron tapped top desktop and network support staff specially trained to work with business executives. These staff members have undergone advanced conflict resolution training and learned how to address executives respectfully. They've also been taught to use body language to appear approachable, and they even wear a uniform: slacks and a company logo shirt. "Jeans and an untucked shirt don't give you gravitas with executive customers," Barron says.

Being upfront about his missteps helped Barron convince his C-level peers to go ahead with a new iteration of the project, he says. Owning mistakes enhances a CIO's reputation, he says.

In Hanna's case, he admits he picked inexperienced project leaders and didn't watch them closely enough to "hear the unspoken." Now he asks for actual — versus expected — results, supported by details and evidence. He has also sharpened his senses.

"I wander around and talk to people in general, not just about the project, and see if they laugh or avoid eye contact," he says. A good CIO can "pick up more in a five-minute conversation at the coffee station than at an all-day project debriefing."

When that PeopleSoft project went bad, Hanna had to tell his the CEO that it would be months late and cost "a lot more money" than budgeted. The project managers, he says, quit to consult. Hanna, meanwhile, lost a bonus riding on the project's success.

The CEO noted the events in a performance review. "His comment was, 'I hired you as a thought leader and you let me down,'" Hanna recalls. "It cut really deep."

Know When to Quit If taking failure personally burnishes the lessons, taking it too personally destroys

“Project teams should include managers with the clout to kill a project if it goes off the rails,” says Don Goldstein, CIO at CB Richard Ellis.

44

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Feature_1_The F Word.indd 44

the chance to learn. In a dysfunctional environment, such as in a department led by a bad boss, it can be hard not to succumb, says Day, Sysco's CIO. She was laid off as a young programmer. Without the finances to be picky, she resolved to take the first offer she got. Her new boss apparently thought little of her.

"He didn't believe women should be in IT," she says. "He would say, 'You can't do this job, you're not smart enough.'" At first, she disliked going to work: "A negative, almost depressing situation," she recalls. Then she decided to disprove his barbs, absorb as much knowledge as she could and get out.

Among the lessons she learned, she says, was not to waste energy trying to change other people. It's best to learn as much from a bad situation as you can and move on.

Quitting on a project, however, can be more difficult because afterward, you're stuck amid the financial, political and personal consequences.

As a result, the wherewithal to stop a project often doesn't exist, says consultant Krigsman. He was recently hired by a client to evaluate a troubled project. In a meeting with the IT and business staff, the sponsor — an executive vice president — asked when the team would achieve a given milestone.

In these situations, denial and fear often prevent changing direction until after the project has become a public spectacle.

"He looked around and there was silence," he recalls. "I knew there was no way on God's green earth this milestone could be achieved in any reasonable time frame." The sponsor called on Krigsman, who told him the bad news.

"When the team is scared to tell management the truth and feels that their jobs may be in jeopardy, the conditions have been created for denial to blossom, and failure is almost assured," he says.

John Halamka, CIO of Beth Israel Deaconess Medical Center, tries to prevent a punishing atmosphere that could spur staff to hide mistakes. During a major network outage in 2002, doctors and lab technicians couldn't access patient charts or test results and 100 temporary workers had to hand-carry records around campus. Yet no one pointed fingers at specific people.

Vol/4 | ISSUE/17

7/13/2009 8:24:18 PM

Project Management Rather, Halamka and his staff examined which processes and technology allowed the problem to develop. They learned they needed to institute thorough downtime procedures and invest $2 million (about Rs 10 crore) to upgrade networking gear and, later, $5 million (about Rs 25 crore) to build redundant datacenters.

Looking at trouble as a process failure and not the fault of one person "gives us the freedom to diagnose and treat ourselves," he says. "We become very transparent about what our organization's strengths and weaknesses are."

CB Richard Ellis's Goldstein says IT managers must stop wayward projects before they cause damage, but no one likes to give up.

"Sometimes it's easier to try to keep momentum going, try to get more funding and resources," he says. "You assemble a team, a budget, what you believe are achievable objectives. You make commitments. The last thing you want to do is not live up to them."

One way he now guards against the pressure to keep going in the face of sure failure is by building a project team from a variety of business sponsors, end users and IT staff. Included are a couple of managers with the rank to kill a project. A subject matter expert at the vice president level or higher, he says, has the pull to refocus or even stop work that goes off the rails or no longer makes sense when business goals change. "It takes both courage and some political capital to stand up and say, 'We've made a mistake.'"

Understand the Risks Scientist, inventor and statesman Benjamin Franklin might be history's most successful mistake maker. He was clonked on the head by the whirling blades of a fan attached to a rocking chair he built and exhausted himself wearing his own wooden swim paddles. Franklin's self-cooling rocker never took off and the paddles were too heavy for swimming. But his flying a kite in a thunderstorm led to harnessing electricity, and his help orchestrating the American Revolution turned out okay.

In all, he amassed an impressive record in his 84 years and advised, "Do not fear

Vol/4 | ISSUE/17

Feature_1_The F Word.indd 45

To Avoid Failure, Define Success

C

IOs and project experts may favor certain project management software and techniques, but the tool doesn't matter so much as having a formal structure to measure project progress. Without clear metrics, work can go undone, says Michael Krigsman, president of Asuret, a consultancy that specializes in helping companies avoid project failures.

Using a project management methodology, such as the practices recommended by the Project Management Institute (PMI), provides a way to structure a project so that major steps are taken in a logical order. Key players, including the project manager, sponsor, creators and ultimate users of the finished product, have designated roles and responsibilities. Management tools, such as Artemis ProjectView, Microsoft Project and the open-source Project. net, can help the team record accomplished tasks and track overall status.

However, the best project methodologies cannot overcome problems created by personal agendas, conflicts and lack of alignment between groups inside the organization, says Krigsman.

CIOs must work hard to make sure everyone agrees on a project's goals and mostly agrees on how the project will run, says Adam Bricker, CIO at World Vision International, a non-governmental relief, development and advocacy organization. Getting agreement entails not only talking about key points, but also recording them, Bricker says.

World Vision did this recently for an ongoing project to install financial management systems in 45 developing countries.

Start by stating your goals and the scope of the project, Bricker advises; define what, specifically, you expect to accomplish. Also, write out examples of how people's everyday work lives will change as a result of the project. All stakeholders should then sign the papers.

Just as CIOs sign contracts with consulting firms, colleagues at the same company can formalize their understanding this way, he says. "There's an enormous sense of commitment when people sit across the table and say, 'Do we have agreement?'" â&#x20AC;&#x201D;K.S.N

mistakes. You will know failure. Continue to reach out."

Easy for Ben to say; no one ever laid him off. Still, says Barron, if you're not making fruitful mistakes, you're not taking enough risk. Risk, after all, brings progress. Barron's project to create mobile, roaming, overseas access to the company's financial data is one example. "We threw away six figures but we learned exactly what we needed and we could buy exactly what we needed when it was available," he says. The company built its now-working system on NetMotion's mobile VPN software and Cisco's Soft Token authentication product. "I have a couple kids and don't want to be out on the street. But

I'm not doing my job if I don't experiment," he says.

Yet evaluating risk with a backdrop of multi-trillion-dollar bailouts and the biggest unemployment numbers in two decades takes special focus, says Beth Israel's Halamka.

For example, infrastructure upgrades often must be done regardless of the economy, to keep IT running smoothly, he says. In discussions with his peers and boards of directors, he multiplies the odds that something bad will occur by the consequences of the bad thing. Had he done that in 2002, he says, he might have determined that a six-year-old network REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

45

7/13/2009 8:24:21 PM

Project Management infrastructure could buckle under growing network demands. Then he'd have known that medical records would be inaccessible, at the potential cost to patient lives. "No patients were harmed. But it was a wake-up call to show how dependent we all [are on] technology," he says.

With a mandate to cut expenses, some CIOs are investigating new technologies that promise cost savings. Cloud computing — consuming technology over the Web as a service from a vendor rather than running it in-house — may be untried for many applications, but the risk is worth the reward of cheaper IT, says Jerry Hodge, senior director for information services of small kitchen appliance distributor Hamilton Beach Brands.

Hodge is replacing Lotus Notes e-mail with Google's Gmail for 500 employees.

He expects to save close to 60 percent of his current messaging costs over five years, he says. "We tend to be conservative and ask a lot of questions. We can't afford a mistake," he says. The projected savings, plus the fact that he can re-assign some of his staff from managing e-mail to more creative and important jobs such as business intelligence, convinced him Gmail was a risk worth taking.

It's Not Always Your Fault No matter how risk averse you are or how much experience you have dealing with adversity, you may still encounter failure beyond your control. The collapse of a company is the kind of failure that hurts — and teaches — on many levels.

Art Hall was vice president of customer care operations with NetBank, an Internetonly bank that went under because of the housing and liquidity crisis. At its launch in 1996, the startup raced ahead of stalwarts such as Bank of America and Wachovia to offer customers online access to checking, savings and other accounts. "People worked 60 to 70 hours a week, living the brand, believing in the company and cascading that passion to everyone else," says Hall, who is now a management consultant at Alvarez and Marsal.

But established banks caught on to the Web and NetBank stagnated. "No one 46

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

Feature_1_The F Word.indd 46

“Learning to shut down a collapsed company is a new experience. And I want to do it with integrity,” says Robert Fort, CIO, Virgin Megastores North America. anticipated, or admitted, that the average consumer wouldn't take everything out of a known branch and put it in a virtual bank," he says.

In May 2007, EverBank announced plans to acquire the NetBank, but the deal fizzled.

ING bought the accounts of NetBank's 104,000 customers in September 2007, and NetBank filed for Chapter 11 bankruptcy protection a month later. It never emerged.

Before NetBank, Hall had been laid off from First Data and he drew upon what he learned from that experience. He relieved pressure by talking with a mentor outside of NetBank, praying and resting more on weekends and advised co-workers to find their own ways to cope.

Such outlets are important, he says, "so there's a forum to get out some of the emotions in a safe environment, and you're not walking around as a ticking time bomb."

The lesson came home to Hall with the suicide of a colleague. "He took his life on his parents' front lawn," he says quietly. It happened as the final 10-week push began to close NetBank. "That was the darkest day."

Those who have experienced failure say that in the middle of it, events move fitfully and whatever learning there is may not be immediately clear.

Robert Fort is riding that roller coaster while he shuts down the remaining six Virgin Megastores in the United States. The

music retailer was sold to a partnership of two New York-based real estate firms, including Related Companies, in late 2007.

"We've known for over a year we were fighting for our survival," Fort says.

He and other officers kept employees informed of "the realities," he says, referring to the speculation that the music chain faced long odds. In March, when the partnership decided to close the US stores, staff morale actually spiked temporarily, he says.

"There's a strange emotional boost you get when things are made clear."

After a few days, though, spirits sank as people thought about medical plans and made severance calculations. Now, he says, judging from the Facebook and Twitter posts of employees, the mood has changed again. "We've noticed the story shifting away from bummer to nostalgia. There's a big demographic that grew up on CDs, and we're an iconic part of that."

CEO Simon Wright put Fort in charge of the internal, national wind-down. Fort expects to be out of a job by the fall. Next year, more lucrative tenants will begin moving into the former Megastores, including the massive space in New York's Times Square.

Planning and executing the shut down while managing his emotions and those of his staff (now down to seven) is new territory.

As for his future, Fort has considered everything from taking the summer off to consulting to seeking another full-time CIO position. But it's hard to make a decision when there is so much work to be done.

He's a bit frustrated, too, because, he says, Virgin Mega-stores recorded record financials for the past two years. They added new technology in the stores, such as a real-time data warehouse and business intelligence system, sampling kiosks, and a converged voice and data network to differentiate from the competition.

But the sinking economy outpaced that good work. "I know that IT alone won't make a company," he says. "But we have a lot of pride." CIO

Send feedback on this feature to editor@cio.in

Vol/4 | ISSUE/17

7/13/2009 8:24:26 PM

Event REPORT

Presenting Partner

business integration for better harmony

There is a need to look beyond silos and bring in synergy in fragmented businesses.

Communications and IT need to work in harmony to achieve this synergy.

Event Report_ Nortel.indd 47

T

he fall in productivity, due to the recent slowdown of economy, has forced organizations to investigate the cause for its occurrence. As one delves deeper into a typical organizational structure, a gap between the network, communication and applications would often be seen. The need, therefore, would be to plumb the structure and fix the vent. This would, in turn, connect the, otherwise, isolated elements and boost productivity. By creating a knowledge sharing platform, organizations can also strive for the agility and flexibility required to service customers.

Various IT leaders gathered to discuss how organizations could go about integrating the dispersed elements of their businesses.

Working in Unison Initiating the discussion, Gurumurthy Arodi, CTO, Zenta Group, said, â&#x20AC;&#x153;Everything is siloed and people donâ&#x20AC;&#x2122;t want to open up. Even if they integrate something, they want it

7/14/2009 12:24:20 PM

Event REPORT

FROM LEFT: Rupinder Goel, CIO - Enterprise Services, Airtel, Shankara Rajan, VP - IT, Ballarpur Industries, Ravinder Jain, CIO, Aircel, Arnab Biswas, Sr. VP and Group CIO, Oxigen Services, Vikas Arya, CTO, Sistema, Sanjay Jain, VP - Information Security & CISO, WNS Global Services.

to be limited to their department and they want to use Enabled Business Solutions, Nortel, said, “Earlier resources as their intellectual property. It is only when communications and IT were two different departments. the business and communication department open up, Now both the worlds are coming together. A lot of synergy that the integration will give any benefits; it is also about could happen if you could communication-enable IT changing their mindsets to accept each other.” Talking processes. It’s a trend that’s happening and the key about the known gap between communication networks driver is business results. A lot of people believe that by and applications, Rupinder Goel, CIO - Enterprise communication-enabling their IT processes one can deal Services, Airtel, said, “Silos are now being broken down, with the next level of productivity. What’s further making it to merge businesses with IT, like real-time information easier is the ubiquitous availability of connectivity.” access. If you can foster machine-to-machine interaction and remove human intervention, you would add more value Customer-Focused Innovation to your business. With the rapid merger of technology and Pointing at some compelling reasons for convergence, businesses, this is the right time to do convergence.”

Hitesh Arora, VP - IT, Max New York Life Insurance, Talking about integration in retail, Veneeth said, “Customer ser vice is of primar y importance Purushottaman, Business Head these days. Customer expectations -Technology, Hypercity Retail, said, have increased and this is a key “Organized retail being a late entrant, factor in legitimizing convergence. we don’t have legacy applications and Applications and communication ERPs are mostly integrated. But the need to converge somewhere to industry would like to see a major leverage each other.” Ravinder integration in retail’s point-of-sale Jain, CIO, Aircel, said “Actually the section, because that’s where it can service experience of a customer give a lot of benefits.” Sunil Mehta, is the driver for convergence. It Senior, VP and Area Systems Director is the evolution of ser vices and (Central Asia), JWT, said that his experiences that has invoked the organization is striving to integrate customer to push convergence in applications globally as a standard enterprises. Business managers because no countr y is standardare now driving internal alignment specific now. These standards would to give customers a seamless “A lot of synergy could happen if determine the process that would experience.” you could communication-enable run in a particular country, vis-àQuoting more reasons for IT processes.” vis the market conditions. “There's convergence, Sanjay Jain, VP a lot of lobbying going on globally to Information Security and CISO, WNS Ravi Chauhan, GM - Communications set standards for this,” he informed.

Global Services, said, “Changes in Enabled Business Solutions, Nortel Ravi Chauhan, GM - Communications macro-economic conditions have

Event Report_ Nortel.indd 48

7/14/2009 12:25:28 PM

Event REPORT

forced business dynamics to change. Organizations have to bring in some variation in their business. This is driving the utilization of technology, whether it is through communication or application integration.”

A Ride Not-so-Smooth Pointing to the difficulties involved in integration implementation, Vikas Arya, CTO, Sistema, said, “An application, whether you use any number of modules, is as good as the data that’s built in. The more correlations we create, the more difficult is the implementation. Also once it becomes a monster data house then it becomes unusable and reduces efficiency.”

U.C. Dubey, EVP - IT, IFFCO-TOKIO General Insurance, said, “Each function in an organization has become so specialized that one needs to have a variety of applications and solutions. All these solutions must be integrated and brought together, to get more value out of them. Still there are a large number of challenges, like infrastructure inefficiencies, insufficient power and unstable connectivity. These must be overcome before moving forward.”

Raising a few more challenges, Shankara Rajan, VP IT, Ballarpur Industries, said, “Organizations have evolved from task execution mode to a process-enablement mode. As they move towards this mode, the requirement for an all-pervasive technology increases. This kind of integration faces serious infrastructural impediments, like lack of communication access, especially in the rural areas. Most of the front line applications and enablers are not designed to work on traditional infrastructure.

Hence, there is a requirement, acceptance and mindset for this convergence, but there is a definite lack of infrastructure.”

Sanjiv Dalal, CTO, First Source, said, “Implementing something like this should start at the process design

“The more we integrate information, the more value we get out of it."

Atul Luthra Head - IT, PVR

“Increased customer expectation is a key factor in convergence."

Hitesh Arora VP - IT, Max New York Life Insurance

“Integration has helped us give personalized services to our customers."

Rajesh Munjal Head - IT, Carzonrent, Hertz India

“Each function in an organization has become specialized. These must be integrated to get more value."

U.C. Dubey EVP - IT, IFFCO- TOKIO General Insurance

FROM LEFT: Tarun Pandey, VP - IT, Aditya Birla Financial Services, Sumit Dutta Chowdhury, CIO, Reliance Communications, Sunil Mehta, Sr. VP & Area Systems Director (Central Asia), JWT,Suresh A. Shanmugam, National Head - Business IT Solutions, Mahindra & Mahindra Financial Services, Gurumurthy Arodi, CTO, Zenta Group, Umesh Jain, CIO, Yes Bank.

Event Report_ Nortel.indd 49

7/14/2009 12:25:58 PM

Event REPORT

“Integration should start at the process design level, which doesn't happen due to process maturity issues."

Sanjiv Dalal CTO, First Source

“Integrating applications at a global level is still a challenge as there's lack of players who give seamless visibility."

Jason D'souza Director IT, DHL Global Forwarding

“The organized retail sector would like to see a major integration in retail's pointof-sale section."

Veneeth Purushottaman Business Head - Technology, Hypercity Retail

“Integration is a way to virtually organize communications and processes."

Arvind Sood CTO, WNS Global

level. However, at that stage organizations usually confront a lot of problem in defining and putting processes in place. Topping it all, is the fact that when business requirements change, processes also need to change. We are still battling with the issue of process maturity. This is one of the biggest challenges in convergence. However, it makes life easier once integration is over.”

According to Jason D'Souza, Director IT, DHL Global Forwarding, few other challenges include the lack of communication players who give seamless global visibility.

He said, “Some countries don’t allow certain plug-ins. In such cases, customers will feel the vacuum, as some

Event Report_ Nortel.indd 50

data might go missing. So integrating applications at a global level is still a challenge.”

Pointing at some organizational challenges, Suresh A. Shanmugam, National Head - Business IT Solutions, Mahindra and Mahindra Financial Ser vices, said, “Integration helps the swift movement of processes in an organization. But since mobility has increased, customers will also need to integrate their applications in order to get the required benefits.”

Talking about the factors that have kept organizations from fully integrating IT and applications, Sumit Dutta Chowdhur y, CIO, Reliance Communications, said, “Programmers do not have an idea of how to use protocols on the communication side, which kept the entire system from being integrated. Hence, there is a gap between communication and IT.”

Rewarding Efforts Talking about the benefits of convergence, Rajesh Munjal, Head - IT, Carzonrent, Hertz India, said, “We use computer telephony integration to feed the database, which helps us give a personalized service to our customer. Ever since this integration has happened, we have been able to increase our call volumes. Reservation levels have also increased and so has customer satisfaction.”

Talking about his convergence implementation experience, Atul Luthra, Head - IT, PVR, said, “With IT and application integration, tickets can be booked at sigma level accuracy. Our conversion rate on the online platform has also increased tremendously. Therefore, the more we integrate information and consolidate it, the more value we get out of it.”

Explaining some of the advantages, Arvind Sood, CTO, WNS Global, said “Integration is a way to virtually organize communications and processes, so that they work together. By making communication a parallel process to IT you can also save a lot of time and effort.”

Tarun Pandey, VP - IT, Aditya Birla Financial Services, said “People have realized that working in isolation and silos doesn’t help anymore. You need to integrate all the elements of an organization. Integrating applications for just the head office will not help. If you don’t equip employees with the benefits of integration, all integration is useless.”

Talking about winning a very crucial management buy-in, Umesh Jain, CIO, Yes Bank, said, “You need to visualize what benefits convergence would bring to the organization. Once you have convinced yourself then you will be able to easily convince the management.”

7/14/2009 12:26:23 PM

Event REPORT

Presenting Partner

Optimizing Risk

for Business Growth IT leaders gather at a round table, organized by CIO, in association with RSA, to share their views on how they view risk optimization and the role security plays in being a driver of business growth and innovation.

“Organizations should improve the maturity of legacy systems to comply with new secure systems.‘‘ vishal salvi CISO, HDFC Bank

“Security should be treated as an integral part of the whole system in an organization.‘‘ Shashi Kumar Ravulapaty CTO, Reliance Consumer Finance

“Even after securing the system, one has to be on guard and must reassess it from time to time.‘‘ Ravikiran Mankikar GM - IT, Shamrao, Vithal Co-operative Bank

Event Report_RSA_Recoverd.indd 51

I

n today’s fiercely competitive scenario, driving business innovation requires tapping global resources, which, in turn, demands technology that enables the secure and seamless flow of information. Regrettably, most IT infrastructure and even some security technologies have not been built to support a high level of openness that is required for such innovative business models. This gave rise to security being viewed as a necessary friction.

The need of the hour is to transform information security from being an inhibitor to an accelerator of innovation and growth. Security, as a function, has always been viewed as a barrier to business innovation.

Addressing this notion, Srinivas Iyengar, Director, Technology and Change Management, Aegon Religare Life Insurance, said, “Unfortunately security and its purpose have not been demystified. This makes the business function wary of the consequences of security and the impact of a security breach. To combat this issue, we relate security breach to a criminal offence. This encourages people to open up to the seriousness of the issue.” Pointing to the loopholes in the security infrastructure in organizations, Nandakumar Sarvade, GM - Financial Crime Prevention, ICICI Bank, said, “Security is looked at as a necessary evil. The decision of securing IT resources is crisis-driven and most businesses still do not allocate resources for security as a function.” Organizations still respond to security crisis in an episodic kind of manner. Giving some

7/14/2009 12:50:41 PM

Event REPORT

“Organizations should convince employees by giving them reasons for restricted access.‘‘ Sundaram Krishnan Head - IT, Universal Sompo General Insurance

“The security decisions are crisis driven as proper resources for this function are usually not allocated.‘‘ Nandakumar Sarvade GM - Financial Crime Prevention, ICICI Bank

“The CISO should convince the CIO by developing a business case for security.‘‘ Sameer Ratolikar CISO, Bank of India

reasons why the management only gets to see the negative implications of security, Shashi Kumar Ravulapaty, CTO, Reliance Consumer Finance, said, “When growth is hampered, security becomes a setback for the management.” He suggested, “Security should not be treated as a checklist item. It should, rather, be treated as an integral part of the whole system.” In the same context, Sameer Ratolikar, CISO, Bank of India, said, “In order to buy in business support, the CISO should make the CIO realize that business growth can be achieved by

FROM LEFT: v. subramanian, CISO, IDBI Securities, B.G. Pal, VP- IT, Tata AIG General Insurance, Atul Bansal, AVP - IT, SMIFS Securities.

Event Report_RSA_Recoverd.indd 52

implementing proper security policies,” he said.

Throwing some light on employees’ contribution in the whole issue, B.G. Pal, VP - IT, Tata AIG General Insurance said, “It is necessary to educate employees about security awareness because the ultimate acceptability has to come from them.” Talking about dealing with people issues in security, “With the security processes Sundaram Krishnan, Head automated, the management can spend more time understanding IT, Universal Sompo General the risk and mitigating it.”

Insurance, said, “One should try to convince employees by giving Arthur W. Coviello, Jr. them reasons for restricted President, RSA access.” Adding to this, Iyengar of Aegon Religare Life Insurance said, “Share your security concerns with your employees and they would be happy to cooperate. This does not stop innovation nor slows down implementation.”

Proposing a modus to approach security, Atul Bansal, AVP - IT, SMIFS Securities, said, “Involve cross-functional heads to create a secure approach. Then implement the process and assess security by weighing the risk appetite against business and technology and then proceed.” V. Subramanian, CISO, IDBI, said, “Security doesn’t necessarily have to be a development project; it can also be a product buyout where security vendors help push the idea to the management. The vendor product is usually compliant with the regulator’s demands because these days regulators drive security in the finance sector.”

Ravikiran Mankikar, GM - IT, Shamrao Vithal Co-operative Bank, pointed out that the management may become complacent after applying security policies. He said, “You have to be on guard all the time and must reassess the system from time to time.”

Talking about the security concerns related to extended enterprise development, Arthur W. Coviello, Jr., President, RSA said, “You need to assume your outsourcer as your organization's extension and need to apply the same security policies and standards there. Whatever security you have applied to your internal infrastructure, you need to apply to the external infrastructure as well.” Coviello also talked about applying automation to security processes and how it could help the enterprise and the outsourcing organization spend more time on understanding risks and mitigating them.

Talking about securing legacy systems, Vishal Salvi, CISO, HDFC Bank said, “While expanding infrastructure, legacy systems need to keep pace with development and be secure at the same time. Organizations should identify high risk areas and look at improving the maturity of legacy systems to comply with new secure systems.”

7/14/2009 12:50:55 PM

Essential

technology With many added features, frequent upgrades and cost cutting options, more and more enterprises are switching to Google Apps. Now, the challenge is to acclimatize users to these new features.

Vol/4 | ISSUE/17

Essentisl Tec.indd 53

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

Inching Towards Google Apps

By C.G. Lynch

| Though it started with selling software to universities and small businesses, Google has pervaded many more large businesses during the past year with Google Apps, the company's suite of messaging and productivity software. Analysts say that Google Enterprise, which is the division of Google that runs Apps, has added many features to the product that make it more attractive to enterprise IT departments.

JohnsonDiversey, a company that sells commercial cleaning products, is Google's most recent win. It moved its 12,000 employees over to the premier edition of Google Apps, which includes Gmail, instant messaging, documents and spreadsheets (among other things) for $50 (about Rs 2,500) per user per year.

"E-mail is critical to our work, but we're trying to simplify IT," says Brent Hoag, JohnsonDiversey's IT director. "We want fewer infrastructures to maintain, and Google (Gmail) allows us to do that." Because Google hosts Google Apps in its own datacenters, companies that buy the product do not need to maintain servers in-house (a Enterprise Apps

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

53

7/13/2009 7:28:22 PM

essential technology

process which is widely known as cloud computing or software as a service).

According to Hoag, JohnsonDiversey had been managing several application servers and two different mail systems prior to moving to Gmail.

Over the past year, Google Apps had matured substantially and added more enterprise features. Among them is providing IT groups with the ability to have greater control over the new features that are rolled out to their users. Productivity applications, such as Google Docs and Spreadsheets, have also seen gradual improvements. Google has baked in more advanced features, such as macros for spreadsheets. Google Apps also work better with BlackBerry e-mail, as a connector has been created to BlackBerry Enterprise

was in stark contrast to that of Microsoftâ&#x20AC;&#x2122;s.

But according to Google executives and analysts, the decision was arrived at after analyzing the needs of both current and prospective customers.

"Google listened to what enterprises wanted, and they delivered much of that," says Matt Cain, a Gartner analyst. "They have developed true proof-points, where companies are saying that they have been successful. Now we're seeing more enterprise interest in Google, rather than just curiosity."

Other enterprise adopters of Google Apps who were at the event included Genentech and the Morgans Hotel Group. During a presentation on the state of the Google Apps product , Dave Girouard, president of Google Enterprise, said that the company

Over the past year,GoogleApps had matured and added more enterprise features like providing ITwith the ability to have greater control over new features rolled out to users.

Server. Perhaps most significantly, at a Google Apps CIO roundtable event, Google announced that enterprise users of Google Apps could access Gmail through an Outlook client. The company hopes it will quell the protests by users who have become tethered to the desktop app and who, as a result, have sometimes hindered enterprise adoption of Google Apps.

"For me, it eliminates the last hurdle or the mindset of letting go of (Microsoft) Exchange," said Bob Rudy, vice president and CIO of Avago, a semiconductor company that moved its employees over to Google Apps. "This will definitely help with adoption."

Google's addition of the ability to access Gmail via Outlook surprised many analysts. A year ago, such a move would have been unheard of since Google has been offering an enterprise environment that 54

Essentisl Tec.indd 54

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

has "dozens" of companies with more than 1,000 employees using Apps. He also said that they generated "hundreds of millions" in terms of revenue for Google.

Easy on theWallet Back in 2002, the Johnson Wax company acquired DiverseyLever (Unilever's division for cleaning supplies), forming what is now known as the Wisconsin-based JohnsonDiversey. From a technological perspective, there was an immediate problem with the combination: Johnson Wax was on IBM's Lotus Notes, and DiverseyLever was on Microsoft Exchange.

In the following years, Hoag and his IT group found that having two e-mail systems was both challenging and annoying. They needed both these systems to talk with one another and to deal with meetings, events and other core functions

$2 million The amount

a construction firm claims to have saved after implementing Gmail.

Source: CIO Research

inherent to enterprise communications.

JohnsonDiversey also owned eight servers to host all the data contained within them.

Meanwhile, JohnsonDiversey committed itself to lowering its carbon footprint, a process which included using energy more efficiently and cutting travel. So when the time came to re-evaluate his e-mail contracts, Google Apps became an attractive option to simplify messaging to one platform and help fulfill the sustainability pledge; in effect, they could offload e-mail servers and limit travel by utilizing the collaboration features on Google Apps, such as its voice and video chat.

"We not only reduced the number of servers that we have, but because of Google's model, they are also a lot more efficient. So, globally we've reduced our footprint," Hoag says.

Hoag is referencing Google's datacenters, which the company has designed to be more energy efficient than most in the industry.

More precisely, servers are a big part of Google's business, while commercial cleaning supplies is JohnsonDiversey's.

Of course, the other upside could be cost savings. Back in January, Forrester estimated that enterprises adopting Gmail would cost (in all ) $8.47 (about Rs 420) per user per month. The next cheapest option would be Microsoft's online cloud-based

Vol/4 | ISSUE/17

7/13/2009 7:28:22 PM

essential technology

version of Exchange, which costs $20.32 (about Rs 1,000) per user per month.

Just how much money will Hoag save?

He says a "substantial amount," but it's also early in his process, so ROI may be hard to prove just yet. Other companies who have moved might provide him with some indication, however.

At the CIO roundtable, Avago's Rudy said his company has saved $1.6 million (about Rs 8 crore) a year. In the UK, not long after implementing Gmail and dropping Exchange, Taylor Woodrow, a construction firm, claims to have saved $2 million (about Rs 10 crore).

"The predominant reason (for switching to Google) is economics. With $50 (about Rs 2,500) a user a year, it is a compelling price point. Plus, access to a lot more storage is a big issue for a lot folks. IT also gets off the upgrade treadmill," says Gartner's Cain.

By "upgrade treadmill," Cain is referring to the traditional model of software updates.

Microsoft Exchange and Lotus Notes take years to add new features to their e-mail systems; Google tweaks Gmail and Google Apps every week or two. For some companies, though, this can also be too much, too fast — something Google has become more conscious of during the past year.

"It is a bit of adjustment for some," says Rajen Sheth, a Google Apps senior product manager. "Anytime we roll out a change to Google Apps, we roll it out to millions of users — enterprises or consumers — who end up getting calls at their help desks the next day. So we've added an option to the administrative control, where they can select whether or not they want the newer, bigger things added immediately."

Taking the First Step Back in January, after Hoag decided on Gmail, he and his group thought about the best way to roll it out to users. Initially, his IT group thought about releasing Gmail in phases, as they would for many traditional IT projects. They were going to start with 150 users, primarily leaders and managers, and then move the remaining employees gradually.

Vol/4 | ISSUE/17

Essentisl Tec.indd 55

Can Google Apps Crack Large Enterprises?

Google primarily has worked with small and medium businesses looking to capitalize on Google Apps' low cost and its ability to enable people to collaborate in real-time on documents. Gaining large enterprise adoption, however, hasn't necessarily materialized.

On the customer page of the Google Apps website, the chief technology officer of General Electric (GE) is quoted as saying the company is considering using the web-based software, and Procter & Gamble Business Services has enrolled as charter member. But analysts such as the Burton Group's Guy Creese says Google Apps hasn't caught on yet in the Fortune 500 .

"Because Google Apps came out of the consumer space, there's a bunch of things missing [for enterprises]," says Creese, who also wrote a report pondering if adopting Google Apps could be a "career limiting" move for IT leaders in the enterprise space.

Among the primary features Google Apps fails to have in its portfolio, Creese notes, are sufficient offline functionality and records management for documents. While Google addressed the offline problem for its documents and spreadsheets, a similar function has not followed for its enterprise Gmail.

The adoption of Google Apps could be a cultural challenge as much as a technological one.

Microsoft's technology has pervaded the enterprise space for so long that many IT managers, as well as regular users of the Office software, have difficulty seeing how they could get off it.

"Office is woven into line of business applications [in the enterprise]," says Tom Austin, a Gartner audience.

"Does anyone get a road map from Google? No. For every application Google offers, there's a blog with it. Go read the blog, they say, and you'll see what new features we offer. You'd never accept this from a mainline vendor,” says Austin.

–C.G. L

The problem with that approach was familiar: If you have people on different platforms, the information traded between them doesn't talk as cleanly as you would like it to.

"That was our biggest lesson learned," Hoag says. "Get them on the same tool as quickly as possible. So in March, we changed our approach. We scheduled to go live in May for everyone."

One question that often arises is what to do with old e-mails. Hoag says JohnsonDiversey deployed a tool that enabled users to choose which e-mails they would like to migrate over to the new system. Meanwhile, as the transition occurred, he said Google had people on site to help with the implementation.

Hoag admits that moving to the Gmail interface, which people have become used

to in the consumer space, has put him in an unfamiliar scenario with regard to IT's relationship with users.

"Users feel like we've given something to them rather than doing something to them," he says.

For now, the ultimate goal is to get users acclimated to Gmail and chat (instant messaging). Eventually, while Hoag has no plans to ditch Microsoft Office, he hopes to use Google Docs and Spreadsheets, and Google Sites (a wiki tool), to sunset old folder structures that were used for enterprise collaboration. CIO

Send feedback on this feature to editor@cio.in

REAL CIO WORLD | J U LY 1 5 , 2 0 0 9

55

7/13/2009 7:28:22 PM

Pundit

essential technology

Tracking the Needle

Understanding the patterns behind IT spending, and the impact it can have on business strategies can help organizations cut costs.

By Kim S. Nash

| Many employees don't understand a lot of the business events that drive internal IT consumption and determine the cost of providing technology. But if you don't know what moves the needle on IT spending, you can't make defensible decisions about how to improve those numbers.

"Part of our survival as IT professionals is to understand our potential, in terms of what we can do efficiently. When it comes to the stuff that we can’t, we either outsource it, or put it on the cloud, or whatever else IT strategy

where those dollars are going, you're going to have some real issues."

To understand the true costs of IT at Blue Cross Blue Shield, Shipley is exploiting both software and people power. Last year, the healthcare provider hired a financial analyst dedicated to IT, and employed software and services from Apptio, to help determine costs. In a SaaS agreement, Blue Cross sends Apptio information on their IT spending, which includes hardware and software licenses, overhead charges and

Shipley also hired a financial analyst fresh out of college to help make sense of the new analysis. Blue Cross wanted someone with no significant healthcare or IT experience, because Shipley felt that an objective, fresh measure of IT costs is an area of untapped potential. He says, "Innovation is a must. We felt that a young, unadulterated financial mind is not burdened by the baggage of the way we used to do things."

The first order of business, says Shipley, would be to build a dashboard within the

If you don't know what moves the needle on IT spending, you can't make decisions about how to improve those numbers. makes sense," says Jeff Shipley, director of IT infrastructure and operations at Blue Cross Blue Shield of Kansas City.

In some cases, drivers are obvious. For example, in retail, the seasonality of holiday shopping produces spikes in the IT usage in their stores and datacenters. In other cases, the drivers are more constant. In healthcare operations like Shipley's, membership renewal rates and customer satisfaction are the challenges all year long.

However, Shipley admits that this is not always the case. In today’s chaotic economical scenario unemployment is rising and people are being thrown off their medical benefits. Coupled with the dramatic changes expected in the healthcare industry, IT is facing significant concerns. Shipley says, "If you don't bring some visibility to 56

ET-Pundit.indd 56

J U LY 1 5 , 2 0 0 9 | REAL CIO WORLD

labor charges. Apptio runs this information through its analysis tools to produce charts that show estimated IT costs, categorized by application and over-time.

Although Blue Cross is still at an early stage of implementation, this data has been used to categorize and present a breakdown of the factors driving IT infrastructure costs. This helps leaders in making better IT investments, says Shipley. The reports are clickable, so he can drill down to see what’s behind each number, from server costs to memory requirements and other measures.

For about $2,000 (about Rs 1 lakh) Blue Cross gets access to both this refined data as well as Apptio tools to carry out a further analysis. "Until we understand what we can do efficiently, we're under the threat of being outsourced at all times," Shipley says.

next few months to help non-IT executives learn more about the company’s technology spending, and the impact it had on various business initiatives.

Placing a financial expert in IT would improve its credibility, says David Ackerman, IT advisory practice leader at the Hackett Group. He adds, "There's no doubt that helps."

However, Shipley faced a few challenges when he tried to get some financial expertise on his staff. He couldn’t add a full-time position to his workforce, so he re-arranged some people and shifted resources. "We took on a little extra burden on the technical side to do this," he says. "I feel like it's that important." CIO Kim Nash is senior editor. Send feedback on this column to editor@cio.in

Vol/4 | ISSUE/17

7/13/2009 7:29:04 PM

Engineered for uptime

™

Data Center Solutions to Maximise Network Uptime One of the most critical measures for Data Centers is network availability. Sophisticated data centers seek Tier IV reliability of 99.995% network availability. Still, all of the redundancy and advanced power and cooling solutions available are worth nothing if the cable, connectivity and cable management systems are inferior and lead to network downtime.

ADC KRONE’s TrueNet structured cabling solution for Data Centers help: • Lower your total cost of ownership • Support your future growth plans • Reduce your risk of downtime • Maximize performance • Improve your ability to reconfigure

Tap into ADC KRONE’s expertise.

Contact us today to get a:

g

Copy of Data center Solutions guide

Appointment with our Data Center cabling consultant

g

g

Brochure on Creating a Green Data Center

SPACE SAVINGS | RELIABILITY | MANAGEABILITY

LAN Cabling systems

Intelligent Physical Layer Management

Racks & Glide Cable Management

Fibre Management Systems

truenetindia@adckrone.com 1800 425 8232 or +91 80 2839 6101 www.adckrone.com/in

10G Solutions The World’s first Cat6A cable

Fibre management Systems

Green Data Center