Refresh: CIO Magazine June 2012 by Sreekanth Sastry

LEADERSHIP

VOL/07 | ISSUE/08

BUSINESS

TECHNOLOGY

MURALI KRISHNA K., Infosys, VENKATESH NATARAJAN, Ashok Leyland, VIJAY SETHI, Hero Motocorp, refreshed their IT infrastructure to benefit business.

REB OT The story of three CIOs who dared to rebuild IT in a slowdown. Page 34

JUNE 15, 2012 | `100.00 W WW.CIO.IN

VIEW FROM THE TOP Devender Rawat on how IT keeps Bharti Infratel ahead.

CHANGING COURSE Convergysâ&#x20AC;&#x2122; fleet management system sets a new standard.

Page 66

Page 82

Highlights

of the

Collaboration Summit 2012 Page 64 & 65

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“Moving to QFabric is moving toward the future.” JIM HARDING, CEO CODONIS, CTO SABEY

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FROM THE EDITOR-IN-CHIEF

PUBLISHER, PRESIDENT & CEO Louis D’Mello ASSOCIATE PUBLISHER Rupesh Sreedharan E D I TO R I A L

New Order Cometh

An economy in flux is forcing IT leaders to look at variedly differently ways to fund IT. I recently moderated a CIO panel discussion at the Premier 100, the annual event of our sister publication ChannelWorld. While a part of the discussion revolved around trends such as mobility, cloud computing, and big data, what I found interesting was the CIOs on the panel were pointing to a significant shift in the way they were beginning to pay for IT. What was remarkable was not that they spoke of a move from a capex to an opex model, but that they were referring to making hardware purchases on a subscription basis! An economy in flux, uncertain business horizons and capex freezes—these are the things that make this year so tough for IT departments. So, it’s not surprising that IT leaders are looking at variedly different ways to fund IT. Leasing, transaction fees, pay-per-use, interest-free loans, deferred payments, and outcome-linked charges are among the options that CIOs are tossing into the mix, to the delight and chagrin of the providers of technology products and services. A host of CIOs tell me that this also forces technology providers to have greater skin in the game; that it ensures that the relationship is neither tactical nor transactional. Vendors and integrators who can manage to offer terms other than outright purchase definitely stand a better chance at pushing their wares in the near future. And, for those that aren’t so inclined, life is getting to be grim. Some integrators bristle at terms that call for an upfront investment on their part, with a payment schedule spread over many years. Given shrinking margins, they see little upside in this situation. Be that as it may, I believe that subscription-based models will increasingly dominate, especially for longer-term, higher-value projects. But, it’s more than a mindset change that’s required here. These new funding models will demand new ways of both measuring and monetizing IT investment. Companies, both end-user and vendor must break out of the shackles of yore if they are to succeed in this new world order. Or, risk being buried alongside it.

EDITOR-IN-CHIEF Vijay Ramachandran EXECUTIVE EDITOR Gunjan Trivedi DEPUTY EDITOR Sunil Shah ASSISTANT EDITOR ONLINE Varsha Chidambaram CHIEF COPY EDITOR Shardha Subramanian COPY EDITOR Vinay Kumaar PRINCIPAL CORRESPONDENTS Aditya Kelekar, Gopal Kishore SENIOR CORRESPONDENT Sneha Jha, CORRESPONDENTS Debarati Roy, Shweta Rao, Shubhra Rishi, Ankita Mitra, Kartik Sharma DESIGN LEAD DESIGNERS Jinan K.V., Vikas Kapoor, Jitesh C.C DESIGNERS Amrita C. Roy, Sabrina Naresh, Lalita Ramakrishna SALES & MARKETING PRESIDENT SALES & MARKETING VP SALES GM MARKETING MANAGER KEY ACCOUNTS

Sudhir Kamath Parul Singh Siddharth Singh Jaideep Marlur, Sakshee Bagri, Varun Dev MANAGER- SALES SUPPORT Nadira Hyder MARKETING ASSOCIATES Dinesh P, Anuradha Iyer, Benjamin Jeevanraj CUSTO M SO LU T I O N S & AU D I E N C E DEVELOPMENT SR. MANAGERS PROJECTS Ajay Adhikari, Chetan Acharya, Pooja Chhabra, Ajay chakravarthy MANAGER Tharuna Paul SENIOR EXECUTIVE Shwetha M PROJECT COORDINATORS Archana Ganapathy, Saurabh Pradeep Patil, Rima Biswas F I N A N C E & O P E R AT I O N S

FINANCIAL CONTROLLER SR. MANAGER ACCOUNTS SR. ACCOUNTS EXECUTIVE MANAGER CREDIT CONTROL SR. MANAGER PRODUCTS SR. MANAGER PRODUCTION SR. MANAGER IT

Sivaramakrishnan T. P Sasi Kumar V Poornima Prachi Gupta Sreekanth Sastry T.K.Karunakaran Satish Apagundi

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.

Vijay Ramachandran, Editor-in-Chief vijay_r@cio.in 2

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

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.

IDG Offices in India are listed on the next page

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FROM THE GOVERNING BOARD

GOV E RN IN G BOA R D ALOK KUMAR VP & Global Head-Internal IT& Shared Services, TCS

Getting to Cloud Nine There's a common perception that moving to the cloud automatically assures business continuity. That's far from true. In various forums, my peers have often echoed a common viewpoint: “Business continuity is a built-in feature of the cloud and its services”. But does this belief really hold true, considering the dynamic nature of business today? Take application-as-a-service for example. While applications are available at a fail-over site, is the relevant data available as well? Unless it is specifically included as part of your SLA, data continuity is not something your service provider can assure you. How can one expect business continuity in such a scenario? If you extend the same further to IaaS or PaaS, you will realize that you need to plan for applications as well in these setups. This becomes worse in continuous customization mode. How, then, does one ensure application continuity along with data continuity, leave alone business continuity? Therefore, adequate contracting needs to be done to ensure business continuity when moving to the cloud. If your cloud service provider doesn’t have adequate provisioning for fail-over scenarios, business continuity may become a distant dream. The conventional approach most CIOs follow goes like this: Implement a core solution, go live with a primary site, wait for a couple of years while it stabilizes, and then invest in a good business continuity solution or DR. While going for a cloud solution, if business continuity is an important aspect, due diligence of the cloud service provider must be done upfront. There are quite a few best practices that can help you ensure successful business continuity while moving to the cloud. Categorizing apps into critical and non-critical from the business continuity perspective, choosing the kind of business continuity solutions required, short-listing a suitable cloud service provider with an appropriate business continuity offering, preparing alternative technical and cost proposals, and getting business buy-in are some of the most common and most important steps you must take. Then you’ll then be on cloud nine.

Anil Khopkar is VP-MIS, Bajaj Auto

AMRITA GANGOTRA Director-IT (India & South Asia), Bharti Airtel ANIL KHOPKAR VP-MIS, Bajaj Auto ATUL JAYAWANT President Corporate IT & Group CIO, Aditya Birla Group C.N. RAM Group CIO, Essar Group DEVESH MATHUR Chief Technology & Services Officer, HSBC GOPAL SHUKLA VP-Business Systems, Hindustan Coca-Cola MANISH CHOKSI Chief-Corporate Strategy & CIO, Asian Paints MURALI KRISHNA K SVP & Group Head CCD, Infosys Technologies NAVIN CHADHA IT Director, Vodafone Essar PRAVIR VOHRA Group Chief Technology Officer, ICICI Bank RAJEEV BATRA CIO, Sistema Shyam Teleservices (MTS India) RAJESH UPPAL Executive Officer IT & CIO, Maruti Suzuki India S. ANANTHA SAYANA Head-Corporate IT, L&T SANJAY JAIN CIO & Head Global Transformation Practice, WNS Global Services SUNIL MEHTA Sr. VP & Area Systems Director (Central Asia), JWT V.V.R. BABU Group CIO, ITC

Bangalore: Geetha Building, 49, 3rd Cross, Mission Road, Bangalore 560 027, Phone: 080-3053 0300, Fax: 3058 6065 Delhi: New Bridge Buisness Centers, 5th and 6th Floor, Tower-B, Technolopolis. Golf Course Road, Sector 54 Gurgaon- 122002, Haryana Phone: 0124-4626256, Fax: 0124-4375888 Mumbai: 201, Madhava, Bandra Kurla Complex,Bandra (E), Mumbai 400 051, Phone: 022-3068 5000, Fax: 2659 2708

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

contents

JUNE 15, 2012 | VOL/7 | ISSUE/08

Case Files 82 | Convergys FLEET MANAGEMENT BPO major, Convergys, re-routes the course its fleet management is taking, thereby tackling its second largest cost—and setting an industry standard. COVER: PHOTOGRAP HS BY SHARP IMAGES & SRIVATSA SHANDILIYA / COVER DESIGN BY VIKAS KAPOOR & UNNIKRISHNAN AV

By Debarati Roy

86 | WNS Global Services

3 4

BUSINESS CONTINUITY WNS Global Services ensures its customers have nothing to worry about in a disaster where their data is concerned. By Shubhra Rishi

34 | Reboot

6 6

COVER STORY | IT STRATEGY Infosys, HeroMotoCorp, and Ashok Leyland give IT a face-lift and change their businesses forever. Feature by Gunjan Trivedi and Shweta Rao

77 | Mid-Term Report Card SURVEY| MID-YEAR REVIEW The Mid-Year Review measures the progress Indian CIOs have made against the goals they set in the State of the CIO 2011 survey. It also checks if their expectations from business and the economy have come through. But both CIOs and the economy have fallen short. Compiled by Shardha Subramanian

VIEW FROM THE TOP:

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

“By the end of the year, we should own the largest solar-powered telecom tower footprint globally, ” says Devender Singh Rawat, CEO, Bharti Infratel.

VOL/7 | ISSUE/08

contents

(cont.) DEPARTMENTS 2 | From the Editor-in-Chief New Order Cometh By Vijay Ramachandran

4 | From the Governing Board Business Continuity | Getting to Cloud Nine By Anil Khopkar, Bajaj Auto

11 | Trendlines

5 4

18 | What We're Reading Book Review | Enchantment By Vijay Ramachandran

20 | Alert Mobile Security | Mobile Apocalypse Now Security Trends | What’s In, What’s Out

60 | Should the CIO Know How to Code? FEATURE | CIO ROLE Non-tech CIOs are all the rage these days. Is that good or bad for IT? Feature by Howard Baldwin

Columns 26

87 | Essential Technology SAN | Making Room for Storage Cloud Storage | NatGeo Cloudward Bound

90 | 5 Things I've Learnt The Voice of Experience | V. Balakrishnan, former CIO, Polaris Software Labs and current SVP of Reliance Money

| You're Open for Business?

CIO ROLE The CIO can take a leadership role by changing the paradigm from a narrow focus of delivering what your business unit client asks for to one that is strategic: What is needed to deliver truly excellent customer service? Column by George Gorsline

| Restructuring: Here We Go Again

UNDERCOVER OFFICER Re-engineering sounded so good the first time around that my bosses decided to give it another try. Hold on to your hats. Column by an Anonymous CSO

3 6 8

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

ALTERNATIVE VIEWS: Is the CIO Role Stagnant? Sticking to one industry lends domain expertise to the CIO role. But is it a good idea? Two CIOs debate.

VOL/7 | ISSUE/08

CIO Online

.in CIO ADVERTISER INDEX

BenQ India

[ CI O HO MEPAGE ]

Bharti Airtel

CIO.in Revamps!

Ctrl S Datacenters

CA (India)Technologies

BC 7

Dell India

To serve your needs better, we've redesigned cio.in. Now you'll be able to navigate content more easily, and quickly see the stories that demand your attention. We also have more surveys and more case studies!

Eaton Power Quality

Fluke Networks

Gartner India Research & Advisory Services

Hitachi Data systems India

HP PSG

IBM India

1 & Cover on Cover

Juniper Networks India

IFC

Lenovo India

IBC

Riverbed Technology India SAS Institute (India)

[ DEBATE ]

Is the CIO Role Stagnant?

We invited two CIOs to kick-start a debate on whether the CIO role gives IT leaders the flexibility to jump industries. Read all about it in Alternative Views (page 32). Which side are you on? We also have more debates for you on www.cio.in Is Money the Best Way to Retain Employees? Ayes Vs Nays Are We Ready for Big Data? Ayes Vs Nays >> www.cio.in/cio-debates

[ BOO K C LUB ]

Tata Consultancy Services Wipro Infotech

3 27 69 to 76 17

Conversation Starter Books have been known to spark conversations and on our website you can find the genesis of one. Learn what your peers think of a book and then visit the all new CIO Book Club section online and join the conversation with your peers.

>> www.cio.in/bookclub

[ Ca se F i l e ] Changing Course

BPO major, Convergys, re-routes the course its fleet management is taking, thereby tackling its second largest costâ&#x20AC;&#x201D;and setting an industry standard.

>> www.cio.in Must Read @ cio.in 10

>> Alert: Security Trends: What's In, What's Out >> Column: Are You Open for Business? >> Feature: Should the CIO Know How to Code?

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

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

VOL/7 | ISSUE/08

EDITED BY SHARDHA SUBRAMANIAN

NEW

HOT

UNEXPECTED

Touchy Feely Touché

QUICK TAKE:

—By Ian Paul

The Benefits of Global Exchange Programs

Global exchange programs, which offer IT staffers from around the world a platform to brainstorm and learn, might not be common, but have real benefits. M. Suresh, director-ADM Group, Hyundai AutoEver Systems, tells Sneha Jha what Hyundai’s IT team has gotten out of the company’s global knowledge-sharing initiative.

KNOWLEDGE SHARING

How does a global knowledge exchange program work? Every year, we nominate about five IT staffers handling diverse functions to attend a week-long global knowledge exchange program at our global headquarters. In all, about 50 IT staffers from around the world gather and gain international exposure through this program. They discuss practical issues and technical lessons, helping them understand best practices that Hyundai AutoEver uses across the globe. And then they adapt these best practices in their local environments. The global knowledge exchange also shows them the big picture in terms of the growth and plans of the group.

VOL/7 | ISSUE/08

Touché can be used in almost any object imaginable because it requires just a single electrical conductor embedded into the object and then a wired or wireless connection to a sensor controller. Disney imagines you could have a Touché-enabled living room where you sit down on your sofa and the TV automatically turns on. As you get more comfortable and lean back to enjoy the show, your living room lights would dim. And if you become so comfortable that you fall asleep, the sensors in your sofa would recognize this and shut down the TV for better rest. You could also put touch sensitivity into a doorknob that would lock based on how firmly you grasped the door handle, or even unlock with a “gesture password,” a feature in use today in Android smartphones and upcoming Windows 8 PCs.

TRENDLINES

You’re already used to touchenabled PCs, tablets, and smartphones, but eventually almost everything in your house could have a touch sensor, including doorknobs, cereal bowls, sofas, water, and even your own body. That’s a reality scientists at Disney Research in Pittsburgh, Pennsylvania—part of the Walt Disney Company’s commercial research arm—are working toward with a new touch and gesture recognition platform called Touché. The new technology relies on “swept frequency capacitive sensing” capable of processing far more information than current touch sensors that monitor a single frequency to detect single and multiple finger movements. Touché can monitor multiple frequencies, allowing it to understand hand grasps, complex finger gestures, and body position such as when a user is covering her ears or uses his elbows to lean on a table.

I N N O VAT I O N

What are its benefits? Thanks to the exposure, we are now able to roll out our projects much faster. With regard to deploying a technology solution, we can now make more informed choices in selecting a product. We also have a complete blueprint of how to go about an implementation, guidelines to adhere to, and training to be imparted to internal users. The program also offers us proven and successful reference points to follow.

M. Suresh

How do you decide who gets to go? We nominate people on the basis of their performance during the year and the projects that we propose to take up in the coming year. If we wish to take up a manufacturing application project, for example, we will decide to send someone handling that function. This makes the participation of that person more relevant to our strategic objectives. And we also use use it as a way to retain staffers. REAL CIO WORLD | J U N E 1 5 , 2 0 1 2

It was a weapon of mass destruction, then it was the earthquake that shook the economy, today it’s the one-that-must-not-be-named. Fuel is the new four letter word. Increasing fuel prices have spared no one. And for CIOs, among other things, it means shelling out more for electricity. But there’s always an option: Alternate sources of power. Debarati Roy spoke to some of your peers to find out if it was time to turn to alternate energy.

I T S T R AT E G Y

RAJAT SHARMA President-IT, Atul

TRENDLINES

“Yes. We certainly think of renewable power sources for fuelling our electricity needs for our datacenter and our company. Atul was one of the first companies to move to renewable energy and today we are generating 1 MW of power from four windmills of 250KW each installed in Kutch, Gujarat.”

SHARAD AGARWAL EVP-Head IT & Operations, Religare Finvest “No. Alternate energy sources are not mature enough to be deployed on a large scale. Lack of infrastructure, space, unclear government rules and regulations, and extremely high capex are major roadblocks in the adoption of alternate power sources.”

SUDESH JAIN Senior VP-Group IT, Transport Corporation of India “Yes. I think it’s a great concept and needs to be leveraged. High capex costs and a lack of associated infrastructure was the reason behind its limited adoption. But with the cost of running a datacenter increasing exponentially, the concept of alternate power sources will definitely pick up in the years to come.”

Lost

POPULAR SCIENCE

Researchers at Northwestern University have developed a device they say can deliver messages from the brain directly to muscles— skipping over the spinal cord—and enable a paralyzed hand to move. Scientists hope the device, which so far has been tested on monkeys, will someday help people with various levels of paralysis move again. “We are eavesdropping on the natural electrical signals from the brain that tell the arm and hand how to move, and sending those signals directly to the muscles,” Lee E. Miller, professor in neuroscience at Northwestern University Feinberg School of Medicine, said in a written statement. “This connection from brain to muscles might someday be used to help patients paralyzed due to spinal cord injury perform activities of daily living and achieve greater independence.” Miller is the lead investigator of the study. The researchers designed a tiny implant, which is a multielectrode array designed to detect the activity of about 100 neurons in the brain. The array also acts as the interface between the brain and a computer which is used to decipher the signals that generate hand or limb movements. “We can extract a remarkable amount of information from only 100 neurons, even though there are literally a million neurons involved in making that movement,” Miller said. “One reason is that these are output neurons that normally send signals to the muscles. Behind these neurons are many others that are making the calculations the brain needs in order to control movement. We are looking at the end result from all those calculations.” This research follows work that was done in 2008 at Duke University. Researchers there reported then that they had worked with scientists in Japan to use the neurons in a monkey’s brain to control a robot. With that research, as well, scientists, who had been working on the project for 10 years, were hoping it would lead to finding a way to help the paralyzed walk and use their arms and hands again. A scientist who successfully connected a moth’s brain to a robot predicted that between 2017 and 2022, people will be using “hybrid” computers—a combination of technology and living organic tissue. That’s happening already. — By Sharon Gaudin

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

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IMAGES BY D R LO HIA & SRIVATSA SH AN DIL IYA

IS IT TIME TO TURN TO ALTERNATE POWER? VOICES:

Paralyze

SCROLL

MOVE

VOLUME

Robo with a Heart

Green IT might have lost some of its buzzword status, but you wouldn’t be able to tell given the number of Indian organizations still creating more energy-efficient IT infrastructure.

IT MANAGEMENT

79%

Greener Than You Think

IT measures electricity consumption for IT equipment and datacenter infrastructure.

26%

IT managers have financial incentives to lower IT power consumption.

86%

IT and facilities have teamed up to reduce IT power consumption.

68%

IT has revised its datacenter layout (or design) to reduce power demand. Source:CIO Research

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

UNDO

DELETE

TURN OFF

Magic Trick:

Wave to Scroll T E C H N O L O G Y Most gesture-based control systems we use today rely on either motion-capture cameras—like the Kinect—or a touchscreen device. But researchers from Microsoft Research and the University of Washington are developing a system that can detect object with sound waves, like how a bat does with echolocation. With the SoundWave project, the researchers aim to bring gesture controls to any computer that has a set of speakers and microphone. The program uses the Doppler Effect of sound waves to detect objects and recognize motion. The Doppler Effect, as you might remember from so many years of science classes, is a principle of physics where the frequency of waves (sound waves, light waves) shifts depending on whether the source of that sound (or light) is moving toward or away from you. The most common example is a passing train, where the sound coming from the train seems to get deeper as it passes you. SoundWave uses your computer’s speakers to emit an imperceptible, ultrasonic audio signal—and you can still play music while it’s doing this. If you wave your hand in the vicinity of your computer, the sound waves that would have traveled through the air bounce off your hand instead. The computers microphone can pick up the audio signal and the SoundWave program can interpret any changes in the frequency as a gesture command. So far the team has been able to detect five different variables involved with a change of frequency, including the speed, direction, proximity, size, and number of the objects, as well as the frequency of the motion. From this, the Soundwave program can perform a number of the usual computer commands such as scrolling, clicking and double clicking, rotating objects, or automatically locking the computer while you’re away. The researchers say that SoundWave is 90 to100 percent accurate, even in a loud crowded room, and can even be used to play a round of Tetris. The most significant advantage of the SoundWave system is that it could add gesture controls to computers and laptops that don’t have a touchscreen display or a webcam. That said, the practicality of flailing your hands around over your keyboard and trackpad to use your laptop is questionable. —By Kevin Lee

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IMAGIN G BY VIKAS KAP OO R

TRENDLINES

R O B O T I C S Sharp’s new robot vacuum isn’t always happy to do your housework. The company has come out with a device that has a host of features including a mounted camera that streams video to mobile phones, voice recognition and a built-in air purifier. It’s also a bit moody. Cocorobo, a name that combines “heart” and “robot” in Japanese, will occasionally complain about being tired, or say it’s not having that great a day. Sharp wants to develop a new line of home appliances that have personality and communicate with their owners. “We’ve developed a a vacuum cleaner, but I think there is a need for automated products beyond vacuums. There will be new demand for such products and so we want to create them,” says Jitsuo Sakamoto, a division manager at Sharp. The new vacuum connects to a Wi-Fi network and can be controlled using a mobile phone app. The app works as a remote control and displays a video stream from its front-mounted camera, though those features don’t work on remote networks for security purposes. The app can also record voice messages for playback to family members through the vacuum or spin around and take images so remote users can check on their homes. The device uses three ultrasonic sensors to avoid obstacles, covering floors in a semi-random pattern. It responds to voice commands like “Clean Up” or “Go Home,” and occasionally chatters to itself, muttering “Ouch!” after it bumps into a wall. —By Jay Alabaster

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Best Practices

Banking on Fraud According to Deloitte’s Indian Banking Fraud Survey—which spoke to chief risk officers, head of internal audits, and chief compliance officers—93 percent of Indian banks indicate that there’s been an increase in incidents of fraud in the last year. Nearly one-in-four institutions has encountered over 100 incidents of fraud. Worse, a full 64 percent of respondents, say they expect fraud to rise between 6 and 25 percent. The average loss per incident for 50 percent of respondents is over Rs 10 lakh. If you multiply this figure by the reported number of incidents, the loss is a whopping Rs 10 crore a year per bank. Unfortunately, fraud risk management frameworks of banks, which are regulatory-driven, are mainly works-in-progress, says the survey. Fraudulent documentation and over-valuation of assets are the two types of fraud that ranked high across all respondents. These are primarily due to a lack of senior manager oversight, leading to deviations from processes and controls, say 73 percent of respondents. Other reasons include business pressure to meet targets, and difficult business scenarios. Most incidents of fraud take over six months to be detected, say over 50 percent of respondents. According to 43 percent, these frauds are mostly detected by anonymous complaints or through a whistler-blower mechanism (37 percent).

PUSH top management to implement policies that encourage moral behavior and demonstrate an ethical culture. Appoint a senior person for the anti-fraud group to put fraud prevention and controls on the company’s map.

CONDUCT detailed fraud risk assessments to help focus management’s attention on the risks to be addressed. These should include specific fraud schemes that could be perpetrated against the organization.

PREPARE an anti-fraud policy and create appropriate training which clearly defines fraud and misconduct.

The Rise and Rise of Fraud Factors Contributing to Fraud 73% Lack of oversight by line managers/senior management leading to deviations from processes

50% Business pressure to meet targets

47% Difficult business scenarios

37% Lack of tools to identify potential red flags

33% Collusion between employees and external parties

64% Of risk managers at Indian banks expect fraud to rise between 6 and 25 percent.

Loss Per Incident 10-50 lakh

13%

Over 100 lakh

40%

10 lakh

17% 23% Not Disclosed

10-20 lakh

SOURCE: DELOITTE’S INDIAN BANKING FRAUD SURVEY

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

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TRENDLINES

If there’s one thing you can bet on it’s that fraud will increase this year. We break down the Indian banking fraud scene.

CUSTOM SOLUTIONS GROUP WIPRO

EXECUTIVE VIEWPOINT

THE REAL VALUE OF

BIG DATA Padmanabha T.K., CTO, Wipro Infotech, says organizations should focus on a business problem that they need big data to solve in order to derive value and gain competitive edge. PADMANABHA T.K.,

these skills have been the purview of a handful of industries and domains but they will become far more important, going forward. McKinsey has estimated that the US alone will face a shortage of 1.5 million managers and analysts to analyze big data; and make decisions based on their findings. A similar scale of talent shortage can be expected in India and other parts of the world.

Big data has been drawing a lot of attention. How can organizations derive value from big data initiatives? Big data is drawing attention because of the explosion of data and the inadequacy of current storage and data processing technologies. However, it is imperative for proponents of big data to prove it’s effectiveness to get buy-in from business. Wipro’s CTO office is committed to investing in big data co-innovation projects with our customers and partners. These projects include supply chain optimization, personalization and churn management, fraud detection, business agility, and security and surveillance analytics. We will work with willing customers and partners to demonstrate the efficacy and business value of big data and prove its utility, going forward.

Does implementing a big data strategy and dealing with large volumes of data involve substantial process re-engineering? Not much if you’re using Hadoop. The great thing about Hadoop is that being an Open Source, open-standards technology, minimal re-engineering is required for your existing IT infrastructure. The Hadoop stack comes with built-in adapters to pull in data from existing systems to perform analysis. Hence, it’s not necessary for businesses to overhaul their IT infrastructure. What will be required, however, is a technology partner, who can understand the business imperative of a big data analytics project and also the data model of the enterprise. It could involve some amount of process re-engineering though, depending on how comprehensive existing processes are. The Hadoop cluster on which big data analytics is performed can be on a public or a private cloud. Wipro is committed to helping customers test the power of Hadoop as easily and seamlessly as possible.

How can Wipro help organizations leverage big data for competitive advantage and to drive organizational efficiency? Wipro’s co-innovation projects driven by the CTO’s office enable organizations to test the power of big data and see for themselves what value they can derive from it. We will bring expertise in Hadoop and data analytics, work with customers to identify sweet spots where big data can help, and co-invest in a big data pilot to demonstrate its value to our customers. This is backed by Wipro’s awardwinning technology consulting, system integration, and managed services expertise that customers have come to rely on. We hope customers will take advantage of this opportunity and experience the value that big data analytics brings to the business.

What are the key parameters CIOs need to consider when investing in big data analytics? The key parameter that CIOs need to consider is how closely big data investments are mapped to business’ pain-points. The need for big data analytics will evolve from business imperatives. Businesses require different sets of analytics for, say, market

What kind of skills does big data demand? Big data is making data science an important field. The ability to understand how large quantities of data can be analyzed, or how IT systems can self-learn and self-correct based on data collected, and what benefits big data analytics can bring to the organization will become increasingly important. Traditionally,

CTO, Wipro Infotech (India and Middle East) Responsible for new technology business incubation across verticals, Padmanabha’s focus is to build a strong team to drive business in new technologies like cloud computing, mobility, smart utility and homeland security. Prior to this, he was head of Wipro’s systems integration business, leading a team of 800 consultants and specialists. He was also responsible for starting the ASEAN operation for Wipro in Singapore.

This Interview is brought to you by IDG Custom Solutions Group in association with Wipro

TRENDLINES

dominators and challengers. And another set of analytics for different verticals and organization sizes. But what will remain constant is the importance of the ROI that can be derived from big data analytics. Hence, I believe that successful big data projects will focus on specific business imperatives with clearly-defined metrics mapping outcomes.

bookclub WHAT WE’RE READING

BY VIJAY RAMACHANDRAN

* ENCHANTMENT

Influential Instruction A master class from the guru of captivating hearts and minds and creating a support base that will root for you. IN SUMMARY: The early nineties were

TRENDLINES

bleak years for Macaholics like me, particularly in India. The absence of software and the limited number of other Mac users meant that the gloom only lifted when the odd copy of Macworld UK with a CD full of demos, trials, and shareware got past the customs authorities (who had the odd habit of snapping the disk into two and chucking the mag into the dustbin since software, free or not, attracted hefty import tariffs). At close to Rs 600 a magazine, it was an expensive way for a newbie journalist to sustain a PowerMac. But, then the magazine wasn’t just a compilation of freeware, it had great articles and columns, with one particular columnist’s opinions so remarkable that they’ve remained stuck in my head since. That columnist, dubbed ‘Wise Guy’ by the folks at Macworld, was Guy Kawasaki. For instance, in 1993, even as the first PDAs were hitting the market, Guy was writing about the need for a “telephone that’s got a computer, not the other way around.” Guy’s perfect 1993 PDA would have apps, and “would replace his cell phone, and, for all but the heaviest writing, my PowerBook.” Eerily perceptive, huh? Guy has been many things in life— Apple evangelist, entrepreneur, centure capitalist, speaker and author—and it’s this rich experience that flows though his tenth book, Enchantment. He defines enchantment as the process of

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delighting people with a product, service, organization or idea. And, he’s had a long history of doing that; as Apple’s Chief Evangelist in the mid-eighties, he was tasked with convincing software vendors to develop for the MacOS. Guy was so good, that he also charged up users like me into plumping for the Mac. The book is meant to be read and experienced as a journey. A journey of change, and a journey of influence, which will help you transform people’s hearts, minds and actions. Distinguishing between influence and enchantment, Guy said in a recent interview: “You can influence me and you can woo me and you can persuade me, but when you enchant me, that means that I’m head over heels in love. It’s the difference between like and love.” What helps is Guy’s smooth flow of thought, which is well organized and shows up in the way that the book is structured. Bite-sized chunks of wisdom and practical insight are served up without being overwhelming. Peppered with anecdotes and personal stories, Enchantment, is about the why of creating ‘wow’ experiences and the how and the what. The whole deal is to captivate the hearts and minds of your audience by making them feel important and involved—a community of fans; a support base that will root for you. Enchantment, can obviously be a great way to pick up tips for brand-building, marketing, customer relations, and

ENCHANTMENT

By Guy Kawasaki Publisher: Portfolio Price: Rs. 400

sales efforts. So it’s a great buy for those in marketing and sales. But what about concepts, and thoughts, and positions? I believe the book will be an invaluable asset to all CIOs in fine-tuning how to pitch their ideas better and how to get buy-in . Of course, Guy doesn’t suggest that we pitch snake oil. Far from that, the essence of this book lies in the way it serves to foster strong relationships. He spells is out that only a “knowledgeable, competent, likeable, trustworthy person” is enchanting. I particularly liked his techniques of using both push and pull methods like Twitter and LinkedIn to achieve this. But, more than that I loved his chapter ‘Think Japanese’, with its emphasis on understatement and soft-sell, and its advocacy of avoiding ‘bull shitake’, the art of spreading lies, and unfounded conclusions in a brazen manner. I recommend this book. If there’s one book that you read this year, make sure it’s this one. Go out there, plant some ideas and watch them bloom. Sounds interesting? We invite you to join the CIO Book Club. CIO Send feedback to editor@cio.in

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ENTERPRISE RISK MANAGEMENT

Mobile Apocalypse Now T

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he meteoric rise in the smartphone market is creating a dangerous vulnerability in smartphone security—one that may not be patched until the problem expands into what has been dubbed an “apocalypse.” Dan Auerbach, a staff technologist at the Electronics Frontier Foundation, points to outdated encryption standards and the inherent vulnerabilities of the baseband processor (a chip or part of a chip in a network interface that manages all the radio controls) found on modern smartphones as the makings for a security hole through which users can be exploited at large. The situation is similar to the PC boom of the late 1990s, Auerbach says. Just as PCs were designed to communicate freely with any and all network elements at the time, the baseband processors found on many of today’s smartphones interact with

any base station with which they come into contact. At the same time, “the cost of having portable base stations has decreased quite a bit,” Auerbach says. This has already enabled some police-state government agencies to create false base stations to monitor cellphone communications, he adds. “So you have just kind of a fake base station, and then you get a user’s cellphone to interact with that instead of the real base station,” Auerbach explains. This idea is known as the “baseband apocalypse,” and it is nothing new. At last year’s Black Hat DC Conference, security researcher Ralf-Philipp Weinmann presented the vulnerability and warned that new

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Open Source tools for establishing mobile base stations will make smartphones easier to exploit than in the past, when the code for base stations was retained by the service providers that managed them. What’s scarier, though, is that smartphone developers since have focused on features like user interface and screen resolution, as opposed to fixing a fundamental vulnerability that has been public knowledge for at least the past 16 months, Auerbach says. The Global System for Mobile Communications (GSM) standard for 3G cellphones still employs the A5/1 encryption algorithm, which Auerbach says is “incredibly broken” and “basically worthless.” Indeed, the industry has been aware of an attack against

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A5/1 that can intercept voice and text communications since 2009. “So, in light of that, controlling the base station and the network elements really does give you access to users’ communications,” Auerbach says. Another similarity between the mobile industry of today and the PC security outlook at the turn of the century is that OEMs and mobile carriers have no incentive to secure this vulnerability during the product development life cycle, Auerbach says. The faster smartphones are developed and pushed out to market, the more money companies like Qualcomm and Apple stand to make. Although he says he does not know the exact cost it would entail, Auerbach believes that “it would be significant to overhaul the encryption that’s used.” As long as OEMs and carriers aren’t feeling any pressure to make such a significant change, they will continue pushing more smartphones through the assembly line as is. Herein lies the difference in security for smartphones and PCs. Just over a decade ago, then Microsoft CEO Bill Gates wrote a memo to the company’s employees that set off the industrychanging Trustworthy Computing initiative. From 2000 to 2003, the

number of Internet users across the globe nearly doubled, from 389 million to 759 million, and a large-enough security threat could affect roughly 12 percent of the world population. With numbers this staggering, Gates was compelled to ensure Microsoft “customers will always be able to rely on these systems to be available and to secure their information.” Ten years and 1.5 billion new Web users later, Trustworthy Computing seems to have made a difference. Microsoft has since come up with the Security Development Lifecycle, for example, to instill security and privacy considerations before new products come to market. Whether the mobile industry will receive a similar call to arms remains to be seen, but Auerbach, for one, is less than optimistic. Because the smartphone market is not showing any signs of becoming as monopolized as the PC market was in 2002, Auerbach says any legislation aimed at improving cybersecurity, “should at least be thinking about incentivizing companies to care about security. I think, unfortunately, people at the helm are not very educated about real security issues and real problems, and instead they are taking their cues from interested parties, for example the intelligence community,

as to what needs to get passed,” Auerbach says. “Unfortunately, the result is that the legislation is not focused on the relevant issues, such as mobile, and instead it tends to become blanket legislation.” An increase in user education about the privacy and security issues with their smartphones could help the problem, as could improvements in sharing information about and patching newly discovered mobile software vulnerabilities, Auerbach says. However, OEMs and carriers are unlikely to respond until they have to, after a major security issue puts their customers directly at risk, he says. “Unfortunately, it might be the case where it will require some sort of big, newsworthy event where users’ privacy is compromised in a big way,” Auerbach says. “I hope that’s not the case. I hope that we can kind of improve security without that, but unfortunately I think it’s going to take a lot of press coverage to get mobile platform vendors and manufacturers to really start caring about this issue.” CIO

Colin Neagle covers emerging technologies, privacy and enterprise mobility for Network World (CIO’s sister publication). Send feedback to editor@cio.in

[ONE :: LINER]

“In order to monitor what’s acceptable online and what’s not, the government should form a top level security committee with wider representation from BFSI, education, CERT-In and private companies. This committee will evaluate online business models—even before a company is registered—and assess its risk levels.” SAMEER RATOLIKAR, CISO, BANK OF INDIA

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REAL CIO WORLD | F E B R U A R Y 1 5 , 2 0 1 1

ENTERPRISE RISK MANAGEMENT

What’s In, What’s Out

ecurity technologies rise and fall in popularity and utilization, and Forrester Research, in its TechRadar report, puts its bets on five it thinks are in a growth mode and five it thinks are dying away. The following are Forrester’s picks for security technologies likely to grow in use: Configuration Auditing Tools: Though not widely used right now, three to five years hence, they’ll be in wider use because of the increasing number of data breaches, current regulatory environment and their “potential to become ubiquitous in enterprise security organizations.” Malware Analysis: Recent analyses of incident response and vulnerability management show that the “adoption of such tools is expected to rise” within the next three to five years in part because of “state-sponsored or advanced persistent threats” which require “more diligent inspection of network traffic.” Network Encryption: Forrester says that the demand for stand-alone appliances is just starting, thanks to the many compliance requirements to encrypt and secure data. In one to three years this could reach the next phase. However, without compliance pressures, this technology will be adopted by only the most stringent and largest of enterprises. Predictive Threat Modeling: This relatively new concept calls for analyzing how to properly protect important data by proactively modeling threats. In three to five years, it could hit the next phase, although the “costs and complexity of current threat modeling tools work as a barrier to adoption of this new technology.” DDoS Mitigation Controls: Though there have been anti-DDoS products on the market for some time, the market has until recently been very small. But due to the increase in hactivism, “the market for DDoS protection is poised for growth” within one to three years.

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

And here’s Forrester’s list of security technologies that may not survive the next few years. Network Access Control: Forrester believes the market for stand-alone NAC offerings will likely be phased out over the next five to 10 years. Why is it bad news for NAC? Forrester says only 10 percent of technology decision makers will implement it over the next 12 months because “solutions are complex to deploy, scale and manage.” Secure File Transfer (as an on-premise appliance): The need to securely transfer and share files between business partners is high, but in three to five years it’s going to be done more with cloud-based services rather than appliances, says Forrester. Unified Threat Management: Though widely deployed, UTMs face dislocation from new security gateways with more integrated firewall and intrusion features

Yours Slyly, Syria

alert

that make UTM look “antiquated.” Forrester gives UTM one to three years to evolve to meet competitive challenges and be more “enterprise-ready,” though it also acknowledges UTM is likely to be “moderately successful over the long run” in retail stores. Finally, a partial list of security technologies Forrester thinks is in decline. Traditional Network Firewall: The traditional firewall market “will stall as wide adoption of next-generation firewall technology occurs,” says Forrester. It says the outlook for the next five to 10 years is that the latter will ultimately replace today’s traditional firewalls, though these old-timers will still be the main line of cyber-defense for at least the next five years. CIO Ellen Messmer is senior editor at Network World (CIO’s sister publication). Send feedback to editor@cio.in.

Further evidence has emerged that the Syrian government is targeting opposition activists using a well-known remote access Trojan distributed through bogus Skype calls. A blog by Mikko Hypponen of anti-virus company F-Secure describes receiving the hard drive image of a Syrian dissident’s PC which turned out to have been infected with the widely-available ‘Xtreme RAT’, a backdoor tool for remotely controlling and accessing PCs. The activist’s PC had become infected after accepting a file over a Skype session from a known contact which he believed would help him to hide his PC’s hardware MAC address from government snoopers. In fact, the file, MACAddressChanger.exe, turned out to be malicious and the contact had already been arrested before the call, raising the likelihood that the Syrian government was behind the attack. The regime had previously resorted to the extreme measure of cutting off the Internet altogether but seems to have realised that surveillance offers greater intelligence possibilities. As such the attacks depend on the PC being poorly defended or the user open to social engineering.s The MACAddressChanger. exe and Xtreme RAT apps are easily detected by an anti-virus program that monitors IM. So far such tactics are aggressive rather than sophisticated. — By John E. Dunn

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George Gorsline

CIO Role

You're Open for Business?

he Web offers cheap and easy access a paying customer or your own employees, The CIO can take a for our clients (internal or external) where anytime, anywhere is the expectation. leadership role by changing to access services 24/7. As a result, Using some old management clichés, this is the paradigm from a our Web stores and public facing shifting the thinking from "we're no worse than narrow focus of delivering sites have become "must be available" on anyone else" to "we're here for you whenever what your business unit the same basis. But how many of us actually and wherever you decide you need us." client asks for to one that is follow through? Going from 99.7 percent availability to 100 Catching up on bills on a recent weekend, I percent is non-trivial in both cost and staff strategic: What is needed was doing Internet banking, paying a parking resourcing. Determining what services need to deliver truly excellent ticket and checking a utility bill. Except for the to be continuously available isn't easy. Here's customer service? annoyance of having to remember and type where you, the CIO, can take a leadership role in passwords (being able to view my recent by changing the paradigm from a narrow focus electricity usage requires more security than accessing my of delivering what your business unit client asks for to one that bank accounts), everything was fine. Fine, at least until I needed is strategic: What is needed to deliver truly excellent customer to check on a health insurance claim. As soon as the screen service? For example, do you track how many times your "sorry flashed up, I remembered, again. While this company prides and go away until Monday" pages are hit and offer a form to itself on customer service, promising 24/7, I have yet to ever leave a message and promise follow-up? Or perhaps include a get access outside of standard office hours. In this case, I got short survey when your site is up asking "how are we doing?" a generic message, paraphrased as "we're normally available And you're using social media; what is being said there? 24/7, but we guess since you got this message that we must be It's about using our roles as IT leaders and experience as doing some sort of software maintenance. Here's our hotline customers to do our real job: Improve our organization's ability number, staffed Monday-Friday during office hours." to be successful. Our competition is Google, Facebook, and the Needless to say, this experience is not good customer other major utilities. We're not in the same business, but they service. Maybe I'm just incredibly unlucky that I have only set the rules for presence on the Internet: Continuous, robust tried the few times that maintenance was actually in progress, full service. Imagine what a weekend blackout of Google would but I doubt it. This certainly wouldn't happen in a Web store be. Catastrophic. environment, where no service is understood to be no business In other words, this is not the time to donate your business and lost future visits. More likely this stems from a corporate to the competition. This is the time to hold on to them—dearly. culture of ‘the customer is captive’, so they have to follow our And the only way to do that is to better customer service, it rules, perhaps coupled with classic "lipstick on the elephant doesn’t take much for your customers to turn away. "architecture; that is, a nice Web portal to an ancient batch But to your customers, being turned away when they need system that really hasn't changed since the 70s. Talk about access sends the message that you don't care about them. It leaves creating an opportunity for your competition! them wondering why you don't care when they're paying you for a Before you dismiss this as "well that's them, I'm OK," service, while the free services are always there. More importantly, perhaps you should take a the answer to the question of whether one of your competitors can more careful look at all of do better is only a few clicks of the mouse away. CIO The Other Side your services as they are To learn more about leading delivered, not against the business initiatives, read What standards of your industry, Makes a Business CIO? On www. but to the standards of the George Gorsline is CEO of Leading Geeks. His newest book is 8 Steps to Restoring Client cio.in c o.in Web consumer, whether Trust. Send feedback to this column to editor@cio.in

J U n e 1 5 , 2 0 1 2 | REAL CIO WORLD

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26/04/2012 18:15:06 10:15:45 16/04/2012

Undercover Officer

Anonymous

Restructuring: Here We Go Again Re-engineering sounded so good the first time around that my bosses decided to give it another try. Hold on to your hats.

hroughout the years, the diverse corporate security function at my company has been parsed, consolidated, amalgamated, re-engineered, insourced, outsourced, downsized, right-sized, started, invigorated, celebrated, berated, molded, melded, digitized and formalized. And, by all accounts, we’re ready to do it again. It now seems that the CEO wants to consolidate the governance, IT, risk management and other functions to narrow the span of his direct reports. Brilliant. We’re now under an executive vice president of the new business services group. This guy is an egocentric, highly placed idiot. Don’t get me wrong—he’s no dummy. He is obviously tight with the CEO. He’s a retired Army Reserve Colonel who has been here since the doors first opened. He prides himself on having always managed functions on the profit side of the business. In fact, he brags loudly that he knows more about leadership in general than anybody else in the company. But I’ve heard he’s a re-engineering freak and uses it

j u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

to zero-base everything. His MO has been to use a certain outside consultant as his smiling assassin. Our first few meetings are mostly pleasantries and the usual probes one should expect from a new boss. He claims to be a supporter of security and says he has heard good things about my team. But I’m not persuaded he’s on our side. “It should be interesting being over here on the cost side,” he says, his voice dripping with irony. Interesting for whom, I wonder? Re-engineering never comes up during our initial meetings. “Just keep on doing the great job you folks are doing,” he promises, “and we’ll be in good shape.” I’ve put my heart and soul into building this

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Undercover Officer

Anonymous

security organization, and now I have to wonder if my future is on the line here. I think it is. At our first staff meeting a couple of weeks later, things seem very relaxed and even collegial. I know his other directs really well and have regular interaction with most of them. Our fearless leader announces that the CEO is really cranked up about “all this Enron and Sarbanes-Oxley crap.” And he’s made it his goal to get the Board of Directors to calm down and the governance team to “stay in neutral.” At this point, he hits the intercom and has a guest join our meeting. Hey kids, say hello to the Guru of Re-engineering. He’s the smiling one in the clown suit over there. In the first few minutes, I deduce he is a graduate of some late-in-life business school epiphany. However, I can’t get past the fact that he’s wearing a couple of past meals on his tie and lapels. Gross. According to him, all business processes can be boiled down to a transactional time-logging system that will enable us to “systematically cut out the fat that so easily creeps into our daily routine.” He’s assembling a team to “work with us” on the process reviews. My radar is working overtime, but I smile and nod so much that every muscle from my shoulders up is frozen for a half hour after his self-satisfied exit. I’m feeling abnormally pessimistic about the absurd lack of substantive leadership we are receiving from

Good Vs Evil To learn more about dealing with a bad boss read How to Tame a Bad Boss on www.cio.in

c o.in Vol/7 | ISSUE/08

I’ve put my heart and soul into building this security organization, and now I have to wonder if my future is on the line here. I think it is. Colonel Cretin on virtually everything. Several of his former subordinates have told me that almost everything he did in past lives has been undone by those who followed. He plays favorites to the hilt and hasn’t a clue about issues such as diversity and respectful workplace etiquette. He openly bad-mouths his peers and seems particularly intrigued by the who, what and how of our internal investigations. Comparing notes with my Internal Audit friend, we both conclude that this guy won’t be satisfied until he has scalps hanging from his office door. One of my most senior investigators reminds me that a few years ago we were instrumental in the investigation of one of our new leader’s most-valued whiz kids for serious Internet time and content abuse. That couldn’t affect our leader’s perception of the security team, could it? Then, the “team” descends. No one on it knows how to spell security yet they want to “help” us redefine our jobs so we can more productively perform our tasks. They believe if you’ve seen one business process you’ve seen ‘em all. It’s simply a matter of documenting each one and then applying a value proposition to each. A couple of months later we are into business process documentation up to our eyeballs. Nearly a quarter of our resources are involved in documenting what we do on an hourly basis. I direct my people to also log the time devoted to re-engineering. A silly voice in my head advises me that this will be

a good statistic to throw at the jury before they are sent out to consider our fate. As time goes by, I’m getting even more negative about this process and the absurd lack of substantive leadership we are receiving from Colonel Cretin. For the senior executive leading all of the governance functions in this global enterprise, he’s totally disengaged in the substance of our collective work and seemingly possessed by this re-engineering business. It’s a sorry day when you reach the point of really disrespecting your boss. Our meetings increasingly focus on why there is a central security function “when it’s just good management to hold individual business units accountable for all that stuff.” My pulse quickens and I explain that there is value in independence of governance functions. I ask if he truly believes that individual managers will reliably oversee their operations for integrity. “What would it look like if every manager established and maintained his own set of internal controls?” I ask. “Isn’t that what we’ve seen with Enron, Adelphia, and a number of other companies out of control?” As a last-gasp effort, I point out that he now owns all of the business functions that are supposed to be able to detect and alert the company to things that go bump in the night. No answer. Philosophically, we are night and day. (I’m day, by the way.) Several months into our REAL CIO WORLD | J u n e 1 5 , 2 0 1 2

Undercover Officer

Anonymous

“relationship” comes my annual performance review. I do OK but I’m struck by one of my leader’s admonitions: “You are too close to your people.” Rather than thanking him for the compliment, I only nod, waiting for the other shoe to drop. “You need to have the guts to pull the trigger when it’s time.” I’ve been around the block enough times to get the drift of this exchange. And at this point there isn’t a damn thing I can share with any of my staff. They can’t know my concerns, and I conclude that I have to keep a positive face on the process and its outcome. Except, underneath it all, I struggle because this, after all, is the security organization. My team gets paid to know what’s going on. Nevertheless, I wear a smile for my own protection as well as the morale of my team. Other b i -we e k l y management treats are supplied by quality time with the Smiling Assassin. Over the months we have filled several huge, three-ring binders with internal customer interview notes, time studies, cost-benefit analyses, and benchmarking results. We are now focusing on some conclusions. “Your organization has incredible customer-satisfaction scores given the negative business you are in,” he says. I respond with my own curt negative: “We weren’t aware we were in a negative business. We’ve obviously lost our way because our customers seem to feel we are adding value to their operations.” He looks hurt. While I’m focused on a particularly colorful stain on his shirt, out comes his real agenda. “We’re about to start our annual business planning cycle,

and the boss wants each of his directs to build a financial plan around a 30 percent reduction in headcount. Every function that can be outsourced for financial advantage should be.” He lives for these moments of drama. I don’t miss a beat. “So, let me get this straight: Through this internal review process we’ve documented several new or expanded services the business wants from us, business is strong and growing, you’ve seen the new threats in our technical and business conduct areas, we’re expanding into high-risk markets, and you want me to gut the program?” That is what this whole damn thing was about. It wasn’t a process to uncover opportunities for

the 11th hour by a human resources department concerned about gender and age discrimination. Much of the outsourcing results in the arrival of people who have zero loyalty to our company and who individually cost more per hour than those they replaced. I know from insiders that I will survive this bloodshed, but I’m tired as hell of fending off this playground bully. Really tired. When the smoke clears, the deed is done. About 20 percent of my team is history, most having found better employment elsewhere. Colonel Cretin has just announced his own retirement to someplace warm with plenty of golf courses.

That is what this whole damn thing was about. It wasn’t a process to uncover opportunities for improvement. It was a cover for our leader’s simple-minded, cost-cutting agenda. Wonderful.

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improvement. It was a cover for our leader’s simple-minded, cost-cutting agenda. Wonderful. Somewhere in my heart, I know I can’t work for this man. But neither can I walk away from my team, most of whom I’ve personally hired over the past decade. Am I confirming the perception that I’m too close to my people? In the months that follow, the Colonel plays out his strategy; several of his directs (my peers) are handed either pink slips or packages, and I attend more bitter “retirement” parties than I can stand. His collective organizations go into two separate reductions-inforce characterized by selections for the door. They are stopped at

The Assassin takes a letter from the Colonel to an old Army buddy at one of the Big Four and is making enough money to buy stain-proof suits. That’s getting somewhere. And me? Due to customer demand, I’m in the process of bringing back most of the things the dodo undid. And I have a new boss that seems to get it. I’m hoping he’s someone I can respect and learn from. Until the next re-organization. CIO

This column is written anonymously by a real CSO. Send feedback on this column to editor@cio.in

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Alternative Views

CIO Role

Is the CIO Role Stagnant? Sticking to one industry lends domain expertise to the CIO role, making them veterans in their own right. But is it a good idea? Two CIOs debate.

’ve worked in organizations across different verticals—healthcare, FMCGand retail—and have also run my own start-up. I believe shifting from one vertical to another is the only way a CIO can become well-rounded. If you stick around in one organization, in one industry, you become just another spoke in the wheel. When I join a new organization, I make two things very clear: I will be reporting only to the CEO and I will be in that role for 18 months. Beyond that, my CEO and I have to start crafting a new role for me. Therefore, one of my KRAs is to find my successor. Sticking to a particular industry is a question of mindset and an unwillingness to move outside one’s comfort zone. It’s true that certain industries such as banking and telecom require a sound understanding of

business processes, but it also depends on one’s aptitude to learn and try out new things. If one is entrepreneurial a shift opens doors to new opportunities and to try out new things. I graduated from IIT in Mechanical Engineering, but I spent the first 10 years of my career in finance. I followed this up with an MBA which further gave me a business edge. My initial years in non-IT helped me develop expertise in supply chain management and e-procurement. My first stint with IT began in 2004 when I came back to India after having been in the US. I joined Nestle as a business technology head which was more of a business role than an IT role. I strongly believe that my experience in finance and other domains, has helped me bring about IT transformations in every organization I moved to.

“I strongly believe that it was my experience in different domains that helped me bring about IT transformation in every organization I moved to.” —Manish Gupta, CIO, Devyani International 32

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Alternative Views

CIO Role

IOs have moved away from being technologists who handle just IT to becoming chief innovation officers. Today, CIOs are chief solution providers for the business. In today’s world, business expects a lot from IT and CIOs. That’s why they need to understand their organization’s business and use the power of information technology to transform it. I have been in the BFSI industry for 20 years now. I don’t think a newcomer from another industry will be able to understand the nuances of the sector and start contributing instantly. When you move to a new industry, you need a lot of time to understand the business process and settle in. How many organizations can afford to give you the time to play catch up? This might work if you’re joining a start-up. If you get that opportunity, you can help build the business processes and there will not be much legacy to deal with. However, you will still need a strong understanding of business needs and customer requirements. The BFSI industry has many subverticals, and CIOs may have some limited mobility within these subverticals. For example, moving from

“When you move to a new industry, you need time to understand that business’ processes. How many organizations can give you the time?” —S. Raghuna Reddy, SVP-IT, UTI Mutual Fund mutual funds to insurance or broking may not be that hard. Banks, on the other hand, have strong, streamlined processes and governance in place. It is very tough to move into the banking industry from another industry. In fact, the banking industry prefers bankersturned-technologists. Most banking CIOs, today, are people who have worked at the grassroot level of banking, and not just techies who entered the system. For a CIO, mobility in the real sense of the word comes from the new roles that he can mold himself into—not from moving across industries. His ability to create real business value will take him to newer heights. CIO

As told to Varsha Chidambaram Varsha Chidambaram is senior correspondent. Send feedback to varsha_chidambaram@cio.in

TRANSFORMING BUSINESS

THROUGH JUDICIOUS APPLICATION OF IT

IN THIS ISSUE

To follow business transformation in action, visit www.cio.in/transformers

69 | POWER OF ONE BSNL raises its customer service to a new standard through the Call Details Record project

74 | AHEADOFTHECURVE R. K. Upadhyay of BSNL talks about the steps BSNL is taking in order to stay ahead in a highly competitive vertical.

An IDG Custom Solutions Initiative

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IT Strategy

Reboot Infosys, HeroMoto Corp, and Ashok Leyland give their IT a face-lift and change their businesses forever.

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VoL/7 | ISSUE/08

Cover Story

y most yardsticks, the economy is in a pretty bad place. India’s growth rate has fallen to its slowest pace since a decade. The country’s economic activity slumped critically in the first quarter of 2012, with growth falling to 5.3 percent, from 9.2 percent a year earlier. The Rupee’s not gaining any of the ground it’s been losing for months, and the government’s taken a severe beating, shaking its ability to lead. All of that is making businesses and markets insecure, forcing leaders everywhere to play safe. Now here’s the silver lining. Business trauma is the best time for re-invention. But there’s a nut inside that lesson: It takes true leadership and the ability to see beyond the downturn to do anything more than panic. That’s exactly what these three IT leaders, the three who form this cover story, have. They looked at the last downturn and saw opportunity, not a crisis. They read the same headlines everyone else did but decided to take a chance and get ready for the upturn—when everyone else was cowering in their bunkers. They envisioned stronger, faster and more efficient enterprises and got their peers to see the same picture. This obviously meant fishing in troubled waters. Along with tremendous planning and foresightedness, their risk-taking abilities were put to test. Not only that, it also meant committing jumbo investments and then taking up the accountability that comes with it. We’re at that point in history again. Have you seen a direct hit to your IT budgets this year? Have you changed plans or revised aspirations for new projects? Doesn’t it feel like 2008 all over again? If you’ve answered yes, read on and revel in the stories of companies that got ready to double their pace when the world decided to slow down.

IT Strategy

Pg36 Infosys completely changes the way it offers users IT services and creates a new business model.

Pg48 HeroMoto Corp revamps the system it uses to interact with its dealers, to great effect.

Pg54

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Ashok Leyland wipes its ERP slate clean and starts afresh, driving business to record heights.

Reader ROI: The long-term benefits of investing in a slowdown How to prepare for the upturn The challenges of implementing a large scale project

REAL CIO WORLD | J U N E 1 5 , 2 0 1 2

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IT Strategy

Performance Center

Forget cost and profit centers. Infosys’ cloud strategy opened the business to new models and drove up resource utilization. By Gunjan Trivedi

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Photo by SRIVATSA SHANDILIYA

urali Krishna K. has just returned from Hanoi, Vietnam. But the SVP and group head-Computers and Communications Division at Infosys wasn’t on a business trip to the easternmost country on the Indochina peninsula. Along with seven friends, Krishna flew to Hanoi, rented classic URAL 650cc bikes and rode the ‘Border Crawl Ride’—an eight-day, 1,250 kilometer trail that traverses the mountain ranges running along the Vietnam-Chinese border. Such rides are not new for Krishna, who is known for his love for super-bikes; he owns a BMW K1200S and a Ducati Diavel. But what’s refreshingly different with this Vietnamese run was the choice of motorcycle. Krishna chose to ride a 42-year-old, Russian World War II machine. “It redefined the experience. That’s what mattered,” says Krishna. It’s with this thirst to redefine the experience of users, customers, and business at Infosys that he begun on a different type of journey five years ago. And much like the Border Crawl Ride, this journey presented Krishna with plenty of opportunities to get off the beaten track and remodel the company’s IT ecosystem. By the time it was complete, the initiative would not only bring in more discipline to Infosys, improve its asset utilization, upgrade its efficiency, fortify its security, enhance user-experience and create service differentiators but it would also, crucially realign the organization to a non-linear business model. In doing so, it would redefine the way Infosys does business. Vol/7 | ISSUE/08

urali Krishna K., SVP & Group Head-CCD, Infosys, created three clouds that allowed the company to both pursue new business models and increase resource utilization.

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IT Strategy

“I wanted my IT department to be referred to as a performance center—not a cost-center, not a profit center. That’s why bringing in non-linear performance, helping Infosys increase its relevance to its clients, and building tomorrow’s enterprise were the primary drivers for this journey,” says Krishna. Here’s how he brought more order to Infosys and revolutionized the way it generated revenue. And then, just when the refresh was settling down, Krishna refreshed the refresh plan.

From Thought to Idea It was the beginning of the last quarter of 2007, and Krishna had just moved from Chicago—where he headed Infosys’ System Integration business unit—to the company’s iconic Bangalore campus—to head the company’s computers and communications division. “This is the team that had delivered consistently, with a year-on-year growth factor of about 60 percent CAGR. They had been very successful in doing what they were doing,” he recalls. But like any good thing, there was room for improvement. With between 5,000 to 7,500 active projects at any given point (at that time), data was never a problem. Making sense of this data, however, was. Technologies and engagement models varied from one project to another. Project teams adopted different ways to build their products, depending on where their customers, experts, and development teams were located. The lack of a standard approach was a problem-inwaiting, considering the scale at which Infosys was growing. The speed at which Infosys was expanding was, itself, a challenge. Take for example the way, project teams were used to getting infrastructure for project development: It

rinath Batni, Member of the Board and Head of Delivery Excellence, Infosys, says that the cloud platform benefits both clients and vendors, making it a “model of the future.”

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had to be ordered. And being located at STP or SEZ only complicated matters. “When you get export exemption, anything you buy needs to get into the billing cycle immediately. You can’t sit on inventory that’s waiting to be billed. Hence, our procurement cycles were at least four to eight weeks long, depending on the configuration someone wanted, assuming that we had budgets to do so. If, it turns out, someone’s needs weren’t budgeted for in a particular quarter, they would have to wait for the next quarter, at least,” says Krishna. Because resources were not super-easy to get hold of, project teams held on to hardware they got—even when they didn’t really need it—leading to poor resource utilization. All of that made Krishna want to have better control on how an asset was leveraged from the time it was bought to when it turned to e-waste. “I wanted better control over what a project team was doing with an asset, what software resided on it, what processes were being followed when an asset moved from one project to another. Improved control would also be better from a data privacy and software license compliance perspective,” he says.

Mapping the Route Armed with a long-term vision to revolutionize the way Infosys did business using IT, and a short-term goal to bring more order to his house, Krishna began to create an elaborate roadmap. The first step was to comply to ISO 20000 standards and introduce the ITIL framework. “Clearly, the idea was to move away from looking at technology metrics to measuring performance metrics,” he says. With the ITIL framework, came comprehensive visibility in relation to the configuration and asset lifecycle management in the company. Procurement was streamlined. The old ways of renting assets—quick workarounds to procure hardware and software that were not always empanelled—were weeded out. Dovetailing that push, Krishna started working on green IT initiatives. His team did plenty of asset consolidation, brought in virtualization on a huge scale, and structured e-waste practices. The IT team, says Krishna, literally combed every inch of its campuses, covering several hundred acres, under the asset and sustainability drive and found thousands of hardware assets that were earmarked to projects and were being under-utilized. Once procured, most project leaders did not hand them back. Servers were merely unplugged and kept aside. At the same time, experimentation labs and Centers of Excellence for different technologies began mushrooming across the company. Krishna himself had run about five labs of his own back in Chicago. The challenge with these labs was that once the initial excitement around a specific technology died out, or stakeholders were re-assigned to other projects, IT resource utilization crashed to below 20 percent. Vol/7 | ISSUE/08

Photos by SRIVATSA SHANDIL IYA

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IT Strategy

“There were about 9,000 IT assets, which were given out to labs and projects, that had just about 20 to 30 percent utilization levels,” Krishna says. But fixing these challenges wasn’t enough for Krishna. In early 2008, when Infosys was about 70 percent through the asset management and green IT projects, it dawned on Krishna that there was a lot of ground left to cover. He needed to refresh the plan. And, refresh he did.

amson David, VP and Global Head Business Platforms, Infosys, says, “What would take a long time to provision earlier can now be done in a fraction of the time.”

The Kickstart “We began re-looking our plans,” says Krishna. “We knew we had to deliver something the business would appreciate. So we asked ourselves the most fundamental question: What is it that we at Infosys do for our living? The answer was developing, testing and transacting concepts,” recalls Krishna. “Hence, we decided to prioritize the development of a dependable, sharable, secure and sustainable IT model. We wanted to increase our relevance to our clients and users, and build a model to evangelize the lifecycle of how business works from concept to co-creation and to revenue generation.” Though the cloud was a nascent concept at that time, it excited Krishna. He saw it a viable engagement platform that could meet many of the needs of their plan. But he quickly realized that he would have to look at building a cloud in-house as none of the public cloud service providers were adequately equipped to meet the scale, agility and security requirements of Infosys. 42

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While coming up with this refresh plan, Krishna and his team considered several factors before choosing the cloud strategy. These included application code base design, multitenancy maturity, distributed parallelism; DB design; how reactive and responsive controls and governance would be; external access and data flows; underpinning SLAs and contracts; business continuity; scaling automation; shared services dependencies; risk tolerance and above all the lifecycle and end-to-end cost implications. “We started by asking ourselves where we could have the greatest impact on business and built the technology—with process-maturity around it—at break-neck speeds,” says Rajkumar R., associate VP and practice manager-IT Services, Computers & Communications Division, Infosys. In the meanwhile, Krishna maintained an open line of communication with senior management. “That brings about a fair amount of trust and confidence. They had a clear visibility of our initiatives. It made it quite easy for me to secure the initial investment of US$ 2 million (about Rs 11 crore at today’s exchange rate) for this plan,” he says. Krishna crafted a three-pronged cloud strategy to remodel, realign and reuse the IT ecosystem, perfectly harmonizing with the ITIL framework and building further on the asset management and sustainability initiatives. The first prong was an entirely internal cloud, called MyCloud, that was designed to address concept creation, as the dynamic infrastructure to power the project development environment for Infosys’ end-users. The second was what was christened the Collab Cloud, which Krishna envisioned would harness and encourage co-creation at Infosys. This cloud would enable conceptincubation labs and POCs, along with Internet-based collaboration among Infosys users and similar interest groups, partners, research bodies and prospects. The last was the Datacenter Microcosm. This was a production or revenue cloud and would be the public cloud partner for clients; its purpose was to serve the Infosys IP as an application stack. This cloud was meant to open up Infosys to non-linear business models. “We re-imagined the process from concept to revenue generation and etched the fabrications, environment sets, service costing and experience wrappers. There were numerous strategic business experiments. Our professional teams made sense of it all and designed it to purpose together,” recalls Rajkumar. Users were accustomed to a certain level of experience with dedicated infrastructure. To ensure the seamless adoption of MyCloud, it was essential for Krishna and his team to ensure that users got the experience or better with the virtual environment. “It was simple. I wanted to make sure that with MyCloud, users get the same power in terms of compute and capacity along with the ability to give access to an asset to other stakeholders. We created experience wrappers around all Vol/7 | ISSUE/08

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IT Strategy

our services that simulate the experience of working with physical infrastructure, by tightly integrating front-end portals with process workflows in the backend,” he says. Krishna also got a lot of his technology partners to invest time and effort to co-create plug-ins and application hooks that would help the IT team create the much-required provisioning and orchestration layer for the cloud. This was critical as no off-the-shelf orchestration layer product for the cloud was available at that time. “We needed it the most to integrate our self-service and provisioning portal to the hypervisor layer,” Krishna says. “If you actually look at it, I did not change the existing IT structure massively. I just remodeled it with the right hooks, add-ons and substrates,” he adds.

Changing Gears While the three clouds were being worked on, the strategy was pretty clear. Phase I would see the rollout of MyCloud, followed by the Collab Cloud, and then armed with learnings from the first two, the Datacenter Microcosm would be rolled out in the third phase. At the same time, Krishna began seeing the early signs of an economic slowdown and decided to be proactive. “As the slowdown kicked in, I became quite opportunistic. I knew that with tougher markets, it would be harder to get

Provisioning time for project specific IT infrastructure has reduced to four hours from two working days, or four weeks if procurement was required. more resources for my new initiatives. I looked around and decided to leverage the engineers who had been benched temporarily. I brought in 30-40 engineers from across different business units to help us parallelly create several automation tools and run project initiatives that became the foundation blocks for our clouds,” he recalls. Then the economy forced him to change plans. Sensing the onset of a push towards non-linear business performance, Krishna opted to refresh the original refresh plan. “I received a clear mandate in early 2009 that we were actively looking to build non-linear business models such as SaaS, and I would be the hosting partner for all Infosys IP. We clearly had to shift gears,” he recalls. 44

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So in phase three, the Datacenter Microcosm, was accelerated and in phase two, the Collab Cloud, went on the backburner. Krishna’s team took just five-and-a-half months to rollout the restricted-access, public cloud, along with a well-structured pricing strategy, well-defined service offerings, and well-organized sales collaterals. Phase one—MyCloud—came into being within seven months of its inception and a few months later, the Collab Cloud was successfully rolled out. “It was indeed a formidable challenge. But we enjoyed cracking it. It was all managed in-house with one team focused on the Datacenter Microcosm and another handling the other two clouds,” he says.

Speed Thrills The benefits of the cloud ecosystems at Infosys are clear, profound and widely accepted. “My team is a major and a strategic consumer of the cloud ecosystem,” says Samson David, VP & global head-Business Platforms at Infosys. “It is imperative that this cloud ecosystem slices through complexity, drives simplicity, enables us to provision infrastructure rapidly, is flexible, caters to the needs of different kinds of platforms, and is as secure as Fort Knox as we run several mission-critical business components for our clients.” Perhaps, the most important benefit of the cloud-approach was the ability to scale. The restricted access, public cloud (Datacenter Microcosm) enjoys 15 times scale-up, stepsize on platform IT abstraction. Over 30 percent blade consolidation has been achieved with 66 percent host-VM density production utilization and right-sizing metrics. “Between then and now, I think global delivery model flows have evolved, altering connectivity vectors and tapping the cloud forms in a big way. Earlier, offshore teams used to work on client-premises systems or vice-versa and now, it’s the cloud that all look up to for their services and system-to-system, real time intelligence. Clients, partners, users all are in fact connecting and conversing over our clouds,” says Rajkumar. With the internal clouds, server deployment time has reduced by over 90 percent. Provisioning time for project specific IT infrastructure has reduced to four hours from two working days, or four weeks if procurement was required. The time it takes to build and rebuild compute platforms has decreased from two hours or more to about 20 minutes per virtual instance. “What would take a long time to provision in the earlier paradigm can now be done in a fraction of the time. The ecosystem architecture also provides immense flexibility in provisioning for different types of disparate platforms, almost making it a plug-and-play kind of an environment for my team,” says David. Plus, average hardware utilization has increased to 70 percent from 20 percent or less earlier. Vol/7 | ISSUE/08

IT Strategy

“The cloud ecosystem essentially converts IT assets to ‘on tap’ resources to be paid per use. This helps business units convert capex to opex, which I am sure is the dream of any CFO,” says Srinath Batni, member of the Board and head of Delivery Excellence at Infosys. Infosys enjoys about 23 percent level optimization in facility sub-systems to power and cool the Datacenter Microcosm and around 80 percent reduction in power demand from project specific servers and additional desktops. In addition these clouds are 100 percent patch and configuration compliant. “Using the internal cloud simplifies information security risk governance. Cloud technology lends itself to processes and systems that enforce central policies on virtual instances of machines and applications,” says P.D. Mallya, head of Security Audit and Architecture, Infosys.

Hyper Acceleration Now, Infosys isn’t limited to the three clouds anymore. Harmonizing on the existing platforms of MyCloud, Collab Cloud and Datacenter Microcosm, Krishna and his team have nitro-boosted the IT ecosystem with three more cloud strata being deployed. With Access Cloud, the application services stack is broken down from presentation layer to the network layer. The shared services model has been married to the internal clouds. It is being used to offer certain set of services that can be run off a single IT resource but being securely shared between two customers. Collab Cloud has been used to co-create concepts and solutions. With the DMZ Cloud, Infosys takes it further to showcase some of these co-created capabilities. Traditionally, MyCloud and Collab Cloud are used to create, develop and test concepts. It will be a vulnerability to provide

ccording to P.D. Mallya, Head of Security Audit and Architecture, Infosys, “Using the internal cloud simplifies information security risk governance.”

the business direct access to the underlying infrastructure layer to showcase these concepts to customers. Instead, these concepts are now moved to the Internet-enabled DMZ Cloud that mimics the Datacenter Microcosm form to demo how solutions would behave in a production environment. The Datacenter Microcosm has been architected to host only Infosys IP and offer SaaS plus BPO services. Though Infosys is not interested in offering pure-play infrastructureas-a-service, it doesn’t want to miss out on an opportunity to help its clients with specific application hosting needs that aren’t covered by the Datacenter Microcosm. Hence, the sixth cloud platform service, introduced by the Cloud Business unit last year, is Integration-as-a-Service. The Integration-as-a-Service Cloud acts as a hub to interconnect the front-end of an application at the client with its correlating data now hosted within the MyCloud. “With this bridge, we are now able to monetize the internal cloud as well,” says Krishna. In addition to these capex-model clouds, Krishna has introduced several tightly integrated, hybrid-cloud based alternatives on an opex model with contractual modes for the business units to leverage to address evolving client requests that might be beyond the scope of Infosys’ public cloud. And never miss an opportunity to generate revenue. “The cloud platform helps clients convert capex to opex while benefiting the vendor to realize higher revenue productivity. This is a sweet spot for a pure-play service player, which is in between the pure-play services and a risky product model. In that sense, I believe this is the model of the future,” states Batni. As part of Infosys 3.0, the enterprise is betting very big on Products & Platforms and wants this to account for a third of the company’s revenues. “The last couple of years have seen huge investments in this area and some very strategic gamechanging wins and we believe this will continue,” adds David. As the cloud ecosystem has begun delivering on its promises, Krishna is already busy charting out the route ahead. The next refresh being planned is the cloud ecosystem’s evolution to network-as-a-service. With network-as-a-service, Krishna’s vision is to not only provide storage and compute on demand but also a secured portion of the network along with storage and compute to run projects, develop concepts, or test solutions. All on demand. “My definition of agility is not speed or response. I define it as coming up with proactive solutions based on new engagement models for business,” he says. And while these newer routes are being chalked out, Krishna plans to spend the next few weekends editing and compiling the 50GB of videos he returned with from Vietnam, videos he shot from an on-helmet camera. “What an experience it had been,” he smiles, commenting perhaps on both his cloud journey and the bike-ride in the mountains. CIO Send feedback on this feature to gunjan_trivedi@idgindia.com

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Photo by SRIVATSA SHANDILIYA

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IT Strategy

Driving a New Deal How and why Hero MotoCorp spent Rs 150 crore during a slowdown to overhaul its dealer management system. By Shweta Rao

ero MotoCorp, in the last year, has undergone such a large and public change (with its re-branding, if you were living under a rock), that it’s hard to believe it’s actually the company’s second ground-breaking transformation in recent memory. Yup, the second. The first, and possibly more important one, (at least from a bean counter’s perspective) took place in 2008, a year when most other Indian companies had battened down their hatches and were trying to sail out the slowdown. That’s when Hero MotoCorp decided to get ready for the sales explosion that it was sure would take place once the slowdown loosened its icy grip on the economy. “The slowdown wasn’t a permanent situation. I knew that,” says Vijay Sethi, VP and CIO at Hero MotoCorp. “What I was worried about was whether our current infrastructure would enable us to take up the challenges of heavy growth postrecession,” says Sethi. To do that, Sethi would need to create a single platform for all of Hero MotoCorp’s hundreds of dealers, a project so complex it would make his first ERP project—the standard against which he measured all tough projects—pale in comparison.

Steering into the Skid Flashback. It’s the 31st of March 2008, and Sethi is about to walk into a budget meeting at the company’s headquarters in New Delhi. He remembers thinking ‘what next?’ 48

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n 2008, Vijay Sethi, VP & CIO at Hero MotoCorp, says he was worried whether the company’s systems were geared for the heavy growth the company expected post-recession.

To be honest, he wasn’t sure what to expect. Hero MotoCorp’s performance, although better than its rivals, had been middling: It had sold as many motorcycles as it had in 2006-2007, while the industry had shrunk by 5 percent. That’s compared to its average of 15 percent CAGR. “Flat was the new growth during the recession,” says Sethi. “Many consultants advised us to cut capex and put a hold on new expansions and investments.” But Hero MotoCorp’s forward-looking management team would have none of this overly-cautious chatter. It had already decided that it wasn’t going to go with the flow—it was going to row against it. So, in April 2008, it unveiled its third manufacturing unit at Haridwar, today Vol/7 | ISSUE/08

the largest two-wheeler manufacturing plant anywhere in the world. Creating more supply, however, wasn’t going to get the demand. The company’s executives figured that one of the ways they could release Hero MotoCorp from the gravitational pull of this sales plateau was by understanding their customers better, faster, and by doing exactly what Hero MotoCorp’s sales engine, its dealers, had been asking them for sometime: Help them connect in a more predictable, less burdensome way with Hero MotoCorp. “We wanted to ensure our ability to track customer information, sales and service trends, defect analysis, etcetera, to enhance customer experience. Also, our REAL CIO WORLD | J U N E 1 5 , 2 0 1 2

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IT Strategy

dealership network had grown to a complex mammoth and we wanted to standardize it because it was only going to get more complex,” says Sethi. Part of the problem was that Hero MotoCorp’s sales and marketing team interacted with all their dealers separately, leading to a slew of interdependencies. Manual inventory or sales updates, for example, meant a high probability of erratic inventory management at both Hero MotoCorp’s end and at the dealers’. Also, without a common platform where product prices were updated on a real-time basis, keeping up with products and spare part prices was a pain. And that’s just two of the multiple processes between dealers and Hero MotoCorp. Sethi believed he could eradicate this problem and give Hero MotoCorp’s executives the insights they wanted if he could put all the company’s dealers on a single platform. “This was the time IT could be the business’ biggest enabler,” remembers Sethi. “We had to improve our customer experience and dealers experience to gain a stronger foothold against competition.” That was the intention of a project that was christened Hero Connect: To make processes uniform across dealers, and introduce a direct, real-time, and predictable information channel between the company and its dealers. But that would cost money, a lot of it.

Shoulder to the Wheel The project, Sethi estimated, would need a capex infusion of Rs 80 crore, a number that was significantly larger than his IT budget. To compare, in the two years before Hero Connect, the IT department’s budget was in the Rs 15-20 crore range. On any other occasion, Sethi would have been worried about

Releasing the Clutch The number of two-wheelers Hero MotoCorp sells has risen steadily since Hero Connect created a sturdier bridge between the company and its dealers.

2006-2007

3,336,756

2007-2008

3,337,142

2008-2009

3,722,000

2009-2010

4,600,130

2010-2011

5,402,444

Source: hero motoCorp 36

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the budgetary constraints for a project of this scale. But, not this time. Sethi says he was assured, upfront, of a capital investment of Rs 80 crore and a total of Rs 150 crore over five years, one of the largest IT investments, he estimates, in a single project by any Indian company. That sort of cash is hard to come by in a slowdown, but money, Sethi believes, is well spent. “I’d rather use IT to allow me to look deeper into my processes to help me cut costs than defer an important project to a later date. For instance, the project would enable us to look into inappropriate expenses,” he says. “It would take us four years to completely reap the project’s benefits. But, I knew it was worth every penny of the investment.” Money was not the only challenge Hero Connect could potentially face. The pan-India project needed Sethi’s team to involve a large number of users it hadn’t dealt with anytime earlier. Less than five percent of the project’s user profile would be internal users. A majority of key users would be dealers spread across the country. Sethi says that could have been a daunting proposition, except that dealers actually wanted the proposed project. “Discussions with the dealer community during our regular all-India dealer meets had brought this requirement to our notice earlier. So, when we shared details of the project it was accepted with open arms,” says Sethi. It helped, Sethi says, that he made it clear that Hero MotoCorp wasn’t interested in a dealer’s financial data. “We told them Hero Connect would only extract data from all major processes except the financials. In our demos, we ensured that the dealers understood that data would flow from our system into Tally and nothing was flowing back into our system,” he says. In retrospect, that made a huge difference, Sethi says. “Three years down the line, I realize that this assurance was one of the key reasons why there was considerably less resistance from dealers.” Also, Hero MotoCorp sponsored all the infrastructure needed at the dealer’s end including network infrastructure like routers, MPLS, and internal LAN connectivity. During the ensuing year, it wasn’t uncommon to see Sethi co-coordinating with his project leads from his office, sometimes till the wee hours of the morning. “I’d sit with the team when they’d come back from dealer visits and explain what they thought dealer requirements were. We’d sift through feedback points and input the most relevant ones into our system. By the time the system went live, I knew about 50-60 dealers on first name basis,” he says. The solution was laid out using Oracle’s Siebel CRM solution with IBM as an implementation partner. It was integrated with existing enterprise applications at Hero MotoCorp including its ERP in less than six months. “It is arguably the fastest implementation of Siebel in the industry,” says Sethi. VoL/7 | ISSUE/08

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Hero MotoCorp’s dealer management system handles over 42,000 sales transactions a day—a number that can rise to over a lakh during Diwali. But like all geographically-spread out projects, a primary challenge was in laying out the network required to interconnect the intricate dealer network. With Bharti Airtel as a network service provider, Sethi and his team set out to lay down an MPLS network at 1,000-odd locations for the project. Why MPLS? “We wanted to ensure that a dealer’s missioncritical business would be backed with a stable, latent and highly-available network. MPLS was hence, the first choice, although expensive. We currently provide a 40MB broadband from our end to every dealer, and the Internet connection is procured by the vendor,” he explains. Sethi began to put the infrastructure into place within six months of the start of the implementation in June 2009. “We completed the implementation in nine-and-half-months post which there was two months of testing,” he says. He says it took them a whole year to implement the system for the first 100 dealers. After September 2010, every day saw three dealers being added to the system. In parallel, Sethi had deployed his IT team to train dealer staff on the system. “Until Hero Connect, I had thought that an ERP implementation, which I undertook 14 years ago, was the toughest project of my life. But with an ERP, your end users are internal, approachable and very predictable. With a dealer network, you don’t know what’s coming your way,” he says. Sethi says his team had to familiarize dealers’ staff with computer systems, and gain expertise in a variety of languages required to train dealers. Out of 7,000 users, a total of 2,500 users were trained in classroom training sessions at Hero Motocorp’s premises by Sethi’s IT staff. “We’ve also provided hands-on training to 10,000-plus users over three years,” he says. What he didn’t anticipate was the amount of re-training his team would be required to do because the dealer staff they trained moved to other jobs. In the last three years, they’ve had to train an additional 6,000 replacements or about 40 percent of the complete workforce trained by Hero Motocorp. “We did have other technical challenges, but this was one area where we couldn’t even collate the damages,” he says. 52

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The Open Road Today, 635 of Hero MotoCorp’s dealers have been synced with the system, which supports about 7,000 users. Sethi says 65 dealers still aren’t on their grid because of connectivity issues due to their remote locations. In the meanwhile, Hero MotoCorp’s sales have never been better. Two-wheeler sales have jumped from 35 lakh in 2008 to 61 lakh at the end of March 2012. “We are one of the very few companies in India which grew at more than 15-20 percent over the last three years,” Sethi says. About 90 percent of those sales are handled over the DMS. In March 2010, for instance, 4.6 lakh of the 5.1 lakh two-wheelers sold by Hero Motocorp had their invoices generated in the DMS. “With above 18,000 sales invoices and above 40,000 services documented in the system per day, the DMS is currently a reliable system,” says Sethi. On an average, the system handles over 42,000 sales transactions per day. “Our vehicle sales volume translates to about six billion a year. On festivals like Diwali, our daily sales could cross up to one to two lakh transactions per day which the system handles without a glitch,” says Sethi. Hero Connect also introduced more uniformity in customer experience by providing dealer offices with real-time updates. “Customers are also sent scheduled reminders of all major events like vehicles service, insurance renewal, etcetera. We also brought in a centralized customer feedback arrangement,” says Sethi. Enhancing customer service has been one of the important drivers of the project. “The customer today is becoming more and more IT savvy and Hero Connect is a key step toward enhancing customer service,” says Anil Dua, SVP sales, marketing and customer care and the project sponsor. Today, Hero Connect helps the company’s staff to make more intelligent decisions, thereby, increasing their effectiveness. With the seamless integration with the company’s ERP, data analytics have reached new heights. “It brought supply chain visibility to the fore which improved our ability to forecast demand patterns leading to better order fulfillment,” says Sethi. Among other things, the project has gone a long way in increasing IT’s value at Hero MotoCorp. “The project is a key strategic initiative for the organization. I firmly believe that we need to introduce more IT initiatives in sales, marketing and customer care,” says Dua. But perhaps the most telling outcome of the project is the feedback from the first 80 dealers who are linked to the system. They say that they have already begun to save costs and better their customers’ experience. Who can deny that that’s a good thing? CIO

Send feedback on this feature to shweta_rao@idgindia.com

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Transformation Ground Up The inside story of Ashok Leyland’s bold move to re-tool its information lifeline as it sought to enter new markets and change the course of the company. By Shweta Rao

he 13th of September 2010, isn’t a date Venkatesh Natarajan, special director of IT, Ashok Leyland, is likely to forget. Early that morning, Ashok Leyland’s marketing director, and a crucial stakeholder in one of the company’s biggest business and IT initiatives in recent memory, walked into the company’s newly appointed SAP project offices and had a heart-to-heart with Natarajan. Natarajan remembers them going over complaints that users, especially those from the marketing team, had been generating around the company’s ongoing SAP initiative. When he left a few hours later, Natarajan remembers, he sent an e-mail to all the company’s regional managers and his own marketing department. Here’s an extract: “I have just reviewed the situation at the SAP implementation center where all the RSO reps are sitting carrying out their respective invoicing. I must say I was impressed with the progress of the SAP implementation. Remember it is a very difficult task and while I haven’t seen an SAP migration earlier, I have heard and read horror stories about businesses coming to a standstill during the process, and then taking months to stabilize. In comparison, ours is a breeze. But it requires a lot of patience and understanding. And of course a lot of faith, that what we are doing is for the better.” Much of the complaints stopped after that, Natarajan remembers. That one of Natarajan’s peers felt compelled to stand shoulder-to-shoulder with him in such a public way, is, in itself, a telling commentary on the challenges Ashok Leyland faced as it attempted to do what many label as extremely ambitious: Rip up its homegrown, built-

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hen Venkatesh Natarajan, Special Director of IT, Ashok Leyland, and his team were asked to get ready for an international business push, they realized the company’s homegrown ERP would get in the way.

Photo by sharp images

from-the ground, tied-to-process ERP and replace it with an off-the-shelf product that would integrate the company better. It would be an expensive, and testing exercise, especially with the pressure created by the slowdown. But in 2008, it was the only way forward.

Rumbling in Low Gear The indigenous progeny of an ambitious Indian businessman who started out assembling Austin cars, Ashok Leyland (Ashok Motors back then) is one of the few sexagenarian automobile manufacturers in new-age India. But it hasn’t let age slow it down. Over five decades, the company has been molding India’s commercial vehicle profile by introducing Vol/7 | ISSUE/08

technologies that have become industry norms. Today, Ashok Leyland is a key player in the medium and heavy commercial vehicle segment and in 2010–11, owned 26 percent of the market. But it wasn’t always this rosy. In early 2007, like much of the industry, Ashok Leyland was forced to drive in low gear. “Over 60 percent of global GDP had toppled into recession and the automotive industry was going through a lot of change. The competition was whipping up euphoric expectations and putting artificial pressure on everyone,” says Natarajan. Driven by competition, Ashok Leyland was contemplating several new joint ventures to broaden its portfolio and REAL CIO WORLD | J U N E 1 5 , 2 0 1 2

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increase international sales; market segments it didn’t have much experience in. The three major JVs that ruled the company’s calendar in 2008-09 were with Nissan in the light commercial vehicles segment—a strategic change in business direction for Ashok Leyland—with Finland company Alteams in the die casting unit segment, and with American leader John Deere in the construction equipment segment. Natarajan remembers the time clearly. “This was a gear shift, not just acceleration,” he recalls. The new ventures, only naturally created pressure on Ashok Leyland’s IT infrastructure, at a time that the IT department was already going through a period of selfquestioning. “We already had reasons to introspect. We were asking ourselves if we had the right people, the right processes, and the core as well as the enabling technology to future-proof the company,” says Natarajan. A large part of the IT team’s worries stemmed from something they themselves had created lovingly: The company’s information system, a homegrown, Oracle-based ERP that they had poured their sweat into since 2001. “We had a well-established platform with Oracle D2k, which had worked non-stop; without more than 12 hours of downtime over six years. The infrastructure system had never posed a problem since I joined,” says Natarajan.

time, and loosely integrated, it required manual changes in many applications in different areas. In an ideal world, one can keep a standalone application, but it doesn’t hold any value. That’s when we realized that product ERPs would bring in much tighter processes,” he says. Looking back, it must have been a hard pill to swallow, especially for the IT team. It meant pulling the plug on years of work and questioning their belief-system. The decision was made easier, however, when Oracle announced it would drop support for the ERP solution beyond 2013. “Depending on a legacy, homegrown ERP solution while we were looking at strong business transformation wasn’t going to work,” says Natarajan. So, in September of 2008, while posters of the company, hanging on the walls of its executive offices at Chennai’s Parry’s Corner, read: Sixty and on the go!, Ashok Leyland began to ready itself for a transformation that would rip out its guts but would prop up its future.

All Aboard? Ashok Leyland started its search for a packaged ERP vendor in earnest. Natarajan says that they looked at both Oracle and SAP. Oracle because of their familiarity with the platform and SAP because of its strong enterprise presence, he says. “The sales team from Oracle took it for granted that we’d be going

It was like Las Vegas for a week. The workplace seemed no different at 2 am from 2 pm.” — Venkatesh Natarajan, Special Director-IT, Ashok Leyland

But in 2008, as the company quivered with the potential of a pouncing cat, the dependability of its ERP wasn’t enough to cut the mustard and in the eyes of many it had actually become a major pain point. “When we reviewed the business’ requirements, in terms of an integrated platform to manage information, we were startled to see our infrastructure requirements,” says Natarajan. “It was even more worrying because the largest shocker came from an ERP solution Ashok Leyland had spent years building within the company!” The changes the manufacturing major envisioned needed a more deeply-integrated platform. Ashok Leyland’s existing ERP platform, though robust, forced it to run as a double sack team, in a single sack race; it had just too many single-instance ERPs, too many feet hampering its forward momentum. That was highlighted in 2007, when the government budget required companies to add an extra one percent educational cess on their invoices. The changes took Natarajan’s team months to incorporate and regularize completely. “Because the system was built over a period of 56

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ahead with them because we were an Oracle shop,” says Natarajan. “But we gave both vendors an equal chance.” Natarajan says he formed a group of 55 business users who took part in demos from both vendors. An evaluation template identifying business processes, ease of use, and reports and analytics-related criteria was used to compare vendors. The team identified key deliverables and differentiators so that each line of business could move towards being a real-time enterprise. The team also assessed gaps in older processes. “Platform changes are more about a change in organization culture rather than a technology migration,” says Natarajan. Getting people involved early in the project was one of the ways to lower their natural tendency to fight change. “Involving business users while setting up a roadmap is buy-in halfway reached,” says Natarajan. Even then, says Natarajan, the going wasn’t easy. Natarajan says that the questions that came his way ranged from: ‘Will the change only present old things in a new box?’ to ‘Do we really need a new platform for a transaction-based Vol/7 | ISSUE/08

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change?’ “I was asked by business users how data retrieval could be made faster by replacing the platform,” he says. The upside of getting people involved early was that they raised the bar themselves. “Business wanted to look at the initiatives from far above the transaction level. Most users wanted to have technology-enabled decision making. They wanted to use the MIS to identify strategic differentiators rather than just be a reporting tool,” he says. Post the sessions, the business users unanimously agreed that SAP would be the right choice. Natarajan and his team then proposed the idea to management and the deal was finalized in June 2009. The project was then given the go-ahead in October 2009 and quickly entered its blueprint phase during which a detailed study of business processes and business requirements are undertaken by project team members. By November, the ambitious project hit full steam. “I was leading an 80-member project team called the SAP Core Team which involved staff both from business and IT,” recalls Natarajan. In retrospect, says Natarajan, the slowing economy was the best time launch the expensive project, as absurd as that sounds. “The timing was handy. What better time to involve stakeholders than a slowdown?” Moreover, Natarajan

Surging Forward A look at Ashok Leyland’s net sales over the last few years reveals the impact of the ERP project.

2008-2009

598,107.37

Pre-project Post-project

2009-2010

724,471.05

2010-2011

1,111,770.90

2011-2012

1,264,204.66 Source: Ashok Leyland

says that the best deals take place in difficult times. SAP, post-negotiation, signed a seven-year contract with Ashok Leyland, which Natarajan says, benefited both sides. “The recession was the perfect timing. We went in for large stack of modules of SAP in terms of licenses. Ashok Leyland was the second enterprise in the country to implement a rollout of such capacity,” says Natarajan. The two, light-commercial vehicle production plants at Hosur were chosen as the site for the first rollout because they contributed to almost forty percent of total production. “We then intended to migrate the marketing units—countrywide— 58

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to SAP by September 2010. The rollout covered almost 55 plants and involved massive data migration.” Those were hectic times. Very hectic. At one point between the 8th to 13th of September, 2010, a few employees suffering from exhaustion from working for 24 hours at a stretch were hospitalized. Then users from the finance department complained that transactions weren’t going through because of irregularities in master data. It didn’t make it easier that, September, being the end of a third quarter, was a busy time of the year. “It was like Las Vegas for a week. The workplace seemed no different at 2 am from 2 pm.”

The Rubber Meets the Road The IT team, aided by support from Natarajan’s peers, like the marketing director, soldiered on. Soon the project came together. “The impact of IT on the business has been fantastic,” says Natarajan. “Process cycle time has come down drastically, and process productivity has gone up by about 30 percent.” That efficiency began to show in important, high-visibility places. International sales clocked record growth, rising 25 percentage points to 12,852 units. In an e-mail Lobo Antony, special director, International Operations, Ashok Leyland, shows his appreciation. “Let me congratulate you and your team for the unstinted support given to our team in enabling us to invoice 1,120 vehicles for the month of September 2011. This Herculean task would not have been possible without your cooperation and support especially while migrating to the SAP platform. Though we anticipated a fall in invoicing, we managed to increase the same and hope to continue the same in the months to come. I once again thank you,” Antony wrote. It’s also been great for IT. The humungous costs Ashok Leyland incurred with its legacy ERP including infrastructure costs, power, maintenance, replacements and manpower adding up to “several tens of crores,” began to ease. “There is higher infrastructure availability with hardly any downtime,” he says. “The greater predictability of spending on IT and IT assets means that our TCO is better than before.” An extra benefit is the project raised IT’s profile within the organization. “There has been a paradigm shift in the way business views the role of IT. Today, IT at Ashok Leyland is involved at a fairly early stage in all aspects,” says Natarajan. That said, Natarajan says he still comes across some criticism about the change, but the voices are less strident. “I still hear complaints from people who say we should have stayed with the legacy platform. It is a part of the pain and it will go,” he says. In the meanwhile, Natarajan has a job to do. He has plenty to accomplish with the next phase—including BI, GRC, and mobile applications—still under planning on the way. And this time, it should be easier. CIO Send feedback on this feature to shweta_rao@idgindia.com

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Non-tech CIOs are all the rage these days. Is that good or bad for IT?

By Howard Baldwin On the organizational chart between IT Director “Ray Walton” and his CIO is a vice-president of IT whom he considers dangerous. Why? Because that VP came from finance. He’s not technical, and worse, he maintains a financial mindset. “In his mind, everything in technology can be reduced to dollars and time,” says Walton, who, to protect Reader ROI: his job, asked that his real name not be used. Walton The pros and cons of a nonangrily maintains that this finance-first attitude works only tech CIO when everything is a commodity, which hasn’t yet come to Why the scale is tilted towards a business savvy CIO pass in technology. “It’s still an art to determine risk and Importance of knowing what rewards in IT. If you only look at ROI, you’ll never build a you don’t know network, because it’s infrastructure. There is no ‘payback.’”

CIO Role But because this VP doesn’t understand technology, and in Walton’s view can’t interact with either network or software engineers intelligently, he dismisses those arguments. “He’s a leader of IT, but he doesn’t understand technology. That’s a problem because he doesn’t take it into account in his decision-making.” This is neither a first-year startup nor an isolated occurrence. Walton works for a Fortune 500 company that’s a household name, and in fact, the situation he faces is part of an increasing trend. A trend that is corroborated by a wave of anecdotal evidence from consultants and industry watchers—including Jack Cullen from IT staffing firm Modis, Suzanne Fairlie from executive search firm ProSearch, and analyst Bobby Cameron from Forrester—who agree that more companies are moving executives into the CIO role from other places within the organization. The very strong feelings of techies like Walton notwithstanding, these observers say the question is not so much whether hiring non-technical CIOs is right or wrong, but rather, how do you make having a non-technical CIO work? As technology becomes inexorably woven into everything the business does, it’s crucial to have someone act as a “translation layer” between the two, sources say. Whether that person is a non-

Gielan says he’s encountered what he considers to be too many people in IT who’ve never coded software, but still have to make decisions about software projects. “This is not good.” One of the exacerbating side effects of this situation is the perceived simplification of IT, critics say. Seemingly anyone who’s gone shopping in a computer store thinks he understands technology. Laypeople don’t understand why a disk drive costs more when it’s installed in a SAN than it does at their local retailer, laments Walton. They think that because they’ve created Excel macros or because they know HTML that they’ve done programming. They haven’t, he insists. Peter Connolly is IT Director of KP Direction, a Web development firm in Syracuse, Utah. Earlier in his career, back in the 1990s, he was brought in as an IT manager at a top advertising agency where the finance director had doubled as the IT manager before Connolly was given those duties. Connolly’s predecessor, a computer hobbyist, may have understood personal computing, but not business computing—he was, Connolly says, someone who “didn’t know what he didn’t know.” “When I came in,” Connolly remembers, “the network was so slow that employees preferred to carry disks up three flights

// The question is not so much whether hiring non-tech CIOs is right or wrong, but rather, how do you make having a nontech CIO work?} After all, there are ways they can make a company stumble, // and ways they can make it rumble.> technical CIO who can articulate the value of IT or an up-fromthe-ranks IT manager who’s gained business savvy along the way, there has to be someone who knows the right questions, who knows how to bridge the gap between business and technology, and most important of all, knows what they don’t know. “In the emerging IT organization, CIOs are more frequently looking at issues around business strategy and how technology can enable that,” says Cameron. “It requires driving a cultural change and moving toward the new world.”

The Non-tech CIO, Done Wrong In talking about CIOs without a technical pedigree and the people who report to them, two schools of thought emerge. One school believes that non-tech CIOs bring greater insight into the needs of the business. The other believes that in order to lead IT, you have to come up through IT. “There’s a difference between understanding it intellectually and knowing it in your gut,” maintains Dan Gielan, who, in his capacity as a Los Angeles-based IT consultant says he’s seen the opposite scenario many times—CIOs without a fire in the belly. “If you’ve experienced [a given technology], you know how difficult or how easy it is.” 62

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of stairs. The agency had three sites, but my predecessor didn’t understand why they had to be networked. If it was outside his comfort zone, he ignored it. “But even after I replaced him,” Connolly continues, “he still wanted the final say on everything because I reported to him in his new position as operations manager. He did this even though the chairman told him he couldn’t do both his job and mine.” In frustration, Connolly resorted to commandeering office copies of computer publications, highlighting references to technology he thought the agency needed, and putting them on his boss’s desk. “Because they were office copies, he never knew whether I had done the highlighting or the head of the agency had.” Forrester’s Cameron notes that he’s been brought in multiple times as a referee when communication had broken down, which can occur if a non-tech IT executive distrusts those who do know the technology, or fears they will show up the CIO. That can create a vicious circle where the lack of communication ends up slowing down IT—and it can get expensive, Cameron says

The Non-tech CIO, Done Right In sharp contrast, well-functioning non-technical CIOs appreciate their technologically-savvy employees, advocates say. These are leaders

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Rise of the CIO Squared who know what they don’t know. strategy. “She was confident in CIOs are acquiring responsibilities outside of IT. But an even They are good at asking the right me because she knew I knew more interesting dual role has emerged: The “CIO squared”–the questions, probing for further IT. If I said we absolutely combination of chief information officer and chief innovation insight, and then re-framing the needed something to make the officer. The chief innovation officer position is less than a decade answers in such a way that the transition to a digital agency, old, and most companies still don’t have one, so there’s certainly business side will understand. she said she’d find the money. no pre-determined place within the corporate structure where “I know how to ask what I It was very much a team effort the role should be located. The position is meant to ensure call ‘the daft question,’” says with a lot of mutual respect.” that there’s someone to shepherd innovation activities (ideas, Mark Bramwell, head of IT for Ultimately, the question of processes and incentive programs) and be responsible for the the Wellcome Trust a global whether the CIO should have success or failure of innovation. charitable foundation focusing a technical pedigree is moot, Given today’s business trends, the CIO-squared combo makes a lot on biomedical research in sources agree. No matter what of sense. With the rise of social media, mobility, the consumerization London. “I can ask what their backgrounds, CIOs have of IT, big data, and BI, IT-centered innovation is growing. IT leaders happened, why it happened, to function as a “translation are well positioned to sit at the hub of discussions with the heads of and how are we going to prevent layer” between IT and business. business units and departments about the sources of innovation and it from happening again.” That means they either have to the technology to support them. Forrester’s Cameron, a strong have those translation skills Trends within the IT department also make CIOs suited to be the advocate for the business-centric themselves—or be able to shepherds of innovation—and not just stick to IT and what they know. CIO, notes, “CIOs shouldn’t extract from their staff the As the CIO role becomes more strategically important, and as CIOs care whether it’s agile versus insight they need if they came become more focused on delivering tangible new value to businesses waterfall. They should pick up on the business side. and customers they serve, we may see more cases of CIO squared. whatever works best to achieve That concept works both the business results necessary, ways, says Walton. “If you’re — Peter High and that decision should be made not a technical CIO, you need Peter High is the author of the book World Class IT: Why Businesses by someone further down in the to surround yourself with good Succeed When IT Triumphs. development structure.” technologists. If you are, you Cameron acknowledges that need to surround yourself with in a smaller IT organization, people who are business-savvy.” of course, the CIO does indeed need to have technical, hands-on Bramwell concurs. “My career has been based on being customercredibility. But as a company grows, so too does the need for the focused, and acting as a bridge and translator to IT, rather than CIO to opt for business-speak over tech-speak, he says. having technical knowledge. In turn, I can interpret what they say At the same time, non-technical CIOs shouldn’t let themselves into words of one syllable.” Put another way: He can’t configure a be buffaloed by techies. “IT sometimes hides behind the jargon,” server, but he doesn’t need to—he just needs people around him Bramwell says. “My team may speak in technical terms, but I play it who can. back to them to make sure I understand what they’ve said.” Furthermore, Bramwell believes that the entire IT department If one of his employees is talking about why they need clustered must have the capability to move closer to the business. “I servers, for instance, Bramwell takes the time to tease out a business look for people who understand what good customer service reason—in this case, to balance loads for optimum performance. means. It doesn’t matter whether it’s application development or “You have to peel back the jargon and make it clear and concise” for procurement; I look for IT people who can have a conversation with the business team, he says. the customer, someone who can represent IT eloquently, and who Beyond that, the non-technical CIO has to school his employees takes personal ownership for delivering against promises.” that their job is to protect the business, not adhere stubbornly to Notwithstanding the need for technical expertise, those soft skills technology for technology’s sake. “I tell my people that they’re the may be even more important in the long run. “If someone needs authorities in storage and networking. I try and empower them to technical skills, you can send them to training classes. It’s harder to focus on the business benefit and move the business forward.” find someone with those behavioral skills,” Bramwell says. Luckily, Connolly, the ad agency tech leader, was able to experience Cameron agrees, emphasizing that that type of behavior starts a positive encounter with a non-tech CIO to counterbalance his initial at the top. If CIOs can’t understand what the business needs, and encounter. When his meddling boss was moved to operations, another then translate that into technical capabilities, and then explain finance director was brought in, to whom Connolly reported and with why those technical capabilities match the business strategy, then whom he had to work closely. The first thing she acknowledged was no one wins. “There’s still a huge gap between IT and business, and that she knew nothing about IT, but that she didn’t need to as long as we need more business-savvy CIOs, not fewer.” CIO Connolly did. It turned out to be a great relationship, Connolly says. The pair started with the business plan and used it to create an IT Send feedback on this feature to editor@cio.in

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EVENT REPORT

The Collaboration Summit 2012

CIOs should create OS upgrade roadmaps to tackle the different types of devices that are entering the enterprise space.”

The Collaboration Summit 2012 was attended by India’s leading CIOs and was brought to you by Cisco in partnership with IDG Media.

GOPAL RANGARAJ, VP-IT, Reliance Life Sciences

Collaboration should enable co-existence. So, it is vital to integrate the different aspects of the technology into a single fabric.” TAMAL CHAKRAVORTY, CIO, Ericsson India

User-experience and liability of collaboration tools are crucial. Fixing bandwidth issues is difficult, but not impossible.” n the sidelines of the Collaboration Summit 2012—held on the 17th and 18th of May at the Taj Mahal Hotel, Delhi—CIOs from some of India’s most prestigious organizations gathered to share their insights on a panel discussion titled Culture, Communication, Consumerization: The Collaboration Challenge. The discussion shed light on the various challenges of implementing and sustaining collaboration technology and ways to overcome them. The panelists stressed on the need for a robust connectivity infrastructure to support the collaboration framework and laid equal emphasis on enhancing user experience on employees’ mobile devices. The panelists unanimoulsy agreed that once organizations get users on their side, it becomes easier to tackle the challenges that collaboration presents.

S.S. MATHUR, General Manager-IT, CRIS

Creating togetherness across teams, enhancing userexperience, and providing users with a feel-good factor are critical.” SEBASTIAN JOSEPH, EVP & Head-IT, Mudra Group

Key Takeaways from Key Speakers

Collaboration and social networking will increase productivity, innovation and growth. New networking technologies now provide far greater freedom as to when, where, and how people collaborate.

DINESH MALKANI, Managing Director-Collaboration, Asia Pacific & Japan, Cisco

Costs for video collaboration and telepresence are reducing while quality is improving exponentially. Companies are using telepresence innovatively to gain a competitive edge.

MINHAJ ZIA, RICHARD DUGGAN, Director Collaboration Sales, India & SAARC, Cisco Head of South Asia,Telstra International

CUSTOM SOLUTIONS GROUP CISCO

The collaborationvirtualization combo gives users the experience they want, in a way that makes sense to the company. Cisco VXI lets a broad set of users access a collaborative workspace.

Product Launch Cisco Jabber: Setting a New Benchmark for Collaboration

PETER BOCQUET, Regional Director-Collaboration & Virtualization, Cisco

IT needs a new approach in this ‘post-PC’ era. The new workspace will become a platform for collaboration capabilities. It will be inherently mobile, visual by design, and virtual in delivery models.

BRYAN TANTZEN, MD-Customer Business Transformation, Business Strategy Group, Cisco

Video will account for nearly 90 percent of all consumer Internet traffic by 2013. Voice and video services over a single infrastructure brings a number of benefits for the user.

SHAIK KALEEM, MD-Global Biz Development, Collaboration Technology Group, Cisco

Public diplomacy is being served using social media channels such as Facebook, YouTube and Twitter. Three

Influencing public opinion and achieving diplomatic objectives through the power of attraction is important.

NAVDEEP SURI Joint Secretary (PD), Ministry of External Affairs

t the summit, Cisco launched its new unified communications application—Cisco Jabber. The application brings together telepresence, instant messaging (IM), voice and video, voice messaging, desktop sharing and conferencing into a single consistent experience across all devices. Jabber provides business users with a simple and secure way to find the right people and collaborate using their preferred device. “In this post-PC era, Cisco is taking another important step in advancing the collaborative workspace and making collaboration even more pervasive for customers around the world. We are making presence, IM capabilities and Cisco Jabber available to our Cisco UC Manager (CUCM) customers globally,” said Dinesh Malkani, MD-collaboration, Asia Pacific & Japan, Cisco. The company believes that together presence, IM, voice, and video call control provide the foundation for realtime communication. Cisco Jabber scores high on interoperability, mobility and video capabilities. With Jabber, business users can use a single line for their desk phone, wireless device, and desktop computer—and can make and receive enterprise calls on the device over a WiFi connection. This is in addition to the existing capability available over a cellular network. Also, a high-definition (HD) resolution enables users to interoperate in HD with Cisco TelePresence and other video solutions.

This event report is brought to you by IDG Custom Solutions Group in association with

VIEW

from the TOP

Devender Singh Rawat, CEO, Bharti Infratel, says IT is helping the telecom infrastructure provider enhance customer service and stay ahead of the pack.

What do CEOs and other C-level executives expect from you? Read all about it in View from the top. Visit www.cio.in/ceointerviews

J u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

Towering

Over

By Sneha Jha

Recently, there’s nothing about the Indian telecom industry that's made for good news. Yet, there is no doubt that the demand for telecom services is only increasing. Growth prospects will blossom with the call for high-speed 3G services, video calls, and Internet services. And to make that possible, telecom companies have to lean on telecom infrastructure providers (IP1 companies). Like Bharti Infratel. A part of Bharti Enterprises, the telecom infrastructure provider is a leader in its own right. In its first year itself the company clocked 35 percent growth. Even in a bad year—like 201011—it has grown by about 15 percent. And that's thanks to the man at the helm, Devender Singh Rawat. As CEO of Bharti Infratel, Rawat believes that today’s businesses need a robust IT strategy that enhances customer experience.

With the cancellation of 122 telecom licenses, your industry will lose about Rs 2,500 crore of annual rental income. Are you prepared?

Devender Singh Rawat: The SC verdict has had an adverse impact on an already uncertain industry. Certain tower companies

that have greater tenancy exposure to newer mobile operators (OpCos), are facing tenancy exits and sustainability challenges with the unviability of operating sites at lower rental rates. Also, with the increase in the cost of capital, the profitability of these tower companies has been adversly impacted, given that this is a capital intensive business.

Vol/7 | ISSUE/08

D.S. Rawat expects I.T. to:

Provide scale for massive roll outs

Facilitate the usage of alternate forms of energy Predict demand better

Photo by SRIVATSA SHAN DIL IYA

Improve the company's supply chain

We conducted a worst-case scenario which indicates that the likely impact on us is about 5-6 percent of our tenancies unlike most of our competitors who might have to deal with uncertainties with 30-35 percent of their tenancies. Our impacted customers have assured us that they’re committed to the Indian market and will re-bid. Much depends on the government’s decision on reserve price and potential slots for auction in these areas. We are waiting to see how the scenario unfolds. But I would like to

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mention that 85 percent of our business comes from the top three teleos.

In five years, 25 percent of subscribers will be on 4G. How does this affect you? The telecom industry is at a cusp of a second revolution driven by data. 3G and BWA deployment is poised to push growth for telecom in the next few years. This will lead to high demand for towers. Operators are already rolling out 3G in cities. Given the scarcity of spectrum,

I believe that there will be an increased demand for pure-play 3G sites. We feel that it is only a matter of time before there will be increased demand in urban areas in terms of coverage and speed. Today, customers push telecom companies to provide better quality of service. Telcos will need more sites to offer better user experience in terms of data throughput. In order to roll out 3G and 4G services, we’ll need new, shorter towers that cover a smaller geographic area. In advanced markets like Europe and Japan everything is connected via fiber, but

REAL CIO WORLD | J u n e 1 5 , 2 0 1 2

View from the Top

India will take time to reach that stage. We are evaluating the business of backhauling fiber but it is subject to regulatory conditions.

Your industry is faced with many challenges. How are you coping with spiraling energy costs? The industry faces various operational and regulatory challenges. Telecom penetration in India has far exceeded power penetration. Today, 10 percent of our sites (roughly 3,000 towers) are not connected to the grid. Also, the lack of a clear policy framework for the approval of towers have added to the woes of tower companies. Currently, interventions from multiple local authorities differ across states, and are very area specific, thereby affecting smooth telecom operations. We are working with the Telecom Ministry along with our industry association TAIPA (Towers and Infrastructure Providers Association) to have uniform guidelines across all the circles and bring towers under ‘key infrastructure’ status. While the government, as part of the draft of the New Telecom Policy, recently announced its recommendation to grant infrastructure industry status to the telecom tower industry, there still remains stiff challenges to the sector. We seek support from DoT to direct all state governments to provide priority 24x7 grid power connectivity for telecom tower sites. All these steps shall enable better provision of 24x7 telecom grade services as expected by the telecom regulator from OpCos. The tower industry is seeking government support to bring commercially viable alternate energy solutions. Further, industry players have been awaiting the support of the universal service obligation fund to erect towers in rural areas. Infratel is moving towards environmentfriendly power and has implemented solar power across over 1,350 sites, specially for our off-grid sites. Our GreenTowers P7 initiative is aimed at using alternate, renewable and energy efficient technologies. We plan to leverage solar power for over 2,000 sites by the end of the year, which will ensure that we 68

J u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

“By the end of the year, we should own the largest solar-powered telecom tower footprint globally. ” —Devender Singh Rawat own the largest solar-powered telecom tower footprint globally.

How does IT help you leverage your capabilities? We proactively imbibe IT into our operations to increase control across the complete spectrum of the business from customer transactions, operations and maintenance and internal systems. Our IT systems enable the delivery of core offerings with speed, highest uptime, and lowest energy cost—in an integrated manner. We have an automated end-to-end enterprise business framework, called the Infratel Enterprise Suite (IES). It's a single e-commerce platform for clients and partners to raise and monitor their business requests online. The system also helps us efficiently track business requests across the complete business cycle. For example, when a new customer logs on to IES, they can do predictive analysis and find out what kind of coverage they are likely to get from our 33,000-plus sites. After which, they can electronically

place an order which we will fulfill within an agreed time—which they can monitor. In order to augment our process efficiencies we have also invested in our Tower Operations Center (TOC), which monitors site performance across all 33,000-plus towers on a real-time, 24x7 basis using asset sensors and a unique platform developed by IBM. TOC is integrated to our ERP systems and this helps drive improvements in uptime levels and energy costs through analytics and operational visibility, while tracking cost expenditure incurred on each of our sites. As a result, all our OpCo customers, vendor partners and employees operate on integrated systems and each tower is managed as a profit center. With the largest tower footprint, we can add new OpCo tenants on our existing sites in the shortest possible time at lower rent and energy costs. We also have dedicated account management both at the circle and corporate levels for customer centricity, improved operational and business performance.

How do you keep pace with cutting-edge technologies? While we’re principally a passive infrastructure provider, I choose to keep pace with technology from a customer perspective as part of my own agenda. I follow the developments in 3G and 4G markets in Japan, South Korea and Europe to tap into the learning’s that are pertinent to our market. That said, these markets are significantly different and much ahead of us. We study the disruptions in these markets and analyze where they will be in the next five years and see how that could apply to our market. Incidentally, technology changes do not have a significant impact on the fundamentals of our business. We are focused on providing space, uninterrupted power, and connectivity to telcos so that they can provide seamless coverage to their customers. Our CTO and CIO functions constantly work with our partners to introduce new solutions. CIO Sneha Jha is senior correspondent. Send feedback to sneha_jha@idgindia.com

Vol/7 | ISSUE/08

AN IDG CUSTOM SOLUTIONS INITIATIVE IN ASSOCIATION WITH

TRANSFORMING BUSINESS THROUGH JUDICIOUS APPLICATION OF IT

POWER OF ONE The behind-the-scenes story of how BSNL, with the help of TCS, reorganized its billing system and merged 334 different systems, a feat that raised BSNLâ&#x20AC;&#x2122;s customer service to a new standard.

PLUS INTERVIEW R K Upadhyay talks about what steps BSNL has been taking to sustain its leadership position in a highly competitive market.

TRANSFORMERS CASE STUDY

POWER OF ONE The behind-the-scenes story of how BSNL, with the help of TCS, reorganized its billing system and merged 334 different systems, a feat that raised BSNL’s customer service to a new standard.

Company BSNL

Industry Telecom

Offering

Provides telecom services across India

here are some organizations that need no introduction. Their identity is widespread, their services are sought out by the public and they pave the path for others. Bharat Sanchar Nigam Limited (BSNL) is one such pioneer in the Indian telecommunication industry. With nearly 100 million wireline and wireless subscribers spread across over 3,000 cities and 600,000 villages in India, BSNL is the seventh largest telecom service provider in the world. With this massive subscriber base, BSNL’s revenues in 2010-11 were $6 billion. However, with the unprecedented boom in the telecom industry in the last decade—which saw many private players swarm onto the scene— BSNL had to take steps to hold on to its status as a leader in the vertical. A major initiative the telecom giant embarked on to achieve this goal is the Call Details Record (CDR) project, a next-generation convergent billing system. Focused completely on the landline division, this initiative would provide BSNL with several benefits that would completely transform the way it ran its business.

CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES

Scattered Voices CDR, which represents a major revamp of BSNL’s operations, though, was easier said than done. BSNL’s landline network is spread across India; it’s a vast spider web with about 33 million subscribers. This mammoth number of customers is proof of the complexity of the endeavor and how critical it was. The main objective of the CDR project was to restructure and consolidate BSNL’s billing process. To provide a glimpse of the disparity that existed within its system, BSNL operated 334 different and independent IT instances throughout the country for billing. Each district had its own IT set up and method for billing and ran on different platforms. Also, BSNL previously followed a meter-based billing process. This was predominantly a manual process which could lead to errors . Worse, this state of affairs impacted business. “Adding to these woes was the fact that these disparate systems were focused primarily on billing and offered little or no support to customers or any other customer-facing internal functions. BSNL did not have a 360-degree view of its customers which made them lose several cross-sell and up-sell opportunities,” says N.K. Gupta, CGM, Punjab Telecom Circle, BSNL. Faced with these challenges, BSNL and TCS began the long journey of creating a pan-India convergent billing system in 2007.

Answering the Call As a first step, BSNL and TCS identified the 334 disparate IT systems spread across the country and divided them into four different zones. The four zones: North, East, South, West had 110, 67, 70 and 87 Secondary Switching Areas (SSA) respectively. One of the primary challenges the BSNL and TCS teams faced was the age of the network elements and IT systems. The four zones collectively required integrating 3,000 network elements for provisioning and mediation. Needless to say, these elements belonged to technologies that were over two decades old. The rollout was carried out parallely in all the four zones, North,West,South and East.The main goal was to consolidate and migrate the data collected from across the 334 SSAs to four datacenters, one for each zone. The main challenge was the data itself.

WHAT TCS BROUGHT TO THE TABLE Consolidation and data migration of 334 secondary switching areas across India into four datacenters. End-to-end responsibility of procurement, implementation and nine years of support for networks, IT and hardware components. End-to-end implementation and SI of over 20 COTS applications including Siebel CRM, SAP CRM, Kenan and Convergys Billing, Clarity OM. More than 100,000 trainee days involved during the transformation. Helping more than 200,000 employees and 33 million subscribers.

A majority of the data collected was unorganized and, in some instances, the required data could not even be found. Collecting data was a truly Herculean task. The teams had to go into the field work, spend a great deal of time in manual activities such as noting down pillar numbers in the landline network and meticulously collecting data pertaining to those. Given the size of the project, data collection and compilation turned out to be a huge exercise. Purifying the data collected from the source system also proved to be a mammoth task. However, these efforts were crucial and at the end of it, all the districts gained visibility on the exact number of subscribers they had and what outstanding amounts were. What followed was the integration phase in which over 250 processes across services were standardized. The next step was the end-toend implementation of over 20 commercially-available, off-the-shelf transactional applications.

250

The number of processes that BSNL standardized for its Call Details Record project

TRANSFORMERS CASE STUDY

Today, reconnecting a phone is so quick that the customer’s connection is restored in just two hours after clearing an outstanding amount.” N.K. GUPTA

CGM, Punjab Telecom Circle, BSNL

The teams created a rollout plan, according to which the system was rolled out in 20 districts per month, that’s almost a district a day. At peak, the rollout was carried out in nearly 25 districts a month. The migration took place in a phased manner because a big-bang approach posed significant risk to both the organization and the systems integrator. However, there was another greater risk that both organizations were willing to take and that was the implementation and migration of data when the production server was live. The teams spent close to nine months analyzing and understanding software requirement specifications (SRS), and this analysis included studying 220 distinct business processes. Adding to the complexity was the fact that the two phases had different sets of applications for the same processes. Like any large-scale implementation, change management and tr aining were of great significance in the CDR project. The TCS teams provided more than 100,000 man-days of training during the transformation, making sure that all BSNL employees throughout India were ready to use the new system. “Getting people accustomed to the system’s GUI was very difficult,” says Gupta. “We even faced severe criticism from employees initially. The system was used by close to 150,000 employees of BSNL. However, thanks to the concerted efforts of all and the intense training we provided,

employees have now become used to the system and are finding it easy to work on.”

Right Number Despite the multiple challenges of implementing the project, the exercise turned out to be greatly beneficial for BSNL in more ways than one. Most importantly, the convergent billing system integrated the different services BSNL offered. The landline and broadband divisions were the two that enjoyed the maximum benefit. After the integration, the broadband business experienced a continuous growth rate of 15-20 percent. In addition to this, Electronic Stapling enables a BSNL customer to get a consolidated invoice for his GSM , broadband and landline services . This also made it easy for BSNL to introduce new tariffs in the market. Pre-CDR, all districts had their own set of tariffs and the overall framework was loose. Today, there are zonespecific as well as pan-Indian tariffs. Even the process of introducing new tariffs has become easier now. The new tariffs are mapped to the target system the moment different district offices receive them from HQ. This has resulted in easier catalogue management and increased customer responsiveness. BSNL’s time-to-market has also come down drastically. New plans or changes in plans used to take close to three months to roll out earlier. Now all it takes is just 10 days. This has resulted

CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES

in an increase in operational efficiency. The exchange personnel earlier had to concentrate on IT as well, which gave them less time to work on initiatives to improve business. With the centralization of the IT management of all 334 SSAs, exchange officers now have more time to work on business improvement. The greatest game-changer for BSNL after the CDR project was the increase in the speed of service. Customer reconnection and revenue recognition—after clearing outstanding bills—has become instant. Shedding light on how this process is less time-consuming now, Gupta says, “The same process used to take a great deal of time when legacy systems were in place. Reconnection, today, is so quick that the customer’s connection is restored in just two hours after clearing the outstanding amount.” The CDR’s account-based data management also means that each customer has his/her own account in which each month’s outstanding amount gets added or subtracted according to the account balance. As opposed to the previous meterbased bill calculation, this method has made bill processing easier and more convenient. The implementation has been beneficial for customers as well. BSNL, earlier, used to receive negative reviews of its customer support facilities. The consolidation exercise has changed this state of affairs once and for all. Customers who once had to visit their local telephone exchange to resolve their complaints, can now reach out to customer convenience centers throughout the country. The online ser vices delivered as a part of the project have also simplified things for subscribers. The online portal gives complete self-care capabilities to customers. Right from buying a new connection or terminating an existing one to registering complaints and receiving real-time updates, the portal provides customers with important ser vices. A single login lets customers manage their landline and broadband subscriptions. Under the current setup, each datacenter can manage 2,000 concurrent users. There are 10,000 collection counters across India that process 350,000 payments each day. These datacenters see volumes of 650,000 payments at peak. Other salient features of the CDR system are the SMS alerts and IVRS system. The IVRS is of great help to customers in that it clears their queries on the various services BSNL offers. SMS alerts, apart from intimating customers on payments received, also send birthday and anniversary wishes. The teams are now working

DIAL IT UP The CDR project, which was spearheaded by TCS, has offered BSNL and its customers a multitude of benefits. They include:

For BSNL: Lower costs Improved operational efficiency More standardized processes Centralized control Better governance Swifter decision-making Reduced time-to-market Increased ability to satisfy customers Increased competitiveness

For BSNL’s Customers: Account-based billing Improved customer care facilities Facility to make payments at banks and post offices

on expanding and consolidating a national database of customers. The implementation also has its own green IT initiative—the e-bill option. An electronic version of the bill, instead of a hard copy, is sent to a customer’s e-mail, thus reducing the use of paper. Overall, the massive project has repositioned BSNL in the telecom vertical. Centralized control, swift decision-making, reduced cost, reduced time-to-market, improved operational efficiency and process standardization have strengthened BSNL and equipped the organization to take its competition head-on. The complete rollout ended in March 2012 after close to four-and-a-half years and TCS received much appreciation and recognition from all fronts for its efforts. The TCS team completed the project with minimum support from OEMs, who in turn, have been lavish in their applause for the project’s success. The CDR project is also an outstanding example of TCS’ expertise in that their activities spanned the entire gamut of activities to be done for the smooth running of the system.

TRANSFORMERS INTERVIEW

AHEAD OF THE CURVE It’s hard to find an industry that’s more competitive than telecom. While most telecom MNCs are shutting shop in India, BSNL is inventing new ways to keep the competitive spirit alive. R. K. Upadhyay, CMD, BSNL, shares how the company is innovating and staying ahead.

R. K. Upadhyay,

Chief Managing Director, BSNL

CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES

How has BSNL benefited from the Call Details Record (CDR) project? The CDR project has standardized BSNL’s processes across the country not only for our employees but also for our customers. All the facilities of a state-of-theart billing and commercial platform are now available to our customers throughout the country—even in the rural areas. The CDR system also has a Web self-care (WSC) module as part of our CRM system that enables us to extend our customer care facility to the Internet. Customers can access the portal and utilize various facilities available on the WSC module. The CDR project has also transformed how we do business and how we see our customers. So, I would call it an end-customer transformation project. The fact that we had multiple legacy systems, inconsistent processes across SSAs (secondary switching area), a non-CDR based billing system, and multiple fulfillment channels added to the complexity of transformation. These processes adversely impacted our customers. So, to me, the greatest benefit is our ability to know our customers better, which is a great step towards customer experience management (CEM). This is the latest trend in the industry and I can confidently say that the processes we have introduced to transform the way we do business have taken us a step closer to providing value to customers. How has TCS helped BSNL execute the project across the company? We found in TCS not only the ability to do a COTS and legacy transformation but also to understand our current processes and needs. It has also aided us in making CDR a business transformation project. TCS has trained over 1 lakh BSNL employees across the country, which has played a big role in the project’s success. There are several players in the broadband segment today. How does BSNL stay ahead? Broadband—from a last mile perspective—offers multiple options. And we use copper for last mile connectivity—which is fast and secure—providing our customers with reliable broadband services. Our strategy is to leverage the advantages of copper and BSNL’s countrywide network. Also, we have embarked on India’s first National Internet Backbone (NIB) program and we believe this will be the most robust backbone for extending bandwidth on MPLS— running into multiple GBs of data—and increased Internet bandwidth throughout the country. No other operator in India can match our capabilities. The CDR system provides us with a unique opportunity to offer service bundling, wherein broadband access is bundled with landline service. This is a cost-effective service for the customer as well. Now, with this integrated platform, BSNL is all set to educate customers about the benefits and introduce combo-offers with flexibility in the hands of customers.

The telecom vertical is predominantly a customerdependent vertical. How do you enhance customer service to beat competition? I believe that customer touch-points should be very sophisticated and focused. If we want to enhance customer experience, we can’t afford to have multiple customer-connect points. That’s why we have focused on consolidation. The fact that we embarked on this journey with CDR and NIB is a testimony to our strategy in this direction. This simplifies everybody’s life because now customers only need to call us once to register a complaint—irrespective of whether it’s a landline or a broadband problem. The other paradigm is about providing value additions. To do this, we need to leverage the strength of telcos when it comes to bandwidth and offer data and other value added services to end customers. BSNL is best positioned to offer IT-as-a-service and evolve from being just a communication company to a total solution provider. The fact that telcos are now opening up to be a ‘platform’ for retail services, is a sign of how things will operate in the future. Telcos are required to adopt a two-sided business model, in which one side will be downstream customers like endcustomers, SMEs, public sector companies, and enterprises. Upstream customers such as content providers, developers, retailers, brand owners and government will form the other side. Telcos can generate revenue from both the sides. Even for this telco 2.0 business model, a sophisticated and focused customer touch-point is an imperative. What kind of innovations do you foresee in the telecom space and how do you think they will revolutionize the industry? Primarily, I believe there are two types of innovations— technology and service innovation. Technology innovation is something which all large players need to embrace. New-age technologies and trends such as LTE, data services, cloud computing, enterprise mobility, and BYOD are some innovations that are gaining ground. However, service innovation is an area where one can take a giant leap. With the average revenue per user (ARPU) decreasing, service bundling and CEM will become key. A solid IT landscape and an industry standard process are vital to make the best use of these two aspects. Thankfully, at BSNL, we are already moving towards this direction.

Transformers is brought to you by IDG Custom Solutions Group in association with

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Mid-Year Report Card

esp

Mid Year

10%

Grown faster than expected

38%

47%

Grown as expected

Business Grown slower than expected

eview 2012 The economy seems to have taken Indian CIOs by surprise. From the results of the survey, it seems like they were over-optimistic about the economy and overambitious about their goals in October 2011. They havenâ&#x20AC;&#x2122;t achieved what they wanted to and didnâ&#x20AC;&#x2122;t get what they expected.

70%

Of CIOs Pressured

due to business environment.

Accomplishment

Wanted to: Drive innovative new market offerings or business practices Achieved: Improved enduser workforce productivity

Focus

Wanted to do: Strategic business planning Achieved: Budgeting / managing costs

Mid-Term Review

Then and now Personal Score Down

Business Growth is Slow

The Mid-Year Review measures the progress Indian CIOs have made against the goals they set in the State of the CIO 2011. It on 5. The also checks if their score Indian expectations from CIOs gave themselves business and the against goals they set six economy have come months ago. They had through. Both have scored themselves 3.7 in fallen short.

Indian CIOs across companies—irrespective of company size and industry—say their business has grown slower than expected.

3.4

Shrunk Grown slower than expected

47% 38%

Grown as expected

October 2011.

Grown faster than expected

Compensation Not Increased A majority of Indian CIOs expected their compensation to increase in 2012, but the economy has played spoilsport and crushed their expectations.

10% 5%

88%

92% CIOs who expected compensation to increase

37%

Of Indian CIOs expected business to grow in 2012.

CIOs who got an increase

Compensation by Industry The average increase across industries was 12 percent. Surprisingly, only BFSI got an increase in pay close to what it expected—in 2011 BFSI got the least increase in pay. Industry

Expected

Received

Difference

BFSI

12%

Manufacturing

15%

12%

-3%

(including Auto)

Under Pressure Compared to six months ago, CIOs say they feel more pressured due to changes in the business environment. 30% NO YES

IT/ITES

15%

11%

-4%

Services (including

14%

-5%

70%

Telecom/ Utilities)

50%

Of CIOs say their IT budget has increased, while 82 percent expected it to increase in 2012.

j u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

35%

Of CIOs say getting clearance for projects has gotten harder, compared to six months ago. They were also the least satisfied—2.8 on 5—with the resources (budget and staffers) they received. The average was 3.5.

Vol/7 | ISSUE/08

Mid-Term Review

What’s Changed: For You Job Satisfaction Mixed Surprisingly, sixty-eight percent of high-stressed CIOs are satisfied or more than satisfied with their jobs.

Stress Levels are Stagnant Stress levels haven’t changed drastically. Ninety-one percent of high stressed CIOs say their workload has increased. CIOs in IT/ITES are most stressed. Oct 2011

2012

Low and very low

42% 38%

Not satisfied

Neither high nor low

51% 54% High and very high

41%

Of CIOs say too many projects and supporting business expansion is the top-most reason for stress.

Oct 2011

57%

Of CIOs say this is not a good time to change jobs. Only CIOs in the telecom industry say it’s a good time to move.

1% 3%

8% 9%

31% 27%

Indian CIOs admit that their compensation has not increased as expected, their stress levels are high, and their workload is heavy. But a majority are satisfied with their jobs and feel this isn’t a good time to move.

37% 41%

Keeping At It

Satisfied

More than satisfied

2012

No Role Outside IT

In October 2011, 69 percent of CIOs said they had a leadership role outside IT. That number has fallen by 16 percent. The most number of CIOs with a role outside IT are in the telecom sector and services the least. 47%

Top 5 Focus Areas Have Shifted Six months ago, CIOs said they would like to spend time in strategic business planning but they have actually spent time in budgeting and managing costs. Except interacting with their companies’ CXOs all other focus areas have changed. Wanted to Focus on in 2012

Focused on in 2012

Strategic business planning

Budgeting / managing costs

Interacting with external customers

Interacting with your company’s CXOs

Making strategic systems decisions

Compliance management/ planning

Interacting with your company’s CXOs

Leading projects

Designing/optimizing business processes

Interacting with IT vendors/ service providers

Vol/7 | ISSUE/08

yes

53%

Top Focus Area by Company Size The activites CIOs spent most time on changed with their organization size. But budgeting and managing costs featured among the top three activities CIOs spent time on—irrespective of organization size or industry. Under Rs 500 crore

Managing IT crises

Rs 500-1,999 crore

Budgeting / managing costs

Rs 2,000-9,999 crore Interacting with your company’s CXOs Over Rs 10,000 crore

Compliance management/planning

REAL CIO WORLD | j u n e 1 5 , 2 0 1 2

Mid-Term Review

What’s Changed: Within the I.T. Dept. Off-Track

The IT department has changed course. There’s a stark difference between what it wanted to accomplish in 2012 and what it actually did.

Workload Increases More Than Expected

44%

40%

Eighty-four percent of CIOs say their department’s workload is more or significantly more, compared to six months ago. Workload has increased the most for BFSI CIOs. But they work the least number of hours.

Challenges By Company Size

Six months ago, CIOs expected their top three challenges to be governance risk and compliance, supporting business expansion, and getting IT funding. Except supporting business expansion none of the challenges are as expected. Under Rs 500 crore

Inadequate in-house skill sets

Rs 500-1,999 crore

Frequent change demands from business users

Rs 2,000-9,999 crore Too many IT projects / Supporting business expansion Over Rs 10,000 crore

Significantly more More No change

Less

10%

Significantly less

75%

Of CIOs expected workload to increase in 2012.

Biz Perception of IT Going Down

The number of organizations that consider IT as a valued service provider has gone up. And those that perceive it as a trusted partner and competitive differentiator has come down. 20% 18%

Top Barriers By Company Size

Compared to six months ago, top barriers have not changed. But they differ according to company size.

Frequent change demands from business users

Oct 2011

2012

Cost center

35% 44%

Under Rs 500 crore

Shortage of time for strategic planning

Rs 500-1,999 crore

Inadequate budgets

Rs 2,000-9,999 crore Unrealistic expectations from the business Over Rs 10,000 crore

Lack of business sponsorship/ accountability for IT projects

Valued service provider

28% 24% Trusted partner/business peer

17% 14% Competitive differentiator

Accomplishments Don’t Match

Six months ago, CIOs had set goals they wanted to achieve in 2012. But they haven’t achieved what they set out to. Also, they have not achieved anything new. All their accomplishments are what they were last year. What CIOs Wanted to Achieve

What They Achieved

Drive innovative new market offerings or business practices

Improved end-user workforce productivity

Improve security/risk management

Lowered the company’s overall operating costs

Re-engineer core business processes

Enabled regulatory compliance

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Mid-Term Review

What’s Changed: Business Environment Playing It Safe

Business Goals Less Clear

Biz Environment Less Challenging

Significantly clearer

A majority of CIOs say their business is more driven and that the business environment is less challenging, but their risk appetite hasn’t increased. However, a majority of CIOs are confident of meeting business goals.

Compared to six months ago, fewer CIOs say the business environment is challenging. Most CIOs in the BFSI sector find it very challenging.

In 2011, 73 percent of CIOs said their business goals were clearer. That has come down by 11 percent. Services CIOs’ business goals are most clear. 16% 45% Clearer

33% No change

5% 2% Easy

12%

Neutral

29% Very

challenging

57%

Challenging

Not much clearer

Confidence Still High

Despite excessive pressure and uncertain economic conditions, a majority of CIOs are confident of their department’s ability to meet business needs. 58% Fairly confident

93%

2% Not confident

Of CIOs said the business environment is challenging or very challenging, six months ago.

40% Very confident

No Change in Risk Appetite

About 60 percent of CIOs say their business is driven but only 38 percent have a high risk appetite. 8% Very high 38% High 42% Neutral 6% Could be higher 6% Low

A majority of CIOs say the horizon of their business’ near-term plans

is 6 months or 12 months. Except BFSI—12-months—All sectors have a 6-month Plan. Vol/7 | ISSUE/08

Survey Methodology The Mid Year Review 2012 was administered online over four weeks during April and May 2012. One hundred and ninety-two IT leaders participated in the survey. Senior-level IT executives from CIO magazine’s database were invited to take the survey. The survey ensured that all participants were heads of IT. Fifteen percent of respondents were from organizations with annual revenues over Rs 20,000 crore; 20 percent represented enterprises with annual revenues between Rs 5,000 crore and Rs 10,000 crore; 36 percent were from companies with revenues in the range of Rs 1,000 crore to Rs 2,000 crore and 22 percent were from companies whose annual revenues were below Rs 500 crore. Four percent represented non-profits, NGOs and government departments. While there was representation from over 20 sectors, there were a significant number of respondents from manufacturing; automotive and transportation; finance, banking and insurance; IT/ITES. All responses were gathered using a secure server with all individual data kept confidential. Percentages described within may not add up to 100 due to rounding. The degree of error is +/- 5.8 percent at a 90 percent confidence level. REAL CIO WORLD | j u n e 1 5 , 2 0 1 2

casefiles real people

* real problems * real solutions

changing

Course

BPO major, Convergys, re-routes the course its fleet management is taking, thereby tackling its second largest cost—and setting an industry standard. By Debarati Roy One look at Ipininder Singh, director-technology, Convergys, and you know little fazes the man. His lithe frame and steely gaze leave little doubt. But then, maybe all he needed was for the right project to come along, a project his own size. And Convergys had something just in his range. When Convergys launched operations in India in 2001, it—intentionally or not—created waves in the Indian BPO industry. It was the largest contact center in India at that time with two facilities in Gurgaon. The Delhi NCR region, especially Gurgaon, was being developed as the hub for BPO operations, thanks to cheap real estate. But while Gurgaon allowed companies to lower cost on the property front, it created other costs. Limited connectivity from Delhi, poor infrastructure, and shifts in the middle of the night forced BPOs to introduce pick-ups and drops for employees. Little did they know that they were creating a Frankenstein. Today, after employee salaries, transport is the biggest single cost for BPOs, at between 12-15 percent of total operational expenses. That’s a reality that Convergys cannot get away from. Over the last decade, Convergys has grown to six contact centers, with three facilities in Gurgaon and one each in Bangalore, Thane and Pune. With 10,000 employees across India, Convergys has to organize 20,000 pick ups and drops a day, that’s over half a million a month. The exercise gets harder if you try, as Convergys must, to create the most optimal route for its fleet of cabs; one that ensures employees have to travel the shortest distance—you won’t

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want employees to arrive tired—yet one that requires the least number of cabs. Convergys sources over 1,000 cabs all over India from 40 vendors. Add to that the complexity of adjusting to 44 different shift timings and employees with different weekly holidays. “The entire process of creating the routes, assigning cabs, slotting employees and monitoring the cabs was manual,” says Singh “And like every manual process, the system was flawed, had loopholes, and was highly rigid and inaccurate.” But when Singh decided to do something about it, he was told that there was very little he could do. “Every technical solution provider I went to told me that this was how the transport system worked across the industry and that I would have to live with this necessary evil,” recalls Singh. With no ready software to fix the problem, Singh decided to roll up his sleeves. “I told my team that the only way we could clean up this mess was getting our hands dirty,” he says. Singh confesses that the sheer size of the project, with its multiple layers of intricacies, scared him. Breaking it down into smaller pieces helped. “Sometimes, we try to boil the ocean. When things are totally new, one should try to build small automation pieces, tie them together and then build on the innovation,” he says. He did just that and created was a model that the industry would emulate.

Ipininder Singh, director-technology, Convergys, lowered the number of cabs needed to pick up the company's 10,000-strong staff by 20 percent.

Where Does Geeta Go? Among the most complicated steps in transport management is rostering—the act of creating a plan of who is going where, from which location, at what time, on which day. The rostering problem is so complicated it’s classified as NP-Hard. Problems in this category are so complex that it’s hard to tell how long it would take a computer to solve it. At Convergys, they threw Excel sheets and man power at the problem. Every week, supervisors would send a worksheet to the transport department with the names of their team members, their shift timings,

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addresses, contact numbers, and holidays for the following week. “When we started, we had close to 100 supervisors, all of them sending different formats and versions of Excel. Just sorting some of them was complex enough to qualify as an analytical question in a GMAT exam,” says Singh. The transport team would then sort each employee by name, determine the area they

lived in, and attach them to a cab route. The roster took three days to prepare—every week—and once done, it was frozen. That meant you couldn’t change plans and that absenteeism lowered the efficiency of the transport fleet. Worse, if an employee changed address or phone number, or quit mid-week, cabs waited at the wrong address, while the Convergys helpdesk tried to contact

REAL CIO WORLD | J u n e 1 5 , 2 0 1 2

Case File | Convergys

an employee—on a wrong number. To fix the problem, Singh figured he needed to get the transport and the HR department on the same page, because HR was kept informed of all changes relating to employees. So with the help of the transport team, he tasked his team to create a HR-IS system and build their online rostering system on that platform. “We realized that if we could link both systems together, the application could pull out employee details from the HR’s records directly,” says Singh. When the team was done, their work cut the time it took for supervisors to fill a sheet, and eliminated the problem of employees who had quit or moved within Convergys. The system also helped Convergys overcome another huge challenge: billing. Initially, after every trip, cab drivers filled up a trip sheet with the number of kilometers they had run. To decide how much a driver needed to be paid, the transport department needed to enter trip data into their Excel sheets, cross it against the cost of hiring that specific vehicle (Indica, Qualis, etcetera), and add on extra costs like over-time, or 24-hour rates. “We automated that function and built an application that had all the parameters and metrics pre-loaded into the system. The system could give you costs by department and by employee. It brought down the billing time significantly,” says Singh. More importantly, the application cut roster-making time from three days to one. And allowed the transport to adjust rosters on demand, thereby improving cab utilization.

The Proper Route The next step was to create the most optimal routes for cabbies. This isn’t vital only because it lowers the cost of running cabs, which charge by the kilometer, but also because, in an industry that bills clients by time, it makes incredible sense. If a driver wasn’t taking the most optimal route—not necessarily the shortest one—employees clocked in late and that meant money out of Convergys’ top line. According to a 2006 report by Financial Express, between 20 and 25 percent of India’s BPO workforce arrive at their office

J u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

30 minutes late—everyday. Despite being a dated report, its findings give you an idea of the loss the industry incurs annually from staff delays: A whopping Rs 380 crore. But how do you plan optimized routes for 10,000 employees?

The Road Ahead Revved up by their success, Singh’s team began exploring ways to make the system more userfriendly. “Attrition and constant hiring means that the system has to be intuitive enough to not require any training at all,” says Singh. So

“We had close to 100 supervisors, all of them sending different formats and versions of Excel to the transport team. Just sorting some of them was complex enough to qualify as an analytical question in a GMAT exam.” Singh bought an off-the-shelf routing solution which had 10-12 algorithms to do basic routing. Then he roped in Eicher World Maps to get digital versions of their printed maps. “We got the algorithm to work on those digital maps. Also we got all employees to geo-code their locations,” he says. In addition to layering the maps and the algorithms, Singh’s team added data including the availability of vehicles, cab capacities, and average speeds on various roads, etcetera. This, now, allows Convergys to plan ahead and create the most optimal route. Importantly, it also allows the transport department to work in a more real-time fashion, increasing its efficiency. “Now when an employee’s pick or drop is cancelled, we can reshuffle routes and fill in the empty space in a cab,” says Singh. “This allows us to reduce the number of cabs by about 20 percent.” "The transport solution helped us reduce and optimize costs and provides apositive experience for our employees, something which is of so much importance to us. It enables us to manage the entire transport service chain from rostering, routing to billing, thereby creating a seamless end-user and vendor experience," says Gaurav Kalra, head of transport, Convergys. Overall, Singh says that a modest estimate of how much the project lowered transport costs is 30 to 40 percent.

they introduced a host of self-service portals to reduce the burden on the transport team. “We have also started the concept of SMSbased workflow. By sending short codes such as "CP" for cancel pick up and "CD" for cancel drop, employees could notify the transport team without having to talk to the call center or helpdesk,” says Singh. "The high level of automation has set a precedent in the industry," says Kalra. By building self-help portals where staffer can check their routes and pick-up time, Singh has managed to considerably lower dependence on the helpdesk. Singh also experimented with barcodes. Earlier, a guard standing at the gate kept a manual record of when cabs arrived. This data was maintained just in case an employee came in late and wrongfully blamed a late cab. Now, by assigning a barcode strip to each cab and trip sheet, Singh's made it possible for the guard to scan both with a handheld scanner. Also, the arrival of specific cabs is flashed on the respective supervisor’s screen. Singh is also exploring technologies like GPS to track cabs in real-time and, if possible, divert them from areas of heavy traffic. It will also allow them to send SMSes to employees, asking them to get ready when a cab reaches within a certain distance of a pickup point. “There's so much to be done,” says Singh. CIO Debarati Roy is correspondent. Send feedback on this feature to debarati_roy@idgindia.com

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casefiles

WNS Global Services

WNS Global Services ensures its customers have nothing to worry about in a disaster where their data is concerned. The Organization: If a geographical footprint across Costa Rica, India, Romania, Sri Lanka, the Philippines, the United Kingdom and the United States and a workforce of around 23,000 people is not a sign of an organization’s success, what is? Probably revenue of Rs 2,643 crore in 2012. If these are measures of success, then WNS Global Services is successful and it has based its success on the success of its clients. The Business Case: Not all of WNS’ clients have the financial ability or the inclination to invest in robust business continuity or disaster recovery plans. And WNS wanted to offer them that ability. In the end, it was up to Sanjay Jain, chief capability officer, WNS, to do so. “We did not have an effective mechanism of data management and data replication which offered a BCP to manage our clients’ information/data,” says Jain. Earlier, WNS used a combination of tape-based and offline backups. But Jain realized that they needed a real-time solution which would allow them to take quick snapshots

J u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

of data that would later be replicated over the company’s MPLS network. The Project: As a solution to the problem, Jain envisaged the IT-Single-Point-of-Failure (ITSPOF) project which involved data synchronization between multiple datacenters using the snap-mirroring functionality of the storage system. “The businesscritical data of our clients was synchronized and made available in a remote datacenter for business continuity,” says Jain. The project enables a realtime data archive utilizing snap-mirror technology. It’s a real-time incremental backup which captures a complete image of all the data vital for WNS’ clients and corporate users. WNS has three DR locations based in Gurgaon, Mumbai and Pune, and in case, a disc or a database failure occurs at the Pune datacenter, the one in Mumbai becomes operational—without the need to physically push tapes on to the network. The snapshot-mirroring technology allows data compression through a block-level compression mechanism, and the data is then transmitted through the MPLS network. “The investment in the MPLS network came handy because we utilized the same infrastructure to manage the flow of data across the datacenters,” says Jain. One of the most important tasks for the IT department is making data available for the DR sites. This involves

* By Shubhra Ri shi Sanjay Jain, chief capability officer, WNS Global Services, ensured customer confidence through the organization’s ITSPOF project.

copying terabytes of data between storage systems which requires high bandwidth link. “We made this process simple using block-level data-sync and snap-mirror network compression which helped in saving up to 60 percent bandwidth,” says Jain. The Benefits: With ITSPOF, WNS has ensured close to 100 percent uptime for all its global clients. The project has given clients a cost-effective and highly-available storage environment while also protecting WNS from revenue losses. This project also helped WNS’ virtual server/desktop environment

to get instant recovery and failover of VMs on another site and has reduced the overall TCO by up to 50 percent, thereby allowing WNS to project lower DR investments to its clients. “With this ambitious project, WNS has built a reputation with regards to its ability to leverage technology to achieve endcustomer satisfaction. WNS has also instilled customer confidence by ensuring data availability at all times, irrespective of how serious the challenge is,” say Jain. CIO Send feedback on this feature to shubhra_rishi@idgindia.com

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Essential

technology image by photos.com

A CLOSER LOOK AT Storage

Server virtualization sometimes creates more storage problems than it solves. But fear not: IT analysts and virtualization veterans offer their advice on how to deal with these challenges.

MakingRoomforStorage By Stacy Collett

| Server virtualization offers a host of efficiencies, but storage administrators say it may open a can of worms on the storage side. Resulting headaches can include huge I/O bottlenecks for primary and backup storage, as well as complicated disaster and recovery efforts, among other things. With multicore CPUs being utilized to create multiple virtual machines on servers— and since the typical large-enterprise server farm is 70 to 80 percent virtualized—there's a lot more application I/O moving back and forth between application servers and primary storage, and between primary storage and backup storage. What's more, between 2000 and 2010, the number of servers worldwide multiplied by a factor of six, while the amount of storage increased by a factor of 69, thanks to server virtualization, according to researchers at IBM. In July 2011, a Computerworld (CIO’s sister publication) poll of dozens of storage administrators found out how server virtualization has complicated their work lives. Their findings yielded this list of three top headaches. Here's how to deal with each challenge.

Storage Area Network

Storage Performance Slowdowns and I/O Bottlenecks IT administrators are painfully aware that storage performance is growing at a much

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REAL CIO WORLD | j u n e 1 5 , 2 0 1 2 8 7

essential technology

slower rate than computing power. So when it comes to virtualization, it's no surprise that I/O bottlenecks and slow storage performance are the No. 1 problem for onethird of the administrators who responded to the Computerworld poll. "Virtualization lets you do a whole lot of workloads on one physical piece of hardware, but there's lots of different I/O [operations] mixed into the I/O stream, so it makes disks work harder and caching less effective," says Jeff Boles, senior analyst at Taneja Group in Phoenix. "Virtualization lets us easily do more than our compute power is capable of." How to Deal with This: The solution to the I/O bottleneck depends on where the problem lies: In the network or in the storage domain. Most often, it's in the storage environment, because improvements in storage capability have lagged behind that of all other infrastructure. "You have a very slow, creeping, linear progression of storage capability. Rotating disks can only go so fast. Part of the problem is visibility. Administrators can't see what's going on inside the storage environment, so they don't know how to fix it. Fortunately, we're getting some tools that can help you figure out that problem and address it [more easily]," Boles says. Boston-based ad agency Arnold Worldwide virtualized most of its servers five years ago. Chris Elam, IT-head, remembers when he first started doing backups and noticed that throughput to the backups was dropping and that backup times were growing. But visibility tools on the firm's SAN alerted Elam to the problem. He added more drives to increase I/O operations per second, and the SAN now spreads the data among the drives. As an extra precaution, Arnold Worldwide's IT staff set most replications to take place during off-hours, except for those involving its production file servers, which it replicates during the day. "That's an I/O hit we are willing to take," Elam says, adding that customer service is most important. "It's one thing if backups take longer; it's another if users start to complain [about slow systems]." 8 8 j u n e 1 5 , 2 0 1 2 | REAL CIO WORLD

Performance is another important consideration in the I/O equation. "It's really important that administrators start to think about the I/O density and performance they need given the amount of infrastructure they have," Boles says. "Workload density has massively increased in the datacenter. Now you have 30 workloads in a single rack [running virtual servers]." I/O density can be increased through the use of solid-state drives and similar technologies, more effective caching or auto-tiering. Also, I/O will only increase as the enterprise adds more servers within a single storage system. Scale-out technologies can help scale performance as well as capacity.

Difficulty Managing Shared Storage Some 23 percent of the administrators Computerworld reported that server virtualization creates new headaches in managing shared storage. Enterprises typically have a lot of different workloads being stored on storage systems, and for administrators, there aren't always clear connections among the storage volumes, the workloads that each volume supports, the demands against each volume, and who is consuming capacity. "Essentially, the virtual infrastructure has created another layer of abstraction on top of the storage infrastructure without really freeing you from the complexity of the physical layer," Boles explains. "Now you have this virtual storage layer that you're managing, made up of [VMware's] VMFS, all the different virtual server files and data, and you're provisioning those resources inside the virtual infrastructure." On top of all that, "you still have to take care of the physical infrastructure and look at I/O demand. Having those two layers makes it harder to connect the dots between them," he says. How to Deal with This: Consider thin provisioning, a storage virtualization capability that helps curb low storage utilization by allocating data to free space. Physical storage is allocated on demand from a shared pool, but only when needed. By

Taking Backups Forward When the Bank of Fayetteville in Arkansas first started virtualizing its servers, Les Barnes, senior vice president- IT, treated backups the same way he would treat traditional servers: He used a tape library. But after a few months, he knew there had to be a better way. What's more, backups were traditionally performed overnight, but as more customers demanded 24/7 access to the online banking system, Barnes needed another solution. He completely eliminated traditional backups and replaced them with SAN replication and SAN snapshots as a way to make multiple copies of SANs off-site. "The beauty of using SAN replication is that it completely offloads any I/O from the server," Barnes says. "It's now SAN-clusterto-SAN-cluster communications. It's all back-channel stuff. There is no impact on the end user or the virtual machine. And if I have to recover, I can do it in a few minutes rather than a few hours or a couple of days." Chris Elam, IT-head, Arnold Worldwide looks at the companyâ&#x20AC;&#x2122;s SAN as a way to bring backups forward. "It's almost impossible now to just write everything to tape [over the weekend]," he says, adding that the ad agency holds 60 terabytes of data on its SAN. "But because we're replicating a lot of stuff off-site, that kind of serves as a backup. We also have snapshots that we keep live. We also do de-duplication to get backups in a timely window." But Elam warns that those snapshots can be quite large: "The biggest thing we didn't realize when we rolled this out was the amount of space that snapshots or replays take up. We didn't even think about how much it takes. You need to plan for that in the amount of data storage you have."

â&#x20AC;&#x201D; S.C.

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essential technology

Whatâ&#x20AC;&#x2122;s In Storage

using thin provisioning along with server virtualization, users can optimize both server and storage utilization rates.

The VDI Dilemma

Send feedback on this feature to editor@cio.in

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NatGeo Cloudward Bound Cloud Storage | The National Geographic Society is in the process of moving its backup and archive of large unstructured multimedia files to a public cloud storage space. The move is in response to at least four significant archive platform upgrades over the decades that the organization has had to perform to store video, photo and graphics electronically. The physical storage box upgrades, along with the data migration process, became too expensive and unwieldy, NatGeo said. The 124-year-old NatGeo said its archive is in the 100TB range today, but it will be moving into petabytes of capacity in the near future, and the costs of upgrading systems and migrating data became too expensive. NatGeo also sees an advantage in using a cloud service for distributing its content and collaborating with editorial resources around the globe. "There's no question that it's the kind of thing we'd look to leverage in the future with our video editors. The traditional office is going away. We all know that," said Dan Backer, NatGeo's director of infrastructure systems. "You want to hire the best possible video producer you can find. If that video producer is in New York City and the data is in Washington DC, there's going to be a transfer problem," Becker added.The file data includes not only its award winning video and photography content, but PDFs of completed NatGeo magazines, as well as Quark Express and EPS files. Becker said benchmark tests showed there's little to no performance difference between uploading media content via an onsite hierarchical storage management (HSM) system or a cloud provider."The cloud NAS and some of the additional controller types allow us to buffer some of that content as well, so we can improve delivery time," he said. Steve Duplessie, founder and analyst at market research firm ESG, said NatGeo's move to the cloud is an example of a wave of new thinking in the media industry. "National Geographic is another prime example of people saying, 'Why am I continuing to do all this myself when there is clearly an easier and better way,' " he said. â&#x20AC;&#x201D; By Lucas Mearian

REAL CIO WORLD | j u n e 1 5 , 2 0 1 2

image by ph otos.com

The virtual desktop I/O workload is tremendously punishing on a hard disk array. For starters, despite the traditional I/O workload of an individual workstation being sequential in nature, many IT departments are running thousands of virtual desktops on a single storage platform, which creates the I/O "blender effect." "They're all doing sequential I/O in different regions of the disk, which turns those easy-to-service sequential I/O patterns into a nasty, random I/O pattern as far as the array is concerned," says James Candelaria, CTO at WhipTail Technologies, a maker of solid-state storage arrays. That's a big problem for traditional storage arrays because many don't have enough cache to keep up with the influx of data, and cache misses occur, slowing down the system. How to Deal with This: First, perform an I/O profile analysis to make sure you know what the I/O demand is going to be. "A general rule of thumb is that to support a typical user on [a virtual desktop infrastructure] in a steady state environment, you need ... 20 to 40 I/O per second per user," Candelaria says. "If you don't account for that I/O demand, your user experience is going to suffer drastically." Also, make sure you have a storage fabric and a transport fabric that's going to scale. "I see a lot of customers attempt to do virtual desktop projects without a highspeed storage fabric, and they're continually maxing out 1-gig storage links running on SCSI," he says. "You need to look at a higher-speed transport like 10 Gigabit iSCSI or Fibre Channel." If you're going to deliver virtual desktops to remote users, make sure you have enough bandwidth to ensure a favorable user experience. CIO

Things I've Learned

V. Balakrishnan, former CIO, Polaris Software Labs, says to be successful CIOs need to learn how to balance the inherent contradictions of the role.

THE VOICE OF EXPERIENCE

Balancing the Yin and Yang The CIO role is a dichotomous one. On the one hand, CIOs are the custodians of enterprise information systems, and this makes them risk averse. On the other, CIOs are also the driving force of innovation in the enterprise. But how does one drive innovation without a sanction to take risk? It’s like walking on a tight rope. To be successful, one has to strive to take the middle path and tactfully balance the two seemingly opposite functions. CIOs should not embrace anything without questioning or shun anything without argument. Learn to Let Go IT is no longer the haloed institution it used to be. From being a niche service, it has become a utility. And enterprise IT users are fully aware of technology, they have become today's version of freedom fighters! They demand the same level of technology at work, as they have at home. You need to learn to encourage and support innovation that today’s users carve out of technology—and let go of the position of sole

A S TO L D TO VA R S H A C H I D A M B A R A M

innovators. Today, IT has to focus on maximizing freedom while sensitizing users to potential risks. IT's job is not to control, but to create awareness. If you educate your users well enough, they'll seek your professional expertise to maintain security. Focus on Your USP Despite the growing adoption of technology, there are three areas that will always remain in the CIO’s purview: Security, compliance and business continuity. With the democratization of IT, each user department has the capability to work in an independent manner. The enterprise is dependent on IT for the integration of these islands of technology power, and in maintaining the integrity of enterprise information. You can never take these away from the CIO. Over time, these areas have become exclusive because only the CIO is authorized to speak on them. IT’s power lies in understanding the nuances of governance and compliance. The CIO, no matter how business-oriented, must never lose focus of what makes IT unique from other functions. Make the Harder Choice One of the principles I've followed in my career is not to let creative and skilled youngsters in positions of administrative power. Creativity in operations can be dangerous. Administrative

J U N E 1 5 , 2 0 1 2 | REAL CIO WORLD

powers are generally given to disciplined, mature people, often middle aged, while experts tend to be young. Managers and administrators need not be frontline experts. People with expertise must focus on R&D, but production and management must rest with people with administrative qualities. This might dissatisfy creative people, but they will be ready to accept something once it becomes a strong principle in the interest of the enterprise. Attitude Above Aptitude I've generally noticed that people's performance is often disproportional to their academic qualifications. Some of the best qualified people fail because they just don't have the right attitude. I've seen the maximum contribution from the people with the right attitude. They might have taken a few wrong turns in life, might not have qualified for IIT, but some of them end up doing remarkably well. You'll also find that people contribute the maximum during their training period when they are paid the least. They are eager to make a mark. And then life catches on, like everything else. CIO V. Balakrishnan is an alumni of IIT, Kanpur. He has been GM at Kudremukh and Jaiprakash Industries,VP at HCL Comnet and CIO of Polaris Software Labs for over 16 years. Send feedback to varsha_ chidambaram@idgindia.com.

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Lenovo ® recommends Windows® 7.

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Source: IDC's Asia/Paciﬁc Quarterly PC Tracker, Q1 2012, for shipments in the Jan – Mar 2012 period to businesses of 500 employees or more. © Lenovo 2012. All rights reserved. Lenovo, the Lenovo logo, For Those Who Do, ThinkPad and Active Protection System are trademarks or registered trademarks of Lenovo. Microsoft and Windows are registered trademarks of Microsoft Corporation. Intel, the Intel logo, Intel Inside, Intel Core and Core Inside are trademarks of Intel Corporation in the U.S. and other countries. Lenovo reserves the right to alter product offering and is not responsible for photographic or typographic errors. Product images are just for reference and might not resemble the actual products. REM _ IND _ HPA _ Q1-13 _ 28006 _ CIO

†

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