InformationWeek India July 2011 SMB Issue by Viraj Mehta

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Why SMBs cannot be ignored

Last year SMBs spent around USD 7 billion on IT, and this contributes more than 30 percent of the total domestic IT spending

ith over 50 million units, India has the largest number of SMBs (Small and Medium Businesses) in the world. In fact, more than one-third of India’s GDP is attributed to the SMB sector (Zinnov’s June 2011 report). SMB is a fast growing and highly competitive sector in India. Even during the recession, it continued to grow at a fast clip. But SMBs have certain challenges — the IT industry and the government have got to acknowledge these and then chalk out strategies. The developmental challenges for this sector are regulatory compliance, insufficient financial capital, tight cash flows, taxation, thin margins, staff and skills retention. The retail and manufacturing verticals have the largest number of SMBs. Within retail, inventory management is one of the major challenges. It is estimated that the IT market for SMBs in retail alone is worth about ` 800 crore; out of this, ` 600 core is earmarked for hardware and the rest for software. According to Zinnov Management Consulting, last year SMBs spent around USD 7 billion on IT, and this contributes more than 30 percent of the total domestic IT spending. Not surprisingly, almost every vendor of IT solutions has aggressive plans for the SMB sector. In this issue, you will read how SMBs have used cutting-edge technologies to tackle the aforementioned challenges and to achieve success. Our Principal Correspondents Vinita Gupta and Ayushman Baruah spoke to SMBs that use the Web, mobility and SaaS (among other technologies) to tackle the issues of capital expenditure and high operational costs. And these companies are certainly more efficient, agile, and profitable today. We also have a story on vendor strategies to target SMBs. I am aware that in certain domains, small business owners come together and form close-knit communities. Yes, they compete fiercely, but they also stand united in their issues and causes. And they are aggressive when lobbying these to trade bodies, vendors or the government. It would serve them well to take this to the next level and form some sort of association or body at the national level. After all, 50 million is a significant number that’s hard to ignore. Government and industry could in turn respond by offering incentives, sops, tax relief, innovative services and financing schemes. That would certainly do wonders for India’s GDP.

u Brian Pereira is Editor of InformationWeek India. brian.pereira@ubm.com

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contents Vo l u m e

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Cover Design : Deepjyoti Bhowmik

22 cover story Solving business challenges with technology Cost effective IT solutions are not only helping SMBs effectively address business challenges like low working capital, employee attrition and increasing customer demands, but are also providing new growth opportunities

Harnessing the power of technology

Vendorsâ&#x20AC;&#x2122; strategies to target SMBs

How SMBs are reaping the benefits of technologies like ERP, open source, virtualization and cloud computing to derive greater business value

SMBs provide huge technology opportunities but have unique needs; thus to target this sector the IT vendors are adopting different strategies

Selling books via the cloud

By adopting a cloud-based service from TCS, Oxford Bookstore has not only reduced the cost of doing business but has also helped it in driving integration between its physical and online stores

MD Synergy uses Google Apps to enhance collaboration

Cloud based application helps NGO track missing children

case study

Godrej Properties smartly used a BPM solution from Savvion to add more process and usage efficiency in its existing ERP solution

Software SMB firm focused on healthcare segment uses the power of the cloud to boost productivity and efficiency of its operations

feature

A smart cloud-based application from vendor AppPoint Software Solutions is helping an NGO in tracking missing children Do you Twitter? Follow us at http://www.twitter.com/iweekindia

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Godrej Properties uses BPM to transform ERP

Find us on Facebook at http://www.facebook. com/informationweekindia

5 core competencies for developing IT Leaders A 40-year IT veteran shares his framework for grooming high-potential directors for executive-level success

If youâ&#x20AC;&#x2122;re on LinkedIN, reach us at http://www.linkedin.com/ groups?gid=2249272

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THE BUSINESS VALUE OF TECHNOLOGY

interview

‘Next-gen services is the new focus for Dell’ Suresh Vaswani EVP Dell Services and Chairman of Dell India

40 ‘CIOs should ensure visible ROI at start of project’ Sandeep Phanasgaonkar President and CTO of Reliance Capital

44 ‘Applying analytics to big data leads to profitability and efficiency’ Manoj Chugh President India & SAARC, Director Global Accounts - Asia Pacific & Japan, EMC

46 ‘AIX has come a long way’ Viswanath Ramaswamy Country Manager, Power Systems, Systems and Technology Group, IBM India/SA

48 ‘India will account for 40 percent of total Asian application download markets’ Christian Goswami Director of Strategic Marketing, Openwave Systems

56 ‘Most cloud offerings are not open’ Steven Dietch Vice President, Cloud Solutions and Infrastructure, HP

EDITORIAL.........................................................4

opinion.......................................................... 58

INDEX..................................................................8

cio profile................................................... 64

letters.......................................................... 10

technology & risk................................... 65

news..................................................................11

analyst angle........................................... 66

news analysis............................................. 18

Global CIO................................................... 68

events (FTS)................................................. 50

practical analysis................................. 69

events (ICSC)............................................... 52

down to business..................................... 70

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Interop Symantec Schneider -APC Siemens Tyco Electronics Corporation India Pvt Ltd. Biz Secure Zoho Ad IBM Juniper

Anand Deshpande, Persistent Systems............25 Anilkumar Nair, Kotak Securities.........................51 Chaitanya Wagh, JM Financial.............................51 Christian Goswami, Openwave Systems..........48

International Associate Offices USA Huson International Media (West) Tiffany DeBie, Tiffany.debie@husonmedia.com Tel: +1 408 879 6666, Fax: +1 408 879 6669

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Manoj Chugh, EMC..................................................44

EMEA Huson International Media Gerry Rhoades Brown, gerry.rhoadesbrown@husonmedia.com Tel: +44 19325 64999, Fax: + 44 19325 64998 Japan Pacific Business (PBI) Shigenori Nagatomo, nagatomo-pbi@gol.com Tel: +81 3366 16138, Fax: +81 3366 16139 South Korea Young Media Young Baek, ymedia@chol.com Tel: +82 2227 34819; Fax : +82 2227 34866 Printed and Published by Sajid Yusuf Desai on behalf of UBM India Pvt Ltd, 6th floor, 615-617, Sagar Tech Plaza A, Andheri-Kurla Road, Saki Naka Junction, Andheri (E), Mumbai 400072, India. Editor: Brian Pereira, Printed at Indigo Press (India) Pvt Ltd, Plot No 1c/716, Off Dadaji Konddeo Cross Road, Byculla (E), Mumbai 400027. RNI NO. MAH ENG/2001/4730

Kamlesh Bajaj, DSCI.................................................58 Kishan Bhat, Zinnov Management Consulting...................................................................24

Manoj Nanda, HDFC Securities...........................51 Meheriar Patel, Globus...........................................26 Naveen Mishra, Gartner ........................................25 Nitin Patki, TVC Sky Shop......................................29 PR Venketrama Raja, Ramco Systems................19 R Muralidharan, Syntel...........................................64 Rajagopal, Repco Bank...........................................51 Robert Richardson, Computer Security Institute......................................................52 Sandeep Phanasgaonkar, Reliance Capital.........................................................40 Sangeeta Gupta, NASSCOM ................................25 Shailesh Joshi, Godrej Industries........................38 Steven Dietch, HP.....................................................56

ADVERTISERS’ INDEX Company name Page No.

Editorial index Person & Organization

Website Sales Contact

2-3 www.interop.com/mumbai/list pankajj@ubmindia.com 5 www.symantec.com/en/in 9 www.schneider-electric.co.in 12-13 www.siemens-enterprise.com india@siemens-enterprise.com 15 www.te.com 17 www.indiaantivirus.com sales@indiaantivirus.com 27 www.ManageEngine.com/it360 sales@manageengine.com 71 www.ibm.com/in/xoffers 72 www.juniper.net

Sumit Mukhija, Cisco...............................................18 Sundar Ramasamy, KPMG.....................................50 Suresh Vaswani, Dell................................................39 Venkatramana Gosavi, Infosys.............................51 Vinay Hinge, Kandor Solutions............................26 Viswanath Ramaswamy, IBM................................46

Important Every effort has been taken to avoid errors or omissions in this magazine. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice immediately. It is notified that neither the publisher, the editor or the seller will be responsible in respect of anything and the consequence of anything done or omitted to be done by any person in reliance upon the content herein. This disclaimer applies to all, whether subscriber to the magazine or not. For binding mistakes, misprints, missing pages, etc., the publisher’s liability is limited to replacement within one month of purchase. © All rights are reserved. No part of this magazine may be reproduced or copied in any form or by any means without the prior written permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only. Whilst care is taken prior to acceptance of advertising copy, it is not possible to verify its contents. UBM India Pvt Ltd. cannot be held responsible for such contents, nor for any loss or damages incurred as a result of transactions with companies, associations or individuals advertising in its newspapers or publications. We therefore recommend that readers make necessary inquiries before sending any monies or entering into any agreements with advertisers or otherwise acting on an advertisement in any manner whatsoever.

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Letters Great learning for me

Vijay Sethi

Vice President, Information Systems, Hero Honda Motors

I wanted to convey to you my appreciation for an excellent June issue of InformationWeek ‘Born to Lead’. You rightly mentioned this as Collector’s issue. I spent quite some time going through the magazine — various interviews, By Invitation articles etc. Each of these is brilliant and gives a great insight. For me personally, it was a great learning reading these and I am sure I will read some of these again over a period of time. My compliments for this great issue and I hope I will get to see more issues of this quality. My compliments to your editorial team too.

Inspiring article L K Pathak

Chief Manager, Corporate communications, Elitecore Technologies

Write to us We’d love to hear from you about our articles. You can also send in your suggestions. Write to: brian.pereira@ubm.com srikanth.rp@ubm.com

Congratulations to you and your team for releasing the special issue on India’s IT Leaders. The issue provides fantastic reading about some of India’s well known IT personalities. The article by Hemal Patel is very inspiring and a matter of pride for all our team members.

Excellent coverage I would like to thank you for the excellent coverage of your discussions with me, including bringing me onto your editorial page. Congratulations on an excellent issue ‘the Collector’s issue’ and for the efforts you took to get a faithful presentation of our dialogue.

Ashok Soota

CMD, Happiest Minds Technologies

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News H a r d wa r e

S o f t wa r e

Dell bets big on SMBs in India

Persistent Systems all set to acquire Agilent

Dell is focusing on the small and medium business (SMB) market in India with open, capable and affordable solutions. With over 35 million SMBs, the biggest growth in the Indian market comes from the consumer and SMB segment, and Dell is serious about tapping this unique opportunity. “While our competitors use distributors to touch the SMBs, we touch them directly. Also, we do not lock our customers in a particular technology. We provide them with open solutions and hence offer choice to our customers. We make our solutions affordable with the option of paying as they go,” says Amit Midha, President - Consumer and SMB, APJ, Dell. Dell does not share the number of SMB customers they have, but in terms of the verticals they are present in — most of its SMB customers are in the IT and ITeS space. “In addition, we are also shifting our focus on other emerging

sectors like retail, manufacturing, media and animation from which we are seeing incredible growth and traction,” says Midha. According to Dell, the company’s ‘Take your own Path’ (TYOP) campaign, which used actual users to show how emerging businesses may use technology to scale their businesses, has been very successful driving up Dell’s market share in India in the target SMB segment. In Q1 FY12, Dell’s revenue from Asia Pacific-Japan (APJ) region increased 15 percent in the quarter from last year, hitting USD 3 billion, with India growing 28 percent. The revenue in APJ for the SMB segment was up 12 percent with India increasing 22 percent. Globally, Dell structures its business into four segments namely large enterprises, public sector, SMBs and consumer. —Ayushman Baruah

Persistent Systems has signed a definitive agreement to acquire Agilent Technologies’ software marketing and development business based in Grenoble, France. The acquisition will further bolster Persistent’s growing life sciences domain expertise, which includes more than 40 life sciences domain experts and more than 500 software professionals working on services supporting laboratory instrumentation, bioinformatics and chemical informatics projects for leading companies in the Life Sciences and Healthcare markets. Upon the completion of this transaction Persistent will establish a Life Sciences Center of Excellence (CoE) in Grenoble, France for the purpose of expanding into the European market. —InformationWeek News Network

Telecom

IBM proposes cloud platform for VAS In a competitive telecom environment, Big Blue is eyeing a massive opportunity. IBM is keen on utilizing its industry experience to help telecom operators drive more revenues using VAS. IBM suggests that telcos must create a common infrastructure and management layer (like the service delivery platform) that is integrated with the telco OSS/BSS layer where various third party content, application and software makers can offer their services to create a true “digital marketplace”. Many telcos have already initiated a move in this direction with Digital Media Exchange (DMX). IBM is also advocating telcos to come together and form an industry wide cloud platform for VAS – which can be used as a base infrastructure for

them to launch various, differentiated VAS offerings. IBM believes that there is little business case for each one of them to put fresh investments on a stand-alone basis. For instance, a shared services approach for things like know your customer (KYC) and fraud management can be extremely useful for telecom operators. If telcos already have a private cloud, then IBM would examine as to which part of that cloud can be re-used. Akash Saxena, Vice President Offerings management & development, GTS, IBM said, “Cloud is important for all the industries. Today companies want a complete consolidated, virtualized and automated solution. IBM can help companies develop the entire cloud environment - from concept planning to hardware and software selection

and implementation.” For example, IBM in December 2009 built a cloud computing environment for SK Telecom, the largest telecommunications company in Korea with over 24 million customers. The IBM-built cloud environment allowed SK Telecom and its business partners to develop, test and publish new end-user services. —Vinita Gupta

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News Internet

LinkedIn reaches 10 million members in India LinkedIn, the world’s largest professional network, announced that more than ten million professionals now use the platform in India. Globally, LinkedIn has over 100 million professionals. LinkedIn started its India operations in 2009 and a major part of the first year was dedicated to understanding professionals in India and educating members to leverage LinkedIn for career development. LinkedIn India also established a local leadership team to drive the company’s Marketing Solutions and Corporate Solutions businesses. “We have focused our efforts on creating a great user experience for our members, which helps them understand the power of their professional network in developing

their own professional brand.,” said Hari V Krishnan, country manager of LinkedIn India. “As our members here continue to use LinkedIn for everything, from networking and gaining business insights to business development and jobs, we are committed to being the exchange which connects talent to opportunity in India.” Members of LinkedIn India are using Answers, Groups and Polls to engage, collaborate and even grow business opportunities across the LinkedIn network. A number of brands in India, including Volkswagen, Jet Airways, CNN, ICICI Lombard and HopSim, see value in LinkedIn’s Marketing Solutions. —InformationWeek News Network

S o f t wa r e

Wipro Technologies announces new leadership for BPO

Oracle records first ever USD 10 billion quarter

Wipro Technologies announced the appointment of Manish Dugar as Senior Vice President and Global Head of Wipro BPO and Jatin Dalal as the new Chief Financial Officer for the IT Business. Manish Dugar has been a long term member of the Wipro Technologies leadership team and brings a deep knowledge and understanding of both the strategic and operational facets of the business and will drive Wipro’s worldwide position in the BPO space. Manish has most recently been serving as the IT Business CFO, where he led strategic initiatives including growing the Wipro footprint into new markets, enhancing operations and transaction processing for the group. Jatin Dalal who will be taking over from Manish Dugar as the new CFO for the IT Business where he

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will be responsible for furthering finance support for Growth initiatives, driving efficiency & simplification in processes and leading profitability improvement. Jatin will report to Suresh Senapaty and TK Kurien. Previously, Jatin was the Finance Head for E&U, Manufacturing & Hitech SBUs and Product Engineering Service line globally. TK Kurien, CEO IT Business and Executive Director, Wipro said, “Manish has enormous passion for this business and his previous role as the CFO will equip him to fully understand and respond to the challenges and opportunities that confront our customers on a daily basis. He has a natural enthusiasm for the BPO sector and a wealth of experience that makes him an ideal leader for such a vital part of Wipro Technologies.” —InformationWeek News Network

Oracle posted its first USD 10 billion quarter this week when it reported earnings for its fiscal 2011 fourth quarter, although hardware sales were disappointing. Sparc hardware, acquired with Sun Microsystems in 2010, has been a target for growth in 2011. It contributed USD 1.2 billion of the total in the fourth quarter but declined 6 percent over the same period a year ago. New software license revenue, while not the biggest component of the total, demonstrated the largest growth, up 19 percent to USD 3.7 billion. —Charles Babcock, InformationWeek USA

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News Security

Malware increasingly being signed with stolen certificates Earlier this year, a Trojan infected a machine at software maker Blackbaud. But rather than steal money or source code or customer details, the attack targeted another valuable but often overlooked piece of information: the company’s private keys for signing its software. Blackbaud, which makes software to help nonprofits run their businesses, discovered the theft when a security firm approached the company and revealed it had encountered malware signed with the company’s private keys. “Companies are very aware of their customer information, but there are other pieces of information that need to be protected,” Eggers says. “A virus can be tweaked to search for something different, and a security certificate is not what you think of protecting in the same way as customer information.” Blackbaud is not alone. Cybercriminals are increasingly targeting developers’ systems to steal the private keys used to sign software. Programs signed with a digital certificate are considered safer by the operating system and security software, and the authors of malicious software have caught on. Perhaps the most high-profile piece of malware to use digital certificates is Stuxnet. The Trojan infected industrial control systems in 2009 and 2010 and is widely considered to have been a nation-state attack on Iran’s nuclear processing facility. The first stage of the Stuxnet attack used code signed by certificates belonging to two Taiwanese companies to appear more innocuous to security software. In 2010, a version of the well-known Zeus banking Trojan used a digital signature belonging to software security firm Kaspersky Labs to lessen the chance of the program being

identified as malware. And a third attack in the same year used an Adobe flaw and was signed with a certificate from a credit union. “They are going right after the keys to the kingdom,” says Jeff Hudson, CEO at Venafi, a maker of enterprise key and certificate management software. “They are not trying to siphon off pennies; they are going right for the heart.” Security firm Symantec has documented a piece of malicious software known as Infostealer.Nimkey that is

designed to steal private keys and keystrokes. Thousands of certificates have been stolen and are being used by malware, says Yuval Ben-Itzhak, chief technology officer for security firm AVG. In a quarterly security report released on Tuesday, AVG documented two attacks that used stolen certificates: one belonging to Blackbaud and the other to German gaming company GameForge Productions. —Robert Lemos, DarkReading

Storage

IBM is the leader in external disk storage market IBM has bagged the top slot in the India external disk storage market in revenue terms in first quarter (Q1) of 2011, according to IDC’s Asia/ Pacific Quarterly Disk Storage Systems Tracker, Q1 2011, May 2011. With 28.2 percent revenue market share, IBM was the among the fastest growing top five external disk storage vendor in India in Q1 2011, gaining 6.9 percentage points share on a year-onyear basis.

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Extending the leadership position in Q4 and CY 2010 into Q1 2011, IBM had 8 percentage points lead in comparison with its nearest competitor in revenue terms in the external disk storage market in Q1 2011. The overall External Disk storage market in India grew 16 percent yearon-year in Q1 2011. “We are investing both through acquisitions (like XIV) and R&D (like Storwize V7000, SONAS) to

drive innovation in key storage technologies across software and hardware,” said Sandeep K Dutta, Vice President - Storage, Systems and Technology Group, IBM India/ SA. “These investments have helped us build the portfolio of storage offerings for our clients, further consolidating our leadership position in the market.” —InformationWeek News Network

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s o f t wa r e

CIOs need to be innovative, says Gartner According to the Gartner Executive Programs worldwide CIO Survey (a survey conducted covering more than 2,000 CIOs), the cost of technology is going up and the IT budget of an organization is decreasing. Compared to the global market, the IT budget in Asia is a bit generous. In India, there is an average budget increase of 3.5 percent. That said, there is immense pressure on CIOs to reduce the cost of IT. Hence, most CIOs are squeezing more value out of their existing IT infrastructure by taking advantage of technologies such as virtualization. “By just adopting virtualization, CIOs can reduce the IT cost by 30 to 40 percent. However, to get a higher percentage of savings, the CIO needs to be innovative,” says Dale Kutnick, Senior Vice President and Global Head of Gartner Executive

Programs. Kutnick advises CIOs to take advantage of technologies such as cloud computing, analytics and mobility to improve efficiencies. Gartner, for instance, is utilizing Amazon’s cloud for hosting its videos as it is extremely cost-effective. While there is an overload of information, the challenge is in harnessing it to make better decisions. CIOs hence must go beyond BI and use the information to deliver real business value. With the increase in business partners and external customers, CIOs have to look at architectures that enable and support mobility and virtualization of multiple devices. Gartner believes that as the mobile workforce expands, enterprise mobility solutions will be in huge demand. —Vinita Gupta

In 5 years, nearly 3.5 billion people will be online approaching half the human population

News Analysis

Ramco brings ‘affordable’ analytics to SMBs Announces Gateway products and new distribution partners By Brian Pereira

mall and Medium Businesses are feeling the need for full-fledged ERP software. But it must be simple to operate, easy to deploy, and agile enough to change with business needs. And of course, it must be affordable. Tight cash flows and thin margins make it almost impossible for most SMBs to make down payments for software licenses and services. And that’s why cloud-based products with OPEX models are more suited to these businesses. Ramco Systems has been selling a SaaS-based ERP solution to businesses in North American, Canada and other English-speaking nations for years. It was also vending an analytics solution called DecisionWorks. Ramco has now fused the two products, offering ‘preengineered’ analytics with ERP on the cloud to SMBs. Specifically it launched Ramco OnDemand Analytics and Gateway products on the cloud. With this announcement Ramco purports to make analytics and ERP affordable, and accessible to businesses of all sizes. It is also offering businesses flexibility in adopting ERP with a “build-as-youneed” strategy through its new Gateway products. The company currently has over 3,000 users in 40 plus countries for its hugely popular Ramco OnDemand ERP (dubbed RODE), and expects to touch 7,000 users in the next 12 months. Speaking to InformationWeek in Chennai, P.R. Venketrama Raja, Vice Chairman, Managing Director & CEO, Ramco Systems said, “We are one of the few ERP companies in the world who have completely re-architected the

informationweek july 2011

ERP product to make it unique. It has high automation and its architecture is such that it requires little programming to adapt to changing business requirements --- yet it is simple, flexible, standard and powerful.” The dynamic nature of business requires enterprise applications such as ERP to adapt fast enough to changing business needs. And companies such as Ramco Systems are modifying the product architecture so that the application transformation occurs at a faster pace, with minimum effort and cost. Traditionally, teams of software engineers in services companies were put to the task of modifying the product as they all tried to keep pace with changes in the business world. Incidentally, Ramco has applied for 16 worldwide patents for this unique architecture, three of which are granted, with another three or four expected this year. The unique architecture (a platform called Ramco VirtualWorks) lets Ramco adapt its ERP products for any vertical. Its solution is now used in more than 70 verticals ranging from textiles to auto components and leather; service companies, dealership, trading, mining,

property management, logistics. Traditionally, Ramco has been a strong player in the Aviation industry. “Because our ERP is so flexible we can adapt it even for niche verticals,” said Kamesh Ramamoorthy, COO, Ramco Systems. “This quick enablement is possible because of our platform called VirtualWorks -- a platform for creating verticalized solutions. Because of the high level of automation and the flexibility that it offers, the entire development cycle is drastically reduced”.

ANALYTICS

Ramco Systems is also addressing the huge demand for analytics. Transactional data captured in Excel sheets or data warehouses is quite useless if it does not offer quick insights and actionable information. This would help businesses react quicker and respond to situations in a matter of a few hours. For instance, a chain of medical stores can monitor the stock levels to take advantage of bulk purchase. With ‘pre-built analytics’ the system can generate alerts when the stock levels fall below threshold levels. “When companies deploy ERP they

“We are one of the few ERP companies in the world who have completely rearchitected the ERP product to make it unique”

P R Venketrama Raja

Vice Chairman, MD & CEO, Ramco Systems

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also spend a lot of effort and money for putting in analytics, and supporting it. We have now fused analytics in our ERP solution so all businesses (regardless of size) have analytics at an affordable cost,” said Raja. Pricing details for Ramco OnDemand Analytics were not disclosed but a spokesperson said it would be an “incremental cost” for existing customers. Explaining the ‘pre-built analytics’ feature Rajasekar D, Executive Vice President, Cloud Computing solutions & BI, Ramco Systems, said the business KPIs are built into the analytics. “For instance, if every invoice of a supplier needs to be paid within 90 days, the KPI will throw up alerts as you near deadlines. The pre-built CRM Analytics can monitor the KPIs of salespersons. We call this lead analysis and opportunity analysis,” said Rajasekar. Ramco has made it simple for its existing base of ERP customers to enable the pre-built analytics. It has done so by cleverly infusing preengineered analytics in its cloud ERP product. So existing ERP customers have a way to quickly “switch on” the analytics functionality. Others will need to go through the ‘plug n’ play’ mode. “They need to only configure the analytics. Since it is on the same cloud

“The pre-built CRM Analytics can monitor the KPIs of salespersons”

Durai Rajasekar

Executive Vice President, Cloud Computing Solutions and BI, Ramco Systems

as the ERP and the customer’s data. So it becomes easy to implement, and it is well integrated,” said Rajasekar. The other USP is that the analytics is compatible with other ERP products via a set of connectors.

IPAD ENABLED

Top management executives in SMBs spend a lot of time travelling to meet customers and suppliers. So Ramco is offering a way for them to access operational and production data on their iPads. “This (analytics) is available to customers on a dashboard and also on an iPad. This would enable an executive on the move to take a look at this data and make a decision without switching on his PC and logging to the net. Decisions can be taken in the presence of customers, suppliers and other business peers, using updated MIS on

“Because of the flexibility that our ERP offers, the entire development cycle is drastically reduced”

Kamesh Ramamoorthy

Chief Operating Officer, Ramco Systems

iPads,” informed Rajasekar.

GATEWAY PRODUCT

The company also announced Ramco OnDemand Gateway products to enable customers to quickly adopt business applications, and then graduate to a full-fledged ERP, without replacing the existing system. Gateway products offer a fusion of transaction and decision support systems (ERP with self-contained analytics), thereby supporting both operations and decision-making. One of the key features of the Gateway product is its Zero touch/selfservice implementation. The product is highly templatized and the entire enrolment and on-boarding processes are automated. Users can easily learn the functionalities and processes using the self-training kit. The gateway products will predominantly be sold through strategic partners like Aircel and NIIT. CRM will be the first Gateway product to be launched in July 2011. The others in the pipeline are Distribution Management, Fixed Assets, HR & Payroll and Service Management System. The writer was hosted by Ramco Systems in Chennai. u Brian Pereira brian.pereira@ubm.com

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News Analysis

Cisco ramps up UCS strategy in India With a client list of more than 60 customers for its UCS initiative, the networking giant is fast making inroads into a new territory By Srikanth RP

bout two years back, when Cisco announced its Unified Computing System (UCS) initiative, many analysts and vendors were skeptical and surprised at the networking giant’s move. This was a move that had the possibility of impacting the whole IT ecosystem as Cisco was making products which were directly competing with some of the established server vendors, who were its alliance partners. Another view was Cisco getting into a business (servers) where margins were getting thinner and thinner. But Cisco clearly was not aiming at the server market, but rather at the core of the data center market which constituted the bulk of the IT spends. Its UCS initiative was designed to simplify management and lower costs due to the unification of networking, computing and storage resources on one platform. After a period of two years, the networking giant is beginning to make its impact in this new space. UCS is already the fastest growing segment for Cisco globally. With UCS, Cisco has already signed up more than 2,500 customers globally. In India too, Cisco’s UCS ramp up has been fast. Cisco has already signed up more than 60 customers in India. Clients include names such as HCL, Wipro, Netmagic and KPIT Cummins. Cisco is also hoping to capitalize on the trend of virtualization, using the UCS platform. “In India, awareness of virtualization is at an all time high, and UCS as a platform is fine tuned to deploy virtualization,” explains Sumit Mukhija, National Sales Manager-

informationweek july 2011

Datacentre, Cisco India and SAARC. Mukhija opines that awareness levels with respect to virtualization are now close to 70-80 percent levels, as opposed to 20-30 percent levels a couple of years back. Cisco is trying to position UCS as a platform on which its alliance partners can create solutions. This is a big shift as it involves its partners in jointly creating the architecture and the solutions around the platform.

Key highlights about Cisco’s UCS strategy ä

Cisco’s UCS is the fastest growing segment for Cisco globally

The networking giant has more than 2500 global customers on UCS

Cisco has signed up more than 60 customers in India

Clients include names such as HCL, Wipro, Netmagic and KPIT Cummins.

“The cloud ecosystem cannot be created by just vendor,” opines Mukhija, underscoring the critical importance of its partners. Cisco has rightly understood that for the success of UCS, it is necessary for it to demonstrate success using reference cases. By encouraging partners to jointly develop solutions using the UCS platform, it is creating the right ecosystem for UCS to bloom. For example, Netmagic Solutions, one of India’s leading managed IT hosting services provider, recently announced the release of its next generation cloud

computing platform developed jointly with VMware and Cisco Systems. This cloud computing platform leverages VMware vSphere and Cisco’s Unified Computing System (UCS) to provide a cloud solution for enterprises and service providers. Netmagic’s engineering team jointly collaborated with VMware and Cisco to develop an Infrastructure as a Service (IaaS) platform. In India, Cisco has found good acceptance for its UCS solution across key verticals such as IT. Mukhija says that companies in the IT sector have typically been one of the earliest adopters, as they are using UCS primarily for building private clouds and for enabling virtual desktops. Though the IT sector contributes the most in terms of number of clients, sectors like defense are showing immense potential in terms of value. For example, Cisco recently signed its biggest deal in UCS from the defense sector. From the success of Cisco, it is clear that the concept of unification and management of storage, networking and compute resources is slowly finding adoption in India. For example, one of Cisco’s biggest rivals, HP is also finding success for its initiative, which it calls ‘Converged Infrastructure’. HP has signed up close to 15 clients, and counts names like Britannia and Essar. With a foot in every enterprise through the enterprise networking gear, Cisco has a huge advantage. With UCS, Cisco has the opportunity to go beyond the network and own the core of the future data center, where the bulk of the enterprise IT spends will happen. u Srikanth RP srikanth.rp@ubm.com

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Tribute

IBM’s 100 years of tech innovation The computer industry would never be the same without the calculating machines, mainframes, and personal computers. Here are some revolutionary products from IBM’s hall of fame 1911

TABULATOR This equipment was invented by Herman Hollerith and built for the U.S. Census Bureau. Hollerith’s patents were acquired by the ComputingTabulating-Recording Co. (which later became IBM), and this work became the basis of the IBM Punched Card System.

1956 MAGNETIC HARD DISK IBM introduces the world’s first magnetic hard disk for data storage. RAMAC (or Random Access Method of Accounting and Control) offers unprecedented performance by permitting random access to any of the million characters distributed over both sides of 50 two-foot-diameter disks.

1966

DRAM IBM invents one-transistor Dynamic Random Access Memory (DRAM) cells which permit major increases in memory capacity. DRAM chips become the mainstay of modern computer memory systems – the “crude oil” of the information age is born.

1971 FLOPPY DISK IBM introduces the floppy disk. Convenient and highly portable, the floppy becomes a personal computer industry standard for storing data.

1976

HIGH SPEED PRINTING IBM introduces the first printer to combine laser technology and electrophotography. The technology speeds the printing of high-volume documents. It is still the workhorse for billing and accounts receivable departments worldwide.

1911

2011

BIRTH OF THE PC The IBM Personal Computer goes mass market and helps revolutionize the way the world does business. A year later, Time Magazine gives its “Person of the Year” award to the Personal Computer.

1981

Scanning Tunneling Microscope The scanning tunneling microscope (STM) revolutionized our ability to manipulate solid surfaces the size of atoms. The STM, in turn, has led to other discoveries on a “nano” scale, playing an essential role in the blossoming of nanotechnology.

1986

DEEP BLUE The 32-node IBM RS/6000 SP supercomputer, Deep Blue, defeats World Chess Champion Garry Kasparov in the first known instance of a computer vanquishing a world champion chess player in tournament-style competition.

1997

SILICON GERMANIUM CHIPS By replacing more expensive and exotic materials like gallium arsenide with silicon germanium (known as SiGe), IBM creates faster chips at lower costs. Introducing germanium allows for significant improvements in operating frequency, current, noise and power capabilities.

1998

WATSON In an historic event, in February 2011 IBM’s Watson computer competed on Jeopardy! against the TV quiz show’s two biggest all-time champions. Watson is a computer running software called Deep QA, developed by IBM Research.

2011

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Cover Story

Solving business challenges with technology

Cost effective IT solutions are not only helping SMBs effectively address business challenges like low working capital, employee attrition and increasing customer demands, but are also providing new growth opportunities By Vinita Gupta

informationweek july 2011

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ith over 50 million units, India has the largest number of Small and Medium Business (SMB) companies across the world. And retail represents more than one-third of the total SMB segment both in terms of size and revenue. Also, more than onethird of India’s GDP is attributed to the SMB sector (as per Zinnov’s June 2011 report). SMB is the fast growing and a highly competitive sector in India. Even during recession, it continued to grow at a fast pace. Although these businesses clearly want to adopt new, innovative business strategies to improve their performance they still face substantial challenges. The foremost business challenge faced by the SMB sector is that of working capital followed by employee attrition, and customer demands.

Insufficient capital

Most of the smaller businesses in India are operating in a subsistence mode and are caught in a vicious cycle in which customers delay the incoming payments, which in turn delays the outgoing payments to be made to suppliers. Sudhir K Sethi – Founder, Chairman and Managing Director, IDG Ventures India asserts that the ﬁnancing pattern of SMBs is radically different from enterprises. On an average, they get only 15 percent from internal sources — indicating that they are far less proﬁtable, 25 percent from banks and

“Internet has matured from a medium used primarily for browsing to a robust backbone which can run mission critical business transactions”

Prashant Ranade

CEO and President, Syntel FIs, and 10 percent from capital markets. As much as 50 percent of their total annual funding generally comes from alternative sources like friends and family equity. Access to institutional financing is very limited owing to their small scale and limited assets that can be used to procure capital.

Talent retention

Another major hurdle which the SMBs face is employing and retaining the right skill sets. An enterprise has access to qualified and experienced technical staff to evaluate suggested technologies on its merits and take care of the network once the installation is completed. SMBs on the other hand, typically do not have dedicated staff to perform this role. Attrition is also a major challenge faced by SMBs — people learn new skills and change jobs for better pay and growth opportunities. Most SMBs find it difficult to retain good talent for more than a year. “Some of the known challenges faced by employees working in Indian SMBs include inadequate infrastructure

Small and medium sized enterprises using Web technologies extensively are growing more quickly and exporting more widely

Growth and exports of SMEs analyzed by cluster of maturity of Internet Analysis includes 12 countries and more than 4,800 SMEs

Web-intensity Low (Web index <20%) Medium (Web index 20-40%) High (Web index >40%)

Revenues due to exports % of total

Annual growth over the last 3 years % 6.2

%of respondents

2.5

7.4

2.7 13.0

True across sectors (in particular, commerce, services and industry)

5.3

Source: Mckinsey SME survey

and working environment (due to sub-optimal scale of operations and fund shortages), lot of manual work (due to low adoption of technology to deliver products/services) and travel to customer locations at short notices (due to unpredictability of demand),” says Chetan Indap, Founder and CEO at StaffonContract.com. There are other challenges which are specific to business processes and verticals — inventory management in retail and manufacturing, project management in professional services and content management in media and entertainment. Also, SMBs often find it difficult to retain business efficiency, employee productivity, and responsiveness to customer needs. But technology can help SMBs effectively address these challenges and at the same time accelerate business performance.

IT to grow business

Technology helps in the growth and expansion of these companies. For instance in 1990, Persistent Systems, a mid-sized company started its outsourcing business in India. At that time it was difficult for the company to run the business as the outsourcing opportunity was not prevalent, connectivity was poor and expensive, and it was very hard to find a skilled workforce. However towards the end of 2000, the market started evolving and new technologies were developed; this in turn helped companies like Persistent (that used cost-effective networking technology) benefit and grow the business. Over a period of time, as the IT infrastructure in India improved and the Internet connectivity speeds were more stable, cheaper and offered higher bandwidth, SMBs started

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Cover Story exploring the power of the Internet actively. They saw the Internet as a means to reach out to markets where they could not be present physically. So the Internet became a channel for the SMBs to grow and tap both the national and international market. This is corroborated by a recent (May 2011) McKinsey SME survey. According to the survey, the SMBs using Web technologies extensively, are exporting more widely and growing more than twice as fast as those with a minimal presence. The survey was carried out across more than 4,800 SMBs in 12 countries. The survey showed that Internet enabled a 10 percent increase in profitability across countries. The impact on profits came half from increased revenues, and half from lower costs of goods sold and lower administrative costs. A case in point is mid-sized IT firm, Syntel, which used the Internet to boost client relationships. “We had initiated a number of client

“Last year the SMBs spend around USD 7 billion on IT. The sector is betting on ITaaS and mobile devices”

Kishan Bhat

Engagement Manager, Zinnov Management t engagements through secure VPN connections over the Internet to give a quick start while implementing longer term network technology solutions like MPLS or dedicated circuits,” says Prashant Ranade, CEO and President, Syntel. Ranade says that the Internet has matured from a medium used primarily for browsing to a robust backbone which can run mission-critical business transactions. That does not imply that the SMBs are content with basic IT systems. They are also exploring other technologies like ERP, CRM, BI and unified communications that can help

in furthering business growth. This can be seen from the increased percentage of IT spend by SMBs on a year-on-year basis. “Last year the SMBs spent around USD 7 billion on IT and this contributes more than 30 percent of the total domestic IT spending. Some of the technologies and innovations that the sector is betting on are IT as a service such as SaaS, IaaS and mobile devices such as tablets and smartphones,” says Kishan Bhat, Engagement Manager, Zinnov Management Consulting, emphasizing the increased trend among Indian SMBs to spend

SMBs eyeing mobile devices SMB employees no longer need the full functionality of the bulky desktops as they can meet their needs using lighter devices like netbooks, smartphones and tablets. These lighter mobile devices have shown significant increase in penetration among SMBs. With 54 percent of Indian medium businesses currently using these devices and a clutch of innovations on the horizon, smartphone penetration and spending are poised for growth. In 2011, Indian SMBs are set to grow that spending to USD 173 million, according to New York-based Access Markets International (AMI) Partners. Smartphone vendors can improve demand for smart phones by continuing to reduce prices as well as by offering more and varied plan options. For instance Nokia Tej, a service that leverages the mobile

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device to help SMBs streamline complex and time-consuming business processes. Last year CavinKare, a Chennai-based FMCG company had deployed this service. Nokia Tej has open APIs which have been integrated with in-house developed system of Cavinkare. With the implementation of this service, the distribution audit data flows on a real-time basis to the central system. The 150-member sales team, including the area and regional sales managers, now have the option of accessing this information and making decisions on a real-time basis. With Nokia Tej, the auditor enters the data as he is travelling from one retailer to the other, thereby avoiding the end of day rush. Information is captured on all CavinKare brands vis-a-vis competitor brands. S. Visvanathan, General Manager,

Marketing, CavinKare asserts, “This service on the mobile device has significantly increased the productivity of the audit team. The 2-2.5 hours spent keying in the data is now being redeployed towards more productive activities.”

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more on IT.

“The CRM as a service helped us reduce the cost and time taken to generate critical business reports from about seven working days to real time”

Adopting cloud solutions

Cost is one of the determining factors for the SMBs as they do not have huge capital to invest. Hence they are looking at IT as a service options wherein they do not have to make any initial investment and have to pay as per the usage. Also, SMBs know the difficulties of maintaining a department which does not form a part of their core competency. Therefore, they are keen on moving towards the cloud model. Sangeeta Gupta, VP, Nasscom agrees. She says, “The SMBs are looking at technologies that are cost-effective, easy to use, provide customers satisfaction and competitive edge.” Cloud computing provides a vastly more efficient, flexible, and costeffective way for IT to meet escalating business needs. A case in point is The Pride Hotel that has about 12 hotels in India. Being in the hospitality sector, the company wanted to create a reliable, integrated customer relationship platform. Thus the hotel chain deployed Oracle CRM On Demand (a SaaS solution) that provided an integrated end-to-end customer account information, such as contact details and booking requirements. “We are focused on developing relationships with customers. The CRM solution helped us reduce the time taken to generate critical business reports — such as employee product revenue and performance reports — from five to seven working days to real time. As it is a SaaS model, it was quick and easy to implement and required no hardware investments,” mentions Tridib Ghosh, associate vice president of sales and marketing at The Pride Hotel. With no upfront investments to

Tridib Ghosh, Associate VP,

Sales & Marketing, The Pride Hotel t

make, the SaaS model is perfect for SMBs. “The cloud computing model is the best solution for SMBs. Though it was SaaS which was initially popular with SMBs especially mid- sized companies,” opines Naveen Mishra – principal research analyst at Gartner. According to Vinay Hinge, CEO, Kandor Solutions, the SMB sector looks at Capex model rather than Opex as they always want to own the IT system but at the same time look at outsourcing too as they lack skilled people. For instance, SMBs will buy the Tally software but outsource the accounting functions. Shailesh Kumar Davey, Vice President at Zoho believes that SMBs can get more efficient by moving to the cloud. He says, “This is something that will happen only by cloud evangelization as a whole. These markets may not be efficiently reachable by deploying on field sales/ support. The cloud vendors or the trade forums can co-jointly take it forward to evangelize the benefits.”

SMBs prefer tested solutions

SMBs are also skeptical about any new technologies that break into the market. An enterprise-sized customer is often willing to take a chance on a new technology, as the perception of being at the forefront of cutting-edge technology can work in their favor.

“Emerging companies like us need to be more agile and nimble to understand the market trends. Big companies can define the market but we can write through it”

Anand Deshpande

Chairman & MD, Persistent Systems t

SMBs prefer the ‘tried-and-tested’ solutions and are usually wary of adopting new technologies without a clear understanding of the ROI from the said investment in technology. This is because SMBs cannot afford the risk of investing time and money in deploying a new technology, and hence rarely make investments in untested technologies. “To survive is not a challenge but to keep on growing is. Emerging companies like us need to be more agile and nimble to understand the market trends. Big companies can define the market but smaller and mid-sized companies like us can write through it,” opines Anand Deshpande, Chairman and Managing Director of Persistent Systems. Deshpande explains this by giving an example of cloud computing. He says “SMBs cannot build cloud computing technologies but can leverage the platform to grow their company.” The requirements of SMBs are not as expansive or detailed as that of an enterprise. This is because the business processes of SMBs are not as mature as that of an enterprise. In fact, most SMBs tend to have unique business processes which call for heavy customization of IT solutions. To grow in scale, SMBs require technology to streamline their businesses and ensure transparency in their operations. With the advent of cost-effective and newer delivery models such as IT as a service, the traditional business challenges can be effectively handled. Technology has powered the SMBs to be flexible to the changing and highly competitive business environment. u Vinita Gupta vinita.gupta@ubm.com

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Cover Story

IT in SMB retail R

etail is the largest industry in the SMB sector followed by manufacturing. And it is one of the most diversified sectors, especially in India; it includes various dimensions of the retail format such as street vendors, the corner stores, and most recently the large format stores. Indian retail industry is on the upsurge and will witness increased IT/ software adoption to remain competitive in the market place. According to Vinay Hinge, CEO, Kandor Solutions, the IT market for SMB retail is about ` 800 crores out of which about ` 600 crores is for hardware, services and system software and ` 200 crores for application softwares. Inventory management is one of the major challenges the retail industry is facing today. It is very difficult from them to decide what and in how much quantity they should buy. Optimal assortment is also a continuous challenge, for example, availability of different variety, colors and designs of shirts. Thus to tackle these challenges, the SMB retailers are implementing technology. A case in point is C’Lai, the Clothier garment retailer in Pune. The retail company was facing challenges like monitoring inventory, performance of salesmen and their incentives, customer orders, customer measurements, issuing jobs to jobworkers and receiving jobs from them, customer trials, splitting of jobs (for example if a customer orders a two

Some of the challenges faced by the retail sector are Managing stocks

Managing promotions

Supplier and customer relationship management

Store execution

Multi-channel retailing

informationweek july 2011

piece suit, it invariably happens that the jobworker for a coat is different from the trouser, but the order has been received for a suit). Thus to address these challenges C’Lai the Clothier started using Retailware Softech’s (a SMB IT company) solutions that help them tackle the inventory and optimal assortment challenge by accepting orders on the system with measurements, assigning images for specific styles, using templates for frequently used styles (for eg. A regular full sleeve shirt has one pocket on the left, two pleats at the back, x number of buttons, one patti for buttons etc). According to Hinge, the retail expert, the retail companies need to have a proper execution and tracking system in place to find out the results of the promotional activities that are carried out by them. For example, a retail company had a discount offer on sugar say for ` 28 per kg whereas their competitor is selling as per the market rate that is ` 35 per kg. Such promotional activities are carried out to attract

more customers, which in turn might buy other products and grow their business. But it is very crucial that the retail company should have a good technology system in place, eg tracking system to find out the success rate of such promotional activities. Accordingly, SSIPL Retail had 250 stores across India and it was very difficult to keep a manual track of reports and issues (like inventory, maintenance of AC & PCs etc) for the regional manager visiting the stores which was time consuming process. Then the company started using a web-based application for capturing the store visit report. As soon as the regional manager mails the reports, it goes to the concerned department. The department has to make sure that the issues are resolved in two days; if not then it goes to the manager. “It had helped us accelerate the issue resolving time. Earlier it is used to take five to six days to solve problems but now it is resolved within two days. This had lead to operational efficiency in the process and saving of huge time on the follow ups,” mentions Harcharan Singh, Vice President - Information Technology at SSIPL Retail. Other than having stores for customers, the retail industry is finding a strong need to be online in form of an online store to grow their sales. Thus Globus had deployed a cloud PAAS model for online shopping. “Building a cloud computing model has helped us be there quickly, efficiently and be user friendly. We wanted to give value to business by deploying efficient and a strategic model,” asserts Meheriar Patel, Chief Technology Officer and Head Information Technology at Globus. Thus, building smart user friendly technology solutions both internally and externally will help in the growth of Indian retail industry.

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Cover Story

ndia is the second largest country in the world in terms of the number of small and medium businesses (SMBs) which total to about 50 million. These SMBs have unique requirements and challenges, and their CIOs are leveraging IT to circumvent challenges, increase efficiency and stay competitive. While IT budgets of most SMBs are marginal ranging from about one to five percent of revenues, yet all SMBs InformationWeek spoke with consider IT an indispensable element of

their budget.

Taking baby steps with enterprise applications

While the initial wave of IT adoption was predictably led by the large enterprises, today the trend has trickled down to the SMBs as well. This is primarily because large enterprises now expect their suppliers (most of which are SMBs) to adhere to the same best practices that were adopted by them. This has encouraged SMBs to implement enterprise applications such as ERP and

CRM, which have traditionally been the mainstay of large enterprises. In most SMBs, the first serious IT investment is in enterprise applications, as they are critical in enabling them to scale up faster. The IT spend in SMBs is also increasing gradually, as they realize the transformational role of IT in increasing business revenues. For the retail industry, ERP is a mandatory tool as it helps retailers manage their businesses more effectively by providing integrated and consistent flow of information. A retail ERP system allows automatic recording of the transactions in real-time environments. For instance, Mumbai-based TVC Sky Shop, which is in the sky-shopping industry (also known as electronic retailing and direct response television or DRTV in India), has implemented Microsoft Dynamics AX for timely delivery of their products. TVC Sky Shop which employs 275 employees, manufactures products as per

Harnessing the power of technology Hereâ&#x20AC;&#x2122;s how SMBs are reaping the benefits of technologies like ERP, open source, virtualization and cloud computing to derive greater business value By Ayushman Baruah

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customer specifications, brands them and then advertises them to their customers through television, print and online media. One of the main challenges for TVC Sky Shop (and for this industry in general) is to deliver ordered products on time. “Our products are mainly ordered by housewives or children who often do not have access to credit cards. As a result of this, 95 percent of our sales is through cash on delivery,” says Nitin Patki, VP-operations, TVC Sky Shop. “If products are not delivered on time, customers often cancel the orders which results in loss.” With this ERP mechanism, TVC Sky shop has gained multiple benefits such as tracking the geographical proximity of their delivery partners and accordingly redirecting the orders in real time. “We have reduced delivery time to six hours (from 24 hours) in metros and 12-24 hours (down from 2-3 days) in non-metro cities,” explains Patki. “Reduced delivery time has decreased order cancellation, enhanced customer satisfaction and ultimately resulted in profitable business.” With currently over 8,000 to 10,000 orders per day, TVC is growing fast and IT is an important element of their growth plans. “We are planning to establish our own manufacturing unit facility and connect that to our head office. In due course of time, we will migrate to the cloud,” says Patki. For a manufacturing company like Murli Cement, the cement manufacturing unit of Murli Industries, availability of an industry-standard sales and distribution module was necessary. Sudhir Thosar, Head of IT, explains, “Our cement business was expanding, particularly the operations. We were particularly interested in switching to industry-standard software that would offer us the best possible fit with our business.” Murli Cement deployed a range of SAP ERP applications centrally, including financial accounting, materials management, sales and distribution, plant maintenance and production planning to provide a single, integrated business management platform. As a result of this, all business units

categorized their costs and revenues in the same standardized manner, enabling the company to extract, analyze and compare data rapidly and produce meaningful results.

Cutting costs with unified communication tools

Some mid-sized establishments have also used technology for their physical security requirements. Delhi Duty Free Services (DDFS), which operates five duty free shops at Delhi International Airport’s Terminal 3, has deployed Cisco’s surveillance solutions to monitor its physical security. “As we cater to luxury items and all our products are on full display, it is easy for anyone to pick them up,” says Abhay Pandey, IT Head, DDFS. With Cisco’s unified communications and unified wireless solutions, DDFS is able to coordinate between the five stores and the command control center. DDFS has installed 250 video surveillance IP cameras, including highdefinition and standard-definition box and dome cameras. “Today, when an alert is generated from a door opening or at the point of sale, it automatically tags the video for rapid retrieval. In addition to providing immediate visibility, the solution saves time through easy tracking and video retrieval. With built-in policy management and business rules, DDFS can prioritize incidents based on rules, frequency, location, and other parameters. For example, passengers can bring only limited quantities of some products into the country without incurring customs duty. If a passenger tries to purchase more than the duty-free limit, the store team is alerted,” says Pandey. According to DDFS, the highdefinition cameras enable stores to

track and validate sales records against video footage. Business intelligence data also support ongoing reporting and trend analysis, enabling DDFS to modify store topologies, present high-value goods more effectively, and formulate marketing strategies to boost sales.

Virtualization takes roots

IT companies in general are quicker than others to adopt technology as they are themselves in the business of providing technology solutions and services to others. For instance, Pune-headquartered Vertex Software with 250 employees in India, used virtualization to consolidate its hardware, thereby lowering its facilities costs and reducing the management burden on its IT team. With application testing and staging conducted on 100 desktop-class machines deployed across three floors, Vertex found its management load and power and cooling costs becoming unsustainable. Today, Vertex Software has achieved a 20:1 server consolidation ratio and it is an example of how the power of virtualization can also be used effectively by SMB companies. In case of Vertex, the time to deploy new machines was reduced from two days to less than four hours and the time required to manage the IT environment was reduced by 20 percent. The power utilization was cut to one-fifth of the previous requirement and the real estate requirements of the company was slashed from three data centers to one rack in one data center. In the BFSI segment, AP Mahesh Cooperative Urban Bank (Mahesh Bank) has deployed desktop virtualization solution to find more effective and low-cost ways of providing staff with desktop services. For a mid-sized

“With this ERP mechanism, we have reduced delivery time to 6 hours (from 24 hours) in metros and 12-24 hours (down from 2-3 days) in non-metro cities”

Nitin Patki

VP-operations, TVC Sky Shop

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Cover Story bank like Mahesh Bank, there was considerable cost involved for the IT staff to visit branches and offices to fix problems, install patches and upgrade applications. In 2010, the bank deployed VMware’s desktop virtualization solution VMware View to run 30 user desktop environments in new locations as a pilot project. These environments were run in a virtualized infrastructure hosted in its production data center. “This project provides us with three key benefits,” said Milind Rajhans, Manager, IT, Mahesh Bank. “We can ensure our staff access the latest version of applications, reduce our power bill and eliminate maintenance on the client side.” The virtualized environment has enabled the bank’s IT staff to create and destroy test environments very quickly and efficiently without having to allocate additional hardware resources. The bank was able to reduce desktop application patching/upgrading time by 70 percent, cut desktop maintenance costs by almost 75 percent and reduce overall desktop total cost of ownership by 50 percent. For Pune-based Chitale Dairy, technology is an indispensable element. “Technology plays a crucial role in our industry right from procurement of raw materials to the final distribution to our customers. This is especially because this is a 24x7/365 days industry. We have a need-based IT budgeting which is typically anywhere between one to five percent of our revenues,” says Vishvas Chitale, CEO and CTO of Chitale Diary. The dairy has used virtualization to streamline and enhance its technology environment. Chitale Dairy consolidated its environment to three physical servers operating in one data center. These host 20 virtual servers running multiple production applications and operating

systems. As a result, the dairy reduced server hardware acquisition costs by 50 percent, software acquisition costs by 75 percent and server deployment time from three weeks to three hours. After the consolidation of servers, the dairy felt the need for storage virtualization, for which it deployed Dell EqualLogic. With this, Dell was able to consolidate eight blades to just two. Looking forward, Chitale’s focus will be to increase its franchisee count. It also plans to get online, catering to e-commerce and aims to increase its cattle numbers to 15,000 in the next few years.

Hopping on to the cloud

When one discusses technology, can cloud lag behind? A recent Springboard Research survey of 100 SMB CIOs states that awareness and acceptance of cloud computing is on the rise in the sector. For instance, Haryana-based Great Food and Beverages (GFB), which considers IT an important aspect of their budget, has used the power of the cloud to suit their business needs. “Our IT budget is three percent of our turnover and is prepared based on factors like capital expenditure, revenue expenditure and manpower bill,” says Vijay Thakur, Head – IT, GFB. “Today, mid-sized companies are growing at a fast pace in a highly competitive business environment. Realizing the need to sustain growth, there is an urge for mid-sized companies like us to be proactive rather than reactive. In light of the above, a strong and robust IT foundation is required to streamline operations and business processes.” With SaaS-based Ramco OnDemand ERP (RODE), GFB has been able to get rid of all the physical infrastructure costs of installing and maintaining the systems. “The system also allows

“The system also allows users to work on different software functionalities without having to bother about installing additional hardware or software”

Vijay Thakur Head – IT, GFB 30

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users to work on different software functionalities without having to bother about installing additional hardware or software. As a result, GFB got benefits such as eradication of unnecessary IT overheads and cost control. The automation of key departments has increased our overall effectiveness. RODE now enables us to make quicker and better decisions. The transparency provided by the heightened visibility of operations across all departments has resulted in greater operational efficiency,” says Thakur. Another case in point is life sciences services organization Indegene Lifesystems which has leveraged cloud to boost the company’s sales. “Technology is a critical factor in the company’s success. Its systems connect employees and tie company processes together. A collaborative business is a successful business,” says Suhas Prabhu, Director-Finance, Indegene Lifesystems. The traditional method of tracking sales in Excel was becoming insufficient when the company expanded into new global markets. It was taking 20–30 minutes to gather data from various sources and validate it before each meeting. A growing travelling sales force was increasingly out of the loop while on the road. Indegene migrated from Indiatimes CRM to enforce a companywide, unified CRM strategy on salesforce. com. “Salesforce.com provided us with endless options of customizing the CRM to fit our processes and data needs,” says Prabhu. Today, leads are easily tracked through multiple stages, analyzed and prioritized in Salesforce.com for the best possible outcome every time. “All administration-related road blocks were overcome. We no longer need to involve finance in generating reports; users can easily run their own reports in minutes. And preparing for reviews and meetings is not the headache it once was, since the up-to-date information is right there in Salesforce,” says Prabhu.

Opening up to open source

Carnation Auto, a complete auto solutions company with 700 employees has used open source to meet their business requirements. The multi-brand

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SMB organization Technology used

Benefits

TVC Sky Shop

ä Reduced delivery time to six hours from 24 hours in metros ä Reduced order cancellations

Microsoft Dynamics AX

Murli Cement

SAP ERP, IBM System ä Industry-standard sales and distribution module x3650 server Able to extract, analyze and compare data rapidly and produce meaningful results

Delhi Duty Free Cisco’s unified communications ä Monitor physical security Services (DDFS) and wireless solutions ä Track and validate sales records against video footage ä Formulate marketing strategies to boost sales Vertex Software VMware server virtualization Mahesh Bank

VMware desktop virtualization

ä 20:1 server consolidation ratio ä Time to deploy new machines was reduced from two days to less than four hours ä Time required to manage the IT environment was reduced by 20 percent ä Real estate requirements were slashed from three data centers to one rack in one data center ä Reduced desktop application patching/ upgrading time by 70 percent ä Cut desktop maintenance costs by almost 75 percent ä Reduced overall desktop total cost of ownership by 50 percent

Chitale Dairy VMware server virtualization, ä Consolidation to three physical servers operating Dell EqualLogic storage in one data center virtualization ä Reduced server hardware acquisition costs by 50 percent ä Software acquisition costs by 75 percent ä Server deployment time from three weeks to three hours Great Food and Ramco On-Demand ERP (RODE) ä Eradication of unnecessary IT overheads and Beverages (GFB) cost control ä Helped make quicker, better decisions and greater operational efficiency Indegene Lifesystems Salesforce CRM Carnation Auto

ä Leads are easily tracked ä Weekly analysis of sales data ä Visibility into sales won and sales lost

SAP Business Suite applications ä Elimination of software licensing costs on Red Hat Enterprise Linux (estimated to be about 30 percent) Advanced Platform ä 360-degree view of the business

auto company deployed SAP Business Suite applications on Red Hat Enterprise Linux Advanced Platform to set up a centralized IT system and solution that functions as a single window to address the various needs of its multiple stake holders. A large portion of Carnation’s cost savings resulted from the elimination of software licensing

fees that are standard with proprietary vendors. The company expects to see upwards of 30 percent cost savings on the IT investment in Red Hat solutions over a five-year period. Carnation’s centralized IT system has reportedly given the company a competitive advantage, operational efficiency, and informed decision-

making at the outlet level, and a 360-degree view of the business. It has helped the company make rapid and informed business decisions, such as ordering spare parts or providing timely information to customers. u Ayushman.baruah

ayushman.baruah@ubm.com

july 2011 i n f o r m at i o n w e e k 31

Cover Story

SMBs provide huge technology opportunities but have unique needs; thus to target this sector the IT vendors are adopting different strategies By Vinita Gupta

Vendorsâ&#x20AC;&#x2122; strategies to target SMBs

arge businesses have traditionally adopted a mix of technologies and their technology refresh cycles are still some time away. On the other hand, the SMBs require IT solutions that can help them drive their business. Naturally, technology vendors are targeting this business segment. But the requirements of the SMB sector are very different from the enterprise. Hence to tap this sector, the vendors are adopting different strategies like developing customized products,, building partnership with channels, providing simple and cost-effective solutions etc. We describe some of these strategies in this article.

informationweek july 2011

#1 Develop simple products

An enterprise will have qualified and experienced technical staff to evaluate suggested technologies on its merits and take care of the technology, once the installation is completed. SMBs typically do not have dedicated staff to perform this role. Thus for SMBs, vendors are developing solutions that are simple to use and manage. For example, Cisco introduced a range of products and services with plug-and-play capability that will enable SMBs manage their resources with the least amount of support for installation and post deployment management. â&#x20AC;&#x153;To identify/ develop SMB specific products and solutions, we had made a USD 3 billion

investment in R&D,â&#x20AC;? says Patrick Mathias, Vice President, Sales - West, Cisco India. Dell also has dedicated SMB specific offerings, not just for products and solutions but for the service and support too. According to Ashish Dhawan, Country Lead for Enterprise Business, Juniper Networks India, SMBs require the same features as enterprises, but require simple and small devices, thus for this sector Juniper has scaled down its devices.

Price matters #2 SMBs in India are more sensitive to the price and affordability of the product. Similarly, SMB customers are concerned about being able to find the right products and solutions that offer

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many different features and functions to suit their requirements. Solutions that enable them to compete with bigger players are what the SMBs need. “SMBs are typically looking at higher ROI and value when they align with a vendor. Hence we as vendors need to understand their buying behavior, risks and pain points to ensure availability of the right solutions for them. Also, SMB customers align with one trusted vendor rather than have multiple vendor relationships for business challenges,” says Ajay Goel, managing director – India & Saarc , Symantec.

Payment schemes #3 Vendors understand the growth needs of SMB customers and are committed to enhance their investments through various schemes and programs. For example, HP-IPG recently announced the program - ‘Buy Back Offer’ for its LaserJet customers. The program allows customers to avail a cash rebate of up to ` 20,000 on return of their old printer after buying a new LaserJet printer or scanner. Cisco also launched Cisco Capital, offering various financing schemes such as monthly installments and zero percent financing.

#4 Increase in service offerings

SaaS solutions provide flexible payment options to SMBs. Vendors understand SMB cost constraints and offer solutions as a service. For example, McAfee has developed a range of end point, email and web protection solutions in the form of Security-as-a-Service (Security SaaS). “Budget constraints and shrinking bottom lines is making SMBs lean more towards implementing SaaS, which supports specific business needs,” asserts R. Sukumar, GM – Sales, Ramco OnDemand ERP. Atul Hemani, managing director and CEO, Omnitech agrees. He says, “SMBs need IT to be flexible, scalable and yet cost effective. More and more SMBs are looking out for pay-per-use model to reduce their cost of operation and IT administration.”

The 15 rules for cracking the SMB market The product rules l Design products for simpler assimilation l Deliver mobile form-factor apps l Accommodate users’ desire for self-expression and self-identity l Emphasize best-of-breed excellence over portfolio integration l Surround products with prepackaged services The marketing rules l Build SMB-specific product line and category brands l Appeal to SMBs’ appetites to serve customers l Tie in to SMB’s word-of-mouth networks l Publish SMB-specific customer case studies l Educate, educate, educate l Continue to invest in print advertising The business model rules l Develop an all-encompassing channel map l Craft a “freemium” pricing model l Offer financing l Employ a dedicated, empowered executive Source: Forrester Research, Inc.

#5 Gearing up for acquisitions

Large vendors are also gearing up for acquisitions and collaborations that can bring in synergy with existing line of offerings. For example Cisco and HP have acquired Linksys and 3Com respectively. Also, VMware has recently acquired Shavlik Technologies, a provider of easy-touse, cloud-based IT management solutions for SMBs. These vendors invest huge amounts on inorganic growth. A case in point is IBM. Nipun Mehrotra, Vice President, General Business, Geo Expansion and Routes-to-Market at IBM India/SA says, “We have over the past five years invested more than USD 14 billion in acquisitions to build the analytics portfolio, and have a dedicated team of 8,000 consultants.” Sangeeta Gupta, VP, NASSCOM asserts that the small IT companies are very good at product innovations and hence are being acquired by large MNC companies. She further says, “Large IT vendors have good strategies to tap the SMB market but still most of the SMB companies feel comfortable using solutions provided by small IT companies.”

Building channels

It is very difficult for a large vendor to reach out to the SMBs as they have specific needs and limited budgets. Also, they are present in every nook and corner of the country. So the vendors engage with channel partners. These partners include System Integrators, ISVs, VADs, resellers and platform providers — all of whom play a critical role in distributing and implementing solutions specific to SMBs needs. For instance, Oracle in India works with more than 4,500 midsize organisations. The availability and reach of Oracle technology has been possible through the vast network of their 1000+ partners (who are part of the Oracle PartnerNetwork) in India. Also, the vendors keep on strengthening their channel engagement efforts through channel road shows and training across the country to educate channel partners on the new product portfolio and technologies. Thus, the SMB sector is a core focus area for vendors and they are adopting various strategies to target them. u Vinita Gupta vinita.gupta@ubm.com

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Case Study

Selling books via the cloud By adopting a cloud-based service from TCS, Oxford Bookstore has not only reduced the cost of doing business but has also helped it in driving integration between its physical and online stores By Vinita Gupta

s the market is maturing, the book industry is going through a major transformation. Today, a large section of book lovers are shifting from hard copy to digital format. With the availability of multiple app stores and digital content, the book business is going through enormous challenges as well as opportunities and Oxford is not an exception. Part of the Apeejay Surrendra Group, Oxford Bookstore, is an 80-year old book retailer. The bookstore has about 35 stores (including the franchise) that cover most metro cities. From an IT perspective, the unique need for the firm was to support an aggressive business growth plan with limited or no capital expenditure. “The other challenge was to integrate and scale the IT solution across channels like physical stores, web-stores, institution sales etc,” says Subhasish Saha, chief technology officer, Apeejay Surrendra Group. Hence the book store was looking for a simple, cost-effective and scalable solution that could integrate the offline and online stores and help in driving the business. Thus in October 2008, Oxford Bookstore started utilizing the IT-as-a-Service (ITaaS) solution from Tata Consultancy Services (TCS) (now known as Tata iON). The company has a fiveyear partnership with TCS.

Cloud fits the bill

Oxford selected the ITaaS model from TCS, as it allowed the firm to choose what was relevant to its present need from an integrated suite of hardware, network, and software solutions. The added advantage came in the form of business, technical and consulting services from a firm like TCS. More importantly, no capital investment was

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required as the company was utilizing IT infrastructure and software on rent that was charged monthly. Some analysts say that if the total cost of a SaaS model is calculated over a longer period of time, it could outweigh the cost of acquiring software with one-time payment. We asked Oxford the same question. Here is what Saha had to say: “The technology adoption strategy for Oxford has been relying on a no-CAPEX model. It is true that when the cost is calculated for five years then there won’t be much difference. But with a proprietary solution we would have to face the one-time payment, maintenance and upgradation

Prime Benefits No capital investment required

Solution has helped in reducing the shipping time by 50 percent

challenge.” The cloud model has also enabled the integration between Oxford’s physical and online stores.

Seamless online-offline integration

Oxford Bookstore’s online channel was built as an extension of its physical stores with a conscious strategy to provide its online customers the same flavor of collection. With the help of the cloud solution, Oxford is now well equipped to provide multiple offerings through well integrated physical and web stores. For example, gift vouchers issued from the stores can be redeemed through

online purchases or a loyalty customer can earn or burn points irrespective of the medium of transactions. Overall, the solution has helped in reducing the shipping time by 50 percent. “The integrated solution take cares of store inventory management, point of sales, ERP, online presence, shopping cart with payment gateway, in addition to procurement,” states Saha. TCS also rolled out ‘Gems’, a loyalty points gateway that has helped in broadening the Oxford customer base. Today, many organizations reward their employees with Oxford Gems that would then get redeemed with books sold at oxfordbookstore.com.

Other engagements

Technology exists for business and not vice versa. Various unique business models developed over a period are continuously being supported through unique customized IT platforms. In a similar way, with the current IT partner, Oxford Bookstore is not only engaging an ITaaS model but has gone to the extent of revenue sharing in many of its other engagements like driving institutional engagement as a support to various company HR initiatives. For example, one international bank was offering a facility where its employees could spend on learning and development. But a majority of its employees were not using it correctly. Thus the bank partnered with Oxford Bookstore to push the learning initiative through a dedicated e-portal built by TCS. Today, even as the firm plans to open ten more stores this year, it is well prepared to match business growth with the required technology infrastructure due to the cloud. u Vinita Gupta vinita.gupta@ubm.com

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Case Study

MD Synergy uses Google Apps to enhance collaboration Software SMB firm focused on healthcare segment uses the power of the cloud to boost productivity and efficiency of its operations By Srikanth RP

D Synergy provides software platform and integrated services for the US Healthcare market. The firm’s platform and services are used by hundreds of doctors across the US. The opportunity for a small firm like MD Synergy is huge, as the US Healthcare industry is estimated to be a six trillion dollar fragmented industry, and is going through rapid reform. The recent mandate by the US Government to have all doctor offices implement a meaningful use certified EHR System (Electronic Health Record) has sparked a boom in existing and sprouted new companies to meet the demands of a connected Healthcare System. MD Synergy is an established leader in the space and with increased demand for its product and services, the company is going through rapid expansion. Typical to a SMB, the huge growth makes it imperative for MD Synergy to have a robust IT infrastructure that scales up with its business growth. With customer service staff in US and the core product development team in India, collaboration between its employees and with the end customers was crucial for its profitable functioning. Collaboration was also indispensable for the firm as a major part of the firm’s work involved keeping in constant touch with physicians and patients to deliver services. A major part of the communication between its staff members was done using e-mail. As the business started growing at an exponential rate, MD Synergy found it challenging to manage the day-to-day tasks using e-mail.

informationweek july 2011

“We process close to 20,000 transactions on a daily basis. As business volumes grew, we found it difficult to manage and review these transactions using e-mail,” states Suman Masciarelli, COO, MD Synergy. This sparked the need to look for an alternative system, where its staff could dig out existing documents or details of past engagements. MD Synergy decided to go in for a cloud-based system as it would help it in centrally coordinating with its staff across the globe. The firm chose Google Apps for its cloud computing needs, as it was familiar with Google’s excellent search capability. With huge volumes and transactions, the search capability was critical for quickly locating documents according to keywords.

Collaboration boosts productivity

Today, the staff uses Google Apps for multiple requirements. The firm uses Google spreadsheets for collaborating and sharing notes. MD Synergy also uses Google Forms extensively for

How the cloud has delivered Cost savings close to USD 12,000 on an annual basis

Increase in productivity by 150 percent

Close collaboration has helped the firm in creating close to 600 knowledge based documents covering six to seven core processes, in a short period

capturing inputs from doctors and staff. Today, due to Google Apps, MD Synergy has saved on system resources related to hosting servers and licenses for new staff. The cost savings are estimated to be close to USD 12,000 on an annual basis. As knowledge is captured and available in the form of a central cloudbased system, the firm has witnessed its productivity increase by more than 150 percent. As a result of extensive collaboration now made possible by Google Apps, the firm has witnessed a boost in IP (Intellectual Property). “In just a span of four months, we have created close to 600 knowledge-based documents covering six to seven core processes,” states Masciarelli on the importance of collaboration. Google Forms is now being used to create timesheets. Going forward, the same Google Forms functionality can be used by the HR team in multiple ways for taking inputs from employees. For strategic accounts, the firm is using Google Sites. Google Apps has given the firm the capability to create a cost-efficient way of enhancing organizational productivity. It has also enabled the management team to see how the team is delivering on new intellectual property, best practices and processes. Today, all employees in the company are required to use Google Talk for small questions. The firm has also acquired large screen iMacs for conducting video conference using Google Talk. The company’s new intranet has also been transferred to a Google Site. u Srikanth RP srikanth.rp@ubm.com

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Cloud based application helps NGO track missing children

A smart cloud-based application from vendor AppPoint Software Solutions is helping an NGO in tracking missing children By Srikanth RP

n February 2011, a report in the Hindustan Times, stated that over 60,000 children went missing in India in 2009. In most cases, despite cases filed by the parents of the missing children, the success ratio is low, as children who are kidnapped or lost are seldom found in their home states. Hence, unless there is an inter-state network, the probability of locating a child is extremely less. To resolve this issue, Don Bosco National Forum for Young at Risk, an NGO with a mission to rescue and protect street children and integrate them into the mainstream society as responsible citizens, started a web-based service called Homelink (homelink.in). The web-based system maintains a comprehensive and integrated database of all children. This helps in tracking down runaway or missing children. Accordingly, the NGO has set up two national websites on missing children, homelink. in and missingchildsearch.net. The organizations in the NGO’s network track the current status of a child registered as missing anywhere in India, by using this web-based software. The data fed in by all the eight hubs or regions and their nodes are integrated. This facilitates the search for missing children in the local and national database. At present this software is implemented across 16 states in 65 districts. In the past one year, more than 33,000 vulnerable children were contacted and nearly 20,000 children were restored.

adding new features to the website. To improve accuracy in identifying children accurately, the NGO wanted to have a robust identification mechanism system. As the NGO extensively worked with local people who did not know English, it wanted the portal to have support for local languages. This was necessary to address the various stakeholders from different geographical locations. However, being a NGO, the firm had limited financial resources to enhance the website. After scouting for technology service providers, the firm approached Bangalore-based AppPoint Software Solutions, who offered to waive off the license costs of its PaaS. The NGO used AppPoint Software Solutions’ BizApp Studio to build an effective solution. “We are collaborating with AppPoint Software Solutions, Bangalore, to create Child MISS (Management Information System and Services) — a comprehensive Child Tracking System for effective data management, monitoring and reporting. The software solution takes care of the data accuracy through Biometric Integration,” says Father Joe, a member of the Don Bosco YaR Forum. A huge advantage is the support for local languages. The PaaS platform ensures that development can be done by non-technical people also. “We just define the process and draw a workflow. Not a single line of code was written for this portal,” says DR Mahesh, director, Business Development & Operations AppPoint Software Solutions. The entire portal was developed in a period of just three months.

Scaling up infrastructure

Cloud enables agility

As the scale and reach of its operations grew across the country, the NGO wanted to improve its efficiency by

The PaaS platform allows the NGO to do rapid application development, as applications can be developed and

deployed in days or weeks. For instance, AppPoint estimates that the cost and effort of building this solution has been reduced by at least a factor of ten. The PaaS solution not only helped in speeding up the development process, but has also enabled the firm to adapt to changing needs. For example, if the government comes up with new regulations, the rules can be quickly incorporated and business processes can be changed on the fly, thanks to the PaaS platform. The centralized information structure means that authorities can now monitor and analyze information pertaining to children in a centralized location. The solution also has a mobile workflow capability which improves the NGO’s responsiveness to key events pertaining to children and enables timely action to be taken. To ensure scalability, the solution has been hosted on the Microsoft’s Azure public cloud platform. “During situations of natural disasters such as tsunamis or earthquakes, there is a huge rise in the number of complaints of missing children. A traditional IT infrastructure would not be able to handle the spike in traffic. Hence, in disasters where a simple action can lead to saving of precious lives, a cloudbased infrastructure can be extremely useful to an NGO,” explains Rajasekar Shanmugam, CTO, AppPoint Software Solutions. As the case of this NGO shows, a technology like cloud computing can really make a huge difference. And more so, when it helps in finding missing children and putting a smile back into the faces of the children and their parents. u Srikanth RP srikanth.rp@ubm.com

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Case Study

Godrej Properties uses BPM to transform ERP

Godrej Properties smartly used a BPM solution from Savvion to add more process and usage efficiency in its existing ERP solution By Srikanth RP

ne of the fastest growing players in the real estate space in India, Godrej Properties had implemented an ERP solution from SAP. While SAP helped Godrej Properties streamline many business processes, some of the existing processes were not getting covered under the ERP. This impacted decision-making as some of the processes continued to be manual, leading to delays and limited visibility in processes. The CIO of Godrej Industries, who also heads the IT for Godrej Properties, Shailesh Joshi, wanted a system that could provide an interface for users where they could input information in the processes they were familiar with. This meant creating a workflow above the ERP which could automate the manual processes not addressed by the ERP. The firm also needed to track process, manage escalations and give users a better user friendly interface to interact with the system. After evaluating different technology options, the firm decided that the only effective option was to deploy a BPM solution. The firm decided to go in for a BPM solution from Savvion (now a part of Progress Software).

The power of BPM Godrej Properties can create a new workflow around the existing ERP

The time taken to release a payment to external contractors has been slashed from 45 days to 15 days

Actions like approval or denial can be undertaken within e-mail

informationweek july 2011

“The BPM solution can integrate with external systems to pull information into a process, and write the information back into the ERP”

Shailesh Joshi

CIO, Godrej Industries

“The BPM solution adds an additional flexibility to our existing ERP. For instance, the BPM solution can integrate with external systems to pull information into a process, and write the information back into the ERP,” says Shailesh Joshi. In a typical ERP, changing of process is an extremely cumbersome task. With the BPM solution, the firm can create a new workflow around the existing ERP. This BPM solution has also addressed a major concern of Godrej Properties in giving access to the ERP for external suppliers. The real estate major was apprehensive on giving access to external suppliers for reasons related to security and cost. Today, the firm has resolved these challenges by planning to give access to vendors via the BPM tool. The BPM tool also allows the firm to customize the User Interface (UI) according to its needs. The transaction starting point is SAP which triggers a workflow for further approval and completion process, with auto generated mail intimation. The chain of approvers can be defined separately as per transaction type or location. Further, approval requests can be undertaken within e-mail. “Actions like approval or denial can be defined in an auto generated mail. On clicking the

required button, the relevant action is completed within SAP automatically in the background. This is accomplished without logging into SAP or Savvion,” explains Shailesh Joshi. The same BPM tool can be used to track the progress of a specific task. Escalation rules can be defined based on transaction type. Using the tool from Savvion, the firm can also add or delete levels of a workflow in a specific process. The firm has initially started with the Procure-to-Pay process, and will extend this to other processes in the coming months. The impact of BPM can be seen from the fact that the time taken to release a payment to external contractors has been slashed from 45 days to 15 days. Godrej Properties also has plans to add the capability of accessing BPM through mobile devices — a feature that is extremely useful to users on the move. In the past, many enterprises have complained of rigidity in processes that are imposed by ERP systems. The success of Godrej Properties in using a BPM tool to address the process gaps is a case in point on how enterprises can make their ERP systems more flexible to change. u Srikanth RP srikanth.rp@ubm.com

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Interview

‘Next-gen services is the new focus for Dell’ Suresh Vaswani, EVP Dell Services and chairman of Dell India tells Brian Periera of InformationWeek about his goal to build next generation service offerings and to grow Dell’s process capabilities on a global basis Could you elaborate on your role at Dell? I head applications and BPO for Dell’s global services business. And my secondary role is as the chairman for Dell India. In India my mandate is to leverage the India service capability for Dell services globally, including Dell’s internal customers. And the second focus is to ensure that Dell becomes a stronger brand in India. We are already in the top two in terms of market share. What’s the contribution from India towards global services? We have substantial applications and BPO capability in India. Dell has centres in Noida, Gurgaon, Bangalore and Chennai. We have a fairly strong BPO capability in Chennai. So we are leveraging India for internal IT (domestic market). Dell also leverages India for its own internal back-office requirements. This is in the areas of financial accounting, procurement, human resources, tech support, R&D and sales. India is the second largest employee base for Dell, with close to 23,000 employees. About 25 percent of the workforce is Indian. This includes people who deliver for Dell global customers and for Dell’s internal IT requirements (overseas). What are your plans for the lucrative SMB market in India? A large proportion of our business comes from the SMB sector. We have the right products and services to

support the product, and we have made substantial investments in sales and distribution across the country. We have fairly ambitious plans for India. And we are already the number one PC player here. Are there any verticals that are of particular importance for

Dell? In India, we are addressing all the sectors. Dell’s business in India is technology-centric: software, servers, mobility etc. So we are a technology player and we do a lot of services. We sell a lot to government, to enterprise customers, to SMBs and to consumers. When it comes to services, I am talking about software services and managed services. We also have solutions capability. If you look at Dell’s application business, globally, we are very strong in sectors like health care, financial, manufacturing and distribution.

A major chunk of the revenue comes from Dell’s services. Are there plans to spin off Dell Services as a separate business unit? We do not see that yet. India is a very strategic market for us. So we will not create separate entities. It will be a fully integrated business. But with regard to the structuring in India, we may be in a situation where we would need to create separate entities in India.

How do you compete with Wipro and Infosys in the IT services business? We partner with them too. So we compete and we collaborate — for both services and solutions. We may be a leader in technology worldwide but that does not mean that we cannot collaborate (with Wipro). Do you have plans to set up a Global Command Center in India? What are the new services that you plan to launch in India? We are evaluating and assessing this now. Since we have a substantial base in India, we want to bring our next generation service offerings into India. These next generation services include cloud services, managed services, security services, virtualization, application support etc. We are also looking at what customers require. For instance, they would need migration services, as they move from traditional service models to new generation service models like SaaS. So we are working to build all the capabilities that we need to deliver these next generation services. I am talking from a global perspective, of which India is an important market. India is also an important delivery center for us to service global customers.

u Brian Pereira brian.pereira@ubm.com

july 2011 i n f o r m at i o n w e e k 39

Interview

‘CIOs should ensure visible ROI at start of project’

In a session titled ‘Hard Talk’ at the recent Financial Technology Summit in Goa, Brian Pereira asked Sandeep Phanasgaonkar, President and CTO of Reliance Capital about the new technologies being implemented and the challenges. Phanasgaonkar also spoke about risk management and about his performance evaluation Can you tell us about some of the new technologies and platforms that Reliance Capital is evaluating? How do you evaluate technology and decide what is right for the business? We have a sister company that is a large Telecom player, so naturally we are evaluating mobility. We are also looking at financial inclusion. There are 100 million bank accounts in India for a population of 1.2 billion people, and 650 million mobile subscribers. So everyone feels that mobility is a powerful tool for increasing financial inclusion. For us it’s about evaluating reach, how much business can be mobilized, the cost of mobility, acceptability of mobility by customers and agents; training people — and how effective it is in terms of operations. It may take several years before all this attains maturity levels and gains acceptability

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in business. We are doing a lot of customer self-service now on the mobile phone. Trying to do new business on the mobile platform is a challenge; for financial business a large amount of data needs to be accepted. You also need to fulfill KYC norms. And a financial payment needs to happen through payment gateways. The cost of the transaction has got to be acceptable to you. So it (mobility) is a combination of several factors, but we feel it is a powerful tool. And we feel that in the next two years, we should be able to get a fair among of traction on this tool. The second area is business intelligence. Not too many companies have adopted BI. It became a necessary factor for us, because of so much competition. Most financial companies have realized that the days of rapid growth are behind us.

Growth rates vary between 20 – 40 percent, sometimes less. So it is vital to retain the existing base of customers. We try to minimize risk and increase profitability. One needs to look (more closely) at customer and transactional databases. One needs to look at historical trends. But how should a financial services company implement BI? What is the sentiment about BI? What kind of challenges do you face in implementing BI? First you need to convince stakeholders about how effective BI is. Look at the historical data and create a model. Then do a prediction. Let’s say you have four years of data. Take three years’ data and analyze it. Then create a forecasting model and predict what will be the fourth year’s results. If the fourth year results match what the model is generating, then

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you know you are on right track. You can then refine the forecasting model with clearer strategies for 2012-13 and beyond. There are huge expectations from BI; many CEOs feel it is like a magic wand that will offer solutions to retaining customers, managing the competition and increasing profitability. There is another set of people who feel that they will be threatened by the fact that they will now be told what to do by a computer tool. So there’s a bit of challenge we are facing here, but over time there will be more acceptance for BI. We are looking at BI for doing cross-selling, for ensuring that our customers in our various businesses get the benefits from us as a group etc. But there are regulatory restrictions in terms of insurance data being used for other businesses. Neither can we incentivise customers for giving us

are regulatory issues as to where data can rest, also security-related issues, the fact that everything is going on the Internet, and anytime, anywhere access. We need to start doing pilots and see how cloud adapts to our respective businesses. We are going through a phase where the market is volatile and we have also seen a lot of scams lately. Can you highlight the importance of Risk Management in the context of business performance, the impact of stringent regulations, legal liabilities and volatile market performance? How do you minimize the impact of all this on customers and shareholders? As you know BFSI is a highly regulated industry. Some of the key areas that come under risk are lending business, asset liability management (ALM), the investment in debt and equity markets,

warehouse, analyze that and see what is the risk exposure. What kind of dashboards do you have to monitor all this? I think dashboards are more transaction intensive and are now passé. We implemented a tool called ClickView that gives multi-dimension reporting, that shows some attractive charts and dashboards on the intranet or Internet, and allows sales people to get yesterday’s sales figures in various forms, and they can slice and dice and do something themselves during the course of the day. We also have reached a level where we can give intranet dashboards. The BI/analytics piece is very different in terms of the fact that it gives you an analysis, and based on that you will try to create a forecasting model and try to come up with strategies to achieve the business

Within the group, we have created risk management capabilities in individual businesses. We also have a consolidated risk management view across Reliance Capital business. So these are challenges. Tell us about your assessment of Cloud Computing. The concept of Cloud Computing came up during the financial meltdown in 2008-09. Our IT budgets were hit and our teams were downsized. At that point of time we had a new CEO coming into our organization and he told me that my IT costs had to become fully variable. That means IT costs needed to be proportionate with sales. We know that 60 percent of our IT costs are fixed in nature and this includes costs for AMCs, hosting fees etc. We struggled to comply with the CEO’s request and our IT budgets reduced drastically. And then we discovered the subscription-based model of cloud computing — it is a variability model. There are certain inhibitors for cloud. People are still trying to get their business models and TCOs right. There

asset management etc. There is also a huge amount of frauds happening in general insurance, motor insurance, and in health insurance. On an average, we see 70 percent ratio of claims in this industry. So the viability of the industry is in question. On the life insurance side, the gestation period is high for getting Return on Investment. So it is important to ensure that you can achieve profitability as fast as possible. Within the Reliance Capital Group we have created risk management capabilities in individual businesses. We also have a consolidated risk management view across Reliance Capital. All the businesses use SAP as the common financial system and this helps us in analyzing financial numbers. We are also implementing an ALM system and then we have SAS as our BI platform across the entire Group. We will take aggregated data across the businesses into a central data

goals: managing customer attrition, profitability of products, geographies etc. Then there is a different piece of BI for managing lapses in the life insurance side, minimize claims in general insurance etc. For this you don’t need dashboards. I see more of analysis and strategies coming out, programs and initiatives, and feedback going back to the database — to see how well the hypothesis and the strategies got formulated. When it comes to selling a new idea, a new innovation or a new technology to top management, what are the questions you anticipate and what’s your strategy to get a buy-in? There are different stakeholders in the company. Even after all these years in the company, I keep discovering new character facets. On the one hand

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Interview there are the business leaders who want the latest and the best in terms of seeing it as a tool to drive business. And then you have people from Finance and Risk who want checks and balances — they check the utilization of technology. And they have a right to ask questions. For example, we can’t rush into cloud computing. We need to ensure that it works well for us and also meets regulatory requirements — and it should offer the right TCO. It’s important for a CIO to determine that there is a visible ROI that is established at the start of the project. And this must be

partners etc. In this context a transition to a new technology would be a massive exercise as you need to take the whole ecosystem to the new platform or technology. Can you tell us about the bigger challenges here and your strategy to ensure a smooth transition? You keep on launching new products and services and if you are going to change the way a process will be done, then people on the field have got to know. Our distributors and agents have to be trained on this. Most companies create a training vehicle to train their employees and

individual performance? Since I am the Group CTO, there are five other CIOs/CTOs in my organization. I also have a corporate team. So for me it is important to ensure performance at the centralized level. But the contribution of the five CTOs is also important. We all try to maintain a set of key strategies and endeavors and we have a stringent operating review mechanism which ensures that we are all on the same page. All the CTOs have got projects and initiatives with definitive timelines, budgets, ROIs and business goals.

Being the Group CTO I ensure that the IT drive in all verticals is adequate; if any CTO gives a negative verdict, then it would have a negative impact on my performance evaluation communicated to the business stakeholder, Financial head and the Risk head. Once you communicate the viability of the proposal then you go back and execute the pilot. You do a proof of concept first that allows people to understand the technology. So these are the stages you need to go through when introducing new technologies — you cannot force it upon users. Resources are always limited. There is hardly any money left for new projects because of the fixed nature of OPEX. So you have to ensure that every new project is reducing costs or driving efficiency either on the IT side or in the business. And that’s how the ROI gets established. Six months later when you do a review of the project you should actually hit the run rate that was desired and the CFO should be able to say the ROI has been met. By ROI I mean a certain cost per transaction was met or a certain benefit was achieved; what is the total outlay that may happen for X number of accounts? Reliance Capital has a large ecosystem of distributors, retailers, merchants, customers,

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distributors. So it is important to create an effective structure. There is classroom training, e-learning, training through Webex, through audio conference bridges etc. Whenever you are trying to launch anything new, you do a pilot first, perhaps in semi-urban sectors. You can gauge how people are responding and what is the acceptance and level of understanding. The challenge here is the huge attrition that happens for intermediary agents, and even on the sales side. This is common in most companies. So you have to win their loyalty and it is a risk you have to take. You also have to ensure that they do not carry away your information to the competition and we have deployed security tools to prevent that. You were presented the InformationWeek Global CIO award in 2010, and we had evaluated CIO performance for this award. Can you tell us how your performance is evaluated internally within your company? What percentage of your KPIs are directly mapped to business performance, and how much of it is based on

Being the Gr oup CTO I need to ensure that the IT drive in all verticals is adequate; even if one CTO in the Group gives a negative verdict on my performance, then it would severely have a negative impact on my overall performance evaluation. And this would be true even if the other CTOs are happy. So it is advisable to define sharp KPIs for yourself; the CTOs below you would also benefit by defining sharper KPIs. That would ensure that these get delivered within the specified timeline and budgets. Also maintain your relationships with the CEOs; keep meeting them on a monthly basis and take their feedback on Group and individual strategies. Be in sync with your Group CEO and the vice-chairman of the company, and find out what is their view on your performance. Never keep things vague and nebulous because at the end of the year it is going to be difficult to justify and explain what was not accomplished. I’ve got three KPIs: the mobility piece, cloud computing implementation, and BI. u Brian Pereira brian.pereira@ubm.com

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Interview What are the business benefits of using deep analytics on big data? Can you illustrate with some examples? There is a study that shows that retailers in the US who used deep analytics on big data were able to improve operating margins by 60 percent. The advantages of (analyzing) big data are significant. They drive efficiency for organizations, they help improve profitability.

structure itself. There are industries where becoming transparent does not hold premium. Which means that, if there are a few players who drive profitability, then trying to be transparent does not help. The industry structure and competitiveness of the industry also determines whether companies want to drive more insights from data. The other issue is the availability

â&#x20AC;&#x2DC;Applying analytics to big data leads to profitability and efficiencyâ&#x20AC;&#x2122; If you look at any organization today, it has tremendous amount of information on its customers, employees and suppliers. Demographic information also comes from the market. Now an organization would want to get deep insights into this data in order to gain competitive advantage and stay profitable. But till now the technology to aggregate/agglomerate this information, and analyze it was not available at an affordable price. The second thing is industry

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and access to data itself. You may not have all the data; there will be certain information that is derived from industry, and that means industry forums need to come together to provide that set of data. Then you put all of this togetherâ&#x20AC;&#x201D;your supply chain, customer buying behaviour, and demographics. When you drive analytics (on this) you will be able to come out with better products and more optimized solutions. So the interest in big data is

significant, and is driven by the fact that the technology exists at affordable price points. Typically, which type of companies will feel the need for big data solutions? I see many of the newer companies leveraging big data solutions. Companies that have the data will move in that direction. If these companies

Deep analysis of big data can offer better insights into business and of consumer behavior; a survey shows that it is a sure route to profitability. Manoj Chugh, President India & SAARC, Director Global Accounts - Asia Pacific & Japan, EMC tells Brian Pereira why the interest in big data and analytics is suddenly picking up. He also suggests potential applications in Government and Healthcare verticals www.informationweek.in

gather information from sources like distributors they can analyze it and create new business opportunities. For example if a company has access to data on consumer durables and consumer buying behaviour, say for movies and TVs, they can come out with unique services and new products. They can send catalogues to their potential or existing customers.

the realm of petabytes. When you are dealing with such large amounts of data, you need scaleout NAS technologies. We acquired a company called Isilon last year for these technologies. Isilon devices can handle file sizes that are multiple petabytes. Once you have stored all this data (in one place), you next ensure that this data is current. It may have taken three months to consolidate data from

be collecting. How does it track all the consumerism in India and translate that into tax collection? If the government knows where the people are spending their money and it applies analytics to big data, then it is able to close that gap. The second area is the public distribution system (PDS). Can we apply analytics to big data to provide an opportunity of a solution? For instance, can we track all the retailers involved in

We see the government vertical having the most significant advantages. The government of India is looking at closing the gap between actual tax collections and what should it really be collecting various places, but you cannot apply analytics on data that is three months old. So the question is how do you do analytics on data literally in real time? You want yesterdayâ&#x20AC;&#x2122;s data so that you can make decisions on pricing of products, new promotions etc.

What kind of storage technologies are needed for big data? When you have multiple silos of data, you need to aggregate these and so you need to have storage technologies that can handle huge amounts of data, in

Which verticals in India could benefit from big data analysis? What about its use in government for driving citizen services? We see the government vertical having the most significant advantages. The government of India is looking at closing the gap between actual tax collections and what should it really

PDS and find out how much is actually being distributed, versus what people believe is being distributed, versus what is there in the warehouses versus who are the actual people to whom it is going? The health care sector is another area. We are not able to capture patient records and provide quality health care here in India. Why do we need to do tests repeatedly? Why are we asked to do tests that are unnecessary? We can introduce more efficiency in these areas, if one is able to apply analytics to big data. u Brian Pereira brian.pereira@ubm.com

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Interview

‘AIX has come a long way’

IBM’s AIX has come a long way. In 2011, it completed 25 years. Viswanath Ramaswamy, Country Manager, Power Systems, Systems and Technology Group at IBM India/SA, talks to Vinita Gupta of InformationWeek about the evolutionary journey of AIX

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It has been 25 years since AIX was launched. What have been some of the major innovations that IBM has done on this platform? Yes, 25 years ago, IBM launched Advanced Interactive eXecutive (AIX), a Unix operating system called for the IBM RT PC. The system ran on a RISC processor code-named “ROMP” (for Research Office Products Division MultiProcessor) and was originally marketed as an engineering workstation. In 1990, the major innovations started with the introduction of AIX v3. Thereafter, we have been innovating the AIX after every two years. Some of the major innovations on the AIX are: l 1990- AIX V3 on the RS/6000 on the first power processor l 1994-AIX V4 with support for symmetric multiprocessing l 2001-AIX 5L provides logical partitioning virtualization on Power4 l 2007-AIX 6 contains workload partitions l 2010-AIX 7 has built in clustering and the ability to host an earlier version of AIX AIX was not evolving alone — since the original release on the RT PC in 1986, the capabilities of Power processor and hardware grew from a single processor running at 5.9 MHz to the present Power 795 running up to 256 Power7 cores at 4.25 GHz. What has been the contribution of AIX Lab in India in this evolution? Across the globe, IBM has two AIX labs, one in Austin and the other in India. AIX India Development Lab has had significant contributions across the breadth and depth of AIX operating system (OS). The India development team contributes across key technology areas. It is widely perceived that Unix as a platform is on its way out due to platforms such as Windows and Linux? Please share your perspective.

In comparison to other platforms, Unix is a much more credible, scalable and reliable platform. Only AIX running on IBM systems designed with power architecture technology can scale up to 256 cores and 1,024 threads and get virtualization with it. Thus it depends on the customer whether they want to look at a low-cost price solution and instead pay a heavy price by running their data centre on an insecure and non-scalable OS. In the emerging world of clouds, what role can a platform like AIX play? The features, that are available only in AIX, allow clients to have fewer operating system images (kernels) on their Power servers. While hypervisor-based logical partitioning helps consolidate and virtualize hardware within a box, it is the operating system virtualization that really allows for a more granular, flexible approach to systems and workload management. The end result is a an efficient use of resources. How has AIX performed in India? According to a recent operating system report by Gartner, IBM’s AIX operating system revenue grew 9.2 percent in 2010. In India we have customers across various verticals. Some of our customers include Cosmos Bank, Ester Industries, Sterling Commerce. We have recently recentlly bagged a contract from Gulf Oil whereby we will be using IBM P700 Blade Server on the AiX 6.1 platform. What can we expect for the future? AIX has come a long way from the initial version for the RT. With the introduction of Power7, virtualization and editions, it is now possible to have very granular systems and LPARs that range from blades, small 2U form factors all the way up to the 256 core Power 795 servers. We will continue to innovate AIX and work on the Power8 is in process. u Vinita Gupta vinita.gupta@ubm.com

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Interview In this competitive market, telecom service providers must proactively offer customers customized services, opines Christian Goswami, Director of Strategic Marketing at Openwave Systems, in an interview with Srikanth RP of InformationWeek

‘India will account for 40 percent of total Asian application download markets’ While India boasts of one of the fastest growing markets for mobile phone usage, it also has one of the lowest ARPUs. How do you think Indian telecom players can survive in the long run? Bharti Airtel, India’s top mobile phone carrier recently reported a 12 percent drop in average revenue per user (ARPU) per month, a key gauge for profitability, in the Q4 results. The telecom market in India is experiencing an interesting period, with more than 15 cellular providers in the country on already deployed or deploying 2G and 3G technologies on different portals, majority of the service providers are in customer acquisition mode. This means India has one of the lowest ARPUs globally, and declining ARPU driven by intense competition remains a big concern for the operators. However, we predict that this will

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change soon due to some of the following factors: a) Mobile penetration is growing close to 90 percent. b) Customer acquisition strategy is currently being reviewed c) Voice revenue is declining d) Service providers in India have paid huge amount of money for 3G spectrum e) Data services will be the next big thing in the Indian context f ) Mobile Number Portability is already in place in the country Indian end users are looking for better quality, service and experience for which they are willing to pay a premium. Hence, all operators will need to examine tangible differentiators to sustain in this cut throat market as well as retain and

attract the most promising customers. Two other factors also need to be considered: There is polarization of ARPUs in countries like India. So the newest subscribers, often being in lower socialeconomic classes, will always be greater in number, and will continually pull the average spend (ARPU) downwards. But the higher spenders are still there, they haven’t gone anywhere. So there is this polarization between high spenders and low spenders that is

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actually increasing over time. In fact, in 2010 approximately nine percent of subscribers were responsible for 29 percent of revenues in India, and furthermore 29 per cent of subscribers were responsible for 70 percent of revenues. So firstly, it’s about targeting the higher data services at these higher spenders who do have disposable income. Secondly, for lower spenders, and especially those who rarely use data, we need mechanisms that lower the barrier to primarily, data

applications in the near future, we believe the Indian market will account for 40 percent of the total Asian application download markets. However, mobile application development in India is still in a nascent phase. As more smart phones are sold substantially, mobile apps need to be created in a way that they can be used across cheaper platforms and all platforms. Mobile app developers need to identify tools that can straightforwardly run their applications in a platform

can be combined with our price plan innovation solution, Passport. These solutions enable more customized tiered pricing plans, which is particularly effective in this region as our experience has shown us that subscribers here are more price sensitive than subscribers in other regions. So users then find that they are being offered data plans that match their online usage behavior and aspirations. For example, a video user is offered a video plan that provides higher throughput and lower latency. These services have a sticky nature so, as

In 2010 approximately nine percent of subscribers were responsible for 29 percent of revenues in India usage and then provide small steps forwards in usage. For example, our product, Openwave Passport does exactly this, targeting small spenders (or no spenders) such as, “One hour of Internet usage for one rupee” and then, once the peoples’ online interests become apparent, it starts to target specific niches, e.g. “Five downloads of Bollywood MP3s for two rupees,” etc. It comes down to understanding where people are today and what small steps they might take from there — rather than expecting them to sign a 12-month contract. ABI Research indicates that application downloads in Asia will surpass 2.4 billion in two years time, generating 20 percent of the world’s total available market. Could you give us some indicative figures for India? According to research firm IDC, India is one of the key drivers in the smart phone market, experiencing exponential growth every year. This makes India a giant market with mobile applications being built immensely. Informate Mobile Intelligence recently reported that number of visitors to App stores in India has increased by 108 per cent in a year. India has one of the highest populations of young people in the world, and since they are expected to be the biggest consumers for mobile

independent manner. Tools like HTML5 enable applications to run within the mobile browser, and although still at a relatively new stage, is expected to bring about major changes in the mobile market. Inline browser apps are inherently simple (just HTML, JS, and CSS), inline (occur within the user’s browsing experience with no need to break the flow), and relevant. Churn is a serious issue that most telecom providers face today. While traditionally, telecom players have tried to address this using BI, you have said that mobile analytics could offer a bigger advantage. Can you explain? Mobile Analytics from the data services standpoint is expected to play a decisive role for all telecom service providers in the current GIGABYTE era. For example, our product, Openwave Analytics gives telecom providers the tools to extract and process the enormous amount of subscriber information they generate. This information can then be used to garner valuable insight for not just operations and marketing departments, but also application and content developers, advertisers and Internet partners. Additionally, our integrated analytics solution inserts this derived intelligence into decision points within the network. To address the issue of high rates of churn, analytics

well as being revenue generators, they act as powerful churn-reduction tools. Your view on market trends that will shape the telecom market in India According to Telecom Regulatory Authority of India (TRAI), there are currently over 550 million active mobile phone users in India, second highest in the world behind China. As India continues to be one of the fastest growing economies globally, we expect mobile market trends to emulate what we have seen in other countries; namely that as the market matures, we will see a rise in the uptake and usage of smart phones. In turn, this can lead to an increase in data usage, particularly in the more developed areas. A rich mix of services will be needed that include but go beyond the classic “Indian ABC” of Astrology, Bollywood, and Cricket services and address, for example, the surging use of social networking sites and video. One trend that Indian telecom operators will have to deal with soon, and in some cases are dealing with right now, is how to manage this increase in mobile data traffic to reduce costs and to ensure smooth data delivery, especially video, to end users. u Srikanth RP srikanth.rp@ubm.com

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Event

at Goa, a resounding success! FTS 2011 at Goa saw delegates benefitting from immersive learning experiences, extensive networking as well as having their fair share of fun as well By Tabrez Khan

he Financial Technology Summit this year was organized under the auspices of Banktech India for the first time. The conference followed close on the heels of Banktech India’s launch and gave the audience an opportunity to learn more about this newly launched portal for the BFSI community (www.banktechindia.com). Amidst the sea-face ambience of the 5-star hotel resort Marriott, the event saw conference sessions rich in learning and networking and loads of fun as well. The conference was thrown open with a welcome speech by Banktech India Editor Tabrez Khan who introduced the audience to the newly launched portal and its future plans for the BFSI community. He also promised that UBM will bring the extremely popular Elite 8 BFSI technology awards that Banktech confers in the US, to

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India soon. Sundar Ramasamy, Director-IT Advisory Services, KPMG delivered the keynote address on Financial Inclusion (FI) and rural banking. In his address Ramasamy talked about the various models of FI available such as business correspondent model, ATMs etc. According to Ramasamy, technology today offers various solutions to enable FI and it was up to individual banks to choose the solution that best -suited them. Ramasamy also said that while FI may not seem very profitable, it had lots of hidden potential. For instance the National Rural Employment Guarantee Act assured gainful employment to rural youth at a remuneration of Rs 120 per day. “If part of this daily income could be tapped and brought into the banking net, banks would gain a lot, while workers gained from banking

services. Tapping the vast expanse of the unbanked rural population and cross-selling to the rural rich had loads of business potential,” he added. Boby Jacobs, Senior Solutions Consultant, Novell in his presentation stressed on the importance of identity and authentication management for better data security within organizations. This was followed by an interesting presentation on smart computing by Viswanath Ramaswamy, Business Unit Executive - Power Systems, IBM India. Viswanath in his presentation spoke about IBM’s world famous supercomputer Watson, which was used in the famous quiz show Jeopardy in the US. “Post-Jeopardy, Watson was being used for a variety of purposes in the business world, and especially in the BFSI industry in the US for gathering crucial Business Intelligence,“

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said Viswanath. Viswanath drew attention to the amazing array of possibilities in which Watson could gather all kinds of structured and unstructured data and make it into coherent whole. Users need to just query it to get accurate answers to a mindboggling variety of data queries. IBM also had a Watson installed at their stall at the conference, where delegates could get an actual feel of the supercomputer and pit their brains against it in a mock quiz. Other exhibitors at FTS were Netmagic, which showcased its Cloud and hosted services portfolio and Aruhat Technologies. The evening party was adorned with several scintillating performances by international dance troupes, but the icing on the cake was the magic created by the famous Goa-based illusionist Santosh. Day two of FTS 2011 was kicked off with a panel discussion on the technology challenges for mid-sized banks, with Sundar Ramasamy and Rajagopal, CIO, Repco Bank as panelists. The panelists felt that while challenges existed, new models such as cloud computing, SaaS etc offered solutions to mid- and small-sized organizations to avail of some best-of-breed technology which is available to large enterprises today. Former CIO, Manoj Chandiramani thoroughly grilled executives from vendor companies in a panel discussion on how CIOs can work with vendors to ensure their requirements are factored into product development. Another engrossing panel discussion saw Anilkumar Nair, Deputy VP-IT, Kotak Securities; Manoj Nanda, VP-IT, HDFC Securities, Chaitanya Wagh, CIO, JM Financial and Diana Bharucha, AVP-CRM, Kotak Securities deliberating on the evolution of IT in capital markets. Anuj Vaid, GM & BFSI Vertical Head for Wipro spoke about how banks can transform their processes for better profitability. Venkatramana Gosavi, AVP, South Asia, Finacle-Infosys made a presentation titled ‘Social Banks’, where he stressed on the importance of the use of social media by banks

for marketing and branding. He said that with the average age of bank customers getting younger, the channels through which customers reached banks were changing and banks had to be mindful of that. Sajan Paul Director-Systems Engineering India & SAARC, for Juniper Networks spoke about new generation data center fabric and how BFSI companies can secure their networks against evolving threats posed by mobility, while not restraining it. Vincent Oh - Regional Pre-Sales Director - McAfee, SEA & India spoke about current trends in data security including advanced persistent threats and targeted malware in the banking industry. After a lot of work on Day 2 of the conference, it was finally time for some play for the delegates. A sightseeing tour was organized for delegates which took them to the famous Panjim market, the Mangeshi temple and several landmark churches of Goa. After the tour, it was time for the mega carnival and networking dinner sponsored by IBM and Novell. The highlight of Day 3 was a candid Q&A with Sandeep Phanasgaonkar, Group CTO, Reliance ADA Group. In conversation with InformationWeek Editor Brian Pereira, Phanasgaonkar dealt extensively on Reliance ADA Group’s IT plans, and the pressures that be, in being a group CIO. “As a group CIO, I have to deal with CEOs of five group companies and manage their expectations. Even if one of them is not happy, it undoes the good work done with the other four,” said Phanasgaonkar. On the IT front, cloud computing and business analytics were some of the key initiatives that the Reliance ADA group was currently focusing on, he added. The FTS 2011 concluded with one of UBM Group’s commercial directors Anees Ahmed thanking the delegates, speakers and sponsors for their participation. A group photo session with all delegates ensured that everyone would take away fond memories of FTS, 2011 with them and be prepared for the 2012 edition next year, with lots more in store!

Tabrez Khan, Editor, Banktech India

The audience listens in rapt attention to one of the presentations

IBM’s Networking breakfast and Roundtable on Virtualization for your Infrastructure

Panel discussion on use of IT in Capital Markets

u Tabrez Khan tabrez.khan@ubm.com

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Event CISOs and security professionals convene to discuss the changing information security paradigm and measures to secure enterprise assets By Verghese Thomas

Managing new security challenges in a changing world

s a part of the agenda to address Information Security issues, UBM India and the Computer Security Institute (CSI) jointly conducted the India Computer Security Conference 2011 (ICSC 2011) in Mumbai. Held on May 19-21, 2011, the event was attended by more than 40 executives from the CISO community. ICSC 2011 focussed on the challenges that organizations face to effectively manage and address security challenges such as mobility security, outsourcing leaks, customer data privacy, regulatory compliance, latest cybercrime threats etc. The

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focus of the conference was real-world solutions that fit into the business plan. The CISO community today is in the midst of a transformation. The event, set up at a luxury resort, provided an ambience that facilitated idea exchange, problem-solving, and retention of learning among CISOs. While delivering his keynote address titled ‘The three strategic wins as the networked world changes,’ Robert Richardson, Director, CSI, stated that real security comes with outdoor survival skills, as both the world and security change over time. His presentation dwelled on creating awareness, and on protecting an

organization’s biggest assets: its information. Richardson presented an insightful perspective on the importance of understanding how a security program works to protect an organization’s valuable assets, and the difference between being vulnerable and being a probable target for an attack. “With the rise in mobile devices as a business tool, it is more important than ever for those involved in their companies computer security to have the latest information and understanding of computer crime and security,” said Richardson. Anand Naik, Director – Technology

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Sales, India & SAARC, Symantec India, in his presentation on ‘IT Mega trends and Implications of CISO,’ said, “The increasing adoption of virtualization among Indian organizations is beginning to have a significant impact on data center disaster recovery (DR) plans. The management of disparate virtual, physical and cloud resources results in added complexity for protecting and recovering missioncritical applications and data.” According to Naik, the implications for the CISO are four-fold: n Everything revolves around people and information n Merging of business and personal digital personae n Expectation of simple and secure access to information n More scalable and cost-effective enterprises. Naik believes that the enablers of the future are identity security, device security, information protection, context and relevance and cloud enablement.

CISO CHALLENGES

The panel discussion titled ‘Talking to Your Board about Security’ highlighted one of the most frequent concerns expressed by CISOs. The discussions veered around the difficulty in communicating complex security plans to largely non-technical board members. With Richardson moderating the session, the panelists shared their experiences on the benefits of security initiatives that make the case for justifying security project expenses, even when the costs are sometimes prohibitive. The panelists were Pankaj

Agarwal, Head - IT Governance & CISO, Aircel, Satish Das, CSO & AVP-ERM, Cognizant Technologies India, Sameer Ratolikar, CISO, Bank of India and Sunil Dhaka, CISO, ICICI Bank. There is no such thing as absolute security, but with effective strategic plans one can indeed get the message across to the board, and this was the common refrain from the panellists.

CHALLENGES & STRATEGY

Harvinder Rajwant, VP Borderless Network - Security, Cisco Systems presented ‘Securing Borderless Networks’. According to him, the emergence of new technologies and user trends is questioning how we go about security. He shared Cisco’s security strategy on how it can help organizations meet the challenges. He drew a parallel on how security can become the ‘safety net’ that allows the business to innovate and boost user productivity, allowing them to say yes more often, and move faster —knowing they have a solid security architecture and strategy in place. “The adoption of virtualization and the move to public and private clouds have created new

challenges for segmenting resources and controlling access and the physical boundaries break down. Hence, security must become more supportive of virtualization and hybrid deployments,” said Rajwant. At the breakfast roundtable the next day, Ruchin Kumar, Principal Solution Architect for India and SAARC, SafeNet made a presentation on ‘Security for Business Enablement in Telecom Services’. He spoke about information security as an enabler in launching new services covering financial inclusion, cloud infrastructure and security as a service —to achieve compliance with IT ACT 2000 / 2008, ISO 27001 guidelines and RBI guidelines for money transfer. Others present were Rana Gupta, Business Head - India & Saarc, and Pankaj Sharma, Regional Business Manager - Information Security Product.

RISK MANAGEMENT

This was followed by a keynote titled ‘The Myths of Risk Management’ by Randy Smith, Information Security manager, United Parcel Services. Smith revealed that information

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Event security risk management has little resemblance to lofty theories and mathematical precision. “The causes of this disconnect are known but often ignored. Nevertheless, information security practitioners must be able to provide rational, defensive judgments to justify appropriate business safeguards,” he said. Smith’s experience on how to consider competing and conflicting views of risks and risk management in a global enterprise highlighted the needs of the business that are the primary driver. “Other stakeholders, including regulators, customers and vendors also affect information risk decisions. So avoid the typical focus on technology and communicate desirable strategies in the business language that describes operational, financial, competitive and regulatory risks, essential for success,” said Smith. This was followed by ‘Tackling the weakest links in Security’, a presentation by Harmeet Singh Kalra, Head Strategic Accounts, Check Point Software Technologies. Kalra said people have become the weakest link in age of Web 2.0 & social media; existing IT security policies have become static and rigid where devices are throwing data/logs and not intelligence. This has resulted in bringing out a realignment of approach to IT security. Manohar Ganshani, Practice Partner Governance, Risk and Compliance, Wipro Technologies dwelled on the topic ‘ Mobile

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computing- Someone is stalking you!’ Ganshani stated that mobile computing is here to stay and that it is all the more pertinent to look at mobile computing seriously.

GLOBAL PERSPECTIVES

The panel discussion on ‘CISO’s and the International perspective’ was moderated by Felix Mohan, CISO, Bharti – Airtel. Panellists were Randy Smith, Information Security Manager, United Parcel Services, Robert Richardson, Director, CSI. They discussed a list of areas that CISOs should focus on as they work in a global framework. In their assessment, they felt that security programs must protect enterprise assets across the globe. They admitted that this could be a thorny problem, not just from a technology perspective, but also from the perspective of meeting legal requirements and from dealing with different business cultures. They believed that where technology is concerned, many multinational corporations are migrating their computing infrastructures to the cloud, which raises new security issues. On the legal side of the equation, international requirements for data retention require contradictory practices — just within Western Europe it is impossible to satisfy all national laws at the same time. Finally, as global as the world may be, there are differing business practices in different countries — just one area that has proven tricky

for CISOs is the relationship of physical security to more traditional information and network security.

LAYERED APPROACH

Ranjit Nambiar, Director of Sales South Asia, HID Global, presented a converged approach to providing strong authentication to physical and logical access systems that allow organizations to tailor their policies, processes and security solutions according to user role, responsibility and business risk in his presentation on ‘Securing Your Mobile Workforce: A Risky Business.’ He propagated the idea of organizations adopting a layered approach to security and how adopting a risk-appropriate strong authentication strategy can help deliver a more optimal balance between maximizing security and user convenience, whilst minimizing cost of ownership. Durga Prasad Dube, Executive Director & Head - Global BFSI Risk Management, Paladion spoke about the issues and prospects of ‘Managing Fraud Risk in Banks’. He felt that frauds across all channels are increasing day by day across the globe in a uniform pattern. The intensity of threat increases drastically when fraudsters start exploiting weaknesses of multiple channels and perpetrate cross channel frauds. He believed that proactive prevention of cross channel transactional fraud required appropriate design and implementation of controls in technology products as well as processes around. This demands in-depth knowledge of the relevant business domains, transactional fraud risk and fraud analysis. “As fraud risk management requires an enterprise level approach, each organization needs to build its own risk framework, depending on its business requirement, risk appetite and technology infrastructure. Access controls based prevention is not enough to manage cross channel real time frauds as they are not designed to understand transactional

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behaviour,” he stated.

CISO & VENDORS

Vishal Salvi, CISO, HDFC Bank moderated a panel discussion on ‘Workshop on Vendor Management’ with the vendor community. Panellists from the vendor community discussed how CISOs work with vendors to ensure that their requirements are factored by vendors in their plans. The vendors seized the opportunity to understand the internal processes that result in products and services that may, or may not accurately reflect the organisation’s needs, Satish Warrier, Chief Information Security Officer, Corporate Audit & Assurance, Godrej Industries said, “While vendors play an important and vital role in our IT infrastructure, we need to know more about the new products that they have to offer.” The third day of ICSC 2011 started on a great note with Director, DIT, Cert-In B.J. Srinath’s address. He used common situations in life to send out a message that CISOs need to look at issues holistically and not as isolated incidents. His erudite talk was driven from day-to-day situations and by applying common knowledge. At the end of the address, he said it was his endeavour to constantly push CISOs to open their envelope and expand their sphere of work as far as IT security was concerned. His session was greatly appreciated by the CISOs. According to Sunder Krishnan, Advisor, ISACA Mumbai Chapter, new delivery models like the cloud have made auditing and governance more complex for organizations. Sundar Ramaswamy, Director - Advisory Services, KPMG in his presentation dwelled on financial inclusion and IT security. The last session was by Bhavin Bhatt, country manager, M.Tech Solutions (India) where he spoke on data security issues. In all, the event turned out to be great success. u Verghese Thomas

“With the rise in mobile devices as a business tool, it is more important than ever for those involved in their companies’ computer security initiatives to have the latest information and understanding of computer crime and security”

Robert Richardson

Director, Computer Security Institute

“The increasing adoption of virtualization among Indian organizations is beginning to have a significant impact on data center disaster recovery (DR) plans”

Anand Naik, Director – Technology Sales, India & Saarc, Symantec India

“The adoption of virtualization and the move to public clouds has created new challenges for segmenting resources and controlling access. Hence, security must become more supportive of virtualization and hybrid deployments”

Harvinder Rajwant, VP Borderless Network- Security, Cisco Systems

“Information security risk management as practiced bears little resemblance to lofty theories and mathematical precision”

Randy Smith, Information Security Manager, United Parcel Services

“In age of Web 2.0 & social media, people have become the weakest link and existing IT security policies have become static and rigid. This has resulted in bringing out a realignment of the approach to IT security”

Harmeet Singh Kalra, Head Strategic Accounts, Check Point Software Technologies

verghese.joseph@ubm.com

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Interview At the HP Discover 2011 event, Steven Dietch, Vice President, Cloud Solutions and Infrastructure, HP, shared his views with Vinita Gupta of InformationWeek about CIO expectations from the cloud

‘Most cloud offerings are not open’ What are the CIO expectations from cloud computing? Today, CIOs are not interested in systems that are proprietary and cannot be customized as per the requirement. Actually, the term, ‘One size fit all solution’ means it fits for none. The major challenge for a CIO today is not security but vendor lock-in. They want IT to be scalable and agile. Also, expectations for insights and real time information are increasing. According to a recent research, conducted on behalf of HP, 72 percent of CIOs said that agility will be very critical to their success in the next five years. Agility enables businesses to make rapid decisions and modify their plans based on changing customer and constituent needs. CIOs thus see value in cloud computing that can provide flexibility, agility and performance. You have to understand that the cloud is not an appliance; it is all about service and application choice and flexibility. Hence we are going to bring a whole lot of applications to the cloud. How is HP’s CloudSystem different from the recently announced Oracle’s IaaS cloud offering? With the help of Converged Systems (that includes HP VirtualSystem, CloudSystem and AppSystem), we are trying to remove roadblocks for CIOs (technology or implementation) in the

informationweek july 2011

cloud initiative. HP will soon add more value to its cloud offering by launching its public cloud. To exploit the full benefits of cloud, like speeding innovation and time to revenue, companies need an integrated approach, and not piecemeal solutions. We do not want to compare our offerings with Oracle’s Infrastructure as a Service (IaaS). But I want to stress that the HP CloudSystem is a complete, integrated platform that enables enterprises and service providers to build and manage services across private, public and hybrid cloud environments. It integrates and automates system management, servers, storage, networking and security to accelerate business processes and reduce time to revenue. Most of the cloud offerings in the market today are not open and compatible with any other hardware or software solution, provide no support and demand self-service capability. On the other hand, the CloudSystem is open and compatible, provides support and is easy to use as it offers drag and drop interfaces for both virtual and physical machines. The CloudSystem also includes the industry’s first dual bursting capability to help clients manage uneven demands. What role service providers play in the cloud ecosystem and how

HP is going to help them? In the ecosystem of cloud, service providers are very important. Large telecom players, VAS providers and system integrators are looking to deliver IT as a service. Service providers want to tap the vast revenue potential of the cloud, but they need a partner to create innovative business models and new revenue streams. Our CloudAgile program enables service providers to become more agile and deliver a new era of cloud services that align with their customers’ changing needs. Do CIOs need to change their approach to BI? Today, vast amounts of structured and unstructured data are being created everywhere, every instant and from a variety of sources. To successfully compete in the age of the Instant-On Enterprise, CIOs need to adopt a new approach to data warehouse and Business Intelligence (BI). This approach must be one that enables them to analyze data from any source in real time to determine actionable patterns and trends. The data can then be used to improve customer experience, reduce operational expenses, reduce exposure to fraud and proactively introduce new services allowing clients to monetize their data assets. The writer was hosted by HP in Las Vegas

u Vinita Gupta vinita.gupta@ubm.com

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Opinion

How vulnerable are you in the virtual space?

Dr. Kamlesh Bajaj

As the Internet and new technologies grow, so do their vulnerabilities

LOGS Read more about Dr Kamlesh Bajaj’s views on: http://www.informationweek. in/Security/11-0606/%e2%80%98Security_ is_now_a_business-centric_ function%e2%80%99.aspx

informationweek july 2011

T, including the Internet, occupies a central role in fulfilling organizational mission in the globalized information economy. Buying goods or services, transferring funds through banks, making credit card payments, sending an email, interfacing with people through social networking sites, exchanging pictures, videos or music are some of the activities, which are routinely carried through cyberspace. It is not only businesses that are critically dependent on the Internet, but also governments that are using e-governance applications to reach out to citizens for delivering services to them. Unfortunately, systems, networks and applications have vulnerabilities, which can be exploited by anyone connected to the Internet to launch attacks against various targets such as corporate or government systems. Criminals can carry out identity theft and financial fraud, steal corporate information such as intellectual property, conduct espionage to steal state and military secrets, and recruit criminals and terrorists. Cyber attackers can disrupt critical infrastructures such as financial, power and air traffic control systems, which can result in outcomes, similar to those that maybe achieved by physical attacks by enemies or terrorists. As the Internet and new technologies grow, so do their vulnerabilities. Knowledge about these vulnerabilities and how to exploit them are widely available on the Internet. During the development of the global digital Internet and Communications Technology (ICT) infrastructure, the key considerations were interoperability and efficiency, and not security. The explosion of mobile devices continues to be based on these insecure systems of Internet protocols. It is the mobile devices

connected over wireless networks that are the new endpoints being used by businesses to reach out to customers and citizens as part of business models that are spawning more and more cyber crimes. Organized criminals, terrorists, and even nation-states are engaging in cyber crimes. Growing dependence of national infrastructures, governance and defence on the Internet has made them vulnerable to such attacks. The growing threat of cyber crimes clearly poses a challenge to organizations, businesses and nations alike. It is instructive to take a look at some of the recent cyber attacks which are as follows: Citigroup: It was reported on June 16, 2011 that Citigroup had told its clients about 360,000 credit cards having been affected by a computer hacking attack. Epsilon, the world’s largest permission based email marketing services company issued a statement on April 4, 2011 that a security breach had affected about two percent of its email clients. Epsilon sends over 40 billion emails annually and counts over 2,500 clients including Fortune 7, to build and host their customer data basis. NIC Websites were hacked by the notorious hacker group Anonymous, as a part of its campaign called Operation India to protest against corruption in the country. IMF systems reported on June 11, 2011 that they were attacked more in the form of cyber espionage with spy software —that was collecting data on social and economic indicators of all countries in the system; also spying on emails in what is known as a spear phishing attack. Lockheed Martin, America’s largest military contractor suffered major disruption in its computer networks in the last week of May, 2011 as a result

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of a hacking attack. It is feared that it might have been a victim of theft of military secrets and plans, although the company has denied in loss of data. Phishing attacks on IDBI bank, ICICI bank and others were reported during the last few months. Sony PlayStation was attacked repeatedly during May-June, 2011 wherein personal identities of over 100 million customers including account details, credit card information were lost to hackers. Sega, a Japanese online games developer admitted to having been hacked through its Sega Europe office resulting in compromise of over 1.29 million records, on June 20, 2011. Google admitted in the middle of June, 2011 that hundreds of gmail accounts of senior US government officers, social activists in China, researchers had been hacked US Government: Web sites of the U.S. Federal Trade Commission (FTC), the U.S. Department of Transportation (DOT). U.S. Bancorp, the U.S. Secret Service, the U.S. Department of Homeland Security, the U.S. Department of State, the White House, the U.S. Department of Defense, the New York Stock Exchange, the Nasdaq and the Washington Post were hacked in 2009-10. South Korean Government: Hackers attacked about 40 websites belonging to the President, foreign office, military and others. Indian Government: Prime Minister’s

Office, Embassies, CBI, Armed Forces have come under hacker attacks during the last two years. This list shows that all organizations, whether in the private sector, or in the government are equally vulnerable to cyber attacks. It is increasingly cheap to launch cyber attacks, but security systems are getting more and more expensive. This growing asymmetry is a game changer. It has another dimension too — individuals, terrorists, criminal gangs, or smaller nations can take on much bigger powers in cyberspace, and through it, in the physical world, as well. This is clearly borne out by recent attacks by ‘Lulz’- a small group of hackers — on Sega, CIA and others. How should organizations and nations respond to this challenge? The answer in one word — through preparedness. The criminals or terrorists can actually launch such an offensive from an unsuspecting network device belonging to someone else, but that is under their control through installation of botnets or trapdoors. This complicates the scenario. Suddenly every citizen using the Net becomes an actor. They have to be educated about cyber security, and the use of good practices to protect their systems against vulnerabilities that are exploited by criminals. Same is true for all organizations — big and small; both in the government and public sector. That’s what makes security difficult. Enterprises have to implement appropriate technical and process safeguards along with physical, legal, and personnel security measures for securing their businesses — best practices for data protection of DSCI fall in this category. Consumers and employees need to be continuously made aware of threats, and advised to use secure ways for conducting online transactions.

Every Netizen has to be educated about cyber security, and the use of good practices to protect his systems against vulnerabilities that are exploited by criminals

u Kamlesh Bajaj is CEO, DSCI

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Opinion

Private clouds? Business execs miss the point

Charles Babcock

Business executives are more interested in building private clouds than taking advantage of the benefits of public clouds, according to an Avanade survey

LOGS Charles Babcock blogs at InformationWeek. Check out his blogs at: http://www.informationweek. com/authors/1149

informationweek july 2011

usiness executives believe their firms should be investing in cloud technologies, according to a survey released by Avanade, an IT consulting group. But most are thinking in terms of private cloud adoption, a move that stalls or diminishes their returns. It’s a conundrum I’ve seen before. During a panel at CA World in Las Vegas last year, I was impressed with how the financial services representatives were eager to talk cloud, but they meant “private cloud.” I’ve no objection to the private cloud. In effect, the next phase of the enterprise data center will be to build out its cloud-like properties for internal use. But focusing on private clouds at the start of your transition to cloud computing would be like the Wright Brothers focusing on the bicycle sprocket when they wanted to get to the airplane. They didn’t do that, and maybe your CEO, CIO, and CFO should rethink what they’re doing if they believe their IT staffs should be focused on private clouds. First of all, let’s take a look at what the Avanade survey shows. Remember, Avanade is an IT consulting firm established by an alliance of Accenture and Microsoft. If anything, responders to its survey may have some prior commitment to Microsoft technologies or perhaps even Microsoft’s Azure cloud. Avanade spokesmen, however, point out that the survey was conducted by a third party, Kelton Research of New York, not themselves, and it surveyed 573 C-level executives, business unit executives, and IT managers in 18 countries. The first thing that stood out to me was that interest in the cloud is picking up rapidly. The survey found that 74 percent of enterprises are using some form of cloud services. This represents a 25 percent growth since Avanade’s previous survey on cloud computing

20 months ago, said Larry Beck, senior director of cloud strategy at Avanade, in an interview. The phrase, “some form of cloud services,” could refer to a host of half measures and dilatory server virtualization efforts. That’s why the second figure that stood out to me from the survey was the amount of the IT budget reportedly being spent on cloud computing. Fifty-five percent of the respondents said their IT budgets had started to grow again and they were no longer being asked to do more with less. Instead, they were being asked to “do more with more,” Beck noted. As they do so, they have three priorities over the next 12 months: cloud computing is number one, closely followed by stronger security, with IT consolidation a somewhat distant third at this point. The way cloud computing (a top priority to 60 percent) and security (a top priority to 58 percent) track each other in the survey makes me think that the parties concerned about one are also concerned with the other. Another place this shows up is in where priorities have changed the most since the 2009 survey: as mentioned earlier, interest in cloud is up 25 percent; interest in security is up 28 percent. Furthermore, elsewhere in the survey nearly 25 percent of responders reported they’ve had a security breach in connection with cloud services, and 20 percent say they have turned off a cloud service and moved back to traditional computing behind the firewall. Nevertheless, IT spending is tending to follow the larger trend in these responses. IT managers have been told to do more with a bigger budget, and one of the chief ways they intend to do so is through increased use of cloud computing. Seventy-four percent of the respondents said they have allocated “up to 30 percent (of the IT budget) to cloud computing.” Kelton Research

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collected basic data from responders on the size of their IT budgets, and found 10 percent of the companies in the survey are spending USD 2 million or more on cloud computing a year. That includes retraining their employees and providing them with cloud services, an investment that was ranked at USD 100 to USD 499 per user, Beck said in the interview. But what kind of cloud, the one represented by Amazon’s EC2 public cloud infrastructure as a service, the one represented by Salesforce.com’s software as a service, or the one represented by Google’s App Engine platform as a service? None of the above. The bulk of the IT spend on cloud computing was in establishing a private cloud behind the company’s defensive perimeter. From the comments picked up by the survey, “security concerns were the biggest drivers for moving back to on-premises applications” among that 20 percent that had discontinued a cloud service. The survey also showed CEOs, CFOs, and CIOs preferred a private cloud when “differentiating internal operations and customer services are at stake.” These of course are the transactions, the intellectual property and data, and unique processes that make the company competitive. Regulations and compliance requirements also force companies to keep data on site as they work with it, with financial services and healthcare services pre-eminent as examples. Avanade’s Beck chose to interpret this pursuit of private clouds as a sign that interest in the cloud is maturing, and implementers no longer think in terms of a test project in EC2. They’re thinking of an elastic, flexible section of the data center running like a cloud and doing more work for them. In the previous survey, respondents relied primarily on public cloud providers. In this survey, “43 percent report they utilize private clouds. Another 34 percent say they will begin to do so in the next 12 months,” Beck said. That means in another year, 77 percent (or close to it) of those surveyed will be private cloud implementers.

Sixty-three percent say they are ready for the private cloud. When responses are restricted to CIOs, CEOs, CFOs, and CTOs, that percentage climbs higher; 70 percent say the cloud will play a key role in their strategy. One in five believes the cloud is the key to generating new revenue. This is a different perception of cloud computing than what we’ve seen in the past, when it was regarded as good for that occasional, demanding workload with brief spikes, like testing a new software application in a variety of environments. It’s more mature in the sense that the cloud is no longer just an experiment but central to future initiatives and revenue growth. I’m not sure the thinking of those choosing to go down this route toward private clouds has matured enough. Granted, the recent Sony game network hacks and the Amazon data center outage in northern Virginia may also be driving interest in the private cloud. Still, the promise of the cloud was to lift the burden of tending servers and patching software from IT managers, letting infrastructure specialists do it. Then IT managers would be free to bring IT services closer to the heart of the business. While there remain regulatory concerns, a well-managed cloud can be proven as Payment Card Industry compliant as internal operations; it only takes PCI-compliant data handling by the cloud customer to complete the picture. Too much of what’s motivating the private cloud build-out is defensive thinking about clouds. Defense will get you somewhere, but offensive thinking will get you further. The enterprise private cloud simply can’t achieve the broad mix of workloads that the public cloud can. Instead of digging in behind the enterprise firewall, private cloud builders might better pour themselves into demanding standardized practices and defined service levels from the public cloud providers. With established terms and clear criteria for security, there might be less a need for big private clouds and a wider enjoyment of the benefits that public cloud computing is poised to bring.

The survey also showed CEOs, CFOs, and CIOs preferred a private cloud when “differentiating internal operations and customer services are at stake

u Charles Babcock is editor -at-large

for InformationWeek. You can write to Charles at cbabcock@techweb.com.

july 2011 i n f o r m at i o n w e e k 61

Feature

core competencies for developing IT Leaders

A 40-year IT veteran shares his framework for grooming high-potential directors for executive-level success

or CIOs to be business and community leaders, they need to build a strong team of officers and departmental directors that can execute without a lot of detailed direction. Without them, the CIO must spend valuable time on daily execution and less time working with the other corporate leaders, reinforcing the perception that the CIO is technologycentric. So building a strong bench is a prerequisite for success. Over my 40-year IT career, most recently as senior VP of architecture and technical strategy at FedEx, I’ve found that most senior IT officers don’t do enough to develop the core management skills of their VPs and promising directors. Performance reviews and annual objective-setting exercises are useful — at best — in aligning individual tasks, management expectations, and organizational

informationweek july 2011

goals. But they don’t build leaders. Particularly when it comes to highpotential individuals, developing IT leaders is a continuous process of mostly small exchanges. Writing from the position of a senior officer, I use a five-dimensional framework which I think sets the core competencies of IT leadership: People, Project, Financial, Executive, and Contract Management. The key to this framework is for senior officer and high-potential individual to use every interaction as an opportunity to help the individual. Those opportunities range from the directional (“Here is what I need from you and these are the things I want you to consider”) to the subtle (“Can you find a more positive way to say that?”). The goal is to build a leader skilled in all five core competencies. Departmental directors should have mastered the basics of managing

people, including teaming, motivation, follow-up, task assignment, legal issues, communications, and company policies. But many haven’t. Often, my first step in developing a highpotential director is to move him or her to a new area under a different VP and monitor carefully how the director and VP manage the change. Typically, another senior officer and I rotate directors between computer or network operations and application development. In one very successful situation, an articulate, personable, but risk-averse director was moved into application development. I told the director the three things you have to learn are how we build software, how to work with business partners, and when to be conservative and when to take a risk--and you should be uncomfortable because you need to be pushing. The instructions to the VP, an experienced development officer, were

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to not let the director fail, ensure that the development processes were in place and understood, and push the director. VPs must master even more skills, such as peer and client relationship building, while deepening and broadening the skills that made them successful. At least half of a VP’s “people management” development comes from managing (re: influencing) people over whom she or he has no authority. This can be a shock to a hard-charging, recently promoted director who has a reputation for getting things done. The reputation that got a director promoted can be the obstacle for further promotion to senior officer. In a classic example, a director with a reputation for “getting things done” and for “doing things his own way” was promoted to VP. “Doing things his own way” diminished his influence and potential for further promotion even though his work continued to be outstanding. Successful IT leaders get things done mainly through deft project management: setting up program and project offices, working with steering committees and working groups, ensuring the coordination of architecture and development teams, and working closely with the finance organization. The two financial management skills new VPs find hardest to master are building a relationship with finance (which is often strained) and working with a team to develop a complex business case. I learned the perils of a poorly thought out business case when I was a new director, tagging along to a meeting with the legendary tough boss at American Airlines, Robert Crandall. I don’t remember what the business case was for, but the bottom line was that if Crandall approved this purchase, it would save 50 IT heads. With great flourish he pulled out his pen, and just as he prepared to sign the purchase order, he said: “Bring me their ID cards.” Of course, the business case was based on cost avoidance, and there

was a lot of yelling before everyone left with the unsigned purchase order. I have never tried to build a business case based on headcount avoidance. Business cases can be built on avoiding future expenses. Later in my career, I assigned a promising IT VP the task of building a business case for a new system that would take data feeds from the operational systems of several companies. The business case was based on the savings of taking these feeds once in a standardized way. It was a large capital project with a significant technical risk and level of invention. The VP led the development of the business case: building teams, pushing the architects, working with the financial analysts, etc. The project

voices Departmental directors should master the basics of managing people, including task assignment communications, and company policies was approved by the board even though the business case was based on expenses to be avoided. And it was a major success. My fourth core leadership competency is the ability to “manage up.” It’s not the executive’s responsibility to discover what’s going wrong in an organization or on a project; management must inform. Without a doubt, there’s an art to knowing what information needs to go up and what situations are expected just to be handled. There’s also an art to informing without getting more help than you want, an art to knowing how to ask when you need help, and an art to knowing what to say and when. Organizations can have long memories — too long — and a misstep in managing up can have permanent career implications. I worked for years with a brilliant director who seemingly

could do anything except be politically smart. He also had earned a reputation as being rude and intolerant of those not as technically astute as he was. He made great improvements, but with this kind of reputation associates read into his words and body language the very impression that he was trying to change. And the occasional minor misstep would wipe away all the progress. I have personally mismanaged executives with bad timing. At one meeting with the CMO and CIO, marketing was giving an enthusiastic presentation on a new technology I had convinced them to use. During the presentation, I interjected the amount of work it would take to do what was being proposed. It was a completely accurate assessment that was completely mistimed, and it took all the enthusiasm out of the room. I doubt the CMO or CIO remembers the incident, but I’m sure it permanently affected their impression of me. Over the last 10 years, I have added contract management as a core competency. More and more work is done via contracts with outsource developers, software and hardware vendors, consultants, and other third-party IT service providers. Sadly, this is probably the least developed IT leadership skill and one that can cost a company significantly. With all the pressures to execute day-to-day IT tasks, it’s too convenient to make believe that third parties are providing the contracted services effectively. Over my 20-plus years as a senior IT officer, I have worked with a few hundred high-potential individuals. All came to me with undeveloped skills. A few didn’t live up to the expected potential. But almost all of them have learned a great deal under this framework and now have a full set of executive IT leadership skills.

u Dr. Larry Tieman has been a senior VP at FedEx, a CIO, or a CTO for the last 20 years. He has worked with some of the great CIOs, including Max Hopper, Charlie Feld, and Rob Carter. He can be reached at Larry@LarryTieman.com

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CIO Profile Career Track

How long at the current company? Working currently at Syntel Ltd for the past four and a half years

R Muralidharan CIO, Syntel

Build a strong ability to identify and deliver key high impact projects which will transform business

Most important career influencer: All my managers were my guiding forces at different points of time. My initial stint at TCS gave me exposure to various technologies. My professors at Jamnalal Bajaj Institute of Management Studies helped me develop the right attitude of being a solution provider rather than a technocrat. Decision I wish I could do over: I firmly believe that all decisions are taken in the best interest given the technical, business and organizational environment at that point of time.

Vision

The next big thing for my industry will be... Mobility and cloud computing and its impact on business models for organizations. Advice for future CIOs CIOs should focus on leveraging technology and enabling transformational business models. They should develop strong business acumen apart from focussing on technology and operations. One of the key traits is to build a strong ability to identify and deliver key high impact projects which will transform business.

On The Job

Top three initiatives ERP system upgradation and automation: An initiative has been taken to upgrade Peoplesoft ERP applications to the latest version. The upgrade has significantly improved system performance and currently projects are underway to automate and provide dashboards for the stakeholders. The project included enhancing the level of integration and information flow between the ERP and Intranet applications used as presentation layer for the business users.

informationweek july 2011

Virtualization and infrastructure consolidation: The initiative was taken to consolidate distributed servers across multiple data centers into a virtualized environment. This led to over 50 percent reduction in the number of servers, optimum utilization of computing and storage resources, over 30 percent reduction in operating costs and significant time reduction to build servers. Single Sign On implementation: This project is currently underway and aims to provide a platform for enhancing productivity of users and information security posture by eliminating the need for the users to remember multiple passwords for various applications. Other benefits include savings in help desk costs facilitated by reduced tickets pertaining to password resets. How I measure IT effectiveness IT effectiveness is measured based on the type of initiative taken in the organization: Operational excellence: l Reduction of unit cost of service provided while improving the quality of service l Timely delivery of key projects aimed at adding business value l Customer satisfaction scores Transformational and strategic projects: l ROI for projects undertaken l Business IT alignment and development of new capabilities l Improving speed and agility for business to perform

Personal

Leisure activities: Reading and watching cricket Best book read recently: The CIO Edge â&#x20AC;&#x201C; 7 Leadership Skills you need to drive results by Graham Waller, George Hallenback and Karen Rubenstrunk Unknown talents (singing, painting etc): I have learnt to play the violin. If I werenâ&#x20AC;&#x2122;t a CIO, Iâ&#x20AC;&#x2122;d be... a researcher focused on high performance computing architecture. u As told to Vinita Gupta

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Technology & Risks

The memory game

Avinash Kadam

To safeguard the password, we invented the two-factor authentication. It could be a token which we now trust to suggest us a ‘one-time password’

http://www.on the web Facebook scammers invite over 10 million people to bogus event Read article at: http://bit.ly/jhGJ0J

oday our entire existence in the e-world depends on our capability to convince the system who we are. We will not be admitted to any of the internet sites, banking portals, social networking sites unless we remember the right password. Even our own PC will refuse to recognize us if we do not remember the magic words which differentiate us from an intruder. We always underestimate our power to remember things. So we write down the password. We are constantly admonished about this habit because a written password can be stolen, lost, misplaced or can fall into wrong hands. To overcome this great mistrust of our own memory and capability to safeguard the password, we invented the two-factor authentication. We now trust someone else to remember or generate passwords for us. It could be a token which we now trust to suggest us a ‘one-time password’. For additional security, we scan and store some digital data pertaining to our biometrics — unique features like fingerprint or retina nerve pattern. We believe that these will now be securely managed by some electronics and will always help us in convincing the entry point about our authenticity. What if this belief is shattered, the way it recently happened in case of RSA SecureId Tokens? Someone breached into the system using a slow and low attack (a more impressive term, APT — Advanced Persistent Threat) which could not be easily detected. The attack was not only against RSA, but against anyone using RSA tokens. So, next we heard that Lockheed Martin, the defense contractor had a major security breach, which was perpetrated through compromised RSA tokens. Now this is worrisome, as millions of customers belonging to thousands of very high profile companies use such tokens. The replacement cost will be in millions of dollars. And how are you sure that similar breaches will not happen again? Can we really trust third parties to maintain security for us? They may have

taken all the reasonable precautions, but still cannot give a guarantee against an unreasonable, very advanced, highly persistent threat. We have not yet heard of a major attack involving biometrics. But observing the trend, it is not inconceivable. How difficult will it be to break into a folder containing biometric signatures and replace them with an attacker’s biometric signature so that the attacker can get in with his/her own signature easily? Someone will definitely come up with another APT for biometric. Since electronics has failed to maintain the secret, why not turn to paper media for help? This is a classic, ancient way of maintaining a onetime pad. Let me give an example. If I choose six numeric characters for my pass-number, I can keep a note of this pass-number on my computer, in my diary or in my memory. But I do not use this number as the password. I convert this number into password by referring to a book. The first two digits on the pass-number refer to the page number, the next two digits give me the line number and the next two digits give me the word number in that line. I can keep changing the passwords, as well as the scheme of reference and also the book to be referred, as often as I want. So, for the same pass-number, different books will give me different passwords. The password could also be a long passphrase. To correlate the pass-number with the password, the attacker needs to know which book I am referring to for the password, and I hope human memory can be trusted to remember this without writing it down. This simple scheme may not be useful in every situation. But it could definitely be used for generating personal passwords and also for changing them frequently. Also we need not worry about forgetting the pass-number as it is written down. u Avinash Kadam is at MIEL e-Security

Pvt. Ltd. He can be contacted via email awkadam@mielesecurity.com

july 2011 i n f o r m at i o n w e e k 65

Analyst Angle

Applying the eight building blocks of CRM to Social Media

Jim Davies

As organizations embrace social CRM initiatives, Jim Davies, research director at Gartner looks at Gartner’s Eight Building Blocks of CRM to improve the effectiveness and long-term success of their programs

LOGS To read more Gartner related blogs, check out: http://blogs.gartner.com

informationweek july 2011

he increase in adoption of social media across media, high-tech, consumer goods and retail sectors has been prolific during the past few years, and is set to expand into other industries during the next three years. Organizations need to embrace this phenomenon as an integral part of their customer relationship management (CRM) strategy. Our research points to improvements in customer and market responsiveness, product development, sales effectiveness and operational efficiency as key drivers. Success, however, requires the same due diligence in traditional CRM that Gartner has reinforced for the past decade. CRM is difficult to get right and Gartner estimates that fewer than 10 percent of organizations have optimized the management of their customer relationships. A decade ago, Gartner created a framework called “The Eight Building Blocks of CRM” to help organizations be more successful. This framework (see below) has stood the test of time and is still highly regarded worldwide. Updated versions of the original research have been released over the years to reflect market shifts, but no fundamental changes have been made to the core framework. Our very latest research emphasizes the additional considerations that organizations now need to factor in across each building block from a social CRM perspective. Many of the social CRM projects Gartner has studied over the past three years have been in the “pioneer” phase, where individuals experiment and break new ground, but don’t

measure benefits. We are now seeing a desire to move to the “settler” phase, where a more structured approach is needed to get business results. Of course, to achieve this settler status, commitment to all eight of the building blocks will be required. Gartner defines social CRM as a business strategy that mutually benefits cloud-based communities and the business by fostering engagement while generating opportunities for sales, marketing and customer service. The key considerations within this definition that organizations need to take heed of are: l Social CRM is a sustainable strategy, not a single project, such as setting up a Facebook page or mining social media l Social CRM requires an increased level of openness and a willingness to engage more with customers l Social CRM relationships need to be mutually beneficial for them to work l Social CRM has to have a positive financial impact on the organization through the associated impact on sales, marketing and service Given these considerations, each of the eight building blocks needs to be refined accordingly.

Social CRM Vision

A CRM vision encapsulates the very essence of a company’s reason for existence, highlighting the differentiated attraction for its customers. A social CRM vision should take this customer value proposition further by embracing the shift of power associated with social CRM to one that is much more balanced.

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Social CRM Strategy

The CRM strategy is a blueprint for how to create and maintain a customer base that is an asset to the company. It needs to integrate with the overarching corporate strategy, and requires the segmentation of customers by attributes such as value, loyalty and satisfaction. Adding a social dimension to a CRM strategy does not technically change anything, it just expands the options available for each segment and each phase of the customer life cycle.

Social Valued Customer Experience

A successful customer experience management initiative ensures that feedback is continually used to help design and refine the customer experience. When adding a social dimension, organizations need to consider how social media can be used to better set/reset expectations with customers, to positively influence the customer experience directly, and to collect feedback on the customer experience and then act on it in an appropriate and timely manner.

Social Organizational Collaboration

Once an organization begins to embrace external social media, new guidelines and policies for employee participation need to be created, and associated aspects (such as its governance and enforcement) embraced. With social CRM and the emphasis on having a true relationship with customers, in which they contribute through activities such as co-creation, support, lead generation and campaign feedback, these “customers” have a far more influential role to play within each department.

Social CRM Processes

Customer process re-engineering to ensure each process flows down a logical path from the customer’s perspective is a common investment area and a key influencer of the customer experience. While executing

The Eight Building Blocks of CRM CRM Vision: Leadership, market position and value proposition CRM Strategy: Objectives, segments and effective interaction Valued Customer Experience Understand requirements Monitor expectations Satisfaction versus competition Collaboration and feedback Customer communication

Organizational Collaboration Culture and structure Customer understanding People: Skills and competencies Incentives and compensation Employee communications Partners and suppliers

CRM Process: Customer life cycle and knowledge management CRM Information: Data, analysis and one view across channels CRM Technology: Applications, architecture and infrastructure CRM Metrics: Value, retention, satisfaction, loyalty and cost to server Source: Gartner (2001)

against a social CRM strategy, specific processes spanning sales, marketing and customer service will potentially be impacted. The key is to determine what processes are most appropriate to be driven socially, and where mass collaboration adds value, ensuring that there is an upside to the customer, as well as the business.

Social CRM Information

In addition to the sheer volume of social data that can be collected from customers and prospects from social environments, the subsequent challenges associated with determining its meaning and importance are the major hurdles to tying that data to individual customers within the existing customer database. The ability to capture the comments made by an anonymous customer called “Jimbo” and then to retrospectively assign them to “Jim Davies,” once a linkage can be determined is a key development area. However, there are lighterweight approaches that can provide some degree of value and should be explored; for example, looking at participants’ follower numbers on Twitter to determine the importance/ impact of their comments.

Social CRM Technology

Most, but not all, CRM initiatives

require some form of technology to enable the CRM strategy. Within the social CRM area, the marketplace is extremely fragmented, with over 100 vendors, each providing a specific functional capability. Most have annual revenue of less than USD 1 million and are not profitable. No single vendor can yet provide a holistic social CRM suite that can facilitate execution of socially driven sales, marketing and customer service processes. However over the next two years, we expect significant market consolidation and much tighter integration between social processes and traditional processes across sales, marketing and customer service.

Social CRM Metrics

The health of any CRM strategy can only be assessed through the provision of appropriate metrics. Once social CRM is embraced, new metrics need to be applied, which are often much harder to measure. Very few organizations have measured the return on investment of their social CRM activities, but this will begin to change in 2011 in line with growing maturity.

u Jim Davies is Research Director, Gartner, Inc

july 2011 i n f o r m at i o n w e e k 67

Global CIO

iPads as a better tool for face-to-face collaboration

Chris Murphy

Think of one-on-one sessions, like doctor-patient or salesperson and a prospect. Will a tablet work better than a laptop?

LOGS Chris Murphy blogs at InformationWeek. Check out his blogs at: http://www.informationweek. com/authors/1115

informationweek july 2011

he standard comparison of laptop and tablet goes like this: laptop good for content creation, tablet good for content consumption. But there’s another area where tablets look intriguing: They can be a better collaboration tool. By collaboration, I mean two people talking face-to-face while sharing and interacting with content on a screen. Think of a patient and a doctor, with the doctor jotting notes on a device and occasionally sharing something on the device with a patient. Think of a salesperson talking one-on-one across a desk, showing various products displayed on the device. Think of meeting a colleague on a trade show floor and wanting to quickly pop open a file to show a message from a would-be customer. A laptop has never fit elegantly in the middle of these kinds of exchanges. With an iPad, it’s as natural as handing someone a plate. Twice in the last week I’ve heard C-level, Fortune 500 IT execs, in very different businesses, paint a very convincing picture of a tablet’s appeal in these kinds of one-on-one business conversations. When you’re sitting across from someone, a laptop creates a visual wall, where the other person can’t see what you’re doing. Not a great atmosphere for building trust and opening communications. I offered some of these thoughts in one of InformationWeek’s e-mail newsletters this week, and I got some excellent reader responses. Here’s one from Dave Sherry, a network architect (who emphasizes that he’s “not antiApple, just anti-hype”): If a laptop is for content creation and a tablet is good for content consumption, then they are not a good mix for collaboration because the communication channel is only one way — without equal content creation power, it’s not collaboration but rather pontification and exposition. About the

only use an iPad has in business is to bring a copy of a presentation closer to the user, carry handout material etc. All one way communication. Oh but wait, isn’t that what execs use smart phones and PDAs for? Good lord, could it be the iPad is just a very pretty... glossy... shiny... big... uh PDA? Here’s another from Randy Schmidt, an IT pro who finds the netbook a better option for mobile work, including volunteer work creating PowerPoints to teach a Sunday school class. He finds it plenty easy to hand the netbook backand-forth, and notes it can handle PowerPoint well and run multiple apps at a time. Writes Schmidt: The biggest drawback I see to tablets is your analogy to the sales guy. Most apps that companies market have not been built for the tablet (right click, left click, scroller, etc.). Most apps I see are built for Windows. And they don’t work on anything other than a Windows-powered tablet. And Windows does not work efficiently on a tablet because it was not designed for that technology (despite what Ballmer has said for the last two years). A tablet is best used for apps that are designed for it. Otherwise it is a clunky round peg in a square hole. To me tablets are a craze that are trying to create a need. Try typing on one for a little while. Banging fingertips on a glass pane is like pounding nails into a board with your fingers. It’s not natural or healthy. It’s like trying to watch a wide screen movie on a 1.5 inch cell phone screen (and do people REALLY do that?) The tablet won’t meet anywhere close to every business computing need, and our data shows some real skepticism that they’ll replace a significant number of PCs. I tend to agree it won’t replace a lot of business PCs. u Chris Murphy is Editor of

InformationWeek. Write to Chris at cjmurphy@techweb.com

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Practical Analysis

Why do Intel’s 3-D Transistors matter?

Art Wittmann

The chipmaker’s new transistor design leapfrogs competitors for now; here’s how it works and why all computer chips will eventually use the technology

LOGS Art Wittmann blogs at InformationWeek. Check out his blogs at: http://www.informationweek. com/authors/6044

ntel announced that it had made the production of 3-D transistors a commercially viable reality and further claimed that in so doing, the company would continue to meet or beat the promise of Moore’s Law for years to come. Intel co-founder Gordon Moore realized that through various innovations in process, chemistry, and geometry, it was predictable that transistors would shrink and that products built on them would become more powerful, less costly, or both. But that doesn’t mean that adhering to Moore’s law is easy. It requires constant research and investment to find and commercialize innovations that allow for smaller and smaller transistors. As they’re used in integrated circuits like microprocessors, transistors can be thought of as switches, when they’re on, current flows; when they’re off, no current flows. The goal of the transistor designer is to make the perfect switch, lots of power can flow when turned on, absolutely no power flows when turned off, and the switch can change states very quickly, requiring very little power to do so. Chips in the first PC CPUs were designed in the early 1970s, had about 3,500 transistors, and used a 10-micrometer manufacturing process. Now, chips have north of 3 billion transistors on a chip and use a process closing in on 10 nanometers, making today’s transistors almost a million times smaller than those from the 1970s. To make that happen, almost everything about chip making has changed in those 40 years. Classical chip manufacturing starts with substrate, usually a wafer cut from a silicon ingot. To make transistors on that wafer, manufacturers go through processes of depositing very specialized materials and then etching some that material off. Each layer’s material is different, and each etching

uses a different mask to produce the desired geometry. The valve or gate is a material that sits across the channel. Depending on the charge state of the gate, the channel material conducts better or worse. When a transistor is off (no electrical field present), some current still gets across the channel. This is referred to as leakage current, and even a little of it is very bad news. While leakage current is a tiny amount in one transistor, if you multiply it by a billion or so transistors, it adds up. In servers it results in heat and in handheld devices it results in reduced battery life. Basically, the smaller the channel, the more you have to worry about leakage current. So as manufacturers go to smaller gates, they have to be very careful to get the geometry right — meaning the etching process needs to be good, and they have to resort to more exotic materials to keep leakage current small — two of the techniques used to limit leakage include strained silicon and high-k dielectrics. Besides allowing for better control of leakage current, going vertical also allows for faster operation of the gate. It can now close off the channel from three sides — hence the name tri-gate — rather than just one. Alternatively, operating voltage can be reduced, which further saves power when the transistor — and hence device — is in its active state. Intel has a lead on this technology. It appears that competitors are a good 24 months behind in bringing it to market. With the new technology, transistoroperating voltages can go down thus saving power. All in all, 3-D transistors are an enabling technology for all chipmakers. The good news all-around is that Moore’s law marches on. u Art Wittmann is Director of

InformationWeek Analytics, a portfolio of decision-support tools and analyst reports. You can write to him at awittmann@techweb.com.

july 2011 i n f o r m at i o n w e e k 69

Down to Business

IT’s lords of discipline

Rob Preston

Many business technology organizations still have a long way to go when it comes to project and portfolio management and functioning like a well-oiled machine

LOGS Rob Preston blogs at InformationWeek. Check out his blogs at: http://www.informationweek. com/authors/showAuthor. jhtml?authorID=1026

informationweek july 2011

aren Garcia’s experience speaks to what’s going well and not so well with IT project and portfolio management. A former programmer and program manager, Garcia recently was promoted to the new role of “chief of staff” for BMC Software’s IT organization, where she’s responsible for applying more operational discipline. All good. But because Garcia’s job requires her to bring more rigor to budgeting, purchasing, vendor oversight, timekeeping, asset management, compliance, and other areas, she faced a lot of early resistance from her IT peers, relates Chris Murphy in our annual salary survey magazine cover story. “If you think you’re going to get something knocked out in a very short time, you’re going to get frustrated,” Garcia says. “I got frustrated.” Despite the dot-com bust and the Great Recession of 2008-2009, many IT organizations — not just BMC’s — still have a long way to go when it comes to functioning like a well-oiled machine. On a positive note, 70 percent of the 684 business technology pros who responded to our recent survey on IT project management said their organizations have adopted formal PM methodologies. Among those who have, their top reasons are to prioritize projects across the enterprise (64 percent), standardize their approach to projects (55 percent), and provide project visibility to the leadership team (34 percent). Among the less common reasons are ones related to project success: track and report on project finances (22 percent), manage risk (22 percent), and track and report on customer satisfaction (2 percent). Those need to be higher priorities. In his in-depth Enterprise Project Management report, InformationWeek Analytics contributor Jonathan Feldman, a leathery veteran who’s now director of IT services for a city in North Carolina, noted that IT organizations tend to have a firm grip on large, expensive projects (runaway projects like the National Cancer Institute’s

Cancer Biomedical Informatics Grid notwithstanding). Where they often stumble is in managing their myriad smaller projects, which can end up grabbing much of the IT budget and resources. Hewlett-Packard, which cut about a billion dollars a year from its annual IT spending thanks to an overhaul of infrastructure and operations, requires its business unit leaders to rank their IT projects — just as 64 percent of the respondents to our survey do. In addition, at the behest of executive VP and CIO Randy Mott, HP’s business unit leaders and their controllers must sign off on a cost-benefit analysis of every single IT project, so they’re not only assigning hard cost numbers to every project, but they’re also estimating the “revenue of IT” to be generated from them. As a result, fewer IT projects make the cut, but HP is assigning more people to each project and requiring faster delivery amid intensifying time-tomarket pressures. Project management and IT discipline isn’t just a budgetary and compliance exercise. It extends to contract negotiation and legal due diligence. Lawyer and consultant Kenneth Richard, in a recent guest column for InformationWeek, related his experiences representing mostly enterprise software vendors in scores of lawsuits brought by customers who simply didn’t pay enough attention to the terms of the contracts they were signing. “Customers that don’t have the foresight to protect themselves invariably want to talk about everything but the contract,” he wrote. (And their lawsuits generally go nowhere.) Whether your organization needs a Leo McGarry-like chief of staff to hold everything together or just better management processes that start at the CIO and are reinforced on, consistency is key. Organizational and process change takes time, so hang in there. u Rob Preston is VP and Editor in Chief of InformationWeek. You can write to Rob at rpreston@techweb.com.