InformationWeek India – September ( Global CIO) by Viraj Mehta

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A new chapter for Apple

Jobs and Apple are almost like a cult, a religion for some — who make repetitive purchases of Apple products

ost technology journalists would love to interview Steve Jobs. So when I heard that Jobs resigned as the CEO of Apple on August 24, I had mixed feelings of sadness and admiration. I’ve been a zealous fan and read everything I come across about Apple and Steve Jobs. When I bought an iPod Nano in 2007, I compared it to other digital music players in the market, and could see a vast difference in features and design. A lot of thought (and love) goes into the design of Apple products and this is evident in the elegant and simple interfaces, product innovation, form factor, and design. Apple products are truly revolutionary and set standards for others to follow. For instance, multitouch screens for iPhone. Today every phone manufacturer has a phone with multi-touch. The credit for this goes to Jobs and his talented team who push the limits of product design. Jobs created products that were ‘disrupters’ across four industries: PC, music, movie and mobile. And these products changed the lifestyles of millions of people. But this sheer genius did not come without failure, both at Apple and Next (the company that Jobs founded when he was ousted from Apple in 1985). Some of his failures were the Next machines, Apple Newton (its first attempt at tablets), Apple Lisa (1983), iMac USB Mouse, iPod Hi-Fi, Apple TV (first generation), and the button-less iPod Shuffle. But then, they say failure is a stepping stone to success. With the acquisition of Next Software (1996), Apple got a great OS X. So, will Apple be the same without Jobs? Can the new man (Tim Cook) fit into Jobs’ well-worn boots? I am no expert on Apple and cannot answer these questions accurately. But what I can say is that Jobs will be missed in his little kingdom — the throngs of ecstatic Apple fans who camp for days outside the Moscone Center in San Francisco every year for Mac World — or outside Apple stores to buy the latest Apple product. I’d go so far as to say that Jobs and Apple are almost like a cult, a religion for some — who make repetitive purchases of Apple products. Jobs will be missed for his marketing genius, his passion and enthusiasm, his penchant for details/perfection and yes, even his business shrewdness and fiery temperament — because it took a combination of all this to make Apple one of the most valuable companies in the world. And so, I wish you all the best Steve. And Apple, I’ll be watching you. Now coming to the theme of this issue. Global CIO awards, now in its third year in India, is our recognition for CIO’s who are adapting well to their new role as business enablers. This year we restructured the whole process and added a number of parameters. We also had a six-member external jury of eminent people from industry and academia. I congratulate the seven CIO’s who won the award.

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

informationweek september 2011

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contents Vo l u m e 3 | I s s u e 0 4 |

September 2011

Cover Design : Deepjyoti Bhowmik

28 cover story CIOs are part of the C-suite CIO performance is measured by a new set of parameters. And it’s no longer about the success and scale of ERP or CRM projects. Here’s what we look for and expect from Global CIOs

the winners of global cio 2011 awards

Vijay Sethi Vice President Information Systems and CIO, Hero MotoCorp

V S Parthasarathy Group CIO, Executive VP – Finance & M&A, Mahindra & Mahindra

Girish Rao

Umesh Jain

35 38

Head -IT, Marico

CIO, YES Bank

K T Rajan Director – Operations , Information Services & Projects, Allergan India

global cio 2010 Hall of fame Do you Twitter? Follow us at http://www.twitter.com/iweekindia

informationweek september 2011

T G Dhandapani

Group CIO, TVS Motor Company

Global CIO, Hexaware Technologies

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

N Nataraj

global cio 2009 Hall of fame If you’re on LinkedIN, reach us at http://www.linkedin.com/ groups?gid=2249272

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THE BUSINESS VALUE OF TECHNOLOGY

interview

CIO of the future: Enterprise leader or Chief Procurement Officer The CIO role is being transformed and is moving more and more towards enterprise leadership, says Harvey R. Koeppel, Executive Director, Center for CIO Leadership

interview

‘Cloud is the core area of focus for HP’ With a huge portfolio, HP is looking at the cloud as a huge springboard that will accelerate its growth in the coming years, says David Caspari, Senior VP, Enterprise Services, HP, Asia Pacific and Japan

12 14 16

20 22

case study

Cloud helps Royal Orchid service customers better Adoption of cloud-based solutions from Salesforce has helped the Royal Orchid Group of Hotels in improving team collaboration and delivering personalized service

opinion

4 things IT can do to embrace social networking Even if your organization has a social media policy and you’re an engaged IT leader, it will take several iterations to get this right

News

EDITORIAL.........................................................6

Intel saves USD 17 million with private cloud

INDEX................................................................ 10

Ramco launches solution for auto submission of returns

news analysis............................................ 24

India eyes 85 percent growth in scale-out storage systems

secret cio.....................................................27

Microland inks USD 55 million IMS deal with Serco

event.............................................................. 54

Indian banks lost ` 12.6 crore due to digital attacks in 2010

opinion.......................................................... 56

BI to help SEBI speed investigations

IBM helps Apollo Munich reduce TCO through server consolidation

feature......................................................... 66 cio profile................................................... 68

India ranks 17 globally in terms of unique IP addresses

technology & risk................................... 69

HP launches cloud-based service to fight counterfeit drugs

analyst angle........................................... 70

42 percent of PCs to run Windows 7 by the end of 2011

Global cio....................................................72

Phishing attacks double in India, says Paladion

practical analysis..................................75

First co-created military vehicle through crowdsourcing

down to business......................................76

september 2011 i n f o r m at i o n w e e k 9

Imprint

VOLUME 3 No. 04 n September 2011

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Managing Director Printer & Publisher Director Group Commercial Director Editor Senior Associate Editor Principal Correspondent Principal Correspondent Copy Editor

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associate office- pune Jagdish Khaladkar, Sahayog Apartment 508 Narayan Peth, Patrya Maruti Chowk, Pune 411 030 Tel: 91 (020) 2445 1574 (M) 98230 38315 e-mail: jagdishk@vsnl.com International Associate Offices USA Huson International Media (West) Tiffany DeBie, Tiffany.debie@husonmedia.com Tel: +1 408 879 6666, Fax: +1 408 879 6669 (East) Dan Manioci, dan.manioci@husonmedia.com Tel: +1 212 268 3344, Fax: +1 212 268 3355 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

Anantha Sayana, Larsen & Toubro ........................40 Arun Gupta, Shoppers Stop and K Raheja Corp. ...............................................................41 Ashish Chauhan............................................................41 C N Ram, Essar Group.................................................38 David Briskman, Ranbaxy Laboratories ..............42 David Caspari, HP.........................................................48 Dhiraj Trivedi, Royal Orchid Group of Hotels ....50 Dr Jai Menon, Bharti Enterprises ...........................42 Dr Nilay Yajnik, Narsee Monjee Institute of Management Studies.................................................30 Dr Pradeep Pendse, Welingkar Institute of Management..................................................................29 Dr Sumit Chowdhury..................................................44 Girish Rao, Marico.........................................................33 Harvey R Koeppel, Center for CIO Leadership.........................................46 K T Rajan, Allergan India............................................35 Karthik Ananth, Zinnov Management Consulting.......................................................................26 Kunal Pande, KPMG ...................................................28 Laxman Badiga..............................................................43

South Korea Young Media Young Baek, ymedia@chol.com Tel: +82 2227 34819; Fax : +82 2227 34866

Liam Keating, Intel APAC ..........................................12

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.

Paul Otellini, Intel .......................................................12

RNI NO. MAH ENG/2001/4730

ADVERTISERS’ INDEX

Manish Choksi, Asian Paints.....................................39 Manoj Sharma, K Raheja Corp.................................52 N Nataraj, Hexaware Technologies........................37 Pradeep Kar, Microland..............................................14 Pravir Vohra, ICICI Bank .............................................43 Rahul Mahajan, K Raheja Corp................................52 Rajat Mohanty, Paladion Networks.......................22 Ravi Garikipati, 24/7 Customer .............................24 Sanchit Vir Gogia, Forrester Research...................28 Sandeep Phanasgaonkar, Reliance Capital .......28

Company name Page No. APC schneider Symantec Cisco Tyco IBM AIX Digilink-Schneider Microwold-e-scan Socomec Zoho IBM CIO Juniper

Editorial index Person & Organization

Website Sales Contact

7 www.schneider-electric.co.in 11 www.symantec.com/en/in 13 www.cisco.com in_assistant@cisco.com 15 www.te.com 17 www.ibm.com 19 www.schneider-electric.co.in 21 www.mwti.net 23 info.ups.in@socomec-ups.co.in 25 www.ManageEngine.com/it360 sales@manageengine.com 77 www.ibm.com 78 www.juniper.net

Sudipta K Sen, SAS Institute ...................................16 Sunil Mehta, JWT .........................................................44 T G Dhandapani, TVS Motor Company................36 U C Dubey, Iffco-Tokio General Insurance Co ..68 Umesh Jain, YES BANK................................................34 V S Parthasarathy, Mahindra & Mahindra...........32 Vijay Sethi, Hero MotoCorp .....................................31 Vikas Gadre, Tata Chemicals ....................................40 V M Kumar, Microland ...............................................14

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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News S o f t wa r e

Cloud Computing

Intel saves USD 17 million with private cloud With a lot of hype and myth around it, cloud today is relevant only if it’s quantified. For chip-maker Intel, cloud is both relevant and real, as the company has saved USD 17 million to date from their internal cloud efforts. Intel’s journey to the private cloud began in 2006, with the successful creation and deployment of a global computing grid to support missioncritical silicon design processes. Today, it is building an office and enterprise cloud on a virtualized infrastructure. As a first step to creating this infrastructure, the company has accelerated the pace of server virtualization with 42 percent of the environment virtualized by the end of 2010. The chip maker also claims to be on track to virtualize 75 percent of their environment over the next few years. Given that Intel is just midway in its journey to the private cloud, both its savings and growth numbers appear significant. “The cloud segment is up 50 percent in the first half of 2011 versus first half

Liam Keating, IT Director, Intel APAC

informationweek september 2011

of last year demonstrating how fast that business continues to ramp. We believe that we are very early in the cloud build-out and Intel remains extremely well-positioned to profitably grow from the explosion of mobile devices and Internet-based services,” Intel President and CEO Paul Otellini said during the company’s Q2 2011 earnings call. Intel has achieved a number of business benefits with their private cloud, which include immediate provisioning, higher responsiveness, lower business costs, flexible configurations, and secured infrastructure. “The provisioning time has reduced from 90 days to three hours and now is on the way to minutes. We have achieved a 20:1 server consolidation ratio, and there has been a shift from capacity planning to demand forecast model. In terms of quality, standard configurations improved consistency and enabled automation,” Liam Keating, IT Director, Intel APAC said at the recently-concluded Intel Cloud Summit in Malaysia. Intel runs all major applications such as engineering (5 percent), sales/marketing (19 percent), ERP (13 percent), HR/finance/legal (22 percent), operations/security/ manageability (26 percent) and productivity/collaboration (15 percent) on their private cloud. Intel recently showcased its latest cloud technologies with “the world’s smallest cloud data center” demonstration tool, which they call ‘cloud-in-a-box.’ The company also promoted several of its technologies relating to security and optimization such as Intel Advanced Encryption Standard New Instructions (AES-NI), Trusted Execution Technology (TXT), and Intelligent Power Node Manager. —Ayushman Baruah

Ramco launches solution for auto submission of returns Reserve Bank of India had recently released an approach paper on Automated Data Flow from various transactional systems of the banks to RBI. By adopting an automated process for the submission of returns, the banks would be able to submit accurate and timely data without any manual intervention. This process would also enable the banks to improve upon their MIS and Decision Support Systems (DSS), etc. From the RBI standpoint, this will ensure uniformity in returns submission. Said Kamesh Ramamoorthy, Chief Operating Officer, Ramco Systems, “The recent announcement from RBI on Automated Dataflow has triggered the need among banks for a solution that will quickly help them to adhere to RBI guidelines. With the launch of Ramco Banking Analytics’ ADF solution, banks will be able to generate all reports as per RBI guidelines automatically. Our ADF solution can be deployed on any database management system and can go live within weeks.” Ramco Banking Analytics is a plug-and-play Bank Performance Management solution, which helps banks to monitor their performance at various levels in the hierarchy under various central banks, as well as bank’s own internal performance parameters on near real-time basis. —InformationWeek News Network

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News Storage

India eyes 85 percent growth in scale-out storage Market interest and acceptance of scale-out storage systems in the Asia-Pacific is seeing a slow uptake, but awareness is still a concern, reveals a recent Gartner report on scale-out storage. Accurate planning of storage resources is a challenge that many organizations have to deal with, generating increased interest in scale-out systems. As per the report, the capacity growth in India is expected to be in the range of 85 percent on a year-on-year basis in 2011, and growth will be driven by a combination of factors, which includes replacement buying, large mega deals within the government segment, the growth within the small and mid-size business segment and private cloud deployments. The report cites cost containment and efficiency of resources as major issues that CIOs across the Asia-Pacific region continue to grapple with. “Earlier CIOs used to over provision their storage requirement. But now due to cost constraints and tight IT budget, the CIO wants to buy just in time. They want flexibility in the infrastructure so that they can

easily scale up and down as per the requirement,” said Aman Munglani, Research Director, Gartner. Scale-out disk storage systems usually cost less than high-end monolithic frame-based scale-up disk storage systems on a dollars-per-terabyte basis. Another of the drivers for scale-out storage is that many CIOs believe that networked storage environments (scale-up storage area networks [SANs]) can scale up only to a certain point. It is rarely possible for a single disk system to scale up to the extent of meeting all the storage needs of an enterprise. According to the report, a number of potential cloud storage providers in the region are looking to deploy scale-out disk storage systems. Commenting on the trend Munglani said, “Secure multi-tenancy and expandability of infrastructure are important discussion points within the cloud provider space. Hence, cloud computing vendors and service providers are using scale-out storage.” —InformationWeek News Network

S o f t wa r e

Microland inks USD 55 million IMS deal with Serco Microland, leading specialist IT infrastructure services company, recently signed a strategic five-year contract worth USD 55 million with Serco, a leading international service company headquartered in the U.K. Bangalore-based Microland has been providing remote IT infrastructure management services to Serco since 2005. Under the new contract, Microland will continue to provide end-to-end infrastructure services for a range of devices through their team located in Birmingham, U.K., and Bangalore, India. “Over the last few years, Microland has been building its leadership and global presence in the rapidly growing IMS space. This strategic contract ushers in a new era for Microland wherein we would now be able to provide an integrated onshore-offshore solution to our global customers,” says Pradeep Kar, Chairman and Managing Director, Microland. Although the U.S. continues to be

informationweek september 2011

the dominant market for Microland contributing about 55 percent of their business, the domestic market is picking up contributing about 18 percent. The growth drivers of IMS in India are also different from that in the U.S. “While cost is the key growth driver

in the U.S., factors like complexity of technology and difficulty in hiring specialized talent are the key drivers in India,” VM Kumar, Chief Marketing Officer of Microland told InformationWeek. Today, Indian IMS providers have gained the confidence of their customers in providing quality offerings. According to Kar, customers in the U.S. choose Indian IMS providers because of superior SLAs and lower cost. “Thanks to the significant experience and success of the software industry, today India has improved in terms of quality, process, mindset and discipline.” Microland pioneered networking in India in 1989, which then transitioned itself into a major provider of Internetbased services by 1999. From 2002 onwards, Microland started focusing on providing IT infrastructure management services, which it believes to be the third wave of the IT services industry. —Ayushman Baruah

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News SEcurity

Indian banks lost ` 12.6 crore due to digital attacks in 2010 Fifty percent of respondents from financial services enterprises in India cited compliance as the primary driver for adopting IT security. In fact, one in four respondents who experienced a digital attack faced monetary penalization. Over the last year, RBI has mandated two factor authentication at banks for all delivery channels. In the past 12 months, 31 percent of respondent-banks invested in identity management, and state that investment in technologies to address such regulations is likely to continue. According to the survey, technology investments 010101010101001110010101001010101000000100111100 during the next financial year 001011101000011@11110101010111011000101010101010 will be made towards stronger 010101010101001110010101001010101000000100111100 001011101000011011110101010111011000101010101010 governance, business continuity 010101010101001110010101001010101000000100111100 planning, securing mobile and 0010111010 PHISHING10101010111011000101010101010 wireless transactions, data loss 010101010101001110010101001010101000000100111100 prevention and network security. 001011101000011011110101010111011000101010101010 Besides increased mobile 010101010101001110010101001010101000000100111100 010101 ID FRAUD 0111001010100101010100000010011100 and online transactions (18 0010111010000110111101010101110110001010101@1010 percent), growing internal threats 010101010101001110010101001010101000000100111100 (15 percent) are also significant factors driving security adoption. The survey revealed that eight out of 10 employees at respondent organizations use endpoints, and that currently 81 percent of smartphone users in these organizations access During the last financial year, 23 corporate information, and 57 percent percent of respondents experienced use instant messaging. an external attack ranging from “CIOs at financial services phishing attempts, theft of proprietary enterprises in India are concerned information and denial of service about the security of their information attacks. External theft of confidential and related losses, leading to crucial information was faced an average of 1.5 attention towards IT governance,” times and internal theft of information said Ajay Goel, managing director, an average of 5.8 times. Financial India and SAARC, Symantec. “RBI services enterprises faced significant guidelines, the impending Basel III financial losses due to security compliance and the IT (Amendment) breaches, with the average loss being Act 2008 regulations are compelling ` 6.86 crore. This figure was nearly the financial sector to take a close look double for Indian banks, at ` 12.6 crore. at how they secure and manage their Sixty-seven percent of respondents who information.” experienced a data breach lost man hours, and 61 percent stated that they —InformationWeek News Network had lost customers as a result. Recent Symantec Security Check – Indian Financial Services Industry 2011 (Banking, Financial Services and Insurance industries) report revealed that firms in the Indian financial services industry lost heavily in 2010 due to phishing attempts, theft of proprietary information and denial of service attacks. The findings, close on the heels of the ensuing deadline for banks to comply with RBI (Reserve Bank of India) guidelines, reveal regulatory and governance mandates as a key driver of IT security for 50 percent of financial services enterprises.

informationweek september 2011

S o f t wa r e

BI to help SEBI speed investigations To achieve the robust surveillance required for ensuring unbiased trading platforms, the Securities and Exchange Board of India (SEBI) chose SAS, for its investigations department. SEBI’s investigators and analytics group uses SAS to analyze market behavior and ensure market safety. Comprehensive data integration using SAS data warehousing and business analytics speeds investigation of suspicious transactions, boosting investor confidence. “Pulling data into our warehouse and analyzing it the next day is our single most important task. With SAS, we maintain uniformity, making data easier to analyze,” said Avneesh Pandey, General Manager, SEBI. He further added, “We collect about 25 GB of data per day and project reaching 80 GB per day in two years. With SAS, we can accelerate the process of utilizing this data.” SEBI can now establish relationships between market participants and generate more accurate fraud alerts based on market participants’ behavior. SEBI uses SAS Enterprise Data Integration Server to load their warehouse with disparate data from multiple exchanges countrywide. The SAS Data Quality component cleanses, standardizes and removes duplicate data to build a single-entity view of market participants. Sudipta K Sen, Regional Director, South East Asia and CEO & Managing Director, SAS Institute (India) said, “SAS with its technical acumen in business analytics and understanding of the Indian market will be able to provide SEBI a single view of customers across exchanges.” —InformationWeek News Network

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News Internet

S o f t wa r e

India ranks 17 globally in terms of unique IP addresses

IBM helps Apollo Munich reduce TCO through server consolidation

India ranks 17 globally in terms of unique IP addresses, 7 in terms of attack traffic origination, and 109 in terms of connectivity speed, according to the first quarter, 2011 State of the Internet report released by Akamai Technologies. The report is based on data gathered from the Akamai Internet platform, which carries between 15-30 percent of the world’s web traffic at any time, and highlights the challenges and opportunities for Internet penetration and broadband adoption in India. Commenting on the report, Sanjay Singh, Managing Director - India, Akamai Technologies, said, “The number of unique IP addresses connecting to our platform from India grew by 21 percent in Q1. India is clearly at the cusp of a mobile data explosion and it will be interesting to track how the newly launched 3G networks will shape the trends in the coming quarters.” The report revealed that global average connection speed increased by 23 percent year-onyear to 2.1 Mbps, while India’s increased by only 0.7 percent to 0.8 Mbps. Also, the percentage of narrowband connections from India (speeds below 256 kbps) was at 35 percent, while the percentage of broadband connections (speeds above 2 Mbps) was at 4.9 percent. As per the report, in the first quarter of 2011, approximately 7 million unique IP addresses from India connected to the Akamai Internet platform, representing 21 percent increase than fourth quarter of 2010. —InformationWeek News Network

IBM and Apollo Munich Health Insurance (AMHI) have completed three years of their 10-year strategic outsourcing agreement. IBM collaborated with AMHI to transform its IT infrastructure and align it to business goals. The deal, valued at ` 196 crore over 10 years, has enabled AMHI to manage their complex multi-application environment and create a stable and scalable processing operation. While the IT spend as a percentage of gross written premium has become more predictable, IBM’s implementation has also brought down the TCO through 20 percent server consolidation. “Over the last three years, we have increased our operational efficiencies and business uptime, resulting in high levels of customer satisfaction,” said Antony Jacob, Chief Executive Officer, Apollo Munich Health Insurance. Under this agreement, IBM provides continuous improvement to bring in necessary changes for driving

informationweek september 2011

operational efficiencies, scaling of operations and deployment of an inherently flexible IT architecture. IBM has also created an annual IT strategy consisting of a roadmap of technologies and processes to be implemented with cycle times associated with each project. “We have helped build a scalable and flexible commercial model to provide greater predictability and direct linkages to business growth, which has helped Apollo Munich achieve significantly lower levels of TCO. Through the standardization brought in, Apollo has ensured single point of accountability for the management of their complex infrastructure and application ecosystem to maintain business continuity and valued technical innovations,” said Ashish Kumar, General Manager, Global Technology Services. —InformationWeek News Network

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News cloud computing

HP launches cloud-based service to fight counterfeit drugs HP has launched its Global Authentication Service, a cloud-based track-and-trace solution based on technology that has been used to fight the global problem of counterfeit and stolen drugs, estimated to claim 700,000 lives every year and representing an illegal USD 75 billion global industry. The HP Global Authentication Service allows pharmaceutical companies to monitor the movement of products through their global supply chains with a much higher degree of accuracy. This helps protect consumers against dangerous or ineffective drugs and enables pharmaceutical companies to protect their revenue and intellectual property from the growing black market. The service is initially being rolled out in India due to the phenomenal growth in the country’s pharmaceutical industry, which also is seeing the

development of a parallel counterfeit drug market. The service, which runs on scalable, cloud-based technology, also can be deployed in other industry sectors, offered in any geographical region and incorporated into an existing

drug production system. The launch of this service assumes significance when you look at the size of the Indian pharmaceutical industry. As of 2009, India’s pharmaceutical industry was estimated at USD 21.04 billion. As this industry grows, so does

the associated risk of a counterfeit market. While India is a leading manufacturer and exporter of highquality generic and patent drugs, the Organization for Economic Cooperation and Development ranked the country as the largest source of counterfeit medicine, with 75 percent of counterfeit drugs worldwide having some origins in India. “HP technology is not only providing commercial benefits to our clients, but is also helping to save lives,” said Prith Banerjee, Senior Vice President, Research, and Director, HP Labs. “The success to date with mPedigree and subsequent commercialization of our Global Authentication Service highlights how valuable social innovation initiatives help in bringing innovative service offerings to the market.” —InformationWeek News Network

S o f t wa r e

42 percent of PCs to run Windows 7 by the end of 2011 Research firm, Gartner has predicted that Windows 7, will run on 42 percent of PCs in use by the end of 2011. Gartner’s latest PC OS forecast shows 94 percent of new PCs will be shipped with Windows 7 in 2011. “Steady improvements in IT budgets in 2010 and 2011 are helping to accelerate the deployment of Windows 7 in enterprise markets in the U.S. and Asia/Pacific, where Windows 7 migrations started in large volume from 4Q10,” said Annette Jump, Research Director at Gartner. “However, the economic uncertainties in Western Europe, political instability in selected Middle East and Africa (MEA) countries and the economic slowdown in Japan after the earthquake and tsunami in March 2011 will likely lead to slightly late and slow deployment for Windows

informationweek september 2011

7 across those regions.” Gartner’s forecast assumes that Windows 7 is likely to be the last version of Microsoft OS that gets deployed to everybody through big corporate wide migration. In the future, many organizations will also use alternative client computing architectures for standard PCs with Windows OS, and move toward virtualization and cloud computing in the next five years. “By the end of 2011, nearly 635 million new PCs worldwide are expected to be shipped with Windows 7. Many enterprises have been planning their deployment of Windows 7 for the last 12 to 18 months, and are now moving rapidly to Windows 7,” Jump said. Also, shipments of Apple iMacs and Mac OS share on new PCs have seen an

increase in the last 12 months. Mac OS was shipped on 4 percent of new PCs worldwide in 2010 versus 3.3 percent in 2008. Mac OS is forecast to be on 4.5 percent of PCs in 2011, and grow to 5.2 percent of new PCs in 2015. Shipments will grow stronger in mature markets where consumers are buying into the Apple product ecosystem. “The adoption of Mac PCs and Mac OS is a result of Apple’s ability to grow well above the market average in the last 12 to 24 months, thanks to its ease of use from the user interface (UI) point of view and ease of integration with other Apple devices, such as the iPhone, iPad, iPod touch and the existing Apple ecosystem of applications and programs,” Jump said. —InformationWeek News Network

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News Security

Phishing attacks double in India, says Paladion While globally phishing has gone down, in India it’s up and rising. In fact, the number of phishing attacks in the country has doubled from last year. Paladion Labs, the research wing of information security services provider Paladion Networks, released its report on ‘Phishing Threat Intelligence’ for H1 2011. According to the report, the U.S. continues to host the highest number of phishing attacks contributing about 64 percent of the attacks in India followed by the U.K. and Ireland, which contributes 7 percent each. The report suggests that the .com domain hosted the highest number of phishing sites in the first half of 2011, though in the past

country-specific domains like .co.cc have been seen as preferred hosting domains. Phishers chose Internet service providers (ISPs) based on the ease of hosting, cost of hosting, and difficulty in shutting down time. U.S.based The Planet, BlueHost and Cogswell are among the most used ISPs by phishers. Interestingly,

the number of phishing attacks increased manifold during April-May as people travel during these months and are relatively less alert. Also, the maximum numbers of phishing sites

are launched during business hours. This, according to the report, is because business hours in India/Middle East region (user countries) are off-business hours in the U.S., which makes take down of sites more difficult. The report points towards another trend of phishing sites being sent as HTML attachments in e-mails rather than hosting on a server. E-mail attachment-based phishing gives certain advantages to phishers such as there is no site to take down and hence effective time is longer. Browser blacklists do not apply to this category of attacks, which again increases effective life. “New phishing techniques have emerged like vishing through phones, e-mail-based phishing, financial malware-based phishing, https-based phishing sites, and financial regulatorbased phishing sites,” says Rajat Mohanty, CEO of Paladion Networks. —Ayushman Baruah

S o f t wa r e

First co-created military vehicle through crowdsourcing Dassault Systèmes, a leading player in PLM solution has teamed with Local Motors to deliver the first cocreated military vehicle. Local Motors’ community was asked to develop a vehicle body design that could support two types of missions — Combat Reconnaissance and Combat Delivery & Evacuation. With Dassault Systèmes’ Version 6 platform and Local Motors’ expertise in crowd-based design and manufacturing, the winning vehicle went from concept to working prototype in less than six months. Participants in the challenge submitted their designs online for review. Feedback from the community of more than 12,000 designers and enthusiasts enabled participants to incorporate ideas and concepts

informationweek september 2011

from their peers. After receiving and validating more than 150 design entries, Victor Garcia’s FLYPMode design was named the winner of the Defense Advanced Research Projects Agency’s (DARPA) Crowd-derived Combat-support vehicle (XC2V) Design Challenge and was subsequently built into an operational prototype. “We both see the future of product creation based upon an open process where we gain wisdom from the masses,” said Jay Rogers, CEO of Local Motors. Dassault Systèmes supported the project by providing technology for individuals to design independently and collaborate amongst each other. Dassault Systèmes’ 3DVIA Composer was provided to each design participant

as a part of the project ignition kit. Local Motors is pioneering a new manufacturing paradigm based upon online crowdsourcing for product co-creation where a virtual community collaborates to leverage the collective knowledge base in order to develop the most optimal solution. “This is a great example of how our technologies are enabling true social product development to take place. By empowering individuals to use 3-D to share ideas, create products and give feedback, the voice of the end-user can be heard earlier in the process, making sure the end-product is even more closely attuned to actual market need,” said Al Bunshaft, Managing Director North America, Dassault Systèmes. —InformationWeek News Network

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News Analysis

Predictive analytics can transform customer service BPO firm, 24/7 Customer, is setting a new trend for customer service by using predictive analytics to predict customer behavior By Srikanth RP Every organization wants to know what the customer is thinking about its services or products. However, in this age of instant gratification, customers are impatient and want answers to their queries immediately. Can information technology help? 24/7 Customer, a BPO firm believes so, and is using predictive analytics to help its clients improve the way they deal with customers. 24/7 Customer also recently became the first BPO in the world to win a patent from the U.S. for its customer contact management system, based on predictive analytics. “Imagine you were on a company website trying to figure out certain information, and a chat window popped on the screen. But instead of merely posing the question ‘How may I help you?’ the social and interactive media agent on the other side knows exactly what you have been looking for. Customers can do this today by using our predictive analytics solution,” explains Ravi Garikipati, Chief Technology Officer - Innovation Labs, 24/7 Customer. The predictive analytics solution enables large consumer-centric companies across the world to transform their customer interactions from traditional contact channels such as phone and e-mail to predictive and personalized online interactions. The solution, delivered through a SaaS model, is called ‘Predictive Interactions’ or Px. Garikipati says that a customer today is naturally inclined to search for information on search engines such as Google or the website of a vendor, before he decides to call the customer care number. “Our clients attract huge volumes of traffic on their websites. If we study the web logs and analyze the footprints of visitors, we can gauge what the customer is looking for. When you correlate this with the calls received by the call centers of the respective companies, you can analyze the gap in addressing customer queries effectively,” says Garikipati. For example, if the top five customer queries received by the call center are on a particular area, then a company may want to re-look at the way the same information can be provided on the website. “When customers switch from

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one channel to another, the end result is always a drop in customer service satisfaction levels,” says Garikipati. Besides using it internally, the predictive analytics solution has also been used for a U.S.-based wireless carrier. Before deploying the solution, the client relied on e-mail as a primary channel for support services, complemented by voice support. A growing customer base resulted in an increase in the support requirements and e-mail as a channel was not effective. This resulted in a backlog of e-mails, increased resolution time and lower customer satisfaction. To address this issue, the carrier used 24/7 Customer’s Px for Service, a predictive SaaS solution. The solution included chat as a support channel to enable real-time interaction and supported this with text mining and analytics. The analysis of information provided operational insights to enable better decision making and performance management. The success of chat as a channel encouraged the client to expand the support to the general queries queue — one of its busiest and most complex queues.

“With predictive analytics, the client realized an an overall saving of USD 3.6 million”

Ravi Garikipati

Chief Technology Officer - Innovation Labs, 24/7 Customer

“The predictive analytics solution allowed the client to replace a non-performing support channel with real-time chat support combined with analytics and text-mining. The client realized an average saving of USD 2.4 on each transaction with an overall saving of USD 3.6 million,” states Garikipati. As the solution is delivered using a SaaS model, Garikipati claims that the solution can easily reduce contact center costs by at least 20 percent. With a huge number of companies in India offering services for their global clients, 24/7 Customer has a huge opportunity to take a lead in the highly competitive BPO segment. u Srikanth RP srikanth.rp@ubm.com

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News Analysis

Cognizant jumps over Wipro, is it a big deal? Will Cognizant be able to sustain its growth and why do we care if it has overtaken Wipro in quarterly revenues? By Ayushman Baruah The news that Cognizant pushed aside Wipro to become the country’s third largest IT services company was interesting but wasn’t surprising. Cognizant has been on a steep and steady growth trajectory for the last two years or so, which makes the giant leap inevitable. In the quarter ended June 30, 2011, Cognizant’s quarterly revenue rose to USD 1,485 million, up 34.4 percent from the year-ago quarter as compared to Wipro whose IT services revenue stood at USD 1,408 million, a year-on-year increase of 16.9 percent. This makes Cognizant’s revenue USD 77 million more than that of Wipro. Cognizant’s net profit for the quarter rose 21 percent to USD 208 million while Wipro’s net profit rose just 1 percent in the same period to USD 299 million. Cognizant’s revenue outlook of USD 1.57 billion for the quarter ending September 30, 2011 was also higher than Wipro’s revenue outlook for the period — USD 1.43 billion to USD 1.46 billion. The striking growth numbers and strong projections leave no doubt that Cognizant is racing past its peers. The question is, how? “One of the reasons for Cognizant’s fast growth has been its low-margin structure,” says Karthik Ananth, Director of Zinnov Management Consulting. Cognizant maintains operating profit margins at about 17 to 18 percent, compared to the industry average of its Indian peers which is about 25 percent or more. Cognizant has also taken advantage of its nimble organizational structure in contrast to peers Infosys and Wipro, which have undergone major management restructuring in the recent past. Though the management re-shuffle in both these companies is expected to create a positive impact in the long term, analysts believe some adverse impact in the short-term is normal. However, there is an air of skepticism in the industry that Cognizant’s strong focus on the BFSI vertical could be a dampener if economic uncertainties continue in the U.S. The BFSI sector accounts for over 40 percent of Cognizant’s revenues, in

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comparison with Wipro, which has only 26 percent of its revenues from this segment. According to Nasscom, “The economic crisis in the U.S., unfolding over the last few days, does not have any major bearing on the country’s private sector. Although the global economic environment is a cause for concern, it is not likely to impact the Indian IT industry in the near-term future.” Should it have any impact, whatsoever, in the mediumto long-term, it will not be specific to one company or one vertical. “The next 18 months or so will be a dull period but if there is any impact of the U.S. slowdown in India, it will be across the board and not limited to Cognizant,” says Ananth. Interestingly, at a macro level, whether Cognizant has overtaken Wipro or not is irrelevant. There are other companies like IBM and Accenture, which already are much larger than any of the Indian IT companies but they are usually not part of the media and analyst’s pecking order. U.S. headquartered Cognizant is often compared with the Indian IT firms because of its Indian management and because it is comparable in terms of similar lines of businesses. It would be difficult for any financial analyst to compare an Infosys or a Wipro with say, an IBM, which is into multiple segments like software, hardware, and services. Cognizant also has a whopping majority of 75 percent of its over 1 lakh employees based out of India. The other curiosity in the industry is whether Cognizant will be overtaking Infosys next. That question, again, may not be too relevant in a broader sense but in terms of the number game, it just might. For, Cognizant is just USD 186 million behind Infosys in quarterly revenue. Given that Cognizant has not missed market estimates in the last two years, it may not be too far away when it becomes the country’s second largest software company in the pecking order of media and analysts. u Ayushman Baruah

ayushman.baruah@ubm.com

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Secret CIO

Meet the manager who will replace me

John McGreavy

Want to go from high-performing IT manager to someone on the CIO short list? Here’s what gets my attention

http://www.on the web The business focused CIO: The need of hour for Indian enterprises Read article at: http://bit.ly/h5WfE4

n this column, I’ll lay out what I think it takes for managers to go from highperforming to CIO-caliber. Future CIOs figure out the players. They get to know the senior line-ofbusiness execs who deliver the core business results on both, professional and personal levels. They ask them how things really work, how decisions get made. They figure out the results those execs are accountable for, and, most important, how the execs’ performance is measured. And they ask IT questions like: How do you know IT excellence when you see it? They then use this information to elevate their influence in the organization. When I was an IT manager, I interviewed our LOB VPs. During the interview with Reggie, our Sales VP, he told me he would know that IT is well-managed when every employee is using the same laptop computer. I was shocked. This was my opportunity to understand strategic selling and devise an IT strategy to make a difference, but Reg thought my job was to standardize on a laptop. Still, it gave me an insight into what he valued in IT. In the coming months, I made certain he saw the standards we were implementing. And as I built credibility on his terms, our chats turned to strategic selling. Over lunches in the cafeteria, we collaborated on a CRM application that subsequently became a foundation for our company’s sales strategy. Future CIOs understand the language of accounting and finance. Every VP or senior manager must understand those fundamentals. They set budgets, revise forecasts, approve fixed asset spending, understand depreciation’s impact on profitability, and hold themselves and their teams financially accountable. Individuals who don’t understand this basic language can’t ascend beyond a mid-tier level. Future CIOs don’t just complete

a project; they create a solution to a business problem. And they make sure everyone knows it was their baby. For example, our VP of sales blamed our poor customer survey results on our phone system. We knew that the old non-IP system had its limitations, but no one could figure out the root cause of customers not connecting to the right agent. I could have given the job to our communications manager, but I asked one of my top managers to solve the problem. Instead of embarking on a standard phone system upgrade, this manager — who will be CIO someday — took on the mandate to improve customer satisfaction. She established call-handling benchmarks. She interviewed VPs and LOB managers to understand how they measured customer satisfaction. She learned about call centers. She talked with customers. She put a technology project in place as well, and when process changes were completed, she demonstrated, using the same metrics, that satisfaction levels had increased significantly. She then presented those results in regional departmental meetings. Future CIOs keep the engine running. No one gets to be CIO if the core IT engine is misfiring. Networks must work all the time. Same goes for web services, ERP transaction systems, storage systems and virtualization environments. Future CIOs make this happen through superlative people management. They develop and motivate their teams to work on the right things at the right times. They plan and execute aggressively. The managers who demonstrate these attributes will likely see their names on my succession plan. u The author, the real-life CIO of a

billion-dollar-plus company, shares his experiences under the pseudonym John McGreavy

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CIOs are part of the C-suite CIO performance is measured by a new set of parameters. And it’s no longer about the success and scale of ERP or CRM projects. Here’s what we look for and expect from Global CIOs By Brian Pereira

usiness is tough. Developed markets are slipping into another recession; profits are reducing or yet to come; there are new competitors and ever demanding customers; and high-license costs and stringent compliance norms are driving managers up the wall. These reasons are driving business leaders to look for innovative ways to sustain and grow the business. And the CIO is expected to contribute directly to the business. Ten years ago, Chief Information Officers, Chief Technology Officers and IT Heads were actively engaged in technology procurement and deployment and in “keeping the trains running.” They were in essence, demonstrating technological leadership. That continues today. However, technology ROI is no longer measured in terms of the project success or scale. Rather, it is measured in terms of business yields. And so the CIO has moved on from a role of ‘IT Leader’ to that of ‘business enabler’ or ‘enterprise leader.’ And this is what our jury was looking for when selecting the InformationWeek Global CIOs this year. Mark P MacDonald, Group VP and Head of Research Executive Programs, Gartner, says the context in which IT is going to be asked to respond to these business changes in the future has changed dramatically from one particular situation. “The coverage of IT systems and major business processes has crossed a tipping point. When you have anywhere between 60 – 70 percent or more of your major business processes supported by information technology, IT’s role changes from building and covering things to being able to improve and generate a yield on the IT assets.” Harvey R Koeppel, Executive Director, Center for CIO Leadership, foresees the emergence of the business-savvy CIO whose role is ‘harmonized’ with other executives in the C-suite. “The largest change that we are seeing in the role

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of the CIO specifically is more ‘harmonization’ between the agendas of C-suite, particularly the CIO and the CEO and the entire IT organization. We see a role that we define as the ‘business savvy CIO.’ Here the CIO is a leader at the enterprise level, who really understands business, business strategies, and who is an active part of the development of the business strategic planning process. The role is also highly focused on creating and driving sustainable business value (top line revenue, earnings per share, customer satisfaction/ retention).” Sandeep Phanasgaonkar, President and CTO, Reliance Capital, who is InformationWeek Global CIO 2010, describes a CIO’s role in business transformation. He feels the CIO is becoming a lot more business-oriented and ensuring that his IT strategies are driving business plans.

Meet the Jury l

Arun O Gupta, Customer Care Associate & Group CTO, Shoppers Stop Limited

Kunal Pande, KPMG Director - Management Consulting

Dr Nilay Yajnik, Professor and Chairman – Information Systems Area, Narsee Monjee Institute of Management Studies, Mumbai

Dr Pradeep Pendse, Dean IT/e-Business/Business Design and Innovation, Welingkar Institute of Management, Mumbai

Sanchit Vir Gogia, Sr. Analyst, Forrester Research

Sandeep Phanasgaonkar, President and CTO, Reliance Capital

www.informationweek.in

“CIO performance gets measured by the success of how much IT has helped the business. It’s not about how successful has been the implementation of his project. So his performance is measured on parameters like increased sales, customer satisfaction, reduction in costs etc. It’s also about the kind of influence that he has internally, which can create an enterprise impact,” said Phanasgaonkar. InformationWeek magazine created the Global CIO Awards to acknowledge and recognize CIOs who are adapting well to this transformation. This annual award is presented to CIOs for their direct contribution to the business through strategic decisions, innovation and cutting-edge projects. In 2009, ten CIOs from leading Indian organizations spanning diverse industry verticals made it to the first-ever Global CIO 50 List. In 2010, three Indian CIOs shared this honor. These top-notch CIOs are now honorably inducted in the InformationWeek Global CIO Hall of Fame.

HOW WE ASSESSED

This year the Global CIO Awards was conducted autonomously and independently by InformationWeek editors in their respective world regions. This gave the editors a free hand to refine the process and make it a lot more structured. For India, we had three levels of assessment, an internal jury of InformationWeek editors and also an external jury comprising six members (See ‘Meet the Jury’). At the first level, the InformationWeek editors scrutinized all the nominations looking for business benefits and impact of CIO initiatives and projects. We saw nominations from well-known CIOs who regularly participate and speak at industry forums. What let some of those ‘popular’ CIOs down was low visibility — they did not articulate the business benefits well enough. While they had years of experience on the technical side, they lacked business experience. Responding to a question in our online survey asking about their contribution to business, some CIOs either used bullet points or numbered lists with sketchy details — or wrote elaborate details about (ERP) project implementations. The jury pointed out instances where CIOs were not involved in strategic business decisions. They report to other IT Heads at the group level — not to the CEO or CFO. The jury looked for the kind of influence that a CIO has among other C-suite members and among peers in the rest of his/her organization. What is his/her involvement and

“I looked for visibility in their contributions to the business. I feel the benchmark for good IT leadership is the overall approach to the linkage of IT and business” Arun Gupta

Customer Care Associate & Group CTO, Shoppers Stop

“I looked for CIOs who are a part of the top management and managed IT and business at the global or regional levels” Dr Pradeep Pendse

Dean IT, Welingkar Institute of Management, Mumbai

participation in the business strategy and strategic decisions? Points were also awarded for CIOs who articulated how their responsibilities grew over the years. A good leader also grooms and grows his team. So we had points for that as well. The jury checked how well CIOs groomed their reportees, and if their people ascended to leadership positions. Apart from this, the jury was looking for qualities like maturity and mindset change in CIOs. To make the whole process transparent and well understood, we are offering more details about the process and parameters applied to nominations at all levels. Obviously, this will also serve as a guide for those who plan to apply next year.

METHODOLOGY

In May 2011, InformationWeek initiated a self-nomination process. CIOs in India were invited to respond to an online survey that was open for a period of three months. The survey was promoted through a targeted e-mail campaign and a series of in-house advertisements in InformationWeek magazine. By the end of July 2011, the Editorial team received 54 nominations in all, directly from Indian CIOs or IT Heads. All entries were validated internally and a few were filtered out. Some nominations were submitted by executives who we felt were not professionally qualified to be IT Heads (Accountants, Sr. programmers trying their luck!). We also looked for long-term and consistent performance. CIOs who are in transition to new companies or who have just changed organizations were not shortlisted. This is why some very prominent and well-known CIOs did not make it to our list, even though they satisfied most parameters. We considered performance mostly in the current company. At the first level, an internal jury of InformationWeek editors shortlisted the list of nominations down to 29 applying all these parameters. This list was published on the InformationWeek website in August 2011. CIOs on this list were informed accordingly.

External Jury

We next sent the 29 shortlisted entries to an external jury comprising six members (see ‘Meet the Jury’): two academia, two market researchers/auditors and two InformationWeek

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JURY ASSESSMENT PARAMETERS We applied the following parameters for shortlisting. These parameters were also used by the external jury at the next level. To avoid confusion, the CIO who applied for this award is hereafter referred to as ‘applicant.’ • Global exposure: Has the applicant worked at the international level? What kind of projects were done overseas, either while working abroad or from Indian shores? • Reporting structure: Does the applicant report to another IT head at the group level? Or is the applicant a Group CIO/CTO with other IT heads (from SBUs) reporting to him/her? Does he report to the CEO or CFO? • Consistency: CIOs in transition to new companies or those with less than a year’s experience in current company do not qualify. • Visibility: We looked for their direct contribution to the business and what kind of impact their initiatives made on business — in terms of cost savings, improving efficiency levels, increasing revenue, improving services, Global CIOs. The jury applied all the parameters (See ‘Jury Assessment Parameters’) and their own. In some instances, jury members conducted telephonic interviews with finalists. We asked the jury members what they were looking for in CIO performance. Most of the nominations shortlisted were well-articulated and the business impact was visible. Also, many of the CIOs were highly experienced. So it was a “tough choice” for the jury. Dr Nilay Yajnik, Professor and Chairman – Information Systems Area, Narsee Monjee Institute of Management Studies said, “It was a very difficult task for me to choose the winners of this prestigious award since each write-up that I evaluated had major plus points. However, I zeroed in on those CIOs who, in my opinion, made significant innovations in the usage of IT for giving their organizations a significant competitive advantage.” Some of the nominations that we received went into pages with details of project implementations, but our jury was really looking for the impact on the business. They kept

“I zeroed in on those CIOs who, in my opinion, made significant innovations in the usage of IT for giving their organizations a competitive advantage” Dr Nilay Yajnik

Professor and Chairman – Infomation Systems Area, NMIMS

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introducing new products and services and supporting business initiatives. • What are the other responsibilities of the applicant, both internally and externally? • Is the applicant a part of the Executive Management Council/Committee (or equivalent) where he/she communicates directly with C-suite executives and is a part of strategic business decisions? • Experience: Total number of years on the business side and in the IT function. • Past awards, certifications and recognitions. • Leadership: Have executives in the applicant’s team (past or present) moved on to leadership roles in the applicant’s organization or elsewhere? • Consistent performance: How long has the applicant been with the current company? What has been his/her growth and track record in the current company? Growth in responsibilities.

a sharp eye for figures and percentages relating to business benefits. “I looked for visibility in their contributions to the business. I feel the benchmark for good IT leadership is the overall approach to the linkage of IT and business. I was also looking for consistent delivery across geographies, despite cultural differences,” said Arun Gupta, Customer Care Associate & Group CTO, Shoppers Stop. We observed that while many CIOs had a lot of experience on the technical side, there were few that had rich experience at the business and strategic levels. “While all CIOs I evaluated had rich experience, most barring a few were also a part of the top management teams in their respective companies. But many of them lacked experience of managing IT and business strategy at a global level. I looked for CIOs who are a part of the top management and managed IT and business at the global or regional levels,” said Dr Pradeep Pendse, Dean IT/e-Business/ Business Design and Innovation, Welingkar Institute of Management, Mumbai. To sum it up, a good CIO has really got to be a good business leader and should be able to actively contribute to business growth and success. Implementing technology and managing projects is no longer a big feat today — this can be done by technology and integration specialists. What really counts are the strategies and initiatives taken to save costs, improve revenues, boost customer satisfaction and to provide better products and services through cutting-edge technology and innovation. That’s how we chose our seven Global CIOs this year — who will receive the InformationWeek Global CIO 2011 Award at INTEROP Mumbai on September 29th, 2011. Their profiles follow, in no particular order of ranking.

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global cio 2011

Blending IT with business

Vijay Sethi Vice President Information Systems and CIO, Hero MotoCorp

bout seven months ago, the erstwhile Hero Honda Motors, India’s largest two-wheeler company, decided to part ways with its major equity holder, the Honda Motor Company. Operationally, the parting was a difficult one and there were many activities to be performed within a short timeframe. For Vijay Sethi (and other executives in his company) this was a highly challenging situation. They had to review legal, operational and people aspects, and make the most suitable decisions for the future of the company — now known as Hero MotoCorp. Donning his business cap, Vijay Sethi successfully helped the company in its separation, and in its transition to the new company. Sethi has also done a commendable job of blending IT and business at his company — he wins the Global CIO Award largely on the basis of this accomplishment. To quote one of the jury members, “Vijay demonstrates excellent mix of business and IT responsibilities, which many CIOs aspire to achieve. His contributions and increasing responsibilities with the business are commendable.” Sethi has extensive experience in developing and deploying IT strategies and plans, managing global deployment, maintaining enterprise-wide applications and infrastructure and implementing business continuity plans. He has traveled to more than 25 countries and led

several IT integration projects for Global M&As. Of his 22 years in the industry, Sethi has served almost four years at his current company. He is responsible for IT initiatives across the organization. Sethi is also on the Enterprise Management team. This is the core leadership team, which makes crucial business decisions. The sevenmember team includes the MD & CEO, the CFO and other business heads. Apart from this, Sethi has other responsibilities at Hero MotoCorp. For instance, he heads certain cross functional teams within the organization — the teams that are formed to work on specific business issues (usually non-IT related). Sethi is also credited for driving certain projects and initiatives that have contributed to the business. The most notable one being the Dealer Management System (DMS) — an implementation of Siebel-based software at more than 500 dealer sites across country. He claims this was one of the largest IT projects undertaken by a manufacturing organization in India. He also spearheaded the Product Lifecycle Management System — an implementation of Siemens Team center-based software linking the R&D and manufacturing operations of the organization. And then he helped deploy Governance Risk and Compliance Software. When we last met Sethi, he spoke passionately about Hero Honda Goodlife, a customer loyalty system that converts the existing paper-based system to a card-based online system. He can talk for hours about the numerous initiatives on IT infrastructure, information security and Green IT. When the jury examined Sethi’s contribution to the business, they could see clear visibility across most of these initiatives. However, he did not quote numbers to prove the ROI, citing confidentiality reasons. To measure the IT-business alignment, he uses external and internal metrics. External metrics: Study of companies last year showed that less than 3 percent of companies mention IT in their annual reports. In its last annual report, two whole pages were devoted to IT. That clearly demonstrates that IT is an integral part of business. Internal metrics: Notwithstanding the recession (2008), the company continued to increase its IT budgets. While most companies were slashing budgets in 2008, the company boldly sanctioned a ` 100 crore project. In a tele-interview with one of the jury members, Sethi said, “IT is as much a part of business, as business is a part of IT. They are one today. Anything that IT has to do has to contribute to the business. When business strategy is planned, IT is part of the discussion. Businesses know that they cannot do anything without IT. It is a mutual pull.”

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The multifaceted CIO

V S Parthasarathy Group CIO, Executive VP – Finance & M&A, Mahindra & Mahindra

S Parthasarathy or ‘Partha’ as he is fondly known, has a strong background in business. In the past 11 years at Mahindra & Mahindra (M&M), he took on the IT mantle and quickly adapted to this role, while continuing to drive key business initiatives for several group’s companies. He’s known to be a ‘multifaceted’ CIO who is adept with both business and technology aspects. Partha was the unanimous choice of all the jury members (except one). And the jury did not collaborate on their decision. One jury member said, “Partha took over the mantle from a seasoned CIO and fitted well into the shoes. His articulation of IT and linkage to business is excellent. While in his tenure as the Group CIO, significant projects have not yet been executed, but the overall responsibility and role which he has been managing deserves commendation.” And another said, “Partha has been spearheading multifarious activities and is highly visible on the IT landscape. He has articulated his role in the business well and has proved that he lives the IT role through great projects such as the SAP implementation. He is a great example of the CIO role changing in a big way and demonstrates how IT helps the business.” Partha joined M&M in 2000 as Head of Information Technology & Performance Management. He gained rich experience on the business side, having served several key

informationweek september 2011

positions and roles such as Accounts & Finance, business planning, international operations, policy deployment, strategy, and mergers and acquisitions for the farm equipment sector. The Mahindra Group is a federation of various companies. Today, Partha is Director at 19 of the group’s companies, including listed companies in various sectors. He is also a member of the Group Executive Board at M&M. Clearly, this puts him at the helm of business. In his role as the Head of International Operations, Partha is responsible for proliferating IT Systems and processes globally through various business expansions in China, Australia and the U.S. Partha has invested more than 10 years as Head IT, driving and evolving the IT strategies for the group. He has led various group companies with IT initiatives that have led to extensive cost savings, and standardization across the group (which also helped in group level alignment). As Group CIO, he took charge of the ambitious Project Harmony, which was initiated by his predecessor. This project is a group-wide initiative to achieve common processes on a single ERP platform (SAP). He is also leading initiatives on Information Security, Business Process Management (IT-BPR) and Knowledge Management. In addition, Partha led innovative projects on spend analysis, vendor rationalization and decision support system. Within M&A, his focus is to enable inorganic growth strategy of business through innovative solutions and set up systems and processes. Under his leadership M&A team has executed more than 25 transactions/acquisitions across geographies. Partha’s contribution to the business is visible across most initiatives. And this was articulated well in his nomination, with ROI gains backed by some percentages. However, the jury felt that he was not a part of some major initiatives. Under Partha’s leadership M&M has won a number of awards, some are his personal accolades. Several of Partha’s team members have taken leadership positions, including CEO positions. At M&M Partha is also head of various committees such as the Information Security Apex committee, the IT Committee for Finance Heads and IT Heads, the Talent Management Council, the Corporate Projects & Budget Cell and the Service Center (BPO operations). No wonder he has earned the title ‘multifaceted’ CIO. In a tele-interview with a jury member, Parthasarathy said, “IT is like two sides of a coin: business cannot have strategy without IT and IT helps transforms business. When they sit together, there is synergy, when they do not, they have silos, which is not great for the company.”

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The practical CIO

Girish Rao Head -IT, Marico

n 2002, Girish Rao experienced a moment of pride, exhilaration, and triumph as Marico went live with its SAP implementation. It was the first implementation of Advanced Planner and Optimizer (APO) and BIW in the country. It gave him immense satisfaction to lead a SAP technical team through this successful implementation. And as Marico expanded globally, Girish replicated that success in other markets such as South Africa, Bangladesh, Egypt, the Middle East, Vietnam, and the U.S. Truly, he qualifies as a ‘Global CIO.’ Today, Rao is doing something rather unique by way of Operation Pearl Necklace (more on this later). Girish Rao was another unanimous choice of the jury. One jury member said, “Girish is the practical CIO, working up the ladder into an IT leader in his company. Over the years he has delivered and aligned well with the business. His current span of control across geographies that he is managing gives him the global exposure that makes him a candidate for the Global CIO list.” For Operation Pearl Necklace — which comprises eight sub-projects (or ‘pearls’) aimed at enabling the organization to combat the downturn and enable it to take advantage of the upturn — Rao and his team deployed GPS tracking and mobile technologies to help increase collaboration with vendors, and drive down costs of procurement to increase purchase efficiencies.

Notable among these projects was the contract farming management system for increasing the contract farming acreage and productivity and the Kardi Buying Cockpit system for getting real-time information of Kardi seeds market across 300 mandis. Oil from Kardi seeds is used to make Marico’s flagship product, Saffola Oil. And Marico, in its bid to increase the Kardi Crop acreage, started contract farming, the largest of its kind in the country. It appointed agricultural representatives to visit the contracted farms to get updates on the status of the crops. These representatives also give farmers advice on farming inputs and remedies for crop damage. A jury member was all praise for Rao’s contribution to these projects and said, “Most IT savvy companies are seen in the metros and highly organized areas. But a company like Marico needs to go back to the rural areas because the sourcing happens there; the supply chain has to be created there. I really like what Girish is trying to do with mobile technology in the rural areas — and mobility has a huge potential. Girish has also done major implementations of SAP in Marico India and South Africa. He has also created a very able supply chain. So clearly, Girish has a touch with the semi-urban and the rural, and this is rare among CIOs.” Rao has a track record of 22 years, including a total of 18 at Marico. Apart from spearheading all the aforementioned IT initiatives, he plays numerous roles at the company. For instance, he is a part of the Mergers and Acquisition task force responsible for due diligence; plays an active role in the business task force responsible for streaming the global supply chain that’s spread across countries. He also contributes to the business task force for the new product development process and to the innovation task force that evaluates and assesses innovations within the organization. He’s responsible for the Green task force for the conceptualization and implementation of the Go Green Project; and championing the HR process of member development, assessment and appraisal systems. Apart from all this, Rao helps initiate business process changes along with the best business practices and the standardization of these within the group. He is also on the Management Committee, which drives strategic business plans and strategies for Marico. In a tele-interview with a jury member, Rao said, “IT is for the business, so you work with business as a pivot and not IT as the pivot. You don’t do anything for the sake of IT. In order for the business to grow, IT needs to align to the criterias and goals. You are there because of the business and business is the prime driver.”

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Driving innovation in banking

Umesh Jain CIO, YES BANK

he YES BANK is a new bank on the block. It has quickly expanded operations and ascended to a respectable position in the industry, thanks to its innovation and bold technology initiatives (it was one of the first banks to embrace BI). The jury felt that, under Umesh Jain’s leadership, YES BANK has taken many innovative initiatives, all having direct business benefits in terms of productivity enhancement and cost optimization. For example, the integration capabilities with corporate customers helped the bank provide faster and efficient services to its customers. To keep costs down, the product was built using innovative technologies (cost of per rollout was reduced to 50 percent). The product was also recognized in The Banker magazine from the Financial Times. Jain has developed strong teams; his reportees are presently CIOs in several companies. YES BANK has won several awards, many of these coming to Jain himself. Of his 10 years in the industry, Jain has spent the last four at YES BANK. Previously, he was at Citibank. In his current role, he is responsible for fortifying the bank’s technology edge and to continue its growth trajectory supported by technology-led innovations. Jain is also responsible for driving innovation projects, and developing strategic planning guidelines in accordance with the business strategy of the bank, leveraging and building upon best in class technology as a key pillar and differentiator of YES BANK.

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Acknowledging his significant contribution to the bank, one jury member said, “Umesh has a lot of domain expertise and is converting fairly complex technologies like BI, mobile money services and identity management for business benefit. He has embraced new technologies like virtual desktop, private cloud, etc. So I see a lot of potential from Umesh for driving change in the business environment.” There are a number of business benefits to Jain’s credit. For instance, during the recession he brought down the technology expense from 15 percent opex to 9 percent opex, which translates to a saving of USD 5 million — and the bank’s business grew by almost 50 percent during that period. Jain helped in conceptualizing and implementing the IT capability framework and in taking most processes from maturity level 0 to key high level areas. These include business alignment, technology governance, technology management, strategy, innovation, project portfolio management, application management, infrastructure management, vendor & financial management, architecture, risk management, and information security. Umesh is instrumental in devising business strategy for mobile banking, social media and BI. He has led projects to transform the entire process chain from customer acquisition to customer service and customer retention. This is being effectively managed through three in-house conceptualized applications: The CRM System, the Business Intelligence platform and Insights 2 Engage. The latter is YES BANK’s in-house initiative to develop a holistic single interface to view all customer details and information about customer relations. This enables the bank to understand the customer better, thus enabling various bank users to generate crossselling opportunities (among many other benefits). Jain is currently engaged with setting up a private cloud, implementing virtual desktop, BI (phase 2 & 3), Insights 2 Engage (phase 2 & 3). He reports to the CEO and is a part of the key Executive Management Committee. This means he is a part of all strategic discussions, and is aware of all strategic initiatives at the bank. He is also a permanent member of Mancom (the highest executive committee), the Asset Liability Committee (ALCO) and a permanent invitee to the board committees (Audit & Compliance). Jain also has other responsibilities such as the Technology & Business Solution Group. This domain includes retail banking, wealth management, cash and payments, trade finance, financial markets, risk, and microfinance, operations for all domains. The Enterprise areas include HR, finance and all other functions of the bank. Apart from that, he is responsible for the technology infrastructure – the data center, networks, hardware and software.

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The multi-specialty business leader

K T Rajan Director – Operations , Information Services & Projects, Allergan India

T Rajan is well-known for his innovation and business initiatives, in both the IT and pharma industries. He’s also a risk taker and is known to embrace technologies that have not yet been proven. He can be regarded as the multi-specialty business leader. And that is backed by several industry awards tucked in his belt, for both his company and himself. He excels at both corporate strategy and technical operations, and handles multiple functions across the organization. Apart from that, he is at the Group CIO level and also has global exposure. He is a member of the management committee where he plays more of a general management role, influencing strategic decisions. As one jury member puts it, “Rajan represents a wellrounded personality with on-the-ground approach to effectiveness of IT solutions. His initiatives have been wellreceived and have delivered the value. The focus on business first and IT next makes him a contemporary IT leader.” Rajan has logged 24 years in the industry, including 16 years as an IT Head. Before Allergan, he served Hindustan Unilever, and previously Sonata Software. He has an experience in commercial operations (including business development and general management), technical operations (including manufacturing and supply chain), scientific operations (including R & D, QA, regulatory, clinical and medical affairs), and Information Systems and Services (ISS).

At Allergan, Rajan plays a diverse role and some of his responsibilities are: establishing subsidiaries of Global MNCs in emerging markets, setting up and commissioning of manufacturing facilities and managing large supply chain networks with a global footprint. He is also involved in research and development including clinical trials, regulatory and scientific affairs, project management, and sales & marketing. And then of course, there’s information and communication technology. This is testimonial to his thorough understanding of the pharma industry, his intimate involvement in the business, and his contribution to strategic initiatives. There are three key solutions to his credit that have propelled Allergan’s business performance, both in financial and qualitative terms. These are sales force automation, sales and supply chain management system, and enhancing employee engagement. These have helped to double sales revenue in three years, and made Allergan India one of the most preferred employers in its sector. He conceptualized, developed and implemented a sales force automation solution to facilitate effective operations for the field staff. And this was done about 10 years ago when PDAs and wireless communications were either non-existent or nascent. During the late 1990s, supply chain management solutions were slowly gaining ground in the industry. However, most applications were multi-centric, stock-point based and de-centralized. Rajan took a big risk of developing and implementing an online, real-time, integrated sales and supply chain solution on the Microsoft’s .Net platform, which at that time was still in its Beta version. The pharma field force is highly dispersed and most individuals operate in isolation. So connectivity with the rest of the organization is relatively sparse and this affects employee morale. It was also observed that one of the causes of attrition was the lack of connect / engagement with the organization. Hence Rajan attempted to improve employee engagement though a suite of technology solutions. He implemented a value-added service for cell phones, which would route e-mail messages as SMSes. And later his team deployed an employee portal that has now become a platform for professional discussions and personal sharing. That certainly turned things round and boosted employee morale. In a tele-interview with a jury member, Rajan said, “Generally companies see IT as a technology function; IT should be seen as an enabler and business driver. For product innovation and efficiency, IT can contribute and become a business enabler. IT can deliver value and become a driver by providing end-to-end solutions, or bring down inventory or accounts receivables. When IT grows to driving business then it is aligned. It is a multiple step process before you reach a situation where you are leading.“

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Contributing significantly to business

T G Dhandapani Group CIO, TVS Motor Company

handapani has a robust business background spanning 30 years. He is highly experienced in finance, business planning, operations, projects and IT. In the past 11 years he was responsible for the IT portfolio at Sundaram Clayton / TVS Motor Group of companies. Here he continues to oversee IT strategy development and execution of IT policies and practices for business profitability and growth in the group’s 11 companies — which have a collective turnover of over ` 9,000 crore. He has conceptualized and successfully deployed projects that have yielded business benefits directly linked to the top line, in the first year itself. And these projects have received many topnotch industry awards. Dhandapani himself has won awards and has numerous certifications. A jury endorses this by saying, “His contributions to the business are quite visible and his overall approach to IT and business is what a good leader can take as a benchmark.” In his present role as Group CIO, which he assumed in 2005, Dhandapani drives business strategies, oversees optimizing, standardizes business processes across the group, drives innovation and ensures that the IT infrastructure is secured to reduce risk. Apart from this, he is also involved in decisions related to technology deployment and IT spending. His contribution to the business is directly reflected in the projects he led and in the immediate ROI. Take for instance

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the project to digitize the NPD (new product development) process to reduce NPD lead time, so as to achieve target cost and quality. Under Dhandapani’s leadership and guidance, the NPD lead time was reduced from 24 months to 11 months — that’s more than a 50 percent time reduction. Or take the project to digitize lean manufacturing system with multiple objectives of improving employee and asset productivity, service levels to customers and quality. Here the service level to customers was further improved from 87 percent to 98 percent. The U.S.-based Managing Automation selected Sundaram-Clayton as Managing Automation Progressive Manufacturing 50 for digitizing lean manufacturing in ERP in the year 2008. It also selected TVS Motor as Managing Automation Progressive Manufacturing 100 for completely automating all business transactions from planning, order to cash for outsourced manufacturing of True4 oil business in the years 2009 and 2011. Sundaram Clayton received the first ever SAP ACE (Award for Customer Excellence) in the year 2006. TVS Motor Company was awarded SAP ACE in the years 2007, 2008 and again in 2010. Dhandapani has also led the in-house development of the Dealer Management System — an ERP system for TVS Motor dealers, which is implemented across the group’s 10 companies. Till date, 750 dealers have adopted the system across India and overseas. Other successful projects were Electronic Kanban for just-in-time manufacturing, and a data acquisition system for Total Productive Maintenance (TPM). Here RFID-based material control systems were introduced. All these projects provided business benefits in the first year itself — yielding revenue of more than ` 60 crore across the group. Also, employee productivity was increased by more than 50 percent in several projects. There’s a ` 100 crore business within the group that has more than one million transactions per annum with 600 customers. Thanks to automation, this business is handled by just one person! It has been running successfully for last four years. That’s another example of Dhandapani’s fine strategy and innovation. Dhandapani is a member of Business Leadership Team (BLT). The high-level BLT is accountable for business results, driving market share and introducing new products and the entire operations and finance. It is responsible for business strategy formulation and execution and for driving business targets. Externally, Dhandapani is associated with, and contributes to various committees and associations. He is an IT Member of SIAM (Society of Indian Automobile Manufacturers), a member of the Academic Board of Council for DG Vaishnav College, Chennai and also Chairman (TN Circle) at Indus.

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An IT leader with global exposure

N Nataraj Global CIO, Hexaware Technologies

s Global CIO of Hexaware, N Nataraj heads the global activities pertaining to IT in 33 countries; he is also responsible for Infosec Governance (IG). Backed by more than 20 years experience in IT, IS and security, he oversees both in-house service, as well as global practice at Hexaware. Nataraj is a member of the company’s senior management council, Org RISK Management team and also heads the Remote Infrastructure Management business, which he started in 2009. This business recently won a USD 25 million deal from IMS. A jury member said, “Natraj has led strategic IT initiatives that have led to significant business benefits. For example, the CRM project has led to better and speedier customer services. The project has been recognized externally in the industry. The business benefits of these initiatives have also been highlighted in certain analysts reports (like the CLSA report).” Nataraj has incubated and led certain revenue generating initiatives like infrastructure management services, and the cloud computing platform that has led to a significant revenue contribution. Some of his most notable projects that had a major impact on Hexaware’s business are HexaPower, Hexa-Analytics, CRM in Hexaware, and HexaGreen. HexaPower is an integrated suite of processes, applications and interfaces towards integrated management

of applications. Purported towards optimizing the entire lifecycle of an IT project — starting from opportunity, contract, project management insight, cost optimization, billing, invoicing and collection. This helped in providing an integrated framework within the organization across various functions. With Hexa-Analytics, the focus was set on bringing multifaceted analytics to senior management. It helped in providing the key analytics dashboards to senior management for effective decision making. HexaPower and Analytics brought in resource optimization in PMO/support staff, resulting in savings of approximately ` 50 lakh per annum. Thanks to the closely integrated systems and the effortless analytics, it introduced enormous savings in manpower, which was earlier deployed for the preparation of data across various practices. Also, it reduced non-billable travel by 50 percent and slashed overall travel expenses by 30 percent. All this boosted Q2 operating margins by 49.8 percent (quarter-on-quarter). CRM in Hexaware effectively implements CRM within the organization and builds multiple integrations around it with other organizational systems. This led to a single version of truth in terms of pipeline, full sales/pre-sales/ marketing process automation, full-fledged workflow in all these, and better controls. This helped the full sales cycle and related process flow automation and better controls & data repositories. CRM introduced a 10 percent improvement in the productivity of the sales force. It introduced nearly 50-60 percent improvement in the responses to RFP/RFQ. And since it is centralized, it helps in corporate forecasting and planning. HexaGreen is a project conceptualized and implemented with multiple objectives such as cost optimization, resource utilization and eco-friendly and green initiatives. After HexaGreen there was a 25 percent reduction in upfront investment. Maintenance for 230 physical servers was no longer required and technical support cost was cut down by 40 percent. Also, license acquisition cost was reduced by 30 percent. HexaGreen significantly helped in the reduction of SG&A cost. It helped in ensuring the elimination of revenue leakage and immediate billability of resources. Also, it set the way for a cloud-ready environment, for the development of cloud-oriented applications. Under Natraj’s leadership Hexaware won various awards for all these projects. Notable among these are the InformationWeek EDGE Award for Innovation in IT (2010) and the Innovation Award (2007) from Robin Simpson, Chief Bureau, TIME magazine. More than a dozen members of Natraj’s team have assumed leadership positions at various companies.

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Hall of Fame

(From our archives)

The following profiles were written in 2010 and reflect designations and achievements up to that point of time. Some CIOs may have moved on to different organizations.

Sandeep Phanasgaonkar

C N Ram

President and CTO, Reliance Capital

CIO, Essar Group

andeep Phanasgaonkar’s role as CTO of Reliance Capital (Rcap) requires him to lead both LOB-specific and panenterprise initiatives for the company. Phanasgaonkar’s priorities for Rcap IT are to drive investments that create flexible processing and distribution capability; to establish strategic drivers for business differentiation; and to establish synergy across all customer engagement systems in different LOBs. Phanasgaonkar has over 25 years of experience in applying IT solutions to finance, banking, BPO and IT-enabled services. He began his career with SBI and has worked with global firms such as Tata Unisys, iFLEX Solutions, Deutsche Bank, and Genpact. He led the critical IT transition of Genpact from GE. Phanasgaonkar began his term at Rcap by implementing the building blocks of IT systems that enabled product and service delivery for new businesses. Simultaneously, he created a shared services technology platform for RCap that spanned HR, finance, information security and specific consolidation of IT infrastructure and IT-managed services. In the aftermath of the 2008 financial meltdown, Phanasgaonkar focused on driving wide-ranging IT productivity through systems consolidation, virtualization, re-negotiation of vendor contracts and economizing IT resources that provided marginal business contribution. Phanasgaonkar says, “This is a great time to be a CTO in India. There are immense opportunities to demonstrate capability and success in a progressive, maturing and rebounded economy that is clearly on the upswing.”

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fter nearly three decades of managing IT for financial services — with major stints at Bank of America, and HDFC Bank (C N Ram was the third employee to join the bank), C N Ram decided to take on a different challenge at the Essar Group. With operations in more than 20 countries across five continents, Essar Group is a multinational conglomerate that employs 60,000 people, with revenues of USD 15 billion. As a CIO of the Essar Group, C N Ram’s primary responsibility is to mentor the CIOs of each business group and supervise the activities of Essar IT Limited (EITL), a 700-person organization responsible for the implementation, support and enhancement of software packages; also for infrastructure, telecommunication, security and availability services. Along with five other professionals, C N Ram jointly promoted Rural Shores Business Services, a company that will set up BPOs exclusively in Indian villages to create employment opportunities for educated rural youth. This will provide corporate India with the benefit of cost reduction, promote economic activity in rural India, and prevent youth from migrating to towns and cities in search of employment. C N Ram was a founder member of the Global Advisory Board of NCR Corporation. He is a member of the Asia-Pacific Technology Advisory Board of VISA International and RBI’s IT Advisory Committee. He has also been on the Executive Advisory Board of Symantec and Sun Microsystems, and the Services Strategy Council of Oracle Corporation.

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Manish Choksi Chief - Corporate Strategy & CIO, Asian Paints

sian Paints, India’s largest color and paint company, is ranked among the top 10 decorative coating companies in the world. The company has a turnover of 66.80 billion. As Chief - Corporate Strategy & CIO, Manish Choksi’s mandate is to execute this vision and strategy for Asian Paints. He plans to do this by delivering technology solutions that adapt to the demands of the business; by turning innovation into profits; by achieving faster ROI on IT investments; and by reducing IT OPEX. During his 18 years (since 1992) at Asian Paints, Choksi has held various positions in sales, engineering and marketing across the decorative and industrial paint businesses. He has been a catalyst for the company’s foray into services such as painting/decor/home improvement solutions, as well as new initiatives. He is also a member of the group’s management board. In his current role, Choksi drives new businesses, corporate planning and IT for the company. Under his aegis, the company successfully adopted ERP, SCM and other new IT initiatives. Choksi has also driven IT solutions across the Extended Enterprise to achieve improved business performance. Choksi and his team set up a central order processing service (COPS), which leverages recent improvements in telephony technologies. To create COPS, Choksi also leveraged the company’s investment in SAP. A SAP CRM with a user-friendly and optimized ordertaking and query handling dashboard was commissioned. An Aspect telephony system was integrated with SAP systems for advanced call handling, distribution, IVRS and predictive outbound dialing.

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Hall of Fame

(From our archives)

The following profiles were written in 2009 and reflect designations and achievements up to that point of time. Some CIOs may have moved on to different organizations.

VIKAS GADRE

ANANTHA SAYANA

VP – New Business Initiatives, Tata Chemicals (Formerly CIO, Tata Chemicals)

n a career spanning over 30 years, Gadre has spent more than 25 years on the business side. He has been involved in driving acquisitions, evaluating overseas investment opportunities, and developing new business avenues. He has even played the role of SBU head in the Tata Group company, Rallis India, where he was responsible for driving sales, manufacturing, and imports. Over the course of his career, Gadre has held seniorlevel positions in finance, procurement, new product development, new business development, and strategic planning. “As a CIO, my role has always been CIO plus another business position. At times, this was for new business development, or acquisitions,” says Gadre, highlighting the metamorphosis of a CIO into a business person. Today, Gadre’s business knowledge is paying rich dividends, as he is able to map and chart strategic IT initiatives that can lead and transform business. When he served as a CIO, Gadre was involved in converting the long-term strategies of this initiative into specific short-, mid-, and long-term strategic plans. Gadre’s example indicates why organizations are increasingly asking their CIOs to help them lead the business. “Today, a CIO has an accurate pulse of the organization, in terms of the information that flows across the arteries and veins of the organization. He is hence the ideal person to take up corporate projects that can make the company grow,” explains Gadre.

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Head – Corporate IT, Larsen & Toubro, Mumbai

nantha Sayana’s experience with IT dates back to pre-IT days. In this period of over two decades, he has witnessed the evolution of many platforms, technologies, and applications in banking, manufacturing, and service industries. Perhaps it’s not surprising that, as Head - Corporate IT for an engineering-centric group of companies, he took a measured approach to improving IT effectiveness. Anantha Sayana led an enterprise-wide exercise that systematically measured the maturity levels in each of L&T’s businesses on five dimensions: IT-business alignment, value delivery, IT risk management, support and service, and TCO. At the same time, his team worked on an enterprise architecture aimed at making generic processes common across the company, while letting business units keep the niche processes they need to have agility and competitive advantage. Anantha Sayana has been with L&T since 1995. He was initially at the Corporate Audit Services department where he headed the Information Systems Audit. In his current role as Head - Corporate IT, his work is now focused on bringing together IT at L&T’s various business units to work with synergy towards the realization of benefits, optimization, service, and risk management. Anantha Sayana is also closely associated with the Information Systems Audit and Control Association (ISACA).

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ARUN GUPTA

Customer Care Associate & Group CTO, Shoppers Stop, and Group CIO, K Raheja Corp.

ne of the most respected CIOs on the Indian IT scenario, Arun Gupta has supported and driven major IT initiatives across companies such as Philips, Pfizer, DHL Worldwide Express, and Great Eastern Shipping, since 1994. In his current role as Group CTO, Gupta manages IT for multiple organizations under the Raheja Group. As a CIO, Gupta looks at the IT enablement aspect of the organization, ensuring technology consistencies across the various companies of the group. “Such consistency not only helps in creating a common framework that can be leveraged cost effectively across businesses, but also gives the ability to create common processes that allows the organization to move people from one business to another, without a big change and with very little learning,” informs Gupta. As a part of the management team, Gupta plays the role of an advisory, providing insight into upcoming technologies or best practices from around the world that can be adopted by the company to stay ahead of its competition in India. He is also an advisory to the group, which includes K Raheja Constructions, Chalet, Renaissance, Marriott, Residency hotels, Raheja ServCorp and a host of other entities. “I help the IT head in K Raheja to strategize on IT initiatives looking at what are they doing and how they can benefit from what we have done in terms of processes and technologies,” says Gupta. For Gupta, the most exciting project in his career is the one he executed during his stint with Great Eastern Shipping. The project involved revamping the accounting system to meet industry regulations. The implementation surpassed all expectations.

ASHISH CHAUHAN

Deputy CEO, BSE (Formerly President and Group CIO, Reliance Industries)

hen Ashish Chauhan assumed responsibility as Group CIO of Reliance Industries, he faced a monolithic challenge — to create a common framework for IT implementation for the conglomerate. India’s largest private sector company has diverse businesses such as manufacturing, petrochemicals, refining, oil & gas etc. Bringing all these businesses on a common IT platform was no easy task. Chauhan’s indepth understanding of the business and his rich industry experience helped him immensely. Chauhan has worn different hats during his career. At one stage he was setting up and running a satellite communications network for the National Stock Exchange (NSE). He was also involved in setting up the Financial Derivatives markets for India. At one time, Chauhan was the Industrial Finance Officer at IDBI. He also headed Corporate Communications for the Reliance Group, and was once the CIO of Reliance Infocomm (now Reliance Communications). Chauhan believes today’s CIO needs to be a business leader first and then an IT manager. That’s because the CIO’s role has evolved from the IT technical function to more of a strategic and business role, he says. Elaborating further, he suggests that a CIO should be intricately involved in activities ranging from annual business reviews and strategic planning to takeovers and mergers/de-mergers. When asked if he considers himself a catalyst in the business process, Chauhan says the role varies. “Depending on the situation, the CIO may at times act as a catalyst in the business process, but in other instances, he may play a more central role or just act as an observer,” says Chauhan.

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Hall of Fame

(From our archives)

DAVID BRISKMAN

DR JAI MENON

VP & CIO, Ranbaxy Laboratories

Director - IT, Bharti Enterprises

s the IT head of India’s largest pharmaceutical company, a company ranked among the top 10 pharmaceutical companies globally, David Briskman’s objectives are clear — to help R&D deliver products quickly to the market; to enable supply chain excellence; and to deliver BI to empower the management to take right decisions. With more than 20 years of business experience and having dabbled in multiple roles — from sales to consulting to implementation — Briskman’s intricate knowledge of the industry has helped Ranbaxy succeed in a market that is marked by constant changes. The critical role of IT can be seen from the fact that today, Ranbaxy has a single global instance of SAP that runs over 80 percent of its business transactions by value. This is one of the most complex SAP implementations in terms of different business processes in different countries, and the scale of the implementation. For instance, close to 2,200 users across 22 countries and 14 manufacturing facilities use SAP for their daily activities. “Experience is the best teacher,” believes Briskman, as he recalls an ERP project at Kraft Foods, which he terms as the toughest project of his career. This project involved an ERP implementation across 11 manufacturing plants in just 18 months. The project involved replacing business processes in a non-receptive technology environment. This project was a success and taught Briskman a lot about the nuances of team and project management. Briskman believes it is important to continuously measure value. However, he states that every project cannot be measured on an ROI basis — since projects such as a business dashboard are more strategic in nature.

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r Jai Menon is a key member of the Bharti Airtel team that saw Bharti outsource its core IT operations to IBM with billings linked to performance. Though this was termed as an ‘outsourcing’ deal, it was a true transformation deal at its heart, since it encouraged IBM to innovate to grow Bharti’s revenues, and in turn, its own revenue. The innovation tap did not stop at that, and has been running continuously since. From the tie-up with Google to offer Google search on handsets for Airtel users, to becoming the first to launch BlackBerry services and an Androidpowered phone in India — the company has a number of firsts. Bharti has also, in partnership with IBM, invested USD 100 million in building a service development platform that will help in driving revenues from value-added services. On his role within Bharti, Menon says, “Within Airtel, I also have a customer service-focused business role. This additional responsibility is to ensure that Airtel customers are delighted with the overall service experience of the company. My role here is also to inject the best available technology to deliver excellence in customer service.” Menon’s role involves being a business leader who is actively involved not only in the IT component of the business, but also the end-to-end execution that a leading telecom operator like Bharti demands. This means bringing together business stakeholders across various departments, working together with customers, and delivering the expected business results in terms of customer satisfaction as well as revenue. At Bharti Airtel, Menon is a member of the Airtel Management Board and drives the Customer Service and IT charters across all lines of Airtel businesses.

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LAXMAN BADIGA

PRAVIR VOHRA

CIO, Wipro Technologies

Group CTO, ICICI Bank

ith more than 30 years of experience cutting across different streams in the IT industry, Laxman Badiga, CIO at Wipro Technologies, is an apt example of the characteristics that global CIOs must possess or imbibe, to lead their companies forward in a global world. More a business person than a pure technocrat, Badiga has used his collective business experience to fuel growth opportunities for his company. With experience in different business functions such as HR, project management, product development, and offshore software services, Badiga understands business at an intricate level. As a CIO of an IT organization that services customers across the globe with a huge number of delivery centers, the dependence on IT is huge. Challenges too are numerous, since it means understanding, adapting and tweaking business processes to handle time zone differences, cultural nuances, and the legalities involved in different countries. “A lot of IT enablement is required in terms of synchronizing timelines, making the system available to teams spread across different locations, and creating war rooms so that the teams can share the same space. The whole delivery mechanism is also systems-enabled. I try to ensure that everything is consistent and that the process itself becomes part of the system and everyone automatically follows it,” explains Badiga, on the need for every employee, whether based in Bangalore, Chennai, Latin America, or Europe, to have the same kind of access and connectivity. Today, Badiga’s team has ensured that Wipro has gone much beyond ensuring connectivity — enabling the firm to save millions in travel-related costs, and simultaneously achieve a significant improvement in resource utilization.

conomists make good leaders. Someone said this when the final result of the 2009 Lok Sabha elections were declared, and it was known that Dr Singh would fulfill a second term as India’s Prime Minister. Could the same be said for CIOs? Well, if you look at Pravir Vohra’s profile and 30-year track record in the banking industry, you’d tend to agree. Vohra, Group CTO, ICICI Bank, holds a Masters degree in Economics and he swears it works to his advantage. Technology came later. “It is actually not difficult to be able to evaluate whether a particular technology is suitable for our business and I find it easy to be able to convert everything into cost benefit and effect,” says Vohra. CIOs always search for ways to use technology to deliver more value to the business, at a lower cost. So whether it is a choice of an ATM switch, a (tough) decision to switch to open source software, or re-negotiating AMCs for servers, this tribe of modern CIOs speak of technology projects and P&L in the same breath. “Twenty percent of our IT spends are strategic. There are times when I tell the MD and the CEO that we need to make some enabling investments to ensure that we maintain our business leadership. I tell them that the benefit of those investments is going to come maybe a year or two down the line. And I ask them to assess me on that,” says Vohra. Enabling investments allow the bank to service its immediate requirements and yet adopt emerging technologies. Fortunately for Vohra, coaxing top management to invest in new technology is not a challenge for two reasons: the bank has a tight ‘gating’ criteria and his team has always managed to deliver under budget.

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Hall of Fame

(From our archives)

DR SUMIT CHOWDHURY

SUNIL MEHTA

VP & Partner, IBM (Formerly CIO, Reliance Communications)

Senior VP & Area Systems Director (Central Asia), JWT

s the CIO of Reliance Communications, one of the fastest growing telecom firms in India, Dr Sumit Chowdhury’s challenges were unique. Operating in the fiercely competitive Indian telecom market, Chowdhury’s team needed to ensure that the IT infrastructure was ready in terms of the capability to support this fast-paced growth, and flexible enough to quickly launch new products or valueadded services. “In most modern companies, IT is the core of the business and can have significant top and bottom line implications. A CIO, as the business head of this IT function, is very much a contributor to the cash flow and balance sheets of the company,” says Chowdhury. He understands the critical importance of cash flow, and embarked on initiatives that were aimed at cutting down major cost drivers in the business, improving utilization, and reusing existing assets. Considering the pace of growth and the scale of the company’s operations, risk mitigation and detailed planning are extremely critical since improperly executed projects can even disrupt business. Chowdhury recalls one such project which involved upgrading the company’s CRM system. In a business such as telecom, where on any given day, thousands of calls are made per hour, a downtime for an upgrade would have been disastrous. Chowdhury used his man management and project management skills to successfully pull off this ambitious project without a downtime. “Upgrading our CRM system that supported more than 70 million customers — without a downtime — was one of the most interesting projects. The alternative was to have a 72 to 100 hour downtime as recommended by the vendor,” recalls Chowdhury.

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unil Mehta has tried everything from writing code and preparing MIS reports to educating officials at the Central Board of Excise and Customs on the technical aspects of production equipment. Industry peers look up to Mehta and JWT (J Walter Thompson) as pioneers. Under Mehta’s leadership the companies he worked for were the first to deploy a model called Agency of Record (AOR), an ERP solution; and the first in the advertising industry to computerize the entire production process and setup. Mehta is credited with taking the right risks and doing things that have never been done before. In his previous job, he led a project to computerize the entire pre-production process and setup, and there have been other such initiatives at JWT. “In my previous company, we brought the entire production process and setup (complete infrastructure and solutions) in-house. This was the first of its kind in the publishing industry and one of the biggest projects I’ve been involved in,” says Mehta. His second major accomplishment, again in his previous job, was that he was instrumental in the acquisition of a small company and that he built a new company internally as a profit center. There were also challenges at JWT, his present employer. For instance, he and his team implemented Oracle Financials, an ERP solution that no one in the global advertising industry had deployed previously and there was no learning. Mehta and his team, with support from users, had to do everything on their own. This major accomplishment brought the company on the global radar of a world-class operation. Mehta now plays a more strategic role at JWT, often doing due diligence for companies they are exploring.

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Interview

CIO of the future: Enterprise leader or Chief Procurement Officer

The CIO role is being transformed and is moving more and more towards enterprise leadership. Harvey R. Koeppel, Executive Director, Center for CIO Leadership outlines essential competencies that CIOs need to acquire and/or enhance for this new role 46

informationweek september 2011

The business environment is getting increasingly complex, competitive and dynamic — with changes occurring more frequently. How is the technology leader helping the business adapt to this change? The largest change that we are seeing in the role of the CIO specifically is more ‘harmonization’ between the agendas of C-suite, particularly the CIO, CEO and the entire IT organization. CEOs in particular, are understanding the value of IT to take advantage of things like global markets or take advantage of changing strategies in different economies. They understand that these new strategies or in some cases, different business models are completely based on information technology — whether it be network, broadband, Internet presence or social media activity or analysis of big / unstructured data. You have been observing CIOs all these years. How has their role evolved? Do you see a change in their thought processes? What have some of the best CIOs done to (quickly) adapt to the new roles (or cope with the change)? We are seeing the evolution of the CIO role and the purpose of the Center for Leadership is to help guide that evolution. We see the role shifting from a manager of the IT cost center to essentially a very tactical or operational role that’s highly focused on process efficiency and expense reduction. This is a starting point for this evolution. At the other end of the spectrum, we see a role that we define as the ‘business-savvy CIO.’ Here the CIO is a leader at the enterprise level, who really understands business, business strategies, and who is an active part of the development of the business strategic planning process. He also understands IT and speaks the

language of both business and IT and serves almost in a translation role in both directions to ensure that there is an appropriate alignment between what the business needs and what IT is doing to really ensure that the business strategies can be maximized by leveraging technology in the most effective ways; it’s really the CIO who has in-depth understanding of modern and emerging technologies and how they can be leveraged in support of the business objectives and goals. The role is also highly focused on creating and driving sustainable business value (top line revenue, earnings per share, customer satisfaction/retention). These are very much the topics discussed by other C-suite members. Keeping the trains running and reducing expenses (managing the IT agenda as a cost center) is also important and should be viewed as “table stakes.” But there is a great opportunity for CIOs to take on this new business-savvy role, to really step up into this enterprise leadership position. If you had to categorize all the CIO responsibilities, what would be the key categories or focus areas? From the Center for CIO Leadership perspective, we’ve created the core competency model for this businesssavvy CIO. Those competencies include things like leadership, business strategies and processes, relationship management, innovation & growth, and risk management & compliance. These are five or six key competencies a business-savvy CIO needs to acquire and develop, in order to have the right conversations with internal business partners and external stakeholders. In this new role the CIO is also developing relationships internally and externally.

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If you had to appraise IT leaders, what parameters would you use to gauge a CIO’s performance? There are quantitative and qualitative metrics. These certainly includes things like direct contribution to earnings or revenue, managing the IT portfolio as a corporate asset, and ensuring that there is appropriate return on that asset. Building relations with line of business heads (internal customers) is key to their success and to the enterprise success. Another good metric is the degree to which the CIO is involved with customer situations. More companies are bringing their CIOs on sales calls (depending on the nature of the product or service being delivered). This is especially true for sophisticated products that have large technology components. When CIOs track the IT Business alignment, what metrics do they use to know that they are on track? I would rather use the word ‘harmonization’ because ‘alignment’ implies that there are two disparate things that need to have a common focus. There should be only one thing — the business. There needs to be a common goal, objective or strategy. One of the qualitative things that we look at is how often does a CIO get invited into a strategic planning conversation. More CIOs are being asked to participate and invited into business strategy and planning conversations because other C-suite colleagues believe that the CIO can add value to that conversation. That’s when you know that you have reached the point of becoming a business-savvy CIO. That’s all about understanding the language of the business, being able to speak ‘finance’ to the CFO, to speak ‘marketing’ to the CMO, and to speak in terms of shareholder value to the CEO and then being able to leverage IT to meet strategic goals and objectives of the enterprise. So on a qualitative basis it comes down to the nature of these relationships most often grounded in the CIO’s ability to comfortably “walk a mile” in the shoes of their C-suite partners.

Quantitatively, there are governance models that need to be put into place. A key aspect of those governance models is the absolute criticality of having the appropriate executive sponsorship — again depending on the size of, and the kind of organization. Often it is the CEO who is the executive business representative at the table in looking at where the enterprise priorities and focus for the IT agenda need to be. But meeting those goals and objectives require other key metrics. For instance, how often does one deliver on time and within budget, is a classical metric. Development of an innovative product or service is a major part of the strategy — the fundamental aspects and processes of IT development still remain the same.

Center for CIO Leadership The Center is a global crossindustry peer community solely focused on the advancement of business competencies for technology professionals through peer insights and connections, education, and research. http://www.cioleadershipcenter.com One needs a plan for this and the plan needs to have measurable business value associated with it. When they do not have formal authority, what strategies should CIOs apply to lead and influence others — perhaps in other teams? This is all about building relationships, having credibility and developing the trust of your colleagues. Most importantly, one has to demonstrate value. If you are going to involve a line of business head that isn’t part of the IT department or someone who is from a different part of the company — developing these relationships comes down to agreeing upon the mutual benefit or the value proposition for both parties, as well as for the enterprise and, importantly, for the

customer. One has to find a common ground in a business context and map out the high-level view of why we were there, what we need to accomplish as a team, and then decompose the problem to smaller tasks that can be deliverable and begin to add business value sooner rather than later. What will a CIO be doing five or 10 years from now? Will he still be designated CIO or will that title metamorphose to something else? The role will continue to evolve and become much more strategic and innovative. The CIO will oversee analysis of data as there is a tremendous explosion of data and information at all levels. Social media and networking have created an extraordinary amount of very valuable information about customers and their buying behavior and preferences. More business models and strategies are being influenced by and built around the availability of much data that is used for creating practical insights in real-time. This is a fundamental shift in the way many businesses operate. The role of the CIO will become less involved with the day-to-day, keeping the lights on activities. This is still a critical role but a much more tactical one. But CIOs will shift their attention to business strategies, business models, helping their enterprise expand into new marketplaces, helping create new customers, new sources of labor and raw materials. There have been lots of debates about whether that individual will be called a ‘CIO.’ There still needs to be a senior executive who connects the business, the mission, the goals and objectives, the strategy and the strategic plan with the IT agenda. This connection could be operational or information management or any other aspect of the IT agenda. And he knows not only how to do it more efficiently and effectively but how to leverage technology in more innovative ways for competitive advantage. u Brian Pereira brian.pereira@ubm.com

september 2011 i n f o r m at i o n w e e k 47

Interview

â&#x20AC;&#x2DC;Cloud is the core area of focus for HPâ&#x20AC;&#x2122; With a huge portfolio, HP is looking at the cloud as a huge springboard that will accelerate its growth in the coming years, says David Caspari, Senior VP, Enterprise Services, HP, Asia Pacific and Japan Market research firm, IDC, says that by 2012, 85 percent of new applications will be specifically designed to be accessed in the cloud. What does this mean for IT consumers and developers? The cloud is definitely changing what enterprise customers want from a cost and business perspective. Recent HP research indicates that business, government and technology executives believe that by 2015, up to 28 percent of their IT delivery will be through the cloud. To meet the demands of a new world, organizations will require a unified platform that manages the delivery of cloud and composite applications. Additionally, organizations must have the ability to accelerate application delivery, while enhancing collaboration among application developers. Applications also have to be tested thoroughly with respect to factors such as security, performance and architecture. For us at HP, the cloud is a massive opportunity, and will be at the core of everything we do. How do you see cloud computing being adopted in India? Our research indicates that cloud adoption has significantly increased, more than double in the last 18 months specifically in key markets such as Australia and India. India leads the Asia Pacific region in terms of future cloud adoption plans at 42 percent, the highest percentage of cloud planners

informationweek september 2011

in this region. Cost savings remain the primary driver for considering cloud among large organizations, and Indian organizations are most bullish on cost savings. Almost 20 percent of Indian organizations surveyed say they are currently using the cloud, 42 percent are currently planning, while 38 percent have no plans at present. Overall, this trend mirrors what is happening globally, and India is no exception to the global trend. With rapidly changing and complex business needs and continued trend among Indian companies to manage risks and reduce costs, we are bullish on services and products related to cloud computing in India. In the emerging cloud landscape, what do you believe are the biggest opportunities for HP? The cloud is one of the biggest strategic areas of focus for HP as a company. We believe we have the right cloud offering for our customers who have varied needs. For example, many organizations today are not ready from a process point of view to move to the cloud. To help customers in their transition to the cloud, we have developed a reference architecture for the cloud, which acts as a guide or a framework for all cloud engagements. We also understand that not all companies are comfortable with moving specific applications to the cloud. For example, a bank may not be comfortable with using e-mail on the cloud. The reference architecture provides building blocks and guides

them on using a cloud architecture to their business requirements and the industry they are present in. This framework accommodates different business requirements, technologies, software stacks and cloud service requirements. For clients who are still in the planning stage, we conduct workshops, which can help these companies build clouds on their own. Apart from opportunities in the private cloud space, we also see huge opportunities in the enterprise space, wherein we can offer innovative applications or platforms in partnership with system integrators or telecom operators. For example, companies in the auto sector can set up a cloud platform, which can be subsequently used by all dealers and suppliers. Similarly, banks can come together and use a common cloud platform. We also want to create an open cloud marketplace that offers enterprises the ability to consume enterprise applications that they can snap on to their existing applications â&#x20AC;&#x201D; just as lego blocks effortlessly snap on to other blocks. In short, we want to create an app store for enterprise cloud users, which has a lot of applications such as testing-as-a-service, softwareas-a-service, or storage-as-a-service, with adherence to SLAs, security and compliance requirements. This is a new business model, and offers huge opportunities for growth. u Srikanth RP srikanth.rp@ubm.com

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Case Study

mong India’s fastest growing hotel groups, the Royal Orchid Group of Hotels operates 18 business and leisure hotels in 11 popular destinations. However, even as the organization was expanding quickly, its hotels were operating as separate islands with little visibility of each other. Information updates and communication between team members located in various destinations was done using excel spreadsheets and e-mails. With the increase in the number of locations, the Royal Orchid Group found it increasingly difficult to keep track of information. “With only a few locations, sharing information in Excel spreadsheets and Word documents was no problem. But as we grew, we started to consider the potential consequences of the inherent delays in processing customer information,”

informationweek september 2011

says Dhiraj Trivedi, Corporate Director, Revenue Management and E-Distribution, Royal Orchid Group of Hotels. Infrastructure-related costs were high as information was based on large servers, which needed space and demanded constant software updates and scheduled maintenance. Further drivers included the escalating burden of producing and printing reservations order forms, as well as the increasing difficulty in pulling volumes of data from an inflexible Property Management System (PMS). “We needed another layer - a central platform where we could store, analyze and share information efficiently across the whole business,” says Trivedi. The group decided that it needed to enhance its customer service by building a guest loyalty

database and keeping a track of guest information. With the huge number of geographically spread locations, the group decided that taking the cloud route was the best option. Accordingly, after evaluating several options, it decided to go in for Salesforce CRM. With no upfront systems to worry about, Royal Orchid Hotels went live on the cloud in just two months, with the added capability of adding hotel locations and new applications at will, and free from the shackles of software maintenance. Today, Salesforce is set up as a central data repository for the entire business so that Royal Orchid’s hotels now operate as a single entity instead of separate islands. The PMS and central reservations systems sync with Saleforce so that the hotel group can analyze customer data (preferences, booking history) and

“We can now invite guests to social networks to interact with them directly online and ultimately grow our brand”

Dhiraj Trivedi

Corporate Director, Revenue Management and E-Distribution, Royal Orchid Group of Hotels

www.informationweek.in

personalize the service. What is unique about the deployment is the fact that Royal Orchid has adopted four key elements of the cloud from Salesforce: The Sales cloud, Service Cloud, Chatter and Force.com — the development platform. While the Sales cloud gives sales professionals every possible information that they need to know to connect with their end customers, the Service cloud helps in delivering faster customer service across any channel — from the call center to social networking websites. Salesforce Chatter is used by the organization to help its team members collaborate and share information in a style similar to social networking websites such as Facebook.

Personalized service

The integration via Service cloud has helped the call center synchronize

“Due to the integration with our revenue management system, we were able to analyze competition data and help forecast information for future dates. We were also able to analyze historical trends through complex algorithms, decipher the dates of impact and also maximize on revenue opportunities,” opines Trivedi. Through the creation of iPhone and iPad apps, the group has also been able to capitalize on mobile marketing, which is an untapped resource of revenue.

Embracing the social way

Understanding the critical importance of social media, the Royal Orchid Group of Hotels is using every possible opportunity that it gets to better understand customer behavior. “Salesforce has opened up new doors for us, taking us in a more visionary direction that we would

Salesforce Chatter lets the group prioritize urgent enquiries and answer them typically within an hour, leading to shorter sales cycles

the information available in the PMS with information about customer preferences, and customer history. This has helped the group in creating a personalized service. Using Salesforce Chatter has helped in establishing faster response to customer queries due to real-time interaction between individuals irrespective of their location. Today, Chatter has become the preferred means for getting answers among staff. “When a guest makes an enquiry, they do not want to wait 24 hours for the person who took their enquiry. Chatter lets us prioritize urgent enquiries and answer them quickly, typically within an hour,” explains Trivedi. This has led to shorter sales cycles. This has also helped in cutting down the e-mail communications by a factor of 80 percent.

have previously thought of going. For example, we can invite guests to our Facebook page and other social networks to interact with them directly online and ultimately grow our brand,” states Trivedi. The hotel chain is currently exploring the possibility of scoping out a Force.com based project for collating the information from social sites in Salesforce — capturing “likes” and automatically routing them to the relevant service handler or marketer for action. With 80 percent of the traffic on its website coming from social media networks, the opportunity is huge. Trivedi says that this initiative has helped the group in improving its capability to understand consumer behavior, in addition to promoting brand loyalty and brand awareness on a global scale.

With no upfront systems to worry about, Royal Orchid Hotels went live on the cloud in just two months, with the added capability of adding hotel locations and new applications at will

u Srikanth RP srikanth.rp@ubm.com

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Case Study

Virtualization helps K Raheja Corp cut energy costs, boost efficiencies By consolidating and virtualizing its servers, the firm has achieved a drastic reduction in power consumption, with added benefits of improvement in performance and manageability By Srikanth RP

huge conglomerate, K Raheja Corp, has representation in diverse fields of real estate, hospitality and retail. The firm is one of the fastest growing firms in the corporate world, and like any other large corporate, depends heavily on IT for sustaining its competitive edge. As the firm started expanding its business, it realized the critical need of upgrading its IT infrastructure to support the business growth. With the huge growth in business, the organization faced issues with respect to server sprawls, utilization and manageability. “The server room was cluttered. We were hosting more than 40 servers using a small part of server resources. A majority of these servers were based on old technologies. It was extremely difficult to maintain these servers as support to these servers had ceased from the principal company. Additionally, our capability to fulfill new requirements due to growing business needs was difficult due to limited data center space, limited UPS power and limited cooling capacity,” states Rahul Mahajan, Associate Vice President – Information Technology, K Raheja Corp. To address these challenges, the firm decided to embark a server consolidation initiative, with the help of Orient Technologies as system integrators. The organization did a detailed analysis of the applications that could be virtualized. Another study was conducted to understand the current server resource utilization. Subsequently, the firm conducted an evaluation based on present and future requirements, features available

informationweek september 2011

“SAP in a virtualized environment gave advantages such as load balancing and easy management in case of disaster”

Rahul Mahajan Associate Vice President – Information Technology, K Raheja Corp

in products and mapped this to its business needs. Based on the evaluation, the organization decided to go ahead with VMware Vsphere 4.0 Enterprise for virtualization and IBM for servers and storage. The project was executed quickly, with the entire implementation being completed in just three months. This achievement is significant as several projects were running simultaneously on the applications side. Mahajan attributes meticulous project planning and excellent partnership between the business and IT teams as the key reasons for the quick implementation of the project. “While many organizations have done server consolidation and virtualization, we are among a list of

Project Highlights 43 servers consolidated to 13 servers

Implementation done in a span of just three months

Expected cost savings to the tune of ` 82 lakh over a period of three years

few organizations that run SAP in a virtualized environment. And probably we are the only one who has SAP ECC 6.0 EHP 4 running in a virtualized environment. Also, we have not only restricted to core SAP, but have also put SAP additional products such as BW, enterprise portal, solution manager in a virtualized environment,” says Mahajan. The server consolidation initiative helped K Raheja Corp reduce the total number of physical servers from 43 to just 13 servers.“ The availability and performance of IT systems has gone up substantially in the past couple of months,” agrees Manoj Sharma, Senior VP – Finance, K Raheja Corp. The organization has also improved its ability to manage its infrastructure with reduced power and cooling costs. “Besides removing our existing limitations, we have also got other advantages such as load balancing, easy management in case of disaster, centralized backup, high availability and scalability,” states Mahajan. A TCO calculation done by the firm estimates cost savings of close to ` 82 lakh over a period of three years. u Srikanth RP srikanth.rp@ubm.com

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Event

Keynotes at

Mumbai 2011 At INTEROP Mumbai, some of the most prolific speakers from leading technology companies will keynote on some of the hottest industry topics. Here is a brief glimpse Wednesday

28th September, 2011 09:30 am - 10:00 am

Mike McCarthy

Vice President - Cloud Computing, IBM Global Technology Services

Topic: Re-thinking IT. Re-inventing business

Abstract: We are seeing dramatic shifts as our planet becomes smarter. These shifts are changing the way business and society work. Nothing is changing more than information technology — the way it is accessed, applied, and architected. At the same time, IT leaders are faced with soaring operating costs and flat budgets. We are entering the next era of computing — Smarter Computing. An era of insight for discovery powered by efficient and innovative IT, and made possible through the integration of big data in optimized systems and innovative IT delivery models such as cloud computing. Deep analytics, business agility and accelerated time to market can be greatly enhanced through this new

informationweek september 2011

computing model. Enterprises are adopting cloud computing to not only change the economics of IT, but help drive transformation and new business outcomes. Join Mike McCarthy, Vice President, Cloud Computing, IBM Global Technology Services, as he provides insights into Smarter Computing and cloud services, and how successful companies are exploiting to drive real business innovation. 10:00 am – 10:30 am

Mike Nielsen

Director of Vertical and Solution Marketing, HP Networking

Topic: Change the rules of networking to enable the cloud

abstract: The convergence of traditional IT, virtualization and cloud computing are combining with mobility and emerging social trends to re-shape the technology industry. These trends are also fueling a revolution of business innovation across all industries. Join Mike Nielsen, Director of Vertical and Solution Marketing, HP Networking, as he reveals industry-first technologies,

designed for the data center of the future, that change the rules of networking and accelerate your path to the cloud.

Thursday

29th September, 2011 09:30 am - 10:00 am

John McCool

Sr. Vice President and General Manager - Core Technology Group, Cisco

Topic: Enterprise journey to the cloud: Will your network take you there?

Abstract: Enterprises are facing the transformation of their networks as they deal with the explosion of information and demands from their employees, customers and partners. Moore’s Law is driving down component costs while improving capabilities, and virtualized data centers are reducing operational costs. Global broadband adoption, mobile phones and devices with increasing capabilities, and changing profiles of bandwidth consumption are driving on-demand access to the Internet,

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networks, and applications. This is the vision and opportunity of Cloud computing. As cloud computing fundamentally changes how we manage data, design applications, and build companies, Corporate IT must figure out how to evolve their enterprise network infrastructure to integrate cloud computing options, while ensuring that connectivity is delivered securely, reliably, and seamlessly to anyone, anywhere, anytime. Can today’s network infrastructure support these new demands — not just in terms of feeds & speeds but also include intelligence and a superior user experience? What needs to happen to today’s network to enable it to support cloud computing? Come hear Cisco’s John McCool discuss how innovations in virtualization, compute, storage, and networking are forging a clear path to enterprise cloud adoption and how you can evolve your existing infrastructure investments to deliver user demands while driving new enterprise business models with cloud computing. He will share innovative technologies, designed for the campus and the data center, that change the rules of networking and can accelerate your path to the cloud. 10:00 am – 10:30 am

Ram Appalaraju VP - Technology and Product Marketing, Enterasys Networks (A Siemens Enterprise Communications Company)

Topic: Network transformation for mobile application delivery: Market trends and technology innovations

Abstract: Mobile applications are becoming an important aspect of businesses today. Mobile devices like iPAD & iPhone are making entry into enterprise IT domain as users want to choose their own devices. Other side enterprises want every enterprise application to be accessed via

handheld mobile devices. This is going to create a scenario of information availability anywhere and increase the pace of business decision making. The real challenge for IT manager is how to prepare the enterprise IT network for this transformation. The keynote will address this topic with focus on market trends and technology innovations in this area.

Friday

30th September, 2011

years, the industry has ushered in a new era that has fundamentally changed the competitive landscape and how we interact with technology. Today, we are at an inflection point that we call the ‘Virtual Era’ where the ubiquity and pervasiveness of technology is unquestioned.

Other prominent speakers K V Krishnamurthy, Head IT, Corporate Centre, Mahindra & Mahindra

09:30 am - 10:00 am

SK Magoo, General Manager (Core Banking), SBI

Anand Shankaran

Alpna Doshi, CIO, Reliance Communications

Senior Vice President and Business Head India & Middle East Wipro

Topic: Consumerization of IT

Abstract: How is the wave of consumerization changing industry dynamics? Are product and service innovations done due to changes in consumption patterns? How are these developments driving innovation in the IT world? What is the influence of new-age tools such as mobility, social analytics and green on IT? To explore more details on this topic, hear our keynote speaker, Anand Sankaran, as he shares his unique insights and perspectives on how consumerization of IT is changing the industry landscape. 10:00 am – 10:30 am

Satyen Vyas

Director – Medium Business, CSMB Dell India

Nirmalendu Jajodia, Chief of Technology & Operations, NCDEX Ellen Dalley, Vice President , Forrester Research Faraz Ahmed, CISO, Reliance Life Insurance Raj Dhingra, Global CEO, NComputing Janakiram MSV, Technology Evangelist, Amazon Web Services Ramprasad Kan, Chief Technologist, Wipro Shreekanth Joshi, Associate Vice President, Cloud Services, Persistent Systems Ravi Gururaj, VP Engineering, Data Center & Cloud Division, Citrix Slavik Markovich, VP & CTO, Database Security, McAfee KK Mookhey, Founder, NII Consulting Pawan Agrawal, President, Kamlabai Educational and Charitable Trust & CEO, Mumbai Dabbawala Education Centre Sebastian Joseph, President Technology, Mudra Group Sheshagiri Rao, Head IT, Indian Rayon

Topic: How SMBs can grow & thrive in the virtual era?

Abstract: Over the past 50 years, the technology industry has revolutionized the way we work and live. Every 10-15

Shyaam Sunder K, Chief Knowledge Officer, Ramco Systems Umesh Jain, CIO, Yes Bank

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Opinion

Great IT leaders must be great managers

Dr Larry Tieman

Many otherwise excellent IT leaders have failed because they took their eye off or didn’t care about core management practices

http://www.on the web Great expectations from the new age CIO Read article at: http://bit.ly/neZqXJ

informationweek september 2011

’ve always rejected the saying that leaders do the right thing and managers do the thing right, implying that leaders and managers are different people. Good leaders — and definitely great IT leaders — are adept at managing people (including other executives), projects, financials, and contracts. IT leaders who fail to or decide not to manage all of these areas closely, throughout their organizations, risk ruining their careers and destroying a lot of business value. Many otherwise excellent IT leaders have failed because they didn’t execute all of these core competencies well. For example, one VP who worked for me appeared to be an outstanding leader. His initiative and motivational skills were superb. He could organize a team and lay out objectives. He knew what IT needed to do to support the business, and he proposed, sold, and executed some important and complex projects. In fact, he was so good in front of executives that they always wanted him to lead their most important projects. But beneath the surface lurked major trouble. His people management skills were fantastic as long as the team was working well together, but when a manager or director was performing poorly or there was contention within his organization, he usually did little to correct the situation. He focused only on big, complex projects, ignoring staff and partners involved with the smaller stuff. Over time, his organization and business peers began to lose confidence in his ability to manage across multiple, conflicting priorities, even as he remained popular. Were these management or leadership defects? It doesn’t really matter. He failed to execute well

on core competencies. Even CIOs advanced in their careers sometimes forget these fundamentals. A CIO who I worked for is an example. Tall, good looking, great hair — if he had also been young he would have had the four physical characteristics I lack. He also had presence and vision. He was impressive. Except that he didn’t think about project management much. He hired me to fix some products that were buggy and always late. The fixes were quite easy and took only five months to complete. Any CIO with a competency in project management could have directed the same changes just as fast. He left for a CIO position at another organization, where he launched a USD 65 million system to manage operations. “We are betting the company on this,” he told one trade journal. They lost. The key technical failure was the need for an unprecedented transaction rate from SAP R/3. He had failed to put in place the proper controls for such a technically risky project, and once the extent of the problem was understood, it was too late to recover. Even one of my idols, the late Max Hopper, former CIO of AMR Corp., could let a high-risk project “get ahead of the headlights.” The project, called CONFIRM, was to be a leadingedge travel reservations system combining airline, hotel, and rental car information. The consortium partners were American Airlines, Marriott, Hilton, and Budget Rent-A-Car, with Max’s organization, AMR Information Systems, to do the development. This was 1988. I was the director of data systems way down in Max’s organization (I think he had 15,000 people in his organization, which went far beyond IT). Early on, I heard that the plan was to use DB2 as the main database,

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at a transaction rate far in excess of anything done with DB2 at the time. The main commercial database at the time was IMS. The airline reservation system was on ACP, moving to TPF. Nothing big and important was yet on DB2. My team was adamant that DB2 couldn’t do what was being planned (and later asserted by the CONFIRM team), so I sent our concerns up the organization. My VP at the time, Joyce Wrenn (later the CIO of Union Pacific), sent them on. Whether or not Max got our concerns isn’t important. He didn’t ask me and I had the DB2 experts. He didn’t know, or didn’t listen to, concerns from many other areas about the technical feasibility of CONFIRM. And he didn’t know that the project was failing and that the status reports were fraudulent. American Airlines would eventually settle with the partners for USD 160 million. Max failed to execute people, project, and financial management competencies, and he placed too much trust in the vendors. Perhaps 30 years ago a CIO and his immediate staff didn’t need to be as broadly skilled at management and leadership as today, but I don’t remember a time when that wasn’t critical. Nor can I remember a time when delivering projects and operational excellence weren’t key responsibilities. Today’s top CIOs have mastered these core competencies — and many more. Anyone who has worked, as I have, with Rob

Carter (FedEx CIO) or Charlie Feld (Feld Group, former Frito Lay CIO) knows they have mastered people, project, financial, contract, and executive management. Both have substantial technical chops and employ a variety of techniques to keep on top of the important projects. Both take a hands-on role when required, but they also know how to redirect a project’s management team. Rob takes contract and vendor management to a new level. He commits a significant amount of time to personally knowing the leadership of technology vendors. Likewise, Charlie is terrific at working with other executives. His Feld Group has taken on some very difficult business transformations. Strong competencies in people, project, financial, executive, and contract management provide the foundation for all other leadership skills. Directors and VPs who aspire to become CIOs — as well as current CIOs and other senior executives — must continually develop these competencies. That is, do the right thing and do the thing right.

Perhaps 30 years ago a CIO and his immediate staff didn’t need to be as broadly skilled at management and leadership as today, but I don’t remember a time when that wasn’t critical

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

september 2011 i n f o r m at i o n w e e k 57

Opinion

things IT can do to embrace social networking

Jonathan Feldman

Even if your organization has a social media policy and you’re an engaged IT leader, it will take several iterations to get this right

http://www.on the web 10 Cool Social Media Monitoring Tools Read article at: http://bit.ly/p0XCLd

informationweek september 2011

recently wrote that IT leaders should not only be allowing social media; they should be actively integrating social network data throughout their enterprises. The question then becomes: how? After doing some thinking on the subject and speaking with a few folks in the business, I’ve landed on these four recommendations for IT leaders.

Push policy

IT organizations have a wealth of experience crafting policies around the use of technology, and that experience can be applied to social media, notes Wade Rockett, a Manager of Digital Strategy for PR firm Weber Shandwick and a former IT Manager. “IT has a keen sense of what can go wrong,” Rockett says. “Maybe that’s a reason why IT can be reluctant, but it can also make them a very valuable partner.” In other words, provide the vehicle, but keep people from driving off the road. Some organizations may already have social media policies, but as was the case with initial Internet policies during the wild, Wild West days, those policies may require modification as the technology matures. Nobody has all the answers right now, and it will take several iterations to get this right. So invite those curmudgeonly security people to the table. Don’t open things by asking, “Are we going to enable social media in our apps?” Start things off by asking, “How are we going to enable social media in our apps in a way that you’ll feel good about it?”

Internalize

There are those at your organization who still think social media is a fad that will go away, and sometimes you can win over

those naysayers by doing an internal project. External software typically is a riskier undertaking and requires much more scrutiny (and faces much more bureaucracy) before the implementation. Says Rockett: “A very lengthy e-mail conversation with many branching threads would be better had on Yammer or Chatter, where it won’t fill up your mailbox. This other site will be searchable, threaded, and will live in a place that is easily accessible.” Ah, less e-mail in my day? Sign me up. In this case, there’s a significant value proposition to most users for trying social media. If IT can do a quick implementation of an internal system, it can help the organization muster the will to do a more ambitious, external project.

Actively advise

While IT needs to be a lot more proactive in proposing social media solutions, you can’t get away from the fact that PR, marketing, and corporate communications are all experts on customer communications. So in many instances, they’re going to come up with the basic idea. Problem is, they don’t have the technical acumen to flesh out what the “systems thinking” view of their proposal is. IT can be helpful in “figuring out whether what I want to propose is even possible,” Rockett says. However, because IT pros have a well-deserved rep for being bearish on social media, the marketing/ communications folks are reluctant to reach out to them. “The IT organization I work with wants to keep things at a 2006 pace, before social networking got really going,” Dave Del Piano, a CMO at a managed services company in San Francisco, wrote to me. “It scares the guys here

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with too much power and too much potential for change.” And that’s why you should reach out to the CMOs in your organization. They’ll appreciate it.

Integrate

Think about what matters to your business. Customer data is (or should be) near the top. Products like Fatwire and Day Software help organizations derive data about their customers from customers’ interactions with their websites. For example, organizations can show tutorials to new customers and product specials to returning customers. Customers who participate in the site’s community features present an additional data collection point that allows for content to be further customized. Sites like Facebook go a step further, putting content in front of users who have voluntarily given

massive amounts of specific data about themselves. That sounds a bit creepy, but in its most innocent form, it’s the same thing as a shoe salesman offering a man, men’s shoes instead of women’s shoes. It’s reasonable for a company to want to know about its customers. And as I pointed out earlier, social networks are relying more on trust and customer recommendations. That’s not creepy at all. People recommend cleaning ladies and plumbers to one another all the time.

Automating this process, whether it’s making it easy for folks to “Like” or “+1” a product or service, just makes good sense. In the long term, businesses that don’t do this will be at a significant disadvantage. Do you need to rip and replace your web-based sales catalog app to let people do referrals to their Facebook friends or Google circles? Kurt Marko, an InformationWeek contributor, pointed out to me the other night: “If your legacy apps are web-based, it might not be too hard to modify the app templates to incorporate some sort of social network widgets like the omnipresent Tweet, Share, Buzz, or +1 buttons.” Bottom line: Enterprise applications exist to provide integrated data — and one source of the truth — among logistics, sales, financial, HR, supply chain, CRM, and so on. If you don’t integrate the social media part, that’s going to be a problem. (Apparently Oracle thinks this way too, since it just acquired Fatwire.) It’s true that “social networking” is almost as vague a term as “cloud.” And the market is splintered and will eventually consolidate. Nonetheless, take the time now to understand the different social networking segments and find the point tools that make sense for your company. Del Piano suggests that IT organizations treat social networking as a buffet, not a zero sum game where if marketing people win, IT loses. I’m not suggesting that organizations dive into social networking without a plan. The key is to offer to help the people who need it most and have a definitive business purpose in mind.

IT organizations have a wealth of experience crafting policies around the use of technology, and that experience can be applied to social media

u Jonathan Feldman is a contributing editor for InformationWeek and director of IT services for a rapidly growing city in North Carolina. Write to him at jf@feldman.org or at @_jfeldman

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Opinion

Taking the cloud route

Ashish Kumar

Local organizations are increasingly embracing cloud computing for its efficiency in terms of reduced hardware maintenance, scalability and on-demand provisioning of resources

http://www.on the web How a startup is using the cloud to find fortune at the Bottom of the Pyramid Read article at: http://bit.ly/pDAZPB

informationweek september 2011

loud computing today is a much discussed topic — considered to be an entirely new approach to computing rather than just being a mere concept. Evolving from grid, utility and SaaS (Software–as-aService), cloud services allow users to add to the existing data capacity or include further capabilities without having to invest in new infrastructure, coach new personnel, or license new software. With diverse vendors delivering a slew of cloud-based services, from advanced applications to storage services to spam filtering, the cloud enables access to vast amounts of information, ‘on-demand,’ from massively scalable data centers facilitated by virtualization. Although India is not a much evolved market in terms of adoption, recent trends and surveys show an increased traction in cloud. It has definitely been helpful for users, as well as providers to have a reliable data cloud source that meets application requirements. Businesses are increasingly outsourcing hardware to providers who operate huge packets of data; having a virtualized application operated on shared resources enables the efficient use of hardware that requires fewer servers to be purchased and IT personnel to be maintained, notwithstanding the operational costs that are incurred. Agility is another benefit of moving to the cloud, where added storage space is always a nagging worry of most enterprises. Flexibility is another attribute most enterprises look for, where they pay only for the capacity being utilized. As with any outsourcing model, businesses need to take ownership for maintaining the confidentiality, integrity and the accessibility of their data. Some of the concerns posed by customers while deploying the cloud are the malicious use of the service, insecure programming interfaces, vulnerabilities created through shared infrastructure, loss of data and traffic hijacking.

Some of the anticipated security threats over the next few years are internal network-based threats and policy violation, online scams and identity theft incidents. In order to uphold the data center network security and integrity, it is essential to understand who accesses a company’s network, the various applications running on it, as well as potential risks involved. Subsequently, having a scalable, high-performance enterprise IT infrastructure to successfully deliver a cloud computing environment is extremely important to position security solutions that are as ubiquitous and automated as the rest of the cloud computing infrastructure. To better understand the security issues that can emerge while using the cloud, businesses need to analyze whether their data is mission critical and whether the data sets apart private customer information. These would enable businesses to determine the level of security they need and what kind of cloud model they need to adopt. Here it may be advisable to opt for a private cloud model. Less mission critical data could be put on a public cloud offering. While migrating to the cloud, some of the key security aspects companies need to look out for are how cloud compliant their businesses are viz. public, private or hybrid cloud; data reliability; data recovery solutions in the event of a disaster; and expertise plus support on mitigation and contingency. Security risks are inevitable. Having said that, businesses that proactively address these barriers will be able to better control existing resource investments while maintaining a strategic focus on core IT initiatives. Identifying a cloud provider who offers end-toend solutions while taking a holistic approach is crucial in order to monitor and quantify the risks involved. u Ashish Kumar is General Manager, Global Technology Services, IBM, India/South Asia

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Opinion

A SaaS-first approach to application portfolio management

Mark Settle

SaaS tools are an important element of the cloud computing transformation that is sweeping across the IT industry

http://www.on the web Global SaaS revenue forecasted to grow to USD 12.1 billion in 2011 Read article at: http://bit.ly/pVEWj4

informationweek september 2011

he year 2010 was a watershed year in the evolution of the Software as a Service (SaaS) industry. Worldwide sales of SaaS tools within the enterprise application software market exceeded USD 9 billion. The industry bellwether — Salesforce. com — continued to grow its revenue dramatically. A variety of IT research organizations predicted that by 2014, SaaS products would account for more than 40 percent of all new software sales. By any reasonable measure, SaaS is now considered to be an acceptable and, in some cases, a desirable means of supporting a company’s business operations.

SaaS is here to stay

SaaS tools were originally considered to be niche products, largely confined to the Customer Relationship Management (CRM) segment of a company’s application portfolio. SaaS products have matured considerably over the past 10 years and are now available to support back-office and mid-office operations as well. A variety of SaaS tools support human resources functions, such as recruiting, contingent worker management, performance management, succession planning, payroll and bonus administration. SaaS products have also expanded into procurement and financial management functions, supporting activities such as pricing, quoting, order processing, tax and tariff administration, and currency exchange operations. SaaS capabilities have even crept into IT functions. Several companies, including BMC Software, offer tools for service desk operations, project portfolio management, vendor contract management, budgeting and forecasting and compliance administration that are specifically designed for IT organizations.

Why SaaS?

BMC’s IT organization has implemented at least one new SaaS application per quarter since the first calendar quarter of 2009. We have realized several benefits through large-scale adoption of SaaS tools. The hard benefits associated with SaaS are well-known to all IT professionals. SaaS products are built, hosted, maintained, and operated by the SaaS vendor. This approach can absolve IT of responsibilities for hardware procurement and installation, availability and disaster recovery management, and application maintenance and development. This transfer of responsibilities has enabled us to reduce the size of our data center and achieve savings in hardware depreciation and maintenance, cooling requirements, power consumption, and operator support. In addition, we have been able to re-purpose several members of our applications teams into business systems analyst roles since their former responsibilities for software coding and testing are now being performed by the SaaS vendors. The more significant benefits of SaaS adoption have been an accelerated time-to-market of new IT capabilities and an improved return on our software investments. Through practice, we have developed the ability to implement new SaaS applications in roughly three to four months. This is in marked contrast to the time typically required to implement licensed software applications. Like most IT shops, we would likely need six to nine months to put a licensed software application into production. This time would be needed to design an appropriate hardware environment to host the application, procure and install the needed equipment, license the database software and additional utilities required to support the application, customize the application to support our users’ requirements,

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and perform extensive testing in collaboration with users prior to the “go-live” date. The business sponsors of IT projects tend to have changing priorities and short attention spans. One of the notso-obvious benefits of SaaS applications is that their original sponsors are much more likely to be present to drive adoption and realize forecasted business benefits, simply because SaaS implementation timetables are so much shorter than conventional application projects. The second, less obvious benefit of SaaS products is the true return achieved on a company’s software investment. Simplistic financial comparisons of SaaS subscription fees versus the costs of conventional licensed software typically fail to capture all the tradeoffs involved. A simplistic analysis of the cost of a licensed application will combine the costs of depreciation and maintenance of the software and hardware that is initially procured. It will also include the professional service fees of any external consultants required to configure the application and the labor costs of the internal staff required to maintain the software and operate the system. This total cost of ownership will be compared to the subscription fees of a competing SaaS solution over a multi-year period, typically three years. Whichever procurement approach results in the lower multi-year cost would appear to be the preferred strategy (assuming that Capex and Opex funds are equally available). What this type of analysis fails to capture is the benefit being realized on the maintenance fees for licensed software versus the subscription fees for SaaS software. Many companies heavily customize licensed software applications that have been implemented internally. In principle, they are paying maintenance fees on the licensed software to preserve their ability to leverage the functional enhancements in subsequent product releases. In practice, however, they become mired in customizations that make it difficult, if not impossible to move to the latest version of

the licensed product. In contrast, enhancements in the functionality of SaaS products are typically delivered in an incremental fashion over much shorter intervals (four to six months). Incremental upgrades are much more likely to be adopted immediately, producing a return on the investment in SaaS subscription fees that is not typically realized on the maintenance fees for licensed software. A SaaS-first application strategy will enable any IT organization to reduce hardware and data center expenses, as well as re-purpose application developers into analyst roles that produce more inherent business values. Far more significant is the ability to drive adoption of new IT capabilities and ensure that the business benefits of a new application are achieved. It is easier to drive adoption and achieve business benefits if the original business sponsors of a new application are available and enthusiastic at the time of “go live.” This is much more likely to be the case for the introduction of a new SaaS product. Furthermore, SaaS subscription fees allow you to offer your users functional enhancements on a much more frequent basis and avoid maintenance fees for which you are receiving no immediate benefit.

What to watch out for

Although SaaS tools can be leveraged to achieve a wide variety of business and operational benefits, they don’t constitute a “free lunch” for your IT organization. Large-scale adoption of such products will create new challenges. You are still responsible for application performance. The employees who depend upon business applications to perform their daily jobs frankly don’t care whether an application is developed or hosted internally or developed and delivered by a SaaS vendor. They still hold IT accountable for the availability and performance of all business applications. Many IT shops have deployed an “inside-out” monitoring strategy to assess the health of their business applications. This strategy employs tools to monitor

A SaaS-first application strategy will enable any IT organization to reduce hardware and data center expenses, as well as re-purpose application developers into analyst roles that produce more inherent business values

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Opinion

To achieve the full financial benefits of a SaaSfirst strategy, IT organizations need to re-double their efforts to retire legacy applications possessing duplicative capabilities

informationweek september 2011

the heartbeat of all the IT components that support individual business applications. This strategy is based upon the presumption that if all IT components are up and running, then the application must be available and healthy. Large-scale adoption of SaaS products will force your IT organization to become much more aggressive in complementing your existing “insideout” monitoring strategy with an “outside-in” strategy that proactively monitors the application experience of your end users. As SaaS tools become more pervasive, it will be essential to proactively assess application availability, response times, and integrity from all worldwide locations in which you have employees and customers. Similarly, IT organizations cannot abdicate their responsibilities for disaster recovery (DR) planning simply because a subset of their application portfolio is now being hosted and operated by SaaS vendors. SaaS products typically have multiple integration points with other applications, databases, and utilities within IT. The interfaces required to authenticate user access to SaaS applications, supply or extract data to/ from SaaS applications for reporting purposes, and synchronize data in SaaS applications with other databases and applications need to be explicitly defined and tested during DR exercises. Although IT is no longer responsible for the hardware and software components of individual SaaS applications, IT remains responsible for the rollover and recovery of all of the interfaces that ensure the business integrity of SaaS tools. Application enhancements are no longer under your control Many SaaS vendors are relatively small firms, delivering applications with very specialized business capabilities. Inevitably, there may be some element of functionality — critical to your company — that needs to be incorporated into a SaaS application. Your ability to influence the prioritization of such enhancements may be limited. This can become particularly frustrating when the

enhancements are small and could have been readily achieved if the application were being maintained internally. Retire legacy applications to achieve financial benefits of SaaS A SaaS product rarely provides wholly new functionality that is not already being delivered by one or more existing on-premise applications. To achieve the full financial benefits of a SaaSfirst strategy, IT organizations need to re-double their efforts to retire legacy applications possessing duplicative capabilities. As a best-practice suggestion, I would encourage all IT organizations to establish a “sunset architect” within their enterprise architecture team whose sole job is to establish and enforce a retirement timetable for legacy applications whose functional capabilities have been largely replaced by new SaaS tools. Differentiate true security liabilities from security phobias Surveys of business executives and IT leaders commonly identify information security concerns as the number one deterrent to SaaS adoption. While there are concrete regulatory restrictions on the movement of certain types of data across national boundaries, and other restrictions have been imposed on the management of healthcare records and other forms of personal data, very sophisticated encryption and aliasing technologies are available to protect sensitive information. Much of the current debate regarding information security is legal and contractual in nature and focuses on who will bear the financial responsibility for business damages triggered by the inadvertent loss of sensitive information. Currently, businesses are largely self-indemnified if such losses occur from any of their onpremise systems. They will likely remain self-indemnified if similar losses are incurred by any of their SaaS providers. I strongly suspect that, over the next five years, our industry will overcome many of the phobias that currently exist regarding the security of data being managed by SaaS providers.

Double standards for SaaS Although reliability and security are

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chronically cited as the most significant impediments to SaaS adoption, discussions of SaaS reliability and security are almost always conducted on an absolute basis and not a net basis. During the course of any given fiscal year, every IT organization experiences outages of its business-critical and business-essential applications to one degree or another. When SaaS alternatives to existing on-premise applications are being considered, the reliability of the SaaS alternative is rarely, if ever, discussed relative to the current reliability of a company’s onpremise application suite. Similarly, prospective SaaS customers screening the security architectures and procedures of SaaS vendors rarely initiate such investigations by exposing the security lapses they have experienced over the past 12 to 18 months. SaaS vendors are not screened to determine the relative improvements in data security they can provide. They are screened to determine the likelihood that any security lapses might occur in the future. SaaS vendors are typically asked to guarantee the availability and security of their services in an absolute sense with zero tolerance for service disruptions or data loss. They are not asked to compare their levels of reliability and data security to the current performance of the IT organizations procuring their services.

What will happen next?

SaaS products make increasing sense in a business marketplace that prizes agility over customization and in an IT industry that prefers “buy solutions” over “build solutions” in responding to business needs. SaaS adoption has been spearheaded by small- to medium-sized businesses but is becoming increasingly prevalent in large enterprises as well. SaaS capabilities are appearing in unlikely places. A company’s data center — once known as “the glass house” — was conventionally considered to be the most highly restricted inner sanctum of the IT empire. The idea that SaaS tools could be used to perform external discovery of data center resources, monitor availability and assess capacity

utilization would have been abhorrent 10 years ago. No self-respecting data center manager would have ever let a third party come through the firewall and interrogate their devices or access in situ agents. Such phobias are increasingly being put to rest. Enlightened IT organizations will form SaaS implementation teams that can be reformed as needed to support the implementation of new SaaS capabilities in any functional domain. Most IT groups have merger and acquisition “tiger” teams, consisting of a set of people who are routinely pulled away from their normal responsibilities to support the assimilation of newly acquired companies. Similar teams should be established for SaaS implementations. The two biggest technical issues in implementing any SaaS tool are user access and integration. Access procedures need to be orchestrated within the single sign-on security procedures that have been established for all other business applications. Interfaces between the new SaaS tool and pre-existing applications and databases need to be defined and implemented. Rather than letting individual application teams discover and resolve these issues on a case-by-case basis, enlightened IT groups will form specialized teams that can leverage past experience to accelerate the implementation of SaaSenabled business capabilities. SaaS tools are just one element — albeit an important one — of the cloud computing transformation that is sweeping across the IT industry. As part of this transformation, IT executives are abandoning the “own and operate” management paradigm that has dominated our industry for the past 50 years and are moving toward a new management framework built around brokering and integrating services. SaaS capabilities are a critical and essential element of this new framework. Early SaaS adopters will be a step ahead of their competitors in realizing the full benefit of cloud computing as this transformation continues.

SaaS vendors are not screened to determine the relative improvements in data security they can provide. They are screened to determine the likelihood that any security lapses might occur in the future

u Mark Settle is CIO at BMC Software

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

Feature

The dreaded SLA:

expert fix-it advice E

very day, our businesses depend on services. From accessing e-mail to making calls, we expect a certain level of availability and quality. Underlying that expectation is a chain of promises that begins with a provider delivering — or not — a well-defined service to a customer. Service-level agreements (SLAs) are how we make sure we’re getting our money’s worth — and they’re even more important as we move a wider variety of IT functions to outside providers. To find out how external SLAs are being defined, managed, monitored, acted on, and fought over, InformationWeek Analytics surveyed both providers of IT services and those writing the checks. Of 562 respondents, 360 are buyers of IT services, and companies with 10,000 or more employees make up the top demographic. We got an earful about the impact SLAs have on service quality today. “I believe large-scale IT customers define too many SLA reports,” says a Project Manager from a major service provider. “Some of our customers require over 200 SLA reports. I think once you get into that realm, you’re looking at the law of diminishing returns.” A VP and COO from another provider weighed in that SLAs, in the server- or application-availability sense, don’t really tell much about how well a company is meeting its users’ needs. Match that against what we heard from the buyers of services: Just 16 percent classify SLAs as generally very effective. Most, 52 percent, rate effectiveness a 3 or lower on a scale where 1 is “very ineffective” and 5 is “generally very effective.” Hardly a ringing endorsement. A miniscule 4 percent of SLAs achieved 100 percent attainment over the past 12 months.

informationweek september 2011

“Most SLAs are not worth the paper they’re written on, even when they’re well negotiated,” says one respondent. “This is because the cost to our business for a violation far outweighs the compensation provided by the SLA. Also, when trying to recoup money, the difficulties and time invested in proving a violation isn’t worth the compensation.” He uses SLAs mainly for comparison shopping for a provider.

Think Smart

At the core of SLAs are service-level targets or objectives — promises made by a service provider to a service consumer, commonly around availability, performance, security, compliance, and data retention. Service-level targets must be specific, measurable, achievable, relevant, and timely. They should be based on business needs and revolve around the key performance metrics that really matter to the buyer. On the other end, the consequences for promises not kept are penalties and chargebacks — painful for the provider, sure, but also for the buyer, who needs

to deal with the fallout of the failure and then expend effort to quantify and collect metrics. To complicate matters further, there’s now more riding on SLAs because we’re using service providers for increasingly critical functions. Forty-one percent of our consumer respondents are using or plan to use public cloud services. Our most recent InformationWeek Analytics State of Cloud Computing Survey showed a 59 percent increase year-over-year in the number of companies using services. Despite that, service buyers have little faith in SLAs. “The most we hope for is that the industry is self-policing,” says one. “If a provider has many and/or frequent violations, customers will find another place to do business.” Perhaps. But that’s not much comfort to a CIO who’s seen as responsible for costing the company business by partnering unwisely. The key to avoiding that fate: documentation, and plenty of it. Negotiating tactics to get the best SLA terms include: l Focus on outage (not performance) SLAs, as these are easier to track and

When SLAs go bad Does your company assess financial penalties on suppliers for SLAs that aren’t met?

Other

47%

Yes, but we’re generally still out money

37% 10% Yes, and penalties compensate fully for lost business

Source: InformationWeek Analytics 2011 SLA survey of 360 business technology professionals who are using services covered by SLAs, February 2011

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The flexibility factor When negotiating SLAs, how do you typically find cloud providers compared with other classes of providers? Much less flexible

Quite Variable

8% Somewhat less flexible

Much more flexible

17% 17%

Somewhat more flexible

44% Somewhat less flexible Source: InformationWeek Analytics 2011 SLA survey of 149 business technology professionals who are using services covered by SLAs and using and planning to adopt cloud services, February 2011

calculate. Get the provider to use your metrics and monitoring tools to track performance so you don’t have to rely solely on the provider’s data. l Get details on exactly how a chargeback or credit is handled. Providers are more apt to issue service credits than refunds; if that is the case, push for more than just 100 percent credits — you already paid for that service. l

When things go south, there are ways to improve your chances for meaningful compensation: l Agree on the process for reimbursement so both you and the provider know the expectations. l Be consistent in the monitoring process. Develop a reporting scheme that is followed every month and loops in the customer stakeholders and the service provider point of contact. Don’t wait until there’s an SLA violation. l Be persistent in pointing out noncompliance with the SLA agreement. Many survey participants expressed frustration in trying to collect penalties. It’s natural to press only so far, then give up in frustration, but resist. l Develop a “team” mentality. Most providers want their service consumers to be happy and profitable, so it’s worth periodic

reminders that you’re in this together. The ability to negotiate SLAs comes down to two main elements: Who has the highest perceived value, and what are the options available to either party? If your company isn’t in the Fortune 500, you can bet large service providers will be less inclined than hungry startups to negotiate customer-specific SLA terms. While it may seem less risky to go with an established provider, as a service consumer, there is a benefit to having a perceived high value to your partner. Among survey respondents buying services, the vast majority of SLAs (79 percent) are, in fact, negotiated. We attribute this in part to the rise in the use of cloud service providers; given the newness of many of these companies, they’re more likely to deal. But they don’t always. Bill Lowell, a Telecommunications Manager with American Engineering Testing, says he hasn’t been able to negotiate any changes to his SLAs. “If you have options, providers generally will at least say they’re considering SLA changes,” Lowell says. The goal is to “trust but verify,” with SLAs the bedrock of that verification.

The ability to negotiate SLAs comes down to two main elements: Who has the highest perceived value, and what are the options available to either party?

u Frederick Rose is the Service Assurance Practice Director at Fusion PPT. Write to us at iwletters@techweb.com

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CIO Profile Career Track

How long at the current company? I have completed 6.5 years in Iffco-Tokio General Insurance Co. Most important career influencer: H S Manjunathan, then CIO of Rourkela Steel Plant, under whom I started my IT career in 1974 remains the most important career influencer. An industrial engineer by qualification, he inculcated system approach in me at a young age.

U C Dubey Executive Director (IT), Iffco-Tokio General Insurance Co

Decision I wish I could do over: I have no regrets.

Vision

The next big thing for my industry will be… Mobile computing for reaching out to masses in rural India to increase insurance penetration. Advice for future CIOs Keep abreast with technology, as well as business domain knowledge.

On The Job

IT effectiveness can be measured in terms of providing simple and easy-touse applications to the satisfaction of internal, as well as external users

informationweek september 2011

Top three initiatives In-house data center: I was the head of IT in Hindustan Organic Chemicals in Rasayani from 1981 to 1987. Those days worker’s unions were dead against computerization. After extensive dialogue with union representatives, they agreed to allow us to use computers but did not agree to procure/install computers in the premises. We hired computer time in night shift at some establishment in Mumbai and our team members used to go alternate nights for processing jobs. In 1984 when Shri Rajiv Gandhi became prime minister and advocated for computerization, worker’s unions also fell in line and we could install our in-house data center in 1985. Common standard application: Indian Farmers Fertilizers Co-operative had four production units in India. Way back in 1980s and 1990s, each production unit had their IT teams and each of them had developed and implemented their own applications like finance, material management etc., using different platforms. Around year

1994, we initiated the idea of having a common standard application to be used by all production units. All the IT teams and business stakeholders were convinced and we could implement common standard applications across all units. Siebel CRM: At Iffco-Tokio General Insurance Co. we are using core policy administration system of M/s Computer Science Corporation. The product is AS400-based application written in COBOL and uses green screens. It was difficult to expose this core application to our business partners, dealers and franchise. In the year 2005, we initiated the implementation of e-insurance module of Siebel CRM. This facilitated exposure to outside world, as well as integration with the legacy core application. Today the new platform is extensively used for point-of-sale, claims processing, opportunity management, renewal retention, call center and many other applications. Favorite project Point-of-sale application developed using e-insurance module of Siebel CRM. The application is integrated in real time with the core policy administration system and provides straight through processing. It is the backbone of all B to B, and B to C transactions. How I measure IT effectiveness I measure IT effectiveness in terms of providing simple and easy-to-use applications of technology to the satisfaction of internal, as well as external users. It must provide great business value at an optimum cost.

CIO UNPLUGGED

Leisure activities: Reading Hindi literature. Best book read recently: The Argumentative Indian by Amartya Sen. Unknown talents (singing, painting etc): Instrumental Music. If I weren’t a CIO, I’d be... An Army Officer.

u As told to Vinita Gupta

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Technology & Risks

Layers of security

Avinash Kadam

There are quite a few lessons to be learnt by all of us in Information Security profession from the TSA approach

http://www.on the web The security industry and a look ahead Read article at: http://bit.ly/lWi36f

nyone visiting the U.S. would have come across the TSA — Transportation Security Administration at every airport. The organization has the formidable task of protecting the nation’s transportation systems. They look for bombs at checkpoints in airports, inspect rail cars, patrol subways with law enforcement partners, and work to make all modes of transportation safe. Normally one will assume that their entire operations will be hidden from the public under a shroud of secrecy. I was pleasantly surprised about the openness with which the TSA shares all information freely. They even have a blog ‘The TSA Blog,’ which answers all questions, and explains various activities and new innovations that the TSA introduces to make travel safer. I was most intrigued by the multiple layers of security deployed by the TSA. To be precise, they have deployed 21 layers of security and seem to be constantly improving upon them. Some of the items included in these layers are as below: Visible Intermodal Prevention and Response (VIPR) teams: Comprises federal air marshals, surface transportation security inspectors, transportation security officers (TSOs), behavior detection officers and explosives detection canine teams. Travel Document Checkers (TDC): Includes specially trained TSOs, using black lights and magnifying loupes, who are positioned in front of the checkpoint to check passengers’ boarding passes and identification, a system now in place at every airport in the country. Behavior Detection Officers (BDO): Utilize non-intrusive behavior observation and analysis techniques to identify potentially high-risk passengers. BDOs are trained to detect individuals exhibiting behaviors that indicate they may be a threat to aviation and/or transportation security. Secure Flight: Requires airlines to collect a passenger’s full name (as it appears on government-issued ID), date

of birth, gender and redress number (if applicable). Federal Air Marshals: Blend in with passengers and rely on their training, including investigative techniques, criminal terrorist behavior recognition, firearms proficiency, aircraft-specific tactics, and close quarters self-defense measures to protect the flying public. In addition, the TSA employs roving patrols of TSOs, screening employees on the secure side of the airport. They are also introducing many technological innovations for checkpoint screening such as paperless boarding pass enabling passengers to download their boarding pass on their cell phones or PDAs. This innovative approach heightens the ability to detect fraudulent boarding passes. They are also improving upon many other technologies deployed by them like imaging technology, biometrics, explosive detection system and so on. They are confident that each of these layers alone is capable of stopping a terrorist attack. There are quite a few lessons to be learnt by all of us in Information Security profession from the TSA approach: l They seem to be truly working towards the principle of defense in depth by deploying multiple layers of security, fully realizing that it will be much more difficult even for a determined terrorist to compromise these multiple layers. l They also seem to have adopted the principle of absence of design secrecy. The openness with which each measure has been described actually improves the customers’ confidence. The design is also open to critical examination and suggestions from experts. Security is always viewed as an impediment in the smooth functioning of a system. By implementing so many layers, some of them visible and many invisible, the TSA has inspired confidence in the minds of travelers. u Avinash Kadam is at MIEL e-Security Pvt. Ltd. He can be contacted via e-mail awkadam@mielesecurity.com

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Analyst Angle

Values associated with CIO success are business related

Mark P MacDonald

Some of the best CIOs talk in terms of how they change the fundamentals of their company, as opposed to adapting the features that they operate with

LOGS You can read Mark P MacDonald’s blog at: http://blogs.gartner.com/ mark_mcdonald/

informationweek september 2011

he CIO role has evolved in three major waves in the last 10 years. If you go back 10 years or a little bit more, there was a big effort associated with proving the relevance of IT. Those were the days of ‘does IT matter’ and ‘IT costs too much.’ Those were also the days when the standard answer to your IT problems was to engage an IT offshore outsourcing arrangement and just practice labor arbitrage. About six years ago there was a significant move in terms of thinking of IT and CIOs as a services provider. So there was a lot of focus on service, service level agreements and creating service catalogs. Gartner had something called the IT Services Company model (ISCO) that said IT and the CIO were evolving to being a service provider. But in the last couple of years all of that was put on hold because of the response to the global financial crisis. And this has been a survival mode; we saw the first real decrease in global IT spending in 15–20 years; a significant global average decrease of about 8 percent in 2009, and a real reckoning with the need to clean up IT and application systems. Now we are seeing organizations looking at how to get speed of execution of their strategies and scale efficiencies of their operations, out of IT. And that requires re-adjusting and repositioning IT, rather than throwing out everything that you are doing now. Someone once told me that there are only three Bollywood plots, but they just keeping making them over and over again. It’s Romeo and Juliet in different versions. The term ‘Reimaging IT’ is trying to capture that. IT is a wellknown capability and people know its strengths and its weaknesses. So if I take IT (a well-known story) and I change

some of the parameters just a bit, so you think about cloud and mobility, outsourcing, the globalization of the market place — I can re-present IT’s capability in a new light to interest and engage an audience for a new purpose. The same way as I can take a wellestablished story line and I just change a few things, and move the setting. So it opens up new opportunities. That’s what we are seeing leaders doing. It is about recognizing that I am building upon my strengths. And that I am using or taking advantage of the technologies and the developments out there, as a way to adapt to that motive. So CIOs have a bigger role in business process, but they had that awhile too. Some of the best CIOs talk in terms of how they change the fundamentals of their company, as opposed to adapting the features that they operate with. Through things like channel consolidation, the use of information in analytics and customer service, really transforming the fundamental way the company works — as opposed to changing the front-end or facade of it. So they think more in terms of changes in business performance than delivery on time scope and schedule.

KEY FOCUS AREAS

If there were three focus areas for CIOs they would be technical excellence, organizational excellence and business mastery. In the Gartner survey titled ‘Reimagining IT: The 2011 CIO Agenda,’ CIOs told us that the ones that matters is the ability to use their organizational knowledge and their technical knowledge to create business results (see chart). If you had a choice between being a very good business person, a good organizational

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leader or a very good technologist, the answer that CIOs told us in this year’s survey was that the sources of their success were Business Results (37 points), Business Knowledge (29 points), C-level relationships (14 points) and Business Relationships (8 points). These are all ratio scales. You’ll notice that the success of their organization is not due explicitly to their technology knowledge or their authority as a CIO. It is their ability to translate technical knowledge, organizational capability inside of IT directly into predominantly business results. This is a really big change and if you look at the ratios, you see the strength of it. So all the values associated with CIO success are business related, not technology related.

MEASURING PERFORMANCE

You gauge CIO performance with two sets of questions: Do I expect my CIO to be part of a leadership team that’s creating a great company? Or do I expect my CIO to execute and run the IT function? If they are part of creating a great company (meaning they are part of an executive peer of other CIOs), then I would expect them to be able to describe how they are driving the achievement of the strategy, as well as driving year-over-year sustainable performance improvement across the enterprise.

Making a great company means saying things like ‘over the last year we were able to support 20 percent growth using the same resource base.’ But if my CIO was looking to run the IT function then I would be looking to see three things from them: firstly, I want to see core productivity of IT increase year-over-year. That is not measured in costs. It’s measured in effort required to complete projects. Secondly, I would be expecting to see cycle times continue to fall. Thirdly, I want to see the average cost per transaction in my infrastructure fall year-over-year. Volumes are growing tremendously and I should be able to drive the average cost per transaction down.

THE ‘EFFECTIVE’ CIO

For the last six years, we have been doing a measure of organizational effectiveness and the number one factor driving it is: The ability to make a plan and achieve the results that are called for in that plan. The results from our 2011 survey show that the single biggest factor that drives effective CIOs and effective IT is having the right number of people to meet business needs. We compared the results of Indian CIOs who responded to this survey with CIOs in the rest of the world. And we see that Indian CIOs are leading in all the areas. But across the board, the

CIOs see business results and knowledge as their primary sources of success and influence Sources of CIO success Business results

37%

Business knowledge

29%

C-level relationships Business relationships IT knowledge

14% 8%

IT relationships

Authority as CIO

Vendor relationships

ENTERPRISE CAPABILITY ORGANIZATION

So what will the CIO role be like in future and will there be a need for a CIO? There will always be a function related to sales or customer service. There will always be operational roles. The discipline associated with information technology, the application of IT across the enterprise to raise overall enterprise performance is a unique discipline. I would say that the future of the CIO, and his skill sets and background, is probably to be leading something that we call an ‘enterprise capability organization,’ whose responsibility is to be building the capabilities that the organization is going to need to compete in the future — as opposed to competing right now. That involves innovation, business process design, job design, information and analytics, corporate performance management, continuous improvement, six sigma — all of these pieces are part of an enterprise capability organization. We are now seeing a business environment where change is constant. So there is a need to be constantly transforming. The direction businesssavvy or business-focused CIOs are going is, taking on responsibility for the long-term viability (3 – 5 years) of their company. The new enterprise capability officer would be incentivized on two things: one would be stock price and the other would be the average run in return on invested capital. u Mark P MacDonald is Group VP and

Global average weighted importance on a ration scale

weakest thing is in the skills area. If I were a CIO, the one thing I would think about most is having the right people in the right roles — am I building the skills and the people to meet the challenge I am going to face? Because if I have the right people and the right processes they will naturally be more adaptive, more productive and more energized than any amount of technical structures like governance structures or planning structures or program and project management structures.

Source: Gartner

Gartner Fellow - Executive Programs at Gartner

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Global CIO

10 lessons in IT strategy from ex-HP CIO Randy Mott

Chris Murphy

Some key insights from past interviews with one of the most respected CIOs in the business

andy Mott is out as Hewlett-Packard CIO after a shake-up by new CEO Leo Apotheker. Among Mott’s many accomplishments over his more than 30-year career at Wal-Mart, Dell, and HP, he led a massive, three-year consolidation and centralization of HP’s IT, cutting costs, staff, data centers, and applications, as well as the average time it takes to finish an IT project. While Mott made plenty of waves at HP while driving that transformation, he is also among the most respected CIOs in the business. (Mott was InformationWeek’s Chief of the Year when he was CIO at Wal-Mart, and he’s on our editorial advisory board.) In numerous interviews with InformationWeek dating back to 1996, when Mott was a CIO at Wal-Mart, he has shared with us his high-level but always practical thinking on IT strategy. Here are some of the insights from those past interviews:

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

informationweek september 2011

Know The “Revenue Of IT”

If a company is looking only at how much IT costs, that figure will always look too high. So a cornerstone of Mott’s philosophy is to put a measurable value on the work the IT organization does — what he calls the “revenue of IT.” That data represents all the benefits, both hard dollar and intangibles that a project delivers in the 12 months following full implementation. Said Mott in 2008: “Every business has revenue, but IT typically doesn’t ... because we don’t have the discipline to capture the benefit of projects in a way that we can show the CEO or executive committee and have numbers that are real.” That’s part of why Mott drove hard at HP for a cost-benefit analysis for every IT project that was agreed

to by business unit leaders and their finance teams. Business leaders sometimes resisted, leading to what HP IT staffers have described as “don’t blink” moments. But the cost-benefit analysis gave the “revenue of IT” figures credibility with execs because they weren’t just IT’s numbers.

“It’s Tough To Imagine Fast Enough”

This idea is about getting technology into people’s hands quickly, and not waiting to have every detail and use case figured out. It’s about letting people on the front lines experiment with technologies before all the technical problems are worked out. To really understand a technology’s potential, IT needs to put it in endusers’ hands. Said Mott in 2003: “It’s tough to imagine fast enough. You have to experience it to imagine what’s possible.”

Fewer Projects At Once, Finish Them Faster

Mott pushed HP’s IT organization to do fewer projects at a time but to finish them faster. He said HP got its average project time down to six months in part by putting more people on a given project while shortening the deadline. The goal isn’t fewer projects in total; it’s faster turnover. This year, Mott had set a goal to squeeze that average time further, to 90 days. This ties to the previous point, the need to get technology into people’s hands sooner so they can experiment. IT can’t set priorities for 10 projects spread over the next two years, he said, because once projects one, two, and three are done, the results may change what would have been four, five, and six. “There’s an innovation feedback loop that right now, in

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these long development cycles, IT constrains,” Mott said in 2010.

“Time Doesn’t Make It Better”

Another point related to speed: Mott is loath to extend a project deadline. “Time doesn’t make it better,” he said in 2008. Mott set a three-year target for HP’s IT transformation. But the company grew markedly during that time, in organic sales and by acquisitions, so he felt he could have convinced his executive council peers to give him more time. But he didn’t try, despite the fact that hitting the three-year goal took a serious toll on the IT team. Mott offered two reasons. First, extending the deadline would’ve hurt IT’s credibility. Second, there’s no telling what else might come up if he gave the team another year. Like having to integrate EDS, which HP acquired in August 2008? “EDS would be a very good example,” Mott said in 2008. “Four years would’ve turned into five.”

“Choosing Is Losing”

This one always struck me as the toughest sell among Mott’s ideas. He contends that if a CIO sets out to transform the organization, he or she must go after all the major changes at once. For HP, there were five big areas — portfolio management, IT workforce effectiveness, world-class IT organization, global data center consolidation, and a single enterprise data warehouse. Most execs would be inclined to pick those off sequentially to lower the risk. Mott’s answer: “Choosing is losing.” The Mott-led IT transformation at HP did yield results in terms of cost savings, and started to do so beginning in year one, not just at the end. Nevertheless, a CIO pitching something billed as a three-year transformation that comes with a big capital investment (about USD 1.7 billion, in HP’s case) is a bet-yourcareer move. Yet Mott only got more adamant

on this point as time went on. Do only part of the transformation, he warned, and “the parts you don’t do will undermine the parts you do.”

No Software “Enhancements”

Mott’s team at HP tracked time spent on new development versus time spent on support of existing applications. The goal: Shift staff time toward new development while automating as much legacy support as possible. One frequent sticking point: There was no middle ground of “enhancements” to existing apps. Either it was a new project, with a priority ranking, a cost-benefit analysis, and a business unit backer, or it was support of an existing system or application. Tracking support costs was a key element in Mott’s often-unpopular effort to slice HP’s application portfolio. Business unit leaders and employees aren’t keen to hear that software that’s working for them is getting eliminated for the greater good of efficiency and consolidation. Mott saw tracking the real support costs as IT’s best chance. “It becomes easy to make an unpopular management decision when you have facts behind it,” Mott said in 2008. “Most management decisions are unpopular to start. People don’t want to change.”

Mott contends that if a CIO sets out to transform the organization, he or she must go after all the major changes at once

Lean On Staff, Not Outsourcers

At Wal-Mart, Dell, and HP, Mott tended to rely on staff, not outsourcers or contractors, even as he squeezed IT budgets for cost savings. At HP, he slashed the IT payroll but moved most of those who remained into staff positions. In 2005, HP had about 19,000 IT pros on the payroll, but about half were contractors. In 2008, it was less than 10,000, of which 90 percent were staff. That effort tied to the goal of having the IT team spend most of its time on new development, while automating as much support as possible. As a company does more new development, it’s more important for

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Global CIO it to have staffers who understand the company’s complexity and culture. I’ve never heard Mott make any blanket statement on outsourcing. Companies need to choose what works for them; they might need more outsourcing if they face particularly variable IT demand, for instance. But in his actions, Mott has relied mostly on staffers.

Mott said it’s incumbent on IT leaders to develop and assemble systems, staff, and infrastructure that’s flexible enough to take advantage of technology

Always Fight “Shadow IT”

Push For A “Game-Changing” Approach

No project got IT support without that cost-benefit analysis, which meant a conversation and agreement between line of business and IT. Isn’t that kind of red tape bound to slow IT decisions and deployments? I pushed Mott on that point in an interview last November, and he insisted that the time such planning takes scales with project size — small project, short amount of time for the cost-benefit analysis. Mott insisted that the risk of not doing that kind of vetting across all of IT is too great. Most companies manage only the top 10 or 20 tech projects closely, Mott said in 2008, and those projects probably represent only half of discretionary spending.

Mott never argued that people should copy HP’s IT transformation. He arranged an HP event in November with Procter & Gamble CIO Filippo Passerini and FedEx CIO Rob Carter, where each discussed the very different approaches they took to change: Passerini through a massive outsourcing to focus the remaining staff on innovation; Carter by working to support its array of specialized, custom transportation apps with more flexible, general-purpose infrastructure. What Mott said IT leaders should copy is the ambition, that almost every company had an opportunity for a step-change improvement in IT performance, but that, based on the industry’s history of failed big projects, IT leaders had become too

informationweek september 2011

risk averse. “The fact that all these tools and all these capabilities have been put in place, those are exactly the reasons you want to do it in a game-changing way,” he said in November.

Try It. Do Something.

“Especially in the IT profession, because things are changing so fast, you can really get yourself lulled into saying ‘I’m going to wait and see,’ Mott said last November. “As an industry, we’re doing the ‘wait and see,’ where we’re almost making ourselves ineffective.” Yes, technology changes fast, but that’s no excuse for IT leaders to fall behind. Mott said it’s incumbent on IT leaders to develop and assemble systems, staff, and infrastructure that’s flexible enough to take advantage of technology improvements as they come, not wait and hope the technology reaches a more steady state. It’s a message Mott espoused long before he worked for a company that sells technology. Back in 1996, when Mott was at Wal-Mart, he was preaching speed to results and the need to get technology in front of people sooner. At that time, WalMart execs expected technology projects to cover development and deployment costs within four months of implementation. As Mott told InformationWeek’s Bruce Caldwell back then: “We prepare a report for the business units on expected and actual payback to date, and if we don’t get the expected payback that becomes a point of discussion.” Maybe business processes were not changed to take advantage of the technology, Caldwell wrote, or the new system missed a key function that would deliver the payback. That’s when Mott conjured up one of founder Sam Walton’s many sayings: “Do it, try it, fix it.”

u Chris Murphy is Editor of

InformationWeek. Write to Chris at cjmurphy@techweb.com

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Practical Analysis

The ultimate ‘business’ pad defined

Art Wittmann

The tablet I want might not be what my employer wants — and that might not matter all that much

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

e’ve seen more than a few CIOs talking about tablets rather than laptops for their users. That’s gotten me thinking: Exactly what would I want in a tablet? I have a good laptop courtesy of my employer, and I have an iPad that I bought myself. With simple e-mail and calendar connectivity, the iPad now replaces my laptop on one- and two-day business trips, but it’s not quite where it needs to be to be a full replacement. Here’s what it still needs. First, the easy stuff. l The iPad’s screen resolution should be higher, full HD — say, 1920 x 1028. The visible screen should take up another inch or so of the surface area — 11-inch diagonal is fine. l It’ll need more solid state local storage — north of 300 GB is fine. Let’s keep it encrypted. It also needs a file system that’s more accessible than the iPad’s; complex document composition requires that. l Of course, it has to multitask, turn on instantly, and run the basic business utilities. All those apps need to run locally, not in a browser. l E-mail and calendar are musts, and the browsers need to be HTML5compliant. Flash and other standards would be nice. l In terms of processor speed, if I can take a video call while an HD movie is streaming, both on encrypted channels, that’s probably enough for anything I’d use it for. Is that single core, dual core, or quad? I couldn’t care less. l Cameras on each side of the tablet are nice, though I’d be tempted to award points for not having a camera pointing at me. I have a face made for radio, as they’d say in the good ol’ days. l The battery life should let me work pretty constantly for about 12 hours. Overall, the tablet needs to weigh no more than 24 ounces.

The list of connectivity requirements are long but not out of the ordinary. It’ll have high-speed Wi-Fi, of course, LTE, of course — with fallback to lesser standards as needed. l It needs to be a great phone, supporting both personal and work numbers simultaneously. For the phone, it’ll be a Bluetooth headpiece. l For desktop productivity, the tablet should support wireless monitors and keyboards; mice too, I suppose, though the pad itself is a pretty good pointing device. Printers, cameras, projectors, and other such devices should all connect wirelessly, seamlessly, and at full resolution. Here’s the potentially unreasonable part, at least from IT’s point of view: I don’t want my employer owning this thing. I want to own it, and I want to carve out a virtualized portion of my space for the company, not the other way around. That, I believe, is a significant part of what makes the iPad so appealing to executives. Mobile connectivity is now just as useful in my personal life as it is in my work life, so I want a choice as to who runs the show on that device. I pick me. My sense is that your user community is going to feel the same way. It probably benefits the company if I do have just one device (or set of devices); I’m much more likely to always be reachable and have the right information available at all times. For some businesses and employees, security requirements won’t permit such an arrangement, I get that, but I bet that number is relatively small. This, then, is the challenge for managing mobile devices going forward, and so far, I don’t hear of too many companies attempting to address it. 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.

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Down to Business

Language of social sounds too soft to business

Rob Preston

Why is Enterprise 2.0 still considered more of a “movement” than a business imperative? Its evangelists speak more like Dr Phil than Jack Welch

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

informationweek september 2011

eutsche Bank managing director John Stepper, in describing his own missteps, sums up what’s wrong with the social business movement. In a keynote address at Enterprise 2.0 Conference in Boston, a UBM TechWeb event, Stepper related spending a good year trying to become the “social media guy” at the bank, culminating in a trip to London to persuade the powers-that-be to invest in a collaboration software platform. When they asked him which specific business problems his “solution” would ostensibly solve, he didn’t have much of an answer beyond the esoteric promise of enhancing engagement and promoting knowledge sharing. Worthy goals, but how would those things improve business performance? Stepper learned his lesson, and he eventually got his approval for a collaboration platform that, come fall, will serve 5,000 employees across 20 role-based and other communities. Among the hard goals: Reduce superfluous e-mails and meetings by 25 percent and cut help desk calls by 50 percent, while also delivering the softer benefits Stepper outlined in his original proposal. Part of the reason social networking tools still aren’t mainstream at most organizations is because Enterprise 2.0 is still considered more of a “movement” than a business imperative. The movement’s evangelists employ the kumbaya language of community engagement rather than the more precise language of increasing sales, slashing costs, and reducing customer complaints. They yearn to empower employees, crowdsource ideas, facilitate storytelling, nurture advocacy, and unleash passion. It sometimes feels like an episode of Dr Phil. In his BrainYard column “Hard And Soft Power In Enterprise 2.0,” Venkatesh Rao also draws a contrast between the hard-edged reality of the business

world and the kinder, gentler “win-win,” “co-creation,” and “delighting customers” specter of the social business movement. Even the names of some Enterprise 2.0 software vendors convey a less than rigorous business purpose. Take microblogging software provider Yammer, whose catchy name was conceived to convey “persistent communications,” says CEO David Sacks, but which literally means to whine or whimper. Or Jive, which can mean glib, deceptive, or foolish talk — B.S. And Twitter? A short burst of inconsequential information. What’s next — a content management provider called Drivel and a reputation management software company called Sycophant? No wonder it’s taking CEOs and CIOs so long to take social business seriously. All that said, there’s a reason we’re still talking about social business and why it’s important. It’s where grassroots user adoption (think Yammer) is solving real problems. John Hagel, co-chairman of Deloitte’s Center for the Edge, relates how a “bunch of old guys” in the Metropolitan Transit Authority’s maintenance department took to a microblogging tool to help them solve a nagging problem: locating hardto-find parts for buses. “It completely transformed their view of social software,” Hagel said at the Enterprise 2.0 Conference. “They drilled down and saw they could use technology to affect operating performance.” The old guys at the MTA weren’t and aren’t Enterprise 2.0 groupies. They just wanted a better way to get important work done. The future of this “movement” hinges on it attracting many more like them.

u Rob Preston is VP and Editor in Chief of InformationWeek. You can write to Rob at rpreston@techweb.com.