CIO September 1 2008 Issue

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Pankaj MishraPankaj MishraExecutive EditorExecutive [email protected][email protected]

From The ediTor

Dear IT leader,

Even as you sift through the ever so dynamic and exciting world of technologies such as SOA, virtualization

and cloud computing (I have no clue what they mean), please do understand that we users are not really

technocrats, but folks who are primarily worried about mere sales targets (and how to achieve them),

apart from getting the next release of the product out before our competition does. So do keep in mind that

apart from its relevance to business at large, any new technology you bestow on us will need to be liked

or at least understood by us.

Yours truly,

A poor IT user.

While i am not sure if you already have an exact office memo pinned to your desk,

I guess most IT leaders would have come across similar sentiments when dealing with any

new technology adoption.

“IT departments need to involve

common users as part of a pilot, apart

from high-end business users,” a

marketing executive at an FMCG

company admitted to me recently. It seems his organization selected only a handful of

business heads for ERP training (which involved a two-day offsite to a nice location), who

in turn imparted training to the field force and other executives. “The seniors hardly had

any time to explain the system to us, and we were too apprehensive to walk into their cabins

for clarifications,” he added.

And if you thought only the ‘tech-ignorant crowd’ posed a challenge, there is the demanding

iPhone worker who remains dissatisfied even after you have deployed the best systems.

A recent survey by research firm Gartner across 360 enterprises in the US revealed that

more than half of IT users would be dissatisfied with the slow rate of IT change in their

companies by 2013, up from almost 30 percent this year.

According to experts, user dissatisfaction stems from the fact that more and more new age

‘digital workers’ are becoming part of enterprise workforces, demanding more web-based

alternatives over and above what their IT organizations directly provides.

How do you balance digital workers with the tech-ignorant crowd? Are there ways to

ensure effective communication and participation from both these genres?ensure effective communication and participation from both these genres?

Let me know how you cope with this.

More than half of IT users would be dissatisfied with the slow rate of IT change in their companies by 2013.Who’s Minding

the User?If your users are not comfortable with new technology, it’s a no sale.

Vol/3 | ISSUE/202 s E P t E M b E r 1 , 2 0 0 8 | REAL CIO WORLDREAL CIO WORLD

Business Transformation HEALtH CARE BEHInD BARs | 50Inside California prisons, substandard medical care kills one inmate every six days. IT is part of the court-ordered prescription to ensure doctors do no more harm.Feature by Kim s. nash

CollaborationYOu, AvAtAR | 56Companies are experimenting with virtual environments for everything. But the technology has some pitfalls.Feature by C.G. Lynch

Applied InsightIs tHE tHROAt YOu ARE CHOKInG YOuR OWn? | 20With fewer vendors to choose from, it’s best to hedge your bets.Column by Laurie M. Orlov

more»

Emerging Technology

COvER stORY AHEAD OF tHE PACK | 26Early adopters of new technologies, share their secrets for choosing which emerging tech is right for their companies and rolling it out successfully.Feature by stephanie Overby

contentseptember 1 2008‑|‑Vol/3‑|‑issue/20

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content (cont.)

Trendlines | 9 security | Make Way for Picture Passwords Quick take | Atul Luthra On SOA voices | Rising Support Costs for Business Apps telecommunication | To Telecommute Or Not Corporate Issues | Call for IT Culture Overhaul Opinion Poll |Are Mainframes Here To Stay? By the numbers | Online Fraud Tools Lagging Innovation | Virtualization In a Theatre Near You survey | Regulatory Compliance a Top Concern It Management | Energy Efficiency No Big Deal storage | We Want SSDs: IT Managers Essential Technology | 65 DR | Rethinking Disaster Recovery Feature by Bill Snyder Pundit | A Kick In Your Butt Column by Thomas Wailgum

From the Editor | 2 Keep the Poor user In Mind

By Pankaj Mishra

dEpArTMEnTs

NOW ONLINE

For more opinions, features, analyses and updates, log on to our companion website and discover content designed to help you and your organization deploy It strategically. go to www.cio.in

c o.in

Executive ExpectationsvIEW FROM tHE tOP | 42Dilip Oommen, CEO, Essar Steel, wants IT to bridge every geographical gap and make one seamless steel giant.Interview by Rahul neel Mani

Case FileDAtA In A stROKE | 46PGA Tour’s IT Chief, Steve Evans, relies on legions of golf-crazed volunteers, high-tech lasers and the input of golf pros to help him identify, manage and display the Tour’s most critical data.Feature by thomas Wailgum

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director, IIIt-bangalore

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S e c u r i t y Canadian researchers have come up with a novel solution to the perennial problem of stupidly insecure passwords — create secure ones using images, MP3 files or videos.

Mohammad Mannan and P.C. Van Oorschot of Carleton University in Canada, have come up with ObPwd (object-based password). It is a way of creating complex, random passwords from hashes generated using a range of image and sound file types as input.

Instead of using the easy-to-guess name of a pet cat as the password, the user could use a picture of the same animal to generate something sophisticated enough to withstand even the best password cracking tools. Getting around the technology would mean having access to the specific image or file from which the password was generated. "Users keep a record (memorized or written) of a pointer

to their content used in to their content used in generating each password. generating each password. Users can write down the Users can write down the password in a secure place, password in a secure place, or re-create it from the content or re-create it from the content when needed," write the authors when needed," write the authors in a public paper on the concept.in a public paper on the concept.

The end user's mental effort is The end user's mental effort is transferred from having to remember transferred from having to remember a string of text to simply having to a string of text to simply having to know which file was used to create the know which file was used to create the password, they point out. password, they point out.

The concept has some limitations. The concept has some limitations. They recommend using files above a certain size — 30 bytes — to create long enough passwords, but not so large that the generation process is slowed down. This rules out using large video files, unless the password is based on only part of the file. They also warn against creating passwords from public material, such as pictures on a Facebook

page or common image files. The password from a given file will always be the same, making secure possession of the file imperative.the file imperative.

Obpwd should not be confused with the much simpler idea of using images themselves as pictorial passwords or mnemonics, which has been around for some years. Numerous systems exist to do the latter, including the UK-based PicturePIN.

—By John E. Dunn

i n f r a S t r u c t u r e Service-oriented Architecture (SOA) seems to be the buzzword in IT circuits these days. While it excites IT professionals, many are wary of it because it gives the impression of being expensive and complex. Saurabh Gupta spoke to Atul Luthra, Head-IT, PVR, to see what he had to say:

What business value can SOA bring to your enterprise?SOA is a very powerful tool, which can help organizations at all levels in integrating different business processes together. For any growing organization, it is very common to have business tools running in silos and SOA can help integrate them and help the business move forward instead of re-looking at their processes.

Does SOA enable business-IT alignment?Yes, definitely. The biggest challenge for CIOs is to integrate business processes while ensuring minimum

Atul Luthra on SOAchange in core business processes. And in today’s world, where information is power, if CIOs can integrate all processes with each other, then your success is guaranteed.

Does SOA require an overhaul of business processes? No. As SOA is nothing but an integrator, using technology, basic business processes remain the same, but might require tweaking

to ensure smooth functioning, which in turn can enhance productivity.

In your opinion. is implementing a service-oriented architecture expensive or complex?All projects require ROI, but unfortunately calculating ROI is a tough task for a SOA implementation. So, it is difficult to say whether it is expensive or not. You will only know its benefits when you implement it.

Quick Take

Atul Luthra

make Way for make Way for picture passWordsords

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t e l e c o m m u n i c a t i o n Not every employee is chomping at the bit to telecommute. A survey commissioned by Steelcase, a manufacturer of office furniture, shows that professionals have decidedly mixed feelings about the option to work from home.

On the one hand, respondents believe it's important for employers to let their employees telecommute. They think that companies that let their employees work from home will be more successful than companies that don't because they believe that working outside the office increases employees' morale and reduces attrition. Respondents also see working from home as a way to help them achieve work-life balance.

On the other hand, many respondents worry about their employers' perceptions of telecommuting. Almost half (46 percent) of the respondents' employers allow them to work from home, but less than one-third (32 percent) participate in telecommuting arrangements. That's because they feel that their employers really prefer that they work in an office — both to control the work environment and to prevent a decline in productivity. Respondents also worry that working from home will hamper their career growth.

Here are the highlights of the survey: More than half of respondents said it's important for a

company to endorse telecommuting. Of the 32 percent of respondents who have the option

to telecommute but don't, 71 percent say it's because they feel their employers would rather they work in the office to prevent a dip in productivity and 64 percent say it's because they think they'll miss out on a promotion.

80 percent of respondents think existing technology allows them to remain just as connected to the office while working at home.

Half of respondents say they're more productive in a different work environment.

More than half think companies that promote telecommuting will be more successful than companies that don't.

Over 80 percent say that having the option to work from home increases employee morale and reduces turnover.

80 percent believe the telecommuting trend will continue 80 percent believe the telecommuting trend will continue to grow over the next five years.

62 percent think their employers prefer that their employees work in the office to prevent a lack of communication; 41 percent believe that their employers don't let employees telecommute because they think the cost of the technology needed to support telecommuters is prohibitive.

61 percent of employees who telecommute do so to balance 61 percent of employees who telecommute do so to balance their family and work lives; 37 percent do so to reduce their carbon footprint.

—By Meridith Levinson

Do Rising Support Costs For Business Apps Concern You?i t B u d g e t It’s almost impossible to find companies not using IT for business purposes and rising support costs for technology implementations seem to be a cause of concern for many CIOs. Saurabh Gupta spoke to your peers and here is what they had to say:

S. c. MiTTalTTalTTExecutive Director, Management services & It, IFFco

aTul kuMaraGM-It, t, t syndicate bank

“A lot of costs are being added in the name“A lot of costs are being added in the name“A lot of costs are being added in

of support. This leads people to look for cheaper technologies with cheaper recurring costs.”

S. p. p. p aryaVp, p, p corporate It,amtek India

Write to [email protected]

lend your

Voice

“At IFFCO, since we use indigenously developed applications, the biggest support cost for us is acquiring and retaining manpower. With off-the-shelf products, updating apps is a huge cost and a big concern.”

“Rising support costs are a big issue now as profit margins against current pricing

structures are being eroded. ‘Working smarter, not

harder’ has never been more fitting."

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To Telecommute or Not to Telecommute?

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c o r p o r a t e i S S u e S As many as 85 percent of survey respondents believe the culture of IT can differ from the overall culture of a firm, according to a recent report by Forrester Research entitled 'Does your IT culture need an overhaul?'

In fact, IT department culture is probably not a match with overall corporate culture in about half of all businesses, Forrester analyst Marc Cecere estimated. The research firm interviewed 15 CIOs in-depth and surveyed 41 IT decision-makers for the study, which defines corporate culture as the way individuals feel themselves to be part of a company's identity.

"Sometimes your IT is organized around efficiency and your business is organized more around responsiveness," Cecere said in an interview.

A distinct IT culture may evolve in a firm due to the different ways each department measures success. And, in a large company where leadership varies among departments, cultural gaps are almost inevitable, Cecere noted. However, the report states, problems can

arise when the culture of IT strays too far in three directions:

Too IT-centric, insular or fearful — When IT doesn't have a healthy relationship with the rest of the enterprise, it's in danger of forming what Forrester calls "an us-versus-them culture where IT hunkers down behind the technologies they manage, problems they solve, and metrics like help desk tickets served, system capacity, uptime, and volumes."

Too heroic, free range or autonomous — The dangers inherent in this style are a tendency to firefighting and working extreme hours to solve problems for customers. This can also spawn a tendency to developing workarounds, rather than understanding and fixing the underlying issues.

Too bureaucratic — IT departments can isolate themselves from the business if they set up too many formal processes that customers must follow. In the interests of comprehensiveness or security they may ask customers to submit overly complex requirements

definitions and the like, but this can create unnecessary barriers between business needs and IT solutions, according to Forrester.

So, how does a CIO go about overhauling IT culture? The first step, Cecere said, is to clearly identify the cultural gaps, examining differences in decision-making styles and levels of risk between IT and other departments.

Once identified, strong leadership and clearly defined metrics of success will aid in closing those gaps, as will a strong network of people within IT who share information with the CIO on a regular basis.

"It's what I call institutionalizing communication," he said. "It's more than just communicate, communicate, communicate, which you hear all the time. It's actually being very disciplined and very organized about it."

Performing such an overhaul, though, requires patience, as Cecere admitted a cultural shift is a long process.

—By Marissa Berenson

source: bMc software

How Optimistic Are You About Mainframes?it looks like mainframes are here to stay. a majority of it managers report that they will continue to use mainframes for legacy applications.

Forrester Report Calls for IT Culture Overhaul

The mainframe platform will continue to grow:

65%

It will continue as a viable long-term platform:

30%

Users must find an exit strategy in five years:

5%

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B Y B Y S t e f f g e l S t o n

Examine how much riskyour organization faces. should you have measures in place to prevent fraud rather than an action plan to recover from it?

Look at how you use information generated from monitoring systems. turn turn tthat data into security controls so that you're getting the most out of your monitoring system.

Evaluate online transaction-monitoring activity. analyze whether broader monitoring or additional authentication factors are necessary.

online fraud is getting worse. nline fraud is getting worse. in 2007, Americans reported losses of $240 million (about Rs 960 crore) due to the problem, according to the Internet Crime million (about Rs 960 crore) due to the problem, according to the Internet Crime Compliant Center. That's up $40 million (about Rs 160 crore) from 2006. Compliant Center. That's up $40 million (about Rs 160 crore) from 2006.

Yet defenses against online fraud including adoption of new technologies are not keeping Yet defenses against online fraud including adoption of new technologies are not keeping up with scammers' tactics, says Geoffrey Turner senior analyst, Forrester Research. He up with scammers' tactics, says Geoffrey Turner senior analyst, Forrester Research. He puts fraud defenses into four categories: authentication, monitoring, risk-driven controls puts fraud defenses into four categories: authentication, monitoring, risk-driven controls and fraud intelligence. "A robust defense includes all four methods," he says. However, his and fraud intelligence. "A robust defense includes all four methods," he says. However, his report, Countering Online Fraud GloballyCountering Online Fraud Globally, notes capabilities in those areas are still maturing , notes capabilities in those areas are still maturing and will keep losses only at current levels. and will keep losses only at current levels.

Turner says it's important to include fraud counter-measures in your big picture Turner says it's important to include fraud counter-measures in your big picture security plan for IT. CIOs sometimes make the mistake of treating counter-fraud and IT security plan for IT. CIOs sometimes make the mistake of treating counter-fraud and IT security as two separate domains, he says. security as two separate domains, he says.

To combat cyber criminals, CIOs need to assess practices of establishing and verifying To combat cyber criminals, CIOs need to assess practices of establishing and verifying identity, since most Internet fraud stems from some aspect of ID theft. They should also identity, since most Internet fraud stems from some aspect of ID theft. They should also look at how stronger identity-proofing credentials can be applied to current business processes. "New identity technologies and processes that are better suited to today's online environment are available," he says, "but their adoption is lagging far behind the fraud economy's ability to exploit outdated identity practices."

Online fraud will be significantly reduced only by broader adoption of more effective identity technology and processes. "CIOs should simultaneously be looking at how identity and fraud relate to the issues in the markets in which they operate and begin to consider market-scale, multi-organizational strategic changes," says Turner.

Online Fraud Tools LaggingBestPractices

technologies for fighting threats face maturity and technologies for fighting threats face maturity and tadoption barriers.

1

2

3


60%of those surveyed said they are concerned or very concerned

about online security

80%of those surveyed said they would

buy more from an online vendor who offered them more than just a user

name and password

consumers dissatisfied with online securityonline consumers are growing frustrated with the lack of security provided by

banks and online retailers, giving rise to online frauds.

source: Gartner

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i n n o v a t i o n Never mind the Olympics. You don't have to be a tween to know that the Disney original movie 'Camp Rock’ was a sensation this summer, drawing some nine million viewers. Wanting to capitalize on the success, the network decided to put the full-length movie on Disney.com for one day, along with interactive features like the ability to chat with other viewers online, take polls and answer trivia questions.

With a window of 60 days to get the movie on the site, Disney's Interactive Media Group relied on a combination

of virtualization, load balancing and content delivery networks (CDN). About 25 servers were provisioned for different parts of the architecture to balance the load of the anticipated increased traffic, says Bud Albers, CTO of the Interactive Media Group, in Seattle.

The group had done virtualization projects before, but never of this magnitude, Albers says. The strategy was to be able to scale server capacity up and down, depending on the demand, he says. Deploying a physical infrastructure was not a viable alternative. "There wasn't time to do it any other way,'' Albers says, since Disney had to gather requirements, features and content and then come up with a production schedule.

The goal, adds Adam Fritz, principal software engineer for the Interactive Media Group, was to ensure capital and operating efficiencies as well as the ability to remain agile by relying upon

virtual machines. "By taking a pool of equipment and dedicate it to the event, and move it around instead of having to go through a deployment and purchasing cycle makes us more agile," says Fritz.

According to Disney's internal tracking, the site reached a daily record with 3.17 million visitors, increasing traffic to Disney.com by 37 percent by the third day. It received 860,000 video plays for the one-day event.

Albers says the day-long event allowed them to prove the scalability of a virtualization scheme, which will continue to be a huge advantage to them for future events where huge spikes in online traffic are anticipated, like during the presidential election. "Going forward we're now very well positioned to leverage growth in this environment."

—By Esther Shein

S u r v e y regulatory compliance will be the top business and technology issue facing It managers and executives worldwide in the next 12 to 18 months, with a major emphasis on protecting personally identifiable information (pII) and transaction monitoring.

Isaca identified 21 current business issues impacted by technology that face It managers and executives, and asked respondents to rank them according to priority. the survey found that the top seven issues It execs and managers will face over the next year and a half are, in order:1 regulatory compliance, specifically protecting pII and

implementing transaction monitoring2 Enterprise-based management and It governance3 Information security management4 Disaster recovery/business continuity5 It value management6 challenges of managing It risks7 compliance with financial reporting

Isaca assurance committee member and vice president of It audit at Viacom, anthony noble, says, "It projects still lack alignment with business objectives at many organizations, and as a result, they are unable to realize business benefits," he said. according to the survey, It must design and maintain systems to comply with these legislative and regulatory requirements.

Isaca said enterprises continue to make increasingly large-scale investments in It and It-enabled change, making it even more challenging to ensure compliance with the growing number of international regulations across all industries.

chairman of Isaca's assurance committee and senior finance director at Dow chemical, Greg Grocholski, said the cost of losing or compromising the integrity of pII is leading to a renewed focus on information security.

the survey found that organizations are finally realizing that information security management must have more to do with managing people and processes rather than implementing technology.

Eighty percent of the 1,500 members who made business continuity management the number 4 issue said that their business managers and owners are not fully aware of their responsibilities to maintain the ability to perform critical business functions in the event of a disaster.

the findings come from a survey of over 3,100 members of Isaca — a non-profit It industry association serving over 86,000 information governance, control, security and audit professionals in over 95 countries.

—by andrew hendry

Virtualization in a Theatre Near You

regulatory compliance a Top concern

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i t m a n a g e m e n t Just 34 percent of IT executives say energy efficiency is a very important factor when considering equipment purchases, a new survey by IT products and services vendor CDW has found.

IT managers routinely say they care about energy efficiency, and a full 94 percent told CDW that they take some routine measures to manage energy consumption and cost of IT equipment. But with just one-third of executives calling energy efficiency a key factor in buying equipment, it's clear that concerns about efficiency are not heavily influencing purchasing decisions, CDW concludes.

"While most organizations care about reducing energy consumption and [could achieve] significant savings, success comes only with sharp, persistent focus on energy-efficiency opportunities throughout the IT organization," CDW says.

The survey involved 778 IT pros in US organizations, including midsized and large businesses, government agencies, and educational institutions. Critics of IT energy use often point out that few CIOs even see their power bill. CDW's survey finds that executives who are given information about their energy consumption are doing more to reduce power usage.

About 57 percent of IT executives say at least one person in their IT organization has some responsibility for energy costs. Of that group, nearly nine out of 10 are developing strategies to manage power demand and energy consumption, whereas just 38 percent of IT shops that lack control over their power bills are doing so.

Buying efficient equipment alone isn't going to solve an IT shop's energy problems. For example, only 38 percent of IT pros who have purchased Energy Star-qualified computers said they make full use of the power management tools in those PCs. Nearly one out of 10 organizations with energy-reduction plans were able to reduce costs by 21 percent to 40 percent, and one out of 50 of these organizations were able to reduce total IT energy costs by 41 percent or more.

—By Jon Brodkin

S t o r a g e It managers around the us are falling in love with ssDs (solid state drives) in enterprise servers because they solve two major headaches: they run so fast they can replace multiple hDDs (hard disk drives) and they help reduce the electric bill.

the benefits of ssDs, which are made from flash memory chips and have no moving parts, are even helping many Itmanagers get over their initial sticker shock, says Jim handy, lead storage analyst at objective analysis.

the key is speed, as measured in Iops (input/outputs per second). Many It managers, particularly those at banks, stock brokerages or with other transaction-type needs, have so much trouble with hDD speeds that they hook up several hDDs to one enterprise server in order to increase Iops.

"With a single ssD they can get rid of a hookup like this altogether, replacing 10 hDDs in many cases, but I heard of one extreme case where one ssD replaced 38 enterprise hDDs," handy said.

tack on savings to the electric bill over time, and tack on savings to the electric bill over time, and t ssDs appear even more attractive.

stEc, one of the early leaders in ssDs for enterprise servers, makes one in a common hDD capacity, 146G bytes, along with a drive half that size. other companies, such as bitMIcro networks and Micron technology also offer technology also offer tenterprise ssDs.

companies running large datacenters are at the forefront of replacing hDDs with ssDs in enterprise servers, handy said, often replacing thousands of hDDs with a hundred or more ssDs.

In one example, he said a company providing video on demand (VoD) was able to replace 16 hDDs with one sDD in enterprise servers at their datacenter, gaining space and cooling savings along with initial cost savings.

the trend has sent sales of ssDs for enterprise servers rocketing. objective analysis predicts unit shipments of ssDs for the enterprise will rise 151 percent per year through 2013.

—by Dan nystedt

we want SSds: iT Managers

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The conventional wisdom is that it's better to have fewer software vendors — or even a single vendor — to manage than it is to use multiple vendors. Now that, according to a recent Forrester Research report,

there are only 17 large independent software vendors left, it's a good time to re-evaluate this closely held belief.

CIOs who subscribe to the ‘one-throat-to-choke’ approach to vendor management typically think about it in one of two ways: either they want to get the various company departments that run different tools to agree to a single provider or they want to forestall deployment of new tools until their big enterprise vendor supplies them. The goal is to, one way or the other, achieve a standard platform and make running IT easier.

But reliance on a handful of vendors may not be in your best interest. This is especially true now, when the software market is consolidating. IT customers are waiting anxiously to see what the big guys are going to do with their newly acquired products. In the meantime, IT departments should hedge their bets.

Vendor Standardization is Wrong-HeadedAt the core of the desire for standardization is the desire to optimize IT at the expense of business constituents who prefer a variety of different tools. By reducing the number of software products to support, limiting the number of vendors to call with a problem and minimizing potential behind-the-scenes data complexity, the IT job will be easier and overall support costs will be reduced. This optimization may, however, engender substantial employee frustration during a switch to IT's preferred tool.

Another questionable justification for standardization is that integrating products from multiple vendors along with data

Is the Throat You Are ChokingYour Own?Lining up a single vendor to supply most of your software seems easy but isn't always smart, says an IT management expert. With fewer vendors to choose from these days, it's best to hedge your bets.

Laurie M. Orlov AppLied insight

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Laurie M. Orlov AppLied insight

from multiple systems costs much more than standardizing on fewer vendors. Unfortunately, few IT departments compare the potential costs of integration with the costs of dependency on one vendor's product. With fewer vendors, CIOs limit their negotiating leverage; vendors won't budge on terms if they don't think they have competition.

Meanwhile, standardization produces unfortunate side effects. Business wait endlessly for that elusive next version or conversion. Resentment of the IT department bubbles and boils as end users' favorite tools are retired or new tools lack functionality they want.

Why Market Consolidation HurtsDuring the past few years, IT has gotten an assist in its quest for fewer vendors from the software industry. For example, as Oracle acquired Siebel, PeopleSoft and others, the acquired products have been integrated at the Oracle corporate level, and license and maintenance fees have become standardized.

But this isn't a standardization fan's dream. Customers have to worry about disconnects between the acquiring and acquired vendor teams, a new pace of tech upgrades, prospective higher license and maintenance costs, and new product development priorities. As my former Forrester colleague VP and Principal Analyst Andrew Bartels notes, "Customers need to worry that the acquired vendor's product might not be a core part of the acquiring vendor's technology universe."

Even when an acquisition is based on acquiring the new technology (rather than absorbing the competition), customers should be concerned about the potential for diminishing entrepreneurship.

Reverse a Flawed StrategyGiven the downsides to the one-throat-to-choke approach, should IT abandon it? In some cases, such as in prime contractor service vendor relationships (where a single consulting firm manages relationships with smaller subcontractors), it may be useful. But in the world of software, having one throat to choke has virtually no benefit. Enterprises need leverage to manage and maintain costs that can get out of hand as their organizations grow and the software market shrinks. Here are five ways to maintain your leverage.

Prioritize a common data model over common software. Sometimes IT migrates to a single software vendor but doesn't run identical app versions, or worse, enables users to enter non-standard data. Making data usable is more important than having a standard version or vendor. Getting agreement on a data model is more difficult than decreeing a software

standard, but the business results are more compelling than the number of vendors.

Retain more than one vendor in every important category. Even though it may be tempting to reduce IT support costs by limiting vendors to one, maintaining multiple products in a strategic software category protects your future leverage. Even if switching costs are high, you should keep vendors guessing by continually reminding them of their competitors' unique and state-of-the-art product and service benefits.

Maintain your balance of power with competitive or reference bids. Vendors know that if you are fully dependent on their products, you will have difficulty eliminating them. Keep them guessing about how much you need them. One mid-market CIO I know attends the user conferences held by his current vendor's competition, meets with the competitor's salespeople, solicits bids from them, and considers their products for new deployments and at upgrade time.

Support third-party vendors. The struggles of third-party ERP maintenance provider Tomorrow Now (which competed with, then was bought by SAP) raises the question of why more CIOs don't support independent maintenance providers. Are CIOs so dependent on a vendor's feature upgrades that they give in to vendors' threats to withhold them if maintenance is canceled? Think about whether you really want those upgrades. IT execs can band together to fund third-party services and products they need to sustain their independence and leverage. There could be more tools out there for reverse engineering processes, data and reports from enterprise apps, which in turn could enable switching vendors if service declines or prices rise following an acquisition.

Instead, CIOs appear to maintain their victim status with an ‘they've-got-us’ stance. That's surprising in light of their inadvertent and growing vendor dependency and the inevitable costs and risks that result.

Assess your portfolio for acquisition probability. Take a close look at your portfolio to check your greatest vulnerabilities. Figure out which software products are likely to be acquired — putting future product innovation at risk — and specify contractually any code escrow terms that preserve your options.

The end result? Those business constituents will be happy to hear that you will leave them alone to use Cognos or Hyperion or whatever application they want. Now, if only they will agree on the proposed standard definition of a customer name and address. CIO

Laurie m. Orlov is a former Vp and principal analyst at Forrester research. send

feedback to this column to [email protected]

Reliance on a handful of vendors may not be in your organization's best interest. this is especially true now, when the software market is consolidating.

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In the United Kingdom, where I'm from, there is a candy called Rock. Sold as a souvenir, Rock often has a town name permeating the entire piece. So with Brighton Rock, for example, you can see the letters spelling out

Brighton through the candy, from edge to edge. The same way you see that name through a piece of Rock candy, a CIO can see through an organization from end to end. In fact, I can't think of any role other than that of the CIO that touches every single facet of the business. So it's logical and imperative that the CIO's perspective and touch extend to the organization's end customer.

I spend 80 percent of my time focused on issues that have the external customer at their heart. The days are not completely gone when the role of IT was primarily to execute projects, but IT organizations have to do more than that. We've got to look at everything through the lens of customers both internally and externally, and help them get where they need to go with the aid of technology.

Admittedly, I have a different background from many CIOs. I have been a general manager and a CEO at other companies, plus I am currently the CEO of our international business group. Some may say that because of my experience, it's natural-or easier-for me to focus on the customer. But I find it difficult to understand how a CIO can do his job unless he understands the mission of the business and shares in developing it, just as a surgeon can't do his job if he doesn't understand how the whole body works. CIOs who don't participate in and influence what the business is trying to do for its customers will only develop technology that feeds or at best incrementally improves the status quo. If you really understand your business, you can

Customer Focus is Your BusinessBest Buy’s CIO explains why delivering value through IT depends upon anticipating — rather than responding to – customer’s needs.

Robert Willett PeeR-to-PeeR

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Robert Willett PeeR-to-PeeR

help it leapfrog competitors and create paradigm shifts that differentiate your company.

Geeks, Pricing and RFIDAt Best Buy we have to understand how our staff — whether our Geek Squad of computer technicians who make house calls or the blue-shirt staff in our stores — face off with customers every day. By understanding customer needs, we were able to develop scheduling, routing and dispatch systems for the Geek Squad that made them 100 percent more productive.

Here's another example of how important it is to understand customer needs and behavior. One of the critical factors when you grow a company to 1,000-plus stores is your pricing strategy: the prices you set are what allows you to stay ahead and drive value. So we developed a price optimization capability that implements pricing strategies by store location, delivering tens of millions of dollars per year.

Finally there are emerging technologies such as Wimax and RFID that have the potential to fundamentally change retail operating models. It's up to us to embrace these technologies and figure out how to use them to our customers' advantage. Imagine if customers could walk into a store, find everything they wanted, use a kiosk to select and pay, and walk out of the

store with their purchases without having to wait in a checkout line. That's the direction we're going in, and it will be enabled by RFID and WiMax.

However, it's not enough just for me to have a customer focus. Everyone on my IT team is embedded in the business, where they bring the lens of change through IT to bear on the customer value proposition. They participate in understanding consumer attitude surveys, spend time in the stores and work with our merchandise suppliers, who are trying to find ways of being more effective with consumers. When we introduce a new product to the stores, each store will have a different experience with that product. We encourage our people to post to an internal blog and share both the issue and the solution. This is the best way for 100,000-plus people to learn quickly.

Understanding the Global CustomerOur customer focus takes on complexity as we expand globally. Best Buy operates in China, Canada and Europe, and we'll expand to both Mexico and Turkey in the next 12 to 18 months. One mistake we don't want to make is to impose our US operating model. You can't look at new countries through a US-centric lens. You have to think like the local customer.

Best Buy carries out research, talks to other retailers about their customers and talks to customers about what they want. Among the differences we've learned: customers in the US are accustomed to touching everything — picking up telephones, switching things on. In China, everything is behind glass cases. The people in the stores in China are employed by manufacturers. These vendors typically hold the inventory and ship purchases directly to a customer's home, instead of having products in the store for customers to carry away. Thus, current systems in China have no capability of assessing stock availability on the sales floor, which has implications if we want to import the open display approach we have in the US.

Knowledge transfer also works in reverse. For example, the Chinese expect much faster response to changes in technology. We change our telephones once or twice every 18 months, but in China, phones are a fashion item that customers change every quarter. Frequent phone changes mean we would have to encrypt and store customers' phone data so that they could go to the store and get all their information downloaded to their new phones. We can transfer such capabilities back to the United States, to improve our relationship with customers here. And so, going global isn't only about scale, it's about

transferring skills and knowledge about customers across the enterprise.

Chief Interconnectedness OfficerStrategic CIOs who focus on end customers have an opportunity to influence how their entire industry relates to them. Over the last 25 to 30 years, with help from IT, retail has shifted from mass marketing to personalized marketing. But I think we're moving into a different and even more exciting space that I am calling co-creation.

The journey for customers no longer ends at the store, it ends in the home. For example, consumers want to be able to link their PCs wirelessly with their TVs and audio systems. That's hard to do today. Best Buy's role as the ambassador of the customers is to represent their needs to vendors in order to co-create solutions to this problem. It's my team's role to understand the issues customers have and to search for ways to improve their experience. The only way we can do that is to take the time to think like a customer. CIO

robert Willett is CIO of Best Buy, CeO of Best Buy International and a CIO executive

Council member. send feedback on this column to [email protected]

the journey for customers no longer ends at the store, it ends in the home. Strategic CIos who focus on end customers have an opportunity to influence how their industry relates to them.

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Cover Story | Innovation

There have been early adopters — and laggards — probably for as long as there has been new technology. Surely, when the first wheel was rolled out in 3000 B.C., only a handful of Mesopotamians had enough insight and risk tolerance to give it a whirl while others looked on from a safe distance.

Not much has changed. That brave soul willing to embrace ‘The New’ still sits in the same spot on the bell curve that Everett Rogers drew up back in 1962 to denote what

he called the ‘diffusion of innovation’ — just after the innovator but well before the early majority, the late majority and the laggards.

But for IT, watching early adopters as they stumble isn't always the safest course anymore. The pace of technology change has increased so much that corporate IT leaders who don't embrace emerging trends risk ending up behind the competition. Gartner produced 70 ‘hype cycle’ documents (analyses of new technology adoption trends) covering 1,500 new technologies last year. And, it's easier than ever to take new technologies for a test drive.

"Sometimes you can do it in your office during an afternoon," says Matt Brown, a principal analyst and research director with Forrester Research. "You can test out new collaborative technology in a matter of hours before making a full commitment to it." Some emerging technologies, like Google Apps or the iPhone, don't even require a full enterprise-wide rollout to get real value out of their implementation. And, anyway, users are going to try them on, if you don't.

Adoption of new technologies has spiked as IT has evolved from the complex tools, centralized systems and transaction-based software to the lightweight tools, abundant data and ubiquitous network-centric software that's taking over the marketplace, says Brown. As a result, early adoption of emerging technology is no longer limited to tech-centric companies or those with pockets deep enough to absorb the risk. CIOs across industries see piloting lesser-proven technologies as critical.

Reader ROI:

Why you can’t wait to adopt new technologies

processes for testing and deploying emerging applications

Ways to mitigate risk

Early adopters of new technologies, share their secrets for choosing which emerging tech is right for their companies and rolling it out successfully. By Stephanie OverBy

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"Ten years ago, CIOs spent a lot of time getting transactional systems — the giant stuff — in place. But that's not so much the job anymore," says Robert Urwiler, CIO of Vail Resorts. "CIOs have more freedom to explore innovative ways to provide business transformation and more freedom to look at emerging technologies. I feel like I have an obligation to do that."

But this does not mean early adoption can't be difficult and costly if it isn't managed well. Here's advice from CIOs who have mastered the art of early adoption.

Put Emerging Technology — and Risk — in Business TermsTalk to Bill Maguire long enough and you'll think he came out of the womb embracing emerging technology. "I've always looked at new technologies, figuring out how to exploit them," Maguire says. "I'm diligent about trying to keep up and have a good degree of confidence in my ability to do so."

Maguire's history as an early adopter contains successful and, well, less-successful chapters. As the CIO of Legato, Maguire was one of the first IT executives to implement VoIP in 2001, saving the company more than $3 million (about Rs 12 crore). The year before, running the US Postal Service's primary datacenter, his organization was among the largest — and earliest — users of VMware in the US. A decade earlier, Maguire had introduced to the USPS one of the first virtual storage solutions in the US, StorageTek's Iceberg disk-array storage subsystem.

That didn't turn out as well."We brought two of the big

storage units in house, and [the vendor] made a big splash," Maguire recalls. "It was bleeding edge." It was also very complicated. What should have been up and running in a few weeks took months. "Once we got it, it put us way out in front," says Maguire. "But it took three times longer than expected."

It hasn't dampened Maguire's enthusiasm for innovation, though. "I'm a glutton for it," he says. Today,

You went down the desktop virtualization path a year ago, when few others had. What was the driving force? And what were the constraints?

When you think about it, IT delivers a series of functionalities. So when you’re shifting paradigms,

you [should not still say] ‘look, this is the cost of my PC, this is the cost of my hard drive and here is the cost of software or licenses.’ When you shift paradigms, what you should ask is: if I had to deliver this functionality, what's my total cost, and how can I rejig my protocol stacks, my hardware and application stack to create the lowest cost of delivery? There will be some cost, which might be

higher in one stack, but dramatically lower in another stack. The cost

structure could be different, but what it costs — per person — to use a function has to be driven down.

Consider what is available from vendors such as Citrix, microsoft, or Vmware — they all offer you a level of centralization. as a

result storage can be centralized and so on. but when you evaluate one over the other, you need to know what environment you are

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CuRvEAs a very early adopter of desktop virtualization, Sanjiv Sanjiv ddalal, alal, ccTToo, ffirstsource Solutions, had to irstsource Solutions, had to answer several hard questions before he took a risk with the technology. In a conversation with cIo, he explains his approach, challenges, and the o, he explains his approach, challenges, and the obusiness benefits he reaped from adopting desktop virtualization before his peers did.

Sanjiv Dalal, CTO, Firstsource

Solutions, led a desktop virtualization

project when less than a thousand other companies

worldwide had bet their money on the technology.

emerging technology. "I've always looked at new technologies, figuring out how to exploit them," Maguire says. "I'm diligent about trying to keep up and have a good degree of confidence in my ability to do so."

Maguire's history as an early adopter contains successful and, well, less-successful chapters. As the CIO of Legato, Maguire was one of the first IT executives to implement VoIP in 2001, saving the company more than $3 million (about Rs 12 crore). The year before, running the US Postal Service's primary datacenter, his organization was among the largest — and earliest — users of VMware in the US. A decade earlier, Maguire had introduced to the USPS one of the first virtual storage solutions in the US, StorageTek's Iceberg disk-

That didn't turn out as well."We brought two of the big

storage units in house, and [the vendor] made a big splash," Maguire recalls. "It was bleeding edge." It was also very complicated. What should have been up and running in

Maguire. "But it took three times longer than expected."

It hasn't dampened Maguire's enthusiasm for innovation, though. "I'm a glutton for it," he says. Today,

others had. What was the driving force? And what were the constraints? When you think about it, IT delivers a series of When you think about it, IT delivers a series of functionalities. So when you’re shifting paradigms,

you [should not still say] ‘look, this is the cost of my PC, this is the cost of my hard drive and here is the cost of software or licenses.’ When you shift paradigms, what you should ask is: if I had to deliver this functionality, what's my total cost, and how can I rejig my protocol stacks, my hardware and application stack to create the lowest cost of delivery? There will be some cost, which might be

higher in one stack, but dramatically lower in another stack. The cost

structure could be different, but what it costs — per person — to use a function has to be driven down.

Consider what is available from vendors such as Citrix, or Voffer you a level of centralization.

project when less than a thousand other companies

worldwide had bet their money on the technology.

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however, Maguire knows the right questions to ask to evaluate the business risks. "You have to understand your environment very well," he says. "Then you have a good idea of whether a piece of new technology will really work for you or not."

At Virgin America, where Maguire landed as CIO two years ago, that has been easier than at previous companies because Maguire built the architecture from the ground up. Yet risks lurk.

Virgin America's application stack is open source to the hilt, from spam filtering to load balancing to document management. Although open-source enterprise systems aren't yet a mainstream tech choice, it makes good business sense because it enables the carrier to keep IT costs down. But because the company is growing there's concern whether these free or cheap solutions will scale. "With spam filtering, when you're getting a couple thousand e-mails a day, it's no big deal. But can you handle 20,000?" Maguire did scalability pre-testing, but it's something he must continuously monitor.

Maguire doesn't fall for emerging technology just because it's new. At Virgin America, new technology must either improve productivity or keep costs low. Successful deployment starts with ensuring company leaders understand the business case and the risks associated with less-tested solutions. Maguire might begin by telling them in basic terms what load-balancing software Ultra Monkey actually does. He then explains his thinking behind the open-source option: it costs $3,500 (about Rs 1.4 lakh) per server versus a non-open-source option at $90,000 (about Rs 36 lakh) per box. A more extreme example is the free, Web-based document management solution Knowledge Tree, one of the first open-source enterprise content management systems, which Maguire says took only a few hours to roll out. The tested, commercial option — Documentum — would have cost an estimated $1 million (about Rs 4 crore). Finally, Maguire gives Virgin's leaders a risk assessment for each new system — from low to extremely high — and the criteria he used to make the assessment.

It's amazing what a dramatically reduced price tag does for the business's willingness to take a chance on new systems. "They'll at P

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in and what applications you’re running, what kind of security or audit trails you’re looking for, etcetera. The suitability of the environment to the application suite would determine what do you want at the technology level.

and the cost of virtual machines kicks in afterwards at the commercial level. at the box level, Windows will have a Citrix model, which will have the Citrix layer on top of it, or terminal service licenses. at the end of the day, how much it costs you to run a session will be a decisive factor.

Can you describe the pilot? We started with around 400 virtual desktops. It isn’t about the size of the project We started with around 400 virtual desktops. It isn’t about the size of the project

— we were not evaluating if the technology works or not. The key in this pilot was to understand the cost. also, when you think about it, you are going to manage your infrastructure and delivery mechanism in a way that’s completely different from the traditional model. In a virtual environment, when there is a problem, you can just drag and drop a person from one platform to another. We decided on 400 machines for the pilot because you need a slightly large sample. Why not 100, 200 or 300? because we had a requirement, and we wanted consistency in the project.

You started server virtualization soon after this pilot. Why not wait for the benefits of the desktop pilot to accrue?

because the cost structures and need for those were very different (in a virtual desktop and a virtual server). What you look for in a virtual server and a virtual desktop are two different things. The benefits that each of them delivers to business are of very different type. We had to do both of them to derive benefits for our business.

What challenges did you face? Is managing user profiles an issue? you are right because the way you would set up a normal and virtual desktop is you are right because the way you would set up a normal and virtual desktop is y

different. you need to plan — the entire planning process itself is very different. you need to plan — the entire planning process itself is very different. y now I will continue to monitor CPU utilization on each of these virtual desktops, apart from the utilization of the physical CPU. This helps to allocate effectively — I can allocate CPU resources based on actual prevailing needs.

If you do not monitor and manage the virtual environment properly, the cost benefits might not accrue.

When you have multiple IPs assigned to each CPU, there are several challenges. all the traffic from multiple systems has only one trunk-one lan port. We had to reconfigure our back-end lan and look at other ways of allocating disk resources when virtual machines are moved from one hardware plate to another. How do you make sure that the data also goes along? There is a fair amount of challenge in the engineering and design aspect for virtualization. For instance, how do you make sure that you get connected to your virtual machine and not somebody else’s?

What have been the benefits so far? Today, if you have around 250 desktops, you really do not bother about utilization Today, if you have around 250 desktops, you really do not bother about utilization

— 250 people use 250 desktops and that’s about it. However, with virtualization, I have one more [lever] with which I can to drive down costs. For instance, you can say that are 250 [staff members ] but at any given point in time, only 100 of them are actually using their desktops, or are required to function. So, I do not need to create 250 virtual PCs, I only need to create 100 virtual PCs. So now, I get an additional control.

also, this will give us an opportunity to leverage time zone differences. When India retires, another geography could take over — all you need to do is to reassign virtual machines.

With workforce becoming mobile, there is a need to offer some value-added services such as allowing people to access their own desktop environments using a broadband connection — desktop virtualization helps you do this.

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least give you a few months to try it out," he says. But not everything makes the final cut. Maguire tried out a free, open-source CRM solution from OpenCMS. And he got what he paid for. "We gave it a whirl. It didn't have the true functionality we needed." Virgin America will probably opt for another open-source option, Maguire says, once the company has defined its needs.

Maguire's biggest aides when assessing emerging technology are also his biggest doubters: the business systems analysts. "They're technically knowledgeable, but also understand the business," he says. "And they're the most conservative because they know whether something is really going to meet business requirements. They don't have time to goof around."

Search for the Next Big ThingVail Resorts' Urwiler and his team of 110 think of themselves as technology innovators because they don't work in a tech-centric business. "All technology innovation comes through the IT team so that has to be part of our core competency," says Urwiler, who previously worked at software maker Macromedia. "It doesn't mean we're always going to be the very first user of software, but it does mean we're always on the lookout."

Urwiler explores everything from social networking tools to mobile device applications to biometrics, looking for emerging technology that might be useful at the company's multiple ski resorts. He works closely with vendors to identify emerging trends, keeps his ears open at conferences and talks to his peers. And he encourages his team to do the same. "Ideas come from every place," Urwiler says. The best ones can provide competitive differentiation for Vail Resorts by improving guest experience.

When Urwiler explores new technologies, he worries most about the potentially negative effect on the end customer. "Once we set an expectation about a new tool, it has to work," he says. "We are very cautious about what we expose to a guest. This is the vacation of the year for many." Urwiler doesn't want to be the one to ruin it. To ensure that only technologies that improve the guest experience get the green light, Urwiler created Vail Labs. It's an idea incubator for vetting ideas and moving those with potential value from proof of concept to rollout.

The RFID guest tags Vail Resorts will roll out next season started there. Urwiler's team looked at biometric passes used at theme parks, which are based on finger geometry

and involve scanning people's hands. The Vail Resorts team determined that scanning hands wouldn't work in the heavily gloved and layered ski environment, but the RFID component of such a system had promise.

Vail Labs fielded a proof of concept on the slopes, bringing mountain operations staff into the process. "Early on, there's a natural skepticism. You're dealing with operations people who are very good at what they do. IT comes in with grand ideas about how to improve that, and there's a show-me mentality." For a pilot last season, 1,000 patrollers and ski instructors wore RFIDs while Vail Labs logged data on usability. The system, which got the go-ahead, uses an RFID chip on a lanyard (like the bar-code ski passes Vail Resorts had employed for years) that can be scanned right through a jacket.

The Vail Labs is also designed to weed out solutions that aren't ready for mountain scrutiny. Last season, Urwiler looked at a friend-finder application for mobile devices. Urwiler had an agreement with the vendor whereby Vail Resorts would pay through a pre-defined usage model only after the technology proved usable. "The proof of concept was brilliant." The pilot wasn't so thrilling. The application, intended to enable skiers to locate each other via GPS, did not meet the reliability threshold. "Because we took a conservative approach, we had very little money invested," says Urwiler. "It was low risk."

Controlled Chaos and the Scientific Method"I have a high level of comfort with paradox and ambiguity," says Todd Pierce. "That helps when talking about new technology."

That's a bit of an understatement from the VP of Corporate IT of Genentech, who's currently overseeing piecemeal rollouts of Google apps and iPhones — and who several years ago installed a cellular data service network and Wi-Fi access campus-wide. "A lot of being successful is figuring out what tensions — what paradoxes and conflicts — to hold," Pierce continues. "Combining what's possible with what's practical — holding that tension — determines how successful I am as CIO."

Cycling in the latest innovative technology is an exercise in controlled chaos for Pierce,


Vail Resorts CIORobert Urwiler established Vail Labs as an in-house incubator to vet ideas and move the viable ones from proof of concept to rollout.

Cover Story.indd 30 8/28/2008 11:05:20 AM

who thinks it is his primary role to figure out how fast to deploy emerging technology to gain benefit. It's a tall order, Pierce notes, with new tools being introduced at a faster rate than ever before. The scientific approach of a biotech company, currently exploring new treatments for cancer and auto-immune disease, is boon and bane for IT. It's an innovative bunch, for sure. "But that scientific mentality makes it easy for them to question what you're doing," says Pierce. "People here are willing to try new things, but it can't just be new. It has to be new and better. And you have to prove it."

Pierce evaluates any new technology on a host of dimensions: who can he serve with it? How reliable and efficient is it? How much does it cost? How does it impact IT's relationship with the business? At what scale can he deploy it? What is its life cycle?

The company was using 5,000 mobile telecommunication devices, including BlackBerrys, last year when the iPhone hit the market. While most saw a sleek, new mobile phone, Pierce saw a business solution. Genentech deals with a lot of image-based data, but no one could imagine accessing it with the devices they were using. Pierce saw the iPhone's multi-touch interface — which allows users to flip rapidly through photos by merely ‘flicking’ a fingertip on its screen or to resize a photo by 'pinching' the image with two fingers.

He tempered his excitement with a five-month study, for which he gave iPhones to a group of mobile device users on his IT staff. He observed adoption rates and conducted three user surveys. Eighty-five percent of users preferred the iPhone. To date, Pierce has rolled out 3,000 of them.

The key for Pierce is that he doesn't have to get to full consensus before rolling out an emerging solution. Ideas are floated. Tests are run. The cross-functional group of five VPs that oversee IT strategy and prioritize projects will argue back and forth about which emerging technologies should be deployed more widely within the organization. But once everyone's concerns have been considered and the potential value of a technology has been validated — says Pierce, "I become the decision maker."It's not as scary as it sounds. "We have a CEO who would rather be fast and make a

give business leaders a layman's tutorial on the role of any emerging tool or process. make sure the larger organization understands the risk of any new technology and what went into your risk assessment.Invite more conservative members of the IT team to weigh in on emerging trends. They may have technical insight to prevent costly mistakes later on.Test unproven technology on a few hundred IT guinea pigs before you conduct larger corporate pilots.Create a repeatable process for shepherding new ideas from proof of concept to rollout that will also weed out technologies that aren't ready for prime time.Harness the energy of early adopters in the business and broadly publicize their success with the tools.Consider segmenting your user base and wait to deploy emerging tools to less-adventurous users until they're ready.

—S.o.

mistake and recover than be slow and miss something," Pierce says. Plus, Pierce doesn't see the embrace of emerging technologies as an all-or-nothing proposition. "We don't have to do everything all one way, or wait for all the factors to line up," he says, "A lot of decision makers get caught in that trap."

Instead, Pierce segments his user base. Not everyone needs an iPhone. Maybe Google apps aren't a good solution enterprise-wide. "There are cultural barriers when you have this much diversity of talent," says Pierce. "So we're breaking things down and asking, Is this segment worth servicing in this way?

We're allowing for more personalization, more customization, more choice."

That approach doesn't work all the time. "It's tricky with technologies that require you to enter at scale. You can't phase your way into ERP," says Pierce.

There are a few products and emerging technologies Pierce hasn't found useful. "What these things have in common is that they have too much complexity and require too large of an investment to implement and maintain," Pierce says. "(They) will probably be replaced by less-expensive and less-complex solutions."

With Google apps, however, Pierce started out with 100 users. He now has 1,000 people using it, at just $50 (about Rs 2,000) a head. And Pierce can justify a bigger rollout based on the benefits of the calendaring system alone. If any of the other applications show value, it's an added bonus.

Art of Modern MainstreamingAny organization can play with cool new things," says E.J. Hutchinson, CIO of the Dannon Company. "They key is figuring out which ones will actually drive business value and mainstream those."

To make the cut at Dannon, a ‘cool new thing’ has to help the company increase sales, increase market share or improve efficiency. Once Hutchinson's team proves an emerging technology is worthwhile, the real work begins — rolling it out to the workforce and creating new business processes to get value from it. Mainstreaming it, in other words.

"Mainstreaming is when the business sees the solution as something they wish to use," Hutchinson says. Of course, mainstreaming isn't what it used to be — a dictate from IT about which tools thou shall and shalt not use. Today it can mean having to support several generations of technology for some users until the larger universe of them catches up. And it's particularly tricky given Hutchinson's diverse workforce.

"The workers coming out of school today have only had the Internet," Hutchinson says. "The way I hate writing a letter and going to the post office, this generation feels about e-mail. They'd rather use IM, SMS or avatars." Meanwhile, he adds, the adoption cycle from research to rollout — once years — is compressed to a year or even less.

seven tips for rolling out

emerging tech




Hutchinson is figuring out the best methods for fast and effective mainstreaming of new tools with the rollout of Dannon's massive, multi-million-dollar Unified Communications and Collaboration (UC2) project. It's one of Dannon's five strategic IT projects today. UC2 encompasses not only a leading-edge, unified communications component (whereby calls and e-mail and video conferences can transfer from a business phone to a cell phone to home to hotel without interruption, for example) but also the exploration of Web 2.0 tools such as wikis, blogs and technologies with capabilities similar to those provided by Facebook and Second Life, which have seeped into the mainstream, but which remain unproven in the enterprise. Voice and data convergence won't be widely adopted for a couple more years, according to Gartner, and telepresence collaboration is five to 10 years out.

A consumer products company may seem an unlikely candidate for leading the charge toward UC and collaboration. "The bulk of our advantage is in product differentiation," admits Hutchinson. "But communication in this company has gotten so complex that e-mail and phone just aren't cutting it."

Jim Panos, Hutchinson's director of informing and innovation for the Dannon Company, along with CTO of Danone North America, Mike Close, conducted a UC2 pilot within IS. They didn't encounter any interoperability issues, because Dannon had been diligent about adopting standards-based technology in the past. Concerns about network capacity were solved with some additional investment in the network backbone and network traffic management. At a corporate leadership event, Dannon IS/IT highlighted some UC2 capabilities — a wiki for month-end financial closes and a video-conference capability for updates that could replace costly executive travel. Top business executives were sold on the value of UC2 right away.

Dannon is about halfway through a rollout that could take another six months to a year. Panos has found that audio and video conferencing usage spikes shortly after these tools are given to new users. But, Panos points out, "there's a difference between adopting capabilities and institutionalizing

them. The challenge is to take those tools and redefine business processes. How do you use conferencing in coordination with social networking to take communication to the next level?" Panos and Close have been working with the business to answer those questions. Following the presentation, they asked early adopters to join the pilot. "There's a huge upside because people are inventing and innovating in their own lives," says Panos.

One HR leader started interviewing candidates by tele-conference instead of flying them to HQ. Finance figured out a way to use a collaborative website to eliminate the mega e-mail files they'd send around during a close. "You can't underestimate the value of putting these tools into people's hands early," says Close. "The business folks innovated with the tools. They'd say 'I get it, but can I use it to do this?' That's where it takes off." Then Hutchinson spreads the word. He uses a wiki to share progress. He is working with his parent company and a network of regional business and IT leaders who share their UC2 approaches and concepts.

Differing adoption rates persist, however. IT leaders don't expect the UC2 tools to replace all existing communication technology. "Both methods have to be there for a while. We're going to have wikis and blogs, but some people will still [feel] comfortable with more traditional communication," says Panos. "We say, 'Here's another possible way to do things.'"

The approach may seem ad hoc, but there are some guiding principles in place. Before moving ahead with any new UC2 application, Hutchinson's team needs some positive responses to a handful of questions: Is the solution scalable globally? Does it look like it will have a positive midterm return? Will it work with existing equipment? Is the vendor going to be around to support it? Are other companies using the solution?

It can make ROI calculations tricky, though. Beyond reduced travel costs and some increased productivity calculations, the payoff of UC2 is a little amorphous . So Hutchinson measures success for the project differently, by tracking usability, adoption rates and employee feedback. The ROI is long term, and senior leaders get it. "[UC2] supports sustainability. It gives

back time," Hutchinson says. "Those are soft benefits, but ones that are on the minds of executives today."

Next, Hutchinson's team will explore how other emerging communication and collaboration tools — intelligent search, streaming video on mobile devices — can take UC2 even further. "I don't see a point where we'll be done," says Hutchinson.

"I fundamentally believe what John F. Kennedy said: 'Change is the law of life. And those who look only to the past or present are certain to miss the future,'" he adds. "We're not going to be bleeding edge, but we're always going to be early." CIO

Send feedback on this feature to [email protected]


Early adoption of emerging technology is no longer limited to tech-centric companies or to those with deep pockets. but CIos must be smart when embracing less-tested tools. Here are 10 questions to ask before taking the plunge.

0 1 How does this solution fit into my existing environment?

02 What is the business benefit (even if I can't prove an RoI yet)?

03 What are the risks?04 Can I explain this technology to

my CEo in 30 seconds or less? 05 Do I know who will use it?06 Can I test it without business

disruption and without spending lots of money?

0 7 Is the vendor stable?08 Will this solution scale?0 9 Does my staff have the expertise

to manage it?1 0 How will this emerging

technology affect my customers or suppliers?

—S.o.

how to decide when new tech is worth trying

Held in the right royal setting of Jaipur on September 5–6, 2008, the CIO 100 Symposium and Awards will honor and recognize India’s top 100 IT deployments, and will help prepare the CIOs behind them to go even further.

Saluting the

Bold

CIO 100 SpeCIal Feature

PARTNERS

CIO 100 Curtain Raiser 02.indd 35 9/1/2008 12:10:52 PM

Airtel

AMD

Attachmate

Canon

Compuware

EMC

Genesys

HP Software

HP (PSG)

HP (IPG)

IBM

Interface

LG

Mahindra World City

Nortel

Safenet

Sify

Tulip

Wipro

PARTNERS


This year’s CIO 100 Symposium will address the issue of growing further, faster.

Nothing Venture, Nothing Win

ADelhi-based CIO and a couple of his school mates built a ‘go-kart’ powered by the engine of an old scooter. They found that it didn’t really posses the ‘zing’ they were looking for. Their ‘Aha’ moment was discovering that the engine

had a governor that restricted its speed. Off it went. The first ride after that proved that the ‘zing’ was in the machine, until it was time to make a turn. Things went awry rapidly. The brakes were not able to slow down the go-kart and it wound up wrapped around a telephone pole.

A hard lesson; with lasting impact. Even today he’s always on the lookout for opportunities, but he keeps an equally close eye on threats as well.

This year’s CIO 100 Award winners are dubbed ‘The Bold 100’, because the organizations and their IT leaders executed their projects while successfully negotiating the risks involved. At this year’s CIO 100 Symposium the focus will thus be on getting Bolder, Better, Bigger while Beating Risk. Turn the following pages to know what’s in store this year.

Cheryl Currid brings rare insight about how people, business and technology can work together.

A former IT executive, award winning journalist and analyst to emerging technology companies, Cheryl brings many years of hands-on experience and secrets of tomorrow’s inventions. She understands ‘Why, When & How’ to best use information technology.

Cheryl’s understanding of technology trends make her a highly successful forecaster. She shares her enthusiasm on how people can make technology work for them. She challenges people to get smart, and do things differently.

An international lecturer, her speeches range from topics of organizational efficiency, computer forensics, social networking, and even the use of smart dust. She is often among the first to predict the use of emerging technologies while testing products before market distribution.

Cheryl’s 14 books and over 1,200 articles, journal papers, and opinion columns span both technical and business topics. Her work has been translated into more than 10 languages. She was named as one of the most influential industry personalities by Marketing Computers and won a Computer Press Association award for her expert “Opinion.” Consulted

by leading organizations such as AT&T, IBM, Texas Instruments, Arthur Anderson, Intel and the US Army among many others, she’s also been widely quoted in the media.

Cheryl regularly contributes analysis and opinion to TV, radio, and print media. She's contributed to ABC's Cyber Bytes TV segment for more than seven years. She is currently working on two books that focus on managing in the information age and disruptive technology.

Cheryl Currid delivers the message that business and technology can work together. From highly technical topics to simple common sense, Ms. Currid delights audiences with her dry wit, plain talk, and entertaining style. She frequently brings out her crystal ball to show people where technology is going, and how to catch the wave. And, does she walk the talk — her home in Houston is highly automated with more than 30 computers and 20 cameras controlling lighting, thermostats, drapes, and the pool cleaner.

In her keynote address, courtesy Airtel, Cheryl will share her perspectives on how sound re-engineering principles can be used by CIOs to transform the way that organizations do business.

Keynote Speaker


One of America’s most respected industry analysts calls for CIOs to re-engineer the enterprise from within.

Changing the way Business Does Business

—Cheryl Currid

“Are your business and technology strategies running along parallel tracks or are they on a collision course? Regardless of the business goal, every business model requires that an appropriate and complementary technology strategy be deployed.”

P r e s e n t sP r e s e n t s


Hear Australia’s ‘Mr Fixit’ and renowned turnaround CIO make his case for IT leaders to dump the status quo and transform into business strategists.

The competitive landscape will increasingly require CIOs to be go beyond being master technologists. Here’s what you need to prepare for.

Being Bold Makes the Difference

Leading On The Competitive Edge

He hangs out with ministers, has defended unfair dismissal complaints before the Australian

Supreme Court and the Human Rights Commission, and copped abuse at home from members of the public furious about his organization’s plans to build wind farms. Oh — and he’s frequently made his board and CEO very, very nervous indeed. It isn't always pretty living the dream, but Carsten Larsen is the embodiment of the ‘Future CIO’. And he’s relishing it.

Carsten is the CIO of the $600 million ActewAGL and TransACT Corporation, Australia’s only multi-utility firm offering water, natural gas and telephony, high speed data and video services under one roof. A change management expert with over 20 years of experience in IT operations, he built his career as the typical transformational CIO — a real ‘Mr Fixit’.

By the time he joined ActewAGL as CIO nine years ago he’d already turned around IT at SC Johnson, Pitman-Moore and State Rail of New South Wales. Underneath the CIO title on his business card now was another — General Manager of Commercial Development. That made him responsible for much, much more than just IT. He was accountable for problem resolution for customers and was in charge of all commercial development initiatives and a host of business opportunities. All because he asked “What’s next?”, after he had achieved the turnaround the organization had been desperately looking for.

At the CIO 100 Symposium, Carsten will share multiple case studies from his experience to prove his point that only ‘bold’ CIOs can bring about a difference within their organizations.

complaints before the Australian Supreme Court and the Human Rights Commission, and copped abuse at home from members of the public furious about his organization’s plans to build wind farms. Oh — and he’s frequently made his board and CEO very, very nervous indeed. It isn't always pretty living the dream, but Carsten Larsen is the embodiment of the ‘Future CIO’. And he’s relishing it.

Carsten is the CIO of the $600 million ActewAGL and TransACT Corporation, Australia’s only multi-utility firm offering water, natural gas and telephony, high speed data and video services under one roof. A change management expert with over 20 years of experience in IT operations, he built his career as the typical transformational CIO — a real ‘Mr Fixit’.

“Ambition without ability is a sure recipe for casualty in business.” That's one of the many one-liners

that Prof. Ravichandran N. of IIM-Ahmedabad likes to keep throwing at his students in between demystifying the intricacies of strategy and operations. Do students appreciate his one-liners, which sometimes tend to wound them as well? Let's just say that, over the years, they have actually turned books out of such pithy remarks. He says that he doesn't believe in too rigid a learning structure. Kindling curiosity, responding to those learning from him and adding value

are the three most important aspects of being a teacher, he points out. Ravichandran, an expert in the areas of competitive strategy, IT strategy and operations management, has authored four books including Competition in Indian Industries: A Strategic Perspective and has over 70 research papers to this credit.

At CIO 100 he’ll share insights on competitive strategy, and help you deal with planning for growth while better evaluating the risks involved.

CArsTEN LArsENCIO, ActewAGL and TransACT, Australia

PrOf. rAViCHANDrAN N.IIM – Ahmedabad

PAST WINNERS


A big hand for IT leaders who have focused on delivering accurate, consistent information to their enterprises. 2006

JAi MENON Bharti Airtel

sHyAMAL BHATTACHAryA HCL Tech

JyOTiNDrA THACkEr Reliance Industries

suMiT DuTTA CHOWDHury Reliance Communications

isHWAr JHA Zee Telefilms

2007 suNiL rAWLANi

HDFC Standard Life Insurance J. siVAsHANkAr

Infosys Technologies V.V.r. BABu

ITC PrOBir MiTrA

Tata Motors NAViN CHADDA

Tata Teleservices

PAST WINNERS

2007200720072007 JAi MENON

Bharti Airtel PrAVir VOHrA

ICICI Bank suMiT DuTTA CHOWDHury

Reliance Communications JyOTi BANDOPADHyAy

Torrent Pharmaceuticals LAxMAN BADigA

Wipro Technologies

Keeping IT infrastructure flexible yet avoiding complexity is where our winners scored.

Data storage Champs

fundamentally supreme

Now in its third year, the CIO 100 Storage Award, established in partnership with EMC, is the

definitive recognition for outstanding initiatives in storage deployment. This award identifies the top five organizations and their CIOs who have successfully deployed exemplary storage solutions that allow them to store, protect, optimize and leverage their information seamlessly.

Applications and the storage environments that companies depend upon have become critical drivers of business processes and decisions that impact organizational growth and profitability. The need to control and secure a continuing explosion of data across the corporate world is forcing IT departments to constantly be on the lookout for storage technologies that can handle perpetually evolving requirements. For the same reasons, many companies are in a rush to include updates of storage systems in major IT projects like data center consolidation, application and infrastructure upgrades, and server virtualization efforts.

Enterprise infrastructure is the fundamental building block of all IT usage. It’s about the

nuts and bolts of the IT organization within an enterprise — not just merely cables or servers or MPLS clouds or even applications but a lot more. The CIO 100 Smart Infrastructure Awards, instituted in association with AMD, is the ultimate benchmark of the application of enterprise architecture technologies to further business objectives. The award identifies and honors

five extraordinary deployments aimed at building smart enterprise infrastructure.

From integrated IP networks to server virtualization to a radical VoIP solution to a converged network that has led to savings of 30 percent, this year’s winners have demonstrated how technology has reduced spending, improved

profits, grown the business and had a huge and very positive impact on operations.

All the winners this year have been successful in implementing leading-edge storage networking technology, from unified storage solutions that have helped enterprises gain access to a single version of the truth to being in compliance with regulatory compliance to utilizing virtualization, clustering and mirroring to

optimize information storage assets.

However, regardless of the solution deployed, the projects had a few things in common: all supported the exchange of efficient and reliable data

between personnel, departments and divisions; all provided a strategic advantage to their organizations while anticipating and accommodating the deployment of future storage solution initiatives; all addressed system and department interoperability issues and heterogeneous platform integration challenges; and, all demonstrated financial return and measurable payback through created or protected revenue opportunities and cost savings.

that allow them to store, protect, optimize and leverage their

Applications and the storage environments that companies depend upon have become critical drivers of business

optimize information storage assets.

solution deployed, the projects had a few things in common: all supported the exchange of efficient and reliable data

Storage Awards 2008Presented by:

within an enterprise — not just merely cables or servers or MPLS clouds or even applications but a lot more. The CIO 100 Smart Infrastructure Awards, instituted in association with AMD, is the ultimate

server virtualization to a radical VoIP solution to a converged network that has led to savings of 30 percent, this year’s winners have demonstrated how technology has reduced spending, improved

Smart Infrastructure Awards 2008

Presented by:


iT Builds a Better idea

— on which vendors and CIOs have been working for years. In fact, the Aberdeen Group has found that automating product development reduces product costs by 17.5 percent, cuts design cycle time by 25 percent to 30 percent and lessens product defects 12-fold.

The CIO 100 Innovation Awards, established in partnership with Wipro,

honor IT leaders who have embraced innovation as a tool for business growth. They have not only created newer, more imaginative and cutting edge products and services, but also have found revolutionary ways of satisfying customer needs.

Addressing this issue required CIOs to take enterprise integration to a new level. A hint of the advantage for highly integrated companies is evident in the returns from standardizing and automating the "D"

Environmentally-friendly IT strategies are paying off for Indian organizations and their trailblazing CIOs.

Recognizing innovators who have set new benchmarks

Honoring the individuals who’ve kept their organizations safe, while supporting new business endeavors.

Towards greener Enterprises

staying secure to the Core

Winners of the CIO Green E d g e

Awards, represent the pioneers of Green IT practices in Indian enterprises. They have led the way by demonstrating concern for the environment a n d d e p l oye d ‘green’ technologies subsequently lowering their power consumption or decreasing their carbon footprint.

The good thing is that by going green, they have increased the efficiency of IT infrastructure and saved on operating expenditure as well. The caveat is that pioneering a green initiative isn’t exactly an easy task. It comes with its share of naysayers and combating mindset issues can sometimes be the bigger battle. If you look across options like more eco-friendly manufacturing processes, new buildings and data centers, and getting staff to even

switch off printers or PCs, server virtualization and everything else looks easy in comparison.

Another challenge that IT leaders face is the other kind of green — money. They must have the financial flexibility and vision to blend capital expenditure and operational expenditure.

What the winners of this award have proved is that making

an organization greener doesn't have to be a daunting task, and that there are not so complex ways in which CIOs can help

green up the enterprise – from improving document management to alternative sources of back-up power. Interestingly, though the returns are almost always sweet, some green projects do pay off in the short run as well.

smart organizations first look at their risk profile and then seek to identify and mitigate vulnerabilities,

leverage their appetite for risk, and ensure a harmonized compromise between operational agility, regulatory pressures and information security. Winners of this year’s CIO Security Awards have worked on these principles to deploy smart security initiatives ranging from SOA-based identity and access management solutions to self-healing, resilient networks to even using biometric-based authentication in conjunction with single-sign-on mechanisms. All in all, letting the good guys in as easily as keeping the bad guys out.

part of R&D — product development

The good thing is that by going green, they have increased the efficiency of IT infrastructure and

an organization greener doesn't have to be a daunting task, and that there are not so complex ways in which CIOs can help

CIO Green EdgeAwards 2008Presenting Partner

— on which vendors and CIOs have

Innovation Awards 2008Presented by:

METhOdOlOgy


To be bold is to assume risk; without risk, there can be no reward. This is a trait common to the organizations that are being honored this year.

The BOld 100 honorees

Ajuba SolutionsT JaganaTT JaganaTT Jagana han

AllerganK T RaJan

Ambuja CementsBihag LaLaJi

Asian PaintsManish ChoKsi

Aurobindo PharmaM K PinnaManeni

Bangalore International AirportRanCis RaJan

Bank Of India KaLyanasundaLyanasundaL R

Bharat PetroleumsRiKanTh P gaTaTa hoo

Bharti AirtelJai Menon

BilcareManoJ aRoRa

Bharatiya Janata PartyPRodyuT BoRa

BSESKaRan B singh

Care IndiahaRChaRan singh

Carzonrent IndiaRaJesh MunJaL

CRISdeePaPaP K ganJu

Cognizant IndiasaTaTa ish das

Consilium SoftwareaRvind saKsena

e4e Business SolutionssRidhaR MiTTaTTaTT

Electrosteel CastingssaRadindu PauL

Emami viKRaM saxena

EricssonTaMaL ChaKRavoRTy

Family Credit IndiaaniBandha MuKhoPadhyayPadhyayP

Fidelity Business ServicesaMiT guPTaPTaPT

Globus StoresMeheRiaR PaT PaT Pa eL

GMR GroupJohnny PaRaMian

HCL BPOP v RaMadas

HDFC Standard Life InsurancesuniL RawLani

Hero Honda MotorsviJay seThi

Hindustan Construction CompanysaTaTa ish Pendse

Hindustan Petroleum nishi vasudevavasudevav

Hypercity RetailveneeTh PuRushoThaM

Hyundai MotorM suResh

ICICI BankPRaviR vohRa

IFFCO-TOKIO General Insurance u C duBey

i-flex Solutionss haRihaRan

Indian Oil Corporations s soni

Indian Rayonh KRishnan

Infosys TechnologiessivashanKaR J

Infotech EnterprisesB L v Rao

ING Vysya Life InsuranceRavishanKaR suBRaManian

Intelenet Global ServicesRaJendRa deshPandePandeP

Intergraph Consultingaswani KuMaR aKeLLa

ITC v v R BaBu

ITC Lifestyle Divisiono P BansaL

Jindal StainlessaJay KuMaR dhiR

JK Tyre s s shaRMa

KPMGsuResh KuMaR

Kuoni TraveldhiRen savLa

Larsen & Toubros ananTha sayana

LG Electronicsdaya PRaKash

Lifestyle Internationalsudesh agaRwaL

Mafatlal IndustriesniKhiL guJaR

Mahindra & MahindraaRvind g Tawde

Mahindra & Mahindra Financial Servicess shanMugaM

Maruti SuzukiRaJesh uPPauPPauPP L

Max New York Life InsurancehiTesh aRoRa

Mindtree ConsultingsudhiR K Reddy

MIRC ElectronicsJ RaMesh

Mudra CommunicationsseBasTian JosePh

Mumbai International AirportT P ananTheswaRan

New Holland Tractorsavinash avinash a aRoRa

OERCJyoTish ChandRa MohanTy

Otis Elevatorsv suBBRaManiaM

Philips ElectronicssanJeev KuMaR

Polaris Software Labv BaLaKRishnan

Power Grid CorporationsaMiR ChoudhaRy

Pune Municipal CorporationanuPaPaP M saRaPh

Punjab National BankRis sidhu

PVRaTuL LuThRa

Ranbaxy Laboratoriesdavid BRisKMan

Reliance Anil Dhirubhai Ambani GroupRaJeev BaTReev BaTReev Ba a

Reliance CommunicationssuMiT ChowdhuRy

Reliance Gas Transportation Infrastructures Bahuguna

Reliance General InsurancesRiRaM naganaTaganaTagana han

Reliance Industriesashish Chauhan

Reliance InfosolutionsaLoK KuK KuK MaR

Reliance Life InsuranceChandRaseKaRan Mohan

Reliance Life SciencesgoPaPaP L RangaRaJ

Reliance RetailTiMoThy d KasBe

Repco BankR RaJagoPaPaP Lan

Samsung India ElectronicsRaJesh ChoPRa

Shopper's StopaRun guPTaPTaPT

SpicejetviRendeR PaL

State Bank Of IndiaseighaL

Sterlite TechnologiesMd. Jawed ahMed

T V Sundram Iyengar & Sonsv sundaR

Tata Consultancy ServicesaLoK KuK KuK MaR

Tata RefractoriesManas RanJan Padhi

Tata Teleservices navin Chadha

The Calcutta Medical Research Institutevishnu guPTaPTaPT

Torrent PowerJyoTi s BandoPadhyayPadhyayP

Tractors & Farm EquipmentP shoBhna Ravi

TVS MotorsT g dhandaPaniPaniP

UnitechuMesh vashishvashishv TaTaT

VSTRaTRaTRa naKaR neMani

Wipro BPOP C Jain

Wipro TechnologiesLaxMan Badiga

WNS Global ServicesanJay Jain

WockhardtsuResh R shenoy

Yes BanksuvanJay KuMaR shaRMa

To be bold is to assume risk; without risk, there can be no reward. This is a trait common to the organizations that are being honored this year.

The BO

Ajuba SolutionsT Jagana

AllerganK T Ra

Ambuja CementsBihag La

Asian PaintsManish Cho

Aurobindo PharmaM K Pinna

Bangalore International Airports FR

Bank Of IndiaP a Ka

Bharat Petroleum

Hundreds of organizations filled out the nomination form for

the CIO 100 Award as well as the five special awards. To be a CIO 100 award winner this year, companies and their IT leaders had to demonstrate that they were able to create new value using IT and execute their project well while successfully negotiating the risks involved.

Each application was reviewed by a jury of CIO editors, who evaluated them according to three criteria: technology usage, business impact and the corporate risk involved. The awards jury looked for unique practices and substantial results; examined how each organization stacked up against the others in the pool; and sought to honor the most interesting initiatives for the CIO 100 honor.

The organizations that we selected for this year’s CIO 100 Award cut across a range of organizations — both in terms of revenue and industry.

A Global Company Forging

CIO: What is IT’s role in giving a global company like Essar a local feel?

Dilip Oommen: There isn’t an iota of doubt that we’re a global company. We are growing at a very fast pace and are acquiring steel companies around the world. And as we have expanded, IT has helped us greatly. Our wide area network and virtual private network — running across all our locations, even the global ones — have helped our staff access vital data resources, business applications and productivity tools in a secure manner, 24 by 7. The benefits don’t stop there. The speed at which we conduct

business has gone up tremendously. Interactions among employees and our responsiveness to business partners have also increased considerably thanks to IT.

To fulfill the company’s dream, we started with a long-term program to upgrade our ERP. We have also implemented planning solutions across the steel business group. Phase one of this IT-enablement is complete and a new version of SAP has been implemented in Essar Steel and the same template is being rolled out in other companies across the globe. The upgraded ERP has helped us achieve business processes integration across IT solutions and has enabled reliable operations reporting.

Dilip Oommen, CEO, Essar

Steel, wants IT to bridge all the

geographical gaps in his global

company — and make one seamless

steel giant.The flat world has steep challenges, especially when you are a steel company with a global appetite. It’s worse when you’re a traditional company that’s working on refurbishing your internal systems and processes. But Essar Steel is doing just that. As it transforms itself from being IT-enabled to an IT-driven global corporation, it is leveraging technology to create seamless collaboration and draw macro-level benefits ranging from deploying resources smarter and improving productivity.

Today, Essar has a long-term plan that will ensure that its IT initiatives are clubbed with every Greenfield and Brownfield project. That’s the only way, Dilip Oommen says, that the company can stay ahead in a competitive marketplace.

View from the top is a series of interviews with CEOs and other C-level executives about the role of IT in their companies and what they expect from their CIOs.

VIEWTOPfrom the

by Rahul Neel MaNi

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We have also completed the implementation of i2 solutions. There are several benefits that are being realized as the solutions stabilize. For instance, the quality of data and user expertise is improving. By implementing i2, we have achieved end-to-end planning from demand forecasting to customer delivery using a single platform. We have also optimized our resources for profit maximization and customer satisfaction.

Put together, both help us increase customer responsiveness because we

can effectively track orders, make active changes in production to meet rush orders or small quantity orders, and have better control on credit and price realization.

What about inventory? Where does IT fit there?

There are three aspects to this question. First, Essar Steel creates ‘made-to-order’ products. In that respect, IT has helped us greatly get an end-to-end visibility of the status of customer orders. It has

also helps us control credit effectively and track every batch or unit of material. Second, by implementing i2 solutions we have got excellent tools to optimize capacity utilization, thus allowing us to manufacture in a more profitable manner. It also gives us complete visibility and control through the manufacturing process.

Finally, our information systems are now being leveraged to crunch the cycle time from steel melting to cash realization.

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Dilip OOmmen expects i.t. tO:

create a seamless corporation

Reduce inventory

Bring his global business closer


And further downstream, at distribution?

Distribution and logistics are most critical for any manufacturer. Based on the intelligence we gathered through our earlier experiences, IT was given a mandate to provide complete visibility of finished goods from factory to a customer’s premises. In its first phase, this challenge has been accomplished successfully. These systems are now being improved with planning and optimization solutions, and other solutions that will reduce vehicle turnaround time. A material tracking system is also being evaluated to further reduce inventory time.

As a traditional enterprise, you could be thought of as a slow IT investor. How would you respond?

As a company, we have always believed in leveraging the latest technologies, developing internal competencies and getting the best value out of our investments. Essar was one of the first companies in India to embrace SAP, leverage auction technologies using the Internet, develop a lively Intranet, launch several master data synchronization/unification initiatives, introduce shared services, etcetera. Our investments in IT have always matched business requirements. And in several areas, business strategies have been IT driven.

At a broader level, what are the top priorities you wanted technology to fulfill?

Since we are a growing enterprise and need quick action and turnaround time, the expectations from IT and our technology leaders are very high. One version of the truth was a priority (by way of unified, actionable, reliable reporting). So was deploying resources in value-added areas through automation and productivity improvements. Another important business priority was business

process orientation, which can help reduce cycle times and cross-functional gaps.

Recently, Essar Steel made some global acquisitions. How do you merge these entities and make one profitable unit?

When it comes to amalgamating the disparate processes of two distinct entities, IT is probably the only savior. It has certainly got an important role to play in the merging of processes, systems and even cultures. People and systems across the globe can talk the same language on SAP and i2, use identical system template, share data across geographies for effective procurement, improve sales realizations, reduce inventory, better customer service, and share services to reduce the cost of operations.

We also want to leverage best practices from each geography, share knowledge using the latest technology and develop domain competencies internally. Apart from this, shared and optimized IT assets have definitely helped us leverage time zone differences and keep working round-the-clock.

Given these contributions, should IT leaders be part of boardroom discussions?

IT is becoming an integral part of every business activity from accounting to production to statutory records. It’s all about how we want to conduct and control business and business processes efficiently. The success of IT initiatives and the delivery of business benefits is becoming lot more critical to stay competitive. It is essential to have CIOs who understand and communicate the business effectively. They are taking role of change managers and catalyst for business transformation.

What importance do you attach to ROI in IT?

All investments should have tangible and intangible benefits. That’s our business philosophy. I agree that some IT costs are part of running the business and therefore, can’t be directly related to ROI. Having said that, effective steps are being taken at Essar to track tangible business benefits, effective ROI forecasting and make the CEO/CFO/CIO responsible for tracking and delivering planned tangible business benefits.

Going forward, how will technology help as the company expands?

In all new initiatives, IT initiatives are planned with Greenfield/Brownfield projects. Plus, IT has a significant role in the integration of acquired entities. We endeavor to ensure that systems talk to each other and every function should leverage technology to their benefit. It’s not just the function of IT to implement projects and rollout new initiatives; but it is for individual business users to leverage IT and benefit from it. That is the recipe to stay ahead in the marketplace. CIO

Rahul Neel Mani is resident editor. send feedback on

this interview to [email protected]

View from the Top

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“When it comes to amalgamating the disparate processes of two distinct entities, IT is probably the only savior.”

— Dilip Oommen


Trendline_Nov11.indd 19 11/16/2011 11:56:19 AM

Case File

Reader ROI:

How the availability of timely data can improve business

How technology can guarantee accuracy

How innovation brings in monetary benefits

Data in a StrokePGA Tour’s IT Chief, Steve Evans, relies on legions of golf-crazed volunteers, high-tech lasers and the input of golf pros to help him identify, manage and display the Tour’s most critical data. By Thomas Wailgum

In 2008, the PGA Tour will award $278 million (about Rs 1,112 crore) in prize money. And it’s up to Steve Evans, senior vice president of IS, and his team to deliver it.

“The objective of the organization is to drive value and benefits to our members,” who include the world’s top 125 golf professionals, Evans says. “And the primary value we can drive is prize money.”

In a sport like golf, where it is next to impossible for spectators to catch all the action, Evans’ technology unit plays a key role by making the game appealing to fans and corporate sponsors. “We put a lot of energy into technology that focuses on enhancing the fan experience across all mediums,” he says.

The name of the game is data — collecting it, distributing it and analyzing it — with systems and processes designed to support the Tour’s unusual business model. The Tour and its IT operation may be one of a kind, but IT’s role is familiar. Evans must deliver accurate and timely business intelligence both to support the players and keep customers — millions of golf fans — engaged with the competition.

Desire for the Tour’s data — specifically players’ statistics — has dramatically increased during the last decade or so. To keep up with the yearning from fans and players for more data and analysis on every shot of every tournament (typically 32,000 shots per four-day event), Evans and his IT crew have spent lots of time and money on technology improvements that satisfy the growing demands of each constituency.

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Case File

Data in a StrokeA Different Ball GameThe Tour has a unique business model, says Evans. First, the PGA Tour is a tax-exempt member organization that wields a powerful, global brand. Second, the location of the business moves weekly from one venue to the next. Third, its operations are subject to the whim of the weather gods. What’s more, the success of its main product — sports entertainment — is controlled not primarily by Tour employees but by professional golfers, whom the Tour considers independent contractors.

Finally, its core workforce isn’t the 2,000 Tour employees but tens of thousands of unpaid tournament volunteers. (The non-profit company does not disclose its revenue, though estimates place it at more than $300 million. [about Rs 1,200 crore])

Each year, the players, along with Tour staff and 15 or so mobile IT workers, crisscross the country, where the golfers compete on the finest courses under grueling and pressure-packed conditions with millions of dollars in prize money at stake. A typical purse for a Tour event is $5.3 million (about Rs 21 crore), with the winner getting anywhere from $700,000 (about Rs 280 lakh) to more than $1 million (about Rs 4 crore).

Since the Tour serves its members, Evans back at the Tour’s headquarters in Ponte Vedra Beach, Florida, needs to ensure that the interests of golf fans and corporate sponsors are aligned with each other as well as with the players who are competing on the fairways and greens. Broadcast ratings, attendance at tournaments, merchandise sales and Internet viewership on pgatour.com are critical to raising the money that pays for the player benefits and the charitable donations made in each of the local markets.

The linchpin in the PGA Tour’s business strategy is the revolutionary ShotLink system, which debuted in 2001. ShotLink tracks every shot at every event — where a player’s golf ball starts and lands, and all the ground covered in between. ShotLink data generates more than 500 statistics as well as predictive analysis on golfers’ games. “Our mission is to capture attributes for every shot, for every player in real time,” Evans says.

In turn, the ShotLink data feeds pgatour.com, TV broadcasters and other media outlets, as well as 11 high-resolution LED scoreboards that are strategically placed on the courses each week. The mobile scoreboards were introduced in 2007, and according to Evans, the players gave a lot of constructive criticism on what content they wanted to see, Evans says.

In essence, ShotLink data is critical business intelligence for the Tour players. “They rely fairly heavily on it,” Evans says. For example, on Fridays, players need to know where the ‘cut line’ is — the score that divides the field into those who will continue playing on the weekend and those who won’t. (Players with a score worse than the cut line aren’t allowed to play on Saturday and Sunday). Once the weekend rolls around, and tensions rise on Sunday afternoon, the data on the scoreboards becomes absolutely vital.

“They evaluate that [scoreboard information] as part of their decision-making processes,” Evans says, “and determining the risk on their shots.”

For A Perfect ScoreWith millions of dollars at stake, the accuracy of the ShotLink data is paramount. Here’s where the volunteer staff comes in, and where Evans has a dual challenge. He

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has to develop and manage a sophisticated data collection system while ensuring that it’s easy for the volunteers to learn and use.

At each tournament, approximately 350 of the 1,000 volunteers work in one of two assignments gathering the data to feed the ShotLink system. One role is called the walking scorer. Each group of Tour golfers has a walking scorer, who records in a PDA the attributes of each player’s every stroke.

The other role is called the laser operator. Two teams of two volunteers each are strategically positioned on each of the course’s 18 holes (one group monitors the fairway, the other, the putting green) and, using a special laser surveying device, locate each golf ball after it’s been played and note the coordinates of its exact location on a digital grid.

Errors happen — especially with some 32,000 shots occurring during a typical four-day tournament, Evans notes. But in his estimation, it’s better to have the data flowing as fast as possible. “There’s no way we’re going to critique every single stroke before we send it to people who use the data,” he says. “We’ll show you all of our flaws and errors, and we’ll pride ourselves on the timeliness to fix that information.”

Because accuracy and timeliness of the data are so critical to players, broadcasters and fans, Evans and his team have built a couple of features into the ShotLink system that allow for quick error resolution. If, for example, the walking scorer says a player’s golf ball landed in the fairway but the result of a laser operator’s survey shows

Case File

SNAPSHOT PGA TourREvENuE: Rs 1,200 crore*

EmPLOyEES: 2,000

IT CHIEF: Steve Evans

*unofficial estimate

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that the ball was actually in the rough (thick grass), an onsite ShotLink producer will receive a warning message from the system.

A call on a voice radio from the ShotLink producer to either of the volunteers can usually clear up any discrepancy quickly. “Our goal is to have any data corrections made inside of one minute,” Evans says, “and we consistently meet that metric.”

Four times a year, the Tour hires professional surveyors to assess the quality and accuracy of ShotLink’s measuring abilities. When the team compares the system’s accuracy of locating a ball in the fairway with the professional surveyor’s data, ShotLink averages about 27 inches of

deviation, Evans reports (meaning ShotLink is within 27 inches of being exactly right on the fairway). At the green, the average deviation is two inches. “Keep in mind that a golf ball is an inch and a quarter wide,” Evans says.

“We spend a lot of staff time at the site focused on critiquing the accuracy,” Evans says, “identifying any process or operational issues and making sure we’re constantly evolving and improving.”

Evans notes that Tour players use the ShotLink data at varying levels. For example, some players break down the numbers with their instructors to find areas for improvement. Evans’ team will create custom queries of the ShotLink data for the players who request it. “We provide all the data to players,” Evans says, “and we provide them full access to the inquiry system.” Last year, Tour veteran Fred Funk told USA Today, “The neatest thing about it is

1 After a player hits the ball, two teams of two volunteers each, equipped with a laser surveying device, track its course

and note the coordinates on a grid.

Caddies For Managing Data

3In case of inconsistency, the ShotLink system will send a warning message to the ShotLink producer, who will call

one of the volunteers to rectify the error.

With the ShotLink System, golfers and spectators get exactly what they are looking for: timely and accurate data.

2 A walking scorer records the attributes of each stroke of every player in his PDA. This information is then sent to the ShotLink system.

Case Study.indd 48 8/28/2008 11:09:10 AM

looking at how guys play, how close they’re hitting their wedges, how close they’re hitting their 3-irons, how far they’re driving it and how certain holes are playing.” But without the volunteers’ efforts, Evans isn’t so sure there’d be a ShotLink. “I doubt that we would be able to build that business case,” he said, if the Tour had to pay people to do the measuring.

The popularity of and reliance on ShotLink data has made retaining the 10,000 volunteers a high priority for Evans and his lean IT staff, who don’t have time to train a new set of volunteers each year. “When we built the system we recognized we had limited time to train, and it was important that we had high retention,” Evans says. “And we also needed to really build a culture around the mystique and value of these positions.”

Today, Evans reports that the Tour is able to retain more than 80 percent of its volunteers on a year-to-year basis.

Follow Through The PGA Tour couldn’t exist without those companies that sponsor individual tournaments or become partners to the Tour. ESPN.com pegged the cost of sponsoring a regular PGA Tour event at $7 million (about Rs 28 crore) a year. (The Tour does not reveal what it charges sponsors.)

Evans’ IT shop is also a part of this sponsorship model. The Tour recently replaced its old technology partner with CDW. Evans says that CDW provides sponsorship money as well as technology help for his staff. “We’re stretched thin, and we need good decision making to help us reduce the research cycles on topics such as software licensing and enhancing new ShotLink functionalities,” Evans says.

IT’s centralized group at the Tour’s headquarters is made up of nearly 50 IT staffers. In addition, the 15-member mobile operations group travels to the Tour’s tournament each week and provides network administration, scoring

Case File

“We’ll show you all of our flaws and errors, and we’ll pride ourselves on the timeliness to fix that information.” —Steve Evans

Senior Vp-IS, pga Tour

operations and troubleshooting help onsite. Evans reports that IT expenses compared with total revenue are slightly less than 1 percent.

While one might expect Evans to be out ‘pressing the flesh’ with sponsors and vendors on one of the Tour’s 17 Tournament Players Club courses that it owns, he says, “We actually don’t do a lot of that here.” Evans is a golfer himself, a very respectable 10-handicapper, but, “I’m surrounded by a group of people who are significantly better at the game than I am.” Nevertheless, Evans says, “I actually enjoy golf much more now than when I first came to work here.” That was 21 years ago, when Evans signed on as a programmer/analyst working on the Tour’s statistical, competition and player prize systems.

Evans is able to attend Tour events four to six times a year, depending on the IT projects on tap. “You can sit in conference rooms and talk about how things should work,” he says, “but the reality check is actually going onsite and watching how the operation works.”

With technology at his side, Evans and his team took the game to the spectator’s doorstep — from a full swing to a great follow through. CIO

send feedback on this feature to [email protected]


4Data from the system is relayed to broadcasters, the Tour’s Website pgatour.com, and is displayed on LED scoreboards for players and spectators.

Case Study.indd 49 8/28/2008 11:09:11 AM

HealtH CareBeHind Bars

Inside California prisons, substandard medical care kills one inmate every six days. IT is part of the court-ordered prescription to ensure doctors do no more harm. By Kim S. NaSh

Business transformation

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Yet, a year passed before prison medical staff referred the inmate to a kidney specialist at a local hospital. He never got to go — the records are unclear about why — and he died three months later.

If only, as on the outside, there had been a database to alert prison doctors of drug interactions. If only there had been software to schedule appointments. If only there had been basic Internet access, e-mail and electronic data about patients, so that prison medical staff could share information.

That patient might have lived.More than 170,000 inmates crowd

California's 33 state prisons — more than double the number the prisons were built to hold. Inside those bars, one inmate dies every six to seven days because of "deplorable" medical care, according to US District Court Judge Thelton Henderson. In 2001, 10 inmates at nine prisons, including San Quentin, accused the state of violating the Eighth Amendment with medicine that amounts to cruel and unusual punishment. In 2002, Henderson agreed with the inmates, pronouncing California's prison healthcare system unconstitutional.

The state settled the case, agreeing to fix the problems. But by mid-2005, after six days of hearings, Henderson concluded the state had made no progress. He seized control, appointing a receiver — a federal overseer — to hire new people, change processes and install basic IT found even in small rural hospitals in the US. The aim of the receivership (officially the California Prison Health Care Receivership) isn't to offer criminals state-of-the-art health care. It's to do no harm.

The decision and other court material relay story after story of how inmates didn't get the right medications on time. Or they didn't see specialists when they should have.

Or they were treated by incompetent doctors whose personnel records didn't document their failings. Or no one knew the inmate was sick because his medical record was wrong. Or lost.

Today, after three more years, the system still falls short of constitutional standards. There are some improvements: nurses added, some doctors replaced; some software installed to, for example, track pharmaceuticals at some prisons. But there's a lot to overcome.

typewriters and dot-Matrix printersFor years, in some cases, for decades, several prisons lacked working phones for the medical staff. Others relied on antique Brother typewriters to fill in forms and leaky, lightless trailers in which to store them. Prison employees soaked printer ribbons in ink by hand because the dot-matrix printers were so old that manufacturers no longer made replacement parts. While the prison healthcare budget had grown from $556 million (about Rs 2,224 crore ) in 2000 to $1.6 billion (about Rs 6,400 crore) last year, most of the money went to staff and medical supplies, not to infrastructure or technology. "Data management, which is essential to managing a large healthcare system safely and efficiently, is practically non-existent," Henderson wrote. "This makes even mediocre medical care impossible."

For technology managers at California prisons, the federal takeover is a rare opportunity. When organizations run so little technology, providing e-mail makes you a hero, says Dan Marshall, staff IS analyst at San Quentin. Marshall manages much of the prison's IT.

In many ways, the prison healthcare overhaul looks like any big IT project. Corporate CIOs will recognize some of the obstacles: uncertain funding, skeptical users, having to please separate groups of people often at odds with each other, keeping projects afloat when the boss gets fired. "It's all there, only more dramatically in the prison system," says John Hummel, who was CIO for the receivership from 2006 until he resigned early 2007.

But in other ways, the project stands apart. How do you set up a WAN among buildings made of stone walls three feet thick and reinforced with steel? When it's time to install a telecom switch, can you get the OK to schedule armed corrections officers to guard your tools from thieving, violent prisoners?

Then there are ethics. Wrestling with the moral dimensions of installing systems to help a rapist get his dermatitis cream isn't typical CIO fare. You get a green field on which to make your IT mark — for a constituency many would rather forget about, and some say deserve to die.

proCessing prisonersIn the hills north of San Francisco's famous Golden Gate Bridge stands the infamous San Quentin State Prison. A 27-year-old Johnny Cash, though never locked up there, visited to sing about injustice. Today, Scott Peterson, convicted in 2004 of killing his pregnant wife, Laci, and their unborn baby, is there

awaiting execution. San Quentin holds 5,400 murderers, rapists, violent felons, parole violators, drug criminals and many, many three-strikes offenders.

The prison is also one of five intake centers for inmates entering, or returning to, the

Four years ago at San Quentin, the 156-year-old prison where the state of California keeps some of its most dangerous criminals, doctors saw an inmate for high blood pressure, diabetes and renal failure. The inmate got two drugs that, according to court documents, made his kidney problems worse. His blood pressure climbed so high his eyes bled.


Reader ROI:

How substandard medical care can kill prisoners

Deploying IT in a hostile environment

Navigating internal politics

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California system. The average state inmate is a 36-year-old male who reads at the seventh-grade level and is sentenced to just under four years.

Before they get housing assignments, prisoners must be screened for medical, dental and mental health issues. The results determine where they serve their time. Someone with a respiratory illness, for example, shouldn't go to Pleasant Valley State Prison in Coalinga, where the local valley fever lung infection routinely sickens hundreds of inmates and staff.

All day at San Quentin, white buses pull in and out of a secured parking area overlooking the cool, blue bay waters. Cuffed and chained, inmates in denim outfits file out. Guards lead them to the Reception and Release Center.

One recent breezy morning, Director of Nursing Tonya Church, who manages the prison's 126-member nursing staff, ducks inside the center. Dozens of prisoners stand in barred or glassed-in holding cells or sit on folding chairs. Staff in scrubs examine inmates while corrections officers keep watch. There's little room to move. Every few minutes a nurse barks an inmate's last name, a call to step up.

Church's nurses perform eye, ear and tuberculosis tests. They take blood to identify conditions such as diabetes and hepatitis. They record a brief medical history — such as allergies, handicaps, communicable diseases — and do a physical

exam. A doctor sees newcomers to assess serious problems, prescribe drugs or do a psychiatric evaluation. "We try to average about 75 inmates a day," she says.

Intake happens in this one building, and just one aspect of the process so far is computerized: blood-test results. Outside firms Quest Diagnostics and Foundation Laboratories set up Web portals through which healthcare workers can view and download lab results.

The rest of the process is still recorded on paper, mostly folders containing four-part forms with check boxes to describe a patient. Even so, Church says, thanks to the receivership there have been big improvements. The prison got money to construct this bigger building; crowded as the new space is, it now includes private

exam rooms and networked PCs to view those lab results and print chart labels.

Before the receivership, there was no room for doctors to work, just nurses and technicians. Mental health and dental exam rooms were in other buildings. To complete a screening, prisoners had to be escorted by corrections officers to different clinics around San Quentin's 440 acres. Medical forms often got misplaced along the way.

Sometimes there weren't enough guards scheduled, Church says, so inmates would have to wait, on occasion, for several days.

Administrators would have to assign temporary housing to inmates who hadn't been fully screened. Usually they stayed

in the general population. Sometimes that caused problems. For example, unless an inmate came with a known history of mental problems or was acting erratic on arrival, a psychiatric evaluation waited, she says, sometimes endangering, in particular, first-time inmates with suicidal tendencies.

Throughout California state prisons, 30 prisoners killed themselves in 2007 and an estimated 480 tried. Today, mental health screens occur the day an inmate arrives, so staff can spot potential suicides sooner, Church says.

While Church likes the changes so far, she looks at what else needs to be done. "Each institute has its own obstacles to overcome," she says, noting that because of San Quentin's age there are lots of low ceilings in buildings not wired for many electrical outlets, as well as asbestos and lead paint issues. "A lot of people feel they've stepped back in time when they come to work here."

oBstaCles to itDan Marshall, a staff IS analyst at California's San Quentin State Prison, doesn't mind working around the physical obstacles to installing technology at a prison dedicated when Abraham Lincoln was president. He's just to be doing it at all.

Walking through a dim cement passageway connecting San Quentin's cafeteria on one end and the Treatment and Triage Area at the other, Marshall cheerfully points out IT impediments. "You can see from the size of this place that putting technology infrastructure is not easy," he says, sweeping his arm to indicate the surrounding complex of I-beams, razor wire and stone buildings pocked by chipped paint. It's not only the size and sprawl of the facility that presents challenges. "If it was your typical office building, we'd be dealing with drywall. Because it's prison, "they're much more into stone and steel."

To deliver even basic medical care, doctors and nurses at San Quentin needed a network. Marshall opted for wireless networks using Nortel gear. His office, underneath the warden's office, now serves as the communications room, with cabling and servers inside. He's set up clusters of virtualized Dell servers, running VMware with an EMC SAN, to


Dan Marshall, Staff Information Analyst, San Quentin, says that “putting technology infrastructure in here is not easy. Because it’s prison, they’re much more into stone and steel.”


Feature -01.indd 52 8/28/2008 11:27:18 AM

control the wireless infrastructure as well as for print and file serving.

While scouting for places to put wireless access points Marshall remembered that runs of fiber optic cable had been installed but never turned on. Four years ago, the state had installed fiber in most prison buildings but the project lost funding before the needed switches and hubs could be bought, says Hummel. "Dan had this beautiful spiral, all truncated and ready to go," he says.

Now clinics, offices and some corrections officers' stations throughout San Quentin have access to either a wired or wireless computer network, Marshall adds.

Engineers from Nortel, a state subcontractor, came to help Marshall and the four other IT analysts at San Quentin install the wireless equipment. But it was no easy visit. To get an outside vendor on prison grounds involves background checks, vehicle searches and, usually at overtime rates, special assignment of guards to protect the people working on the project.

"You have to think: are you putting yourself in a position that if something were to happen that you have no help?" He casually steps aside to let pass a guard gripping the triceps of a man in handcuffs and the white jumpsuit of someone in protective custody. Although Marshall himself has not been attacked, 121 members of the San Quentin staff were assaulted by inmates in 2006. Once every three days an inmate, sometimes armed with a homemade weapon, attacked an employee there — one of the highest assault rates in the state.

Marshall has worked at San Quentin for 14 years — his first seven in nursing, the last in IT. Before the receivership, he'd begun to stagnate. He still felt dedicated to serving people who need help, he says, and helping the medical staff do their important work. But maintaining 120 standalone Windows NT 4.0 and XP PCs held little appeal. He wanted to use new technologies that would change the working conditions for the doctors and nurses. That wasn't happening at San Quentin, so he was hunting for a new job.

Then Judge Henderson took over. Marshall met the receiver, Bob Sillen, and his new boss, Hummel. Sillen had 40 years in healthcare administration behind him. After touring San Quentin to see for himself conditions he later described as "appalling," Sillen decided to focus there first.

"It is the oldest, most decrepit and most notorious prison in California. It's perfect for reform," he said in one of his many letters to staff and inmates during his 21 months on the job.

10 inmates sue the state, accusing the prison system of violating the Eighth Amendment with medicine amounting to cruel and unusual punishment.

US District Court Judge Thelton Henderson pronounces prison healthcare system unconstitutional. State agrees to fix the problems. State senate advisory committee concludes that Department of Corrections technology is "antiquated".

Medical review of 193 inmate deaths finds 34 to have been preventable or possibly preventable. An audit committee requested by Gov. Arnold Schwarzenegger calls for an overhaul of the prison healthcare system, asking the University of California hospital system to take over inmate health care. The university declines.

Henderson places prison healthcare system in receivership.

Medical review of 426 inmate deaths finds 66 to have been preventable or possibly preventable. Bob Sillen starts as receiver. Calls the conditions in San Quentin "appalling."

Federal review finds prison pharmacy costs are up four times higher per inmate than comparable prison systems. After paying $100 million (about Rs 400 crore) in overdue vendor and medical bills, Sillen spends $5 million (about Rs 20 crore) on a pilot of contract management software at four prisons. John Hummel is appointed CIo of the receivership. All 33 state prisons receive new networking and telecommunications gear for telemedicine program so remote doctors can treat inmates.

Henderson says overcrowding must be addressed. orders a three-judge panel to consider a prisoner release. The state appeals.

Maxor's GuardianRx pharmacy management application goes live at Mule Creek State Prison. Sillen issues a request-for-proposals for a "clinical data repository," database to track inmate medical records. Sillen files a three-year plan that includes IT infrastructure. Says total overhaul could take at least 10 years.

Sillen is fired, replaced by Clark Kelso, former CIo for the state. Hummel resigns. Kelso proposes new three-year plan to improve business processes and technology, including completion of the Maxor rollout and the clinical data repository by mid-2009.

—K.S.N

it Cure eigHt yearsin tHe Making

California inmates sued over substandard medical care in 2001. Full deployment of critical systems begins this year.

2001

2002

2005

2006

2007

2008

2004


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Hummel, meanwhile, was astounded, and excited at the opportunity to transform the IT backwater of the entire prison health system. He was a senior manager at outsourcer Perot Systems and before that, CIO at Sutter Health, a network of hospitals and doctors' offices in California, for nine years. Early in his career, he had worked with doctors in poor countries, helping set up hospitals and data management.

"Walking into San Quentin and watching water come dripping down out of the showers of death row and having to hold a plastic tarp over the doctor as he treated a patient was beyond anything I'd seen in a third-world country," he says. "I was ashamed."

Such passion touched Marshall. So did the prospect of the receivership freeing up funds for technology. He decided not to quit. In fact, he says, he started thinking, How long will it take for me to change San Quentin's culture to make IT important?

Yet making IT important is not as straightforward as it sounds, says Hummel. When he started as CIO of the receivership in 2006, Hummel says, he had to learn to live with one truth: the warden is boss. Judge Henderson may have invested the receivership with the authority to administer, manage and operate the prison healthcare system but the warden runs the prison. Custody of inmates is the warden's number-one job; everything else is secondary.

Hummel made sure to visit as many prisons as he could throughout his tenure, to

discuss "very real concerns of theirs" about technology projects. During the wireless installation at San Quentin, he recalls, one of his and Marshall's tasks was "simply proving to the warden and corrections officers that this was not going to stop their walkie-talkies from working," he says, "or that a gang member sitting a mile and a half away couldn't possibly steal that signal."

Marshall, meanwhile, tries to use his nursing background to bridge the cultural gap between San Quentin's medical and IT staffs. Take the process of dispensing medications to inmates. Each morning and evening, nurses wheel carts loaded with drugs to cell blocks where inmates live. They walk up and down rows of cells. If their patients are housed in the gym — a 'temporary' measure the state took over a decade ago to accommodate overcrowding — nurses look for inmates, who are assigned bottom or top bunks.

Marshall did this drill many times as a nurse and says that often, nurses can't find all their patients on first rounds. An inmate might be at a clinic or at work. Or maybe gone from the prison altogether. Over 500 inmates transfer in and out of San Quentin each week. State-wide, weekly transfers number 5,000. There's a 24-hour lag between when an inmate changes prisons and when the master housing roster database gets updated."I would come back with a deficit of hundreds of inmates I couldn't find," Marshall recalls.

The nurse would then typically return to the pharmacy or the medical records room hoping to find updates to the housing roster app, an Oracle database running on a Hewlett-Packard MPE server and accessed via a dumb terminal. With any fresh information then available, the nurse would head back out.

"It could take most of a day," he says. Knowing this, Marshall and Church discussed how to improve that process. Once the wireless network was in, Marshall was able to set up PCs in satellite clinics and housing units around the campus to access the roster database. "There were two places to look up this information previously," he says. "Now there are 250."

Meanwhile, there is not yet any electronic way to thoroughly track the medications San Quentin prescribes, orders, receives, dispenses and discards — or how much it all costs. To do all that, the prison is due to switch on pharmacy management software by Maxor.

The goal in California is to better manage the 21,000 prescriptions prison doctors write each month by monitoring, for example, how many get administered properly and how much medication gets wasted or stolen. Analysis of pharmacy billing at Pleasant Valley State Prison, which has already installed Maxor, resulted in the arraignment in December of two contract pharmacists who did work at the prison, on charges they had embezzled $1 million (about Rs 4 crore) from the state. Police searched the pharmacists' homes and found 30,000 prescription drugs, some bearing prison labels.

But even when the Maxor application is fully rolled out at all 33 prisons, none of them will be able to share data with each other, at least not for a few years. That feature would be useful when, say, inmates transfer between institutions. Instead of doctors at the receiving prison having to write fresh prescriptions for a new inmate, existing prescriptions would follow the inmate to his new location. "Less wasted medicine," explains Church, "and more continuity of care."

However, that won't happen until later phases of the Maxor project, not yet committed to time lines, she says. IT time


“A lot of people feel they’ve stepped back in time when they come to work here," says Tonya Church, Director of Nursing, San Quentin.


Feature -01.indd 54 8/28/2008 11:27:34 AM

lines generally are uncertain right now, as Sillen and Hummel are no longer with the receivership.

tHe politiCs of getting tHe JoB doneIn January, US District Court Judge Thelton Henderson fired Bob Sillen, the federal receiver who had been appointed to fix California's prison healthcare system. Henderson praised Sillen's reconnaissance and understanding of the scope of the problem but criticized him for not moving quickly enough.

In a 'Plan of Action' he filed, Sillen outlined 22 objectives, from building more physical buildings at various prisons to piloting a new grievance investigation procedure to installing IT. Though he devised milestones for each objective at intervals six months to three years out, Sillen didn't envision returning the prison medical system to state control for a decade.

Further, Sillen is known to be prickly and confrontational — a style unlikely to persuade state legislators and Gov. Arnold Schwarzenegger, among others, to come together to support expensive prison overhaul projects. While Judge Henderson gave the receiver wide powers to make change and hand the state the bill, the money must be appropriated by state lawmakers. Right now, the state is running a $14.5 billion (about Rs 58,000 crore) deficit. Sillen could not be reached for comment.

Replacing Sillen is Clark Kelso, the former CIO of the state. Kelso, who is also an attorney with a degree in philosophy, has a reputation

for collaborating and brokering peace between different groups. He has worked in all three branches of California state government, including a tricky job turning around the state Department of Insurance after a corruption scandal in 2000.

"The reason you have to have the receivership is because the state wasn't able to do it on its own," Kelso notes. "California is in the midst of a very serious budget crisis. No question that there are going to be some tough discussions ahead. I approach those as opportunities for dispute resolution. I'm not going to look for conflict."

Marshall knows that some IT plans made by Hummel and Sillen are iffy now. They envisioned the healthcare system running its own network separate from that of the overall department of corrections. But Kelso released a new strategic plan that includes aggressive technology deadlines. Kelso is also considering whether running one network for both medical and corrections apps would be faster and cheaper. "The vision of the new people may be different," Marshall allows. "But it'll all go forward."

on proBationPrisons are consistently underfunded and understaffed, state and federal analyses show. And the state overall remains intermittently paralyzed by budget crisis after budget crisis, going on two decades.

The receivership has progressed at the prisons where the state had, or could, not. Incompetent doctors, some exposed as unlicensed or under disciplinary action, have been fired. Care has gotten better; San

Quentin's intake process is one example. New construction is under way at many prisons. Some software, hardware and networks have been upgraded, or in some cases installed for the first time.

The receivership has spent more than $20 million (about Rs 80 crore) so far, according to a report from the state Office of the Inspector General, with about $8.7 million (about Rs 34.8 crore) of it going to IT, system-wide, and construction at San Quentin specifically.

But still health care in prisons throughout California "remains below constitutional standards," Henderson wrote when he removed Sillen.

Other courts have noticed. One San Francisco Superior Court judge recently ruled that a jewel thief with Crohn's disease didn't have to go to state prison. He could instead start his 12-year sentence in county jail. The judge, Hummel says, "felt that within 12 years, it was a reasonable thing in treating Crohn's disease that the inmate would die by medical neglect." An appeals court overruled the decision, acknowledging the poor healthcare system but saying one cannot conclude "that all persons with serious medical problems...will in fact receive constitutionally inadequate medical care."

Meanwhile, the tally of what Henderson calls "needless" death has not dropped. Sixty-six inmates died of preventable or possibly preventable causes in 2006, the latest year for which statistics are available. Death row is safer: just 14 people have been executed in the past 28 years. CIO

send feedback to this feature to [email protected]


One goal is to better manage prescriptions by monitoring how many get administered properly and how much medication is wasted or stolen. For example, analysis of one prison pharmacy resulted in the arraignment of two pharmacists because they had embezzled Rs 4 crore.


Feature -01.indd 55 8/28/2008 11:27:43 AM

Collaboration

You, AvAtAr

Virtual worlds like Second Life aren’t just for games.

Companies are experimenting with virtual environments

for everything from training exercises to meeting spaces

for remote workers. But the technology has pitfalls.

Reader ROI:

Business applications for virtual environments

Pros and cons of virtual-world technology

Lessons from early adopters

By C.G. LynCh

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Collaboration

For emergency responders working along Interstate 95, accidents aren't a game; they're a way of life (and death). So it seemed odd to a group of firefighters, cops

and medics when researchers from the University of Maryland suggested it use a virtual world to collaborate on training for rollovers, multi-car pileups and life-threatening injuries.

The phrase virtual world is often associated with Second Life, the much-hyped 3-D environment hosted by Linden Lab that allows users to talk to friends, sell T-shirts, fly around on carpets and even build amusement parks — in other words, to play. At first, the emergency responders who make up the I-95 Corridor Coalition didn't take seriously the idea of a virtual world as a training tool, says Michael Pack, director of research with the University of Maryland's Center for Advanced Transportation Technology.

"It wasn't until we started to do elaborate demos that the first responders started to realize the true potential," says Pack, who has since begun rolling out a virtual world pilot project that could accommodate training for hundreds of emergency workers.

In fact, as the consumer buzz over Second Life has faded, organizations like the I-95 Corridor Coalition, accountancy Pricewaterhouse and healthcare technology provider Greenleaf Medical have quietly explored business uses for virtual worlds. From setting up 3-D environments for geographically dispersed workers to giving therapy to troubled teens, early adopters are testing virtual worlds as a collaborative tool.

Industry analysts and developers of virtual worlds believe that by immersing users in an interactive environment that allows for social interactions, virtual worlds have the potential to succeed where other collaborative technologies, like teleconferencing, have failed. Phone-

based meetings begin and end abruptly, at the mercy of the person or service administering it. In a virtual world, conversations between employees can continue within the virtual space — just like they do in company hallways after a meeting ends. "The informality of a virtual world can lead to great conversations," says Roo Reynolds, a Metaverse evangelist with IBM. Metaverse is a virtual world for Big Blue employees. "It leads to discussions that otherwise would have been missed with the formality of older technologies."

However, businesses must overcome many technical and cultural obstacles before they adopt virtual worlds on a major scale. The technology often lacks robust audio capabilities that business users need to communicate, and it can be frustratingly slow without a high-performance desktop. Meanwhile, users have to get over the novelty of working as their virtual selves. And there's a learning curve for older workers who didn't grow up with richly rendered video games.

Perhaps even more important than the technical challenges, companies must tackle the issue of workers' online identities. People's 3-D representations, known as avatars, must be constructed in such a way that allows users of virtual worlds to have faith they're talking to the right colleague. Security challenges abound; most companies using virtual worlds today do so on a public or externally hosted platform with limited options to protect corporate data.

"You want people to be so comfortable in the virtual world that they're not concentrating on how to use them," Pack says. "They can't be worried about how to turn left or talk to someone. They need to be worried about how to do their jobs, just like they would in the real world."

EarLy adoPtErS Get Down to BusinessMany first adopters have proceeded carefully when implementing virtual

REAL CIO WORLD | S E P t E m B E r 1 , 2 0 0 8 5 7Vol/3 | ISSUE/20

worlds, in some cases opting for trials and low-risk options that require modest investments. Jonathan Reichental, director of IT innovation at PricewaterhouseCoopers, started researching virtual worlds for the professional services firm more than a year ago. Since then, his team has tested virtual worlds that are hosted outside the company's firewall. He's looking for one he likes. Reichental hopes virtual worlds can be used for recruiting, innovation, business modeling and training.

"We'll extract more uses over time as it becomes even more enterprise-ready," he says.

University of Maryland's Pack got the idea to use a 3-D environment for first responders after a group from the I-95 Coalition took a tour to Europe to observe the training techniques of emergency workers there. "They had great simulations, where if you did the wrong thing [in a virtual world], everything would get worse," he says.

Pack says training in a virtual world presents a desirable alternative to real-life exercises, which can be pricey and inefficient. "You'd go out in a field and flip a car over and have people act as victims," he says. Trainers couldn't introduce many variables (such as mounting traffic). In virtual worlds, Pack and his team can program multiple scenarios into the software. For example, if a first responder gets out of his car and fails to put on a reflective jacket, the system might respond with a car hitting that person's avatar.

"It's supposed to be as human as possible, so anything goes," he says. "We've put together lots of scenarios, from fender benders to 20-car pileups. We put [the participants] in dangerous situations to see how they will respond."

While Pack and Reichental remain optimistic about virtual worlds, however, most organizations lack the developers with the proper skills to work on them, says Erica Driver, an analyst with Forrester Research. "Most places don't have 3-D developers on I

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staff to build this stuff," she says. "Initially they'll turn to vendors with out-of-the-box [software] to get them started."

LEarning from the MistAkes oF seConD LiFeTo see the challenges and benefits of adopting virtual worlds, businesses need look no further than Second Life, which analysts say has affected the technology for both better and worse. Though viewed by some as a fatty piece of Web 2.0 excess, Second Life deserves credit for putting virtual worlds on the map.

"This is the first time we can observe a large user community in a virtual world that the users are able to shape and re-formulate," says Jaron Lanier, a computer scientist who was among the pioneers of virtual reality in the early 1980s. "The mere fact that it can work at all on a social level was only a theory before Second Life. Overall it's been a great success."

But Second Life has pitfalls, including problems with managing user identities,

Collaboration

Vol/3 | ISSUE/205 8 S E P t E m B E r 1 , 2 0 0 8 | REAL CIO WORLD

though virtual worlds are a nascent technology, some vendors offer out-of-the-box software that will help

companies get started with 3-D environments and avatars for their employees with little development work of their own, says Erica Driver, a Forrester research analyst.

here’s a list of some virtual world vendors and their specialities, according to a recent Forrester report, ‘Getting real Work Done in Virtual Worlds.’

Forterra Systems With its online Interactive Virtual Environment (olive) platform, Forterra helps companies set up client side applications and servers capable of handling the demands of a 3-D environment. the I-95 Corridor coalition uses Forterra software to train first responders how to work an accident scene, but it can also be used for simpler activities, such as meeting between employees. Most customers who use Forterra use speech, rather than text, to communicate.

Qwaq If you want to set up a virtual meeting space right away, Qwaq might be a good place to start. this vendor takes virtual world meetings beyond cartoonish avatars sitting at a table. Qwaq software lets users drag documents to the wall or to

the air within the virtual space so they can collaborate. Qwaq will host the server for you or will set it up for you to host. It supports both voice and text chatting.

Unisfair allows you to meet with clients in a virtual space just as you would at a conference. by facilitating 3-D environments where you can display a poduct or talk about a specific service, Unisfair makes it easy to hold a virtual event or trade show.Clients need only a Web browser and Flash to use the technology, and they can communicate using text and audio.

Vivox knowing that communication capabilities will make or break the success of vitual worlds, Vivox focuses on providing voice technology for 3-D environments. For companies that are first adopting the technology, however, this might be a ‘down the road’ consideration as they work to get visuals of the virtual world in place first.

Icarus Studio provides businesses with a set of development tools they can use to build virtual worlds. and customize them to their specific needs.

— C.G.l.

The Vendor in the Machinethese are some vendors of virtual worlds software that can get you started on building and using 3-d environments

limited security and less-than-perfect audio, all factors businesses must consider when setting up their own virtual worlds. "Second Life is still a wild west," says Jonathan Yarmis, an AMR Research analyst. "Businesses have legal issues and policies they must consider."

idEntity MAttersIn Second Life, people create avatars with genders, races and eye-pleasing anatomical features that often contrast their own. While businesses shouldn't prevent their employees from being creative (it's foolish to think users will let their virtual bodies surrender to gravity), they need to create policies for avatar creation so that people maintain consistent representations and adhere to appropriate dress codes, says Yarmis.

The early adopters haven't delved too deeply into this issue, though University of Maryland's Pack says the software he bought from Forterra Systems allows for easy customization to differentiate users from one another. First responders

will wear appropriate uniforms so their colleagues can pick them out during a training exercise, but that doesn't mean he wants everyone to look the same. "We can easily go in and change the body shape of the avatars," he says. "If you want to make them fat, or have a rounder face, we can."

Companies should aim to maintain consistency and accountability, without sacrificing creativity, says Aaron Delwiche, cofounder and CEO of Elastic Collision, a company that consults with organizations on how to deploy virtual worlds. "We encourage people to be imaginative and playful because virtual worlds are a freeing of the imagination," he says. "But you do need to have guidelines."

thE nEEd for GooD AuDioMany Second Lifers with imaginative avatars don't want anyone to know what they really sound like, observes Ian Wilkes, Linden Lab's director of operations. "A big criticism we got from Second Life residents when we released audio was, well, this kind

Feature -02 NEW.indd 58 8/28/2008 10:08:33 AM

of pulls back the curtain on who I really am and it isn't what I want."

But business users require it. Experts even argue that users typing what they have to say could disrupt their thought processes. "The typing would have been a showstopper for us," says Dan Gillette, lead designer at Greenleaf Medical, which recently worked with a residential treatment facility to use virtual worlds to provide therapy to children with psychiatric disorders. Virtual worlds allow patients to communicate in a stimulating environment where they might be more willing to open up about sensitive issues than they would face to face. "We need the patients to go in freely and have these social interactions [with their therapist]," Gillette adds. "For that, you need voice."

Unfortunately, for companies looking to use virtual worlds on a larger scale, audio needs to be perfected in such a way that takes into account spatial considerations. "When someone walks up to you from your left, you want to hear it in your left ear," says AMR's Yarmis. "When this happens, it takes virtual worlds beyond the realm of being a cartoon and it becomes a reasonable substitute from being in the same room."

gEtting users on BoArDThe prospect of an avatar that improves upon one's looks won't be enough to get employees to venture into a virtual environment. For one thing, people have to get used to it. Younger workers will be comfortable more quickly navigating around a virtual world because they grew

up with game consoles such as Nintendo and Sony PlayStation, says Forrester's Driver. "The 30-and-younger crowd will pick this up in a few minutes," says University of Maryland's Pack. "That doesn't mean the older folks won't get it too, but it will take a little longer."

Even once users learn their way around, PWC's Reichental says you need to allow for the novelty factor to wear off. But he adds that this can be a pretty painless process with some users. "Our first meeting [in a virtual world], as you'd expect, people stood on tables and had fun and roamed around," he says. "Remarkably, though, by the second meeting, people became engaged and were ready to talk."

The first responders who participated in Pack’s demos became so enthusiastic that “we had to bring some of them back down to reality,” he says. They wanted it to do everything for them. But these massively multiplayer games aren’t appropriate for all types of training.

arE VirtuaL WorLdS riGht For You? Driver believes using virtual worlds for meetings and training is the tip of the iceberg. She imagines that in five years, each knowledge worker will have about four monitors on her desk, perhaps with one dedicated to the Internet and e-mail and the rest to internal and external virtual worlds where people collaborate with colleagues and customers.

But to get started, you have to understand what virtual worlds offer today. Yarmis has spent a lot of time in Second Life, and

Virtual Training For Emergency Workerstransportation first responders practice how to manage an accident scene in these screen shots from a training exercise of the I-95 Corridor Coalition. Participants enact scenarios through avatars.

suggests that people interested in virtual worlds for business do the same. "To grasp what's really going on, you need to make a commitment to spend a number of hours there. That's the only way you can see how rich an experience it really is," he says.

As end-user companies wait, big tech vendors have begun building and testing new virtual worlds on themselves. At IBM, developers are building the Metaverse, a place for Big Blue's employees to meet informally. Sun Microsystems, meanwhile, is developing MPK20, a virtual world extension to its 19-building facility in Menlo Park, California. According to Nicole Yankelovich, principal investigator of the collaborative environments group, at any given time more than half of Sun's employees work remotely (which Sun encourages because it reduces the need for office space and has environmental benefits). Virtual worlds are a compelling alternative to the boring old audio conference. "We need a way to bring everyone together and get some informal brainstorming going," she says.

Accessing MPK20 from the comfort of her home might help Yankelovich and her colleagues avoid the traffic on that wide stretch of concrete near their Burlington, Mass., office, known as I-95 — a place the I-95 Corridor Coalition's first responders hope they won't have to visit, at least in real life, anytime soon. CIO

Send feedback on this feature to [email protected]

Vol/3 | ISSUE/206 0 S E P t E m B E r 1 , 2 0 0 8 | REAL CIO WORLD

Rethinking Disaster Recovery by bill snyder

Disaster recovery | Hancock Bank, a century-old institution headquartered on Mississippi's hurricane-prone Gulf Coast, likes to boast that it will be the last to close and the first to open when stormy weather shuts down area businesses in the area. That claim got the severest test imaginable when Hurricane Katrina roared ashore in 2005 and caused massive destruction. "We were hurt badly," says Ron Milliet, the bank's director of IT services.

Hancock's IT department, which serves 150 sites across four states, took a major hit, of course, but it could have been worse. The bank found that the relatively small number of servers it had virtualized (the project had just begun when Katrina hit) could be recovered in hours, while the physical servers took days, says Milliet. Many critical services were up within 24 hours.

Until now, virtualization has stolen the spotlight, but it's just one of the innovative tools today available to CIOs who are rethinking their disaster recovery and business continuity strategies. Techniques including WAN optimization and appliance-

Thanks to techniques

including virtualization, WAN

optimization and e-mail backup

appliances, CIos have better

disaster recovery options and more negotiating power

with vendors.

technologyessential From InceptIon to ImplementatIon — I.t. that matters


Essentisl Tec.indd 65 8/28/2008 10:06:16 AM

based e-mail backup are reducing recovery times, lowering costs and most importantly, raising confidence levels that business will continue even after a major disaster.

As for good old tape, it's still a backup mainstay, but CIOs are looking for supplementary technologies that can be used to overcome the venerable media's limitations.

Not only are CIOs adopting new disaster recovery technologies, "they are asking themselves what disaster recovery will do to improve business as a whole," says Michael Croy, director of business continuity solutions for the Forsythe Solutions Group.

That could mean, for example, leveraging IT assets acquired during a merger by putting the excess capacity to work as a backup or mirror site, or making underutilized resources part of a disaster recovery arsenal.

And because there are a wealth of new disaster recovery strategies available, customers are now in a stronger-than-ever position to cut affordable and flexible

deals with vendors running offsite recovery services such as SunGard and IBM, says Croy.

The Virtual Solution Gamblers look at a casino and see slot machines, roulette wheels, bars and restaurants. But for an IT exec, the same casino is a river of data and applications that must keep flowing 24 hours a day, no excuses accepted.

The Borgata Hotel Casino and Spa in Atlantic City, New Jersey, used a traditional tape backup solution, but it was "slow and inconsistent. We were in a labor-intensive manual world," says John Forelli, the resort's VP of IT.

What's more, the tape system gobbled a significant amount of network resources, and since the 2000-room hotel is a 24/7 business, it was difficult to find a time to back up a server without sacrificing overall performance, Forelli says.

In 2006, three years after the resort opened, management decided to virtualize its Windows servers using VMware and speed backup and recovery tasks with replication software from Double- Take Software.

Double-Take replicates application data from 77 virtual production machines to a single physical disaster recovery target and will failover to the target (automatically switch over to the backup system) in the event of an outage. When the reserve system is activated, the appropriate application services are started within a corresponding virtual

machine at the disaster recovery site and users are automatically redirected, says Forelli.

Because the software looks at data on the byte level and replicates incrementally, there's less bandwith pressure on the network. "It's automatic, it's quick, it's under the covers," he says.

That simplicity is one reason why virtualization is becoming so popular for disaster recovery. "Windows systems are

miserable to recover," says Donna Scott, an analyst with Gartner.

At Hancock, Katrina's lesson that virtualization equals faster recovery, along with a corporate desire to cut hardware and power costs, convinced the company to move much of its operations to a virtualized environment (with the exception of a mainframe-based banking system). The bank replaced 55 physical servers with five blade servers running VMware infrastructure, saving $150,000 (about Rs 60 lakh) in server hardware capital costs alone, says Milliet. There, is however, a potential downside. "We have a lot of eggs in one basket. One bad motherboard can take out a lot of virtual machines at one time," he says. To avoid that disaster, Hancock uses software that will automatically switch the VM workload to another physical server if trouble is detected.

Smart WAN TricksFor companies struggling to ship large amounts of data across the network, WAN optimization can improve day-to-day performance and speed backup and recovery operations as well.

Cubist Pharmaceuticals was using a traditional disaster recovery model that involved backups to tape, a day or more

Virtualization equals faster recovery. Clubbed with a corporate desire to cut hardware and power costs, these reasons are convincing more and more companies to move much of their operations to a virtualized environment.

ESSENTIAl technology

17% of enterprises

say disaster recovery will

be 8% to 10% of their 2008

datacenter budget. source: CiO research



of travel time to the recovery site, at times a wait for available machines and then a cumbersome restore. "Boring, static, not flexible," comments Michael Geldart, senior manager of computer operations at the company's headquarters, in Lexington, Massachusetts.

Geldart was not only concerned about his disaster recovery strategy, he was also struggling with the large amount of data the company needed to move between headquarters and its facility in Italy.

Moreover, management wanted to use the same WAN link for video conferencing and VoIP. Increasing the bandwidth, says Geldart "would have been a very expensive proposition."

Cubist had already introduced virtualization, "so one of the benefits that

we wanted to get out of it was the ability to do a snapshot of these [virtualized] machines and replicate them to other sites," he says.

The company decided to move forward with a Riverbed Steelhead WAN optimization and application acceleration implementation. The major applications it needed to speed up over the link to Italy were Exchange 2003, Microsoft networking/CIFS, and for the disaster recovery link, FTP and NFS, says Geldart.

With its own equipment in place at a third-party vendor's recovery site (out of state), backup and recovery time have been reduced dramatically. That's because the data is now replicated and sits on a live disk array, eliminating the need to restore from tape, which is one of

the most time consuming parts of disaster recovery, says Geldart.

Tape is still useful, he adds, noting that it provides the ability to retrieve historical data and can also be a backup should replication fail.

Interestingly, deploying its own equipment at an offsite disaster recovery facility run by a third-party involved some struggle with that vendor. "The initial reaction [from the vendor] was a blank stare," says Geldart. But [the vendor] came around, and Geldart reports that "they are absolutely changing their model." (For security reasons, Cubist prefers to not reveal the name of the recovery site's vendor.)

Croy, the Forsythe consultant, agrees. Vendors in this arena, such as

SunGard, are becoming more flexible and competitive, he says. However, he argues those companies still need to lower costs, become even more flexible and broaden the scope of offerings "to better meet business needs."

E-mail Appliances DeliverBacking up e-mail in case of disaster has been a costly and time-consuming problem for years, says Gartner's Scott. But now appliances are making it much easier to replicate Exchange and other major mail servers, she says.

Ken Adams, CIO of the Baltimore-based law firm of Miles & Stockbridge, says his company tried clustering Exchange servers, but found the strategy too complicated to engineer, requiring personnel to manage as well as hefty

outlays for hardware and licensing. "We're a law firm, not a technology company," he says.

But the company's 600-or-so e-mail accounts are considered mission-critical, so a solution was mandatory. Adams eventually turned to Teneros, which sells continuity appliances designed to replicate Exchange servers. The Teneros appliances are IP-based and easy to install at production and disaster recovery sites, says Adams.

Should one of the firm's Exchange, BlackBerry or Goodlink servers go down, the appliance takes over. And since Teneros monitors and maintains its appliances, there's little overhead for Adams' IT group.

Budgeting WiselyWhile disaster planning needs to be high on your to-do list, that doesn't mean you've got to bust your budget. In Katrina's wake, Hancock "opened the checkbooks for DR," says Milliet. "But now, we want to rationalize our spending to be in line with business value."

One way to do that is to integrate disaster recovery needs with day-to-day operations, as Cubist did by optimizing its WAN.

On a larger scale, Hancock's management realized that having a single, centralized call center in hurricane country was courting disaster, so it opened a second. Score one for disaster recovery, and chalk up a win for customer service: the new facility reduces caller wait times for customers during normal operations. CIO

bill snyder is a freelance writer based in California.

send feedback on this feature to [email protected]

Backing up e-mail in case disaster takes down your servers has been a costly and time-consuming problem for years. But now appliances are making it much easier to replicate Exchange and other major mail servers.

ESSENTIAl technology



A Kick in Your ButtSurveys say that storage and data management — at crunch time — is a challenge that will catch you with your pants down.By Thomas Wailgum

Pundit

ApplicAtions | If survey results are an accurate predictor of future calamity, then IT will soon find itself in big data-management trouble. In this case, the cause for alarm is a mushrooming explosion of data that is barreling down on enterprises and will be a "global and unstoppable force poised to overwhelm the complacent or unprepared."

Scared yet?All that fear-mongering is actually

from one recent study, called ‘Uptime @ Crunch Time: Valuing the Need for Data Speed at Critical Business Inflections’. But there are others out there. How about

IDC's prediction that by 2010 we'll all be producing 1,000 exabytes of digital information per year (an exabyte equals 1 billion gigabytes, by the way).

The Uptime @ Crunch Time survey work was conducted by the Business Performance Management Forum and sponsored by BlueArc, a network storage provider (so take the results with a heaping dose of salt because BlueArc aims to help solve these data storage issues). The findings are based on responses from more than 125 IT professionals.

So what say these IT professions? The Crunch Time study concludes that most IT

organizations "are not equipped to handle periods of intense data flow," despite the majority of respondents saying they know that the data tsunamis are coming in the next year.

"More than half [of the respondents] have already experienced productivity losses as a result of data overload at critical business junctures," according to the study, "and 25 percent willingly share specific stories of how poor data performance has hurt their business."

More findings paint a complex and grim picture:

More than a third of respondents said chances are good they will experience a significant spike in data volumes and user demand over the next year.

56 percent are not prepared or only somewhat prepared to handle the coming onslaught.

78 percent are not fully prepared to address any single spike of data that is over 10 times their average daily processing volumes.

80 percent said storage performance and data access by employees, partners and customers are important to their business.

According to the findings, a variety of core enterprise applications are driving the need for better data management. These include: rich media files and applications, ERP systems, e-mail and messaging, research and product development, and Web traffic. This gets even more complex with today's master data management initiatives.

The implication for today's enterprises is that "peak business performance is inextricably tied to seamlessly handling sudden spikes in user demand, accommodating lightning-fast data throughput, rapidly assimilating high

bandwidth applications and quickly analyzing vast amounts of information," notes the study.

For those who were surveyed, ‘uptime at crunch time’ is already a business imperative, states the study. "They have no time for long waits for expensive fixes or delayed opportunities. In their eyes, 'time to data' is equivalent to 'time to money.'"

Are you worried yet? Or is this just more vendor FUD? CIO

Thomas Wailgum is senior editor. send feedback on

this column to [email protected]

Peak business performance is inextricably tied to seamlessly handling sudden spikes in user demand, but 56 percent say they are not prepared to do so.

eSSential technology

Vol/3 | iSSUe/206 8 s e p T e m B e r 1 , 2 0 0 8 | REAL CIO WORLD

ET-Pundit.indd 68 8/28/2008 10:07:14 AM

CIO September 1 2008 Issue

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