October 15 2006

Alert_DEC2011.indd 18 11/16/2011 6:28:22 PM

From The ediTor

how can iT be strategic if the CIO does not report to the CEO? That’s the question

that Christopher Koch, executive editor of CIO US, recently asked in his blog. His argument

(and concern) is that without a direct reporting relationship, no CEO will consider IT strategic.

Worse, this also sends a signal to the rest of the organization that IT isn’t strategic.

With a majority of CIOs reporting in to their CFOs, it’s little wonder that this debate

is necessary.

Condemning the formation of an “extra management layer” around the CFO, the legendary

Jack Welch states unequivocally in a recent column that “companies where the CFO or chief

administrative officer reigns supreme have a much harder time attracting top people to HR and

IT jobs. The best and brightest will always choose to work where they have a seat at the table

equal to the CFO. Why shouldn’t they? Smart companies recognize their value and reward

them with pay and prestige.”

Whenever I ask your peers about this, the typical response is that CIOs ought to report in

only to CEOs. Yet, how many CIOs have been

able to change the status quo or even insist in

a job interview that a pre-condition to their

joining is that they have a direct working

relationship with the CEO?

A CIO that I was exchanging ideas with

the other day has in his last few assignments

reported to the CEO. This, he feels, facilitated IT to bring about a fair deal organizational

transformation. In fact, things were going great in his last assignment, until the time that a

CFO became the CEO. As he puts it, that was the end of the IT innovation cycle. (He has since

moved on to another assignment.)

While he observed that CFOs do a fair job of managing funds and, these days, also help with

compliance, he pointed out that few have the strategic intent and rarely demonstrate the level

of maturity and business alignment that IT requires to function and deliver.

Funnily enough, transforming this critical relationship requires a strong person. From

my discussions with many of your peers, I guess most would rather fight other battles than

attempt this change.

I also have a niggling doubt. Are CIOs also partly to blame for the situation because

they’ve allowed an impression to be created that their role is only to prioritize and

implement IT projects?

What do you feel about this issue? Write in and let me know your thoughts.

How many CIOs have been able to insist on a direct working relationship with their CEOs?

Whom a CIO reports to is directly related to IT’s impact in an organization.

Vijay Ramachandran, Editor [email protected]

Who’s your Boss?

VOl/1 | ISSUE/23� O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

Content,Editorial,Colophone.indd4 4 10/17/2006 12:58:29 PM

CO

VE

r:

Ill

US

Tr

aT

IOn

by

PC

an

OO

P

contentOCTOBER 15 2006‑|‑VOl/1‑|‑issuE/23

Executive ExpectationsVIEW FROm ThE TOp | 42Bhaskar Bhat, MD of Titan Industries, appreciates the CIO’s role as one that has access to both information and processes.Interview by Balaji Narasimhan

Total LeadershipShOW ThEm ThE mONEy | 22It’s time to position your IT organization as a profit center. Here’s how.Column by mike hugos

Crisis ManagementDISASTER! | 46The London bombings killed people, disrupted communications and shut down the city. But one global company connected with its employees and kept business running.Feature by Susannah patton

more »

Virtualization

COVER STORy | DOINg mORE WITh LESS| 28

Freed from the earthly bonds of hardware, IT pioneers are taking virtualization to the datacenter and the desktop.Feature by Leon Erlanger and galen gruman

VOl/1 | ISSUE/23� O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

10/17/2006 12:58:43 PM10/17/2006 12:58:43 PM10/17/2006 12:58:43 PM

GovernON e-WINgS AND A NETWORk | 52A project that took over a decade to roll out for the Indian Air Force, with Tata Consultancy Services, promises to make inventory management a matter of real-time. This means, the country’s air warriors will eventually be better prepared — and better kitted out for combat.Feature by harichandan Arakali

EVOLVINg A pLATFORm FOR TRANSpARENCy | 56Srikanth Nadhamuni, managing trustee of eGovernments Foundation, on the experience of working with urban local bodies in India, and the challenges in improving the quality of governance therein.Interview by kunal N. Talgeri

content (cont.)

Trendlines | 15 Innovation | Inspired by the Rubik’s Cube

SOA | When Thinking Small Pays Software | The Future of Software Pricing Business Alignment | Finding the Right Metrics Security | Tech Tools to Fight Fraud Applications | Google Maps the Enterprise Book Review | Smart Lessons from the Mavericks WimAX | A Different Stroke Energy | Chilling Data Center Costs

Essential Technology | 59 knowledge management | By Invitation Only By Galen Gruman

Communication | The Real Revolution By Bernard Golden

From the Editor | 4 Who’s your Boss? | Whom a CIO reports to is directly related to IT’s impact in an organization. By Vijay Ramachandran

Inbox | 14

2 6

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

VOl/1 | ISSUE/231 0 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD


ManageMent

President n. bringi Dev

COO louis D’Mello

editOrial

editOr Vijay ramachandran

BureauHead-nOrtH rahul neel Mani

assistanteditOr Harichandan arakali

sPeCialCOrresPOndent balaji narasimhan

seniOrCOrresPOndent Gunjan Trivedi

CHiefCOPYeditOr Kunal n. Talgeri

COPYeditOr Sunil Shah

www.CiO.in

editOrialdireCtOr-Online r. Giridhar

design&PrOduCtiOn

CreativedireCtOr Jayan K narayanan

designers binesh Sreedharan

Vikas Kapoor

anil V.K.

Jinan K. Vijayan

Unnikrishnan a.V.

Sasi bhaskar

Vishwanath Vanjire

Sani Mani

Girish a.V.

MM Shanith

anil T

PC anoop

PHOtOgraPHY Srivatsa Shandilya

PrOduCtiOn T.K. Karunakaran

T.K. Jayadeep

Marketingandsales

generalManager,sales naveen Chand Singh

BrandManager alok anand

Marketing Siddharth Singh

BangalOre Mahantesh Godi

Santosh Malleswara

ashish Kumar

delHi nitin Walia; aveek bhose;

neeraj Puri; anandram b

MuMBai rupesh Sreedharan

nagesh Pai; Swatantra Tiwari

JaPan Tomoko Fujikawa

usa larry arthur; Jo ben-atar

singaPOre Michael Mullaney

uk Shane Hannam

AdverTiser index

All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher. Address requests for customized reprints to IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. IDG Media Private Limited is an IDG (International Data Group) company.

Printed and Published by N Bringi Dev on behalf of IDG Media Private Limited, 10th Floor, Vayudooth Chambers, 15–16, Mahatma Gandhi Road, Bangalore 560 001, India. Editor: Vijay Ramachandran. Printed at Rajhans Enterprises, No. 134, 4th Main Road, Industrial Town, Rajajinagar, Bangalore 560 044, India

3M 13

Canon 63

Epson 5

Freescale 23

Hewlett Packard 3, 16, 17 & 37

Hitachi 21

Intel 11

IBM 64

Mercury 9

Microsoft Gate Fold

Netmagic 25

RIM 2

SAP 35

Wipro Infotech 6 & 7

VOl/1 | ISSUE/231 2 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

anilnadkarni

Head IT, Thomas Cook, [email protected]

arindaMBOse

Head IT, lG Electronics India, [email protected]

arunguPta

Director – Philips Global Infrastructure Services

arvindtawde

VP & CIO, Mahindra & Mahindra, [email protected]

asHisHkuMarCHauHan

advisor, reliance Industries ltd, [email protected]

M.d.agarwal

Chief Manager – IT, bPCl, [email protected]

ManiMulki

VP - IS, Godrej Consumer Products ltd, [email protected]

ManisHCHOksi

VP - IT, asian Paints, [email protected]

neelratan

Executive Director – business Solutions,

Pricewaterhouse Coopers, [email protected]

raJesHuPPal

General Manager – IT, Maruti Udyog, [email protected]

PrOf.r.t.krisHnan

Professor, IIM-bangalore, [email protected]

s.B.Patankar

Director - IS, bombay Stock Exchange, [email protected]

s.gOPalakrisHnan

COO & Head Technology, Infosys Technologies

s_gopalakrishnan @cio.in

s.r.BalasuBraManian

Sr. VP, ISG novasoft, sr_balasubra [email protected]

PrOf.ssadagOPan

Director, IIIT - bangalore. [email protected]

sanJaYsHarMa

Corporate Head Technology Officer, IDbI, [email protected]

dr.sridHarMitta

Managing Director & CTO, e4e labs, [email protected]

sunilguJral

Former VP - Technologies, Wipro Spectramind

[email protected]

unnikrisHnant.M

CTO, Shopper’s Stop ltd, [email protected]

v.BalakrisHnan

CIO, Polaris Software ltd., [email protected]

AdvisorY BoArd


reader feedback

Impacting Social ChangeThe cover story on migration (Aiding Action, CIO, September 15, 2006) was indeed an eye-opener on the need for such an IT system for the not-for-profit sector. And kudos to CIO’s design team for the visual presentation of the article.

ActionAid’s technological architecture — of putting a separate box for applications and a separate one for the Oracle database — impressed me. The article and the editorial rightly indicated that not-for-profit organizations need technology in the process to impact social changes. At CRY, we have started using technology over the past six years, and have benefited by its impact to our mission.

One hopes there will be more articles that focus on the not-for-profit sector — at least every quarter. This will benefit the not-for-profit world in general.ArAvAvA Ind rAmAmurthy

GM-IT, Child Rights And You

the CIO resourcecIO has been a huge source of knowledge for me. I am impressed with the quality of articles. It brings appropriate depth and width to a topic, which would be of interest to CIOs. Peer-to-peer learning is another advantage I have derived through the case studies published in your magazine.SAtAtA ISh PendSe

CIO, Hindustan Construction

cIO is doing a good job of coming up with good and relevant content for the CIO community. I have a suggestion: why don’t you start a column or section for CIOs in the magazine to regularly feature our point of view or experiences as technology decision makers in our organizations? This will definitely benefit the readers a great deal. I would recommend having such a column on a regular basis. v.K. mAgAPu

Director & senior VP (IT & technology

services), Larsen & Toubro

the giant 100The challenge in organizations like Samsung is to provide to the organization robust IT infrastructure and systems that are flexible, yet operational in 24/7 situations (The CIO Giant 100, October 1, 2006).

As a growing organization, the challenge for the IT team is also to synchronize systems with business processes, with changing taxation structures. I always believe that appreciation of our work is a bigger motivation factor for any IT professional than money or technology. And the CIO 100 honor felt simply superb.rAJeSh ChOPrA

GM-ISD, Samsung India

What I learnt from the CIO 100symposium and award ceremony:

Communicate, communicate and communicate.

You need to sell IT, because users will not buy-in on their own. Mobile technology is yet to happen. Adoption will improve when it goes beyond the ‘I-want-one’ phase.New technology will be disruptive. Be prepared.The CIO role will remain safe for the next five years, but will focus less on information and technology, and more on business.

Arun guPtAtAt

Director IT, Philips Electronics India

I am a regular reader of CIO, which offers an interesting read with its thought-provoking content. I like the mix of technology and tech management perspectives. I hope this does not change.

I would also like to recommend that the magazine carry a regular feature on near-future trends of important technology development. For example how the soon-to-be-released Microsoft Vista will impact the security concerns of a CIO and what he should watch out for. Of course, the featured trends or roadmaps should be of the significantly-impacting variety, and should serve much larger purposes than mere version-tracking. SAtAtA ISh JOShI

Executive VP, Patni Computer Systems

What Do You Think?

We welcome your feedback on our articles, apart from your thoughts and suggestions. Write in to [email protected]. Letters may be edited for length or clarity.

editor@c o.in

“The appreciation of our work is a bigger motivating factor for any IT professional

than money or technology.”

Vol/1 | ISSUE/231 4 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

Inbox.indd 14Inbox.indd 14Inbox.indd 14Inbox.indd 14

Inspired by the Rubik’s Cube

n e w * h o t * u n e x p e c t e d

I N N O V A T I O N

Companies resemble puzzles: many pieces must fit together (like staff, products and processes) to produce the desired outcome. When a company fails to solve this, or takes too long, it loses out to craftier competitors. In a new wrinkle,

researchers are striving to help companies improve efficiency by studying the puzzle of all puzzles: the Rubik’s Cube.

Armed with at least 64 microprocessors and 20 terabytes of space, a professor from Northeastern University in Boston will try to do just that—by recording as many states of the Rubik’s Cube as possible. The project may seem like a fascination with

one of the world’s most popular toys gone awry, but it’s actually a complex look at how better operations research could improve a company’s bottom line, says Gene Cooperman, director of the Institute for Complex Scientific Software at Northeastern, who is spearheading the project.

“I’ve never solved a Rubik’s Cube,” Cooperman says. “It’s not one of my personal hobbies. But if you can take the more obscure research and apply it to something the public recognizes, then it’s definitely worth doing.”

Cooperman says the Rubik’s Cube has about 40 quintillion possible states. He believes the 20 terabytes of storage (for which his department was given a Rs 90 lakh grant from the National Science Foundation to aid research projects, including his) will not be enough to record all the states of the Rubik’s Cube. Even so, he says the myriad combinations the research will yield could help businesses make smarter operational decisions, like planning more efficient employee travel schedules.

—By C.G. Lynch

When Thinking Small Pays

Ill

us

tr

at

Ill

us

tr

at

Ion

by

MM

sh

an

Ith

REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 1 5Vol/1 | IssuE/23

S O A Companies that have achieved early success with service-oriented architectures (soa) focused first on small, incremental projects that show immediate returns to the business, as the It operations group at Munich-based t operations group at Munich-based tsiemens has demonstrated.

the It team focused its initial soa project first on automating and streamlining the processes for fulfilling internal requests to It for new equipment, passwords and the like, said thomas buse, section manager of concepts and processes, siemens, at the recent Microsoft soa and business

Process Conference in redmond. once users from various departments started using that system for new workers, they asked It to similarly automate and improve the processes in their departments, he said. by reusing existing services to create new ones, he asserted, “we can really save money.”

by leveraging soa to reuse common corporate services, siemens has cut the time required to implement new processes by 83 percent, said buse. now, the company releases four to eight new business processes to run on its soa every six to 12 weeks.

tracy tracy t leGrand, chief architect and vice president of technology, strategy and architecture at ameriprise Financial, also described soa as a “journey that has incremental benefits.” ameriprise began building a limited-focus soa in 2000, long soa in 2000, long soabefore the company was spun off from american Express Co. in 2005.

“We chose to implement soa as a course of doing business,” leGrand said. “We focused on the key services we needed to support the business strategy of being more nimble and reliable, and a quicker time to market.”

— by heather havenstein

Trendlines.indd 15Trendlines.indd 15Trendlines.indd 15Trendlines.indd 15Trendlines.indd 15Trendlines.indd 15 10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM10/16/2006 9:43:03 PM

Tr

eN

dl

INe

S

S O F T W A r e the growing popularity of server chips with multiple microprocessor cores continues to muddy the waters of software pricing: CIos should start planning now for changes and perhaps some uncertainty in their software budgets.

Enterprise software vendors have traditionally priced software per processor. but now that some server processors have two cores (and soon will have four cores, followed by 8- and 16-core versions), one processor delivers the power and speed of several. that means customers will purchase servers with fewer processors to handle bigger workloads — and software vendors won’t make as much money, if software continues to be priced traditionally.

to compensate, Ito compensate, It bM recently announced it will begin charging for software based on how fast it runs, not the number of processor cores on which it’s running. as the basis for this model, it created a new license pricing unit called the ‘processor value unit‘. however, Microsoft hasn’t hopped on this train yet. It will continue to charge per processor for software, not per core or using a performance-based method.

Forrester research analyst Julie Giera says she expects to see not only confusion, but also frustration among customers in the next six to 12 months as software pricing continues to be “fluid” due to the growing prevalence of dual-core and multicore servers. as the software pricing changes begin to take effect, CIos should start new consolidation projects with care since they may not be as cost-effective, she adds. “server consolidation projects that may have generated 20-25 percent savings six months ago may not be generating those same kinds of saving in the next six to 12 months,” she says.

you may also need to rework your calendar.you may also need to rework your calendar.y

— by Elizabeth Montalbano

What's Roiling the Pricing Waters?

Vol/1 | IssuE/231 8 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

FIndIng the Right

MetRiCsB U S I N e S S A l I G N M e N T If your IT metrics do not align closely with business goals, you’re less likely to achieve top performance. Yet, CIOs struggle to fashion achieve top performance. Yet, CIOs struggle to fashion those metrics: a recent global survey of 150 CIOs by those metrics: a recent global survey of 150 CIOs by Accenture found that top performers base IT investment decisions on their ability to drive the business forward, but few companies have created the metrics to help them do it. Seventy-five percent of companies surveyed recognize the need for such metrics, but only 33 percent currently use them, the consultancy found.

The high turnover rate among CIOs contributes to the problem, says Frank Modruson, currently in his fourth year as CIO of Accenture. “IT takes time to change, and if the leader is changing too frequently, it’s hard to successfully implement a program,” he says.

Modruson says that CIOs must create metrics that show the business how IT is meeting its needs, in “digestible and understandable” terms.

Measure IT’s overall performance using a scorecard, he suggests. This should cover IT’s contribution to the business, project sponsor and employee satisfaction, and IT spending on operating costs versus new technology investments.

Another best practice: create a business case for each IT initiative, highlighting costs, benefits and business processes to be affected, he says. Then IT needs to report on the initiative. At Accenture, Modruson’s IT team measures the results of a project for three years after completion, highlighting achievements and pointing out hard and soft benefits. “This shows us where IT is strong, where it is weak and where [we] should be investing,” he says.

The highest-performing companies in the study (as measured by 33 criteria such as effectiveness of skills management and leadership in technology innovation) were more willing to invest in new technologies, such as SOA and Web portals. They were also more likely to throw out rather than tweak applications that didn’t meet business needs, Modruson says.

—By Katherine Walsh

Ill

us

tr

at

Ion

by

MM

sh

an

Ith

TTr

er

eNN

dl

dl

ININee

SS

A P P l I C A T I O N S Enterprises looking to put a visual spin on their information systems can now turn to Google Maps. Speaking at a Unix Users Group conference, Google Australia’s head of engineering Lars Google Australia’s head of engineering Lars Rasmussen said Google Maps has attracted Rasmussen said Google Maps has attracted thousands of ‘mash up’ applications that thousands of ‘mash up’ applications that use the free Web service API to integrate third-party information.

One of Rasmussen’s favorites is the Seattle Bus Monster, which displays the live

location of buses, the location of bus stops, and estimated waiting times of buses on their routes around Seattle. SMS messages can also be sent to a phone informing people when a bus is arriving.

Many of the so-called ‘mash ups’ are using the free API, which is a free beta service available for any Web site that consumers can access without charge, according to Google. Rasmussen said the company has also released an enterprise

version of the API, because “a lot of people asked if they could pay money for it.” Google Maps for Enterprise was created for the maps API to be used on an intranet or in a non-publicly accessible application. The enterprise API comes with a guarantee of uptime and support from Google.

Rasmussen, one of the original creators of Google Maps, said when the company decided it was worth doing, his team didn’t have to argue over how much money it would cost because the idea was consistent with the philosophy of “if you can find large numbers of people to use something you can make money out of it.”

— By Rodney Gedda

Technology description Utility

hologramsovert (used since 1980s)

stickers or labels with complex 3-D images, which are difficult to

replicate.

In the retail, pharma, financial services and government sectors.

optically variable inksovert (1980s)

Inks are made to shift color when viewed from different angles

Documents such as currency, passports,

tax stamps and product security.

Microlenticular technologyovert (new)

a micro-engineered plastic screen is a micro-engineered plastic screen is alaminated over microprinting. When you look through it, a moving image is formed that can be produced only

with this technology.

Currency. Dietrich predicts it will migrate into product security. the owner of this technology has licensed it to Crane & Co., producers

of paper used for uscurrency, but plans to

expand.

Special inksCovert (1980s)

Inks change color when exposed to uV or infrared light.

thermochromic inks change color when they come in contact

with heat.

a wide variety of government documents.

also used on security labels and some corporate

documents.

RFIdCovert (invented in 1940s; recently used for security)

rFID tags are scanned to track a product’s movement through

the supply chain and establish its provenance for authenticity.

a system that the FDa is pushing for drug retailers and distributors to have

by 2007. but the cost is delaying widespread

adoption.

nanomarkersCovert (new)

special nano-engineered particles are embossed into a product,

placing a bar code that is readable via an electron microscope.

the pharmaceutical industry. It is testing nano-embossing on

individual tablets for some medications.

S e C U r I T Y In 1739, benjamin Franklin, then a Philadelphia printer with a colonial government contract, intentionally misspelled Pennsylvania on the currency his house printed in order to battle counterfeiters. as the smithsonian Institution tells it, Franklin reasoned that a counterfeiter would correct the spelling to make a bill look legitimate.

today, manufacturers use both overt and today, manufacturers use both overt and tcovert technologies to provide a multi-layered approach to security. Ed Dietrich, director for the americas at reconnaissance International and a newsletter publisher and consultant on authentication techniques, provides us with a primer on the state of anti-counterfeiting technology development and use.

— by Daintry Duffy

Tech Tools for Fraud for Fraud for Fraud for Fraud for Fraud for Fraud for Fraud for Fraud for Fraud for Fraud FightersFightersFightersFightersFightersFightersFightersFightersFightersFighters

REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 1 9Vol/1 | IssuE/23

FIndIng the Right

MetRiCs

Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19Trendlines.indd 19

Tr

eN

dl

INe

S

B O O K r e V I e W Companies content to be just a little better than the competition may fade into mediocrity. That’s the warning from William C. Taylor and Polly LaBarre in their new book, Mavericks at Work. Companies defining not only best practices but also a set of next practices will be the ones that shine in an overcrowded, ultra-competitive marketplace, say the authors (both original members of Fast Company’s editorial team).

After spending nearly two years visiting 32 maverick firms,

the authors have lessons to share in four key areas: rethinking competition, reinventing innovation, reconnecting with customers and redesigning the workplace. Despite differing greatly in terms of size, revenue and business models, the companies profiled share a ‘usual-isn’t-good-enough’ mind-set. For example, these mavericks provide compelling reasons for customers to choose them. One maverick idea that CIOs might apply is the concept of ‘open-source innovation’: when you’re stuck on a business problem,

consider turning to the outside world for help instead of trying to force a solution internally. The authors present the case study of mining company Goldcorp, which shared proprietary data in a Web-based contest seeking solutions on where to drill for gold with great success.

Also informative for CIOs: mavericks buck traditional ideas regarding hiring and recruiting. They hire with the notion that character outweighs credentials. And they don’t wait for good people to contact them. They look for those who fit, and

consider it a bonus to recruit them from rivals.

Ultimately, Mavericks at Work poses a challenge: Is status quo good enough for your company, or will you find a way to be at the forefront of business leadership? CIOs charged with driving new lines of revenue could find insight in this book — and value in answering the key questions it presents.

— By Cathy Mallen

Smart Lessons from the Mavericksthirty-two free-thinking companies share secrets on problem-solving, recruiting and more.

Mavericks at Work: Why the Most Original Minds in Business WinBy William C. taylor and Polly LaBarretaylor and Polly LaBarretharperCollins, 2006, Rs. 1,597.50

A different Stroke

Vol/1 | IssuE/232 0 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

W I M A X Hanna, Alberta, has 2,996 people, 16 restaurants, 10 churches, seven motels, and six WiMAX towers. This rural farming town about two hours northeast of Calgary, adrift on Canada’s ocean of ‘short grass country’ is on the cutting-edge of fixed broadband wireless deployment in North America.deployment in North America.

At the recent WiMAX World conference in Boston, multimillion-dollar chip vendors, equipment builders, carriers and network providers promised to do what a tiny start-up, Netago Wireless has already begun in Hanna: deploying Nortel base stations and customer premises

gear (called subscriber stations) with radios based on the IEEE 802.16d fixed WiMAX standard.

Netago’s plan and early experience suggests the future development of fixed WiMAX in much of North America: affordable, multi-gigabit data services in areas where alternative technologies such as fiber-optic networks and 3G wireless are lacking, inferior or costly.

In 2005, Netago provided a data connection via proprietary radio gear as a stopgap until the IEEE standard was finalized and vendors began delivering WiMAX gear. Terry Duchcherer, founder and president of Netago,

wanted a radio technology that made use of licensed spectrum, in this case the 3.5-GHz band. The WiMAX standard can use numerous different licensed and unlicensed bands. “Moving from and unlicensed bands. “Moving from unlicensed proprietary equipment to unlicensed proprietary equipment to licensed WiMAX removes all [potential] licensed WiMAX removes all [potential] interference issues for us,” he says. interference issues for us,” he says. Radio users, whether rival carriers or private enterprise, “just plain are not allowed to use our spectrum,” he says.

— By John Cox

Show Them the MoneyIt’s time to position your IT organization as a profit center. Here’s how.

For years now, CIOs have been hard at work consolidating data centers, systems and software licenses. We’ve saved our companies millions. But as the saying goes, “You can’t save your way

to greatness.” Greatness in business requires making money. And so we need to change our thinking about what

IT contributes to an organization. We’re used to viewing computing as a back-office function — a cost center. But we have to turn it into a profit center. We need to ask ourselves what we can do with IT that our customers will pay for.

CIOs must exercise leadership here because IT is becoming central to how companies make money in our global economy. While important for all CIOs, it’s particularly essential for CIOs at mid-market companies, where survival depends on finding new revenue opportunities.

Think Like a SalespersonUsing IT to make money means getting close to your sales force and helping them sell more of your company’s products. It’s that simple. But it takes commitment to shift from a money-saving to a money-making frame of mind.

The first thing to do is delegate cost cutting to some of those very competent people who report to you. Lay out any remaining money-saving plans you may have, encourage your team to develop their own ideas and let them run. Stay informed, but leave the daily decision making to them. Now, you have cleared your desk and can focus on making money.

Next, get to know your company’s salespeople, the products and services they sell, and the customers who buy these products. Go on sales calls. Take note of how the salespeople

Mike Hugos TOTAL LEADERSHIP


Coloumn - Show Them the Money.i22 22 10/16/2006 8:42:24 PM

talk about products and the questions that customers ask. Concentrate on what customers like and don’t like about your products. Find out what your competitors are doing. How do their products and prices compare with yours?

Now ask yourself, what will make the products your company sells more attractive? How can IT improve the things customers like and eliminate those that they don’t like? As you ponder over these questions, remember that all products have two components. The first component is the basic product or service itself. The second component is the information that surrounds the product. This information is what enables customers to search for and select your product, understand how to use it, and get the results and benefits they want from it.

Most products quickly become commodities because your competitors have similar products, and the prices you can charge for them get ratcheted down. This makes the information component more valuable. Through creative use of the information component, you can wrap any commodity product with a mix of value-added services that make it more useful, and for which customers will pay. Let’s say your company sells electrical wire to building contractors. You can increase the value of the wire by collecting information about the builders’ needs. You can use this information to offer wire pre-cut into the lengths customers require, to splice specified plug connectors onto each end and to deliver the wire to job sites right when it is needed. Your company can charge builders extra for these services.

Because value-added services are information based, the CIO is a key enabler of them. CIOs are best equipped to design ways to collect information about customer needs. And, you understand best how to present this information to the people in your company who deliver new services to customers.

The Value-Added Paper CupFor six years, I had been the CIO of Network Services, a mid-market distributor of food-service disposables and janitorial supplies for restaurant chains, property managers and grocery stores. We’re talking paper cups, plastic forks, paper towels and floor wax. A paper cup is a commodity product if there ever was one. What do you suppose is the profit margin on a paper cup? The answer is not much, and it gets lower every year. So the challenge was to use IT to make those paper cups more valuable. (Network Services was honored with a 2006 CIO 100 Award.)

Here’s how we did it. In collaboration with the company’s sales, customer service and finance organizations, we devised a menu of value-added services that salespeople could mix and match to meet specific customer needs. We made it very easy and convenient for customers to find and

order our cups by providing an online product catalog that let them search on many different product parameters. We also set up the catalog to remind them to order other items that normally go along with cups, like lids and sleeves.

We let customers place and track their orders online, so they could know when their supplies would be delivered. We also created customized labels so that when cups were delivered, customers could quickly receive, store and retrieve them.

We enhanced our billing system to streamline the processing of invoices by customers and reduce their costs of doing business with us. We sent invoices in whatever format

customers wanted, so they could automatically import them into their accounts payable systems. We even pre-processed invoices, inserting customers’ general ledger codes into every line item on invoices. Those costs could thereby be automatically disbursed to their general ledger systems.

Finally, we provided customers with easy-to-use Web-based reporting that lets them see how many cups they ordered at each of their ordering locations over any period of time from one day to two years. They could monitor their spending and get detailed data for planning and budgeting, along with real-time insight into usage patterns and purchasing trends.

In short, we turned our products into tailored solutions that solved important problems for our customers. And therefore, we could sell our paper cups for a few percentage points more than our competitors.

Every company has its equivalent of the paper cup. Figure out how you can leverage the information about the products your company sells, and how you can use IT to deliver a customized mix of services that enhances those products. You will then earn the right to call your IT organization a profit center. You can take that straight to the bottom line. CIO

Mike Hugos is the former CIO of Network Services and the

author of two books, Building the Real-Time Enterprise

and Essentials of Supply Chain Management. Send

feedback on this column to [email protected]

Using IT to make money means getting close to your sales force and helping them sell more of your company’s products. It’s that simple.

Mike Hugos TOTAL LEADERSHIP


Coloumn - Show Them the Money.i24 24 10/16/2006 8:42:24 PM

The Right QuestionIf perception helps define reality, then asking your customers how they perceive IT innovation is a simple and inexpensive way to focus your efforts.

I f you really want to know how innovative your IT shop is, don’t bother benchmarking your competition or retaining consultants: just ask your colleagues and customers. The question is simple. The answers will surprise you.

“What’s the most innovative thing you think IT is doing for you?” Just ask. It’s not expensive. The best reason for asking: you’ll quickly learn how critical stakeholders see — and don’t see — your IT organization’s innovation ‘brand’. You’ll also gain a quick insight into how they define innovation — or if they even care about it at all. A shrug of the shoulders matched by a glazed look of annoyance is not uncommon. Hopefully, that’s not how your CEO or CFO reacts.

Then again, they may not care as much about innovation as you do.

Because IT wants to be customer-centric and future-focused, we’re often too quick to ask, “What do you want IT to do for you?” That’s not a bad question, but it’s one that’s sure to set false expectations. CIOs had first better grasp where internal perceptions are rather than selling where they’d like them to be. Getting to where you want to go depends on it.

Too many employees, for example, don’t associate IT with genuine business innovation. They think of technical upgrades and enhancements. That perception effectively brands internal IT innovation as ‘geeky’ and ‘techy’. That’s bad brand positioning for a CIO who wants to help an enterprise grow.

It’s not surprising that different parts of the enterprise define innovation differently than IT does. The surprise — and disappointment — comes from hearing so many of your peers and their subordinates define IT innovation initiatives in ways that make what you’re doing seem incidental, inconsequential or

Michael Schrage IT’S ALL ABOUT THE EXECUTION


Coloumn - The Right Question.in26 26 10/16/2006 8:43:43 PM

taken-for-granted. CIOs need to hear those answers. I have heard responses ranging from “the most innovative thing IT does for us has been cutting our downtime in half” to “runs the website” to “implemented a CRM we actually use” to bursts of cynical laughter. Are you confident you know how that question will be answered both inside your organization and out?

Why Users Know BestThe simple beauty of simple questions is that they frequently yield simple insights that matter. One Fortune 100 CIO who casually but consistently asked employees to name the most innovative thing IT was doing was consistently referred to the help desk. He discovered that, in addition to answering technical questions, this help desk had made a follow-up practice of e-mailing URLs of sites that would further explain to users how to get more value from their machines.

That simple — and cheap — innovation prompted the CIO to partner IT with HR. They set up a pilot program to send targeted URLs to employees with questions and concerns about health care, educational programs and personal-day policies, and it tested well. The CIO cleverly leveraged an existing internal perception of an innovative IT practice to make his department more visible and more valuable.

This approach can lead to revenue-generating ideas as well. For example, an airline CIO learned that his online customers thought the most innovative thing the airline did on its website was the seat selector map. That got the CIO thinking whether the site should offer people the opportunity to pay more to get ‘better’ seats. That’s an easy Internet experiment to run: would individuals pay an extra Rs 675 or Rs 900 for an aisle or exit row seat on a four-hour flight? Like the e-mailed URLs, this idea cleverly played into what IT was already seen as doing innovatively and successfully.

How to Build the Innovation BrandCIOs can better build IT’s innovation brand by explicitly linking it to their customers’ perceptions of innovation. You build your innovation brand not by doing things you think are more innovative, but by doing those things your customers and colleagues find more innovative. How will you know this? Because they’ll both tell you and show you. They’ll effectively explain how e-mailed URLs and seat maps can become innovation springboards for IT.

The hard problems materialize when IT’s internal and external clients can’t answer the simple question. They don’t know, don’t care or simply take for granted what IT does for them. Even worse, they understand the question perfectly but genuinely believe that IT is not an innovation partner or supplier. What should CIOs do then?

The best answer is: take ownership. In the spirit of turning a bug into a feature, I’ve seen CIOs successfully exploit the total absence of their shop’s innovation brand by personally going out to the business units to learn how they defined innovation. The CIOs, out of their own budgets, had a SWAT team of trusted lieutenants present IT-enabled innovation ideas to key business units, then ask them what seemed like valuable innovations to them. These CIOs were savvy enough to recognize that ‘supporting the business’ was no longer enough; IT’s role in ‘supporting the business’s innovation agenda’ also had to be explicit.

Of course, CIOs can also boost IT’s innovation brand by successfully exporting their own innovations. At one Fortune 200 company, the CIO informally asked his people what they thought was the most innovative thing IT was doing. To a person, they declared that their extreme/agile programming effort was an innovation initiative they really liked. This CIO immediately had a couple of his lieutenants scout for XP project opportunities in business units that wanted a new, more agile way of working with IT. The methodology became a platform for collaborative innovation.

There is no way a CIO can be an innovation leader without a real grasp of how IT’s innovation brand is perceived. More importantly, there is no way that IT can successfully become an innovation leader unless it learns how its internal and external customers define what’s innovative. While there are many detailed, comprehensive and expensive ways to determine these things, simple questions sincerely asked offer a lot of bang for the buck.

Instead of asking, “Are we doing a good job for you?’ or “Do you think you’re getting a good value for your time and money?” CIOs need to ask the business users a few simple questions about what IT does for them when they try to innovate. While perception surely isn’t reality, it’s where reality starts. It’s where innovation begins too. CIO

Michael Schrage is co-director of the MIT Media Lab’s

eMarkets Initiative. Send feedback on this column to

[email protected]

There is no way that IT can successfully become an innovation leader unless it learns how its internal and external customers define what’s innovative.

Michael Schrage IT’S ALL ABOUT THE EXECUTION

REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 2 7Vol/1 | ISSUE/23

Coloumn - The Right Question.in27 27 10/16/2006 8:43:44 PM

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

Doingwith LessMore

By L eo n e r L a n g e r

Cover Story.indd 28Cover Story.indd 28Cover Story.indd 28Cover Story.indd 28Cover Story.indd 28Cover Story.indd 28Cover Story.indd 28 10/16/2006 8:55:15 PM10/16/2006 8:55:15 PM10/16/2006 8:55:15 PM10/16/2006 8:55:15 PM

Virtualization has gone mainstream. According to The Yankee Group’s 2006 Global Server Virtualization Survey of 750 businesses, 62 percent said they already had a virtualization solution in place or were in the process of migrating to one. Only 4 percent did not have plans to tap server virtualization.

Given the technology’s upside, it’s easy to see why. Virtualization divides a physical server into virtual machines, each of which runs an isolated operating environment and applications. It means less hardware, reduced overhead costs, and extended datacenter life. Provisioning a new server simply by loading a virtualized image onto existing hardware not only saves IT money but makes the business more agile.

Make no mistake; this is a relatively young technology. The market offers multiple solutions, but few standards. Customers say that it works as advertised and is not difficult to implement, but efficient management and migration remain challenges. Nor is virtualization appropriate for every application. Applications that hog I/O and memory resources, such as large database deployments are often not good candidates for sharing server hardware with other applications, even virtually.

Customers that have taken the plunge are typically in the early phases: after initial testing, applications are virtualized gradually as servers are retired, applications are upgraded, or IT moves toward a service-delivery model. Despite a cautious start, however, the common theme among these customers is great enthusiasm for the benefits virtualization brings.

Although server virtualization technologies are still maturing, early customers see real benefits.

Reader ROI:

How server virtualization isgood for costs and scaling up

What you can and cannotvirtualize

Server virtualizationchallenges

Doingwith LessMore

ILL

us

tr

at

Ion

by

PC

an

oo

P

Cover Story | Server Virtualization

10/16/2006 8:55:17 PM10/16/2006 8:55:17 PM10/16/2006 8:55:17 PM

A Lot Less HardwareOne of the key incentives driving virtualization is a desire to reduce server hardware costs, both for limiting new purchases and reducing the total portfolio of equipment in the datacenter. For Capital One, a diversified global financial services company, virtualization provides a key component of a three-year IT consolidation strategy and transformation to an on-demand service delivery organization.

“In the past, our businesses owned their hardware and applications and had them configured to individual specific requirements,” says Lee Congdon, managing VP of corporate technology at Capital One. “We ended up with everything, including Unisys, Tandems, Suns and AS/400s. On the software side, we were running Novell NetWare, old versions of [Windows] NT, and Windows 2000.”

To tame this unwieldy environment, Capital One began using VMware ESX Server to pack multiple server environments on fewer, more powerful physical servers. Rather than dedicating servers to each unit, business users are increasingly assigned smaller shares of more powerful processors. “We currently have about 150 server instances running on 17 physical servers,” Congdon says. And rather than giving each business its own applications, Capital One has consolidated to five IT-approved platforms. The business units simply buy services, such as knowledge or content management, often unaware of the platform they’re using.

Similarly, Citrix is in the early stages of consolidating 15 racks of 200 out-of-warranty servers to just two racks, or a total of 10 HP ProLiant DL585 four-way, dual-core Opteron servers, using Microsoft Virtual Server 2005 R2. “We’ll be saving Rs 4 lakh a month in power costs and huge amounts in network port and cabling costs,” says Dimitri Mundarain, Citrix’s manager of datacenter operations. Why Microsoft? “VMware’s ESX Server is more technically advanced and has a better management console, but would be much more expensive in licensing and training costs. Our datacenter runs on Windows, and we like the fact that MS Virtual Server uses the same type of interface.”

For other organizations, virtualization essentially extends the life of datacenters that are close to capacity. “We were run-ning out of air- and power-conditioning capacity, which are expensive to scale,” says Neal Tisdale, VP of software devel-

opment at NewEn-ergy Associates, a software and energy consulting company. NewEn-ergy used a combi-nation of VMware GSX Server and Solaris Containers to consolidate its server hardware. The datacenter

now runs 19 degrees cooler with no cooling upgrade, Tisdale says; and if the power fails, its batteries can keep it up for days, rather than hours, thanks to the reduced server power load.

Packing Them InHand-in-hand with hardware consolidation comes increased utilization of server resources. Before virtualization, IT would limit each physical server to a single application and operating environment, because multiple applications tend to conflict with one another. The result was often server sprawl and inefficient use of server resources. Congdon says running multiple virtual operating environments on each server has increased server utilization at Capital One from an average of 30 percent to as much as 80 percent.

After monitoring his VMware environment for two weeks, Tisdale found that he could pack many more virtual servers onto a physical server than he originally thought — in the high teens and low twenties, rather than seven or nine. “Users generally overestimate how much they’re using a server, and the software vendors are conservative in estimating the memory needs of their applications,” he says.

Virtualization consumes its own server resources, which can take its toll on application performance, but users say that the overhead is offset by running applications on more powerful servers and taking advantage of VM portability. Congdon says general response times have improved now that his applications are sharing much more powerful server hardware.

When application performance declines due to an overburdened server, Next Financial, a securities broker/dealer, simply moves the virtual application to a less busy server. “You shut down the virtual machine, move its disk on the SAN from one LUN (Logical Unit Number) to another on the SAN, re-attach it on the new host, configure the VM, and launch,” says CTO Ismael Carlo. (The company isn’t using VMware’s VMotion management product, which can actually move VMs around on the fly without any downtime.)

Another benefit of virtualization is reduced network utilization. “If two [virtual] servers on the same box talk to each other a lot, you’re actually offloading network traffic,” says Tisdale, who claims that performance gains from more powerful servers and virtual network connections overshadow VMware GSX Server’s overhead of 7-10 percent.

Provisioning a Mixed BagManaging a virtual environment is two-sided. On the plus side, quickly provisioning new servers by loading virtual images onto existing hardware produces savings in IT staff time and resources, not to mention improved business agility.For example, Mornay Van Der Walt, VP and systems architect at Ixis Capital Markets, a global financial services company, estimates that virtualization has reduced the time it takes to provision a new server to as little as five hours in the virtual world, from as long as 17 days for procuring and building a


Virtualization Gotchas

Increased datacenter complexity

Physical-to-virtual migration can be difficult

Management tools are still immature

backup and recovery can be challenging

Hardware failure has greater impact

VoL/1 | IssuE/233 0 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

Cover Story.indd 30 10/16/2006 8:55:17 PM

new server in the physical world. Associated labor costs have dropped 80 percent.

Management savings can also come from upgrading to more capable servers. For example, NewEnergy’s Tisdale claims there were significant administrative cost savings from upgrading to higher-end servers with advanced lights-out management tools. And, of course, virtualization reduces the number of physical servers to monitor. Migrating current applications and data from the physical to the virtual w orld is more of a mixed story, however.

Capital One’s Congdon used VMware’s P2VAssistant tools and found them to be sufficient. “There were very few technical migration issues,” he says, “though there were a few cases, particularly when we wanted a really clean installation, in which we ended up building the server instance and re-installing the applications manually.”

Lukas Loesche, director of IT operations at German mobile content provider Arvato Mobile, had an even better experience with SWsoft’s Virtuozzo. “Virtuozzo 3.0 has a [physical-to-virtual] migration wizard that's absolutely flawless,” he says.

Other users, particularly those performing large-scale migrations, may find the initial provisioning phase hard. An option is to try third-party migration tools, like those from PlateSpin and LeoStream, which automate large numbers of physical-to-virtual migrations from a single console. Tisdale found PlateSpin’s automation tools to be a real time-saver, but Citrix’s Mundarain thought they didn't work well for every app, and that despite advanced tools, he had to resort sometimes to rebuilding the OS and applications from scratch.

Management HurdlesOther issues arise when managing the virtual i n f r a s t r u c t u r e i t s e l f . Management tools offered by vendors tend to be works in progress. For example, Ixis’ Van Der Walt has found managing remote servers with VMware’s Virtual Center management platform to be problematic. “VMware manages local infrastructure well, but you usually have to have a VirtualCenter Server at

each datacenter. I’d like to manage the whole infrastructure with one server,” he says.

Computer Sciences Corp. (CSC) also found that backing up virtualized physical servers to tape had its challenges. “It came down to whether we should use traditional backup for each virtual server or use VMware’s tools and back up virtual machines as files,” says John Macioci, partner and deputy CIO of CSC. The company found VMware’s tools overly complex and settled on traditional backup solutions from Veritas, treating each virtual machine as an individual server.

And even when the physical server load is reduced, you still have all those virtual servers to monitor and patch. This is where host-based virtualization platforms, such as Solaris Containers or Virtuozzo, have advantages. “Since all the VM file systems are accessible from the hardware node, you can update them all with one small script,” Loesche says. The drawbacks, compared with hardware emulation systems such as VMware’s ESX Server and Microsoft’s Virtual Server 2005, are that you can’t mix different operating systems on one hardware node, and if a bug crashes the kernel, the entire server crashes.


REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 3 1VoL/1 | IssuE/23

The Physical Mirrored in the Virtual

Domain controller 2

Web server

Database server 1

Domain controller 1

Documen-tum server

Front-end mail server

Back-end mail server 2


Application server

File-share server

Database server 2

VM server 1 VM server 2 VM server 3



Front-end mail server

Domain controller 1

Domain controller 2

File-share serverWeb server

Documen-tum server

Application server

Database server 2

Database server 1

Home-office physical servers Collocation physical servers

San VMware images

Inf

og

ra

PH

ICs

: VIk

as

ka

Po

or

to ensure business continuance, next financial replicates 11 physical servers to virtual machines hosted on just three physical servers at a co-location facility. the VM images are stored in a san for greater reliability.


Hardware failure is an issue with virtualization — one failed physical server can bring down all resident virtual servers. But if you can detect failures before they happen, you can quickly move a virtual machine to new server hardware.

“You may see some performance degradation, but at least you can keep processes running,” Congdon says. “Then you can add hardware back to the pool seamlessly without taking all those applications down when you configure the new systems.”

Less Obvious BenefitsAside from simple datacenter consolidation, virtualization can have a multitude of other benefits. For example, CSC uses VMware ESX Server and Solaris Containers to store and run multiple customer demonstration environments on a single physical server. “We store several versions of our

ERP suites and have five or six instances of each for different client situations,” CSC’s Macioci says. “We simply turn them on and off when we need them and can run 15 to 20 different demo environments concurrently.”

Next Financial has made advanced business continuity affordable by replicating 11 physical servers at its primary site to three physical servers with 11 virtual machines at a collocation facility. Leftover processing power is used as a primary Web server and application server farm for sales force field applications. “It would have been expensive to have duplicate servers doing nothing most of the time,” Carlo says.

Arvato Mobile uses Virtuozzo to isolate multiple development environments on its servers to prevent any one project from accidentally overwriting the files of another. “We can create a quick virtual backup, making a roll back easy,” Loesche says.

And NewEnergy uses Solaris Containers to isolate and run hundreds of simultaneous Monte Carlo simulations across its Sun N1 Grid of Sun Fire X4100s with minimal need for software changes.

There’s little doubt that server virtualization has a promising future. It works, the benefits are real, and its savings can be dramatic. For it to take off, however, migration and management tools need to mature — remote management in particular. Virtualization standards too need to be developed that will allow different virtual platforms to be managed together across the network. VMware has been working with AMD and Intel, among others, to deliver open standards, but the effort will take time. All the same, for targeted implementations aimed at solving specific business or IT issues, server virtualization makes a lot of sense today. CIO

Sendfeedbackonthisfeatureto

[email protected]


server virtualization is an efficient way to save on server hardware costs, real estate,

and management resources, but it isn’t the only way. Just ask the folks at avanade, a systems integrator specializing in Microsoft solutions. for one government customer, avanade had originally designed hundreds of sQL servers in highly available MsCs (Microsoft Cluster server) clusters, but the system was spiraling out of control.

“We had roughly 50 percent of the sQL server nodes acting in a passive capacity,” says David k. Miller, avanade’s director of technology and infrastructure in the uk. “this was a potentially huge expenditure in server hardware, rack space, network and storage infrastructure. and we still had to monitor and patch them all.”

to reduce both its hardware and database software costs, avanade turned to Polyserve Database utility for sQL server, which is based on the company’s Matrix server virtualization technology. as opposed to traditional server virtualization, Polyserve uses a symmetrical cluster file system to allow all servers in a cluster to see all the data within the Windows file system, creating a single, virtualized storage and server pool. Previously, some instances of sQL server might have used only 10 percent of their available storage, whereas others were bursting at the seams and would need to be taken offline to expand their storage. sharing the storage pool improves overall storage

utilization, while still giving the performance benefits of dedicated servers.

Polyserve also gave Miller more hardware flexibility. “unlike with MsCs, all the nodes in the cluster don’t have to be identical, so we had the option to mix two-way, four-way, and eight-way servers in the same cluster,” he says. “this would allow us to move an instance of a sQL server from a two-node to an eight-node server for heavy overnight batch processing, while moving the off-peak online traffic from the eight-way to a four-way or two-way server at the same time, then moving them back the next morning.”

Polyserve’s ‘dynamic re-hosting’ feature can move sQL server instances from server to server in seconds. It also allows every server in a cluster of as many as 16 nodes, active or passive, to act as a fail-over target for every other server. Compared with MsCs, which limits a cluster to eight nodes, Miller estimates that Polyserve’s approach has reduced the number of passive nodes by 80 percent across the enterprise.

“server virtualization was not the answer for us, as the processing requirements of our sQL server deployments really required us to put them on their own physical platforms,” Miller says.“Polyserve’s product allowed us to reduce the number of physical servers by reducing the number of passive nodes.”

— L.E.

Virtualized Databases: An Alternative Solution



Managing PCs has always been painful, but the job has gotten nastier thanks to an endless parade of application upgrades, OS patches, and anti-threat updates. Even with network-based installation and patch management tools to ease the burden, IT spends too much time at the PC itself, dealing with issues involving personal software, multiple versions of Java or ActiveX controls, driver or DLL conflicts, malware infections, misconfigured hardware, and more.

The promise of desktop virtualization technology is to centralize applications at the datacenter to make them easier to manage and provision — stretching hardware resources and keeping nagging software conflicts to a minimum in the bargain. In some cases, the same technology helps accomplish all three, bringing greater control and flexibility to IT without users mourning the loss of ‘their’beloved desktops.

By g a L e n g r u M a n

Virtualization can reduce the time and expense of managing desktops by a magnitude. But the choice of technologies and approaches is downright dizzying.

REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 3 3VoL/1 | IssuE/23

Making PCsManageable

ILL

us

tr

at

Ion

by

PC

an

oo

P

10/16/2006 8:55:24 PM10/16/2006 8:55:24 PM10/16/2006 8:55:24 PM10/16/2006 8:55:24 PM

Cover Story | Desktop Virtualization

At first blush, desktop virtualization sounds a lot like terminal services such as those provided by Citrix Systems, where servers run the applications and give users remote access. All the user’s terminal or PC does is present the updated screen display and permit input via keyboard and mouse.

Desktop virtualization, on the other hand, is a new way of delivering the individual PC environment that white-collar workers demand and love. In essence, servers host an entire desktop environment specific to each user.

The early versions of desktop virtualization were blade servers such as those offered by ClearCube Technology and IBM, which simply moved the processing guts of a PC to the datacenter and left the input and display at the user’s desk. But the latest versions use the PC at the user’s desk for much of the processing. Dubbed ‘desktop streaming’, this approach retains the benefits of central management without throwing away the desktop’s power. The needed code is streamed to disk and memory cache for just that session, ensuring that there’s nothing for the user to mess up or alter.

A few providers go beyond desktop streaming to application streaming, where IT can send out the runtime cache for individual apps as needed. This reduces the number of unique user images to maintain and provides better insight into which application licenses are really needed.

Building a Better Thin ClientThe greatest benefit of desktop virtualization is the ability to provision PCs and other client devices with software from a central location. IT can manage a large number of enterprise clients from the datacenter, rather than at each user’s desk, thus reducing on-site support and increasing control of application and patch management.

At its simplest, virtualization on the application server side reduces hardware costs by letting one server provision multiple desktop clients, rather than having one server per desktop client, says John Humphreys, an IDC analyst. And virtualization also adds the ability to move desktop environments and hosted applications as needed for load-balancing or fail-over. To make existing terminal services and blade systems work with virtual machines, established providers such as Citrix and ClearCube have developed broker technology to let IT manage the mapping to virtual resources.

Citrix, ClearCube, and Wyse Technology now support the use of VMware and Microsoft virtual machines on blades and other application servers. VMware also offers VDI (Virtual Desktop Infrastructure software), which makes server-hosted virtual machines accessible to users through the RDP (Remote Desktop Protocol). Bell Canada uses VDI to provision desktops to call-center users, letting them work in

other locations or even at home without burdening IT support, notes Martin Quigley, senior solutions adviser for adaptive infrastructure at Bell Systems & Technology, which manages Bell Canada’s call centers. “RDP is quite thin,” he notes, so it does not burden the network. But Qui gley looks forward to the next release of VMware’s underlying E SX technology, which will support load balancing across servers, making it easier to maintain performance levels as user demands change. (Currently, this is a manual process.)

At Duncan Regional Hospital in Duncan, Oklahoma City, the number of desktops more than doubled to about 500 in the past two


Operating System

Productivity

Enterprise financial

Multimedia applications

Finance

Sales

Marketing

Create desktop and/or application images

the ideas behind application streaming is simple: create images for the virtual and their apps, host the images on virtual (or physical) servers, and make them available on the network for access by clients.

Deliver images via physi-cal or virtual servers

Provision to users based on physical client or log-in

Streaming Applications to the Desktop

Inf

og

ra

PH

ICs

: VIk

as

ka

Po

or


years. Rather than lobby for money to hire more desktop support techs, CIO Roger Neal decided to deploy ClearCube thin clients and keep the physical management in a central location — and get more from his existing staff. When ClearCube began supporting VMware virtual machines in 2006, Neal began reconfiguring his blade servers to run three virtual machines per blade, so he wouldn’t need more blades as the demand for desktops increased. He also saw desktop support calls drop by 40 percent, which he attributes to centralized PC management.

Streaming to the DesktopVirtualization at the application host server can make thin clients more efficient to deploy, but many organizations are wedded to having real PCs at users’ disposal despite the support costs. Desktop streaming is emerging as one of the most efficient ways to support this model without incurring the usual bloated desktop support costs.

A growing number of vendors — including Ardence, Propero, Stream Theory and Wyse — offer desktop streaming software that provisions the entire desktop environment from a server to a desktop PC (or thin client).

Altiris, AppStream, and Microsoft (through its recent acquisition of Softricity) have pushed the concept to the next level, streaming applications rather then a complete desktop environment. This allows greater flexibility in what is provisioned, because IT can create a basic operating system image and then individual images for each application, and combine them as needed on the fly. You don’t need a separate desktop image for each combination of applications.

With both desktop and application streaming, the provisioned operating system and applications use the client’s local resources, without the overhead of permanent installation on the client. For example, financial services firm Russell Investments Group saw application deployment shrink from four weeks to 1.5 weeks after it began using Microsoft’s SoftGrid, says Greg Nelson, an IT analyst at the company.

Typically, a set of stub services is transferred to the local cache at connection time, and other resources are streamed as needed. “When you run an app, you need only 15 to 20 percent to start using it, so it can be network-delivered,” says David Grescher, director of marketing for SoftGrid at Microsoft.

Streaming does delay initial application access, acknowledges Bill Washburn, operations analyst at California State University at San Marcos, which uses Altiris’ technology. “But once the application is installed, people say it’s the best they’ve ever seen it run,” he says.

Russell Investments’ Nelson says that although desktop and application streaming should theoretically use more network resources than terminal services do, that’s not always the case. For example, printing and working with large files can swamp the network in a traditional terminal services architecture. Desktop and application streaming can avoid that by using local printers and local storage.


Desktop virtualization can ease It’s own efforts, not just lighten the burden of end-user support. testing is a prime

example. setting up and tearing down development and Qa environments is hard, time-consuming work. but with desktop virtualization, developers and Qa staff can quickly create a new environment or load a pre-configured one from a library. they can even create snapshots of an existing environment’s state for troubleshooting purposes.

two companies provide virtual test bench software: EMC VMware (through the recently acquired akimbi) and surgient. both use the same basic approach: creating image files, deploying them within virtual machines on remote servers for access via the network, modifying them as needed, and saving them if desired for reuse.

Catalog retailer Coldwater Creek recently adopted the akimbi technology to move the server teardown and build-up responsibility from the It staff to the developers themselves. after Coldwater Creek began using VMware on its servers, developers started asking It to do provision test environments as virtual machines, because that was faster than doing so on actual server boxes, recalls stewart Hubbard, It director for the server engineering group. but the requests multiplied because it was easier.

“We started running out of capacity and became a deployment bottleneck. so we wanted a tool that put the control back in the developers’ hands,” he says. to address this, Coldwater Creek deployed akimbi’s VM image library system, and the It burden has all but disappeared. “things have just gotten easier,” Hubbard says.

for developers, things are easier, too. With more control of their configurations, they don’t have to wait for It. and they can troubleshoot problems more easily because Qa staff can snapshot a problem and provide a link to that saved image for the developer to load and explore.

— g.g.

Virtual Test Benches Ease QA



Simplifying ManagementOne big advantage of streaming is that IT has fewer images to maintain. That benefit applies in spades to application streaming products from Altiris and Microsoft.

For example, CSU’s Washburn says that Altiris’ Software Virtualization Solution solves a long-standing annoyance with SPSS’s statistical software. Each year, a new license key is issued and must be updated at every user’s desktop. But with Altiris’ software, Washburn simply updates the server copy, which is provisioned to users automatically when they call the application.

Although the technologies from Ardence, Propero, Stream Theory, and Wyse centralize applications and data, they also let users store data locally as well. (A PC’s C drive is re-mapped to become its D drive when their software runs.) Moreover, because Altiris’ and Microsoft’s application streaming tools let you set up applications in their own virtual layer or session, IT can avoid the regression testing across the whole application set whenever a program is modified or added, says Russell Investments’s Nelson.

With the solutions offered by Altiris, AppStream, and Microsoft, the client PC can have its own operating system and applications installed, while the server pushes centrally provisioned applications into local desktop caches. In this

fashion, IT can distribute resources selectively. For example, Russell’s Nelson installs Windows along with applications that act as extensions to the operating system (such as Adobe Acrobat Reader, Apple QuickTime, and Java) on local PCs — plus Microsoft Office and a few other frequently used applications — on local PCs. Then he uses SoftGrid to provision other applications as streams.

This selective approach can also help balance performance, notes CSU’s Washburn. Were Washburn to deliver everything as streams, it would take client PCs five minutes or more to boot up — a nonstarter. So he installs core applications on the PCs the old-fashioned way, using Altiris’ remote deployment tools, and provisions less frequently used programs via application streaming.

Yet another variation is to combine application streaming with terminal services. At Alamance Regional Medical Center in Burlington, North Carolina, senior network administrator Andy Gerringer uses both Citrix and SoftGrid to provision desktops. Citrix is used in the usual manner to deliver server-based applications as individual sessions. But Alamance also uses it to provide access to a SoftGrid desktop environment for terminal users. Essentially, the Citrix session runs the SoftGrid virtual machine. “SoftGrid and Citrix complement each other very well,” Gerringer says.

Conflict Resolution for ApplicationsApplication streaming comes with a significant side benefit: eliminating application conflicts. The application streaming tools from AppStream, Altiris and Microsoft separate application-specific support files such as DLLs and libraries from the underlying operating system. Altiris separates just the support files, keeping the applications with the operating system, whereas AppStream and Microsoft keep each app and its support files together in one virtual layer or package.

These programs manage the communication among the layers and the underlying operating environment, so both Windows and its users think they are working on a single environment. By separating each application into its own virtual layer (or package, as some call it), these products prevent software conflicts common with homegrown software and some commercial applications. And user-installed applications can’t conflict with IT-provisioned applications in the virtual layers, says Microsoft’s Grescher.

For example, before adopting SoftGrid, recalls Alamance’s Gerringer, the medical center had to maintain separate servers for ill-behaved apps, forcing users to switch among multiple systems from their terminals. “By summer 2005, the problem got too big to



Virtual layers separate application-specific com-ponents such as DLLs and drivers from the operat-ing system and associates them with specific apps instead. this eliminates conflicts that may occur among ill-behaved apps.

How Layering Resolves Application Conflicts

the filter driver presents an aggregate view of the real and layered virtual file systems. this is the view that the end-user sees.

the ‘base environment’ is the actual operating system files, data, and applications that are conventionally installed.

Virtual software packages form the layered, virtual file system.

Application

Filter driver

Real files Layer file

Inf

og

ra

PH

ICs

: VIk

as

ka

Po

or

PH

ot

o b

y s

rIV

at

sa

sH

an

DIL

ya


manage anymore the old way,” Gerringer says. The problem? Different versions of Java used by various specialty health care apps prevented simultaneous usage, as did the embedding of different versions of the Crystal Reports reporting tool in other applications. (If Crystal Reports 4 is running, Crystal 5 cannot run, for example.)

Now that Alamance uses SoftGrid, users get a unified desktop environment, with the ill-behaved apps corralled, so they can no longer cause trouble.

The New Reality of VirtualizationDesktop and application streaming require IT to think differently about tasks that they’ve done for years, notes Neal of Duncan Regional Hospital. “It takes a little more thought in the rollout,” he says. For example, his support staff now has to keep an eye on the blades that serve the desktop environments, because a broken fan can cause them to overheat, knocking out multiple users in one blow. His staff also must monitor disk usage for each blade, because 80GB is shared among three users. Virtualized desktops can be provisioned to specific client hardware, so a

particular call-center terminal always uses the same virtual machine on a specific blade. But they can also be provisioned to specific users, based on user log-in, so the client device running them could be anywhere. That can pose a challenge for setting up access to printers and departmental file servers, depending on how mobile users are, observes Bell’s Quigley.

He notes another issue that can puzzle support staff: users connecting from home may not get their DNS address resolved properly, so IT tends to assign a fixed IP address to get around that issue. But the Windows virtual machines are rebooted each night to deal with memory leaks, and the IP address for that virtual machine might no longer match what is set up in the remote user’s home system.

Nonetheless, early adopters all agree that these relatively minor issues are far outweighed by the benefits of central administration of fewer desktop images. As IDC’s Humphreys says, “There are some really pragmatic reasons that this is taking off.” CIO

[email protected]

Vendor Product Supported VMsSupported

deployment toolsVirtual app

layersApplication

locationDisconnected

mode

Altirissoftware

Virtualization solution

Microsoft VM, VMware

altiris, Microsoft sMs, others via

WMIyes

server and/or desktop

yes

AppStreamVirtual Image Distribution


Various via aPI yes server yes

Ardencesoftware-streaming Platform


Microsoft sMs, HP openView, IbM

tivolino server no

Microsoft softgrid Microsoft VM,

VMwareMicrosoft sMs yes

server and/or desktop

yes

Propero Workspace VMware none yes server no

Tadpole Stream Theory

appExpress none none yes server no

Wyse Technology

streaming Manager

nonealtiris, IbM tivoli,

Ca unicenteryes server no


Seven Steaming Solutions

the main differentiation among application streaming solutions is whether or not they enable users to work in streamed apps without a server connection.



BridgingMarkets withthe Backend

CIO: What is the vision that drives Titan Industries?

Bhaskar Bhat: We are working on an objective: achieving a $1-billion turnover by 2009-10 and exceeding that significantly thereafter. By that time, we also have the desire to become an institution which is healthy, wealthy, sharing and caring, one that will be the envy of Indian corporates.

It is not just in terms of scale — not just about creating a billion-dollar company. Wealth is about financial health; and health is about sustained, long-term growth. Sharing means that we will share our wealth with all our stakeholders, and caring means that we will care for the individual, the environment and the community. Becoming the envy of Indian corporations means that we want all people — associates, employees and customers — to be touched. We want people to own our brand, work for our

Bhaskar Bhat, managing director of Titan Industries,

says the CIO has a significant and

strategic role in the organization

because he has access to both

information and processes.

Unlike a lot of CEOs who want to outsource their IT departments, Bhaskar Bhat, managing director of Titan Industries, believes in keeping IT in-house. It is the only way one can get the level of commitment to stay ahead in the marketplace, he says. He also believes that IT is critical in two areas of operation: managing the supply chain and developing a strong understanding of what the customer wants — something that is vital for lifestyle brands.

By Balaji NarasimhaN

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.

Ima

gIn

g b

y m

m S

ha

nIt

h I

P

ho

to

by

Sr

Iva

tS

a S

ha

nd

Ily

a

vol/1 | ISSUE/234 2 O C T O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD

View from the Top.indd 42 10/17/2006 9:34:36 AM

View from the Top

company, and associate with us. Even if we are just a billion-dollar company and if there are other companies that have a turnover of $10 billion, it doesn’t matter. People must say, “I wish to work for Titan. I wish to buy its products, do business with it, and run a franchise store for Titan.”

Has the growth of IT in your organization been a process that is parallel

to Titan’s manufacturing and retail expansion?

I think that during some years, IT has outpaced expansion in terms of investments. But overall, if you take the last five years, it has kept pace. Sometimes, you have to outpace to be able to prepare yourself for the future, especially with something like IT. Similarly in HR, sometimes you have to recruit the talent that is required to run your future vision. And not only has it gone as per plan, it has gone as per strategy. We have an operating

plan for a year, apart from our strategy. Our strategic plan covers five years, but IT strategy can’t be embedded because technology is changing so rapidly. You have to be flexible and nimble, but, at an overall level, you need to create an information culture.

What is Titan Industries’ current IT budget?

Normally, we are in the Rs 10 crore per annum bracket. I think that this year,

BHASKAR BHAT EXPECTS I.T. TO

Manage the supply chain

Deliver an understanding on what the customer wants

Keep the company ahead in the fast-changing world of fashion

REAL CIO WORLD | O C T O B E R 1 5 , 2 0 0 6 4 3vol/1 | ISSUE/23


it will be around Rs 8 crore-10 crore. But overall, including revenue expenditure for software and associated heads, it is around Rs 15 crore per annum. As a percentage of turnover, we spend around 1 percent on IT. As a percentage of turnover, I don’t think that it will grow much, and I expect IT spending to generally account for around 0.5-1 perrcent.

Could you comment on the role of IT, specifically in managing your distribution channels?

I think that the greatest impact of IT has been in the supply chain and distribution channel. It starts with our entire business, which is based on consumer understanding. Our brands are our most important assets. Therefore, enriched consumer understanding helps us to derive greater value from our brands. All the action is in the marketplace as far as we are concerned. Capturing that transaction — or non-transaction, so that we can find out why a consumer didn’t buy our product — is critical to building a competitive advantage. Therefore, we have processes and technologies to align manufacturing with the marketplace requirement. So, everything is marketplace driven and for that to happen, IT becomes a key bridge between the marketplace and the backend.

What about the progress of technology in Titan’s product development cycle?

Ours is a lifestyle product and in this category, design plays a very key role — and this is just on the outside. But, if you take a watch, all the internal moving parts have to be engineered to perfection. So, IT has helped convert the creative output of a designer into an engineering and factory-floor manufacturable product.

In the development of significantly advanced technological products like Edge, the slimmest watch in the world, IT has played a significant role both with respect to the design of the technical parts of the watch and in the aesthetics.

How do you see technologies like RFID, especially with your growing retail network?

We have been evaluating RFID and feel that it will play a very crucial role across all our products because you can embed so much on the products using RFID. You can extract a lot of information and it is a very attractive area of opportunity for us. We will start with jewelry and tracking of inventory. For instance, we provide a guarantee for our watches and if there is any defect, the consumer can bring it back. Using RFID, we can get information on when the watch was produced, the batch number, and so on. We already have pilots running for jewelry, and plan

to do something with RFID and watches next year.

Tell us about your vision for Titan’s IT department? What are the challenges you foresee for it with Titan’s global expansion?

Actually, our global expansion plans will not make any difference to our IT setup. For instance, we have opened an office in Hong Kong, and the people there are seamlessly connected to our SAP systems. We are also building portals for all our distributors to use.

Nowadays, people are talking about the death of distance. The vision for the IT department is to build a robust information system and to align the same with the business needs of the organization, so that the company’s future requirements are met.

What challenges have you faced in developing synergies between your IT and HR departments, with the danger of losing talent to IT-services companies?

We have got specific programs for this. First of all, we have addressed the problem of attrition at a very basic level by creating a separate pay and perks system focusing on the IT staff, differentiating them from the rest of the organization. Additionally, the IT function is so attractive within Titan that people from other departments have begun to move to IT. So, we have created a mobility policy in HR, which enables employees who are qualified to work on IT projects to do so.

But, the culture-enabling thought in the organization is most important — that IT is integrated into the company and that IT people are seen as part of the team. So, it is not just the money or the job that makes them work with us; it is the culture that

View from the Top

“On our current path of

growth, IT is such a critical function that

we don’t want to outsource it.”

–Bhaskar Bhat



we have created that makes them want to work for Titan. Therefore, I wouldn’t want to bracket it as just an HR initiative. There is a strong sense of belonging that we have created, and this ultimately helps us to tackle attrition.

What motivates a manufacturing company like Titan to keep IT in-house?

We have benefited a great deal by keeping IT in-house. It is not just about cost-cutting. We feel that IT is such a critical function that we don’t want to outsource it. The way we are growing, there are fire-fighting issues, development issues and long-term issues.

If you have an IT team that is in-house, it will be totally aligned to the vision of the company. The sheer commitment of the IT employees will help us achieve our goals faster and in an easier manner. If you outsource it, it is seen as a business. When it is done in-house, the commitment of the people working on the IT project is higher. This again is created by the sense of belonging. We have people who visit the shop floor at midnight to see if the disaster recovery systems are working. This sort of commitment is not something that you can get if you outsource.

Another problem with outsourcing is that creativity doesn’t blossom. We have IT people working with brand managers of the jewelry business, who are telling them how IT can solve issues. You can outsource something like traveling, but business-driven creative solutions will only emerge when things are done in-house.

How do you see the role of a CIO evolving?

The CIO has access to information as well as processes in our company. He is involved in the development of business plans. I think that the CIO’s strategic role

is increasing, and it will grow further in terms of strategy development. Because of process orientation and process knowledge, our CIO is already the corporate quality head. The CIO here also handles the knowledge and business excellence management role, and this is a very strategic role. The CIO can also play a major role in the think-tank of the company, which mostly comprises the top management. But since the top management is very much hands-on in running the company, the CIO is in the best position to stand apart and facilitate the thinking process of the company.

Could you offer some insights into how Titan manages the supply chain?

Today, the company is able to collect data on every single sale. We have developed advanced forecasting tools, which can take this past data and help us to forecast what will happen in the future. These forecasts are then vetted by our sales people. Since the entire supply chain rides on the IT backbone, this knowledge can be fed back to the manufacturing units and is used to design better products.

Customer understanding is critical for Titan because it’s dictated by fashion trends. How does IT help you to manage this?

This happens at two levels. For one, our retail outlets are highly IT-enabled, and are feeding information on the transactions

that the customer has with the company. In addition, we capture the customer information and have a loyalty program. All the information comes through our IT network. Since the transaction information is generated and goes back to the ERP system, data mining gives us useful information. All the reports that our brand managers get on cluster wide and geographic trends help them to take better decisions. This is especially useful while launching new products — the faster you get the information, the quicker you are able to react to market trends. Thus, IT has given us a lot of agility,

which is important because the fashion business changes very rapidly. IT has also helped us to significantly reduce costs in terms of inventory. I think that we are one of the few watch companies in the world that doesn’t carry dead inventory. CIO

special correspondent Balaji Narasimhan can be

reached at [email protected]

SNAPSHOT Titan IndustriesNET INCOME (2005-06) rs 1,442.61 crore

ANNUAL IT BUDGET 1% of turnover

DEALERS 10,000

TANISHQ BOUTIQUES 90

HEADCOUNT 3,000

NUMBER OF IT STAFF 60

CIO n. Kailasnathan

View from the Top



On the morning of July 7, 2005, Kenneth McCrae left his hotel in central London and headed for Baker Street Underground station. It was a warm day and he remembers looking longingly across the street at the green grass and trees in Regent’s Park before heading down to catch his train.

McCrae boarded at 8:42 AM along with the millions who jam the city’s famous subway system each day. On a whim, he decided to take the Metropolitan line instead of the Circle line. It turned out to be a good choice.

BY SUSANNAH PATTON

A little more than a year ago, terrorist bombs ripped through london, killing people, disrupting communications and shutting down the city. Here’s how one global company quickly connected with its employees and kept business running.

Reader ROI:

The primacy of trackingemployees in a crisis

Howstoringpast incidentscangeneratebestpractices

Theimportanceofmultiplechannelsofcommunication

Disaster!


Feature.indd 46Feature.indd 46Feature.indd 46Feature.indd 46Feature.indd 46 10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM10/17/2006 9:42:44 AM

At 8:50 AM, a series of powerful bombs exploded underground, and one of those seriously damaged a train on the Circle line, just two trains ahead of McCrae. Above ground, another blast would rip apart a bus in Tavistock Square nearly an hour later. Meanwhile, McCrae and his fellow passengers sat in the dark, silently, for 20 minutes. It wasn’t until they left the train, filed down the dark tracks and walked up the stairs into daylight at King’s Cross station that they realized something very, very bad had happened.

The terrorist bombings in London that day killed 56 people, wounded 700, crippled lines of communication and effectively shut down one of the world’s largest cities. As sirens blared, McCrae, managing director of real estate management company Gale Global Facilities UK, a division of Gale Global Facility Services, pulled out his BlackBerry and called his boss in New Jersey.

“My immediate thought was, ‘how lucky have I been?’” says McCrae, who splits his time between his home in Scotland and a hotel in London. “Then, I knew I had to get in touch with the home office. I had to somehow check on the safety of my colleagues in London.”Even though much of the area’s phone and cellular networks were quickly overwhelmed, McCrae was able to reach New Jersey as well as a colleague in Toulouse, France, who went immediately to the company’s intranet site to open an ‘incident report’, which would chronicle the day’s events and help account for the location and safety of Gale GFS employees in the London region. McCrae used his BlackBerry to communicate with his colleagues in London, around Europe and in the United States. Within 90 minutes, Gale was able to account for all of its 80 London-based employees. The company’s Incident Reporting System, or IRS, which sends out e-mail alerts to the cell phones, BlackBerrys, pagers and laptops of those concerned and also informs employees via a sort of Web chat room on their home-built company portal, helped spread the news of the unfolding crisis. And because of it, Gale GFS never stopped operating.

McCrae’s experience — and the company’s ability to communicate broadly through a variety of channels — shows how companies hit by disaster can effectively track employees using simple Web and mobile technologies. During the London bombings, many companies suffered from a total information blackout because most communications lines were blocked. Gale GFS, however, was able to find its employees, make sure its properties were safe, and send alerts to those in charge within a short period of time. This kind of system, which relies on cell phones, e-mails, BlackBerrys and pagers to communicate, is simple but, unaccountably and unfortunately, rare. Many companies simply don’t have systems in place to keep

track of and communicate with employees during and just after a crisis, experts say.

“It’s not just putting out fires; it’s about staying in business, and one of the essential steps is tracking employees,” says Jack Harrald, director of the Institute for Crisis, Disaster and Risk Management at George Washington University. “Technology can help you do this.”

The Limits of E-mailGale GFS’s crisis management system was born out of the company’s desire to better communicate with its employees on a day-to-day basis. The company started to build its Incident Reporting System in 2003 when its largest client, AT&T, asked for help. The telecom giant was looking for a way to let employees know, in real-time, what was happening when there was a major incident — a hurricane or power outage — at one of its locations. “They wanted to be able to let everyone know what was happening even as the situation was changing

Crisis Management

“It's important to imagine how you would respond to a variety of crises, and then, develop a system of communicating with multiple devices.” Kenneth McCrae, MD, Gale GFSDisaster!


Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47Feature.indd 47

every few minutes,” says Chris Messineo, assistant VP for IT at Gale GFS (a unit of the Gale Company), which manages and oversees properties around the world for clients including AT&T, GlaxoSmithKline, IBM and Toys “R” Us.

Messineo, working with Gale GFS president and CIO Ian Marlow, decided they needed to create an alternative to e-mail, which can be an inefficient way to find employees during a crisis because it can create a tangle of messages that cross each other. The two had initially designed the company portal in 2002 in an effort to share information inside the company, and had more recently added functions such as file-sharing to allow vendors and clients to use it as well. Messineo

stresses that the system, built using Microsoft’s ASP.net and SQL Server, was designed for simplicity. “In fact, its power is in its simplicity,” he says, noting that — so far — it has never locked up or crashed and that all of the code used to run it can fit on a single floppy disk. The system had to be robust and easy to use, even for employees connecting from dial-up modems in airports. And unlike more complex Web conferencing systems, employees access it directly from any Web browser and don’t need to download software to do so. Messineo says his team was successful because they kept the application simple. And while AT&T was the first to request such a system for its property managers, all of Gale GFS’s clients can now use the IRS.

Recent disasters have shown that companies focused on the process of finding their employees after a disaster are more resilient than those intent only on keeping their systems running, says Yossi Sheffi, director of MIT’s Center for Logistics and Transportation and author of The Resilient Enterprise. After Hurricane Katrina, for example, Sheffi notes that Wal-Mart’s first order of business was to account for all employees. Only then did it re-open its affected stores. “The first thing [in a crisis management strategy] would be to instill in your employees the importance of getting in touch after a disaster,” says Sheffi.

Keep it Simple and FlexibleGale GFS employees agree that policies urging employees to keep in touch with each other are as important in a crisis as the technology itself. Adding the Incident Reporting System — which operates as a sort of business blog — to Gale GFS’s portal site was not complicated, says Messineo. Essentially, an employee can log on to the Web-based system with a user name and password and write about a hurricane, an explosion or any other incident. Gale GFS designed and built its system to automatically send out an e-mail notification to everyone in the region. Through an online control panel, administrators can determine who gets notified by region and by company. E-mail alerts pop up on cell phones and BlackBerry pagers, as well as on computer screens. Originally, Messineo

1MITIGATION According to the Book of Genesis, God decided to flood the Earth to punish humankind for its bad behavior. To mitigate the disaster, God told Noah

to build an ark, instructing him to take along his wife and family, as well as one pair of every living creature. When the heavens opened and rain poured down for 40 days and 40 nights, the ark floated and the world was preserved.

2NEGOTIATION In 1962, President John F. Kennedy prevented the arming of Soviet nuclear missiles in Cuba after a tense 13-day confrontation between the

two superpowers. After reconnaissance photos showed Soviet missiles on the island, Kennedy ordered a naval blockade to prevent Soviet supply ships from approaching. Thirteen days later, Soviet General Secretary Nikita Khrushchev announced that the installations would be dismantled. This Cold War brinkmanship was mitigated by back-channel negotiations between the two nations. It was later revealed that in return for the Soviets removing their missiles, the United States had agreed to dismantle its own bases in Turkey.

3COMMUNICATION Severe Acute Respiratory Syndrome (Sars) first appeared in the Guangdong province of China in November of 2002. The virus then

traveled to 30 countries around the world in 2003 after news of the outbreak was initially suppressed by the Chinese government. The virus was successfully contained after the World Health organization (WHo) sent out worldwide alerts. Dr. Carlo Urbani, WHo expert on communicable diseases, was the first to identify Sars, and his swift actions led to global awareness. He died of Sars on March 29, 2003.

4PREPARATION After the Federal Emergency Management Agency’s September 2005 response to Hurricane Katrina proved disorganized and ineffective, Wal-

Mart, thanks to its robust supply chain and logistics expertise, was able to quickly truck in much-needed supplies to flooded New orleans.

— S.P.

4 Great Moments in Crisis Management

Crisis Management


Feature.indd 48 10/17/2006 9:42:54 AM

says, AT&T wanted to be able to track 40 fields of information — ranging from precise location to detailed weather conditions and number of employees — for each incident. That level of complexity, however, would mean that the system would be slow. Messineo decided to reduce the number of categories within each type of incident to a maximum of eight. The result: employees can connect to the system using a 56K modem with pages loading in under three seconds. And they can also access the system from an Internet cafe or any other Web connection.

According to Marlow, who is also COO of Gale GFS’s parent, the Gale Company, the main challenge was to make sure that top executives could communicate with employees from inside an affected location using multiple forms of communication. Just after the 9/11 attacks, for example, telephone traffic was re-routed and it was impossible to call the World Trade Center area using landlines. In the London bombings, the cellular network was essentially shut down, but Internet and BlackBerry communications were still working.

“The goal is to be prepared for any type of incident, whether it’s a hurricane or tornado, or bomb scare or terrorist attack,” says Marlow. “Communication lines will be affected depending on the incident, so we need to remain flexible.”

Blogging for SafetyWhen a Gale GFS employee first logs on to his computer, he sees a welcome screen filled with company news and announcements, similar to other corporate intranet sites. Gale GFS’s, however, has a small box in the upper left-hand corner: the Incident Reporting System (IRS). Depending on the employee’s location, that box may contain information on power outages, fires or impending hurricanes. Like a journal or blog, the entries track developments and conversations between employees.

For example, a property manager in Houston logged on to the IRS (Internal Revenue Service) on Sept. 23, 2005, alerting employees in the area as Hurricane Rita approached. The subsequent back and forth between the property manager and other employees chronicles the weather reports and developing plans to secure property and account for employees. Each time an alert was placed on the intranet site, employees were notified on their mobile devices and via e-mail.

Each case or incident is archived in the system so that others can retrieve them from the database in order to study them. “From reading and analyzing the information, we can gather best practices and bring them back to the company as a whole,” says Chris Furlong, manager of education and training for Gale GFS. Each session, however, is

available for viewing only by the employees working with a specific client so as to maintain security. For example, if an AT&T site experiences a power outage, only Gale employees working on that account (and, of course, their client, AT&T) will be able to see what’s going on. Furlong says that new employees can be trained on the system in 10 minutes.

Before the Incident Reporting System was developed, employees had to stay on the phone for long stretches in order to stay up to date, says William Mellin, a Gale GFS VP. With the IRS, people can do their job while they check the site, or get information via handheld devices. “It’s more productive to have people working than tied to a conference call or webcast,” Mellin adds.

Messineo also says that before the IRS, e-mails between employees created a ‘spider web’ in which messages crossed each other, and made it hard to make sure who was speaking to whom and when.

People versus PropertyWhen the London bombs went off, Marlow was watching the early morning news on TV at his home

Using multiple forms of communication, Gale GFS president and CIO Ian Marlow wanted to ensure that top executives could communicate with employees from inside an affected location.


Crisis Management

Feature.indd 49 10/17/2006 9:42:56 AM

in New Jersey. He immediately picked up the phone. Within minutes, an incident report was opened on the company intranet and Marlow had accounted for the safety of the top four executives in the region, including McCrae, who had provided the initial information to a colleague in France. Then McCrae got in touch by phone with the manager of Gale GFS’s account with GlaxoSmithKline, one of its largest clients in the London area, who was able to log on to the intranet and account for all employees at those London facilities through the IRS.

When all employees in the London area had been accounted for, Marlow sent out a worldwide e-mail alert. “As a global company, we have people all over the world, and in the event of a major disaster, everyone wants to know about people’s safety,” Marlow says.

Meanwhile, in London, McCrae had convinced the owner of a pub in Leicester Square to allow him and two colleagues to hole up there for the afternoon. With the trains and buses stopped, traffic closed, and phone and cellular networks failing, McCrae spent the next hours using his BlackBerry, which was drifting in and out of service, to send and receive information. “That day was filled with lots of uncertainty, and many companies struggled to communicate,” says McCrae, who was able

to feed information about the attack and its aftermath to colleagues who then updated the IRS. “I didn’t realize the power of the portal until then,” he says.

Gale GFS isn’t the first or the only company to use a combination of Internet and mobile technologies to keep track of employees and monitor crisis situations. Companies are increasingly looking at building websites that can account for the whereabouts and status of employees (and in the hotel industry, guests), says George Washington University’s Harrald. Others are looking into Web conferencing systems that can provide emergency meetings around the world. And some are considering using companies such as iJet and UK-based Control Risks Group to provide Web conferencing services that can keep tabs on far-flung employees and also provide a dashboard on which executives can monitor employee whereabouts and safety.

Security software vendor SunGard Availability Services has offered a ‘notification service’ for the past three years that allows companies to keep in touch with employees through multiple channels. Don Norbeck, product manager at SunGard Availability Services, says the service was initially hard to sell, but not anymore.“Technology is starting to replace traditional call chains,” says Harrald. Up until 9/11, companies

Crisis Management

1COVERING UP After a burglary at the headquarters of the Democratic

National Committee in the Watergate apartment complex in Washington, D.C. in 1972, President Richard Nixon, instead of turning in the members of his staff who conceived and executed the break-in, sought to protect them and cover up his own involvement. A ‘smoking gun’ tape later revealed his role and led to his impeachment and subsequent resignation on Aug. 9, 1974.

2BAD INTELLIGENCE President John F. Kennedy approved a secret,

underfunded and ill-conceived plan to

overthrow the government of Cuban President Fidel Castro in 1961. The scheme assumed that when US-trained Cuban exiles landed in the Bay of Pigs in Southwest Cuba they would be supported and joined by thousands of freedom-loving Cubans. They weren’t, and the invasion failed ignominiously.

3POOR DILIGENCE Information broker ChoicePoint sold the

personal information of 145,000 people to inadequately vetted bogus businesses. As a consequence, many people later became victims of identity theft. ChoicePoint will pay Rs 67.5 crore to settle charges of

failing to protect consumers’ information, the Federal Trade Commission announced in January 2006.

4FAILED PROCESSES A laptop containing sensitive personal

information on 2.65 crore US veterans was stolen from the suburban Maryland residence of a Veteran’s Administration data analyst who wanted to work at home but did not have remote access to the VA’s system. News of the theft was kept under wraps for 19 days. A week later, Michael H. Mclendon, VA deputy assistant secretary for policy, announced his resignation.

— S.P.

4 Not-So-Great Moments in Crisis Management


Feature.indd 50 10/17/2006 9:42:56 AM

viewed crisis management primarily as an exercise in property protection. After the attacks on the World Trade Center and the Pentagon, that perception changed. For example, Harrald knows an employee of a large bank who, in the wake of 9/11, had to call the homes of thousands of employees to see if they were alive. “Companies are trying to get away from that,” he says.

For organizations now looking to build a system to track employees and share information during a crisis, Gale GFS serves as a model for those who want to add a discussion board to an already existing intranet or portal. Mellin, who is a portfolio manager on the AT&T account and has been using the system for the past three years, says he would recommend the simple, Internet-based system because the need for training will be very low. By adding a forum or chat module to an existing secure intranet site or portal, companies can quickly document an employee’s safety, while sending important information to those in the field. Messineo says that such modules are relatively easy to develop internally using tools such as Microsoft .Net and are very easy to maintain. All data can be backed up each day on a standard Dell server using .Net SQL and on a duplicate server offsite.

Preparing for the Next TimeWhile McCrae sat in the pub in the aftermath of the bombings, he was frustrated that he couldn’t feed information directly to the IRS. The system was built before every executive carried a BlackBerry, so it did not allow for

direct feeds from the device to the site. Instead, McCrae was sending comments about his well-being and the condition of employees to colleagues in the United States and France, who then logged the information on to the intranet.

That will change. Messineo and his IT team are now working to allow BlackBerry and cell phone users to send text directly to the IRS. This involves new coding that will accept BlackBerry messages as real-time updates. By the third quarter of this year, if a hurricane hits, a power line goes down or a bomb explodes anywhere where Gale does business, its employees will be able get in touch with the IRS instantly, Messineo says, from any device.

Although McCrae hopes there won’t be a next time, he believes his experience in the hours following the bombings taught him some key lessons.

“It’s important to imagine how you would respond to a wide range of crises,” he says. “Then, you’ve got to have a system that will allow you to communicate using multiple devices. If you have flexibility, you have a much better chance of finding your employees and making sure that your property and systems are in place.” CIO

Send feedback on this column to [email protected]

In crisis management, redundancy is key. That’s why Gale Global Facility

Services built its Web-based Incident Reporting System (IRS) — so that it can contact employees on multiple devices. Chris Messineo, Gale GFS’s assistant VP for IT says it’s also a good idea to collect employees’ personal e-mail addresses as well as their professional contacts, so they can be reached if the company network crashes. Here’s a list of hardware and software that should play a role in any crisis management plan:

INTRANET SITE OR PORTAL Make easy to access from a Web browser, without the need to download software.

DEVICES Cell phones laptops Pagers PDAs

TELEPhONE LANDLINES Keep current records of employees' home phone numbers as well as work lines.

E-MAIL Keep records of employees' personal e-mail addresses, apart from their work e-mail IDs.

— S.P.

Crisis Management

The most important thing is to have a lot of them.

Crisis Management

Management

Tools


Feature.indd 51Feature.indd 51Feature.indd 51Feature.indd 51

By H a r i c H a n da n a r a k a l i

e-Wingsand a Networke-Wingse-Wingse-WingsOn

Reader ROI:

The benefits of inventorymanagement

Why creating a sizeable pilotis important

Inventory Management


An Indian Air Force project promises to make inventory management a matter of real-time. This means that the country’s air warriors will eventually be better prepared, and better kitted out, for combat.

In a world that is inexorably moving towards network-centric warfare, as the Americans call it, imagine an Air Force that depends on manually-intensive processes to keep track of where 500,000 pieces of spares, equipment and other material are located. In the actual event of a war, it’s a nightmare scenario to not know, in real-time, how many of which spares or ammunition India’s defence forces

have, where they are needed the most, and how quickly they can be forwarded.It took nearly 13 years, but the Indian Air Force is now the owner of a computer

software application, implemented across 130 units that not only tracks inventory but also generates vital decision-support reports for the top brass.

Computer services company Tata Consultancy Services (TCS), which built and deployed the application it calls the Integrated Materials Management Online System or IMMOLS. Air Marshal B.U. Chengappa, the air officer-in-charge (maintenance), with whom the logistics buck stops at the IAF, says the

“implementation of IMMOLS is a historic moment for us in the IAF”.

Information superiority assumes great importance in today’s digitized battlefields. IMMOLS is a strategic IAF

initiative that facilitates the translation of information superiority into combat power by the effective utilization of inventory resources, says Chengappa.

IAF has achieved logistics e-governance by shifting gears from a manual system to an e-enabled online environment. IMMOLS has facilitated attaining integrated logistics functionality, a composite of all support considerations, and ensured economically viable support for weapon systems throughout their lifecycle. IMMOLS also provides knowledge-based decision models for the quick resolution of ‘sustainment’ problems. In the days to come, IMMOLS will be instrumental in reducing the turnaround time of weapon systems, an improvement in provisioning activities and a significant cost savings in inventory holdings.

The project was conceptualised as an online materials management system that would improve the availability of items/spares, which would lead to enhanced serviceability of weapons systems and reduce inventory costs by minimising non-moving inventory. The complexity of logistics management in the IAF stems from the geographical dispersal of operational sites and the technological diversity of its weapons systems and spares. High costs, limited sources and high lead times in the supply of military aviation standard items/spares add to the challenge of providing cost-effective logistics management.

Ill

US

tr

at

Ion

by

bIn

ES

h S

rE

Ed

ha

ra

n

IMMOLS has the capability of providing online asset visibility as well as transit asset visibility to various echelons of the IAF hierarchy. This e-decision support system will enable the techno-logistics hierarchy to fully tap all available material resources and accurately forecast future requirements. It captures the business logic of the IAF’s logistics, thus ensuring standardisation across units.

Further, being a truly IT-enabled service, it reaches out to the end user in the IAF’s supply chain. Aided by an online accounting system and audit system, IMMOLS is a functional system cleared for e-audits where the concept of ‘no e-voucher, no issue’ is strictly enforced. It fulfils the IAF’s vision of realising a lean and dynamic logistics organisation.

Tanmoy Chakrabarty, a vice president at TCS and head of its business that deals with governments, recollects how,

“we carried out a pilot for around 22 sites of the Indian Air Force.” The application, he adds, received extensive testing, which included software development, acceptance testing, training, analysis and several other initiatives before it was rolled out across all 108 sites of the Indian Air Force.

The project started in 1993-94 and just the initial pilot took a few years to build and roll out, after which the project’s endorsement came through, and final phase was

rolled out. Being a replacement system, IMMOLS posed significant challenges, says Air Marshal Chengappa.

Many of these were sorted out, Chakrabarty says, because the project was initially started with two teams: one from TCS and the other from the maintenance core of the air force. They thrashed out the functionalities, which many applications required, right at the start — bypassing a requirements mess that could have stopped the project cold.

“The support extended by top officials at the IAF played a crucial role in ensuring the success of the project,” he adds.

The final phase was covered in the last eight months. Initially, there was the need to get buy-in, clear internal validation and go through several leadership cycles (within the Air Force). The nature of the program was holistic and enterprisewide, which meant that it had a longer evolutionary phase.

The application tackles two essential processes in order to achieve efficient materials management: the procurement/supply chain management cycle, and the repair management cycle. Efficient

materials management at the IAF is directly related to the speed, at which these two cycles are churned by decision-makers at various techno-logistics echelons or the infrastructure. This, in turn, is dependent on the time taken for the execution of every activity in each cycle. IMMOLS ensures the movement of these two cycles, which leads to efficiency in terms of cost and time.

The application — built on Microsoft .Net — and its implementation cost the IAF Rs 55 crore. It was implemented in a distributed manner at various depots of the IAF and replaces the current manual system of materials management at all levels of hierarchy.

Being a custom-designed application software, IMMOLS caters to all facets of materials management at various levels of hierarchy in the Indian Air Force. The IT infrastructure covers a nationwide installation of computing platforms, campus LANs and other hardware equipment, says Chakrabarty. What TCS did was to develop and deploy an enterprisewide logistics management system that encompasses the inventory management control capabilities of all items present in the Indian Air Force, right from the air headquarters to the battlefield command operating station, he adds.


“The support extended by top

IAF officials played a crucial role in the

success of the project.”

—Tanmoy Chakrabarty, VP&head,globalgovernmentindustry,TCS


Ima

gIn

g b

y m

m S

ha

nIt

h I

P

ho

to

by

bh

ag

Ira

th

Govern Main.indd 54 10/17/2006 11:15:23 AM

Logistics management is under the maintenance command of the Air Force, where all items in excess of 500,000, whether they are aircraft spares or ration and clothing for the airmen, are controlled, maintained, and their procurement processes automated.

Under the earlier, manually-intensive system, plenty of inventory sat idle and it took a lot of time to replace critical spares required across stations. It was also a very complex exercise since the Air Force maintained a varied inventory of aircraft and material. Streamlining this task, introducing the concept of just-in-time procurement and giving the IAF full control over their inventory were some of the drivers behind IMMOLS.

The IAF now has real-time access to information on any spare part or piece of equipment at the push of a button, information that would take weeks to collect. At the unit level (the lowest level), the records of specific items, various stock levels, replenishment cycles, usage patterns and metadata standards used to maintain

the fast retrievability of information also became much easier to organise for the IAF’s top brass. IMMOLS will also generate reports (itemised stock register) at the unit level on available material, usage patterns, among others. Further, it aids the valuation of stock, and gets increasing complex as it travels up the IAF’s hierarchy. For instance, at the command level (the air force has seven), Chakrabarty says a real-time status of inventory is available.

And as the IAF gets their nuts and bolts in place, and closes their ranks in a world of network-centric warfare, the Indian skies will hopefully be a safer place. CIO

Assistant editor Harichandan Arakali can be reached at [email protected]

SNAPSHOT IMMOLS

ObjECTIvE: to align the

IaF’s inventory, replacement and

repair cycles, creating efficiency on and off

the battlefield.

COST: rs 55 crore

PILOT: 22 sites

DEPLOyED AT: 130 sites



1Increased asset visibility (including transit assets) at all echelons of

IaF hierarchy will help top brass make decisions that will exploit available material resources and bring about a quantum reduction in downtime of weapon systems.

2the quality of provisioning data will get better since it will be based

on real demand figures and trends. ImmolS provides online allocation and stock status of every item. the facility can be utilized for bringing in better accountability in the system.

3budget management. the ImmolS application software dynamically

consolidates and updates the budget details by accessing data from the e-procurement documents generated in the system.

4availability of stock data online is expected to bring non-moving

items into sharp focus. once the inventory fat has been located, it can be removed.

5a history of costs will progressively be made available on ImmolS.

this may then become an objective tool for price negotiations.

6Financial concurrence and sanction. ImmolS provides the

facility to green-flag e-documents within and across units. this will help reduce processing time involved in the physical despatch of paper documents across units.

7Personnel work folder. ImmolS provides user-specific personnel

folder interface to view pending jobs. the approval of an e-document can undertake online query and clarifications from the subordinate recommenders.

Source: tCS

The impact of IMMOLS.

IMMOLS Gets its Wings

Srikanth Nadhamuni, managing trustee of eGovernments Foundation, is partnering with urban local bodies

to create an IT-enabled system and improve their administrative

functioning.

Interview.indd 56Interview.indd 56Interview.indd 56Interview.indd 56Interview.indd 56Interview.indd 56Interview.indd 56Interview.indd 56 10/17/2006 10:12:10 AM10/17/2006 10:12:10 AM

Interview | Srikanth Nadhamuni

CIO: How has eGovernments Foundation evolved in Karnataka since 2003, this being the third government in three years?SrIkaNth NadhamuNI: In spite of the political changes in the state, successive governments have been steadfast in their commitment to e-governance projects. Our work with the Karnataka government since 2003 has been an example of a private-public partnership delivering results on the ground.

What has your experience been with urban local bodies (ULBs)?

Our experience has been positive across the 60 cities that we work with. Some have seen a huge upswing in property tax revenue. For example, Whitefield (near Bangalore) has seen an 800 percent increase in property tax collection in one year, due largely to better record keeping from our eGov Property Management System.

Record-keeping, maintained in computer databases, has improved by leaps and bounds across Karnataka. GIS mapping of urban areas is in full swing across 3,000 sq km of urban area in 57 cities. Many of the smaller corporations and cities are faster to embrace

these systems, while larger cities like Delhi and Bangalore move at a slower pace.

Can you identify three key areas where ULBs still need to improve?

First, most ULBs face an acute revenue shortage. While urban India contributes almost 60 percent to the country’s GDP, revenues from urban local bodies are only 0.6 percent of GDP. We need to improve property tax collection through improved record keeping, increasing the tax base and collection.

Second, on the expenditure side, the process of managing civil works needs to be streamlined. Tenders need to be published more widely, approvals, monitoring and finances for each job need to be tracked closely to ensure a quality job is done on time and within budget.

Third, a robust accrual accounting system is needed to track the income and expenditure of the ULBs to generate various reports like a balance sheet. Increasingly, cities around the world are looking to financial/bond markets to raise funds. This requires a high degree of financial discipline and transparency.

Towards Financial

DisciplineIm

ag

Ing

by

mm

Sh

an

Ith

I

Ph

ot

o b

y S

rIv

at

Sa

Sh

an

dIl

ya

a robust accrual accounting system is the need of the hour at a majority of the urban local bodies in India, asserts Srikanth nadhamuni, managing trustee of egovernments Foundation. It is the first and most crucial step towards transparency.

By KUNAL N. TALGERI


Interview.indd 57 10/17/2006 10:12:11 AM

All of the above public data needs to be shared over the Internet and other media with the public, so that transparency in ULB functioning translates into accountability.

Typically, how much time goes into designing a solution for an ULB? What is the average implementation time?

Ours is a product-based approach. Hence, it’s quicker to deploy as opposed to building custom solutions. The time-consuming steps are government process reengineering, data gathering and solution deployment.

Depending on the product, you can go live in as little as one week for public grievance and redressal modules, to about 6-12 months for the eGov Property module that involves GIS mapping and a house-to-house survey. It‘s taken three years to deploy a full e-governance suite in 57 cities in Karnataka.

How has the GIS solution in Karnataka evolved since its introduction in 2003?

It is hard to run a city effectively without a firm grasp of its administrative and natural boundaries. Many cities where we work did not have decent maps of the city, only rudimentary hand sketches. About 35 percent of its streets did not have a name (or number), and properties did not have a unique door number. We were forced to

undertake a massive street naming and property numbering exercise, and then a base map of the city had to be created with accurate administrative boundaries (wards, blocks), road network and natural bodies.

We then integrated our property tax system to the city’s GIS map and linked each property record to its GIS representation. This gave the city’s revenue department ‘visual decision-making’ abilities. You could ask the GIS system questions like: show me all commercial properties in a given ward

and street, which have to pay more than Rs 2,000 in property tax.

We also generate real-time GIS ward maps to show complaint distribution over the city collected by the Public Grievance & Re d r e s s a l m o du l e (e.g. http://complaints.m c d o n l i n e . g o v.in). We intend to integrate GIS to the eGov Works module, so that citizens and a d m i n i s t r a t o r s can look at ward works across the city and get to the works details such as estimated time, cost, contractor and payment details.

Is eGovernments Foundation involved in improving technology buy-in within ULBs? What are the challenges here?

Continuous training as a means of improving employee productivity

is non-existent among ULBs. The government is a first-generation user of computer technology. They have a limited understanding of IT systems and its advantages. Many of the older employees are threatened by these new technologies. We need to dispel their fears and enlist their support. There is need for capacity building in our ULBs whose staff and their core competencies are woefully inadequate to address the complexities of today’s urban governance.

We work to improve the awareness of our urban local bodies, administrators and other government officials. We also enlist partners such as the Survey of India to impart training on survey and GIS. We conduct workshops and training for ULB staff on property t a x syst e m s , a c c r u a l - b a s e d accounting systems, naming streets and numbering properties, among others.

What are the resources at your disposal? How do you retain engineers with so many other IT companies in Bangalore?

Many of us have rich professional experience. The desire to work for e-governance comes from a dedication to improve governance in India, and this is the reason that keeps our people from jumping ship for higher salaries.

That said, we do have a tough time in retaining mid-level and junior IT personnel due to the overheated IT job market here. We try to retain them through our product-based approach, state-of-the-art technologies and a high-energy environment. We also try and instill a sense of pride in working for our country’s needs as opposed to solving America’s problems.

While we have about 30 full-time employees in Bangalore and Delhi, we have more than 600 volunteers worldwide who help us in many areas. We have GIS experts, urban planners, transportation modellers, and technical architects from our global pool of volunteers from the Indian diaspora. You can volunteer for the eGovernments Foundation through our website www.egovernments.org. CIO

Chief copy editor Kunal N. Talgeri can be reached

at [email protected]


While urban India contributes almost 60 percent to the GDP, revenues from ULBs are only 0.6 percent of GDP. We need to improve property tax collection through improved record keeping and increasing the tax base.”

Interview.indd 58 10/17/2006 10:12:24 AM

By Invitation Only BY GALEN GRUMAN

KNOWLEDGE MANAGEMENT | Cliff Bell came to a somewhat shocking realization last year: the two most important Internet software applications in recent history — e-mail and Web browsers — were failing his company. Overwhelmed by e-mail and lacking the time and energy to surf the company’s intranet for important information, employees simply weren’t getting the information they needed to do their jobs. “People often don’t check [an intranet] landing page,” says Bell, who is CIO of Phoenix Technologies, a maker of electronics components for PC motherboards. “And if you send them an e-mail, it’s not often read.”

But Bell did notice that “blogs get traction.” That led him to explore Really Simple Syndication (RSS), a new model for keeping employees, customers and business partners up to date, one that pushes relevant information to them via subscription rather than relying on their ability to find the information. For example, Phoenix’s legal team uses RSS for legal review, mixing RSS subscriptions with internally generated feeds for specific projects. With RSS, the lawyers no longer have to trawl through e-mail or the intranet to find out what’s going on with a particular project — they can rest assured that if something

Really Simple Syndication can improve

business processes

and help overwhelmed

employees manage

information better.

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

REAL CIO WORLD | O C t O B E R 1 5 , 2 0 0 6 5 9Vol/1 | ISSUE/23

Essentisl Tec.indd 59 10/16/2006 8:44:54 PM

ESSEntIal technology

new happens, they will hear about it. The result is a common, instantaneous channel for legal staff to share information and add their own comments to it. Bell envisions the use of departmental or project-based RSS feeds throughout the company, as well as a common corporate channel for companywide announcements.

Beyond the NewsBest known as the delivery technology for many blogs and for content sites such as Yahoo and USA Today, RSS formats messages in XML for delivery over a network or the Internet to a reader — an e-mail program, Web browser or dedicated application — that displays the messages much like e-mail or a Web page. But RSS is based on a subscription approach, where recipients decide which message feeds they want delivered. It includes filtering capabilities — for example, a subscriber may specify that only stories related to mergers and acquisitions in a legal newsletter should be sent — to keep received messages on target. It’s that filtered, subscription approach that enterprises can take advantage of to create a communications channel that recipients consider useful.

CIOs who are pushing the original definition of RSS are doing so in two primary ways: one is inside the enterprise, to create ad hoc groups that can subscribe to and comment on the same core information, whether for engineers working on a new design or HR staff analyzing the latest standards and regulations. The second method is to focus outside the enterprise by using RSS to deliver custom information that partners and customers subscribe to, such as the ongoing status of an order or transmitting current customer leads to distributors.

The Inside ApproachRoss Szalay, IS director for law firm Dykema, took the internal approach to turbocharge the firm’s ability to monitor current cases. For example, an attorney in charge of a specific client account gets a regular feed of all specific efforts

undertaken by other attorneys for the client, so there’s a unified view of the services the client is getting — and needs to be billed for. “That billing attorney wants to see this status, but he does not want to sort through all the details in our case-management database,” says Bill Gratsch, Dykema’s Web technologies director.

Using RSS rather than e-mail updates works better for both the users and IT, notes Szalay. The RSS feeds automatically go into separate Microsoft Outlook folders, saving users the effort of identifying relevant messages in their general inbox. Because the RSS system sorts and filters the messages, Szalay’s IT staff doesn’t have to configure individual users’ Outlook clients with complex message filters to achieve the same sorting result — nor maintain them.

The Outside ApproachAt Jets International, which provides a matching service between private-plane operators with unused seating capacity

and executives who need a flight, the emphasis of RSS is external, to keep suppliers and customers up to date on available flights and customer requests, according to Nate McKelvey, who serves as both CEO and CIO of the company. Plane operators have a custom RSS reader that keeps them updated on customer requests that match the available seating. (Jets International maintains a database of available jets and customer flight requests, generating the matched data for each client and sending it out as a custom RSS feed.) The reader works within Google, so the operators can conduct searches for executives with specific travel needs and further customize the RSS feed results. McKelvey is working on a similar option for executive travelers.

“We won’t have to worry about e-mail fatigue, since they choose what to get,” he says. But the bigger benefit, he adds, is the ability to make custom data easily available from multiple sources, since it’s straightforward to generate data in the

While RSS is best known as a way to filter the vast world of the Web, most CIos will want

to manage the information they make available via RSS from behind their firewall, so that

outsiders can’t pry into the innermost thoughts of the company. that need has prompted

two companies — newsGator and Knownow — to develop enterprise RSS platforms to

serve as in-house RSS aggregators, so that CIos can tailor internal and external RSS feeds

to specific needs.

Uptake of RSS has been slow so far, however, because to access RSS feeds, users typically

need to do a fair amount of configuring of standalone readers, their browser or an e-mail client.

But in the next year, the major browser and e-mail client companies — Microsoft and Mozilla

— will include native RSS support, so users can read and manage RSS feeds with minimal

configuration. So will the next version of Microsoft office, notes W. Gregory Dowling, senior

analyst at Jupiter Research.

Meanwhile, enterprise application providers like SaP and oracle already include program

interfaces to support XMl exports for use in RSS feeds — with the major portal providers

soon to follow suit, notes Dan Keldsen, senior analyst at the Delphi Group consultancy. “More

and more commercial vendors are RSS-enabling their applications,” Keldsen says. and the

increasing popularity of Web services — which also uses XMl as a standard data format

— makes it straightforward to generate RSS feeds from homegrown applications, he adds.

— G.G.

RSS: the next Generation the technologies aren’t fully baked yet, but the recipes are coming together.

Vol/1 | ISSUE/236 0 O C t O B E R 1 5 , 2 0 0 6 | REAL CIO WORLD


ESSEntIal technology

XML format that RSS uses. “You can now integrate as you see fit,” McKelvey says.

Your Experience May VaryThe downside of RSS for CIOs at this point is its newness. Because it isn’t yet clear how RSS will be used and where, CIOs are finding that they need to do a fair amount of custom configuring of the few tools available to meet their particular organizations’ needs (see “RSS: The Next Generation”).

In Bell’s case, he had to integrate his enterprise RSS aggregator server from KnowNow with his Microsoft SharePoint portal and Microsoft ActiveDirectory directory service. In McKelvey’s case, he had to write a custom reader for his 350 suppliers of seats on private planes because it would have been too difficult, he judged, for his suppliers to configure a generic RSS reader

themselves. The complex configuration has caused him to hold off on delivering RSS feeds to the company’s several thousand customers: “I’ll deploy it to them when there’s no configuration to support,” he says.

Similarly, Szalay’s in-house developers have to write the applets that query the databases and generate the RSS files that are distributed via Dykema’s RSS server from NewsGator. Both say the efforts are not difficult, because RSS uses just a portion of XML’s functions, making the programming simple. Plus, developers are typically familiar with XML, so they can usually dive right in.

From Overload to ManagementLike other knowledge-based IT projects, the hard benefits from the targeted information delivery that RSS provides are difficult to quantify. “How do you judge

the ROI of accessing information more easily?” asks Phoenix CIO Bell. His RSS efforts fall into the technology exploration category, part of ongoing efforts to identify promising technologies that might provide his business a competitive advantage. “It’s not a significant amount of budget, since I don’t know what I’ll get out of it,” he notes. Dykema’s Szalay agrees the cost is small, in the low tens of thousands of dollars. “If it doesn’t work out, that’s OK,” he says.

“We don’t really know how we can use RSS for work purposes,” says Mike Gotta, principal analyst at the research firm Burton Group. While pioneering CIOs are already exploring some possibilities, they’re all guessing at this stage, he notes.Bell expects the use of RSS will increase employee satisfaction — something they can measure — by providing an alternative

communications channel that won’t overwhelm them, as well as provide hard-to-quantify work efficiencies.

With RSS, Bell sees himself helping people to manage information, rather than simply installing and supporting tools. Analyst Gotta concurs: “You have to let people shape their own world. We need multiple paths to information based on people’s work style,” he says. That’s a key part of the RSS promise. CIO

send feedback on this feature to [email protected]

the hard benefits from the targeted information delivery that RSS provides are difficult to quantify. Fortunately, it isn't expensive.

To help CIOs keep up with RSS and

other ‘new channel’ technologies such

as wikis and blogs, Burton Group analyst

Peter o’Kelly publishes a blog devoted to

the enterprise perspective. You can find

it at: www.burtongroup.com/research_

consulting/doc.aspx?cid=11

When you’re ready to deploy RSS inside

the enterprise, you might be interested in

checking out what some companies have to

offer in the realm of enterprise RSS server/

feed management systems:

NewsGator’s Enterprise Server is a

behind-the-firewall solution that delivers

internal and external RSS feeds securely to

employees through outlook, the Web and

mobile devices — all synchronized.

www.newsgator.comKnowNow: Its event-driven RSS eliminates

latency, reduces errors, helps ensure

regulatory compliance, and integrates into

existing It infrastructures and business

processes. www.knownow.comReactivity Inc. has entered the emerging

enterprise RSS market by announcing its

Reactivity Gateways. It seeks to make XMl-

based syndication practical for use with

sensitive, secure and private content. www.reactivity.comZipLine uses targeted web feeds to publish

messages directly to a single user or group of

users throughout the enterprise. Its targeted

Web Feed (tFeed) enables personalized

content using existing web feed readers.

www.voiceoftech.comHiT Syndicaat’s enterprise syndication

management system (based on the RSS

2.0 XMl standard) simplifies tasks involved

in the creation and editing of content to

syndicate. www.hitsyndicaat.com—team CIo

RSS Moves into the Enterprise

REAL CIO WORLD | O C t O B E R 1 5 , 2 0 0 6 6 1Vol/1 | ISSUE/23


The Real RevolutionOpen source is not a cut-price version of what enterprises already have.BY Bernard Golden

Pundit

Open sOurce | IDC, a well-known analyst firm, recently released a study on open source, concluding that it represents "the most significant, all-encompassing and long-term trend that the software industry has seen since the early 1980s."

IDC surveyed 5,000 developers in 116 countries and discovered that 71 percent used open source — 54 percent in their production environments.

Upon its release, a senior executive at IDC said "Although open source will significantly reduce the industry opportunity over the next 10 years, the real impact of open source is to sustain innovations in mature software markets, thus extending the life of software assets and saving customers money."

Yes — and no. Or perhaps more accurately, Yes, and more yes.

IDC's conclusions are interesting. They identify a near-three-quarters proportion of software developers using open source, and recognize the enormous impact that open source has on IT organizations.

These organizations are leveraging open source to get their work done faster, cheaper, and with more control. This clearly represents a revolution in how IT operates.

On the other hand, IDC fails to really examine the implications of their findings. Their report analyzes the use of open source through the lens of the software industry — but that's a myopic view.

This short-sightedness is a natural outcome of the vendor-centric approach to IT that most of the industry suffers from. From this perspective, open source is mostly about the effect it's going to have on the packaged

software industry — its real impact is to shore up existing software markets. In other words, what's important about open source is what it does to the software industry and, by the way, it will save customers some money as well.

While this acknowledges the effect open source will have on existing software players, it fails to recognize the revolution it will bring about in how we run organizations.

In a world of expensive, inflexible software, only the most conservative, obvious-payoff projects get funded. In the new world of open source, companies can experiment, develop prototypes on the cheap, and inexpensively scale the winners.

To understand this dynamic, look at the Web 2.0 companies. I don't necessarily believe that most of them have a sustainable

business at their core — but that's not important. What they represent is a totally different way of getting Internet businesses off the ground. What Flickr, YouTube, and a hundred other companies have in common is that they leverage cheap hosting, open-source software, and commodity hardware to get going — without a cent of venture capital. Put in language that we all use: they delivered applications without having to

make capex investment or even use much operational budget.

Seeing open source as a lower-cost alternative to traditional software is to miss the huge effect it will have. It completely changes the economics of IT projects.

Don't perceive open source as a cut-price version of what you've already got. Think about what projects you can incubate and perhaps hatch into fledgling new lines of business by leveraging easily available, easily modifiable, low-cost software. Look where you've never looked before — instead of taking another look at the same old flock of applications. CIO

Bernard Golden is Ceo of navica, an open-source

consultancy. Send feedback on this column to

[email protected]

Seeing open source as a lower-cost alternative to traditional software categories is to miss the enormous effect it's going to have on the industry.

eSSential technology

VOl/1 | iSSUe/232 8 o C T o B e r 1 5 , 2 0 0 6 | REAL CIO WORLD

ET-Pundit.indd 28 10/17/2006 10:04:56 AM

October 15 2006

Documents

cios role

majority of cios

direct working relationship

direct reporting relationship

cio reports

critical relationship

isnt strategic

strategic intent