cio april 1 2007 issue

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From The ediTor

“If you can keep your head when all about you

Are losing theirs and blaming it on you,

... you’ll be a Man, my son!”

—‘If ’ by Rudyard Kipling

have you ever come across this equation: crisis = danger + opportunity? If you have,

it would typically have been followed by an explanation about the Chinese ideogram for

crisis (wieji) having two parts — one that stands for danger and the other for opportunity.

Then comes a profound bit of wisdom: in a crisis, be aware of the danger but look for

the opportunity.

Except that it isn’t so really. Wieji actually breaks down as danger + crucial point. So

in a crisis, watch out because you are at a critical juncture that can break you.

And, color me cynical but an unstable

state of affairs is hardly the time to be

looking out for how to ‘benefit’ from them.

Survival, absolutely. Business Continuity,

entirely. Learning, you bet. Those are the

bits about a crisis that make it interesting.

Business crises test the best of executives

and CIOs are no exception. In fact, over the

past decade, as IT has become an integral part of an enterprise’s DNA, it’s no surprise that

IT leaders form a vital part of putting together a strategy to tackle an incident that can have

a catastrophic effect on your business.

Our month-and-a-half search for CIOs with compelling crisis management stories

turned up a round dozen (What Would You Do If ? 8). And, no, they were not all

about strikes or floods. It’s remarkable the shapes and forms business crises can take

these days. From reversed electrical polarities frying a datacenter to Budget-induced tax

changes threatening to disrupt sales to even 70 percent of an IT team quitting en masse.

It’s these low-frequency, yet high-impact, events that test a CIO’s mettle, his skill and

ability to remain calm and look for a way out.

Amongst the immortal lines of Kipling’s If are also these: “If you can force your heart and

nerve and sinew, To serve your turn long after they are gone, And so hold on when there is

nothing in you, Except the Will which says to them: ‘Hold on!’”

How have you confronted crisis? What were your learnings? Write in and let me know.

In a crisis, watch out because you are at a critical juncture that can break you and your organization.

Survival. Business Continuity. Learning.

Vijay Ramachandran, Editor [email protected]

Calm in a Storm

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contentAPRIL 1 2007‑|‑VoL/2‑|‑Issue/10

Executive ExpectationsVIEW FROM THE TOP | 44Ashok Malhotra, MD of Otis Elevator India, talks about how IT helps keeps the company on the top floor of India's elevator business.Interview by Gunjan Trivedi

Peer To PeerA FORMuLA FOR ALIGnMEnT | 20 Take an equal measure of business experts and IT professionals. Mix well. And watch IT-enabled processes flourish.Column by Tom Abendroth

Wireless HOW TO TAkE YOuR WAREHOusE WIRELEss| 48 Dorfman Pacific needed to grow, so it needed to get rid of the paper processes that held it back.Feature by Thomas Wailgum

more »

CRIsIs MAnAGEMEnT| WHAT WOuLD YOu DO IF? | 28

Twelve CIOs recall a unique crisis, each of which disrupted business — and challenged their IT organizations’ best-laid plans.Feature by Team CIO

PLUS: Book ExcerptDECIsIOns unDER PREssuRE | 40

A tragic wildfire provides lessons about how leaders can make the best call when there’s no time and no room for mistakes. By Michael useem

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content (cont.)

Trendlines | 13 Identity Fraud | ID Theft from Photocopiers Bio-IT | Talking Tech Saves Lives Government | Soldiering in a ‘Virtual Iraq’ search Engines | ‘Knowledge Bits’ to Boost Search I.T. Maintenance | Sweating the Small Stuff Book Review | Want a C-Level Post? Make a To-Stop List Internet | A Search Beyond Web-crawling Grids | Grid Accelerates Medical Research Physical security | Digital Evidence Better than DNA

Essential Technology | 58 Open source | Is Open Source the answer to ERP? By Galen Gruman

Pundit | Is standard performance what your company is gunning for? By Bernard Golden

From the Editor | 4 Calm in a storm | Survival. Business Continuity. Learning. By Vijay Ramachandran

Inbox | 12

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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

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Govern sIGn OF THE TIMEs | 54In the 1980s, BSNL was among the first to computerize some of its operations. But with systems added over time, this strength was turning them into a mess. Here’s how they called on subscriber signatures to fix their problems.Feature by kunal n. Talgeri

Executive Coach TRAnsITIOn DIsCIPLInE | 26 Mapping out priorities when starting a new job can ease stress and help you hit the ground running. Column by susan Cramm


ManageMent

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Prudence PaysI read your edit, ‘To Protect & Serve’ (March 15, 2007) and the proposed experiment of Dr. McAfee. My belief is that evolution cannot be stopped, and a CIO who tries to stall this effort will see the way of the dinosaurs sooner or later.

If Microsoft is now embedding blogs and Wikis in their new product portfolio, it demonstrates the momentum. Indeed, a prudent approach to what everyone agrees is the way to go. Security and compliance became excuses to put in draconian controls and justify the inflexibility that became the talking point with all users of such IT solutions.

If you do not trust your employees, what righteous justification gives the power to the CIO to decide on how the enterprise will behave and operate with shackles?

The unfortunate reality in many a case is that 98 percent of the business community suffers for the sins of the 2 percent who may potentially breach the fort. If a CIO understands business drivers, the end point will be dramatically different with an open environment that shouts a message, “I trust you! But if you breach this trust, you are out.”

The answer to Dr. McAfee’s riddle is

a no-brainer: free enterprise surpasses restrictive practices by a huge margin.Arun GuPtAtAt

Customer Care Associate & CTO

Shopper's Stop

Growth is the KeyThe role of the CIO is a relatively nascent one. Most top managements, particularly in India, aren’t sure exactly what to do with this person if he’s given a seat on the top table. So, when you ask the question in your editorial (CIO vs BTO, March 1, 2007) whether the role of the CIO will morph into that of a BTO, I would reply that any executive who wants to be taken seriously in business has to contribute to growth.

There is no place at that table for a utility service provider, a code fixer or even someone who runs the transactions in the belly of the organization.

Some of the most insightful CIOs I have met are people who have moved across functions. One set up a plant and handled procurement before becoming a CIO. Another was running the company supply chain, and took on the CIO role to help get the job done better. Yet, another was a consultant and had P&L responsibilities to meet. So quite apart from getting a seat on the table, I believe that to even be effective a CIO, at some time, must handle some aspect of the core business. Maybe, your next edit could explore job rotation!AlAGu BAlArAmAn

Executive VP (IT & corporate development)

Godfrey Phillips

Educating ExperienceThe CIO Focus event on security in February, featuring the panel discussion, was great. While most people present there placed security strategy above tactics, I would disagree completely. My stand is that you need an in-between path of strategy and tactics. Strategy by itself will not mean much without security tactics, and tactics without strategy will lack vision.

I have a suggestion for a CIO Focusevent in future: if you invite engineering and communications students who might be the CIOs and CSOs of tomorrow, for them to gain knowledge of what it is like to be a CIO or CDO, they can develop an understanding of the industry by interacting with three or four CIO-panelists. It would be a service to them and would also serve as a forum to develop future information and security leaders.

On the magazine front, CIO is great as always. Maybe, it’s time for the magazine to increase the local-US content balance towards India-oriented content. Your coverage of sectors has also been good, but education as a sector needs to be touched.BurGESS COOPEr,Head-IT security

Hutchison Essar

reader FeedbaCk

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

Quite apart from getting a seat on the

management, I believe that to even be effective, a CIO

must handle some aspect of the core business at

some time.

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I d e n t I t y

F r a u d Photocopiers are the newest threat to

identity theft, according to a copier maker, because the

new models are equipped with hard drives that record what has been duplicated. It's a threat especially during tax filing time.

“Consumers and business owners will photocopy highly confidential tax forms containing social security

numbers, employer identification numbers, and other sensitive information in places outside the home, leaving them vulnerable to digital theft,” states Ed McLaughlin, president of Sharp Document Solutions.

At issue are the hard drives embedded in most copiers and intelligent printers manufactured in the last five years. Data is

stored on the drive before a document is copied or printed; unless security provisions are in place, the data is stored unencrypted and remains there until the drive is full and new data overwrites old.

Sharp, a major copier maker, commissioned a survey that found 55 percent of Americans plan to photocopy or print out copies of their tax returns and supporting documents this year. And almost half of that number will do so outside the home, using copiers and intelligent printers at their offices or public machines at libraries and copy centers.

Sharp’s survey also indicated that 54 percent of those polled had no clue that digital photocopiers store an image of what’s duplicated, and that a majority believed running off returns on copiers or printers is a safe practice.

Sharp was one of the first photocopier makers to offer a security kit that encrypts data on the hard drive and ‘shreds’ each copied document by overwriting the image after it’s printed. Rival Xerox introduced similar features on its machines last year.

“We’ve told enterprises that they should change the password from the default on copiers and [multi-function printers],” says Avivah Litan, an analyst with Gartner. “They should disable all services that they don’t need, and make sure that the data modem is separate from the fax modem.”

— By Gregg Keizer

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

m e d I c I n e University of New Hampshire researchers are working to make hospital operating rooms safer by fostering better communication among computerized healthcare equipment, such as hospital beds and blood pressure monitors.

They are exploring the use of CANopen, a protocol that uses common hardware and software, and that has been used in the automotive industry for years to establish interfaces between computerized car parts.

The trick with using CANopen in healthcare is that the equipment makers

are so competitive that they’ve been skittish about handing over information about their products needed to do the research.

“We’re trying to get pieces of equipment that don’t normally talk to each other to do so,” says John LaCourse, professor of electrical and computer engineering at UNH, in a statement. “We’re doing something that we feel is going to save peoples’ lives.”

Having a hospital bed talk to a blood pressure monitor is important since the raising or lowering of a bed can affect blood pressure, for example.

“Our primary objective is to reduce the 98,000 annual death rate caused by medical errors,” says principal investigator LaCourse, who is working with a company called IXXAT and Massachusetts General Hospital in Boston, home of a broader project called the 'Operating Room of the Future'.

Other OR equipment that could soon benefit from the research includes ventilation systems, plus ultrasound and electrocardiogram monitors.

— Network World

ID Theft from Photocopiers

REAL CIO WORLDREAL CIO WORLD || a p r i l 1 , 2 0 0 7 a p r i l 1 , 2 0 0 7 1 31 3VVOLOL/2 | ISSUE/10/2 | ISSUE/10

Talking Tech Saves Lives

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G o v e r n m e n t A soldier is riding in a humvee convoy through what could be the tranquil Mojave Desert. Soon, the vehicle is passing through a Middle Eastern city where the smell of exotic spices and cooked lamb waft through the truck as it rumbles past burned-out cars and bombed-out buildings. In an instant, a second humvee explodes in front of the soldier’s vehicle, and the concussive force of the bomb shakes the truck.

This scenario is part of a new virtual reality system developed by researchers to help soldiers who are suffering from post-traumatic stress disorder (PTSD) brought on by their service in the Iraq war.

The goal of the system is to gradually expose returning soldiers to the sights, sounds and smells that traumatized them in Iraq, says Albert ‘Skip’ Rizzo, research assistant professor in the Institute for Creative Technologies at the University of Southern California. The exposure should help ease PTSD symptoms, he adds.

Since beginning clinical trials using the system at the end of last year, six soldiers have been treated on it, Rizzo says. Four of those have seen “dramatic improvements,” he notes. In fact, one of the treated soldiers is said to have returned to Iraq, and a second will soon go back.

The virtual reality system is based on a video game called 'Full Spectrum Warrior' that was developed by the army. The researchers added graphics, sounds, vibrations and smells to the original game to create various scenarios mimicking those experienced by soldiers in Iraq, Rizzo said.

The scenarios include soldiers being shot at by insurgents, crashing in a helicopter or witnessing a bomb exploding or a fellow soldier being shot. To help make the experience more real, the platform where the soldier sits can vibrate during a humvee ride and provide the smell of human sweat, gunpowder or burning rubber, Rizzo says.

“We’re basically trying to use computer systems to create as immersive an environment as we can,” he said. “The sense of smell is directly tied to areas of the brain that are responsible for memory and emotion.”

Using a tablet PC, the person treating the soldier can gradually add more frightening stimuli. With this technique, “a person experiences a little bit of anxiety, and they stick with it and talk about it, and eventually that anxiety extinguishes,” Rizzo says.

Based on feedback from soldiers, researchers now have plans to enhance the realism of the system.

— By Heather Havenstein

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s e a r c h e n G I n e s A recent search query for ‘George Washington’ on a beta version of a new search engine called Hakia brought back results organized under 12 categories including headlines, biography and timeline.

During the development of the engine, engineers at Hakia scoured each of those Web pages for what the company founders call ‘knowledge bits’, or pieces of relevant information such as dates, names of people and events to provide more pertinent results than current engines can.

Each page also includes a virtual guide located prominently at the top urging users to ask further questions for more details about the search subject. In this case, the response to the question 'What was George Washington’s greatest accomplishment?', the guide answers that it was 'never losing so great a battle that he couldn’t continue to fight'.

The technology is the brainchild of founder and CEO Riza Berkan, who spent much of his career using artificial intelligence to classify documents related to the country’s nuclear weapons programs while working for the US Department of Energy.

Berkan wanted to launch Hakia in 2004 with a plan to apply natural language processing techniques in the development of a search engine. It should interpret the meaning of information a user sought based on words typed in the search box instead of just indexing pages based on keyword matches, he says.

Hakia is different from today’s typical index-based search in two ways, Berkan adds.

First, the company’s developers have spent the past two years manually building maps of concepts and how they are related so “by looking at the questions [in search queries], we know what concepts are involved.” Also, instead of indexing results based on words found on a Web page, Hakia uses a technique it calls Qdexing to bring back more relevant search results. Qdexing involves the analysis of individual Web pages for the ‘knowledge bits’, like dates, names and events to help generate better search results.

“We spend much more time on any given page to understand the concepts involved, the credibility of the page and many things like that,” Berkan says. “The number of pages [returned from a query] doesn’t really matter much if you think about it. The number of knowledge bits is the important thing,” he adds.

— H.H.

'Knowledge Bits'to Boost Search

Soldiering in a‘Virtual iraq’

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I n t e r n e t Artificial intelligence-based search technology originally developed for US military and government agencies to gather intel from the so-called deep Web is now is finding a place in businesses looking for tool that can scour the Internet beyond the Web-crawling capabilities of Google or yahoo.yahoo.y

One company, Fetch Technologies, is focusing on building technologies to harvest data ensconced in databases and behind forms that obscure it from traditional general search engines.

A number of US government agencies funded the development of the Fetch technology by researchers at the University of Southern California’s Information Sciences Institute during the 1990s. A group of computer science professors who developed the core AI algorithms of the Fetch Agent Platform later founded the company to build a commercial product.

The hosted Fetch Agent Platform search engine is still commonly used by government agencies seeking to rapidly import and integrate data from websites and databases for emergency response, location intelligence and anti-terrorism efforts. However, over the past two years, says Fetch CEO Robert Landes, use of the technology has been extended to businesses in different vertical markets looking to better target specific data sources on the Web.

“We can go to places and extract information where Google and yahoo can’t,” Landes says. “The idea of yahoo can’t,” Landes says. “The idea of yhow to cast this net, how to extract and aggregate information that [companies] can find useful from a commercial standpoint is where the company has really exploded.”

For example, travel industry data aggregator Farelogix is using Fetch’s technology to integrate fares, scheduling and related information from airlines, hotels and other travel destination sites, Landes says.

Landes notes that while a Google user could perform a general search for data about Toyota Camrys, a Fetch client could use the same search to compile the color, description and style number for all Camrys in the US. To do that, Fetch builds an AI agent to extract that particular data, not just to look for Web sites that may contain that data, he says.

In addition, the tool can mimic human behavior by automatically filling out a form without human intervention, using data from search results.

While a company could extract data from websites on its own, it would be hard-pressed to scale to some of the demands of Fetch clients, Landes adds. One client, for example, uses a Fetch agent to extract news from 40,000 websites, he says.

— H.H.

A Search Beyond Web-crawling

B o o k r e v I e w Most executives have an ever-growing to-do list. But if you’re looking to take the next step in your career, Marshall Goldsmith suggests concentrating on a ‘to-stop’ list. Goldsmith, an executive coach who works with people being groomed for the C-level suite in top companies, says that often, successful people could be more successful if they ended some bad behavior.

In his lively and often humorous book, What Got You Here Won’t Get You There, Goldsmith looks at 20 workplace habits that could leave your career stuck in neutral — or worse, get you fired.

Do you not listen well enough to colleagues? Is your negativity dragging people down? Is your temper the subject of water-cooler gossip? Do you hog the credit when things go well but pass the buck when they don’t?

Any of these 20 habits could be sandbagging your career prospects. Your people skills (or lack thereof) are more noticeable the higher you climb on the corporate ladder, says Goldsmith. Therefore, identifying your pitfalls and addressing them should be a top priority.

To this end, Goldsmith lays out a multi-step regimen that includes getting feedback from colleagues, selecting a key area

or skill to target, apologizing to those affected by your flawed behavior, advertising your efforts, and then following up.

Goldsmith lays out his case in a no-nonsense way and makes it known that you must truly want to change. Refreshingly, mixed in with dozens of interesting real-life case studies, he shares his own foibles.

— By Cathy Mallen

Want a C-Level Post? Make a 'To-Stop' ListBreaking into a new level often requires cutting out those annoying habits.

What Got You Here Won’t Get You Thereby Marshall goldsmith, oldsmith, with Mark reiterHyperion, 2007, rs 1,080s 1,080

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P h y s I c a l s e c u r I t y The emergence of digital evidence means investigators now have many more ways to find out who committed a crime and how, but it also means wading through near-endless amounts of data to arrive at those answers.

So said retired special agent Jim Christy, now director of the future explorations unit of the Department of Defense’s Cyber Crime Center, who recently gave a keynote speech at a Black Hat conference.

Considering all the electronic devices that the average person uses in the course of a day (and how much information they collect), he believes digital evidence can give investigators insight into a crime like no other type of evidence can.

“I think digital evidence is more powerful than DNA evidence,” Christy told the audience. “It can answer who, what, where, why, and how; DNA can only tell you who.”

Only about 1 percent of criminal cases introduce DNA evidence — contrary to what is typically portrayed on television crime dramas — because most of the time, it’s not relevant, he says.

Christy walked the audience through a typical person’s day and the digital trail of information collected about his or her actions, starting with the alarm clock that tells what time a person woke up to a video camera at a gas station taping when gas was pumped to cellphones logging what time a call was placed and to whom.

Searching through the information collected by these and other devices can paint a more complete picture of a suspect than any other medium, he says. For example, investigators can learn a suspect’s movie preferences, biometric information, what hobbies they have, what their motives might be — through e-mail and instant message conversations — even what they scoured a search engine for, he says.

“There’s a tremendous amount of evidence out there to help prove or disprove allegations,” Christy says. “The bad news is the volume is tremendous.”

Calling on the security industry for help, Christy asserts that investigators need better tools to help them sift through and make sense of these piles of data and process evidence in a timely matter.

— By Cara Garretson

Grid Accelerates Medical ReReR searcrcr hG r I d s A project that allows the public to donate idle computer time to a grid computing system is helping scientists solve complex medical problems more quickly. For example, the World Community Grid has helped researchers dramatically speed efforts to develop new drugs to treat HIV and identify new treatment paths for people with several different types of cancer.

IBM launched the community grid in late 2004 to allow computer users worldwide to donate idle computer processing power to a grid tasked with performing medical research. Since then, its users have donated the equivalent of more than 78,000 years of research time, according to IBM. The grid today includes 265,000 members and 530,000 devices. It has helped researchers compile about 6 crore research equations, officials said.

The Help Defeat Cancer project has used the grid to help build a massive public database of tissue samples that eventually will be used like a national fingerprint registry to get more accurate diagnoses from biopsies.

David Foran, professor of pathology and radiology and director of the Center for Biomedical Imaging at the University of Medicine and Dentistry of New Jersey (UMDNJ), says the effort has already created the "gold standard of databases" for breast, head and neck, and colon cancer. The project aims to eventually use the database to diagnose cancer and to plan the best course of treatment for patients, says Foran, who is leading the project.

In addition to the tissue images, the database stores comprehensive data about treatments received by patients participating in the project. As a result, physicians and pathologists can compare a new biopsy to all those in the database and then determine which types of drugs and treatments have worked best for other patients with the same types of tumors, Foran says.

It would have been impossible for Foran’s research team — which has no access to a supercomputer — to create the database without the community grid, he adds.

—By Heather Havenstein


Digital EviDEncE

Better than DNA

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A Formula for AlignmentTake an equal measure of business experts and IT professionals. Mix well. And watch IT-enabled processes flourish.

Why would someone complete medical school and residency training, then spend a decade in IT to become a CIO? Colleagues ask me this when they hear my background.

My response reflects the growing importance of integrating business professionals with information technologists.

Healthcare, like other fields using automation to transform business practices, requires a fusion of IT expertise and subject matter expertise. This need has given rise to multi-disciplinary project teams that couple clinicians with information technologists, and to the emergence of individuals who are trained dually as clinicians and IT professionals.

During my medical training in the 1980s, I observed clinicians hampered by primitive information management tools. Information sharing among health professionals within any single hospital was sub-optimal. Sharing across healthcare settings was extremely limited. Efforts to improve this situation were insufficient, with limited clinician involvement in IT.

The magnitude of the problem — and the potential benefits achievable by attacking it — captivated me. With a naive understanding of the challenge ahead and no evident career path, I decided to focus my professional life at the intersection of medicine and IT. Over the past 20 years, the most important lesson I have learned is the value of blending IT professionals with the subject matter experts they support.

The Business-IT Mind MeldDuring the past decade, our academic health center has created multi-disciplinary teams to implement an electronic medical record (EMR). Though we are deploying commercially available

Tom Abendroth Peer To Peer

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Coloumn A Formula for Alignment.20 20 3/27/2007 4:07:05 PM

products, this undertaking has proven to be ambitious for us — as it has for the entire healthcare industry. We have succeeded thus far because we have engaged clinicians to work alongside IT professionals, not just as consultants or focus group participants, but as this-is-my-job-and-passion members of the EMR team. Several clinicians have stepped away from direct patient care, driven by a desire to advance their professions and a recognition of IT’s potential to assist. A dozen nurses, pharmacists and medical laboratory professionals now devote themselves full-time to improving patient care processes, applying automation where it can help. Several physicians remain clinically active but dedicate up to 40 percent of their time to our EMR initiative.

We ensure that each project team integrates clinicians from different disciplines, since collaborative planning is required to design effective team-based care processes. Physicians, for example, know what care is required and why but often are unaware of the downstream workflows used by nursing, pharmacy, radiology and laboratories to deliver this care. Similarly, most clinicians know how they would like the computer system to work but require the expertise of the IT professionals to make it work that way. Together, and only together, does our team of clinicians and IT professionals encompass the experience and expertise required for effective process automation in health care.

Our EMR team members have benefited one another professionally. The members from IT have learned the clinical relevance of the systems they install, providing meaning and personal rewards not previously realized. The clinicians, meanwhile, have learned IT skills, such as workflow analysis and project management principles, increasing their ability to leverage automation to improve clinical processes. Most have, without deliberate career planning, developed hybrid skills that will make them more valuable for the rest of their careers. Several of the clinicians have made permanent career transitions to IT roles.

Implementing computerized physician order entry — a critical EMR milestone that enables physicians to order diagnostic tests and prescribe medications and other treatments — had been a personal goal for 15 years. Upon finally reaching this milestone recently, I was overwhelmed not by a sense of technical accomplishment but rather by pride in our team — how it had grown together, the passion and commitment it demonstrated, and the fact that it was unstoppable with or without me.

How to Align Your Project TeamThe strategies for creating such integrated teams are straightforward:1. Forge the project team from individuals who are respected subject matter experts and who are inspired by the greater goal of the initiative (for us, improving the quality of the

care we deliver). If backfilling the vacancies created by these individuals in their work units is not painful, then you probably have selected the wrong individuals.2. Establish two leaders for every project team: a project leader from IT to perform traditional project management functions and drive technical decisions, along with a process leader from the business unit to drive workflow redesign decisions. This pairing mirrors the inherent duality of IT-enabled transformation: technical execution married to effective process redesign.3. Require that team members have a common space, common goals and a functional dependence on one another to succeed. If you demand that they interact intimately on all aspects of project work, the cultural differences that exist among them will soften over time to create a new, shared culture.4. Establish a forum for integrated decision making, where team members from all disciplines (for us, nurses, physicians, pharmacists, clinical technologists, medical records personnel and IT professionals) must contribute. This forum becomes the nerve center of the project. Eradicate decision making in silos, because there are few decisions that affect only a single discipline within a team-based workflow.5. Allow no party to proceed along an independent path. Nourish the commitment to multi-disciplinary integration where it exists; force it where it does not; and highlight the successes achieved through collaboration.

We all will complete major projects in our careers. Some will fade, especially as advances in IT transform our grand accomplishments of the past into trivial exercises in the future. But the memory of our EMR team’s maturation will never leave me. I am excited by the new generation of clinicians who are embracing IT early in their careers, working alongside IT professionals who are learning the processes of health care. Through this evolution, the landscape of healthcare IT will never be the same. CIO

Tom Abendroth is CIO of Penn State Milton S. Hershey Medical Center and the Penn

State College of Medicine. Send feedback on this column to [email protected]

Tom Abendroth Peer To Peer

our eMr team members have benefited each another professionally. IT members learnt the clinical relevance of the systems they install; the clinicians learnt IT skills .

REAL CIO WORLD | a p r i l 1 , 2 0 0 7 2 3Vol/2 | ISSUE/10

Coloumn A Formula for Alignment.23 23 3/27/2007 4:07:05 PM

Transition DisciplineMapping out priorities when starting a new job can ease stress and help you hit the ground running.

The very nature of starting a new job jeopardizes the chances of a successful, or at least smooth, transition. In a time when you need to be at your best, you feel the greatest anxiety — anxiety that

impairs your judgment and social skills.Your anxiety is well-founded because you understand the

risks. Studies indicate that failure rates for new executives approach 40 percent to 50 percent. Unfortunately, there is too much to know and too many unspoken expectations to make the transition process anything but stressful.

Research supports what we know intuitively: failures or setbacks during a transition occur because newly appointed leaders falter at getting along while they are trying to get it done. While the advice to use the first weeks on the job to question, listen and learn is sound, it’s hard to act upon. Executives often feel that they don’t have a grace period because they sense their new colleagues responding with thinly veiled impatience.

Consider a client of mine named Philip. Philip was insistent that he wanted help in moving into a new role, but he never seemed to make progress on his coaching assignments. While his behavior was illogical, it was understandable. He was cast at sea in his new job, buffeted by waves of deadlines, re-organizations, interpersonal issues and staffing challenges. I had to threaten to terminate our relationship, the coaching equivalent of shock therapy, to get him to think rationally about his priorities.

The competing demands inherent in job transitions bring on heightened anxiety. Daniel Goleman, in his book Social Intelligence, defines a neural state called ‘frazzle’. In this stressed state people become self-absorbed and find it difficult to concentrate, think clearly and establish a rapport with

Susan Cramm ExECutivE CoaCh


Coloumn Transition Discipline.in26 26 3/27/2007 4:08:47 PM

Susan Cramm ExECutivE CoaCh

others. The challenge of job transitions is to manage stress so that you can operate at your best both cognitively and interpersonally. And the key to managing stress is to take control by formulating a transition plan or ‘road map’ and building it into your calendar.

Start by determining what you need to learn and from whom during the first week on the job. Then, identify your stakeholders and schedule meetings with them within your first few weeks. These meetings serve three purposes: to establish a rapport with stakeholders, to understand what they care about and what you can do to build credibility, and to signal a sense of your values and working style.

Establishing a rapport requires one-on-one, in-person meetings in venues where both parties will be relaxed. Coffee and lunches are great, but time spent together on airplanes is even better. As a bonus, sales and operational types will appreciate your interest in traveling to the field so that you can experience the front lines of the business firsthand.

Understanding what stakeholders care about is the next step. However, many clients are intimidated by what to ask and how to behave in these meetings. I tell clients that by the end of the meeting they should understand the stakeholder’s key objectives and initiatives, major concerns, how to support their interests and who they should get to know.

Let the stakeholder do most of the talking, but be ready to share your views. Be friendly and respectful, look them in the eye, and clearly state the meeting’s purpose. At the meeting’s end, thank them and say you will ‘circle back’ to confirm your understanding and review a draft of your strategic road map with them once you have gathered more information. Afterward, demonstrate your commitment by doing something unexpected and relevant on their behalf, such as following up on an issue. Such an act signals values and working style.

Once you have worked through half of these meetings (about a month into the job), you are ready to formulate your strategic road map. This should include an assessment of the situation, objectives, strategies and initiatives. It should consist of six-, 12- and 24-month phases with success measurements, key issues and mitigations, and next steps.

It’s likely you won’t feel comfortable doing this with key stakeholders so early in your tenure. An alternative is to draft the road map with your direct reports and then review the results with external stakeholders. Again, use your calendar to take control by scheduling these circle-back meetings before you draft your road map.

Through this simple process, Philip regained control over his job while securing the support and commitment of those around him. In fact, this process should be part of every leader’s planning repertoire. Regaining focus is key to fighting off the frazzled mind and ensuring that getting it done isn’t at the cost of getting along.

Reader Q&AQ: The most stressful aspect of a transition is dealing with the expectations of direct reports. What tips do you have for building credibility with them?

A: People want to be respected and valued. They want to work for someone who cares about them, is competent and has vision. Jump-start strong relationships by taking the time to get to know your staff — their goals, backgrounds, job challenges, passions and ideas. Demonstrate your understanding by removing barriers to make their jobs easier. Respecting the past is also key to building credibility. Many executives commit the faux pas of criticizing the past. Doing so dishonors those whom they need to engage in the future.

Q: You say research shows a 40 percent to 50 percent failure rate for newly appointed leaders. Why is that?

A: Success in leadership roles depends on relationships and knowledge of the organization and industry. Most organizations don’t have support systems to facilitate the transition process. For new employees, the lack of relationships and credibility combined with an unfamiliarity with the corporate culture, sources of power and informal networks make the transition period treacherous, even for executives with strong track records.

Q: Can you offer me suggestions for how to move from technical lead to CIO? I have worked in IT for 15 years. I have a master’s degree in technology management and computer science.

A: IT professionals with your qualifications are in demand. But skilled professionals can be sidelined because of issues with building relationships, delivering on commitments and building teams. Career counseling will help you understand your motivators, values and goals, and will enable you to plan an approach to accelerate your progress. CIO

Susan Cramm is founder and president of

Valuedance, an executive coaching firm in San

Clemente, California. Send feedback on this column

to [email protected]


Coloumn Transition Discipline.in27 27 3/27/2007 4:08:48 PM

Cover Story - 04.indd 28 3/27/2007 4:59:13 PM

Awise cannibal in a Thomas Harris novel said, “What a collection of scars you have. Never forget the best of them. And be grateful, for our scars have the power to remind us that the past was real.”

Fast-growing enterprises have their equivalent of scars that they acquire by dealing with crises. And, as CIO India’s special coverage of crisis management demonstrates, the best enterprises have tackled unexpected situations — before using them as a crucial learning to get back on their path of growth. In the following pages, each of the 12 CIOs featured retraces one unforgettable low-frequency, high-impact situation they have encountered.

During our 45-day search, a range of such scenarios emerged, including government policy changes, industrial action, floods and power blowouts. These constitute situations, often borne from external factors, for which it would be hard to draw out contingency plans. Yet, business must grapple with them to stay on course.

As an IT leader from the manufacturing sector notes, “For long, situations in business in India were not so dependant on IT that it would lead to a shutdown or something of that sort.” It’s only in the past eight years that IT has revolutionized the way business functions — through thick and thin. A few CIOs believe that a distinction needs to be made between ‘crisis in the IT organization’ and ‘business contingency that requires IT’s support’. Be that as it may, information unites business and the IT organization, whilst enabling management and the CIO to put its crisis in perspective and make amends.

Check out how 12 CIOs brought the house back to order when it didn’t just rain. It poured!

Reader ROI:

Dealing with low-frequency,high-impact situations

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Awhile back, tamal Chakravorthy, tamal Chakravorthy, tthen the head of It infrastructure t infrastructure tat PepsiCo, was headed for a bath when he got a call from

his office. one of his servers had shut down, but that wasn’t going to stop him from taking a shower.

“My first reaction wasn’t of worry,” says Chakravorthy. “It’s normal to have a server fail (in our line of work). I certainly didn’t jump out of my seat. I just wanted my hardware vendor, hP, to fix it. If it was a software issue, then the software folks would fix it. I thought someone somewhere would...” he recalls.

that’s when the other servers started to drop like nine pins.

the wipeout couldn’t have come at a worse time. “It was half-yearly reporting. I remember because an england-India cricket match was on.” Chakravorthy knew it was time to start his one-hour commute to the office. he was getting phone updates: all that his staff could determine was that every rack in the server room had electricity running through it. “that’s when I started to worry… the engineers could not even touch the electrically-charged racks, which meant that no one could assess the extent of the damage.”

the situation fit one of his two definitions of a crisis. “A crisis is when business has shut down and there isn’t a time-horizon

to rectify it.” unfortunately, it also fit his second definition. “My other definition of a crisis is when business is dying to do something but because It has faulted or systems don’t work, they can’t.”

And business needed his systems urgently. It was half-yearly reporting time and the entire finance team, many of whom had been flown in for the meeting, was waiting. “Management was screaming, and I couldn’t tell them when I could have the systems back up because I didn’t know what the problem was.”

Meanwhile, the electricity was frying his systems. “It started with my sAP server, then my email server, my domain server, then my intranet and website servers. And, it went on until all 25 servers were out,” he says.

It was four to five hours before electrical engineers could stop the

electricity from destroying the servers. “but, my problems started only after they had done their job. the sAP server was destroyed, and my team had no idea about sAP,” he explains. the It team had to get hP and someone from hyderabad on the phone to walk them through the repairs to PepsiCo's sAP system.

It took them nine hours, with 18 of the company’s top suits waited to get the systems back up.

the losses came in two forms: delays in reporting and wasted time. More tangibly, the inability to create invoices and challans halted delivery challans halted delivery challansof innumerable cases of Pepsi, “which meant that many more bottles of Coke were being sold”. he estimate a loss of at least rs 10 lakh.

“At that time, I couldn’t have foreseen such a situation. but, now I can,” he says

wryly. “We learnt a lot about sAP, for sure. It also got the idea of starting a disaster recovery site going and we created a bible to handle crises,” he adds on a more serious note.

If the same were to happen to him today, Chakravorthy says the damage would be more limited. experience has given him eyes. “We have predictability now.”

— As told to sunil shah

an electrIcal reversal wipeDoutyouRDatacenteR?

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tamal chakravorthy, CiO, Ericsson india

Tamal Chakravorthy | CIO, Ericsson India

What Would You Do If...

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every user’s general perception of the IT function is this: anything that does not work is the IT department’s responsibility.

For example, no one thinks of IT when they shop for a new gadget like a mobile phone or a notebook, or invest in new ‘personal use’ technology. But let it break down, and the first picture that crosses their mind is the IT department.

Likewise in the context of projects, all foreseen problems are in the project team’s direct control, but all unforeseen issues belong to the IT team: be it technology knowledge, expertise in installation and integration, security setup, tuning for full load response, or anything else under the sun.

We had a case of a large project which, for some strange reason, had the delivery teams split across three locations. The development team was in one city, IT support was based out of another city, and the servers themselves were close to the customer in a different country.

All the three teams were interconnected through the Internet. The project’s front-end team landed first in this new country, and the servers were quickly rented. And then, to their shock and horror, this team realized that the expertise available locally in the country

was insufficient to install the right software on the high-end servers. Naturally, the entire load fell upon the IT department.

Unfortunately, there was no time to get visas to travel to this country. Therefore, the team sat down to work around the clock, doing remote software installation with a constricted Internet line. Finally, they managed to bring up the server and application.

It doesn’t end here. After all this was done, one of the hard disks failed. Again, the people at the location had no clue as to which disk was faulty and needed to be replaced. To overcome this problem, a Webcam image was beamed across the world, and the IT team guided the local country team and told them which drive to change was faulty.

Once this was identified, the faulty drive was pulled out and the process started all over again. All went well for a while until we got into load handling problems, which called for system tuning. After the development team in the third city tried and threw up their hands in despair, the need arose for help from third party technology vendors,

who were based in a different city. Once again, the load fell upon the IT team, which created ‘delegated’ remote access for the vendors. Eventually, the issues were resolved.

The entire problem lasted a week, but our biggest learning was that every time such events happen, we add a few more ‘service menu items’ and formalize the services demanded with costing and SLAs.

This is a classic example of what types of crisis the IT organization lands into while handling unplanned situations.

Quite often, an IT setup provides the best excuses, if not the best solutions, to a situation. It is every IT setup’s endeavor to make sure that we don’t get surprised by the demands on us, and stay as a solutions department rather than an excuses department!

— As told to Balaji Narasimhan

youaRetoo Far aWay? "With projects, foreseen

problems are in the project team’s direct control, but the unforeseen issues generally belong to the iT team."

v. Balakrishnan, CiO, polaris Software

V. Balakrishnan | CIO, Polaris Software

What Would You Do If...What Would You Do If...

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At Mphasis, risks center on bPooperations. And to moderate our risks, we work on continuity plans with our customers. We

also use an MPls (multi protocol label switching) network to connect all our domestic locations. We had provided for redundancy in terms of last-mile links, provided by two different carriers.

still, we once faced a severe outage and a number of sites suffered production disruption. later, we discovered that our redundancy plans stopped at the PoP (point of presence), beyond which there was just one router. this meant that sites connected to the specific MPls PoP were affected.

Fortunately, we operate a 24x7x365 global network operations center in

bangalore, which monitors our network. It picked this up. And because of our prompt response, we didn’t have to resort to our disaster recovery plans that provided for action after 4 hours.

We learnt from the experience, and we made two changes: we got the carrier to put redundancy at the infrastructure at the PoP and we also moved one of the last-mile links to a second PoP. this level of redundancy has stood us in good stead.

our systems are tested at intervals by the forces of nature but we have not faced any problems yet. one example that comes to mind is the tsunami in 2004, which affected circuits going eastwards. Planning came to our rescue in the form of our circuits going westwards. the other time was the recent earthquake around taiwan that threatened taiwan that threatened t

our network but we routed everything from the Pacific to the Atlantic seamlessly without a minute of downtime.

We can do these things because our network is a dual Atnetwork is a dual Atnetwork is a dual A M (Asynchronous transfer Mode) ring with redundant transfer Mode) ring with redundant tcarriers. this means that we use different cable systems and track them down all the way down to the actual systems used by the carriers. even though our contracts with both vendors are different, we make sure that there is no duplication of cable networks between the two carriers.

the most important thing I’ve learnt about risk mitigation is that it needs to be done at the source. you shouldn’t you shouldn’t ysign a contract and then have to worry about the risks.

— As told to balaji narasimhan

Vol/2 | Issue/103 2 a p r i l 1 , 2 0 0 7 | REAl CIo WoRld

there Is an overnIght chanGeinGoveRnmentpolicy?

At 8 PM on February 28, 2007, after most of his IT team had left for the day, S. Chandrashekhar received a call from Ashok Leyland’s taxation department. They wanted him to update all outgoing forms by the following morning.

S. Chandrashekhar, deputy GM-application development and maintenance, Ashok Leyland, sat up.

“Normally, a change of this kind would have been put through the paces. It would have been handled lower down the command chain.”

So why did the taxation department decide to call out the big guns? Because the government’s new Budget required companies to fork out an additional 1 percent cess for higher and secondary education. It meant changing many outgoing invoices — fast.

It wasn’t like the folks at Ashok Leyland hadn’t foreseen such a move — they had. “We had expected such a move, but we thought that

the existing education cess of 2 percent would be hiked to 3 percent,” recalls Chandrashekhar. Bumping up the cess would have been a breeze for the IT department. But in the post-Budget confusion, many companies were not sure whether the government wanted to lump the cess together or create a separate line item on all their invoices.

What made Chandrashekhar sit up was the amount of work involved in carrying out such a task — primarily because Ashok Leyland didn’t own a store-bought ERP, but a home-brewed one.

“Our [ERP] system,” says Chandrashekhar, “is as good as any packaged solution." But it would have also forced them “to carry out code modifications on 30 different programs.”

The logical thing to do was to wait until the Budget dust had settled down. Soon accountants across the country would have a clearer idea of

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S. Chandraskekhar | Deputy GM-Application Development & Maintenance, Ashok Leyland

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What Would You Do If...What Would You Do If...whether the government demanded a separate line item (which would drive their IT departments to

make changes to company invoices) or not. But, the truck maker couldn't afford to

wait. A change in invoices impacted where it hurt the most. Ashok Leyland sells about 8,000 vehicles a month at an average price of Rs 6 lakh. The potential loss for each day they had to wait for clarity was at least Rs 16 crore, as invoices could not be raised and sales would come to a standstill.

The new line item also threatened to hold up supply of parts and raw material. Until Ashok Leyland’s systems were geared to account for the 1 percent cess, they would have to pay suppliers. Trucks filled with

supplies would have created a long line outside factories, causing disruptions in suppliers' businesses.

Ashok Leyand scrambled to get an extension. “Our first reaction was to ask the excise authorities for more time,” says Chandrashekhar.

But at 8 PM that evening, all attempts were called off. Ashok Leyland decided to play it safe and the problem was shrugged off on the IT department.

Chandrashekhar got about a quarter of his application team to get out of what they were doing. “We prioritized,” he says succinctly. Invoice generation programs, gatepass generation modules, inter-unit material transfers and payment modules were all changed. Within a day, they had done the job.

But the experience had them thinking. “We should have been more prepared. And we’ve been thinking of looking at a packaged solution.”

—By Sunil Shah


We have an organization-wide disaster recovery (dr) and business continuity (bC) plan. We are also in the process of continuously improving our dr planning, and have regular drills. today, being today, being tprepared is an ingrained behavior. And, it has to do with one incident

in the nine-and-a-half years I’ve spent with JWtAbout three years ago, our core financial server,

which is online 24x7, went down for a day because of some os and hardware glitches. our risk mitigation guidelines accept 48 hours of downtime but this incident taught us that in addition to dr processes, other factors, such as managing backups and maintaining the hygiene of a dr infrastructure, can evolve into critical issues.

We’ve always taken regular backups of critical data and during the crash, we decided to fall back on them. but since the os had tumbled, we found that the hot-pluggable drives, backup devices and arrays were of no use. We had to restore the entire os, applications, their customizations and the data from scratch. here was the first learning: we shouldn’t have relied on a software backup only, but hardware backup too.

the other critical issue we faced as we tried to restore data was that some of the backup media, which we used for daily backups, were rendered unreadable. It’s a common problem because people rarely check whether their backups work. this lesson stayed with us: verify that the backup media is readable. later, our compliance with soX also enforced the backup verification process.

though we managed to recover all our data during the crisis, we brought in force a well-defined, if tedious, enterprisewide backup process. In addition to daily backups on tape, we also back up every week. the daily backups are kept onsite, and the weekly backups are stored in bank lockers. We also have monthly and bi-annual backups; the latter requires our financial head to be physically present to witness and attest the restoration verification exercises.

these processes ensure that even in the worst-case scenario, we’d lose only one day of transactional data. even the emails of key personnel are backed up on an overseas server, ensuring anytime, anywhere access to the email communication.

since that incident, we have made sure we are prepared. even during the Mumbai deluge of July 26, 2005, we were ready. however, I believe that risks are always present and all we need to do is to minimize them — one has to learn to be proactive and not reactive in addressing them.

— As told to gunjan triveditrivedit

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The poTenTial loss for each day was rs 16 crore, as invoices could noT be raised and sales would come To a sTandsTill.

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in the nine-and-a-half years I’ve spent with JWt. About three years ago, our core financial server,

which is online 24x7, went down for a day because of ur risk mitigation

guidelines accept 48 hours of downtime but this processes,

other factors, such as managing backups and infrastructure, can

We’ve always taken regular backups of critical data and during the crash, we decided to fall back

had tumbled, we found that the hot-pluggable drives, backup devices and arrays were of no use. We had to restore the entire

, applications, their customizations and the data ere was the first learning: we

tried to restore data was that some of the backup

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



When you think about it, ensuring the availability of IT infrastructure and services is the paramount responsibility

of the IT team. This becomes more critical when business operations and transactions throughout the country, like in the case of M&M, are IT-enabled. Any non-availability of core infrastructure for prolonged durations impacts the business nationwide.

A major challenge in meeting the high expectations of users in a crisis is in managing the crisis itself. In addition to the well-defined crisis management process that involves monitoring, analyzing and identifying an emerging crisis and taking necessary steps, credible crisis management depends on how effectively the IT team responds to the crisis and executes defined action in time. We witnessed a live example of the effective cohesiveness and responsiveness of our IT team during the deluge that hit Mumbai on July 26, 2005.

M&M has a state-of-the-art datacenter that hosts around 200 servers in Kandivili, a Mumbai suburb. The applications across all M&M sectors and locations

are centrally hosted here, which is well equipped with power, network and other infrastructure redundancies. Our DR site, which replicates the ERP set-up, was also located at a nearby manufacturing plant.

The staff at M&M is used to the heavy monsoons rains in Mumbai, but by noon on that fateful day, we realized that it was an uncommon downpour and that it had the potential of becoming a crisis.

Because of a flood-like situation in many parts of the city, all power suppliers, including BSES-Reliance and Tata Power stopped supplying electricity. We powered our datacenter with generators.

Soon, we realized that the water level had not only risen around the datacenter but was entering the electrical room on the ground floor — where the generator was housed. Based on the gravity of the situation, the datacenter head immediately consulted the pre-designated emergency team. A decision to switch over to the DR set-up was taken.

However, before the actual switch-over occured, the DR set-up, which was located nearby, was also flooded.

Meanwhile, the situation was worsening. Water was rising up to the generator panel and we were running out of fuel. At this point, the datacenter head got in touch with me since he needed an approval for a complete shutdown. He made a situation update and recommended that we initiate a shutdown process.

Against us were two facts: we only had enough fuel for two hours, and all M&M locations across the country were running off our datacenters. On the other hand, waiting in the hope that the rain would stop would mean risking an abrupt switch-off, which would have resulted in data loss and a prolonged recovery process.

In the knowledge that it would take an hour to properly bring down 200 servers with the available resources, I decided to opt for the shutdown process.

In retrospect, if we had decided against shutting down the servers and generators, the impact would have been disastrous, and we would have suffered major data loss in addition to probable hardware problems and even a fire breakout.

All the offices of M&M were informed of the shutdown. Business and locations heads were being kept in the loop too. Because the shutdown happened at around 4 AM on July 27 and lasted only four hours, it did not disrupt our business operations to a great extent. Meanwhile, we pumped water out of the generator room, arranged for fuel and dried the generator panels with hot air blowers.

This incident quickened our endeavors to migrate the DR site from Mumbai to Chennai, and helped us understand that monitoring the signals of an emerging crisis is critical. These signs can only be interpreted by people, which is why the credit for ensuring minimal disruption goes to the team who identified the crisis early, responded to it promptly, and executed the processes perfectly.

— As told to Gunjan Trivedi

youRdatacenter gets Flooded?

arvind tawde, Vp & CiO, Mahindra & Mahindra made a decision to switch over to the Dr set-up. But before the switch-over occurred, the Dr set-up also got flooded.

Arvind Tawde | Vice President & CIO, Mahindra & Mahindra


Cover Story - 04.indd 34Cover Story - 04.indd 34Cover Story - 04.indd 34Cover Story - 04.indd 34 3/27/2007 4:59:27 PM3/27/2007 4:59:27 PM3/27/2007 4:59:27 PM

Max new york life (Mnyl) has business interests in the life insurance sector in India. We have more than 100

offices spread across India. Mnyl has successfully implemented customized business applications, all of which are hosted in our datacenter at our gurgaon office. March, being the financial yearend, has huge importance — from a strategic and business standpoint.

during this critical month, we experienced the worst crisis precipitated by failure of the core switch in our datacenter. the MtbF (Mean time between Failures) for these high-end core switches is extremely high. And in my entire career as an It professional, it was the first time I had seen one fail. since we have a centralized architecture, our operations came to a standstill across the country.

It was midnight when the switch failed and critical batch jobs were in progress. the first task at hand was to bring back entire operations back to normal. It was a humongous task as we have more than 150 servers terminating on that core switch apart from more than 50 access switches for user lAn segments. We had to ensure that by 9 AM, when employees start trickling in at various offices, things were back to normal.

thankfully, the switch was covered under a 24x7x4 hours replacement contract. (never did I realize the importance of covering all critical equipment under ‘best AMC options available’ more than at this time.)

the learning I would share with all CIos is that never compromise on support levels for critical equipment.

once a call was logged with the vendor at around 1 AM, we received

the switch in the early hours of the morning. the switch that was shipped as replacement was a different one and had more slots than our existing switch — hence, it could not be fitted into the existing rack. Further, our configuration backups were of little use.

We had to make a stopgap arrangement for mounting the switch. And then, start the mammoth task of removing all cables from the old switch, dismantling it, putting the new switch in the rack and configuring it, besides putting all the cables back in their respective places.

here again, the importance of documentation and the role of structured cabling in a disaster scenario was heightened. the team worked relentlessly to ensure that the switch was configured and operations restored. by 11 AM, 90 percent of our operations were restored.

Another key learning we got from this incident was that there has to be adequate redundancy for all critical equipments — some of us may say that

this is a thumb rule, but I am stressing this point because sometimes we tend to overlook this in an effort to save money. Also, the support contracts should be carefully drawn up with an understanding of any exceptions and fine print. In our case, we had to do the entire work twice. (When the replacement came, we had to redo the entire work.) things like replacement, turnaround time and resolution time should be clearly mentioned in the contract.

Finally, it is important to know that information technology plays a critical role to help an organization achieve its business goals. hence, it is imperative that all measures be taken to ensure its smooth functioning.

— As told to kunal n. talgeri


acoReSwitchdIsrupts BusIness?

amit kumar, Vp-iT of Max New York life, stresses on adequate redundancy of critical equipment.

Amit Kumar | Vice President-IT, Max New York Life

What Would You Do If... What Would You Do If...



during April 2006, I got a phone call around midnight from the maintenance personnel in our datacenter at one of the refineries. The datacenter had faced a power breakdown. There were two separate power lines coming in from

different electrical grids, but terminating at the same junction box that powered the datacenter premises. This electrical arrangement, which had been overlooked earlier, was the cause of concern on that fateful night.

Despite the redundancy built in the electrical power lines and UPS, the datacenter, housing various systems running production data, has a single point of failure: the electricity junction box. An electricity supply grid had developed a problem and tripped the junction box. The datacenter immediately switched over to an alternate power supply, which would last for 90 minutes.

Within 30 minutes of the call, my team and I reached the datacenter. We assessed the situation and realized that it was critical. Backup power was running out fast, forcing the datacenter to shutdown the 10-12 systems in it, which might otherwise corrupt data. With about 45 minutes of UPS power left, I decided against taking any chances and authorized a shutdown.

With about 20 minutes of UPS power to spare, the servers completed an orderly shutdown. Within minutes of the shutdown, our electrical maintenance experts, stationed at the refinery, were also able to repair the junction box and restore the main power supply.

This incident taught us a valuable lesson that in and around the IT domain, any component — regardless of whether it belongs to IT or not — can fail and give rise to crisis situations. One should be prepared to face any eventuality. A year hence, we

have made the electrical power supplier rectify this single point of failure and built separate junction boxes for

the power lines to terminate.We have now made arrangements to acquire power from different power sub-stations

as well. Another onsite datacenter has been set up nearby drawing power from

a third electrical grid, with a third datacenter deployed as a DR setup at our corporate headquarters. We have, in fact, recruited one more electrical maintenance staffer to be stationed at the datacenter at night, so that critical

situations can be addressed faster. The monitoring of the datacenters have also

been increased using CCTVs and hourly physical checks, up from the earlier practice

of a physical check every three hours. This has been done to ensure regular health checks of

not only computer technology but also environmental factors such as power, air conditioning and cabling.

Compliance to governing standards such as COBIT has also helped us in ensuring that we are now better prepared and equipped to manage crisis.

— As told to Gunjan Trivedi

aSinGlepointoffailuRe,FaIls?

the IoC group controls over 47 percent of its market. this is possible because it has 10 refineries, which operate 24x7.

but everything needs maintenance and it is standard procedure for refineries to shut down periodically. Planned shutdowns can extend up to 30 days and affect as much as 1 million metric

tons with a major refinery. With so much at stake, shutdowns are planned so that the balance of supplies throughout the country is not disturbed. It calls for an integrated and comprehensive planning system based on models.

to give an example of how complex these to give an example of how complex these tmodels can get, one of our five models covers over 69,000 variables and 29,000

constraints to work out an optimized refinery schedule and distribution plan. With anticipated shutdowns, we need to plan three months in advance.

two months ago, one of our major two months ago, one of our major trefineries had an unplanned shutdown. the challenge before us was: how do we meet

youhaDanunplanned shutdoWn?

M.d. agrawal, GM-iT (refineries), BpCl, learnt that any component

— iT or not — can fail and give rise to a crisis.

M.D. Agrawal | Chief Manager-IT (Refineries), BPCL

S.S. Soni | Executive Director-Optimization, Indian Oil Corporation



this happened three years ago. Back then, we used to shut our extranet system on national holidays like Republic Day. It was Diwali when the problem cropped up. My people in operations requested leave, so that they could spend time with their family, which meant the system

would have to be closed for four to five hours. We went ahead and decided to shut down the system for that duration.

One of our dealers, however, had a customer who wanted to buy a car on the evening of Diwali. Before delivery, the customer wanted his insurance policy too. All our policies are given online, courtesy our real-time systems (that were shut down on that day as the operations team was on leave).

Meanwhile, the car left the premises of the dealer. That same evening, it was stolen. So, the dealer had to bear the cost of the car because the insurance policy had not been recorded on our system. On our part, after this incident, we ensured that the system would work 24x7, so that dealers have real-time access to it even when a customer comes calling unexpectedly.

During periods of high availability, enterprises tend to overlook the possibility of customers approaching its dealers on a festival day or a national holiday. It puts pressure on our whole infrastructure availability. After the incident, we put a process in place to ensure that the system runs 24x7, 365 days a year. In fact, we outsourced system management: with service-level agreements towards running the systems throughout the year. We also worked on disaster recovery options, though it wasn’t a direct fallout of this problem. The incident, however, made us work faster toward it.

Whenever a vehicle is sold, we make the insurance policy available online. We have a backend tie-up with insurance companies to do underwriting on that. We don’t sell a car in the dealership without an insurance policy, which is taken in real-time from the system.

Our manufacturing facilities are open only on working days, and the same used to be true of the IT organization. One incident of this kind made us realize that the system needs to be up 24x7.

— As told to Kunal N. Talgeri

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demand economically — and fast? We were looking at a 10-day disruption; about 10 lakh metric tons of petroleum

products were in the balance. It was crucial that we met 100 percent of the demand 100 percent of the time.

Apart from It, I also head corporate information systems and optimization. the roles overlap because of the highly sophisticated supply-chain optimization models that IoC has. these integrated planning models monitor demand, supply, product mix and our logistics network. We also use a vast supply-chain database — making It a main driver in optimization needs.

With a crisis unfolding, the natural tendency, without It tools, would have been to meet demand on an immediate basis,

putting economics second. this is where the integrated supply chain management packages proved valuable.

Meeting the crisis head-on also required coordinated efforts at an inter-divisional level, that is, the refineries, pipelines, marketing operations and the optimization department. based on revised inputs, a realigned plan was finalized, which revised distribution, logistics, refinery scheduling, pipeline scheduling and inventory planning. It was done fast and economically.

— As told to kunal n. talgeritalgerit

acuStomeRcamecallinG

on a holIday?s.s. soni, iOC's executive director-optimization, believes that coordination is vital during a crisis.

Rajesh Uppal | Chief General Manager-IT, Maruti Udyog



a vIrus BRinGSDownyouRenteRpRiSe?

As a CIo, being at the helm while handling a crisis is like being a general who is going to war. not only do you need to proactively

strategize to strengthen and reinforce your defenses, but you have to also aggressively face adversity in various forms.

Further, if you overlook one loophole, it can cause huge chinks in your enterprise's armor. early this February, Pantaloon retail, a Future group company, was up against a barrage of viruses and worms that were gobbling up hundreds of our computers and threatening to take down the entire enterprise. the chink: an army of undetected time-bomb worms residing in old, harmless-looking desktops that were commissioned a few years ago, and were embedded deep into two key locations. the ensuing crisis threatened to throw us into turmoil, leading to a firefight for the next fortnight to rescue the organization.

It began as a small blip on our radar, as certain users at the Pantaloon headquarters in Jogeshwari (a suburb in Mumbai) and at another key office in Andheri reported isolated cases of virus infection on their desktops. soon, the number of reports increased manifold, and our first-level support engineers detected an outbreak on our systems.

naturally, the support call was escalated to our senior support staff. they received a rude shock: despite high-end security suites, we had both locations of the Future group completely infected. two hundred computers were rendered useless and our business continuity planning was challenged, bringing business at both locations to a grinding halt, at least for a day. thankfully, it was a saturday.

We called for a holiday, which gave us two days to address the crisis. Information security experts from symantec were called

to analyze the situation and deploy server-based security components. leveraging these applications, we created war zones, housing cleaned or cured PCs. these measures ensured that a large number of our users could get back to work. Certain PCs sustained damages at the kernel level and were unable to boot up. so, we set up 'kiosks' with clean, new desktops in conference rooms, equipped with key enterprise applications to allow users at both locations to access business systems like the sAP front-end, graphic designing and apparel manufacturing apps.

Fortunately, none of the old systems infested with the time-bomb worms ever got shipped to any other location apart from the two locations. this, in addition to the strong network security ensured, that none of the other locations or critical servers of sAP or email went down.

Without our security measures, the viruses would have affected our core server backbone, which runs sAP for the entire business in India. It could have affected the core active networking components as well, because of which we would not have been able to access vital information from any remote location. Worst of all, it would have affected business data and business may have crashed.

since we were able to limit the scope of virus to just two locations, we managed to avert an organization-wide catastrophe. though the cleaning exercise went on for a fortnight, the staff working on ‘kiosks’ and new infrastructure ensured that business was up on its feet within two days.

We open about 70 stores and procure close to 1,500 desktops every quarter. since we are continuously recruiting people in key positions, we also keep 20 to 25 laptops in stock. this inventory proved helpful during the crisis. We

procured new hard disks and added them with reloaded os to the infected system, allowing the users to boot their PCs. the os kernel was damaged in the old hard disks, but the data was intact. so, users were able to salvage their critical data. later, the infected drives were packed off to a makeshift disk-cleaning factory we set up in our basements.

We also created an emergency helpdesk, which was open for 10 days. At the end of the exercise, we standardized desktop configurations, making it easy for us to manage desktop infrastructure from the server end. this crisis made us realize that we also needed tools at the server level. this would ensure that once an infected PC is detected, it can be easily and effectively isolated from the rest of the network. Post-infection, we ensured that policies on users' access to usb drives and the Internet were followed stringently.

It made us sweat, but this crisis also gave us a challenging experience with a lot of learning.

— As told to gunjan trivedi

Chinar Deshpande | CIO, Pantaloon Retail

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What Would You Do If... What Would You Do If...


We implemented an SAP ERP system in 1998-99. Things went well for a few years. But the project soon receded

into the background and we lost internal support for the system. Financially, it got tough to keep up with the needs of the system and its maintenance.

Things got worse around 2002, when we started losing people in quick succession. Information technology was booming, and a lot of people in senior positions began to leave our IT organization, which works out of Ahmedabad, to join IT firms for want of more challenge.

Their charge wasn’t really off the mark. Although Arvind Mills has been using IT since 1969, it wasn’t as if we kept investing in new IT initiatives. This means that our IT employees have less scope for growth compared to their peers in IT firms.

As a result, over a 30-month period starting in 2002, we lost 70 percent of the senior IT staff. And as the boom took its course, it became progressively harder to replace them — and those in lower levels — with fresh talent.

At the same time, Arvind Mills was moving into new areas. The company traditionally manufactured fabrics, but wanted to become a garments manufacturer. The move meant that IT would play a more crucial role as the organization needed more dynamic market information like seasonal and geographical sales and tighter inventory management.

While they were busy creating new business plans, we were losing people. The management made it clear that they needed support from IT, but we didn’t know how we were going to provide support with a dwindling workforce.

I studied the problem and realized that we were losing people fastest at the general manager level, what we call G1 and G2. We were losing people slower at the manager levels (M1, M2), and almost none at all at the junior levels (E1, E2). It then dawned upon us that the best way to recruit people who wanted to stay was to look for people at the two ends of the employment spectrum: the very young ones and the ones who were looking to settle down.

We realized that there was a pool of older IT professionals in Ahmedabad who wished to stay in the city and were not attracted to the pull down south. We targeted them, bearing in mind that that we need to give them independence and responsibility.

Simultaneously, we decided to empower those at the junior level. We gave people at the second and third rank more opportunities for growth. We told them, for example, that they could move up the value chain if they trained themselves in the programming language of SAP. (Our database is Oracle-based, which they were well-versed in, but we also needed people to do jobs relating to basic SAP.)

Furthering this philosophy, we hired graduates at the junior level and trained them. We paid them normal compensations, but gave them great responsibility. For example, I hired a fresh graduate and put him in charge of networks. My only criterion was: don’t let the system crash.

The strategy worked. Although our staff count is at 40 today — it has never gone back to the 60-person strength of 2001 — we have been able to run our show, take on new business responsibilities, and still retain young people for three years.

Of course, I realized that merely giving people freedom wouldn’t do. So, I made myself a single-point centre that would

back up the department and at the age of 50, I got myself certified for CISA (Certified Information Systems Auditor). Additionally, I have people on the bench in case an employee wants to leave in a hurry.

The strategy has added benefits: with large responsibilities, our young staff is coming up with novel and inexpensive ways to deal with old problems.

If you give people freedom, they’ll give you give good ideas in return. CIo

— As told to Sunil Shah

youlost 70 percentofyouRSenioRi.t.Staff?

"if you give people freedom, they’ll give you give good ideas

in return."B.M. shah, Vp-iT,

arvind Mills,

B.M. Shah | Vice President-IT, Arvind Mills


What Would You Do If...What Would You Do If...


On July 6, 1994, Donald Mackey was helping oversee a team of 49 firefighters on Storm King Mountain in Colorado. It looked like a routine fire, but it is always a mistake to treat any back-country blaze as routine. Bad luck and a fatal confluence of environmental factors contributed to the flaming ambush

of the firefighters, but individual decisions were critical. Fourteen firefighters, including Mackey, died on the mountain that afternoon as the fire blew out of control. Wild-land fires are special. But the experience of those who fight fires in the outdoors has much to teach us about decision making indoors, especially when there’s little room for error or delay. And like so many critical business decisions, fire decisions brutally punish those who do not keep both the big picture and small detail in mind.

Acute StreSS And deciSion MAkingWild-land fires can reach 2,500 degrees Fahrenheit, race at speeds up to 25 miles per hour and leap overhead without warning. At their most dangerous, such fires are said

A tragic wildfire provides lessons about how leaders can make the best call when there’s

no time and no room for mistakes.

By Michael UseeM

Decisions UnDerDecisions UnDecisions UnDecisions UnDDererPressure

VOl/2 | ISSUE/104 0 a p r i l 1 , 2 0 0 7 | REAL CIO WORLD

Book Excerpt

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Pressure

to ‘blow up’, acquiring a manic momentum of their own. A blowup is one of nature’s most terrifying spectacles — one reason tension is ever-present in a fire zone. For crew leaders and incident commanders, the tension can become acute. The more severe the stress, the less optimal decisions are likely to be just at a time when they are becoming most consequential.

The decision-making burden on fire leaders is made even greater by three organizational factors that are prevalent in combatting wild-land blazes. First, crew leaders guide a workforce that is largely seasonal since fires are most common in the summer. Second, leaders are required to collaborate with agencies over which they have no control. And third, as fire crews meld into temporary amalgamations on larger blazes, crew leaders and incident commanders find themselves working with, reporting to, or instructing others whom they have never met or barely know.

The weak relations among the parties also tend to result in information hoarding as much as sharing. Add up the parts — a reduced flow of information to the fire leader, a weakened commitment by the leader to exercise authority and diminished team compliance with the leader’s instructions — and you have the makings of a decision crisis.

Authority BeginS to BlurAs light dawned on July 5, Butch Blanco, 50, a veteran firefighter with the US Bureau of Land Management, hiked up the mountain to evaluate the situation. Just a few months before, Blanco had qualified as an incident commander, the person who takes charge of a blaze. He and his team of seven began digging a line around the slow-moving fire. But this blaze was more tenacious than Blanco expected, and at 8:19 a.m. he radioed for help.

Since Blanco’s fire was not a priority (there were bigger ones in the region) it was not until 5:20 p.m. that an eight-person crew of smokejumpers, some of the best-trained wild-land firefighters in the country, boarded a small plane. Among them was Don Mackey. Mackey, 34, had eight seasons of smoke-jumping under his belt and had

also served as an instructor. Seated next to him was Sarah Doehring from upstate New York, whom Mackey had helped train.

At 5:45 p.m. the smokejumpers left the plane. Because Mackey happened to be sitting nearest the door, he leaped and landed first. That made him the ‘jumper in charge’. He would coordinate the landing and prepare the crew. The fire was still Blanco’s responsibility, but the lines of authority would begin to blur.

the Fire SpreAdSUnequipped for a night on the mountain, Blanco and his crew descended to the town of Glenwood Springs not long before Mackey and his fellow smokejumpers arrived. Within hours, the flames had crossed the fire line Blanco’s crew had cut, growing from 30 acres to 50. Don Mackey went into action against the blaze.

“We all thought we were going to dig a line around it by midnight,” Doehring remembered. But it continued to spread. In Blanco’s absence, Mackey took the initiative, radioing a request for two more crews (Decision 1).

As dawn broke on July 6, Mackey again took the initiative, asking for a fixed-wing aircraft that would serve as a full-time ‘eye in the sky’ (Decision 2). None was available; instead he got a helicopter that would have to do double duty ferrying gear. The effect was to leave him partially blind at a time when the blaze was threatening to morph into something larger.

the criticAl deciSionEarly that morning, Blanco reappeared on the ridge with a fire crew of 11. Now Mackey and Blanco huddled. Deciding they needed more information, they boarded the helicopter at 9:30 a.m. to get a better sense of the fire (Decision 3). What they saw was worrisome. The blaze had expanded to 125 acres and was creeping down the west flank

of the ridge. Mackey proposed a bold plan (Decision 4). He wanted to cut a fire line below the flames since fire can climb up a slope faster than a person can.

Blanco agreed. This was a crucial moment in which two important things happened. First, Blanco effectively ceded some of his authority to Mackey, who became the point man on the downhill fire line. Second, both men committed themselves to a strategy at odds with established rules. “Downhill fire line construction is hazardous in steep terrain, fast-burning fuels or rapidly changing weather,” warns the wild-land firefighters’ manual. All three conditions prevailed in the canyon. The manual also cautions against relying on a steep uphill escape route, but Mackey’s plan created just that. Some of Mackey’s team considered this a dangerous call. Mackey argued that the fire would run back uphill — above the proposed fire line — in the event it surged out of control. “Let me have a big crew and we’ll do this. We’ll do fine,” he said.

Mackey’s confidence got the crew moving. In the absence of an experienced decision-maker, a ‘can-do’ attitude had triumphed.

Who’S in chArge?An hour later, eight additional smokejumpers floated onto the ridge. The melding of crews from diverse locales and agencies became further exacerbated at 1 p.m. when 20 hotshots from Prineville, Oregon, began arriving. Like smokejumpers, hotshots are among the most highly trained and esteemed wild-land firefighters.

Mackey was now supervising 24 people over whom he had no authority. Did that mean the fire was his? At 2 p.m. he asked fellow smokejumper Kevin Erickson. “I don’t know,” Erickson responded. “Neither do I,” said Mackey. But he took no steps to clarify the issue (Decision 5).

The lingering ambiguity may also explain why Mackey ignored procedures that call for lookouts to ensure that no flames are burning below a fire line. Behind a vertical cleavage known as Lunchspot Ridge, the fire had already burned down below the level of the fire line. Had there been a lookout — or the surveillance plane Mackey never got — the radios would have been crackling with warnings.

Reader ROI:

What fire-fighters can teach CIOsaboutdecision-making

Why lines of authority are importantin a crisis

Why overview and preparation arecritical

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the ForeSt And the treeSBecause Blanco concentrated on controlling the fire at the top of the ridge and Mackey on completing the fire line lower down, neither had an overall view of the situation. Nor did Mackey, Blanco or their crews know that nature was creating the catalyst for a catastrophe.

A meteorologist predicted that a cold front would surge through around 3 p.m. Bureaucratic bungling had bottled up the alert. Mackey never asked for a weather forecast (Decision 6). If Mackey had been certain that he was in charge, he might have felt compelled to seek the data. By 3:30 p.m., taking note of the rising winds, Mackey assigned Doehring to patrol the west-flank fire line for burning debris and hot spots.

“What should I do if the wind comes up?” she asked.

“Go down,” Mackey instructed.As they stood, though, and Doehring

began to resume her patrol, Mackey changed his mind and ordered her back to the top of the ridge (Decision 7). Tense about the worsening conditions, Doehring was relieved to turn around — an act that saved her life.

the BloWupBy 4 p.m., the fire came surging from both below and from the far end of the fire line. Mackey stopped fighting the fire and raced to survive it. He told eight firefighters to run up Lunchspot Ridge to an area where he knew there was sufficient cover (Decision 8). Mackey did not follow them. Instead he radioed ahead: “Okay, everybody out of the canyon!” Then he dashed back along the fire line, urging the remaining firefighters to flee (Decision 9).

Six firefighters crested the ridge top with seconds to spare. Mackey and the rest were not far behind, but the steepness of the hill meant that they were not moving fast enough. At 4:16 p.m., a 300-foot wall of flame overtook nine of the Oregon hotshots and three smokejumpers, including Mackey. They were less than 100 yards short of safety. It took five more days to bring the fire under control. The final death toll reached 14, making it one of the deadliest forest fires in US history.

WhAt WorkedFive of Mackey’s nine decisions proved relatively optimal while the other four were less so, in some cases far less so. Those that improved the likelihood Mackey and his team would swiftly and safely suppress the South Canyon fire were:Decision 1 — to request two additional crews, which secured the firefighters necessary to combat an expanding fire.Decision 3 — to conduct aerial surveillance personally, which improved Mackey’s information on the environment.Decision 7 — to send Doehring to the top of the ridge, a decision that saved her life.Decision 8 — to dispatch eight smokejumpers up Lunchspot Ridge, moving them into a life-saving area.Decision 9 — to evacuate the West Flank fire line, helping to move six firefighters toward another life-saving area and placing team survival ahead of personal safety.

WhAt didn’t WorkWeighing against Mackey’s five successful decisions were four that lessened the likelihood that he and his team would halt the fire or even come out alive. In each case, the choice can be explained at least in part by the three factors identified as potentially undermining effective decision making: under preparation, acute stress and ambiguous authority.Decision 2 — requesting continuous aerial surveillance. Mackey’s seeming reticence about pursuing the request further was probably derived from the fact that he was not the incident commander.Decision 4 — to construct the downhill fire line. A more thoroughly prepared decision-maker might have been less sanguine about transgressing standard operating procedures. A more experienced leader also

might have been uncomfortable predicating this strategy on a resource not yet firmly in hand: the ‘big crew’ that never materialized. Finally, a leader with unequivocal authority might have been more successful in deploying the big crew that was required.Decision 5 — not to clarify who was in command. With greater experience and training comes greater appreciation for the requirement of clarity in who carries ultimate responsibility on the line.Decision 6 — not to secure a weather forecast. The uncertainty of whether Mackey was incident commander was a likely factor in combination with his under preparation and preoccupations.

leSSonS in deciSion MAkingFourteen people lost their lives in what most qualified observers have concluded was a preventable disaster, derived in large part from an underdeveloped capacity for making rapid decisions under demanding conditions. In 2001, the National Wildfire Coordinating Group, a consortium of federal and state wild-land firefighting agencies, established the Wildland Fire Leadership Development Program. The odds are good that anyone who has been through this program will be better prepared to deal with two of the three root causes of the suboptimal decisions that plagued leaders on Storm King Mountain: inadequate preparation and high stress. Separately, the fire service has attacked the third cause — ambiguity of authority — by sharpening and better instilling the principles of unequivocal responsibility on a fire line. CIO

This excerpt first appeared in CIO US. Reprinted by permission of Crown Publishing, a division of Random House. Excerpted from The Go Point: When It’s Time to Decide — Knowing What to Do, by Michael Useem, 2006. Useem is a professor of management at the Wharton School.

[email protected]

Book Excerpt

VOl/2 | ISSUE/104 2 a p r I l 1 , 2 0 0 7 | REAL CIO WORLD

With greater exPerience

comes greater aPPreciation for

clarity of Who carries ultimate

resPonsibility.

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A VerticalHorizon for Technology

CIO: How well has Otis Elevator India leveraged IT vis-à-vis your vision to ensure that the company is ahead of the curve?

Ashok Malhotra: The actions we put in place in the last quarter of 2000 were the need of the hour. We needed to bring in technology to ensure instant communication in our various offices and service networks across the country.

After establishing connectivity and uniform hardware, we improved our key processes that had an impact on internal and external customers. Over the next few years, our company continued to leverage IT to streamline and make our business

processes more efficient and effective. For instance, it has enabled us to decentralize certain processes as well as helped various teams to handle larger volumes of work, while reducing cycle times.

Currently, we are in the process of refreshing and upgrading our connectivity and hardware, so that we can enable employees to leverage the full benefits from the J.D. Edwards integrated systems, which we introduced very recently.

How has IT improved turnaround time at Otis?

Customers in today’s competitive world expect more than quality products and services. They also expect quality response

Ashok Malhotra, managing

director of Otis Elevator India,

says that constant evaluation and

leveraging of new technologies

are important to maintain

an edge in delivering value

to customers.

Otis Elevator has come a long way from the time its founder Elisha Graves Otis invented a safety brake technology to suspend the car in the shaft if a cable snapped. Today, a chunk of its technology investments extend to IT, with the company having a global presence. As Ashok Malhotra, managing director of Otis' Indian subsidiary, explains: IT drives its decentralized setup and continues to reduce turnaround time.

BY Gunjan trivedi

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. Im

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Ashok MALhoTRA

expecTs I.T. To: Increase staff productivity

Reduce turnaround time

offer more accurate decision making


both in terms of time and completeness. It is in this area of quality response that IT plays a crucial and enabling role.

It has been and is still our endeavor to leverage IT by providing reliable infrastructure in terms of connectivity and hardware. Part of this endeavor requires that we provide efficient application systems, which will help employees meet and address the response and expectations of customers effectively — be it internal or external.

I believe that constant evaluating and leveraging new technologies and solutions are important to maintain an edge in delivering value to customers. I also believe that IT plays both a crucial and collaborative role in ensuring an efficient and optimum turnaround time in the organization. In this context, we have recently introduced JDE integrated systems that will provide our employees with online information. This will, in turn, improve the speed and quality of their decision-making apart from strengthening organizationwide internal controls.

The move to J.D. Edwards ERP was a major move. Tell us more about the experience of executing an organization-wide change.

We implemented an ERP system as part of our global strategy to have a commonality of systems, integrating business functions across the enterprise. The implementation of the ERP across Otis India was a major change-management project right from the time we moved away from legacy, home-grown systems to an enterprisewide integrated and controlled system.

At every stage of the project, we ensured the complete involvement and participation of our users. By educating and training them on the functionalities and features of the ERP system, we created awareness. We expect benefits in terms of standardization of processes, availability of information, integration and further

strengthening of controls. We expect this to lead to an enhancement to the productivity of the people involved, improving their turnaround time.

It was a challenge for the project team to drive implementation while training users across the company, considering the complexities of business processes and requirements. They created infrastructure readiness to support ERP, and integrated to country specific requirements that were simultaneously in line with the Global Governance Model that I referred to earlier.

As a team, we worked together to address the challenges in a focused and structured manner to minimize the impact on business operations. Without the total involvement and dedication of the core project team, the external consultants and the users of Otis across the country, the success of the implementation of such a major change management project would not have been possible. With the systems now stabilizing,

our focus is now on leveraging the systems to derive the expected benefits.

How did you make change painless, yet effective?

It has famously been said that if there is one thing constant in life, it is change. However, I feel that it isn't just change but the increasing pace of it that is constant. It is a common characteristic of all successful companies. I also believe that pain always accompanies change.

Nevertheless, there are methods, tools and techniques to reduce the level of pain and make change more acceptable and manageable across an organization. IT plays a key role in not only reducing the level of pain, but also in introducing major change programs. These can be instrumental in bringing about total change in the way business processes are handled.

How has the E2H project brought about seamless flow of business?

The Enquiry to Handover (E2H) process has been one of our key processes. It requires that we leverage IT on both the hardware and software ends. This has enabled various functional teams to reduce response cycle times and, to a large extent, helped them meet customer needs.

The project has consolidated various core functions of the organization, including sales, marketing, manufacturing, modernization, construction management, finance and HR. E2H automates a number of processes that earlier involved a lot of paperwork.

It also helped us decentralize some activities to our regional offices, and gave them the ability to access and process information directly and in a timely manner. It dramatically reduced our response times to both our internal and external customers, besides improving accuracy. One of the examples is the time difference

View from the Top

“IT plays a key role in making processes short, efficient and accurate besides complying with stringent control requirements.”

— Ashok Malhotra



from enquiry generation by the customer to a proposal. Earlier, this workflow took at least two days. Post E2H, our sales executives are able to quote their best prices in less than an hour. I can now say that the E2H process has given our teams confidence in meeting response time requirements of a major section of our customers.

How has IT made your products more secure and user-friendly?

What started with us as a small measure has today become a way of life. I am referring to the change that our products have witnessed. They went from being electro-mechanical systems to fully electronic and microprocessor-based elevator control systems. What was cutting-edge technology some years ago has now become a basic need for all safe, reliable and efficient elevator systems.

There are a number of ways by which we leverage the latest technologies to incorporate user-friendly features in our elevatoring systems. For example, we can now group a number of high-speed elevators in a building more efficiently and also ensure optimum dispatching of elevators to various calls from different floors. Security access can also be given on our systems, so that only nominated individuals can take elevators to designated floors.

How is Otis Elevator India using IT to integrate and align with its parent organization, UTC?

Otis India’s IT strategy is aligned with the company’s global IT policies as well as local business strategies. In terms of IT policies, we are strongly governed by UTC, and compliance is very important and mandatory for all entities.

On the infrastructure side, we have a Standard Operating Environment (SOE) to ensure that infrastructure is standard

across the entity, and runs in a common environment to support systems and applications besides enabling effective monitoring.

As far as connectivity is concerned, key Otis India locations are connected through domestic WAN, which in turn is connected globally to support both global as well local applications by users across locations.

We continuously review and enhance domestic and international WAN to support changing business requirements in terms of speed and reliability. On the applications front, we have identified processes specific to local requirements in conjunction with the governance model driven by UTC. We have implemented global enterprise systems in line with the governance model, with adequate enhancements and customizations to support local business operations as well.

What about complying with Sarbanes-Oxley?

I strongly feel that IT plays a critical role in ensuring that systems are SOX-compliant at all times in the organization. This is important since all key business processes are IT-enabled across the enterprise.

Strong controls both on infrastructure and applications fronts are critical to ensure compliance with the requirements of SOX and other internal controls. At Otis Elevator, compliance with all control requirements is mandatory and is one of the top-most priorities apart from safety and business ethics.

To ensure compliance, we educate our users, create awareness about the importance of adhering to policies governing the organization, and work as a team to build controls in processes and

systems. Our endeavors to be compliant are monitored and reviewed periodically. These are followed by regular audits to ensure 100 percent compliance at all times. We believe that a secure and controlled system leads to a secure enterprise in compliance at all times.

How core is the role of the CIO to Otis’ strategy? How central is the IT roadmap to the

enterprise’s growth plans?

Today’s competitive environment and the increasing pace of change and growth, means that IT team plays a key role as an enabler in making processes short, efficient and accurate besides complying with the stringent control requirements in any progressive company.

The CIO and his team play a vital role in aligning various available technologies and systems appropriately to the organization’s current and future needs. It also ensures reliable, efficient infrastructure and systems. This invariably helps the organization think big in the future. CIO

Senior correspondent Gunjan trivedi can be

reached at [email protected]

View from the Top

SNAPSHOTOtis Elevator Company, India

REvENUE*: Rs 481.2 crore (2005-06)

MARkET SHARE 60 percent

LOCATIONS: > 100

CIO: V. Subramaniam

*Source: myIris

REAL CIO WORLD | a p r I l 1 , 2 0 0 7 4 7Vol/2 | ISSUE/10


Reader ROI:

Why IT needs toresearch businessprocesses before arollout

How to sellemployees on awireless project

The importance ofconducting a radiofrequency study

WarehouseWireless

How totake Yourtake Yourt

For all businesses, growth is a good thing. More sales, more customers, more demand, more revenue. But growth has a funny way of exposing inefficiencies by shining a harsh light on wasteful, entrenched business practices, loosely stitched together by siloed IT systems, that lead to high operational costs and act as roadblocks to real change.

At Dorfman Pacific, a mid-market manufacturer and distributor of headwear and handbags, the business had always been about serving the Mom-and-Pop stores that had constituted the company’s customer base since its inception in 1921. But although the company had kept current with fashion, its warehouse processes had scarcely changed during 86 years in the business. Despite technology’s march, its warehouse processes remained paper-based and relied on the workers’ tacit knowledge of the warehouse and each customer’s needs.

By Thomas Wailgum

But in the late 1980s and on into the ’90s, a new sales and distribution channel created room for growth: Dorfman Pacific began selling to the big-box retailers such as Wal-Mart, which craved more of the 25,000 items that the company sold. Dorfman Pacific still sold to the small and midsize retailers, but the split between the two was now about half and half.

As the company sought to expand during this period, its modus operandi showed cracks: the paper-based order-modus operandi showed cracks: the paper-based order-modus operandipicking processes that served Dorfman’s 100,000-square-

foot warehouse were too inefficient; the warehouse itself was too small; the use of a temporary

workforce and loads of overtime to meet demand peaks meant it incurred huge

operational costs; and siloed IT systems offered little computing assistance and inventory visibility.

In short, the company’s growth had spotlighted the inefficiencies inherent

in the way things had always been done.“In the environment we had, it was a

challenge to actually do a good job,” says Mark Dulle, the IT services director for Dorfman Pacific, who came on board in 2003. “It was stressful and very difficult to maintain any level of quality and get it right.”

Executives at Dorfman Pacific could see the future and knew they faced a challenge in expanding operations using the existing warehouse and technologies. So starting in 2001, top management, most notably CEO Douglass Highsmith, began to push for a big technology-driven change to business as usual. “I don’t want to fight technology. I want to embrace it,” says Highsmith. “We’ve got to constantly improve the technology

applications of our company.” A total revamp of Dorfman’s operations, including a complete IT overhaul inside the warehouse, was called for. Paper was out. Wireless was in.

What follows is the story of how one company upended every square foot of its warehouse operations — its interior layout, day-to-day shipping and receiving practices, the equipment workers used and the IT systems enabling it all — and reduced its warehouse labor costs by 30 percent, saving more than Rs 112.5 lakh a year and vanquishing many inefficiencies that had plagued its operations.

But the road to success wasn’t without bumps. “There are things we didn’t do right,” Dulle admits. For one, he says, the project team pushed too far, too fast on the wireless implementation. As a result, the company didn’t meet the initial March 2005 go-live date, which negated the first return on its investment.

What’s most notable (and applicable for other CIOs), however, is what Dorfman Pacific did do right: the business side took full responsibility for the project’s success; a cross-functional project team determined the overall plan, chose the appropriate technology and managed workers’ expectations throughout; and a non-IT sponsor shepherded the entire project. IT was there at every turn but “this was not an IT project. No way,” Dulle emphasizes. “This was strictly a business project.” Which is why, he believes, it was such a success. Here’s how the company did it.

Examine Existing ProcessesDorfman Pacific’s steady growth in the ’80s and ’90s bolstered its status as one of the world’s largest headwear and handbag companies. (You wouldn’t know it but you’ve probably seen their hats, which are worn by celebrities and featured in People and InStyle.)

Then, in the late ’90s, Highsmith pushed his company to grow even more. Dorfman Pacific took aim at the growing women’s headwear market and what Highsmith calls the resort business — straw hats and other protective headgear worn in summer or at tropical vacation destinations. The company also pursued private-label and specialty work for Orvis and others. Dorfman Pacific had contracted out some manufacturing to cheaper countries in Asia; now it accelerated the process. It still serviced its smaller customers, but now it received orders from much bigger companies that wanted thousands of different items and box types.

WirelessWireless

Dorfman Pacific needed to grow, so it needed to get rid of the paper processes that held it back.

To accommodate demand, the company expanded over the years to a 275,000-square-foot warehouse. But the bigger warehouse “wasn’t set up for the growth we had had,” says Dulle. And neither were its processes. Warehouse personnel received a paper order or ‘pick ticket’ from a supervisor for, say, a Scala Western hat, drove a forklift to the bin where they thought it was located and manually picked the boxes off the rack. They brought the items to the packing area, put them in a box, stuck a label on the box and put it on a truck. However, merchandise bins

were manually labeled and not easy to read. Workers knew the box types and had a sense of what they held but weren’t always right since items were sometimes mixed together. The route that each worker chose to accomplish his pick work was up to him.

“Picking by order just wasn’t going to cut it anymore,” Dulle says, “but the worst part was that the warehouse was not really set up for anything other than picking processes.”

As the company grew, so did its problems with the old system. Inefficiency reigned. Special orders could wreak havoc, and Dulle says the ERP system, installed by his predecessor, wasn’t much help due to integration challenges with the rest of the systems. When the peak seasons hit in spring and fall, Dorfman Pacific had to hire temporary workers to get the goods out

the door, which cost it around Rs 112.5 lakh annually. “We used to have people working on Saturdays and Sundays, and tons of overtime,” Dulle recalls. “That’s where a lot of the costs came in.”

Dorfman Pacific’s warehouse problems are not uncommon in the manufacturing and packaged goods industry. According to Steve Mulaik, director of logistics consultancy The Progress Group, warehouses can get “out of control” because of a reliance on seasonal and temporary labor, high employee turnover or too many inexperienced pickers. In his research, he figures that a novice picker who simply follows a paper pick list can end up with a ‘pick tour’ almost 20 percent longer than one who uses a system that employs wireless technologies, intelligent routing software and handheld devices — the kind of system that Dorfman Pacific thought it needed.

Put Everything on the TableThe impetus for Dorfman Pacific’s warehouse makeover came from the top. Highsmith had seen wirelessly enabled warehouse management systems and knew he needed something similar to cut labor costs and enable his company’s long-term success. “You could see how much more efficient you could be with the technology,” he says. His vision, along with the guidance of the former vice president of operations and Dulle, provided the spark.

An outside consultant who reported in to Dulle and was embedded with the management team acted as the project manager. The project team consisted of managers from the distribution center, purchasing, customer service and sales. IT was responsible for hardware selection, hardware and software installation, and providing an administrator for the new warehouse management system application.

Highsmith’s vision soon boiled down to a simple question: what’s the most efficient way to pick product with the fewest errors and the least amount of people? To find the answer, the project team analyzed how the 25,000 SKUs flowed through the warehouse and how the workers fulfilled each order. The team also measured the dimensions and weights of each SKU using a cube-a-scan, which records a box’s dimensions. They examined the size of every bin and rack, and identified whether products were stored where they were supposed to be.

Everything was on the table. “We decided that if we’re going to disrupt the warehouse, we’re going to do it all at once and get it done,” Dulle says. “We felt that that was the only way to go.”

Dorfman Pacific execs also wanted to make certain that the wireless component, a critical piece of the overhaul, would work in their warehouse. They hired Texas Bar Code Systems to conduct a radio frequency study to see if the wireless signals would play nice inside the facility’s concrete walls, steel doors and metal racks, and to identify the best wireless access points.

The IT infrastructure gluing this all together also needed a makeover. Dulle had to revamp the ERP system he inherited as well as select, install and integrate a new warehouse management system that had wireless capabilities and could sift through the company’s warehouse data and shipping information. He also ripped out the old networking, cables and switches, and upgraded to the latest and fastest network gear and fiber.

After hiring Symbol Technologies for the wireless networking equipment, HighJump Software for the warehouse management system and Zebra Technologies for the bar-coding equipment, and selecting an integrator (RedLine Solutions), Dorfman Pacific could see its future warehouse. The backbone would be a wireless local area network (with 802.11 connectivity) that utilized 15 wireless access points (APs) spread out over the facility that could simultaneously run the 802.11a/b/g bands

Wireless


The quesTion aT Dorfman Pacific boileD Down To This: whaT’s The most efficient way To Pick ProDucTs wiTh The least errors anD The feWest number of people?

REAL CIO WORLD | a p r I l 1 ,

on each AP. Warehouse staff would have 40 mobile and fixed-mounted computers on the forklifts at their disposal. The devices were kept simple: “[It was] all F1, F2, press this key, press this button — no mouse and no pen,” Dulle says.

In the back office, IT was set to roll out an upgraded ERP suite and the new warehouse management system that would direct the picking, packing and shipping processes using specialized logistics software. Data from the software would appear on the forklift’s mobile device

and tell a picker where to go, what to grab and where to bring it in the most efficient way. Paper would be a thing of the past.

Learn from MistakesIn late 2004, executives and the project team had to sell the change and set the expectations for the March 2005 go-live date for the folks on the floor. Executives held group meetings and one-on-ones, formed focus groups and selected project leads to get the message out. “We

Wireless

Vol/2 | ISSUE/10

Because you are changing the way people do their jobs, a wireless implementation adds an extra layer of complexity to project management. Here’s how Mark Dulle, Dorfman Pacific’s IT director, ensured that his wireless makeover would work.

steps to a successful Wireless rollout

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Do Your HomeWorkBefore Dorfman Pacific project team members made any changes to warehouse operations and before they contacted any vendors, they researched everything about how the warehouse operated — how goods were received, replenished, picked, packed and shipped. They also examined the business processes that supported the operations in the warehouse distribution center. The project team then used that data to determine what the RoI on a new wireless warehouse would have to be to justify the expense. The team also hired a company to conduct a radio frequency study to see how the wireless signals would play in the facility and to determine in which areas of its 275,000-square-foot warehouse and in which job functions wireless technologies would work best and have the most RoI.

Sell tHe ProjectSince Dorfman Pacific executives wanted to turn their warehouse operations ‘upside down’, gaining the support of the warehouse personnel was critical. It’s important to “sell the project to the warehouse employees and then have them take responsibility for designing processes and training as the project moves forward,” Dulle says.

The project team set up a series of sessions designed to obtain employee

buy-in by discussing how things worked in the warehouse, where the employees saw problems and opportunities in the environment, and whether they had ideas for improving operations without adding headcount. Then, Dulle says, a second set of sessions was held where executives described to workers how a wireless warehouse would address the issues and opportunities. “These were open discussions where the employees could voice their concerns with not only the technology but how the processes would change,” Dulle says.

make tHe training uSefulThe week before the go-live date in July 2005, Dulle says warehouse personnel inventoried the entire facility using the new wireless equipment (scanners and mobile devices) and warehouse management system. “This alone produced the biggest benefit,” he says, because “it gave the employees a significant amount of time on the equipment prior to processing customer orders” in a live environment. Everyone “got some intensive, hands on training,” Dulle says.

Determine HoW it Will affect Your cuStomerSDorfman Pacific has two dissimilar customer bases (Mom-and-Pop stores

and big-box retailers), so it was crucial to understand how the wirelessly enabled distribution and logistics procedures would affect each base. Dulle says the company quickly learned that “the distribution process for a big-box chain store is different than that used for a Mom-and-Pop,” and that they had to readjust the warehouse application to account for the difference. That also meant pushing the go-live date from March to July.

juSt go for itBoth Dulle and CEo Douglass Highsmith say that even with a delay in the launch of the new warehouse systems and processes, they probably could have used more time to make sure everything was perfect. “But there comes a certain point and time when you’ve just got to go,” Dulle says. All the hard work they had done in advance — designing a robust, fast network, understanding the warehouse operations and preparing the workers for the new environment — gave him and others confidence that it would work.

— T.W.

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

said, 'We’re going to make your lives different',” Dulle recalls. “We’re going to make it harder to make mistakes. We’re going to make it more efficient. We’re going to help you to do a better job.” Everyone got on board.

In the race to meet the March deadline, as the pressure to deliver the new system pushed everyone to work nights and weekends, and as the opportunity to deliver the first reduction in temporary labor costs loomed, Dorfman Pacific hit the brakes. Despite everyone’s efforts, the new system and processes just weren’t ready. “We pushed this very, very fast. We were trying to drive operational costs down, and we let that color our judgment,” says Dulle.

The go-live date moved to July. It was a costly decision. Dorfman employed the largest amount of temporary labor in March and April, and executives were counting on this first reduction in costs. However, the extra time allowed employees to work through lingering issues with the IT systems and the new shipping and inventory flows. For example, the warehouse management system required a different floor configuration and new ways to pick, pack and ship products. It also placed more emphasis on the process of expediting the merchandise no matter how many other products were a part of the order and were, most likely, going to the same customer.

For bigger retailers, receiving 20 boxes instead of five wasn’t a problem. But for the smaller stores, receiving 20 boxes instead of the usual five made a huge difference because of the accumulated freight charges. The delay let Dulle and the team reconfigure the software to fix the problem and keep smaller customers happy.

CEO Highsmith says the decision to delay was based on how the premature rollout might have a negative effect on Dorfman Pacific’s customer base so close to peak season. “The technology embrace has to have a positive impact on customers. If it makes it more efficient here but has a negative impact on the customer, whatever gain you make you lose on the other end.”

After the delay, Dulle says, Dorfman Pacific was "mentally ready" for the new operations and procedures. Each warehouse bin now had only one product type in it, and all bins had bar code labels so wireless scanning devices could track inventory. The warehouse was divided into new zones, which sped up the shipping process for orders that didn’t need any extra handling.

Instead of bludgeoning its way to the finish line, Dorfman Pacific was able to pull back when other companies might have pressed on. “We were able to stop and catch our breath, and work through the issues and flows,” Dulle says.

Enjoy the Fruits of Your LaborAlmost two years later, the vision of a wireless warehouse is a reality. Workers now take advantage of wireless networking, handhelds and scanners, bar codes, and streamlined shipping and receiving procedures. All product inventory is seamlessly tracked and there’s not much paper floating around the warehouse. “As far as paper to manage inventory, we don’t have it,” Dulle says.

He won’t say what the total project cost but notes the company is looking out three years for the return on its investment. Meanwhile, three peak seasons have come and gone using the new system, and executives are happy with the results. Dorfman Pacific now handles approximately double the number of orders during its peak periods and has sliced labor costs by nearly 30 percent in the warehouse.

“We had a significant increase in [shipments] during the last peak season, and we handled it with less people,” Dulle says. “We can take market share from competitors because we can deliver faster now.” CIO

ThomasWailgumisseniorwriter.Sendfeedbackonthiscolumnto

[email protected]


Wireless

Taking Their warehouse wireless alloweD Dorfman Pacific To approximately double the number of orders During iTs Peak PerioDs anD slice labor costs by nearly 30 percent.

Project Management

Govern Main.indd 54 3/27/2007 10:39:12 AM

In the 1980s, BSNL was among the first to computerize some of its operations. But with systems added over time, this strength was turning it into a mess. Here’s how they called on subscriber signatures to fix their problems.

Vol/2 | ISSUE/10

Signof The TimeS

By K u n a l n . Ta lg e r i

As a cricket-crazed teenager in Dwarahak, a town in the Almora district of Uttar Pradesh, Rajkumar Upadhyay never had it easy as an autograph hunter. The big names were hard to come by even in uptown Kanpur, where he once made it into a squad of 30 youngsters in a cricket academy. That was in 1977. On a different wicket, almost 30 years later, his luck with signatures changed as his IT team combed through more than 10 lakh subscriber signatures in BSNL’s Bangalore Telecom District’s Oracle 7 systems.

The team’s immediate objective was to scan each signature. The tedious effort would enable a faster and more seamless IT-powered mechanism for officials in BSNL’s customer service centers (CSC). It would allow them to trace and check

a customer’s details on the run. “It took us not less than three months,”

says Upadhyay, deputy general manager-IT at Bangalore Telecom District. “Most of my time was spent in fetching signatures from past files, which was made harder because of old hardware. Oracle 7 does not store as many signatures as Oracle 9 or

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How to develop an integratedsolution with legacy systems

The case for in-house ITdevelopment

An alternative to achievinguser buy-in Il

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10. The newer versions store signatures as a part of a record. However, Oracle 7 would store a signature as an individual file. This made fetching signatures difficult,” he recalls.

It was the most mind-numbing aspect of Project Falcon, designed to deliver BSNL services through a single window. But the signature-campaign of sorts has made all the difference. For customers in Bangalore, the application has reduced a month-long verification process to get a new line to less than a day. For CSC officials, the signature-driven feature of the Web-based application entails access to 12 area servers that store customer information, thus empowering them to authorize customer requests at a faster clip. “The clerk has suddenly become empowered in a sense. He only has to check for the signature on the database. It will come with all corresponding details,” notes Upadhyay.

The single window application itself came into operation in August 2006. It’s too early to draw conclusions of its efficacy from an ROI perspective. But Project Falcon has already received a national e-governance award for ‘Exemplary usage of ICT by PSUs’ in February this year. And going by other indicators, it appears to be a technology solution that

has combined financial innovation with the intent of being user-friendly to CSC officials and the public. The trick lay in planning — and marrying an efficient front-end with a robust backend mechanism.

Technology Begins at homeIn several respects, the management of BSNL had taken the technology plunge much before its counterparts in other sectors of the economy. In the 1980s, for example, it had computerized several aspects of its operations pertaining to a range of services like billing. The question at the turn of the century, for Bangalore Telecom District, was whether its great strength was turning into a greater weakness. For, technology expansion was happening in phases through a process of adding systems without a central network to house their multiple systems.

Further, though a customer could avail of technology benefits during registration of services, the time and effort it called for was still immense. “The New Lines (NL) server was catering to Bangalore City as a whole, and the customer from any part of Bangalore had to come to the centralized NL

counter working from a specific location,” says Upadhyay. “The systems were working as silos in their respective area,” he adds.

By 2006, BSNL was rendering a range of services beyond just new lines: broadband, mobile telephony and its peripheral services, apart from billing and complaint redressal functions. Such a market required an integrated, multi-faceted and faster system to cater to these services — a WAN, to begin with.

“Without a wide area network, it was difficult to consolidate all the servers, leading to lack of an integrated database for a single front-end,” says Upadhyay. “This forced the customer to deal with separate departments. The lack of an integrated database also delayed information from getting to management, thereby causing reduced control on efficiency of customer services,” he explains.

Significantly, Upadhyay felt the best step forward was to develop the application in-house for two reasons: no one could understand the needs and limitations of the front-end better than its own IT team. Secondly, it was best placed to tap the benefits of BSNL’s large existing infrastructure and resources.

“Our entire IT cell is not more 20-30 people,” says Upadhyay. “We appointed a networking team for the WAN work who would deal with the switches, fiber connections, etcetera. This had one sub-divisional engineer and one junior telecom officer, apart from the maintenance guys. From the software side, we had four to five people. Our software employs ASP and JSP, primarily

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“THe SySTemS were workINg aS SILoS IN THeIr reSpecTIve area. This forced cusTomers To deal wiTh separaTe deparTmenTs.” —Rajkumar Upadhyay DeputyGM-IT,BangaloreTelecomDistrict


because we had in-house expertise in those two platforms,” he adds.

To begin with, the Bangalore Telecom IT team connected all its area servers in January last year, using optic fiber onto one network, yet allowing them to function independently. This would form the core architecture. Then, they brought the commercial office, call center operations, network management system and central directory enquiry onto the same platform to enable an integrated view from a single location. And all dumb terminals working in the system were replaced by PCs. “Except for the WAN infrastructure, we haven’t spent on anything else,” says Upadhyay. “Building the WAN network cost about Rs 1 crore. Otherwise, we have used existing resources like optic fiber, and freeware like Apache Tomcat for the Web Server,” he adds. The WAN can be used for other applications and is scaleable, he says.

Typically, for projects like this, a large portion of the expenditure is spent on consultancy. By developing and maintaining it in-house, Bangalore Telecom bypassed that spend.

Lining Up SolutionsThe Karnataka circle has an IT budget allotment of nearly Rs 15 crore per annum, a third of which is utilized by Bangalore Telecom. However, if you can demonstrate benefits, budget is not an issue in government, Upadhyay asserts. Unsurprisingly, the success of the single window application is expected to pave way for a model that will be developed and managed by a vendor. This will consolidate the 12 servers in Bangalore. “We will begin that shortly, and are inviting tenders from April,” he says.

Another component of the project that is on the anvil is disaster recovery. “We are doing a DR server. That is one thing we need to build in.” says Upadhyay who is also Bangalore Telecom District’s deputy general manager for infrastructure planning & business development. The current lack of DR is among the project’s few weakness.

And as far as ROI is concerned, apart from the visible benefits at the front end, Bangalore Telecom has begun to generate a higher quantum of revenue through its services.

“In terms of money, because of reduced timelines, we record additional rental and revenue because we can provide a service to customers earlier than before. With that calculation, we can document how we have already recovered costs. There are process efficiencies,” Upadhyay points out.

The biggest benefit though is intangible: back-end capability. With online management reports on the performance of critical parameters, which impact delivery of services to the customers, the application has created greater transparency in the system.

The result is that Bangalore Telecom is now able to report, classify and compare performances of area managers. It has given management a handle to hold division heads accountable about areas to focus on, to laud efficiency

— and point to pending jobs. The back-end infrastructure has effectively overcome the practice of depending on divisional heads and their subordinates for status reports on works and projects.

In addition to the CSCs, the IT organization also devised two routes for customers to access service and information: an SMS server and the Bangalore Telecom website. Customers can get information and avail services, like complaint booking, complaint status, bill enquiry, outstanding bills and changed number enquiry, by sending a message to the SMS server. The information is also available on the website, apart from a function to pay bills online. For online payments, the amount passed on by BSNL to the gateway is Rs. 3 per transaction in case of transaction through bank or 1 percent subject to maximum of Rs 1,000 if a payment is made via credit card.

While alternative routes are gaining currency in Bangalore, the onus is still largely on the customer service centers. These continue

to be the face of BSNL’s quality of service, and training personnel at the CSCs was a challenge. “They were reluctant to use computers at the start, fearing that one wrong press of a key and they might lose data — or, worse, the system might get damaged,” smiles Upadhyay.

The solution was to keep it simple. “At every level, when we discussed a new technology, I told the persons concerned what part of it would be relevant to our target. If I shared the whole project, they might have found it mind-boggling. But telling each one of them their parts helped me keep it simple and generate the desired result,” he explains.

This approach proved especially useful in the development stage, says Upadhyay, because an IT head in government takes upon himself the task of integrating versatile, albeit limited, technology skill-sets. “A person might be in IT today. Tomorrow, he might be elsewhere…When we completed work on the single window product, the IT personnel themselves were surprised with the results,” he says.

Upadhyay believes Project Falcon is capable of being implemented across Karnataka and in other geographies too. He only hopes amassing the signatures then doesn’t turn out to be as much of a challenge as it was in Bangalore.CIO

[email protected]

Project Management


SNAPSHOT Bangalore Telecom DistrictREvENUE (KARNATAKA CIRCLE) rs 3,100 crore

I.T. BUDgET < rs 4 crore (bangalore)

CUSTOmER SERvICE CENTERS 44

IT TEAm > 30

SERvICES new land lines &

related services Mobile telephony broadband bill payment Complaint

redressal


Is Open Source the Answer to ERP? By Galen Gruman

Open SOurce | When Mark Alperin went looking to replace his aging ERP system in 2006, he found himself in the same place as many CIOs of midsize companies — not feeling terribly sought after by software vendors who prioritize large enterprise accounts, and facing few choices. Alperin serves as COO with CIO responsibilities for Vertex Distribution, a manufacturer and distributor of rivets, screws and other fasteners. He wasn’t happy with the two main packages for his industry, from Activant Solutions and Microsoft (neither of which he was using, nor did he want to use).

“I had lots of concern over the consolidation of the industry. I felt locked in to those two guys,” recalls Alperin. That lock-in made him nervous, since he was already frustrated by lack of flexibility with his old homegrown ERP system, which was not built around a relational database. Also, customization was a vital need when Vertex acquired other companies or needed to integrate with new customers. “We’ve grown because of our

A growing number of mid-market

CIOs say yes. In the wake of ERP vendor consolidation, open

source promises flexibility for the

future. Plus, it fits the need to customize

— affordably.

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


Essentisl Tec.indd 58 3/28/2007 6:11:12 PM

flexibility,” Alperin says. He didn’t want to risk that growth.

So Alperin chose to use the Compiere open-source ERP suite, so he wouldn’t be subject to a vendor’s shifting priorities. “The primary motivation was the ability to control our own destiny,” he says.

Alperin shares that desire with plenty of mid-market CIOs, more of whom are now tapping into open-source ERP, for reasons of cost and flexibility.

Custom FitOpen source addresses a key concern in this instance. Often, ERP vendors pitch smaller enterprises with packaged applications that they can run as is, requiring little or no IT investment. It’s a logical pitch in environments with scarce technology resources. But a substantial percentage of smaller companies want or need to customize the applications to fit their specific business needs — just like larger enterprises, notes Paul Hamerman, vice president of enterprise applications at Forrester Research.

“There’s such a diversity of needs. Some companies want a system they can mould to their business, which gives them more inherent flexibility. And open source is designed to be customized,” he notes.

And customized without astronomical cost. In Alperin’s case, he first asked a systems integrator he’s used over the years, Transitional Data Services (TDS), to develop a custom ERP application. Alperin wanted an ERP system he could directly control, with functionality equivalent to getting a customized version of commercial software, he says. But TDS suggested a money- and time-saving solution: Base Vertex’s new ERP application on the open-source Compiere project.

“They said it doesn’t make sense to develop all that code when there’s an open-source basis to get started from, eliminating 30 to 50 percent of the coding needed,” Alperin says.

The results? Alperin can now delve into the open-source code to move

quickly on business needs. “We have our own programming staff, and the ability because of that to customize services on our own and respond to customer needs is an advantage,” he says, “so the direct access to the source code is very important.”

Prevention Partners, a maker of prevention program posters, buttons and other health-related signage, had a similar desire for customization when it decided to replace an aging ERP implementation: as the company grew, its Windows-based ERP software could not scale with it and was becoming unreliable, among other faults. “I assumed the Oracles, SAPs and Baans would be out of our price range,” says Scott Rosa, CTO. So he looked for mid-market–oriented vendors.

Rosa found that they were cheaper than the large vendors, but licensing costs were

“still six figures” — and that even more money would be spent on customizing whatever it bought. “We didn’t want to spend our limited budget on licensing,” he says. By saving licensing dollars with open-source ERP, he could redirect monies to additional customization efforts — getting a better fit at the end, for the same outlay as commercial software, Rosa says. The company has deployed the open-source Web ERP software for its manufacturing arm.

“Flexibility means money to me,” says Rosa. His experience with the company’s previous commercial ERP system made it clear that, no matter its source, ERP software would require significant customization effort.

“We had to build a whole ecosystem around our existing ERP to fill the gaps,” he recalls. “Every business does

Open-Source ERP’s Big 3At least five open-source ERP projects exist today, but just three of those — Compiere, Open

For Business and Openbravo — have gained traction, analysts say. In order of age:

Compiere: Founded in 1999, this project has the most adoption and “has grown into a

significant level of functionality,” says Paul Hamerman, a Forrester Research analyst.

Compiere particularly suits sales, CRM and retail uses, but for manufacturing, lacks shop

floor management capabilities, says Martin Schneider, an analyst at The 451 Group.

Open For Business: Part of the Apache group of projects, the first version was released in

2005. It’s best suited for online businesses, says Peter Bohnert, a principal at Transitional

Data Services.

Openbravo: First released in 2006, Openbravo is designed for customization, rather

than for a specific type of industry. It’s Web-based, so companies with remote offices and

traveling executives can provide browser-based access to simplify deployment and client

management — attributes that won over pharmaceuticals supplier Galenicum’s COO,

Erich Büchen.

less-established open-source ERP projects include WebERP and ERP5. Note that a few

ERP applications are often considered to be open source but are not: OpenMFG, a well-

regarded commercial application for manufacturers, lets licensed users access and modify

the code for their own use, but not redistribute the code. Tiny ERP, a free ERP application, is

nonetheless licensed and its code is not available.

— G.G.


ESSENTIAl technology


something outside of what the software has in its business process,” whether that software is commercial or open source, he says, “so if I need to have that customization, I’m going to do it myself.”

Truly, control ranks right up there with costs on the list of CIO concerns regarding ERP. The open-source community, of course, values individual control as a key part of its culture. When Galenicum, a three-year-old supplier of raw materials for the pharmaceutical industry, sought its first ERP system in summer 2006, customization and control were key requirements. The company looked at two commercial applications — SAP Busi-nessOne and Microsoft Dynamics — but chose instead the Openbravo open-source ERP software. For COO Erich Büchen, “the most important factor was that it is easier to customize Openbravo than the other two. SAP and [Microsoft] Dynamics are much more rigid in what they can do, or at least in what their consultants say they can do.”

Given that any ERP software would need extensive customization (for

example, for interacting with Galenicum’s customs management and logistics partners), commercial software offered no advantage, he says. That’s not music to the ears of SAP, but Büchen’s not alone.

Retail distribution firm Frilac chose Openbravo to ensure control over the ERP system’s capabilities when it decided to replace its hodgepodge of disconnected back-office applications with a unified ERP suite. “An open-source software

system meant we were in full control — with customizations suited to us, the software adapted to our particular needs and with no restrictions from the product manufacturer,” says Carlos Villanueva, Frilac’s sales director.

Flexible Support SystemMid-market CIOs also have to be realistic about support options — and the need to not only manage costs but also keep a few exit doors open in case of trouble. An aspect of open source that attracted these open-source ERP adopters was flexibility with who could support their development and maintenance needs.

“It’s easy to switch if one consultant doesn’t work out,” Büchen says. “We could easily change suppliers if we were unhappy with the service,” echoes Villanueva. “I’m not tied to any proprietary vendor who tells me what I can do,” says Rosa.

Because smaller businesses usually have small IT staffs — sometimes just a few developers and a few network and desktop support staff — they’re used

to working with IT consultants who specialize in their industry. That makes it easy to adopt open-source software, since smaller companies can often turn to the same independent consultancies that support their other software.

That was the case at Vertex, whose preferred consultant recommended the use of open-source software. Or they can turn to the commercial arm of the open-source project to customize

their deployments, ensuring that the development team intimately knows the software. That’s the approach taken by Galenicum. But even in this case, familiarity with the consultant played a role: because Openbravo and Galenicum are both Spanish companies, “we knew them,” Büchen recalls.

“The reality is that the people who do all the work [in ERP deployments] are in-house teams or system integrators, not the commercial software vendors,” says Martin Schneider, senior analyst for enterprise software at The 451 Group market research firm. “The availability of open source points out that disconnect in the value chain,” he says. “It’s almost a miracle that SAP got as big as it did; they’re just selling a skeleton.”

However, anyone relying on open-source software should understand what


Gartner says that among companies currently using or considering using open source in any form, 12 percent are using open-source ERP today. And 14 percent plan to do so in the next 12 months.

Consolidation ManiaSince 2002, your ERP vendor choices have

dwindled as commercial vendors went

on an acquisition spree and gobbled up

rivals. Consider the lineup changes that left

SAP, Oracle, Infor, Microsoft and lawson

Software standing in this game of Survivor:

SAP purchased Factory logic.

Oracle purchased JD Edwards,

PeopleSoft and Siebel Systems.

Infor purchased Extensity, GEAC,

Infinium, lilly Software, Mapics, Marcam,

Mercia Software and SSA Global; SSA

had purchased Baan, Epiphany, Max

International and Provia Software.

Microsoft purchased Axapta, Great

Plains Software, Navision and Solomon.

Lawson purchased Intentia.

QAD purchased Precision Software.

Intuitive Manufacturing Systems

purchased Relevant Business Systems and

SupplyWorks.

— G.G.



kind of support mechanism is actually available, says Peter Bohnert, a principal at TDS (the integrator Alperin used). For example, some projects (such as Compiere and Openbravo) have a services division, while others (such as Apache Open For Business) do not. All have independent consultants who offer support as well.

Future OutlookAnalysts are split on how wide the appeal of open-source ERP will be in the coming years. When you consider the entire universe of ERP deployments, few companies have adopted open-source ERP software. Even the most established and longest-lived project, Compiere, mostly attracts companies that have significantly customized their commercial software and thus are more likely to do the same for open-source software, says Forrester’s Hamerman. (There’s little hard deployment data because the software isn’t licensed through normal sales channels.)

“The vast majority of companies prefer the vendor to maintain the system for technical support and compliance,” says Hamerman, who expects that approach, not open-source adoption, to remain the norm.

Early adopters tend to be the smaller companies. “Many developers are intrigued by — and therefore gravitate toward — open-source solutions,” says Timothy Burks, a principal at PTRM Management Consultants. “But these developers typically report to CIOs and CFOs who are far more risk averse and unwilling to jeopardize their careers; consequently, open-source ERP solutions aren’t likely to take off too quickly in the commercial space.” Burks expects smaller companies to be more willing to take that risk.

However, Gartner research director Laurie Wurster does not think that companies are so cautious. “Today, ERP is very low on the list in terms of open-source adoption,” she says. But it’s on a growth path. According to

recent Gartner research, among companies currently using or considering using open source in any form, 12 percent are using open-source ERP today. And 14 percent plan to do so in the next 12 months. Open-source ERP should have increasing appeal because of the wave of ERP consolidation — mostly acquisitions by Oracle, Microsoft and Infor, she says.

“SAP and those guys are not serving the mid-market — they provide more functionality than customers need at a price they can’t afford,” she says, “but open source is meeting the needs.” And open source has proven itself in many other enterprise applications, so any concerns center around the software’s fit and support system, she says.

“Open source will become more rampant,” agrees The 451 Group’s Schneider. “People using old SAP R3 and pre-Version 11 Oracle Financials

systems in a few years will be looking at [SAP’s] Netweaver and [Oracle’s] Fusion [middleware platforms] and say, ‘We don’t want your middleware,’” he predicts. That opens the door for a serious look at open-source ERP. CIO

Galen Gruman is a freelance writer. send feedback on

this feature to [email protected]

At first blush, Scott Rosa’s experience parallels that of other successful open-source

ERP adopters. But the path to success wasn’t straight. The CTO of Prevention Partners,

which manufactures and distributes posters, buttons and other health-related signage,

says his company outgrew its vertical-market, Windows-based ERP system. So Rosa hired

a consultant to customize the Open For Business open-source ERP software for his firm’s

distribution arm.

But the project management spun out of control, causing the effort to go over budget.

First problem: the consultant had no experience with Open For Business, and its learning

curve was steeper than expected. Second problem: because Open For Business is very

customizable, both Prevention Partners and its consultant “got caught up” in much

customization, Rosa recalls. And Open For Business is based on Java, which Rosa’s

developers aren’t experienced in, so they couldn’t take over.

But Rosa didn’t move back to a commercial product. Instead, he adopted the WebERP

open-source software to develop a custom version for his company’s manufacturing arm,

which needed a quick and easily deployed ERP solution.

WebERP uses the PHP language, which his developers know, and Rosa can manage

directly.He plans on completing the Open For Business–based ERP effort as well. “I’ve

got the code. I just need to find someone to finish it for us. I would not buy a proprietary

solution,” Rosa says.

Ultimately, Rosa plans to migrate one business to the other’s ERP, but he hasn’t decided

which of the two open-source options will prevail.— G.G.

My ERP Story




Get This About Open SourceYou like packaged apps because they're standard, but is standard performance what your company is gunning for?By Bernard Golden

Pundit

Open SOurce | I recently penned a piece called ‘Why CIOs Don’t Care About Open Source’ (February 15, 2007) and I’ve been getting responses that have got me thinking. Several dismissed the importance of open source because it was too RTFM (Read the Flaming Manual) and not enough business benefit. In other words, because open source isn’t enough like packaged apps, there isn’t any point for CIOs to consider it.

If there was a time when CIOs thought of their job as taking the latest release from

Gigantic Enterprise Vendor and spending gobs of money in installing, configuring, and integrating it, that day has passed. Today, businesses are being turned inside out by digitized processes, automated supply chains, coalitions of organizations that come together to aggressively address nascent markets, and more.

Every one of these centers around IT and demands CIOs to help create new business offerings. And guess what — performing the same old packaged app shuffle is a recipe for irrelevance. Simply put, the eye-wateringly expensive packaged app game was fine for a time when IT meant centralized execution of easily standardized processes, but today’s economic environment calls for a much less expensive way and much more responsive way to create IT-enabled business functions.

Feebly offering up the mantra of ‘business benefit’ as a shield to avoid confronting technology trends won’t protect you from other parts of the business demanding new IT-enabled market offerings. Refusing to countenance open source as part of your solution portfolio is like a marketing person, circa 1995, rejecting the new-fangled Internet, citing his or her need to focus on ‘business benefit’ marketing programs like TV spots and direct postal mail. Judging open source as a kind of second-rate enterprise app and

concluding it falls short of the standard misses the point.

In a world where IT is central to how businesses run, implementing packaged apps to standardize your functioning by definition consigns you to middle of the pack — because packaged apps are designed to cover one standard deviation from the center of the bell curve: that’s how software companies make money — delivering middle-of-the-road applications. Being as good as the rest of the pack was OK when IT meant support for the real business of the company, but is a death threat in today’s economy.

I found this discussion of the 'long tail of enterprise applications' particularly germane to the future of IT. I argue that following the traditional IT rules and process makes IT organizations unable to

recognize or respond to real end user IT needs. The specific analogy the poster uses is the rise of the PC, in which end users smuggled the puny, RTFM, unapproved machines into the enterprise in order to take advantage of their powerful utility. This provides the most vivid evidence of what happens when unstoppable end user demand confronts unbending IT resistance. End users always win in this battle.

In a world where digitization and information processing is pervasive,

information technology has to get less expensive. If you don’t consider evaluating open source as an option to drive down costs, you are neglecting your charter as head of technology. InfoWorld just released the results of a survey they did, which showed that 36 percnt of respondents using one or more open source products used it in mission-critical applications; for those respondents with 100 or more open source products in use, the number using open source in mission-critical applications rose to 61 percent. What do they know that you don’t? CIO

Bernard Golden is Ceo of navica, an open-source

consultancy. Send feedback on this column to

[email protected]

Implementing packaged apps consigns you to middle of the pack because they're designed to keep everyone happy.

essentIal technology

Vol/2 | IssUe/106 2 a p r i l 1 , 2 0 0 7 | REAL CIO WORLD

ET-Pundit.indd 62 3/27/2007 10:31:00 AM

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