In today's economic scenario, how can CIOs get the best value out of shrinking IT budgets?
Although it may sound harsh, I would say that the CIO should stop spending. He should evaluate his existing assets, and then decide what he can deliver using those assets. For example, assume that you have 20 servers, 25 databases, 30 applications and a staff of 25 programmers. Can you deliver the value that business requires with this staff without hardware investments?
Yes. This can be achieved with reengineering, re-staffing and staff rotation.
A CIO should also resist the tendency of unnecessary upgrades or migrations. Don't get carried away by what vendors suggest. For example, suppose I have a budget of Rs 5 crore. That budget should be used for extracting new value out of existing software. Instead, for most CIOs who have an ERP implemented, the effort is to go to the next version just for a couple of new features. In my opinion, you can implement add-ons which extract those values from the old system. If you have good programmers, this can be achieved. If business requirements absolutely demand a new version, definitely go in for it. Otherwise, the old system can be tweaked to get incremental functionality.
Be a bit more conservative on infrastructure investments, and try to use outsourcing as much as possible. If everything is in-house, you are not able to make 100% use of this investment. For example, most hardware runs on 25-30% of capacity, whereas 70-75% capacity goes waste. With outsourcing in place, you pay as per your usage. So you save on capital investments and running costs.
Can you give us some examples of the aspects that can be looked at for outsourcing?
Common concern here is of security going out of your control. Always understand that it's a matter of governance. If proper governance is not in place for your IT setup, this can happen even in a new organization. So outsourcing is not necessarily the culprit.
Should you renegotiate existing contracts?
How do you handle re-staffing and re-skilling?
Second is that I always create new challenges for my staff by putting them in charge of a new technology every year. So they gain new skill sets. Always ensure that they have an enjoyable experience. You have to see that they should find a career in the technology.
With IT budgets coming down, staff training has also come down. How do you cope with that?
For example, we had undertaken migration from Microsoft SharePoint Portal 2003 to Microsoft SharePoint Server 2007. The challenge was to migrate Hummingbird IDMS to SharePoint Server 2007. Now the staff member was not conversant with SharePoint Server 2007, but she mastered it and completed the migration in three months.
Now, I had the budgets for outsourcing, but the objective was to create a challenging opportunity for a team member. Today we are able to roll out the technology in other parts of our business. We'll also be saving at least Rs 50 lakh.
What about using cloud computing's touted benefits?
So our sister concerns use part of my ERP -- the catalog management system. We've asked them not to buy any software and hardware. Our manpower manages their system, and we charge them a very nominal fee. Such efforts substantially reduce hardware and software costs.
How can a CIO deal with reduced IT budgets? M D Agrawal, the deputy general manager of IS (refinery) at Bharat Petroleum Corporation Ltd., shares tips.
What is the scenario in India when it comes to SLA management?
We believe that the adoption of formal SLAs is fairly limited in India. SLA formulation and management requires IT and multiple business stakeholders to accept a single version of the truth, in terms of the data that drives the metrics. This is typically a fairly resource-intensive task that involves aggregating data from multiple application repositories, databases, infrastructure management systems, configuration management databases and service desks. The cost is at least in the order of tens of thousands of dollars, and in many cases above the U.S.$100,000 mark.
A company would take up such a resource-intensive project only if sufficient scale exists and/or if the awareness of the need for IT maturity is high – these conditions are rare in India. Even globally, formalized internal SLAs are more important to the very large enterprise than any other kind of company (this does not include service providers of all kinds, because SLAs are the core of their business).
When the service involves application hosting, SLAs would be related to uptime (availability), which is qualified by factors such as the number of concurrent users to be expected. Performance is a little more difficult to define. Ideally, performance should be measured in terms of end-user experience, but sometimes measuring end-user experience involves hard-to-scale tasks such as installing agents on end users' desktops, and with the growth of mobile users, it's hard to control the endpoint and the network, complicating matters.
It needs to be appreciated that SLAs can be met only under certain given conditions – for example, if the average user's Web experience is to remain above the threshold, strong URL filtering is required to ensure that Web usage is in accordance with policy, and requests for exceptions should be carefully managed. At a high level, there isn't much that is arguable about the right SLAs. However, collecting and aggregating metrics is usually quite tough. Data typically resides in multiple databases, infrastructure management systems and possibly multiple service desk solutions. Building connectors to these data sources, aggregating them and developing dashboards for reporting are all resource-intensive tasks.
Tools don't do much here – the professional services' costs typically equal the average SLA management tool's licensing costs (a 1-to-1 ratio). Hiring an expert who is familiar with the metrics that work in terms of securing buy-in (and truly representing the business' interests) and hiring the IT talent to build the data connectors is much more important than any tool-related considerations.
Vendors have the necessary tool knowledge to build connectors to the data. They also provide mechanisms such as rules engines that ease the process of aggregating the data to build metrics to be monitored. Dashboards are usually provided to aggregate and present the metrics in an automated way, which provide automated alerting services, analytics, etc., and in effect, create a single system of records that everybody can agree on. So, it's less about tool features and more about competence that the SLA management tool provider brings to the table.
What differentiates your systems from the competition?
Our blade architecture is very easy to integrate servers and storage into the same form factor.
Another big difference is the use of off-the-shelf components. It gives us a couple of advantages: When something changes, we're able to implement as soon as it happens. We're shipping [Intel's latest offering] Woodcrest the day it's available. It makes it much easier to come out with new products.
Normally, the servers at the base of the rack get all the cooling, and the ones at the top of the rack take what they can. We draw in more than 2,400 cubic feet per minute (CFM) of air. Each blade is getting 100 CFM. We don't have one blade getting 300 CFM and others getting less. Our blades have no cooling on the parts themselves. All of it is provided by the cabinet.
If you're in a raised floor environment, our installations have no problem being in a hot row. We don't draw air in from the ambient room unless we're in a solid floor environment.
[Driggers founded San Diego-based Verari 10 years ago. The company recently appointed former EMC-exec David Wright to CEO. Wright will take over the business functions, allowing Driggers to focus on the technology.]
in working in the distribution center, participating in the financial close process, taking a few shifts in a retail store and working on the customer service...