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.
Vice president of Eco-Responsibility is a rather new job title in the industry. What prepared you for this job?
My interest in this whole space got started early in my career building supercomputers in Cambridge [Douglas received his bachelor of science and master of science degrees in computer science and electrical engineering at MIT]. We built some of the first air-cooled supercomputers back then. Then at Sun, I was really involved in getting into low-end server business, which was a similar process -- how to take these big mainframe servers and put them in people's offices and have low-power and low-noise solutions. It's something I've been hitting over and over and it became a theme for me in my career. On the personal side, I've been looking at my kids and the world where I'm raising them and thinking about things we enjoy doing as family. I've been thinking about how we make sure our kids have a great place to live in future.
Is the VP of eco-responsibility an evangelist, a manager or an engineer?
All of them. Some people who will be reporting to me will be running specific projects. But there is certainly a lot of evangelism both inside and outside the company trying to raise awareness. At Sun, I'll help get a lot of the various businesses moving in same direction.
Eco-responsibility is a broad concept. Where do you think you will be focusing most of your attention this year?
There are two broad areas. Some of it being set by outside players, like the [Environmental Protection Agency (EPA)], and the regulatory stuff happening in Europe. They kind of have a time frame of their own. Another big priority is internally working on our short-term and long-term road map. And there are tons and tons of other things to do, like "Bike to JavaOne." [During its annual Java developers' conference JavaOne on May 16 in San Francisco, Sun will encourage local attendees to ride bicycles to the conference. A local biking coalition will offer free bicycle valet service.]
Environmentalists see virtue in an eco-friendly computing initiative, but why is it good business for Sun and for your customers?
I think it's a really similar situation to why people are buying hybrid cars today. There is money savings to be had by paying attention to energy consumption. And doing more eco-friendly things, there is a class of people to whom it's personally important to do that. Toyota is seeing customers demand eco-friendly products, and we're seeing the same thing with Sun, demanding our CoolThread processors. People are saying, "You've really hit something important for me going forward."
When and how did you realize that eco-friendly computing was going to be an important issue?
It is kind of something that has sunk in over the last four or five years, just thinking about the energy that's consumed in the data center. And then on the flip side, watching our customers use our technology to try to solve eco-friendly problems, such as designing better cars, tightening up the supply chain. It's a yin-yang situation, [IT is] part of problem but it's also part of solution.
Where is Sun strongest in its commitment to eco-responsibility?
There are a lot of programs under way. With just three days on the job, what jumps out at me is the product leadership right now with the new processors and servers and our work with AMD on x86 compatible servers.
Where is it weakest?
I think it's a Sun problem and also a bigger industry problem. There's amazingly little data available that decision makers who want to factor power into their decision-making process can really turn to. We are not doing a good job at this at Sun. Nor is anyone else. One priority is to keep pushing to work with the EPA to get visible metrics out there so we can be up front and honest about what people can do. Data and transparency drive a lot of things in this country and the world overall just getting the facts out on the table can do a lot of good.
What can you tell us about the formal metric for measuring the miles-per-gallon equivalent for servers? Why is this metric important?
It's a process that started up with leadership from Sun, the EPA and others. The goal is to give people an up-front, visible way to make tradeoffs and understand what the long-term costs are going to be for various technology choices. Today you go in and talk to people setting up data centers, there are a lot of back envelope things and an overdesigning of things for cooling just in case. This is just a way to say this company is doing better than that company (with energy consumption). [People might say] 'This technology might get me where I'm going at a lower cost for power and cooling and that stuff.' If you give people facts they can make better decisions.
What is Sun doing to make its technology run cooler and more efficiently?
A lot of it starts down at the chip and processor level, very low-level engineering. You focus on how you do computing with less power. There's no magic. It's just been the focus for awhile. Sun took a particular leadership position with the multi-threaded and multi-core space. It re-thought processor design from ground up. We're doing a similar thing with AMD, who we use in our x86 systems.
Will you be Sun's point man on the Green Grid consortium?
Yes, I will certainly be very active and we've got other folks in company involved already. I think that's going be a nice piece of technology, particularly around interacting with broader population.
Why come back to Sun? A couple of reasons. There are still a lot great people here who I knew from last time here. And I'm very upbeat on the long-term business. And third, what I really want do -- what I felt like I wanted do in the eco-responsibility space, Sun already has some momentum. It has the engineering capability to really go and tackle these kinds of problems. If you look at Dell, for example, they have got to go get processors from someone else. We design our own processors. It's a big enough company and it's got a lot of horsepower to go and do some fundamental things.
Douglas, who is returning to Sun after 5 1/2 years, co-founded in 2001 ConnecTerra Inc., a Cambridge, Mass.-based startup radio frequency identification middleware company, where he served as vice president of products and strategy. In 2005 Douglas became BEA Systems Inc.'s chief architect for WebLogic after San Jose, Calif.-based BEA acquired ConnecTerra. In his first interview as VP of eco-responsibility, Douglas talks to SearchCIO.com about how serious Sun is about eco-friendly computing and when CIOs can expect energy solutions from Sun.
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