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Issue of February 2004 
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Infrastructure Management

IT on a platter

To provide IT as a service, the CIO has to evolve the IT department into a service provider within the company. And in such a situation, it's important to take a fresh look at the IT infrastructure and devise strategies to manage it optimally. by Soutiman Das Gupta

The concept of Infrastructure Management (IM) is not new to many CIOs. Any CIO would understand that a holistic view of the IT infrastructure, as opposed to fragmented views of the network and its components (like server management and bandwidth management), provides a base on which the performance of IT stands.

And this difference in vision makes one company's IT department more successful than that of another, and puts one company in a better position to achieve it's business goals than another.

A global CIO survey conducted by Gartner revealed that infrastructure was the number one priority for Indian CIOs in 2004. And Indian CIOs consider 'making IS more service-oriented' as their second-highest management priority.

But in order to emerge successful in every challenge that the IT department throws at you every year, it's important to keep visiting all the reasons and concepts that make a good CIO. And it's important to look at the way concepts have evolved in order to keep realizing the benefits offered by these concepts.

IT the service provider

What makes the IT department different from any other operational department? The correct answer to this is CIO vision. CIOs with vision have been able to evolve their departments into a service provider organization within the company.

By doing so, the IT department establishes a 'service provider-customer' relationship every time it has an assignment to perform. To fulfil needs starting from removing a bad sector on a workstation to deploying a mission-critical financial package, the IT department will treat the assignment as if the request came from its customer. And at every step of the project and even after deployment, the IT department will provide value services to all concerned departments as if it were it's paying customer.

Internal customers

This idea of looking at all users within an organization as internal 'customers' provides a fresh outlook to the IT department and makes the CIO look at his/her infrastructure and assets in a new light.

Concepts like quality of service, service levels, and utilization of assets become important considerations when the CIO has to plan deliverables and schedules. A successful IT department will treat each assignment, deliverable, help-desk request, and complaint like it came from a client organization.

Conglomerates, and companies with several lines of businesses can go a step further and merge the IT departments of the various sister companies into an integrated entity. This single IT unit can be the internal IT service provider to all (or some) group companies of the conglomerate. Group companies like Godrej, L&T, and Birla are good examples of this.

For instance, the IT infrastructure needs of the group companies of Godrej, like its consumer products division and Godrej Industries, are managed by a single IT department with one CIO. This arrangement provides significant cost-savings and fewer management hassles for all the group companies.

External customers

IT has traditionally been a cost-center in an organization. Apart from companies like telecoms and ISPs, the IT departments of organizations have never been directly involved in generating revenue.

However, in the wake of such a practice there have been organizations that have broken the traditional mould and emerged as active profit centers. And in doing so, have been so successful that the IT departments have been spun-off as separate companies that cater to a large number of external clients and generate large volumes of profit every year.

Companies like NSE.IT, ICICI Infotech, and L&TITL are such examples. Usually, the parent organizations began with a small IT department with a few qualified staff. As the companies grew in size, their IT departments grew in functionality, infrastructure, skill-sets, competency levels, and number of personnel.

The higher management of these companies realized that their IT department is now competent enough to provide consultancy and management services to other companies for a fee. Most of these spun-off companies in India are performing extremely well and currently have ambitious expansion plans.

Assuming a new role

Although the idea of making profit from a spun-off IT department sounds good, there are unsavory sides to it. The status of the new company becomes equal to that of any other vendor, and it has to deal with new customers.

"The new CEO has to handle a large range of new responsibilities. He/she has to be very particular about issues like budgeting and cost, ROI, SLAs, and time commitments. External customers can be very demanding and firm; aspects, which the CEO may not have found among the parent company's internal users," explained Alok Shende, Industry Manager, Technology Practice, Frost & Sullivan.

Policy-based IM

Companies that have evolved their IT departments into internal service providers could only do so by creating well-planned policies and strategies. And creation of policies is especially important since there is a shift in the department's vision, to offer IT as a service.

It is very necessary to take a realistic look at the company's technology, manpower, and knowledge resources. And after doing so, the CIO must follow the company's business vision. A combined look at the business vision and infrastructure management strategy will help create and align a suitable IT policy.

In an ideal situation the upfront investment in the innumerable components of technology must be aligned with the business needs and planned for future growth. However, the reality is that the IT infrastructure investments are still, save some exceptional cases, viewed as an IT operation. And thus, IT infrastructure invariably does not get aligned with business strategy and plans.

IM strategy and ITIL

The goal of an IM strategy is to ensure that the IT infrastructure is reliable, available on a 24x7 basis, flexible, cost-effective, and adaptable to the ever-changing IT paradigms like Web-based applications and virtual offices.

These characteristics raise the issue of managing the unpredictability of technology on one hand, and providing reliable and uninterrupted services to the customer on the other hand. However, the complexity and sophistication of IT infrastructure remain the same irrespective of the size of the organization. The differentiating factor is the volume of transactions and geographic spread.

A company can use the specifications provided by the IT Infrastructure Library (ITIL) to help create its strategy. The ITIL is essentially a series of documents that are used to aid the implementation of a framework for IT Service Management (ITSM). This customizable framework defines how service management is applied within an organization. ITSM is generally divided into two main areas, service support and service delivery.

Bithin Talukdar, Market Development & Alliances, Software Global Business Unit, Hewlett-Packard India limited, highlights a number of criteria for enterprises to create an IM strategy. "Create a roadmap for ITIL implementation within an organization. The first step in ITSM is when you plan, you plan top down. And when you implement you implement Bottom up."

  • Short-term focus should be on stability and focus. These would typically cover areas like configuration management, network management, service desk, computer operations, and problem management.
  • Medium-term focus should be on managing service levels. This would typically cover the areas of availability management, capacity management, IT service continuity, and financial management for IT services.
  • Strategic focus should be on achieving a Quality Organisation. This would include areas like planning & control of IT services, managing supplier relationships, CRM, infrastructure architecture design & policies, software lifecycle support, and Quality Management of IT Services.

Practicing IM

The practice of IM should be a continuous process, especially because it is a holistic approach that involves people, systems, assets, and relationships. Good IM can provide a number of benefits to the organization.

It can enhance system performance, increase reliability and security, utilize resources optimally, and reduce costs. These will in turn enable IT to satisfy the company's business objectives.

Most CIOs will agree that a consultant is not essentially required to create an IM strategy and run the IT department in-line with the strategies. A consultant is only necessary when there are certain grey areas or difficult patches in the business objective, which needs to be addressed with a technology solution.

Akash Saraf, CEO & Jt. MD, Zenith Infotech suggests a few best practices for IM.

Be proactive: Advance knowledge of areas where things are most likely to go wrong can help you put measures in place before anything actually does.

Compare, compare: It is good to perform historical analysis of your network's performance. Using tools that give you present and past performance data, allows you to identify patterns and keeps you from repeating the mistakes in future.

Give more attention to network design: Pay ample attention to how the network and its various components are laid out at the design stage. Simple things like where the hubs should be placed in the network, what should be the ideal distance between two switches, and how the storage should be configured make a big difference to the performance and management of a network.

Cry wolf whenever required: It is very important to raise the alerts and alarm levels at appropriate failure points along the network. Network administrators should be able to receive and respond to these alerts through channels like phone calls, e-mail, and SMS.

Form cross-functional teams: When adding on new devices or functionality to a network, you may often lose sight of the big picture. It is advisable to form cross-functional teams across departments and have the network admin interface with them as often as possible.

Stick to standards: In order to avoid incompatibility issues in hardware and applications you should try to minimize heterogeneity as much as possible and stick to what you know works best.

With inputs from Arun Pande, Vice President, Information Technology, Colgate-Palmolive India Limited

Justifying benefits of IM tools - what lies beneath

In today's business context in the Indian enterprise, IT has become a core component of business operations. The backbone of IT is the infrastructure that lies beneath. This IT infrastructure provides the foundation on which business systems are built, managed, and used to provide the required services.

Management of this IT infrastructure assumes significant dimensions when it is visualized as an enabler of business. As a consequence, the operational performance of all the supporting systems is totally dependent on the IT infrastructure.

In such a scenario it is imperative for a business to realize that payback on an Infrastructure Management (IM) tool is imperative. The CIO should be clear to the higher management about expected increase in productivity and reduction of costs by using an IM tool.

Companies that run critical applications and ERPs, and those with distributed nationwide locations can compare the cost of managing the entire infrastructure without an IM tool and compare it with the cost of using one.

"Many indian organizations are also developing infrastructure management tools in-house," said Gaurav Dua, Industry Analyst - Technology practice, Frost & Sullivan. In such cases the cost of deploying the solution and managing it is drastically reduced.

CIO view

Vikram R. SriHari, Director - Business Systems, Coca Cola India

The idea of providing IT as a service for the benefit of internal and external users is very good and progressive. The internal user is very satisfied with the levels of service and in case of external customers, the management is happy with the profit.

Users tend to respect the value contribution of IT services instead of looking at it as 'just another corporate service'. It keeps the IT function competitive, as the parent company always has the option of looking at external service providers.

Policies

A policy is paramount for proper Infrastructure Management. No organization can grow successfully without a stated policy. The consequences of policy infringement should also be stated at the onset, to better ensure compliance.

IM strategy

A company that has made a proper IM strategy will expect certain business improvements. The cost of operation (opex) will decrease, SLAs will be honored, and there will be true TCO realization along with asset management. Performance will be the consequence, and IT will be better utilized throughout the enterprise

Consultants play a key role in auditing and monitoring/reviewing the strategy on an continued basis. It's like swimming in shark-infested waters. You should never stop swimming or else you'll perish.

The CIO and the external customer

The CIO is as much a salesman as a sales executive in the field. The sooner the realization dawns, the more effective the CIO will be in a business context.

The CIO needs to look at TCO and not ROI on IT investments. It is important to look at hard business benefits with soft benefits on the backburner.

CIO view

S.B. Patankar, Director, Information Systems, The Stock Exchange

In a stock exchange scenario, IT plays the key role because all the products and services are delivered through IT. IT is delivered as a vital service, and without IT there can be no stock exchange.

Gone are the days

Gone are the days when trading took place using manual methods and brokers would use sign language to communicate. IT has enabled us to use a central trading engine, which serves over 10,000 trader workstations (TWSs) in more than 400 Indian cities. Every TWS requires a split-second response since it has to display the current price, for the order to be processed. And that's the name of the game.

IT is the business driver. And when we talk about a business driver we talk about service levels. You should be able to calculate the response time of requests. If you want to expand business in India, you should be able to foretell how much time it will take to set up infrastructure in the new locations. You should have well-organized process that will enable IT to be the business driver.

So IT plays a pivotal role and the IT strategy has to be aligned with the business strategy in such a way that the business grows.

Policies and service levels

A mission-critical environment like ours cannot afford interruptions. And such dedicated levels of service can only be offered by putting proper policies in place. These policies will ensure that the level of quality is clearly defined and strictly adhered. Adherence to the policies will ensure that the service levels are also strictly followed.

Good policies will take care of a number of aspects like change control, change management, capacity management, security, IT management, backup, and DR strategies. Each of these policies will become an intrinsic part of an organization's structure.

Infrastructure needs

When you look at IT as a business driver, a matching infrastructure has to be procured, deployed, and maintained.

An important aspect is reliability. When you buy fault-tolerant systems (like Tandem) it is expected that the system will run even when a component goes bad. So a decision has to be taken regarding the kind of infrastructure needed to be set up.

If you need a 24x7 infrastructure the design consideration and system architecture will be different. The technology components have to be carefully considered at the design stage.

So the cost comes in the end. The first consideration is about enhancing business. After you achieve that you can go on doing improvements regarding technology and hardware.

Providing IT as a service

We have a very large nationwide network, which includes an 11 meter VSAT antenna, a full transponder to ourselves, and 2000 VSAT terminals. So the underlying management principle is to provide IT as a service to the user.

Our infrastructure allows us to satisfy service level guarantees, reliability needs, uptime requirements, and response time requirements. And these have to be done at minimum costs. So the cost parameter comes only after you decide on the necessary features and have fulfilled them.

IM strategy

We take a long-term view of the business and growth. And since IT provides a path for the business, the IT policies are governed by the business.

We felt that an internet-based trading system would be the future of trading. So we invested in WebEx, which is an internet-based trading system. WebEx allows any person from any PC to carry out trade directly with the exchange within specified risk management factors.

Our strategy is to stay current in technology. When we adopt the latest technology, we can pass the advantage to the users, and in turn benefit from the business advantage. We carry out pilot testing projects and find out the advantages and disadvantages. We introduce the product into the mainstream only after we feel that it conforms to our standards and expectations.

Cost of tools

IM tools do cost money, but you have to consider that you want to provide an established service standard through an SLA to the user. If there is an SLA between the user and IT department, the actual standard can only be achieved with IT tools.

We use a software tool from Prognosis for the online trading system. It's like a CAT scan or an ECG for the system. It tells us what is happening internally and gives proactive warnings about performance issues. We cannot manage without it. In a complicated environment like ours we cannot afford to wait for a fault to happen and then diagnose the vast network. In addition top this, the people cost is a huge cost.

We can choose between a less costly tool and a costly one, but can we do away with a tool? No.

CIO view

Sanjay Sharma, Head-Information Technology, IDBI Bank Ltd.

IT is the lifeline of business in most Indian enterprises today, especially in banks and financial institutions. No bank user can work even an hour without IT systems. So the direct impact is on business.

Building infrastructure

Such mission-critical infrastructure needs to be managed on a pro-active basis. If a CIO decides to upgrade storage system only after it has reached 80 percent capacity, it is actually quite late. One has to be proactive because one needs lead time to build and deploy infrastructure.

The idea of using a consultant is fine. But I usually contact my vendors first since they already know my systems. On the other hand, an external consultant has to start from scratch.

For instance, our IT infrastructure functioned on a star topology. When business volumes went up we re-designed the network with inputs from the vendor and evolved it into a mesh. So you need to look at your specific needs.

IM policy

The CIO must look at aspects like the business need, business focus, and business strategy. For example a bank's strategy can be that IT will only play a support role. Another bank may want IT to play an enabler's role or a product innovator unit. In these cases, the IT policies will be different.

The bank, which wants IT to be an enabler or product innovator, will expect a lot from the CIO. The CIO has to be very alert about the infrastructure and has to keep pace with technology evolution.

Once the CIO is clear about business strategy, he/she needs to look at the assets. It is necessary to see the existing assets, the ones required in future, and ways to manage it. It is also required to look at the expected ROI and the asset lifecycle.

CIO checklist

The CIO can refer to this checklist when designing an Infrastructure Management (IM) strategy.

  • What is our business plan?
  • What do we want to do?
  • What are our expansion plans?
  • What are the challenges we need to focus upon?
  • What is the current state of the infrastructure?
  • What is the lifecycle of the infrastructure?

And now we create the strategy.

Service provider

The IT department is service provider in an organization. From the infrastructure perspective the CIO has to ensure that the expectations of the users at all branches like response time, throughput, and systems is satisfactory.

Our bank doesn't have formal SLAs with all branches but it is a KRA (Key Responsibility area) of a CIO anyway to ensure that the resources are available all the time.

External customers

This idea that we can use our IT department to provide services to external customers is not a bad one. A few other organizations and banks have approached us requesting for support since we have skill-sets in this domain.

But till now we have been focussed on our own growth and its related issues. So shifting focus to external organizations will not be very feasible.

Some organizations have begun to offer services to external customers, but how successful have they really been? And most organizations that have created subsidiary solution providers in reality do not use all the services of the subsidiary.

The downside of becoming an independent subsidiary is that you actually become like any other vendor and have to be cost-effective and competitive. You no longer have the advantage of being an internal department, and take things for granted.

The parent company will begin to make cost-comparisons with other companies and that's the downside.

So an organization needs a critical mass in skill set and equipment to actually offer cost-effective solutions.

 
     
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