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.
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.
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.
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.
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
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
|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.
| Vikram R. SriHari, Director - Business Systems,
Coca Cola India
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.
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
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
|S.B. Patankar, Director, Information Systems, The
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
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.
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
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.
Sanjay Sharma, Head-Information Technology, IDBI
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.
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
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.
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.
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.
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
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.
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.