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Re-Drafting IT & the ITO
Extracting the most from the least
 Consolidation
rather than replacement is the name of the game as India Inc focuses upon squeezing
out maximum RoI from existing resources. DR preparedness as well as interest
levels in SOA, leasing and outsourcing models are on the rise. By Kumar Dawada
Things have come a long way from the early haphazard days of IT deployments.
Today the first thing that an organisation thinks of when planning an investment
is whether technology investment is crucial to its core business. An IT implementation
happens only if it is an indispensable business need.
Once the implementation goes live, the entire focus is on how to extract the
maximum RoI and in the shortest possible time. This is because most deployments
initially remain underutilised.
The Quest For ROI
Today it is essential that the IT initiative is scalable.
It must be based on business needs. “The organisation must get quantitative
results from it and optimise costs like maintenance, support and obsolescence
costs. In such a case the organisation can extract maximum RoI,” says Ishwar
Jha, VP, Business Technology, Zee Network.
Satish Pendse, CIO, Hindustan Construction Company, feels that when IT initiatives
go live, there is only 20 to 30 percent utilisation in the initial stage. “A
user task force can be formed to ensure better usage, and constant training
of business users will lead to better utilisation of the IT resources. Better
usage helps get maximum RoI from the existing system,” says Pendse.
Other factors that contribute in getting maximum RoI include sharing resources
(especially among the peer group), benchmarking and top management commitment.
Benchmarking is also used across industries to improve usage. It is also very
essential for the top management to send a signal on an ongoing basis that they
are eager to get more out of the existing setup and investment.
However, it is ironic that trying for maximum utilisation does not always translate
to maximum RoI. (See Box: Dark Side of Maximum Extraction on how this happens.)
The Consolidation Gambit
Currently there has been a perceptible reduction in WAN setup and associated
costs. There has also been a significant increase in the number of service providers.
This is why consolidation is the need of the hour for most businesses today.
However, Sam Srinivas, Chief Technologist, Juniper Networks feels that as network
access increases due to consolidation, its security decreases. Security costs
are decreasing, but downtime is also increasing alongside. This is causing a
loss of productivity.
According to Pendse, the best method to consolidate server
and network connectivity is to use a new initiative as an opportunity. “For
instance, when an organisation changes from legacy to enterprise applications
like ERP, there is an opportunity to consolidate and make its network stronger,”
illustrates Pendse.
| Vikas Gadre, CIO, Rallis India is of the opinion
that Service Oriented Architecture (SOA) is not about how IT delivers to
business. It is more about how the business likes to use IT.
"You are demanding a service and not how it
is done. You are giving service request in the form of an item. It initiates
action at the backend and generates an output to give you the demanded
service. A Gartner study expects that by 2010, 70 percent of applications
will be come with SOA support," says Gadre.
According to Jha, there is a lack of understanding
and addressability among CIOs regarding SOA. "Also there is no regulatory
and business framework which can support and sit over SOA. It is still
a nascent technology," says Jha.
Pendse too feels that though it is a very good concept,
it is yet to mature. “Successful implementation of SOA is a change
management issue. IT people will have to change themselves,” says
Pendse.
Gadre elaborates that to provide SOA, the entire
IT mindset and not just infrastructure has to undergo a major change.
"You are thinking not only in terms of an application but a service.
The change will affect the company itself. It is not something to be understood
by IT departments, but also by the management," says Gadre.
Jha feels that the disadvantage of SOA is that many
organisations are not ready to accept the service concept. "Connectivity
and information exchange issues need to be resolved before it can be used
effectively," he adds.
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The Data Store
Enterprise-wide applications deal with huge databases where high availability
and high performance data storage is required. Moreover, data is spread across
the network as well at the user level. In addition to this, when an employee
leaves the company there are also issues like safeguarding enterprise data (especially
data on user desktops).
“The CIO needs a framework to transfer desktop data on to the network to
provide additional safety. It can backup all data or only the crucial data.
The aim is to safeguard enterprise data,” explains Pendse. This is where
storage consolidation steps in.
Data Purity Is Essential
With storage consolidation and enterprise-wide applications has come the unsuitability
of data sources in many cases. This is why present-day Indian enterprises have
started to place major emphasis on data quality and cleansing of existing data
sources.
“Data crucial to me can be garbage to someone else. The
same data can be manipulated due to difference in style of a business professional’s
understanding of data,” says Jha. He is of the opinion that a company can
set up standard rules in applications to ensure purity of data—especially
key data. It is possible to identify critical and non-critical information in
transactional data. Therefore, it is possible to have proper validation to prevent
users from entering a wrong contact number or e-mail ID.
| Leasing model is a good concept according to Pendse.
“If IT infrastructure or applications are leased, then they can be
got rid of when not required. It reduces assets in the balance sheet to
make it looks healthier. Risk of IT obsolescence is also reduced,”
says Pendse.
Jha is of the opinion that this model has not evolved
in India due to the greed of Indian companies. For instance, it is well
known that a PC costs Rs 20,000, but its rental is Rs 3000 per month.
As a result, you spend Rs 36,000 annually on rent. The bank charges Rs
2,000 as interest and the PC is owned by the company after 12 months.
This model is a success in USA, but in India, it
is a different case altogether. “Indian leasing companies want to
extract the maximum from their clients. So people are not leasing except
in case of emergency,” explains Jha.
Pendse provides guidelines on how to make the lease
model work in India. “The proposal must be a truly operational lease.
Allow me to remove the machine when not needed. Recover over a longer
period. Give me an offer which is better than the bank's interest rates.
Give me a better proposal than what I get to buy the IT deployment,”
says Pendse.
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The Take On System Architecture
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With the speed at which technology and business scenarios
change, there is little room for experimentation. It is not always possible
to conduct R&D or develop organisation-specific frameworks. This is
where infrastructure management frameworks such as ITIL come in handy
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At the speed at which technology and business scenarios change
in today’s world, there is no room for experiments. It is not possible
due to these constraints to perform R&D or develop brand new frameworks
specific to organisations. This is where infrastructure management frameworks
like ITIL come in handy.
Adopting such global frameworks enables an organisation to demonstrate its credibility
quickly at the global level. This is the due to the widespread acceptance of
these frameworks. Vinod Agrasala, Sr. Consultant, QAI-ITSM Practice feels that
organisations prefer to look at global best practices and proven frameworks
to adapt and adopt.
“ITIL for example, strikes an experienced and knowledgeable mind as a simple,
logical, structured and integrated framework. It makes people wonder why did
they not think or do something like this till now. The flip side of this is
that the detractors ask ‘what is new in this?’” explains Agrasala.
Such frameworks have proven to be successful and they take a holistic view on
overall IT service management. “These frameworks do not make anything mandatory.
Organisations can adopt and adapt to suit their needs. They do not carry the
tag of royalty or pricing with them,” elaborates Agrasala.
Pendse feels that ITIL and other frameworks are used primarily to get access
to best practices.
Jha feels that architectural frameworks like ITIL are templates.
Suitability of the framework to an organisation depends on the IT initiatives
being implemented. “The organisation needs to create the right blend of
architectural framework and real-time business requirements suitable to the
industry. After all, computing requirements are different across verticals,”
stresses Jha.
| A company can use slow and outdated systems, Internet
infrastructure and connection. In this way, it can show an IT policy for
using the same system over five years and show a good RoI. However, this
approach might cost more.
“There is always a hidden cost in terms of
wastage of time of key users and loss of opportunity to the organisation
due to such policy. In 99.5 percent of the cases it is worth investing
in higher spec computing than retaining the slow performers,” warns
Jha.
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Data Centre-IC
A data centre is no longer an optional component of enterprise IT—it is
necessary. “It helps you achieve consolidation. It helps the organisation
develop good IT manpower and proper maintenance and utilisation processes,”
elaborates Pendse.
To keep things in-house or outsource, the answer to this question lies in whether
there is a need to invest in something that is not the core competency. “However
the decision to in- or outsource depends on criticality and confidentiality
of information and data transactions, internal capabilities and cost,”
says Jha.
Improving DR Efficiency
Many organisations have learnt the importance of DR sites the hard way by unprecedented
downtime due to natural calamities or unexpected outages. There are also customer
and business pressures to have effective DR procedures.
Jha feels that all businesses, especially large enterprises, are completely
dependent on IT. Having a good DR site ensures that they do not have a substantial
downtime. “The type of DR site depends on how long the business can afford
downtime. Whether the organisation needs a hot or cold site depends on its business
need,” says Jha.
Pendse is of the opinion that an organisation can manage the DR site in-house
or outsource it to a data centre which can handle it better—especially
if IT is not its core competency. “Here economy as well as operational
aspects play an important role. A better outsourcing partner can deliver better
operations,” explains Pendse.
kumard@networkmagazineindia.com
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