August 6, 2012 5:07 AM
Posted by: S R Balasubramanian
data center management
We have seen an increasing trend of companies moving their facilities to external professionally managed data centers. Some companies still feel the need to retain their facilities in-house while many others stay undecided and defer their decisions. As far as the data centers are concerned there is a great potential for them to nab customers but this opportunity needs to be tapped effectively.
One would tend to assume that enough is being done by vendors to expand their business but it may be good to examine this premise. I will look at this situation from the users’ perspective, based on my experience in dealing with them.
In my last article I discussed various obstacles that companies face when they consider data center outsourcing. While some of these can be attributed to indecision at the customers’ end, lack of adequate support from the vendors is also a matter that impedes progress on this front. I will discuss the measures that vendors can take to address this anomaly.
It is no secret that users feel intimidated when the sales representatives come over to meet them with their sales pitch. They invariably start off with a list of the services offered by them, cutting edge technology they possess, and their strengths. They offer the moon and throw the gauntlet in the form of ‘cloud solutions’. The customer is usually scared to death, seeks time to savor the concoctions offered and prefers to defer his decision till he understands the subject a little more.
- Important issues to consider
It is important to realize that various companies are at different levels of maturity and therefore would have different needs. It is important to approach customers differently with offerings that are specific to the their requirements. The first step, in my opinion, should be to understand the customer’s current status in terms of IT assets they have, applications they run and problems faced by them. If they have expressed a desire to outsource, it is important to understand the objective and the target that they have set to achieve.
Once having understood the requirement, it is good for the vendors to go back to the customer with specific solutions that they propose for them. The vendor can restrain himself from overselling, as is often the case with sales persons pressured to meet their targets. An honest assessment and an appropriate solution go far in building a lasting relationship with the customer.
Customer usually seeks help in arriving at a right decision and so it is prudent to do hand-holding and to help him choose options that work best for him. Nothing works better than educating the customer, making him aware of the technology options being proposed and the advantages that the company would derive.
When organization’s data moves out from its premises, there are usual concerns on safety and security which need to be addressed. Some good vendors go a step further and help the customer in preparing a business case and a ROI justification where necessary. It may sometimes be prudent to initially take the customer through baby-steps rather than leading him to a big commitment — that will help build confidence. Filling the customer with case studies, providing references, and taking them on site-visits can help the cause further.
During my interactions I have felt the disconnect between the vendors and users and think vendors need to work more on this area. Instead of merely dispatching sales representatives to pick up orders, they would do better to assign solution specialists to work out proper deals for the customers. This, in my opinion, is the best way to expand the market and win customers.
July 24, 2012 9:01 AM
Posted by: S R Balasubramanian
The trend shows that organizations are slowly moving out their computing facilities from the in-house data centers to external professionally managed data centers. While some have moved their facilities completely, others have either moved a significant part running mission critical systems or have moved a few servers to test the waters.
Some corporates have genuine reasons to run their facilities in-house but many others are in different stages of transition. There are a few first time customers who tread carefully and a few others who have hosted servers before but now want to expand their footprint and are also willing to examine new models of outsourcing. There are, however, a large chunk of companies that keep dancing at the fence, unsure of taking a leap. Let us examine a few cases of resistance which inhibit a changeover.
Shades of resistance
- Established in-house data centers: There are cases of very large organizations, both in the public and private sector, that have huge, well laid out and well managed data centers (DCs). Being the nerve centers for the organization, these DCs are given due importance and comprise considerable investment made over the years. They employ state-of-the-art equipment and processes and have dedicated staff and managers to take care of the facilities. Through virtualization, they ensure flexibility and deploy automated software tools to monitor availability and performance of servers, storage and networks. Since they care of safety and security, they don’t feel the need to transfer out their facilities and in my opinion, they are quite right in their stand.
- Cost consideration: Some companies are very conscious of costs and are not easily convinced with the idea of hosting their IT equipment elsewhere at a cost. They are comfortable managing a small or a medium sized facility in their premises especially where they have available space. These organizations mainly comprise of those who do not attach much importance to IT and are happy with services they get currently.
- The ‘ROI’ factor: Finance heads have a role to play and they always like to throw their hat into the ring on matters of investment. They get down to figures and question the investments against benefits and therefore play spoil sport. It is not easy to beat them on figures and it is only the CEO who can rein them if he sees sense in the proposal.
- The ‘IT manager’ factor: Many IT heads are too attached to their DCs which they would have built over a period and dislike the very idea of shifting them. In addition, they perceive a loss of power and influence and often resist with full force. I have seen them getting extremely worked up and trying to create roadblocks by suggesting that moving out is risky and fraught with security concerns. They just delay the inevitable.
- Concerns about security: This often comes as a genuine concern and needs addressing. Sometimes it is the fear that once the server is placed somewhere outside anyone can steal the data. This can be explained to drive home the point but there are others whose traditional mindset deflects the answer to keep the matter suspended. The reluctant IT managers also joins the fray to add fuel to fire.
- Suspicious of the cloud: There is no doubt that the ‘cloud’ solution beats many and more so for naive business heads who see cloud as a smokescreen to curious play happening on the public platform. They insist that their domain should be physically earmarked and cannot accept a virtual demarcation of their territory. The issue is complex and needs to be handled with care.
So the going is not so easy. Sales representatives of data centers have to overcome hurdles and have to use their skills of persuasion and confidence building to win over customers. There are, of course, the other customers who refuse to budge and have their swords drawn out of their sheaths, ready to fight the intruder who tries to suggest a shift. Such battles still need to be won.
July 16, 2012 9:08 AM
Posted by: S R Balasubramanian
data center management
Yes, I would think so, though quite a few of my fellow professionals might differ. The trend is fairly visible now and though it had a slow start a few years ago. I have visited quite a few professional data centers and have been amazed to see an array of servers there belonging to various organizations. These spaces are occupied by banks, financial institutions, brokerage houses, telecom companies, large public and private sector organizations, small and medium sized organizations and so on — you name it and you will find it there. The extent of this change cannot just be perceived, it has to be observed in person.
The initial thrust
In the beginning, when companies moved their servers to external data centers, it was for one of the following reasons:
- For external facing applications: These included applications like CRM, SRM, field sales operations, etc., as these were essentially accessed by users outside the organization. Issues of connectivity could be overcome as these sites had robust networks.
- Lack of space for expansion: Organizations in main cities had paucity of space and could not add on more servers and hence preferred to host them elsewhere.
- Problems faced on servers at remote locations: Many enterprises placed their servers at the factory sites as most of the transactions emanated from there and there was ample space to place them. However, issues of maintenance and delayed resolution during emergencies forced these companies to consider hosting them at external data centers.
- Turning wise after a mishap: We often see light of the day when we are hit by an undesirable incident. Some companies make emergency calls to service houses after their in-house data centers are struck by short-circuits / destroyed by fire.
The scene now
Companies have moved quite a distance since then. Hosting servers or hiring computing facility is more out of choice than being forced by circumstances. Managements today are more aware and CIOs more willing to shift facilities outside than they were in the earlier years. Their decision is based on the following considerations:
- Lean staff strength: Corporates are no longer in favor of having a large army of people installing and maintaining data centers. They are also wary of committing scarce organizational resources for ensuring power, physical security and fire safety requirements.
- A revenue model rather than owning assets: The whole rigmarole of buying servers, storage, software, et al, paying AMC for them every year and finally replacing them with newer equipment on obsolescence or at end of life, has become too much for organizations to handle. They now prefer arrangements where they can hire facilities as and when they want.
- Flexibility and agility: The nature of the markets today force organizations to be responsive to ever changing needs. Companies therefore can’t afford the luxury of time to provision resources, they want extra resources as and when needed and on demand. Virtualization, the ‘cloud’ model, etc., have made this possible.
- Safety and reliability: Tier-3 data centers today have strong measures against unauthorized intrusions, fire hazards, etc., and have round-the-clock monitoring. They also offer disaster recovery solutions with a parallel server placed in one of their data centers in another geographical zone.
As I speak to organizations including those from the SME sector, I find them more amenable to hiring external facilities and the resistance from the old guards is slowly dwindling. Greenfield setups clearly start with a clear direction towards hiring and provide no budgets for owning IT equipment. It is because of these trends I am prompted to state that the days of in-house fortified data centers are numbered and they may get extinct in a few years from now. Resistances may prolong their life but can’t prevent the inevitable — let us discuss the roadblocks in the next piece.
July 10, 2012 3:46 AM
Posted by: S R Balasubramanian
CIO as a service
, CIO career
, CIO career development
, CIO leadership
As discussed in my earlier notes, the concept of ‘CIO as a Service’ is catching up fast and I see more enterprises viewing this option. As information and communication technologies throw up newer tools, methods and solutions, some of the medium and smaller sized organizations find it difficult to cope up with these challenges with available resources at their command. They need help but they do not know where to go looking for such a resource.
So we have a set of enterprises which are in the need for such a service and there are quite a few CIOs and other IT service organizations that are ready with this service offering. Since the market for this service has not developed yet, this match between the demand and the supply has not taken great shape. There are two ways of looking at this opportunity – one that the demand for this service is not developed and hence there is a need for stimulating demand; and the other, that the supply of this service has not matured enough for the market to grow. Let us look at both these factors.
Developing the market
While a few organizations do feel the need for such a facility, most others are not even aware of such a possibility. They are wary of engaging with consulting organizations and do not trust technology vendors to play a neutral role. It is therefore important for providers of this service to increase awareness among their target customers and make them believe that such an arrangement could really benefit them. This can be done through publicity (distributing pamphlets or direct mailers), advertisement (in specific magazines), arranging seminars or associating with industry associations (like CII, FICCI, SIAM, etc.). Cold calls by individuals do not really work as the contacted CEO is suspicious and takes it to be another case of aimless selling. There are quite a few CIOs who have been pursuing this market individually but it would make a lot of sense for them to get together and think of ways to market this concept collectively. I would not be surprised if we see the formation of something like a ‘virtual CIOs guild’ that serves the role like NASSCOM does for IT software and service companies.
Supply side constraints
One of the main factors for the development of any market is the availability of adequate resources to service that demand. For the services that we are talking about, this factor is still to take proper shape. I have seen individual professionals as CIOs vigorously pursuing this opportunity on their own and though a few have formed organizations, they do not have enough resources to service the need. There are also IT service providers who have been trying to sew together an offering by getting a few CIOs to be on their panel. However, there is still not a formal service delivery model and the scope of each engagement is drawn up on the basis of negotiation between the CIO and the client. There is perhaps a need for forming an organization which can have on their Board several CIOs with specializations in specific industry segments or technologies, and also have CIOs at various levels of seniority. For example we can have a senior level CIO operating at the strategic level for the client organization and have a less senior person filling up to supervise at the operational level. It would not be inappropriate to suggest that the ‘virtual CIOs guild’ helps develop models or standards of quality and delivery – that will really help credibility to this service.
We have to be aware that some services of this nature have hitherto been provided by consulting organizations that are more organized and mature. It is therefore necessary for the proponents of this idea to get together to develop and grow this market.
July 3, 2012 9:23 AM
Posted by: S R Balasubramanian
I have written about the topic of CIO lending some time to help organizations with their IT deployments. Since the CIO is available for rendering service to other organizations at the same time, he becomes a shared CIO. I also wrote about different types of roles that he takes on such assignments. What we need to discuss now is proper execution of his task so that he plays an effective role in the client organization.
Since this concept is still developing, the contours of this service have not yet been clearly marked. Many from the CIO community are already working on such assignments with different companies but the scope of their work differs. Based on their experiences they tweak the scope to make it workable although such learning is not shared with the community at large. It is therefore important that we have a forum to discuss and learn from each other’s experiences.
The CIO when taking this task faces various challenges. Not being a full time role and being different from the conventional role of a functional head, this task is not fully understood by the other managers in the organization. The CIO therefore has to struggle to establish himself. In this note, I am putting down a few challenges that are often faced and actions which could help managing the scene better.
- Clear definition of CIO’s role missing
It is very important to define the scope of his services right at the beginning. Many a time we start with a general understanding of the scope and this is what lands us in trouble. An overarching purpose stating the scope as a ‘review of the IT systems and making it more relevant to business’ is somewhat vague. It is necessary to be specific about the role whether he would just be an adviser coming in at important meetings or a consultant whoa would undertake a review and advice periodically or as a functioning part time CIO managing the IT function. He should also arrive at an understanding with the management on the frequency of reporting on status and his recommendations.
We sometimes rush into laying down deliverables at the start under pressure from the company. While it is important to have clear understanding of deliverables, it is but fair to ask for a month’s time to study the organization’s status and arrive at the measures that need to be taken in the short term and for working out plans for the future.
The actual status and the prevailing problems are at times different than what is perceived. Therefore an initial assessment is important to start with the right set of assumptions. Differing expectations are sometimes a stumbling block which is played up by political groups within the organization. The plans put up should also state assumptions with respect to employees’ participation and the management support desired.
- Powers and responsibilities of the CIO not predetermined
This is an area which in my opinion is the most challenging. In a role where he is supposed to oversee and monitor the IT function, he is expected to assume ownership. Since he is not in an executive function, he does not have powers to approve projects, select vendors or even to appraise IT staff. He may just recommend; in such cases he has responsibility on his shoulders but no powers.
The best arrangement would be that he is given powers like a regular CIO where his recommendation on technology solutions is put up to the executive board, he has a say in selecting and buying products and is given the right to write the appraisals for IT staff and others whom he is supposed to supervise. If he continues to be treated like an outsider without a place in the organization hierarchy, he may suffer from a handicap and would be less effective.
June 25, 2012 5:43 AM
Posted by: S R Balasubramanian
CIO as a service
, Outsourced CIO
, Shared CIO
, Virtual CIO
In my last dispatch I had spoken about the recent trend of organizations hiring CIOs as part time advisors to help put their IT program on track. This concept is certainly catching up and some organizations have already started experimenting with this service. While this seems to be working, there exist quite a few rough edges which need to be evened out.
The service can come in various flavors and companies define the scope depending on the complexity of their problem and their level of dissatisfaction with their current IT set up. Based on my experience and my conversations with fellow professionals, I have found the variations in scope which lets me classify the service into the following types:
Here the CEO wants the CIO to come and review the entire operations, point out things that are in order and those that are not, prepare a report, and also specify the budget for the next one year. The need arises because the CEO may often be irked by frequent requests for spends on IT and is not sure if the IT is headed in the right direction. If CEO is satisfied with the CIO-engagement, he may ask the CIO to come over again after six months and assess if the IT tasks are running as per plan and to make a revised budget based on progress till then.
Here the CEO may not be dissatisfied with IT, but is still not happy enough and wants IT to acquire a proper direction. He therefore asks his CIO friend to act as an advisor and be a member of the IT steering committee which may meet once in a month or so. The CIO is expected to either present a status report or join in the review of various projects and present his opinion as an expert. Wherever necessary, he can ask the advisor CIO to undertake special study or seek some involvement in a specific project. This can work well with the part time CIO devoting only as much time as is required by the organization.
- As an advisor cum reviewer
The need of the organization is somewhat different here. There is no IT manager in play and therefore the whole IT program has no direction and the function has the limited role of maintaining the infrastructure and developing a few miscellaneous applications. The CEO wants the external CIO to advise the company on the road map for IT and also regularly review the working of the function to ensure the processes and delivery mechanisms are properly managed. For this the CIO may have to spend a fixed number of days, say two days a week to monitor the progress on various projects. He is not expected to manage the day-to-day operations but is expected to put systems in place, define performance parameters, and monitor them every week.
Some companies have very little or no confidence in their IT team and therefore want someone to take over the entire responsibility. They look for a senior professional who has been a CIO to advise them on IT and also help manage the show. The CIO then spends some time to assess the requirements and then posts his own person to devote two or three days in a week to ensure that operations are smooth. The CIO does a periodic review and reports to the management and the company staff reports to him.
Which option is the best?
This depends entirely on the company’s requirement and plans. The objective here is to use the right resource and in optimal measure so that the plans of the organization are met. Being a new facility which has recently gathered momentum, I am not quite sure which model is setting the trend but from my recent interactions it seems the option 3, ‘advisor cum reviewer’ is getting some traction. It is up to the CIOs and IT service providers to develop this market and make the offering more attractive.
June 18, 2012 7:25 AM
Posted by: S R Balasubramanian
CIO as a service
, Outsourced CIO
, Shared CIO
, Virtual CIO
This is a new concept that has been doing rounds for the last couple of years. The idea looks good and sounds logical too. There are several other phrases by which this concept is referred to, such as ‘CIO as a service’, ‘Shared CIO’, ‘Virtual CIO’, ‘Outsourced CIO’, etc.
‘CIO on Demand’ refers specifically to the services that can be made available to a host of small and medium organizations who struggle with their IT program. These organizations have difficulty in getting good IT managers and even if they manage to grab a worthy professional, he leaves them soon as he spots greener pastures. They cannot afford to appoint consulting houses to run their IT programs as it gets a little too expensive. In such circumstances they make do with a low level IT officer who just operates and manages the IT set up.
Many of these companies have ambitious plans of growth and also have the next generation of owners/ directors at the helm who are not shy of technology. The managements here want more out of IT and feel terribly constrained in the absence of right people required to run and manage the show. These organizations may be at different levels of IT maturity but most of them wish that their IT had better direction and wonder if the money spent on IT is right.
How can this be addressed?
These companies cannot afford consulting houses neither are they sure about the complete outsourcing of the IT function as advocated by some IT service organizations. They cannot also recruit and retain senior IT managers. They can however look for senior IT professionals (ex-CIOs), those who have either retired and are available for consulting or CIOs who have left their regular job to become freelance consultants. Instead of a full time engagement, they can devote time as much as is necessary to guide the IT program to fulfill management needs & expectations. Such a service has not yet gained ground yet and many of the users organizations are not aware nor have not examined this option. Such services are however affordable.
Who is talking about this concept?
I have seen some hardware and software vendors exploring this option in an effort to place one of their chosen persons there, a few experienced CIOs who have a contract or two, a few CIOs who want to kick their jobs and want to start off on their own, or IT service firms who suddenly have sensed this as an opportunity and are building their portfolio by trying to string in a few CIOs available.
Is the going easy?
It is perhaps not that easy. Many have spoken to me wondering how to tap such opportunities. This kind of service is new and no one seems to have clear answers. Some say they want to create a portal offering free counseling to attract customers, some speak about building a team or a panel of CIOs and then publicize through mailers or through a special site, some plan to add this as a strength on offer to the firm’s profile and I have also heard of a few CIOs coming together to form a loose association thus offering varied expertise related to specific industry segments or technology areas.
If we are confident that this service has potential, then, in my opinion, companies that fall into this segment should be educated and made aware of such a service being available. One way could be to tie-up with industry associations and spread awareness through them, or one can arranging seminars where business heads from these participate. Advantages could be two-fold; these companies can derive benefit from such as a service and at the same time useful resource available in the community can be utilized.
June 11, 2012 8:14 AM
Posted by: S R Balasubramanian
, CIO responsibility
All of us like attending seminars or short term courses once in a while, don’t we? This gives us a break from mundane activities and a chance to be away to network with fellow professionals. The lucky ones get an outing every now and then but some are not as fortunate. I am reminded of a senior official in an organization that I worked for, and he was one of the fortunate ones. He was intelligent, but wasn’t one of those efficient and effective managers who are sought after, nor did he get along well with this peers and seniors. So away from routine work, he was assigned as an officer on special duty with no clue of what his responsibilities were. The organization heads were often flooded with requests from industry associations, management institutes and vendors asking them to nominate someone for their seminars and short term courses. Out of obligation, the directors looked around and finding no one free for the purpose would send our man on Fridays to attend the seminars. That fortunate soul spent half of his time attending such sessions and gained knowledge which was never put to use by the business. This speaks of the mis-utilization of learning opportunities in many corporates.
The CIO faces this situation often, either with respect to his own training or for the officers and staff reporting to him. He is torn between alternatives and tries to balance the factors in question. Let us look at some of these situations.
The HR intervention
The human resources function has their task cut out clearly. They have their own budgets and targets to meet, for example, the number of training programs to hold, total training hours achieved, average training hours per employee met etc. So they fix up seminars & courses and then look around for candidates to fill in for the batches. Quite often, without my knowledge, I have been nominated for management development programs, soft skill development (like communication skills), leadership development, negotiation skills or as a representative to an industry forum. Similar pressure is applied when they ask our officers to be spared for training seminars they have arranged. Constrained by the work in hand, CIOs may nominate someone who can easily be spared. This story thus gets repeated more often than we are aware of.
The CIO too has his own sphere of influence. He has friends in the industry, whether it is vendors, service providers or media agencies. Seminars and events take place at a monotonous frequency and the CIO cannot possibly attend all of them. He is however obligated and cannot afford to neglect the invite that may affect his relationships and therefore assigns one or two of his associates to attend the events. He therefore plays the same game with his associates that his management plays on him.
Candidate’s own needs
In most organizations there is a process of asking the employee of his training needs so that steps can be taken during the year to meet those expectations. Some term it as ‘development need’ for the employee so as to help him function more effectively and is directly linked to the role that he has to play. The needs may be genuine but at other times it has more to do with the candidate’s desire to learn something which could make him marketable to seek opportunities elsewhere. The CIO has to play a balancing act here by striking down a few requests and agreeing to others.
Is there a right way ?
Yes, I would think so. We are normally consumed by the conventional practices followed by the functions and toe the line faithfully. It may sometimes be prudent to turn down requests for attending events if they do not seem to benefit us and at the same time pick up courage to ask for specific programs or seminars which would benefit the department. Breaking traditions is always a difficult task but is worth attempting.
June 5, 2012 5:43 AM
Posted by: S R Balasubramanian
business IT alignment (BITA)
, IT as differentiator
, IT as enabler
, Strategic IT
, top management buy-in
It is true that information technology, as a discipline, has made steady progress over the years. From being a back-end operation, IT today has come on to the forefront, impacting work in all organizations. While companies are embracing IT like never before, IT as a function still struggles to stay relevant in many organizations.
Beyond the jargon
As the debate lingers on, CIOs speak out about their achievements and about how they bring value to their organizations. We often hear terms like business alignment, IT strategy, talking business language, business orientation, reforms / process re-engineering, leadership qualities, cross-functional orientation, etc. They sound great, no doubt; but different workplaces require different solutions and the CIO has to do what is relevant for the situation.
For instance, large organizations may require a different focus than a medium sized one; similarly banking companies may have different priorities than conventional manufacturing companies. I have come across quite a few of them during days of my regular employment and subsequently as a consultant. I would like to classify companies and their requirements in the following four types:
• Companies that want a ‘good’ IT budget:
These are essentially the small and medium companies who have IT facilities but have no grand ambitions. The proprietor or director is troubled with the IT manager’s regular demand for more PCs, servers, switches, and the likes, and wants the spends on IT to be regulated. He looks for some advisor who would tell him how much of IT he should have and help make a proper IT budget for the company so that he can manage his meager finances better.
• Companies that want a streamlined IT:
These are medium-sized organizations and have much better intentions with respect to IT. They are serious about IT and want a proper direction for their IT program but are often plagued with their inability to get a good, senior IT professional to manage the function. They look for external assistance in the form of consultants or advisors who can draw an IT Plan for the next year and also set a direction for IT over a 3-year period. They may not have exalted ideas of using IT as a competitive weapon or making IT a driver for their business, but have down-to-earth views of using IT efficiently.
• Companies that understand the strategic value of IT:
These are from the medium and large segment of companies belonging to the conventional manufacturing and distribution, whether in the discrete or process manufacturing. They usually operate in a competitive environment and look for ways and means of increasing or retaining their market share. Efficiencies in operations, effectiveness in delivery, responding to vagaries of the market, and being alive to changing customer preferences are areas that they want to use IT for. They have a senior person to head their IT function and also seek external consulting assistance. They largely consider IT a strategic tool and insist on an IT strategy document and one that aligns with business goals and priorities. The CIO here does not really have an easy time.
• Companies that use IT as a differentiator:
Companies belonging to the BFSI segment, telecom, retail, airlines, rail / road travel and related service companies, have a different take on IT. For them IT is the lifeline and most of their offerings ride on their IT systems. They create differentiated products and services and make as their winning formula. They also offer personalized services to important customers and use IT to retain and enhance their customer base. CIOs in such industries have to be on their toes and create a flexible architecture to meet ever changing business environment.
No simple solution
A single solution or approach therefore is not apt for dealing with all situations. Importance of IT differs from one organization to another. I have often heard some people speaking of the winning formulas and advocating solutions to others based on their own successes. We don’t have to talk of an IT strategy or IT as a differentiator in all cases and IT solutions therefore need to be relevant to the situation the company is in.