In his opening presentation to both conferences (Kuala Lumpur, 12 March, Singapore 18 March), Storey said that research, however, pointed to some current executive friction. Frost & Sullivan 2008 research showed that 80 per cent of CEOs believed their executive teams were their ‘biggest barriers to growth’.
Recent Gartner research found that executive teams in Asia Pacific know each other well and that CIOs here are much more business-savvy. What’s more, some 54 per cent of CIOs in Asia now report directly to their CEOs, compared to just 38 per cent worldwide.
“CIOs are also well on the way to becoming hot-wired into the business decision making processes with CEOs wanting more insights on the IT spend,” Storey said. “CEOs also expect IT to contribute firm results in an uncertain economy.”
Communication means harmony
These findings augur well for today’s CIOs, Storey said, but the key to success and harmony is communication. He quoted Marianne Broadbent, Managing Director of Australian executive search firm, Edward W. Kelley & Partners, who said that CIOs often misjudge ‘the extent and nature of communication with their fellow executives. Broadbent’s view is that a good CIO must spend at least 50 per cent of their time talking to business colleagues. Anything less could mean that management is neither well informed nor engaged.
Gartner finds that ‘CEOs “tend to be more forward looking while the CIO is more grounded in the current mode”. CIOs need to be more future-oriented and to evangelise results in the way they think and communicate with the CEO. Storey’s advice to CIOs?: ‘Claim your space and clearly state your case!’
He said that, according to Dave Aron, research director in Gartner’s executive programs, the CEO was ultimately the ‘customer’ of the CIO. CEOs now want their CIOs to explain IT issues more in terms of business strategy and value. This helps the CIO build substantial political capital, so when there are disagreements, the CEO respects the CIO enough to listen.
Beyond enterprise communication
Beyond communicating effectively, areas within the enterprise which CIOs can strengthen, before making a case to their executive colleagues, include the communications infrastructure, utilisation of storage, business intelligence, information security and IT governance.
In his Malaysia presentation, entitled ‘The CIO Value Chain’, Stan Singh, senior vice president of IT at MUI dotcom, told the KL conference that CIOs had to add value in everything they do, transforming and embedding controls and measures in the processes, the overall eco landscape and system.
“The CIO should see IT governance as assisting in a variety of areas, from organisational change and development, to business goals to IT objectives and encompassing IT mapping, compliance and risk management,” Singh said. “IT governance is a process, not a product.”
He said a successful value chain would see the integration of business strategy, IT, business process and people. The foundation was the availability, confidentiality and integrity of information, all protected against unauthorised modification plus the authenticity of information being exchanged. Failure in any of these areas could have strategic, financial, legal, operational and reputational consequences.
In his KL presentation, James Young, technical director of AP CommScope Enterprise Solutions, said CIOs must enable their organisation to cope with the exploding volume of digital information.
Young said IDC March 2007 research showed that the exponential growth of information created and replicated each year would inevitably pose severe challenges for data centres. “In 2005 it was only around 100 billion gigabytes globally; by 2010 it will hit 1000 billion gigabytes,” Young said. “This is like adding a zero once every 5 years.”
He told the KL conference that paying attention to the design of basic network infrastructure and having meaningful ROI objectives and measures, enabled better management of mission critical information flowing through a business.
Set Clear Goals
Setting clear objectives and goals, while also justifying IT infrastructure investments, was vital for CIOs, Young said. They had a myriad of issues - cabling infrastructure, power capacity, space , rising costs, energy efficiency, green initiatives, consolidation, virtualisation, technology transitions, new data centre construction, business continuity, service levels and many others.
Young said, given the high cost of refreshing and upgrading infrastructure, CIOs should determine the ROI of IT expenditure while planning future infrastructure.
He cited how his organisation helped maximise ROI for its client in the King Abdul-Aziz Endowment Project in Malaysia. By using a converged physical layer infrastructure in the highly integrated intelligent building, CAPEX savings of 33 per cent were achieved, along with substantial OPEX savings by using only one system administrator instead of seven. Young reckons that by 2012, 20 per cent of network traffic will come from sensors. “They will put online almost everything – from telephony, pay phones, fax, TV, ATM, PoS, access control, video surveillance to even door locks,” he predicted.
NetApp’s Asean programme and alliances director, Raymond Siow, spoke at both the Malaysia and Singapore conferences. He said a rethink of the business model for IT was necessary.
Pressure for cost reductions has emphasised high infrastructural utilisation and performance with storage efficiency technologies. It is vital, Siow said, to discover strategic and innovative means to accelerate business and IT alignment within data centres.
Typical IT Spend
Siow quoted an IDC Perspectives Study 2008 showing typical IT expenditure comprises peripherals nine per cent, networking 18 per cent, servers 27 per cent, PCs and notebooks 22 per cent. Storage, which accounts for 23 per cent of overall costs, is growing about 50 per cent annually and should be a key area of focus for companies in the digital era.
The CIO, he said, should consider the positive impact of a shared-storage model and virtualisation, to transform the enterprise IT operations into highly efficient and agile units. This would allow key decision makers to more proactively manage their own resources.
Siow cited the case of communications provider BT. Upon implementation of its virtualisation model, storage utilisation rose from 25 to 70 per cent, two mega watts of energy was saved, which translated to US$2.25m for the year, while only 660 racks were required. “ROI was realised in just eight months,” he said.
“And how were these results achieved? Through Ethernet Storage capabilities where the performance surpassed FC (fibre channel) in throughput and greater economies of scale.”
Siow said storage remained a crucial slice of corporate IT expenditure that would not go away. Data protection remained a top concern for enterprises, and technology should be harnessed to mitigate the risk of data loss.
“Singapore companies tend to be conservative, and wait till everyone has adopted a particular technology before jumping onboard,” he said, urging CIOs to consider changing their mindset towards risk, and instead consider the potential rewards of doing projects during tough economic times.
“Look at infrastructure as a service to be delivered,” Siow said. “The benefits are tremendous.” Simplifying the company’s data centre infrastructure was a key approach that CIOs should take, said Siow, adding that immediate ROI can be realised if the project was implemented correctly.
Solutions such as virtualisation, Ethernet storage and storage efficient technologies, could be implemented to great effect. These technologies include: deduplication, thin provisioning, double parity RAID, snapshot copies, thin replication and writeable snapshot copies. Deploying these could lead to cost savings from investing in skilled resources, process re-engineering, and new technology, he said.
Siow also warned of pitfalls, such as inefficient storage management, a lack of a disaster recovery solution and untimely capacity purchasing. The latter, he said, could be avoided by deploying a shared storage services platform.
Storage Services
The advantages of such a platform were many, he said, including manageability, fast activation, and reduced costs. As charges for such a platform are consumption based and require next to no upfront investment, such models were ideal for most companies seeking to stretch their dollar.
Jason Bissell, managing director APAC, for QlikView, told the KL conference that CIOs should focus on simplicity when implementing business intelligence. Bissell said the economic crisis provided opportunities for CIOs to thrive. Andy Woo, Asean regional channel manager of Sophos, urged CIOs at the Malaysia conference to examine security and control, because today’s cyber-criminals were constantly hunting new vulnerabilities. They are using fast-changing, low-profile threats to surreptitiously infect and hijack computers across the business network.
The CIO is confronted with spammed emails, infected endpoint devices, and above all, the largely unprotected web. Woo said there were 19,200 new web pages being infected every day – one every 4.5 seconds. This was an increase from one every 15 seconds (6,000 a day) in 2007. What’s more, 85 per cent of all web threats reside on legitimate sites that have been hacked and about one per cent of all web searches deliver an infected web page. He warned that businesses need to block by category and content and to keep their servers regularly patched against security threats. The IT challenge for CIOs, Woo said, was to look beyond mere antivirus tools. They should introduce more multi-layered protection instead of just depending on end point solutions. The issue of controlling network access and compliance was also important and CIOs should consider encryption capabilities and co-ordinated layers to maximise user protection and to boost network efficiency.
Beyond facilitating
Besides looking at the CIO’s role as faci l i tator, execut ives at the Singapore leg examined areas such as communications infrastructure, information security, green IT and storage utilisation; all pertinent issues in today’s difficult economic conditions.
The role of the CIO as a facilitator between IT and the business becomes increasingly important during these difficult times, according to Divyesh Vithlani, CIO, Asia Pacific, Credit Suisse.
“I would emphasise the word ‘facilitate’,” said Vithlani, who is responsible for more than 3,000 IT professionals in the region. “The CIO alone should not be responsible for making critical IT decisions,” he said. “IT managers should work in close partnership with the business on all IT decisions.”
This Credit Suisse CIO stresses the importance of effective IT-business alignment and joint decision making. To ensure success he recommends that CIOs work in partnership with business executives, to clearly define the role of IT and then determine the level of funding needed to achieve various business objectives.
“At Credit Suisse, all decisions regarding budgets are made jointly with other business heads,” Vithlani said. “And together, we determine what IT initiatives will receive funding, based on the priorities of the business.
Alignment Crucial
“This business-IT alignment is crucial in difficult times. You have to be agile, to have full transparency, and to understand the leverage you have on what you can and cannot do with your IT infrastructure to support your business. This will be very important in the coming months in deciding where to invest.”
One area where CIOs need to be more mindful about how they spend their money, is cabling. Ispran Kandasamy, vice president and managing director Asia Pacific, for CommScope said installing cabling infrastructure should be considered by CIOs as a long-term investment.
“(You should) budget to invest in the best cabling infrastructure available and building lease permitting,” said Kandasamy, and cabling infrastructure should support at least two generations of equipment.
Over the course of a 15-year life, he said that any network infrastructure will be upgraded at different times. But, if a high quality robust cable plant was installed, it would support the business for the entire duration.
Kandasamy said IT managers typically recognised and planned for three upgrades or iterations of software, and five upgrades for computers and servers over 15 years, so the cabling specific cost is two to three per cent.
Very costly cabling
He warned that, if a poor cabling choice was made at the initial build out, by using mix and match components or an unproven vendor with suspect quality, then re-cabling the network could prove very costly. The CIO had to then consider the financial impact of removing and disposing of abandoned cabling, the network downtime or business disruption associated with cabling pulls, plus higher labour costs.
Also, he said that CIOs interested in green IT should note that “Recabling once in 10 years doubles your carbon footprint. Recabling twice in 10 years triples your carbon footprint.”
Eric Lam, Sales Director, Enterprise, Data Loss Prevention Solutions, APJ Specialist Sales, Symantec, said data security threats are shifting. “It is no longer about making sure the hackers don’t get in, it is about making sure that your confidential data and sensitive intellectual property is not getting out,” he told the Singapore conference.
Given the current economic conditions, where the temptation to steal data is even higher, protecting the organisation’s intellectual property must rank very high on a CIO’s to-dolist, Lam said.
He said only one per cent of data security leaks were malicious, and 96 per cent were unintentional; consisting of broken business processes or a lack of appropriate oversight from employees.
“Today just about anybody can share, access and distribute information in unlimited volumes, securing the network is no longer enough,” Lam said. “It is time to secure the data itself. He recommends data loss prevention (DLP) solutions that protect data in storage, on the network and at endpoints.
DLP accuracy key
Accuracy, Lam said, was a key DLP solution characteristic. Comprehensive coverage should include all network protocols, data types and data egress points. The ability to stop violations before they happened was vital.
He said the solution has to be able to monitor and stop transmissions that violate security, acceptable use, or privacy policies, before they leave the network.
The Symantec executive said the speed at which the DLP operates was also important. It must respond immediately to violations, provide immediate and actionable information, automate processes, offer real-time alerts, and provide a complete profile of each incident.
Besides moitoring ability, the DLP also had to offer the ability to measure the effectiveness of the information security plan. It had to weigh risks, fix broken processes and identify compliance issues, Lam said. It also needed to distribute reports on historical trends and investigative forensics.
Go green
The Singapore conference heard that besides reducing greenhouse gas emissions, efficient IT can cut power costs.
Sundeep Khisty, Green Practice Leader, Asia Pacific Japan, EDS, a HP Company, said power and cooling have overtaken the cost of buying a server and the worst has yet to come. “By 2012, these costs can be expected to jump up to 22 times the cost of a server,” he said.
Khisty said the ICT industry now produced two per cent of global CO2 emissions, the same as the aviation sector. According to Gartner, for the CIO, energy bills traditionally used 10 per cent of IT budgets, but this could soon be more than 50 per cent.
IT can consume up to 45 per cent of power bills in a mid-sized business organisation, said Khisty. Of this, 10 per cent goes to the data centre, while another 10 per cent goes to cooling equipment.
Office equipment, desktops and printers, take up 15 per cent. “A computer left on 24/7 will cost you about AU$161 - $224 (US$112 - $156) in annual electricity costs and dumps about 680kg of CO2 into the atmosphere,” Khisty said.
Energy saving
He told the conference, however, there were ample ways CIOs can save energy. These included installing thin clients and server based computing instead of desktops; teleworking, using collaborative technologies, and hot desking, the employment of wireless LAN to cut the number of cables. Just by employing multi-function printers, a combination of fax, scanner and printer, helps too, said Khisty, while a more sophisticated method involved service based user provisioning, which helped drive higher utilisation rates.
