Issue Number 1

CIO

an

publication
 Contents
6 From the CEO's Desk: Leading Across Boundries
Vineet Nayar 48
8 Editors’ Note: Continuing the Conversation 52
9 Are You a “Reincarnate CIO?” 54
Evolution of the CIO's Role; “Employees First” and the CIO; Snapshots of
Reincarnate CIOs 58
Generating Value By Effective Collaboration & Planning
Changing Contracts on the Fly
Rob Hornby, Chief Information Officer, Wealth Management Group, Old Mutual P.L.C.
Case Study: In Search of Agility and Savings
Dixons Retail P.L.C. (previously DSG International)
Getting Ahead by Getting Along
Chuck Ciali, Chief Information Officer, Teradyne Corp.
Creating the IT Blueprint
Bruce Carver, Chief Information Officer, Cummins Inc.

23 Straight Talking: Dispatches from the Front Lines 61 CIOs @ HCL: How to Pitch Your Transformation Plan
Kris Hillstrand, Satish Chandrasekaran, Greg Black and Raymond Siebert, HCL Technologies
Generating Value For Internal Business Operations
24 Many Brands, One System 65 Solution Spotlight
Virginia Guthrie, Chief Information Officer, Dr Pepper Snapple Group Inc.
66 Using the iPad to Boost Sales Productivity
27 Case Studies: Optimizing Business Services
A sales order tracking tool currently being built on the iPad platform
KLA-Tencor Corp., UTC Fire & Security, and 3M Co.
67 A Systematic Approach to Developing Your Cloud Strategy
29 Measuring and Maximizing the ROI of ERP
Deciding which business tasks and applications should move to which types of clouds
Glyn Evans, Corporate Director of Business Change, Birmingham City Council

33 Case Study: Achieving Sweeping Business Transformation

Fonterra Co-operative Group Limited
72 What Lies Ahead?
Three Outside Perspectives on Tomorrow's CIO
Generating Value For Customers Maryfran Johnson (CIO Magazine), Jeanne W. Ross (MIT Center for Information Systems Research),
Ellen Kitzis (Gartner)
34 Building “One AEGON”
Kees Smaling, Chief Information Officer, AEGON N.V.

37 Case Study: Getting IT Right the First Time

76 Appendix: 15 Questions
British Telecom Group P.L.C.
A Checklist of Things to Consider as You Begin Your Annual IT Planning
38 Life After a Crisis: Lessons for IT
Jeff Carlson, Chief Information Officer, SunAmercia Financial Group (AIG) Pullout Poster: “Envisioning Our Cloud Strategy”

Generating Value Through Innovation
41 Leading by Example
David Evans, VP, Information Technology, Quest Diagnostics Inc.

44 Case Study: Achieving Fleet and Field-Force Optimization

Australian subsidiary of Veolia Environnement S.A.
46­ Going Mobile in Wiltshire
Assistant Chief Constable Patrick Geenty, Wiltshire Police Force
CIO We thank those who agreed Chris Barendregt CIO Fonterra Cooperative Group
to be interviewed and share
Greg Black Former CIO American Safety Insurance
their insights and experiences, (currently with HCL Technologies)
as well as those who allowed
Ronald Blahnik VP/IT Engineering Lowe's Co.
us to feature their companies
Scott Bonneau VP/IT, Service Dr Pepper Snapple Group
in case studies.
Management
Editorial Team Jeff Carlson CIO Sun America Financial Group (AIG)
Paul Hemp, Anirban Sanyal, Jayabrata Nag, Sameer Chandiramani, Bruce Carver CIO Cummins Inc.
Joel Kurtzman (Kurtzman Group), Glenn Rifkin (KG), Fred Eliason (KG), Satish Chandrasekaran Former VP/IT Target Corporation India
Claire Meirowitz (KG) (currently with HCL Technologies)
Chuck Ciali CIO Teradyne Inc.
Design Team
Dean Del Vecchio CIO, CAO Dow Jones & Co.
Mukund Arora, Amy Detrick (KG)
David Evans VP/IT Quest Diagnostics Inc.
Editorial Advisory Board Glyn Evans Corp. Director, Birmingham City Council
Shami Khorana, Krishnan Chatterjee, Dharmender Kapoor, Business Change
Rupak Rathore Patrick Geenty Assistant Chief Wiltshire Police Force
Constable
Circulation/Distribution
Tim Graumann VP/IT and CIO Brocade Communications Systems Inc.
Laurance Allen
Phil Gray CIO/Australia Veolia Environnemental S.A.
Mike Green Operations Manager 3M Company
Acknowledgments
Virginia Guthrie CIO Dr Pepper Snapple Group Inc.
While it isn’t possible to name everyone who has contributed to CIO Straight Talk, Rob Harris SVP/IS U.S. Foodservice
the following are particularly worth mention:
Kris Hillstrand Former CIO Energy Future Holdings
All HCL senior sales leaders; the entire Cost-Out Idea Owners team; Abhay (currently with HCL AXON)
Chaturvedi, Amitabh Dasgupta, Ajay Nair, Anand Narayanaswamy, Ankit Kumar Rob Hornby CIO Wealth Management Group, Old
Duggal, Aravind Venkataramanaiah, Chandraraj Ramachandran, Franck Henri Mutual P.L.C.
Jean Ridon, Gaurav Sharma, Gowri V Shankar, Harsha Rao, Kunal Purohit, Neha Maryfran Johnson Editor in Chief CIO Magazine
Chopra, Ninad Kamlesh Parikh, Raj Singh, Rakesh Raman, Robert DeSouza, Robert Paul Johnson EVP, CIO BB&T
MacDougall, Sandeep Malik, Srivathsan Sridharan, Sudhanshu Gupta, Sudip Lahiri, P
Ellen Kitzis Former Group VP Gartner; co-author, "The New CIO
Sunilkumar, Vijayakumar, Vinod Sathrukhnan. Leader"
For information on reprinting articles and all other correspondence, Dan Lambert VP/Service Integration British Telecom P.L.C.
please e-mail straight.talk@hcl.com or contact the editorial team at: Deb Hall Lefevre VP/IT Enterprise McDonald's Corp.
Paul Hemp Anirban Sanyal Tim Marks Customer Service & 3M Company
Business Process Mgr.
HCL America, Inc. HCL Technologies
400 Crown Colony Dr. 2nd floor, A-9, Sector - 3 Albert Perruzza SVP, Global Ops, IT The Reader's Digest Association
& Business Redesign
2nd Floor, Suite 203 Noida - 201 301, Uttar Pradesh
Quincy, Mass. 02169 India Martin Racioppi Head, PMO & IT Pearson P.L.C.
Service Sourcing
United States Tel:+91-120-4069000
Tel: +1-408-328-7501 Jeanne W. Ross Director MIT Center for Information Systems
Research
CIO Straight Talk is a periodical published by HCL Technologies for its clients and Kees Smaling CIO AEGON N.V.
friends. The contents are copyright © 2010 by HCL Technologies Ltd. All rights Raymond Siebert Former VP and CAO; Zurich North America
reserved. Excerpts may be reprinted with attribution to HCL Technologies. Sr. VP/Corporate Insurance Co. (currently with
Operations HCL Technologies)
Articles can be found at our soon-to-be-revamped website:
www.unstructure.org/straighttalk. William T. VanCuren CIO NCR Corp.
Walter White
with orat
CAO Allianz Life Insurance Co.
 From the CEO's Desk
Leading Across
Boundaries
Vineet Nayar
Stop for a moment and look 10 years into the future. What do you see?
Over the next decade, business will face daunting challenges:
Emerging markets characterized by rapid growth but products selling
at a fraction of their developed-economy prices. Countries with aging
workforces trying to leverage the entrepreneurial energy of younger labor
pools in places like China and India. Sustainability issues that bedevil
not just business but all of society. These will be overtaken by new issues,
just as we’re learning to deal with the old ones.
What will spark the innovation needed to address these cascading
challenges? The promise of great personal wealth from a successful
startup? Increased government funding of R&D? I believe the answer lies
in a new kind of organization.
Fostering Collaborative Thinking
Certainly, today’s business organization, with its hierarchical pyramid
and well-oiled but inflexible systems, isn’t equipped to tackle tomorrow’s
challenges. We need organizations in which trust, based on transparency,
Vineet Nayar creates a culture of constant innovation; in which managers are as
CEO, HCL Technologies
accountable to their employees as employees are to their bosses; in which
responsibility for change is pushed down the ranks to young workers.
Organizations that put their “employees first” to drive innovation at the
bottom of the pyramid.
6 // CIO Straight Talk
This approach can deliver strong business
results as well as solve sweeping global or
industry challenges. Over the past five years,
HCL’s experiments in this area have contributed
to growth that has outpaced others, including 20
percent year-over-year growth during the depths
of the economic downturn.
The dismantling of the traditional hierarchy
leads to strong business results because it frees
up possibilities for collaborative thinking, the
kind needed to find solutions to problems made
increasingly complex by an ever-accelerating
explosion of information. Instead of a few individuals
with all the answers holding leadership positions,
We need organizations in which trust, based on
transparency, creates a culture of constant innovation.
many different people — depending on the situation
and their individual talents — step forward to lead
efforts to solve problems. Though not always in
leadership roles, everyone is always prepared to lead.
As for the traditional leader at the top: He or she
is left with the job, a crucial one, of enabling and
encouraging new leaders at every level.
Sometimes those who step forward to lead are
people who aren’t even in your own organization
— your customers, for example. Some of the most
innovative solutions, after all, come from give-and-
take between a company and the people it serves.
Other answers emerge from collaboration among
peers at different, even competing, companies.
Practical “Thought Leadership”
Which brings us to CIO Straight Talk, a publication
that is, at its heart, “for CIOs from CIOs.” That is,
most of the voices you’ll hear in this issue are not
those of “experts” — even our own experts at HCL
— but of your peers: CIOs and other IT executives.
The publication’s aim is to facilitate a conversation
among CIOs about their experiences battling it out
in the trenches — a conversation that taps their
collective expertise and insights.
Think of it as crowdsourcing for IT professionals.
We do offer some of our own points of view
in CIO Straight Talk (and even, at the end of
this issue, the opinions of a few outside experts),
but these insights are drawn from our work with
clients. The lead article of the issue, “Are You a
Reincarnate CIO?,” reflects our belief that CIOs
have a transformational role to play in their
organizations and that to play this role they may
need to be transformed themselves. It’s something
we’re increasingly hearing from our customers — and
they’re increasingly hearing from each other.
This publication is an attempt to capture and
share with you some of the practical insights that
emerge from this kind of dialogue across company
boundaries, one in which individuals will take the
lead in offering their ideas and then step back to
listen to others’. It’s a dialogue that will continue long
after you put down this issue of CIO Straight Talk,
in both a Straight Talk online discussion forum
(at http://unstructure.org/groups/straighttalk) and in
Straight Talk events around the world.
We hope you will join us in the conversation —
one that will help us all face the challenges of the
next decade. //
From the CEO's Desk: Leading Across Boundaries // 7
 Editors’ Note: Continuing the Conversation
The idea driving CIO Straight Talk is that IT professionals can learn as much, if not
more, from their peers than from “full-time experts” – consultants, academics, analysts,
management gurus. After all, professionals who face similar challenges in similar situations
are likely to have especially relevant and practical insights that others can benefit from –
insights that simply wouldn’t occur to outsiders, however smart and however broad their
perspective on an industry or profession.
And many of the best practitioner insights burst into consciousness during candid and
honest conversation. The interplay of ideas and the friction of debate create the spark of a
new idea. CIO Straight Talk is an initial and still-evolving effort to begin such a conversation

Are You a
in printed form. We hope you will respond to the ideas of your peers in these pages and that
your thoughts will serve as starting points for articles in an upcoming issue.

A Movable Forum

Reincarnate
But that conversation will continue in other forms after you put down this publication.
(Some of you may in fact be reading an iPad, Kindle or Nook version of CIO Straight Talk,
which will be available at the end of 2010. Others may be reading one of our translated

CIO?
editions, scheduled to appear in January.)
Another conversational venue will be an online CIO Straight Talk forum, in which
CIOs and other IT executives will be able to raise problems, debate issues, and air their
views. The forum will have its home on the website www.unstructure.org, an online
platform for contemporary thought leaders, bloggers and professionals. Although the site
was developed and is maintained by HCL, it is driven by participants eager to discuss the
As the IT landscape becomes transformed almost
important management issues of the day – especially those that raise questions about the
management status quo. beyond recognition and as CIOs are called upon
CIO Blogs, Breakfast Debates to transform their companies, they may find that
The CIO Straight Talk site (www.unstructure.org/straighttalk) will also offer an online
version of the print publication; and individual home pages where a CIO will be able to they also need to transform themselves ­— be “born
upload a profile, host a blog and begin discussion threads.
again,” reincarnated in a new form with a new role
There also will be the opportunity for conversation among CIOs at CIO Straight
Talk live events, which will be held periodically in locations around the world. Whether and a new way of thinking. A number of CIOs offer
breakfasts featuring a single speaker or after-work panel discussions, these events will be
their thoughts on what a Reincarnate CIO looks like
informed by the same spirit of inquiry and peer-to-peer idea sharing. We hope you’ll join us
for one of these gatherings. and how the change takes place.
We also hope you'll share your thoughts on how we can improve CIO Straight Talk –
whatever form it takes. Send your suggetions, your responses to articles in this issue and
your ideas for articles or case studies in future issues to straight.talk@hcl.com.

The Editors

8 // CIO Straight Talk

 The Environment The CIO
The Various Applications Portfolio
Transaction processing from order
Role
Operational manager of
through delivery specialist function
Incarnations Executive Attitudes
IT for cost displacement and
Tasks
On-time delivery; reliable operations

of the CIO
automation; from enthusiasm to
cost consciouness

Are You a
Reincarnate
CIO?
A new set of skills – and mindset – may be needed to
succeed in the evolving CIO role.

CIOs are being asked by their CEOs to help develop new offerings
for customers. That means the “I” in CIO now stands for innovation,
not information.
Ronald Blahnik, VP/IT Engineering, Lowe’s Co.

The CIO must be viewed throughout the organization as a trusted

business partner and leader.
Dean Del Vecchio, CIO and CAO/Corporate, Dow Jones & Co.
'60s- Mainframe Era
For IT to drive business transformation, an IT leader must couple a CEO-
like grasp of emerging business strategies within his or her industry with
CTO-like understanding of emerging technologies outside of that industry.
'70s
Walter White, CAO, Allianz Life Insurance Co.
These are the kind of candid comments we hear as we talk to
CIOs and other IT executives about the challenges they face these
days. You yourself may have voiced similar thoughts to a colleague or
business partner.

10 // CIO Straight Talk Photo by SuperStock/Getty Images. Are You a "Reincarnate CIO"? // 11
 Such statements highlight an all-too-real risk
facing IT professionals, especially those who see
their job as mainly involving technology. Many say
privately that, no matter how successful they have
have been in the past, they fear becoming stuck in an
organizational backwater, marginalized within their
own company.
Call this straight talk from CIOs – in this case,
about the transformation of their role.
***
The idea of expanded CIO responsibilities isn’t
new, of course. That the IT leader is well-positioned
to help define and develop business strategy, rather
than simply enable it, has been discussed for a decade
or more.
But as we emerge from the downturn facing
the prospect of a sustained period of relatively low
– delivering these will be just table stakes for anyone
seeking to build a successful career. “The current
economic climate and increased business expectations
for technology have certainly added complexity to
the CIO’s role,” says Scott Bonneau, VP/IT, Service
Management, at beverage company Dr Pepper
Snapple Group.
As we make the transition to an era of cloud
computing, these operational roles become even
less relevant. Increasingly, CIOs will be expected to
champion initiatives that spur top-line growth, build
market share, generate new products and services,
even transform a company’s business model.
None of this comes as much of a surprise to most
CIOs. After all, information technology in many ways
drives business strategy today, with countless products
and services and nearly every business transformation
reliant on IT in some way.

'80s Distributed Era growth, pressure on the CIO to perform more

than the position’s traditional tasks will continue to
increase. Keeping the IT systems up and running,
reducing IT costs, improving operational efficiency
Photo by Tim Brown/Stone/Getty Images.
In a recent survey of 230 business executives at
global organizations in numerous industries, co-
sponsored by HCL Technologies and Knowledge@
Wharton, two-thirds of the respondents, representing

The Environment The CIO Snapshot of a

Applications Portfolio
Knowledge worker support;
interorganizational systems;
process reengineering; ERP
systems
Executive Attitudes
Increased involvement in IT issues
and governance; polarization of
attitudes: IT as strategic asset or
cost to be minimized
Role Glenn M. Renwick, CEO, Progressive Corporation
Executive team member; Reincarnate CIO
organizational designer; strategic
partner; technology architect;
informed buyer
In the leap from CIO to CEO of Progressive Corporation, Glenn M. Renwick has overseen impressive growth since taking over
Tasks the top spot at the highly rated automotive insurance provider in 2001. Under Renwick, Progressive has increased revenues from
Manage "federal" IT organization;
$6 billion to $15 billion. But more important, Progressive has maintained its reputation as one of the top auto insurers in the
recruit and develop staff; educate
line management; align IT with nation and a dominant Internet player in the auto insurance marketplace. As CIO from 1998 to 2000, the native New Zealander
business; design corporate drove Progressive online well before other insurance providers understood the power of the medium. Progressive.com was the first
architecture; scan technologies; to offer comparison insurance quotes online, and today it continues to find innovative ways to lure customers to its website with
stabilize and standardize such options as Name Your Price, an opportunity to build an insurance plan around a price the consumer suggests. In addition,
infrastucture; scan services market; customers can file claims online and follow their claims with online claims reporting and tracking. Progressive.com has been rated
develop alliances with key vendors
the best website for buying and owning car insurance by Keynote Systems, Inc. every year but one since 2000. With his CIO
background, Renwick was able to envision the competitive advantage that technology offered early on, and under his leadership,
Progressive has woven technology into the fabric of the corporation. //

12 // CIO Straight Talk Are You a "Reincarnate CIO"? // 13


a variety of functions, said they view the CIO
as a business leader and innovator. Just as many
respondents said that their organization sees the IT
function as a “strategic driver for transforming the
business” as said that IT only plays its traditional role
as an “enabler for running the business.”
And yet despite all the talk about CIOs getting a
seat at the strategy table, most have been offered only
the occasional folding chair. So what stands in the
way of IT expanding beyond its traditional support
function?
And yet despite all
the talk about CIOs
getting a seat at the
strategy table, most
have been offered
only the occasional
folding chair.
Some of the barriers are external: the longstanding
relegation of IT to an organizational ghetto where
people aren’t exposed to business issues, for example,
or mistrust among senior executives who’ve been
burned by too many failed or underperforming IT
projects.
But barriers to assuming an expanded role also
exist within the individual. Removing these barriers
may require a kind of metamorphosis, a fundamental
change in how you view your capabilities and
responsibilities. Is it time to be “born again” into a
more enlightened and evolved professional state?
Is it time to become a “reincarnate CIO”?
14 // CIO Straight Talk
What Is a Reincarnate CIO?
We use this somewhat unusual term in an effort to
capture – and draw attention to – the nature of the
professional transformation that CIOs tell us is now
required to meet the demands of the future.
In numerous Eastern spiritual traditions,
reincarnation is a process by which an individual’s
identity, capabilities, knowledge, feelings and mind
move through time in various forms, all the while
enhancing their perceptive and creative powers, their
understanding and ability.
Whereas spiritual reincarnation involves multiple
lives, in today’s world of intense change, a CIO can
live the equivalent of multiple lives in a single career
in a single lifetime. Still, the transformation involved
in becoming a reincarnate CIO doesn’t happen
overnight; it’s a journey, both for the CIO and for his
or her organization.
Although the notion of the reincarnate CIO more
reflects a state of mind than a list of defining traits, let
us sketch out a profile for this evolved professional. A
reincarnate CIO:
•  Focuses more on business than on technology,
more on strategy than on operations.
•  Without abandoning the traditional tasks of
controlling IT costs and increasing operational
efficiency, views IT primarily as a driver of greater
business innovation (through better alignment of
IT with business strategy) and business impact
(through IT-enabled transformational change).
•  Is as accountable to the CEO and business unit
heads, who set strategy, as to the COO and CFO,
who oversee operations and the cost of running
them.
•  Serves as a change agent within the organization
by emphasizing communication and transparency
and using negotiating skills gained over the
years while building numerous outsourcing
partner relationships.
•  Develops capabilities that open up a career path
extending beyond the IT function.
Of course, information technology – and the people
who manage it – have always had the potential to
redefine or even create businesses. Think of the way
that IT shaped the revolutionary business models
of companies as different as FedEx, Dell, eBay and
Facebook.
But over the years, and especially during
economic downturns like the one we’re emerging
from, circumstances and perceptions generally have
boxed in CIOs as cost controllers, first; business
enablers, second; and strategic business thinkers, a
distant third.
In the post-recession world of 2011 – with its
slower growth, heightened competition, and the
emergence of potentially game-changing technologies
like cloud computing – the CIO may find herself
called upon to perform all three tasks, and in reverse
order of priority.
This requires both a granular understanding of
specific business operations and an appreciation of
the strategic needs of the company as a whole. “The
biggest challenge for IT leaders is to rise above the
chaos of multiple vertical functions and to provide
a consistent companywide platform for agility,”
says William T. VanCuren, CIO at NCR, a global
business technology company. “This platform must
be accessible via multiple channels, such as mobile,
kiosk, Internet and voice technologies.”
In fact, in today’s business world, even more may
be required; cutting costs, improving operational
efficiency, and ensuring that your IT strategy is in
sync with your company’s business strategy may
Snapshot of a
Reincarnate CIO
Dawn Lepore, CEO, Drugstore.com
When Dawn Lepore became CIO at Charles Schwab
& Co. in 1993 at age 39, she was the rare woman
technology leader. In fact, she may well have been the
only woman CIO at a major company at the time, and
she knew she would be challenged. To make things
more difficult, she did not have a computer science
degree or an MBA. She was, in fact, a music major,
which made her a target for naysayers who didn’t
believe she was qualified for such a technology-centric
position. But she had some traits that served her well
as CIO and eventually helped elevate her to a CEO’s
position. She told The New York Times, “The reason
I got (the CIO) job was that I took on really tough
assignments, things nobody wanted, things that people
thought were kind of impossible or thankless tasks.
So I proved that I could take on things I didn’t know,
and learn ... And I was good at building relationships
across the company.” Under Lepore, Charles Schwab
began online stock trading in 1996, a pioneering move
that changed the industry. Lepore served as Schwab’s
vice chairman and CIO for 11 years before joining
Drugstore.com as CEO in 2004. Ironically, Lepore
isn’t the first former CIO to lead Drugstore.com. Her
predecessor, Kal Raman, was the company’s CIO and
COO before taking over the top spot. //
not be enough. “A transformation is a fundamental
change in the way a business operates, whether
that be a new market or a new operating model,”
says Tim Graumann, VP/Information Technology
and CIO at Brocade Communications Systems, a
provider of data center networking solutions. “And
successful businesses are in a permanent state of
transformation.” IT, he says, has to be a fundamental
enabler of such transformation and the subsequent
business advantage it creates.
Are You a "Reincarnate CIO"? // 15
 How Do You Become a
Reincarnate CIO?
Talk to enlightened CIOs about how they have
evolved professionally, in order to keep up with
their evolving role, and they’ll point to a number of
important factors to consider.
Reset your thinking. As we mentioned above,
becoming a business transformer may well require a
personal transformation. An obvious starting point is
to get savvy about your business and your industry
in general.
There's an
interesting litmus
test of a CIO's
business orientation:
Ask him who his
customers are.
Ask yourself.
“To focus and enable transformational-type
change requires a deep understanding of business
opportunities, as well as excellent execution abilities,”
says Paul Johnson, EVP and CIO of BB&T, a
regional U.S. bank.
Some CIOs point out that a typical IT mindset
can trap IT executives in techno-centric thinking —
a view of the world that doesn’t encourage support
from corporate leadership.
It doesn’t matter whether such a mindset is
because of hard-wired differences — IT attracts
people who are inherently analytical and rational,
16 // CIO Straight Talk
business attracts people who are intuitive and
'90s
impulsive — or simply because technology is all that
IT people are typically exposed to in their segregated
'00s
corner of the corporation. Whatever the reasons,
The Environment
today’s CIOs are increasingly discussing the need to
Applications Portfolio
broaden their horizons. Automated business processes; electronic
commerce; knowledge management; virtual
Keep in mind that, in the role of what we’re organization and supply chain reengineering.
calling the Reincarnate CIO, technology won’t in Executive Attitudes
fact be CIOs’ primary job. They must understand IT, particularly the Internet, viewed as
transformational, a driver of strategy; IT
technology, but they don’t need to be technologically
investments now more attractive in terms of
adept. What CIOs must do is think about the future costs and time scales
and position their IT efforts so that the company is
headed in the right direction.
The CIO
Role
Align IT strategy with business strategy. Internet developer and manager
Tasks
There’s an interesting litmus test of a CIO’s business
Develop new business models for the
orientation: Ask him who his customers are. Ask Internet; introduce management processes
Web-Based
yourself. If you immediately think of the guys in that leverage the intranet
Procurement who are always calling about glitches in
Era
the new ERP system, you fail the test, according to a
growing number of CIOs.
An overwhelming 70 percent of respondents in
the HCL-Knowledge@Wharton survey said that
IT alignment with business plans was the most
important factor in helping IT play a strategic role. require companies in almost every industry to change But, Blahnik notes, most Lowe's stores were
the way they do business. designed for Baby Boomers; the Millennial generation
And in order to adopt this business focus, it’s
Consider recent customer initiatives at home behaves differently. They research the pros and cons
worth expanding your definition of “customer”
improvement retailer Lowe’s. During the economic of products before they come into the store. Once
beyond your internal customers to the end users
downturn, rather than focusing exclusively on costs, there, they’re linked with friends, texting. Lowe’s
of your company’s product or service — that is,
Lowe’s was thinking about the customer experience, knew it had to begin rethinking its retail experience
your customer’s customers. How can IT enhance
according to Ron Blahnik, the company’s VP/IT — and IT would be central to that effort.
their experience, as well as the experience of that
demanding customer segment in Procurement? Engineering. With the top two players in the home The future store experience will make the
retail industry (Home Depot and Lowe's) accounting stores hubs of the community — nodes on the
Remember that end users very often drive the
for just 28 percent of the $450 billion market, there neighborhood network. Dot-com functions on
innovation that IT can enable. For example, the
is a lot of room to grow if the company can figure out countless devices — wired and wireless — will bring
profound generational shifts in the use of technology
ways to engage customers and deepen the company’s associates and customers closer together in a simple
— most young people don’t have landline phones,
relationship with them. and seamless collaboration that makes it easy for
prefer texting to calling, and don’t e-mail — will
Are You a "Reincarnate CIO"? // 17
 customers to do business with Lowe’s. Customers
will leverage special bar-code tagging to access greater
information on products and services, comparison
shop and communicate with knowledgeable
product specialists.
Blahnik says that, of the 11 major strategic
initiatives at Lowe’s, nine have IT at the heart of value
realization. “The evolution is in the role of the CIO,”
he says. “In the past, CIOs were about cutting costs
and about aligning technology with strategy. Today
the CIO is expected to drive innovative business
strategy, while delivering the technology that enables
speed to market.”
There was a time when a CIO would never be
deeply involved in customer initiatives like those at
Lowe’s. But Lowe’s is hardly an anomaly. Deb Hall
important enabler of our growth as we seek to further
differentiate our brand,” she says.
Focus on ROI. Many CIOs point out that one of
the surest ways to align IT with business — and to
earn the respect of senior business executives — is to
measure the ROI of IT investments in terms of their
business benefits.
Assessing the returns on technology investments
can be devilishly difficult, though, as any CIO knows.
Although nearly one-third of the HCL-Knowledge@
Wharton survey respondents said they were able to
track and estimate return on investment from IT
projects, more than half reported being able to do
so only sometimes — and nearly one-fifth said they
never could.

Today Smart Computing Era

Lefevre, VP, IT Enterprise at McDonald’s, says she
has some traditional IT responsibilities – for example,
simplifying, standardizing and modernizing the
company’s technology – and less traditional ones,
such as helping to shape the customer experience
and brand-building. “Technology remains an
To determine the benefits of an IT investment,
it’s important to track and capture business data and
then measure its value to the company. Tracking data
has become easier, and many companies now collect a
great deal of information. The problem is that many
aren’t aware of what data they have and, if they are,
what to do with it.

The Environment
Applications Portfolio
Deep vertical industry focus;
blended elements of hardware,
software, and network
technologies, which optimize
process results and ROI
Executive Attitudes
Real-time situation awareness
and automated analysis to help
firms solve smarter and more
complex business problems
The CIO Snapshot of a Filippo Passerini, President, Proctor & Gamble’s
Role
Business visionary, industry- Reincarnate CIO Global Business Services unit, and CIO
specific manager
Tasks
Build more industry-specific
solutions, as the task of Filippo Passerini joined Procter & Gamble as a systems analyst in its Italian offices in 1981. For two decades, Passerini held both
optimizing the value of technology and global business posts within the $80 billion consumer products giant before being named CIO in 2004. Today,
assets and liabilities will vary Passerini, a native of Rome, retains his CIO title but he is also president of P&G’s Global Business Services (GBS) unit, one of
dramatically from industry the company’s four “pillars” that form the core of its organizational structure. The GBS unit was created in 1999 to handle the
to industry company’s IT needs, and its unique business structure has saved P&G more than $600 million through shared services over the
years. Rather than being viewed as simply a services organization, GBS is itself a brand within the company and Passerini has
Sources:
used his post to broaden the impact on technology throughout P&G. Prior to 2004, IT was a separate organization but as CIO,
Andrew H. Bartels, “Smart Computing Drives the New Era of IT Growth,”
December, 2009.http://blogs.forrester.com/vendor_strategy Passerini brought IT into the GBS fold. He changed the name from IT to Information and Decision Solutions so that the focus
Jeanne W. Ross, David F. Feeny, “The Evolving Role of the CIO,” August 1999, would be less on providing technology and more on providing business solutions. Passerini believes that IT people are often given
MIT Center for Information Systems Research white paper short-shrift and are, in fact, well-equipped to be change agents within the organization. //

18 // CIO Straight Talk Are You a "Reincarnate CIO"? // 19


“Employees First” and the
Reincarnate CIO
The Reincarnate CIO drives innovative transformations
not just of IT operations but of the entire business. But while
the CIO may establish this as an IT goal, he or she isn't
likely to personally come up with all – or any – of the specific
innovations that together result in the transformation.
For those innovations, the CIO must rely on the people
of the IT organization. And that includes those who work far
down the IT hierarchy, directly with their counterparts from
IT’s internal customers – Marketing, Sales, R&D, Logistics.
In fact, the CIO should realize that many of the most valuable
innovations won’t come from R&D or edicts from the senior IT
management team.
Instead, they will emerge from day-to-day interactions
between IT employees and their customers in other parts of the
business, as they together work to find value-creating solutions
for those internal customers. With any luck, these innovations
will find a path to rise up through the organization, so they can
be utilized in other situations and parts of the company.
HCL’s efforts to adopt this kind of approach across the
entire business is the subject of the book “Employees First,
Customers Second,” by CEO Vineet Nayar (Harvard Business
Press, 2010). Through a variety of relatively simple initiatives,
Nayar and senior HCL managers set out to “enable, encourage,
20 // CIO Straight Talk
and enthuse” employees, particularly those who work in a
company’s “value zone” – that is, the place where value is truly
created, the locus of interaction between customers and front-line
employees. The aim was to inspire employees to come up with
innovative solutions that would create value for both customers
and HCL.
The “Employees First” approach has several important
elements:
•  Creating the need for change, through a process dubbed “Mirror
Mirror,” in which the organization and individuals candidly
assess where they are now and where they dream of going
•  Creating a culture of change, by increasing transparency
throughout the company, from financial results to employees’
360-degree review of senior managers, which are posted on
the intranet
•  Building a structure for change, by making managers as
accountable to employees – especially customer-facing
employees, who create most of a company’s value – as
employees are accountable to their managers
•  Transferring the responsibility for change, by pushing it down in
the organization and empowering employees to make changes
that have the potential to transform the entire business
The “Employees First” philosophy helped fuel a surge in
HCL's growth in the past five years. It has attracted the attention
of academics (Harvard Business School did a case study on
the approach), the media (Fortune magazine has characterized
HCL management as “the world’s most modern”), and analysts
(a Gartner research report highlighted the customer benefits of
“Employees First”).
The approach has also yielded numerous employee-generated
ideas for innovative products and services. These include
innovations in cloud computing, described beginning on
page 67; an iPad application that can boost sales productivity
through an interactive order management and tracking system,
described on page 66; and the IT cost-reduction ideas described
in the Appendix.
Whether cost-reduction, greater operational efficiency,
or business transformation is the goal, a Reincarnate CIO
will benefit from an appraisal of whether an “Employees
First” approach could yield similar benefits in his or her own
organization. //
More information on “Employees First, Customers Second” can
be found at www.employeesfirstbook.com.
Even the business dashboards that some companies
have developed to interpret the significance of captured
data and thus create a window onto business operations
have mostly been inadequate, serving up abstract sum-
maries of monthly or regional financial reports.
A growing number of CIOs see this as an
opportunity to establish methods for better analyzing
the raw information, moving operations data through
the IT layer to provide insights and intelligence that
will help business decision making. An enlightened
CIO has a dashboard with predictive indicators that
are more actionable and real-time than a typical
passive business dashboard.
For example, final sales figures aren't the sole
metric. IT systems are linked to operations and
highlight detailed drill-downs into key databases.
Instead of, say, simply reporting monthly statistics, a
progressive dashboard might signal in red, green or
amber the status of current costs or inventory levels
and issue alerts when the levels would have a material
impact on sales.
Rethink the nature of partner relationships.
Most large companies have, to varying degrees,
engaged IT service companies as partners to carry
out an array of IT tasks. “The way technology is
changing, no one person or group or company can
stay on top of it all and do everything on its own,”
says Marty Racioppi, Head of the Technology
Sourcing Office at Pearson, the London based
education, business information and consumer
media company. Because of that, though, a CIO
“must understand how to create and manage
partnerships whose result is innovation, within the
boundaries of costs.”
This kind of relationship goes far beyond the
traditional arms-length outsourcing or offshoring
agreement that is designed primarily to cut a
Snapshot of a
Reincarnate CIO
Philip Clarke, CEO-Designate, Tesco
Philip Clarke first worked at supermarket giant Tesco as
a 14-year old shelf stacker in his native Liverpool. As the
son of a Tesco store manager, the famed British retailer has
literally always been a part of Clarke’s life. After earning
his university degree, Clarke returned to Tesco in 1981
and has spent his entire career at the world’s third largest
retailer, its $95 billion in sales behind only Wal-Mart and
Carrefour. As Tesco’s CIO, Clarke has managed to combine
his oversight of the company’s technology efforts with deep
immersion on the business side. He has not only sat on
Tesco’s board since 1998 but he served as a store manager,
a buyer, a marketer and the leader of the company’s
international expansion, especially across Europe and the
Far East. Tesco operates in 14 countries and has planted
a flag in the U.S with its Fresh and Easy stores. Clarke
managed the company’s supply chain and added the CIO
title in 2004. Overseeing technology for a global retail giant
with more than 2000 stores and nearly 500,000 employees
is a daunting task, especially when that company has been
in a major growth mode for more than a decade. But when
Sir Terry Leahy, Tesco’s acclaimed CEO, announced his
decision to step down in March, 2011, he and the board
didn’t hesitate in naming Clarke as his successor. //
company’s IT costs by farming out IT functions to
low-cost programmers in a country like India.
Albert Perruzza, SVP, Global Operations, Global
IT and Business Redesign for The Reader’s Digest
Association, says the primary goal of a partnership
is to help Reader’s Digest “evolve IT from a ‘service
provider’ to a ‘value creator.’”
Rod Harris, SVP, Information Systems, at U.S.
Foodservice, a major food distributor, calls the
optimal partner relationship “right-sourcing” – that
is, a means of enabling his company’s IT function
to “bring the right resources with the right cost
Are You a "Reincarnate CIO"? // 21
 to deliver high-impact solutions to business in the
accelerated time frame that business demands.”
“The driver today is the total cost of operations,
familiar responsibilities, to assert themselves in
the senior executive suite by taking the lead on a
corporate transformational initiative. In fact, a lack of
confidence may be the biggest barrier to becoming a

Straight
which includes driving up service levels,” says Racioppi.
Reincarnate CIO.
“But relationships with partners should also be about
innovation. That puts more of the responsibility on One of the ways to gain confidence is to

Talking
your outsource partners to understand your business share experiences and insights with peers at other
and where it is going. In some ways, they have to be as companies – which is a primary purpose of this
conversant with your business as you are.” publication and the online forum and in-person

Dispatches
activities that grow out of it. We hope that hearing
Racioppi adds that an external partner also brings
the experiences of fellow CIOs and other IT
to the table insights gained in its work with other
managers – engaging in conversation with them –
clients. “Ideally, in my view, partnering works best

From the
will lend confidence to your own efforts at tackling
when you have access to everything an outsource
transformation challenges, in your organization
firm learns, leveraging those learnings across different
and yourself. //
industries. The goal of a partnership is not simply
to have a good working relationship between two
organizations. Rather, it is to cross-pollinate ideas
across a wide spectrum of organizations to really get a
Front Lines
grasp on the way things are changing,” he says.
To do that, though, CIOs must develop their This section is the heart of this issue of CIO Straight Talk, the presentation of a diverse array of CIO and
relationship-building skills. “Good partnering doesn’t
other voices. Some of the articles, based on in-depth interviews, feature the experiences of individual
just happen on its own,” Racioppi says. “It takes
CIOs or others who have overseen IT implementation projects. Other articles are concise case studies that
management, on both sides of the partnership, and it
examine the ways companies have addressed various IT challenges.
requires transparency. Good partnering takes work.”
A number of other pieces look at current issues affecting CIOs. In fact, most of articles focus less on
Do You Dare Become a technology than on broad concerns of top technology executives. All of the articles – which are loosely
Reincarnate CIO? grouped into four sections about different types of value creation – relate to the day-to-day work of IT

The transformational goal that characterizes a highly professionals.

evolved Reincarnate CIO is an undeniably challenging The articles aren’t meant to offer definitive solutions that apply to the situation of every reader. Rather, they
one. The stakes are high. The demands take most
are designed to stimulate thinking about the challenges faced by the CIO and to what degree the solutions
people far outside their comfort zone. Leadership
represent “transformational” responses to those challenges.
skills will be required to get people to follow you on a
journey to an uncertain destination, one that will be The companies mentioned in the articles and the case studies are HCL clients. Many of the featured ideas
marked by sometimes painful change. and insights grew out of HCL’s work with the company or the featured CIO.

Many CIOs say privately that it takes tremendous

confidence and even courage to break out of their

22 // CIO Straight Talk Are You a "Reincarnate CIO"? // 23


// Virginia Guthrie
Position: Chief Information
Officer and Senior Vice
President for Information
Technology
Company: Dr Pepper
Snapple Group, U.S.
Professional Background:
Virginia helped drive
the legal and technical
separation from Cadbury
Schweppes P.L.C., putting
in place the team and
processes for DPS to
operate as a stand-alone
IT function. Earlier, she
had been CIO at Coors
Brewing Company and
handled leadership roles
at Frito-Lay and Celanese
Corporation.
Education: Bachelor of
Science, Western Kentucky
University; Master of
Business Administration,
University of Dallas
24 // CIO Straight Talk
// Generating Value For Internal Business Operations
Many Brands,
One System
When Dr Pepper Snapple Group spun off from Cadbury Schweppes,
the beverage maker seized the chance to consolidate its different IT
operations and align them with business goals.
Having been a CIO in the beverage industry for more than 10 years (and
having spent many more years as a consumer packaged goods industry
finance executive), I’ve lived through some dramatic technology and
business shifts during my career. But few things could have prepared me
for the challenges of my last four years as CIO at Cadbury Schweppes
and now the Dr Pepper Snapple Group (DPS), which was spun out
of Cadbury as a separate company in 2008. Though DPS is a new
company, it is at the same time a huge, thriving business made up of
more than 50 top brands of carbonated soft drinks, juices, teas,
mixers, waters and other beverages. With names like Snapple, Mott’s,
7Up, Canada Dry, A&W, Schweppes and Welch’s, DPS is one of the
largest beverage companies in North America, with $5.5 billion in sales
in 2009.
Unlike a CIO at a true start-up, which has a clean technology
slate from which to build efficient IT systems, I inherited an eclectic
mix of technology infrastructures that somehow had to be melded
into a cohesive, state-of-the-art IT organization. And given the highly
competitive nature of the beverage marketplace, along with the
ceaseless need to cut costs and promote growth, my job has been
more than challenging.
Don’t get me wrong. I love this job because it’s
one of the jobs in the company where you really see
what is going on end to end. That is truer now than
ever. We’ve had to understand the entire business, in
order to make the systems work and that has helped
us positively impact the business process. The pace
of change today is just out of sight. Things have
always been fast in IT, but now if we are not buying
something, selling something or making a whole new
venture, it’s just not a typical week here.
The pace of change today is just out of sight. Things have
always been fast in IT, but now if we are not buying
something, selling something or making a whole
new venture, it’s just not a typical week here.
A Collection of Antiquated Systems
Just two years ago, DPS was part of Cadbury. Less
than a year before that, the company began buying
up many of its independent bottlers. Even before
that, the Mott’s and Snapple brands had their own
individual IT systems, as did the Concentrate
division. All the systems were antiquated, and the
bottlers, most of whom were independent companies,
were each on different systems. My mandate is to pull
all this together into a single coherent IT entity that
crosses all brands and business units. Inside DPS, this
is referred to as “one source of the truth,” a single
information system aligned across all the businesses.
My focus has been on five key requirements:
•  Align IT to the business
•  Enable the business to “Grow Sales and Cut Costs”
•  Reduce the cost of operations
•  Ensure that the level of service is fit for purpose
•  Enhance the business knowledge of my IT team
Connecting to the Business
I knew as soon as I became a CIO that running help
desks and data centers was not where DPS needed to
“own” expertise.
It is important that I have a very strong business
role in the organization. Outsourcing much of our IT
development work affords me the time to focus on
business issues. Along with the good work we’ve done
with HCL, there are also some subject matter experts
in IT who are very strong from a business perspective,
and they have good architectural and configuration
skills. I’ve outsourced much of our IT requirements
to HCL, and we’ve put together a long-term plan that
focuses everything around our business process. We
are getting key metrics right up front and lining up
our key processes. We track those by doing a lot of
our process flows during the projects. Usually, when
we turn those projects over to operations, the process
flows totally fall apart. We turn the project over to
HCL and we’re going to hold them accountable,
along with IT and our business units.
For example, we’ve started a high-level project
involving our customer-to-cash process. One of our
key metrics is that we want to do a perfect order;
in other words, the customers get exactly what they
ordered exactly when they want it. Any deviation
from that perfect order can be tracked and corrected.
The business alignment is definitely better
than when we were with a global candy company.
However, IT has also been a big piece of the
change and consolidation in the company, which
Straight Talking: Dispatches from the Front Lines // 25

has been very tough. And, yes, it’s tough on the
business to spend years on foundational work. For
example, we rolled out our handheld sales system
and implemented SAP in the same year. That was
a challenge. We impacted a lot of route drivers,
warehousemen, district managers — people who
don’t spend a lot of time with IT — and we changed
a lot of their processes. The systems worked well, the
information is much better, but it was a drain, a big
adjustment for many of them. But they understand
that this is like a foundation for a house. You have to
have it.
It is important that I have a
very strong business role in
the organization. Outsourcing
much of our IT development
work affords me the time to
focus on business issues.
At DPS we work to be clear about roles in
projects — both IT and the business unit have a
place at the table. The business unit’s role is to define
their requirements and needs. I insist they prioritize
everything they need, and IT’s role is to figure out the
best way to deliver that requirement.
Starting the Journey to
"One Source of Truth"
As the business units are working on the strategy, I
want to be an important enabler, be on the team and
bring ideas as to what IT can do to make a difference.
Right now, we are revisiting our long-term IT plan.
We break it out in two different ways: a capability
model, which is very similar to the SID process model
in which you have commercial, supply chain and
your enabling capabilities. After establishing business
needs and our roadmaps, we prioritize programs
26 // CIO Straight Talk
across three buckets. The first layer of programs is
foundational programs for the organization. These
are the transactional projects like ERP and handheld
selling systems, which feed a lot of our systems. The
second layer is what we call information, which
is where all our business warehouse, master data
management and decision support tools are. Once
our transactional information systems are established,
we’ll be working hard to manage our information
layer as the “one source of the truth.” The third layer
is where you can have the most direct impact on the
business. This represents our growth and efficiency
projects, where we work with the specific business,
usually ROI-driven needs — warehouse management,
trade promotion spending and many other marketing
and supply chain activities.
We’re about 70 percent of the way through the
first foundational layer; we have a good start on the
information layer, and have tremendous opportunity
with the growth and efficiency layer. Given the global
economy, IT also faces the DPS mantra to grow sales
and cut costs.
For example, DPS owns about 50 percent of our
bottlers today. Coca-Cola, Pepsi and independent
bottlers distribute the other 50 percent. Working
with more granular data in our data warehouse is
a large priority for our ability to grow sales. That’s
where we will do a lot of distribution analysis and
pricing scenarios.
Clearly, this is a journey, but we’re getting closer,
and what I expect is that we will achieve our goal of
a single source of the truth across our entire business.
With the investments we are making today, we should
be very close to that in a couple of years. It makes
coming into work pretty exciting for an IT team. //
Further reading:
Roy C. Wildeman, Mike Gilpin, Andrew Magarie, Forrester Case Study, “Dr
Pepper Snapple Group Partners With HCL To Drive Greater Service Centricity,”
April 2010. http://www.hcltech.com/insighthcl/pdf/case_study_dr_pepper_snapple_
group_partners.pdf
KLA-Tencor, UTC Fire & Security, 3M
Optimizing Business Services
High-technology and manufacturing companies are increasingly looking toward streamlining their
procurement, spend and order management business operations to achieve a long-term competitive edge.
Case 1
A Holistic Approach to Procurement
The Company: KLA-Tencor
The KLA-Tencor Corporation, based in Milpitas, Calif., is a
$1.5 billion supplier of process-control and yield-management
solutions for the semiconductor and related nanoelectronics
industries. Its products are also used in a number of other
industries, including light-emitting diode (LED) and data
storage manufacturing, data storage, solar process development
and control, and general materials research.
The Challenge: A Workout Regimen to Improve Agility
In 2006, KLA-Tencor identified a number of goals that it felt
were imperative to achieve if it was to improve the flexibility and
agility of its operations. It needed to enhance the oversight of its
supply system. It needed to synergize operations across multiple
business divisions. It wanted to enhance the satisfaction of both
its vendors and its internal customers. And it had to reduce the
back-office costs of procurement as manufacturing shifted to the
Asia-Pacific region (APAC).
The Solution: A Radical New Approach
With the help of HCL Technologies, KLA-Tencor decided to
adopt a radical new way of looking at procurement operations.
It would put into effect a holistic vendor management and
supply approach. In the process, it would adopt new tools to
increase process automation, using carefully defined metrics and
service-level agreements.
Business Benefits: Reduced Cycle Time
KLA-Tencor was able to substantially reduce its purchase order
processing time — dropping it from four days to one day. At
the same time, unnecessary inventory returns were substantially
reduced. What is more, the cost of processing an average
purchase order dropped by as much as 67 percent.
Case Study
Case 2
Analytics for Controlling Spending
The Company: UTC Fire and Security
UTC Fire and Security is a $5.5 billion business based in
Farmington, Conn., that provides fire safety, combustion
control, and electronic and physical security solutions
internationally. The company offers fire safety products in
industrial, commercial and residential settings. UTC Fire and
Security is a subsidiary of the United Technologies Corporation.
The Challenge: Conquering Cost Concerns
For an increasing number of companies, analyzing and
optimizing spending has become an area of intense focus in
supply chain optimization. In 2003, the Aberdeen Group
issued a report concluding that savings opportunities totaling
close to $260 billion were being missed by companies across
the globe because of inadequate analysis capabilities related to
expenditures.
Like many other manufacturing companies, UTC believed
it needed mechanisms to control costs. In 2006, UTC set out
with several critical business objectives in mind. It needed
better oversight of spending across business units, regions
and headquarters. Data aggregation from multiple legacy and
enterprise resource planning systems (UTC at that time had 16
different ERP systems) had to be brought under control. Cost
compliance could be improved through variance reports for each
business unit or region. Cost analysis could be enhanced to help
identify suppliers with the lowest total costs.
The Solution: An In-House Management Tool
UTC sought HCL’s services in developing a Web-enabled
platform for reporting savings and managing spending. An
in-house tool was developed, tested and administered by the
HCL business process outsourcing function. As UTC and
HCL embarked on this journey together, they came across a
big hurdle: how to ensure data sanctity. Not only did the data
Straight Talking: Dispatches from the Front Lines // 27
 collection process have to be organized, but it had to result in
timely reporting, it had to avoid duplicating data and it had to
minimize changes in data.
The effort encompassed 200,000 supplier records across
40,000 vendors, and it resulted in process standardization across
various business units, continuous analysis and reporting of
spending data, and ongoing identification of opportunities to
reduce costs and realize savings.
Business Benefits: Sailing Past the Targets
As the Web-based system is used and refined, it has resulted in
improved decision-making capabilities and better cost control.
The use of e-auctions, for instance, is credited with producing
$50 million in savings. And e-sourcing overall has enabled UTC
to achieve savings of up to 29 percent, compared with a target of
7.5 percent.
CASE 3
Keeping the Goods Flowing
The Company: 3M
The 3M Company is a multinational corporation based in St.
Paul, Minn. 3M produces thousands of products for scores of
fields, including health care, highway safety, office products,
abrasives and adhesives.
The Challenge: Seeking Superior Processes
In a customer-driven market, organizations are constantly
seeking superior order management. This involves every process,
including planning and forecasting, acquiring and creating
accurate orders and contracts, handling order changes, and
resolving fulfillment and post-delivery problems.
The Global Channel Services division of 3M aspired to
significant improvements in its sales channels. It wanted to
reduce its costs of order management, but it was also determined
to fill orders and manage its supply chain effectively. And it
wanted to provide high quality internal and external customer
support that would drive additional sales. Finally, it set out to
create a proactive communication channel with customers,
providing round-the-clock order management and shipment
tracking support for APAC and Europe business customers.
The Solution: A Six Sigma Approach
In partnering with 3M, HCL adopted a Six Sigma approach
toward running the order-management process. The joint effort
28 // CIO Straight Talk
had its share of challenges and roadblocks. Not only were there // Generating Value For Internal Business Operations
minor quality issues to start with, there was resistance toward
implementing best practices. For instance, the immediate fallout
of improved quality was increased turnaround time (TAT). 3M
was faced with the difficult task of improving TAT without
compromising on quality of order processing.
Part of the solution involved transforming people's
Measuring and
attitudes, and the partnership had to make use of its knowledge
of the Hawthorne effect, cognitive dissonance theory and
other workplace factors to help to increase the productivity of
the team. As people's attitudes were transformed, there was
Managing the
ultimately a deep impact on productivity.
Business Benefits: Better Performance,
ROI of ERP
Better Relationships
For 3M, the improvements were tangible. Information
flow within the 3M supply chain network was made over.
Coordinated orders for timely shipment and real-time
information about the status of shipments helped improve // Glyn Evans
on-time delivery by up to 92 percent. Order processing By quantifying returns on its IT investments, both in terms of cost Position: Corporate
turnaround time improved markedly. The average time taken savings and service improvements, the Birmingham City Council Director of Business
to process an order decreased from two days to three hours. determined that it realized $600 million in “cashable benefits” over Change
Thanks to increased responsiveness to customer needs, strategic three years. Organization: Birmingham
relationships with logistics providers and end customers have City Council, U.K.
been greatly enhanced. // When people talk about business process reengineering and technology- Professional Background:
driven transformation, they tend to think about corporate entities. But With 30 years’ experience
in local government,
Reference: we in the public sector face similar if not tougher challenges within in 2003 Glyn was
Aberdeen Group, "The Spending Analysis Benchmark Report — Dissecting a
Corporate Epidemic," January, 2003
our organizations, and as Corporate Director of Business Change of appointed Director of
Birmingham City Council (BCC), I face the same difficult challenges as Business Solutions &
IT at Birmingham City
any corporate CIO. Council to lead its
Located in the British West Midlands, BCC is the largest local business transformation
program. As Corporate
authority in the European public sector. BCC has a budget of more Director of Business
than $4.5 billion and 57,000 employees serving the one million citizens Change, he ensured that
the transformation was
of Birmingham. It is responsible for providing more than 250 services
adopted, embedded
including social care, public health, social housing, the environment and and implemented
urban development. In other words, our pressures are more widespread across the council. Glyn
and demanding than most companies. chairs the Society of IT
Management's Futures
Having served as BCC’s official CIO (what we then called Director Group and is a member
of the CIO Council, an
of Business Solutions and IT), I know what it’s like to drive business
advisory body established
transformation across multiple “business” units. I had a 500-person by the U.K. Cabinet
department with a $70 million budget. Like other organizations, we Office's e-Government
Unit, and the Local
faced daunting changes due to financial pressures and the increasing
Government Delivery
expectations of our customers. In April, 2006, BCC realized we needed Council.
Straight Talking: Dispatches from the Front Lines // 29
 innovative changes in our business processes in order
to provide superior service to our citizens, save money
and be in line with the national government’s strategic
directives of the time. To achieve these three goals,
we set in motion a business transformation project
that was the largest of its kind in the British public
sector. We would come to invest more than $1 billion
in order to save nearly $2.3 billion (profiled over a
10-year time frame) and dramatically improve our
services through rethinking our ways of working. The
program was made up of nine individual business
transformation workstreams: Corporate Services
Transformation (CST), Customer First, Excellence
in People Management, Excellence in Information
Management, Working for the Future (housing), the
environment, adult social care, child social care and
housing.
The first of these programs, CST, would be the
pathfinder for all the others. Because SAP Business
Suite was selected as the foundation software for
CST, we needed a strategic partner to lead the project
and spearhead the SAP implementation. We chose
HCL AXON, a firm we had come to know well since
our first work together in 2005, to be our partner.
And our first challenge was a daunting one: the
entire program had to not only improve services but
deliver a financial return on investment of 2.5:1. If
we couldn’t bank the $1.35 billion in total benefits
generated from just the CST portion of the plan,
the overall 10-year program would not be funded.
In addition, the CST project had to be delivered
against a set budget and provide transparent and
comprehensive financial information to
all stakeholders.
Turning these ambitions into real-world results
was not easy. But we had a good plan and a strong
partner. There were three core elements to the project:
•  Business transformation
•  SAP implementation
•  Business benefits realization
30 // CIO Straight Talk
Finding the Right Methodology
I’ve read that, irrespective of sector, more than
50 percent of business transformation projects fail
to deliver the expected benefits. This would be a
problem in any organization, but in the public sector,
which tends to be highly risk averse, this is a very
significant issue. We decided we had to develop an
approach to managing the risk. So we developed a
change management methodology, which we called
CHAMPS 2.
What I’ve learned over the course of my IT
career is that business transformation inside any
organization calls for absolute commitment from
the business executives, expert guidance from
experienced professionals and a proven, well-designed
methodology. We were quickly able to check off
the first two and for the methodology, we worked
together with HCL AXON and other partners to
jointly develop the CHAMPS2 methodology.
CHAMPS2 requires us to have great clarity
about what outcomes we are aiming to achieve and
how they will be realized, and one aspect of this that
we put a lot of effort into developing the business
case. Our business cases go through four iterations:
We have the strategic business case, the outlined
business case, the full business case and the revised
full business case. And by the time we get to the
revised full business case, we have designed the future
operating model in detail. Every benefit that the
project will deliver is recorded on a benefit card. A
major part of my job now is to monitor the delivery
of those benefits and hold individuals to account for
their delivery.
One of the things CHAMPS2 does is focus
heavily on benefits. The benefit cards, an idea we
developed from working with AXON HCL, are
each owned by an individual officer with the council
who is responsible for its delivery. A benefit card
might record a saving to be realized or a service
improvement to be made, and in each case it would
need to be measurable.
An example would be a benefit card aimed at
improvement in service, taken from our Customer
First program, which is establishing a consistent
approach to customer service across the organization.
We chose a target of driving up customer satisfaction
levels from 59 percent (i.e., who were either satisfied
or very satisfied with the council), up to 85 percent.
So that’s a measurable benefit. In the same way, if you
look at CST and the cashable savings around that,
our head of procurement has a savings target for each
year, which is defined on a benefit card.
Five Key Processes
There were five key processes at the heart of the CST
project. These classic back-office ERP applications
included:
•  Business management, including reporting
and planning
•  Business support, including systems and skills
•  Record-to-report business process
•  Service-to-cash business process
•  Procure-to-pay business process
From the last of these — procure to pay — we
projected the most savings, which would be
accomplished with better spending controls,
renegotiated contracts, a consolidation of current
spending with fewer suppliers, and supplier contract
compliance across BCC.
Our SAP project, which we code-named Voyager,
successfully went live (though with the usual teething
problems you would expect from an implementation
of this scale) to 2,700 business end users and 100
super-users, in October, 2007. The results have been
impressive. CST has, to date, realized more than $600
million worth of savings in just over three years. Its
target is to deliver a projected savings of more than
$800 million.
But that’s not enough. $600 million in signed
benefits would make most SAP customers proud.
But BCC expects even more business benefits as we
continue to refine and implement the system. We’ve
received positive feedback from BCC suppliers, and it
is clear that efficient new processes were long overdue.
For example, more than 95 percent of invoices are
now paid on time, a vast improvement from the 65
percent of the past.
Every benefit that the project
will deliver is recorded on
a benefit card. A major
part of my job now is to
monitor the delivery of
those benefits and hold
individuals to account for
their delivery.
Lessons Learned
We’ve also tracked some key lessons learned during
the process. Among these are:
•  Gather as much background data — benchmarks,
feasibility studies and current key performance
indicators — as possible to create a target of
achievable business benefits.
•  Make sure you have full buy-in from all key
stakeholders, especially senior management and,
in the public sector, politicians.
•  Design formal project deliverables with formal
measurement techniques.
•  Communicate progress on a regular basis across
the enterprise.
•  Get the right training for the right people.
•  Celebrate all successes.
Straight Talking: Dispatches from the Front Lines // 31

Being in the public sector creates an added
dimension to the successful completion of such
initiatives. If you don’t have political ownership, as
soon as there’s a bit of a rough ride — and you can’t
install these change programs without some problems
— there is a danger that there will not be the support
required. At that point the project is likely to be
stopped; I’ve seen that happen many times in my
career. So politicians have to be actively engaged in a
major change program such as this.
The CIO has to be the person to
change that perception, because
no one else is going to do it.
If I was going to characterize the three main
causes of failure, that would be one of them: not
enough support at a senior level, either an executive
or a politician. The second cause of failure is a lack
of needed capacity and capability in delivering the
change. Managers can’t be responsible for delivering
a major change and still have the responsibility
of delivering business as usual. You’d have to be
superman to do that. So you have to make sure the
change process is supported by putting in place
additional capacity.
And the third reason for failure is not
having an approach to change management, an
effective methodology.
We certainly did not get everything perfect in
this initiative. For example, at the start we didn’t put
enough effort into engagement with staff and middle
management within the organization. Though we
were taking the top tier with us, there was often far
more skepticism lower down the organization. We’ve
now addressed this and we’re recovering from the
situation, but of course it’s a lot harder to recover
from a poor situation than to avoid it occurring in the
first place.
32 // CIO Straight Talk
Sound project management is a must. But sound
change management is also required, including a
robust approach to business case development and
approval. I’m always amazed at how many projects
begin without defining the outcomes, including
ROI, in measurable terms. Unless we put these in
place, we won’t start a project. I’ve worked in the IT
community in local government for 30 years, and
for most of those 30 years, we could have done a
much better job by getting a return on investment
from our spend in technology.
In this regard, I believe CIOs must
make the journey to being much more
responsible for business change, not just
the technology. In a sense this is about
IT becoming a true profession, with CIOs taking
responsibility not just for their actions but also for
the implications and outcomes of their actions.
The CIO Mandate
To me, the role of IT is to be a strategic enabler of
change. I’ve spent much of my career with IT being
perceived as nothing more than a tactical add-on to
business. The CIO has to be the person to change
that perception, because no one else is going to do it.
Critical to a CIO’s success is his or her
relationship with the executive management team,
and in the public sector, with the politicians. You’ve
got to put serious effort into establishing and
building those relationships. This requires the CIO
to take on a business leadership role. If you want
to take the business with you, you have to sit down
with management and ask the key question: If we’re
going to start a business change process, what would
success look like? And then work with business
management to achieve that success. //
Reference:
Derek Prior, AMR Research, "HCL AXON Helps Birmingham City Council
Realize Huge Business Value from SAP," November 2009
Fonterra Cooperative Group
Achieving Sweeping Business Transformation
The Company: Fonterra Cooperative Group,
New Zealand
Fonterra Cooperative Group is the world's largest exporter of
dairy products, a leader in dairy science and innovation, owner
of a significant portfolio of brands in Asia Pacific, and a partner
to many of the world's leading food companies. New Zealand’s
largest company, with revenue of NZ$16 billion (US$11
billion), Fonterra is also the world’s largest dairy products
exporter, with offices in more than 40 countries and sales in 140.
The Challenge: Scaling Up Globally
Operating from a small market like New Zealand and having
diversified operations across multiple geographies run by a
centralized IT operations team, Fonterra was looking to scale
up operations on a global basis across the breadth of its services,
while demonstrating capability and maturity in the IT space.
The Solutions: Speed the Plow
Fonterra partnered with HCL in 2007 to ensure that all of its
applications across the entire value chain­— from the farms to
manufacturing to product distribution and logistics — were up
and running when required and that support across business
operations would be seamless.
Two key areas can be highlighted among the various tracks
of the engagement: SAP-based Global Trade Services (GTS) and
Advanced Planning and Optimization (APO).
GTS: With 95 percent of its product being exported, Fonterra
sought ways to increase productivity and reduce risk in handling
the large volume of trade documents required. With HCL’s help,
Fonterra turned to the SAP BusinessObjects GTS 7.2 solution,
which automates global trade processes and enables firms to
manage large numbers of business partners and high volumes of
documents, while also helping them to comply with constantly
changing legal regulations.
APO: As Fonterra is in the business of perishable goods, daily
sales and operations planning is one of the most critical business
processes. The company traditionally had disparate systems and
incongruent means of cataloging its products. For instance, the
same product produced across different factories may have had
different material codes in the SAP system, creating immense
inefficiencies across the supply chain, particularly in planning
and demand forecasting.
The Deployed Product Interchangeability functionality
developed by HCL, which at run time substitutes the original
Case Study
product with the product made in the factory, helped Fonterra
bring integrity into the way it managed product classification
and thus sped up processing.
The Business Benefits: The Wonders of Automation
Fonterra realized enhanced performance through both the GTS
and APO initiatives.
GTS: In the first year of operation, automating and streamlining
the trade document processes have contributed to a 22
percent productivity increase. For example, automation of the
electronic Chamber of Commerce certification process, whereby
documents are now sent and received back electronically with
a single keystroke, has saved approximately 8 to 10 minutes of
user processing time per transaction. And the implementation of
various e-interfaces has significantly reduced printing, stationery,
and courier costs and allowed customers to expedite the import
clearance processes earlier.
There has also been a reduction in risk. By deploying GTS
in the United States, Australia and New Zealand, Fonterra
now has a centralized platform that manages 80 percent of its
export business. HCL has worked closely with the Fonterra
Documentation Centre to implement uniform standards and
practices across all these export locations, including increased
system checks for incomplete data in a transaction (thus
eliminating the requirement that users manually verify import
country regulatory requirements) and improved processes for
the system to select the correct set of documents on country-
customer-product-payment term requirements. In addition,
technical risks have been reduced through, for example, the
standardization of coding patterns and coding standards for
discretionary deliveries.
APO: The Deployed Product Interchangeability function, by
eliminating the incoherent cataloguing of products, combined
with other enhancements to remove the biggest bottleneck in the
Level Management Chain. This reduced delays in procuring the
product catalogues, which had been resulting in needless hold-
ups in SAP BW report generation.
With this improvement, the daily processes of numerous
departments, which previously couldn’t begin until 1 p.m.,
now get under way at 8.30 a.m. In addition, “blackspots” — a
measure of the number of times APO issues prevent planning
activity — were reduced from a peak of six in February 2008 to
nearly zero. //
Straight Talking: Dispatches from the Front Lines // 33

// Kees Smaling
Position: Chief Information
Officer
Company: AEGON N.V.,
Netherlands
Professional
Background: Kees has
more than 20 years’
experience in Information,
Communication &
Technology (ICT) — about
seven years of that working
on the other side with ICT
technology suppliers and
two years at AEGON.
He has diverse experience
in insurance, general
management, sourcing,
change and people
management. With
experience in both ICT
industry as well as the
financial services industry,
he brings a strong focus on
business-ICT alignment.
Kees was a panel speaker
at HCL’s Global Customer
Meet 2010.
34 // CIO Straight Talk
// Generating Value For Customers
Building
"One AEGON"
The global insurer launched a companywide customer-service portal.
Although it was a clear win for customers, IT had to convince the
various business lines that the benefits outweighed their loss
of independence.
As the second largest life insurance company in the Netherlands as well
as one of the top global insurers, AEGON is known for its private and
group life and pension insurance offerings. AEGON’s 30,000 employees
serve 40 million customers in 20 countries around the world. Like all the
players in our industry, AEGON faced a tough business climate during
the harsh global recession. It was clearly NOT business as usual. We
had to rethink our operational and strategic outlook and make timely
decisions about how we work and interact with our customers. Given
the difficult global economy, AEGON faced three key challenges in
order to ride out the crisis:
Regulation: Due to the stringent regulations in the Netherlands,
we in IT are under constant pressure to provide systems to fulfill all
the requirements from our auditors and bankers. I’d say that at least
80 percent of our work is aimed at legislative issues, so we must be
innovative and stay ahead of the curve.
Distribution: Most of AEGON’s revenues come through intermediaries
such as independent agents. But more than ever, customers are seeking
direct contact with AEGON. For example, when a customer needs to
change her address, she doesn’t want to go through an intermediary to
do so, she wants to connect directly with us. Though
we understand this desire, it puts IT in a difficult
position due to the great dependency we’ve always
had on our intermediaries.
New Competition: AEGON’s most challenging
competition is now from the “new kids on the block,”
the Internet-based insurers rather than the legacy
old-line insurance companies. These new competitors
are not burdened by “historical baggage” of legacy
systems and infrastructures, and most new products
are virtual, which means we must respond with new
ways of innovating.
Getting to Strategy
As CIO, I am fully aware that my role is changing
and the focus must be on strategic business initiatives
rather than serving as the technology service
organization. Nonetheless, IT remains critical to the
success of any organization in the financial industry.
The whole industry is information-centric and
though that is not much different from 20 years ago,
the focus on IT today is far more strategic.
In order to confront these daunting business
challenges, AEGON embarked on a “Loyal
Customer” program aimed at customer retention
by remaking the way customers interact with the
company. You can say that the focus on efficiency
is just to stay in the game, and the focus on the
customer is more to win the game. We decided to use
social media (Twitter, etc.) as a method for getting
closer to our customers and learning what they really
want. The aim is to build profitability and effective
business programs using initiatives that target growth
through innovation, better use of capital and creating
customer-focused organizations.
To that end, we created the Shared Customer
Contact Center Program, a project aimed at allowing
customers to access all of AEGON’s various products
through a single portal that would bridge our
traditional business silos. The aim was to create a
centralized service desk and multichannel access for
AEGON customers, regardless of the communication
and distribution channels through which they
bought products. Agents would also be able to access
customer information for AEGON products through
a single “agent desktop” portal. The portal is intended
to replace more than 100 contact telephone numbers,
e-mail addresses and interactive voicemail menus that
have created confusing customer access points over
the years.
This shift in our distribution channels was simply
not possible 10 years ago when the ability to access
data and products through a single channel did
not exist. It was difficult to interact with different
You can say that the
focus on efficiency
is just to stay in the
game, and the focus
on the customer is
more to win the game.
kinds of data, and the solution back then was to
build separate distribution channels. Today, we can
consolidate different channels using the same back-
end technology. But in order to do that we needed
to implement an integration layer. It took us two
to three years to build the infrastructure for this
integration layer. Building the portal was not difficult,
but having to build a whole new environment to
support that portal was daunting. Now that the
integration layer is in place, adding a data delivery
channel can be completed in weeks.
Another new challenge is the need to modify
our back-office process almost daily as opposed to
implementing three to four new applications per year
Straight Talking: Dispatches from the Front Lines // 35

as we did in the past. Having new and unprecedented
communications with our customers means that we
are more aware than ever of their changing needs.
So transforming customer requirements means that
we must have flexibility and agility to meet these
changing business requirements.
Given the time and costs of building the new
infrastructure, the Shared Contact Center project
drew some criticism along the way. We had to prove
to the business side that all this back-office work was
worth the time and money. We had to build trust
with the business units because we were taking people
out of the comfort zone of a single silo having its own
technology infrastructure. The portal connects across
If I had to do it over again, I’d work harder to
gain confidence and trust within the business
units before embarking on the project.
silos and forces people to rethink internal business-
technology alliances. The moment of truth came
when the portal went live and people quickly realized
that it had all been worth the effort. Of course, if
I had to do it over again, I’d work harder to gain
confidence and trust within the business units before
embarking on the project.
Some employees believe that their needs may
still be better served within the silos of the various
business lines. But we had to look at this from our
customer’s point of view, and that required the
creation of “one AEGON.” Customers don’t care
what the underlying business structure is. They want
answers and products that solve a problem.
The End and the Means
Needless to say, we’ve seen immediate increases in
customer satisfaction. Both agents and customers,
using the portal along with speech recognition and
knowledge systems, have access to a single view of
36 // CIO Straight Talk
the customer and a complete trail of customers’
contact history. Customers now encounter “one call
and done,” rather than the nightmare of multiple
phone numbers and multiple attempts to reach the
company. We’ve installed technology that enables
a single telephone number to service all customer
inquiries without interactive voice response. All this
has decreased the average handling time and increased
the quality of service delivered, which was the goal
all along.
For me, one of the key lessons learned in this
project was to remain focused on the end goal and
not get caught up in territorial or philosophical
disputes. When building something like a portal
or integration layer, the tendency is to employ a
centralized approach. But in so doing, you can
easily get caught up in trying to create the best IT
performance and become IT-focused rather than
focusing on supporting an insurance company. Our
goal was not to have the best IT performance but to
find ways to make the company competitive.
Of course, that is easier said than done when you
are building a central initiative like a portal that is to
be overlaid across many business units. You encounter
less of the ownership mentality from the individual
business units because this isn’t their own unique
technology solution. Instead, the focus falls on the IT
organization and that can be problematic. Though
some initiatives just don’t have a natural business
owner to support them, the CIO has to find ways to
rally support from the entire organization in order
to create support and ensure success. Nobody said it
would be easy, but today’s CIOs must be ready to see
the new world differently. //
British Telecom
Getting IT Right the First Time
Anyone who has been lured by better rates, wider coverage
areas, better service and clever marketing schemes to switch
telecommunications providers is aware how competitive this
industry is. Customer loyalty is evanescent, and competitors
such as BT know only too well that it requires innovation and
focus to stay ahead of new technology, new customer bases and
faster delivery requirements. To get caught behind could give its
competitors the advantage.
The Company: British Telecom Group P.L.C.
BT is the largest fixed telephony provider in the U.K., and it is
among the world’s largest telecommunication companies, with
operations in more than 170 countries. But even the biggest
players must find ways to remain nimble and ahead of the curve.
To meet this challenge, BT’s executive leadership, in 2007,
set out a three-pronged initiative focused on addressing the
situation. The goal was to emerge as an even better customer-
centric organization.
The Challenge: End-User Experience, Time-to-Market
and Cost
The three key goals were:
•  “Right First Time” – This is intended to enhance the end-
user experience by delivering services right the first time and
reducing cycle time required to repair defects and problems.
•  New Services Faster – BT must reduce the time-to-market
in introducing new services, along with a reduction in cycle
time to achieve a competitive advantage in the marketplace.
•  Reduce Costs – The goal is to optimize BT’s cost structure
by reducing the number of business-impacting incidents in
BT’s systems and creating added value by saving costs for
BT’s business units.
The Solution: A Partnership to Deliver the Right
Services at the Right Time
When BT approached HCL to help create and implement the
Right First Time concept to reduce the number of incidents,
HCL’s team decided to construct a 360-degree view of BT’s
customer base that helped HCL build a Services Operation
Framework. The idea was to create the “Right Services at the
Right Time” for every customer, recognize the customers’
preferences and proactively introduce solutions to their
problems. It also intended to reduce service errors, increase the
Right First Time experience for every customer, standardize
Case Study
BT’s operations, reduce duplications and install rigorous
governance. In partnership with BT, HCL suggested a three-step
plan to enable the transformation: standardize, automate and
improve. The steps:
•  to standardize BT’s operations, HCL took end-to-end
ownership of 270 different applications on multiple
platforms and worked across all four of BT's customer-facing
business units.
•  to automate, HCL introduced a series of automation and
monitoring solutions for such applications as Wireless Field
Force management and Incident Monitoring.
•  to improve, BT and HCL teamed up to create a number
of services that would be delivered automatically through
standardized, tested procedures. This led to a series of
proactive processes and technology improvements.
The Business Benefits: Enhanced Customer Centricity
For BT, the results have been a success. The partnership with
HCL, along with other BT initiatives, have brought a dramatic
reduction in the number of incidents over its applications
estate, from 10,800 to 3,400 — a great contribution to BT’s
overall Right First Time challenge. There was also a substantial
reduction in cycle time across incidents — by as much as
76 percent for Priority One incidents — which means higher
customer satisfaction scores. And service availability increased,
while order management processing time shrank from
62 minutes to five minutes.
As BT gears up as a major corporate service provider for the
2012 London Olympics1, these improvements provide optimism
that they’ll meet the ultimate Right First Time challenge. //
1. BT is the Official Communications Services Partner and a Sustainability
Partner for the London 2012 Olympic & Paralympic Games.
Straight Talking: Dispatches from the Front Lines // 37

// Jeff Carlson
Position: Senior Vice
President and Chief
Information Officer of
SunAmerica Financial
Group
Company: American
International Group,
Inc. (AIG)
Professional Background:
Jeff is responsible for all
information technology
efforts across the business.
Over his 15-year history
at American General Life
Companies (a division
of SAFG), Jeff has held
a number of senior
leadership positions in the
information technology and
operations organizations.
Education: Bachelor of
Science, University of
Northern Iowa; Fellow,
Life Management Institute;
Certified Public Accountant
and Chartered Market
Analyst designations
38 // CIO Straight Talk
// Generating Value For Customers
Life After Crisis:
Lessons for IT
The financial meltdown reinforced just how crucial information
technology is to the continued health of a business.
As CIO of the SunAmerica Financial Group, a life insurance and
retirement savings business unit of American International Group,
Inc. (AIG), I am sure the past two years have been among the most
challenging of my career. The fallout from the September, 2008,
financial crisis on Wall Street and the resulting impact on AIG was felt
throughout the entire organization.
Though AIG’s predicament received widespread international
coverage, the 2008 crisis impacted many other financial services
companies as well. We suffered many of the same pressures that a
number of our peers did in terms of considerably reduced sales, which
put heavy constraints on our expense structure. We went through a
difficult period of contraction in terms of both the amount we were
investing and our staffing levels. During late 2008 and most of 2009,
we went through a rigid process to identify those business lines that
could successfully compete, as well as those where we did not believe
there were sufficient opportunities for success. Needless to say, all this
restructuring put tremendous pressure on the IT organization. Like most
organizations during the downturn, we had to figure out how to do
more with less.
This creates a paradox because to be able to leverage technology to
do this kind of streamlining and process improvement requires a level of
investment that is more challenging to justify during
a period of uncertainty. We had to spend a lot of time
and energy helping the business units understand that
if we made the right targeted investments, it would
simplify and automate many manual processes. It
would make it far easier to respond to future crises,
should they happen again.
The eSignature Solution
One of these vital initiatives was to implement a
much-needed digital signature capability into our
customer offerings. Building an eSignature solution
does not seem particularly complex, until you
realize that the system has to be a universal solution
that a customer will use to fulfill all of his signature
requirements. Like most things worth doing well,
the eSignature implementation brought along
its challenges.
We looked to HCL to help us build the
eSignature solution because we’ve had a long-term,
successful relationship with HCL, starting in 1999.
Back then, we were looking for a partner to help
us deal with the Y2K dilemma and happened upon
HCL. We engaged them to do a relatively small piece
of the Y2K resolution work, and that project went so
well we continued to work together. Since then, our
relationship has grown steadily and the eSignature
work was a natural partnership. The “black box”
eSignature component was built by a third party, and
HCL’s role was to help integrate the solution into our
environment, make it a Web service to be accessed
by other applications, and help with production
monitoring.
From a business perspective, the digital signature
capability had become table stakes for many
distribution opportunities. Within AIG, most of
the key technology initiatives, projects and new
development are driven from within each of the
core business units. Within our business, the project
had two key drivers: the ability to automate the
front end of the insurance process and the ability to
accelerate the time in which we could receive a policy
application. We also anticipate that the project will
be critical to supporting a strategy in which we create
more self-service opportunities for our customers.
Offering the eSignature option supports a move in
that direction.
In addition, we envisioned better control over
compliance and legal processes, a reduction in cycle
time that would reduce costs, and a drop in process
errors. From a legal perspective, the solution had to
comply with the Uniform Electronic Transactions
Act (UETA), one of the several United States
Uniform Acts. Its purpose is to bring into line the
differing state laws over such areas as retention of
paper records (checks in particular) and the validity
of electronic signatures, thereby supporting the
validity of electronic contracts as a viable medium of
agreement. Thus, this meant the eSignature solution
had to be compliant with Standards and Procedures
for Electronic Records and Signatures (SPeRS), a set
of guidelines, procedures, checklists and strategies for
developing systems to create, deliver, sign, manage
and transfer legally enforceable electronic records and
signatures in commercial and consumer transactions.
Also, from the green perspective, we expect a
significant impact on our environmental footprint
and a decrease in paper. We don’t tend to justify a
project like eSignature based on whether or not it is
green, but I do believe it is important to demonstrate
to our employees and customers that we are trying to
recognize our impact on the environment. It’s a nice
side benefit. Most important, we had to create a level
playing field with our competitors who were already
offering the digital signature capability.
On the technology side, the eSignature solution
had to be scalable, support multiple clients with
varied needs, support multiple formats, and
yet maintain a consistent formal interface. The
eSignature solution would be Web service based, and
the expectation is that it must have high availability.
Straight Talking: Dispatches from the Front Lines // 39
 In addition, because the documents being processed
are legally binding and with significant financial
implications, a failure or error in the system could
have serious consequences.
Early Benefits
At AIG, we go through a rigorous business case
process for everything we do, and we believe this
project has a positive net cost benefit. It easily
meets our threshold for justifying the work. With
anticipated cost savings and the opportunities for
increased revenue generation from projects we would
otherwise be unable to handle without the eSignature
capability, we believe the project has more than
justified itself.
Though we are early in the adoption of the
application, we already see that we’ve created an
environment in which this capability can be reused
and leveraged in other situations. For example,
today we ask our customer to complete a paper
form, and we can’t process a service request until we
receive written authorization. This tends to slow up
our processes, which inevitably leads to dissatisfied
customers. It also impacts the productivity of our
distribution partners.
Among the benefits we’ve already identified:
•  There has been a reduction in policy application
runarounds, which means more satisfied
agents and agencies along with better customer
experience, which could translate to more business.
•  We now have a streamlined approval process, a
one-step signing and automatic validation process
that eliminates several manual steps.
Though it’s not the only improvement, eSignature is
a core element in trying to significantly improve our
customers’ experience when they do business with
us. Our industry is a very paper-form, regulation-
intensive business. The more we can use eSignature
technology to make that part of the process easier for
our customers and distributors, the better our ability
40 // CIO Straight Talk
to successfully win over our customers. // Generating Value Through Innovation
For example, we are planning to use the
technology in engaging a new set of distribution
partners with a product that we previously hadn’t
sold. One of the requirements in their RFP was
having the eSignature capability. No discussion
about a relationship was even possible without
the eSignature system in place. As more and more
distribution partners and affinity groups aim to avoid
Leading
subjecting their customers to all that paper shuffling,
the eSignature will be a requirement.
Impact on the CIO and the
By Example
Information Technology Organization
There is no doubt that what AIG has been through
as an organization over the past couple of years
has reinforced how important technology is to our // David Evans
Quest Diagnostics’ CIO created an “Innovation Orchard” designed to
business. As CIO, I’ve been fortunate that technology generate revenue for IT projects and serve as a model for innovation in
Position: Vice President,
Information Technology
has always been viewed as a critical element to the company.
Company: Quest
the success of this company. Our organization Diagnostics Incorporated,
understands and values what technology can do. As There are few industries under more intense pressure than health care. U.S.
we rebuild our business units, one of the challenges Everyone wants the very best care but everyone also rails at the ever- Professional Background:
we have is to seize the opportunity, to help reinforce increasing costs of such care. At Quest Diagnostics our goal is to provide David joined Quest
high quality services that will improve health outcomes for patients while Diagnostics in 2001
how technology can help us do that and, at the as Executive Director,
same time, even help change how we do some also minimizing or even lowering the cost of health-care delivery for Laboratory Operations
things. Whether it is automating manual processes providers. At the same time, we have to continuously innovate to gain Systems, and was named
entry to new markets around the world. Vice President, Diagnostics
or modernizing existing systems, the challenge is to Systems and Services, in
continue to demonstrate how crucial technology is to As Vice President of Information Technology at Quest Diagnostics, 2006. He previously served
our business. in a variety of management
my challenge is to align information technology with our corporate
positions at the American
So I can’t overstate the importance that the business goals and act as a strategic business partner. And that’s just Red Cross and spent the
IT organization, not just its leader but everyone the beginning. Of course, we must provide the traditional IT products early part of his career in
technical sales.
throughout the organization, understands the and services in an effective, efficient manner. But today, that’s just table
business side of the equation. The importance and stakes. I have no interest in being just an order taker. There is always Education: Bachelor of
Arts, Richard Stockton
power of a technologist who understands the business pressure to deliver high quality IT, but there is a mandate to go well
College
he or she supports couldn’t be higher. We’ve often beyond that. Like other proactive IT leaders, I also have to focus on the
told our people that their highest value isn’t really company’s top-line growth through innovation and help identify and
in their technical skills, because frankly, we can get create competitive advantage.
those skills from organizations like HCL. But their Quest Diagnostics is the world’s leading provider of diagnostic
greatest value is understanding the business and being testing, information and services that patients and doctors need to make
able to translate a business problem into a technology better health-care decisions. The company offers the broadest access to
solution. I believe that very strongly. //
Straight Talking: Dispatches from the Front Lines // 41
 diagnostic testing services through its network
of laboratories and patient service centers, and
provides interpretive consultation through its
extensive medical and scientific staff. Quest
Diagnostics is a pioneer in developing innovative
new diagnostic tests and advanced health-care
information technology solutions that help improve
patient care. Quest Diagnostics had revenues of
$7.5 billion in 2009 and has 43,000 employees.
Additional company information is available at:
www.questdiagnostics.com.
result in real top-line growth. That same CIO needs
to understand the seemingly endless waves of new
technology — mobile computing, iPads, social media,
search engines — that have an impact on all our lives,
especially in the consumer space.
For me, that simply means “stop talking, start
doing.” We talk a lot about innovation, but talk
is cheap and if we all agree that IT needs to be
innovative to spawn growth, then let’s push hard
on innovation. The key starting point is a question:
What will innovation bring to the organization to
initiatives over time. We can open a small spigot to
provide the necessary nurturing for some good ideas.
The seeds of the Innovation Orchard are
produced through a process I call the 5x5 Innovation
Approach. I will provide $5,000 over five weeks
for an individual or group to bring an idea to the
prototype stage in which they’ll have a discussion
with a business partner. The goal is to either scale
fast or fail fast in terms of identifying and developing
a new business-enhancing innovation. And our
target is to take on business challenges with these
initiatives and open them up to our entire IT team.
text like they do or use Facebook like they do. There
are wikis and blogs, and all that has driven technology
engagement in a far-flung organization. This
represents a vast change for IT. And in that is another
challenge. Everyone assumes all this is free; they
don’t realize they have given up their freedom and
privacy. Google offers tremendous value for them.
But I’m a commercial lab so I have to figure out how
we learn from that, and it is complicated. How do I
deliver flexibility, speed and value free in a field that is
highly regulated?
I spend an hour every morning surfing

I call our program the 5x5 Innovation Approach.
I will provide $5000 over five weeks for an
individual or group to bring an idea to
the prototype stage in which they’ll have a
discussion with a business partner.
Needless to say, IT is at the heart of what we do.
But as we’ve seen in all aspects of our lives, technology
is now pervasive in both our personal and professional
worlds in ways that seemed unimaginable not that
long ago. Our children are experiencing a completely
different environment than most of us grew up in,
seemingly attached at the wrist to handheld devices
that connect them seamlessly to the entire world.
As these new generations of consumers become
employees and customers, expectations for IT will
evolve in dramatic fashion. Being prepared for the
unexpected is a requirement for anyone who hopes to
succeed in this environment.
In a world like that, companies want a CIO who
can provide real leadership and innovation. By that I
mean, they are looking to the CIO to produce radical,
disruptive, market-based changes to the business that
improve the customer experience or spur growth
and profitability or cut costs? The CIO who focuses
on the ROI question is now a business partner. And
that requires the CIO to understand the business
thoroughly, identify real business opportunities and
understand how those opportunities relate to the
corporate strategy.
Rather than make IT a back-office services
function with a hand out for funding, I decided to
fund some innovations out of my own budget. In so
doing, I have the opportunity to energize a number
of modest initiatives and get everyone on the team
excited about making a difference. I call this the
“Innovation Orchard” — an initiative to cultivate
new innovations that will help to drive business
growth and productivity enhancements — because
we can grow these small seeds of ideas into bigger
I am using what is called “crowdsourcing,” meaning
we are getting ideas from everyone — executives, lab
the Internet, reading CIO magazine and other
publications about management and marketing. I
technicians, IT people — and fertilizing those ideas have taken some risks and pushed the envelope on
in our Innovation Orchard. innovation, and I have to demonstrate that I can lead
the change. Nothing gets deployed until I’ve used it.
The idea is to get everyone into the Innovation
Orchard and allow them to open a spigot. Among I’m one of the first adopters and every change to the
desktop our team makes, I’m the first person to use it.
other benefits, this helps bridge the gap between IT
and the business side. We’ve solicited ideas from our I have to lead by example. //
business partners and asked for challenges from them.
I insist that people blog about what they are doing,
rate ideas, vote on ideas, and post arguments for and
against ideas. This is democratic innovation at its
best, and it represents a huge paradigm shift. Thus far,
the concept has people fully engaged, and ideas are
emerging at a healthy rate.
We’ve gotten several ideas to the pilot stage, and
our business partners looked them over and said,
“No, thanks.” But that’s fine. That’s what we need,
a quick answer — not an ambiguous response that
wastes time. We have some big thinkers who want
to change the entire world, and we have others who
are more about iteration, incremental changes that
improve processes and quality.
CIOs must be comfortable in a new world of
technology. There is a generational divide, and
nothing is a phone call anymore. We don’t always
understand how the 20-somethings think. We don’t

42 // CIO Straight Talk Straight Talking: Dispatches from the Front Lines // 43

Veolia
Achieving Fleet and Field-Force Optimization
How do you efficiently manage a nationwide fleet of waste
collection trucks in a sluggish economy with astronomical
fuel costs?
For Australia’s leading waste management company,
the challenge was daunting, especially in a volatile business
environment in which technology had become an increasingly
important part of the solution. In an industry unaccustomed
to depending upon technology, this meant a significant
transformation in culture and strategic planning. But this is just
what Veolia Environmental Services faced in 2004 as it looked
for a blueprint for the future.
The Company: Veolia Environmental Services, Australia
This unit of Veolia Environnement S.A. is an industry leader
in all facets of resource recovery and waste management
in Australia. The company, formerly known as Collex, has
spearheaded innovative and sustainable waste management
solutions in Australia for more than 30 years. Acquired by the
French multinational company, Veolia Environnement, in
1991, the Australian company became part of a $50 billion
global water, transport, energy and waste management giant
that employs 330,000 people in more than 64 countries. In
Australia, Veolia Environmental Services has more than $800
million in revenues with 3,000 employees and more than 52,000
commercial and industrial customers.
The Challenge: Streamlining Its Fleet and Field
Force Operations
In order to maintain its industry leadership position as a
sustainable innovator, Veolia sees itself as far more than a
provider of waste collection services. But having forged a
reputation for reliability and environmental responsibility in
every area of solid and liquid waste management and industrial
services, in 2004, the company’s executive management realized
that Veolia’s business model needed a transformation.
One crucial area of focus was the management of its vast fleet
of collection vehicles. Being in the waste management business,
Veolia Australia maintains a fleet of more than 600 hundred
waste collection trucks, some of which are owned and operated
by contractors under the Veolia brand and management.
44 // CIO Straight Talk
Among its most pressing challenges:
•  High fleet running costs
•  Difficulty in tracking and tracing “assets”
•  Slow response to customer requests
•  Inefficient logistics operations
•  Lack of integration between operational sales and financial
systems
•  Lack of reliability and difficulty in managing real-time, two-
way communications with a mobile staff
•  Safety and compliance
Clearly, these issues crossed all the company’s lines of business,
but the key leadership role in addressing the challenge fell
to Veolia’s IT team to deliver this critical business-sponsored
initiative. In order to proactively attack the problem, a
strategic technological solution was required. Veolia needed
a comprehensive fleet and field force management system to
address the needs of its mobile staff and their vehicles. The CIO
needed a system that would dynamically schedule and dispatch
jobs, and provide GPS/ GIS-based real-time tracking of trucks.
The system would have to offer an interface for functionalities
such as performance monitoring, alerts generation, geo fencing,
history tracking and dispatch, confirmation of jobs in real time
with the back-end system, and high availability in a challenging
industrial environment.
Given that Veolia was a market leader and wanted to
solidify its position, it had a laundry list of requirements for the
new mobile technology.
Among the goals:
•  Better in-the-field connectivity for its drivers
•  Moving from reactive to proactive fleet management
•  Improved service management
•  Vehicle performance and maintenance automation
•  Reduction of the pick-up to payment process cycle time
•  Elimination of manual data entry by office staff
Case Study
•  Integration of vehicle data and systems Business Benefits: Streamlined Operations and
•  Integration with the industry-leading implementation of Cost Savings
SAP Waste and Recycling As the HCL relationship with Veolia entered its fourth year,
the PTS solution had been successfully rolled out across all of
The Solution: Dynamic Job Scheduling Based on Veolia’s waste management operations in Australia. Extensive
Real-Time Tracking cost savings, in terms of both labor and time, have been realized
In 2006, Veolia began a relationship with HCL in order to and have resulted in significant increases in customer service.
create a solution for its mobile technology needs. To that
In fact, the outcome has been so well received that Veolia
end, HCL worked with Veolia to develop the Paperless Truck businesses in Europe, Asia and the United States are considering
System (PTS). implementing the system. HCL also successfully partnered
with Veolia to implement a SAP Waste and Recycling software
As part of the PTS system, each truck was outfitted with a
custom-designed on-board computer and PDA connected in real solution, among the first organizations in the world to install
time to a fleet/field force management system which, in turn, this system. //
was connected to the centralized SAP back-end system. The
system included:
1.  Fleet/Field Force Management
Among the functions:
Job Dispatch and Driver Allocation — This facilitates a
job order to the truck through a logistics officer who
automatically allocates the job and task to a specific driver.
GIS/ GPS-based Vehicle Location Tracking — Coordinates are
stored for 5-second increments with full real-time mapping
integration.
2.  Improved Visibility into Vehicle Maintenance
Real-time monitoring of vehicle dynamics and driving
details — Vehicles can be carefully monitored via this system,
which feeds real-time data from each vehicle including fuel
usage, current speed, distance traveled, engine idle time and
location.
Trip Tracking — Every trip is logged automatically and
available for display via history tracking with a media player-
style browser interface.
3.  Improved Service Management
Signature Capture and Authentication — By allowing a
customer signature to be recorded and authenticated
electronically on-site, the system helps speed up transactions,
increase accuracy and reduce administrative staff input.
Straight Talking: Dispatches from the Front Lines // 45

// Patrick Geentry
Position: Assistant Chief
Constable
Organization: Wiltshire
Police is a police force in
the southwest of the U.K.
covering an area of 3,490
square kilometers, serving
a population of more than
half a million citizens.
Professional Background:
Pat joined the force in July
2009 from Humberside
Police and lives in
Wiltshire. He is a member
of the Chief Officer Group
with responsibility for
Citizen Focus, Contact
Centers, Learning &
Development, Professional
Standards, Justice and
Partnerships. He is also
working with Wiltshire and
Avon & Somerset officers
toward Special Branch and
Major Crime Collaboration
and chairs the MAPPA
Strategic Management
Board and the Local
Resilience Forum for
Wiltshire.
46 // CIO Straight Talk
// Generating Value Through Innovation
Going Mobile
in Wiltshire
A program that equipped officers of a rural English police force with
handheld devices made the force more effective by unshackling the
officers from the computers at headquarters and getting them back
onto the street.
After a recent street robbery in Chippenham, a rural community near
the city of Bath in southwest England, the Wiltshire police officers who
responded to the scene took a different approach to solving the crime.
Having been called to the shop where the robbery took place, the officers
used a handheld mobile device to take a still photograph of the suspect
from the closed-circuit television video that had caught the robbery in
progress. The image was sent immediately to the Wiltshire police image
database and within minutes was circulated around the local stations and
to police on the street, also using handheld computers. Within a couple
of hours, the offender was picked up and arrested.
For police forces in the United Kingdom and other parts of the
world, technology is changing the way routine police work is handled.
The impact, in both economic and crime prevention outcomes, has
been dramatic.
Wiltshire Police Force (WPF) is one of 43 police forces in England
and Wales. Home to Stonehenge, covering an area of just over 1,250
square miles and with nearly 700,000 inhabitants in dozens of primarily
rural communities, Wiltshire is a relatively safe part of the country.
But Wiltshire has been under constant pressure to improve its policing
processes and enhance its officers’ visibility and effectiveness in the field.
With the global economic crisis causing severe cuts in
government spending, police forces such as Wiltshire
have had to find ways to maintain effectiveness with
tighter budgets.
Much of the computerization that WPF had
introduced over the past few years required officers
to spend added time at the station retrieving and
depositing information. Everything handled on the
street required some kind of back-office function,
which meant that police officers had to constantly
come back to the police station to update systems.
Cumulatively, this added up to countless hours
of wasted travel time and time off the street for
Wiltshire’s 1,200 police officers, resulting in
diminished visibility and effectiveness.
In 2007, Wiltshire police brought in HCL to
develop a Mobile and Remote Working Solution
(MRWS) and helped implement a plan in which
mobile handheld devices would be given out to nearly
all of Wiltshire’s officers. Today, 1,000 such devices
— mobile PDAs — are out in the field and have
transformed a significant part of the police operations
in Wiltshire. The implementation cost $3.75 million,
with annual productivity gains expected to reach
nearly $10 million.
According to an IDC report on the Wiltshire MRWS
implementation, key benefits expected include:
•  Increased policing visibility
•  Increased officer productivity of up to 20 percent
•  Improved arrest rates
•  Reduced workload for contact center staff
•  Improved resource deployment. By adding a
GPS component to the mobile devices, Wiltshire
police will be able to instantly pinpoint all
available resources in the field in real time. This
capability facilitates rapid deployment of the most
appropriate available resources.
•  Reduced resource requirements. Elimination of
some back-office processes is likely to result in cost
savings that can be redirected to the front line.
The new devices have the potential to be the
linchpin for a reorganization of WPF’s way of
operating. Officers, for example, may not have to
come to the station at all. They could be briefed
about their duties on the handheld from home and go
straight to their beat.
Before MRWS, for example, an officer called
to a domestic abuse incident would deal with the
offender but then return to the station to fill out a
form and provide details so the police could do a risk
assessment for the victim. A form could take an hour
to complete, and travel time could add up to more
hours off the beat. With the mobile device, an officer
can now fill in the form at the crime location with the
victim present, and the information is immediately
uploaded to WPF’s mainframe system.
The handheld devices also tie directly into
the United Kingdom’s Police National Computer
(PNC) system, so an officer out on the beat can check
somebody directly without using a radio to connect
to an operator at the PNC center. Data is transferred
back and forth instantly, meaning that arrests can be
made more quickly and information shared across
a wide network immediately. In an era of increased
terrorism, intelligence data can be circulated using
this model and prioritized instantly. An intelligence
search can be completed accurately on the spot,
resulting in much higher arrest rates.
Throughout our mobile device initiative, we're
using technology to make the people of Wiltshire feel
safe with the available number of officers. //
Reference:
Jan Duffy, IDC Government Insights European IT Opportunity Case Study,
"Mobile and Remote Working Adopted by Wiltshire Police Force: Improving
Police Visibility,” September, 2008
Straight Talking: Dispatches from the Front Lines // 47

// Rob Hornby
Position: Chief Information
Officer
Company: Wealth
Management Group,
Old Mutual P.L.C.
Professional Background:
Rob joined Skandia, the
Swedish financial services
company in 2007, just
after it was acquired by
Old Mutual. Before that, he
had been at Sky Television,
where he was Director
of Software Delivery and
Support and CRM Program
Director. In his career,
he was a co-founder of
a software business and
spent seven years in
consulting.
Education: Bachelor's
degree, Master's degree,
Aston University, U.K.
48 // CIO Straight Talk
// Generating Value By Effective Collaboration and Planning
Changing
Contracts
On the Fly
Skandia faced an all-too-common CIO headache: a radical change in
the business and a long-term outsourcing agreement ill-suited to the
new environment. Flexibility saved the day.
As the outsourcing of information technology has evolved over the
past two decades, CIOs have faced myriad challenges in effectively
driving those relationships. Outsourcing deals are fraught with potential
minefields — from poor communications to unmet expectations. But
one common scenario that receives minimal attention, yet keeps many of
my fellow CIOs up at night, is the midstream deal course correction. In
a field where change is the watchword and technology shifts occur with
lightning speed, long-term outsourcing contracts are often obsolete well
before the end date is reached.
And that is exactly what happened to me in early 2009. As CIO
of Old Mutual Wealth Management in England, I have spent the past
18 months getting a lesson in outsourcing realities in a tumultuous
global economy. Having joined Skandia, the Swedish financial services
giant in 2007, just after it was acquired by Old Mutual, I inherited
a five-year $200 million outsourcing deal with HCL, in which HCL
would optimize application development and handle development,
maintenance and support. The goal was to create a world-class
infrastructure that would make Skandia’s existing business model more
competitive. Just a couple of years into the engagement, however, the
HCL relationship took a sharp and unexpected turn.
Skandia was an old-line life insurance and
pensions business and had been transacting business
in the British market in a traditional paper-based
manner. But when Skandia merged with a small
company named Selestia, everything suddenly
changed. Selestia provided financial service portfolios,
using an online gateway investment model that
was unknown in the British marketplace. Though
Selestia represented a tiny part of Skandia’s business,
Old Mutual’s leadership decided to make a radical
strategic shift. Even though the old-line business was
profitable, Skandia would switch to the innovative
new online model as its primary route to the market.
The belief was that the financial market in Britain was
inevitably heading toward this digital landscape and
Skandia had the chance to lead the way. It was a risky
bet but a potentially lucrative and visionary move.
Two Years to Six Months
I oversaw a two-year IT transition plan designed to
morph our current business model into a radically
new one. Plans for an orderly transition were set in
motion but, unexpectedly, the transition accelerated
like a Formula One racecar, and the two-year window
shrank to six months. Skandia’s sales team had
embraced the new model, resulting in a sharp decline
in sales of its traditional products. All new business
was coming in online. The comfort of a two-year
transition period was no longer a possibility.
In the meantime, there was that huge HCL
outsourcing contract filling the room like an
800-pound gorilla. Having entered the agreement
well before the business model shift, the HCL deal
reflected none of these changes or the new direction.
Suddenly, I was CIO of an online company but we
had a technology platform that needed to be scaled
and provisioned to handle that task. And we had a
strategic outsourcer in HCL that had been contracted
to provide a whole range of services that were no
longer strategic to our future. In the blink of an
eye, we faced a major discontinuity across our
entire business, but IT in particular. We had to
move very quickly or we would have damaged our
entire strategy.
We immediately began to talk to HCL about
transitioning away from what it was doing and
creating new capabilities. We made a crossover plan
designed to move to a new skill set and focus the
engagement away from what we had originally asked
the firm to do.
All of this could have been a dreadful mess,
but something surprising happened. We had a very
traditional and specific contract with HCL. There
were certainly provisions for terminating the deal,
but there would have very costly penalties, and that
is not the option either we or HCL wanted. So when
the legal framework of the contract is not of much
help, the only thing that can make a difference is
the relationship. That is when you really begin to
understand what the culture of a strategic supplier
means. How are they going to behave when you can’t
make them do something but you need them to reinvent
the relationship?
Building a New Partnership
We had no framework for the conversation except
that we had a sweeping new business need. It wasn’t
so much about HCL’s supplying specific things that
we had asked for, but how the two of us could work
together to respond to the future. And it was a future
for which neither of us was prepared at the time.
It clearly changed the nature of the relationship,
ultimately in a positive way. But at the time, it was
very difficult. HCL had made commitments. It
had people with specific skills who were part of our
account, but those were no longer skills we needed.
People with the skill sets we needed immediately
were not available. We actually needed lots of
infrastructure support for an online gateway, but the
original contract didn’t anticipate that. HCL didn’t
have that capability immediately available, so we
faced a tough decision.
Straight Talking: Dispatches from the Front Lines // 49
 We considered terminating the contract. We
had our own internal software capability within
Old Mutual. It was a small group, but it had the
skills we needed. One option was to significantly
expand that group. We could have gone to our local
contract market and hired needed skills directly into
our in-house IT department. But we made a better
choice. We did a bit of a joint venture with HCL. We
decided to build a team together that could deliver
the infrastructure we needed. This would be a cultural
joint venture, where we worked together to design an
organization that neither of us had at that time but
we knew was needed for this task.
We agreed on three key goals:
•  We needed to focus on creating and sustaining
an online business, and there was no room
for downtime. In the past, many of our systems
could have outages of several hours, and our
customers would never know about it. We had
online systems, but they were not transacting in
real time. Now, in this new world, all our systems
are transacting online in real time, and if we lose
them for even 15 minutes, several hundred other
businesses that depend on our platform can’t
transact business. Our whole culture of urgency
around managing and maintaining live systems has
had to radically change. We needed HCL to go on
that journey with us to a world where five minutes
really matter. This is not just about technical skills,
it’s about mind-set and urgency and organization
and the ability to manage incidents. It underscores
the real sense of dependency that the business now
has on IT.
•  We had to use this platform in multiple global
markets. Our investment gateway platform is in
Britain, but we have to reuse it in other European
markets. The next things we need to draw from
HCL are the skills around software platform
engineering — because it’s one thing to supply
in-house IT for a customer’s internal use but quite
50 // CIO Straight Talk
another to create a platform for several hundred
other businesses in other geographies. What
becomes paramount is the ability to treat the
systems like a product, to create a platform that is
sufficiently robust to be in use in many different
situations at the same time, using a single code set.
•  We had to maintain our legacy business.
What sometimes gets lost in this mad dash to a
new system is that we continue to have a very
significant legacy business. We needed HCL
to maintain all of our legacy systems to a high
standard and to retain motivated staff to do that,
without having these employees feel that the world
has moved on and that they are irrelevant. We
had to do that with our own people as well. Our
legacy business is a precious asset that we needed
to protect and steward.
Even as I say all this, the transition is still a work
in progress. HCL is still in transition, and so are
we. It remains our goal that HCL will continue to
provide the same volume of service that we originally
contracted for, but provide it according to our new
needs. So far, we’ve been very close to achieving that,
though there is a long way to go.
For example, we expect the investment in our
legacy systems, in financial service terms, to exist for
many more years. The average life span for a financial
application is 17 years. Technology has to last a long
time because investments last a long time. We can’t
move out of the old world entirely.
Managing Expectations
As CIO, I faced another challenge. I had to manage
expectations inside the company as well. The first
thing I have done is offer complete transparency and
honesty about the situation we are in. I’ve never tried
to make it look better than it was. My job is to very
clearly articulate the risks and challenges we face.
The second thing has been to be very creative about
the way we’ve responded to this situation. We sought
to be extremely well prepared, to be doing the right
things, and to be able to demonstrate to my senior
colleagues that this was what we were doing. We
made it our business to have all the answers we could.
We had to access a wider network to do that.
HCL didn’t have all the answers either, so we
have had to work together. I am fascinated by the
dependence that we in the IT industry have created
by using outsourced partners. All CIOs are aware of
that dependence. But we’ve also created an entirely
different organizational model about how strategies
are implemented. And maybe we haven’t thought as
much about that as we should have. It is one thing to
get services provided from a lower-cost geography, but
it’s another thing to realize that your ability to execute
your strategy is entirely dependent on that other
party — because you then have to rely not just on
their technical ability to do basic delivery but also on
their ability to adapt strategically and to move with you.
We didn’t look at that very carefully in the selection
process. I’m not sure anyone does.
In this post-recession world, companies will
be dealing with different strategies than they had
before the financial crisis. As macroeconomic
conditions change, the ability of partners to think
and act strategically with us will be a key factor in
whether businesses succeed or fail in the delivery of
these new strategies.
I’ve been to lots of IT management seminars, and
none ever mentioned that challenge, let alone told
me how to do it. We’ve had to learn on the job. I’ve
been lucky with HCL. I’ve worked with several other
outsourcing partners, and HCL has been the most
flexible internally and most willing to work with us to
create new things that we hadn’t had before.
But I’ll add that it was not entirely luck. We
selected HCL based on our perception of its culture
and the chemistry of the relationship. We felt there
was something in its culture that was favorable —
initiatives like Employees First. Its leaders are trying
to do some radically new things, not just in the world
of outsourcing but in the world of business. If you are
trying to make a radical reformation of your strategy,
a company that is used to working that way itself is of
much more value than a company used to doing just
transactional delivery.
My Takeaways
I recently sat at a round table with 11 CIO
counterparts discussing outsourcing, and not one was
fully satisfied with the arrangements that he or she
had. But not one would consider going back to before
he or she had outsourcing. Major shifts are likely to
continue in the financial markets over the next five
years, and no one can predict what will happen. We’re
confident in general terms that we have proved we
can pull off this kind of transition, even though it
remains a work in progress. So I’m confident but also
cautious. The ecosystem in which our products are
delivered to the world today is not a finished model.
It works better than the previous model, but we also
know it doesn’t work as well as we want it to.
One of important lessons I’ve learned from this
experience is that you must have an outsourcing
contract that is as much about changing the contract
as it is about the services you start with. You need
to assess suppliers against a scenario in which most
of what you asked them to do would change. There
are very few companies that can predict the next
five years, and therefore, our contracts can’t pretend
that they can predict the future either. You need to
think about how your partners would respond, how
you would respond, and how the framework would
respond. In other words, you need to be treating your
outsourced partners as strategic before getting into this
kind of situation. You have to have the relationship in
place before this happens. It’s very difficult to build a
relationship while a crisis is happening. //
Straight Talking: Dispatches from the Front Lines // 51

Dixons Retail
In Search of Agility and Savings
The Company: Dixons Retail P.L.C. (previously DSG
International P.L.C., or DSGI)
Dixons Retail P.L.C. is Europe’s second-largest consumer
electronics retailer by revenue, behind Metro Group of
Germany. It specializes in selling electronic equipment, personal
computers, domestic appliances and other products. The
company's stores include Currys, Currys.digital, Dixons, Dixons
Travel, PC World and Pixmania. Its most significant presence is
in Britain.
The Challenge: A Changing Competitive Landscape
In 2006, Dixons realized that it needed to become more
agile to be able to respond proactively to changing markets.
Dixons had achieved many years of market share growth up
to 2000, but after the turn of the century, the demand for
consumer technology weakened and intense competition drove
prices lower. As a market leader, Dixons was seen as a target
from which others could take market share. The competitive
background also became more complex with the arrival of non-
specialists like grocers and pure-play online retailers.
As rivals expanded and offered consumers more choices on
price, service and products, Dixons’ market share declined, and
its growth in sales slowed. Changes were needed. The company
was no longer able to compete on price alone.
The Solution: A New Focus
Dixons chose to focus on raising the bar in customer service
as a way of differentiating itself. Outsourcing information
technology and support functions was considered an attractive
route to free up valuable staff and operating budget to focus on
business development and other core areas.
To find the resources for customer service improvements,
Dixons needed to make adjustments to its spending. It began a
review of costs across all of its business areas. In retailing, IT is
often considered a "necessary evil," so this was seen as a prime
area for cost reduction. Having already outsourced call center
functions to the British company Capita, Dixons was aware of
the potential cost and business benefits of this option.
52 // CIO Straight Talk
At the time the request for proposal was issued, sales
were still rising, but the pace of growth was slowing and market
share was on a steep decline. Dixons’ response was to announce
a focus on its longer term viability: Offer better service, overhaul
its store portfolio, increase online sales and reduce costs. After
a review of all business areas in 2006, Dixons formulated a
plan designed to achieve cost savings of £30 million a year by
streamlining its distribution network, centralizing its business
processes and reviewing internal IT support costs and service
levels. Wanting to focus internal skills on the retail operations,
Dixons decided that outsourcing the IT department would be
the most efficient and cost-effective approach.
But Dixons found that the lowest bidder was not in a
position to deliver the level of services that it expected. It
ultimately selected HCL Technologies based on a number
of factors, citing cost, service levels and business alignment
as elements that influenced the decision in almost equal
measure. At the time that the contract was signed in 2006,
the HCL and Dixons outsourcing deal was the ninth largest
retail sector outsourcing deal since 2001, and the largest for an
Indian outsourcer.
The Engagement: An Evolving Relationship
Since 2006, HCL Technologies has been providing systems
development, application delivery, infrastructure support and
maintenance services to the information systems function of
Dixons Retail.
At the start, the Dixons business operating model
consisted of many different brands running entirely
independently of one another. The group needed business
clarity, and so before outsourcing IT, the retailer embarked on
a project to centralize human resources, commercial operations
and the group’s distribution network. Outsourcing IT support
and infrastructure management enabled Dixons to focus on
managing the centralization and management required to
change the business processes.
The retailer has begun the process of overhauling its services
platform onto a single enterprise resource planning system from
SAP A.G., the German software giant. This centralization is
targeted to streamline Dixon’s application landscape, provide
greater flexibility and agility, reduce the cost of IT provisioning,
enable greater exploitation of its multichannel offering and
through enhanced functionality significantly transform its
supply chain, supporting the reduction of distribution centers to
two, based in Newark; as well as shrinking its overhead costs and
generating savings from inventory reduction.
In 2006, Dixons sold The Link, a mobile handset
retailer, decreasing its portfolio by around 350 stores. When
Dixons' leadership changed in December 2008, the new CEO
embarked on a transformation program intended to improve the
company's retail lineup even further. The goal was to ensure that
it would be equipped to take on grocers, such as Tesco and Asda,
as they expand their consumer electronics offerings; its main
rival, Comet; and the American chain Best Buy as it enters the
British market. The group’s store restructuring program broadly
has two key facets: dispose of underperforming outlets and
improve those with a potential for better profits.
All this change was complicated, of course, by the recession,
which has caused operating margins to take a steep dive.
The relationship of HCL and Dixons has been marked by
great flexibility, beginning with the retailer's decision to embark
on the installation of the SAP software system. The plan resulted
in a reduced need for development, and the development
agreement was renegotiated 18 months into the contract. In
addition, as the retailer's circumstances changed, it needed to
offshore more staff than was originally intended. As part of the
deal with Dixons, HCL initially managed a total of 250 workers,
with 65 percent working offshore in India. Today, about 70
percent of the workers are based offshore.
Such adjustments are possible because of flexible contracts
and an adaptable pricing model. Unlike standard "time and
material" pricing models, which charge against units of worker
time, transaction-based pricing takes the quantity of work
completed into account. Today, about 70 percent of the contract
follows this pricing model.
Case Study
The Business Benefits: The Value of Flexibility
With the initial five-year contracts with Dixons having run
most of their course, HCL regards the relationship as a notable
success, thanks to a number of factors. For starters, it spent a lot
of time in coming to understand the client's business and then
the two parties jointly devised systems to manage resources and
undertook annual planning of key capital and revenue projects.
Both companies were careful to ensure that service-level
agreements (SLAs) were effective. This resulted in technical
SLAs being tuned to reflect business requirements.
There are important lessons to be learned about the matter
of pricing. For starters, price was not the prime driver when
Dixons chose its outsourcing partner. Further, flexibility in the
pricing model proved critical, enabling the outsourcer to flex
the contract according to market or internal strategic changes,
using transparent cost models. Rigid contracts invariably lead
to problems farther down the line. A flexible pricing model was
important in allowing the services (such as staffing requirements)
required by Dixons to adapt to the ever-changing retail
environment.
Retailers are not looking for just a services supplier. They
are also looking to build long-term successful partnerships with
service providers who are able to adapt and evolve along with
the retail business. The experience for both Dixons and HCL is
that circumstances change. To manage changing circumstances,
long-term relationships need constant communication, clear
expectations and transparency to be successful. //
Reference:
Christine Bardwell, Matthew Piner, Ovum, "DSG Outsources to HCL: Case
Study," June, 2010. www.hcltech.com/insighthcl/pdf/DSG_Outsources_to_HCL-_
Case_Study.pdf
Straight Talking: Dispatches from the Front Lines // 53

// Chuck Ciali
Position: Chief Information
Officer
Company: Teradyne Inc.,
U.S. is a leading supplier of
automated test equipment
in a $5 billion marketplace;
$1.1 billion in revenues
and 3,600 employees in 35
countries.
Professional Background:
Chuck has been CIO of
Teradyne Inc. since 2005.
He joined it in 1998 as
Director of Enterprise IT
Infrastructure. Earlier, he
worked with FTP Software
and Digital Equipment
Corp. Chuck is an adjunct
member of the Computer
Science faculty at the
University of Vermont.
Education: Bachelor
of Science, Rutgers
University; Master of
Science, University of
Vermont
54 // CIO Straight Talk
// Generating Value By Effective Collaboration and Planning
Getting Ahead by
Getting Along
When Teradyne set out to outsource its entire IT operations, it avoided
some common problems by establishing a transparent and trusting
relationship with its IT partner before work began.
When I became Chief Information Officer at Teradyne in 2005, I
knew that this was going to be anything but a status quo assignment.
I had been at Teradyne since 1998 and when I took on the CIO’s role,
I realized quickly that we needed to modernize our legacy application
portfolio and, in many ways, reinvent ourselves as an organization.
In order to do that, we would need to initiate a transformational
outsourcing strategy. The challenge was huge and the stakes were high,
but a failure to execute effectively could produce devastating results.
Teradyne had grown exponentially in nearly 50 years in business,
but if we wanted to maintain a leadership position, we had to
respond swiftly.
Like all technology manufacturing sectors, automated test equipment
is a highly competitive and demanding business environment where
there is little margin for error. By 2006, we knew that the automated test
equipment (ATE) marketplace was changing dramatically, which meant
that we had to aggressively reduce IT operating costs. What we faced
was immense pressure in the manufacturing sector due to increasingly
complex chip technology that required sophisticated testing. At the same
time, there was severe market demand to lower the cost of testing and
reduce product development cycles. This was a business problem but
we were technology driven, and the solutions to our
problems would emerge from a savvy technology-
based blueprint. I realized that our IT organization
needed help to address these pressing demands.
Having spent time teaching computer science
at the University of Vermont and participating in
many sponsored research projects, I believed there
was a teaching opportunity here despite the pressure.
Lessons would be learned, one way or the other, and
my goal was to find a partner who not only had the
skill sets but also the strategic outlook to help us
achieve our objectives.
I knew that if we gave our partner the ability to
participate in additional new application development
work, they would have “skin in the game” and thus
added incentive to succeed.
We were looking for the soft skills as well as
demonstrable technical capabilities. We had been
going offshore since 2000, so this was not new to us.
We are a highly cyclical business and we worried that
if the market went into a downturn, we could stall.
We knew that more than 60 percent of applications
were two revisions behind and some critical ones were
actually out of support. We believed that if we did
this bundled outsourcing strategy and linked our
portfolio transformation work to it, we’d get the
business side more behind it and it would get baked
into a five-year plan.
In looking for the right outsourcing partner
that would help us rationalize our enterprise
applications, maintain our supporting applications
and IT infrastructure, and migrate our data center
operations, my team laid out three main objectives:
1.  Achieve cost benefits and productivity
enhancements through integrated offshoring.
When the ATE market changed dramatically
in 2006 and we were forced to slash IT
operating costs, we knew off-shoring was
a given. Until 2005, we had outsourced
application development to offshore providers
so we understood this environment. Instead of
managing a distributed, multi-vendor outsourcing
model that would undoubtedly grow more
expensive over time, we decided to find one
excellent partner and embark on a true multi-
service managed services outsourcing deal with a
co-sourcing engagement model.
2.  Transform existing legacy applications and
underlying infrastructure. To increase our
efficiency, we saw the need to provide services
delivery from remote locations, and we decided to
deploy IT Infrastructure Library [ITIL®] practices
to standardize services.
3.  Adopt a relationship-based model to enable
objectives. In order to gain buy-in from our
various business units and employees, both we
and our partner would have to show extreme
sensitivity to the IT workforce. Without an
element of trust and transparency between us and
our partner, this would not happen.
I also knew one other thing: If we gave our partner
the ability to participate in additional new application
development work, they would have “skin in the
game” and thus added incentive to succeed.
When we set out to obtain bids for a partnership,
we actually included HCL, the eventual winner,
Straight Talking: Dispatches from the Front Lines // 55
 at the last minute. We already had a relationship
with HCL in our engineering services business, but
hardware and infrastructure services were not part of
that relationship. Nonetheless, we decided that HCL
would pressure the other bidders to be more price
competitive and let us get a better idea of available
services across the board.
We had a very high-touch bidding process, and
my staff spent more than 50 percent of their time for
five months in 2006 on this process. We probably
spent more than 80 hours with each of the bidding
vendors. When you
do that, you get to
know the supplier very
For me, the process
well. Early on, HCL demonstrated the
identified its delivery
team, the people we importance of visibility
would actually work
and vigilance on the
with, and that provided
us a level of comfort. It’sCIO’s part in the course
all about the team that
is going to come in and of these engagements.
work on your account.
I also made a trip to India to meet HCL’s CEO
Vineet Nayar. We met in his office and it was just the
two of us. Vineet looked at me closely and said, “I
really, really want your business, Chuck!” And there’s
something to be said for really being wanted.
We liked the fact that HCL embraced the idea
of putting skin in the game. Rather than a client-
provider deal, we saw this as a true partnership
opportunity and we made our choice. We signed a
5-year, $70 million multiservice agreement, and the
deal encompassed an effective plan to transform our
IT operations.
The partnership focused on three critical areas:
Enterprise Applications (including legacy systems),
infrastructure services and data center migration.
56 // CIO Straight Talk
The engagement included IT consulting, application
development, and end-to-end application and IT
infrastructure management (including data center,
network, security and help desk services).
The HCL team approached our partnership with
three key goals:
1.  To achieve cost benefits. By deploying a
centralized team across an integrated operations
center that was made up of both onshore and
offshore members, HCL was able to create
significant savings
for the application
and infrastructure
management
outsourcing program.
In so doing, HCL
“rebadged” about a fifth
of our IT personnel.
2.  To transform
applications. HCL
helped us bring about
a series of significant
transformations to the application portfolio by
cross-leveraging best practices and leveraging the
HCL technical and domain functional experts.
3.  Build better relationships with Teradyne
employees. I set up weekly meetings with
HCL, my management team and me to ensure
visibility of problems and transparency in the
process. We addressed sensitive issues, and
both organizations embraced the idea of using
relationships rather than sticking only to the
letter of the contract to resolve problems. We also
initiated a detailed employee review and made
a point of holding onto employees who were
performing to our satisfaction.
The Results
We are still in the middle of our application
transformation, so it is too early to comment on those
results. But there have already been dramatic results
from the partnership. Among the successes:
•  We consolidated our two ERP systems into one.
In so doing, we’ve given operations, finance and
sales a single, end-to-end view of the customer
order status, and we are now able to commit to
specific delivery times. It is critical to be able to
provide our customers with an accurate delivery
date so they can do their own production
planning. We’ve
achieved greater than We avoided the bickering
90 percent on-time
delivery and taken our and territorial disputes that
lead time from
12 weeks down to
inevitably sink so many of
six weeks. these partnerships.
•  We’ve significantly
increased our engineering efficiency and moved
our cycle time from really poor, by industry
standards, to among the best — from 90 days
down to 14 days. Given the cyclical nature of
our business, if you miss a market window, that
business might not return for 18 months.
•  In so doing, we removed more than million
dollars in hard staff savings and even more
savings in terms of reduced re-work and reduced
material risk.
•  We’ve reduced our engineering slip rate, which is
a measure of hitting product design delivery dates,
from 20 percent to nearly zero for more than a
year now.
•  We’ve improved our software engineering
productivity rate by 18 percent through reuse and
better utilization of our 500 software engineers.
For me, the process demonstrated the importance
of visibility and vigilance on the CIO’s part in the
course of these engagements. By maintaining a strong
and visible presence, I was able to ensure continuity,
minimize the disruption and oversee the inevitable
personnel issues that arise with such ventures. Even
through rough times, we cemented a trusting and
positive environment.
And most important, we agreed beforehand how
we would resolve our problems and in so doing, we
avoided the bickering and territorial disputes that
inevitably sink so many
of these partnerships.
Though technology is the
foundation of our world,
it is people who make the
decisions, carry out the
assignments and build the
bridges to our business
units and our customers.
So relationship management is the key to both the
short-term and long-term success of a partnership. //
Reference:
Allie Young, Ian Marriott, Gartner Research, “Teradyne’s Outsourcing to HCL
Shows How Transparency, Flexibility Deliver Outsourcing Value,” May, 2009.
ID No. G00166530
Straight Talking: Dispatches from the Front Lines // 57

// Bruce Carver
Virginia Guthrie
Position:
Position: Vice
ChiefPresident
Information
and Chief Information
Officer
Officer
Company: Dr Pepper
Company: Cummins Inc.
Snapple Group
is a U.S.-headquartered
Current Focus: Need
$10 billion corporation that
Professional Background:
designs, manufactures,
distributes
Need and services
engines and related
Education: Need
technologies.
Professional Background:
Before Cummins, Bruce
had been VP and CIO at
Dana Corp., a tier-one
automotive parts supplier,
responsible for global
information technology
programs. He has also
served at PepsiCo as VP
and division CIO for the
PepsiCo Beverages and
Foods Division.
Education: Bachelor
of Science in Finance,
Virginia Polytechnic
Institute; Master’s Degree
in Human Resources
and Organizational
Development, DePaul
University
58 // CIO Straight Talk
// Generating Value By Effective Collaboration and Planning Do you have a blueprint for
IT? How do you define it and
measure it?
In Conversation with Bruce Carver
Creating the
IT Blueprint
Bruce Carver leads the Cummins global IT organization and is charged
with helping the company generate and manage information in a way
What are the top trends that you
that drives business growth and profitability. In this interview, he talks
are seeking to implement in your
about his company's IT blueprint and how it is shaped by — and helps
organization that would define
shape — the company's business.
the next blueprint for your IT?
How do you think growth will be redefined as traditional financial
measures reflect a social impact? Do you think IT has a role to play
in this transition and if so, how?
The answer is yes. I think it's all around the concept of value and
social and environmental responsibility. For our customers and our end
users, it's really about the value that we add. Our IT team supports our
businesses’ Web presence and how the various products and services
are presented to our customers, and it performs back-office functions
that consume a lot of resources. What I mean specifically by this is that
it's really around what is the value that we provide by delivering the
right information and IT services at the right time. Our ability to do
this impacts the cost algorithm and the profit algorithm and provides
efficiency to product development, and the way the company works
allows us to be a responsible consumer of environmental resources
(primarily our consumption of energy resources).
The way we look at the IT blueprint is pretty simple. It's really around
determining the value that IT brings to the business. And within that
value, what are the core operating principles and priorities that IT
delivers. We look at IT as a percentage of the company’s revenue. We
track the value that we get from the IT expenditure. That is one way
of looking at how we start to construct the blueprint. The next step is
to identify the enabling services and how those services are orientated
in delivering a program that supports the core businesses. Once our
business partners determine their needs from a go-to-market standpoint,
the next logical step is to identify how IT supports that go-to-market
strategy within a fixed algorithm, while ensuring that we add value and
efficiency to the business. The entire process takes us about nine to 12
months to draw up our five-year blueprint, which we call our strategic
initiative plan. We work with our business partners to map out their
key business opportunities and how IT will support them. We then
continue to work on that five-year plan proactively and update it as the
market evolves.
Though we still don’t know if it is actually real or just concept, cloud
computing and virtualization are definitely a trend to watch for. We
are determining how we would leverage these technologies as we have
started looking at the IT architecture supporting our businesses. There
is a potential for cloud computing and overall virtualization to really
make a big impact on our business by adding more flexibility to the
organization and our IT cost structure.
In line with that would be the second trend around making desktop
devices smaller and leaner. Leveraging virtualization as well as enterprise
computing from a centralized standpoint and adding less cost at the
desktop level should be the focus. In the consumer space, when we
look at the desktop, I am anticipating that the market will start moving
to devices that can actually save a lot of expense through investing in
smaller and less complex devices because your back end is much more
complex and much more robust.
The third trend is the virtualization of where people work. This is the
whole idea of virtual teams and how these teams do their work from
multiple, disparate locations. IT suppliers who support our application
development and back office (support desk and data center operations)
are typically remote to our core business locations. These teams
collaborate virtually across time zones. As a multinational organization,
Straight Talking: Dispatches from the Front Lines // 59

What were the essentials you had
in mind when you created your
blueprint for IT?
// Virginia Guthrie
Position: Chief Information
Officer
Company: Dr Pepper
Snapple Group
Current Focus: Need
Professional Background:
Need
Education: Need
All high-growth companies are
investing strategically in IT and
gaining competitive advantage
through collaboration and
value-centric relationships.
What is your organization’s
competitive advantage, and what
kinds of relationships and/or
partnerships are you building?
60 // CIO Straight Talk
we have many touch points, and those people in most cases will never
sit in the same room with one another. So, worrying about how you
have solutions that allow these teams to collaborate efficiently and still
produce a product that is usable and defect free is very important.
No. 1 would be the customer. We do business because we have
customers. Everything we do is to support our customers, acquire more
customers and keep the existing ones happy.
No. 2 is value. What's the value that we get for the investment compared
with the business value?
From the value stems the third essential, which is establishing the cost
drivers to produce effective solutions as well as the cost drivers that we’re
positively impacting.
And fourth would be around what's the overall business impact, which is
really the role of the three prior items.
In the shared services group, the fifth would be around what's the
efficiency that we get from processes and output.
The next would be the organizational and professional growth of our
IT team.
And the role about the first six is really around what's the overall IT
environment that we have created.
We look for partners with a strategic focus and the ability to execute.
They have to do more than the traditional development and create
robust tested solutions at a reasonable price. The one thing that is
important in creating those partnerships is showing that the partners
work in the same way that our core teams do around the world, because
we cannot have our partners work in a different way than we do. Then,
it's really about showing that the partner’s chemistry is aligned with our
corporate culture and that everybody is working on the same strategic
plan and the same operational structure. //
// Generating Value By Effective Collaboration and Planning
// Kris Hillstrand
Former CIO, TXU
CIOs @ HCL:
How to Pitch Your
Transformation Plan // Satish Chandrasekaran
Former Vice President/
Four former CIOs offer advice on making the internal
Technology, Target (India)
business case for transformative IT investments.
Here’s a typical strategic problem CIOs have to contend with: A
generation is coming of age that has never dealt with salespeople. They
are used to conducting transactions with their mobile devices, laptops
and desktops. They text and hardly use the voice “feature” of their
phones. And yet, they — like everybody else — want to have a great
customer experience. They want to feel valued. What do CIOs need to
do to understand these customers and fulfill their needs?
// Greg Black
But wait a minute. These customers, who want to use their phones Former CIO, American
to scan a RSS barcode to get information or make a purchase or Safety Insurance
comparison shop, coexist with customers that like to be sold, face-to-
face, in a store, by a real, live person. And, while one of your newer
customers might be comfortable with an online transaction that
costs the company, say, $.25, another type of customer from another
demographic group only trusts a call that costs the company $8. At the
same time, yet another type of customer requires a real, live encounter
with a representative on the sales floor that costs even more. All of these
transactions must be supported with IT. All of these transactions have
// Raymond Siebert
different price points, different costs and different levels of complexity. Former CAO/CIO,
How do you manage these differences? By cost of sales or by value Acceptance Insurance
of sales? By brand value or by repeat business? By a particular type of
customer experience you are trying to provide? And, how do you make
Straight Talking: Dispatches from the Front Lines // 61
 sure the right customer gets the right type of service?
How do you transform your IT to support your
organization’s aims in a practical way — and convince
the CFO and other senior management that the
investment needed to achieve this transformation is
justified?
Straight Talk posed questions like these to four
former CIOs/IT executives, who are now with
HCL: Kris Hillstrand, former SVP/Operations,
TXU Energy, and CIO, Energy Future Holdings;
Satish Chandrasekaran, a former Vice President of
Technology for India at retailer Target Corporation;
and Greg Black and Raymond Siebert, former CIOs
in the insurance industry. Their answers were candid
and forthright.
To get a project kicked off and supported,
you have to make the business case,
which includes the benefits case.
A first step, according to Kris Hillstrand,
is “creating metrics and dedicating yourself to
measuring everything that’s relevant.” Measurement
is not exactly action, but an intense dedication to
measurement helps CIOs make their case when it
comes to developing a strategic direction and getting
the organization to invest in it. “Measurement helps
CIOs define the business case,” says Hillstrand.
Defining the Business Case
Defining the business case is critical because one of
the CIO’s newer roles is to translate IT issues into
business terms, and vice versa. This is particularly
important, even critical, when CIOs are invited to sit
at the strategy table, which is often presided over by
the CEO. Since many business leaders are not well
versed with regard to technology issues, the CIO must
put those issues into concepts they understand. Even
62 // CIO Straight Talk
more difficult for the CIO, many business leaders are
skeptical when the discussion turns to technology.
Why the skepticism? In many cases they earned it, by
supporting programs that failed to deliver benefits to
the organization, or fell short of their goals. For those
reasons, the CIO must translate how IT can support
business goals.
The aim of technology is not — and never has
been — simply to upgrade an organization’s IT.
Technology is simply a force that enables other
things to happen. Those other things are activities
related directly to the business — increasing revenue,
decreasing costs, connecting employees to each
other, to their clients and customers, improving the
customer interface, integrating suppliers, and so on.
All this sounds simple enough until you realize
that in almost every instance, the technology
outside the organization is ahead of, or driving, the
technology inside the organization.
Because the list of business issues that IT must
address, enable and support is long and changing, the
CIO needs to have a place at that strategy table so
that the organization remains capable of adapting to
change. As a consequence, everything the CIO wants
to do, that requires investment and executive support,
needs to be developed as a business case. “To get a
project kicked off and supported,” says Hillstrand,
“you have to make the business case, which includes
the benefits case.” Doing that is one of the reasons
why measurement matters, on a cost/benefit, net
present value basis. With the business case comes the
need for credible milestones.
A Leg on Two Horses
As the organization’s chief translator of IT issues
into business terms, the CIO must take trends that
are emerging and put them into a business context.
Inside the organization, the CIO needs to be one of a
small group of people with a very long-term strategic
horizon. He or she also has to be adept, when it
comes to timeframes, of having a leg on two horses —
one that’s long-term and capabilities driven, the other
that requires quarterly progress reports and updates.
It’s not always easy to ride these two horses at once.
Whereas 20-something consumers can go into stores
on a whim on a Saturday and purchase smartphones
without going to an investment committee meeting,
and then demand as a group that those smartphones
be supported, the CIO has far less freedom to act.
To support those consumers, the CIO often needs to
get one committee or another to give its okay, which
takes time and requires making a case. But how do
CIOs make that case efficiently and quickly so their
efforts enhance, rather than impede, the aims of the
business? How do they do it so their organization
doesn’t lose revenue or profit each time a customer or
supplier blinks?
They do it by keeping their peers educated.
Making the Case
CIOs need to “build support in the organizations,
which requires selling their ideas, something they’re
not always comfortable doing,” says Raymond
Siebert, Principal, HCL Insurance Practice.
“CIOs need to develop advocates throughout the
organizations for what they do and who support their
strategic business vision.”
But doing that, according to Siebert, means
making the case not in the CIO’s terms, but in terms
other executives understand. If people inside the
organization realize that the CIO is there to support
their objectives, they will become advocates. CIOs
who are capable of translating IT into business
terms and of educating their non-IT peers develop
support for their ideas and plans, and — even more
importantly —develop trust.
Preparing the ground by continuously educating
peers — instead of simply seeking support for a
particular program during the annual planning and
budgeting process — is one way a CIO can develop
support for his or her ideas and plans. It’s also a way
of ensuring that the CIO will be invited to sit at the
strategy table.
How Much of a Visionary?
Being a visionary, even in a conservative organization,
is looked at positively, if people understand that
your aim “is to give your company a sustainable
business advantage,” says Satish Chandrasekaran,
head of Retail and Global Application Development
Delivery at HCL. “The desired structure,” says
Chandrasekaran, is not just to have the CIO part of
the strategy-making process, but to have him or her
“as a member of the capital allocation committee. To
do that, the CIO must understand return on capital,
opportunity cost, sunk cost and everything else that’s
needed to make good financial investments.” CIOs
must also understand an organization’s internal
competition for capital, and be able to weigh the
relative merits of each request for investment.
But there is yet one more item, according to
Chandrasekaran, and it’s where trust comes in. “For
CIOs, the name of the game is risk mitigation.” Not
only do people have to understand why an investment
in technology makes sense and why it makes sense
now, they also must understand their level of exposure
if it goes wrong and whether the CIO can fix it if a
problem occurs.
Of course, in almost every instance, the antidote
to risk is trust, which is based on developing a
reputation for competence, something CIOs
must cultivate inside their organizations. To do
that, “people have to understand you run a tight
Straight Talking: Dispatches from the Front Lines // 63
 organization with real metrics and meaningful
measurements. That helps them when they weigh the
risks against the costs,” says HCL’s Hillstrand.
Support for Plans
Being known for business acumen and running
a tight organization is extremely important for
CIOs who wish to develop support for their plans,
particularly their long-term plans. But what’s
also important, Hillstrand says, is being known
as someone who “gets things done fast.” That’s
important because too often IT projects take longer
than planned.
Planning horizons are important too. CIOs need
to “articulate a strategic vision, and they need to
do it in a business context, but they need to keep it
practical,” says HCL’s Greg Black, a principal at HCL
America,.
“You have to build the organization’s IT
capabilities for the future, but not too far out into the
future. What we can do always happens faster than
what we should do. On the other hand, you can’t be
bound by tradition,” Black says.
The best way to find the right distance out into
the future is by getting external views, which includes
global views to help you understand how things are
done elsewhere in the world.
Selling a Vision to Peers
Wrapping a strategic vision in a business case is the
minimum requirement a CIO needs to sit at the
strategy table. But it’s also important how you sell it
to your peers so they support you and remain your
advocates.
“What I always say is that if you say to people,
‘what I’m talking about is five years ahead. Get on
board,’ it’s insanity. They won’t do it. It’s too far out,”
says HCL’s Siebert. What you have to do is present
your case for practical transformation in stages.
“Swiss-cheese it,” says Siebert. “By that I mean,
64 // CIO Straight Talk
present your plan in chunks. Rather than looking
out five years, give them two- or three-year chunks,”
he says.
But making a case is more than setting out
a timeline that’s comfortable. “You also need to
get proof. You need more than one or two people
supporting your ideas. You can’t just be a futurist.
You need to show your peers that where you’re taking
them other people are going too.”
According to Siebert, one powerful way to make
the case is to “use case studies to build confidence.
Show your peers that you’re not some pioneer out
Solution
there all alone. Make them understand that other
organizations, other industries, have done what you’re
proposing to do. And that they succeeded. There’s a
lot of power in making the case that way,” he says.
Spotlight
Translating, educating and building trust are vital
for making the case. But in the end, the CIO has to
adopt one more role if he or she wants a seat at the
strategy table, that of leader. “Leadership, now, is an
extremely important quality for the CIO. If CIOs
are helping to create an organization’s strategy for This and the following section
the future, they have to make people want to follow
them,” says Chandrasekaran. // represent a detour from the rest of
the issue, which primarily features the
Ambitious IT initiatives that can transform the voices and perspectives of CIOs and
business – typically the most difficult to sell internally,
other IT professionals. In this section,
are only one element of a CIO’s project portfolio. Even
today, after years of squeezing costs out of IT and we look at two areas of current
making business processes more efficient, relatively
interest — mobile computing and
modest investments may yield a dramatic reduction in
costs and increase in operational efficiency. For a catalog cloud computing ­— and offer thinking
of such initiatives, see the Appendix “15 Questions: A
from HCL on these topics. In the next
checklist of things to consider as you begin your annual
IT planning” (page 76). section, “What Lies Ahead?,” we offer
the views of three outside observers of
IT on the future of the CIO role.
 A systematic approach
FPO
CloudStrategy
Using the iPad
To Boost Sales Productivity
27th Jan 2010: The world waits with bated breath to witness Steve Jobs unveil the much anticipated Apple tablet
computer at the Yerba Buena Center in San Francisco. Meanwhile, far away in a suburb of Delhi, a team of 10
engineers is busy conceptualizing a sales productivity enhancement tool for the iPad — though as of yet, none of
them has seen the about-to-be-unveiled device.
Today, their idea has materialized as an interactive order management and tracking system that runs on the
iPad platform. Move over, bulky laptops or tiny tablets: This is feature rich, portable and highly interactive. It is
simple to use and aesthetically pleasing, with a paper-like feel and with interactive features that can take the pain
out of order management for sales representatives.
The integrated functionalities cluster around predefined task flows and information reusability for recurring
scenarios, context-sensitive display, advanced search, and dynamic analytical capabilities. The platform is
currently being piloted across two micro-verticals.
Incubation of ideas like this is the hallmark of HCL’s “Employees First, Customers Second” philosophy,
which drives responsibility for product innovation, customer solutions, and organizational change down in the
organization. (See “Employees First, Customers Second,” Harvard Business Press, 2010.) For a demonstration
model of the sales tool, write to iORDER@hcl.com.
66 // CIO Straight Talk
to developing your
Everyone has his or her head in the clouds these days. And that can make it difficult to know where
you are — or, rather, where you should be headed.
Cloud computing has cast a shadow over the corporate landscape in the past several years, sparking
as much confusion as genuine interest. But despite the buzzword-de-jour feel of the topic, most
people now agree that cloud computing is more than just a new IT delivery model and instead
represents a sweeping transformation of IT. For CIOs, it can be a significant career enhancer, enabling
them to drastically decrease costs and improve IT services for their organizations.
But for that to happen, CIOs need to understand how cloud computing is changing their business
and their role. They need to be able to choose among clearly defined cloud options — and just as
important, explain the pros and cons of each to the CFO and the CEO. A systematic approach to
defining and assessing the options can make navigating the world of clouds clearer.
Surveying the Cloudscape: Not All Clouds Are Alike
For all the interest — and investments made — in cloud computing, no one has really pinned down a
single definition of this rapidly evolving space.
In general, everyone agrees that cloud computing delivers elastic IT resources — elastic in that they’re
easily scalable, both up and down, to meet fluctuating business demands — as a service, via Internet
technologies and available on a variety of devices, including laptops, desktops and mobile phones.
The customer is typically billed on a subscription or pay-per-use basis, with relatively few contract
obligations or entry and exit fees.
This offers enormous potential benefits. Cloud computing, with its on-demand resources, pay-as-
you go pricing, and rapid scalability, should make IT provisioning faster, more efficient, and more
cost-effective than most enterprise networks are capable of, even through stand-alone partnerships.
Cloud computing allows companies, using browser-based user interfaces, to increase capacity or add
capabilities on the fly without any CAPEX on new hardware assets or software licenses, and without
having to invest in new employee skill sets.
Solution Spotlight // 67
 However, for most enterprise organizations, these
benefits come with certain risks: a lack of control
over the resources in the cloud; possible breaches
in the security of confidential data; and issues
around data governance and interoperability.
But these risks vary depending on the type
of cloud.
We talk about “the cloud,” as if it were some
ubiquitous nonterrestrial IT environment.
But there isn’t just one cloud up there in the
troposphere; there are many, offered by a
variety of cloud computing technology and
service providers.
And these big clouds run by external providers
aren’t the only kind of cloud there is. In fact, one
type can actually take shape within the walls of
your organization.
Generally speaking, there are three types of cloud
deployment models available today — public
cloud, external private cloud and internal private
Figure 1
As companies try to determine which elements of their IT landscape
(applications, workloads, environments) are good candidates for
migrating to the cloud, as well as which cloud operating model will
deliver business value, they should consider various factors in each of
four areas.
Organization Application Platforms
Business Imperatives Business Criticality Traditional/Next Generation
Organizational Structure Demand Elasticity Technology Complexity
cloud. Many companies will adopt a hybrid
strategy based on a mix of these, along with
continued use of their legacy, non-cloud
IT systems.
Public Cloud. This is the most widely adopted
type of cloud as well as the most thoroughly
understood — it’s what most people think of when
they think of cloud computing. In a public cloud,
a service provider — for example, Microsoft,
Amazon Web Services or Google Apps Engine —
makes IT resources available to any customer via
the Internet. Those resources range from e-mail,
CRM and payroll applications to storage capacity
to server compute cycles. Specific examples are
Cisco's WebEx meeting space and Salesforce.
com's CRM SaaS cloud.
Private Cloud (Internal). With this type of cloud,
enterprise IT resources are consolidated, so
users across the company can have self-service
access to those resources, which can be easily
scaled up or down. Automation enables the
speedy, on-demand provisioning of resources,
such as applications and infrastructure. The use
of IT resources is typically metered, which allows
Infastructure
Network Bandwidth
Storage Requirements
people or groups in the organization to
be internally billed for the service. Figure 2
This consolidation of IT resources across HCL’s experience in cloud computing and its long-time work
numerous servers or other hardware is a key in the area of virtualization provides the basis for a schematic
differentiator between the internal private cloud that indicates where various elements of a company’s IT
landscape would typically sit along a continuum that runs from
and conventional company IT systems.
traditional, on-premises IT systems on one end to a public cloud
In conventional IT, the excess capacity of a environment on the other.
single server may go unused. In the case of an
internal private cloud, it is pooled with the excess
Messaging &
capacity available on other servers elsewhere in Collaboration
the organization. This allows everyone throughout Enterprise Apps
Productivity Apps
the organization to tap into available IT resources
Data-Sensitive HCM, CRM,
on a server that, in the past, people outside a Apps Learning Mgmt
particular function didn’t have access to.
Web Apps
Internal private clouds are appealing to many
Legacy Apps Development Environments
companies because they mitigate the security
concerns around public clouds. Because the Test Environments
Apps Tightly
company owns all of the equipment powering the Coupled with POC/Lab
Hardware Infrastructure
cloud environment (often a very large data center),
it has complete control over the IT resources as Storage & Backup Archiving
Mainframes
well as the data and is responsible for securing it. Transient/
Infrastructure Apps
This comes at a cost: the significant expense of Unpredictable
Workloads
acquiring and maintaining the cloud infrastructure.
But companies often fail to accurately assess Internal External
On Public
this cost. While it’s certainly always worth Private Private
Premises* Cloud
looking at public cloud options in the market, Cloud Cloud
there is value in also looking inward, at your
company’s previous investments in software and
*Industry-specific/application-specific SaaS has to be dealt with separately for each industry.
infrastructure. A service provider such as HCL
can help its customers assess whether current IT
assets are underutilized and could serve as part of For now, of course, most companies will
a private cloud. continue to run many applications on traditional
on-premises, non-cloud infrastructure —
Private Cloud (External). A third option combines
the benefits — but also shares the drawbacks especially legacy applications tightly coupled with
— of public clouds and internal private clouds. existing hardware.

Readiness for Change
People and Skills
Process Maturity
Tools, Vendors, Partners
Risk & Compliance
Complexity
Stability & Performance
Interfaces & Integrations
Regulatory/Compliance
Data Sensitivity
Environment (Test/Dev) Server Computing
Manageability Connectivity
Database Security
Interoperability Client Computing
Support Coverage Backup & Disaster
Recovery/Business
Continuity
In this approach, an external provider hosts your
company’s cloud environment on the provider’s
infrastructure— but infrastructure that isn’t shared
with other customers of the provider, as in the
case of the public cloud.
Security concerns are lower than on a shared
platform, and you eliminate the expense of
creating and maintaining the cloud infrastructure
for an internal private cloud. But you also lack
control to manage the infrastructure as you see fit.
It’s important to note that, whichever of these
options — or mix of options — that you deploy,
the end-user experience won’t change. The same
services are delivered in the same way to internal
customers across the organization, whether HR,
Finance, or Sales and Marketing. In the case
of the three cloud options, users probably will
consume the services as metered IT resources
flowing through a central “pipe,” unaware of the
type of cloud where those services originated.

68 // CIO Straight Talk Solution Spotlight // 69

 One of the biggest challenges cloud computing In making decisions about which applications Innovation in Cloud Computing
“What exactly is the ‘cloud?’ And what are presents to an IT professional is explaining to are ready to move to a cloud environment, and
non-IT senior executives both the cloud concept which kind, a company needs to consider four at HCL
we doing about it?” and the array of options available in developing variables: the application itself, the platforms on
HCL has made significant investments in proprietary tools and
which it runs, the infrastructure it currently utilizes,
Helping Your CFO Make Sense of a cloud strategy. The poster inserted into this
issue of CIO Straight Talk is meant to be a usable and the nature of the company’s own business
frameworks for helping companies develop a cloud computing
strategy. These include:
Cloud Computing tool for conversations prompted by questions organization and requirements. (See Figure 1 for
such as these. a list of some factors to consider in each of these
four areas.) Tool Area of Focus
Labeled “Envisioning Our Cloud Strategy,” the poster represents the sort of explanatory sketch you
HCL recently worked with a client, one
might draw at a whiteboard in talking to non-IT executives and helping them understand your cloud CRI, CEF, Cloud Readiness Index, Cloud Evaluation
of the world’s largest product development Migration++ Framework, Migration Assessment
options. It includes four areas that the company should consider in determining whether an element of
organizations, to help it through this process Framework
its IT landscape is a good candidate for migration to a cloud and, if so, to what kind of cloud.
and begin developing a cloud strategy. After an Automated, scoring-based frameworks for
And it includes a spectrum of cloud options indicating where certain elements typically fall. unsatisfactory experience with a consultant that evaluating a company’s cloud options: the
failed to see the technology implications for the pros and cons of different cloud platforms, the
Representations of sticky notes suggest that a useful discussion can develop around where, in the case
readiness of software applications to move to the
of your company, those elements should fall. company of migration to a cloud, the company
cloud, the cost of adopting cloud technology, the
sought out HCL. Using a proprietary migration effectiveness of migrations efforts
If the poster is missing from your copy of CIO Straight Talk, go to: assessment tool, HCL evaluated 300 applications
www.unstructure.org/straighttalk/cloudstrategyposter to download a poster. that the company was considering moving to the MTaaS™ — Cloud Management Solution
Microsoft Azure cloud platform. It categorized Managed Tools Integrated set of tools delivering application
the applications based on their suitability for as a Service monitoring, infrastructure monitoring,
infrastructure management, provisioning and
Developing Your Cloud Strategy in which the cloud environment is stable Azure and on how difficult it would be to move
service management capabilities. It is based
and the focus is on effectively managing them there. As a result, the company was able in
The process of developing and adopting a cloud on HCL’s IT Service Assurance Framework, in
operations. Ensuring guaranteed uptime and several weeks to pilot two applications on Azure,
computing strategy occurs in several stages: alignment with the standard ITIL® V3 framework
zero disruption can be challenging, given providing valuable information about the migration of operations management
1.  Explore. A company evaluates cloud that workloads and performance targets are of additional applications.
computing as part of its overall IT strategy, often split among multiple service providers. Nimbo™ Private Cloud Enablement Platform and Cloud
assessing applications, workloads and HCL has developed a model that helps a
The company also determines whether Gateway for Hybrid Cloud
environments to gauge their cloud readiness; company make an initial assessment about which Cloud enablement and orchestration platform
additional applications could migrate to a
decides on the appropriate deployment mix type of cloud or mix of cloud environments it that incorporates core modules (capacity
cloud environment and whether the mix
should consider. Based on assessments in the planning, load balancing, network and resource
between public and private clouds; designs between public and private clouds needs to
four areas shown in Figure 1, it establishes ranges management, disaster recovery) which govern, in
a target operating model; and prepares the be modified because of different IT needs an automated fashion, critical cloud computing
business case for cloud adoption. within which various elements of a company’s IT
and priorities. delivery parameters: SLA, high availability,
landscape should sit along a continuum that runs
2.  Experiment. An enterprise identifies elasticity, security and self-service
5.  Evolve. As the enterprise moves through from traditional on-premises IT to public cloud
easily realizable cloud opportunities — “low- complete cloud life cycles, it can assess computing. (See Figure 2.) It can help companies Agora™ Service Delivery Platform for Subscription-
hanging fruit” — that can make the business the effect on workload and on different with an initial assessment of what the mix of Based Services
case for cloud migration more appealing. applications and environments. It moves A comprehensive platform covering customer
their cloud computing strategy is likely to be —
Proof of concept and experiments are run toward more extensive adoption, including onboarding, subscription management, service
although an application or other IT element may
to validate cloud technology and help migrating true business applications and catalog, multi-tenancy management, billing,
migrate along the continuum, as circumstances
engender confidence among the business metering and chargeback
processes to the cloud. The business benefits and a company’s needs change.
and IT teams. and ROI of cloud investments are quantified.
Both the individual assessment criteria and Cirrus™ Tooling Platform for End-to-End Azure
3.  Adopt. The company begins implementing its Most companies are understandably still at the Management
the general placement of applications on the
cloud strategy, by creating an internal private stage in which they assess their readiness to Azure performance monitoring, storage
continuum can help IT executives explain the
cloud, migrating existing applications to an management, data migration and porting,
migrate elements of their operations to the cloud, options to others in the company. It may not help
external private cloud or a public cloud, or by data integration, deployment, provisioning
determine which of those elements are the initial them get their heads above the clouds, but it can and release management for Azure, Microsoft’s
building new applications on public clouds. candidates for migration, and target which types provide the clarity of vision needed to navigate cloud platform
4.  Run. The company moves toward a run state of clouds they should migrate to. inside them. //

70 // CIO Straight Talk Solution Spotlight // 71


What Lies
Ahead?
Three Outside Perspectives
on Tomorrow’s CIO
Much of this issue features the thinking of CIOs about current problems they face
and solutions they have devised to address those problems in a way that benefits the
business. Their insights are based on firsthand experience down in the trenches.
We wanted to close the issue with the perspectives of three nonpractitioners able to
offer a broad view of the changing CIO’s world, but from different viewpoints: seasoned
journalist, academic researcher and industry analyst. These observers are:
Maryfran Johnson, Editor-in-Chief of CIO magazine and events, a unique dual
role directing editorial content for CIO’s print publication as well as conference agenda
development, speaker recruitment and related editorial functions for the magazine’s
events. A frequent media commentator on the IT industry, she previously was Editor in
Chief of IDG's Computerworld magazine and Founding Editor of CIO Decisions magazine.
Jeanne W. Ross, Director and Principal Research Scientist at the MIT Sloan School’s
Center for Information Systems Research, where she lectures, conducts research and
directs executive education courses on IT management practices. Her research examines
organizational and performance implications of enterprise initiatives related to enterprise
architecture, IT governance, outsourcing and business agility.
Ellen Kitzis, until recently a Group Vice President and member of the CIO Research
Team at Gartner. Her 24 years of experience in the IT industry include time not only as
an analyst, researcher and consultant but also as a practitioner ­— she is a former VP for
Strategy, Service, and E-business at Compaq. She also is the co-author, with Marianne
Broadbent, of "The New CIO Leader" (Harvard Business Press, 2005).
You might call these short essays, summaries of interviews with the three women,
“straight talk” from the outside.
Managing the CIO in existing technologies, they live in a world where
Paradox
everything around them is changing ever more
rapidly. Smartphones, Android systems, cloud
computing, embedded devices, new security concerns,
Maryfran Johnson
social media — all of these were nearly impossible to
Editor-in-Chief, CIO Magazine
anticipate and even more difficult respond to.
Or take consumerization — something of a new
CIOs live in a world of paradoxes term that means the influence of social media and
that are only going to become more other things happening outside of the organization
difficult to manage. on a company’s technology. This kind of boundary
On the one hand, CIOs are hired blurring will have a big impact on business, and CIOs
as strategists, but on the other, they will have to adapt to the changes. Yet not all the
must spend most of their time on technology shifts coming from the outside will take
operational issues. They are considered root. Many of those that receive publicity and large
stewards of risk management and cost investments — think MySpace and Second Life —
containment, but they are expected to innovate. They will make a big splash and then recede from view.
run one of the most critical functions in a business, While dealing with such challenges, many CIOs
but they must constantly prove their value. They are are being given additional responsibilities. Because
often accountable for project success, but business of their experience managing outsourcing contracts
units have project ownership. Their organization is and relationships, negotiated agreements, and
viewed as a service provider, but they are told they infrastructure investments, they are being asked to
need to be a business driver. The list goes on. play a lead role in a variety of initiatives. In one of our
There’s another set of challenges: In my view, magazine’s recent surveys, 64 percent of CIOs said
CIOs have been given two scarlet letters. In Nathaniel they now have significant non-CIO responsibilities.
Hawthorne’s novel, "The Scarlet Letter," Hester The job of being CIO was never easy. But it
Prynne was forced to wear a letter “A” that marked typically involved periods of slow change punctuated
her as an adultress. CIOs are defined by not one but by rapid advances. In the past, there were safe moves
CIOs could make.
by two burdensome A’s: alignment and accelerate.
Everything the CIO does — everything, they are No longer. The CIO’s plate is full and growing
told — must be aligned with the business. CIOs hear even more so. The question becomes not “How
this constantly. And whatever they do, it must be should I manage IT?” but “How should I manage
constantly accelerating, the business changes must the paradoxes and the new responsibilities I face?” A
happen ever faster. The problem with these scarlet tough job is only going to get tougher. //
letters: Though the terms alignment and acceleration
are commonplace, no one really knows exactly what
they mean, if you think about it. So CIOs are judged
by standards that haven’t been adequately defined.
There are other growing challenges. Though
CIOs are being asked to conserve their investments
What Lies Ahead? // 73
 The IT Function's
Uncertain Future
Jeanne W. Ross
Director and Principal Research Scientist at the
MIT Sloan School's Center for Information Systems
Research
Although the corporate IT function
will surely play an important role in
tomorrow’s business organization, it
isn’t clear what that role will be.
As companies increasingly digitize
their operations and their products
and services, will IT’s job involve
identifying and implementing the
best technology for a new business process or product
offering? Or will it involve designing that process or
product? Research I’m currently involved in looks at
these questions.
It will come as no surprise to a CIO that we’re
finding IT may actually be better positioned than
business to design a new business process. Why? IT
often has a far better understanding of a process —
whether existing or proposed — than people on the
business side, because IT people see the entire process
from end to end and thus can wrap their minds
around the whole thing.
For example, many manufacturing companies
have focused on improving their order-to-cash
process. This requires streamlining activities — and
the handoffs between activities — starting with a
customer order, continuing through delivery of the
product or service, then billing for that product
or service, and finally recording payment. These
activities cross functional areas such as sales, finance
and distribution. In most cases, people in any given
function have a limited view of the activities in other
functions.
IT professionals also bring process knowledge
to situations that can benefit from reuse of process
74 // CIO Straight Talk
components. For example, in financial services, the
mechanics of opening an account are repeated across
multiple product offerings. Because IT people have
often delivered applications supporting the account-
opening process, they can take the lead in identifying
opportunities to reuse the process for a new product.
As for products, in a digital economy a growing
number of offerings are digital. Because IT people
know the technology, they can be instrumental in the
design of the product itself. This ability to take the lead
in both business process and product design means
that, after years of attempting to align IT with business
strategy, IT more often shapes business strategy.
At the same time, we’re finding that, while in
some companies or industries a CIO may take the
initiative to lead the business process design, in
others CIOs resist being pulled in. Even CIOs with
considerable clout in their companies will argue that
the business side should be pressured to learn how the
underlying technology can be leveraged. They believe
that IT needs to focus on delivering and supporting
the technology, that a partnership in which IT leads
technology innovation and business leads product and
process innovation provides a powerful combination.
One final point: Note that a business process
and the technology behind it are separate but
interdependent. For example, take a company that
wants to improve its competitive intelligence gathering
and analysis. Business people, with well-developed
analysis skills, may lead the way, pushing IT to come
up with the technology needed to collect raw data. Or
IT people could lead the way, creating a system that
generates data the business people aren’t yet able to
effectively use.
But IT can’t get too far ahead of its business
counterparts. Whatever the potential value of a
cutting-edge technology, it won’t be realized if the
business doesn’t have the capabilities to take advantage
of the output it generates. And, as every CIO knows,
business people hate spending money on an IT project
that can’t show a positive return on investment — even
if that failure rests with business folks. //
The Role of the
Transformative CIO
Ellen Kitzis
Former Group Vice President, Gartner
Co-author, "The New CIO Leader"
In the short term future, CIOs have
to contend with what everyone else is
contending with – reduced spending
due to the economic slowdown,
which has not yet abated in many
areas of the world. But while reduced
spending impacts other parts of the
organization, it’s particularly difficult
for CIOs, who can’t just wind down programs or
curtail projects. You can’t just start and stop an IT
initiative. Once you set down a certain path, you have
to complete it. But the fact is, CIOs will have to deal
with this situation until the environment changes,
and one way CIOs will be doing that will be by
investing in smaller projects.
In the longer term, the best CIOs will resume
their transformational roles. I characterize CIOs
by what I call my 30-60-10 rule. Thirty percent of
CIOs are transformative; 60 percent are capable,
operationally oriented; and 10 percent don’t have a
clue.
But let’s talk about the 30 percent of CIOs
who are transformative. These CIOs are the ones
the CEOs brag about when talking about how the
company leapfrogged the competition. And they’re
going to be even more crucial to business success in
the future — at least in businesses where their talents
are understood and appreciated.
I always can tell this type of CIO within the first
few minutes of meeting them. They talk business,
they don’t talk technology. They talk about what
IT can do to transform the customer experience. If
they work in an airline, they think really hard about
how to use IT to lower ticket prices because they
understand that’s the key to their company’s health.
If they work in mining, they really pay a lot of
attention about how to use IT to increase the speed
of ore extraction. Their goal is to fully embed IT in
the business model, and to do that they need to build
teams and create levers that trigger the growth in the
enterprise. These transformative CIOs don’t fuss
about lowering costs by 2 percent or 3 percent. They
want to optimize the organization as a whole.
In my experience, transformative CIOs are the
ones who really understand where the organization is
going. And while others are waiting for a seat at the
strategy table, these CIOs already have it.
In many ways, transformative CIOs are the
mirror image of the CEO. They understand that they
need to have a vision, same as the CEO, that they
need to build teams with the right mix of talent, same
as the CEO. They understand this means they have to
have people with a variety of functions on their team,
like finance and marketing. They also understand
they must think across the entire organization and
that to get things done inside an organization they
need to get people on board beyond their own group.
Transformative CIOs are also capable of dealing with
multiple work streams, like the CEO. When I was at
Gartner, we called these “Type A” CIOs.
But in the end, CIOs are part of their
organization and its culture. If it’s a risk-averse
culture, that’s the type of CIO who will succeed,
however much a transformational perspective might
benefit the business. If it’s an innovative culture, that’s
the type of CIO who will make it. In the end, it takes
a village to define a CIO. //
What Lies Ahead? // 75
 15 Questions
A checklist of things to consider as you
begin your annual IT planning
Every CIO knows the challenge of trying to meet
three different goals when considering investments
and initiatives for the coming year: 1) reduce IT
costs, 2) improve operational efficiencies and, most
ambitiously, 3) leverage IT to create new business
capabilities — capabilities that may ultimately
transform the entire business. (See "How To Pitch
Your Transformation Plan," p.61.)
But before you think transformation, be sure
Appendix:
you have extracted the most from your existing IT
systems. After all, the monetary benefits of reducing
costs and improving IT efficiency can help you fund
your big transformation initiatives.
15 Questions So it makes sense to begin the annual planning
and budgeting process by asking yourself these 15
questions. They will help you identify relatively
A checklist of things to modest initiatives that will not only reduce your costs
but have a positive impact on the business.
consider as you begin your
Putting the Questions in Context
annual IT planning It is important to understand the implications of
“less is more” in the context of your organization’s IT
costs. Recall that IT accounts for only 3 to 4 percent
of your organization’s revenues. Thus, IT cost cutting
simply for the sake of cost cutting is a bad idea; it
won’t have much of an impact on the bottom line,
while it risks undermining what firms around the
globe increasingly see as the source of sustainable
competitive advantage.
Indiscriminately slashing IT costs can be
devastating and can even result in an operational
collapse — which would be tragic, given the modest
impact of such cost saving on the overall business.
Instead, through intelligent and informed
consolidation, rationalization and optimization of
IT investments, you can achieve significant benefits
76 // CIO Straight Talk
while at the same time reducing costs — benefits such
as improved efficiency and productivity, lower risk,
better operational visibility and enhanced customer
satisfaction.
The cost savings achievable through such
initiatives can be estimated in advance, by breaking
down IT costs into six buckets and determining
the percentage of overall IT costs that each of these
buckets represents. Although the percentages will vary
from industry to industry and company to company,
a typical breakdown might be:
Construction & Testing – 23%
Architecture & Design – 3%
Applications & Infrastructure Provisioning – 13%
Outsourcing – 10%
Application Operations & Support –
Infrastructure Operations –
35%
16%
Total – 100%
(Source: HCL research wing)
We’ll use this breakdown in calculating the cost
benefits of the first 11 initiatives described below.
Most of the 15 questions — and the initiatives that
follow from them — are designed to reduce costs
in one or more areas of the IT cost buckets. Those
costs may be mandatory ("run-the-business costs") or
discretionary ("change-the-business costs"). The last
four questions involve the reduction of business costs
— that is, non-IT operating expenses.
The initiatives are drawn from what HCL calls
the “CIO Cost-Out Kit.” For each one described
here, we list the HCL “idea owner” of the initiative.
Appendix // 77
 1.  Can I make my production support more
business-aligned?
Initiative Optimize Your Production Support by Target
Operating Model
Cost Bucket Application Operations & Support
Applicability If your firm has decentralized application
development teams or seeks a service line-based,
business-driven approach to production support.
What It Transforming your production support to a
Involves service line-based, business-driven approach for
customer management in a shared services model.
This is done by adopting industry best practices
and a framework for delivering high quality IT
services that are measurable, proactive, predictable,
repeatable and cost effective.
Benefits •  Improved first call resolution
•  Reduced mean time-to-repair/resolution
•  Increased resolution within service levels and
reduced recurring incidents
•  Cost benefits: an estimated 20 percent of cost
savings over the original expense is achievable
in the near-term and up to 40 percent over
a period of time with the maturity of the
operating model.
HCL Idea VV Apparao (Apparao.vv@hcl.com);
Owners CS Muralidhar (CS.Muralidhar@hcl.com)
3.  How can I build error-free operation into
my systems?
Initiative Instill “First-Time-Right” IT Management
Philosophy
Cost Bucket Infra-Operations; Application Operations &
Support
Applicability If your firm has decentralized service line teams
providing application support across various
business domains.
What It Addressing cost, problem-resolution times and
Involves customer satisfaction through close process
conformity, knowledge management tools that
capture IT process and business knowledge,
improved tech staff productivity and proactive
defect prevention.
78 // CIO Straight Talk
2.  How can I improve IT response time for critical
business transactions?
Initiative Consolidate your IT Operations (Integrated
Operations and Management Center)
Cost Bucket Infra-Operations; Application Operations &
Support
Applicability If your firm has disaggregated IT support teams
in multiple service centers across applications and
infrastructure, geographies. Also, if your firm has
inconsistent IT support processes and tools.
What It Simultaneous improvement of IT response time
Involves by monitoring response time of a critical business
transaction and drilling down to the application
and its infrastructure components. Forming a
common team for the first level of support for the
application and its infrastructure.
Benefits •  Lessened downtime for operations; increased
speed of resolution
•  Reduced risk; increased real-time monitoring
capability
•  Cost savings: an estimated 15 percent of
cost savings over the original expense base
is achievable in the near term and up to 30
percent over a period of time with the maturity
of the target operating model.
HCL Idea Mohit Mathur (Mohit.Mathur@hcl.com)
Owner
Benefits •  Early error avoidance in the life cycle; preventive
maintenance of both applications and
infrastructure
•  Proper production fencing that improves
integrity of the IT system
•  Reduced cost of operations by eliminating
incidents and redirecting IT workforce to
prevent rather than cure; improved customer
satisfaction due to customer-centric approach
toward service delivery
HCL Idea Ramalakshmanan Subbiah Pillai
Owner (RamlaxmanS@hcl.com)
4.  Should I rethink my outsourcing strategy?
Initiative Optimize Your Outsourcing Mix
Cost Bucket Outsourcing
Applicability If your firm contracts services through higher
on-site, higher-cost location teams, and if your
firm has had low job rotation or has not mapped
services with roles and experience, resulting in
increased cost per service over time.
What It Reorganizing your onsite-offshore mix and
Involves resource skill set across outsourced services
requires a scientific assessment of your complete
service portfolio to identify services that are
deployed from onsite, higher-cost locations with
a suboptimal resource mix. After identifying
potential areas of improvement, define a roadmap
to leverage low-cost sourcing locations and a
role-deskilling technique to arrive at an optimized
resource mix that will deliver the same level and
quality of service as had been available before.
Benefits •  Increased budget predictability as you
move from a time-and-material model to a
fixed-price model
•  Increased service specialization will get the right
people for the right jobs
•  Better overall quality of available software by
using best practices
•  Services are rationalized and consolidated, based
on commonality and delivery through a shared-
services model.
HCL Idea Dharmender Kapoor (DharmenderK@hcl.com);
Owners Rupak Rathore (Rupak.Rathore@hcl.com)
1
Elapsed time is the total time taken to execute a task. This takes into account
not only the CPU processing time but also time spent in waiting for I/O (disk
IO or network IO). Since I/O operations, such as reading files from disk, are
performed by the OS, these operations may involve noticeable amount of
time in waiting for I/O subsystems to complete their operations. This waiting
time will be included in the elapsed time, but not CPU time. Hence CPU
time is usually less than the elapsed time.
5.  Can I optimize performance of legacy systems to
lower total cost of operations (TCO)?
Initiative Optimize Performance of Legacy Mainframe
Applications
Cost Bucket Applications & Infra-Provisioning; Applications
Operations & Support; Infra-Operations
Applicability If your firm has core legacy applications
running on IBM mainframes with MVS, OS390
and z/OS operating systems and is incurring
workload licensing charges (WLC) for IBM
mainframe hardware and software. Also, if
your firm faces challenges with user experience,
maintainability, batch windows, response time or
technology obsolescence.
What It Legacy system runtime parameters, job
Involves parameters, scheduling, the nature of various
interfaces and jobs, file parameters and access,
storage access and database queries/access paths
­— all warrant significant optimization. These and
other runtime characteristics that determine the
cost/performance drivers such as CPU utilization,
I/O delays, high elapsed time1 and more also
have a direct impact on optimizing performance.
Leveraging HCL’s proprietary framework for
Workload Rationalization helps in deferring CPU
upgrades, improving online response time and
delivering an application that performs to service-
level agreements (SLAs) while minimizing the
application’s running costs.
Benefits •  Reduced total cost of operations (TCO) via
savings from reduced operational costs and
associated licensing charges
•  Reduced technology risk and improved
maintainability
•  Enhanced asset longevity through technology
enhancement and renewal
•  Optimized performance
•  SLA improvements; enhanced customer
satisfaction through optimized performance;
increased SLA compliance and higher levels of
user confidence
Appendix // 79
 6.  How can I bring predictability into my operations
both in terms of cost and service quality?
Initiative Deploy Managed Application Services
Cost Bucket Construction & Testing; Outsourcing;
Applications Operations & Support
Applicability If your IT organization has one or more of
the following:
•  Significant portion of application services
outsourced in staff augmentation mode
•  Inadequate formal SLAs and key
performance indicators (KPIs) and/or SLA
compliance process
•  The wish to move from a “capacity-based”
sourcing model to an “outcome-based”
sourcing model
•  A need for continuous improvement during an
outsourced engagement journey
•  High costs for quality
•  Budget overruns; not getting enough “bang for
the buck”
What It “Managed services” can be defined generically
Involves as a vendor’s running one or more services for
a customer in such a way that the vendor is
responsible for meeting the agreed outcome
(measured as SLAs and KPIs) for a fixed price.
Certain components of managed services (typically
in the application development scenario) may
be variable in nature and may be priced using an
hourly rate card. The service is managed by the
vendor proactively, with minimal management
overhead for the customer. The service may deal
with applications or infrastructure, or both.
Benefits •  Can achieve predictable service levels at
foreseeable cost for application support
•  Customer gains access to best-of-breed tools at a
reduced cost
•  Frees up management bandwidth so the
company can focus on its core business
•  Gains in quality, innovation and continuous
improvement through a process approach
HCL Idea Mukund Garg (Mukund.Garg@hcl.com)
Owner
80 // CIO Straight Talk
7.  How can I make my application development
process more efficient?
Initiative Assemble an Application Development Factory
Cost Bucket Architecture & Design; Construction & Testing
Applicability If your firm has low application development
productivity, with major spending on software
development projects; also, if application
development projects suffer from cost and
schedule overruns by 50 percent or more.
What It The development factory divides the software
Involves development cycle into a requirements
department, design department, construction
department and testing department at an
organizational level. The concept implies that a
piece of development work passes through the
assembly line from one department to another.
The work in these departments is managed by
the individual department managers, and the
employees in each are skilled at performing the
tasks required by their respective departments.
The entry and exit criteria are well defined for
every piece of work to be serviced by
a department.
Benefits •  Better application quality, with each
process component managed by the right-
skilled employees
•  Increased predictability of outcome, with a
uniform set of tools, processes and standards
applied across the development cycle
•  Reduced time to market; minimized risk of cost
and schedule overruns; enhanced productivity
and quality for application development
HCL Idea Annie Abraham (Annie.Abraham@hcl.com);
Owners Sandya Gopal (Sandya.Gopal@hcl.com)
8.  Do I need to rethink my application portfolio?
Initiative Rationalize an Application Portfolio
Cost Bucket Application Operations and Support
Applicability If your organization has large and opaque
application portfolios; also, if you believe you
can decommission at least 20 percent of your
applications and yet support business effectively,
or if you have acquired duplicate systems as a
result of mergers and acquisitions (M&As).
What It A structured enterprise application management
Involves methodology, Application Portfolio Optimization
(APO) does away with a piecemeal approach
toward application maintenance by providing
a comprehensive assessment of the health and
utility of all applications. The recommendations
and decisions might vary: technology migration,
application consolidation, retirement,
enhancement, modernization or outsourcing.
Benefits •  Better visibility and application quality
as a result of continuous application
health assessment
•  Cost reduction through optimized
resource utilization, lower license fees,
lower cost of platforms
•  Productivity improvements through
standardization, modernization
and consolidation
•  Lower operational risk and higher stability
HCL Idea Arup Vithal (AVithal@hcl.com);
Owners Neeraj Kaushlendra (Kaushlendra.N@hcl.com)
9.  How can I better govern my IT projects?
Initiative Prioritize using Project Portfolio Management
(PPM)
Cost Bucket Construction and Testing; Applications and
Infrastructure Provisioning
Applicability If your organization has invested in multiple, large
and complex projects and you are experiencing
delays, budget overruns and resource crunches.
Also, if you are looking for processes to
synchronize demand with capacity to make the
best possible use of budget and resources.
What It A tools-enabled IT governance mechanism
Involves that gives business and IT decision makers the
ability to align their resource investments and
initiatives with business goals by doing an in-
depth assessment of projects and products based
on factors such as business utility, return on
investment (ROI), business impact, costs, etc. Key
techniques include:
•  Setting up a knowledge repository of demand
evaluation and project execution methods
•  Assessing change requests to minimize ad
hoc requirements
•  Realigning existing processes to agree with
best practices
Benefits •  Achieve positive ROI in year 1; recoup more
than 5 percent of annual IT budget after year
1; overall reduced project delays save at least 10
percent of project budget.
•  Improved annual average of project timelines;
reduced IT management time spent on
reporting project status
HCL Idea Samir Kapoor (SamirK@hcl.com)
Owner
Appendix // 81
 10.  How can I improve the scalability of
testing platforms?
Initiative Set Up a Test Factory
Cost Bucket Construction and Testing; Application Operations
& Support; Architecture and Design
Applicability If your IT organization has cost of quality (cost
of review, inspection, testing and any rework) in
excess of 11 percent of your total IT spending; if
your organization lacks visibility into testing tools
and licenses usage that runs in zero-error-tolerance
mode because the operations are critical.
What It A scalable, on-demand service platform that
Involves provides a one-stop shop for testing services. The
services are launched using a target operating
model and are governed by detailed workflows
on service initiation, transition, onboarding and
implementation. The services are also tracked and
monitored through a program dashboard. Some of
the techniques deployed are:
•  Analyzing root cause and incidence mapped to
the test life cycle
•  Maximizing automation of regression and
enhancing test coverage
•  Increasing test case reusability and effective use
of test tools and frameworks
•  De-skilling resources and standardizing the
communications framework
•  Upgrading and rationalizing testing tools
cost-effectively
Benefits •  Accelerated testing as a result of segregating the
lines of services across all testing types of the IT
organization
•  Testing-cycle time reduced by 10 to 15 percent
through process standardization and reuse
•  Increased team utilization through effective
demand management
•  Lower cost of quality
HCL Idea Manas Chakraborty
Owner (Manas.Chakraborty@hcl.com)
82 // CIO Straight Talk
11.  Do I need to review my approach to
data management?
Initiative Reduce Enterprise Data Management Cost
Cost Bucket Application & Infra-Provisioning; Application
Operations & Support; Infra-Operations;
Architecture & Design
Applicability If your firm has large, diverse and disparate IT
landscapes, or if you are seeking to optimize your
systems to attain a holistic view of the data. Also if
your firm has grown inorganically through mergers
and acquisitions (M&A's).
What It Assesses enterprisewide data management costs
Involves across the various components of the data life cycle
— acquisition, data storage, data management
patterns, data delivery and archiving. The
key techniques to drive cost savings consist of
implementing or adopting:
•  An enterprise view of the data
•  Data as a service (DaaS) by means of service-
oriented architecture (SOA), data virtualization
•  Best-in-class master data management solutions
•  Storage management practices based on
information life-cycle management (ILM)
•  Governance, risk and compliance (GRC)
frameworks for data privacy and security
•  A holistic and business-centric view of
data management
Benefits •  Reduced costs of managing data and better
visibility into enterprisewide data
•  A common understanding of data between
business and IT helps expedite application
development and ease maintenance
•  Consistency in use of data results in improved
operational and regulatory compliance
•  Common data models facilitate enterprise
integration and support SOA and business
process management (BPM)
HCL Idea Jayashree Govindarajan (JayashreeG@hcl.com);
Owners Kandasamy Ramanujam
(Kandasamy.Ramanujam@hcl.com);
Rajesh Agrawal Ramesh (rajeshramesh@hcl.com)
12.  What opportunities are there for
process improvement?
Initiative Deploy "Pathfinder" Business Process Maps
Applicability If your firm is implementing business process
re-engineering, seeking business-IT alignment or
undergoing M&A’s or restructurings.
What It Pathfinder is a cross-referenced catalog of industry-
Involves specific business processes, including associated
measurement parameters, best practices, industry
trends and operational benchmarks. Built from
our experience of working with Fortune 500
clients, it is deployed to provide holistic visibility
and remedial recommendations to the CIO /
COO on information workflows of the enterprise.
Benefits •  An understanding of business processes
helps expedite deployment of a business
process reengineering initiative and improves
documentation of business processes
HCL Idea Jayashree Govindarajan (JayashreeG@hcl.com);
Owners Deepti Mittal (Deepti.Mittal@hcl.com)
13.  How can I better manage content across
the enterprise?
Initiative Consolidate Enterprise Content Management
(ECM)
Applicability If your organization incurs licensing costs
on different ECM product suites across the
organization; if your business is driven by a unified
content view from various content sources, or
guided by adherence to regulatory compliance and
document standards (such as pharmaceutical,
for example).
What It The Enterprise Content Consolidation (ECC)
Involves framework with well-defined processes and tools
helps consolidate unstructured content into a
single enterprisewide repository. Some of the key
techniques are:
•  Identify and analyze content touch points
within the enterprise
•  Design a unified content architecture with
optimized platform license usage
•  Content platform rationalization – MS
SharePoint, open source, if applicable
Benefits •  Cost: depending on the engagement area,
complexity of business processes and the
existing content management landscape,
benefits can range from 3 to 7 percent savings
on the applicable cost base for the first year, and
between 20 to 30 percent in two to three years,
based on the total budget outlay for ECM.
•  Increased business volumes through
reduction in cycle times and instant access to
the right content
•  Reduced business risk through adherence to
records-management norms
HCL Idea Deepak Mehta (DMehta@hcl.com)
Owner
Appendix // 83
 14.  How do I keep tabs on my procurement
spending?
Initiative Outsource the Indirect Material Spending
Management Process
Applicability If your organization has a global presence and
decentralized sourcing functions; also, if you need
visibility into spending for strategic initiatives or
want to deliver value through strategic sourcing.
What It An extract, transform and load (ETL) tool enables
Involves extraction of all spending data from internal
and external business functions. The data items
are then automatically cleansed, classified and
deduplicated through a Web-enabled spending
analysis tool and also classified according to
globally accepted standards such as the United
Nations Standard Products and Services Code
(UNSPSC) and Standard Industrial Classifications
(SIC). Based on queries, reports are generated
at the end-user level and shipped to vendors,
preferred suppliers and procurement divisions to
gain visibility into their spending.
Benefits •  7 percent assured savings on the indirect
materials procurement process
•  Ability to view accurate spending information
at the aggregate and line-item level
•  Ability to rapidly identify time-sensitive
savings opportunities
•  Enhanced capability for financial and business
reporting and analysis
•  Duplicate suppliers can be removed
•  Excess stocks can be cut; inventory costs can be
lowered and expediting costs reduced
HCL Idea Srivathsan Sridharan
Owner (Srivathsan.Sridharan@hcl.com)
84 // CIO Straight Talk
15.  Is there room for improvement in my
printing infrastructure?
Initiative Use Managed Print Services
Applicability If your organization is a medium to large
organization with heterogeneous printing
infrastructure and output environment; also, if
you have an aging fleet of printing devices with
little visibility into the cost of hardware, software
and supplies.
What It HCL Xerox Managed Print Services (MPS)
Involves provides a fully integrated enterprise print
strategy with managed services consistent with the
customer’s desktop environment. MPS captures
user requirements and reconfigures the client’s
printer, copier, fax and scanning infrastructure to
be more efficient and cost effective. The output
environment is optimized for accelerated problem
resolution and measurable service improvements.
Generally, the hardware is either owned by
the external service providers or leased from a
financing company in the name of the customer.
The customer usually pays a monthly or quarterly
fee, based on a cost per page or cost per seat,
which is agreed upon when negotiating
the contract.
Benefits •  Utility-based pricing using a per-click or per-
seat model
•  Savings on capital expenditures, since the
hardware infrastructure is either leased out or
taken over by the service provider
•  Reduction in power, paper and consumables
•  Savings on maintenance (total support and
maintenance provided by the third party)
HCL Idea Vandit Dixit (VanditD@hcl.com);
Owners Sidharth Mukherjee (SidharthM@hcl.com)