SILICON VILLAGE

Friday, October 17, 2008

A ‘prolonged’ recession would impact IT industry

The on-going recession would mean several quarters of declines in IT purchases…Software and IT services vendors will start to feel the pinch.

Forrester Research, an independent research firm has outlined an IT spending scenario for a long and deep recession for technology companies. According to this latest Forrester scenario, “A prolonged recession would mean several quarters of declines in IT purchases, not just two or three quarters with little or no growth in late 2008 and first half 2009.” This is the first time Forrester has outlined the possibility that the economic crisis could spark a short-term contraction in IT spending as opposed to a slowdown in growth.

The latest Forrester report offering this scenario - What The Financial Crisis Means To The Tech Market, by Andrew Bartels (VP & Principal Analyst, Forrester Research), states that on a full year 2009 basis, a sustained recession could lead to annual US IT spending growth of 2-3% and global IT spending growth of 3-4%. Says Bartels, “This is just a scenario as an acute financial crisis has hit not only the US but also countries in Europe and Asia.”

In his Sept’08 review of the US IT market, Bartels had predicted a distinct slowdown in growth for US business and government purchases of technology goods and services due to an assumed recession starting in the third quarter. Elaborates Bartels, “We continue to estimate global IT spending growth in 2009 being 7-8%, and we are still sticking to our forecast of a sharp decline in growth – instead of a contraction – for US tech purchases. Why? Our tech market forecast already presumes the recession that is actually happening… Still, with the financial crisis now spreading around the world, risks have grown that the US and other major countries will experience a longer and deeper recession than we had expected.

This scenario will help technology vendors to be prepared, and to mould their strategy, according to the economic environment.” He further adds, “The Software and IT services vendors will anyways – with or without the said scenario – start to feel the pain though sales of these products and services have so far avoided much slowdown in 2008. They will be hit hard in the next three quarters. Still, "hit hard" is relative — vendors in these categories will have on average 3% to 5% growth instead of the 9% to 12% growth they've seen earlier in 2008.” Stating that the rules for technology vendors’ success have changed, Bartels recommends, especially to the US based vendors, to refocus on the US market as it (US market) is likely to recover from a global slowdown sooner and stronger than other markets.

India's EDA industry growing at 30pc annually

Globally, India is amongst the fastest growing markets for EDA tools, along with USA and China. With the EDA market growing here at about 30 percent annually, Hewlett Packard, a leading EDA high performance computing platform solutions provider, is targeting the fast growing chip design centers in India.
On this occasion of the HP Intel Asia-Pacific EDA seminar, Brain Lowe, Alliance Marketing Manager of HP (Cupertino) with Faisal M. Paul, Country Manager (India) – HPC & OSLO of HP (India), spoke to Manu Sharma of CIOL Bureau the on various aspects of the EDA industry. Excerpts:

CIOL: What is EDA and what is its importance?
Brian Lowe:
Electronic Design Automation (EDA) is the category of tools for designing and producing electronic systems ranging from printed circuit boards (PCBs) to integrated circuits (ICs). This is sometimes referred to as ECAD (electronic computer-aided design) or just CAD.
EDA is specifically for electronics, and concentrates on EDA used for designing integrated circuits. As chips grow larger and become more complex to design EDA becomes much more important at semiconductor companies.

CIOL: What are the trends in EDA?
BL
: EDA computing complexity and very complex chip designs put heavy demands on computing resources such as CPU MIPS and memory. In addition, there is a need for reliable, scalable storage because of the huge chip design database.
There is also a need for setting up data centers and global grid that allow designers to tap into compute servers worldwide. This will allow the compute infrastructure to utilized very efficiently. Besides, this allows the designers and the company to scale the compute resources during various phases of a project.
There is also need to optimize data center design such as power, cooling, floor space, etc., and HP's HPC clustering technologies and blades fit the bill.

CIOL: What is HP's role in the EDA industry?
BL
: Electronic product development organizations are constantly challenged to deliver advanced technology to market in less time. HP's focuses on inventiveness creates innovative high-performance technical computing solutions that allow design teams to maximize their EDA productivity.
HP has architected their technical computing solutions to make large memory capacity affordable. This allows engineers to synthesize and simulate larger sections of their designs, thereby maximizing designer productivity.

CIOL: Who is HP targeting in India and why?
Faisal M. Paul: HP provides leadership and innovation in high-performance computing (HPC) solutions for customer EDA design environments. For HP, India is among the fastest growing markets with many chip design firms setting up units in India. We are growing here at 30 percent at par with the USA and China.
HP partners with leading EDA software vendors to leverage HP's internal EDA design expertise and provide direction to HP R&D product groups.

CIOL: What does HP feel about the growing chip design industry in India?
FP:
Chips have automated our lives with gizmos and designing this has been a good business proposition for Indian technology firms.
Without any hesitation, we can say that we are among the largest system integration vendors for EDA across the globe. We offer a broad range of Linux-based systems – workstations, servers and blades, together with leading edge IT data center solutions for the design environment.

CIOL: What is HP's innovation in EDA?
BL
: As one of the world's largest electronic, R&D, design and manufacturing companies, HP has found innovative ways to employ technologies to address the pressures found in EDA design environments.
In fact, HP was one of the first computer vendors to embrace Linux as a practical and cost-effective alternative to proprietary solutions, including support for a myriad of EDA applications, across a wide range of platforms and flexible clustering solutions.

CIOL: Where does HP's C-class blade role come in?
BL:
The HP BladeSystem c-Class enclosure is said to feature the world's fastest midplane at 5TBps of aggregate throughput and the first midplane to support 4X DDR InfiniBand, the industry's fastest blade server interconnect, which delivers up to 20GBps bandwidth in each direction especially meant for high performance computing for the chip design companies.

CIOL: Where does HP stand in the blade industry today?
BL:
Following the introduction of HP C Class blade for high-performance computing during the third quarter of 2006, HP has outperformed all competitors with 85 percent growth. We are at the No. 1 position according to IDC Server tracker in Q4- 2006 in x86 Blades report, followed by IBM and Dell.

CIOL: How does the chip design automation in India look like?
FP: The Indian product market has already crossed the $1 billion mark. The chip automated our lives with electronic gizmos and has been a good business proposition for Indian technology firms. Now, we are moving towards the next step, designing tools that automate the chip designing process itself.
This growth is likely to accelerate with more players entering the fray in the coming years as electronics consumption goes up significantly.
At present, there are about seven major EDA companies, both multinational and Indian, operating in the country. Cadence, Mentor Graphics, Magma, Synopsys, Circuit Sutra, Sequence Design and SoftJin are all reporting growth. The India Semiconductor Association (ISA) expects more domestic players to start providing EDA tools to chip designers.

Embrace the right technologies

Putting your neck out, betting and embracing the right technologies to create a differentiator is one of the major challenges that R. Muralidharan, Chief Information Officer (CIO) of Syntel India is facing. In a interview with Manu Sharma of CIOL Bureau, he shares his views of his achievements as a CIO and also on what he wishes to hear from vendors during the next fiscal. Excerpts:

CIOL: What are the major challenges faced by a CIO?
R. Muralidharan
: The major challenges faced by the CIO today revolves around
* Reduction in total cost of ownership of running IT
* Ensuring that IT is always driving business value and consistently being perceived as a business enabler.
* Putting his neck out, betting and embracing the right technologies to create a differentiator.

CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
RM
: Yes. Syntel does link IT budget with the company's performance /growth. The total IT spend is typically pegged as a percentage of revenue.

CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
RM
: There have been quite a few major areas of focus for IT over the last two years in my stint as the CIO of Syntel. There have been significant achievements across not just implementation of technologies but the entire aspect of effective deployment of people, process and technology all aimed towards the goal of being valued as a true business enabler. The areas of significant achievements cuts across all areas of infrastructure such as network, storage, systems/servers, security, telecom all supporting critical internal business applications and connectivity needed for providing services to its global customers. Apart from focus on investments in technologies, there has been a significant focus on processes and people competency development all aligned to delivering value to customers.

CIOL: Going forward, what are the challenges which you foresee?
RM
: The challenges of the future envisaged revolves around more and more Green IT initiatives thus enabling significant environmental benefits apart from providing a lower cost of ownership for running IT in the organization. The other challenge revolves around betting on the right technologies for the future which will deliver the maximum benefit to the organization.

CIOL: How far have you come as regards adopting 'Green IT technologies'?
RM
: Green IT initiative is a moving target and Syntel is investing significantly on ensuring the all the campuses being built to support the growth is enabled using Green It technologies. On a parallel front, there is a large effort on driving investments in terms of time and processes to ensure that Green IT initiatives are inculcated across the organization thus focusing on reducing carbon foot print.

CIOL: What will be the IT budget for the new fiscal year/ What is the growth rate over last year?
RM
: Syntel has been consistently growing at around 25-30 percent and hence the IT budget has also been growing to meet these needs of the growth. Apart from the growth of the operating budget, there is also significant amount of investment being done in investing on cutting edge technologies in its campuses.

CIOL: Name the top 5 items that you expect to spent on this fiscal year?
RM
: The top five areas of spend is expected to be in the areas of:
* Build out of campuses to support growth
* Business productivity applications
* Security and Compliance
* Network Optimization
* Virtualization

CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
RM
: IT being typically treated as a cost center, it is extremely important that any investment made in IT should be measured by evaluating as to how it has lowered the total cost of ownership to business. As an IT company that is growing, it is not possible to lower the absolute amount of investment. Hence the yardstick for measurement is to primarily focus on reducing the unit cost of providing IT services to the employees of the organization. We have been able to successfully demonstrate this across all domains. The business value delivered in terms of contribution to the bottom line has been apt so far.

CIOL: How big is the IT staff in your organization?
RM
: The total IT organization size globally inclusive of outsourced staff is around 160. This team supports the various business entities within the group engaged in the business of IT services and KPO.

CIOL: As a global company how are you networked all the centres?
RM
: All the global delivery and sales offices are networked using multiple technologies such as ATM, MPLS, Frame Relay and IPsec VPN's over the Internet cloud. The core network is built over Nortel Passport WAN switches that support data, voice over IP and video traffic. This backbone enables us to seamlessly integrate into our customer networks securely while at the same time providing scalability and high availability to meet varied requirements at an optimum cost.

CIOL: Is it difficult to gets adequate funds for IT implementations?
RM
: The biggest challenge for CIO's for getting funds for new IT implementations is to continuously work on reducing operating expenses as a percentage of the total budget for keeping lights ON and meet business expectations of IT availability. It is always a moving target as every CIO would like to get the maximum funds diverted for new implementations.

CIOL: What part of IT implementations plays a more prominent role? Software or hardware or networking? Why?
RM
: IT needs to be viewed as a tool and not the end. Hence no individual component whether it is hardware, software or networking is individually more or less important. What business gets in a highly mobile environment in today's context is a function of achievements across all these domains to enhance the user experience level.

CIOL: The success or failure of an IT deployment should be attributed to whom, the CIO or the vendor, or is it a collaborative accountability?
RM
: Though any CIO would like to always have a joint accountability or would like to blame it on the vendor to cover up for failure, I firmly believe that it is always the CIO's accountability for the success or failure of an IT deployment. One can't have a situation where the CIO is complemented for success but the stick is on a collaborative accountability or put on the vendor. The CIO is in the best situation to know what fits his business the most and also the prerogative to choose the vendor and partner most suited to be successful for his business environment.
CIOL: What percentage do you outsource a portion of your IT project?RM: To a large extent possible, Syntel works in developing and implementing core technology components internally. What is typically outsourced for BAU support is low end hardware support activities. For any IT project under implementation, Syntel works very closely with its vendor partners to ensure that an optimum solution is implemented while ensuring that internal skills are developed. This helps us leverage our experience in these domains to deliver value and thought leadership to our clients while delivering IT and infrastructure services. CIOL: Has the nature and pattern of IT adoption become more sophisticated? If yes, to what extent?RM: IT has become an integrated tool as every aspect of business relies on IT. To this extent the dependency on IT by the various stakeholders and users has become very high. Some of the complexities or sophistication arises out of the diversified business needs and this coupled with the plethora of vendors providing various technology options. The sophistication of diverse user requirements is translated into sophistication in the need for integration of various technologies to deliver business value to the end user and business. This is making the task more and more difficult for the IT organization in terms of timely delivery of integrated solutions matching the pace of the need by the business.

CIOL: Are some enterprises under the myth that modernization processes such as automation and IT deployment can take place only in large enterprises? Elaborate.
RM
: Yes. Today IT is all-prevalent and an enabler for growth. Investment in the right technologies for small and medium enterprises will help them be well prepared for scale up and growth. CIOL: As a CIO what would you wish to hear from vendors during the next fiscal?RM: One of the biggest challenges hearing from vendors is always the gap between what then can deliver vis-à-vis what they actually deliver. Secondly, there are a lot of exciting technologies in the areas of virtualization, unified communication etc. which is going to key investment areas. Key areas that I would like to hear from vendors is factual information of what they can deliver which will really help in reduce the time spent on POC's and implementing thus enabling a faster return on investment and maximizing business benefit.

CIOL: With so many vendors pushing their products, how are you able to distinguish what really works in your organization?
RM
: We have a very elaborate and rigorous evaluation methodology when it comes to embracing any new technology and product. One of the key aspects of product selection focuses on relevance and adaptability to our work environment and we have been able to do a decent job so far.

CIOL: So many IT products fail after being implemented Why?
RM
: There a lot of elements that needs to be addressed for a successful IT implementation. Beyond just simply what the product can do which can be addressed using a one time good evaluation process, there are areas of continuous investments in the right processes and people competency development that needs to be done to sustain the implementation and also keep upgrading it on a periodic basis to meet the changing business requirements as well as technological advancements. These are bigger challenges than the product itself and this also has a longer lifespan. These are areas where most failures occur. Or put differently, this is where competing organizations adopting similar products and technologies also differentiate themselves.

Steps into green IT technologies

The world leader in removable data storage media is a beginner in implementing 'Green IT technologies' and are taking it forward without a conscious effort Manu Sharma Moser Baer India, a world leader in the development and manufacture of removable data storage media has just made a beginning in implementing 'Green IT technologies' and are taking it forward without a conscious effort. In a interview with Muthukumar V., Senior General Manager – IT of Moser Baer India spoke to Manu Sharma of CIOL Bureau on various challenges faced an a CIO and the way ahead in tackling major issues.

CIOL: What are the major challenges faced by a CIO?
Muthukumar V
: I feel that the present challenges faced by a CIO in the areas of Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and Improving on service deliveries provided by and through IT.

CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
MV
: Moser Baer has no such link where in the company's IT budget is linked to the performance of the firm.

CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
MV
: We have tried to leverage the ERP utilization by bringing in more processes and controls within the ERP frame work. These are done either by exploiting the existing functionality that was not implemented or by building functionality within and around the ERP. We have ensured that the investment that we had done in the ERP and other application architecture is fully exploited. We have supported the growth of the business both organically (in terms of volume growth) as well as in-organically (additional business coverage like M&ES, ITCE, Entertainment and PV).

CIOL: Going forward, what are the challenges that you foresee?
MV:
I feel that the present challenges faced by a CIO will also continue over the years and these include: Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and improving on service deliveries provided by and through IT.

CIOL: How far have you come as regards adopting 'Green IT technologies'?
MV
: Our company is a beginner in this front and we are taking it forward without a conscious effort.

CIOL: What will be the IT budget for the new fiscal year? What is the growth rate over last year?
MV
: I would prefer not to respond to this question. But can only indicate that it runs in crores each year.

CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
MV
: I can do with more funds. Having said that we have been very decent in allocating budget for IT, when there are enough justifications for the investment.

CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar in 2007?
MV
: Do they. Don't think so; not because of a stronger rupee. In fact, India should be benefited as biggies turn more towards India as the global spend on IT could shrink.

CIOL: Since the rupee is growing stronger against the dollarin 2007, don't you thing it is the right time to purchase IT products both hardware/software?
MV:
It all depends on the business benefits. Rupee appreciation against dollar can't be a critical determining factor; not at least in our case.

CIOL: How big is the IT staff in your organization?
MV:
We have atleast 48 working in our department.

IBM UC2 helps people stay connected

Today's organizations are largely global in nature with the workforce being mobile and virtual. In the present environment, it is important for employees to stay connected and collaborate, says Chandru K., Business Manager (Converged Communications Services) at IBM India.
In an interview with Manu Sharma of CIOL Bureau, he spoke on the challenges faced by enterprises and the steps a CIO needs to ensure success of converged communication systems.

CIOL: Role of IBM in Converged Communications?
Chandru K
: IBM offers a suite of assessment, design, deployment, integration and managed services to deliver converged communications solutions. IBM offers a uniquely flexible and broad portfolio of services, software and financing capabilities that can be easily customized to address specific needs required to support communications for a diverse and global workforce.
These capabilities are backed by the experience and technical know-how required to provide smooth, successful unified communications and collaboration deployments. Working with a broad network of partners and suppliers (device manufacturers, network equipment vendors, telecommunication service providers and independent software vendors), IBM can offer an extensive range of skills and solutions to meet the client's immediate and long-term business needs for converged communication solutions.

CIOL: What are the present challenges in communication that the enterprises are facing and what does Converged Communications help address/solve?
CK:
Organizations are largely global in nature with workforce being mobile and virtual. The focus for organizations is to improve their bottom line that means they are focused on employee productivity. It is important for employees to stay connected and collaborate.
Typical challenges are:
* Communication-caused delay and disruption is a pervasive business problem.
* Communications complexity affects long-term productivity, business process reform, and financial performance.
* Decision support outcomes suffer from the inability to access and collaborate effectively with primary players.
* Resources are improperly used or misallocated because of the complexity of communication.
Converged Communications helps address these challenges and streamline communications.

CIOL: What do you accomplish by deploying Converged Communications, in the short and long terms?
CK:
Converged Communications with its emerging class of applications and services helps improve communications. It helps businesses in simplifying communications for their mobile and distributed workforce to improve communication flows, access primary decision makers quickly, enhance collaboration, and improve productivity to positively affect their business. They speed access and improve communication, integrate different device modes and communication applications, and dramatically improve collaboration, allowing organizations to streamline business processes, reach the right resource the first time, and enhance profitability.

CIOL: What are the steps a CIO needs to prioritize to ensure success of Converged Communication systems?
CK:
Firstly take a step back and do an assessment of the opportunities What do I spend on tools today? What are my opportunities for savings? And then do a business evaluation. Given those opportunities I uncover, how will I leverage those against my business processes?
Then, a very, very important step and that is to do a network assessment. Is my network ready? And if not, take the step, which is to get the network ready for voice deployments. And when we say network-readiness, we're talking about things such as what sort of network latency do I see in my data network? What are the jitter characteristics of my network? How much bandwidth do I have? And very, very importantly, have I implemented quality of service?
Beyond those steps, customers need to begin to prepare themselves to develop the skills necessary and really to begin to bring together skills between their traditional telephony groups and their data networking groups. And, of course, once you've gotten to that point, then it's time to move into the design and implementation phases.

CIOL: What are the differences between Unified Communications and Unified Messaging?
CK:
Unified Communications enables people to find peers or decision makers using a single telephone number or Internet address. It integrates e-mail, instant messaging, and calendaring applications with communications devices and applications—telephony—wired and wireless; voice messaging; and audio, video, and Web conferencing.
Unified Communications applications support advanced presence-sensitivity and find-me capability, and media independence. They are easy to use, with a familiar intuitive interface linked to powerful functions. Finally, they provide voice access to applications and data.
While, Unified Messaging is a subset or one of the Unified Communications applications, Unified Messaging is the integration of different messaging (voice, email and fax) into a single or Unified Message store. They can access this through a variety of devices. Since these are integrated it makes it easier for users to access their message store. For e.g., they can access their voice, fax and email messages through a single touch point, their emails.

CIOL: What are the benefits of using IBM UC2?
CK:
IBM offers the essential software, services, strategic alliances and hardware elements that companies need to help people stay connected to applications, data and one another anytime, anywhere. So, users can find an expert, reach out within and beyond business boundaries and collaborate more easily. And, as a result, help organizations improve productivity, speed responsiveness and lower operational costs, while creating a better, more attractive work environment that's easier to manage, extend and enrich.
Unified Communications requires an integrated communications strategy and architecture—enabling the secure combination of voice, video, data, and mobility applications within a robust, intelligent network. IBM, with its industry-leading breadth of solutions, its world-class partnerships, and its understanding of how to map technology to address business challenges, is uniquely able to fulfill the promise of Converged Communications.

CIOL: Why do I need technology from Avaya, AVST or Cisco?
CK:
Global Technology Services within IBM focuses on providing infrastructure solution for customers. We work with customers to understand their business problems and check on the best technology to fit this. Working with a broad network of partners and suppliers (device manufacturers, network equipment vendors, telecom service providers and independent software vendors), IBM can offer an extensive range of skills and solutions to meet the client's needs.

CIOL: What is IBM's predictions for Unified Communications?
CK:
The Virtual Workplace will become the rule! There will be no need to leave the office. Just bring it [Unified Communications] along. Desk phones and desktop computers will gradually disappear, replaced by mobile devices, including laptops that take on traditional office capabilities. Social networking tools and virtual world meeting experiences will simulate the feeling on being there in-person. Work models will be changed by expanded globalization, and green business initiatives that reduce travel and encourage work at home.
* Instant Messaging and other real-time collaboration tools will become the norm, bypassing e-mail. Just as e-mail became a business necessity, a new generation of workers has a new expectation for Instant Messaging (IM) as the preferred method of business interaction. This will fuel more rapid adoption of Unified Communications as traditional IM becomes the core extension point for multi-modal communications.
* Beyond Phone Calls to Collaborative Business Processes. Companies will go beyond the initial capabilities of IM, like click-to-call and online presence, to deep integration with business processes and line-of-business applications, where they can realize the greatest benefit.
* Interoperability and Open Standards will tear down proprietary walls across business and public domains. Corporate demand for interoperability and maturing of industry standards will force unified communications providers to embrace interoperability. Converged, aggregated, and rich presence will allow businesses and individuals to better find and reach the appropriate resources, removing inefficiencies from business processes and daily lives.
* New meeting models will emerge. Hang up on routine, calendared conference calls. The definition of "meetings" will radically transform and become increasingly adhoc and instantaneous based on context and need. 3-D virtual world and gaming technologies will significantly influence online corporate meeting experiences to deliver more life-like experiences demanded by the next generation workers who will operate more efficiently in this familiar environment.

CIOL: Why is IBM holding this roundtable and what will be the focus? What issues will IBM address at the meet?
CK:
IBM in association with CIOL is bringing a live session on Converged Communication. The rountable will focus on the subject, "Enhancing effective business communication". IBM will address issues such as how to communicate and collaborate effectively in today's disparate work environment and how to reduce reliance on external voice, video, date service providers.
The forum will provide an opportunity to discuss the communication challenges organization are facing today and understand how Converged Communication solutions help address these. Customers will have an opportunity to talk to experts and also network with industry peers. IBM will also showcase the actual working of Converged Communication solutions at our customer solution center at Delhi.

Business does not stop due to non-availability of IT

The seriousness of IT in the real estate industry is still at a nascent stage in India Despite the seriousness of IT in the real estate industry being at a nascent stage, the Mumbai-based Lavasa Corporation Limited, a leading property deveoper undertaking large-scale lifestyle development in India has deveoped a new urbanism principle towards IT. In a discussion with Manu Sharma of CIOL Bureau, Vinod Vyas, Head – Information Systems of Lavasa Corporation Limited spoke about the new communications sytems implemented and also on what are the challenges he forsees in the future.

CIOL: What are the major challenges faced by you in your organization?
Vinod Vyas:
The seriousness towards IT in Real Estate industry is still less because of simple reason that business does not stop due to non-availability of IT. However, certain organizational necessities cannot be avoided such as office automation, finance & accounts, sales and MIS. Thus major challenge is to aware users to use IT for automation where traditionally they are completely manual such as construction, projects, land department etc.

CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elobrate?
Vinod Vyas: No. Our management has a strong conviction that IT is critical to the business of Lavasa and hence IT is viewed as a critical investment.

CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint?
Vinod Vyas
: Introducing integration of conventional communication methodologies with new IP based communication systems such as IPPBX, VoIP etc.

CIOL: Going forward, what are the challenges that you foresee?
Vinod Vyas:
Change Management (User's acceptance to automation and revised business processes.)

CIOL: How far have you come as regards to adopting 'Green IT technologies'? Vinod Vyas: We are concerned about the global warming. The initiatives are at planning stage.

CIOL: What will be the IT budget for the new fiscal year? What is the growth rate over last year?
Vinod Vyas:
The budget is significantly more than the previous year.

CIOL: Name the top 5 items that you expect to spent during the fiscal year?
Vinod Vyas:
Some of the major IT items that we invested during the last fiscal include: Infrastructure & Telecom and also in ERP.

CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
Vinod Vyas:
The amount is decided by Head – IT and COO together and its sufficient as per business need.

CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar in 2007?
Vinod Vyas:
Not much

CIOL: Since the rupee is growing stronger against the dollar in 2007, don't you thing it is the right time to purchase IT products both hardware/software?
Vinod Vyas:
It effects when the purchases are huge in quantity.

CIOL: How big is the IT staff in your organization?
Vinod Vyas:
The strength in our organization is presently ten.

KPO fastest growing vertical for Syntel Inc

With a growth rate of 51 percent annually, Knowledge Processing Outsourcing (KPO) is emerging as one of the fastest growing business opportunities for specialized players. India's leading global Information Technology provider -- Syntel Inc -- with global development centers in India and US has leveraged on its domain knowledge in financial services and forayed into KPO space.
In a discussion with Manu Sharma, Associate Editor of CIOL, Keshav R. Murugesh, president & chief operating officer of Syntel India speaks on Syntel's service portfolio of consulting, IT and business process outsourcing and also how Syntel emerged as one of the largest diverse 3rd party services provider across the investment operations spectrum.

CIOL: Why and when did Syntel foray into KPO space?
KM: KPO with a growth rate of 51 percent annually, is one of the fastest growing business opportunities for specialized players like us. Today, KPO as a whole generates $3.05 billion revenue annually and directly employs around 25,000 people in India. The worldwide KPO market is expected to grow to $16.7 billion in revenues by 2010-2011. From this, India would account for $12 billion.
Syntel had a rich 23 years heritage of providing IT services to Fortune 500 financial services firms across banking and capital markets. In 2003, we completed the entire build-out of a complex performance attribution system for the investor services division of one of the top 3 global custodians. It made logical sense for Syntel to leverage its extensive domain knowledge in financial services and provide an end-to-end service portfolio to existing and new clients. We forayed into KPO in late 2003 providing middle office investment operations services to one of the top 3 global custodians.

CIOL: What are the other businesses Syntel is presently into in India?
KM: In early 2000, Syntel's revenue was divided into staffing services and IT outsourcing services. We have remodeled our portfolio based on emerging trends and changing customer requirements. Today, we service clients across verticals via a three-pronged integrated service portfolio of consulting, IT and business process outsourcing. Our consulting services range from technology to process engineering across verticals. In KPO, Syntel is arguably the largest diverse 3rd party services provider across the investment operations spectrum. For e.g. Syntel KPO services one of the top 3 custodians across North America, UK, Europe and Asia Pacific for the entire middle and back office investment operations spectrum. We manage the entire post originations functions for a large retail brokerage firm. Similarly, we have an almost 1000 FTE KPO operation across the life insurance vertical.
Syntel provides customized IT, BPO and KPO solutions to verticals such as automotive, education, retail, finance, insurance, healthcare and life sciences. The BFSI industry overall outsources more than 20 percent (amounting to $400 billion) of its cost base to offshore services. Syntel offers value to its customers by offering services such as cash management, settlement, underwriting, claims, reinsurance etc.

CIOL: How much of business does KPO contribute to Syntel?
KM: The KPO business is the fastest growing vertical across Syntel businesses. KPO is a key revenue driver for Syntel, exiting the year 2007 at 19 percent of total revenue and posting 155 percent year-over-year growth.

CIOL: Is KPO emerging big in India like the BPO sector? If yes in what areas do you see the growth?
KM: Yes, the evolution and maturity of BPO services has given way to more knowledge intensive outsourcing services in India. The KPO industry is growing at a fast pace and the high talent base of chartered accountants, doctors, MBAs, lawyers and research analysts in India is certainly going to capture a big pie of the global KPO business. The knowledge process outsourcing industry (KPO) is likely to grow 45 percent in size by 2010 whereas the BPO industry, only 26 percent. Global KPO pie in 2010 will be around $17 billion of which $12 billion (70 percent) will be outsourced to India. Thus, India is fast emerging as a global KPO hub.
We see the fastest growth across banking and financial services, data management and legal services. Similarly HRO and pharmaceutical outsourcing shows promising growth by 2011.

CIOL: Syntel has been in the list of Global Services 100 list? How important is this achievement to the company?
KM: We are honoured that Global Services and neoIT chose Syntel as one of the world's top technology providers. Syntel is dedicated to delivering flexible solutions and innovative uses of technology to its clients that help them remain at the forefront of their industries and operate in their businesses more efficiently. It's encouraging to know that Syntel's business model has gained broad acceptance as an effective and well-proven method of providing innovation to businesses. This ranking is a testament to the great value Syntel delivers to our clients.

CIOL: Where do you see Syntel emerging by 2012?
KM: We continue to invest into the five-year plan strategy. The plan calls for Syntel to be positioned as a business partner as opposed to as a vendor. We like to position ourselves with our clients as Nimble, Flexible and Right sized as opposed to a giant unresponsive firm. Forrester recently said of us; "Small enough to listen, big enough to deliver."
Physical Infrastructure: We are developing our own campuses in Pune and Chennai. This is about 110 acres of SEZ facility. We are investing in the best-of-class technology and infrastructure. The campus strategy allows us to cater to our rapid sequential growth and meet the specific needs of our clients.
People Infrastructure: We have invested heavily in consolidating and deep rooting of all our talent initiatives, providing coverage across the entire talent life-cycle. These include a focused effort in ingraining our "growth from within" philosophy, with targeted programs to address the needs of specific talent levels in the organization. These investments continue to provide pay-offs in the form of lower than industry average employee attrition and increased client wallet-share and contract renewals.
Geographical expansion: Syntel continues to invest into the expansion of its sales infrastructure in North America and in Continental Europe. This is through front-end staff expansion and expansion in office bases. We are also looking at the EMEA (Middle East & Asia) region and the APAC region to finalize our entry strategy in these regions.
Innovation Labs: In line with our mission, Syntel has invested in Client-Focused, Collaborative Innovation Strategies and establish the R&D division, a Strategic Business Unit, to provide best-of-breed services to our customers to address their needs. Our R&D division initially plans to focus on few broad technology categories e.g. Proprietary technologies, Devices/ Embedded systems, Tools and Products, Open source and Methodologies/ Frameworks. Our R&D division will work closely with different verticals and support organizations within Syntel to foster better talent management, reduce time-to market of new offerings and services as well as support business development.
We continue to position ourselves to achieve a greater percentage of our revenues and growth through outsourcing, including BPO. We work with clients to develop and deliver business process innovations that transform their businesses or deliver higher performance levels at lower costs. Each of our BPO businesses provides function-specific or industry-specific business services to multiple clients on an outsourced basis through standard operating models. Some of our BPO businesses offer services to clients across many industries, while others offer services only to clients in a specific industry.
We have aggressive growth plans at our Indian Delivery Centre and believe this will be sufficient to cater to potential increases in the number of staff over time. Syntel currently has over 3,500 BPO employees working in different areas of capital market operations. The majority of these have been recruited specifically to service individual clients, as that is the business model we adopt for each BPO contract. We typically do not maintain a pool of unassigned generalist resources, because we find they do not meet clients' process-specific needs.
Our current plans anticipate growing our BPO capacity in India to between 10,000 and 15,000 seats within the next three to five years. This will be achieved through a multi-centre strategy, which envisages centers across at least two cities in India and more than one centre in each city, thus providing centre level and city level redundancy.

CIOL: What about your expansion plans in India?
KM: India is an important supply center for Syntel and will also be a good market for us as we introduce some of our key offerings here. Syntel Inc plans to invest $50-60 million (Rs 200-240 crore) in capacity expansion alone in India this year. This will enable the company to add around 6,000 seats. The bulk of our hiring will be in India and .we are very excited about the prospects of the country.

CIOL: Do you have plans to foray into the other sectors of KPO like legal, Medical etc?
KM: Syntel has a flexible business model that is constantly evolving. We are always looking for new avenues to invest in. The legal offshoring segment is increasingly gaining momentum.
Syntel is definitely looking to diversify its KPO portfolio and leverage its extensive experience for managing critical operations across verticals and explore emerging areas of KPO and pharma outsourcing.
The Healthcare Practice in Syntel contributes 17 percent of overall revenues and is one of the focus areas to aid our growth. Syntel's Healthcare & Life Sciences Practice team includes doctors, medical professionals, HL7 experts and DICOM specialists which help provide a comprehensive, integrated suite of IT and KPO services that help payers, providers, and pharmaceutical firms realize sustainable competitive advantages by focusing on continuous innovation and knowledge management. We continue to leverage our IT expertise in servicing huge healthcare companies to provide back office and analytical support as a full service model.
Syntel was included on the Healthcare Informatics 100, a list of the 100 leading global health care IT providers for four years in a row (2003-2006) and is already is one of the largest healthcare IT providers in the world. Syntel derives 14.5 percent of its annual revenue from healthcare projects.

CIOL: Where does Syntel stand among the KPO companies in India?
KM: As mentioned earlier, Syntel perhaps is the only 3rd party service provider to have current experience and capabilities of servicing clients across the entire investment operations spectrum. Similarly, we have the unique experience of helping a large industrial house break into a new service line of brokerage operations.
Today, we manage the entire post origination operations for the client. In the capital markets space, we have a team of almost 4000+ professionals servicing clients across low-end processes like reconciliation to the highly critical functions like performance measurement and attribution. We consider ourselves to be a highly experienced player across the securities processing and capital markets arena and capable of deploying our expertise in transaction processing, data analytics to leverage it across other domains.

CIOL: How big is the KPO industry in India today and what is the forecast for the future?
KM: India is fast emerging as a global KPO hub as globally businesses require specialized solutions, and India's engineering and technical institutes are increasingly providing highly qualified professional to address these manpower demands. The global KPO industry stands at close to $5 billion today.
A NASSCOM report estimates that with an annual growth rate of 39 percent KPO industry is expected to reach $17 billion by 2010, of which $12 billion would be outsourced to India. Also, the number of Indian KPO professionals is set to leap from 25,000 to 350,000 by 2010. Overall BPO revenues are slated to touch 40 billion by 2010.

Leading service provider completes energy audits of data centres

As part of the Green IT project, Adventity BPO India Pvt Ltd, a leading provider of fully integrated strategic KPO and BPO services to a diverse global business community has completed energy audits of all its data centers and also made changes to reduce the carbon footprint. In a interview with Manu Sharma, Associate Editor at CIOL, Rajendra Sawant, CIO of Adventity talks about switching off any servers when it is not required and also on how hard it is to get the right IT manpower in an organization.

CIOL: What are the major challenges faced by you in your organization?
Rajendra Sawant: Some of the major challenges we face in our organization include:
* Getting the right manpower
* Unrealistic expectations from IT
* To convince top level management about importance of IT

CIOL: Does your organization link IT budget with the company's performance or growth? If yes please elaborate?
RS: No, our organization does not link IT budget with the company's performance or growth

CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint? RS: One of our major accomplishments has been that we converted most of the IT Infrastructure projects from Capex into Opex. The other include major cost reduction on almost all aspects of IT Infrastructure and also creating a Wi-Fi and Mobile savvy IT climate.

CIOL: Going forward, what are the challenges that you foresee?
RS: Going forward the challenges we forsee include:
* Retaining good talent pool
* Protect IT investments
* To delivery more for less cost

CIOL: How far have you come as regards to adopting 'Green IT technologies'?
RS: We have done an energy audit of all our data centers and made changes to reduce carbon footprint. We also switch off any servers when it is not required.

CIOL: What has been the hike in the IT budget for the new fiscal year? What has been the growth rate over last year?
RS: IT budget has increased by almost 100 percent and same has happened over last year.

CIOL: Name the top 5 items that you expect to spent on this fiscal year?
RS: * Storage solution
* Server virtualization
* MPLS
* Voice solution upgrade

CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
RS: We have sufficient allocation for IT. Currently IT being integral part of our service offerings, IT budget allocation gets priority.

CIOL: How big is the IT staff in your organization?
RS: The current strength of IT in our organization is over 150 employees.

ERP SAP implemented to dispose off deadly chemicals

Gujarat Industries Power Company Ltd (GIPC), a leading company engaged in business of generation of electrical power has implemented ERP SAP that has helped in disposing off dead inventory of hazardous Neptha Chemical worth of Rs 0.5 crore in one month complying fully with all regulations. In an interview with Lt. Col. Shankar Gurkha, Chief Manager – IT of GIPC talked to Manu Sharma of CIOL Bureau about his achievements as a CIO and what he foresee as the major challenges in the coming years.

CIOL: What are the major challenges faced by a CIO?
Shankar Gurkha: Some of the major challenges faced by a CIO include:
* Aligning IT with business
* Business process improvements
* Create robust integrated IT platform enabling business

CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
SG: Yes. However the formal system is now being put in place.

CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
SG: The main accomplishment during my stint as a CIO include the ERP SAP implementations that has helped us in disposing off dead inventory of hazardous Neptha Chemical worth of Rs 0.5 crore in one month complying fully all regulations.

CIOL: Going forward, what are the challenges that you foresee?
SG: Deployment of cost effective IT solutions enabling business, Optimum utilization of existing IT assets.

CIOL: How far have you come as regards adopting 'Green IT technologies'?
SG: We are at an initial stage but are taking few steps in the next financial year.

CIOL: What will be the IT budget for the new fiscal year/ What is the growth rate over last year?
SG: Our budget for the next financial year will be about Rs 2.5 to 3 crore. That will be a 200 percent growth compared to the previous year.

CIOL: Name the top 5 items that you expect to spend on this fiscal year?
SC: Some of the top items we expect to spend our budget include:
* Upgrade and enhancement of ERP SAP,
* Enterprise Document Management Sys,
* Unified Communications,
* DR Plan
* Green IT.

CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
SG: The amount allocated for IT is sufficient for projects as planned.

CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar (2007)?
SG: Yes, It has somewhat declined due to the current stronger rupee against the US dollar.

CIOL: Since the rupee is growing stronger against the dollar (In 2007), don't you thing it is the right time to purchase IT products both hardware/software?
SG: Yes, If found useful for the organization.

CIOL: How big is the IT staff in your organization?
SG: We presently have a team of 20 in our organization.

BA Systems eyes 10pc of Indian networking solutions market

BA Systems, the Bangalore-based router manufacturing company, headquartered in San Jose, California, has entered the router market and is aiming at a market share of 10 percent in the networking solutions space in India by 2009-10.

The company has launched 'Enterprise' category of routers with a contract manufacturer in India. Its USP is its price, which it claims is about 30-50 percent cheaper than competitors. B. Jagadish, director marketing, BA Systems, speaks about the company's entry into the Asian market and the growing market for Enterprise routers, in an interview with CIOL's Manu Sharma. Excerpts:

CIOL: Being a US company what made you roll out your products in India?
B. Jagadish: BA Systems is headquartered in San Jose and has presence in Bangalore, Singapore, Hong Kong and China. We are targeting the Asia-Pacific market since it is growing by many folds in the Enterprise segment of routers. India, in particular, has a big market and the router market is growing at 15-18 percent. In comparison, it is growing by only 5 percent in the developed countries. Therefore, we have launched our products here and plan to expand overseas through our OEM network. In fact, we have already sent our first shipments to China and Bangladesh.

CIOL: Describe the Enterprise router market and what is its estimated growth in India?
BJ: The Enterprise routers industry segment is presently estimated at $4 billion and is likely to grow at a CAGR of 30 percent to touch $10-billion by 2010. According to an IDC report, while Edge, PC based, wireless, ADSL, broadband, XDSL and core routers make up most of this industry, Enterprise is in lesser numbers, but is catching up.

CIOL: What are the routers that you have launched and what applications do those support?
BJ: The BA Systems' EN3500, and EN2400 integrated routers uniquely address key customer requirements such as reduction in CAPEX and OPEX, and the power to implement IP networking services with minimal disruption and maximum remote control from a central location. This is achieved by combining the high performance and carrier-grade reliability of the BA Systems Operating System (BOS) with a central management application -- a BA Systems Element and Services Management Supervisor (BESS).
The modular, multi-threaded design of BOS, in combination with the EN series high-performance hardware, provides for the best-in-class performance, both raw and with multiple services loaded.

CIOL: Who are your competitors in this segment?
BJ: Cisco Systems has a market share of over 90 percent, while Juniper Networks, Nortel, Tasman, Huawei and 3Com are the other major players in this segment. BA Systems has just made an entry into the market and hopes to capture a 10 percent market share by 2010.

CIOL: How do you plan to tackle your competitors?
BJ: The BA Systems' EN series represents the next generation of integrated routing platforms. The EN series is the first routing platform that leverages the combination of optimized hardware with tested, interoperable, and modular high-performance operating system –(BOS), thereby affording significant CAPEX savings.
BA Systems' products are deployed in mission-critical networks at high profile customers, including a leading national telco, banks, stockbrokers, MSPs and BPOs. BA Systems strategically partners with channels, including systems integrators and service providers to go-to-market. The company provides partners with level-3 technical support, training and feature customization for partners/customers.

CIOL: What kind of marketing and sales support does the company provide?
BJ: Our support base for the customers will be out of India. We have already started a toll-fee line that will be attended by us starting next January. Presently, we provide technical support to our customers that make it unique unlike others and have no plans to outsource the aftersales support. We provide technical support to our customers to handle them faster and understand their needs better. Presently, it is offered 12x5, and once the volumes build up, it will be 24x7. The company also has marketing offices in Bangalore, Chennai and Delhi. Besides, we will have full-fledged offices in Mumbai, Kolkata, Ahmedabad and Hyderabad by October 2007.

CIOL: What sort of pricing models are you following for you products?
BJ: Our USP is our cost that is incomparable to any competitors even Cisco. Our solution comes at a cost that is at least 30 percent lower than close competitors Cisco, and can even be as less as 50 percent less if it is an end–to-end solution. Our hardware contributes a lot, while our software has own patent rights. We are the only router company with a local manufacturer. Neither Cisco, Juniper or anyone else has such a facility. Most of them source their products from either China or Taiwan.

CIOL: Who are your present customers and whom are you targeting?
BJ: Our products are affordable, off-the-shelf components. We started production in May 2006 and have already installed the products at the Taj Group, ITC, STPIs and co-operative banks. We also have corporate clients like Fortune Financials, Bosco Steel, BNA BPO and Divya Systems. The company will also be tapping into the railways, airlines, telecom and defence sectors in 2008 as they are all based on tenders.

CIOL: How is the feedback from your existing customers?
BJ: The feedback has been phenomenally good. It is because of our modular operating system, inherent features, rollback graceful restart, route tracking, SLA monitoring tool, etc. All of these are the major empowerments that our customers have experienced. We offer end-to-end solutions, including real-time WAN management. In fact, we have moved away from offering a product to a total solution.

Wipro among top three in desktops segment by 2008

Computer major Wipro Infotech, a division of the $3.47-billion Wipro Limited, having rolled-out its new range of environment-friendly desktops in the Indian market, is now eyeing to be among the top three in the Enterprise and SMB desktop segment by 2008. Ashutosh Vaidya, vice-president – Personal Computing Division, Wipro Infotech in an interview with Manu Sharma, spoke on wide range of issues ranging from their foray into eco-friendly computers to future plans.

CIOL: What is Greenware range of desktops and laptops? What prompted Wipro to launch these products?
Ashutosh Vaidya: Wipro has been addressing the issue of increasing e-waste and in this connection launched eco-friendly range of products as part of its responsibility towards cleaner environment. This provides a compelling proposition to our customers to adopt eco-friendly, high performance and feature-rich computing products in their enterprise.

CIOL: Where does Wipro stand in the computer market and how does it plan to grow?
AV: After having registered sales of 150,000 units in 2006 (IDC report), Wipro is now looking to achieve a target of 225,000 units in 2007. In the Enterprise/SMB segment, the company occupied number five slot with sales of 70,000 last year and is now eyeing to reach 70,000 units in 2007, thus move up among the top three. HP leads this segment followed by HCL, Dell, Lenovo and Acer. We are targeting at state banks, government agencies to reach our target.

CIOL: What are RoHS compliance products and mention its importance?
AV: RoHS or (Restriction of Hazardous Substances) is a directive from the European Union to reduce substantial e-waste in the environment. A lot of e-waste such as Brominated Flame Retardants (BFR), PVCs and heavy metals like lead, cadmium and mercury are used by computer manufacturers. Now Wipro has set up its e-waste management process called Wipro Green Computing, which spans across its product lifecycle – from designing, manufacturing right up to the final disposal.

CIOL: How does Wipro plan to reduce e-waste in India?
AV: Wipro is among the first computer manufacturing companies to launch these products in India. We will also not procure non-RoHS components from our global vendors. Besides we will roll out only RoHS compliant products by the end of this fiscal. Presently, we have eight products including four desktops and three notebooks that are 100 per cent RoHS compliant. We also have 16 centers across the country where customers can come and surrender their old computers and we will handle the disposal.

CIOL: In what way is Greenpeace involved in this project?
AV: Greenpeace, a global NGO has been at the forefront of the campaign for clean production and safe recycling. Greenpeace wants the electronics industry to design products that are free from hazardous substances, easy to recycle, and do not expose workers to health risks during production or recycling. Greenpeace is convincing individual producer responsibility (IPR) for full take-back of their products at their end of life, and go beyond the EU RoHS directive in eliminating all hazardous chemicals.

Thursday, October 16, 2008

Experience drastic cut in IT budgets

This is mainly due to drop in system innovations, reducing costs and increase in speed of doing business, says Dell

As most companies allocate about 80 percent of their IT budget for infrastructure maintenance and 20 percent for new business innovations, Dell officials feel this figure can be cut down from 80 percent to about 50 percent in the next six-seven years.

Talking to CIOL Bureau, Sameer Garde, General Manager – Services, Dell India said: "The reduction will be mainly due to the 50 percent drop in system innovations and also due to the reducing costs and increase in the speed of doing business."

Recently, India has been witnessing the introduction of two services, Dell's ProSupport for 'IT' and ProSupport for the 'End Users', aimed at improving local support for enterprise customers by improving turnaround times and offering the ability to fast-track requests.

Now Dell ProSupport assures its customers who add two to three servers every month that they should virtualize their hardware and data centers. "IT infrastructure is where it all starts, i.e., from data centers, servers to desktops. We have virtualized several customer's data centers from 200 to 15 servers thus reducing their costs," he adds.

Dell takes up turnkey projects on end-to-end solution that takes about six-eight weeks to complete. "While the assessment of the data centers takes two-six weeks the design implementation takes six-eight weeks," Garde says.

Reports indicate that Dell has invested about $6 billion in services alone during FY07, and this is likely to shoot up further with more offering in the service space. Having launched its service operations in India, Dell's ProSupport, a globally consistent, customer-driven support offering, spans Dell's commercial product and solutions portfolios.

Dell has distilled more than 10 service offerings down to two customizable packages with flexible options for service level and proactive management.

"ProSupport goes beyond reactive problem resolution and hardware support to include proactive management," says Garde. With the right options, customers can reduce technical incidents by as much as 37 percent and critical downtime by as much as 48 percent, Garde adds.

The company is targeting emerging enterprises with 200 to 1,500 employees, but don't have a help desk. "We are focusing on banking and financial institutions, BPO and also government institutions to offer our service portfolio," he says.

Dell Prosupport wing already has about 650 engineers in India and about 150 call center executives in India. The company offers same day support in 22 cities besides other services in over 300 towns across the country.

'Implement the right technology'

With so many new technologies available in the market, which is the right technology for your own optimization is going to be a major challenge

Each day new technology floods the market. So which is the right technology for your own optimization and what is the right time to invest is going to the major challenges ahead, says N. Kailsanathan, Vice-President & CIO of Titan Group. In an interview with Manu Sharma of CIOL Bureau, spoke on some of his major accomplishments as a CIO to what he would like to hear from the vendors in the coming fiscal.

CIOL: There has been a lot of noise on IT spending and breakthrough implementations? How much of this mere tom-tomming and how much of this makes an impact on the ground?
KN: I would not like to term it as breakthrough. IT has improved the processes and simplified them to make things more robust and reliable. Innovations happen the way IT is managed.

CIOL: A lot of organizations link IT budget with the company's growth? What do you have to say about it?KN: Can you say that by investing in an ERP your turnover will grow? But what will happen is your ability to analyze the data will become much better. Certain areas like supply chain, we also have to link directly with the alignment in the field.

CIOL: What are some of the challenges faced by you as a CIO?
KN: Getting more and more money out of the system by investing in IT is a major challenge. Once you have set up the base like ERP, Planning, Networking in order, getting funds to upgrade the system is another challenge. Management asks why do you need to upgrade when things are running smoothly?
Security is another big thing that needs constant upgradation but getting funds again and again is not easy.

CIOL: Does your enterprise consider spending money on the latest IT implementation as a burden or do they feel it is an investment and mandatory for any organization?
KN: Long term investment can create a problem but now every one looks at investment with quick returns.

CIOL: Can you site any specific area where IT has come as an accomplishment in your stint as a CIO?
KN: We have done some advanced planning and optimization of a software, that has really helped the business. It was optimization of not only the products but also the deliveries.

CIOL: What would you like to hear from the vendors during the next fiscal?
KN: Service Oriented Architecture (SOA) is going forward will play a major role in the way you integrate the system. A lot of integration is through home grown applications they will come under a standard platform of SOA.
Since a lot is happening on the retailing front, a lot of technologies will come into the market like RFID. Besides CRM is another major area to identify the customers' needs.

CIOL: What has your organization doing on the IT green front?
KN: Our organization is not a major consumer of power but what every one is talking about today is how to save on electricity. Green technology is a very big subject from green buildings to green computers and a lot of works needs to be done.

CIOL: What are the challenges you foresee during the coming years?
KN: More challenges are about running the business than IT. When things begin to work well, getting funds for improving/enhancing is a major challenge. Security is another challenge since it is a perennial problem.
Implementing new technologies at the right time is another challenge. But since all technologies don't work and you have to be very careful about the products that are flooding the market.

Indian BPO industry to reach $50 bn by 2012?

A joint study conducted by National Association of Software and Service Companies (Nasscom) and the Everest Group, a global strategy consulting firm reveals that the $11 billion Indian BPO industry in its current momentum is poised to touch $30 billion by 2012. However, with accelerated growth to capture the addressable spend in the international and domestic market could take the industry to $50 billion by 2012. Som Mittal, president of Nasscom spoke to Manu Sharma of CIOL Bureau on how the Indian BPO industry is shaping up.

CIOL: What was this study all about?
Som Mittal: The Nasscon-Everest India BPO study began in August 2007 to provide a comprehensive fact-based view of capabilities of sector, opportunities and growth imperatives for Indian BPO industry and its stakeholders. We found that the Indian BPO sector has evolved tremendously since its inception, not only in its size but also in terms of maturity - service lines, service delivery capability and footprint.

CIOL: Does India's BPO have the potential to touch the $50 billion mark?
SM: I strongly feel that the aspired target for the BPO industry is very much achievable however stakeholders will need to act on a number of initiatives to accelerate growth individually as well as collectively.

CIOL: What are the steps needed by the industry/government to achieve the $50 billion mark?
SM: The study highlights an eight point action themes for the Indian BPO industry to realize its potential and accelerate its growth. We will share the study with the industry and also the various governments. Some of the themes include: Protect India's cost advantage to ensure buyer interest; Create BPO hubs to drive this industry deeper within India; Increase employment and access untapped talent pools by creating greater linkages between the current education system and the needs of the BPO industry and Facilitating the development of BPO-specific education models.

CIOL: How will the BPO growth impacted the Indian economy?
SM: The five-fold growth in the Indian BPO market will bring huge payoffs to India's economy and employment. It contributes about 2.5 percent to India's GDP from export earnings and provides employment to over 2 million people that is expected to grow by 2-3 times. Besides growth in tier 2 and tier 3 cities and towns will see a six-fold growth in the number of delivery centers.

CIOL: In terms of employment where does it stand today?
SM: This US$ 11 billion industry today employs more that 700,000 people across 25 countries and accounts for approximately 40 percent of the global BPO offshore market thereby creating huge job opportunities and impacting the economy.

CIOL: Has the industry been able to penetrate into smaller towns across India?
SM: The industry has today expanded to tier 2 and tier 3 cities and towns and delivers services from over 30 cities with in India. In addition, the industry has acquiring global services delivery footprint with operations in over 75 cities across 25 countries.

CIOL: How has the BPO industry growth over the years?
SM: India has emerged as the destination of choice for offshore delivery of business processes. Today the BPO industry has touched $11 billion and growing annually at 35 percent over the past last five years. Earlier the IT industry involved only the engineers and technical people but now the fresh graduates are entering this industry.

CIOL: What are the areas of potential growth in this industry?
SM: About 30 percent of the opportunity will be in the under-penetrated industries such as telecom, retail, media and energy and so it is needless to say that the traditionally large areas such as banking, insurance, financial services and manufacturing will offer large opportunities as well. Today North America continues to be the largest BPO market for India. However, untapped opportunities in UK, Continental Europe and Asia-Pacific will offer larger outsourced opportunities as well.

CIOL: What is the Future of BPO industry in India?
SM: Our figures indicate that the global BPO industry is estimated at about $250-$280 billion. But presently only less than 4-5 percent of the industry is actually tapped. But we see a huge potential in the future in terms of growth and also employment in India.

Lawson to make a dent in the Indian ERP market

Lawson Software, the Minnesota-based third largest ERP company has entered the Indian market as part of the strategy to attract regional partners to serve customers.

According to a Gartner reports, India's ERP market is pegged at $143 million and is growing at 14-15 percent on a yearly basis. With more companies emerging in the infrastructure space, Lawson has opened an office in New Delhi to expand in the region. It has also appointed Kamal Sharma as its regional head for Lawson South Asia.

Talking to CIOL, Harry Debes, president & CEO of Lawson Software said, "we were predominantly a US-based company but have gone global since and have presence in about 33 countries. We see huge opportunities in India and other BRIC countries and expect to grow at a steady pace."

The company is already serving customers in India and Sri Lanka through partnerships with Symphony Services and ETP International and plans to draw on the expertise of more local partners and provide sales and marketing support via its India office.

"Even though ERP major Lawson opens India office have had their presence in India for several years, still we are sure of gaining a sizeable market share in the coming years through our partnership," remarks Debes.

In fact, the company entered India way back in 1994 and has about 25 customers existing in India and hopes to now focus on the mid-level customers. "Walmart, the leading global retail giants is one of Lawson's big corporate customers, so not necessarily targeting only on mid-sized or big corporates but will remain focused on new companies in fashion, F&B, healthcare, public sector verticals in India," says Sharma.

But on specific verticals like the healthcare segment where in Lawson claims to have about a 60 percent market share in the USA, the company is looking for active partners in the healthcare industry mainly for back office. Likewise, it has already signed up with ITC, Reliance Retail, PTEX in the fashion and garment vertical and KPIT Cummins in the equipment service and retail segments. It also has TBA in the food & beverages (F&B), Symphony in the distribution & manufacturing and likely to enter in the other segments also shortly.

The company plans to employ four initially at its Delhi office and grow over the years. On the global front, the company is expected to grow its headcount by 15 percent in 2008.

Lawson currently has offices in China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, Taiwan and also in Thailand.

Opt for better technology to stay agile

Syntel has joined hands with Relativity Technologies for the modernizeation workbench platform to deliver enhanced system transparency and business efficiency.

Syntel Inc., a global information technology services and Knowledge Process Outsourcing (KPO) company, has selected Relativity Technologies' Modernization Workbench platform to support its rapidly growing application maintenance and migration practices.

Market pressures demand that companies stay agile in the face of an increasingly competitive global economy, but many core application portfolios are inflexible and inefficient, which hampers an organization's ability to adapt. A successful modernization effort requires first gathering a great deal of intelligence on the application portfolio.

A recent report by Forrester noted that "emerging application management disciplines such as application portfolio management (APM), application dependency mapping (ADM), and other portfolio disciplines are changing the way CIOs think about applications under maintenance and all work done in IT." The report continued, stating that "…increasingly, corporate management is tapping information to help distinguish the applications that should be kept and modernized from those that must be replaced and retired."

In order to help its customers make these difficult decisions, Syntel has integrated Relativity Technologies' Modernization Workbench into its Application Maintenance and Migration Centers of Excellence.

The Modernization Workbench is a market-leading suite of applications that analyzes a diverse array of legacy mainframe, mid-range and distributed applications and captures application data and business rules in a centralized repository. It generates rich technical and business intelligence about clients' application portfolios, which can be used to gain an insight into how well an organization's systems align with their business goals, enhancing Syntel's ability to deliver efficiency to clients' core business processes.

Syntel has successfully migrated the core operations of numerous Fortune 500 companies to more efficient architectures, and the Modernization Workbench promises to accelerate future initiatives by discovering, isolating, and reusingmission-critical business processes within a service-oriented architecture.

"We believe enterprises today understand that a legacy modernization strategy is crucial for maximizing the value of their investment. Application modernization can significantly reduce the total cost of ownership and align IT investments with business imperatives," said Keshav Murugesh, Syntel President and COO.

"After an intense, ROI-focused evaluation, we decided to standardize our migration framework on the Modernization Workbench. Syntel is pleased to partner with Relativity Technologies, and we look forward to expanding our deployment of this technology," said Murugesh.

"Syntel's adoption of the Modernization Workbench is a major validation of our technology," said Steve Maysonave, Chairman, President, and CEO of Relativity Technologies. "Our combined solution amounts to business intelligence for application portfolios, and enables outsourcers and clients to collaboratively address core business challenges. The result is an application warehouse that improves IT governance, efficiency and alignment with strategic goals like agility, security, and regulatory compliance."

Juniper expands R&D staff based in India

The company is planning to invest $400 million in next five years mainly for R&D activities and also add 300 more staff by mid 2008 in India.

Out of the total global strength of about 3,500 R&D workforce in Juniper Networks, close to 30 percent of the engineering workforce will be based in India doing research across all the product line. Now with India among the fastest-growing region in Asia pacific, the networking equipment major plans to invest $400 million in next five years in India mainly for R&D activities.

Talking to CIOL, Hitesh Sheth, executive vice-president & general manager of Ethernet Platform Business Group of Juniper Networks says, "India has the largest workforce for research & development globally and we are very bullish about it. Juniper has some major contribution from the R&D centre in Bangalore and plans to add 300 more R&D and operations staff by mid 2008 in India." In fact, since the strength of the team is expanding rapidly and will touch 1000 in India now, we are also expanding on our office premises here at the Bagmane Tech Park in Bangalore, he adds.

Juniper has major centers across the globe, headquartered in of San Jose, the company has other R&D centres in Westford in Massachusetts, Beijing, Canada, Israel and Bangalore, where the teams works in a matrix environment, says Sheth.

Lately the IT network infrastructure solution provider has increased its level of contribution towards evolution of global products for the company. In fact, the Bangalore R&D centre is engaged in developing networking platforms, routers and security products, switches and JNOS, the operating system. The centre has also developed fully-owned products.

Recently, Juniper unveiled its new high-performance network infrastructure offerings with a new family of Ethernet switches (EX series). "The team is now focused on completing the terabit-chassis EX switch, and further enhancing the fixed-configuration and virtual-chassis products. The Bangalore R&D team's contribution in the past and the recent success has prompted the company to hand over critical projects," he noted.

Narendra Venkaswamy, managing director of India & SAARC at Juniper Networks, Bangalore says, "the company will invest in research, engineering, switching products, security products. Globally our switching portfolio is largely focused here and we are also growing our sales team in Mumbai, Chennai, Delhi and other cities."

The company is focused on Internet protocol (IP) solutions market in India and it is expecting major market opportunities with telecom service providers rolling out their network infrastructure. Juniper India has around 1,250 employees and has invested $200 million in the last three years.

Juniper is also seeing major opportunity in the area of 3G equipment and infrastructure mainly routers, switches, WAN acceleration and security products to major service providers.
Reacting to the future of Juniper in India, Venkaswamy says the company has a $2.8 billion turnover for the year 2007 with Asia-Pacific contributing 23 percent. Besides telecom, Juniper India is also focusing on the segments of government, BFSI, IT and manufacturing.

"3G is one of the areas that has given us great growth in other parts of Asia. The future in 3G drives switching which drives routing and security. We are partnering with all major tier 1 service providers in India, who will be rolling out their 3G networks," says Sheth.

Troubled times for tech?

It seems to be a very shaky state of affairs for the global economy and technology in the high-tech industry. What worried economists six months ago, is having them in an outright panic with "economic rescue" plan that may be on the brink of a depression. A depression? That may be pushing it. But if you believe this has little to do with the tech industry, think again. That mess on Wall Street means it's hard to get credit--whether if you're a giant company looking to make capital expenditures like new server station, or a start-up looking to buy office furniture or put money down for rent. Wall Street has always been a cutting-edge technology buyer, and that spigot is all but shut off for now. Enterprises are announcing plans to trim or freeze spending, and private customers probably aren't far behind.
On top of that, venture capital spending is on shaky ground, mergers and acquisitions in tech are down, and successful initial public offerings on the stock market are as unlikely as they have been at any point since the dot-com bust. What more, after witnessing a steady increase in billing rates for the last few years, Indian IT service providers could face pressure on the pricing front as demand slows down amidst worsening financial crisis in the US, the largest service market.
Already, we're starting to see signs of growing problems. Rumors are spreading of growing layoffs in Silicon Valley that is already having a global affect, and since the third quarter just ended, it's a good bet that surprising earnings shortfalls could be the big news in the coming days.
Nonetheless, while many may fear a replay of the dot-com bust, what could happen to the tech industry over the next year will be different for a combination of reasons: This isn't a self-made disaster, there's not as much public money on the table, and the rate of spending for Web 2.0 companies has been relatively modest when compared to the wild gold rush days of the late 1990s.
Some analysts feel that the US financial crisis will impact in India after December. IT Secretary Ashok Kumar Manoli said that about 35 per cent of revenue of major IT industries comes from Banking Service Finance Institutions world over, with banks in the US having a major share. "It is too early to say about the impact of the crisis on this."

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