cxo europe 16

Google Enterprise’s Adrian Joseph on business innovations

CLOUD SPECIAL

Discussion, debate and in-depth advice on cloud computing

SOCIAL COMMERCEGroupon: The new kid on

the social media block

Whistleblowers are as much a threat to data security as cybercriminals. Is your company doing enough to keep staff onside?

Blown over or overblown?

www.cxo.eu.com • Q3 2010

IT

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FROM THE EDITOR 5

There’s always been a healthy camaraderie between the boss and employees. Hallmark have made a tidy profi t on the back of numerous tacky cards, mugs and calendars they tout extolling the ‘tricky’

relationship between the person in charge and the guys who work for them. Much of this banter can, and usually is, taken in jest: each party gets the joke and is aware that the status quo – the hierarchy – works because of this relaxed form of showing, giving and receiving respect.

Having a good relationship with your employees is paramount to creating a harmonious and successful busi-ness, and there are various means in which to forge good bonds. Whichever way you manage, though, not every employee will respond in the same manner. Some need an arm around the shoulder; some need tough love; others need little management at all. But all need to know that, no matter how untenable they think their work situation becomes, there is always an open and clear channel of communication.

Th ere should be no dead ends in business. If an em-ployee feels trapped, voiceless, disengaged or threatened, they – like a cornered animal – will lash out, and oft en in the most damaging manner possible, as the recent Af-ghanistan War leak proved. Now, few of us are dealing with thousands of frightened and exhausted soldiers waging a war thousands of miles from home, but some companies are engaged in business practices that may not always sit comfortably with a selection of their employees.

In such instances, the threat of a disenfranchised em-ployee becoming a whistleblower increases, and securing against these internal threats is more than just a job for the IT department. Of course, implementing good levels of security, encryption and a watertight perimeter should be the fi rst step, but corporations must also look at their

Are you engaged?

Companies have a responsibility to engage with all of their employees or run the risk of alienating some members of staff .

Ian CloverEditor

own social responsibility. Every employee must feel valued, listened to and respected, especially those privy to sensitive data and information.

Granted, even the bravest and frankest member of staff is rarely likely to speak to a superior in the same way they would a fellow colleague, but if they know that there exists that means of communicating their worries without fear of comeback or the threat of disciplinary action or worse, then it is surely a better situation for a company to fi nd itself in than on the front pages of a tabloid or haemorrhag-ing secrets that could damage its competitive edge.

Th e business world is becoming ever clearer on the need for corporate social responsibility, better HR prac-tices and intelligent talent management. Bad bosses say ‘Go!’ while good bosses say ‘Let’s go!’ Respect is a two-way street in business, and the antiquated practices of old are slowly being eroded by a variety of innovative and progres-sive companies that are forging a fresher, clearer and more communicative way of managing their staff .

Companies that do this are going to be the leaders of the future, so it imperative that their very own leaders are capable, willing and able to engage with each and every member of their staff .

“I think it takes a brave business indeed to admit that, oft en, you are just part of somebody’s career journey. At McDonald’s we are clear that for many students, why would we want to keep them beyond the two, two-and-a-half years that they are with us? Th ey are great value for that time and if they are going off to study to be a doctor or a scientist, well, why would I stop them?” Vice President of People for McDonald’s Europe, David Fairhurst(page 118)

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Enterprising ‘App’etitesAdrian Joseph, Managing Director for Google

Enterprise EMEA, talks to CXO about the challenges of delivering Google’s renowned

innovation and expertise into the corporate world

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CONTENTS 7

40 Tour de thoughtTh e role of the CIO is ever-evolving, and can no longer rest safely in the camp marked ‘IT only’, says Gary Edwards of Th omas Cook

46 Local coup How social commerce can help companies better connect with their customers in a way that adds genuine value to the business and the client.

Calling time on whistleblowersAs the recent Afghanistan War leak showed, whistleblowers can be highlydamaging. What can organisations do to ensure their employees never become so disengaged?

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EXECUTIVE INTERVIEW93 Andreas Åsander, Clavister106 Albert Grooten, Draka Communications116 Mark Lewis, Riverbed Technology 124 Vincent Belliveau, Cornerstone OnDemand

ASK THE EXPERT50 Tim Hines, Consona57 Paul Tyrer, Schneider Electric72 Michel Roth, Quest Software126 Pradeep Upad, Northgate Arinso

INDUSTRY INSIGHT36 Jeff Barto, Thawte38 Paul Heiden, BHOLD44 Françoise Soulie Fogelman, KXEN122 Doug Leeby, Beeline International

ROUNDTABLES65 Cloud computing 96 Videoconferencing114 WAN, with Nigel Hawthorn

PROJECT FOCUS108 John Stone, PGI

NEXT BIG THING85 Stuart Johnston, Experian QAS86 Ketan Karia, Ingres

TROUBLESHOOTER58 Prelini Chiechi, Adobe

52 Low carb dietNpower’s Head of Business Energy Services, Dave Lewis, talks us through the UK’s Carbon Reduction Commitment Energy Effi ciency Scheme (CRC) and explains how companies can benefi t

54 What’s in store for data centres?Effi cient, cost-eff ective and secure data storage is an ongoing challenge for banks, says Jim Borendame

60 Clouded judgementWilliam Fellows off ers further clarity on cloud computing and outlines why business should adopt a cloudier future

78 Thirsty WorkSabine Everaet of Coca Cola talks to CXO about adding some fi zz into business management

82 Smart companyTh e recent surge in popularity of business intelligence cannot mask the errors many companies make when utilising a BI strategy, says Herman Heyns

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CONTENTS 9

44Françoise Soulie Fogelman

65 Adrian Joseph

114Nigel Hawthorn

116Mark Lewis

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96Clive Sawkins


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88 Calm computingIT innovation is helping the John Lewis Partnership to meet the demands of an increas-ingly tech-savvy consumer base, John Keeling tells CXO

94 Video killed the waiting lounge starVideoconferencing technology is rapidly reaching the stage where it might well displace business travel altogether

102 The business of communicationMark Heraghty, Managing Director of Virgin Media Business, on extending his com-pany’s reach across the UK

110 Alpha MailCIO for A&N Media David Henderson talks to CXO about striking a balance between innovation and tradition

118 More than a McJobTh e challenges faced by McDonald’s’ HR department are unique and ongoing, explains David Fairhurst, Vice President of People for McDonald’s Europe

128 Print job in progressJosh Feathers of Photizo discusses how managed print services could help benefi t your business

134 Converse fortunesConverse nearly went out of business at the turn of the millennium, until a smart invest-ment by Nike helped transform the company’s fortunes

118128

CONTENTS 11

134

DETAILS138 Objects of desire141 Book reviews142 36 hours in: Seville144 Last word


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UPFRONT14

There’s an interesting moral quan-dary thrown up in 2002’s dystopi-an classic Minority Report, which revolves around the issue of free will versus determinism. While the pre-cognitive characters used in the fi lm were fi rmly entrenched

in the realm of science fi ction, the police network set up to deal with the future (or pre-) crimes committed via ‘forethought’ was interesting, and a good deal closer to reality than many of us might think.

Predictive analytics have been making waves in the world of IT for a few years, and the practice is about to hit the mainstream, threatening to drastically alter the way we view policing, banking, consumer behaviour and energy consumption. “If you work in risk management, policing, marketing, IT or the energy industry, you could quite easily utilise predictive analytics to deploy strate-gies that can enable you to work more effi ciently,” says Colin Shearer, Worldwide Industry Solutions Leader for SBSS, an IBM Company.

IBM has invested billions in developing its predic-tive analytics tool, ensuring it is as useful and reliable as possible. Th ere are already tangible results that show

that the tool works. In Memphis, US, violent crime rates have fallen by 30 percent since the city’s police force fi rst started using IBM’s predictive analytics. “Th e Crimi-nal Reduction Utilising Statistical History tool, or Blue CRUSH, can work out – with predictive analytics – where crimes are likely to occur,” reveals Shearer. “It came about when we realised that there is a whole movement in many areas of life that recognises that previous decision-making has been, to a large extent, based upon people’s experience and previous knowledge. Which all sounds a bit like gut feeling, hunches and so forth. Some of this stuff may be valid, some not, so we were able to develop a system based around evidence-based decision-making, allied with asking the question: ‘What do the hard facts and the data tell us?’

“Th e Blue CRUSH system uses human knowledge on how criminals operate to try to give police offi cers and commanders assistance with their operational decisions. With their raw data they would ordinarily base their deci-sions on, our systems are able to give them quantifi able probabilities based on what has happened in the past, taking into account all sorts of factors, such as particu-lar parts of town; the existing police presence there; the weather and temperature; the time of day; whether there

Monetising the future

How predictive analytics, business intelligence and social media studies are beginning to alter the way we think about business.

“Th e thing that has really changed in the past few months and years is that, all of a sudden, organisations have access to so much more data”

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UPFRONT 15

is a rock concert on in that part of the city; whether it is pay day, and so on. All the while the Blue CRUSH system is looking at this data and working out the probability of a crime occurring.

“With this data, the system can advise shift com-manders to help them with rostering, telling them where and when to deploy their offi cers. And then when an incident occurs, the system can rerun these models and update the city’s risk profi le.”

Th e ability to analyse information for use in predict-ing future results is just one facet of the recent upsurge in collating vast quantities of data and employing new tools to reach a desired decision or result. “Th e thing that has really changed in the past few months and years is that, all of a sudden, organisations have access to so much more data,” says Laurie Miles, Head of Analytics at SAS. “Tra-ditionally companies have done a pretty good job analys-ing structured data, but the real thing that has changed is all this unstructured data that is now available on blogs, review sites, Twitter and places like that. Increasingly, organisations are starting to take advantage of that sort of data.”

Th ere is no doubt that websites such as TripAdvisor have been shaping the thoughts and consumer habits of millions of hotel-goers for a few years now, but the next step in this evolution is going to be companies using this information to tailor their services and products in a more structured, targeted way. Everybody who is online in the modern age leaves a trace, and it is this trace that companies are now analysing in an eff ort to better under-stand their customers, and seeking ways to capitalise on the content people leave as part of their trace.

“Companies can and will now analyse not just the types of words people are using on sites such as Twit-ter, Facebook and TripAdvisor,” says Miles, “but also what time of day they are posting, how frequently they are posting and the ways they are interacting with their peers. Th is information is proving to be a goldmine for proactive businesses.”

It cannot be long before analysed data begins to alter the very way in which we consume. Loyalty card schemes based around information companies hold on shoppers are already shaping buying habits in some supermarkets, while telecommunication companies have a wealth of information on their customers’ preferences, developing packages to provide better service and further monetise their consumer base. Th row in predictive spending and consumption habits, allied with better business intelli-gence feedback and smarter analytical tools, and you are faced with a future where every action of every consumer can be analysed, fed back into the business and worked with to create profi t and more streamlined service. Excit-ing times lie ahead.

News in pictures

British supermodel Naomi Campbell is seen giving evidence at the Sierra Leone war crimes trial at the Hague via a videoscreen in the press room at a UN-backed special court in Leidschendam, The Netherlands.

Flood victims in Pakistan’s Khyber-Pakhtunkhwa province await their turn to cross a dangerously swollen river by cable car as the fl ood-damaged bridge severed this Chakdara region in half.

A Freedom of Information request has revealed that the BBC lost mobiles and laptops worth £240,000 (€290,000) over the past two years, which is the equivalent of 1656 TV licence fees.


UPFRONT16

Professional networking site LinkedIn celebrated the second quarter of 2010 by announcing that it has passed the four million-members mark in the UK, now boasting more than 15 million European

members and 70 million worldwide. Such growth mirrors the phenomenal rise of social

networking site Facebook, with a LinkedIn member join-ing every second worldwide and more than one third of UK professionals now a member.

“UK professionals from all industries are adopting LinkedIn with accelerating speed,” said Managing Di-rector at LinkedIn Europe, Kevin Eyres. “Driving this growth is the increasing realisation that an online pro-fessional profi le is the best way to present yourself pub-licly because of the opportunities that come your way. In our working lives, the internet is now oft en our fi rst destination when we’re looking for advice or expertise; it makes sense to have your skills and experience avail-able and up to date so you can be discovered by your next opportunity.”

Additional fi gures released by LinkedIn revealed that 50 percent of Fortune 100 companies have hired through LinkedIn and one million professionals are joining the site every 12 days.

While Apple might grab the lion’s share of the global tech sector andhas seen record profi ts, Google’s Android mobiles have been quietly performing more robustly than many in the industry would have expected. In fact, statistics from research fi rm Canalys suggest that the fi rm is doing extremely well, with shipments reportedly increasing 886 percent year-on-year from the second quarter of 2009.

This is even bigger than Apple who, while second in smartphone growth, only saw a 61 percent increase in the same period. However, the smartphone sector has been steadily increasing with Q2 sales rising by 64 percent. While Apple may have dominated headlines due to its brand images, Canalys’ Pete Cunningham said that Android’s success was due to the release of “highly compelling” phones.

“We’re really seeing major vendors getting behind the platform,” he said, citing large manufacturers such as HTC, Samsung and Sony Ericsson, who all use the platform and have helped drive shipments. Due to the diverse brands, Android has been able to get a higher market share over Apple. Despite this, the most popular platform is still Symbian, most commonly found on Nokia and certain Sony Erics-son phones.

Symbian has grown in popularity since the Symbian Foundation made its code open source, meaning that any organisation or individual can use and modify the platform’s underlying source code. However, Apple’s popularity in the media and its brand awareness has meant that the iPhone’s operating system has always over-shadowed it.

Nokia is the most popular phone maker in the world and the operating system it opts to use in the future could determine a clear market leader. While it is a ‘mass market’ for operating systems, Nokia is reportedly seeking to switch to another platform in order to compete with other brands.

Nokia recently launched Meego with Intel to compete, but few in the industry are sure what Nokia could do in the future. In comparison, media-darling Apple saw the iPhone achieve the second largest growth during the period, despite high-profi le issues with the iPhone 4G.

Android phone sales soar

LinkedIn looms large

Fast factSmartphones will acquire

of the global mobile

phone market by 2013 (Source: ABI Research)

25%


UPFRONT 17

A UK-wide study by Virgin Media Business has uncovered a national north-south divide in the way companies and their customers communicate. Of the 5000 busi-nesses polled, results show that workers in the north are keen to engender a more personal way of business, conducting more face-to-face meetings and making more telephone calls than their southern counterparts, who are more inclined to embrace the communication technologies at their disposal.

London, in particular, was a digital frontrunner, with the use of social network-ing sites commonplace throughout the capital as a means of keeping in touch with colleagues and customers (London is, after all, the top Twitter city in the world). In Northern Ireland, demand for digital interaction was the lowest, with just six percent of businesses relying on social networking or instant messaging to stay in touch.

Despite the proliferation and evolution of greater means of communication in recent years, the humble telephone remains the north’s most used comms tool, with 71 percent of businesses considering it a ‘critical’ instrument. After that, face-to-face meetings are considered the next most important communication method,

with two-thirds of northern companies believing that human contact matters more than any other. Just 23 percent of polled businesses saw mail as vital.

London-based businesses, unsurprisingly, were the least enamoured with ‘snail mail’ – just 11 percent saw it as important to their operations, while York-shire businesses were the most traditional: 37 percent deemed daily delivery of mail essential.

“The way in which we all communicate has changed beyond recognition over the last few years,” said Virgin Media Business Commercial Director, Andrew McGrath. “We now send dozens of emails and text messages, post on Facebook walls, and tweet on a daily basis. In fact, many younger workers have never known a time when the rush to collect and send off the post was a daily ritual.

“This transformation is particularly pronounced in the south, where many businesses are now almost entirely dependent on mobile phones and email, help-ing staff to keep in touch while on the go, enabling workers to respond to colleagues and customers a lot faster. As more and more businesses realise the ben-efi ts that this digital dialogue has to offer, I would not be surprised if this number increases rapidly.

“That said, it is vital that organisations do not completely dismiss traditional communication chan-nels in favour of trendy online tools. Companies must take a multi-channel approach to their communica-tions, as this will allow them to build strong relation-ships through human contact, while benefi ting from the mobility that modern tools allow.”

Wait in gold

North-south divide

British banks take an average of 74 seconds to answer calls from individual consumers, while business customer calls are answered aft er just 61 seconds

Th e best performing banks answer calls aft er just 34 seconds on average

Th e worst bank took fi ve minutes and 33 seconds to pick up a call

Britain’s high street banks are being tweeted about 180 times a day on average

55% of social media users expect a response from their bank to an online complaint within 24 hours

(Figures from Virgin Media Business’ Customer Service Study)


UPFRONT18

InfoWatch, one of the European leaders in the fi eld of confi dential data control, has recently announced a new release of its fl agship enterprise data protec-tion solution, InfoWatch Traffi c Monitor Enterprise. The new version facilitates implementation and signifi cantly saves integration expenses, which is extremely important in today’s fi nancial situation.

InfoWatch Traffi c Monitor Enterprise is a com-prehensive modular solution to protect information against various internal threats by controlling dif-ferent data transfer channels. The solution includes a gateway protection module to safeguard the corporate network perimeter (controls information transmitted via web mail, blogs, forums, corporate email system, instant messengers and network printing), an end-point protection module (controls local printers, portable devices, removable media and communication ports) and a forensic storage to archive all the info for further investigation.

One in fi ve employees globally would turn down a job if they were forbidden from accessing social networking sites while at work, a survey from soft ware specialists

Clearswift has revealed. Th e survey also claimed that eight out of 10 workers believe trust in how they manage their own time on the internet is more important than pay.

“Th is is quite shocking, especially when you consider the recent fi nancial meltdown and the fact that unem-ployment is still so high,” said Andrew Wyatt, Clears-wift ’s Chief Operating Offi cer.

Th is trend was most evident in the 25- to 35-year-old generation, a group that, according to Wyatt, has grown up in a world of online connectivity. “Th ey’re completely connected through things such as email access and mobile phones, and it’s built into their psyche in the way they work; it’s how they expect things to be. Removing access to social media websites in the workplace would be like cutting off their right arms.”

However, the survey also showed that employees were not neglecting their work commitments, with two-thirds admitting to working later or through lunch in order to make up for time lost spent undertaking personal tasks and errands online while in the offi ce. “Employees are used to being constantly connected, and progressive busi-nesses have seen that they can leverage that,” said Wyatt.

Social satisfaction

Minimisation of a solution’s infl uence on corporate infrastructure and business processes is one of the main customer requirements during imple-mentation. Striving to better serve customer needs, InfoWatch has introduced a new product release that features ICAP (internet content adaptation proto-col) support, thus minimising the product interference with the existing IT-infrastructure.

InfoWatch Traffi c Monitor Enterprise provides companies with visibility into their information fl ow thanks to a user-friendly reporting system. Graphi-cal reports clearly show the data sender, recipient, time, category and the channel through which the data left the corporate network. More than 60 report types are available to better monitor user employee current activity or conduct an investigation. Still, corporate security offi cer can create their own handy report-types with one click of the mouse.

Natalya Kaspersky, InfoWatch CEO, says: “Most companies now live in a tough budget saving mode, including expenses for IT security. In these circum-stances I’m pleased to offer the product version that meets our customers’ needs and substantially reduces integration costs. I’m sure the customers will appreciate our efforts.”For more information, please visit www.infowatch.com

InfoWatch Traffi c Monitor Enterprise protects corporate data

More than 1600 employees and managers in the UK, Germany, Australia and the US were surveyed in the study, with 48 percent of men admitting to using social networking sites at work compared to 36 percent of women. Men are also more likely to check their per-sonal emails at work (69 percent compared to 54 percent of women), and – perhaps the most surprising statistic – shop online (34 percent to 20 percent).

“Eight out of 10 workers believe trust in how they manage their own time on the internet is more important than pay”


www.infowatch.com | e-mail: [email protected]

Start protecting your data today InfoWatch Traffi c Monitor Enterprise is available for immediate licensing.Address your technical and business questions to [email protected]

• Protect sensitive corporate data and manage various risks• Improve employee effi ciency and corporate culture• Ensure compliance with regulative requirements

InfoWatch Traffi c Monitor Enterprise controls corporate information fl ow to protect enterprise data against internal threats.

www

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UPFRONT20

UAE

BlackBerry owners in the United Arab Emirates have been banned from using the smartphone’s email, in-stant-messaging and web-browsing capabilities as UAE authorities have clamped down on the device due to en-cryption concerns that makes it diffi cult for the govern-ment to monitor them.

Due to the way in which the BlackBerry network is set up to function, data is exported offshore and so the UAE authorities are unable to regulate the information coming in and out of the country. The service is to be sus-pended on October 11 following a three-year campaign to make BlackBerry toe the line with the UAE telecoms regulations.

Sweden

Sweden is set to post the most robust economic re-bound in the European Union aft er 80 percent of the country’s largest companies posted earnings that far exceeded the estimates given by analysts for the last quarter.

Th e OMX Stockholm 30 index featured 25 Sweden-based companies, of which 20 surpassed the average second-quar-ter profi t estimates given by analysts, outstripping Germany, where only 65 percent of companies came up healthier than analysts had predicted. Sweden’s largest exporters – which include Volvo AB and Svenska Cellulosa AB – have been propelling the recovery, which is expected to continue into the third and fi nal quarters of the year.

Russia

The devastating heatwave that has left Moscow swel-tering over the past few weeks is set to have a dramati-cally deleterious effect upon Russia’s economy. More than 15,000 deaths have already been attributed to the heatwave – close to 7000 of them in the smog-blanketed capital Moscow – and it is estimated that the forest fi res and droughts could cost the country €11.4 billion.

The heatwave, an almost-unprecedented event in the history of the country, is expected to hit Russia’s US$1.5 trillion annual economy, because agricultural and indus-trial output will be severely disrupted. The country is likely to harvest only a third of the grain it did last year because of the drought, said Prime Minister Vladimir Putin.

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UPFRONT 21

China

The month of July saw the Chinese economy slow down as the country began to get to grips with tackling its increas-ingly infl ated housing market and addressing the need for its population to begin consuming less energy: twin

problems that face the country as it slowly transforms from a third world into a fi rst-world nation.

Increases in industrial output, retail sales and fi xed asset in-vestment also slowed in July, as did new bank loans. Infl ation did increase, by a margin of 3.3 percent, which was higher than govern-ment estimates. Economists agree that China is now experiencing a controlled slowdown from the eff ects of its economy overheating in 2009. “Th e key data point to a moderate slowdown rather than a sharp downturn,” Brian Jackson of the Royal Bank of Canada told the Financial Times.

South Africa

The ruling African National Congress (ANC) has declared that it wishes for ‘greater state intervention’ in South Africa’s mining industry, stating that it worries the sector has little divergence. The ANC has made no secret that it wants to create a state-owned mining company in order to develop a new mining strat-egy that will bring better regulation to the industry.

“There is broad support for greater state involvement in the mining sector,” said Deputy Chairman of the NEC sub-committee on economic policy, Enoch Godongwana. The ANC is seeking new ways to recoup tax on the speculative capital infl uxes that have enabled the rand to strengthen by 21 percent against the dollar since 2008, and sees state ownership of mining assets as the best way to maintain levels of foreign investment in South Africa.

United States

The jobless rate for American teenagers aged between 16 to 19 stands at 26.1 percent, prompting fears that this ‘teen-age wasteland’ is raising a generation with no hope, few qualifi cations and little chance of gaining work experi-

ence in the near future. Before the recession this jobless fi gure would ordinarily hover around the 15 percent mark.

Nationwide, the offi cial unemployment rate for all ages stands at 9.5 percent, yet the government’s broader gauge – which includes those that are underemployed – puts the fi gure at 16.5 percent. In 2009, the hourly minimum wage was increased from US$5.15 to US$7.25, a factor, argue some economists, that has exacerbated the unemployment problem for thousands of teens, with many busi-nesses unwilling to pay such wages. However, the poor economy has had a negative impact too, with millions of federally funded summer jobs cut by the government as it tightens its own belt.

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UPFRONT22

Demand and supply levels for IT and ICT professionals in the UK have in-creased for another quarter, according to a report published by the Recruit-ment & Employment Confederation (REC) Technology Sector Group.

Th e published report shows an increase of four percent for demand in ICT labour, and a 10 percent increase in demand for ICT skills. Latest fi gures point to 60,000 unemployed IT professionals and 68,000 employed jobseekers competing for a total of 86,000 IT jobs.

Th is is a ratio between demand and supply of 1.5 potential applicants for each job. However, in some areas of the industry there is a shortfall in expertise, with the report highlighting that qualifi ed systems developers, architects of .NET and SQL SVR are

coming up short.“Th ese results show that the demand within

the sector continues to grow and return to good health,” said Chair of REC Technology, Jeff Brooks. “At ground level, members say that things have improved markedly from the low points of late 2008 and early 2009. IT systems are clearly seen as tools that can help drive growth and help reduce cost across the enterprise and we expect to see this growth maintained.

“I would also reiterate our message to the coalition government [of the UK] that IT can help reduce costs within the public sector and continued investment in technology is vital if government is to both improve services and reduce budgets.”

If the apple doesn’t fall far from the tree, then what of Apple employees? The Apple executive in charge of development for the iPhone 4, Mark Papermaster, has left the company following months of haranguing at the hands of irate Apple customers who found a design fault with their shiny new iPhone 4s.

Left-handed users, or those who simply liked to hold their phone in a certain way, began reporting poor signal and dropped calls – problems widely believed to have been linked to the phone’s antenna. Hard evidence was soon uncovered by the infl uential Consumer Reports organisation that proved that the phone’s signal strength weakened when held in a certain manner, a problem particularly exacer-bated by left-handed users.

Apple was quick to smother the issue but was forced to respond to the continu-ing commotion by offering free cases to those affected, because the signal problem was identifi ed in the iPhone 4’s use of metal casing to bridge the short gap between two antennae in the lower-left side of the phone.

Papermaster was head of Apple’s iPhone and iPod hardware department, a role he assumed in 2009 when he joined the company from IBM. It is not clear whether Papermaster was fi red or he resigned, but reports have suggested that his departure is inextricably linked to the iPhone 4’s problems.

Apple exec quits

Demand IT IT fact

Global IT spend is set to reach €1.2 trillion by the end of the yearSource: International Data Corporation


UPFRONT 23

“A marked shift to shorter working hours has been one of the key characteristics of the recession,” said Chief Economic Advisor at the CIPD, Dr. John Philpott. “But signs of an increase in long-hours working since the trough in hours in summer 2009 suggests that the fall in working time during the jobs downturn was a forced detox for Britain’s workaholics, most of whom will be eager to start putting in the hours again once the eco-nomic recovery gathers steam.”

Working hours increasing aft er recession trough

Figures published by the Working Hours in the Recession audit by the Char-tered Institute of Personnel and Development (CIPD) have revealed that demand for labour in the UK has picked up for the fi rst time since mid-2009.

Aft er the recession fi rst bit, the UK job market suff ered one million full-time job losses and a shift to more fl exible and fewer working hours among a workforce that was eager to do all it could to hold on to employment. As a result of this shift in working patterns, there was a 10 percent fall in the number of employees working more than 45 hours a week.

Full time employment fell by 4.1 percent at a time when part-time employment grew by 4.4 percent as a result of workers agreeing to cut their hours in attempts to stave off redundancies and help see their employers through the recession. Overall, 32.7 million fewer hours were worked each week in the UK since the start of the recession and the publication of these fi gures by the CIPD.

By the second quarter of 2010, 440,000 fewer employees worked more than 45 hours a week compared to two years prior, with male employees accounting for the bulk of the recession casualties. Th e audit report also reveals that, by spring 2010, there were just as many UK employees working between 16 and 30 hours a week as there were working 45 hours or more, suggesting the country has come to fully adopt a ‘mixed-hours’ culture. As a result of this shift , there are only four EU countries that have a shorter average working week than the UK – Sweden, Ireland, Denmark and Th e Netherlands.

Ad spend on the up

Marketing behemoth Publicis Groupe SA have predicted that global

advertising spend will grow by 3.5% by the end of 2010, to a total of

US$447.5 billion (€338 billion)

This marks the fi rm’s third continuous upward revision of ad spend after six

consecutive downgrades during the recession

Internet ad spend is projected to increase the most, up a total of 13% to

US$61.3 billion (€46.2 billion)

Television will attract the largest share of ad expenditure –

US$177.7 billion (€134 billion) in total

Newspaper and radio ad spend is down by 3% and 1.4% respectively

Across Europe, only Greece (13.9%) and Spain (0.7%) will experience a

decrease in ad expenditure


UPFRONT24

Ensured but not insured

An Abbey Legal Protection (ALP) Protection Gap survey has discovered that a quarter of CEOs do not know what claims or eventu-alities their commercial insurance policies

cover their business for. When surveyed about whether a variety of potential

claims would be covered within their workplaces, 21 percent of CEOs and 18 percent of senior management admitted that they had no idea what eventualities would be insured, and what would not.

Th e top occurrences where senior management thought their company’s standard commercial insur-ance policy would have covered them but, in fact, does not, were personal injury (57 percent of those surveyed thought personal injury claims would be covered), damage to company property (55 percent), employment law claims (42 percent) and disputes over employment contracts (33 percent). Th ankfully, only two percent of those surveyed believed their pets would be insured while on company premises, and just nine percent thought like-wise while their car was parked in the company car park.

“It is concerning that in tough economic circum-stances when legal disputes are more likely and more costly, such a signifi cant proportion of senior managers do not know what they are covered for, and almost cer-tainly do not know the terms and conditions that apply,” said Richard Candy, Underwriting Director for Abbey Legal Protection. “Most insurers impose terms and con-ditions to achieve a speedy and economical solution of the insured problem to the benefi t of the insured and the insurer. If you do not know what those terms and condi-tions are you are likely to lose those benefi ts and may even lose the insurance cover entirely.

“Th ere is a gap in management understanding of what is covered and how to use the cover that is there.” So dust off that insurance policy and fi gure out exactly what your company insurance covers before inviting Fido in for a dog-day at work…

Top 10: Most common iPhone claims

(Source: protectyourbubble.com)

1. Cracked screen

2. Stolen while texting

3. Dropping calls

5. Damaged by pet dog

7. Internet no longer connects

8. Battery no longer charges

9. Dropped in toilet/bath

10. Screen has frozen

4. Left on car roof and so fell off while driving

6. Stolen from handbag


GEODIS WILSON AD.indd 1GEODIS WILSON AD.indd 1 11/08/2010 15:1811/08/2010 15:18

UPFRONT26

EU population surpasses 500 million

The population of the European Union has now reached half-a-billion thanks to net increases in immigration pushing the population higher than ever, according to fi gures published by Eurostat, the EU’s statistics agency.

As of January 2010, the offi cial population of the EU was 501.1 million, a 1.4 million increase on the same time in 2009. It is estimated that 900,000 of the ad-ditional heads came from immigration. Th ere was a population increase in 19 of the 27 member states, and a decrease in the eight others, with Luxembourg posting the largest increase in its population (up 17.2 per 1000 inhabitants) and Lithuania experiencing the largest decrease in its population, losing 6.2 people per 1000 inhabitants.

• Th ere were 5.2 million newborns in the EU in 2009, with Ireland reporting the highest birth rate (16.8 per 1000 inhabitants), followed by the UK (12.8) and France (12.7).

• 10 member states experienced negative natural growth, led by Bulgaria, Latvia, Hun-gary then Germany.

• Ireland, following a boom decade of economic immigration, has returned once more to being a nation of emigrants, with the country recording the highest net outfl ow of inhabitants.

Eurozone’s wave of confi denceA report by the European Commission has indicated that confi dence in the 16-nation Eurozone has signifi cantly increased from minus 17.3 in June to minus 14.1 in July. The fi gures, based on the consumer confi dence indicator, refl ect a growing ease with the euro since the European debt crisis began to settle down.

The Commission’s Economic Sentiment Indicator (ESI) for the Eurozone has also increased to 98.7 since June, just a few points behind the general EU ESI rating of 100.1.

Nationally, the UK experienced the largest drop in ESI at minus three points, while Spain experienced the largest increase, of 2.3, possibly on the back of their country’s successful World Cup campaign and July marking the high point of the profi table holiday season.

Th e issue in numbers

MCDONALDS HAS A GLOBAL WORKFORCE OF 2,000,000 (P118)

A 52-year jail term could be awaiting the US Army whistleblower who brought about the Afghanistan War Leak (p30)

Thomas Cook services 22 million customers annually (p40)

80% of Groupon subscribers are female (p46)

750 MILLION PAIRS OF CONVERSE ALL STARS HAVE BEEN SOLD WORLDWIDE (P134)

SMART COMPANY (P82)Business intelligence might sound a straightforward proposition, but many companies still get their BI strategies drastically wrong, says Herman Heyns.

MORE THAN A MCJOB (P118)An intriguing insight into the internal Mc-inations of HR talent management at one of the world’s larg-est and most recognisable companies.

CONVERSE FORTUNES (P134)CXO looks at how one of the most famous sports shoe names in the world was rescued from the brink of oblivion to become a market leader once more.

82

Don’t miss…


UPFRONT28

Furthermore, Tectia solutions are quickly de-ployed, easy to confi gure and work in complex net-works, giving security and visibility to application traffi c without modifi cation to existing applications or their confi gurations.

Tectia solutions for PCI DSS compliance help com-panies to reduce the risk of fi nancial fraud; increase customer confi dence by providing higher levels of security; maintain customer trust; protect corporate brand and reputation; protect the organisation against fi nancial losses and compensation claims due to secu-rity breaches, and provide methods for benchmarking and assessing card payment security systems.

For more information, visit www.tectia.com

With credit card security breaches costing stakehold-ers millions in revenue, businesses and consumers are concerned about the same challenges. Who is legally using credit card information? How can businesses maintain the confi dentiality of credit card information and meet security standards and regulations for credit card transactions?

Tectia Corporation, formerly SSH Communications Security Corp, recently highlighted the challenges of protecting customer credit card data. Tectia President and CEO Jari Mielonen noted that information security issues should no longer be the sole domain of technol-ogy offi cers. Mielonen has remarked that requirements for compliance with payment card industry security standards have made credit card security part of com-panies’ risk management portfolios. “Information security should belong to every board agenda starting from today,” he declared.

Tectia helps businesses to secure the transmission of sensitive consumer data across all networks, thus protecting customers and complying with PCI DSS re-quirements. Customers lose no time in ensuring that their card payment systems comply with the rigorous information security standards of the PCI-DSS, and more importantly, that customers and overall business processes suffer no disruptions.

Safeguarding credit card transactions

Companies in this issue are indexed to the fi rst page of the article in which each is mentioned.

Company index Q3 2010

A&N Media 110Adobe 58, 59BCS Global 96, 100Beeline International 122, 123BHOLD 38, 39Blackberry IFCBlue Coat 114Clavister 80, 93Coca Cola 78Consona 6, 50, 51, IBCConverse 134Cornerstone OnDemand 124, 125Draka Communications 104, 106, 107Expand Networks 114, 115Experian QAS 85GE Capital 94Geodis Wilson 25Google 12, 64, 65, 74, 132, OBC

Groupon 46InfoWatch 18, 19Ingres 86, 87IQPC 139John Lewis Partnership 88Juniper 10, 65, 67KPMG 82KXEN 44, 45LifeSize 96, 98McDonald’s 118Meet the Boss 69Mercedes 2Nike 134Npower 52Northgate Arinso 126, 127 PGI 108, 109Photizo 131Psytechnics 96

Quest Soft ware 72, 73Ricoh Europe 30Riverbed Technology 116, 117, 140Schneider Electric 4, 27, 55, 57Tectia 28, 29Th awte 36, 37Th omas Cook 40Videra 8, 96Virgin Media Business 102Wipro 65, 71Wells Fargo 54451 Group 60

“Information security should belong to every board agenda starting from today”

Credit card fraud

• Card fraud losses in the UK totalled €534.7m in 2009• Fraud on lost and stolen cards totalled €58m• Card ID theft amounted to €46m• Counterfeit card fraud equalled €98m,

down from €206m in 2008• All the fi gures were down from previous years


TECTIA AD.indd 1TECTIA AD.indd 1 12/08/2010 11:4212/08/2010 11:42

WHISTLEBLO CALLING TIME ON

COVER STORY30

COVER STORY ED P30-35.indd 30COVER STORY ED P30-35.indd 30 18/08/2010 15:4418/08/2010 15:44

Sporting the online moniker ‘Bradass87’ and off ering bold, boastful claims of access to the most top-secret data within the US army, Bradley Manning – a US Army Intel-ligence Analyst – hardly came across as the most trustworthy surreptitious source to ever leak from the largest military power the world has known. Th e internet is, aft er all, awash with the disillusioned, the dis-enfranchised, the disappointed and the

downright deluded. At fi rst glance, Manning belonged in this bracket: his deep throat-esque instant message conversations to a hitherto-unknown Californian computer hacker; the almost insatiable desire to relay ‘sensitive’ information that, if false, could get him into serious trouble and, if true, could land him with a heft y prison sentence if ever caught; the sensational lan-guage he used when talking about ‘incredible, awful things’ that ‘belong in the public domain and not on some server stored in a dark room in Washington DC’ – it all pointed to yet another online crackpot looking to spout whatever had ailed him to anyone who would listen.

Th e problem for the US authorities though, was that the in-formation Manning was all too eager to offl oad about the Afghan War was, in fact, true. Manning’s job within the US Army af-forded him privileged access to two secret networks: the Joint Worldwide Intelligence Communications System, and the Secret Internet Protocol Router Network (SIPRNET), both of which carried material that was classifi ed as ‘Top Secret’. Unrestricted access to this type of information led Manning into the realm of temptation. Th e sensitivity of the data and the shocking truths that it covered up (the shelling of unarmed Afghan civilians by a US helicopter in 2007 being the most damning) compelled Man-ning to seek to release the information into the public domain: compressing, encrypting and uploading the juiciest details to Julian Assange, founder of the Wikileaks website. Manning would even take blank CDs labelled ‘Lady Gaga’ with him to work at the Operation Hammer base camp some 60 kilometres east of Baghdad in Iraq, insert them into his high-security laptop and even lip-synch along to nonexistent music so as not to arouse suspicion while he was downloading the explosive information.

As the Afghanistan War leak proved, no organisation’s security perimeter is ever completely safe from breach. Ian Clover discovers how adopting more progressive strategies can helpdilute your employees’ desire to leak information.

WERS

COVER STORY 31


COVER STORY32

Such a news story raises various questions. Rumours have abounded for years about the less-than salubrious practices of the US and Allied forces in Afghanistan. But that is all they ever were before – rumours. Th is Wikileak uncovers the non-PR version of events in Afghanistan, and they threaten to be far more damaging for the American authorities than any-thing that has gone before, the Pentagon Papers during the Vietnam War included. And if a body as powerful as the US Army can fi nd its security perimeter breached by an employee on a mission, then how do mere cor-porations protect their sensitive data from internal threats and external malice? Is it a matter for IT departments to implement better security technology, or do companies have a duty to engender better channels of communication for employees who could become potentially disgruntled? Do corporations have a social responsibility to treat the threat of whistle-blowers more seriously? Th e challenge for most companies lies somewhere between the two stools – better technology can certainly help to secure a company’s perimeter, but failure to engage with employees, or indeed teach them the value of following secure practices, can be just as harmful for your business.

“Highly visible leaks such as the Afghanistan Wikileak should encour-age all businesses to recognise how close risk is and give them impetus to document governance and process review,” says Ian Winham, Chief Technology Offi cer for Ricoh Europe. “Th is story highlights just how im-portant it is for companies to review internal security processes to ensure information is protected and access to sensitive information is restricted, but also to engage the IT community and the HR community to make sure that your company is addressing communication with your staff .”

Failure to engageManning was arrested by the US Army Criminal Investigation Com-

mand in May this year and, in July, was charged on two counts of ‘transfer-

ring classifi ed data on to his personal computer and adding unauthorised soft ware to a classifi ed computer system’. He could be looking at a jail term of 52 years, which he would have known before acting in such a manner. His defenders have been calling him a whistleblower for free speech; others think him foolish. But the question is – what compelled Manning to act in such a manner? Did he simply want the fame, or did he feel so disengaged from his superiors, and frustrated with what he saw, that he felt he had no choice but to act as he did?

Such questions are equally valid in the corporate world. Employees with access to sensitive data need to act responsibly of course, but is there a duty for the employer to ensure that its staff are made to feel valued and respected? “Th e armed forces can be, without wishing to say anything too detrimental, extremely negative about any form of information or feed-back that is, in itself, negative,” says Grahame Waite, Information Security Offi cer and Data Protection Offi cer for Fife Constabulary, who spent 25 years in the armed forces. “Th e rank structure is designed to be rigid. You are expected to do what you’re told. Th en again, every serviceman that I have ever known has absolute dedication to the armed forces and it takes something really extreme to tip somebody to the point where they think, ‘You know what? I have to do something about this.’ It really must be something extreme.”

And it was. Th ankfully, most companies are not waging wars in foreign lands, or being forced to act in a manner that has the potential to take lives. But what is classed as damaging information diff ers from company to company and organisation to organisation, and so does the type of data and structure that could lead to employees feeling aggrieved. “Whistleblowers are always a bit of a contentious issue because it all de-pends on which side of the fence you are on,” says Waite. “Th ey can prove really benefi cial if, for instance, they go to their own executive and tell them that there is a real issue that they would like to address. Th is sort

”…everywhere there’s a US post, there’s a diplomatic scandal that will be revealed…”

”…documents that expose the almost criminal political back-

dealings that show how the fi rst world exploits the third, in detail, from an internal perspective…”

”…at fi rst glance it was just a bunch of guys getting shot up by

a helicopter…no big deal…about two dozen more where that came from right…but something struck me

as odd with the van thing…and also the fact it was being stored in a JAG offi cer’s directory…so I looked into it…

eventually tracked down the date and then the exact GPS co-ord…and I was like…OK, so that’s

what happened…”

Out of the mouth of Manning…Choice excerpts of Bradley Manning’s conversation with Adrian Lamo, the Californian hacker he contacted.


COVER STORY 33

of culture should be encouraged. But if somebody is doing it for fl agrant self-aggrandisement or malevolence, then it becomes a diff erent matter.”

Data and information security can be guarded right from the off if every employee feels that they have the relevant facility and chain of com-mand in place that enables them to report something that they feel is wrong within an organisation. “You have to accept that technology can only de-liver part of the solution,” says Andy Kellett, Senior Analyst at OVUM Re-search. “Technology itself can be part of the problem, as we have seen with the Afghan War leaks. So if you can put a formal and secure communica-tions channel in place that off ers an outlet to people who feel that things are not going their way and need to express their concerns about something that their company is doing, that has to be advantageous. Th e approach could involve the use of an independent mediator to whom employees can pass information without feeling that their own position is threatened. If you can do this while making staff feel valued, it can be an important addi-tion to your corporate structure.

“Th e fact is, most people become whistleblowers because they are either scared that their concerns will be ignored or know for a fact that they won’t be taken seriously. Rightly or wrongly they believe that unless the information they hold goes public, nothing will be done and that they will suff er as a consequence if they make their views public.”

Educating your workforce is of paramount importance. If they are fully aware of their responsibilities within your organisation, then that is half of the security battle won. “Th e issue really boils down to the use of good tech-nology controls alongside user education,” says Kellett. “At the same time it is imperative that an organisation maintains proper relationships between itself and everyone who works for it.” But there are also responsibilities on the employee to act maturely and responsibly, too. “We all go through stages where we are less happy than we could be,” adds Kellett. “But the responsi-bility of the end-user doesn’t disappear just because they are discontented.”

”…I took some information to an

offi cer to explain what was going on. He didn’t

want to hear any of it. He told me to shut up…”

”…If you had free rein over classifi ed networks for long periods of time…say, 8-9 months, and you saw incredible things,

awful things that belonged in the public domain and not on some server stored in a dark room in

Washington DC, what would you do?…”

”…lets just say *someone* I know

well has been penetrating US classifi ed networks, mining data like the ones described...and been

transferring that data from the classifi ed networks over the air gap on to a commercial network computer...sorting the data, compressing it,

encrypting it…”


COVER STORY34

Identifying weaknessesEvery company and organisation has its vulnerabilities. Th e US Army,

for all its might, technological power and ability to lean heavily on impor-tant decision-makers to get the outcome its country seeks, is vulnerable from within: from disillusioned soldiers who, ordinarily, pledge blind loyalty to the cause. Conversely, corporate enterprises may be extremely eff ective at combating internal leaks and exposures but fi nd that they are susceptible to third-party interference.

“What organisations need to do is undertake upfront risk assessments to understand and identify what and where their real vulnerabilities are,” says Kellett. “For example, if you are in the retail or the fi nancial services sector, you obviously need to protect credit card data. You need to ensure that customer information is protected and doesn’t end up on external devices without being properly encrypted. Th is issue of getting your com-pany’s priorities right, of understanding the things that are really going to cause your organisation problems, is highly important.”

As is applying techniques and strategies to ensure that data loss prevention and security breaches are rare occurrences. “If yours is an or-ganisation where everything stays on central servers, then you can start to address those issues by understanding where your most sensitive data is,” continues Kellett. “Very few organisations like that exist today. Real-istically you are looking at business operations that support the free fl ow of information and, therefore, there is a need to make use of technology that can deal with things that attack your organisation but also address the issues of accidental misuse. Because it is not always a case of malicious attacks and people stealing information; the loss of fi les, laptops and data is oft en down to human error; it’s stuff that people just do.”

Th is is where security technology can work collaboratively with better corporate responsibility to both educate employees and arm them with their own sense of responsibility and technologies that will come to shape their behaviour for the better. “Working in the police force means there is that responsible mentality already built in that our information is ex-ceptionally sensitive,” says Waite, “but in the corporate world intellectual property can be just as valuable and sensitive, so you do not want this sort of data leaking from your company.”

Having an increased awareness of the need to maintain strict security measures is just one part of the perennial battle companies are engaged in as they fi ght off the threat of data breaches and security lapses. “Aware-ness and activity are always two things that actually are diffi cult to pull together,” admits Winham. “Th ere are plenty of organisations that have implemented good security policies that they are very clear about, but what they tend to overlook is the process of fl owing these practices and poli-cies throughout the entire organisation; there is oft en a lack of governance, sometimes confusion, and sometimes something as simple as oversight.”

Technological helpSimply training your staff to follow stricter security protocols is only

half of the battle; staff members need to be armed with a suitable security infrastructure too. Prison offi cers, for example, would quickly be over-whelmed if all they had at their disposal were batons, intense training and an intimidating collection of bushy moustaches and shouty voices – they need the bars, walls, razor-wire and fences to help them secure their perimeter. Likewise, a prison with no intelligent guard presence would quickly be breached. And so it is for company security. Collaboration


COVER STORY 35

ganisations need to have visibility of your data and you need to control that access – what they can do and see etc. – the boundaries that exist in normal business relationships no longer apply. Technology allows information to move around very easily, and the amount of information that we make available is expanding all the time. Next generation technologies will open things up even more and make it even easier for information to be moved around, which poses a serious set of security questions for the future.”

Central data and data on the move both need to be protected and securely encrypted so that any attempt to remove this information from within the perimeter to beyond it is fl agged and of little use to the malevo-lents. “Most organisations don’t know when somebody sticks a USB drive into the back of a machine and makes a copy of a fi le,” says Kellett.

Th ere are other dangers too. Th e printing off of sensitive information may seem charmingly old-world, but it remains a very real threat for

companies that do not implement appropriate document security. “While a business may never experience such a high profi le

leak as the one suff ered by the US Army, it is important to acknowledge the quieter risks within an organisation,” explains Winham. “Business plans, product road maps or budget data that are easily printed can get into the hands of competitors and bring competitive disadvantage. In many

cases a business will not even be aware that such an inci-dent has taken place, so to help control security breaches,

businesses need to take greater control on who is able to print their information, and what information they are able to print.”

As the world becomes more and more digitalised, the issue of securing actual physical documents is being over-

looked by many of the larger companies prone to security breaches. “A lot of security comes through the IT func-tion, whereas a lot of document governance sits outside of the IT function and is located in a wide range of areas within a company,” says Winham. “Th is is where things

such as innocent mistakes can happen, where documents are not being controlled as tightly as they could be. End-of-

life employees (those coming to the end of their contract) pose a threat too, but if you know your security environment and there

is an executive looking aft er the issue of document governance – whether this falls to the IT department or not – such threats can be minimised.”

In the wake of the Afghan War leak, the end-to-end processes of data security should be given even greater attention than previously. Technol-ogy can only help so far; employees need to take the responsibility aff orded to them by their employers to work in a reliable and transparent manner, engaging with their superiors on matters that are giving them cause for concern, without feeling the need to resort to extreme whistleblower tactics to get their message across. Equally, corporations have a duty to provide not just secure working environments but access to clear channels of communication throughout the entire structure of their organisations. Without this complete end-to-end security process, leaks like the one suf-fered by the US Army will continue to happen.

through governance and utilisation of the appropriate technology is the most eff ective method.

“Sometimes there is a failure to engage by senior executives who perhaps view their data security procedures as a cost rather than an in-vestment,” says Waite. “Of course, in this day and age the plus and minus columns of balance sheets are more important than ever. But data security is an investment because it gives you and your organisation that peace of mind, and it highlights to your partners that you see security as an im-portant issue and that you are willing to take the appropriate measures to protect the sensitive data of your organisation.”

One such measure advocated by Waite and employed by every police force throughout the UK is solid encryption of data. “If you have a suitable level of encryption on a laptop, then who cares whether you lose it? All you have lost is a piece of plastic. However, if it’s not encrypted or it has only a very low level of encryption, what you might lose in terms of the value of data on there can be immeasurable. I would much rather lose a piece of plastic having paid a little bit more money for a good level of encryption than face the embarrassment, the inconvenience, and the possible legisla-tion and job loss that could follow if sensitive data was lost.”

Employing a professional team to ensure the implementation of ap-propriate data encryption soft ware is equally imperative as having the forethought to undertake such a strategy, as is educating every member of the workforce who works in each department about the potential dangers of data leakage. “It is relatively straightforward to introduce a secure email service system that sends all outgoing mail via an encrypted route to secure addresses,” says Waite. “Th is is one technique that actively forces employees to take deci-sions on the value of the information they are trying to send, prohibiting them from sending emails to unsecured recipients. But there are programs that will allow infor-mation to be sent to insecure addresses, and it is in these instances that employees have to act responsibly.”

Policies, education, auditing and technology can all be combined to minimise the threat of potential leaks and breaches. Determined whistleblowers may always attract some attention, but if they are unable to back up their claims with hard evi-dence, they will not be taken as seriously. Security offi cers must not lose sight of employee management; it is partly their responsibility to ensure that staff members feel valued, rewarded, listened to and empowered to speak their mind if they at all feel that the company they work for is engaged in some activity or practice that concerns them. Th ese channels of communication need to be kept clear and open, or independent mediators should be employed to, perhaps not encourage a culture of looking for problems and fl ag-ging them, at least engender an atmosphere whereby members of staff at all levels are aff orded the time and respect to make their concerns heard.

Protecting the perimeterMobile workforces are posing even greater challenges as companies’

security perimeters grow ever larger, and potentially more porous than tighter-knit ones. Smartphones and laptops are great drivers for business, but bring with them their own sets of security concerns and challenges. “Th ere are few organisations out there with common risk boundaries, so there is no single strategy for dealing with the security concerns of mobile workforces,” says Kellett. “For example, a company that has a need to share its information with a third party – on supply chain relationships for in-stance – needs to have in place federated access controls. Where other or-

“Security offi cers must not lose sight of employee management; it is partly their responsibility to ensure that staff members feel valued"

Nothing replaces a correctly educated workforce

Physical security

risks need to remain a

priority


INDUSTRY INSIGHT36

Owned and operated by Gateway File Systems Inc., a leading Canadian healthcare information systems company, Health nexxus is one of the world’s fi rst web-based healthcare information portals. By making online security its top priority, Health nexxus is revolutionising the way healthcare providers and patients communicate, says Jeff Barto.

SSL security brings doctors and patients together

With more than 25 years of experi-ence developing systems to manage electronic medical records (EMRs),

Gateway File Systems founder Brian Harper understands the power of improving access to healthcare information. “With electronic re-cords, doctors can get a comprehensive view of their patients’ health and provide better care,” he says.

In 2004, Harper and his team decided to push the boundaries of traditional EMR systems by off ering online access to medical records to both providers and patients. Th e result was Health nexxus, a pioneering online healthcare information portal. “We knew that giving pa-tients access to their health information online would empower them to be more involved in their own care,” Harper says.

Since personal health information is ex-tremely sensitive, Harper also knew that Health nexxus had to be highly secure. “If doctors and pa-tients didn’t trust the Health nexxus system, then no one would feel comfortable using it,” he says.

Initially, Health nexxus used a proprietary security framework to protect patient records, but as use of the system grew, Harper decided to switch to SSL security. “We explored several SSL providers, but selected Th awte because the company has a long history of providing strong, reliable security,” says Harper. “Th awte is also widely recognised around the world, making it an ideal choice to establish trust with our inter-national providers and patients.”

Harper also wanted a clear, unmistakable sign that the portal was protected, so he opted for SSL with Extended Validation (EV), an ad-vanced technology that makes the address bar in compatible web browsers turn green. “We tested EV with some of our doctors and we got excellent feedback. Th ey said, ‘yes, the green bar makes a lot of sense. I’m going to look for that on every site from now on.’ It’s been a great choice for our business,” he says.

Harper and his team also discovered that Th awte SSL certifi cates are easy to roll out, giving Health nexxus the fl exibility to scale to meet changing business needs. “In my experience, many enterprise technology solutions can be hard to deploy, but Th awte SSL certifi cates are easy to implement,” says Harper. “We’re currently focusing on small practices and individual prac-titioners, but it’s reassuring to know that we can easily accommodate an enterprise deployment if we decide to go in that direction.”

By changing the security technology behind its EMR system, Health nexxus has been able to

For more information, please visit: www.healthnexxus.com.Jeff Barto is the Senior Product Marketing Manager at Thawte.

give patients and providers safe and convenient web-based access to health information, increas-ing patient engagement and improving care. “We want our users to feel like they can depend on the Health nexxus portal, and Th awte SSL certifi cates are crucial to providing the security and reliabil-ity that they have come to expect,” says Harper.

With Th awte EV SSL certifi cates, Health nexxus has also been able to comply with key government security requirements, underscor-ing the company’s commitment to protecting patient data. “One of the biggest issues with EMR systems is who has access to medical records, especially in the United States where complying with HIPAA – the Health Insurance Portability and Accountability Act – is critical,” Harper says. “With Th awte SSL security, we can help ensure that the entry point to health information, the browser, is secure. Th at is absolutely essential to our business.”

“With Th awte SSL security, we can help ensure that the entry point to health information, the browser, is secure. Th at is absolutely essential to our business”

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INDUSTRY INSIGHT38

Imagine this scenario - the brakes on a series of new cars fail and the car manufacturer responds with the comment, “Modern cars are so complex these days that it’s not surprising when something goes

wrong in production.” People would be up in arms! But believe it or not, certain banks have tried to blame the complexity of their IT systems and processes when unauthorised transactions have caused huge losses. Governments have also used the same excuse when private data is made public. Whilst an organisation’s systems may be very complex, not even the most desperate lawyer would try to absolve blame on that argument alone.

These days IT systems are considered a production asset – just like the machines used in a production line at a car plant. IT systems are a key production asset for banks and governments. Logically, like any other pro-duction asset, management has to be responsible for the deployment, control and management of their IT systems.

An organisation’s user access processes determine how employees use the company’s IT systems – what they should and can do within each system. These processes are increasingly referred to as access gover-nance (AG). AG is not to be confused with identity and access management (IAM), which allows IT managers to ensure that all systems act in accordance with user access settings as prescribed by AG. IAM belongs to the realm of the plant manager, AG to the business.

The problem is, all too often the link between AG and IAM is broken. The way many companies grant access to information can be likened to requesting a light to be switched on by sending a postcard to the power supplier. Steps between decision and execution are numerous and lack transparency. What’s more, the outcome is uncertain. You may or may not be granted light at the end of the process.

Should organisations give priority to mending the link between AG and IAM? Absolutely, because with-out it you’re making an expensive production asset wait. That asset might be your employee, a recently hired consultant, a business partner or even a valued customer. Doesn’t it make sense to give the person who notices it is getting dark permission to switch the light on without further interference?

If you need another reason for improving control over your IT systems, then compliance and liability should be reason enough. If your processes are broken

Paul Heiden is BHOLD’s founder. Heiden started his career as an offi cer of the Royal Netherlands Marine Corps. Having obtained a master is degree in business and Roman law, he became legal counsel and frequently encountered the problem of controlling access to confi dential information. In this period he developed the ideas on business-driven access control that became the foundation for BHOLD in 1997 and developed into BHOLD’s leading business applications for access management today.

Access control – a serious priority

Paul Heiden outlines exactly why businesses urgently need to control access to information.

or ineffi cient, they undermine control, and control is needed for compliance.

These days, your management team must be able to prove it is in control of its production assets. Lack of control not only results in noncompliance and audit issues, but it can lead to liabilities. It doesn’t matter whether the production asset is a machine or a bank’s trading system, if you can’t prove it has been properly managed you invoke liability.

So, for reasons of control and effi ciency, businesses must manage access to their information systems. Luckily it is an investment that you’ll see an immedi-ate return on. Control is the stepping stone towards effi ciency. Control means certainty that the right users get access to the right information; that the people who are able to submit expenses cannot approve them. With control you have reliable processes with predict-able outcomes.

Access governance prevents people from waiting, it ensures control, it proves compliance, it enables an organisation to respond to restructures or new busi-ness models. It is the conditio sine qua non – to be able to rely on IT services like you rely on power. What is required are easy to use, accessible products that help organisations to establish control and shift the man-agement of their systems from the IT department over to the business.

What organisations need is a true management console to manage access to information regardless of where that information sits. You can’t even begin to consider cloud or collaborative business unless you control access.

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IT INTELLIGENCE40

Tour de thought

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Of the many departments that make Th omas Cook as successful as it is, the work done by the IT staff is something that stays fi rmly behind closed doors. While innovative ad-vertising slogans and whimsical TV campaigns are drawing in dreamy

punters, or glossy brochures are being fl ipped through on rain-sodden buses or on lunch breaks in strip-lit offi ces throughout the world; and while the instantly-recogni-sable cool-blue tailfi ns of the Th omas Cook planes are descending into view at airports all over Europe at the end of yet another successful holiday… as all this is going on, Th omas Cook’s dedicated team of IT professionals are working diligently away in the background.

Such legwork may go unheralded by the consumer, but from within the Th omas Cook Group there is a grateful understanding of the continuous challenges the IT sector of a company with the scope and scale of Th omas Cook must face and overcome on a daily basis. Gary Edwards is Group CIO for Th omas Cook, and when he takes a minute from his busy schedule to cast some thought over the busi-ness, he sees an IT landscape ripe for simplifi cation and standardisation. “I am the fi rst Group CIO for the Th omas Cook business. We currently have a decentralised business model where we have 20 CIOs across the group that, over the years, have obviously driven various solutions into the group. So I think the main challenge facing me as Group CIO is to put a group strategy in place. Th is would be achieved by simplifying our IT landscape in order to make it more reliable, drive more effi ciencies and fi nd ways to exploit our technology landscape to make us more com-petitive in our industry sector.”

Edwards has only been at the helm since September 2009 and has already undertaken some research that has enabled him to paint a clearer picture about exactly where

As the business world continues to diversify in the wake of the recession and advancing technology, CIOs can no longer hide behind an ‘IT only’ remit. CXO chats with Thomas Cook Group CIO Gary Edwards to discover his thoughts on the CIO’s ever-evolving role.

IT INTELLIGENCE 41

the Th omas Cook Group can begin streamlining its IT processes. “With some of the statistics and fi gures I have been able to ascertain while I have been at Th omas Cook, the strategy becomes self-defi ning. What I mean by that is if we look at our application architecture across the group, we have 1200 business applications – far too many for any Fortune 100 company.”

Hence, Edwards sees it as a no-brainer that Th omas Cook must seek to simplify its application landscape. “If I look at our infrastructure,” he says, “we have multiple commercial models and multiple solutions in the provi-sion of workplace environments for desktops and laptops, networking arrangements, and most importantly our data centres. So there is an opportunity to standardise and ra-tionalise our infrastructure from desktop through to data centres across the Th omas Cook Group.”

Despite a number of inherent good practices already incumbent at Th omas Cook, Edwards is adamant that more can be done to bring tighter standards across the department, and whether that means adopting cloud computing, opting for virtualisation or utilising a utility on demand managed service, he is keen to ensure that the group has a streamlined and standardised approach to its IT services.

“Th ere is an opportunity for us to have an IT sourcing strategy that will allow us to align with strategic partners and have true strategic management in place that will be aligned to a group architecture and technology roadmap,” says Edwards. “Th is is a great opportunity to have much more fulfi lling relationships with some key IT partners, but at the same time we can look at our project eff ec-tiveness and the way we manage our portfolios. Th ere is always room for improvement, especially when looking at the level of investment we are making and driving the right agendas for the group as we are for the individual markets.”


Mobilising for growthDuring the early part of 2010, Th e Th omas Cook Group

– on Edwards’ insistence – focused on prioritising quick wins, putting in processes and governance around the issue of demand and supply and designing how their IT model will work in the new demand-supply model. Th e next step is understanding the impact that these designs have had on the business and, in 2011, to begin implementation. “Other things we still need to do this year is issue RFPs to a number of the usual suspects that can play in the infrastructure space, desktop networks and data centres,” says Edwards. “Because what I am looking for are global providers. Th omas Cook is a very ambitious business. It has grown consider-ably over recent years through natural growth and acquisi-tion. We currently are looking at other emerging markets in Russia, China and elsewhere in Asia. We have a good footprint in Canada and North America, and we want to grow that. We are very dominant in the UK and Europe and we want to protect that and do other things in terms of our multi-channel strategy.”

Th omas Cook is already in 22 countries and hope to diversify into regions that will pose a diff erent set of chal-lenges. “Such growth,” explains Edwards, “aff ects our infrastructure provision. We may be going into even more diverse countries than those in the European market, and this calls for more knowledge of data centre provision, data centre strategies, network provision, the future of cloud computing, virtualisation and workplace environments, whether that be desktop, laptops, terminal services or BlackBerries. Th is entire strategy needs locking down and we need to pick the right partners we are going to work with, which may be some of the people we work with today, or it may be new players.”

Th e eff ects of the recession hit the travel and tourist industry particularly hard, both in a commercial and an op-erational capacity. “Th e recession has had an impact on our ambitions,” says Edwards. “From a strategic point of view we must ensure we retain market share in our traditional business, which is tour operating prepackaged holidays for our customers, of which we have 22 million. Also, more of our consumers are moving towards what we call dynamic packaging where, whether they do this online or go into one of our retail stores or call the contact centre, they want to be able to say: ‘Well actually I want to fl y on this day to that destination, and then I want to move on to this destina-tion and I want these hotels because I have already decided where I want to stay.’ So the consumer pre-packages their holiday, which is becoming more prevalent in the industry. Of course, what you have now is companies like Expedia and LastMinute.com that really are technology companies that are selling holidays rather than a holiday company like ourselves that uses technology.”

As part of a strategy to manage margins and keep the Th omas Cook Group operating at the sharp end of the sector, Edwards is adamant that growth must be managed and strategised in a more structured manner. “I am looking at our independent businesses as a second gang plank to the strategy, which is where the growth story is, and the growth

CIO roleAs Group CIO, and the fi rst one the Th omas Cook

Group has employed, Edwards is acutely aware that his role must be clearly defi ned and accountable, working alongside the CIOs in place in the various countries in which Th omas Cook operates. “My vision here is to move to a classic demand management and supply management model, so I envision my country CIOs reporting into the business. Th ey will be accountable for their local IT strategies, demand management and prioritisation of what they need to do on behalf of the business,” says Edwards. “I also see them being accountable for innovation in the way we use technology in the local markets for portfolio management and for solution management. So they are really shaping what we need to do on behalf of the business.”

With Th omas Cook’s CIOs delivering projects, qual-ity of operational services and fi nancial transparency, the Group CIO, believes Edwards, must then be responsible for implementing change, restructuring and growth. “I see the group CIO function as a driver for the right policies, the right standards on a group strategy and on an architectural roadmap, so that helps give us some control frameworks along with the right processes of governance, but then fundamentally we are managing the supply side. In quite simple terms it is a soft ware factory. So creating the soft ware factories and infrastructure, service providers should be managed by the group as a supply chain into the demand being articulated by the country’s CIOs. Th is gives us better economy to scale.”

With clearer management, superior results and perfor-mances will occur, but it is not all about the delivery ability of the staff , says Edwards. “It will come via our testing envi-ronments, our landing slots for moving things into produc-tion environments, which will allow us all to be moving in a similar direction when it comes to the solutions, the ap-plications, or the infrastructure to serve our diff erent local markets. Th at’s the vision. Th at’s the challenge. Many CIOs have gone on this journey and have been successful; many have failed.”

The Thomas Cook Group

Thomas Cook Group plc is one of the world’s leading leisure travel groups with sales of around £9 billion (€12 billion), 22.3 million customers, 31,000 employees, a fl eet of 93 aircraft and a network of over 3400 owned and franchised travel stores, with interests in 86

hotels and resort properties. It operates under fi ve segments: UK & Ireland;

Continental Europe (Germany, Austria, Belgium, France, the Netherlands, Poland, Hungary,

Slovenia and Slovakia); Northern Europe (Sweden, Norway, Denmark, Finland), North America (Canada and USA); and German airlines

operating under the Condor brand. The Group operates in 21 countries including India and Egypt.

“Th e CIOs that are going to make a diff erence today and in the future are the ones that can bring ideas to the table “

IT INTELLIGENCE42


story is very much about how you use your multi-channels, and particularly how you leverage e-commerce or the e-channel for both the B2C model and the B2B model.

“I think the third gang plank is many consumers look to us for fi nancial services, whether it’s travel insurance or currency exchange, and there is more we can do in that space of opportunities. Fourthly, we have a lot of acquisi-tions over recent years in diff erent countries and the oppor-tunity around acquisitions remains. Playing this against the economic backdrop, we need to continue to manage costs because margins in this industry are very, very aggressive: they can range from between two to eight percent, so cost leadership is a key discipline within Th omas Cook.”

Using IT to drive more value for money is something that Edwards is adamant Th omas Cook can achieve. “We can cut our current expenditure on IT,” he says. “When you have 1200 IT suppliers you are not getting an economy of scale debate in your commercial model, and so there are defi nite opportunities to realign that supply chain and to optimise it and to reduce the number of physical suppliers.”

22 million passengers are served annually

Thomas Cook

is in 22 countries

IT INTELLIGENCE 43

Delivering changeFrom within, the Th omas Cook IT department is keen

and eager to implement change throughout the group. And not just in matters of IT, but in cross-channel areas that can help the business to better achieve its objectives. How this will be done remains a constant challenge, but Edwards has identifi ed a couple of areas where the IT department and its CIOs can begin realigning themselves in order to assist the business.

“Th e phrase ‘CIO’ is bandied around too loosely, and when you look at the diff erent individuals that claim the CIO job title, what they actually do varies considerably, and Th omas Cook is no diff erent,” says Edwards. “We have 21 CIOs including myself, and some of the individuals are excellent operational service managers. Some are great at delivering change. Some are good at technology architec-tures and roadmaps; but they all call themselves CIOs. My personal view is that a true CIO must work very closely with the business, must understand the industry sector, must un-derstand the business strategies, and must be commercially astute and bring to the table how we might exploit technol-ogy to leverage things in the business.

“An example: It is very easy for the business to turn around and say to a CIO, ‘can you take 10 percent out of the cost?’ and many CIOs will achieve that one way or another. Ten percent out of any cost basis is always a welcome benefi t, but if I take Th omas Cook as an example, 10 percent of our IT cost is a drop in the ocean compared to if I can help them innovate their sales process. So if I can take one percent out of that because we re-engineered processes or we stopped duplication in business processes across the countries, if we can exploit the technology to help the group do something in a diff erent way, then the prize there is far greater than me just saving 10 percent of my budget.”

Th is is an area where the CIO community can add real value to an organisation. CIOs and their IT departments have had an increasingly diffi cult task in recent years, and the struggles of the recession have brought home just how important it is for every sector of the business to not only prove its value and fi ght for its existence, but also to aug-ment its skills sets in order to bring more profi tability to the business.

“A CEO merely keeping the lights on or having a strat-egy that helps simplify IT is the bread and butter part of the job. Th e CIOs that are going to make a diff erence today and in the future are the ones that can bring ideas to the table with the business about how to actually transform the busi-ness and exploit technology to help them do that. I think the trick is recognising that the technology industry is about to hit another wave of change. Whether we wrap that up around cloud computing, around the convergence of the workplace environment, or whether we look at the power of the bandwith that is available through networks that could change the business operating model with home workers. In IT we have these periods when there is a new wave that really opens up the way we do business, and I think we are just about to embark on the next one, but it is something that needs to reach a bit more maturity yet.”


INDUSTRY INSIGHT44

When police raided 84 separate addresses across Europe, the US and Australia one day in June and arrested 178 individuals, it was the conclu-

sion of a two-year investigation into credit card fraud and related crimes that had netted more than €18.5 million. But when taken against a card fraud total of €5.3 billion in 2009 according to the Nilson Report, the gang’s eff orts were just a drop in the ocean.

And as over-the-counter transactions involving credit cards get progressively more secure, the focus of criminals is increasingly the online world. Yet current detection and prevention mechanisms tend to be too slow to eff ectively fi ght this kind of fraud, oft en not highlighting problems until a bad card has been used several times.

For a long time credit card fraud detection has been rooted in data analysis techniques fi rst developed in the 1980s, mostly with systems built around neural networks and decision trees.

While these can work adequately for cardholder pres-ent transactions where volumes are relatively low, they have not translated well into the online world where transaction volumes are much higher and speed of authorisation is ev-erything. Nor do they spot the links between frauds that give away organised crime.

But now a new analytical technique, social network analysis, has entered the war against credit card fraud. Augmenting the already established detection methods, it promises to help lower signifi cantly the risk of card fraud.

Instead of mining historical transaction to detect fraud, social network analysis instead maps the complex networks of relationships that exist between frauds, cards, card-holders, transactions, merchants, industry sectors, phone numbers etc. If two or more of these network nodes share something in common – for example the same card used at two diff erent merchants – then a connection exists. Add many thousands of nodes, plot all the connections between them, and soon patterns emerge that can help reveal fraud.

For example, two cases of fraud may involve diff erent cards and cardholders but the same telephone number or email address may have been used to make the fraudulent purchases. Further investigation may reveal other common factors with other cards (nodes) in the network and previ-ously isolated groups – or islands – of fraud suddenly come together and start to make sense. It is being able to visualise these networks with hundreds or even thousands of nodes that is crucial to fraud detection.

When multiple node types enter the equation – for example cards and merchants – there are potentially many millions of nodes in the network. Th e task of mapping then becomes massively more diffi cult, as does navigating around them. Th e use of highly automated soft ware tools can greatly ease the process and make results available in the minimum possible time.

Leading the fi eld in social network analysis is the data mining automation vendor KXEN. Its social network analy-sis soft ware module, KSN, is well proven with international telecommunications operators in combating customer churn. Now the technology is behind an initiative to fi ght online credit card fraud with a major European fi nancial consortium.

Early results show great promise and single fi gure percentage reductions in fraud are already being projected. With the scale of the crime as large as it is, even a small reduction can add up to tens or hundreds of millions of Euros saved.

Better still, the results of social network analysis can be used to augment the fi ndings of the traditional analytical techniques used in detecting fraud. Th is can add signifi -cantly to the effi ciency of an existing predictive model in determining which transactions are likely to be fraudulent.

As it is now acknowledged that the large majority of credit card fraud is committed by organised gangs – some-thing which social network analysis is most eff ective at detecting – the case for social network analysis becomes all the more compelling.

Analysing and bringing together readily available information from social networks can help to combat credit card fraud, says Françoise Soulie Fogelman.

Social network analysis – a new weapon in the fi ght against credit card fraud

Françoise Soulie Fogelman is VP Strategic Business Development, KXEN and has 30+ years experience in data mining and CRM, fi rst as a professor directing research into neural networks. She then co-founded an OCR business, started the Data Mining and CRM group at Atos Origin then - before KXEN - ran a business intelligence and CRM company.

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CUSTOMER RELATIONSHIP MANAGEMENT46

LOCAL COUP

Ian Clover discovers how businesses are using a new social media tool to

attract customers in their own neighbourhoods.

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CUSTOMER RELATIONSHIP MANAGEMENT 47

Lying crumpled on coff ee tables, stuff ed into pockets, slid absent-mindedly into wallets and overlooked in the classifi ed sections of local newspapers, coupons have had a hard time of it in the 21st century. Ostensibly a great money-saving device for con-sumers and a handy commercial tool for small businesses, in reality the coupon has suff ered from something of an image problem for decades.

Coupons are not cool. Th ey are hardly complementary to the lifestyles led by those consumer groups that most media target. Pensioners and the poor know their true worth and will use them whenever possible, but social climbers, the hip iPhone owners and pretty much any group with a discern-ible disposable income will be averse to cutting out coupons, collecting stamps or deviating from routine in order to take advantage of certain off ers.

Th ere are exceptions to this rule of course. Supermarket ‘buy one, get one free’ deals and bars off ering 2-4-1 cocktails fi nd that this approach to discounting goods certainly works, but only because purchases are made on impulse; there is no (or little) forethought involved – acting on a whim and ‘getting a good deal’ are acceptable social actions for even the most ABC1 consumer groups.

Going localLoyalty and genuine value are invaluable commodities for companies

of all sizes, and something coupons were originally designed to engender. But today’s fast-paced, hyper-connected world had left the coupon behind, until late in 2008 when Andrew Mason, founder and CEO of Groupon, hit upon a novel idea. Channelling the twin energies of group buying power and local knowledge, Mason developed his Groupon idea (the etymology is, quite obviously, derived from ‘group’ and ‘coupon’) as a deal-of-the-day website, where local companies could off er their services or products at vastly reduced rates, provided enough people signed up to the deal. If the predetermined minimum was not met, then the deal no longer stood, thereby reducing risk for retailers. Soon enough, word spread throughout

the cafes, restaurants and side streets of Chi-cago about Groupon’s value as a sales tool for local businesses and a real-time, easy-to-use discount platform for consumers.

“If you look at commerce on the Internet over the last decade, there haven’t been too many amazing breakthroughs other than the shopping cart and the innovative market-place that eBay created,” says Rob Solomon, President and COO of Groupon, and Andrew Mason’s right-hand man. “But we have seen that the web has now evolved into this sort of social vein, and Groupon is one of the fi rst ap-plications that not only deals with traditional commerce, but social commerce and, more interestingly, local commerce, which is what fi rst got me excited.”

Groupon’s impact has been immediate. Th e Internet has long been used as a place for

commerce, but Groupon was the fi rst site to tie together the large-scale buying potential that the Internet possesses with local products and ser-vices. In other words, it meant that consumers could seek out deals and discounts online that were redeemable around the corner, down the road, or across the street. “E-commerce is a gigantic category, but it is very small compared to the overall commerce category,” says Solomon. “What Grou-pon does is allow people to buy products and services from local merchants

How does Groupon work?Rob Solomon and Daniel Glasner explain how the Groupon model works.

Once a business has agreed to sign up, we work on creating an offer. Our sales people put together a deal that is compelling, creative and interesting. We take care of everything from a marketing

perspective – writing descriptions of a service and even taking professional photos if need be. We word the offer in complete concert with the merchant, and we handle the transaction. All the business has to do at this stage is wait for the customers to come through their doors and redeem their Groupons.

The business tells us how many customers they would like to acquire and we work on that. The ‘Tipping Point’ is the stage where enough people have bought the deal for it to go through. If not enough people buy, then the deal doesn’t happen – credit card payments are only taken once the deal is confi rmed. Our sales team work with the merchant to set the ‘Tipping Point’, and so the more creative or compelling the offer, the better it usually does.

Aside from this sales conversation, we provide them with everything, so the upfront work a merchant has to put in is minimal. A merchant gets a full 24 hours of exposure on the website, and 97 percent of these want to run again after their promotion ends, so there’s a big pipeline backlog.

From a customer perspective, they register online, tell us what city they are in and they will then receive a daily email alert telling them the deal of the day. The great thing is, customers can simply keep an eye on that day’s deal and, if they are interested, buy a Groupon. If not, they can simply wait to see what tomorrow’s deal has in store for them. Once purchased, the Groupon has a shelf life of approximately two months, so you don’t even need to redeem it on the day of purchase, which means that you can stockpile great deals in advance of birthdays, stag weekends and other special occasions.

for the fi rst time in large scale, and that’s very intriguing – the combination of local, social and real-time ability to buy things.”

Local businesses were quick to see the value in Groupon. Th ey saw a real-time website that off ered them the opportunity of global exposure for 24 hours, with no upfront advertising costs and the chance to entice many hundreds of customers with a predetermined deal. “Th e Groupon model has solved two major problems for local businesses,” reveals Solomon. “Firstly, for merchants in the physical world, they were never really able to leverage the Internet in a big way, even if they were using Google or some-thing like that – they would only attract a small number of customers. But with Groupon, a restaurant or an activity or a health club can run an off er and we can literally send them anywhere from a few hundred to 20,000 new customers, all within a one-day send.

“For most of the local businesses, the traditional methods they have used, like Yellow Pages directories and local newspaper advertising, just don’t work anymore. And any great Internet solutions that worked for Internet sites and e-commerce companies similarly do not work for local

“

”

Almost 80% of Groupon

subscribers are female

They are primarily in

the 18-34 age bracket


CUSTOMER RELATIONSHIP MANAGEMENT48

businesses. So it solves a major problem for a local merchant. If a restaurant gets 10 or 15 new customers a day over a one-year period, that changes the profi tability and dynamics of their business, and this is exactly what we are doing for these merchants. We’re helping them acquire new customers in the most cost-eff ective way possible.”

Customer relationshipsTh e Groupon model is perfectly placed between these two stools of

retention and attraction, making it an attractive tool for all types of SMEs. “Groupon presents a pretty risk-free proposition,” admits Solomon. “With most advertising you have to pay up front, but with our model you pay nothing up front and you only pay for a delivered customer, meaning we consummate the transaction on our platform. So any time somebody buys a Groupon for, say, a cupcake bakery or a Pilates studio, we are actually delivering real customers that have already paid for the service.

“So for a merchant, there has never been an advertising model where you only pay when you actually receive a customer, and a paying customer at that – not just somebody who walks through your door, but somebody who has already bought something. Th is is a paradigm-shift ing advertis-ing model, and I think that is the main reason why we are achieving such stratospheric growth.”

Solomon is not wrong – Groupon is growing quicker than both Amazon and eBay did. Having started life in November 2008, the company is now estimated to be worth US$1 billion (€770 million), and in April this year attracted a US$135 million investment from Battery Ventures and DST, an Internet investment group with a large stake in Facebook. Th ere are more than six million Groupon subscribers worldwide (up from just 400 in November 2008) and more than 5.5 million Groupons have been sold, saving a total of $230 million.

“In North America, Groupon is in about 60 cities, and in Europe we are in approximately 80 cities. We’re in just about every major country in Europe, and our next challenge is to get even more hyper-local,” says Solo-mon. “We’re in the major metropolitan areas right now, but suburban areas and smaller towns have a need for this service as well, so I think that we are going to focus more and more on going hyper local.”

European expansionIn Europe, Groupon acquired MyCityDeal, a Berlin-based startup

that followed a similar model to Groupon and made its fi rst deal in Janu-ary of this year. “Aft er our fi rst deal in Berlin, we started building out to other cities in Germany, then into additional countries in Europe, starting with the UK and France,” says Daniel Glasner, MyCityDeal co-founder and Groupon Managing Director for Germany. “It soon became obvious that it would be a match made in heaven to have the US market leader and the European market leader collaborate. So we started discussions with Groupon and immediately realised that there is a perfect match in terms of culture, understanding and vision. Our view on customer relationship and partners was the same and, given that, it became quite obvious for both sides that it would be a perfect match.

“We had been growing quite fast before getting together with Grou-pon, but clearly with them on board we can now service our customers, partners and merchants better and acquire new markets.”

Solomon agrees. “Th e founders of MyCityDeal are amazing entre-preneurs and were the best team that we saw in terms of execution. We could have entered the European market and competed with them, but we thought joining forces and becoming the undisputed market leader made sense. Th e logic behind us acquiring MyCityDeal meant that we could be in 18 European countries very quickly.”

Ahead of the curveTh e danger with innovation is that there is quickly a gaggle of ‘me-

too’ websites springing up looking for their share of the market. Groupon and MyCityDeal were able to collaborate rather than compete because they catered for two very diff erent markets, but there have been a number of websites emerge looking to hitch an easy ride on the back of Groupon’s success. “A lot of people discount this but there’s a huge advantage to being the fi rst mover,” says Solomon. “You are the site that everybody recognises within the category. Back in 2004 when YouTube was launched there were literally 125 video companies running around Silicon Valley trying to get funding. I think the reality is we’ve defi ned this category, we’re the leader in the space, we have massive scale on the consumer and merchant side, and we’ll continue to dramatically grow that scale. A lot of the social features and merchant tools that we are building will create consumer lock-in – other clones that come into the market will be called ‘Groupon-this’ or ‘Groupon-that’, which means that in real time we are becoming the verb, the brand that’s defi ning the space. “

Aft er such exponential growth, Groupon is now tasked with taking the market further. Th e company has managed to achieve such growth without yet really embracing the full potential of the smartphone market, which is


CUSTOMER RELATIONSHIP MANAGEMENT 49

and hope to be partners over the coming months

and years, because I think Groupon will be one of the

main monetisation platforms for businesses like Foursquare:

they focus on location-based checking in, we focus on local

selling, and so it’s a perfect mar-riage.”

Other features in the pipeline for Groupon include mobile pay-ments and receipts (showing your coupon on your mobile phone rather than a printed-out version) and a richer social conversation online. “Th ere are a lot of reviews already written about the deals we run,” says Solomon. “And we have introduced a really interesting feature called Two-Way Ratings. Traditionally, consumers have been able to rate businesses, but with our model busi-nesses know who the consumers are, so we’ve done a fantastic job of closing the loop from advertisement to transaction, and now merchants can rate consumers. Th ey can sing the praises of a fantastic customer, and that’s really interesting and po-tentially rewarding. Th ere will be a lot of features coming on board that will allow and encourage more social feedback, but if I told you about these then I’d have to kill you!”

While local businesses will continue to reap the benefi ts of the Groupon model, Glasner does not rule out the possibility of collaborat-

ing with multinational companies at some point. “I can imagine working with big brands because they usually have very high demands in terms of target groups, and so that could be a specifi c way in for Groupon – to identify and determine their customers in a more local, regional or demo-graphic way. Having said that, we are in the local Internet business, and our core is clearly helping local businesses.” Besides, being local does not necessarily mean being small-scale. “I see us growing from a few hundred cities to probably thousands of cities over the next fi ve years,” concludes Solomon. “Currently we have more than six million subscribers; by the end of the year we’ll probably have 16 million, and double that by the end of next year… this creates amazing reach for our merchant audience.”

Th e Groupon business model is, much like every successful business innovation of the past few decades, devilishly simple. Consumers love it and merchants love it; they both win out, as does Groupon, which takes a cut of every deal done. Businesses receive increased revenue, increased exposure and increased footfall as word spreads; they can then receive and off er feedback, and follow up their initial deals with other, more targeted and specifi c off ers for a local and connected consumer base. Th is is the future of customer relationship building, and it’s only just begun.

an area in which Groupon is eager to make its mark in the very near future. “Social media is a very important part of our business, and it clearly allows us and our off ers to be spread very quickly,” says Glasner. “Th e deals are live for a very short period of time – just 24 hours – and one important part of our model is knowing that our customers like the deal and send it around to their friends via social media forums. Andrew Mason calls it ‘social commerce’, because it’s all about group buying: bringing friends together in order to get a good deal and then spending a day out together in that restaurant, or that spa, or even raft ing together.”

Solomon is equally excited by the potential that the smartphone market and social media can bring to the business. “We already have iPhone and Android apps, but this is just a small part of our business right now. In the future, I imagine that they will become a huge part of our business. Our growth has been down to the socialisation of the Web, and by that I mean the Facebook and Twitter phenomenons, which assists collective buying and is a huge driver for our success and growth.”

Facebook tells us who you are. Twitter tells us what you are doing. Th e ‘next big thing’ focuses solely on the next obvious evolution of social media – where you are – and has already happened. “We know the Four-square guys well,” says Solomon. “We have had conversations with them

Less than 1/3 of Groupon

subscribers are married

80% of Groupon subscribers

possess bachelor’s or graduate

degrees

Fast Facts: Groupon

• More than 6 million subscribers today, up from 400 in November 2008

• 70 North American markets including Chicago, New York, Boston, Los Angeles, Washington, DC, Atlanta, San Francisco and Toronto

• 16 countries among North America and Europe via acquisition of CityDeal in May 2010

• 900 employees, up from 7 in November 2008

• Most Groupons sold: US$12 for 75-Minute Chicago Architectural Boat Tour, 19,894 sold


ASK THE EXPERT50

Most Internet users aren’t just passively con-suming content; they’re creating it: rating, commenting, blogging, tweeting and col-laborating. As a result, social media is fun-

damentally changing how businesses and their customers interact.

Naturally, marketing wants to get in on the phenom-enon, and so they should. But nowhere will the impact of the social web be stronger, or more benefi cial, than in service and support. It is true that marketing is pioneering the enterprise’s involvement with the social web. But for them, it is a double-edged sword. Brands are no longer in the control of advertisers or the PR department, but in the words, messages and even videos of consumers.

Th ings are diff erent for Service and Support – custom-ers have always helped each other, and social technologies give them new, more scalable platforms for helping even more. Service and support owns the ‘use’ part of the cus-tomer experience, while social media amplifi es the voice of the customer, providing new ways to listen and learn from customers. Social isn’t a threat for service and support – it’s a force multiplier.

Th ere is a proliferation of social technologies, but a small number of integrated features can help make support social.

Support forums are the most popular social technol-ogy for service and support, but most communities are not well integrated into other pieces of the service website. As a result, they are used less than they should be. Knowledge inside the communities should be harvested for the knowl-edge base as support professionals use it to solve customer problems. And enterprise employees should have a light-

weight, respectful, but visible presence in the community: letting customers shine, never being defensive, but adding their voice to the conversation when it can bring clarity or closure to topics.

Blogs are another easy way for service and support to deliver information while building relationships. Most support content is impersonal: knowledgebase articles, FAQs and documentation have a deliberately corporate feel. Blogs, on the other hand, refl ect the voice and style of an individual, generally an executive or subject matter expert. As such, blogs humanise the service experience, making support less transactional and more conversa-tional. Blogs are also great for addressing high-priority emerging issues. Postings can be easily shared so others can spread the word on their own blogs, status updates or forum postings. Popular blogs score high in search engine results, giving them more prominence than a knowledge-base article.

Status feeds integrated into knowledge and incident management applications can turbo charge productivity. Sure, it’s nice to hear from your friend on Facebook that ‘Snuffl es had a great day at the dog park,’ but wouldn’t it be better if a colleague’s status is ‘I just fi gured out how to work around the data dump bug in version 3.3?’ No off ense to Snuffl es, but we think the answer is an unequivocal ‘yes.’ People are people fi rst, employees second. Th e integration of social networking into enterprise applications – ‘social in the workfl ow’ – provides an informal communication channel that is crucial to real team building. Th is is espe-cially true with global teams and work from home staff –social in the workfl ow is replacing the disappearing water cooler.

Finally, most knowledge management teams we talk with would like to create multimedia such as how-to videos. But budget pressures and a lack of appropriate skills oft en make it hard for them to do as much as they would like. Th is is where customers can jump in. Support organisations should make it easy for customers to contrib-ute tips and tricks, knowledge articles, code samples, and multimedia how-to’s and training.

Th ere can be as much or more knowledge outside of service and support than inside. By embracing a suite of social capabilities integrated with each other, with knowledge management and with incident management, enterprises can channel the passion of customers to drive greater customer satisfaction and success.

Making support social

Corporate participation in social media has been largely driven by the marketing department. Tim

Hines, Vice President of Product Management at Consona CRM, believes that service and support has an even more important role to play.

Tim Hines is Vice President of Product Management at Consona CRM. Hines began his career as an AOL tech support representative and soon moved into management. He then worked in Andersen Consulting’s CRM internal practice. After leading implementation efforts in marketing automation, he joined Consona (then Onyx) in 2002. Hines guides the product roadmap and functionality across Consona’s CRM product lines.

Consona.indd 50Consona.indd 50 18/08/2010 15:3718/08/2010 15:37

CARBON MANAGEMENT52

The CRC is a recent scheme that is highly incentivised, so could you tell us how busi-nesses are responding to it so far?Dave Lewis. Well I have to say it is diffi cult to assess at this early stage, although we do know that only quite a low proportion of companies have registered so far. Registration opened on April 1st and will run up until the end of Septem-ber, but the registration level is currently running at between fi ve to 10 percent, which is approxi-mately 5000 companies that are impacted by the scheme, a fi gure that is surprisingly low. I must admit, some of the more high-profi le names I thought would have pushed for a fast registration have failed to do so, so it does seem that there is still quite a bit of work left to do for a lot of companies.

It also suggests that there is maybe still some concern about what is required of these companies, such as how to gather and manage all the information that is required because it is a very bureaucratic process. In summary, I think that companies are struggling a little bit with the new legislation – we have had conversations with companies that initially thought they had it all under control, only to then turn to us to do it for them because they realised that it was far more complicated than they maybe appreciated.

If a company has not registered in time for the September cut off point, are they then penalised?DL. Absolutely. Th e environment agency has a very clear view of whom they expect to be im-pacted by this, so they have a good idea of all the sites that should be registered, which is any com-pany that has a half-hourly electricity meter. At best guess this is about 20,000 organisations. Th e benchmark is as follows: if a company, through their half-hourly electricity meters, consumed more than 6GW hours of electricity in 2008, then they are a full participant of the scheme and therefore have to register and manage their carbon under the CRC process.

How are these 20,000 companies being contacted to ensure they are aware of their obligations?DL. Th ey have been contacted by us. Npower has been asked by the environment agency to mail out to all of the sites that have these half-hourly electricity meters to inform them that they are impacted. But, with all the best will in the world, this has proven a sizeable task. Our information is sent to billing addresses, so the guidelines are oft en reaching no farther than the accounts team, not energy managers or fi nance directors – the guys who are really impacted by all this. Our requirement from the government has been to get these declarations signed off by a board member of a suffi cient level that the environment agency is satisfi ed with. Th ere are thousands of companies out there that are in the sights of the environment agency, and they need to know it.

In response to the introduction of the scheme, you set up a CRC Assist programme. How can this scheme help businesses to get on board and better manage their carbon output and energy use?DL. CRC Assist is a very specifi c product. We are agents under CRC, so we can represent organisa-tions as part of the CRC scheme, and we are also registered agents with the environment agency,

so we can eff ectively manage the whole process for an organisation. In this instance, we will tell them what to do, we will source the data for them; we will run the data management process for them. Everything that they need to do to comply can be done via our CRC Assist scheme, which covers the basic steps.

Th ere are other things that we can assist with in order to make a company’s registration process successful. In the early days of the scheme, having smart metering installed in your portfolio earns you extra credit as an early action, which then builds to extra, subsequent credit depending on how much smart metering you have in your portfolio. Also, being accred-ited to the Carbon Trust Standard shows that your company has an energy management scheme in place, which can also earn more credit.

On April 1st 2010, the Carbon Reduction Commitment Energy Effi ciency Scheme (CRC) went live in the UK amid not a little confusion as to how the scheme works.CXO spoke with Npower’s Head of Business Energy Services, Dave Lewis.

LOW CARB DIET

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CARBON MANAGEMENT 53

The money that the scheme raises is recycled fully back into it, but how do the companies benefi t from this?DL. Th ere are no stipulations attached to the money that gets recycled back: a company pays it in and, six months later it all comes back out again to the participant. Ultimately, though, the ones that really benefi t are those at the top of the lead table – leaders are rewarded with a bonus, while those at the bottom get a penalty. Over time, this risk band increases. In the fi rst year it is plus or minus 10 percent, rising to 20 percent next year and so on, up to 50 percent aft er fi ve years.

In the economic downturn, companies will obviously focus on cut-ting costs rather than carbon, so what would you say to the decision makers of companies who are reluctant to cut carbon right now?DL. I think you do both. Energy is no longer a cheap commodity. It varies in price, quite signifi cantly, and the market has moved a lot in the last couple of years. By banking carbon savings you are banking the value of that carbon, and so you are banking good energy savings. Th is potentially incentivises a company to do more rather than less because it makes the paybacks more attractive. Hence, I would suggest that those issues that were borderline before are now more attractive because there is that po-tential of fi nancial gain, coupled with mitigating risk under the lead table and moving up it.

Th ere are many equivalents to the Carbon Trust Standard too, so we can work toward getting companies accredited under those standards as well. Our aim is to ensure companies understand how to run their energy management programmes and reduce their energy consumption because, ultimately, CRC was started as simply the Carbon Reduction Commit-ment, and I think companies have become confused, asking ‘is it carbon trading?’ or ‘Is it the EU Emissions Trading System?’ It is neither. Th is is about energy reduction, using less energy.

The scheme does support, however, a Carbon Allowance Purchasing Scheme. How does this work and how have companies responded to it so far?DL. In the early part of the scheme, which is called the introductory phase and is three years long, a company can buy allowances for whatever is re-quired; it is at a fi xed price, so a company has to calculate its carbon allow-ances and its carbon footprint, purchasing allowances for what it thinks its footprint will be in the following year. So a company covers its future year’s allowances. For example, in April a company can buy allowances to cover its future year consumption and, at the end of the year, it can sur-render them. Th e idea is to buy enough to cover allowances, which means a company has to understand exactly what its footprint is and also anticipate any changes to its footprint throughout the year. So it might be that a com-pany is expanding and acquiring sites and so has to buy more carbon, or a company might need less carbon allowance because, fundamentally, it is becoming more effi cient.

Th erefore, a complete understanding of a company’s carbon footprint is important because allowances are purchased for a full footprint, irre-spective of what gets recycled back to the company. Th is is quite a large cash fl ow requirement, particularly if a company purchases every ton of CO2 in its portfolio – carbon is priced at £12 per ton (€16) which, if you are dealing in electricity only, will add £6 (€8) a megawatt hour to a company’s electricity bill.

Despite the cost, is it easier for companies to simply buy more carbon allowances rather than follow the course of long-term investments in energy-effi cient techniques to ultimately lower their carbon foot-print?DL. Well this is why the scheme is structured in the way that it is because, ultimately, a company gets a recycle payment, and in the fi rst year they get a minimum of 90 percent of that cost back because the penalty band is plus or minus 10 percent. However, in order to purchase a full allowance, there is quite a big cost involved, which is what will discourage companies from signifi cantly overburdening just to be safe because too much carbon allowance purchases becomes quite a burden in itself. Companies could play it safe, sure, but then they would have to manage the cost impact of that on their business.

So the government’s aim is to instigate a change from the bottom up – do companies grasp this?DL. Th ey do, yes. In addition to the Carbon Allowance Purchasing Scheme, the environment agency is also publishing a lead table. At the end of every year of the scheme, each of the registered organisations will be ranked ac-cording to their performance under CRC. How it gets measured will change a little bit throughout the scheme, and that bit is quite complicated, which is why we have products to help organisations perform better in terms of their energy management and so rank higher up on the lead table. Th is has two impacts: reputation and fi nancial – the better you do, the more industry respect and money back you receive.

Green IT facts

Datacentres produce approx 0.3 percent of the world’s CO2 emissions. The airline industry produces 0.6 percent, and the steel industry produces 1.0 percent.

A PC with a screensaver going can use well over 100W of power, compared with only about 10W in sleep mode. That's why powering down PCs in the offi ce saves both cost and carbon.

GREEN IT ED P52,53.indd 53GREEN IT ED P52,53.indd 53 18/08/2010 15:4618/08/2010 15:46

DATA STORAGE54

Twentieth century British politician Herbert Samuel once remarked that ‘a library is thought in cold storage’, which is a phrase that succinctly encapsulates the challenge of organising, com-

partmentalising and enabling easy access to a vast wealth of information.

Here in the 21st century, the challenges of delivering accessible storage to data have evolved in line with the explosion of technological advances and customer-driven demand for information, service and speed. Th ere are vast quantities of data that carry an ever-growing weight of importance and sensitivity, particularly in the fi nancial sector. Th e problems associated with storing such a wealth of information are manifold, not least the issue of cost and energy effi ciency.

“Managing data centres for energy effi ciency is one of the key eff orts in helping Wells Fargo obtain its green-house gas emission reduction goal and operating effi ciency requirements,” says Jim Borendame, Wells Fargo’s Execu-tive VP of Enterprise Hosting Services. Wells Fargo has a goal to reduce its US-based greenhouse gas emissions by 20 percent below 2008 levels for 2018, and has looked at a variety of ways in which to do so, starting with its data stor-age strategies. “To drive effi ciencies in our data centre, we take the approach to stabilise, standardise and optimise.

“We’ve successfully employed standardised service off erings and accomplished strides in server, storage and network virtualisation, with over 10,000 virtual devices currently in place,” says Borendame. A more effi cient and optimised approach to data storage has proven benefi cial

What’s in store for data centres?

Jim Borendame speaks to CXO about the various strategies fi nancial institutions face when meeting the challenge of storing data effi ciently, securely and cost-effectively.

on many levels, not least cost. “Th e benefi ts from these ef-fi ciencies are remarkable, including decreasing costs – up to $250 million in avoidance by negating the need to create a new data centre alone – while increasing computer power and reducing energy consumption.”

Longer storage lifeAlthough cost is oft en seen as the key driver for

optimising data storage, there are a number of second-ary benefi ts that result from reducing energy output and streamlining the data server environment. “We try to manage and extend the life of our data centres by increas-ing energy effi ciency through our Service Life Extension Programs, ‘right tiering’ applications, consolidating and retiring less effi cient or secure facilities, benchmarking data centre operation and design to industry standards and continuing to optimise data centre use and operations,” says Borendame.

A service life extension programme focuses on renew-ing and renovating existing data space in order to update and modernise pre-existing centres along the lines of cur-rent design techniques while simultaneously harvesting and recycling sections of the previous data centre with newer technology. Wells Fargo is committed to maximis-ing the life cycle of its data centres as part of its future growth plans. “By leveraging size and scale, eliminating redundancy and ineffi cient processes in our data centres and focusing on standardisation,” says Borendame, “the infrastructure will be strategically positioned for a con-tinual increase in transaction volume.”

"Managing data centres for energy effi ciency is one of the key eff orts in helping Wells Fargo obtain its greenhouse gas emission reduction goal"

Date centre 54Date centre 54 18/08/2010 16:0118/08/2010 16:01

DATA STORAGE56

Such streamlining is just one aspect of the innova-tion that has helped create a whole new way of thinking when it comes to data storage. Culturally, attitudes have shift ed dramatically as technological storage needs have increased, accelerated by mobile computing, to levels never seen before. “By installing energy-effi cient and vir-tualised servers we are combating the issue of under-util-isation, which reduces energy consumption by as much as ten to one,” says Borendame. “Th rough server virtualisa-tion we enjoy a simpler operating environment, which in turn reduces our power, support and maintenance costs.

“During this time of integration we are also making many optimisation choices between our investments and the need to stay nimble and fl exible – customising where it counts, standardising whenever possible. Our infrastruc-ture is on the front line of the customer’s experience and we continue to stay focused on the end-to-end picture, utilis-ing technologies that provide robust benefi ts of availability, time to market and energy effi ciency.”

Lean and greenTh ere are also green concerns too, which can have a

huge impact on how customers view their bank. “Green technology is a factor in data storage and all of our IT ini-tiatives,” continues Borendame, “because it supports our customer experience and effi ciency requirements. Green IT allows us to deliver better availability, simplify our envi-ronments and help us make the right investments, which is crucial as we execute on one of the largest fi nancial mergers and technology integrations in fi nancial services history.”

Wells Fargo and Wachovia merged in late 2008 and were immediately faced with the challenge of ensuring that their data centre power and space would be of suffi cient standard, size and cost-effi ciency in order to not become a drain on the new partnership’s overall objectives and goals. Allied to Wells Fargo’s pre-existing commitments to energy reduction and a greener future, a sizeable challenge now faces the bank, not least in terms of changing the cul-ture of the IT department. “Wells Fargo’s GHG reduction goal drove the need to increase server virtualisation,” ex-plains Borendame. “One of the challenges we faced in fi rst beginning this eff ort was addressing the change in culture that virtualisation would bring. We had to alleviate any fears or doubts that our business partner had by eliminat-ing exclusion reasons for virtualisation.

“We have shown virtualisation’s positive impact on the infrastructure through our aggressive eff orts in 2009. Last year, 70 percent of our servers used standardised shared service off erings with 41 percent leveraging virtualisation. Today, we currently have in excess of 10,000 virtualised machines consuming less than six percent of the space and power of a physical server, allowing us to stretch the life of that data centre and add capacity while reducing our resource strain.”

Such impressive fi gures surely point the way to a vir-tualised future, yet Borendame is reluctant to countenance a complete shift to virtualisation. “With more than 50,000 servers in production, we won’t ever be 100 percent virtu-

alised,” he admits, “nor should that necessarily be the goal. However, our physical-to-virtual eff orts will be an ongoing discipline and we’ll continue to expand its footprint into other areas, to an extent whereby virtualisation is seen as one of our standard approaches.”

One such approach toward virtualisation is the cloud, which is being leveraged by Wells Fargo on an internal basis in order to raise the bank’s effi ciency and agility, particularly when faced with the proliferation of mobile computing. “We see increased storage demand from customer web access for electronic records, such as check images, statements and the like,” says Borendame.

Not all virtualAs the need for greater capacity continues at such an

impressive pace, Wells Fargo’s effi ciency, cost-eff ectiveness and environmental footprint will all come under greater pressure to perform satisfactorily. Borendame is aware of the challenges that lie ahead and is convinced that the protocols, procedures and plans that he has put in place will set the bank in good stead for the foreseeable future. “We will continue to focus on increasing our hardware effi ciency, which includes our virtualisation and storage density eff orts, refreshing technology and next-generation mainframes.

“We are also seriously assessing product engineering in our energy labs, with power consumption and space as key design criteria in all products. Additional objec-tives include our commitment to continue to increase energy effi ciency through thin-client provisioning, ATM enhancements, recycling and telecommunication.”

In Minneapolis, Wells Fargo’s water-side date centre has been well-received; viewed as an effi cient, sustainable and eff ective means for data storage, this is one arm of the organisation that is most defi nitely non-virtual, but im-portant and innovative all the same. “For fi ve months or more each year,” explains Borendame, “the free cooling for our air conditioning system provides water that is chilled suffi ciently by outside air to directly feed the data centre with cold air. Th is has resulted in a 15 percent energy-use reduction and a half-million cost saving annually.”

While this water side economising is nothing new, it has rarely been embraced by IT departments for the specifi c purpose of data center storage. “For Wells Fargo there were very few implementation hurdles because our engineering and operating teams had experience with free cooling,” says Borendame. “Our primary focus has been to fi ne-tune the system with the cooling towers for use during extremely cold weather, although there is no particular technology out there that is enough to determine where we located our data centres; we consider many factors when making this decision.”

A multi-faceted, long-term and carefully considered approach to data storage can not only help manage costs, but is also the ideal strategy to adopt when dealing with exponential growth, environmental concerns and energy effi ciency – all factors that need to be addressed as the fi -nancial world continues to evolve.

64% of Americans now

pay bills online

58% of Americans now receive paperless

statements

Date centre 56Date centre 56 18/08/2010 16:0118/08/2010 16:01

ASK THE EXPERT 57

It is diffi cult to envisage any business that could func-tion eff ectively without IT in this day and age. In fact, anecdotal evidence suggests that even when businesses are failing or unprofi table, they continue to invest in

information technology. In recent years, this increasing dependency has been fuelled by great leaps forward in technology and a buyers’ market.

Today, most would agree that the best place to house new generations of compact and powerful IT servers is in dedicated computer rooms and data centres. Irrespec-tive of whether you choose to build your own facilities, outsource your IT infrastructure or elect to have your IT supplied as a service, a key objective will be to ensure con-tinuity of services.

Until recently, IT availability has been pursued at almost any cost, with highly resilient infrastructure de-signs the order of the day to ensure power and cooling for IT, irrespective of the mains power supply condition.

But escalating energy costs coupled with concerns about the environmental impact of increasing numbers of data centres has stimulated action from the EU in the form of the Code of Practice for Data Centre Effi ciency. As a result, the consultants responsible for data centre design and build and the manufacturers that supply the plant to power and cool these facilities have started to give primacy to the need to ensure energy effi ciency.

Th is has led to a number of changes to the uninter-ruptible power supply (UPS), the piece of equipment that protects IT equipment against the loss of the mains supply. In the fi rst instance, designers have sought to more closely size the UPS exactly to the load being protected. Over-sizing of the UPS not only has consequences for capital costs, but also drives up operating expenses such as energy and service costs.

Th e introduction of scalable data centre physical infra-structure is therefore a key enabling technology for reduced total cost of ownership. By taking a building block approach to UPS protection, modular architecture enables additional power modules and battery cabinets to be deployed as a ‘pay-as-you-grow’ solution for growing IT estates.

Th e system can be scaled back too: virtualisation enables organisations to reduce the number of physical servers it requires to run many of the applications required for day-to-day activities. Scaling down physical infrastruc-ture at the same time aff ords the opportunity to maximise potential energy savings and, therefore, cost and environ-mental impact.

At the same time, modularity brings benefi ts by en-abling service parts to be kept on site and by reducing the complexity of maintenance. Mean time to repair (MTTR), together with mean time between failure (MTBF) are the measure of availability. By making important components such as power modules user replaceable, time to repair can be decreased, thereby improving the availability of the power protection plant. A major cause of UPS failures is as a result of service visits, and simplifying maintenance routines plays an important part in reducing this hazard.

Th e data centre sector is in the process of adopting the power usage eff ectiveness (PUE) metric as a gauge of electrical effi ciency. Th e measure is based on the propor-tion of facility energy that is used to power the IT equip-ment hosted in the data centre. Ensuring that electrical infrastructure is scaled according to IT requirements is key to achieving lowered PUE; evidence of a well managed data centre.

Th e introduction of UPS which are both high effi -ciency and which achieve high levels of effi ciency at low IT load conditions can be an aid to improving PUE by in-creasing the amount of energy available for powering IT. High effi ciency UPS can also provide some overhead for growth without the user being penalised through heavy operating costs.

UPS vendors are taking a technological approach to solving the problems caused by the proliferation of technology. Current generation UPS provide a range of topologies to ensure availability and while the static UPS remains the staple for modern data centre designs, the benefi ts of modularity, scalability and serviceability are helping ensure the fi tness of the facilities that are at the heart of today’s IT services.

Paul Tyrer outlines and emphasises how important an uninterruptible power supply can be to your company’s IT department.

Non-stop business

Paul Tyrer is Vice President, UK, Ireland, Nordics & Baltics, APC by Schneider Electric. He joined APC in 1994 and has held various management roles as his career has developed. In 2002 he became Director of Channels & Partners, EMEA to develop business for InfraStruXure, APC’s solution for on-demand data centres. He has served the company as country VP since its purchase in 2007 by Schneider Electric.

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If anyone was still in doubt as to the potential value of e-Invoicing, they need only look at what has been hap-pening at Samsung SDS Europe (SDSE) – the IT service and e-Business provider to Samsung Electronics and other businesses across the European region. Since developing and implementing an e-Invoicing

service based on Adobe solutions, Samsung has seen the cost of processing inbound and outbound invoices drop signifi cantly. Th e number of Days Sales Outstanding (DSO) has also been reduced, while invoice dispute resolu-tion time has fallen sharply.

Th is return on investment has also been quick. Sam-sung SDSE Business Development Director Paul Le Mes-surier says the gains are set to keep on coming, “In less than two years, e-Invoicing will account for a multi-million euro reduction in invoice-related costs,” he explains.

Just how have such gains been made possible in such a short space of time? To understand, it is instructive to look at what the situation was like before. As with many multi-national companies, Samsung used paper-based invoicing processes – and partial electronic methods – that were in-effi cient and costly. A large amount of employee resources were also necessary to handle inbound and outbound in-voicing, at times taking months from outset to completion of each transaction.

Ineffi ciencies also caused delays in receiving or issu-ing payments, with manual invoicing processes aff ecting the company’s operations. At the same time, if payment disputes did arise, paper-based processes made it challeng-ing to reconcile payments against inventory shipped, and received, on an everyday basis.

Introducing e-InvoicingTo overcome these ineffi ciencies, Samsung SDSE se-

lected Adobe LiveCycle ES modules to develop and deploy a scalable, intuitive e-Invoicing service that bridges in-ternal and external business processes for both accounts payable and accounts receivable, while also helping to guarantee authenticity of the electronic documents.

“Inbound vendor invoices can be received electroni-cally in a number of formats and interfaced automatically into Samsung’s accounting system,” says Le Messurier. “For outbound invoices, when we receive an order and ship the product to a customer, an invoice is electronically generated and transmitted to the customer”. Trading part-

ners can log into a rich Internet application to manage and reconcile invoices and can also use the online system to easily determine the value of outstanding orders.

Another important benefi t of the system is the ability to easily track and store electronic invoices, addressing regulatory requirements to manage invoices and archive them for the required period. “Adobe LiveCycle ES makes it easy for us to generate accounting reports for govern-ment regulators,” adds Le Messurier.

Signifi cantly, the e-Invoicing service will also help Samsung meet its wider corporate responsibility targets and green initiatives. “Th ere is no doubt that e-Invoicing is also reducing our corporate carbon footprint,” says Le Messurier. “By automating the invoicing process, we are showing how e-Invoicing improves effi ciency and reduces costs, meets government regulations and signifi cantly contributes to more sustainable operations.”

e-Invoicing – delivered by Samsung SDS Europe as a service

Th e Samsung e-Invoicing solution built on Adobe LiveCycle ES has realised so many business benefi ts for the organisation that it received a ‘Best Practice’ award at Samsung’s 2010 global accounting symposium. Build-ing on this success, Samsung SDS Europe is now off ering the service to other, non-Samsung businesses across the EMEA region.

As a growing number of governments mandate that organisations minimise their environmental footprint – and businesses everywhere look to improve operations and reduce costs – the adoption of electronic invoicing (e-Invoicing) solutions is on the rise. Samsung in Europe is making the move, realising signifi cant benefi ts in the process.

Pioneering Samsung project proves e-Invoicing is a winner in more ways than one

To learn more about the e-Invoicing solution used by Samsung, how Adobe LiveCycle ES can help your organisation or to request a whitepaper, contact Prelini Udayan Chiechi, Senior Manager, Enterprise Marketing at Adobe Systems Europe Ltd: [email protected]

“Since developing and implementing an e-Invoicing service based on Adobe solutions, Samsung has seen the cost of processing inbound and outbound invoices drop signifi cantly”

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Clouded judgement

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With data storage capacity needs growing exponen-tially at a rate never before seen, companies are falling over themselves to align their business with a suitable cloud strategy. “Companies are now looking at the cloud as something that can manage their increased workloads,” says Fellows. “For most large enterprises, the majority of their IT spend is still going on premise equipment rather than third-party services, and it is probably about 75/25 throughout most industries. If an end user is comfortable putting 25 percent of their data into the public cloud that is fi ne, but that might mean there is still 75 percent worth of data that remains in-house, so the issue of the private cloud becomes more pressing.”

Private cloudSuch virtualisation of data is nothing new for most

larger corporations, but the benefi ts that the public cloud bring are starting to be transferred into the private space, such as fl exibility and scalability. “Most organisations have virtualised some, or all, of their data, but the prevailing thought process is if they had some of the other features of the public cloud at their disposal they could enjoy greater benefi ts. So they are doing a couple of things. Firstly, some progressive companies are looking to emulate, replicate or imitate what the public cloud delivers, and they are looking at their IT infrastructure and assessing what the total costs and ROI is for hosting and running their own workloads.”

Th e issue of cost-eff ectiveness is a hot topic in these times of tight liquidity and negative growth. Th e private cloud is seen as a potentially cost-effi cient implementation that many businesses can no longer aff ord to ignore. “Is it more cost-eff ective to host and store data internally than on a public cloud?”, asks Fellows. “Th is is something that a lot of companies are looking into, whether these end-users of cloud computing are better off investing in their own ‘best execution venues’; and by that I mean the purchasing of hosting capabilities that are suitable for their business in terms of price, performance and capacity.”

Cloud computing: a hot topic and a buzz phrase, but what exactly is it, and how can your business benefi t? William Fellows speaks to CXO to cast clear blue skies through the cloud of confusion.

The term ‘cloud computing’ is purpose-fully arcane. It denotes an intangible; something that people can visualise but not grasp, comprehend but rarely fully un-derstand. ‘Th e cloud’ in a computing sense is just like the clouds of the geophysical world – real and noticeable, but physically

impossible to pin down. And while planes surge through real cloud cover with the minimum of fuss, so too do smart companies traverse the cloud computing landscape with the greatest of ease, reaping the benefi ts that this service brings to their organisation.

Th e cloud delivers agility and fl exibility to a company, while also helping to cut costs and environmental impact. A company with a rigid server may be paying for storage costs that it doesn’t need and, conversely, if they experi-ence a sudden spike in business, their server capacity may be inadequately able to cope with the increase in demand, harming their business growth. On one level, a public cloud virtual server is the ideal solution here – it can be incorpo-rated to respond to a single company’s storage and hosting requirements, either in times of growth or contraction.

A private cloud can be used within an organisation’s fi rewall and security infrastructure to help enable

the business to better manage its data storage needs, the only diff erence being that no

external sources or data are stored on these particular servers. But under-standing what the cloud is and how it could work for your company is a perennially challenging task. Th ere are just so many parameters to work within, so many strategies to

follow, and so many questions to ask. “I guess many businesses see the

cloud as the next great white hope,” says William Fellows, Principal Analyst for Th e

451 Group. “Th ere is a convergence in the indus-tries of telcos, service providers and IT vendors and inte-gration players who are all competing for this next cycle of spending opportunity, with the majority of them forecast-ing that servers are going to be increasingly in hosted en-vironments rather than in on-premise deployments. While there is still some way to go before managed hosts are able to reach the gold standard of someone like Amazon, there are plenty of companies out there that are getting close.”

“For most large enterprises, the majority of their IT spend is still going on premise equipment rather than third-party services”

72%72%of federal CISOs are

still not using the cloud because of

security concerns


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Companies unsure of exactly where to start as they take their fi rst tentative steps into the world of cloud com-puting should, says Fellows, follow a couple of practical steps in order to fi rst assess their requirements. “Th e fi rst step I would advise is for companies to simply create a ser-vice catalogue in order to at least understand what services are available to end users in their organisation. Th e next step is to look at the cost of provisioning and deploying to those end users. Just this very action of fi nding out cost al-location is proving an enormous driver because end users are discovering the range of services that are available to them, and fi guring out the specifi c cost to their business.”

Using the public cloud as a means of measuring the potential costs and scalabilities of an organisation’s in-ternal IT is, believes Fellows, a smart move. Public clouds have already begun to replace internal IT infrastructures in many enterprises, so it would be foolish for a company to not at least investigate how cloud-based services could benefi t their business.

Hybrid hintsAll this points to the adoption of the hybrid cloud,

which is a managed cloud computing environment where some services are managed in house, and others services are provided externally. Th e hybrid cloud, when imple-mented correctly, enables businesses to enjoy the best of both worlds: the security and control of internal IT main-frames, and the fl exible scalability and cost-eff ectiveness of the public cloud.

“Clouds are the ring fence that is under the control of a private cloud owner, but they run at a third party,” says Fellows. “With the hybrid cloud there are any number of combinations that can be applied. Th ere will be verti-cally integrated Clouds of IT systems in B2B chains where partners and customers will be able to access elements and process their supplies and data on the cloud, but it is going to take longer for the more horizontally federated cloud to come into wider usage because the interoperability of diff erent cloud providers is quite diffi cult at the moment. It’s not impossible to move workloads between diff erent clouds, but there is a whole bunch of maturing the industry needs to go through before we arrive at that stage.”

Th e ability to easily and safely transfer data across dif-ferent cloud providers will mark a watershed moment for a number of companies who still harbour reservations about this, and other issues, of cloud computing. Fellows believes we are three years away from achieving complete interop-erability; the desire and innovative thought processes are in place already. What is currently lacking is the technol-ogy to make it happen.

Trust and securitySecurity concerns abound in the world of cloud com-

puting. Companies threat over access to the data, control of their data and loss of their data. But the cloud is as much about security as it is about trust: two concerns that can easily be overcome with time, education and improved technological advances. “We’ve been surveying end users of

cloud computing for just over a couple of years now,” reveals Fellows. “We have conducted some quantitative surveys of a broad end user base and undertaken a more qualitative assessment of smaller groups of end users, and what we have found is that there is a pretty consistent level of concern re-garding the issue of trust, control and security.

“It is important to distinguish between security and trust. IT security – the security of your actual systems – is obviously a concern, but more important are the regulatory and compliance requirements, and basic protection. Th ese issues are quite distinct and separate, but rolled up and bundled together. Th e major concern for a great number of companies is overall control and trust. And within that there are data management concerns, auditing, interoper-ability and so on.”

“It’s not impossible to move workloads between diff erent clouds, but there is a whole bunch of maturing the industry needs to go through before we arrive at that stage”


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people in big organisations who are already using cloud computing to some degree, whether they know it or not. So over time what we have found is cost reduction has become one of the main drivers to adoption of cloud computing; sorting out that bottom line. Cost of ownership is seen as just as important, if not more so, than fl exibility and agil-ity. But the two issues are connected, because the ability to move tasks and workloads fl exibly both internally and into the cloud is really the thing that has proved to be the key attraction adopter, because effi ciency helps lower costs.”

Cloud evolutionAs cloud computing has steadily emerged from the

backrooms of IT offi ces into the consciousness of every com-mitted businessperson around the world, its focus has been mainly on infrastructure service: how it runs and works, security concerns and hosting. Fellows believes that the sec-tor’s evolution will move away from initial questions about understanding and penetration, to more soft ware-type con-cerns. “Th e next big step for cloud computing will be con-cerned with platforms of service, whereby you basically have one type of environment, you show the code and it gets run.

“I think what we are seeing is the control of the plat-form as a collaborative tool to be used inside organisations. So where, for example, Spring Source is a collaboration be-tween VM Ware, Force.com and Google, we are now seeing Microsoft working with Azure. Th e developed world is divided into three camps, basically. Java, dot-net and open source (Python, Ruby, etc.), and systems staff are looking to create big developer environments and communities and to take advantage of their platforms that support the execution of those code bases. And this again rides on top-off infra-structures of service because you need this kind of fl exible infrastructure behind it to create that platform service.”

Recognising where the cloud is drift ing to and ensur-ing your business is best placed to take advantage of the ever-evolving service it off ers is another challenge that lies not too far over the horizon. “You can identify the cloud computing model when you see IT organisations aff orded the ability to provide some automated governments in a way that they haven’t been able to before,” says Fellows. “It is not so much a case of exerting control, but by off ering, for example, the developer a black box that they can develop against without having to be concerned with what hap-pens in getting the tasks done. Th is is manifest in the trend we are seeing for developer and IT operations functions coming together in what we call the ‘devox’.”

Th ese changes will inevitably lead to widespread re-structuring of IT departments, but are most organisations ready for these various stages of upheaval? “To date it has mostly been champions for the cloud pushing through change by utilising end examples to show their bosses,” says Fellows. “But I think going forward, the greater their peer experiences, the better the collective understanding about the benefi t of the cloud. And as more and more com-petitors adopt and reap the rewards of the cloud, more and more in your organisation will begin asking questions, and will want to enjoy the same benefi ts too.”

Fellows’ research identifi ed a grouping of inhibitors to adoption of the cloud, with control and trust what he referred to as ‘the fi rst set of inhibitors’, and cultural con-cerns the second set. “Oft en reluctance to embrace cloud computing has little to do with technology,” says Fellows. “Snagging points revolve around issues of internal resis-tance to change. Whenever the issue of power, trust and control come up, there are a whole bunch of organisational factors that have to mature or change in order for new prac-tices to be accommodated, new working environments to be embraced and new technologies to be implemented. Th e cloud brings all three of these inhibitors to change to the very door of the executive decision makers, so this hesita-tion is oft en understandable.”

Overcoming these hesitations and inhibitors is a chal-lenge that the cloud computing industry must focus on if it is to promote an atmosphere of wider acceptance. Greater adoption of cloud computing will happen regardless though, thinks Fellows, as more and more companies begin to trust their instincts and take advantage of the wealth of services out there. “Wider use of cloud computing is hap-pening kind of by default because there tend to be lots of


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Many large companies will have a number of concerns with cloud computing, the primary one being that of security. How does your business ensure that the cloud is secure?Adrian Joseph. Security is at the heart of every Google application from its very conception, and Google Apps has been built with security in mind from day one. What’s more, the scale of our operations means that our investment in security can be much greater than that of an av-erage business. Th at’s why, with the technology and processes we have in place, as well as over 100 security staff , including some of the world’s

foremost security experts working around the clock, we believe that the cloud might actually off er better security than many traditional IT infrastructures.

Th ere are some specifi c challenges each CIO needs to consider. Firstly, a cloud-based solution reduces the chance of data loss. Staff are less likely to have confi dential fi les stored on their laptops or USB sticks, and are less likely to email documents to their personal email addresses if they want to continue to work on them at home – both common causes of the breach of confi -dential information.

Secondly, in terms of physical security and availability, we replicate users’ data to multiple servers across multiple data centres and loca-tions. If a disaster strikes in a particular region, the data remains secure and available.

Th irdly, there is the patching problem – while traditional systems may take up to 60 or even 90 days to patch for vulnerabilities, the homogeneous nature of cloud solutions such as Google Apps allows for instant patching of the entire infrastructure.

In addition, external auditors perform reg-ular detailed security reviews of our processes

Cloud and clear

CXO speaks to three industry experts about the pressing questions posed by cloud computing.

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be part of the customer’s infrastructure as long as the network can support it. It does become important that the network being used can sup-port the new techniques required to manage the cloud environment and that any potential sav-ings and improvements are not negated by a slow old network.

SG. Leading companies do analyse their IT and IS landscape and categorise their applications into business-critical and context applications. Th ey take a two-step approach. First, transition-ing few of the context applications on cloud or alternative shared services environment. Th ese applications would have light SLA requirements and the non-availability in some situations would not impact the business severely. Th is route is adopted to reduce the increasing costs and, at the same time, evaluate the performance, availability and security aspects of cloud com-puting to begin with.

For business critical applications, they continue to host them at their primary in-house datacentres, which they perceive to be giving them higher control over their IT assets and confi dence of recovering from any breakdown situation through personnel attention at the site.

Wipro supports the above approach by help-ing clients analyse their business applications landscape, categorising them in terms of business criticality, evaluating interdependencies and sug-gesting a roadmap to a cloud-based approach.

and Google Apps is SAS 70 level II and FISMA certifi ed.

Trevor Dearing. Th e cloud changes the game completely for security as we move to a world where users are mobile and resources vir-tual – the old concept of providing a physical boundary will disappear. We have to abandon the previous idea of security being like a castle with all the applications on the inside and all the users on the outside. Instead we must think about a model that is more like a hotel where a user is given a pass key based on their identity and this gives them access to certain resources within various rooms.

Juniper Networks has developed security solutions that deliver security as a service for a virtual network. Th is approach is based on iden-tity management, application identifi cation and automated management. We have developed a series of open platforms that allow third par-ties to develop specialist applications to further secure the network.

Sanjay Gupta. Data security is the top-most concern among enterprises adopting cloud services. Wipro off ers most stringent security measures in its data centres and applications within the cloud. A robust design, best of breed technologies and practices based on ISO20000 ITIL standards lend consistency to the cloud so-lution monitored on a 24/7, 365 days a year basis.

Multiple layers of physical security controls are in place in the data centre – 24/7 security

guards, access control systems. Th e data centre is divided into multiple security zones and access control policies are enforced to ensure restricted and authorised access to sensitive areas.

Wipro has implemented a robust intrusion prevention system for networks carrying highly sensitive information. To protect storage, Wipro has defi ned zoning and LUN masking only for pre-defi ned authorised hosts. OS hardening is performed on a regular basis. A separate VLAN and virtual fi rewall for each customer is off ered to protect the network layer.

URL fi ltering is available and can be con-fi gured upon customer requirement through a robust fi rewall mechanism. Secure access is

allowed using SSL-VPN. Servers facing internet are protected by a minimum one layer of fi re-wall, and backend database servers are protected with two layers of fi rewall.

Wipro advises enterprises to link cloud se-curity with their organisational security policy. In the case of very high company sensitive data, enterprises are advised to retain the setup within their data centres on dedicated setup. However, for less critical data, they can look at cloud aft er doing a detailed risk/control assessment of the service provider.

Leading companies face increased hardware and storage costs, but they also have an un-derstandably greater desire to maintain full control of their servers. How would you ad-dress these concerns?AJ. What we hear from our customers is that, faced with the ever increasing pressures to make their business more competitive and more effi cient, they prefer to focus on projects that add real business value rather than purely sup-porting their IT infrastructure. Th ey tell us that, since deploying Google Apps, their IT teams spend less time managing email systems and more time looking at ways to use technology to transform their companies.

Cloud computing off ers an opportunity to make immediate cost savings on hardware, stor-age and other resources, but more importantly off ers a new way of working. For example, one of our customers is providing a communication and collaboration environment to over 35,000

staff , including 10,000 mobile workers who have never had access to any IT tools in the past.

In another example, account managers at a global ad agency share calendars with their business partners, enabling them to coordinate groups of people a lot faster than before. Th ey also use video chat to review campaign ideas by bringing together experts in multiple countries, enabling them to tap into their global workforce.

TD. Th is obviously depends on the services being off ered by the provider. Th e technology is available to extend a customer’s virtual network into the cloud and right into the data centre. Th is means that the resources in the cloud can

Adrian Joseph is Managing Director of Google Enterprise, EMEA. Joseph joined Google over three years ago with 15 years of blue chip sales, marketing and supply chain experience. Prior to Google, he spent six years at Ford Motor Company, and was the main Board Director for Traffi cmaster, where he was responsible for sales and marketing. He holds an Economics degree and an MBA from Manchester Business School.

‘“Private cloud’ is not much more than dedicated hosting. Th e need to manage the physical hardware is removed, but you don’t get any of the economies of scale that you get with a ‘public’ cloud” - Adrian Joseph


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The greater scale offered by virtual cloud computing is obvious, but how easy is it for an IT manager to support and transfer data across multiple clouds?AJ. Interoperability is a key component for the simplicity of data transfer. Right now it’s down to each vendor to make it easier to transfer data in and out of their cloud-based systems. I think there is still a lot of work for the industry to do in terms of standardising that. At Google, we feel very strongly that the customer owns the data and we would like it to be as easy as possible to move data in and out of Google products. We have already done a lot of work on the consumer front with the launch of our data liberation ini-tiative (www.dataliberation.org) and we would individually support a customer wishing to transfer to another solution.

TD. Once again this is a network issue and depends on the services being used. If it is pure application as a service then it can be easily accessed by traditional IP networks. However, if you are taking any platform services – and especially cloud bursting type services – then potentially everything will need to be in the same layer-two domain. Many service providers are now off ering virtual LAN or line services based on VPLS, which do allow the extension of an existing customer network across a service provider infrastructure.

SG. Th is is one of the biggest challenges for IT operations staff and in a way limits their abil-ity to migrate types of workloads across mul-

Sanjay Gupta leads the Productised Solutions Group of Wipro Technologies. He has been with Wipro since 1988 and has held responsibilities across sales, post-sales support and key account management in India and the US. Gupta is an electronics engineer, holding a MBA from Indian Institute of Management Ahmedabad.

“Th e challenges are not only around technology but also around managing mindset change”- Sanjay Gupta


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tiple clouds. Th e challenges are not only around technology but also around managing mindset change. Another aspect that comes into play is the bandwidth requirements that data will impose on networks. Innovative solutions have been deployed but these add to the latency and hence, again, become a limiting factor. However, given the fact that compute, storage and band-width follow Moore’s law, it is possible that tech-nological challenges will be overcome. Vendors are working on securing data-in-fl ight as well. Th e most important aspect that will still remain is the mindset change, which requires a touch-and-feel approach.

What are the greater benefi ts of the public and private cloud, and how can the hybrid cloud enable greater control without com-promising on storage costs and capacity?AJ. ‘Private cloud’ is not much more than dedi-cated hosting. Th e need to manage the physical hardware is removed, but you don’t get any of the economies of scale that you get with a ‘public’ cloud. To give you an idea of the immense scale that the Google cloud handles, over one billion searches happen on Google.com every day. Every minute, 24 hours of video is uploaded to YouTube. We have over 3.5 million servers dis-tributed across our global data centres. Google Apps runs on this same platform, enabling our developers to create applications quickly, with-out needing to know where the code executes, how it scales, how it gets backed up or how to build in fault tolerance. I’ve talked about the

number of security experts that Google employs – this is another example of the scale that a true cloud off ering brings – it would be a very costly exercise for our customers to do that individu-ally. You just don’t get the same scale or cost ben-efi ts with a ‘private’ cloud.

As for ‘hybrid cloud’, we defi nitely see it as a matter of course that our customers integrate their existing on-premise solutions with our cloud off erings, and that continues to be an important part of our enterprise computing strategy.

TD. Th e hybrid cloud appears to be the solution that is becoming most popular. Th e virtualisa-tion technologies adopted in the public cloud can have some real benefi ts in the enterprise net-work, so giving rise to the private cloud. Th e cost savings of being able to outsource non-critical services are very attractive but many organisa-tions are not comfortable in giving away the core of their business. Th e hybrid cloud off ers the best of both worlds but does create some new challenges around management, especially with

an environment with a multitude of diff erent management systems.

It is important, therefore, that the manage-ment of the network and security is integrated with the management of the applications, stor-age and servers. Th is can only be achieved by the adoption of open standards and products with published APIs. It is important as we move into the cloud world that adoption of these types of products becomes routine.

SG. Th e benefi ts of private cloud are full control on data and servers, increased resource utilisa-tion and sharing across enterprise. Th e benefi ts of public cloud are reduced CAPEX, infi nitely scalable in compute and storage requirements and more focus on core business processes and innovation by releasing unused resources.

Hybrid clouds enable greater control as the most critical workloads reside on private cloud and less critical applications move to public cloud. By leveraging public cloud, enterprises pay on usage basis, save on storage cost and provision for extended capacity as per business needs.

Trevor Dearing has been part of the networking and security industry for nearly 30 years. He has been involved in initial implementations of many of the new innovations that have taken place, including ethernet, PCs, IP telephony and virtualisation. He currently works as Director of Enterprise Marketing for EMEA at Juniper and managed the launch of Juniper’s switching portfolio.

“We have to abandon the previous idea of security being like a castle with all the applications on the inside and all the users on the outside”- Trevor Dearing


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In today’s economic climate, enterprises are faced with the diffi cult task of delivering a rich IT off ering while at the same time minimising IT spend. Enterprises demand a richer IT experience with a lower TCO, a

faster ROI and a more secure environment. Desktop vir-tualisation promises to enable enterprises to achieve these loft y objectives, which is why Gartner predicted that desk-top virtualisation revenue will grow to $65.7 billion (€49.9 billion) in 2013 .

To ensure your success with desktop virtualisation, it is imperative that you fully understand the technology. You fi rst need to know that desktop virtualisation is not the same as VDI. Rather, desktop virtualisation is a collection of technologies that includes terminal server (or ‘remote desktop session host’) as well as VDI. It is the combination of these technologies that gives desktop virtualisation the power to enrich the user experience and simultaneously reduce IT costs and better secure the desktop environment.

Turning desktop virtualisation’s promise into reality is all about applying the right technology to the right usage or roles. Employees with the same role oft en perform the same set of tasks. One example of such a role might be an

inside sales representative who typically performs the same tasks using the same basic set of applications every single day. Th is role is ideally suited for terminal server, which typically provides the lowest cost-per-workspace. Another role: a marketing developer might require more than the basic set of applications and also need to make more chang-es to his virtual desktop, such as installing applications or connecting new peripheral devices. For this type of role, VDI is the best choice. While VDI has a higher cost-per-workspace when compared to terminal server, VDI does allow for personalisation and a high degree of device and application compatibility.

When using VDI, you will need to choose which virtualisation platform (hypervisor) to use to host the vir-tual desktops. Th is choice is very important because it will impact the desktop virtualisation deployment throughout

its lifespan. Making the wrong choice will severely impact the TCO and ROI. Unfortunately, there is not one right choice. Hypervisor A could have a feature set that would perfectly suffi ce for enterprise A at a cost of A while en-terprise B might need hypervisor functionality that is only available in hypervisor B at a cost of B. Unfortunately, the hypervisor market is very complex and dynamic; today’s market leader could be tomorrow’s loser. Th e good news is that third-party tools exist to help you broker and manage your virtualised environment, regardless of which hy-pervisor you choose. Th ese tools can also blend multiple hypervisor platforms under one management umbrella.

Th e key to the success of a desktop virtualisation project is to use a product that effi ciently maximises the ca-pabilities and features of your environment. Quest vWork-space is the only comprehensive management framework that is built to harness the full power of all types of desktop virtualisation. Quest vWorkspace is hypervisor-agnostic, resulting in the lowest average cost per workspace for enter-prises of any size. Th is innovative technology enables you to easily manage and provision your environment from a single pane of glass and a single license. Quest vWorkspace is the smartest path to simplifi ed desktop virtualisation management, and can ensure a successful virtualised envi-ronment to both large and small enterprises.

Desktop virtualisation is one of the biggest revolutions in IT since the introduction of the PC, offering tremendous benefi ts to enterprises of all sizes. By making the most of desktop virtualisation’s many capabilities and features, you can quickly realise these benefi ts, says Michel Roth.

How smart desktop virtualisation enables success

Michel Roth has over 10 years of experience working with application and desktop delivery technologies. He currently fulfi lls the role of Principal Product Architect in the Desktop Virtualisation Group of Quest Software. Roth’s specialisation is in desktop virtualisation. He has spoken at many industry conferences, including Microsoft TechEd, BriForum and Pubforum, and is a frequent author for sites such as MSTerminalServices.org and BrianMadden.com. In his spare time he maintains the website Thincomputing.net.

“Turning desktop virtualisation’s promise into reality is all about applying the right technology to the right usage”

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QUEST.indd 1QUEST.indd 1 12/08/2010 11:3512/08/2010 11:35

BIG INTERVIEW74

As Managing Director for Google Enterprise EMEA, what are the main strategies for business that you are currently implementing?Adrian Joseph. At Google Enterprise, we are a business that essentially covers four product groups. So, the fi rst is search – taking our search technology that most people are familiar with – and putting it into businesses. Th is could be helping them to fi nd stuff within their own businesses a lot easier, or helping their customers to fi nd stuff on their websites more easily. Search is one of our core elements, and that’s where we started the Enterprise business.

Th e second product is geo – so taking Google Earth and Google Maps and opening up APIs to allow businesses to use our technology to overlay stuff that they fi nd inter-esting or their customers fi nd interesting. Th e third part is Postini, which was implemented about two and half years ago. It’s anti-virus, security managing and an archiving and discovery tool. And then the fourth one is Google

Apps, which is essentially a suite of components, which include Gmail. But not what I call traditional email, so within the email suite, for example, you can instant mes-sage, you can do it in 47 languages instantaneously. And you can do things like video chat, for example.

Th e next part of Google Apps is Docs. Th ese are spreadsheets, presentation packages, word processing packages, etc., but the key to its success is its real-time col-laboration. In the existing traditional model, what people tend to do is to work on a spreadsheet email it out to fi ve or six or however many diff erent people, and everybody makes a change and sends it back.

Well, our app is quite diff erent. What we do is to create this central space, and then invite people to collaborate, and we can all be working on the same documents simul-taneously. Th is sort of technology – bringing our experi-ence of the consumer side to our business and delivering enterprise-ready features like those – is what Google En-terprise does.

Can you explain how the technology Google Enterprise is introducing enables better business collaboration and access to information?AJ. One example would be websites: the ability to create internets within your own business, and being able to do so without having to go to the IT department. Users can set this stuff up themselves. Th ey can invite people in to interact because such collaboration is built into sites. Th ere is also video for the business, such as our YouTube technology and bringing it into the enterprise. We try to imagine a world where users within businesses can access their stuff at any time, and can become what I like to de-scribe as ‘super-productive nomads’.

Th ese nomads can access information when they are out and about, and can collaborate in real time. At the same time as delivering empowerment to users and making them these super-productive nomads, we’re also driving innovation within businesses.

We demonstrate a very strong link between collabora-tion and innovation – a correlation of 0.81, which is pretty phenomenal. So we are driving innovation but doing that as well at much lower cost. Th is obviously brings me on to my view of cloud computing at a macro level – it’s about super-productive nomads. It’s about continuous innova-tion. And it’s about real empowerment of the users.

Google’s global dominance has come about via a combination of hard work, innovation and the ability to respond to consumer needs. These attributes are now transferring well to the corporate world, according to Managing Director for Google Enterprise EMEA Adrian Joseph.

“Th e shared component is very important, because that enables us to drive continuous innovation”

Adrian Joseph

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BIG INTERVIEW 75

Cloud computing has been touted as the best option for business to cut costs and carbon footprints, but there are still numerous concerns about data security.What do you say to those who still harbour worry?AJ. I think it’s a very important question, and one that we feel very strongly about. Th e cloud absolutely delivers many of these benefi ts that I have spoken, about. Not all clouds are equal. Maybe you just have to describe at a more technical level a defi nition of clouds.

Th ere are three core components to that. One is that it’s hosted, so it is run by a third party outside of that busi-ness. What that means is we can bring real economies of skill. Two, it is on shared infrastructure, and for us that means a true, multi-talent environment where we take our data and distribute it across a number of data centres, but

we guard that – encrypt is not quite the right word – but we do something similar to encryption. It is almost like if you gave me a letter, and what I did was to encrypt it, and then put it through a shredder, and take all those little pieces and distribute them across a number of centres. Th at is what we do.

Th e shared component is very important, because that enables us to drive continuous innovation. It gives us huge economy of skill. Th e third component of cloud, for us, is in the browser; it is internet based, and Google Apps is en-tirely in the browser as an icon upon your desktop – there are no other installations on your desktop, or on servers, or any other complexity around that. Th ose are some of the components that are important to understand about our defi nition of cloud.

Only 12% of employees are

happy with the technology available in the

offi ce


BIG INTERVIEW76

How has the Android platform helped Google to de-liver its aims and strategies?AJ. Th e reason that we got behind Android is because we wanted to ensure openness, which is one of the key charac-teristic of what I’ve described as Google’s DNA. Previously it was really hard for developers to create a great applica-tion and expose that to a large community of users. Th e reason for that is that you have to create apps that were spe-cifi c either to handset manufacturers or a carrier. And so Android was developed to enable much large distribution and openness of the web in a mobile platform.

Th e same is true of some of the work that we are doing with Chrome OS, the Chrome operating system. Th is is really transformative in the sense that our belief is that we can deliver applications, and we can deliver an operating

Just to your question about security, actually the right question to be asking – I think there are three components from a Google perspective that are important to under-stand. Th e fi rst is about control. What we do is to give the administrators of our Google Apps system the ability to give diff erent permissions for usage of the diff erent parts of Google Apps. Th ey can look at usage data and so on, so control is an important element of that.

Th e second part is trust, because I think trust is at the heart of the question, as is providing confi dence. Google is SASS 70 Type II certifi ed. Th at means that every year, external auditors come in. Th ey look at our systems, our processes, and so forth, and if we are up to scratch then we get that certifi cation – which we’ve got.

Th e other part of confi dence that is important to bring out is Safe Harbour: we meet US and EU Safe Har-bour requirements. Under Safe Harbour there are seven diff erent components – things like access, storage, and so forth – that you have to meet standards by which, again, is something that we do.

And the third point is giving people choice. With our data liberation movement what we try to do is make it easy for people to move into Google Apps and transfer their data in, but we also try to make it easy for them to take their data back out. Th ose three points of control, confi dence, and choice are critical to understanding the context of trusting Google Enterprise.

How else is Google Enterprise working toward making Google technology more readily available and easy to use for businesses?AJ. At the heart of our DNA we obsess over our users and we obsess over innovation. We have taken our experience and reach – we now have over 300 million users of Google Apps – to do something quite diff erent. At Google, our model of innovation is quite diff erent. It is not the very traditional, soft ware level of spending a few years design-ing and a couple of years doing build, then a couple more years trying to convince the businesses to adopt the latest version.

Our innovation cycle is every one to two weeks, where we are uploading new or improved features within Google Apps, and we are doing that seamlessly. If you think about the experience of users when they go home, they have access to things like Facebook, to Google Search, to LinkedIn. Th ose users have got accustomed to continuous innovation being delivered to them in a way that doesn’t disrupt their lives.

And so we take that experience. We can expose a slice of that massive base to our new innovation. We see how they react to it and then we make it available to wider enterprise business. But before we get to that stage we do something that we call ‘dog fooding’, which is to expose our own employees to these innovations.

We have some very experienced users, some critical users. So we test it on ourselves and a portion of the con-sumer database, and then we open it up to the enterprise.

Enterprise SearchSearch tool for website or intranet designed to maximise website ROI and internal productivity Consists of Google Search Appliance (administrative customisation options and the ability to scale across all content), Google Commerce Search (retail-centric features designed specifi cally for online merchants), Google Site Search (search results for websites) and Google Mini (for small businesses or intranets).

Postini ServicesEmail security, archiving and encryption, powered by Postini and complementing Microsoft Exchange, Lotus Notes and other solutions. Comprises Google Messasge Security, Google Message Discovery, Google Web Security and Google Message Encryption.

Earth & MapsDesigned to help businesses view, understand and make decisions about location-based information. Allows the incorporation of company’s data into Google Maps and Google Earth to be shared with colleagues and clients. Comprises Google Maps API Premier, Google Earth Pro and Google Earth Enterprise.

Google AppsSuite of web-based tools for businesses, including Gmail, Google Calendar and Google Docs. Among the promises Google Apps makes to its customers are cost savings thanks to its web-based applications requiring no hardware or software; mobile email and calendar sync; 99.9 percent uptime reliability guarantee; 50X more storage than industry average; data security and trust; and 24/7 customer support.

Google Enterprise core applications

“Th e reason that we

got behind Android

is because we wanted to ensure openness”


BIG INTERVIEW 77

much longer. One piece of advice I would off er is to think through how businesses can tap into the technologies that people are using in their homes and bring those into their businesses in a safe, secure way, to drive innovation and to reduce cost.

Companies like Jaguar, Land Rover, Rentokill, Valero and Motorola have all gone Google for these reasons. Also, if you think through the relationship between IT and HR as well, our hypothesis is that there are opportu-nities for those departments to work more closely to drive innovation, recognise it, and reward it. But they need to work in unison to make that happen.

Th ose would be some of the things that I would be saying to IT directors. I would encourage them to realise that not all clouds are equal. Google was born in a cloud, this is where we started up. All of the Google Apps Suite sits in the same infrastructure that we run Google Search and Google Maps on, so if Google Apps fails for us then we have a much more serious problem than in running and managing our own business.

So, I would say be clear about the cloud and what that really means. Experiment with it, try it, test it. Speak to others who have gone down that route and see what their experiences have been. Do not underestimate the cultural aspects of this change. It is not just a technology change, so it is important to ensure that there is a strong manage-ment communication plan around any sort of innovative implementation. KLM, for example, adopted Google Apps a few months ago, and the most interesting thing they told us from their experience was the feedback they received from their cabin crew. Th ey discovered that most of their cabin crew, over 50 percent, were already using Gmail for their own personal use. Th is is that user experi-ence I mentioned; this dissonance between our home ex-periences and our work experiences cannot be sustained.

How far is Google from bridging this dissonance, in both a cultural and a technical sense?AJ.Th e challenge is not a technology challenge any longer. I don’t think it has been for some time now.

An author called Nicolas Clark wrote a number of articles, and in one of them he made the comparison to electricity. If you think back many years ago, companies were generating their own electricity. Th ey had their own generators on site. It is a business critical resource, and obviously over time that has been outsourced – we trust the electricity companies to consistently deliver what we need. So it is this paradigm shift in the way that we think about technology, and cloud computing in particular, that is the major blocker, not the technology itself.

A lot of the investment in IT at the moment is about keeping the lights on. It is about doing maintenance. It is about patching. It is upgrades and stuff . I think the power of cloud is that it frees up IT resources by outsourcing to a trusted, reliable, low-cost provider, enabling seamless innovation in a way that then frees up resources for them to do more value-added activities to really drive their business forward.

system that is entirely based in the web. So take it out of the desktop, make sure that it is really secure and safe. For instance, imagine opening up a notebook in four or fi ve seconds from cold start and having access to all of your stuff . And imagine it not mattering if you’d lost that notebook because all of your stuff would be based in the cloud, in a secure way. You could just go back into the IT department or to the shop and get another one, and you would have all of your stuff ready and available. Th ese are some of the core benefi ts that we see of cloud computing.

And one of the questions we get asked is, ‘How secure is the cloud?’ But one of the questions that I’m increasingly seeing big businesses asking themselves is, ‘How secure is my existing infrastructure and IT applications?’ Quite a lot of them are fi nding that in moving to the Google cloud, it is many times more secure than their existing systems.

How is online collaboration affecting innovation and idea generation in the workplace?AJ. If you think back over time, one of the limitations of innovation has been geography. If we were able, centuries ago, to connect some of the great thinkers to one another, the sharing of ideas might have fl ourished and been dis-seminated much more rapidly. And that is the power of the technology that we bring in terms of real-time col-laboration.

Th e research that we did recently with Th e Future Foundation showed this almost perfect line between collaboration and innovation. I don’t think there is a business that I have come across that isn’t interested in driving innovation within their businesses. We know that there are some barriers to making that happen now, some of which are around cost. But some other barriers are around vision, the management having the vision and experience to give empowerment to their teams.

Do you fi nd that access to such easy collaboration helps to create a different corporate structure by breaking down entrenched hierarchies? AJ. I think what it does is enable everybody to have a voice and to be able to articulate that. We know that employees, if they were incentivised in the right sort of ways, then more than half of them say they would come up with even more creative ideas. Th is is all about recognition and reward, and our collaboration tools help to enable that. Businesses are missing out on a huge opportunity to tap into the internal wisdom that exists across their busi-nesses, irrespective of hierarchical structure.

What advice would you offer to IT directors and CIOs in relation to the types of technologies they should be implementing for their business?AJ. One of the things I would note is that if you look at some of the research, only 12 percent of employees are happy with the technology that is available to them in the offi ce. Th ere is this huge disconnect, this dissonance be-tween our experience in the home and our experience in the offi ce. I don’t think this dissonance is sustainable for

There are now over

300 million users of Google

Apps

Over 50% of KLM cabin crew

are already using Google

Apps


Before being handed the CIO role 18 months ago you worked in a variety of posi-tions and departments throughout your 15-year career at Coca-Cola. How has this experience stood you in a good position to take the beverage company’s top IT job in Europe?Sabine Everaet. Before I joined Coca-Cola I was working as a consultant for KPMG and PriceWaterhouseCoopers mainly on change management and organisational design initiatives. Th is gave me a business background, and also, I had the opportunity to get experience in diff erent types of industries. Aft er four years in consulting, I start-ed with Coke – the concentrate, marketing and innovation business – as a business analyst / project manager. My fi rst big achievement was the implementation of an ERP system for the juice business in Europe that gave me more of the logistics experience. Th en, I moved on to diff erent IT Account Management roles where I learned to engage properly with internal and external customers trying to understand local business needs and cover them as much as possible with European solutions, a big challenge, that required a lot of infl uencing.

For a company as ubiquitous as drinks manufacturer The Coca-Cola Company, its bottler, customer and consumer-facing IT are a crucial cog in global operations spanning over 200 countries. For Sabine

Everaet, Europe Group CIO, it’s all about seeing the opportunities of how technology can transform and grow the business, she tells Julian Rogers.

SPECIAL FEATURE78

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I became the lead of the European application development and sup-port team, and installed a PMO to introduce a formalised tollgate process for development and deployment of any IT solution. Establishing formal processes always requires change management. Associates typically ques-tion the need for more formalised deliverables, but need to understand that this is to support the thinking process, allowing for calculated risk management instead of forcing deliverables for the sake of it.

Just before I was appointed Europe Group CIO, I was Deployment Ser-vices Director for two years on a worldwide bottling programme. Th is was critical for me to gain bottler experience which I did not have so far. I have travelled around the world – Australia, China, the Philippines and South Africa – to drive process, data and system standards in a culturally diverse environment. Th at was truly positively impacting my skills and experience to grow into my current role.

I have always been a passionate and energetic person, typically satis-fi ed when truly achieving something that drives the business forward. I would strongly encourage people that want to grow to focus on company interest versus personal interest – do the right things for the company and you will be rewarded – and, step out of your comfort zone to experi-ence something totally new which is enriching and preparing you for the next step. Never be happy with what you have achieved, raise the bar for yourself and the people around you on a continuous basis. Th is is critical.

What were your priorities when you became CIO last year? SE. IT globally was in the midst of a transformation when I started, and Europe had to contribute US$1.9 million savings – a key driver of this was the renegotiation of our technology and end user computing outsourcing contract.

It included moving our outsourced IT service desk from Toronto to Manila and at the same time reducing the number of languages from six to one – English only. Also, our outsource provider moved the back offi ce monitoring activities mostly from Brussels to Voronezh in Russia. For the local presence in the 28 European locations to deal with end user com-puting incidents, we moved from a staff augmentation to service based contract. Th at all resulted in achieving the required savings.

At the same time, big transformation programmes were run in Fi-nance and HR that needed much of IT’s attention. Our team stepped up and started playing an ‘integrated planning’ role, not just planning IT but all business activities across the diff erent functions. Th is eff ort was, and is, still highly appreciated by our clients as it allows us to oversee the full impact of the transformation and to manage the risks. In parallel, we need to prepare the team and its skills for moving from back offi ce IT support to enabling the business to grow through IT enabled innovation in the areas of consumers, customers and bottlers.

Another key focus was to build a strong relationship with senior management in Europe and be included in their routines. It is important to be able to listen to our internal clients when they discuss their specifi c business challenges. From these discussions, I picked three areas for us to drive innovative change as to how IT can contribute to business growth including driving and executing a far advanced collaboration strategy. At the same time, we had to uplift the credibility of IT as an organisation. Due to restructurings, outsourcing and off -shoring, headcount was reduced by 80 percent over the past 10 years, the operating expenditure by 60 percent. I have made that picture clear to our management team and obtained the ‘go’ for increasing the investment in IT for the fi rst time in 10 years.

Here at Coca-Cola we have a global IT environment. I had to learn to balance the global needs of globalising IT and fi nding synergy and cost savings with the local requirements of the business. It’s about managing


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SPECIAL FEATURE 81

expectations for both the business here in Europe and our IT counterparts in Atlanta [the company’s head-quarters].

How has the recession affected Coca-Cola Europe? Have budgets been cut and are you being expected to do more with less?SE. Even before the recession hit us, we had a mandate from our CEO to save US$500 million by diff erent functions over three years – 2009 through to 2011. Th erefore, we had initiated the transformation initia-tives in IT, Finance and HR, as I mentioned before. Yes, on one hand we are doing more with less, we saved 40 percent on our technology and end user computing outsourcing contract. But as of 2010, I’m convincing the business in Europe and Global IT management to reinvest in IT, less into the back-offi ce part but more to drive front offi ce programmes and reinforce the business partnership.

Do you think this tough period has given you the opportunity to be more innovative? SE. Yes, absolutely. Th ere are diff erent dimensions to innovation. On one hand, we look at it from an IT operating model perspective. Th is is about the way we operate internally, but also how we execute our outsourcing contracts in a smarter and more effi cient way. We started collabo-rating with our strategic partners to drive this type of innova-tion. Th e challenge is going to be adapting the contract before its expiry date.

We are also looking at innovating IT in order to drive per-sonal and team effi ciency and eff ectiveness. We are in the process of building a cohesive collaboration strategy. Th is includes uni-fi ed communications to have our colleagues and partners be only one click away and be reached at the device they want. We are ready to launch a wiki-platform to interact around services and programmes, internally in IT but also with our clients. We have just launched an internal Facebook, and are evaluating a YouTube type of tool.

Th e third innovation area is the most important one and is related to understanding how IT enabled innova-tion drives either cost reduction or extra revenue and growth for the business. With Finance and HR we are looking at transforming and standardising the processes supported by new systems. At the same time we are working on two, still confi dential, innovation projects with the business in the customer and consumer space. Th e challenge, as for many companies, I suppose, is to fi nd bandwidth in the team to execute the plan and at the same time drive innovation. Th e art is to bring this con-tinuous innovation mindset to your teams.

You mentioned your internal versions of Facebook and YouTube. Why you are implementing these social tools? SE. We need to be ready as an organisation to have Gen-eration Y onboard, and have them be productive. People compare their home computing environment with the en-terprise one, and start interacting with colleagues just as with their friends and family. We have just launched the internal Facebook to encourage

informal interactions and support an organisation that is becoming more and more network based. It also enables us to fi nd expertise throughout the world. Th is encourages replication of best practices, instead of re-inventing the wheel, and not wisely investing our marketing funds. We are currently testing desktop videoconferencing, etc. We are typically limited by security and network bandwidth. We need to learn to work around these constraints and provide eff ective and effi cient solutions for our end-users. We have a long way to go.

How is cloud computing impacting the way the business operates? SE. At Coca-Cola, we are not yet taking advantage of the cloud computing possibilities. As we are shift ing towards a truly service-oriented organisation, we are

assessing options to shift applications to the cloud. Th e main reasons are cost – you pay per consumption unit – fl exibility, ease of support, etetera.

We hear a lot of talk about how the CIO role is going to transform in the next 10 years. What’s your 2020 vision? SE. I do not believe there is a single answer to this question. Th ere are a lot of diff erent opportunities for CIOs but how you shape the role is based

on your own experience, interest, potential and drive to infl uence the business to consolidate diff erent responsibilities. I see the role evolving into a business transformation role which could be either truly transformational in terms of innovation and drasti-cally changing the business operating model within the company and with its partners, or, leading business process management type of work and shared services.

When recruiting, do you look for IT professionals with a good level of business acumen as well as a technology head on their shoulders?SE. Defi nitely. Understanding the business is both about the nitty-gritty details of business processes and the short term and strategic direction of the business. On top of that, I would be looking for people with very strong client engage-ment skills, a lot of creativity that helps them to see the opportunities, pro-activity to carve out the work when the opportunity arises, and reap plenty of drive and passion for learning and execution.

Given the fact we work with a lot of outsource pro-viders as well as internal service providers in Atlanta, it is less important to be truly technical experts. Although, our experience in the team is that a minimum level of technical expertise is required to fi rst and foremost un-

derstand the potential of IT, but also to validate solutions delivered by our partners. Working with outside partners on the other hand requires strategic vendor management skills, as opposed to the typical people leadership skills to manage internal teams. Working with in-house service providers requires a high desire to collaborate with other

teams and the perseverance to infl uence the strategy and quality of the deliverables. People need to see how global

solutions can cover local needs, but more importantly learn to drive the global agenda and strategy from the fi eld.

Sabine Everaet


BUSINESS INTELLIGENCE82

SMART

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BUSINESS INTELLIGENCE 83

To shamelessly borrow a catchphrase from a well-known woodstain manufacturer, busi-ness intelligence ‘does exactly what it says on the tin’ – it provides intelligent solutions and strategies for your business, implemented via a series of tools, systems, processes and

planning. Adopting a strategy that can work for your par-ticular business can be tricky; there are so many variables, techniques and approaches that can be employed to help your business better understand its productivity, effi cien-cy and data. But the end-goal is always the same – to add to the bottom line and grow your business.

Th is is always the danger with broad and sweeping industries such as business intelligence. It sounds a capti-vating proposal – to employ intelligent business strategies to produce better performance results, but there are dan-gers in trying to tackle something so potentially sensitive without a clear approach strategy in mind. As the fi nancial constraints of the recession leave ever-diminishing room for error, more and more companies are looking to busi-ness intelligence to help identify areas of weakness or inef-fi ciency within, so it is little wonder that interest in this sector is currently greater than it has been for many years.

“Th e big organisations spend upwards of €40 billion a year on business intelligence and, in terms of their total expenditure, it is quite a signifi cant chunk of money of these organisations’ overall spend, but the majority of executives feel that they are not getting massive value or competitive advantage over the intelligence they already have about their business,” says Herman Heyns, Partner of Business Intelligence at KPMG. “Conversely, there are a small percentage of companies that actually use business intelligence smartly, gaining a competitive advantage. Th e companies that do this well tend to do some really basic things that are executed well. Th is is the context – what do they do diff erently that proves so successful that other business fail to grasp?”

Retrieving something quantifi able, usable and tan-gible from the masses of data and information a company works with on a daily basis is the Holy Grail for most busi-nesses, and the purpose driver behind the employment of business intelligence techniques and processes. Actually obtaining satisfactory results, though, has oft en proved elusive for even the most sophisticated of enterprises.

“What our research has found is that the real lead-ers in this space understand the value of information in terms of making better decisions that drive value for the organisation,” explains Heyns. “On the other hand, the losers in this fi eld spend vast amounts on solutions, oft en technology solutions, without actually knowing where

Utilising business intelligence to achieve better performance is nothing new, but are organisations getting the basics wrong? CXO spoke with KPMG’s Herman Heyns to fi nd out how organisations should be using BI more intelligently.

they want to go with this. So what we see are vast sums spent on producing more reports, putting in new data warehouses, putting in new analytical tools etc., and you can fast-forward fi ve or seven years later and you can bet that they have no better insight into the decisions they need to make.

“So the challenge for many companies is breaking that habit of applying the same recipe over and again and expecting diff erent results. Companies with a vague idea of what they need to achieve from a business perspective spend time and money in all the wrong places.”

Business inhibitorsSpending large sums of money on business intel-

ligence is no guarantee for success, and is oft en seen as one of its main inhibitors – if higher spend does not yield better results, then what is the point of business intelli-gence? “Th ere are two things that really limit the success of some companies’ business intelligence strategies,” says Heyns. “Th e fi rst one is not being clear about what infor-mation you need in order to make the business successful. So many organisations that try to get better business infor-mation say ‘what can we get easily? Well that’s what we’ll invest in,’ rather than identifying what is most valuable to their business. Most companies would love to get into the minds of their customers to really understand what services would make them even more valuable, but actu-ally most business intelligence projects try to tackle things like how much of a particular stock they have, which is a completely diff erent theme and not actually that valuable.”

Companies that are unclear about what parts of their organisation are the most valuable oft en fi nd that their business intelligence strategies prove unfruitful, and this, argues Heyns, stems from a lack of clear understanding at executive level about exactly what business intelligence is and how it can be most eff ectively applied to their com-pany. “Certain organisational structures are not aligned in a way that is conducive to getting the information they seek,” says Heyns. “A typical organisation will have a CEO, then the CFO and COO, plus an operations director and marketing director. Th ey all have specifi c roles, but the information that is valuable to them actually cuts across all silos and sectors, and so the governing structure in organisations such as these doesn’t allow people to execute decisions in that lateral way. Th e problem is that somebody in an organisation is going to take the responsibility for executing a business intelligence project and it is going to sit within one of those silos, and that person is not going to challenge the silo that they are sitting in.”

Rational organisational heads would obviously be

It was not until the late 1990s that the term ‘business intelligence’ was

widely used

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BUSINESS INTELLIGENCE84

able to identify if and when these structural inhibitors were aff ecting the company’s ability to glean better results from its business intelligence approach, but oft en the value in the information they require is not so clear-cut. “If the value in the information is clear enough, then it’s at least a rational decision that the organisation can take to say that it is worth changing structures to deliver results,” says Heyns. “But most organisations don’t actually take this step because they don’t understand the value that they are leaving on the table. And for that reason, they are oft en not even willing to contemplate changing the organisational structure.”

Understanding informationFailure to grasp the value of the information at a busi-

ness’ disposal is more commonplace than one might think. It is oft en not an easy task to identify where a company can streamline, cut costs, invest or provide better service: institutionalised business methods, rigid structures and general misunderstanding of where to look combine to produce ineffi ciencies in a number of companies.

“Mobile phone companies are a good example here,” says Heyns. “Th ese companies see themselves as sellers of airtime and data, and they are in a commodity space where they compete fi ercely with other providers without ever realising how to off er true value. But if they really understood what it costs them to deliver a package of data, voice service, and really understood what their customers valued – whether they use the phone as a web-browsing device for example – they are then able to price accord-ingly. So they can approach certain customers with a pack-age that might be more expensive for them, but completely meets their needs. It’s simple, but most mobile phone companies are so focused on trying to compete that they don’t actually know the real value of their service, and so they might well be making losses without knowing why.

“Th is approach leaves signifi cant value on the table, oft en as much as 30 percent of margin with every contract they issue. But the key thing is, if an organisation doesn’t even know that it is leaving this money on the table, they are not going to make any changes.”

Companies that are looking to implement better busi-ness intelligence have, therefore, to understand the value of better decision-making and understanding of the infor-mation at their disposal. When they are able to do this, then business intelligence will show its true worth. “If a company can grasp the fundamentals of its business,” says Heyns, “then it can begin working out how its structure might be inhibiting their delivery targets. Th is is super-simple stuff – having something more than a vague idea of what they want can make all the diff erence. At senior level in many organisations I speak to, most guys get it. But if you talk at a mid-management level, you fi nd that many managers don’t actually realise the context in which they are trying to solve the problem is, in fact, already part of the problem. Th e fact that they are sitting in an organ-isation such as fi nance or marketing or production is the reason why they cannot see the real problem.”

Some companies are better than others at seeking to understand what their customers value and then actually producing products that possess the key attributes identi-fi ed in their business intelligence feedback. Positive out-comes such as this confi rm to business leaders the value in business intelligence, and it has become increasingly clear that information is now one of the most important assets for any organisation, if not the most. “I think there is a change happening where people are starting to realise that technology has not delivered on its own,” says Heyns. “It is a management issue that dictates how information is stored and analysed, and some businesses are so fragment-ed that they are unable to provide a singular view of their products or their customers. Companies have become unable to predictably get an insight around the core ele-ments of their business because their information is stored in disparate silos scattered all across the organisation.

“And this is where the real issue is for many organ-isations – they cannot get insight into the stuff that they should, ideally, have complete control over.”

Th e evolution of BIThe inherent vagueness in and around the world of business intelligence stems from the fact that experts within its fi eld – the analysts, researchers, strategists and technicians – are constantly able to redefi ne what the category actually is. To the layman, business intelligence is converting vast quantities of data into something that is visually useful, such as fl owcharts, graphs and statistics, but it is more open-ended than that.

Business intelligence is nothing new, but always reappears as a new industry exciter because of its fl uidity and ability to adapt to ever-changing markets. BI is, though, whatever works for your business: it can be something as simple as a bakery wafting aromas on to the street so more passers-by are enticed inside, to a large multinational analysing millions of streams of data in order to better maximise profi t on a particular service or product.

“Some companies are better than others at seeking to understand what their customers value”

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NEXT BIG THING 85

In a perfect world, businesses should be able to operate in an environment of transparency, certainty and trust. Unfortunately, the cost of doing business today oft en means factoring in the bad guys, i.e. the fraudsters. But,

identify who your customers are before you engage with them and you’re a step closer to that perfect world.

An analysis of fraud trends during the fi rst half of this year revealed an alarming and continuing surge in identity fraud. CIFAS, the UK's Fraud Prevention Service, reported a 22 percent increase in the number of victims of impersonation compared with the same period in 2009. Th e reality is that businesses are faced with the major chal-lenge of determining whether a customer is actually who they claim to be, while attempting to get more customers through the door.

So herein lies a critical challenge. How do you protect your genuine customers from the ill eff ects of identity fraud without making the authentication process too onerous? Aft er all, the process should be about creating a positive customer experience for the majority of your customers that you do want to do business with, as well as being able to identify the few that are fraudulent.

Identity verifi cation could be one of the answers. Au-thenticating customers quickly and easily upfront before you do any form of exchange will keep the customer expe-rience positive and straightforward, weeding out potential customers you don’t want; making life easy for the ones you do.

Th ere is no silver bullet remedy to increasing the acquisition of genuine customers whilst totally eliminat-ing identity fraud, but you can ensure a fast and effi cient customer authentication process incorporating stringent verifi cation, balancing risk and return.

Improved acquisition processes can work alongside risk reduction procedures through using new and innova-tive methods of identity verifi cation. Experian has a new string to its authentication bow. In addition to more tradi-tional means of verifying identity through authentication, organisations can now interact with applicants to confi rm and verify identity.

Electronic authentication off ers the ability to seam-lessly verify an identity using various data sources. And remember that where there isn’t much data held on an individual, it doesn’t always mean they aren’t the genuine person. Oft en, the answer is to ask the individual. If you need to prove that Bob is really Bob then why not ask him? Who is better qualifi ed to know? Experian’s interactive

questioning service uses the same vast data resources as electronic authentication to create a set of unique questions which only the genuine applicant will know the answer to. For the customer, it provides a straightforward, simple process; for the identity fraudster it creates a signifi cant barrier as they will not have access to the kind of day-to-day information being asked.

Interactive questioning is complimentary to other authentication methods, providing additional confi dence and another approach to identifying genuine customers. Having greater confi dence in the identity of your custom-ers will enable you to improve how you engage with them from start to end and increase your ability in providing them with high value products and services. Genuine cus-tomers should not have to battle with endless form fi lling and memorising passwords, when the verifi cation process can just as easily be done through answering a set of simple but unique questions.

As companies emerge from the recession, improving customer acquisition, operating safely and securely, and tightening the belt are at the top of their survival check-list. Acquiring more genuine customers fi rst time, while making life as diffi cult as possible for those customers who are not, is part of the process.

Stuart Johnston has worked in the data industry for over a decade. He has supported hundreds of organisations with their contact data management strategies and still retains an active role with several of Experian QAS’s major customers.

Verify to identify

Identity management should underpin your organisation’s customer experience and acquisition strategy, states Stuart Johnston, Managing Director of Experian QAS.

For more information about electronic identity verifi cation, visit www.qas.co.uk/identity-verifi cation

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NEXT BIG THING86

The promise of data delivered at the speed of thought has been voiced by many soft ware vendors in the past. However, the fact is the industry still hasn’t delivered data analytics that would completely

eliminate the time delay (as represented by the ‘hourglass’ which oft en appears on Windows-based machines) be-tween data queries and output and allow businesses to base their decision-making on real-time data.

Optimisation of business based on real-time data will have an immense impact on overall business performance. Th ere will be no need or, eff ectively, place for long-term business plans as companies will be able to adjust their op-erations and interactions with customers and partners in-stantly, responding to their needs as they appear based on the next generation of data analytics. Th is of course leads to an immediate impact on the bottom line, with large companies becoming much more nimble and sensitive to the trends in their environments. For example, a fi nancial services organisation can make investment or business decisions based on huge data sets without the traditional time-lag associated with large-scale analytics, giving them competitive edge. An e-commerce company can cut the time of business intelligence engagements with its custom-ers whilst IT service providers can lower their costs with better performing analytics.

How is the soft ware industry currently responding to the need for real-time data? Moore’s Law claims that tran-sistor density on integrated circuits doubles about every two years. Th is means that the ever-increasing capabilities of the hardware lower the costs of processing and storage and in turn enable the development of powerful soft ware. We have seen tremendous developments in hardware over the past few years. However, soft ware has not been keeping up with this rapid pace of development. Even more, businesses are struggling to keep pace with the explosive growth of data or the powerful capabilities of modern chips.

One of the solutions to this issue has proved to be data processing at the chip level, which unlocks the raw power of today’s chip technology. Ingres has been developing such technology with CWI Institute in Amsterdam for a couple of years now and in June 2010 we fi nally announced the general availability of Ingres VectorWise. Intel has been a key partner in bringing Ingres VectorWise Analytic Data-base technology to market and was an active participant in the project announcement in July 2009. Ingres VectorWise extends Moore’s Law to business applications for the fi rst time. For businesses this provides the ability to manipu-

late huge amounts of data and increased speed, even on the move, eff ectively giving the ability to process complex business queries at the speed of thought.

Our VectorWise beta customers report that answers to business queries that previously took several minutes are now available in seconds, whilst partners report the amount of time that big analytical or business intelligence projects usually take is being cut in half. Most of all, we are very pleased to hear from customers how Ingres VectorWise has helped them remove former data analysis obstacles and accelerate business decisions. It has been particularly welcomed by the fi nancial services community, where real-time data can lead to immediate business impact.

Ingres VectorWise also gives rise to other important business benefi ts such as greater performance with small servers and radical reductions in disk storage, which sig-nifi cantly lowers power and air conditioning requirements, and the carbon footprint of a company. Reduced hardware cost of course also leads to lower total cost of ownership.

Does Ingres VectorWise mean the end of the ‘hour-glass’? It certainly represents a very important step towards decision-making based on real-time data and in turn en-ables companies to always have access to up-to-date infor-mation about customers, partners and market trends. Does it also mean the end of the long-term business plan? I think so. Th e new fast analytics will change the way business-making is done, enabling companies to be more responsive and fl exible as well as to make informed decisions faster than ever before.

The end of the hourglass

Innovations in data analytics will improve accuracy and accelerate business decision-making, says Ketan Karia.

Ketan Karia is CMO and Senior Vice President of Marketing at Ingres. He is responsible for all aspects of marketing and services, working closely with the sales and marketing teams worldwide. He is also responsible for the marketing of global partnerships.

For more information, visit www.ingres.com/performance

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INNOVATION88

JOHN KEELING ED P88-92.indd 88JOHN KEELING ED P88-92.indd 88 18/08/2010 15:4718/08/2010 15:47

89

dominates one section of the famous Victoria Street. Here, in the heart of London, you would expect the headquarters of one of the nation’s best-loved high street names to be equally hectic, but once through the glass doors and into the foyer, the traffi c horns, pneumatic drills and sound of the street melts away. Calm envelopes you as the organisation’s smooth professional-ism takes over.

High up on the tenth fl oor is where John Keeling and his team work. Panoramic views towards Buckingham Palace and Hyde Park in the distance immediately draw the eye, but what is most striking is just how peaceful and relaxed the offi ce is. In a way, it is hard to believe that this is the IT hub of an organisation that has experienced healthy growth in the last quarter, driven in part by strategies developed in the IT

departments that were designed to help the part-nership gain a better insight into the shopping trends and habits of its loyal customers.

John Lewis, as well as Waitrose, are much-loved high street names throughout the UK. John Keeling, as an IT Director for the part-nership, is tasked with the challenge of helping drive the company to greater heights through the implementation of better, bolder and more inventive IT strategies. As he relaxes into his seat – eyes sparkling and a contented air settled assuredly on to his shoulders – it is hard to imag-ine how a man laden with such responsibility can appear to take it all so easily in his stride.

INNOVATION

John Keeling, Head of IT for the John Lewis Partnership, tells Ian Clover how the business calls upon IT innovation to meet the constant demands of an increasingly tech-savvy consumer.

London’s Victoria train station is remarkably busy and bustling at any time and on any day of the year. As one of the main transport hubs in and out of the largest city in Europe, this is understandable. But visit in the middle of a weekday at the height of summer – do not

let England’s perennially grey outlook fool you; London in late June can be stifl ing – and you’ll soon fi nd yourself embroiled in a battle against the elements, the traffi c, the noise and the army of commuters and tourists fi ghting their way to their destination.

Hardened Londoners have developed an eff ective shield against such an onslaught. Th ey stare blankly ahead, fanning their faces with rolled-up copies of the city’s Evening Standard

newspaper, jostling and rushing with or against the madding tide of people; expertly straddling the narrow path that separates rude from hur-ried. Respite is hard to come by. Pubs adorned with colourful hanging baskets of fl owers look charming and inviting from the outside, but are oft en oppressively heaving within. Cold blasts of air conditioning as you enter shopping centres tempt you to linger under their chilled breeze awhile; sharp elbows to your ribcage quickly tell you that that’s not such a good idea.

Amid such organised chaos stands the John Lewis Partnership’s HQ. Tall and bulky, the partnership’s relatively nondescript building

“Over many years now we have actually got to a point where our customers expect high standards of reliability and service from our technologies” - John Keeling (pictured)


INNOVATION90

How does the John Lewis Partnership utilise technology to help improve its customers’ experience?John Keeling. Th e John Lewis Partnership doesn’t just use technology to become more ef-fi cient, which means better supply chains, more effi cient administration procedures, things like that. We also use technology to create diff er-entiation; particularly around the way we con-duct customer service, and the way we provide a diff erent experience to our customer. So it’s more of a strategic thing; if you go into a John Lewis store today you see the John Lewis Gift List system, which used to be the old wedding list system. Customers can go in, they take a scanner and walk around the shop, scanning items they’d like to put on their list, and then that list can be put online for people to view and purchase from.

Th at system was, and still is, a market lead-ing product that uses technology to actually provide a real diff erent kind of service. And if you go into our Waitrose supermarkets you will see many with our self-scan hand scanners, designed for quick scans that can also drive increased footfall to our stores. Th ese types of technologies make a diff erence for us. So from this point of view, technology provides im-proved customer service, which enhances our reputation of delivering great customer service and great value.

Can you describe how these technological decisions are communicated through to the business management?JK. We’re business-driven; we work very closely with the business and system teams and the underlying technology these departments use. Th is is a very close relationship that enables us to look at not only new technologies that we are

implementing, but also identify how reliant we are on our technology. So whether this is the point of sale system or customer systems that we rely on – and we do – they have got to be resilient; they have got to be robust; they have got to be available. And over many years now we have actually got to a point where our customers expect high standards of reliability and service

How does the John Lewis Partnership view the current trend for cloud computing?JK. I sit on a number of advisory boards that consider the cloud, and the point I always like to raise is – what is it? What is the cloud? In my view, there is nothing new here. People talk about things like soft ware as a service, or they used to talk about time-sharing back in the 60s and 70s, where you used to buy computer-time from a company who ran a big data centre somewhere. Th ese were early forerunners to the cloud.

What the cloud of today is really about is buying service: whether it be storage; whether it be CPU mixes or CPU processing power; whether it be a piece of soft ware that you buy that runs somewhere in this cloud, whatever it might be. An example is Google mail – where you’re buying a service rather than running it yourself, so you’re buying where that service sits. I see the cloud as an alternative delivery model, where you don’t have to do all the work yourself.

Th e diff erence between private and public clouds is a very interesting one. Because we run our own data centre, a virtualised data centre, it has storage area networks – a shared storage platform, which runs an IBM mainframe, which is again a shared platform where you’ve got net-works that are actually shared. In some respects, our internal customers, our internal trading divisions, are buying from us processing power. In some ways this could be classed as the cloud. However, I think there are a number of steps that need to mature before this could be considered a full private cloud.

Externally, in the public sphere, it is the same thing. We could just be buying processing power that we use, and it could be anywhere in the world. And I guess that is where some of the issues of the cloud lie: is it secure? Where’s my data? Because there are certain rules and legisla-tions that apply to that data, so I can’t just have it fl oating around anywhere, in many cases (but not all) we need to actually know where it is.

Th ese are the issues that are the main inhibitors for public clouds. When you are a business of our scale, you can quite economi-cally create your own private cloud, so any organisation that has this capability can get the benefi t of both. So, you could create a great pri-vate cloud for all the sensitive data and manage that yourself, and then there are other areas of the business that perhaps make more sense to put out into the public cloud. So in terms of ‘the cloud’, I think it is really about diff er-ent delivery models, shared delivery models, and there are various challenges about using it: commercial challenges, security challenges

from our technologies, and this information is fed back up to myself and the systems team.

Th ere is an expectation that people want instant service now; they are not going to wait around, because they will go off somewhere else very quickly if your systems are not reli-able and fast.

What green initiatives and environmental responsibilities is the John Lewis Partnership adopting over the next few years?JK. Like any other retailer we need to take these issues seriously, and I think we have taken quite a lead in green IT and a number of other initiatives. Th ere are two ways of looking at what we’ve done. Firstly, there is the greening of IT, which is making IT as ‘green’ as you can. But it’s also about how IT can be used to make your business green. We created awareness fi rst, which is an important and eff ective step to take, and then the next step we took was developing a system that automatically turned systems off where before they would have been left on. Th is was a simple technological change that has had a notable environmental impact.

Secondly, we have made quite a big move recently toward what we call our second data centre, where we have worked very closely with BT to make a centre that is very, very green. Th e sort of things you put in there is virtualisation, which means that we are using smaller power units but producing more computer power. Th e whole way that we drive performance through them takes a lot of eff ort and time, but it has been worth it – we now have a very high green rating. Th e IBM mainframe that we use is one of the greenest platforms in the business, but they can only become green if you can actually get the most out of it, so it is really important that you have on board the people who can make this

happen, skilled partners who can aff ect change. We also manage the temperatures of our

data centres too. By allowing them to run a few degrees hotter than you might otherwise, you can signifi cantly reduce fuel bills, so quite oft en our green initiatives have been able to save us money too. Managing the data centre so that it is effi cient is absolutely key to becoming greener.

“Th at is where some of the issues of the cloud lie: is it secure? Where’s my data? Because there are certain

rules and legislations that apply to that data, so I can’t just have it fl oating around anywhere”


INNOVATION 91

How do you align business acumen with IT expertise in order to ensure that the IT department is seen as more than just a cost centre?JK. I think we have a great advantage here at the John Lewis Partnership in that we are co-owners in the business. Th e Partners in our IT departments take a huge interest in not just their own functions in the business but also in the company as a whole. As a result of that, we have developed a working culture that allows us to become natural collaborators with the business.

One of our principles is for us to work to-gether. Our IT departments work very well with our business, which is a really big plus, helped by being co-owners of the business; there’s a common goal and common interest there that makes a big diff erence. But to be taken seriously and to be trusted by fellow business partners, you’ve got to be able to deliver the basics. Once

and economical challenges, and you’ve got to make sure that it is right for your business.

Do you think the public cloud will reach a point of maturation whereby you would be comfortable putting more data out there?JK. I do. I think so, over time. It still has a way to go but eventually there will be an even greater commoditisation of IT where, just like electric-ity, we’ll just plug into the national grid and away we go. We have got some way to go until we get to that point, but we are talking about an industry that does mature things, so it takes a while for that mature state to be realised. So I think that the John Lewis Partnership will con-tinue to work toward a plan where we continu-ally mature what we already have and create a private cloud. However, we will be looking for opportunities to use the private cloud particu-lar for suitable point solutions.

you start doing that then there are more oppor-tunities to develop thought leadership. Th is has become more diffi cult in recent years because technology in general has started to get closer to the customer, which presents a whole new set of challenges.

People in general – not just the IT com-munity – show more of an interest in technol-ogy today, which is one of our main challenges. Th e Internet has made people more technically savvy, which leads to increased security risks, added expense, diff erent types of training and recruitment – all sorts of challenges are evolving for the IT department.

So I think it is important for the IT commu-nity here to be a trusted partner. When you are, people will come to you for solutions, and that is one of our challenges – to make sure that we can be seen to be responding to requests for as-sistance in a positive way. Th ere are three things I look back on over the last 15-20 years that have had large impacts on how we work. Th e fi rst was the PC, people having their own desktops at home. Th en there was email communication; people creating documents, sending them, be-coming more technically savvy, linked up to an online community, things like that. Th e Internet created so many commerce opportunities, but also instant access to information and increased security threats.

I think we’re faced with a new wave now, which is the mobility and connectivity off ered by smartphones. Over the next few years we expect to see enormous growth in this area, where the ‘phone’ element is secondary and people use it for Facebook, Twitter, GPS, geo-location, games, TV etc. I see huge potential here, and huge chal-lenges too. I see a changing face in the way our customers, and indeed society, will behave and shop. Even today people can walk into one of our stores armed with an iPhone app that scans prices and it gives them the three best prices on the market. Or you can download vouchers on to your phone and then a store knows where you are and off ers you a real-time deal.

Th e expectations on service this brings is completely diff erent to what we know. Technol-ogy is forming new habits, and we have to react to that.

From an IT perspective, how do you ensure the John Lewis Partnership is ready for the evolution the smartphone market is driving?JK. I think we have to recognise that there is a lot of innovation going on out there. Companies like Apple and Google, as well as Microsoft , are changing the landscape, which is something we’ve got to be mindful of. In this aspect, it is


INNOVATION92

the mobility issue that is most challenging; people now have increased access to the Internet through mobile devices, and the way they are communicating with one another through Twit-ter and what not, will change the face of com-merce. We are faced with a generation that is constantly online, so the trick is how to manage that rather than fi ght it.

We are constantly monitoring the market-place for new social media tools that may have some impact upon the business. Th e implica-tions at the moment are that if people are Twit-tering away about the Partnership then we’d like to know what they are saying. Th is is something we need to begin to consider. It’s like having an ongoing real time customer survey! So as smart-phone users become more and more able to go into our stores and scan our goods in order to fi nd the best price, we need to be there, react-ing to this change in consumer behaviour but, not only that, maintaining what our customers expect from us, which is good customer service, good quality in all we do. Th e challenge is not just ‘getting it’, but doing it well, too.

How do you think consumer technology will alter the way that the John Lewis Partner-ship, and all major commerce outlets, con-duct their business?JK. Our business is becoming a multi-channel business, and we will continue to refi ne that so that it is a more seamless experience for the customer. We are what you would call ‘clicks and mortar’, in that, whether it is a click of a mouse, a swipe of an iPad or an actual physical shop, we can deliver what our customers want.

As a business we are looking at diff erent ways of engaging customers, so we have large stores, smaller format convenience stores [Wait-rose], catalogues, the Internet, some franchises in the Middle East, smartphone access; basically everywhere the modern consumer expects us to be, we’re there. Th e IT department has had to learn to adapt to this change. We need to know what our customers are connecting to, for example. Are they connected via 3G? What system are they coming through to? How can we identify this customer? Challenges like this are forever coming at us, so we have to understand our customers, understand availability, which links to the core traditional systems a normal retailer has to know, just on a larger, slicker and real-time basis.

So this leads to challenges around the types of systems and architecture that is required be-cause in the end, IT is about data, and how you deliver it. It is no use if you cannot deliver it and understand it. It has to be available for any time,

any place, anywhere. One of the largest invest-ments we have made in the IT department is in ensuring our data centres can provide real agil-ity. We host a lot of websites, and we have the capability to do this because our data is virtual-ised, it is green, it is effi cient – we have really un-derpinned our technology, which is something I’m extremely pleased about.

We also have a communication network that has converged data and voice. By implementing this, we have created a digital landscape that en-ables us to do quite a lot things, such as putting out our own Wi-Fi to link into our networks. Th ere are many more digital infrastructures that we are looking at that we are not doing yet, but are now in a good position to do so.

We have made big investments in technol-ogy in order to be ready to face the challenges of a digital, tech-savvy world. Th is commercial con-sumerisation of IT that is starting to appear is one of the main challenges, and I think our modern and agile infrastructure is extremely capable and a big plus for the John Lewis Partnership. Our fi t and ready IT department is constantly evolving to meet the challenges posed by the consumers and support the needs of the business.

“I think our modern and agile infrastructure is extremely capable and a big plus for the John Lewis Partnership”


EXECUTIVE INTERVIEW 93

How does a virtual security gateway solution differ from traditional IT security solutions?Andreas Åsander. First of all, the virtual security gate-way is diff erent from the traditional IT metric security solutions in the sense that they are running inside the virtual environment, rather than on the outside protect-ing whatever goes to the virtual infrastructure. Th e major diff erence is that there are a lot of things going on inside a virtual infrastructure, especially since VMware released the vCloud-based hypervisors.

Th e value we bring is that we’re able to create virtual security on the inside, which means that you don’t have to build isolated islands of multiple virtual infrastructure. So, traffi c doesn’t need to leave the virtual infrastructure to go out to an external, traditionalised security and then come back in. All of these security inspections can take place on the inside.

What advantages does this offer to companies that have migrated their IT services to the cloud?AA. Th e major advantage is that you’re able to protect your cloud-located applications and resources using the same methods and protection mechanisms as you would if you were doing it in a traditional physical environ-ment. Th at means that you get the same level of control of what’s happening in the cloud as you would do if you were

having that host in a normal in-house data centre. In the end, I think that’s what customers are looking for. Th ey want to feel the same level of control independently of it being cloud-based or traditional-based.

How scalable are virtual security solutions? Can they be adapted to the needs of large corporations and SMEs alike?AA. Absolutely. In the case of Clavister, we have a unique licensing system. First of all, regardless of whether you’re using a high-end, small or virtual solution – all of them use the exact same piece of soft ware, but it’s regulated and licensed depending on how much capacity or how many

connections you want. We are able to fi ne-tune licenses that fi t the SMEs and the large corporations alike, or even at telecom equipment manufacturers; they’re all able to utilise the same features, but they’re packaged and priced diff erently, depending on their needs.

What is unique about the solutions that Clavister offer compared to others that are on the market?AA. I believe there’s a fi ve-pillar structure to what’s unique about Clavister compared to other virtual security gateway vendors. Number one is that we have proved to be trusted and have been around since 1997, delivering more than 150,000 products and licenses worldwide, so we’re not new to the game in terms of virtual infrastructures and security solutions.

Second is that we are complete and scalable. Our of-ferings include the complete unifi ed management feature set; having worked for this long with this many custom-ers, it drives us to have a very complete security solution.

Th e third is that we have fl exible licensing, meaning we can tailor a license that fi ts your need today. So, you don’t need to over-invest today to be secure for tomorrow. At the same time, you’re able to meet the exact business needs you have today without being locked in on a sce-nario where we have to do a big rip-and-replace activity to adapt to unique conditions.

Number four: I’d say that we have a supreme tech-nology. We have the Clavister CorePlus, which is the fi rmware that’s running. We don’t rely on any underlying operating system, which is rather unique in our indus-try. Finally, we have a unifi ed set management approach, which means that if you have an infrastructure with Clavister security, you can manage your virtual security gateways, taking care of the cloud using the same tools that you’re using when you’re administrating your physi-cal traditional security gateways, or even your soft ware base that might be running on your other hardware, like a Dell, HP or IBM server.

Independently on each one, you are able to admin-istrate all of them using the same management and the interface looks exactly the same, no matter what the platforms. It’s also designed to manage up to tens of thou-sands of gateways, so your entire enterprise infrastruc-ture can be managed from one console, allowing you to work up to hundreds of simultaneous administrators. Just as easily, it can be one gateway of one administrator – al-lowing for unifi ed management.

A virtual security gateway opens up to the cloud

With many companies taking their IT towards the cloud, Andreas Åsander reveals a new security gateway that protects from the inside out.

Andreas Åsander is Vice President, Product Management at Clavister. Åsander joined the company in 1997, supporting key Clavister customers such as FMV, Bofors and SAF.

“Th e value we bring is that we’re able to create virtual security on the inside”

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VIDEO KILLED THE WAITING LOUNGE STAR

Hotels and airlines might not like it, but advancements in videoconferencing technology are making endless business travel increasingly obsolete, as CXO discovers.

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TV and movie producers have long had a soft spot for video conferencing. Its pseudo-futuristic functionality enabled and perhaps even encouraged shoddy dialogue to make it past the cutting room fl oor as viewers were dazzled by the ability of two people to interact via screens rather than focusing on actual

plot development. In the real world, video conferencing had been eliciting similar yelps of awe for decades. Despite it being an ostensibly simple and eff ective means of conducting meetings and collaboration, most users were overawed by the technology, which has been stymied at various stages of its evolution by poor connectivity, unreliability, low defi nition and sound delays. Costs, too, have been prohibitive in the past, as demand has lagged behind the imperceptible technological advances that have been occurring regardless of adoption rates.

In the past few years, however, the industry has matured and evolved to such a point where most users are no longer put off by the potential complexity of the systems. Today’s video conferencing interfaces are much more user-friendly, enabling even the most technophobe of executives to get on with business without having to call upon the IT work experience kid to bail them out. Costs have also fallen to a point where reliable, good quality kit is a cost-eff ective proposition when the alternative is endless and expensive travel and hotel costs in order to conduct face-to-face meetings.

Earlier this year, the travel chaos caused by April’s volcanic ash cloud brought the effi cacy of videoconferencing into sharper focus as grounded businessmen and women were forced to seek alternative means of conduct-ing their duties. “Wherever possible we use diff erent means of communica-tions to stay in touch with our customers, our vendors, our partners and our employees,” says Kevin Griffi n, CIO EMEA for GE Capital Bank. “We have video conferencing capability in-house so where travel has proved unavoidable, as it was in April with the ash cloud problem, we looked to get them connected via the best means possible.

“At the time of the ash cloud, we had leadership team members right out across Europe, Asia and the USA, so in some cases there were guys who were nowhere near a GE site and they had no option but to audio in. But where people were close to GE sites we were able to connect with them via video-conferencing technology and found that we could still work very eff ectively.”

Cost reductionAlthough videoconferencing technology is occasionally used to con-

duct business between partners, vendors and competitors, its primary use for the moment is as a means for communicating and collaborating between various offi ces within one corporation. John Keeling, Head of IT for the John Lewis Partnership, has been impressed by the ability of tech-nology to make internal collaboration easier.

“Th e way we collaborate can actually make a big diff erence to a busi-ness like ours,” he says. “We’ve got a mobile workforce, which is only possible thanks to the various tools at our disposal, such as smartphones, laptops and now video conferencing. We have this capability up in our of-fi ces in Scotland so that they can conduct face-to-face style business with our London-based offi ce. Th is shows that technology capability is becom-ing an even bigger driver for business.”

Technology in all forms is becoming cheaper and more consumer-friendly. Th e new iPhone 4 has videocall capability, and it cannot be long before the idea of sitting down to a high-speed, high-resolution videocon-ference becomes second nature across the globe. Th is proliferation of the technology has come on the back of its perceived cost-eff ectiveness. If the alternative is time-consuming and expensive air travel, then reliable and relatively inexpensive videoconferencing will win every time. “Like a lot of other companies, we were focused on cost reduction and certainly the

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last couple of years has driven us to get even more cost conscious,” says Griffi n. “We see video technology playing a role in that. So one of the costs that we are trying to control is travel and living/accommodation, and that objective is driven by video technology as a way of mitigating the impact of us asking the organisation to travel less.”

Like the internet, email and smartphones before it, wider adoption of videoconferencing technology will come to reshape and redefi ne the way we do business, bringing together formerly disconnected countries and compa-nies in a way that was always thought possible (thanks again, Hollywood), but always seemed just slightly out of reach for the average corporation.

“Videoconferencing is going to allow for more eff ective management of geographic location, because for businesses like ourselves,” continues Griffi n, “videoconferencing that is life size, high defi nition quality video and wideband audio provides a life-like experience to users. We have got executives that have very high expectations like every other company, and we are fi nding that those expectations are being met and they love using videoconferencing. Th e adoption rate among the executive population is very, very high.”

Longer-term, videoconferencing will, believes Griffi n, enable greater collaboration that will prove extremely benefi cial to those businesses that decide to adopt the technology fully. “Th e long-term eff ect is you drive more cohesiveness because you are having more frequent meetings as people’s work-life balance is not disrupted as much. So videoconferencing will even-tually result in faster decision-making and shorter time to market, which are key competitive advantages for us and, I suspect, for every other company.”

Future techTo the uninitiated, videoconferencing remains a wildly exotic techno-

logical innovation that can appear rather daunting to use. Overcoming this cultural aversion to both the technology and the initially unusual task of talking to a screen and seeing your own image beamed back at you in the corner of the monitor will take some time, but widespread adoption will come sooner rather than later.

“Our executives have shown no reluctance to embrace videoconferenc-ing technology,” says Griffi n. “We found that the high defi nition nature of the technology that we use has allowed us to really allow remote locations to stay in touch, and that virtual face-to-face contact is something that our executives have really taken to – meetings that they would otherwise not have travelled for they are now participating in.”

Once the value of videoconference technology has been realised, overcoming minor technicality concerns becomes an easy task. “Th e key thing for us has been ease of use,” continues Griffi n. “Technology can be an inhibitor sometimes if it is diffi cult to use. So the key thing about this high defi nition video conferencing is its ease of use. It needs to be easily scheduled and it needs to be easy to operate. Our technology telepresence is a one-touch system whereby the executive walks into the room, presses a button and they are online.”

No fi ddling with cables or peering behind monitors, then – simplic-ity is paramount, and modern video conferencing technology is not only simple to use and increasingly cost-eff ective, but is becoming more com-monplace throughout various sectors of the business world.

“Videoconferencing will eventually result in faster decision-making and shorter time to market, which

are key competitive advantages for us and, I suspect, for every other company”

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How can today’s videoconferencing technology enable companies to save travel and communication costs?Clive Sawkins. As the environment for collaboration is changing, the ‘tried and true’ collaboration method of face-to-face meetings has become too costly and has a huge impact on employee productivity. Companies now need collaboration technologies that allow anyone, anywhere, anytime and on any connected device to work together. With the potential for signifi cant reduction in travel ex-penses and the ability to conduct productive meetings leading to effi cient and eff ective decision-making, video-conferencing is fast emerging as one of the most feasible enterprise collaboration technologies.

Today’s videoconferencing and telepresence solutions enable companies to have an immersive experience that is very close to a face-to-face meeting experience. While face-to-face meetings require customers or employees of a company to travel, arrange for hotels and transport – in addition to the productivity loss and stress resulting from airport security and delays, traffi c, spending hours just to get to a business meeting lasting an hour or two – a video conference meeting can be conducted with greater ease without leaving the comfort of one’s offi ce.

In addition to this, if a company has implemented the right video infrastructure and has also engaged with a managed service provider to manage their day-to-day visual collaboration needs, the managed service provider

can provide the company with videoconferencing services that are easy to use by their employees at all levels, irrespec-tive of their technical knowledge, resulting in enhanced employee productivity, improved collaboration, and re-duced business costs.

Anthony Finbow. Globally active and distributed busi-nesses are increasingly turning to IP-based videoconfer-encing – a key pillar of the new enterprise communications architecture – as a mechanism to signifi cantly reduce travel costs and achieve working productivity gains. Th ere is a clear business case for various industry verticals from manufacturing, where globally distributed design teams are able to collaborate more eff ectively in real time using the medium, to legal services where witnesses may be required to testify remotely, before a jury, over videoconferencing

Evolving technology and the recent Icelandic ash cloud disrupting travel has brought the issue of videoconferencing into sharper focus. CXO hears four industry experts discuss the business benefi ts offered by videoconferencing technology.

Place-to-face

“Today’s videoconferencing and telepresence solutions enable companies to have an immersive experience that is very close to a face-to-face meeting experience” - Clive Sawkins

Clive Sawkins brings a wealth of experience to BCS Global as CEO and Senior Vice President, Global Sales and Marketing. Sawkins’ previous position was at Cisco Communications, where he was responsible for the Unifi ed Communications and Telepresence Video Collaboration business across Europe. He has also held senior positions at Avaya, where he was Vice President, and at Nortel Networks.

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link. Th e rapid evolution of Sales 2.0 methodologies, where the use of videoconferencing is supplanting traditional face-to-face meetings for many customer interactions, is also an area of signifi cant growth for the technology. Despite some scepticism, the evidence shows that sales yields are maintained and cost of sale signifi cantly reduced through the use of the medium, which enables many more interactions with customers, or potential customers, than might otherwise be possible.

A further effi ciency can come through the delivery of video communications as yet another application over a common IP network infrastructure. Th is holds the prom-ise of signifi cant cost savings but to realise such savings re-quires that both real time voice and video communications be managed as a distinct class of applications. In all cases user experience and, therefore, quality of experience-based service management is key. Th e challenge of the IT manag-er is to deliver the required experience without consuming all available network bandwidth, thereby compromising the delivery of other applications over the infrastructure, eradicating the envisaged cost savings and potentially damaging the business.

Janne Lauanne. Much more important than merely saving travel costs is the signifi cant and comprehensive benefi t that companies gain by deploying distance working tech-nology on a large scale and introducing a new virtual way of working. Th is new way of working will very positively aff ect utilisation of diff erent resources and increase pro-ductivity.

We are no longer talking about saving travel costs, but managing the company’s resources and operations in such a way that facilitate the organisation to do three times more with the same knowledge-worker headcount than they managed to do before introducing the new virtual way of working.

A virtual way of working means being able to take the needed meetings anytime and anywhere. Instead of book-ing meetings weeks ahead it usually is possible to take a virtual meeting during the next few days, maybe even the same day. It’s just so much easier to book one hour in your colleagues’ calendars than to try to book an entire day for the meeting.

Jonathan Tracey. Videoconferencing technology has been an unrealised goal for many companies for a long time as technology has always failed to deliver on the expectations of an in-person meeting. Business travel has been seen as the only choice.

In 2005, LifeSize off ered a viable alternative to busi-ness travel by bringing to the market the world’s fi rst high defi nition (HD) video communications technology.

With the wide adoption of HD technology, businesses are able to have face-to-face meetings that are close to a real meeting experience, reducing the need for time-consum-ing and costly travel.

Now that the technology gap is closing, the process of educating users to consider using video must begin, and

simple to use systems are a must: if it’s too complicated to use, people will not take the time to learn.

As the cost of systems comes down and the qual-ity of the experience rises, a simple return on investment calculation can show systems paying for themselves in a few short weeks. In addition, systems that are easier to use encourage more widespread usage across organisations, which not only further reduces travel expenditures, but can also boost employee morale and productivity.

Th ese factors, coupled with improvements in the reliability of the technology, have allowed businesses to change the way they work and become signifi cantly more eff ective without incurring the costs of long distance travel.

Concerns about the impersonal nature of virtual meet-ings and about privacy prevents some companies from partaking in videoconferencing. How would you allay these fears?CS. Th ough the concerns around the impersonal nature of using virtual collaboration as a business tool are pretty mixed depending on the type and size of a company or the applications it is used for, these tend to nearly disappear as usage within an enterprise increases and the business begins to see the value and benefi ts that visual collabora-tion technologies like videoconferencing and telepresence can provide.

AF. HD video and wideband – or HD – voice are quickly becoming the standard for all but desktop videoconferenc-ing. Further advances in camera technology and placement and the eff ective design of the videoconferencing space make it possible to conduct even the most demanding of meetings using this medium. Telepresence, by defi nition, aims to replicate the face-to-face meeting as much as is possible. Privacy is also an important issue but the appli-cation of the technology to such fi elds as telemedicine, for instance, is a testament to how far the industry has come in addressing the issues. Th e video conference will not replace the face-to-face meeting for all important interactions, but it enables many more interactions than might otherwise be possible, and it provides a richer communications experi-ence than a pure voicecall.

JL. Impersonal could also be applied to audio conferencing. Having to conduct a longer conference call with say six or more people and listening to the bad quality audio is not something you want to do too oft en. On the other hand, there is nothing impersonal about having high defi nition video meetings where you feel like you are in the same meeting room with the other participants.

Th is level can be reached by utilising the latest high defi nition videoconferencing systems, certainly immersive telepresence studios and even the latest high defi nition desktop solutions, all of which Videra’s Virtual Offi ce ser-vice off ers. Th ose who doubt this should take a demo on the latest solutions.

For those who are worried about the privacy: taking part in a video call is as private as taking part in a face-to-

Anthony Finbow is CEO at Psytechnics Ltd, a leading provider of voice and video communications performance management solutions. Prior to joining Psytechnics he was Managing Director at MetaSolv Software Inc, which was acquired by Oracle. Previously he was CEO at Orchestream plc.

“Th e delivery of voice and video communications applications requires a diff erent approach to management”- Anthony Finbow


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to be satisfactory. Service management based on users’ quality of experience is now broadly accepted across the industry as the way to ensure optimum performance and enable eff ective troubleshooting in the event of ser-vice issues. Without the right tools, the cost savings and productivity enhancements – which drive the business case for adoption of videoconferencing solutions – are compromised, with potentially damaging consequences for a business. Th e emergence of ‘the new enterprise com-munications architecture’, incorporating IP telephony, voice and video soft client architectures, unifi ed commu-nications, desktop and boardroom video collaboration el-ements, all required to interoperate eff ectively, is driving businesses to adopt to solutions to enable this approach to service management.

JL. Technology blips have been one of the major hurdles for the industry and to prevent the ‘technology factor’ from hindering the adoption of remote meetings and the new virtual way of working, companies are changing their purchase behaviour and demanding services instead of hardware. Videoconferencing in many organisations has already reached a business-critical role that is underlying this trend. Companies want to work with a service provider rather than with a hardware reseller as services off er SLAs, availability guarantees and sanctions if the service levels are not met.

In general, technology is continuously developing, which also makes video more dependable. While video quality today is full high defi nition, the bandwidth con-sumed is the same as what a few years ago was needed for standard defi nition video with a fraction of the amount of pixels used today. Still, it is just technology that someone needs to make work.

JT. People expect technology to work – every time. Pick up a phone anywhere in the world, dial and connect instantly without a thought to the technical feats behind it. Th ere is no thought about scheduling the call, or the amount of network traffi c. You want to communicate when the time is right for you.

LifeSize brings to the table a unique collection of tech-nologies that help disguise common issues found on many networks to ensure a seamless video meeting experience. Th ese include packet loss concealment algorithms, auto-matic bandwidth control and other technologies that help deliver an uninterrupted meeting experience.

Because technology blips can be one of the biggest hurdles to adoption of this technology, LifeSize focuses on ensuring the user has the best experience on any network.

face meeting where people are physically present, with the bonus of having the possibility to mute your microphone and steer the camera so that you can’t be seen by the other participants.

JT. With the advent of HD, the video meeting experience is as close to being in the room with someone as it is possible to achieve. HD video allows you to see every movement and every gesture. Th e easy-to-use, intuitive interface in-vites interaction and encourages continued use. Dramati-cally increased usage means enhanced communication and greater productivity.

To ensure confi dentiality, modern cryptographic technology allows real-time encryption of sensitive meet-ings over any network to help allay any privacy fears. Th is technology is seamless, so from the user’s perspective it all happens in the background.

How can companies be sure that technology blips will not interfere in the videoconferencing experience?CS. For companies that want to implement an eff ective vid-eoconferencing or telepresence solution, there are fi ve key points to understand. Th e fi rst is to defi ne the enterprise visual collaboration strategy: develop a comprehensive en-terprise visual collaboration strategy with an emphasis on making videoconferencing or telepresence a mainstream collaboration tool within the enterprise. Secondly, defi ne the enterprise inter-company B2B visual collaboration strategy: in addition to having a strategy for intra-company visual collaboration, it is of vital importance to defi ne the corporate goals, policies and strategy for enabling inter-company B2B visual communications with customers, suppliers and partners.

Th e third thing is to select the right network: deter-mine a network that is right for the enterprise in terms of technology, network availability at desired locations, band-width required, and costs based on usage. Fourthly, select-ing the right video equipment will help greatly: determine the video equipment that is required to make it all work, including selecting the right vendor, the right video infra-structure, the right boardroom system, the right desktop system etc. Lastly, employ the services of a managed service provider (MSP): An MSP can be a key enabler in providing the company with a high-quality, reliable and consistent service. In addition to this, the advantages of engaging an MSP can result in improved eff ective and effi cient op-erations, including: managing the service on a day-to-day basis thus reducing the burden on in-house resources, making the service easy-to-use resulting in increased video usage adoption and providing value-added video concierge services that enhance the videoconferencing meeting ex-perience – in addition to converting all CAPEX to OPEX over a period of time.

AF. Th e delivery of voice and video communications ap-plications requires a diff erent approach to management. It is not suffi cient to manage network performance using traditional IP QoS tools and just expect user experience

Janne Lauanne is a director at Videra, responsible for videoconferencing business globally. Lauanne has been working in the industry for 10 years and has transformed Videra’s business from manufacturing and reselling videoconference hardware to customer-oriented service businesses through the Virtual Offi ce service concept. Lauanne has opened multiple international markets for Videra and seen the company grow exponentially.

“Taking part in a video call is as private as taking part in a face-to-face meeting where people are physically present”- Janne Lauanne

ROUNDTABLE


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and the like. Th is adds presence awareness features and increased ease of booking meetings to videoconferencing solutions. In addition to the trend of more and more com-panies subscribing to services instead of buying hardware, this UC trend will shape the industry.

Standards will continue to develop and we will see even greater resolutions and better frame rates in the future. No matter how videoconferencing technology evolves, Videra will always be utilising the leading technologies from all leading vendors in the virtual offi ce service concept and always bring the new opportunities to its customers.

JT. Video communications technology will continue to evolve, delivering ever higher quality experiences without the need for massive investment in networks and infra-structure. As the technology becomes more advanced, it is important to keep a focus on the user and ensure that the system is simple to use with features such as one button calling and recording and simple layout controls.

Bringing down the cost and complexity of video will enable LifeSize, together with its parent company Logitech, to deliver on a vision of video for any business, anywhere – not just in the board room for a select few, but in any meet-ing room on the offi ce desktop, while telecommuting from home, and on the road. LifeSize will continue to deliver HD video systems that blend high-quality experience, superior fl exibility and lowest total cost of ownership.

If the user has a good experience with the technology, he or she is more likely to choose a video call over business travel.

In what ways do you see videoconferencing technology evolving in the future?CS. As videoconferencing becomes more prevalent within an enterprise as an intra-company collaboration tool, there will be a high demand for inter-company B2B visual collaboration arising from the need for enterprises to col-laborate externally with their customers, suppliers and partners the same way they communicate with their peers within the enterprise. As the industry sees more advance-ments in technology, video endpoints will become cheaper, more feature-rich, more compatible and interoperable, and will have more value-added applications developed specifi -cally for video collaboration.

Th e video collaboration industry will see a surge in high-end telepresence systems slowly replacing a majority of room-based systems in larger enterprises, while room-based systems will record a high growth in the small and medium-sized enterprises. Also, desktop videoconferenc-ing will see a huge growth trend, mainly due to increased enterprise-wide adoption, emergence of unifi ed communi-cations and the need to be connected at all times.

AF. Th e migration of videoconferencing from dedicated telepresence suites and dedicated in-room hardware through to the desktop is happening now. Technology is available to enable the seamless upgrade from instant messaging through voice call to videoconferencing, mid-

session, to deliver the richest collaboration experience possible based on hardware and user preferences. Th e emergence of mass consumer videoconferencing in the mobile domain is now being heralded by the off erings of Fring and Apple with Facetime. We will see the conver-gence of consumer telepresence with IPTV at the home hub and the embedding of video communications into business applications, for instance, to enable point of sale interac-tion with customers, so called ‘communications enabled business process’.

JL. To some extent already and even more in the very near future, videoconferencing will be viewed as an integral part of the unifi ed communications (UC) space and will be integrated with UC platforms such as Microsoft Offi ce Communications Server, Active Directory, Exchange

Jonathan Tracey has over 20 years’ experience in complex networking technologies. As Sales Engineering Director for EMEA, Tracey is responsible for driving adoption of LifeSize technology in customer environments, and enabling users to get maximum benefi ts from their investments. Previously he worked for UUNET Technologies and also served in the British Army for 11 years.

“With the wide adoption of HD technology, businesses are able to have face-to-face meetings that are close to a real meeting experience” - Jonathan Tracey

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Despite its services reaching over 50 percent of the UK population, Mark Heraghty, MD of Virgin Media Business, says the company is keen to keep building its customer base. He lets Diana Milne in on some of the telco giant’s plans.

The business of communication

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How much demand are you currently seeing from business customers – particularly in view of the UK’s economic situation?Mark Heraghty. Th e demands are ever increasing. We’re in the fortunate position of being in an industry where there’s still extremely strong demand so we’re not seeing any drop off in demand in spite of the recession. Th e majority of the products we sell are to support data services and that can be everything from simple internet access for small businesses to complex hosted IP telephony and data wide area networking for very large customers. For example we work with Northcliff e Media and with hospitals and police forces across the country. So we work with a lot of very large customers who need a resilient data networking solution to support their operations. Our ethernet network is one of the few that has been accredited for Cisco’s telep-resence solution. We use it internally between some of our offi ces and it requires an extremely good network to give you the picture quality that you need.

How do the demands of business customers differ from those of consumers?MH. Consumers generally live in one house and use rela-tively few services – usually TV, broadband, mobile and telephony. Th e obvious diff erence with businesses is that most have many sides. If you take a hospital or a healthcare trust, for example, they will have a community of inter-est around them. So they will have doctor’s surgeries and consultants working from home as well as on the main hospital sites and they will have a requirement for voice and a range of data services. I guess the key diff erence is that whilst a failure with your home is extremely irritating, for a hospital it could be catastrophic. So their requirement for resiliency is for fast fi xes when problems do occur and for diversity to prevent any single failure bringing them down. Th eir expectations are very high. It’s a much more demanding and complex customer set but a still a very viable and interesting set of customers to address.

Can you please give an example of an organisation you have worked with recently to set up a new communica-tions network?MH. Th e most recent one is Hampshire County Council (CC). We’re working in partnership with them to roll out what’s called HSPN2 which is a complete refresh of Hampshire’s WAN. And it’s a contract that is worth ap-proximately UK£90 million to us over the next few years. It interconnects not just all the offi ces of Hampshire CC but it connects up potentially every school, hospital, surgery and all the employees that work from home. It gives them a reliable network platform, which allows Hampshire to start to redesign the way in which it serves its customers.

Would you describe it as a particularly challenging project?MH. With any major project as this is, we enter into a partnership not only with the customer, in this case Hampshire CC, but also with the vendors that are helping

us to put in all the equipment. And it’s something that I monitor on a weekly basis. Th ere was also a steering group, which we called every week to review progress. It’s going very well and it (Hampshire CC) is an extremely happy customer so far.

How competitive is the UK telecoms market and in what way does it have the edge over its rivals?MH. Th e key diff erentiator for us is our network. About £13 billion was spent in the UK by cable TV companies digging up the streets during the 1990s. Th e legacy of that is that we’ve got a deeper and more modern next generation net-work, which is made up of 186,000 kilometres of fi bre and duct around the UK. So that gives us real presence in most of the UK to a far greater extent than anybody else other than BT. And in fact the network is signifi cantly ahead of BT’s from a technology standpoint. So we’ve got a depth of access and a next generation network that nobody else in the country has. We cover more than 50 percent of the UK population and I believe our network is within economic distance of 72 percent of all UK businesses.

“Th e key diff erence is that whilst a failure with your home is extremely irritating, for a hospital it could be catastrophic. So their requirement for resiliency is for fast fi xes when problems do occur”

Mark Heraghty

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accelerate. I don’t see any slowdown in our growth rate and I think the re-brand and other investments we’re making in the network will accelerate that. Th e slowdown in the UK economy, if anything, could benefi t us because organ-isations are looking to re-engineer the way they provide services to their customers, and that’s a very IT-centric change. Whenever there’s a big IT refresh that brings with it a lot of networking requirements that we’re ideally placed to provide. It could be, in fact, that a recessionary time is an ideal time for us to grow.

What would you say are the biggest potential chal-lenges that you face in the year ahead?MH. At the moment the biggest challenge we have is keep-ing up with demand. We’re growing strongly and I think the re-brand will give us a major boost because NTL:Telewest was one of the best kept secrets in the UK. With the re-brand we will get more business. A major challenge is going to be dealing with the demand that we can already see. It does bring with it increased expectations. If you look at the value of the Virgin brand, excellent customer service is right at the core of that. Whilst I’m delighted to have it, I’m mindful of the fact that existing and new customers will have increased expectations around the level of customer service they can expect from us, and that will keep us very much on our toes.

How many customers do you have and what sort of customers are you currently targeting?MH. We’ve got about 65,000 customers. Now for us it’s less about the number of customers we get and more about the revenue. Th e majority of those customers are SMBs, which have been strong customers of the cable TV industry in the UK. Now, particularly with the Virgin Media Business re-brand, we have an opportunity to sell into larger corporate and public sector customers. I would be keener to focus on a smaller number of additional customers. Obviously I want the total to increase but I want those customers to be larger and I want them to be a mixture of public and private sector.

Your company has specialised in serving the public sector. How important an area is this for you?MH. We’ve traditionally been very strong in local govern-ment but haven’t penetrated central government signifi -cantly to date. We are the clear number two in serving the public sector, at least the local authorities. So for example, we serve about 60 percent of the UK’s health and emer-gency services already, and about 35 percent of all of the UK police forces. So we’ve traditionally been very strong in that area and one of the reasons for that is the legacy of our franchise past. We have not just sales teams in 40 offi ces around the country, we have technical teams, and we have service management in Glasgow, Birmingham, Belfast and so on. When you’re dealing with local organisations it is very important to have a local presence. Th at’s an impor-tant diff erentiator for us and gives us the edge over and above some of our other competitors that are more South East/ UK focussed and less present in Newcastle and Pres-ton and places like that where we still have real strength.

You’re aiming for double digit growth in next three years. Will that be hampered by the economic climate?MH. Double digit growth on our data products is some-thing that we’ve been delivering for the last few years and it is something that I’d like to see continue and, if possible,

In the beginning… Mark Heraghty explains how Virgin Media Business was formed.

If you go back through the history of the UK cable industry, at one point there were around 26 different franchises all over the country. Over the years they came together into two companies, one was ntl and the other was Telewest. They combined in late 2006 as one company together with Virgin Mobile. The company’s name changed into Virgin Media and everything apart from the business division was rebranded as Virgin Media. The business division was left with the NTL:Telewest brand. So it was always a 100 percent owned subsidiary of Virgin Media but it was still called NTL:Telewest, which didn’t have the best brand value and image that one could have. That continued for about three years. I joined in June last year and not long after I joined I got everything in place so that we could change the name to Virgin Media Business, which we’ve now done, bringing the original ntl and Telewest customer base with us.

Two become one

Virgin Media recently made headlines when its subscription television channels were bought by BSkyB for UK£160 million. The deal had been under negotiation for a year and refl ects Virgin Media’s wish to shift away from producing content to focus on its network. Under the terms of the deal Virgin will gain access to 17 new HD Sky channels. Speaking after the deal was announced Neil Berkett, CEO of Virgin Media, said: “The sale of our channels business has generated substantial value. The deal will allow us to focus more closely on our strategy of exploiting Virgin Media’s super-fast connectivity to offer our customers a range of the very best content through a highly versatile next generation entertainment application.”


EXECUTIVE INTERVIEW106

Can you explain why you feel there is the need to make the business case for fi bre to the home?Albert Grooten. Over the last few years next generation access services have continued to be made available to more end users as next generation networks of all dimen-sions are being planned, begin and continue their rollouts. Over the last two years, FTTH subscribers grew by 29 per cent in 2008 to reach 33.6 million subscribers, while in 2009 a further 5.5 million subscribers were added (FTTH Council fi gures). Today, FTTH is being deployed by a greater diversity of organisations. Not only the incumbents but also alternative operators, governments and local au-thorities, real estate developers, residential associations, utility companies and municipalities. Despite the global downturn of 2009, this growth shows little sign of slowing down, but there is an understandable necessity to explain the business value of FTTH in more detail, especially in these uncertain economic times.

How do you explain in simple terms the FTTH business model? AG. Th e FTTH business model is quite straightforward. First you have to put in place a fi bre optic infrastructure at a sensible cost, then lease out the fi bre to service provid-ers, or take on the responsibility and added complexity of providing your own services. Exactly the same as in real estate, where a long-term approach is needed. Although the concept appears simple, the detail and execution can be full of surprises. As many of the organisations now plan-ning or building FTTH networks do not have traditional telecoms backgrounds, this could result in an expensive learning curve.

So how do you convince a potential investor that there is a strong business case for FTTH?AG. Of course, as for any business opportunity, it is pos-sible to build a strong business value case for FTTH. But there are specifi c fundamentals about fi bre networks that are not applicable to other business environments. Putting together a successful FTTH project requires many diff erent inputs. Each individual project has a uniqueness, depend-ing on geography, the history of the market, national and local regulation and a multitude of other factors. Many of the variables involved are interconnected; improve one variable and you must compromise on another. Th e main point is to have an awareness of some of these situations, have an in-depth understanding of the key considerations

and to learn from the experience of real-world fi bre instal-lations.

What experience have you accumulated in Draka over the time that you have been refi ning your fi bre infrastructure business, and has this given a broader perspective? AG. We do indeed have a much broader perspective driven by the current evolution of FTTH networks. Business value and cost of ownership are drivers. As well as telecoms com-panies, we have to address a broader range of investors and stakeholders in future FTTH networks to reply to some of the issues. We are drawing upon the practical experience accrued from large scale projects such as CityNet in Am-sterdam with 40,000 FTTH subscribers, to smaller scale community networks such as of Berkel and Rodenrijs, a small town in the Netherlands. Th is suburb of Rotterdam completed a successful fi bre rollout to 6000 homes. We also have the experience of green fi eld fi bre projects, as we are doing for Energy City Qatar in the Middle East. Essential during this learning phase are the lessons learnt from such a diversity of FTTH projects and the factors that contribute to success. Our road-show around small communities in the United Kingdom has generated considerable interest for our business value approach.

Albert Grooten is Director of Technology FTTH for the Amsterdam-based optical fi bre technology and network solutions specialist Draka Communications. Albert worked for Draka in R&D and was subsequently International Product Manager for Optical Fibre Cables.

Albert Grooten outlines some of the practical arguments why fi bre to the home (FTTH) has a solid business case to reassure investors and stakeholders alike.

Building a business value case for FTTH

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CXO talks to John Stone, Executive Vice President of PGi EMEA, India and Canada about the importance of communication contingency planning in the modern world and the growing reliance on audio and web conferencing to maintain effective communication and business continuity in an unstable global environment.

Meetings are core to the success of a business. Whether meeting clients, prospective cus-tomers, board members or staff , people meet every day and organisations build from the

meeting upwards. Today, we operate in an international marketplace where organisations deal more and more on a global scale. Globalisation has changed who, where and why we do business, thus resulting in an increasing need to connect and communicate globally.

What, therefore, would happen if businesses could not communicate or meet? A lack of communication can lead to costly mistakes or delays, loss of productivity and a drop in revenue, ultimately leading to possible failure. If com-munication is so important, then why do businesses all too oft en fail to protect it?

Th e recent eruption of the Icelandic volcano, Eyjafj al-lajokull, brought the realisation of these risks crashing down on the business world. For almost a week, European airspace was practically shut when thick plumes of volcanic ash spewed from the Icelandic volcano and tumbled across European skies, grounding almost all fl ights in Europe. Th e whole event opened up the business world’s eyes to the fact that many of those companies aff ected by the travel disruptions did not have a contingency plan in place to deal with such an outcome. PGi, an industry leading provider of audio and web conferencing solutions, saw usage of its conferencing services shoot through the roof during the volcanic fl ight ban. John Stone, Executive Vice President EMEA, India and Canada at PGi describes how the busi-ness landscape dramatically changed during the ash cloud disruption and how PGi responded: “In a global business environment fraught with dynamic change, natural disas-ters, pandemics, civil unrest and strikes, planning for un-foreseen events and developing a contingency plan must be considered a key element of strategic management. During the disruptions, our PGi customer care team provided cli-ents with on-demand, instant access to meetings off ering free web services to those who couldn’t travel, enabling our clients to interact and communicate just like a traditional meeting and report business as usual.”

Stone stresses the importance of contingency plan-ning, stating that “no matter how carefully a fi rm formu-lates, executes or evaluates its strategies, unforeseen events can make a planned strategy obsolete in no time. With an unstable economic environment and the ever increasing

need to communicate globally, virtual meetings are a cru-cial part of risk management as business critical meetings cannot be cancelled without there being some impact to business productivity.” He also highlights that not only is business continuity planning essential to maintaining effi ciency and workfl ow but “added to increasing cost pres-sures and an onus on businesses to demonstrate corporate social responsibility, organisations need to also now look at more cost-eff ective, productive and environmentally friendly ways of communicating and doing business.”

Stone concludes with some hard facts emphasis-ing how the benefi ts of switching to virtual meetings are now diffi cult for modern day organisations to ignore. “By reducing travel and converting to virtual meetings, organisations can save dramatically on the cost of fl ights, accommodation, transfers, travel expenses and employee downtime whilst also reducing carbon emissions and by switching to a virtual meeting strategy one of our existing customers reported savings of 86 percent.”

As the ash cloud disperses, the risk of travel disruption fades temporarily. What this incident has taught us is that future events cannot be predicted and the business world ultimately is at the mercy of an uncontrollable and unpre-dictable environment. Th e only way that an organisation can control and lessen the risk and impact to business is by contingency planning: creating alternative strategies that allow businesses to maintain ‘business as usual’ like so many that have already done so with PGi.

John Stone is the Executive Vice President of PGi EMEA, India and Canada. PGi is a leading global provider of conferencing collaboration solutions.

Virtual meetings = business as usual

“A lack of communication can lead to costly mistakes or delays, loss of productivity and a drop in revenue, ultimately leading to possible failure”

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MEDIA110

The Daily Mail is one of the UK’s most in-fl uential newspapers and the fl agship title for A&N Media. Second only to Th e Sun in terms of readership, the Daily Mail’s

renowned conservative stance attracts derision and admiration in equal measures. It targets and attracts, predominately female readership, fi rmly entrenching itself in the heart of the middle-class sensibilities of Middle England. It is fair to say that no other newspaper is so easily typecast as the Daily Mail; which is not necessarily a bad thing for its owners, its journalists, or its staff , who know their audience and readership better than most.

For a newspaper that ostensibly toes the con-servative line, the Daily Mail has actually been rather progressive in embracing the shift to digi-talisation that has occurred throughout much of the printed media over the past decade, while also retaining its core sensibilities of delivering hard-hitting news, opinion, sport, lifestyle and fashion in printed format. While the title’s readership has remained unchanged for decades, the various

With renowned titles such as the Daily Mail and the Metro under its stewardship, A&N Media boasts a wide reach throughout the UK. CXO asks its CIO David Henderson how he helps to drive the company’s innovation and growth while retaining its core identity.

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MEDIA 111

mediums on which news is now delivered have been trans-formed in recent years by various technological advances, posing a series of challenges and opportunities for A&N Media’s CIO, David Henderson.

“Th ere is now an additional culture here at A&N Media that has existed for about a decade where all the content we write is initially tagged for upload on to our websites,” says Henderson. “Our technically savvy workforce understands that the real culture debate is around the longevity of our existing printed products versus the longevity of the com-mercial website and the growth and collaboration of both.”

As A&N Media’s staff has become more technically savvy, so has its readership, who are growing increasingly comfortable in searching for and consuming content online, via a variety of diff erent mediums. “Our workforce constantly fl ow content through to the very end stage, which is now the printed medium because we fi nd that the majority of our readers want to read our content on a web-site, an iPad or a BlackBerry,” says Henderson, who does not believe that such a shift in attitudes necessarily sounds the death knell for the printed media. “Th ere is a belief among the staff at A&N Media that the next three decades for the printed newspaper market will be stable. Increased market share and revenue growth isn’t just about digitali-sation; it’s about the commercial objectives and consumer understanding of our products, which will go through its own cultural change.”

Other media outlets are actively trying to aff ect the pace of this cultural change, nowhere more so than at News Corporation, owner of Th e Times Newspaper, which has recently introduced a paywall for its online

Quote Quote Quote

content. “Within A&N Media, we are on record as saying that we will not be implementing a paywall,” says Hender-son. “Over the past 12 months we have posted impressive growth, and the Mail Online has just become the UK’s larg-est website throughout the world. So we’re fairly comfort-able with our own model of complimentary content allied to our printed output, and are actively now in competition with the BBC and other online sources that have free con-tent. Th is is where we see the future for A&N Media.”

Clouds and costsTh e growth that A&N Media has experienced in the

past few years has had a direct impact upon the back-end IT infrastructure the company employs in order to stay at the cutting edge of news and media throughout the world. Older IT systems and practices have been phased out and replaced with newer technologies, newer strategies and a more fl exible, selective approach to managing the com-pany’s IT needs.

“One of the luxuries A&N Media has is the ability to merge all of the technician crews from the various titles together so that we have plenty of supplies, knowledge and applications to choose from,” says Henderson. “So it has been less a case of a complete overhaul and more a selecting the best of breed from each of a diff erent supplier or diff er-ent operating system.”

During the updating process, Henderson gave careful consideration to the value of cloud computing, and reached the following conclusions. “Suffi ce to say most of the clouds we’ve looked at are not robust enough, mature enough or cost-eff ective enough to actually deploy,” he reveals. “We’ve selected a sales force on the CRM side that is cloud-based. We’ve put all of our e-commerce platform into the cloud. So I suppose you could say that we are adopting it when it’s robust enough, when it’s mature enough, when it’s cost-eff ective – then we’ll defi nitely go more cloud-based.”

Th is steady approach to modernising and virtualising the company’s IT infrastructure has proved rather benefi -cial for A&N Media: they have experienced healthy growth over the past few years to reach a point where their entire output reaches 41 percent of the adult population of the UK, and has extended to 1.5 million copies of 50 or so titles throughout Europe. “On the operations side of things we have been fairly successful in running things better, faster and cheaper,” says Henderson. “It’s about really employ-ing leading manufacturing techniques and just basic stuff around continuous fault-fi nding improvement, such as receiving feedback from users. As a result, we have taken out approximately 20 percent of the costs of last year.”

Remaining cost-eff ective is a continuous slog for IT departments in every industry, and A&N Media is no dif-ferent. “It is a constant battle and a constant challenge to ensure that we are not viewed as a cost centre from within the business,” says Henderson. “What we have is what I call a ‘run and change’ concept. So the running of the business – the base operations – is seen as a cost. And then there is the change function that was all about innovation and business change. We try to share those costs, and I would

A&N Media in numbers

The Daily Mail has a circulation of close to two million copies a day

The Mail on Sunday was launched in 1982 and sells 2.2 million copies

every week

The Metro was launched in 1999 and is distributed free in 14 UK

cities. It was designed to be read in 20 minutes – the time of an

average commuter journey.

Main websites include the Mail Online, Metro.co.uk and

Thisismoney.

to aff nowhownrece

“Th ere is a belief among

the staff at A&N Media

that the next three

decades for the printed newspaper

market will be stable”


MEDIA112

Henderson’s sharp business sense and clear view of how he wishes the IT department of A&N Media to be run en-sures that his relationship with the CEO and other C-level executives in the country is healthy, with all departments pulling together to ensure the company remains a market leader. “It is important to be open with fellow executives,” admits Henderson. “We have discussions on things like costs and operations, and oft en others in the business have been asked to pick out cost areas and have come up with more lateral solutions than the ones you yourself identifi ed, which is useful. One of the biggest lessons I have learnt is that you build up a credibility in the business by know-ing your stuff well. I know I can deliver projects at a cost saving, and that raises the whole credibility cycle so next time around there is greater expectation, but greater trust.”

Th e future of the media industry is a cause for eternal debate. Various schools of thought exist on the best way to monetise content and continue to be profi table, be it the introduction of paywalls online, the continuation of com-pletely free web content, free newspapers or a combination of these approaches. Th ere is no single right way of doing things, but Henderson certainly has his own ideas. “One of the key innovations that we are looking at is the issue of mobility, having journalists in the fi eld and the offi ce. We have looked at an inventory management system using radio frequency and mobile technology that will enable the company to have a much more mobile workforce in the future. Th is is the biggest and most exciting initiative we are working on right now.”

advise other IT heads to embrace benchmarking and not be defensive about saying that in a sector where there is a high change and there is a higher item of cost for other functions, IT is actually all about cost savings. We have seen over the last few years that 15 percent of our cost base has gone toward IT systems and self-service, and that has been an inevitable cost. Th ings like storage growth and network growth – all of these things cost, so it’s useful to be engaged in the discussion about costs, not to be defen-sive and explain how these initial costs are actually longer term investments.”

Growing challengesA&N Media’s newspapers include the Daily Mail and

Mail on Sunday, the Metro, the Evening Standard and 105 additional local papers throughout the UK, with a large presence in Hungary (their Kisalfšld title is the largest regional newspaper in the country), Romania, Bulgaria, Croatia and Slovakia. Th e company also has a wide web presence that extends to some 47 percent of the UK online population. Such a large and diverse level of operations obviously brings vast challenges for Henderson and his team. “Th e greatest challenge is managing the needs of dif-ferent parties of diff erent businesses that we see and they see as being the most important; trying to just manage and prioritise each of the various titles is perhaps the biggest challenge we face.

“So the macro context is the bigger challenge. In this industry, you learn to work concurrently with diff erent channels, diff erent models and diff erent ways of working. It’s oft en about what works today versus what works in the future. I guess the biggest challenge is wearing many hats for operations that get papers out on a daily versus the longer-term consummational change that takes two years to implement.”

Th e various titles that A&N Media – as the consumer publishing business of DMGT plc – own cover pretty much every demographic in the UK. Th e Daily Mail, as mentioned, is the newspaper of choice for Midbritons – a diverse, brand-aware and infl uential consumer group that is responsible for 51 percent of all consumer spend in the country. Th ey are predominately female, middle-class and middle-aged; a demographic that largely applies to the Mail on Sunday too. Th e Metro and the Evening Standard, on the other hand, are titles consumed by working urban-ites aged between 18 and 44. Naturally this latter group is going to be more technically-savvy than the former, so how has Henderson set about capturing the former demo-graphic online?

“We don’t try to. Th ere are a few complementary prod-ucts that naturally cross over from the printed product to online. Our recent TV marketing campaign for the Daily Mail was the only newspaper advert that didn’t display its web address; it was pretty much targeted at our loyal print customers, which I think is important because we don’t want to give the impression that we are trying to have our readers stop buying papers and simply going online for their content.”

David Henderson is the CIO for A&N Media, the consumer publishing business within DMGT plc. A&N Media has revenues of €1.8bn per annum and provides technology for newspapers including Daily Mail, Metro, Evening Standard, The Independent and over 100 local newspapers and magazines within Northcliffe Media.


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ROUNDTABLE114

What is driving investment in WAN optimisa-tion technology by organisations today?Nigel Hawthorn. A number of strategic and tactical activities in corporate networks are driving the need for WAN optimisation. Firstly, many organisations are consolidating serv-ers into the centre of their network to reduce costs and ensure better management, such as backups. Secondly, the rollout of ever more sophisticated (oft en web-based) applications continues. Th irdly, the increase in video stream-ing for training and meetings to deliver more eff ective communications. Fourthly, the need to allow users to access internal services whenever and wherever they may be, as users increasingly work remotely from HQ. Fift hly, the general in-crease in bandwidth needs, to both internal and external content. All fi ve of these trends increase the amount of traffi c on the wide area network and the importance that this data gets to the users fast to improve their productivity. It is a mixture of these trends or all of them together that mean CIOs are looking to WAN optimisa-tion to accelerate data delivery and reduce WAN bandwidth usage.

Adam Davison. WAN optimisation has evolved from a tactical ‘nice to have’ to a key enabling technology for many strategic IT initiatives such as server consolidation, virtualisation, server based computing and virtual desktop infrastruc-ture (VDI). In fact, an eff ective WAN optimisa-tion solution is critical to the overall success of these projects, including the ROI or TCO.

Add to this the move to centralised, lean IT, distributed enterprise operations and a disparate workforce and you create what we describe as the ‘proximity gap’, whereby applications and

services become further and further distanced from the user. Th en there’s the growth in real-time traffi c, web-based applications, on demand services and a growing collaborative culture. Suddenly the WAN has become the umbilical cord between corporate applications, data and services and the business user.

How can this technology enable them to reduce their communication and bandwidth costs?NH. WAN optimisation uses a number of tech-niques to reduce ineffi ciencies in data transfer, thereby reducing the amount of bandwidth used for each request. Remote caching of data requests mean that a repeated request can be served lo-cally and the data doesn’t have to be sent across the network. Saving repeated strings (called byte caching) reduces further the data requirements when a request is made for similar, but not ex-actly the same, data. Protocol optimisation can send large amounts of data in parallel – reducing the ineffi ciencies of protocols originally writ-ten for local area networks – reducing the delay multiplier that results from serial requests and responses. Compression of data before sending and decompression at the other end on the fl y can ensure that the data that does need to be sent is as small as possible.

Th ese four techniques, working together on the data transfers, can reduce traffi c needs – thus saving the constant up rating of WAN connec-tions and ensuring that users furthest away from the data and on the weakest WAN links can still have an eff ective delivery of shared information.

AD. Optimising bandwidth usage is the foun-dation building block of WAN optimisation.

By optimising the traffi c fl owing over the WAN you are able to send more data, resulting in more effi cient use of available bandwidth, which could lead to bandwidth consolidation and reducing a company’s overall bandwidth requirements and costs.

Th is becomes key when faced with upgrad-ing bandwidth to cope with increased traffi c demands. Optimising the WAN and achieving greater throughput can therefore negate the need for these costly bandwidth upgrades.

In what ways can improved WAN optimisa-tion boost productivity within organisations, particularly when it comes to better commu-nication with clients, business partners and customers?NH. Oft en, the major benefi t of WAN optimisa-tion is in user response-time improvements. How many times have you been held on the phone while the operator says, “I’m just looking up your record, sorry to keep you waiting, the network’s slow today”? Th e organisation that can access the customer’s data the fastest will win the most business.

ANY WAN WILL DO?Optimised wide area networks (WAN) are altering the very landscape of business communication.

CXO invites two industry experts to give their thoughts on the future of WAN technology.

Nigel Hawthorn has more than 25 years’ experience of computers, security and networking technologies. He writes articles, has presented at security, e-commerce and networking forums in over 50 countries and contributed to a number of computing books on protocols and security. He has worked for Blue Coat Systems for more than 10 years.

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ROUNDTABLE 115

With WAN optimisation in place, users can work effi ciently further away from the data while still providing fast response times to their customers. Higher-quality (therefore network-demanding) applications can be rolled out, and it brings a global organisation together.

Without WAN optimisation, remote users tend not to attend global streamed training and senior management meetings – therefore miss-ing out on the latest information. Th e ultimate goal should be that every user receives instant responses to every question, wherever they are located in the world.

AD. Th e ‘proximity gap’ created by centralised IT and distributed operations can potentially be counterproductive. Any cost savings achieved through IT consolidation can be eroded by lost user productivity and effi ciency. Th is is where WAN optimisation becomes a critical enabler in assuring the business performance is not ad-versely aff ected.

Collaboration with partners and suppliers is key in achieving competitive advantage. Th e ability for customers to communicate with an organisation via multiple channels, using web- based services and applications, is paramount. Expand’s visibility and control capabilities combined with advanced WAN optimisation techniques allow IT to identify, monitor and accelerate the performance of business-critical applications across the WAN, ensuring that the user experience is productive and effi cient and that eff ective communication with customers, partners and other stakeholders is assured.

How does WAN optimisation support the virtual offi ce concept, which allows workers far greater fl exibility in terms of where they work?NH. You could claim that the main benefi ciaries of WAN optimisation are those users furthest away from HQ, with the worst WAN links – es-pecially if working over a public Wi-Fi link that isn’t even under the control of the IT department.

WAN optimisation vendors have client soft ware for laptops and other platforms that implement some of the WAN optimisation tech-nologies, so that people can work from home and when travelling, and still benefi t from better data delivery.

In addition, the virtual appliances available from some WAN optimisation vendors allow a remote offi ce deployment to be of low cost, if it can run on industry-standard hardware. Oft en a remote offi ce will have a server that is under-utilised – by deploying a WAN optimisation vir-tual appliance, the users in that offi ce can benefi t

from optimisation previously available only to larger offi ces.

In addition, data routing is oft en through corporate connections, so any WAN optimisa-tion along the path of the data will benefi t the user wherever they may be.

AD. Th ere is a saying that ‘work is what you do, not where you go’. WAN optimisation enables disparate employees to create ‘virtual offi ce’ en-vironments by delivering the corporate applica-tions and services needed – virtually anywhere. We call this ‘virtual proximity’ – putting the user in virtual proximity of business applica-tions and services.

Supporting a ‘virtual offi ce’ requires a mix of both physical and virtual solutions. At the central site and remote offi ces, a physical device may be deployed, as there is adequate space and facilities to house the appliance. However, when it comes to the remote user who may be work-ing from home, a serviced offi ce or on the road, deploying a physical device is oft en not possible. To overcome this, a virtual WAN optimisation off ering is needed. Expand’s Mobile Accelera-tor (MACC) addresses this issue and makes the virtual offi ce a reality as opposed to a concept.

In this competitive market, what gives your product the edge?NH. Some WAN optimisation vendors have fo-cused their eff orts on delivering optimisation for high-bandwidth backup systems and have dif-fi culty scaling down to small offi ces and remote users. As I said earlier, it is the users in the smallest offi ces and when travelling that have the greatest need and I’m pleased that Blue Coat is driving down the costs to the most remote users, with entry-level prices sometimes less than half our competitors, free client soft ware, and virtual appliance soft ware that can run on existing stan-dard servers.

Other WAN optimisation vendors only support a small sub-set of data formats and protocols in their solutions – some haven’t moved from supporting Microsoft fi le sharing (CIFS) and email (MAPI). But today’s net-works are full of HTTP, HTTPS and various streaming applications. Blue Coat’s support for stream caching (for on-demand streams) and splitting (for live streaming) – even for Adobe Flash (nowadays the most common streaming technology) and optimisation of SaaS HTTPS content – ensures that the fastest growing tech-nologies are also being optimised.

Blue Coat’s 12-year history of fl exible policies means that IT management can decide which content is optimised, not just by protocol

but by user or content type – as IT management doesn’t usually want to spend network resources optimising non-business critical applications.

We are increasingly seeing customers who want to consolidate the number of network de-vices in their network, so Blue Coat’s optional security soft ware (that runs on the same hard-ware) allows customers to deploy WAN optimi-sation and web security at the same time. Th ere’s no point in accelerating malware and non-business traffi c that might later be thrown away by a security device – so Blue Coat can decide to accelerate the good traffi c and block the bad.

AD. Expand has been a pioneer and innovator in WAN optimisation for over a decade and today is recognised as a market leader by many ana-lyst organisations. We continue to innovate and have achieved a number of market fi rsts, espe-cially in the area of virtualisation, where Expand is unique in its ability to be both deployed as a virtual solution as well as being able to optimise and accelerate virtualised traffi c fl ows. And being a true virtualised off ering, we enable IT to leverage their existing virtual infrastructure of choice as opposed to having to use the propri-etary hardware that is dictated by other vendors.

Our Layer 7 QoS capabilities mean that we can gain visibility and control of over 400 business applications, ensuring prioritisation and assuring all TCP and UDP traffi c, includ-ing real-time applications such as video and VoIP. Our virtual and physical off ering means we have the most fl exible deployment options of any company in the market. Furthermore, our breadth of portfolio means that we can span the entire enterprise IT infrastructure, from the data centre, to the branch offi ce, to the remote site, to the mobile worker. Add to this the ability for all devices to be centrally managed, monitored and controlled via our management platform ExpandView and we believe we have the most comprehensive, technically advanced and cost-eff ective WAN optimisation solution on the market today.

Adam Davison is Corporate VP Sales and Marketing for Expand Networks and is responsible for implementing sales processes across the regions, coordinating and initiating global efforts and alliances to enhance Expand’s worldwide presence. Davison has over 16 years’ experience in sales, management and business development.

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What is WAN optimisation?Mark Lewis. WAN optimisation helps companies over-come the issues of poor performance when accessing data and fi les over the wide area network (WAN). In a nutshell, Riverbed technology makes the WAN perform like a local area network (LAN).

In our experience, organisations with distributed IT network architectures oft en encounter performance issues over the WAN due to latency – or the amount of time it takes traffi c to move across the WAN – and ap-plication protocol ineffi ciencies, which is also known as chattiness. Th ese two factors can cause bottlenecks on the WAN that can cripple traffi c moving between sites, killing productivity along the way. Because of this, no matter how much bandwidth is purchased, until the issues involving latency and application ineffi ciencies have been addressed, performance will not be materially improved.

Riverbed solutions address each of these issues by optimising application protocols to mitigate the eff ects of chattiness and accelerating traffi c across the WAN, which reduces the impact of latency. Riverbed also uses caching and deduplication technologies to reduce the amount of traffi c across the WAN, giving organisations the abil-ity to better use the bandwidth they already have. As a result, Riverbed customers see signifi cant performance improvement in application speeds over the WAN.

Why is WAN optimisation important and who ben-efi ts from a WAN optimisation solution?ML. Any distributed organisation can benefi t from a Riv-erbed WAN optimisation solution. Because we overcome the issues of latency and poor application performance over the WAN, we’ve enabled companies to take advantage of their existing network infrastructure and applications in ways that they had never imagined possible. Riverbed so-lutions have enabled companies to reduce their bandwidth utilisation by between 65 percent to 95 percent, allowing them to avoid costly bandwidth upgrades. Riverbed’s application-specifi c optimisations also improve application performance across the network, resulting in performance improvements of fi ve to 50 times, and in some cases up to 100 times. With these dramatic results, our customers have been able to reduce costs, consolidate their IT infrastruc-tures, deploy private cloud environments and accelerate disaster recovery (DR) traffi c. Th at’s why many of our cus-tomers consider WAN optimisation to be a critical compo-nent of their IT infrastructure.

What are some of the challenges you think this tech-nology can help organisations overcome?ML. Our customers have turned to Riverbed to overcome a range of issues from poor application performance in distributed environments to challenges with slow remote data backup and replication. Th e Riverbed range of solu-tions have enabled companies to overcome insuffi cient, expensive or congested network bandwidth into remote offi ces, implement consolidation and private cloud envi-ronments and enable a mobile workforce to access appli-cations from the data centre at LAN-like speeds. Riverbed also off ers customers the Riverbed Services Platform (RSP), a virtualised partition on our Steelhead appliances that enables customers to deploy up to fi ve edge services such as print, DHCP, fi rewall and video. Th is gives cus-tomers the ability to consolidate WAN optimisation and edge services onto a single appliance. Additionally, River-bed’s Cascade products provide network and application monitoring and management, which enables companies to have true visibility and insight into how their networks are running.

What impact does virtualisation and cloud computing have for WAN optimisation solutions?ML. Th e more pertinent question is how WAN optimisa-tion benefi ts virtualisation and cloud computing projects. When organisations start to move local services to a cen-tralised location, whether it be virtualised or a private or public cloud environment, users are no longer accessing applications over a LAN. As a result, they’re now rely-ing on the WAN, which brings us back to the challenge of poor application performance. A WAN optimisation solution will help organisations looking to deploy both private and public clouds, to overcome the performance hurdles of latency and poor application performance and allow organisations and employees to take full advantage of the benefi ts that virtualisation and cloud computing environments bring.

Mark Lewis outlines why WAN optimisation can be important to the success of your business.

Removing ineffi ciency in your wide area network

Mark Lewis is Senior Director of Marketing & Alliances for EMEA at Riverbed Technology. He is responsible for business development, developing the brand and raising awareness of WAN optimisation across the region. Mark has over 20 years’ industry experience in a variety of roles covering engineering, sales and marketing.

We’ve enabled companies to take advantage of their existing network infrastructure and applications in ways that they had never imagined possible”

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MORE THAN A

MCJOBAs one of the most recognisable brands in the world, McDonald’s’ HR challenges are different from any other. Victoria Newing spoke with Vice President of People for McDonald’s Europe, David Fairhurst, to discover how the company attracts, retains and motivates its staff.

The now-ubiquitous ‘I’m Lovin It’ catchphrase that accompanies all of McDonald’s’ advertis-ing and branded packaging (indeed, it has become so commonplace and entrenched into Europe’s collective subconscious that the words are oft en no longer required; only the jingle re-

mains, and yet we all still hum along submissively) is generally regarded as a nod towards its consumers’ enjoyment of the Mc-Donald’s experience. Happy, relaxed, attractive and ethnically diverse pals are shown enjoying the food, the fun and the frolics that McDonald’s delivers, carefree and inexpensive, in a scene played out in restaurants across the continent at breakfast, lunch, dinner and at all other times in between.

Few would have ever thought, though, that the slogan could equally be applied to McDonald’s staff . Aft er all, what could there possibly be to love about fl ipping burgers and shak-ing fries in the hot kitchens, or off ering customers the chance to ‘supersize’ their meal for a tiny extra cost as queues snaked out of the door? Th ere was a time when McDonald’s was seen as nothing more than an unhealthy burger chain; progressive and careful marketing and the introduction of a welter of new products has changed all that. But the perception of the com-pany as a bad place to work still lingers in the air like a greasy aroma, although it is a perception that, much like McDonald’s’ antiquated image of purveyors of nothing more than fatty fast foods, belongs in the past.

“McDonald’s is probably a brand that people anywhere in the world would recognise; it is easier for me to list the coun-tries and locations where we’re not rather than where we are,” says David Fairhurst, Vice President of People for McDonald’s Europe. “We have two million employees around the world, and 87,000 in the UK, which is my main market. Th e majority of our people obviously work in the stores, perhaps 86,000 comprising

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store managers, support managers, trainers and crew. Th en we have a small support offi ce of about 600-700 people with a whole range of corporate functions such as sales, market-ing, HR and supply chains.”

As the European executive in charge of McDonald’s’ HR department, Fairhurst is clear that his most important and valuable business metrics are the people themselves. “I’m a big believer in insight,” he says. “Not just metrics, but actually driving metrics to insight. HR is a function that has been devoid of metrics for many years, and that’s because we haven’t grown people with analytical skills, with statisticians and those sorts of things. It’s harder to correlate people metrics in many cases, but it is not impos-sible. Many HR functions have given up on the journey of trying to get insight from data – they fi nd it too diffi cult or are perhaps not interested in that side of things, treating the function almost like an art, when it is my belief that it needs to be both an art and a science. “

Extracting tangible value from these people metrics is, explains Fairhurst, achievable provided the right type of investigation is undertaken. “I have used relationships with universities, with statisticians and the clever people who can do numbers far better than I can to actually look at correlations of data. And in fact, very recently I took the 167 operational metrics of a single store across 200 stores and correlated them with all the people metrics and found some pretty impressive insights from that. But in order to do that, you do need some clever analytical support people, and we haven’t groomed those sorts of HR people, which is why it is important that we fi gure out ways of getting more science into the human resource function.”

Fast food passionNurturing an agreeable working environment in

somewhere as fast-paced and transient as a typical Mc-Donald’s restaurant might seem, to the uninitiated at least, a thankless task. Th e long hours, initial low pay and repetitive nature of some tasks might appear to be inhibitors to employee satisfaction, but Fairhurst is of the opinion that attracting good talent and motivating your workers stems from the attitude and ability of some of the most important people in the entire McDonald’s hierarchy – the store managers.

“Th e star in most retail businesses is the store manager, who has a massive impact on morale, engagements and the metrics of a particular store,” says Fairhurst. “Th ere was some research done by Bristol University a couple of years ago that looked at the diff erence on two similar Tesco stores made by changing store managers, and found that the sales impact of a good store manager could lead to a 20 percent increase in sales.

“Th e shadow of the leader that is created by that phe-nomenal role in retail is critically important. So for most of my change programmes when we are looking at culture and we are looking at change and we are looking at engage-ment, the fi rst person to be engaged in a retail organisation is the store manager. If you capture their heads and their hearts and their guts and get them completely onside and

aligned with where you want to go, then that impact casts a shadow right over the organisation, and suddenly 80,000 people are with you and giving you the discretionary eff ort that you need in order for your business to be successful.

“So that is where my start point would be for a success-ful retailer – employ, identify and engage with a good store manager.” Identifying and managing talent is a constant cycle of challenge and opportunity for a company like McDonald’s. Th eir turnover of staff would frighten many organisations, but it is this freshness of talent, this wheel of workforce, that enables the company to continually deliver at the very fi ercest end of the market. “When you think of talent management and succession as a discipline, it is a decade behind most other HR disciplines,” says Fairhurst. “Th e reason for this is, I think, because rather than get the behaviours and the dialogue right in organ-isations around talent, many companies have jumped to technology which has slowed down the entire process of progress around talent.

“I still fi nd it incredibly surprising that chief executives cannot have, on one piece of paper, what their talent profi le is for the organisation. So the fi rst fundamental point is about the basics, the dialogue. It’s not about clever technol-ogy – technology is the transportation of that progress. It can accelerate, it can make things easier, but actually it is the dialogue that is important. And when you have used this dialogue to identify the people you need, you need to be courageous. You cannot hesitate, you do not have time to. You identify, motivate and give them a chance.

“So these are all the things in the bad times that I am hoping will transpose into the good times because these are the behaviours that are being forced on many organisa-tions, which are about dialogue and how you are develop-ing your people.”

Better connectionsFairhurst believes that a more fl uid corporate infra-

structure can help the HR functionality by delivering better

“Th e star in most retail businesses is the store manager, who has a massive impact on morale, engagements and the metrics of a particular store”

David Fairhurst


HR MANAGEMENT120

“So they really need to wake up to what it is that the next generation coming into the workforce are going to be demanding. And assessing the intergenerational dynamics of the workforce too, because with the economic downturn we are seeing a lot of older workers returning to the work-place, so how does this aff ect what type of reward is going to appeal?”

Simply put, HR departments have a duty to identify what engages their staff and then implement strategies to get them onside and make them feel happy in the workplace. “People want to feel as though they are making a diff er-ence,” says Fairhurst. “People want to be communicated to and recognised, and by recognition I’m talking about a ‘well done, that was brilliant’; not in some pre-set appraisal, but there and then – instantly recognisable recognition from your boss that you are doing a good job. So this is one of the things that I would encourage executives or HR people to think about: how ongoing and prevalent are the recognition mechanisms on a daily basis that cost probably nothing for the organisation?

“I use an acronym called CHARM: Committing to Help, Attract, Retain and Motivate, to help line managers think about what they are doing to attract people to the business and then motivate them. When I used to work for SmithKline Beecham we would spend a lot of time doing exit interviews, which is actually leaving it too late [to get feed-back]. So we created stay meetings rather than exit meetings.

connections between organisations, allowing for a greater understanding of the culture of a business, which leads to better and easier talent management. “Th e number one thing that is stopping organisations progressing is silo men-tality, where people operate in pockets of activity and do not connect,” says Fairhurst.

“One thing about the next generation of talent coming into the workplace is that they connect. It is all about con-nectivity and co-creation. And not only do these guys connect with each other, but they connect with the outside world. So you’re faced with all these connections and yet businesses still operate with structures and cultures that are very much linear, where most of the challenges in organisa-tions are lateral, running horizontally across silos.

“McDonald’s operates in the most siloless manner I have ever worked in,” he says. “It is this structure that I would advocate for any other organisation I would go to, too.” In order to achieve this more malleable and inter-connected working structure, Fairhurst advocates a radical shift in the way we think about our jobs. “Job descriptions are the things that get in the way of progress. While people need to be clear on journey, vision and what their role is, we need to make sure that the collaboration in the organisations is there. So when it comes down to HR, I considered my team who worked for me in HR, probably the most award-winning HR team in Britain, to be ones that changed or evolved their jobs every 12 to 18 months.

“If you look at my own role, for example, I sit as one of four senior executive running Northern Europe. And we have an interest in everything. I sign off commercials; I’m interested in the supply chain; I taste the products… all this while having my own specialist portfolio covering environ-ment, CSR, HR, customer service. Th e expectation of the organisation is that I have an interest in everything.

“At the other end, if you look at the education sector and how degrees are evolving, you see the sector almost getting ahead of business because they are starting to off er degrees where marketing is mixed with HR, and HR is mixed with CSR. I love the phrase ‘CSR without HR is PR’. It’s a clas-sic line that shows you can no longer operate in a rigid way. Gone are the days when HR can sit in a box and behave like a precious separate silo.”

Empower and engageImplementing more fl exible working structures and

open-ended job descriptions will certainly help to empower employees to strive for a better performance in their daily duties, in much the same way that incentivisation does. Th ere is though, warns Fairclough, a need to understand how best to reward and engage your staff in a manner that is conducive to producing better performance and a happier work ethic. “Th e interesting thing about incentivisation and rewards and benefi ts is that most are oft en not rewarding for the individual,” says Fairclough. “It is important that the re-cipient of the reward fi nds it, well, rewarding. Compensation and benefi ts of all the diff erent pockets of HR have been one of the least fl exible, least dynamic and least progressive of the areas that we can consider.

“Th e interesting thing about incentivisation and rewards and benefi ts is that most are oft en not rewarding for the individual”


HR MANAGEMENT 121

because they like what they have seen. But you shouldn’t pre-tend that you are all things for all people. And I still think there is a certain mentality with some employers which is to try to keep you for life irrespective of whether the employee has got better things to go to, or other things to fulfi l in their life. Th at is the wrong strategy, and I think HR directors should stop thinking about retention and start thinking about engagement.”

Future stars‘Th e youth of today’ is a phrase bandied about without

due care and forethought by any generation over the age of 25. Th e ‘youth of today’ always appears more detached, less motivated, lacking in experience and work ethic, oft en poorly educated. Th e truth, though, is that every generation coming through has its stars and its slackers. Th e diffi culty comes in fi nding the talent, and Fairhurst is of the opinion that a number of larger organisations make it extremely diffi cult, both for themselves in actually uncovering good people, and for the youngsters who just want to get their foot in the door.

“I’m terribly frustrated by the way in which employers treat work experience,” says Fairhurst. “A vast proportion in a recent survey I did of 2000 young people with Populus, the research company, found that 67 percent of them turned up at a workplace and were not expected to work; 21 percent of them said that they were there to just make tea – a problem that is particularly prevalent in the media and creative in-dustries.

“Th is is an absolutely unacceptable situation. Employers need to be structured, they need to work with the education system because you’re bringing people into the world of work, and that’s the fi rst thing they remember. So my call to arms for those who are infl uencing connections with educa-tion and work experiences is please focus on providing op-portunities for young people into your industry and sector to enrich them with the knowledge of what the world of work has in store for them, which is more than just making tea.”

Fairhurst’s evident frustration at the current state of the UK’s job market is indicative of the pride he takes in know-ing that people are being given a chance, whatever indus-try they may be working in. Despite the current economic downturn, Fairhurst believes that employers cannot use this as an excuse for reverting to bad practices or restricting access to the job market. “Th ere are a lot of good practices evolving through adversity, and there are a lot of HR people thinking smarter, thinking diff erently, thinking with less budget, thinking more creatively, thinking about taking more challenging and courageous steps with their people.

“Th e strategies and processes that we have learnt during these bad times can be applied to the good, and we must not lose sight of them. So when budgets come back and staff training picks up, and redundancies stop and we start hiring again, I would urge HR leaders to remember the lessons from the bad times and become better, slicker and more agile in the future.”

Once a year your boss would sit down with you outside of your appraisal and ask how you were doing, what more they could do to help, were there any additional tools that could make the job easier, were objectives clear etc., and it was amazing the impact it had.”

Retaining good staff has always been one of the main focus points for an HR department. Why would a progres-sive and intelligent company wish to ever let good staff go? Fairhurst, however, believes that there always comes a point where attraction of new staff is more important than reten-tion of existing staff . “In business there is too much focus on retention. What you do by focusing on retention is you create prisons. If you keep staff there for life, you don’t get any fresh new ideas. It’s a lifer concept where you have cre-ated a prison when actually what you want to do is create a more dynamic workplace where people are engaged and they stay engaged.

“It takes a brave business indeed to admit that, oft en, you are just part of somebody’s career journey. At McDon-ald’s we are clearly that for many students, why would we want to keep them beyond the two, two and a half years that they are with us? Th ey are great value for that time and if they are going off to study to be a doctor or a scientist, well, why would I stop them? Why not create them as a brand ambassador leaving with a great experience so they continue to be a customer, tell their friends about their experience, the training, the education they received while working with us?

“So for the fi rst time a few years ago we said that we are not necessarily a destination employer. We are for some. A lot of staff come to us because they think we’re fl exible, for student pocket money and what not, but a lot of them stay

McDonald’s has2 million

employees around the world, and

87,000 in the UK

The sales impact of a good store manager could

lead to a 20 percent increase

in sales

David Fairhurst was speaking to Victoria Newig for MeetTheBoss.tv


INDUSTRY INSIGHT122

course, that is a highly suspect assertion in most cases. When these companies can’t fi ll all of the requisitions, they oft en subcontract to other staffi ng companies to increase their sourcing depth. Invariably, this leads to disgruntled feelings from competing staffi ng fi rms, as the only oppor-tunities they get to work on are the diffi cult ones that the master vendor can’t fi ll.

In 2001, when the internet bubble burst and the economy slumped, a game changer arrived on the scene. A challenging economic climate acted as the impetus to a wholly new and innovative model.

Th e advent of VMS (vendor management soft ware) brought an entirely new, yet highly eff ective vendor man-agement model – the vendor neutral managed service programme (MSP). Eager to reduce costs, drive process effi ciency and gain visibility into contract labour spend and supplier performance, organisations adopted MSP/VMS solutions.

Today in Europe, the vendor neutral MSP is gaining signifi cant traction. Early adopters of these programmes are reaping the benefi ts of signifi cant cost savings and robust management information available at the touch of a button. Sound MSP (VMS driven) providers are able to off er each client a tailored approach specifi c to their organisa-tional goals and needs. Backed by localised operational and product support teams, the web-based solution is highly confi gurable to client’s workfl ow and business processes.Th e vendor neutral MSP model has gained in popularity because all three constituents – the organisation, the MSP and the vendor – all benefi t. Th e client is the prime benefi -ciary because they are able to outsource non-core duties to experts who maintain a fair and competitive environment. Th is ‘level playing fi eld’ environment fostered by the vendor neutral MSP means hiring managers have access to an ap-propriate supply base, which increases quality and reduces costs. Th e staffi ng fi rms win because they are judged strictly on their performance and their ability to provide qual-ity at a fair price. Th e vendor, of course, benefi ts from the revenue derived from providing its service. For once, all three constituents can rest assured they are operating in a performance-based arena. Th e model is sound.

Whichever model you chose, be sure that you spend as much time in your due diligence process looking at the companies, not just their solutions. Ensuring that you fi nd a partner with a respectable balance sheet, similar values and a vision that aligns with your long term goals will posi-tion you well in managing such an important component of your labour force.

With European fi rms spending an annual sum of approximately €130 billion on temporary labour, organisations are scru-tinising their current models of managing

temporaries and contractors to fi nd greater effi ciencies wherever possible. Rightly so; there’s certainly no shortage of providers in the market willing to off er ‘model solutions’ for more cost-eff ective outsourced labour programmes.

Th ough traditional models have off ered value, they have not been without fault. However, as these models have evolved, they have yielded much greater results. In fact, it seems that the newest methodology in contractor man-agement – the vendor neutral managed service provider model – is gaining widespread adoption for good reason: the proven success organisations are having with it.

Th ey say necessity is the mother of innovation. Th is was certainly true in the case of the fi rst formal managed staffi ng model. Clients, feeling fi nancial constraints, asked their staffi ng suppliers to deliver qualifi ed labour for less. Smart suppliers countered with what appeared to be a win-win solution. Th ey off ered to guarantee a specifi c mark-up along with onsite personnel in exchange for an opportu-nity to fulfi l all requisitions. Th us, the vendor on premise (VOP) or master vendor programme (MVP) was born. Th is model prevailed for many years and still exists in certain pockets even today. Over time, however, the inherent prob-lems with this model became evident.

For large and complex staffi ng programmes that have a high number of labour categories (professional services, admin/clerical, light industrial, etc.) across various geog-raphies, the master vendor or vendor on premise model is destined to be problematic. Th e underlying premise of the master vendor programme is that one staffi ng com-pany can provide all of the required contingent talent. Of

The vendor neutral managed service programme

Doug Leeby tells us how innovations in talent management programmes are meeting the increasingly challenging manpower needs of business.

Doug Leeby serves as President at Beeline. Leeby oversees business development, marketing, and the talent management business unit. He has been with Beeline for seven years. Prior to joining Beeline, Leeby spent 10 years in the consumer products industry serving in various sales, marketing and strategic planning roles. Leeby attended Vanderbilt University where he received a Masters in Human Resources and a Bachelor of Arts degree.

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There is a lot of buzz around the term ‘talent manage-ment’ – but what does it actually mean?Vincent Belliveau. In human resource management, the term talent management originally meant identifying and grooming potential high-fl yers in management roles and identifying successors for senior management. HR Direc-tors came to realise that such a narrow focus failed to ensure that the right people with the right skills were deployed in the right roles – which is absolutely critical in delivering competitive advantage and achieving business objectives. However, it was impossible to roll out organisation-wide talent management until the introduction of talent man-agement systems. Th ese systems include functionality to track each individual’s performance against pre-agreed goals, record their career aspirations and development, equip managers with actionable information about their teams, and help executives manage talent planning by building a pool of suitable candidates for mission critical job roles.

Training and talent management is a cost to the organ-isation – why should it be prioritised?VB. Th ere are clear fi nancial reasons for implementing a talent management strategy at any point in the economic cycle. According to research from Bersin & Associates, companies with intermediate to advanced levels of talent management performed better fi nancially during the re-cession and generated higher revenue per employee. Th ey also benefi tted from a lower level of voluntary turnover, avoiding the costs and productivity gaps associated with recruiting new employees.

How can organisations get the best return on invest-ment from their talent management strategies and systems?VB. To get the best return on investment, executives need to adopt a holistic approach and link talent management and organisational learning at the strategic, planning, pro-cess and system levels. Th is was borne out by research that found that organisations with combined talent manage-ment and learning management systems experienced the strongest revenue growth.

For example, it is more cost-eff ective to develop talent internally rather than recruit new employees. A combined system enables executives and managers to identify people with potential and then map out and track the learning and development plans that will make them suitable candidates

for any given role within the organisation. An embedded learning management system can automatically provide links to relevant learning opportunities and record learn-ing completions, enabling managers to instantly identify who is ready for promotion or a sideways career move and bridge skills gaps.

Th is system can also be used to automate the learning programme for new starters, so each individual receives an email with portal access to their own personalised induc-tion plan. Th is may include generic courses to introduce the company, its structures and practices, job specifi c training, and links to social learning opportunities that will help to speed the integration of the new employee into the organisation and reduce their time to productivity in their new role.

A talent management system without learning in es-sence only works at a tactical level – you can identify talent, but then what? Th e combination of talent and learning makes it a strategic solution that delivers real benefi ts to the organisation. Perhaps most importantly, talent that is able to grow within an organisation is less likely to leave.

Is there any way to achieve these benefi ts without in-curring a massive increase in costs?VB. It is surprisingly aff ordable to roll out a talent manage-ment strategy – particularly when compared to the poten-tial fi nancial benefi ts. Soft ware as a service (SaaS) solutions can be implemented rapidly and cost eff ectively with no up-front hardware costs, and with the peace of mind that the same infrastructure is being used successfully by other organisations. Also, executives need to remember that em-ployees are developed most eff ectively through a combina-tion of formal and informal learning. Learning does not have to mean expensive training courses, when e-learning, social learning, coaching and mentoring can all deliver excellent results.

Talent comes from learning

Vincent Belliveau explains why many leading organisations are turning to talent management solutions to gain competitive advantage.

“Th ere are clear fi nancial reasons for implementing a talent management strategy at any point in the economic cycle”

Vincent Belliveau is Cornerstone OnDemand’s General Manager of Europe, Middle East and Africa (EMEA). Prior to joining Cornerstone OnDemand, Belliveau served as the North East Europe Director of IBM’s Master Data Management (MDM) and Information Integration Solutions. Belliveau was also a consultant with McKinsey & Company earlier in his career.

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ASK THE EXPERT126

Pradeep Upad tells CXO how Human Capital Management Analytics can be used to unearth the true value of your workforce.

To eff ectively drive an organisation’s workforce, provide accurate and timely guidance on corpo-rate strategic initiatives in support of business growth and even to justify the value of the team’s

very existence, HR must have a solid handle on its knowl-edge capital (i.e., data). It is imperative for HR professionals to think strategically, input the right value-add informa-tion and use the results as eff ectively as possible. What can HR do to become a true business partner? Th e answer is Human Capital Management Analytics.

Th ere are several factors impacting the need for better accountability with HR data. For many HR directors, dis-cussions around HR’s presence at the executive table are nothing new. However, in light of the recent recession, this debate is relevant once again. Th e recession has increased scrutiny on all activities and decisions related to human capital. During times of restructuring, an organisation’s talent is the most aff ected. Th is means the team in charge of people management should be reporting in at the highest levels of the company.

A good HR data management process has become es-sential to be a true business partner. Capturing employee and talent data can be diffi cult. In order to be eff ective, HR professionals must fully acknowledge the data, identify KPI’s and settle on the technology approach.

A staged approach is oft en the most appropriate. Th e fi rst step is to put in place a consolidated technology plat-form to capture your HR related data. Th is is a very im-portant step as your outcome is based on the quality of the input. To increase the data quality and to make sure it is kept up-to-date, companies need to have self-service tools in place to enable the workforce to manage their personal situation. By installing good data entry procedures, HR can easily monitor the changes to your database. Aft er all, HR needs to remain in charge of the HR data, but it involves commitment from the whole workforce. Th is stage can be considered as fundamental in building good reporting.

Next, HR and their business partners should deter-mine meaningful metrics to be tracked and recorded. HR can then adopt more sophisticated technology for analytics. In this step, business intelligence solutions off er valuable information for business decision makers and can help the HR department make better fact- and data-based decisions.

Putting your data to workData management is only a means to an end. You can

let your teams get bogged down in all the reporting and

analysis in the world, but it’s what you do with the results that makes the diff erence to your organisation. When HR uses data to make policy and organisational changes, mea-sure the success of these changes and report back to the executive team, the department will fi nally get the recogni-tion it deserves.

Th rough clear reporting and easy-to-use dashboards, the HR director can show how a review of benefi ts off ered to employees has improved, for example, absence levels, which has a very clear impact on the bottom line. Alter-natively, identifying a positive trend in employee reten-tion will help demonstrate what you’ve saved the business on the cost of recruiting new starters. In hard economic times, cost is everything and having the right data on hand at short notice can mean justifying HR’s existence at the highest levels of the company.

Even more important than reporting on what has happened is the HR director’s responsibility to look for-ward, identify potential problems and create solutions in advance. HR directors are now starting to use the process of data mining to predict what’s going to happen.

If HR professionals have the right information at their fi ngertips, they can report clearly and succinctly, which in turn translates into the concrete data proving the positive diff erence HR contributes to the company.

HCM Analytics: uncovering the real value of your employees

Pradeep Upad is the VP of consulting at NorthgateArinso US He has 20 years’ experience in planning, delivery and management of complex business programmes. His expertise includes systems and process integration, HR BPO solutions, ERP packages, supply chain solutions, custom application development, technical architectures, operations, sales support, contracting and outsourcing. He holds a master’s degree in computer science from New York Institute of Technology and a bachelor’s degree in physical science from Osmania University, India.

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MANAGED PRINT SERVICES128

Josh Feathers outlines how managed print services can prove extremely benefi cial for you and your business.

To print or not to print, is that the question

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MANAGED PRINT SERVICES 129

The benefi ts of managed print services (MPS) are remarkable – a 30 percent average reduction in imaging costs, a 60 percent reduction of hardcopy fl eet carbon emis-sions and increased worker productivity.

However, when it comes to reducing print expenses, an extensive MPS pro-gramme focusing on optimising the environment, ensuring best-in-class equip-ment and reducing the overall service disruptions can only take a business so far.

Without a well-informed and accountable associate population it may be a signifi cant challenge to realise the full potential of MPS.

When considering how to infl uence employee behaviours there are varying cultures to account for within an organisation. Some organisations place a high emphasis on speed and delivery over processes and methodologies. In other organisations, employee stress may come from the high risk of a fast-moving landscape, or stress just from their internal bureaucracy and politics. Anyone who had a job during high school can tell you that their employer then had expectations that are most likely diff erent than that of their current employer, whether that is a fi nancial institution, a manufacturing company or the military. Th e point being: you will need to consider and adjust your print reduction plans around your organisational culture to get the most out of your MPS program.

Most employees, even the ones who unknowingly copy and print indiscriminately, want to be good fi nancial stewards. Th ey want to take an active part in helping their company meet whatever needs, expectations, missions or visions promised to customers. However, they need the direction, information and tools to take the cost of printing into their own hands.

The big questionTo print or not to print, is that the question? At the very least, that is the question employees

should start asking more. Within our organisation, we have recently begun marketing our best practices, and the documents begin with this question. If your associate base can remember to ask this simple question prior to clicking print, you are on the right path for having your associates make the impact in print for you.

Finding alternatives to printing is the quickest and easiest way to reduce a company’s carbon footprint, decrease costs and incorporate more effi cient process workfl ows. However, simply asking employees to stop printing is not likely to work any better than asking your chil-dren to do, well…. anything. You will need to get them interested, and understanding what is in it for them. And depending on the organisational culture, the information and tools required may vary widely. Th ere is no doubt that a college student will be motivated diff erently than a bank manager, for example. Below are a few examples of diff erent methods of empowering employees to make the right decisions regarding print.

Informed costs and accountabilityEmployees may not know what the cost of print is. Give them this information at the most

granular level possible. Print costs at a high level mean little to an individual. Departmental over-views are great for selling a new workfl ow solution, or retiring a legacy print screen process. How-ever, print scorecards with drill-downs to an individual level are an excellent tool for a supervisor to take initiative and reduce printing for their department. When you begin to share individual costs, volumes and usage history is when people start becoming accountable for their print activ-ity. Simply put, an employee who knows this type of information is available will mitigate most print misuse and abuse, even if the information is never queried from the database.

As an example, our organisation provides training prior to any managed print solution rollout. Within the training, we provide a slide that presents a screenshot of our internal budgeting system. Th e employee’s name is shown, with the cost of their printing in the next column. Since we started providing this information in our training sessions, we have seen a reduction in overall print volume aft er MPS implementations. Our associates think twice about clicking print, regardless of whether it is used for auditing compliance.

Emotions and eco-friendly printEmployees may care more about the environmental impact of their printing than the cost

to your organisation. Currently, environmental aspects have a broader appeal and an emotional likeability that may engage associates in a diff erent way. If this is the case with your employees, as it was in my organisation, you will need to take a diff erent angle to market the idea of print

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MANAGED PRINT SERVICES130

reduction. Marketing MPS as a tree-hugging service may help. Try converting your managed print solutions into a green initiative, with the reduction of waste, CO2 emis-sions, and energy reduction as your selling points. Develop documents that outline ‘green printing tips’ and get that in front of your staff . Get people thinking about how changes they make to their printing habits may have a positive infl uence on the environment, and applaud those already doing their part to make it happen.

Remember, there is still a lot of criticism and specula-tion on whether or not you can actually make an environ-mental impact by reducing your print volume. In contrast to what some believe, trees are a renewable resource. Many corporations buy paper from companies that are in some way initiated with sustainable forestry already. However, I can tell you fi rst hand, sharing ‘print impact data’ can have a big impact on your end-users. Telling Julie (name changed to protect the innocent) in Subrogation (depart-ment not changed; everyone knows Subrogation prints the most) that she used 76 trees in paper proved to have a meaningful eff ect on her printing behaviour, even aft er the costs of printing didn’t faze her.

Printing smartYou can also realise a large amount of savings by getting

your associates into the habit of carefully considering and taking the time to review their document settings before

printing. My team did a study into historical print usages in regards to the impact of certain defaults, settings and managing the change of behaviour; the latter being the goal state. Th e simple stuff includes setting default duplex at the server level, and utilising job storage features. More invasive and lengthy is getting end-users to print only the pages they need, or to actually use that button labelled ‘print preview’.

As an example, the aforementioned study found that 2.4 percent of all print jobs are printed twice due to mis-takes made the fi rst time printing. Th at does not include the page reduction of a job that a print preview can detect. If associates take the time to select the correct features the fi rst time and verify the print job looks good, the savings will add up. If they have the foresight to preview the docu-ment, end-users will see the Excel spreadsheet is going to print portrait when it should be landscape. Oh, and it is going to print 32 pages of blank data with a footer as well.

Remember, your company will reach the fullest sav-ings potential from its managed print service when you have associates who are knowledgeable, responsible and accountable for their print activity. To retain that competi-tive advantage you feel you have with your managed print service, you will need your employees’ help. Don’t be afraid to ask them for it. If you are like our organisation, your em-ployees are highly engaged, honest and are seeking ways to actively take a part in the success of your business. All you need to do is get them the information they care about.

Currently, Josh Feathers is leading the implementation of a managed print support infrastructure throughout Nationwide Insurance, supporting 30,000 associates and 3000 network printing and imaging devices, along with the respective infrastructure in 50+ regional locations.

Feathers is also promoting, advocating, and educating to the end-user segment of the managed print community as a board member for the Managed Print Services Association (www.yourmpsa.org). His goal is ensuring that delivery of the association objectives are done with the best interest of end-users, and feels their involvement is crucial to its success.

FAST FACT: Photizo Group found that the average cost of a hardcopy fl eet for a fi rm with 750 employees is over US$700,000 (€540,000) per year. The fl eet will use over 33,000 kWh of electricity and generate over 80 tons of carbon (CO2) emissions (equivalent to the total CO2 output for 16 cars – for an entire year).

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Last wordDo civil servants’ salaries come down to money or trust?P144

Objects of desireA peek at what’s hot and what’s not in the world of technologyP138

BooksThe quarter’s best page-turners go under the microscopeP141

City guideCXO takes a stroll through SevilleP142

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144

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The ubiquitous Converse brand was almost dead and buried at the turn of the millennium. Ian Clover

uncovers how the sneakers were not only saved but reinvigorated to become a market leader once more.

The fi ling cabinet in North Andover, Massa-chusetts, heaved with legal documents call-ing for payment. Sales fi gures had plunged through the fl oor. Market share had been ripped from its grasp. Th e contract for offi cial shoe supplier to the NBA had been relin-

quished many years prior, but the fi nal nail in the coffi n for the company came in January 2001 when the last United States factory closed down. Bankruptcy was inevitable. Converse, the counter-culture sneaker of many a genera-tion, had had its day.

From its early innovations on the basketball court through Chuck Taylor’s ringing endorsement to the sneak-ers’ adoption by Th e Ramones and other 70s punk bands, right up until Kurt Cobain’s navel gazing turned into a nationwide lank-haired teen homage to Converse All Stars – or ‘Chucks’ – the shoe company was an ever-present in the

popular culture of the United States and, to a lesser extent, Europe. Where the jocks and the cool kids wore Nike or Adidas, the more indie kids wore Converse. Th ey were the global brand it was okay to like, even love. Th ey were Amer-ican yet everyman, aff ordable yet durable, stylish yet never fashionable. In short, they had a solid consumer base and a clearly defi ned place in the market, so what went wrong?

“Converse had several athletic contracts that played themselves out all at the same time,” says Matt Powell, a research analyst for SportsOneSource. “Th is created some fi nancial diffi culty for them. Prior to that, the Chuck Taylor shoe would go through a very cyclical sales loop. You would see two or three years of really terrifi c sales, and then a couple of years when the shoe was on the backburner, then yet more years where sales would pick up again. Th ey also persisted with domestic manufacturing for far too long [producing the shoes exclusively in the USA], which proved very expensive. Th e company also owned some factories, which caused cash fl ow issues as well. Th ey were, essen-tially, undercapitalised for such a competitive market.”

“Th e problems Converse had were completely op-erational,” agrees Stephen Cheliotis, Chairman of the UK Superbrands Group. “Th eir size and synergies were out of kilter; it certainly wasn’t a case that the brand was in the doldrums and needed revitalising – Converse simply needed assistance, deeper pockets and wider reach.”

FORTUNES

BRANDING

“You would see two or three years of really terrifi c sales, and then a couple of years when the shoe was on the backburner, then yet more years where sales would pick up again”

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DETAILS 135

ganic growth of this market, providing advice and invest-ment, but leaving brand perception well alone. “Nike are not suddenly going to ruin a brand that has been bought into and believed in for so many years,” admits Cheliotis. “Elsewhere, you see thousands of examples where a brand is in some way associated with its parent company – for some organisations this is a good and sensible thing to do, but for Nike and Converse there is both an opportunity and a danger in doing that. Nike is well aware of this and is trying to walk that tightrope, because the strength of the Converse brand is that it is an alternative brand; it isn’t your Nike Air Max or your Reebok Classic. Clearly, when you buy a brand you want to optimise return on your in-vestment as much as possible, but in doing so you risk the

Just do itSalvation came in the form of an unlikely source.

Sports giants Nike had perhaps been instrumental in bringing about the near downfall of Converse with their domination of the sports shoe market. Indeed, Nike’s dominance in the 70s was one of the reasons why Con-verse was adopted by the counter-culture movement. Yet as the market became more and more constricted in the 90s, Converse felt the pinch. Nike, ever innovative and opportunistic, spotted a gap in the market and, in 2003, purchased Converse for $305 million (€235 million).

Th is was news, but it never really became common knowledge. Nike, identifying that they had a money-mak-er on their hands, were quite happy to keep a low profi le in the part they were to play in Converse’s renaissance. “In many ways, Nike let Converse do their own thing,” says Powell. “Th is is one of the reasons that has contributed to the brand’s recent success – Nike invested, but didn’t inter-fere because they know that to some extent they are opposi-tional brands. Nike remains a very athletic, urban-centric brand, and Converse really speaks to the counter-culture, to the Indie kids; two cultures that don’t necessarily mesh.”

Nike knew not to change the Converse core appeal and attraction, and was more than happy to augment their product range to cover a more low-key, low-tech market. “Nike saw that Converse possessed quite a pleasant brand location in the market,” says Cheliotis. “If you look at many a Converse wearer, you will see a principally non-mainstream, non-popular, non-high street market share. Wearers are looking to stand out and say ‘Hey, I’m buying into a brand that’s diff erent; I’m not wearing a Nike or Adidas trainer.’ If it became clear that Converse was owned by Nike – and I’ve seen research that shows that most people don’t know – that would damage the brand rather than help it, and Nike know this.”

Th is is where Nike has been incred-ibly sophisticated. Th e company not only spotted a gap in the market and identifi ed the brand to fi ll it, but has also been smart enough to allow or-

750 million pairs of

Converse All Stars have

been sold to date

1908Marquis M. Converse founded ‘America’s Original Sports Company’ in Malden, Massachusetts.

1921Basketball player Charles H. ‘Chuck’ Taylor wanders into a Converse store complaining of sore feet. He’s promptly given a job as salesman and ambassador for the All Star brand.

The rise, fall and re-emergence of Converse

1941Converse provide footwear, apparel and rubber protective suits for the US Army during WWII.

1950The Converse Yearbook chronicles the lives of high school and college athletes, canonising the brand as the footwear of choice for American teens.

1966Coloured and patterned shoelaces were introduced, alongside high-top versions as demand for more variety grew.


DETAILS136

essence of the brand, which can also damage it and alienate those initial advocates and loyalists that make the brand enticing to others.”

Converse convertedLook around today and you see Converse All Stars

everywhere: adorning toddlers, tweens, teens, young busi-nessmen, mothers, older hipsters and even pensioners – it seems that every demographic now wants to own a pair of Converse sneakers. Whether this is anything to do with Nike’s marketing expertise is hard to ascertain, but the brand has certainly seen a dramatic upturn in its fortunes since the buyout. “As brands grow and become popular, distribution increases and more people buy them,” says Cheliotis. “Th en eventually, the brand becomes not very ‘now’ anymore, and people move on. For a time, the brand still grows, but there is a bit of a lag until eventually, a tipping point is reached where the original people have abandoned it and the brand doesn’t quite know who it is targeting any more.

“Th is doesn’t happen with Nike because they are very savvy, and what we are seeing with Converse is a brand that has gained momentum and increased exposure on the back

of their retro image. Retro is probably always cool, it’s just periods that change.”

Converse has been able to nurture a special and last-ing relationship with its customers, something that – while not unique to the sports shoe industry – is most defi nitely a feat only a few brands ever manage. “People relate to Con-verse on a whole lot of diff erent levels,” says Powell. “I’m almost 60 and it was the fi rst sneaker I ever wore. We have gone through periods where they were seen as the symbol of music movements, to the current situation where their customers reject the idea of having to have a technologi-cal shoe. Interestingly though, Converse have been clever in fi guring out how to make the shoe lighter in weight and more comfortable to wear, while keeping its price low and its low-tech credentials in place. Th is has attracted a wider audience.”

Niche NikeAs the sports shoe market matures and the lines be-

tween fashion and fi tness continue to blur, Nike has been able to position itself strongly in both camps. Able to both engineer and respond to shift s in trends, Nike has learnt a lot from its experiences with Converse. “Th eir mainstream brands sell to all ages, rich and poor, men and women,” says Cheliotis. “But the more information Nike can glean off diff erent segments of the market, the better. For example, the type of people who wear Converse aren’t necessarily the people who run around in Nike every day, but they might need athletic shoes for some reason. So if they can provide products through the insight they have gained through Con-verse for that particular market, then great. Nike is always keen to learn, and a good thing about them is they’re not a brand that assumes they know everything.”

Converse has clearly benefi ted from the digital, market-ing and product placement expertise Nike has always been good at. While the All Star ‘Chucks’ have become more mainstream as a result, they have been able to retain their core appeal of being low-tech, inexpensive and all about counter-culture, which is not only a terrifi c success story for them, but is also an impressive feat for Nike to have achieved. Not that anybody on the street would ever know, of course.

“Converse have been clever in fi guring out how to make the shoe lighter in weight and more comfortable to wear, while keeping its price low and its low-tech credentials in place. Th is has attracted a wider audience”

1976Every member of The Ramones punk band is photographed on their eponymous debut album sporting a pair of Converse.

1991Nirvana’s Kurt Cobain immortalises the ‘plaid shirt with Chucks’ look that comes to characterise grunge music, sounding the death knell for the shoe as sporting apparel.

2001Converse fi les for bankruptcy.

2003Nike buys Converse for US$305 million.

2010Converse All Stars are the most successful shoe in history, having sold in excess of 750 million pairs.


From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Your World. COVERED

Find out more: www.cxo.eu.com

cxoTechnology leadership is merging with strategic and financial leadership, and senior management is being called into a partnership for the future. CXO brings together a range of voices with one shared vision: to develop a strategy that considers business needs and technology’s role in moving your company forward.

Next Generation PharmaceuticalApproximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. Available for: EU, US

Find out more: www.ngpharma.eu.com

Business ManagementWhat business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets? Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision-makers in government and private enterprise.Available for: EU, US, MENA

Find out more: www.bme.eu.com

Financial Services TechnologyProviding for its customer’s needs and demands is the goal of fi nancial institutions now more than ever. But it is a tricky remit to fulfi ll. Your customers want it all – security, cost-effi ciency, speed, added functionality and, most of all, convenience. Can it be done? Read FST to fi nd out…Available for: EU, US

Find out more: www.fsteurope.com

InfrastructureInfrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility.Available for: EU, US, MENA

Find out more: www.euinfrastructure.com

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DETAILS138

Technology for today’s executive

Toshiba Libretto W100 TabletThe fi rst dual screen tablet PC, the Libretto W100 is powered by an Intel Pentium Processor U5400 running at 1.2GHz and consists of two WSVGA multi-touch screens that are LED backlit.

With tablet technology becoming more and more popular, Toshiba has pulled out all the stops for its device, ensuring it is not ignored by those in the market. The dual screen tablet also featues 2 GB of RAM, 62GB SSD, webcam, Bluetooth 2.1 + EDR , USB 2.0 port, micro SD slot and 8-cell battery, and runs under Windows 7 Home Premium. The only question is whether a dual screen tablet is as appealing to the consumer as a single screen sleek device such as market leader, the iPad.Desirability rating: **

Samsung UN55C7000 3D TV has yet to fully take off, mainly due to the fact the premier 3D event fi lms like Avatar have actually yet to be re-leased in 3D, but electronic fi rms are ready for the revolution and the Samsung UN55C7000 is a good indicator of this.

The 55-inch 3D LED HDTV will not only make the latest block-busters explode out towards your eyes with shocking clarity, it also has unique features such as the ability to connect with web applications allowing for the streaming of movies and computer games. It also features a USB 2.0 fl ash drive for camera con-nectivity and has communications application Skype built in.Desirability rating: ****

Nokia N8The Nokia N8 could give Apple’s iPhone 4G something to worry about. It is Nokia’s fi rst Symbian 3 smartphone and as well as having a 3.5-inch 640 x 360-pixel touchscreen and 16GB of onboard memory, it boasts a 12 megapixel camera and 720p HD video.

Unlike Apple’s products, which are general-ly hampered by a lack of external connectivity, the Nokia N8 features an HDMI connection so you can easily show off your images, videos and music on compatible televisions and projectors.Desirability rating: ***

iPhone 4GArguably one of the most desired pieces of technology, the iPhone 4G is the next gen-eration model of Apple’s fl agship product. Boasting a higher resolution screen, longer battery life, multitasking capability and larger storage space, it is expected to be every bit as successful as its predeccsor.

Of course like all Apple products, there are still some drawbacks. Due to Apple’s dispute with Adobe, the iPhone 4G will not be able to play Flash animation or access Flash-based websites, leaving a high percentage of websites still inaccessible. It also has the by now well-known tendency to drop calls made by left-handed users.Desirability rating: ****

OBJECTS OF DESIRE

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DETAILS 141

The Leaderful Fieldbook: Strategies and Activities for Developing Leadership in EveryoneBy Joseph A. Raelin

The global economy – the fl attened world – demands a new type of leadership, collective and collaborative, where the solutions and vision are co-created by the team. Yet the practical application of collective leadership remains a mystery to many practicing executives and managers. The Leaderful Fieldbook helps change agents – from managers and trainers to consultants and coaches – create the conditions for transitioning from conventional to more collaborative forms of practice. Everyone is capable of participating in leadership, and not just sequentially, but collectively and concurrently – that is, all together and at the same time. The Leaderful Fieldbook presents a fresh and successful approach to leadership development across organizations.

FST SAYS: An essential guide for those looking to develop their leadership skills, whether they are just starting out in management or merely looking to fi ne-tune their personal performance.

Wall Street at War: The Secret Struggle for the Global EconomyBy Alexandra Ouroussoff

Many of the problems that lie at the heart of the current fi nancial crisis stem from a signifi cant but little-known confl ict that began in the early 1980s: Western credit agencies acquired much greater power due to investors shifting priorities, and so controlled the ability of corporations to gain access to capital.

Exploiting more than six years of fi eldwork on Wall Street, this book describes, for the fi rst time, the unspoken confl ict between corporate executives and the credit agencies responsible for assessing the fi nancial risk their investments posed.

FST SAYS: An in-depth and fascinating look at how corporate greed and risky business strategies brought the fi nancial industry to its knees.

Change: Bring it on! By Keely Nugent

Change is a tricky concept in business. It invariably happens and yet somehow, when it does, we are often reluctant to get on board. Author and strategic thinker Keely Nugent has recognised

the same resistance to change in international racing horses and in her book she applies the tried and test techniques of the equestrian world to business. Using a fi ctional company as an example, Change: Bring it on! clearly and concisely explains how to establish a winning team by managing change and the challenges it brings.

FST SAYS: Simplicity is key with this book. Broken down into sections of no more than two pages, it’s manageable even for the busiest among us. A light and refreshing read while still insightful.

The Financial Crisis: Who Is To Blame?By Howard Davis

The cause of the fi nancial crisis is still mysterious. Myriad suspects have been identifi ed, from greedy investment bankers and governments encouraging home

ownership, through feckless borrowers, dilatory regulators and myopic central bankers to violent video games and high levels of testosterone on the trading fl oors.

Seven Keys to Imagination: creating the future by imagining the unthinkable and delivering itBy Piero Morosini

Morosini’s book examines the power of the imagination as taught throughout history, and how that can be applied to generate a successful future. An intelligent and complex book, Seven Keys to Imagination unravels the various elements of an innovative and creative mind, and applies them to real-world, industry-leading examples. This book offers an alternative way of thinking about how to develop your own future; however, the parallels that Morosini draws between magic and business become somewhat gratuitous and irksome.

FST SAYS: Lengthy and dense and most likely futile for anyone who currently holds a creative position. However, those who do not consider themselves natural innovators would benefi t from this book’s insight.

Howard Davies inspects the evidence for these arguments, inviting the reader to assess each, and the likely effectiveness of the proposed remedies.

FST SAYS: An interesting look at the factors that might have been behind the global fi nancial crisis. Hopefully lessons can be learnt for the future. 5

2

4

3

1

BOOK REVIEW

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Closer to Casablanca than Barcelona, Seville is a hot and passionate city that combines the sass and class of Europe with the wild abandonment of Africa to create a beautiful and beguiling place, as CXO was only too happy to discover.

AboutSeville is the fourth biggest city in Spain but the largest and most important city in Andalucía, the huge autonomous community that covers the entire southern quarter of the country. Dry, hot, historic and stunning, Seville has roots in antiquity, being a former Roman and Moorish stronghold, the starting point for Columbus’ New World voyage of discovery and the home of Flamenco, tapas and pretty much every Spanish stereotype you can think of. Today, it is a popu-lar tourist destination all year round, combin-ing modern infrastructural marvels with some of the fi nest cultural sights Europe – let alone Spain – has to off er.

Getting aroundTh ose red open-topped buses that tour the

city might look like a fi ne transportation option for a city boasting only one metro line, but they aren’t really recommended during the months of May through to September. Th e reason? Se-ville is the hottest city in Europe, so the scorch-ing sun is best avoided during the day, which is diffi cult to do if you’re wedged atop a bus with no roof, slowly melting into your seat as sunstroke

goes from being something ‘idiotic sunbathers’ get to something you’re suddenly feeling rather worried about. Besides, Seville is small enough to walk around or, if you are feeling extra fl ush/romantic/lazy (delete as applicable), you could take one of the many horse-drawn carriages that tether up at various points across the city. Th ere is also a useful tram system that traverses much of the centre of the city. Seville airport handles national and European fl ights, but fl ights from beyond the EU will likely head to Madrid’s Barajas airport fi rst.

SeeYou simply cannot miss Seville Cathe-

dral. Quite literally, you cannot miss it – it is the second-largest cathedral in the world and boasts the largest nave in Spain. Located in the very cultural heart of the city, this stunning monument is a breathtaking sight, particularly when viewed alongside the Giralda, which is a converted Minaret of Arabian origin; these two symbols of Christianity and Islam standing proudly alongside each other. Other notable at-tractions include the sweeping Plaza de Espana located in the delightful Maria Luisa Park, the

Time: +1hr GMT

Currency: Euro

Language: Spanish

Population: 703,000

CITY GUIDE

Seville

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TOURIST TIPS

• For a glimpse at a post-apocalyptic world, head to the La Isla de Cartuja area of Seville. Here, in 1992, the city threw the Seville World Expo, which attracted 100 nations showcasing their wares to the world. A great spectacle then; an eerie, empty corner of the city now, where weeds are reclaiming the streets as life goes on, everywhere, it seems, but here.

• Pack sunscreen, hats and water when out and about in the summer months. It’s been said before but it bears repeating – you will have rarely experienced heat like the heat you feel in downtown Seville in July and August.

• Either avoid April altogether or plan readily in advance. Seville’s Easter celebrations are legendary and wildly popular, meaning all hotel rooms are snapped up early, the streets are full to bursting and respite is impossible to come by. You have been warned.

16th century Town Hall, the Mudejar-style Al-cazar (which is right next to the Cathedral), the Museum of Fine Arts of Seville and the classical Bullring, which is one of the oldest bullfi ght-ing arenas in the world. All of these sights are within easy walking distance of one another.

RelaxIn the height of summer, welcome relief from

the sun can be found in the fragrant Patio del Los Naranjos gardens where you can stroll along the shaded walkways protected by citrus trees and serenaded by the soothing gargling sounds of the many fountains that seemingly spring up all around you. Alternatively, the ancient winding streets of the Old Quarter are extremely narrow, built this way centuries ago as an eff ective means of sheltering from the sun, and a great spot to wander along in the heat of the aft ernoon. Of course, the sunshine might be one of the reasons behind your visit, so if you want to top up your tan you can head to the banks of the Guadalqui-vir River to sunbathe. Or you can befriend a local – most apartment blocks have rooft op pools that boast unbridled seclusion and uninterrupted tanning opportunity.

SleepHotel Alfonso XIIIFor opulence, elegance and the most sophisticated night’s sleep you could ever wish for, there is no better hotel in Seville than the Hotel Alfonso XIII. Built in 1928 with the aim of becoming the most luxurious hotel in Europe, it is not far off – gorgeous period features combine sublimely with modern facilities and contemporary fl ourishes, delivering a superb combination of old world charm and service coupled with more mod-cons than you can shake an iPhone at. The Hotel Alfonso XIII is located a short distance from the Guadalquivir River in the centre of Seville, and so is within walking distance to all the main sights and attractions.

Casa ImperialHoused in a former 16th century palace, you will feel as though you have stepped back in time as soon as you cross the threshold at the Casa Imperial, one of Seville’s handful of fi ve-star hotels. The architecture is unmistakeably Andalusian, which lends the hotel a languid air of tranquillity in a manner that only continental Europe can muster – chic without even trying. With a lovely terrace bar overlooking the Cathedral, business can be conducted with the utmost effi ciency, in the fi nest comfort, and with one of the most jaw-dropping backdrops setting the mood.

EatCasa CuestaSpain is ferociously protective of its cuisine, deigning to accommodate only a tiny smattering of foreign eateries in most of its larger cities, Seville included. But what Seville may lack in Indian or French restaurants it more than makes up for with its selection of traditional Andalusian restaurants, of which the Casa Cuesta in the Triana district is the pick of the bunch. Over 100 years old, this delightful diner has an informal bar area in the front and a much more formal restaurant at the back, where artistic décor, professional staff and well-dressed clientele are to be found, in addition to some of the fi nest Andalusian dishes around, especially the Casa’s signature Guisos – hearty stews that originated in the city and have weathered the haute cuisine revolution to become as popular as paella throughout Spain.

La Flor de mi VinaEver wandered into a bar in a foreign city and immediately noticed the lack of tourists as all eyes fall silently on you and your hopelessly out-of-place entourage? Well, the La Flor de mi Vina is like that, but in a good way. Tucked away in the old quarter of Seville, tourists rarely stumble upon it, but are in luck when they do, for this is how tapeando – going out for tapas – is done, Sevillian style. Orders are barked across the bar, the bartender writes your order down in chalk, on the bar, slides a plate of olives and a small beer your way, then carries on serving. Before you know it, your tiny plates of tapas have arrived, to be eaten stood wherever you can, with a fork and a napkin the only thing between you and the food. No airs, no graces, just excellent, traditional cuisine served quickly and cheaply. Try the meatballs in tomato sauce, the fried squid and the grilled chicken kebabs for a true Andalusian dining experience.

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Does knowing what other people earn make you happier? Say you discovered the juicy details of a colleague’s pay packet – would it spur you on to earn more yourself? Or would you be consumed

by jealousy? Maybe you are in a position where you can sniffi ly dismiss the majority of others’ salaries as inferior to your own. If so, how would you feel if your salary was then made public knowledge?

Whenever the curtains are pulled back on practises that are normally private knowledge, outrage invariably follows. Th e MP expenses scandal that swept through UK Parliament in April 2009 provoked indignation among the general public at perceived corruption, criminal activity and deceit. Th is leak not only revealed that the going price for a fl oating duck shed was scandalously expensive, but it

also shone a mirror on taxpayers’ own sense of worth – the very notion that had MPs not been claiming expenses for biscuits, second homes and late night blue movies then the average guy on the street would be better off is ridiculous. ‘Taxpayers’ money’ is a misnomer: it should actually stand for ‘the money that a taxpayer has left over once tax has been paid’, because we’ve all heard about life’s two cer-tainties right? You can’t escape tax, so to rant about tax as ‘your money’ is like complaining how your off spring spend your inheritance once you’re gone. You can’t. It’s not your money anymore.

But there is certainly an argument for transparency – at least in the public sector – which needs to be addressed. CEOs and their ilk in the private sector already have their earnings made public knowledge in AGM reports and online. Some salaries are eye watering, yet here’s the beauty of the private sector – if you object to the CEO of BMW being paid €4 billion a year (he’s not, but let’s specu-late), you can always buy a Mercedes, Audi, or other make of car. You have that choice.

In the public sector, chances are that you do not. Th erefore, the logic goes, you should be privy to who earns what: paid by public money = public demand to know whether it’s being well spent or not. However, such an approach could have far-reaching consequences for the public sector. It could drive some of the high earners (the talent) out of public sector management towards the more fl exible world of the private sector, thereby behead-ing public sector organisations and stripping them of the fi gures they need in order to maintain strong leadership, oft en on life or death matters.

Such a diaspora of talent could seriously undermine a country’s infrastructure in a matter of years, yet in many Scandinavian countries, this practise is widespread. Th e salaries and tax returns of every offi cial worker in countries such as Sweden and Norway are made public knowledge and nobody raises an eyebrow. It is a practise ingrained in the culture, and has helped to nurture living standards that are widely regarded as the highest in the world.

Europe, though, is a melting pot of diff erent cultures. What works for the Scandinavians does not always travel well to the rest of the continent (naked saunas being one such example). Transparency is not always a good thing. Th e general public may scream for it, but oft en do not like the results when they see them.

Th e issue of public sector pay will always spark healthy debate, but is the outcome ever satisfactory? Does the general public want civil servants’ salaries slashed so that they feel ‘their money’ is being spent wisely and appropriately? Would they be happy knowing that the former CEO of their local public hospital has quit aft er revelations that his €280,000 annual salary was deemed ‘too much’ by the indignant on the street, and he now earns more in the private sector while in his stead comes a less experienced individual?

Not an ideal situation at all. Generally, we don’t need to know. We just need to trust. Which is hard enough as it is.

Public sector pay – a need to know? In June, the new Prime Minister of the United Kingdom, David Cameron, took the bold step of revealing the salaries of public sector workers who were earning more than £150,000 (€180,000) per year. In total, 172 civil servants earned more than Cameron, which begs the question: do we have a right to know who is paid what?

LAST WORD

“To rant about tax as ‘your money’ is like complaining how your off spring spend your inheritance once you’re gone. You can’t. It’s not your money anymore”

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