Day 1/ Session

Money Saving Service

Sriprakash N Sridharan, Client Advocate, IBM argued that the world economy is going through a rough patch and that Big Blue had the answers. Here’s what he had to say

Today, the company expects you to support the business infrastructure more than it used to in the past and, at the same time, there is a huge fixed cost. There are two ways in which a CIO can overcome this situation. One is to reduce capacity by shelving off people and putting projects on hold and at the same time you reduce the full time equivalent of certain employees to ensure that you reduce your cost. However, your capacity has also been reduced.

The second thing is that you try to identify the areas where you can make cost savings. Not just what you save on IT but also on non-IT. For e.g., If I am a production company then how can I control my logistics management so that, assuming that I spend Rs 50 crores, how will I save Rs 10 crores out of this rather than spending a lot on IT and trying to save Rs 1-2 crores out of that amount.

Once you move your expenses from fixed to variable, you will be able to play with the computing capacity in your organization without worrying about how you can cope if there is a downturn that affects your business.

In 1997 we had around 200+ datacenters, 31 networks and 15,000 applications running across the globe. We took the initiative to transform our IT systems and reduce the number of servers from 3,900 to 30 zSeries servers. Today the servers consume 80% less energy and occupy 85% less space. The storage cost came down by 50% because storage optimization was done. Applications were brought down from 15,000 to 4,000. We merged certain applications, while some were removed from the system. Between 2002 and 2007, we were able to save close to $4 bn just in operational efficiencies.

I would like to share this slide that is based on a Wants and Needs study conducted among the top 300 CIOs in this country. As per the study, there are five top priorities for an Indian CIO, which are expense predictability, risk mitigation, energy efficiency, productivity gains as well as aligning and optimizing IT. The first is about migrating from a CAPEX to an OPEX model. People have started looking at pay-as-you-grow rather than investing heavily on the infrastructure and trying to get a RoI on that. In risk mitigation, at least 90% of the CIOs said that ‘my personal credibility is at stake when something goes wrong with respect to security’.

Some CIOs have started looking at a vulnerability assessment every six months. It’s not just external threats that you have to worry about but also the internal threat of Identity Access Management where employees moving out of your organization might exit with confidential information.

Energy efficiency: Starting from star rated energy appliances to a green datacenter—this has been one of the hot topics. How do I make my datacenter more energy efficient?

Productivity gains: CIOs felt that the employees who had been trained properly in the services that are available in the organization would tend to be more productive.

Align and optimize IT: At least 70% of CIOs felt that they had underutilized server/storage capacity in their organizations. When we did a global study we realized that server utilization was only at 33% but CIOs had been adding servers and storage on a year-on-year basis. SOA is gaining ground and people realize that applications inside the system need to talk to each other.

Money saving services: You need to cut costs, get more out of your existing infrastructure, and increase the productivity of your IT systems. We assess your infrastructure and highlight areas where we can help you cut costs, consolidate and virtualize.

IBM helped Kotak Mahindra Bank bring everything into a single datacenter that let the group’s companies share best practices saving the group Rs 1 crore on their operational efficiencies in the first year. Overall, Kotak would save Rs 5 crores in the next five years.

As per RBI norms, Purvanchal Bank had to maintain a DR site. However, the bank lacked the funds to invest in DR and a datacenter. We offered them an operation-based model and this will help the bank save Rs 5 crores over a 10 year period. Their entire production facility runs from IBM’s Whitefield center and the DR site is with them.

In the space of desktop virtualization, IBM has a tool known as Virtual Storage Optimizer that takes a master image of your entire desktop environment and saves it in one place. Every desktop added to the system has a marginal storage space so that users don’t need exclusive storage on your SAN.

Reliance Life Insurance being a late entrant, wanted to take a virtual office to reach more people quickly. Our middleware services helped Reliance save to the tune of 6-8 crores per annum as well as reduce the time to market by 40%.

We did a data center energy efficiency assessment for one of India’s largest telcos. The annual energy bill was to the tune of Rs 13 crores. The investment into a datacenter was 15 million. The energy cost was overshooting their entire investment in four years time. The study helped them cut their energy bills by Rs 1.2 crores per year.

Over two years Fullerton India’s outlets mushroomed from 25 to 500. Application performance issues were taking a toll on its customer turnaround time. IBM did a complete network assessment and increased application performance by 25%. The RoI was over 400% in the first few months.

The other areas are telecom expense management, RIM and IBM asset management services. If your telecom expense is over Rs 25 crores per annum we can give you a guarantee of how best you can utilize the available resources with you.

— Prashant L Rao