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Core data center spending will be hot in 2010

After a lull, enterprise application software spending is expected to make a strong come back in 2010 especially ERP and BI. Server-storage virtualization with DR and cloud services will be other technologies in the wish list of CIOs during 2010. Rajendra Chaudhary tracked the spending spree

These are the times of great lament, especially for business organizations. For most entities, however big or small doing business is still a tough proposition in this slow economy. Although things have begun to look up more recently, one can easily sense that we are still a long way away from a full recovery. With sentiments still in the red, organizations are struggling to break the shackles of the recent past and move on. CIOs are however have a different story altogether to tell. Talk to any CIO today and you'll notice a kind of optimism that was missing for quite some time. Psyched about 2010, they are currently reflecting back on things that transpired over the course of the last 12-18 months and setting their IT agendas for 2010 with renewed confidence. Of course they are well aware of the role that the current sour economy will play in their decision making going forward.

While for most it is a story of reviving shelved IT projects, for many 2010 marks a new beginning and fresh IT projects. Conversations with CIOs seem to suggest that, for them, it's back to old objectives of improving business productivity, reducing operational costs, boosting business agility and better IT-Business alignment. The only difference as we enter the new year though, is that they won't have to do all this with empty pockets.

What's on your agenda?

Let's take stock of the sort of IT initiatives some of our leading CIOs will undertake in 2010. That would give us the idea where the bulk of the technology investments would go.

At JSL Limited, one of country's leading steel companies, it has lined up many significant IT initiatives for 2010. On the infrastructure side, the company is planning to engage in a BCP DR initiative and set-up a DR site for its only data center. Ajay Dhir, CIO, JSL Ltd., said, “That [BCP-DR] project was shelved in early 2009 due to the highly CAPEX-oriented nature of the project and the adverse economic climate.” Additionally it is also planning to upgrade its SAP ERP to the latest version to add additional functionality and accommodate future business growth. Then there is an initiative to clean up databases so that the business intelligence and data warehousing system can churn out more accurate and reliable information for business users.

One of country's oldest engineering services companies Hindustan Dorr-Oliver Limited has its sights set on Business Intelligence (BI). Ajay Khanvilkar, Deputy General Manager-IT, Hindustan Dorr-Oliver intends to implement BusinessObjects BI solution in 2010 to extract 'intelligence' from his SAP ERP and generate executive dashboards and reports for the senior management using BO Crystal Reports. Khanvilkar is also keen on setting up a data warehouse to alleviate growing data challenges and system performance issues.

For Harish Shetty, Vice President-IT, HDFC Bank the mandate is rather simple, 'keep everything up-to-date' and that's just what he intends to do next year. At HDFC Bank they are currently upgrading the existing Core Banking System to its latest version. Simultaneously, they are also in the process of deploying a data warehouse. Due to be completed in 2010 (besides these two initiatives) Shetty intends to migrate the company’s Credit Cards Systems on to the mainframe in 2010.

For Girish Rao, Head-IT, Marico, technology priorities will be in IT governance, risk management and information security in 2010. Also he is going focus on technologies that will help him reduce operational costs for the overall business. Therefore technologies such as mobility, telepresence and videoconferencing are likely to be popular at Marico next year. Rao said that given the fact that there is still a fair amount of uncertainty in the market, we will focus more on leveraging the existing capabilities, optimizing the current IT set-up and strengthening core processes rather than investing heavily in acquiring newer IT tools.

It's not as if only the larger enterprises are working on an IT agenda, even some of the smaller organizations plan on initiating several programs next year. The owner of brands such as Killer Jeans, Lawman, Integriti, Easies and K- Lounge, Kewal Kiran Clothing Limited has got plenty on its IT checklist for 2010. Prasad Rao, Head-IT said, we identified BI as a strategic business tool going forward and hence we would be deploying BI in 2010. I have already identified the potential vendors and currently I’m evaluating different solutions and the customization required to fit our business requirement. Secondly, he's also planning to work on improving the capabilities of his ERP system and look at the areas which aren't covered by it such as visitor management (something which is very small but is important from a security perspective). Additionally consolidation of data from various sources is another priority area for him.

Rao for whom consolidation and rationalization of the IT portfolio was the top most priority in 2009 informed us that even though the recession did prevent him from initiating certain projects this year, things have certainly turned around in the past few months and he won't have to hold back on any projects next year.

Similarly the IT head of another mid-market company, on conditions of anonymity, informed us that he engaged in consolidation of his IT assets but is planning to invest in server and desktop virtualization and application consolidation. Additionally he is planning on revamping his current networking infrastructure and migrating to an MPLS network.

Currently busy rolling out SAP ERP for streamlining his company's operations, M K Mittal, Head-IT, Aegis Logistics has got a couple of projects lined. The Oil & Gas logistics specialist, Aegis Logistics, is one of those rare organizations which tried to exploit the dull market conditions by kicking off an ERP project in the middle of a downturn.

"Our management thought that we'd be able to negotiate a much better price with the vendors now that it was a customer's market and we did get a good bargain," informed Mittal. In addition to deploying the ERP, Mittal is also planning to set up a DR site for his company.

One of the leading pharmaceutical companies in the country is planning on rolling out SAP ERP to its global locations in 2010. Another major banking services provider currently plans to engage in Green IT initiatives going forward. A relatively new entrant in the auto-ancillary business is keen on deploying Cloud Computing services given the limited IT resources and the cost advantage the emerging computing model has to offer.

In conclusion

Although to a cynic a few examples like these may not be enough to prove that slowly but surely the tide is turning on the IT investment front and organizations which were sending projects to the chopping block towards the end of 2008 and earlier this year are now starting to regain some of the confidence of the pre-recession period. It is expected that in 2010 CIOs will be given the freedom and more importantly the budgets that they can use to bolster the IT capabilities of their organizations and make up for 'lost time'. Sure, it may still take a lot of time and planning before we return to the status quo of the pre-recession era, but at least here's a start.

rajendra.c@expressindia.com