Doing more with less

By Ken Wong | Tuesday, November 06 2007

Like any enterprise, CIOs of technology vendors rely on IT to enable their businesses.

It may surprise some people to learn that IT solutions companies suffer from the same problems as all others in the market.

For example, Deva Choesin, an IT executive of IBM ASEAN says today's challenge continues to be how to "deliver more with less," and at the same time, perform business transformation. "Hence we will continue to seek ways to be creative in our day-to-day operations, "keeping the lights on" at a lower cost so we can channel funds for our business transformation initiatives," he adds.

Beyond issues of cost, IT companies also grapple with continuity. Disaster recovery has been important to many Asian businesses with the attacks of SARS, tsunami, earthquakes and terrorism in recent years. Additionally, as businesses grow, they face challenges of increased IT complexity resulting from expansion, demand for seamless connectivity, as well as the need to mitigate risk and secure business outcomes.

At HP, the IT transformation has focused on improving the delivery of IT projects to ensure they are on time. Increasing the annual benefit of the IT organisation and the IT staff time spent on innovation and developing new capabilities are also internal targets at HP, says Anthony McMahon, vice- president of HP Asia-Pacific and Japan. The company states that as part of the cost optimisation process, it has reduced the number of worldwide data centres from 85 to six and integrated 3,500 applications to 1,500, as well as lowered the number of legacy applications. "HP has also derived benefits from effective portfolio management to focus on the most important IT projects," he states.

Strong market demand for huge increases in bandwidth and the need for communications-enabled applications, are placing a strain on the existing networks. Eric Lauzon, CIO at Nortel Asia, says with "hyperconnectivity" driving demand, the networks are supporting billions of connection points at the same time. "Networks today have never been larger," he says. "But they are not designed for a 'hyperconnected' world, where anything that can be connected and would benefit from being connected, will be connected. We need new technology to transform IT and telecommunications."

IT firms need IT
Sharing the same business concerns as any enterprise, IT companies also take advantage of IT to become more efficient with streamlined and speedy operations. According to Choesin, IBM is a global company and it requires a seamless operation behind the scene to support an operation that crosses all time zones. "I can be an executive in Singapore but my assistant is 12 time zones away. He needs to be as productive using things like web services to book meeting rooms, make travel arrangements, set my calendar as if he were sitting next to me," he says.

According to Lauzon, the IT organisation in Nortel is essential in providing a secure network, spanning 255 locations in 60 countries around the world. IT supports over 30,000 Nortel employees in addition to about 20,000 users from the Nortel supplier and partner community, representing more than 800 companies. Lauzon says the deployment of the company's IT product do make a difference at Nortel's operations. "The deployment of our own unified communications technology within our organisation has proven to enhance workforce productivity, improve business agility and drive down companywide communications costs," he says.

However, despite being in the IT sector and having access and knowledge of what is available, IT companies also wish that IT could do more for them. Choesin for example is looking forward to major adoption of Web 2.0. "Web 2.0 is about combining content, collaboration and rich user experiences that are transforming the internet from static web pages into a dynamic platform for social interaction, while enabling the creation of powerful, web-based applications," he notes. For him, Web 2.0 also demonstrates the power of standards. Choesin adds the industry should continue to support emerging standards so that technologies from different companies can interface together for a truly collaborative world.

Lauzon sees the industry at a major inflection point. According to him, the three major mega-trends of significance today are "hyperconnectivity", communications-enabled applications or frameworks and broadband services. They together strengthen the role of IT and the future direction of the industry.

Emerging IT
When asked about emerging technologies that would make a difference to the way they work, Choesin says some existing technologies need only improvements to be ready for enterprise use. "Video conferencing has existed for decades, but the cost to own and operate it is prohibitive. As explained earlier, it can put pizzazz in our collaborative tools. So we continue to follow developments in this area," he says. Lauzon of Nortel Asia notes that he is looking forward to 4G mobile broadband, carrier ethernet and unified communications. He adds: "These are three technologies that we will continue to develop and invest in, to build powerful networks of the future. We believe these investments will make daily communications and business processes richer, more dynamic and connected."

IT solutions companies are no different from other businesses in dealing with the challenges of IT adoption. Their main advantage, however, is being closer to understanding what is available in the market and where IT can do the most good.


Intel Corporation
Senior IT executive: John N. Johnson, vice-president and CIO
Screens: 19,000 (Asia)
Website: www.intel.com

The year 2006 was a year of true transformation for Intel IT.

The company conducted a comprehensive self-assessment that led to substantial organisational changes, ratification of key programs, stopping some internal programs, and launching others. Through the assessment, Intel hopes to transform the organisation into a more flexible and focused IT operation.

Intel completely re-engineered its IT governance model for decision-making and accountability. It implemented a program to transform the firm's enterprise resource planning (ERP) environment, which is now highest on its priority for development efforts.

The IT team of Intel migrated one of its largest legacy ERP systems to Itanium-based servers. The move consolidated 42 servers to 15, with the aim to increase operational performance and reduce cost of ownership.

Intel sees the need to move out of established islands of operation and focus on delivering assessable and speedy solutions. The roles of the team are to facilitate Intel's business needs and improve staff productivity through IT deployment.

One of the team's contributions is developing WiMAX trials in different regions. As an early member of WiMAX forum, Intel keeps promoting the use of WiMAX technology to reach larger communities.

Intel has recently teamed up with the National Telecommunications Institute in Egypt to establish a wireless training lab and implement a training and certification program on WiMAX.

"The growth of WiMAX in Egypt is a positive sign that a greater number of people are becoming more open to the benefits that technology brings," Khaled Elamrawi, general manager Egypt, Levant and North Africa, has reportedly said. "This leads to a greater understanding of technology which will in turn benefit their communities."

The lab is being implemented as Intel needs to increase local expertise in computing and communication technologies to meet the demands of regional markets.

It is difficult to measure the IT team's contributions, but Intel's financial results may reflect part of its hard work.

Intel recently announced this year's second-quarter revenue of US$8.7 billion, which increased 8 per cent year-over-year. And the company expects its third-quarter revenue to be between US$9 billion and US$9.6 billion this fiscal year.

"Intel's operational execution continued to strengthen, resulting in an outstanding product roadmap and solid year-over-year revenue growth," president and CEO Paul Otellini has stated. "We're pleased that our efforts to streamline the company are delivering profit growth in excess of revenue growth."

Current projects
* Outsourcing
* Storage virtualisation
* Data warehousing
* Business Intelligence
* Business Performance Management

Completed projects
* IT consolidation
* Business Continuity
* Customer Relationship Management
* IT service management
* Sarbanes Oxley compliance



Microsoft
Senior IT executive: Anurag Vij, regional IT director
Screens: Undisclosed
Website: www.microsoft.com

Microsoft launched Windows Vista and the 2007 Office system for consumers late last year.

"This is Microsoft's most significant software launch in over a decade," Kenneth Lundin, general manager, Windows Client Group, Microsoft Asia-Pacific, has reportedly said. "I am super-excited about the positive impact Windows Vista and the 2007 Office system will have on consumers' work and lifestyle."

Microsoft recently announced that 60 million copies of Vista had already been sold since its release. That is 20 million more than the company said in mid-May.

The firm has also outlined several current or forthcoming large-scale corporate Vista deployments, including 70,000 seats already installed at Banco Bradesco in Brazil, and 10,000 due to be rolled out by the end of this year at Continental Airlines.

According to chief executive Steve Ballmer, total Windows installations are expected to pass one billion by the end of its fiscal year 2008.

With the ongoing promotion of Vista, Microsoft is aiming to release the next version of its desktop operating system, dubbed Windows 7, in 2010.

"We are scoping development of Windows 7 to an approximately three-year timeframe, with the specific release date ultimately determined by meeting our quality bar," the company has reportedly stated. The continuous development of its desktop operating system is driven by one of its IT strategic direction - driving new product implementation and improvement to accelerate adoption of the technology.

There are three more core areas Microsoft is focusing on, including developing people as a strategic asset of the company, excellence in execution, and enhancing customers and partner experience.

As the maker of the world's most widely used desktop operating system, the firm has the advantage of testing new products in-house first before marketing them. Being Microsoft's first and best customer is an important strategy of the company.

This influences the development and customer adoption of Microsoft enterprise products by establishing shared goals with the product groups in testing key scenarios, providing product feedback, proactively implementing and showcasing its technology.

The strategy demonstrates the business value of Microsoft's services and ensures the security of the firm's assets and intellectual property. It is about running a world-class IT environment, providing world-class availability, reliability, and cost-effectiveness.

Moving forward, Microsoft will keep working to expand the possibilities for computing every day, through continually improving and advancing its current products and working on fundamental research that paves the way for future breakthroughs.

Current projects
* Storage virtualisation
* Business Continuity
* Data warehousing
* Business Performance Management
* Two-factor authentication

Completed projects
* Thin client
* IT service management
* Wireless networks
* Knowledge Management
* Single sign-on



Nortel Asia
Senior IT executive: Eric Lauzon, chief information officer
Screens: 4,000
Website: www.nortel.com

Nortel has aligned its research and development investments to focus on three critical areas-4G mobile broadband, carrier ethernet and unified communications. This strategy is designed to drive Nortel's leadership in building powerful future networks while making daily communications and business processes smoother.

For unified communications, Nortel last year announced a four-year alliance with Microsoft that will integrate Microsoft communications software with Nortel's internet telephony products, hopefully displacing traditional business phone systems in the process.

IP telephony and unified communications implementation yields over US$12 million for Nortel in annual savings with a 10-month return on investment. Nortel has achieved a 55 per cent reduction in calling card, long distance and other telephony charges, US$5 million annual savings from on-premises audio conferencing and an estimated US$5 million travel savings annually from multimedia conferencing.

Nortel aims to expand its business in Asia and has set key priorities for information systems to help business development in the region.

The priorities include controlling operating costs, enhancing employee productivity, strengthening relationships with customers and partners, improving business agility and performance, and aligning with Nortel's overall business strategy.

Current projects
* IT consolidation
* IT chargeback and cost recovery
* Data warehousing
* Knowledge Management
* IT service management

Completed projects
* Email management
* Service-Oriented Architecture
* Sarbanes Oxley compliance
* Strategic sourcing
* Business transformation


SAE Magnetics (Hong Kong)
Senior IT executive: Patrick Lam, vice-president of IT
Screens: 7,100
Website: www.sae.com.hk

SAE Magnetics (SAE), a wholly-owned subsidiary of TDK Corporation, is one of the largest independent manufacturers of magnetic recording heads for hard disk drives being used in computers and increasingly, in consumer electronics such as digital video recorders, MP3 players, or even mobile phones.

To maintain its leadership in these fields, SAE Magnetics established technology teams in different areas, developing product technologies, and manufacturing or processing technologies.

SAE has global technology teams organised in the specialisation of advanced product development, wafer fabrication, slider fabrication and ultra-precision assembly for magnetic recording heads.

With the acquisition of Acasia Technologies, a spin-off company developing photonic packaging technologies, from the Applied Science & Technology Research Institute of the HKSAR, SAE has diversified its strategy to include optical communication components (OCC). It is now a vertically integrated contract manufacturer with full capability in production of OCC.

Last year, SAE reached an agreement with Optical Communication Products (OCP), a manufacturer of fibre optic components, enabling OCP to manufacture certain product lines in China this year. The partnership helps OCP to reduce production costs and expand production capacity by manufacturing in Asia.

Hewlett-Packard
Senior IT executive: Randy Mott, executive vice-president and CIO
Screens: 6,427 (Asia)
Website: www.hp.com

Hewlett-Packard (HP) is one of the largest technology companies in the world. Its products include personal computers, servers, printers, storage devices, networking equipment and software; it also provides information technology services.

The IT team of HP works closely with the business to understand their needs. It is known to deliver within timeline and budget. It works closely with the other IT teams across the world as well. This has helped HP to adopt best practices, leveraging systems from different parts of the world.

The team aims to make better use of IT dollars and resources. To achieve this goal, its strategy is to establish a world-class enterprise data warehouse to eliminate data duplication.

HP recently announced that it has signed a definitive merger agreement to purchase Neoware, a provider of thin client computing and virtualisation solutions.

The acquisition is part of HP's strategy to expand in growth markets and further its leadership in personal computing. Acquiring Neoware is intended to accelerate the growth of HP's thin client business by boosting its Linux software, client virtualization and customization capabilities, expanding its regional sales footprint and broadening its hardware portfolio.

IBM Singapore
Senior IT executive: Peter Quah, ASEAN / South Asia manager of technology and deployment
Screens: 2,449
Website: www.ibm.com

IBM last year announced its plan to invest about US$6 million in India to enhance its engineering capabilities and at the same time reduce operational costs. And now, its plan in India is in progress.

IBM India Software Laboratory employs 3,200 people across five cities, making India one of the largest software development hubs for the company worldwide. The company recently announced the opening of a new Autonomic Computing Technology Center in Bangalore, India. The new development centre was created to address the great demand from India-based business partners and customers for technology and systems that are self-managing.

Other than focusing on its business expansion, IBM also values its employees and this makes it one of the few companies which provide paid training opportunities to their IT professionals.

The company recently announced that over the next three years, it will spend US$60 million for new Global Citizens Portfolio programmes which encourage employees to further learning.

Employees who have worked at least five years at IBM are entitled to up to US$1,000 each year into an interest-bearing account. The funds can be used for training of the employee's choice.

The investment in the new programmes is in addition to the US$600 million that IBM already spends annually on employee training and development, says Stan Litow, IBM vice-president for corporate citizenship and corporate affairs.

IBM wants more employees to take advantage of the opportunities to advance their skills, leadership abilities, and global experiences.

Cisco Systems
Senior IT executive: Chuck Trent, CIO, Asia-Pacific and Japan
Screens: 1,000 (Singapore)
Website: www.cisco.com

Cisco continues to extend its reach, despite claims that the company is in danger of losing its leadership position in the networking market.

"It doesn't matter where we are in the world," John Chambers, Cisco chairman and CEO, reportedly said. "Wherever I go, the first thing CEOs talk about is growth."

In Cisco, IT acts as the bridge between technology and the business. Chambers adds IT can be used to help enable, or perhaps even change, companies' business strategy.

According to Asia-Pacific president Owen Chan, Cisco's sales in China are currently growing about 40 per cent per year. The company has responded with a US$32 million investment in a research and development facility in Shanghai.

The company spent approximately US$50 million on a 93,000 sq m campus in Bangalore, India, with the aim of supporting staff from the company's research and development, IT, sales and customer support teams in India.

Chan says these funds are "in recognition of these markets as growth engines from the company" and says Asia is likely to continue to outperform the vendor's other regions.

SAP

Senior IT executive: Tay Beng Hang,
vice-president and CIO
Screens: 1,000 (Singapore)
Website: www.sap.com

SAP Asia-Pacific Japan is set to be the company's growth engine. The company announced recently SAP Asia-Pacific Japan's second quarter software and software-related service revenues, grew 29 per cent to more than US$300 million. Total revenue in Asia-Pacific grew 25 per cent year-on-year to more than US$400 million.

"SAP Asia Pacific Japan has had a tremendous year so far, with dynamic growth in key markets such as Japan, India and China and continued market leadership across the region," Geraldine McBride, president and CEO, SAP Asia-Pacific Japan, has reportedly said. "A key to our success was the continuing embrace of SAP by the fast-growing small and mid-sized enterprise (SME) market."

Out of 625 new customers of SAP Asia-Pacific in the second quarter this year, there are 525 SME customers. In Japan, SAP achieved over 50 per cent quarter-on-quarter growth in the SME sector. The SME market already contributes more than 40 per cent of SAP's total software revenue in Asia-Pacific Japan.

SAP has revealed that its goal is to reach 100,000 customers by 2010 and plans to invest more in SAP Asia-Pacific, especially in the SME market.,