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INSIGHT<br />
Meet the global desi IT leaders<br />
Pg 26<br />
BOOK REVIEW<br />
Systems thinking for<br />
effective managers Pg 24<br />
Volume 06<br />
Issue 07<br />
<strong>October</strong> <strong>2017</strong><br />
150<br />
TRACK TECHNOLOGY BUILD BUSINESS SHAPE SELF<br />
A 9.9 Media Publication<br />
Organized retail giants are gearing<br />
up for their second innings into<br />
e-commerce - and they are not<br />
leaving without a good fight
INSIGHT<br />
Meet the global desi IT leaders<br />
Pg 26<br />
BOOK REVIEW<br />
Systems thinking for<br />
effective managers Pg 24<br />
Volume 06<br />
Issue 07<br />
<strong>October</strong> <strong>2017</strong><br />
150<br />
TRACK TECHNOLOGY BUILD BUSINESS SHAPE SELF<br />
A 9.9 Media Publication<br />
Organized retail giants are gearing<br />
up for their second innings into<br />
e-commerce - and they are not<br />
leaving without a good fight
EDITORIAL<br />
Shyamanuja Das<br />
shyamanuja.das@9dot9.in<br />
The game<br />
is wide<br />
open…<br />
U<br />
nlike many other areas—most notably banking<br />
and telecom—India’s organized retail is nowhere<br />
close to its counterparts in developed and even<br />
many developing markets. Significant part of<br />
Indian retail activities happens in small outlets,<br />
either single stores or hyper local chains. There’s<br />
a garment store chain which calls itself a ‘giant’ of<br />
West Delhi. Five years ago, it was one store. Now,<br />
it has at least four outlets that I know of.<br />
With this kind of fragmented market, it was not<br />
surprising that the first real pan Indian brand was<br />
built by the online retailers. Flipkart, Snapdeal,<br />
Amazon…why even Jabong/Myntra…are top of<br />
mind brands in Raipur, Vizag and Bhubaneswar!<br />
Which retail brand can claim to have that kind of<br />
mind share – except probably the good old Bata?<br />
So, you cannot really blame investors when they<br />
threw their money behind the Indian online retail<br />
opportunity. The top three Indian private companies—all<br />
Unicorns—are retail companies—two<br />
of them pure play retail (Flipkart, Snapdeal); the<br />
third (One97/Paytm) is now getting there quite<br />
aggressively. Flipkart is also the largest retail<br />
unicorn globally.<br />
While the first (half-hearted) foray into online<br />
business by the large organized retail vendors<br />
some time back was quite a non-story, this time<br />
they claim they have had a change of heart. It<br />
seems that they are transforming their entire<br />
business and ‘online venture’ is not a project led<br />
by a couple of bright mid-level guys. That is what<br />
Shubhra’s cover story suggests.<br />
That is a good start—even if the ‘transformation’ is<br />
just a wish. At least, give it to them for the thought.<br />
The online retailers started with some real<br />
As retail becomes more of<br />
a technology-leveraged<br />
business—we will see<br />
tighter integration of online<br />
business with the rest of it<br />
innovation based on local needs—like Flipkart<br />
addressing the gaps that existed in logistics. But<br />
somewhere on the way, they seemed to have lost<br />
the direction. Maybe, it was plenty of funding,<br />
maybe something else... I would argue that good<br />
competition from the offline retailers could have<br />
prevented that.<br />
Even now, the game is wide open. As retail<br />
becomes more of a technology-leveraged business—we<br />
will see tighter integration of online<br />
business with the rest of it.<br />
That will make it a real competition. The Tata<br />
CLiQ ex<strong>amp</strong>le makes one hopeful.<br />
Let it be more exciting. India is a high growth<br />
market. And there’s enough room for everyone.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
1
TRACK TECHNOLOGY BUILD BUSINESS SHAPE SELF<br />
A 9.9 Media Publication<br />
INSIGHT<br />
Meet the global desi IT leaders<br />
Pg 26<br />
BOOK REVIEW Volume 06<br />
Issue 07<br />
Systems thinking for<br />
<strong>October</strong> <strong>2017</strong><br />
effective managers Pg 24<br />
150<br />
Organized retail giants are gearing<br />
up for their second innings into<br />
e-commerce - and they are not<br />
leaving without a good fight<br />
CONTENT<br />
OCTOBER <strong>2017</strong><br />
COVER STORY<br />
10-17|<br />
Click and Mortar 2.0<br />
Organized retail giants are gearing up for their second<br />
innings into e-commerce - and they are not leaving<br />
without a good fight<br />
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2 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
FEATURE<br />
04-08<br />
Are You Ready For A Data<br />
Protection Regime?<br />
www.cioandleader.com<br />
INTERVIEW<br />
18-19<br />
“Observe zero tolerance<br />
towards basic security<br />
hygiene”<br />
EVENT REPORT<br />
20-23<br />
CA CIO Strategy<br />
Summit <strong>2017</strong>: Paving<br />
The Way For Digital<br />
Transformation<br />
BOOK REVIEW<br />
24-25<br />
Book Review: Learning<br />
To Draw The Big Picture<br />
INSIGHT<br />
32-33<br />
Smartphones Will Come<br />
Bearing AI in 2020<br />
36-37<br />
Security Not A<br />
Priority For The<br />
Board<br />
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38-39<br />
New WEF Report<br />
Brings Bad News<br />
For Gender Equality<br />
in India<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
3
FEATURE<br />
Are you ready for<br />
a data protection<br />
regime?<br />
Protecting personal data of citizens is increasingly<br />
being seen as a major obligation<br />
By Shyamanuja Das<br />
R<br />
ecently, when Equifax, one of the top three US<br />
credit bureaus, suffered a massive cyber attack<br />
that resulted in breach of personal data of 143<br />
million people, the first major fallout was rolling<br />
of the heads of some C suite executives.<br />
No marks for guessing who those C-suite<br />
executives were. Dave Webb was working as the<br />
CIO of the company for seven years while Susan<br />
Mauldin was the chief security officer since 2013.<br />
It is anything but surprising. Protecting<br />
personal data of citizens is increasingly being<br />
seen as a major obligation of those who deal<br />
with that data—be it commercial agencies like<br />
Equifax or government agencies like Unique<br />
Identification Authority of India.<br />
Globally, an individual’s right to privacy—that<br />
includes informational privacy—is increasingly<br />
being recognized. Authorities are coming with<br />
4 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Feature<br />
stringent regulations for the entities<br />
that handle individual’s personal<br />
data—often called ‘data controller’ and<br />
‘data processor’ in regulatory lingo.<br />
The General Data Protection Regulation<br />
(GDPR)—a regulatory framework<br />
that has been approved by the European<br />
Union Parliament and will come<br />
into effect in May 2018, is seen as a pioneering<br />
regulation regime in the area.<br />
The demand for such regime is<br />
becoming stronger in all parts of the<br />
democratic world. In India, the apex<br />
court, the Supreme Court of India has<br />
lent its voice to the cause by explicitly<br />
recommending the government to initiate<br />
such legislation.<br />
Justice(s) Seeking<br />
On 24 August, in a historic judgment,<br />
a nine-judge bench of the Supreme<br />
Court ruled that right to privacy is<br />
a fundamental right. While another<br />
important judgment on triple talaq<br />
delivered two days earlier saw a divide<br />
of opinion among the five members of<br />
the bench, the decision on right to privacy<br />
was completely unanimous, in a<br />
much larger bench.<br />
“The right to privacy is protected as<br />
an intrinsic part of the right to life and<br />
personal liberty under Article 21 and<br />
as a part of the freedoms guaranteed by<br />
Part III of the Constitution,” the bench<br />
ruled in its order while over-ruling two<br />
earlier decisions by the apex court. The<br />
government had argued against privacy<br />
being a fundamental right.<br />
While the media focused on the<br />
judgment’s implication for Aadhaar<br />
because the judgment came while<br />
hearing a petition that questioned the<br />
data collected by Unique Identification<br />
Authority for Aadhaar, the implications<br />
of the judgment are far wider.<br />
Creation of a data protection regime—is<br />
by far the most obvious and immediate<br />
fallout—something which the honorable<br />
judges have pointed out as well. Protected<br />
personal data is one of the most important<br />
means to protect an individual’s<br />
privacy. Ensuring it is becoming a tough<br />
challenge in this era of digital everything.<br />
There is an unprecedented need<br />
for regulation regarding the<br />
extent to which such information<br />
can be stored, processed and<br />
used by non-state actors. There<br />
is also a need for protection of<br />
such information from the State<br />
“We are in an information age. With<br />
the growth and development of technology,<br />
more information is now easily<br />
available. The information explosion<br />
has manifold advantages but also some<br />
disadvantages. The access to information,<br />
which an individual may not want<br />
to give, needs the protection of privacy.<br />
The right to privacy is claimed qua the<br />
State and non-State actors. Recognition<br />
and enforcement of claims qua<br />
non-state actors may require legislative<br />
intervention by the State,” Justice Sanjay<br />
Kishan Kaul said in his judgment.<br />
Giving ex<strong>amp</strong>les of players, such as<br />
Uber, Facebook, Alibaba and Airbnb<br />
and noting the capabilities of technologies<br />
such as ‘Big Data’, the judgment<br />
observes that individual’s data can be<br />
collected, processed to find new uses<br />
of data. “A large number of people<br />
would like to keep such search history<br />
private, but it rarely remains private,<br />
and is collected, sold and analyzed for<br />
purposes such as targeted advertising,”<br />
the judgment noted.<br />
Noting that the personal data collected<br />
is capable of effecting representations,<br />
influencing decision making<br />
processes, shaping behavior, and the<br />
possibility of the government exercising<br />
control over us like ‘big brother’<br />
leading to stultifying effect on the<br />
expression of dissent and difference<br />
of opinion, the judgment explicitly<br />
argued for legislation in the area.<br />
“There is an unprecedented need<br />
for regulation regarding the extent<br />
to which such information can be<br />
stored, processed and used by nonstate<br />
actors. There is also a need for<br />
protection of such information from<br />
the State,” Justice Kaul noted while<br />
clarifying that interception may be<br />
desirable and permissible in order to<br />
ensure national security, it cannot be<br />
left unregulated.<br />
Both Justice Dr DY Chandrachud<br />
and Justice Kaul explicitly stressed<br />
the need for legislation to protect<br />
data privacy. The judges delivered six<br />
separate judgments. While Justice<br />
Chandrachud delivered the judgment<br />
on behalf of four judges including the<br />
Chief Justice, the other judges delivered<br />
their own judgments.<br />
“Informational privacy is a facet of<br />
the right to privacy. The dangers to<br />
privacy in an age of information can<br />
originate not only from the state but<br />
from non-state actors as well. We commend<br />
to the Union Government the<br />
need to examine and put into place a<br />
robust regime for data protection. The<br />
creation of such a regime requires a<br />
careful and sensitive balance between<br />
individual interests and legitimate<br />
concerns of the state,” Justice Chandrachud’s<br />
judgment noted.<br />
“I agree with Dr. D.Y. Chandrachud,<br />
J., that formulation of data protection<br />
is a complex exercise which needs to<br />
be undertaken by the State after a careful<br />
balancing of privacy concerns and<br />
legitimate State interests, including<br />
public benefit arising from scientific<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
5
Feature<br />
THE DATA PROTECTION LINGO<br />
Data Subject: The individual (natural entity) whose<br />
data is being used by the data controller and data processors.<br />
The data protection regulations are meant<br />
for protecting his/her right<br />
Personal Data: Any information related to a natural<br />
person or ‘Data Subject’, that can be used to directly or<br />
indirectly identify the person<br />
Data Controller: The entity that determines the purposes,<br />
conditions and means of the processing of<br />
personal data<br />
Data Processor: The entity that processes data, on<br />
behalf of the Data Controller by the definition of EU<br />
GDPR but also ‘independently’ by the definition in the<br />
private member bill introduced in the Indian Parliament<br />
Consent: The explicit permission given by the data<br />
subject to the controller to use his/her data for a purpose<br />
other than what it was collected for. Usually, that<br />
can be withdrawn at any time<br />
Data Erasure or Right to be Forgotten: The right of<br />
the data subject to have his/her personal data erased<br />
by requesting the data controller/processor/third parties<br />
associated with them<br />
Data Portability: Obligations on data controllers to<br />
provide the data subject with a copy of his or her data<br />
in a commonly used, machine readable format that<br />
can be transferred to another controller with ease<br />
Data Protection Authority: Regulators for ensuring<br />
data and privacy protection; the body may even be<br />
involved in making recommendations to make amendments<br />
to the data protection legislation<br />
Data Protection Officer: The executive within a data<br />
controller or processor accountable for ensuring data<br />
privacy and the data protection regulations are complied<br />
with<br />
Privacy by Design: A principle that calls for the inclusion<br />
of data protection from the onset of the designing<br />
of systems, rather than a later addition<br />
Pseudonymisation: The processing of personal data<br />
in such a manner that the personal data can no longer<br />
be attributed to a specific data subject without the<br />
use of additional information, provided that such additional<br />
information is kept separately and is subject to<br />
technical and organizational measures to ensure that<br />
the personal data are not attributed to an identified or<br />
identifiable natural person<br />
Right to be Forgotten: Also known as Data Erasure,<br />
it entitles the data subject to have the data controller<br />
erase his/her personal data, cease further dissemination<br />
of the data, and potentially have third parties<br />
cease processing of the data<br />
Right to Access: The right of the data subject to<br />
have access to and information about his/her personal<br />
data<br />
6 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Feature<br />
...Continued from Page 5<br />
and historical research based on data<br />
collected and processed. The European<br />
Union Regulation of 201629 of<br />
the European Parliament and of the<br />
Council of 27 April 2016 on the protection<br />
of natural persons with regard to<br />
the processing of personal data and<br />
on the free movement of such data<br />
may provide useful guidance in this<br />
regard. The State must ensure that,”<br />
said Justice Kaul in his judgment.<br />
With such unambiguous, unequivocal<br />
and forceful recommendation by the<br />
highest court of the country, the efforts<br />
towards formulating a data protections<br />
law are only expected to accelerate.<br />
As such, the government had initiated<br />
some first steps in that direction.<br />
In July, the Ministry of Electronics and<br />
Information Technology (MeitY) constituted<br />
a committee of experts under<br />
the chairmanship of Justice B N Srikrishna,<br />
former Judge of the Supreme<br />
Court, to identify key data protection<br />
issues and recommend methods<br />
for addressing them. Its brief also<br />
includes creation of a draft data protection<br />
bill. Members of the committee<br />
include Dr Gulshan Rai, National<br />
Cyber Security Coordinator; Prof<br />
Rajat Moona, Director, lIT, Raipur and<br />
a noted cyber security expert and Ajay<br />
Bhushan, CEOof Unique Identification<br />
Authority of India among others.<br />
Interestingly, a private member<br />
bill called Data (Privacy and Protection)<br />
has been introduced by Biju<br />
Janata Dal MP Baijayant Panda in<br />
the Parliament. The draft bill is<br />
based on the major issues addressed<br />
by the European GDPR.<br />
Implications for<br />
enterprises<br />
The EU GDPR defines a data 'controller'<br />
as ‘the natural or legal person,<br />
public authority, agency or other<br />
body’ which, alone or jointly with<br />
others, determines the purposes and<br />
means of the processing of personal<br />
data. Similarly it defines a processor<br />
as an entity that processes data on<br />
behalf of the controller.<br />
The non-state actors referred to by<br />
the judges are typically commercial<br />
companies who use an individual’s<br />
data for their business purpose. Most<br />
commercial agencies, especially those<br />
engaged in large scale B2C business,<br />
would fall under the definition of data<br />
controllers in the EU GDPR definition.<br />
And certain category of businesses<br />
would typically be classified<br />
as data processors. While in the EU<br />
definition, a processor is defined as<br />
someone who does the processing of<br />
personal data ‘on behalf of the controller’,<br />
it may not be defined that way<br />
necessarily. For ex<strong>amp</strong>le, the private<br />
member bill introduced by BJD MP<br />
Panda, defines a processor as someone<br />
‘who processes data independently<br />
or on behalf of a data controller’.<br />
In short, most businesses would fall<br />
under one or both the definitions and<br />
will have to comply with the new set<br />
of regulations. A limited exposure<br />
to EU GDPR—such as by companies<br />
who do business there or who provide<br />
IT or BPO services to European companies—has<br />
already resulted in many<br />
companies scrambling to comply. A<br />
full-fledged Indian data protection<br />
regime will result in several compliance<br />
requirements.<br />
Once that happens, it is a no brainer<br />
that the CISOs and CIOs will have<br />
to drive this new set of compliance<br />
requirements.<br />
Here is a look at some of the obligations<br />
that may come your company’s<br />
way. While you may have some of<br />
those in place already if your sectoral<br />
regulations require that, most of them<br />
would be new for most companies.<br />
While all of them may not require<br />
you to ‘show’ something (like<br />
appointing a Data Protection Officer)<br />
immediately, you nevertheless need<br />
to ensure that the obligations are met.<br />
An Indian draft data protection bill is<br />
yet to be ready and is a specific brief<br />
for the committee appointed by the<br />
Government under the chairmanship<br />
of Justice Srikrishna. So, most of the<br />
possible requirements that are presented<br />
here are taken from European<br />
GDPR’s principles, if not its exact<br />
regulatory requirements.<br />
In the discussion, we will refer to<br />
data controller/processors as businesses<br />
or enterprises though it may<br />
apply to other types of entities as well.<br />
Possible Issues/<br />
Requirements<br />
Purpose of processing: The controller<br />
or processor has to clearly mention<br />
the purpose of collecting/processing<br />
data. That is because using the data for<br />
anything else other than the original<br />
purpose for which it was collected has<br />
to have explicit consent of the individual<br />
concerned, also referred to as data<br />
subject. The onus of ensuring that will<br />
be on the enterprises.<br />
Consent of the individual: One of<br />
the requirements of the European<br />
GDPR is that “where processing<br />
is based on consent, the controller<br />
shall be able to demonstrate that the<br />
data subject has consented to processing<br />
of his or her personal data.”<br />
It further mandates that the request<br />
for consent cannot be fine print as<br />
is the case today. It should be very<br />
clear and in plain language. Further,<br />
the companies should be able<br />
to make it easy for the individual to<br />
withdraw consent any time. Whether<br />
the consent us taken through<br />
paper-based documents or electronic<br />
means, business organizations<br />
have to put the systems in place to<br />
make it possible. “Making it easy for<br />
the individual’ has to be defined and<br />
that may go through change from<br />
time to time.<br />
Right of access by the data subject:<br />
One of the possible requirements from<br />
the companies dealing with individual<br />
data would be to provide the data<br />
subjects with access to their own data<br />
as well as additional information like<br />
the period for which the data would<br />
be stored; who will be provided access<br />
to that data, if it would be transferred<br />
beyond the boundaries of the country…the<br />
list may keep changing.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
7
Feature<br />
Right to be forgotten/Data erasure:<br />
Another important requirements that<br />
the EU GDPR has mandated—and<br />
which has become somewhat controversial—is<br />
the right of the individual<br />
to be forgotten or to request erasure<br />
of his/her data without ‘undue delay’.<br />
This is going to be especially challenging<br />
as there would most likely be a<br />
stipulated time period and failure to do<br />
that in that period may attract stringent<br />
penalties/punishment. The front end<br />
and back end system should be such<br />
that it should not only make it easy for<br />
the data subject to give or withdraw<br />
consent but also easily request for<br />
erasure which then have to be honored<br />
within a given time period.<br />
Data portability: Another possible<br />
requirement—taking a cue from EU<br />
GDPR—could be data portability. This<br />
means the data controllers or processors<br />
are under obligation to provide<br />
a data subject’s data to him/her on<br />
demand in a structured, commonly<br />
used and machine readable format<br />
for the latter to transport that data to<br />
another data controller. Practically,<br />
the challenge for the businesses is not<br />
just to make it possible but find an efficient<br />
cost-effective manner in which to<br />
make it possible.<br />
Storage and transfer of personal<br />
data: There are a number of requirements<br />
from the data controllers or<br />
businesses about how they should<br />
keep the data subjects in loop where<br />
they store the data and if they transfer<br />
data to a third party. With evolving<br />
technology, there would be a number<br />
of clarifications needed to enforce this<br />
regulation. For ex<strong>amp</strong>le, for this purpose,<br />
if a public cloud will be considered<br />
a third party is open for debate.<br />
Data protection mechanisms:<br />
The EU GDPR explicitly mentions<br />
pseudonymization as a data protection<br />
mechanism. A robust data<br />
protection mechanism may involve<br />
advanced techniques of data encryption<br />
and/or anonymization.<br />
Breach notification to the data<br />
subjects: This one is a no-brainer.<br />
Any data protection legislation would<br />
make it mandatory to for the data<br />
controllers to inform the individuals<br />
about any breach that happens. While<br />
many countries already have laws to<br />
address this, in India, it is still not a<br />
requirement; nor has been a voluntary<br />
practice. So, a new data protection<br />
regime will be challenging.<br />
Appointment of Data Protection<br />
Officers: The EU GDPR asks for a<br />
designated Data Protection Officer.<br />
This is primarily for accountability<br />
purpose as far as regulators are<br />
concerned but a dedicated executive<br />
also brings in focus. It remains to be<br />
seen if some information security<br />
professionals would look at a new<br />
career path through this responsibility.<br />
The companies will have to clear<br />
on what would be the role, seniority<br />
As a CIO or CISO, it is time<br />
for you to examine what the<br />
compliance requirements could<br />
mean for your organization and<br />
your KRAs. While the legislation<br />
and enforcement may still be at<br />
least a year away<br />
level, reporting structure of such an<br />
executive and what will be his/her<br />
relationship with the CIO and the<br />
CISO. Taking a cue from EU GDPR,<br />
the private member bill introduced by<br />
MP Baijayanta Panda too mentions<br />
the need to appoint a Data Protection<br />
Officer.“Every data controller or<br />
processor or third party, as the case<br />
may be, shall appoint a Data Protection<br />
Officer having adequate technical<br />
expertise in the field of data collection<br />
or processing and the ability to<br />
address any requests, clarifications<br />
or complaints made with regard to<br />
the provisions of this Act,” it notes.<br />
The draft bill also tries to list the role<br />
of Data Protection Officers. It says<br />
the role of DPO would be to act as an<br />
independent person, address requests,<br />
clarifications or complaints by any<br />
aggrieved person in stipulated time<br />
and recommend actions to be initiated.<br />
The Indian bill is yet to be drafted.<br />
It may add some other requirements<br />
and/or ignore some of the EU GDPR<br />
requirements. One of the tricky challenges<br />
for Indian banks, telcos and<br />
other such companies dealing with<br />
individual data will be how to meet the<br />
compliance requirements even in the<br />
wake of mandate to link with Aadhaar.<br />
As a CIO or CISO, it is time for<br />
you to examine what the most likely<br />
new compliance requirements could<br />
mean for your organization and for<br />
your KRAs. While the legislation and<br />
enforcement may still be at least a year<br />
away, it is only now that you can provide<br />
input to making of the legislation.<br />
Since a regulator like a Data Protection<br />
Authority will only be formed later,<br />
the committee may not be proactively<br />
be able to approach businesses. It is<br />
not a bad idea to get your voice heard<br />
now. This will ensure that the draft bill<br />
does not throw some nasty surprises.<br />
The private member bill introduced by<br />
Panda is a fairly comprehensive work<br />
and may serve as a good starting point<br />
in case you want to deliberate and<br />
reach out to the authorities with your<br />
considered opinion.<br />
8 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
100<br />
IT Decision makers with<br />
10,000+Cr<br />
of IT Budget are getting<br />
together at<br />
1st-2nd December, <strong>2017</strong> | Amritsar<br />
Are you there?<br />
For engagement opportunities, please contact<br />
AshishKumar ashish.kumar@9dot9.in, 9740761921<br />
DeepakSharmadeepak.sharma@9dot9.in, 9811791110<br />
PrashantAmin prashant.amin@9dot9.in, 9820575282<br />
Gold Partners Technology Partner<br />
Associate Partners Organised by A Brand of
10 CIO&LEADER | September <strong>2017</strong><br />
Organized retail giants are gearing<br />
up for their second innings into<br />
e-commerce - and they are not<br />
leaving without a good fight
Cover Story<br />
TAKING<br />
STOCK<br />
Organized retail in India<br />
has reached an inflection point<br />
By Shubhra Rishi<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
11
Cover Story<br />
I<br />
These are interesting times for India's retail sector.<br />
The e-commerce space is innovating at breakneck<br />
speed. Amazon and Flipkart recently completed<br />
their much-awaited Great Indian Sale and<br />
the Big Billion Day sale. Not to mention the more<br />
than sizable losses. According to news agency<br />
Moneycontrol, Flipkart topped the tally for last<br />
year with USD 803.99 million in losses. Amazon<br />
came second with USD 549.46 million in losses.<br />
The mounting losses for e-commerce firms indicate<br />
heavy spend on marketing to up the gross<br />
merchandise value (GMV) last year.<br />
In Amazon's case, the global ecommerce player<br />
has been on a losing spree for the last 23 years. In<br />
1996, two years after its launch, Amazon grew its<br />
revenue from USD 511,000 to USD 15.75 million,<br />
and its losses grew from USD 303,000 to USD<br />
5.78 million. Its Indian unit reported a 50.2%<br />
jump in sales to USD 26.14 million but suffered a<br />
loss of USD 3.78 million in a year after launch,<br />
Flipkart, on the other hand, clocked USD 100<br />
million from its first Big Billion Day sale in 2014.<br />
It also recorded a net loss of USD 298.3 million<br />
(approx) in the same year.<br />
However, these losses don’t concern the spendthrift<br />
Indian consumer who gushes over every<br />
penny saved on an online purchase and in turn<br />
is spending more than ever. Heavy discounts and<br />
aggressive marketing over a range of products<br />
have the Indian consumer in the online player's<br />
pocket. According to PwC’s retail survey conducted<br />
in 2016, Indian consumers have adapted<br />
the pace towards the omni-channel way of life.<br />
Their survey data suggests that Indians buy<br />
online primarily because of convenience (65%),<br />
followed by price (31%).<br />
Unfortunately, the organized retail sector<br />
hasn’t impressed the Indian consumer yet. They<br />
have disappointed the Indian consumer - in<br />
terms of cost, customer experience, and choice.<br />
Until now.<br />
Organized retail may be soon have its Amazon<br />
moment.<br />
According to Pinakiranjan Mishra, Partner and<br />
National Leader, Retail and Consumer Products,<br />
Ernst &Young (E&Y), the organized retail sector<br />
is ready for some change. In the last year or so,<br />
the stress on pure-play online retailers to showcase<br />
business profitability, has given these retail<br />
giants some respite, in order to take advantage<br />
of the visibility of opportunity, and to invest and<br />
innovate in the online space.<br />
Let’s consider Tata Group, the 150-year-old<br />
conglomerate who despite being a major offline<br />
retailer since 1998, entered online retail only a<br />
year ago in 2016, with an all-new e-commerce<br />
portal TataCLiQ. Tata UniStore is the company<br />
behind TataCLiQ.com that offers customers the<br />
phygital experience through a ‘Cliq and Piq’<br />
payment option that allows you to shop online<br />
and collect your order from the store. “Within<br />
the first week of launch, it has received orders<br />
Carve a compelling<br />
brand story that<br />
promises a unique<br />
customer experience<br />
12 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Cover Story<br />
from every Indian state. In terms of traffic to the<br />
website, we are witnessing a 3X growth since the<br />
launch date with a 15% repeat rate amongst customers,”<br />
said Ashutosh Pandey, CEO, Tata CLiQ,<br />
in an interview published on tata.com.<br />
In the past, the organized retail sector has disappointed<br />
the Indian consumer - both in terms<br />
of price and products. First it was Future Bazaar<br />
and then Big Bazaar Direct, Future Group’s<br />
much-hyped e-commerce venture, which shut<br />
down after almost 3 years of its launch in September<br />
2013. The recent casualty has been USD<br />
41 billion Aditya Birla Group’s flagship e-commerce<br />
site Abof.com, which will close down its<br />
operations by the end of <strong>2017</strong>, after being unable<br />
to compete against the heavy discounting model<br />
of online rivals such as Flipkart and Amazon.<br />
Abof.com is the only exception to this trend.<br />
As against USD 3.1 billion Future Group, which<br />
is suffering a loss of around USD 38.46 million<br />
on their e-commerce ventures, such as Future-<br />
Bazaar.com, Big Bazaar Direct, and Fab Furnish,<br />
you would expect the retail major to swear off<br />
e-commerce retail. However, the company is<br />
playing it safe by not talking about its investments<br />
in the online space.<br />
Tata CLiQ, on the other hand, has gone one<br />
step ahead by stating that the company has<br />
got into the e-commerce space to play the long<br />
game. Shoppers Stop also, is looking at generating<br />
10% revenue from online sales by 2020.<br />
Mukesh Ambani-led Reliance Industries Ltd’s<br />
retail arm Reliance Retail is preparing to capture<br />
the top spot as India’s top online grocery<br />
retailer by 2020.<br />
We anticipate that the retail giants are gearing<br />
up for a second coming into e-commerce and this<br />
time they won't go down without a fight. How?<br />
Read on to find out.<br />
In the year 2007, the Indian retail sector was<br />
estimated to be worth USD 350 billion. It was<br />
also around the time when 97% of the Indian<br />
retail market was dominated by traditional<br />
'kirana' or 'mom and pop' stores. India's vast<br />
geographic, cultural, and economic diversity<br />
has encouraged traditional retail to prolifer for<br />
centuries because of a strong need and preference<br />
for personalized shopping requirements.<br />
The organized retail sector by that time, had<br />
developed a business model and was expanding<br />
very rapidly to get scale, but was badly hit<br />
by e-commerce. It was the year when Flipkart<br />
launched its business as an online bookseller<br />
"In many ways, the<br />
businesses are trying to<br />
bring up their play in all<br />
channels - online and<br />
social - and prominently<br />
stay available there."<br />
—Anil Shankar<br />
Customer Care Associate and<br />
VP – Solutions & Technology,<br />
Shoppers Stop Ltd.<br />
in India. Since then, the world of retail has been<br />
the same again.<br />
Today the Indian retail market is estimated to<br />
cross USD 1.3 trillion by 2020 from the current<br />
market size of USD 500 billion. According to<br />
Anurag Mathur, Partner-Consumer and Retail<br />
at PriceWaterhouseCoopers (PwC), organized<br />
retail will observe a 28% growth whereas<br />
e-commerce would be about 46%.<br />
“Both e-commerce and organized retail will<br />
grow fast although it is only in the last one and<br />
a half years that offline retail players got serious<br />
about online retail,” said Mathur.<br />
The Big Trigger: Demonetization and<br />
the Rise of Digital Payments<br />
One of the major reasons why this was possible is<br />
the Modi government’s November 8 demonetization<br />
drive in 2016, which has had a positive impact on<br />
organized retail unlike several other sectors.<br />
According to E&Y’s Mishra, several industries<br />
including food and groceries benefitted<br />
-- because citizens didn't have cash to pay at local<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
13
Cover Story<br />
"If retailers wants to do<br />
business in this age, and<br />
wants to be profitable,<br />
they have to be on every<br />
channel."<br />
—Vineeth Purushotaman<br />
CIO, Fortis Healthcare<br />
and Former CIO, Bharti Retail<br />
kirana stores -- many of them saw the spike in<br />
the prices as an aftermath of demonetization.<br />
The fashion and apparel unit suffered because<br />
buying clothes wasn’t a priority for consumers at<br />
the time. Most major retailers had already understood<br />
the importance of bringing the convenience<br />
and interactivity of online commerce into the<br />
offline world thereby integrating digital wallet<br />
into their point-of-sale systems.<br />
For instance, Shoppers Stop launched its digital<br />
wallet in September 2015, Reliance Retail<br />
launched ‘JioMoney’ in May 2016, and Future<br />
Group launched FuturePay in <strong>October</strong> 2016. The<br />
penetration of mobile Internet and smartphones<br />
aggregate, mobile wallets, with their ease of use<br />
and convenience, as expected, have grown in<br />
popularity ever since.<br />
According to a report, digital transactions, trebled<br />
and quadrupled in volume and value across<br />
various modes from wallets to cards and interbank<br />
transfers from a year earlier. The mobile<br />
wallet industry is expected to maintain the pace<br />
of its current expansion with transaction volume<br />
expected to touch USD 32 billion by 2022 and the<br />
Offer customized<br />
offers based on totally<br />
secure personal<br />
preferences and<br />
information<br />
value of transactions is also expected to reach<br />
INR 32 trillion by 2021, growing at a rate of 126%.<br />
GST – The Great Leveller<br />
“GST will significantly impact the retail sector,”<br />
said Mishra. It will bring two major reforms in<br />
the retail sector. One is definitely the shift from<br />
unorganized to organized retail, and second<br />
is the improvement in margins. "The prevailing<br />
revenue neutral rate for apparel industry<br />
is 12-14%, and any rate set out by the new GST<br />
regime above it would have affected demand in<br />
the short-term as companies would pass on hikes<br />
to consumers, However, with the latest reports,<br />
rate for the branded apparels has been fixed at<br />
12%, expected to have a neutral impact on the<br />
apparel industry. The GST would reduce competition<br />
from the unorganized sector and provide a<br />
level playing field to the organized branded players,"<br />
said a Credit Analysis & Research Limited<br />
report.<br />
GST will be able to set-off the service tax paid<br />
on the rent as input tax credit against the taxes<br />
to be paid on the final revenue.<br />
According to Mathur at PwC, a fully compliant<br />
value-chain will be more profitable than a partcomplaint<br />
one. As a retailer if you buy something<br />
from a vendor and you will be able to check the<br />
value chain, you can negotiate the credits that are<br />
available in the entire chain. As a result, the pricing<br />
and procurement will be better.<br />
“That’s where the retailers will get a more levelplaying<br />
field,” added Mathur.<br />
Know Your Customer and Technology<br />
Shoppers Stop, with an annual turnover of USD<br />
300 million, owned by K Raheja Corp Group is<br />
one of the oldest players in the organized retail<br />
business. The department store chain, owned<br />
14 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Cover Story<br />
by the K Raheja Corp Group, has over 83 stores<br />
across 38 cities in India. In 1991, it launched<br />
its first store in Mumbai, and since then it has<br />
made consistent efforts to introduce innovative<br />
schemes such as the loyalty programs which has<br />
garnered over 4.6 million First Citizen members<br />
and one million Shoppers Stop Mobile app download.<br />
The retailer believes it can use anonymized<br />
aggregate data to provide mapping, directions<br />
and personalized in-store promotions to customers<br />
in the coming months.<br />
The retail major is aiming to accelerate the digitization<br />
of its stores in-line with its omni-channel<br />
strategy by 2020.<br />
According to Anil Shankar, Customer Care<br />
Associate & Vice President - IT, Shoppers Stop,<br />
this is a result of a sustained effort that has gone<br />
in the last couple of years. We have put in unrelenting<br />
effort in a direction where things are<br />
moving.<br />
Shankar has closely observed the evolution<br />
of the Indian retail sector for over two decades.<br />
He said that there has been a consistent effort in<br />
terms of how customer segments are moving and<br />
how customer preferences have changed - we<br />
have to align their strategies internally and put<br />
tech into play.<br />
In organized retail, this change is happening.<br />
“In the last 2-3 years, retailers are looking at<br />
deploying a cross-channel strategy. We acknowledge<br />
the fact that they will need to be available to<br />
the customer on channels in which the customer<br />
is available,” added Shankar.<br />
Multichannel retailing has been helping India’s<br />
consumption story and increasing the share of<br />
organized retail in the total retail pie. According<br />
to Mathur, in the present scenario, omnichannel<br />
agenda coupled with the pressures of delivering<br />
superior customer experience and in the face<br />
of aggressive competition will put the onus on<br />
developing an operating model which is strategically<br />
aligned to business goals.<br />
As a retailer, you can't choose between e-commerce<br />
and brick and mortar today.<br />
According to Veneeth Purushotaman, CIO,<br />
Fortis Healthcare, “the decision to choose the<br />
channel lies with the consumer. However the<br />
choice of being the channel is obviously in the<br />
hands of the retailer. If a retailer wants to do<br />
business in this age, and wants to be profitable,<br />
they have to be on every channel.”<br />
In a career spanning over two decades, Purushotaman<br />
has led technology leadership roles across<br />
several retail mammoths, such as Shoppers Stop,<br />
HyperCity and Bharti Retail. “Retail is the most<br />
dynamic and fast growing industry. Today a lot of<br />
consolidation is already happening among online<br />
and offline players. A good offline retailer player<br />
could shake hands with an online player rather<br />
than going all out and creating an online presence,”<br />
he said.<br />
According to E&Y’s Mishra, the element of connecting<br />
with customers, creating engagement,<br />
and connecting with the brand is significant –<br />
"The time has come when<br />
the retail players re-align<br />
technology, value, and<br />
margins in order to<br />
become profitable."<br />
Provide an<br />
enhanced and<br />
consistent experience<br />
across all channels<br />
—Meheriar Patel<br />
Chief Information Officer, AGC<br />
Networks Ltd and Essar Retail<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
15
Cover Story<br />
that is an area where retailers have to do more.<br />
With the variety of technology, whether it is<br />
through big data, artificial intelligence IoT, a lot<br />
of this data that can be embedded into the physical<br />
world.<br />
Today, retailers are using predictive analytics<br />
to data optimize customer experiences by identifying<br />
the most valuable big data streams and<br />
integrating cross-channel data requirements<br />
for targeting customers, This data is also being<br />
used for understanding retail, and staying ahead<br />
of new trends, buying preferences and product<br />
affinities, checking inventory status, and segmenting<br />
and targeting customers accurately.<br />
“The change has led through the tech side. Some<br />
retail players have put in a lot of tech investment<br />
especially in the online retail space,” added Shankar.<br />
Essar Retail is a venture of USD 22 billion<br />
Essar Group. It has over 300 telecom retail outlets<br />
spread across 48 cities in India. Meheriar<br />
Patel, who is the Chief Information Officer, AGC<br />
Networks Ltd and Essar Retail, believe that a<br />
convergence of technologies is happening in digital<br />
technologies. While Robotics, AI, and big data<br />
are already getting implemented, the relative<br />
value in using these technologies and quantifying<br />
it is becoming extremely important. Patel,<br />
whose carrer in IT spans over three decades, has<br />
worked with organizations like Sun Pharmaceuticals,<br />
Globus Stores, Jet Air Pvt Ltd., and The<br />
Mobile Store. He believes that offline retailers are<br />
now looking at reinventing their offline strategies<br />
to serve their existing and new customers.”They<br />
are experimenting with ‘Buy Online and Pick from<br />
Shop’, ‘Shop Offline and Get Delivery’, and ‘Order<br />
Online and Pick’ customizations, and offering<br />
competitive pricing and parity for both offline and<br />
online. Most of the large and small retails have<br />
their backend integrated with online and offline<br />
interface. However, time has come when the retail<br />
players re-align technology, value, and margins in<br />
order to become profitable. It is the business model<br />
that will shape their existence,” he added.<br />
Today retailers’ brick and mortar strategies<br />
Provide an always<br />
on, 24/7 experience<br />
INR billion<br />
9,000<br />
8,000<br />
7, 000<br />
6,000<br />
5,000<br />
4,000<br />
3,000<br />
2,000<br />
1,000<br />
0<br />
MUMBAI METROPOLITAN REGION<br />
1,415<br />
2,243<br />
TOTAL RETAIL MARKET SIZE<br />
NATIONAL CAPITA L REGION<br />
1,218<br />
1,919<br />
BENG ALUR U<br />
741<br />
1,155<br />
also need to evolve.<br />
To continue to draw customers into their stores,<br />
and to compete with the online retailers opening<br />
their own physical outlets, innovative marketing<br />
strategies, as well as new technologies such as<br />
smart shelves, robots, self-checkout, and interactive<br />
and virtual reality, being deployed in-stores<br />
as retailers strive to compete on all fronts.<br />
According to Purushotaman, the real intel-<br />
CHENNAI<br />
384<br />
615<br />
HYDERABAD<br />
444<br />
692<br />
TOTAL RETAIL MARKET SIZE IN 2016 (INR BN)<br />
ESTIMATED TOTAL RETAIL MARKET SIZE IN 2019 (INR BN)<br />
Source: Knight Frank Research<br />
PUNE<br />
337<br />
545<br />
TOP 6 URBAN CENTRES<br />
4,539<br />
7,168<br />
16 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Cover Story<br />
2,0 00<br />
1,80 0<br />
1,60 0<br />
TOTAL MODERN RETAIL MARKET SIZE<br />
MUMBAI METROPOLITAN REGION<br />
NATIONAL C API TA L REGION<br />
BENGALURU<br />
CHENNAI<br />
HYDERABAD<br />
PUNE<br />
TOP 6 URBAN CENTRES<br />
1,718<br />
Use predictive<br />
analytics to<br />
understand your<br />
customer better<br />
instead of post facto,” he added.<br />
“Video analytics also has a huge potential in<br />
retail stores and now retailers are using it to capture<br />
customer trends, track traffic, catch shoplifters,<br />
as well as reduce fraud.<br />
INR billion<br />
1,40 0<br />
1,20 0<br />
1,0 00<br />
80 0<br />
60 0<br />
40 0<br />
20 0<br />
0<br />
194<br />
381<br />
319<br />
630<br />
183<br />
363<br />
ligence that will drive business will come from<br />
predictive analytics. “Data will continue to<br />
become bigger. One of the problems that continue<br />
to persist is the triviality with which we<br />
handle KYC in retail stores. That activity has<br />
to be given more seriousness. If the customer is<br />
inside the store, what is the best way in which<br />
you can invoke personalization, recognizition,<br />
and reward the customer - instantaneously<br />
61<br />
119<br />
43<br />
86<br />
TOTAL MODERN RETAIL MARKET SIZE IN 2016 (INR BN)<br />
ESTIMATED MODERN RETAIL MARKET SIZE IN 2019 (INR BN)<br />
Source: Knight Frank Research<br />
72<br />
141<br />
871<br />
The Future<br />
According to Shankar, in many ways, businesses<br />
are trying to bring up their play in all<br />
channels - online and social - and prominently<br />
stay available there.<br />
“The disruption has been there, but whether<br />
it will match up to the same level as their e-commerce<br />
counterparts, through their online strategies,<br />
will be a hope for the future,” he said.<br />
Organized retailers have long focused their<br />
business model innovations on aping the techniques<br />
applied by their ecommerce counterparts.<br />
To succeed, these tactics may not help in the<br />
long run.<br />
What Tata CLiQ has done in the last one year is<br />
commendable. As its CEO puts it: We are attractive<br />
for a brand-focused, quality-seeking audience<br />
so that we can deliver a targeted phygital<br />
marketplace.<br />
Essentially, they are taking steps to carefully<br />
carve a unique brand image via online, mobile<br />
and social platforms, at the same time, making<br />
use of their 149-year old brand heritage.<br />
All other large Indian retailers have the same<br />
advantage.<br />
Small innovations and supply chain improvements<br />
cannot differentiate an offline retailer. It needs<br />
a structure for organizational change, a carefully<br />
crafted cross-channel strategy that reflects what<br />
customers want and where and when they want it.<br />
Last but not least, the model requires a mechanism<br />
for getting the most out of the technology, tools and<br />
the vast ocean of big data that only is going to grow<br />
larger every day. As for consumers, the more retailers<br />
there are, the merrier they will be.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
17
INTERVIEW<br />
“Observe zero<br />
tolerance<br />
towards<br />
basic security<br />
hygiene”<br />
Vishal Salvi, CISO, Infosys<br />
discusses the security trends in <strong>2017</strong><br />
We have heard that 2016<br />
has been a year of<br />
ransomware and in <strong>2017</strong> also<br />
we saw that there were two<br />
incidents that took place<br />
simultaneously. What does<br />
that really tell us about our<br />
security preparedness?<br />
If you look at the recent<br />
ransomware attacks: WannaCry on<br />
12th of May and "Petya" on 27th of<br />
June, both are watershed events as<br />
far as cyber security is concerned.<br />
In my two decades of cyber security<br />
experience, I haven't seen so much<br />
of devastation being caused by any<br />
single cyber security event which<br />
has impacted multiple organisations<br />
at the same time in a very short<br />
span of time. These are the events<br />
we should sit back and understand,<br />
learn and take lessons from. In my<br />
mind it has changed my outlook<br />
towards how we look at the issues in<br />
cyber security, how we look at our<br />
value that we add to the business,<br />
and how we need to change our<br />
strategy, our vision and our response<br />
when it comes to dealing with<br />
managing the overall cyber security.<br />
Of course it will be a mistake to just<br />
look at ransomware as an issue and<br />
focus on that, but also if we look at<br />
the overall strategy, it is extremely<br />
important but ransomware is<br />
one ex<strong>amp</strong>le which gives us how<br />
important cyber security is for<br />
today's digital evolution. While<br />
we can’t expect the technology<br />
evolution and innovation to change<br />
dramatically, we can definitely<br />
change the way we look at it. As<br />
cyber security experts, we must have<br />
an influencing capacity in terms of<br />
being able to engage the stakeholders<br />
and send the right message, get the<br />
right budgets, and make sure that<br />
you work closely with the CIO and<br />
the technology teams to be able to<br />
build necessary controls. I think we<br />
need to observe zero tolerance when<br />
it comes to basic hygiene.<br />
How has the role of the<br />
CISO evolved in the last<br />
few years? How do you think<br />
the role is ready for change in<br />
the near future?<br />
Organisations which have got<br />
impacted have made the CIO and<br />
the CISO equally accountable for<br />
their role in the organisation. Today<br />
the CISO must be able to influence<br />
and convince people to invest in the<br />
right controls and build a trust with<br />
the stakeholders. Otherwise you are<br />
not doing your job. So it’s not about<br />
externalising the problem, you need to<br />
internalise the problem and you need<br />
to take ownership in order to make<br />
sure that it’s not just implementation<br />
of control but getting sponsorship for<br />
implementation of control is equally<br />
an important part of your role to<br />
entrust people and get it done. So I<br />
18 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Vishal Salvi, Infosys<br />
Interview<br />
think that people should realise that's<br />
the change. In fact it was always there<br />
but it is now more fundamental now<br />
that people realise that you know you<br />
are accountable and you need to make<br />
sure that a business case needs to be<br />
presented. It is also about making sure<br />
that you are also accountable to get<br />
maximum return on investment.<br />
What is the importance of<br />
vendors collaboration in<br />
security and how does that<br />
impact the solutions that you<br />
choose within your<br />
organisation or for your<br />
organisation? Isn't<br />
collaboration essential for the<br />
new threats that are emerging<br />
in the enterprises?<br />
Generally speaking, you know<br />
most of the vendors have a closed<br />
approach towards their solutions<br />
and how they would want to bring<br />
them to the market. That definitely<br />
is a problem. Every security vendor<br />
has his own standard and strategy.<br />
And they haven't really been able to<br />
come together and create a common<br />
architecture and a common standard<br />
which the world will benefit. We<br />
obviously have challenges in the<br />
bureaucracy and the processes and<br />
practitioners also. So all these are<br />
loopholes which are exploited by<br />
cyber criminals who don’t have any<br />
processes that are very cohesive.<br />
As practitioners you have to do the<br />
best with what you have. For ex<strong>amp</strong>le,<br />
we invest in engineering, orchestration,<br />
and automation; so there is hope. But<br />
not many organisations are able to do<br />
that. We are able to do it but not many<br />
organisations are able to that and<br />
therefore, there is always a struggle in<br />
terms of depending on an external party<br />
to come and deliver that value.<br />
What are the top 3 things<br />
on your agenda in 2020<br />
as far as security is<br />
concerned?<br />
I think this year has largely been<br />
in terms of investing and building<br />
capabilities. We are actually embarking<br />
on a journey of operational excellence<br />
and making sure that every single<br />
control that has been invested on is<br />
actually delivering the value for the<br />
buck right. There are four important<br />
objectives: The first one is to build a<br />
team which will give assurance to our<br />
clients about security of their data<br />
and business that they are entrusting<br />
on us. The second objective is to<br />
constantly improve the efficiency and<br />
effectiveness of the controls that we<br />
have deployed. The third objective is<br />
to ensure that people remain calm and<br />
composed when you respond to cyber<br />
events and cyber incident that happen<br />
to your organisation so that you not<br />
only contain, but also recover from<br />
them quickly. The fourth objective is to<br />
build a security culture. At Infosys, we<br />
have various tools and methodologies<br />
along with the maturity models<br />
that we have defined, both of which<br />
focus on the improvements as well as<br />
operational excellence, and every year,<br />
we revisit ourselves and constantly<br />
evolve to deliver the value that our<br />
customers expect from us.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
19
EVENT REPORT<br />
CA CIO strategy<br />
summit <strong>2017</strong>: Paving<br />
the way for digital<br />
transformation<br />
The CA Technologies CIO Summit <strong>2017</strong> took place in<br />
Udaipur from 5-7 <strong>October</strong> <strong>2017</strong><br />
By CIO&LEADER<br />
20 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Event Report<br />
Sunil Manglore, Managing Director<br />
– India, CA Technologies welcoming<br />
delegates to CA Strategy Summit <strong>2017</strong><br />
Ongoing discussions on Day 1<br />
of the CIO strategy summit<br />
Martin Mackay, President & General Manager<br />
– APJ for CA Technologies delivering a keynote<br />
address to the gathering<br />
T<br />
oday’s business environment is characterized<br />
by shrinking product lifecycles, new forms of<br />
competition, growing customer expectations<br />
and relentless cost pressures. New, nimble competitors<br />
are leveraging advances in technology<br />
to disrupt markets and displace market leaders.<br />
Consequently, enterprise technology leaders are<br />
under growing pressure to change and innovate<br />
at a brisk rate—and deliver compelling solutions<br />
to stakeholders.<br />
However, to deliver superior customer experiences<br />
in this new environment of continuous<br />
change, they need to adopt new methodologies and<br />
tools, and employ different skills and techniques<br />
to develop, test, deploy and operate software that<br />
forms the heart of the business in the digital age.<br />
At the CA Technologies CIO Summit <strong>2017</strong> which<br />
Today’s business environment is characterized<br />
by shrinking product lifecycles, new forms<br />
of competition, growing customer expectations<br />
and relentless cost pressures. New, nimble competitors<br />
are leveraging advances in technology<br />
to disrupt markets and displace market leaders.<br />
Consequently, enterprise technology leaders are<br />
under growing pressure to change and innovate<br />
at a brisk rate—and deliver compelling solutions<br />
to stakeholders.<br />
However, to deliver superior customer experiences<br />
in this new environment of continuous<br />
change, they need to adopt new methodologies<br />
and tools, and employ different skills and techniques<br />
to develop, test, deploy and operate software<br />
that forms the heart of the business in the<br />
digital age.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
21
Event Report<br />
The winning team posing after a successful Cook Out session<br />
Stephen Miles, Chief Technology Officer- APJ, CA Technologies took<br />
the delegates through the concepts of the Modern Software Factory<br />
on Day 2 of the conference<br />
was held in Udaipur from 5-7 <strong>October</strong> <strong>2017</strong>, delegates were<br />
introduced to contemporary thinking and new practices<br />
that comprise the “The Modern Software Factory.”In his<br />
welcome address, Sunil Manglore, Managing Director –<br />
India, CA Technologies emphasised the need to transform<br />
innovative business ideas into outstanding customer experiences—and<br />
how the how the software factory concept<br />
brings together agility, automation, insights and security<br />
to help businesses compete more effectively and efficiently.<br />
In his keynote address to the gathering, Martin Mackay,<br />
President & General Manager – APJ for CA Technologies<br />
discussed the imperatives for digital transformation,<br />
and described how various organizations were<br />
leveraging new technologies to build better apps quickly,<br />
maximizing application performance with better tools,<br />
and making security a competitive advantage. In his talk,<br />
he also highlighted the typical challenges encountered<br />
by organizations undertaking a digital transformation,<br />
and suggested ways to overcome them.<br />
In the ensuing panel discussion on Digital Transformation<br />
Strategy moderated by R Giridhar, Group Editor, 9.9<br />
Media, experienced industry practitioners debated and<br />
deliberated on practical issues surrounding digital transformation<br />
efforts. Participating in the discussion were<br />
Keyur Desai, CIO, Essar Ports & Shipping; Navin Agarwal,<br />
Director, KPMG; TejveerBhogal, Head - Governance &<br />
Alliances, BCCL; Rajendra Mhalsekar, Head - Corporate<br />
Banking Technology, Yes Bank; and Martin Mackay, President<br />
& General Manager - APJ, CA Technologies.<br />
The day concluded with a light-hearted contest amongst<br />
the delegates in the form of a cooking competition. Technology<br />
experts put on their chef hats, and wielded skillets<br />
and spatulas with great adroitness to produce and array of<br />
mouth-watering delicacies to impress the judges. The competition<br />
was won by team 4 comprised of Vibin Venugopal,<br />
Rajesh Pareek, Nitin Bansod, Avinash Naik, Sushil Kumar<br />
and Sunil Mangalore.<br />
Rajendra Mhalsekar, Head Corporate - Banking Technology,<br />
Yes Bank said that it was a fantastic experience especially<br />
the the Cooking event was amazing and innovative.<br />
On Day 2 of the conference, Stephen Miles, Chief Technology<br />
Officer- APJ, CA Technologies took the delegates<br />
through the concepts of the Modern Software Factory.<br />
He demonstrated why emerging and evolving business<br />
models require an entirely new way of thinking about<br />
developing, testing, deploying and running software to<br />
deliver digital transformation solutions for the application<br />
economy.<br />
Speaking on “APIs and the Application Economy,” Sumit<br />
Gupta, Senior Director Software Engineering, CA Technologies<br />
described how APIs—the flexible, extensible building<br />
blocks of today’s apps—operate behind the scenes to<br />
help you innovate faster and fuel your digital transformation.<br />
His talk covered issues like the need for Application<br />
The panel discussion on Digital Transformation Strategy moderated by<br />
R Giridhar, Group Editor, 9.9 Media, with experienced industry practitioners<br />
22 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Event Report<br />
Experience Analytics and proper API Management.<br />
Abhilash Purushothaman, Senior Director – APJ,<br />
DevOps Business, CA Technologies spoke on the growing<br />
role of DevOps in organisations, and the need to establish<br />
a proper set of practices to automate the processes between<br />
software development and IT operations teams to build,<br />
test, and release software faster and more reliably. Abhilash<br />
also covered the CA Technologies’ DevOps portfolio<br />
that enables users to develop code swiftly, test automatically<br />
and release reliably.<br />
In the online age, you need to deliver an exceptional<br />
digital experience to keep customers engaged and satisfied.<br />
However, without proper insights into how well<br />
your apps are working makes it hard to find and fix<br />
issues and problems. Sushil Kumar, Senior VP – Product<br />
Strategy & Management at CA Technologies, described<br />
the techniques available for end user monitoring, application<br />
performance management (APM), and infrastructure<br />
management.<br />
Head - Governance & Alliances - Information Technology<br />
- Bennett Coleman and Co said that the event was a<br />
great opportunity to meet such intellectual minds over<br />
the last few days.<br />
In today’s digital world, you need to open your business up<br />
so that users, employees and partners can access the data they<br />
need. But the more open you are, the more vulnerable you<br />
become to data breaches. So, how can you have better security—and<br />
even use it as an opportunity to win customer loyalty<br />
The delegates were taken to a tour of<br />
the magnificent Udaipur city<br />
Rajasthani folk dance was performed<br />
during networking cocktail and dinner<br />
The workshop on 'Optimized Business Outcomes' was conducted by Paul<br />
Eames, Senior Principal Transformation Consultant at CA Technologies<br />
Delegates participating in the workshop<br />
and boost employee productivity? In his talk, Sumeet Mathur,<br />
Vice President - Software Engineering, CA Technologies<br />
explained how you can boost application and access security<br />
without compromising on performance and usability.<br />
Ashok Gupta, Associate Vice President at Max Bupa,<br />
said that the entire event was very meticulously planned,<br />
well-executed and the sessions were quite informative.<br />
On Day 3 of the conference, a 3-hour workshop on “Optimized<br />
Business Outcomes” was conducted by Paul Eames,<br />
Senior Principal Transformation Consultant, CA Technologies.<br />
Participants were taught how to employ a structured<br />
approach to achieve the greatest business impact when<br />
updating their current It environment to meet new business<br />
needs. The workshop helped delegates identify business<br />
drivers, understand current state capabilities, and formulate<br />
a plan of action for digital transformation.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
23
BOOK REVIEW<br />
Book review:<br />
Learning to draw<br />
the big picture<br />
The importance of system thinking is ever on rise as the<br />
world becomes more and more interconnected<br />
By CIO&Leader<br />
24 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Book Review<br />
I<br />
t is ironic that in a culture where sacred texts start<br />
with teaching the importance and characteristics of<br />
the divine ‘wholeness’ (the invocation of Isa Upanishad),<br />
thinking in whole or ‘system thinking’ is so<br />
conspicuous by its absence.<br />
Never has the importance of ‘system thinking’<br />
been as evident as it is now, as the world becomes<br />
increasingly interconnected; and solving problems<br />
in isolation can no longer said to be a valid, let<br />
alone sound, method.<br />
What is more, with technology making things<br />
more and more open and interconnected, people are<br />
increasingly realizing the value of the ‘whole’—that<br />
is not segregated into small parts, thus breaking<br />
a hundreds-of-years old legacy of reductionist<br />
approach. Whether it is the Internet itself or the<br />
ctyptocurrencies and blockchain, they proclaim the<br />
superiority of this systems approach, where complex<br />
systems with no one centrally controlling it<br />
have provided immense value and benefit to a world<br />
which still sees thing, by and large, in parts.<br />
‘System thinking’ is becoming essential for businesses<br />
to succeed. A book for practicing managers<br />
on the subject, like Systems thinking for Effective<br />
Managers: The Road Less Traveled by Prashun<br />
Dutta and published by Sage, hence, is an extremely<br />
relevant and timely effort.<br />
Dutta, who has served both as a management<br />
consultant and a CIO (Tata Power and Reliance<br />
Infrastructure), is no stranger to the real life situations<br />
and expectedly the book is replete with typical<br />
situations that managers can relate to.<br />
“Attempts at isolating problem situations and then<br />
developing solutions for the same without considering<br />
the whole context are most likely to fail. In this<br />
regard, one has observed the practice of trying to<br />
import a solution that may have worked elsewhere.<br />
While one may adopt the thinking behind a solution<br />
implemented elsewhere, it will necessarily have to<br />
be adapted to the context at hand,” writes Dutta.<br />
How familiar it sounds! Few practicing managers<br />
would fail to identify with such situations.<br />
There are many ex<strong>amp</strong>les from real corporate<br />
world—from manufacturing companies to IT companies;<br />
from business issues to IT project management.<br />
Once you go through them, you will surely<br />
relate to them.<br />
The challenge, however, is to find them as they<br />
seem almost hidden inside the descriptive text. That<br />
is the essential issue with the book. It is neither a<br />
‘chicken soup’ for the managers, written in heady<br />
easy-to-refer format nor is it a systematic primer to<br />
‘system’ thinking. Nor for that matter, and out-andout<br />
academic book, though Dutta’s work does exude<br />
significant academic indulgence.<br />
The book is essentially presented as a journal<br />
of the author’s learning journey, though loosely<br />
categorized into various aspects of ‘systems’ thinking—right<br />
from basic definitions to areas such as<br />
complexity management, management styles and<br />
leadership. The author tries to show the utility of<br />
systems thinking or looking for the big picture,<br />
which he confesses to have discovered as being<br />
synonymous with wholeness or completeness of the<br />
picture and not really their ‘bigness’.<br />
Essentially it is a reader’s book; not a referrer’s<br />
book. You have to invest time to read it sequentially<br />
and absorb. The original analysis and presentation<br />
style of the author is sometimes very enlightening<br />
and engaging. But you must fully commit<br />
to it. It is not a book that you can flip through. So,<br />
for those going through a training program or<br />
academic program, it is a welcome addition to systems<br />
approach literature—a book with so much of<br />
practical insight. But it is not a book that will help<br />
you on the go. To that extent, the name may be a<br />
bit misleading.<br />
In essence, it is a very good book on systems thinking<br />
for those who are willing to invest on learning;<br />
not a guide book that can be referred at will.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
25
INSIGHT<br />
The global desis<br />
Close to a dozen Indians manage IT for the Fortune<br />
500 companies. Find out who they are...<br />
By CIO&Leader<br />
J<br />
ust like it isn't rare to spot an Indian while<br />
travelling to the rarest corners of the world, it<br />
isn't rare for an Indian to head a large Indian<br />
corporation today. We all know about Google<br />
when it was choosing Sundar Pichai for the<br />
top job, there wasn’t another contender in<br />
the race. In the case of Uber, however, former<br />
Google and Softbank executive Nikesh Arora,<br />
was among the candidates considered for the<br />
post of Uber's CEO.<br />
As Indian companies expand their businesses<br />
and advance into new territories,<br />
people will be the immediate beneficiaries of<br />
their success.<br />
Is it interesting to see that global organizations<br />
are appointing leaders from diverse<br />
backgrounds and cultures to look after their<br />
businesses. What’s stirring this diversity in<br />
organizations?<br />
According to a Glassdoor survey conducted in<br />
<strong>2017</strong>, the largest highly inclusive organizations<br />
generate 2.3 times more cash flow per employee,<br />
while the smaller companies had 13 times higher<br />
mean cash flow from operations when compared<br />
to peer organizations. The survey added<br />
that highly inclusive organizations generate 1.4<br />
times more revenue and are 120% more capable<br />
of meeting financial targets.<br />
While CEOs remain cynosure of everyone's<br />
eyes, it is the CIOs or the IT leaders, who are an<br />
eclectic but a shy bunch, and hardly make headlines<br />
with their appointments. Thanks to Vivek<br />
Kundra who served as the first Chief Information<br />
Officer of the United States and Hardik<br />
Bhatt, the CIO of the State of Illinois, brought<br />
the position back to the limelight. And thus, has<br />
given rise to a trend across the globe.<br />
Enterprises also have appointed Indian<br />
CIOs to look after their IT departments and<br />
implementations. Some Indian CIOs took this<br />
responsibility from their homelands while<br />
others were born there. Some even moved<br />
there after securing these top positions.<br />
We bring to you ten names who have set<br />
ex<strong>amp</strong>les for others to follow. The appointment<br />
of these CIOs is surely not an aberration<br />
and it will be interesting to see whether it continues<br />
to remain a trend.<br />
26 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
Mamatha Chamarthi<br />
Chief Digital officer,<br />
ZF Friedrichshafen AG<br />
Germany<br />
Mamatha Chamarthi served as the Chief Information Officer<br />
and Vice President of Consumers Energy Company and<br />
CMS Energy Corp. since May 2010. Chamarthi had overall<br />
responsibility for the information technology systems for<br />
CMS Energy and its principal subsidiary, Consumers Energy,<br />
a Michigan electric and natural gas utility. During her<br />
16-year career, she held a series of increasingly responsible<br />
positions. She served as the senior manager of information<br />
technology for Daimler Financial Services.<br />
Anthony Thomas<br />
Global CIO,<br />
Nissan Motor Company,<br />
Japan<br />
Anthony Thomas, also known as Tony, has been Corporate Vice<br />
President of Nissan Motor Co., Ltd. since <strong>October</strong> <strong>2017</strong>. Thomas<br />
served as the Chief Information Officer at GE Global Growth<br />
Organization since 2015. He served as the Chief Information<br />
Officer at Vodafone India Limited until September 15, 2015. He<br />
joined Vodafone in April 2012. At GE, he is a Member of GE<br />
Global IT Council and GE India Leadership Council.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
27
Insight<br />
Roger Gurnani<br />
EVP & CIO,<br />
Verizon Communications, USA<br />
Roger Gurnani served as the Chief<br />
Information & Technology Architect<br />
and Executive Vice President of Verizon<br />
Communications Inc. and Verizon<br />
Nederland B.V. for the last two years.<br />
Gurnani was responsible for developing<br />
and guiding Verizon’s technology strategy<br />
and investments. His role includes network<br />
and technology planning, development<br />
of architecture and roadmaps, continued<br />
evolution of digital platforms and oversight<br />
and direction for the Chief Information<br />
Officer and Chief Technology Officer teams<br />
across Verizon.<br />
Bask Iyer<br />
EVP & CIO,<br />
Dell Technologies, USA<br />
Bask Iyer has been the Chief Information Officer and<br />
Senior Vice President of VMware, Inc., since March 2015.<br />
Iyer served as the Chief Information Officer of Juniper<br />
Networks Inc., since 2011 and served as its Senior Vice<br />
President of Technology & Business Operations. A<br />
respected industry veteran, he has more than 25 years of<br />
experience in executing and driving change in traditional<br />
Fortune 100 manufacturing companies as well as Silicon<br />
Valley-based high technology firms.<br />
Anuj Dhanda<br />
EVP & CIO, Albertsons, USA<br />
Anuj Dhanda has been the Chief Information Officer and Executive Vice<br />
President at Albertsons, LLC since December 17, 2015. He serves as a Member<br />
of Executive Board at BITS Financial Services Roundtable. Dhanda has been<br />
Chief Information Officer and Executive Vice President of AB Acquisition<br />
LLC. since December 2015. Mr. Dhanda served as Chief Information Officer<br />
for the Giant Eagle supermarket chain based in Pittsburgh, PA since 2013 and<br />
its Senior Vice President of Digital Commerce.<br />
28 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
Rahul Samant<br />
SVP & CIO, Delta Airlines, USA<br />
Rahul Samant has been the Chief<br />
Information Officer and Senior Vice<br />
President of Delta Air Lines, Inc. since<br />
February 2016. Samant is responsible<br />
for the airline’s information technology<br />
strategy, applications, cybersecurity and<br />
infrastructure, which are a vital part<br />
of nearly every aspect of the customer<br />
experience. He joined Delta Air Lines in<br />
February, 2016 from AIG, a multinational<br />
insurance corporation with more than 88<br />
million customers in 130 countries<br />
Suren Gupta<br />
EVP Technology & Operations,<br />
The Allstate Corporation USA<br />
Krishna Mikkilineni<br />
SVP Engineering, Operations and IT,<br />
Honeywell International, USA<br />
Krishna Mikkilineni has been Senior Vice<br />
President of Engineering, Operations &<br />
Information Technology at Honeywell<br />
International Inc. since April 2013. Mikkilineni<br />
oversees the effectiveness of Honeywell’s<br />
research, development, engineering, supply chain<br />
and operations, strengthening Honeywell's ability<br />
to create differentiated products and solutions for<br />
Honeywell’s markets across the globe.<br />
Suren K. Gupta has been Executive Vice President<br />
of Enterprise Technology & Strategic Ventures -<br />
Allstate Insurance Company since January 2014. He<br />
served as Executive Vice President of Technology &<br />
Operations for Allstate Insurance Company since<br />
April 11, 2011. Gupta is responsible for enterprise<br />
wide technology strategy, network infrastructure,<br />
enterprise applications and technologyrelated<br />
governance, security and compliance<br />
activities. Most recently, Gupta was<br />
Wells Fargo Executive Vice President<br />
and Group Chief Information<br />
Officer for consumer<br />
lending.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
29
Insight<br />
Atish Banerjea<br />
CIO, Facebook, USA<br />
Atish Banerjea has been Chief Information<br />
Officer of Facebook, Inc., since November<br />
2016. Banerjea served as an Executive Vice<br />
President and Chief Information Officer<br />
at NBCUniversal from January 2013 to<br />
September 2016. Mr. Banerjea served as the<br />
Chief Technology Officer and Senior Vice<br />
President of Dex Media, Inc. from 2011 to<br />
2013. He was responsible for all information<br />
technology, engineering and interactive<br />
product development. While at Pearson,<br />
he was credited with helping direct its<br />
transformation from a print-dominated<br />
business to a digital leader.<br />
Ganesh Jayaram<br />
VP-IT,<br />
John Deere, USA<br />
Ganesh Jayaram is Vice President, Information<br />
Technology, Deere & Deere, a position he has held<br />
since January 2016. He is responsible for all global<br />
information technology activities for the company.<br />
Prior to that, he was named Director, Global IT<br />
Business Insights and Enabling Solutions. Jayaram<br />
also handled senior roles in Canon, and The Boston<br />
Consulting Group in Chicago and Mumbai.<br />
Alpna J Doshi<br />
Global CIO,<br />
Business Transformation & IT,<br />
Royal Philips, The Netherlands<br />
Alpna Doshi joined Royal Philips as<br />
the Global CIO in 2016. She was the<br />
Chief Information Officer of Reliance<br />
Communications for four years. Doshi<br />
served as Vice President of Telecoms<br />
Business at Satyam. Doshi has been a<br />
Director of TeleManagement Forum since<br />
April 2007. She is a strategic thinke, a<br />
collaborative leader dedicated to delivering<br />
top and bottom line results and creating<br />
new business models.<br />
30 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
O<br />
Putting<br />
cloud<br />
first,<br />
literally!<br />
IBM may also be looking for<br />
capturing a higher share of<br />
public services market<br />
By CIO&Leader<br />
n Wednesday 1st Nov <strong>2017</strong>, IBM announced<br />
Cloud Private, a platform for enterprises<br />
to leverage the microservices architecture<br />
for building cloud-native applications and<br />
refactoring their monolithic applications. This,<br />
the company says, will facilitate “integration and<br />
portability of workloads as they evolve to any<br />
cloud environment, including public IBM cloud.”<br />
The new platform is built on the open source<br />
Kubernetes-based container architecture and supports<br />
both Docker containers and Cloud Foundry.<br />
IBM is the third largest cloud company globally<br />
and is a leader in the private cloud market, according<br />
to the Q3 <strong>2017</strong> (latest) figures released by research<br />
firm Synergy Research Group. However, IBM lags<br />
both bigger rivals AWS and Microsoft as well as<br />
challengers like Google, Alibaba and Oracle in<br />
terms of growth. That is because of a higher growth<br />
witnessed by the public cloud segment of the market.<br />
The new initiative, on the face of it, will give<br />
a greater push to the private cloud market, on<br />
which it has a firmer hold, and drive its growth.<br />
Some customers are having a relook at public<br />
cloud, because of control and performance<br />
issues while some others want to remain private<br />
for privacy/regulatory reasons. IBM wants to<br />
leverage this segment and grow the entire private<br />
cloud piece of the market.<br />
That is the stated positioning of IBM.<br />
“IBM Cloud Private brings rapid application<br />
development and modernization to existing IT<br />
infrastructure and positions it to be combined<br />
with the services and experience of a public cloud<br />
platform,” he said.<br />
IBM also claimed that “companies will spend more<br />
than USD 50 billion globally starting in <strong>2017</strong> to<br />
create and evolve private clouds with growth rates<br />
of 15 to 20% a year through 2020, according to IBM<br />
market projections.”<br />
However, IBM may also be aiming to capture a larger<br />
share of public cloud market through this initiative.<br />
This is how.<br />
IBM has a huge customer base that uses<br />
its traditional middleware and other legacy<br />
applications. Through this initiative, IBM hopes to<br />
provide an easy migration path for these customers.<br />
By building the platform on the open source<br />
Kubernetes-based container architecture (supporting<br />
both Docker containers and Cloud Foundry), IBM<br />
hopes to facilitate easier integration and portability<br />
of workloads between private and public cloud.<br />
One thing that IBM Cloud Private will do is<br />
to help IBM customers place IBM middleware<br />
and other legacy applications inside containers<br />
and transform them into modern cloud<br />
ready applications by leveraging container<br />
orchestration run by Kubernetes.<br />
By working closely with the clients on their private<br />
cloud and making it easy for them to migrate to<br />
public cloud, IBM can genuinely hope to boost its<br />
public cloud business.<br />
This strategy is evident from the fact that IBM also<br />
announced new container-optimized versions of<br />
core enterprise software, such as IBM WebSphere<br />
Liberty, Db2 and MQ.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
31
Insight<br />
Smartphones<br />
will come<br />
bearing AI<br />
in 2020<br />
Apple, with its Bionic system on chip (SoC),<br />
will drive native AI adoption in smartphones<br />
By CIO&Leader<br />
32 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
The initial driver for the rapid adoption<br />
of AI in smartphones is the use of<br />
facial recognition technology by<br />
Apple's new iPhone X<br />
O<br />
ne in three smartphones -- roughly over half<br />
a billion -- shipped in 2020 will have machine<br />
learning and artificial intelligence (AI)<br />
capabilities at the chipset level, new research<br />
said on Monday.<br />
According to Counterpoint's 'Components<br />
Tracker Service', Apple, with its Bionic system<br />
on chip (SoC), will drive native AI adoption in<br />
smartphones, making the iPhone maker a leader<br />
in the AI-capable chip market through 2020.<br />
Huawei, with its HiSilicon Kirin 970 SoC, is<br />
second in the market after Apple with AI-capable<br />
smartphones.<br />
"The initial driver for the rapid adoption of AI<br />
in smartphones is the use of facial recognition<br />
technology by Apple in its recently launched<br />
iPhone X," said Counterpoint Research Director<br />
Jeff Fieldhack.<br />
"Face recognition is computationally intensive and if<br />
other vendors are to follow Apple's lead, they will need<br />
to have similar on-board AI capabilities to enable a<br />
smooth user experience," he added.<br />
Qualcomm is expected to unlock AI capabilities in its<br />
high to mid-tier SoCs within the next few months.<br />
Qualcomm should be able to catch up with<br />
Apple and Huawei and is expected to be second in<br />
the market in terms of volume by 2020, followed<br />
by Samsung and Huawei.<br />
"With advanced SoC-level AI capabilities,<br />
smartphones will be able to perform a variety<br />
of tasks such as processing natural languages,<br />
including real-time translation; helping users<br />
take better photos by intelligently identifying<br />
objects and adjusting camera settings<br />
accordingly," explained Counterpoint Research<br />
Director Peter Richardson.<br />
Machine learning will make smartphones<br />
understand user behaviour in an unprecedented<br />
manner.<br />
Analysing user behaviour patterns, devices will<br />
be able to make decisions and perform tasks that<br />
will reduce physical interaction time between the<br />
user and the device.<br />
"Virtual assistants will become smarter by<br />
analysing and learning user behaviour, thereby<br />
uniquely serving each user according to their<br />
needs," Richardson added.<br />
According to Research Analyst Shobhit Srivastava,<br />
there is also growing potential in for AI-capable<br />
devices to play a key role in health care.<br />
"Machine learning algorithms can be used to<br />
generate health and lifestyle guidance for users by<br />
analysing combinations of sensor data and user<br />
behaviour," said Srivastava.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
33
Insight<br />
Enterprises, is<br />
it time to say<br />
goodbye to legacy<br />
networking<br />
infrastructure?<br />
Legacy networks are causing cloud transition<br />
problems in enterprises<br />
By CIO&Leader<br />
34 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
G<br />
Companies are<br />
struggling with<br />
legacy networks,<br />
which are not<br />
suited for today's<br />
cloud based<br />
applications<br />
and their<br />
accompanying<br />
workloads<br />
etting rid of old furniture is a little like<br />
replacing your legacy infrastructure.<br />
It isn't easy to let go.<br />
According to Riverbed Future of<br />
Networking Global Survey <strong>2017</strong>,<br />
which includes responses from<br />
1,000 IT decision makers across nine<br />
countries, including 100 in India,<br />
revealed that legacy infrastructures -<br />
especially networks - are holding back<br />
their cloud and digital strategies.<br />
The survey found that nearly all<br />
respondents from India (98%) agree<br />
that legacy network infrastructure<br />
will have difficulty keeping pace with<br />
the changing demands of the cloud<br />
and hybrid networks. Conversely, 94%<br />
of respondents say their organization’s<br />
cloud strategy will only reach its full<br />
potential with a next-gen network,<br />
and 98% agree that a next generation<br />
network is critical to keep up with the<br />
needs of their business and end users.<br />
Let's agree to the fact that<br />
SD-WAN is a definite improvement<br />
over the MPLS networks. In the<br />
recent March <strong>2017</strong> "Market Guide<br />
for WAN Edge Infrastructure"<br />
report, Gartner evaluated the<br />
SD-WAN market at USD 1.3 billion<br />
annually by 2020.That is a really<br />
short time. Considering some<br />
common problems that SD-WAN<br />
promises to solve a)Increase<br />
flexibility and performance of your<br />
network b) Manage costs c) Decrease<br />
network complexity, the Riverbed<br />
survey confirms that 92% of IT<br />
decision makers in India plan to<br />
migrate to SD-WAN within the next<br />
four years - up from just 3% in <strong>2017</strong>.<br />
Other benefits for SD-WAN include:<br />
Increase application performance<br />
(40%)<br />
Network automation and ability to<br />
prioritize apps (55%)<br />
Unified connectivity across entire<br />
network (43%)<br />
Network visibility and monitoring<br />
(47%)<br />
Simplicity/ease of management<br />
(51%)<br />
Increased network security (46%)<br />
Integration with WAN optimization<br />
(37%)<br />
Instant cloud connectivity to AWS<br />
and Azure (44%)<br />
Decreased costs (29%)<br />
Currently, the survey confirms that<br />
performance pains experienced by<br />
businesses are glaring, as 42% of the<br />
respondents that they experience<br />
cloud-related network issues<br />
specifically caused by their legacy<br />
infrastructure a few times a month or<br />
more; and 90% said it impacts their<br />
business at least monthly.<br />
All this adds up to the fact that<br />
companies are struggling with<br />
legacy networks, which are not<br />
suited to meet the demands of<br />
today’s cloud based applications<br />
and their accompanying workloads.<br />
Simply put, legacy networks are<br />
dysfunctional for the business.<br />
According to the survey, 84% of<br />
Indian respondents stated both<br />
legacy networking infrastructure<br />
and lack of visibility into the cloud<br />
are barrier to their cloud strategy<br />
reaching its full potential – this,<br />
compared to 69% globally.<br />
However, there's still hope.<br />
The survey indicates that within<br />
two years SD-WAN technology will be<br />
critical in next generation networks<br />
to manage cloud and hybrid. And<br />
while only 3% of those surveyed are<br />
currently benefitting from SD-WAN<br />
today, within two years 54% plan to<br />
migrate to SD-WAN, and 92% within<br />
four years.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
35
Insight<br />
Security not a<br />
priority for the<br />
board<br />
A Fortinet survey reveals that 84% of<br />
businessses have reported increase in breaches<br />
By CIO&Leader<br />
36 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
Another important driver for board<br />
awareness is the proliferation of<br />
regulation. With major fines threatening<br />
the bottom line, the board now has a<br />
mandate to take interest<br />
A<br />
Fortinet Global Enterprise Security Survey reveals<br />
that despite high profile cyberattacks continuing to<br />
occur, almost half of IT decision makers (ITDMs)<br />
at 250+ employee organizations around the world,<br />
including India, still believe that business executives<br />
are not making cybersecurity a significant priority<br />
or focus. However, many IT professionals believe<br />
that the transition to the cloud as part of their organizations’<br />
digital transformation will in turn make<br />
security a growing priority.<br />
India Research Highlights:<br />
Board members are not treating cybersecurity as<br />
a top priority: 42% of IT decision makers in India<br />
believe that IT security is still not a top priority<br />
discussion for the board. This doesn’t seem to affect<br />
budgets since 74% of enterprises stated that they<br />
spend over 10% of their IT budget on security, which<br />
is a high investment. 89% of the surveyed respondents<br />
said their IT security budget has increased<br />
from the previous year. Now, IT decision makers<br />
feel strongly that cybersecurity should become a top<br />
management priority with 87% of the respondents<br />
saying that the board should actually put IT security<br />
under greater scrutiny.<br />
Three key drivers for cybersecurity becoming a top<br />
priority:<br />
Increase in security breaches and global cyberattacks:<br />
In the last two years, 84% of businesses<br />
have experienced a security breach, with the most<br />
common vector of attack being malware and ransomware<br />
for 54% of respondents. 71% of ITDMs said<br />
there has been an increased focus on IT security following<br />
global cyberattacks, such as WannaCry. The<br />
scale and profile of global cyberattacks is bringing<br />
security to the attention of the board. Security is no<br />
longer just an IT department discussion.<br />
Increased pressure from the regulators: Another<br />
important driver of board awareness is the proliferation<br />
of regulation, 47% of respondents reported.<br />
With major fines threatening the bottom line, such as<br />
the impending GDPR compliance for European data,<br />
the board now has a mandate to take interest.<br />
Transition to the cloud as a catalyst for security<br />
priorities: As organizations look at migrating to the<br />
cloud as part of their digital transformation, 88%<br />
of IT security decision makers believe that cloud<br />
security is becoming a growing priority. 92% of the<br />
respondents also affirm that cloud security - along<br />
with the investment in security to support it – is<br />
becoming a key priority for the board. As a result,<br />
half of those surveyed (71%) are planning investment<br />
in cloud security in the next 12 months.<br />
Report Methodology<br />
The <strong>2017</strong> Fortinet Global Enterprise Security Survey<br />
was undertaken on behalf of Fortinet by independent<br />
market research company Loudhouse to<br />
examine the changing attitudes towards security in<br />
business in July/August <strong>2017</strong>. The global survey of<br />
IT decision makers with responsibility/visibility of<br />
IT security, received 1,801 anonymized respondents<br />
across 16 countries (India, Hong Kong, Korea, Indonesia,<br />
Singapore, the US, Canada, France, the UK,<br />
Germany, Spain, Italy, Middle East, South Africa,<br />
Poland, Australia). There were a total of 100 respondents<br />
in India to the online questionnaire. They were<br />
not aware of the purpose or sponsor of the report.<br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
37
Insight<br />
New WEF report<br />
brings bad<br />
news for gender<br />
equality in india<br />
The overall gender gap has fell back to where it<br />
stood in 2008, after a peak in 2013<br />
By CIO&Leader<br />
W<br />
e have written extensively about<br />
the underrepresentation of women<br />
in the workforce. However, this bad<br />
news continues to prevail - especially<br />
for India. According to World Economic<br />
Forum's The Global Gender<br />
Gap Report <strong>2017</strong>, India has fallen to<br />
an overall rank of 108 in <strong>2017</strong> from<br />
87 last year. The report states that it<br />
has been largely due to the widening<br />
of its gender gap in women's share<br />
among legislators, senior officials,<br />
managers, as well as professional<br />
and technical workers.<br />
In contrast, Iceland sits at the top of<br />
the Global Gender Gap Index. Having<br />
closed nearly 88% of its gap, it has<br />
remained the world’s most genderequal<br />
country for nine years, according<br />
to the report. The four countries<br />
that made it to the top five included<br />
Norway (2), Finland (3), Rwanda (4)<br />
and Sweden (5). North America has<br />
a remaining gender gap of 28%, the<br />
38 CIO&LEADER | <strong>October</strong> <strong>2017</strong>
Insight<br />
I<br />
out of 144 countries<br />
108<br />
0.00 = imparity<br />
0.669<br />
1.00 = parity<br />
IND<br />
A<br />
0.40 distribution of countries by score 1.00<br />
SCO E AT<br />
LANCE<br />
E INDICATO S<br />
Politics<br />
Economy<br />
Education<br />
ll<br />
e a a a l<br />
al ula<br />
ula<br />
a e<br />
ula a e ale ale<br />
u a a al e e<br />
a<br />
ave a e<br />
e<br />
Health<br />
e<br />
Global Gender Gap score<br />
a a a u<br />
u a al a a e<br />
eal a v val<br />
l al e e e<br />
a u<br />
a e a e<br />
COUNT SCO E CA D<br />
smallest after Western Europe. Both<br />
Canada (16) and the United States (49)<br />
have closed more than 70% of their<br />
overall gender a ugap.<br />
e a a<br />
What is surprising a ee ual is the la steep fall ve<br />
in gender pairity a ehas ea come e in ea span<br />
of one year. The overall gender gap<br />
has fell back to where it stood in 2008,<br />
e al a e al e<br />
after a peak in 2013. The report indicates<br />
that the gap in <strong>2017</strong> is larger<br />
Educational attainment<br />
than<br />
Economic participation and opportunity<br />
e a al a a a e<br />
it stood in 2006,<br />
e a<br />
in<br />
a epart due to specific<br />
l e a e u a<br />
issues in selected large countries, in<br />
particular China l e and India. a e u a<br />
Deconstructing l e the eeconomic a e u a gender<br />
gap into two of its core aspects, wage<br />
Health and sur i al<br />
parity and labour market participation,<br />
the report has found that low-<br />
e a a<br />
eal l ee e a<br />
income countries namely India, Sri<br />
Lanka, among<br />
Political<br />
others<br />
empohave, erment<br />
on average,<br />
e a l a e<br />
closed only 67% of their labour market<br />
participation gender e gaps. e al<br />
Notable recent ea estimates e ale easuggest<br />
a e la<br />
that economic gender parity could add<br />
Source: Glassdoor<br />
France’s and aUSD310 e a billion to the<br />
a e av e ale ale 0.00 1.00 2.00<br />
Gender parity<br />
could add a 60%<br />
jump by 2020<br />
if the gender<br />
inequality issue<br />
in the workforce<br />
is resolved<br />
an additional USD 250 billion to the<br />
gross domestic produc (GDP) of the<br />
United Kingdom, USD 1,750 billion<br />
to that of the United States, USD 550<br />
billion to Japan’s, USD320 billion to<br />
GDP of Germany. Closer home, the<br />
report indicates that China could see<br />
a USD2.5 trillion GDP increase from<br />
gender parity and that the world as a<br />
whole could increase global GDP by<br />
USD5.3 trillion by 2025 if it closed the<br />
gender gap in economic participation<br />
by 25% over the same period.<br />
In India, the GDP could see a jump<br />
of about 60% by 2025 if the gender<br />
inequality issue in society is resolved<br />
and more women are allowed to join<br />
the workforce, according to a McKinsey<br />
report last year.. The report also highlighted<br />
that in a ideal scenario in which<br />
women play an identical role in labour<br />
markets as men, India is likely to witness<br />
the highest potential boost at 60%.<br />
Unfortunately, this scenario remain<br />
ideal unless steps are taken to close<br />
this growing gender gap in India. Are<br />
0.00 1.00 2.00<br />
the enterprises listening?<br />
176 The Global Gender Gap Report <strong>2017</strong><br />
<strong>October</strong> <strong>2017</strong> | CIO&LEADER<br />
39
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