QuickREAD

October 4, 2006

CIOs, Do Something About Those Dirty, Energy-Wasting Data Centers of Yours!
Chief information officers need to take immediate steps to reduce information technology's spiraling energy consumption, which poses a threat to the environment, a research firm says.
Escalating use of power-hungry data centers are helping to boost the emission from electricity-producing plants contributing to global warming, Gartner says in a recent report. In addition, increasing consumption, along with rising prices, could help energy costs reach more than 50 percent of an overall IT budget in the next few years, from less than 10 percent today.
"IT's age of innocence is nearing an end," says Steve Prentice, chief of research at Gartner. "Technology's clean and friendly weightless economy image is being challenged by its growing environmental footprint."
Gartner has found a significant increase over the last 12 months in deployments of high-density servers, which consume more power than other technologies. Besides using more electricity, these beefy, heat-emitting servers also require more electricity for stronger cooling systems.
"The power needed for a rack of high-density server blades can be between 10 and 15 times higher than the power needed for a traditional server environment," Gartner researcher Rakesh Kumar says.
Source: Internet Week, http://internetweek.cmp.com/

Wait, Aren't Business Rule Management & Business Process Management the Same Thing?
Is your company trying to accelerate cycle times, lower costs, improve responsiveness, ensure compliance with policies and best practices, and increase customer satisfaction? Well, of course! That's why you need a comprehensive approach to managing your organization's business rules. Wait a minute. Aren't those the same things business process management is supposed to do? Confused? That's understandable.
Unfortunately, business rule management and business process management (BPM) are increasingly being pitched as competing options—or one-size-fits-all solutions to business improvement—by vendors and consultants who focus on one area or the other. After all, BPM systems are based on rules, and business rule engines can execute actions without a BPM system.
In reality, BPM suites and business rule management systems serve fundamentally different and complementary purposes. In many cases, you need to use them together to fully achieve the goals of agility, alignment, compliance and the rest. The trick is striking the proper balance: Which rules are the domain of the BPM system and which are managed by the BRM system? What actions should be taken by the business rule engine, and what should be left to the process engine?
Source: Intelligent Enterprise, http://www.intelligententerprise.com/

HP First Refined Its Metrics So It Would Know if It Received What Was Expected of Suppliers
When Hewlett-Packard began outsourcing its manufacturing facilities, it knew it had to clearly define what was expected of its suppliers. The only way to make sure product quality met requirements was by clearly defining what the metrics for measurement were. By forming a concrete set of standards regarding product technology, quality, responsiveness, delivery, cost, and environmental impact, HP has been able to weed out non-compliant suppliers, and drive performance higher in others.
Greg Shoemaker, vice president of central and direct procurement at HP, says that “we work with our suppliers on quality enhancements to reduce warranty cost to HP, and therefore to offer the most reliable products possible.” Several quality metrics are measured weekly for cost of quality impact, including annualized failure rate, annualized return rate, defects parts per million, and component failure rate.
Source: Purchasing, http://www.purchasing.com/

Well, Well—It Seems that ERP and Lean Aren't So Incompatible After All
Many observers said you couldn't mix enterprise resource planning with lean. One dealt with material planning and the other with improving production; how could they cooperate? Weren't they total opposites that couldn't exist harmoniously beneath the same plant roof? As it happens, manufacturers' lean projects are starting to catch a boost or two from ERP systems.
Source: Industry Week, http://industryweek.com/

Most Complying with Sarbanes Don't Seem to Use Software Solution to Do It
About 70 percent of finance and technology executives said their companies still aren't using a third-party software tool to help meet the financial control requirements mandated by the Sarbanes-Oxley Act, according to a survey released recently by controls management software maker Approva.
The survey of 200 chief financial officers, chief information officers and heads of internal audit, conducted from Sept. 13 to 21, comes amid continued criticism and calls from top economic officials to loosen parts of the 2002 legislation.
More than seven of 10 executives queried say their firms lack a software solution that helps them conform to Sarbanes-Oxley's Section 404, which mandates tighter internal financial controls. Thirty-seven percent of the executives report that at least four-tenths of their IT controls are still done manually.
"When people started out on this, it smelled a lot like Y2K to them," says John Hagerty, vice president of AMR Research, referring to technical compliance requirements for companies to fix the date-related errors associated with the year 2000.
Even though most companies aren't using a compliance tool, those that are have been spending more on consulting than on actual software. That trend is changing, though, Hagerty says. In 2007, he expects companies to boost spending on technology ($1.98bn, compared with $1.94bn in 2006) and lower spending on professional services ($1.73bn, down from $1.75bn this year).
Source: Baseline, http://www.baselinemag.com/

Encrypted Data Can Be Virtually Theft-Proof, But Few Corporations Seem to Be Interested
Hundreds of corporate security breaches have been reported in recent years, some with highly embarrassing results for executives, not to mention clients and customers. Despite the consumer uproar and congressional fulminations, corporations aren't rushing to encrypt their sensitive customer data. According to a survey of 227 North American-based security professionals from organizations with at least 1,000 employees, conducted in March 2005 by Jon Oltsik, an analyst at the Enterprise Strategy Group, only 36 percent use encryption. "By far, the two most important reasons companies have not yet implemented encryption are cost and worries about decreased performance," says Oltsik. Cost was cited by 64 percent of all respondents, and overall system performance by 60 percent.
Experts agree that encryption technology itself is pretty much foolproof. If the consumer data lost or stolen in some recent high-profile incidents had been encrypted, thieves would have ended up with nothing. The National Institute of Standards and Technology says a code-breaking super-computer would require 149 trillion years to decrypt a 128-bit encryption key. Who wouldn't want that kind of protection?
Source: CIO Insight, http://www.cioinsight.com/

Deloitte: Number of Corporate Brands Attacked in 'Phishing' Scams on the Rise
Both the sophistication of security threats and their potential impact across the company are escalating, says Adel Melek, partner and global leader of the IT risk-management and security-services practice at Deloitte, He says disorganized hacking is being replaced by purposeful, targeted acts of criminal activity whose ramifications are felt for a long time. A new report from the anti-phishing working group reveals that the number of brands under attack was up 18 percent from June and 12 percent over the previous record, set in May. In July, 157 online brands were hijacked by phishing campaigns, according to the report. Phishing is an e-mail scam that dupes users into revealing personal or confidential information.
Source: Optimize, http://optimizemag.com/

Net Promoter Score Seen as Reliable Measure of Customer Loyalty
"I have little doubt that this will be as big and long-lasting for GE as Six Sigma was," a senior General Electric executive told BusinessWeek in January. The executive, Peter McCabe, chief quality officer for GE Healthcare, was talking about the "net promoter score" (NPS), a method of measuring customer loyalty.
McCabe was prescient. Since then, GE Chief Executive Jeffrey Immelt has told shareholders that the entire company will be using NPS and that it will play a central role in his strategy to drive organic growth.
Indeed, business leaders and investors are likely to hear more about NPS, and not just from GE. NPS is the culmination of more than 20 years of work aimed at developing a reliable measure of customer loyalty. The link between loyalty and growth should be obvious, though it never shows up on a financial statement. Loyal customers keep buying. They increase their purchases over time. They refer their friends and colleagues. They make suggestions and provide honest feedback.
Source: E-Commerce Times, http://ecommercetimes.com/

Would Majority Bring Outsourced Services Back In-House if They Could? Looks Like It.
A recent Compass poll of executives from 70 outsourced companies in North America found that only 4 percent of organizations would not consider taking all or some services back in-house when their contract term expired. Two years ago, this result would have been surprising, but recently an increasing number of client organizations view repatriation of services or insourcing as a viable option.
The growing popularity of insourcing results from a variety of factors, including acquisition of outsourced companies by insourced companies, clients' disillusionment with their outsourcing deal, an increased focus on selective sourcing (and retaining strategic services in-house), and a growing confidence within companies in their ability to efficiently manage an IT operation.
Source: CIO, http://www2.cio.com/

Narrow Scope of Project or You Will Exhaust Valuable People, Time and Resources
Nothing is worse than the never-ending project. It can suck up resources and exhaust even the most resilient teams, according to the Ten Commandments of Project Management. To keep projects tight and focused, carve larger efforts into smaller projects that have achievable deliverables and can meet deadlines. In the long run, a series of small wins has more impact on the organization than a big bang that never sounds.
Source: Computerworld, http://computerworld.com/

More and More, Forwarders Involved in Building Air Cargo Containers, Pallets
An air cargo industry pressed to meet the contradictory demands of service and efficiency increasingly is finding the answer in the basic building blocks of shipping. Industry experts say more forwarders are enhancing services by building up completed containers and pallets.
The action is changing the way forwarders and airlines are handling cargo and could have far reaching ramifications for carriers and airports.
Buffeted by financial pressure, carriers have whittled down their cargo activities to core functions in recent years. In the process, many airlines have outsourced functions such as ground handling to third-party providers.
On top of this, carriers are facing an encroachment from the other side - their customers.
Some forwarders are pushing for further reduction in the airlines' activities, as they see advantages in building and breaking down pallets and containers themselves.
Source: Air Cargo World, http://aircargoworld.com/

Risk Management Is Important Part of Supply Chain Management Now
While there is little risk in a perfect world, it is far from the reality of the one we live and work in. As globalization intensifies, so do the risks of competing in such a volatile, dynamic marketplace. Remaining competitive means mitigating potential risks by understanding supply chain interdependencies and discovering alternative solutions for areas with high exposure.
Accounting for all potential risks would not only take an excessive amount of time, but the relevancy of the identified risks would depend on the individual company and its supply base. With the recent focus on natural disasters, pandemics and terrorism, companies that are not addressing the issue of risk to their supply chains are overlooking what is now a core attribute of supply management. And with growing world tensions, drastic climate changes and increased trade congestion, there are plenty of risks to keep supply management executives up at night.
Source: Inside Supply Management, http://www.ism.ws/

Product Lifecycle Management Not Just for Giant Corporations Anymore
Product lifecycle management—software that tracks a product through design, manufacturing and support—until quite recently was a classic Fortune 1000 application. PLM vendors fell into two general categories: technical software firms extending their products beyond engineering and manufacturing, and business software firms expanding their products beyond the corporate financial infrastructure. To get into PLM, therefore, a company needed either a fairly sophisticated engineering system or an up-and-running ERP system, both of which involved a substantial IT investment.
Today, however, the high cost of entry is largely moot, with much smaller firms implementing PLM for a variety of purposes, according to Jon Gable, a vice president of products at ENOVIA MatrixOne, a subsidiary of Dassault Systèmes. "We now see installations ranging from very small enterprises to some of the largest companies in the world," he says. According to Gartner, the expansion of PLM into smaller firms is largely responsible for the robust forecast growth of PLM software sales, from $1.7bn in 2006 to as high as $2.4bn in 2009. "That's a compound annual growth rate of almost 14 percent, better than most other segments of the software industry," says Gartner analyst Marc Halpern.
Source: Electronic Business, http://www.edn.com/

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