Telecommuting, Indian Outsourcers, Portable Karaoke and More

This issue of Trendlines from the 7/15/08 issue of CIO magazine covers recent news impacting the IT community including Wi-Fi issue in Philadelphia, IT costs at Dow Chemical and Online fraud tools

Even With $4 Gas, Demand for Telework Unmet

Even as gas prices hit historic highs in the U.S., most Americans can't telecommute, according to a recent survey released by advocacy group Telework Exchange.

Of those surveyed, 92 percent said they believed their jobs could be done from home. But only 39 percent of the respondents say they were able to telework at least part-time. Nearly all the survey respondents were culled from the 377 registrants of the Telework Exchange website.

"Telework Exchange registrants—both government and private-sector employees—do have a clear interest in telework," says Cindy Auten, Telework Exchange's general manager, in an e-mail. "We find that this is an accurate sample of the full population." Even with people in much of the U.S. paying $4 a gallon or more for gas, telecommuting seems to be facing an uphill battle. Telework Exchange has pushed for more telework options for U.S. government workers, but a survey released in March by CDW-G found only 17 percent of federal employees telecommuting.

Surveys have shown that management resistance to telework remains a barrier, Auten says. "What we found was that as managers become exposed to/involved in telework, their approval of the operating practice improves significantly," she adds. "Encouraging managers to telework is a critical step to achieving overall agency telework adoption. Further, agencies must educate and train management on telework drivers and benefits."

Thirty-eight percent of those surveyed said they're willing to pay any amount for gas. More than eight in 10 respondents said they rely on their vehicles to get to work, with only 13 percent using carpooling and 10 percent using public transportation. However, 78 percent said they were making lifestyle changes—such as limiting car trips—because of high gas prices. Another 62 percent said they were spending less in general and 53 percent said they were eating out less often.

An average, a U.S. resident spends $2,052 a year for gas to commute and spends 264 hours on the road, according to the survey.

"I think that we are seeing a tipping point for people to start looking for other alternatives to commuting," Auten says. However, employees may have to prove to managers that they can remain productive. "It is also important that employees focus on measurable outcomes to demonstrate continued or increased productivity," she says. "It is helpful to use project schedules, key milestones, regular status reports and team reviews."

-Grant Gross

Indian Outsourcers Gaining Global Share

India's top outsourcers are growing their share of the global IT services market as customers break large, multibillion orders into smaller chunks, and customer confidence in Indian providers grows, according to research firm Gartner.

Gartner says the top six Indian offshore service providers, including Satyam, Wipro, Infosys, Tata Consultancy Services, Cognizant and HCL Technologies, accounted for 2.4 percent of the total worldwide IT services market last year, compared with 1.9 percent in 2006. All have headquarters in India, except Cognizant, which is U.S.-based but delivers services mainly from India.

India's top outsourcers have delivered high quality at low cost and have put in place human resources practices that let them hire and manage large staffs, says Gartner senior research analyst Arup Roy. "We expect the share of these companies to continue growing," he says.

Other analysts agree that India's top outsourcers are increasing their share of the IT services market. Most of the growth comes from their strength in application development and maintenance, said Siddharth Pai, a partner at outsourcing consultancy Technology Partners International. Indian companies have close to 40 percent of this market, he says.

But challenges loom. Multinational services companies like IBM and Accenture have set up Indian operations to take advantage of lower staff costs. Indian outsourcers must also grapple with growing staff costs, attrition, the appreciation of the Indian rupee against the dollar, and their dependence on the U.S. market.

However, India's top outsourcers are expanding into other countries to reduce their dependence on the U.S. Attempts to diversify into new services like remote infrastructure services have also been successful.

-John Ribeiro

Karaoke, Anyone?

Coming to a cubicle near you: a portable karaoke system that allows would-be crooners to belt out a tune no matter where they are. And you thought sitting next to someone blasting their iPod was bad.

In October, Japanese toy maker Takara Tomy plans to release the Hi-kara, believed to be the world's smallest karaoke system. The Hi-kara is a complete portable music system in a 7-centimeter cube. A 2.4-inch LCD screen on the front of the box displays a video and song lyrics, and users can hear the music and sing through a custom headset that includes a microphone. Or, if desired, it can be hooked up to a pair of speakers so that multiple people can hear the song.

White and pink models of the Hi-kara, which is aimed at children of around eight years old, will go on sale in Japan on Oct. 18 and will cost 10,500 yen (US$97).

Songs can be added to the system in cartridges that will cost either 2,100 yen for 10 songs or 3,675 yen for 20 songs. Takara Tomy plans to offer both preloaded cartridges and prepaid blank ones, onto which users can download songs of their choice through a planned Internet site.

Four AA batteries will provide enough power for about four-and-a-half hours' use.

Takara Tomy hopes to sell 500,000 units of the Hi-kara during its first year on sale.

Just imagine the endless possibilities for an office sing-along. Simon Cowell, are you listening?

-Martyn Williams

How Dow Chemical Keeps Its I.T. Costs Low

Companies that are planning cost-cutting measures could learn a lesson from Dow Chemical. "We look at cost management from a strategic point of view," says Mack Murrell, Dow's vice president of IT. "I've got a three-to-five-year look ahead on costs." Dow's cost-containment approach involves planning for different business and economic scenarios (see "When Cutting IT Costs, Look to The Future"). Murrell notes that Dow's revenues have more than doubled in the last decade, while its IT costs have only risen 15 percent to 20 percent in that time. IT costs are a little more than 1 percent of revenue.

Despite organic revenue growth, acquisitions and expansion, Dow has controlled IT costs by maintaining an "appropriate" level of IT standardization. Murrell says that means the number of solutions is equal to the number of problems. "You're not doing things twice that need to be done once."

Dow has done well enforcing its IT standards. Consider this: The company, which sells 3,100 products, runs on a single global instance of SAP. More than 90 percent of its 46,000 workers worldwide use laptops of the same brand, Lenovo. "There's no variability where there doesn't need to be," says Murrell. That keeps costs down. The emphasis on standards means IT customizes solutions only when necessary. Murrell says the goal is to deliver a high level of service at a low cost. However, "Driving our IT cost to zero is not where we should go," he says. For now, Dow seems to have struck the right balance.

-Meridith Levinson

Philadelphia Wi-Fi Network Saved

Philadelphia's municipal Wi-Fi network, previously scheduled to be shut down by its builder, EarthLink, has been saved by a group of private investors.

The investors will finish building the network and plan to work with nonprofit organizations to offer services to people without Internet access. They plan to contract with several enterprise and municipal customers as anchor users of a paid service and offer free services to the general public.

The group modeled its idea on other successful municipal Wi-Fi ventures, says Craig Settles, an independent consultant who has been in close contact with people involved with the new arrangement. In Fredericton, New Brunswick, Canada, for example, the network provider partnered with 12 businesses to commission the network. The business users pay for access, while citizens can use the network for free.

"Despite all that has gone on with Philly and their network, I still expect the city to join the ranks of successful muni network projects," says Settles.

The investor group will use advertising to help support the free service. In addition, the group also expects to offer wired service to its customers. Mark Rupp, Rick Rasansky and Derek Pew are three founders of the investor group. Pew and Rupp are on the board of Remi Communications, a provider of communications services to enterprises.

Philadelphia's network was one of the first (read "More Cities and Towns Want Their Own Wi-Fi"). But the plan drew fire from Verizon, which charged it was unfair to use tax dollars to build a network that would compete with private providers. Eventually, EarthLink won a contract to build a network at no cost to taxpayers. But the Internet service ran into financial difficulties and scaled back its Wi-Fi projects. In May, after failing to come to an agreement with city and nonprofit groups, EarthLink said it would shut down the Philadelphia network that it had already built.

-Nancy Gohring

By the Numbers: Online Fraud Tools Lagging

Technologies for fighting threats face maturity and adoption barriers

Online fraud is getting worse. In 2007, Americans reported losses of $240 million due to the problem, according to the Internet Crime Compliant Center. That's up $40 million from 2006.

Yet defenses against online fraudincluding adoption of new technologiesare not keeping up with scammers' tactics, says Forrester Research Senior Analyst Geoffrey Turner. He puts fraud defenses into four categories: authentication, monitoring, risk-driven controls and fraud intelligence. "A robust defense includes all four methods," he says. However, his report, "Countering Online Fraud Globally," notes capabilities in those areas are still maturing and will keep losses only at current levels.

Turner says it's important to include fraud countermeasures in your big-picture security plan for IT. CIOs sometimes make the mistake of treating counterfraud and IT security as two separate domains, he says.

To combat cybercriminals, CIOs need to assess practices of establishing and verifying identity, since most Internet fraud stems from some aspect of ID theft. They should also look at how stronger identity-proofing credentials can be applied to current business processes. "New identity technologies and processes that are better suited to today's online environment are available," he says, "but their adoption is lagging far behind the fraud economy's ability to exploit outdated identity practices."

Online fraud will be significantly reduced only by broader adoption of more effective identity technology and processes. "CIOs should simultaneously be looking at how identity and fraud relate to the issues in the markets in which they operate and begin to consider market-scale, multi-organizational strategic changes," says Turner.

Best Practices

1. Examine how much risk your organization faces. Should you have measures in place to prevent fraud rather than an action plan to recover from it?

2. Look at how you use the information that is generated from fraud-monitoring systems. Turn that data into security controls so that you're getting the most out of your monitoring system.

3. Evaluate online transaction-monitoring activity and authentication practices. Analyze whether broader monitoring or additional authentication factors are necessary.

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Copyright © 2008 IDG Communications, Inc.

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