Indiana Jones, IT Manager

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Who knew a flak jacket was essential equipment for an IT manager? Executives who go abroad to manage foreign IT activities might expect to face some culture shock, but many also have to contend with gunfire, natural disasters and political strife that can threaten their systems - and their lives.

Indiana Jones, IT Manager

Think Globally, Act Locally

Take Gregor Bailar. Now CIO and executive vice president for operations and technology at Washington-based Nasdaq Stock Market Inc., he formerly was Citibank's managing director for the advanced development group at its global relationship bank division, where he oversaw the building of 39 data centers around the world.

In his career, he's had to grapple with everything from feuding guerrilla groups in Africa to a shaky national infrastructure in India when setting up IT operations there.

Bailar remembers that a Citibank colleague who was setting up an IT office in Arkansas glibly compared the region to the Third World.

"Right - compare Arkansas to security in Africa," says Bailar. "When I lose two people to gunshot wounds, and this person is saying the market in Arkansas is an emerging market, I say, 'Get a grip.' "

When doing business in Africa for Citibank, he says, it just wasn't reasonable to expect the same level of security that's present in the U.S.

"In the African market, you couldn't go in and put in a Brinks truck for every delivery. It would cost hundreds of thousands of dollars," Bailar says.


The Hard Way

Cultural differences are just one of the hurdles IT managers face when setting up operations in far-flung corners of the globe. Here are a few of the lessons they've learned:

Know the disaster recovery plans for your local Internet, telecommunications and storage providers. What you might assume is standard practice won't necessarily be the same everywhere else.

Look at the security record of your local Internet service provider and Web host. For example, Brazilian hackers prey upon Web hosting companies with particular ferocity. Microsoft Corp. and AT&T Corp. have been recent victims.

Check the physical plant. How are the phone lines? Do your outlets have surge protection? How steady is the electricity supply?


In India, however, Citibank became the largest delivery service, because it wanted to ensure that its own deliveries were made safely. It then spun off the delivery service into a business.

The key to success, Bailar and his peers say, is to plan ahead but expect surprises.

IT leaders warn that careful study and planning are necessary before opening an overseas office.

"I think we've been very careful in looking at those situations," says Frank Butstraen, vice president of corporate IT at Amsterdam-based Philips Electronics NV.

Philips, like many other companies, looks to developing nations to host local or regional IT support operations for its businesses. In Eastern Europe, India and Southeast Asia, there's a plentiful supply of skilled IT workers, Butstraen says.

Before deciding to open an office abroad, however, Philips conducts cost and risk analyses. And with an ever-changing political climate abroad, the planning continues well after an office has opened, Butstraen says.

For instance, Philips used to have its main Asian office in Hong Kong. English was the official language when Hong Kong was under British rule, as it is at Philips, despite the company's Dutch heritage.

In Hong Kong, the electronics maker had easy access to regional development centers in India and Southeast Asian countries with stable IT labor pools, despite spasmodic governments and tremulous telecommunications infrastructures. The company could get good rates on all kinds of equipment and supplies, from a base located in a stable colonial outpost.

But the slated transfer of Hong Kong to Chinese sovereignty in 1999 made Philips executives nervous, so the company created a contingency plan to move its Asian IT operations to Singapore, which offered many of the same benefits as Hong Kong, without the political implications.

Although "it turned out that the impact [in Hong Kong] was not as bad as we thought," Butstraen says, the contingency plan was in place.

Nevertheless, even basic mistakes can trip up an IT department abroad.

Once, a Philips outpost in a developing country ordered a server that was to be installed on an upper floor. However, just as the office was to take delivery, says Butstraen, employees discovered that "the construction of the building was such that the floor couldn't support the weight of the server." As a result, Philips was forced to move to a new building. Bustraen declined to quantify how much the move meant to Philips in terms of additional costs or delays in opening the new facility.

Risk assessment also means doing extensive research on local partners and acquisitions.

Irene Dec, vice president of international investment at Newark, N.J.-based Prudential Financial, says that when negotiating recent acquisitions in Mexico City and Taiwan, the financial services company studied their business continuation plans, validated their backup and disaster-recovery procedures, monitored their call center structures and tested their networks to make sure everything worked according to Prudential standards.

Prudential won't make an acquisition where there is any serious risk in the IT infrastructure, Dec says. It may decide that an acquisition has the potential to rise to its own standards over time, depending on local circumstances, she explains.

While Prudential standards are the measuring stick, how to get there is flexible, Dec says. "Do you try to develop [a rigid] expertise in the U.S., or do you use local partners? In each of our products, we look to see which is appropriate," she says.

Bowing to Mother Nature

Keeping those local standards in mind is crucial, Bailar says.

Japan, where Nasdaq has some operations, has more earthquakes than anywhere else on earth. Locals bow to Mother Nature's might, but some American expatriates find that they simply can't assimilate that easily.

"For a stock market, it isn't OK [to have an outage]," Bailar says. "In Japan, with all earthquakes, it's common [for locals] to assume that [there will be] an outage and to come back the next day."

Of course, there are companies in Japan that do have sound disaster recovery policies, he says, but it takes some investigation and planning.

To ensure consistent network connectivity and capabilities, Nasdaq hires native Japanese firms, Bailar says. "As a result, I think we get better service. Local telecommunications companies are the dominant players, so it makes sense," he says.

That means contingencies for power as well - and not just in Japan.

"In India, you have to assume your power's going to go down every day. It has to do with the quality of the infrastructure," Bailar says. For example, Citibank had a new power system installed by the Indian government, but it still failed regularly, he says.

Another key issue is security. Bailar says he's pleased with the depth and proficiency of the IT professionals available in Brazil but would think twice about hosting a Nasdaq Web site with a service provider there.

According to, a Web site that documents defacements of Web pages, sites with the .br domain denoting Brazil had the biggest jump in the number of hacks throughout the world last year.

"With security, there are certain things you do local, and there are certain things you don't do local," Bailar says. "Security on the Web is not a local event."

Sometimes, however, the simplest problems upset the best-laid plans.

Being just over the border from Northern Ireland might imply danger. But bombings have been relatively rare for the past five years, says Paul Carmody, manager of Prudential's Prumerica Systems Ireland Ltd. in Letterkenny.

What really scared Carmody, he says, was a thunderstorm.

Having grown up in Massachusetts, Carmody says, he was accustomed to powerful thunder and lightning storms during the summers. In contrast, Ireland, though damp, has a mild climate and relatively few thunderstorms.

Last August, Carmody found out the hard way that Prumerica lacked surge protection, when Letterkenny experienced a particularly violent thunderstorm that crackled telephone lines and temporarily knocked out his system.

"I couldn't for the life of me understand how a lightning storm could bring my system to a halt," he says. "It was something I never thought of."

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