Green IT a Natural Fit for Enterprise Executives

More than just a passing fad, Green IT is a growing, global business concern that is significantly impacting how IT executives will make technology buying decisions now and in the future. According to IDC's U.S. Green IT survey, 80% of executives say that Green IT is growing in importance for their organization, and 43% say they consider a vendor's "greenness" when selecting their suppliers.

Additional Survey Findings

One half of survey respondents claim that “reducing their organization's environmental impact” was important or very important to senior management

42% of respondents said that IT will play a lead role or an important role in their organizations' efforts to reduce environmental impact

One-third of respondents rated an IT supplier's "greenness" as important or very important

81% of respondents identify green products' ability to reduce operating costs as the most important reason for considering a supplier's greenness

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IT Leaders Must Consider Alternative Delivery Models or Risk Being Bypassed By the Business Units

Gartner, Inc. has identified 14 alternative delivery models that will completely transform the IT market in the next five years. Advancements in technical areas are presenting a scenario that offers new ways to deliver, package and procure IT, and these alternative delivery models have the potential to dramatically change how IT is accounted for. IT leaders must examine these models, or business units may implement these solutions without them.

At the highest level, alternative delivery models are approaches to acquire, package and deliver IT in nontraditional ways. Traditional methods of IT acquisition and delivery are wrapped in well-honed internal processes whereby IT develops or acquires technology (hardware or software), deploys it, supports it and retires it. Even when part of the IT service is outsourced or handled offshore, the provider runs the day-to-day service and may own part of the assets. The client IT function retains most of the risk and responsibility for the overall design and management of the technology life cycle.

The 14 alternative delivery models include: business process utilities (BPUs); infrastructure utilities (IUs); storage as a service; grid computing; communications as a service (CaaS); utility computing; capacity on demand; remote management services; SaaS; Web platforms; community source; software streaming; software-based “appliances” (SBAs); and user-owned devices.

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The Customer Service and Support Applications (CSS) Market Experienced Moderate Single Digit Growth in 2006

According to a new Frost & Sullivan report, the North American customer service and support (CSS) applications market, including the markets for customer and account management, case management, problem diagnostics and resolutions, offer management and service and customer analytics, continues the slow and steady positive growth trend of all of its constituent parts.

While there is no single technological trend that drives the growth in CSS applications sales, on the whole, growth is derived from an increasing enterprise focus on customer experience, as well as new products and sales tactics aimed at penetrating the underserved small and mid-sized business community. A long-standing drive to transform contact centers into profit generating entities is causing many existing CSS customers to re-evaluate their technology and to seek out adjunct products to help agent’s cross-sell and upsell.

Interestingly, the sales model of the two leading players in the CSS market – Oracle and SAP – has diverged from the rest of the pack. Since these two market leaders also have deep inroads into enterprise back office technology stacks (including financials, human resources, supply chain, and so on), they tend to sell their CSS applications, as well as other front-office applications, as part of a larger functional suite.

Quiet significantly, on-demand CSS applications accounted for approximately one-fifth of total market revenues in 2006. On-demand implementations, for the most part, were clustered in smaller agent seat count deployments as larger contact centers shunned the model citing concerns about stability and guaranteed uptime. However, Frost & Sullivan trusts that enterprises will increasingly turn to on-demand applications as traditional on-premise CRM applications have failed to provide a 360-degree view of every customer and every interaction.

Furthermore, CSS delivered as an on-premise implementation still faces numerous integration and customization problems, extremely high costs and a lack of extensibility. By the end of the forecast period, Frost & Sullivan expects the on-demand market to account for close to of one-third of all CSS revenues.

Overall, the CSS market experienced moderate single digit growth in 2006, generally in line with expectations. Due to the success of full suite CRM vendors tapping into their traditional large enterprise ERP base, the top end of the market is currently well saturated.

“This is not to say that opportunities do not exist in this space as the best-of-breed knowledge management and service resolution management specialists are moving into the space by positioning their technology as an adjunct to traditional CRM suites rather than tackling a full-on replacement game," says the Frost & Sullivan analyst. "Additionally, large enterprises are increasingly being pitched unified communications platforms by their telephony, contact center and networking infrastructure vendors." Enterprises that adopt such technologies will become sales opportunities for CSS vendors savvy enough to pitch their offerings as tools for knowledge workers and other non-contact center enterprise personnel.

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Study Finds Significant "Engagement Gap" Among Global Workforce

Employees do not believe their organizations or their senior management are doing enough to help them become fully engaged and contribute to their companies' success, according to a new global workforce study conducted by Towers Perrin, a global professional services firm.

Just 21% of the employees surveyed around the world are engaged in their work, meaning they're willing to go the extra mile to help their companies succeed. Fully 38% are partly to fully disengaged. The result is a gap -- which Towers Perrin has dubbed the "engagement gap" -- between the discretionary effort companies need and people actually want to invest and companies' effectiveness in channeling this effort to enhance performance. The study found that companies with the highest levels of employee engagement achieve better financial results and are more successful in retaining their most valued employees than companies with lower levels of engagement.

The most striking data about the linkage between employee engagement and financial performance come from a study of 40 global companies which involved a regression analysis of company financial results against engagement data. It found that firms with the highest percentage of engaged employees collectively increased operating income 19% and earnings per share 28% year to year. Those companies with the lowest percentage of engaged employees showed year-to-year declines of 33% in operating income and 11% in earnings per share.

In a related study over a longer time horizon (three years), the firms with the highest levels of employee engagement achieved a 3.7% increase in operating margins, while those with the lowest levels of engagement suffered a drop of 2%.

Engaged employees also are more likely to see a direct connection between what they do and company results, according to the study. More than 80% of engaged employees believe they can and do contribute to the quality of products and services, and to customer satisfaction. Only half as many of the disengaged share that view.

In addition, engagement has a direct impact on retaining employees. Half of the engaged employees had no plans to leave their company, compared with just 15% of the disengaged ¾ and roughly a third of the workforce overall. Less than 5% of engaged employees said they were actively looking for another job compared with more than one in four of the disengaged employees.

The Towers Perrin study also debunks a widely held view that engagement is an innate trait. Rather, it is the organization itself -- and most particularly, its senior leadership -- that has the biggest impact on engagement levels.
The study's findings point to three areas of focus for companies to increase engagement and tap the reservoir of employee discretionary effort.

1. Employees need their senior leaders to demonstrate inspiration, vision and commitment. Only 38% of employees surveyed felt senior management communicates openly and honestly, and just 44% agreed senior management tries to be visible and accessible. In addition, only 10% of employees agreed that "senior management treats us as if we're the most important part of the organization." More than half felt that senior management "treats us as just another part of the organization to be managed" or "as if we don't matter."

2. Employees want to give more to their companies and their jobs, but also want a clearer picture of what's in it for them. The study shows that employees are optimistic about their jobs and have a strong desire to learn and grow. More than three out of four employees love or like their job (86%) and their organization (77%). In addition, 83% "look for opportunities to develop new knowledge or skills," and 84% "enjoy challenging work that will allow them to learn new skills." But, as the engagement scores show, they are not delivering the full discretionary effort these views would suggest because they don't feel their companies and leaders are meeting these needs and creating the conditions that will sustain engagement. For instance, just 36% agreed they have excellent career opportunities at their organization, and more than two-thirds said they are sometimes or frequently frustrated by their organization's people-related decisions. And while 68% agreed their organization has a reputation for financial stability, only 54% agreed it had a reputation as a great place to work.

3. Employees want to work for a company that is seen as a leader. A big part of what's in it for employees is an organization's reputation. Employees worldwide show a desire to work for an organization that strives for excellence in the eyes of its employees, customers and the world at large. According to the survey, top drivers of higher engagement ¾ all within the organization's control ¾ include senior leadership behavior, a commitment to corporate social responsibility, the company's reputation, and sufficient opportunities for learning and development.

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Companies Worldwide Struggle to Attract, Retain Workers

A large majority of companies in the United States and around the world are struggling to attract and retain top-performing and critical-skill workers, according to a new study by Watson Wyatt Worldwide. Furthermore, many employers do not fully understand why workers join or leave an organization, an obstacle that greatly increases the challenge of finding and keeping good employees.

Two of three companies worldwide report difficulty attracting top-performing workers, while a full 70 percent have difficulty attracting critical-skill employees, according to the 2007/2008 Global Strategic Rewards study. These trends show remarkably little variance around the world. In addition, more than half of companies report difficulty retaining top-performing (52 percent) and critical-skill (56 percent) workers. The United States has the highest median voluntary turnover rate, at 11 percent, while Latin America has the lowest, at 5 percent. The study results are based on a survey of 946 companies and a complementary survey of 13,000 employees.

Efforts by companies to limit turnover appear to be hampered by an incomplete understanding of employee priorities. For example, workers rank stress as a top reason they would leave their company, but it is not even among the top five reasons that employers cited. Instead, employers cite insufficient pay and lack of career development and promotion opportunities.

The study found that when employees are satisfied with stress levels and work/life balance, 86 percent are more inclined to stay with their company (versus 64 percent when dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55 percent when dissatisfied).

The study also found that to attract, retain and motivate the best employees, companies must clearly communicate expectations about rewards and then deliver as promised. More than two-thirds (69 percent) of employees who say their employers succeed at both promising and delivering rewards are committed to their company and motivated to help it succeed, versus about one-fourth of workers overall. These employees also are more likely to be top performers.

Other findings from the Global Rewards study:

Incentive compensation: Globally, companies are making more workers eligible to participate in incentive compensation programs, although nearly one-half of employers also raised the financial targets that must be met to earn those bonus rewards.

Performance management: Roughly one-half of companies say their managers do a good job at performance management. Managers at U.S. companies received the lowest ratings, while those in Asia-Pacific received the highest.

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Contact Center 'Empathy and Advocacy' Standards are Falling in Europe

According to the results of the 2007 Aspect Contact Center Satisfaction Index - Europe, the first and only published independent survey of consumer experience versus expectations of contact center interactions in Europe, customer satisfaction with contact center-delivered service fell between 2006 and 2007. European consumers rated satisfaction with their last contact center interaction as an E grade (64 percent). This compares with 67 percent, a D grade in 2006.

Among the countries surveyed, British, Italian, French and Spanish consumers all awarded contact centers an overall satisfaction grade of E (scores fell between 61 and 62 percent). Dutch consumer ratings were slightly higher at 65 percent (D grade). While German consumers were the happiest in Europe, rating their last interaction 72 percent out of 100, a C grade on the Aspect Index - Europe.

European consumers were particularly critical of contact center Empathy and Advocacy skills - rating their last interaction with a 65 percent score, 5 percent lower than in 2006. In three key Empathy and Advocacy areas highlighted previously as being important to European consumers - “Knowledgeable and Informed”, “Professional” and “Patient”, European consumers rated contact center performance 5 to 6 percent lower in 2007 than in 2006. In addition:

28 percent of consumers in Europe said that their last contact center interaction fell short of their expectations compared with 22 percent in 2006.

Consumers in the Netherlands have the highest expectations of contact center-delivered service at 6.9 out of 9 in 2007, and French consumers the lowest at only 5.9 out of 9.

On average, 2.7 interactions are required with a European contact center in order to resolve a consumer query. Additionally, European consumers wait an average of 4.5 minutes when trying to reach a person within the contact center.

44 percent of interactions with communications companies fell short of European consumer expectations compared to only 20 percent of retail company interactions and 21 percent of financial company interactions (35 percent, 17 percent and 16 percent respectively in 2006).

The 2007 Aspect Index – Europe study also examined the impact of good and bad customer experiences on future business, finding that one third of European consumers who were ‘satisfied’ with their last interaction would conduct more business with that company; with 8 percent of these saying they will do much more business. Conversely, nearly half of consumers who were ‘unsatisfied’ claimed they will conduct less business; half of these saying they will do much less business.

Two-fifths of European consumers that were asked to repeat information after being transferred from an automated system to a live agent said they will conduct less business with a company; and, overall, 20 percent European consumers said they were “likely to switch companies based on their latest (actual) interaction”.

More information can be found at www.SupportIndustry.com.

Huge Costs, Workflow Disruptions and Frustrations Caused by Fragmented Communications

The largest-ever survey of enterprise and contact center employees and their workflows reveals the silent but staggering true costs of fragmented communications: Enterprises of 1,000 persons could lose nearly $13 million a year in lost productivity and avoidable expenses. That's just one of many startling results from a recent, landmark in-depth poll of 517 communications end-users across North America and Europe conducted by independent Insignia Research and commissioned by Siemens Communications, Inc.

The survey report is the first to fully quantify the costs of the status quo -- including workflow disruptions, added costs and associated frustrations to enterprises lacking unified communications. It explores pain points at the individual, team and enterprise levels in terms of time and impact on serving customers as well as the frustration and anxiety to users and their teams. A solid majority of the respondents (62%) identified themselves as being in customer service and sales roles. The survey asked very specific questions about experiences with existing communication systems while involved in customer-facing and time-critical processes.

Highlights of the survey include:

Ninety-four percent of respondents reported waiting an average of 5.3 hours per week for information from others to complete tasks. In 1,000-employee enterprises, this can translate to more than $9 million yearly in lost productivity based on a $37 weighted hourly wage. Taking a process view of this nearly universal pain point, the negative impact of 5.3-hour delays in customer-facing activities has larger implications on customer sales, service and revenue realization.

Respondents reported an average productivity loss of 7.8 hours a month at offsite locations because they lack the communication tools they have in their main office. Nearly a full day each month is lost because they are not properly equipped with effective, remotely-accessible, collaborative communications systems. As workers continue to become increasingly mobile, the net effect of this may become more dramatic. Fully weighted, in a 1,000-person enterprise, these costs can exceed $3 million a year.

Enterprises are wasting at least $3,400 per person each year in unnecessary business travel expenses because of ineffective or non-existent collaboration with existing communications systems. Managers are forced to synchronize teams through expensive internal meetings requiring travel. In a 1,000-person enterprise, these costs can top $3.4 million a year.

More information can be found at www.SupportIndustry.com.

Outsourcing and Innovation Survey: Keep It at Home

According to a recent survey by CIO Magazine, outsourcers continue to market themselves as the IT department's partners in innovation. Yet with increased globalization and the resulting decrease in profit margins for many IT service providers, can they really deliver on that promise? CIO Magazine recently asked 290 IT executives to tell us what they think. The results show that for most IT leaders, outsourcing offers benefits in many areas. But when it comes to innovation, they prefer to keep those efforts closer to home.

Three quarters (76%) of technology executives who responded to the survey said that they believe in-house activities contribute the most to IT or IT-enabled innovation. Only 22% said that they believed offshore/captive activities contribute the most to IT or IT-enabled innovation.

Respondents' satisfaction levels with innovative products also proved higher when those projects stayed in-house or on-shore. According to the study, eighty-five percent (85%) of respondents were satisfied with the level of innovation provided by internal IT operations at their organization Projects outsourced to onshore providers, meanwhile, compared favorably, with 78% of IT executives surveyed saying they were satisfied with the level of innovation offered by those providers.

Offshored innovation didn't perform nearly as well. Just over half (52%) of the respondents reported that they were satisfied with the level of innovation provided by their offshore outsourcers/external providers--a significant difference from the other two options.

The reasons for the lack of satisfaction varied widely. More than half (54%) of the survey's respondents cited cultural or communication issues as one of the biggest barriers to increasing innovation by outsourcers, followed by lack of skills within the outsourcer (37%), internal resistance (32%) and internal budget restraints (30%).

In addition the survey also revealed the top reasons for outsourcing:
Labor Cost Savings – 58%
Focus on Core Business – 33%
Access to specific skills – 32%
To maximize resource availability – 29%

The top domestically outsourced activities were:
Application development -47%
Help desk/user support - 37%
Website development - 35%
Web services - 29%

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Five Major Trends Will Force IT Organizations to Change the Way They Support Workers

Five major discontinuities are combining and will force IT organizations to change long-standing practices for procuring and managing IT, according to Gartner, Inc. The intensity of these trends will grow through 2011, according to Gartner, Inc.

The five discontinuities include - Web 2.0, software as a service (SaaS), global-class computing, the consumerization of IT and open-source software. SaaS is already empowering business units to act independently of corporate IT strategies. Global-class systems, built on tera-architectures (as in Google Apps), threaten to upset the careful balance of power between IBM and Microsoft in messaging, and more importantly, they introduce entirely new ways to implement and scale applications. “Consumerization” and users’ clamor for IT organizations to be as responsive as Internet vendors are giving many IT departments headaches. Web 2.0 communities are bonding people in ways many people do not fully understand. Community members are doing business in ways that most enterprises had never even considered as they laid out their communications strategies. Open source is a hidden “secret” that enables many elements of the other four discontinuities to develop.

Gartner recommends five actions that can help IT managers take advantage of, rather than just react to, these five trends.

Question Core Assumptions about the Role of the IT Organization — Once upon a time, it was the only source of IT. Now that users can often buy “what they need” from the Web, business executives must re-evaluate IT-related operating principles, guidelines, policies, practices and governance.

Experiment with Free-form Environments — Create free-form searchable “personal Web pages” for users, along with folksonomies, tag clouds, navigation by tag or type of user, feeds, blogs and “wikis”. Companies need to provide free-form, open environments to facilitate productive social interactions and to allow patterns of behavior, interaction with the rest of the business ecosystem and new business models (and opportunities) to emerge and evolve over time.

Help Users Innovate — Innovation speeds economic development. IT managers should apply this general rule to the enterprise by helping selected users interact in an open environment and thereby innovate. Allow them to exploit Web-based tools and share their experiences with other users.

Segment Users — The IT organization needs to stop providing the same support to everyone. One size does not fit all. IT managers should segment users based on difference in roles, responsibilities, and information and application access requirements. The IT organization can increase workers’ effectiveness by giving them support that better fits their individual needs.

Stop Trying to Provide Everything — The IT organization should admit that it can no longer compete with the Web in providing many personal and social tools. The IT organization should define what it is really good at, and for other activities, play the role of advisor and facilitator. It should no longer assume responsibility for supporting and managing all IT systems that workers use. Users must take personal responsibility for experimenting with new software and communities.

More information can be found at www.SupportIndustry.com.

Attracting, retaining IT professionals key concern for nation's CIOs

Ensuring business-IT alignment is a top concern among the nation's leading CIOs, but for the first time in years, it's not the top concern, according to new research conducted by the Society for Information Management (CIO). The impending IT talent crunch has re-focused CIOs' attention on retaining and attracting IT professionals.

More than 130 CIO and IT executives from 112 different companies responded to this year's SIM membership survey, which polled members to determine the issues that are top of mind for them.

IT and business alignment is still a major concern among CIOs, finishing second on the list of top ten issues, followed by:

- Build Business Skills in IT
- Reduce the Cost of Doing business
- Improve IT Quality
- Security & Privacy
- Manage Change
- IT Strategic Planning
- Making Better use of Information
- Evolving CIO Leadership

Some other highlights from this year's report include:

- 78.6 percent of respondents expect to maintain or increase their IT budget in 2008

- 75.4 percent expect to maintain or increase their IT staff

- The CIO or top IT Executive has been in their position for an average of 4.1 years (compared to 3.6 in the 2006 survey)

- 31.4 percent of CIOs report to the CEO (compared to 45.2 percent in 2006); 29.3 percent report to the CFO (compared to 25.4 percent in 2006)

More information can be found at http://www.supportindustry.com/.

Service Level Management Acceptance on the Rise and Linked to Business Survival

A recent study by Enterprise Management Associates (EMA) reports that Service Level Management (SLM) acceptance continues to grow and that IT executives increasingly view SLM as a vital factor to business success. The 2007 comparative study shows that the number of surveyed organizations implementing Service Level Agreements (SLAs) has risen to 82% of respondents, a 26% increase since EMA’s 2003 findings.

Key findings that are detailed within the report include:

• 90 percent of end users perceived SLM as critical or important to their executives and directly tied to business survival
  
• 82 percent of organizations surveyed have implemented SLAs
  
• 79 percent of respondents cited ITIL as an adopted methodology
  
• Internal education is key to success and also one of the greatest challenges for organizations implementing SLM
  
• 56 percent of end-user respondents report having no sense of ROI either before or after employing best practices
  
• More users associate IT-business alignment with BSM than with SLM
  
• SLM and Configuration Management Database (CMDB) initiatives can coexist very nicely – as one survey respondent notes, “you can’t do sophisticated SLM without a CMDB”
  

EMA’s research reveals a marked correlation between enforcing standards and achieving results. SLM adoption, paired with the right mix of best practices, is continuing to provide positive outcomes. More than two-thirds of the respondents reported increased operational efficiency and customer satisfaction after rolling out their SLM initiatives.

More information can be found at www.SupportIndustry.com

CEOs – Putting Customers First

According to a recent article in 1to1 Media, after years spent dealing with issues revolving around governance and regulatory changes, CEOs at public companies are focusing more on a long-overlooked aspect of their business: customers.

That's one of the main conclusions drawn from the third annual "NYSE CEO Report," compiled for NYSE Magazine by Opinion Research Corp. The survey collects data from CEOs of 240 of the New York Stock Exchange's listing companies.

For example, CEOs are planning greater investment (both budget- and time-wise) on managing customer relationships than in the past. The importance of sales growth -- driven by customers -- as a performance measure has increased by 11 percent since the prior study. And on the strategic side, brand, reputation, and investments in corporate social responsibility -- all focused on winning customers -- are increasingly important. CEOs continue to recognize the costliness of losing customers.

What's more, they're putting money where their mouths are. Almost one third of CEOs plan to spend more time on customer relations in the coming year, while more than half expect to spend more money on customer contact. The report also found a 10 percent increase in the amount of time a CEO feels he should spend on customer relationships.

Most CEOs (81 percent) believe they take sufficient action to manage their companies' reputation, and going hand-in-hand with the issue is an increased focus on social responsibility, which is an important factor not just in customer relations and retention, but in employee retention as well. Social-responsibility initiatives are seen as having a greater impact on employee retention in companies with greater than $3 billion in market capitalization (where 46 percent of respondents tagged it as an important factor in employee retention), compared with companies with $1 billion to 3 billion in market cap (16 percent) and below $1 billion (29 percent). Such initiatives range from encouraging employees to volunteer at homeless shelters to instituting and enforcing environmentally friendly ideas like recycling and tree planting.

More information can be found at www.SupportIndustry.com.

Research Reveals 84% of Service Executives Expect Their Businesses to Grow Over The Next Year

According to a new survey by Service Strategies Corporation, a provider of standards, career development and strategic advisory services for the technology services market, 84% of service executives interviewed expect their businesses to grow over the next year, while 43% believe this growth will be more than 10% annually. Service has become a strong driver of growth and as a result, a strong contributor to corporate profits. The study indicates that service now contributes more than 30% of both corporate revenue and profit for many companies and is continuing to grow.

Seventy-five percent of participating service executives indicated that improving customer satisfaction, loyalty and retention are among their primary business objectives. While nearly half cited technical skill shortages as a major obstacle to growth in the coming years.

More information can be found at www.SupportIndustry.com.