Thursday, October 30, 2008

National Survey Highlights How Economic Climate Is Impacting Local Government Technology Budgets

Thirty-eight percent of local government information technology budgets will decrease over the next two years as a result of the economic slowdown, according to the results of a national survey conducted by Public Technology Institute (PTI) and INPUT.

The survey, “The State of City and County IT 2008,” targeted local government chief information officers (CIO) and information technology (IT) department directors. Other areas of the IT budget impacted by the economic climate include:

  • Staff development and training: 38% of respondents stated this budget item will decrease over the next two years, while 53% stated this budget item will remain the same.
  • Travel for educational events for IT department staff: 54% of respondents stated this budget item will decrease over the next two years, while 39% stated this budget item will stay the same.

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    Wednesday, October 29, 2008

    Interactive Voice Response (IVR) Market Hits $1.9 Billion in 2007

    DMG Consulting LLC, a provider of contact center and real-time analytics research, has published its inaugural 2008 Worldwide Interactive Voice Response Trends and Market Share Report. IVR systems have been around since the 1980s, but the market has exploded in the last few years. DMG estimates that worldwide IVR revenue reached $1.867 billion at the end of 2007 and will grow to $2.4 billion by 2010, despite the current economic challenges.

    Growth in the IVR market is being driven by strong demand for self-service applications, a steady flow of innovation, the increasing popularity of hosted solutions and the expansion of the outbound notification market. The recent slowdown in IVR growth in the US has been offset by expansion in international sales, particularly in Brazil, India, Saudi Arabia, Eastern Europe and the Pacific Rim. Once enterprise spending freezes caused by the economic meltdown are lifted, DMG expects increased investment in the IVR market. Sales will be driven by spending on self-service applications, replacement of outdated and expensive-to-maintain systems, and the need to standardize technology in newly merged and consolidated companies, especially in the IVR-intensive financial services industry.

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    Monday, October 27, 2008

    Data Leaks & Malware Incidents Rise as Employees Embrace Web 2.0 & Collaborative Internet Applications in the Workplace

    For large enterprises, the costs associated with malware now amount to an average of more than $125,000 per month. The costs of repairing malware attacks and corporate data leaks have risen along with employee usage of Web 2.0, and social media at work. These are some of the key findings in the 4th annual independent study commissioned by FaceTime Communications, the leading provider of solutions that control employee use of Internet applications and manage unified communications in the enterprise. The report also confirmed that the use of these applications is widespread with more than 60 percent of all companies surveyed having eight or more of these application in use on their networks.

    The research was conducted to determine the impact that collaborative Internet applications have on companies and organizations. Conducted by NewDiligence in September 2008, the survey of more than 500 employees and IT managers tracks the growth of Web 2.0 and employee-initiated applications that contribute to the consumerization of IT. These applications, which introduce compliance, security and data leakage risks, are in use at 97 percent of all organizations, up from 85 percent in 2007. On average, companies report 9.3 such applications in use by employees on the enterprise network. This year's study delved into the use of social media in the enterprise as well as IT's preparedness for electronic discovery requirements.

    While email and Web browsing are typically monitored and controlled by IT (79 percent and 65 percent respectively), the extent of the risk associated with Internet applications may be less understood. Fewer than 40 percent of IT respondents report monitoring and managing applications such as P2P and only 25 percent say they are securing and monitoring Web 2.0 applications.

    The survey also revealed that fewer than half of IT managers could actively monitor and reproduce specific applications such as instant messaging (IM) communications if asked by corporate attorneys in the event of a lawsuit. In fact, 38 percent of IT managers said they have no such capabilities and only 13 percent said they could do it - but not in any practical time frame. In 2006, the definition of what is considered electronically stored information (ESI), as defined by the Federal Rules for Civil Procedure, expanded to include IM, and other types of electronic communication. In the event of litigation, all ESI – not just email – must be produced as part of the e-Discovery process. Yet, only 31 percent archive IM communications.

    More key findings:

    --79% of employees use social media (Facebook, LinkedIn, YouTube) at work for business reasons and 51% access social media sites at least once per day.

    --IT managers reported an average of 34 security and data leakage incidents per month.

    --73% of IT managers report at least one security incident as a result of Internet application usage; viruses, Trojans and worms (59%) are most common, followed by spyware (57%) for a close second.

    --37% of companies report an instance of non compliance with corporate or regulatory policy, while 27% report incidents of accidental or unintentional data leakage.

    --Despite the new Federal Rules for Civil Procedure, only 31 percent of enterprises store IM communications. One in four has copies of audio conferences (25%), while slightly fewer (20%) archive corporate Web conferences.

    Unified Communications

    Unified communications suites, such as Microsoft Office Communications Server and IBM Lotus Sametime, are becoming integral to the way employees work today. However, IT managers are finding that their UC rollouts don't significantly reduce employee use of consumer-oriented Web 2.0 applications and public instant messaging networks. Security and compliance controls must extend across all UC modalities in this heterogeneous environment, both enterprise-sanctioned and consumer-oriented.

    Unified communications suites, which give enterprises a way to enable employees with multiple communications modalities over an IP infrastructure, exist today at about 29 percent of IT respondent organizations and an additional ten percent have deployed pilots to a limited number of users. Security, compliance and management issues are top of mind among IT managers in organizations with UC deployed.

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    Thursday, October 23, 2008

    2008 technology leaders forecast survey reveals concerns and opportunities in the current economic environment

    In the midst of a financial and economic crisis, and in the midst of uncertainty associated with a historic presidential election, the DLA Piper 2008 Technology Leaders Forecast Survey found that industry leaders have a host of concerns, but are fundamentally optimistic about future opportunities.

    The survey, measuring the attitudes and perspectives of top executives within the technology industry, reveals that 75% of respondents say they have been adversely affected by the economic slowdown. Only 15% of respondents think the U.S. economy is likely to rebound in the first half of 2009 and more than half of respondents (55%) believe the IPO market will not begin to rebound until at least 2010. With responses received between September 23 and October 6, the survey was conducted as Congress debated the $700 billion bailout bill and during a tumultuous two weeks on Wall Street.

    Respondents deploying capital (Venture Capitalists) reflected a much different view of the financial crisis than those needing capital (companies themselves), which is understandable given that VCs have a greater focus on exit strategies. Nearly half (47%) of finance and venture capital respondents say the current financial crisis will have a more adverse impact on the technology industry than the Technology Bubble Burst of 2000. However, 67% of technology company entrepreneurs and leaders disagree. The survey yielded a number of other interesting conclusions, including:

    --85% of respondents think we are in for another year or more of the current economic conditions, signaling a collective view that the present financial challenges are not a short-term phenomenon.

    --Clean technology is one of the bright areas amid the financial crisis and economic turmoil, with tech leaders believing the sector will get a boost given the continuing economic and political pressure towards greater U.S. energy independence.

    --With almost 90% of respondents saying the Chinese consumer market is an exploitable opportunity, technology industry executives still believe China represents a significant opportunity as both an end market and a supplier.

    --Almost half of all respondents (48%) do not have an open source software policy, which experts warn could open them up to legal exposure.

    -- While there continues to be considerable discussion about innovation coming out of emerging markets, 55% of respondents think the US will still lead in producing the next generation of “leap-frog” technologies in the coming decade.--Beyond the hard data captured, survey respondents provided some interesting perspectives when asked to share the greatest opportunities in today’s technology industry. Many respondents see green technology and clean technology as the segments most poised for growth.

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    Sunday, October 19, 2008

    Changing the Cost Structure of IT Will Become a Business Imperative for Most CIOs

    IT departments are struggling to keep pace in a world that is moving at breakneck speed, and the IT industry is entering a period in which it will not only be possible to change the cost structure of IT, but it will be an imperative for many CIOs, according to Gartner, Inc.

    Today, IT spending is heavily weighed by fixed costs. Almost two-thirds of the average IT budget is fixed, at least in the short run. IT outsourcing is the most well-known way to move fixed costs to variable, but it is not the only technique organizations will employ. Gartner analysts said they expect some organizations to come up with new models, such as joint ventures and shared data centers as a means to reduce the fixed costs associated with IT.

    Gartner said that fixed-cost models burden organizations with assets and large amounts of depreciation, making the business less responsive. The trend toward user provisioning of IT requires a more flexible acquisition model that gives greater agility in both IT and the business.
    Going forward the burgeoning number of technology as a service (TaaS) offerings that will emerge during the next five years will give firms new acquisition models. In the area of staffing, reducing the number of salaried IT professionals and shifting to a model of using more contract labor will move more fixed costs to variable costs while compensation changes – such as putting more pay into the performance-driven category – can also help reduce fixed costs.

    Prominent industry trends such as TaaS and the need for greater business flexibility will increase the importance for more variability and IT leaders need to recognize and balance the strengths, weaknesses, opportunities and threats of variable cost structures. Gartner expects that some of the biggest challenges will come from the businesses internal capabilities, such as demand management budgeting and forecasting and vendor and asset management, all of which will need to evolve to exploit new acquisition models.

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    Thursday, October 16, 2008

    Maintenance and Professional Services Now Generate 54% of Revenues for a Typical Software Company

    For most high-end software companies, post- sale services now contribute more total revenue than product and license sales, according to a new research report from the Association of Support Professionals (ASP). The report, based on data from a hundred major public software companies, shows that maintenance and professional services now generate 54% (median) of revenues for a typical software company.

    Services also make a substantial contribution to overall profitability, the report points out. Maintenance is the top cash cow, with a gross profit margin rate of 81% (median). Professional services, a category that includes custom development, consulting, and training, is a more people-intensive business, but still delivers a median 22% margin. The ASP's report notes that software companies vary considerably in their emphasis on services.

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    Tuesday, October 14, 2008

    Survey Shows Employees' Everyday Behavior Puts Sensitive Business Information at Risk

    RSA, The Security Division of EMC, announced the findings of its latest insider threat survey, conducted among attendees at industry events in North America and Latin America in the spring and summer of 2008. The results of the survey show that employees are well aware of the restrictions placed upon them by their corporate IT departments, yet many often work around these controls in order to get their jobs done in a convenient and timely manner.

    Of all respondents polled:

    --94% are familiar with their organizations’ IT security policies, yet 53% have felt the need to work around IT security policies in order to get their work done.

    --In response to a separate question, 64% frequently or sometimes send work documents to their personal email address in order to access and work on them from home.

    --15% have held a door open for someone at work that they did not recognize

    --8% frequently or sometimes access their work email via a public computer, and 65% frequently or sometimes access their work email via a public wireless hotspot

    --One in 10 has lost a laptop, smartphone and/or USB flash drive with corporate information on it

    --79% frequently or sometimes leave their workplace carrying a mobile device containing sensitive information related to their jobs, such as a laptop, smartphone and/or USB flash drive

    --43% had switched jobs internally and still had access to accounts/resources which they no longer needed

    --79% reported that their company employs temporary workers and/or contractors who require access to critical organizational information and systems

    --37% have stumbled into an area of their corporate network to which they believe they should not have had access

    Access to highly sensitive data should be granted only to those who need it, and in some job functions access to only very specific areas within the information infrastructure are necessary. Organizations can manage large numbers of users while enforcing a centralized role-based security policy that ensures compliance, protects enterprise resources from unauthorized access and makes it easier for legitimate users to do their jobs.

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    Firms Yield 12% Boost in Service Profitability from the Use of Mobility Field Service Solutions

    In an extremely competitive service landscape, Best-in-Class service firms are looking to empower their field technicians and mobile workers with tools to ensure quick and efficient service. As such, these firms are actively taking steps to map and automate service-specific workflows to replace outdated and inefficient paper-based systems, as indicated in a new study published by the Aberdeen Group.

    Aberdeen’s benchmark survey of over 250 companies identified that rising cost pressures were top of mind for most service firms, and the need to balance these pressures with rising customer expectations for service was the major driver for these firms to evaluate mobile automation initiatives. In an attempt to meet these pressures, leading firms were more than two times as likely to track their mobile assets in real-time and almost two times as likely to provide their field technicians with mobile tools to manage service work orders and parts-related information.

    To support improved access, increased data capture and enhanced data transfer capabilities needed for real-time field worker empowerment, leading firms were nearly two times as likely to leverage mobile field service applications for work order management and 42% more likely than others to leverage mobile solutions for optimized scheduling and asset tracking. As a result leading firms were experiencing:

    -- An 18% decrease in mean time to repair over the last year

    -- A 19% increase in technician productivity over the last year, compared to a 9% increase for all other firms

    -- A 93% level of SLA compliance, compared to a 77% performance for all other firms

    -- Service-based margins of 25% as compared to a 18% level for all other firms

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    Monday, October 13, 2008

    IT Spending to Slow in 2009, But Continued Growth Reflects Critical Role

    Global economic problems are impacting IT budgets, however, the IT industry will not see the dramatic reductions that were seen during the bust, according to Gartner, Inc. At that time, budgets were slashed from mid double-digit growth to low single-digit growth.

    “In a worst case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent,” said Peter Sondergaard, senior vice president at Gartner and global head of Research. “Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009, the United States and Japan will be flat.”

    The IT industry went through more dramatic reductions during, and after, the recession of 2001. Mr. Sondergaard said many lessons were learned.

    Organizations now view IT as a way to transform their businesses and adopt operating models that are much leaner. Other reasons that IT will not see more severe reductions include:

    --IT is embedded in running all aspects of the business
    --The shift to multi-year IT programs aligned with business, and they are difficult to cut immediately
    --IT spending decreases lag the economy by at least two quarters

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    Friday, October 10, 2008

    Telecommuting Boosts Worker Productivity, Survey Finds

    Companies that give their workers the option of telecommuting are benefiting from greater productivity, lower costs, more options for finding and retaining qualified staff, and improved employee health, according to a new survey released by the Computing Technology Industry Association (CompTIA).

    More than two-thirds (67 percent) of survey respondents said their organization has experienced greater worker productivity as a result of allowing employees to telecommute either full-time or part-time. Improved productivity is principally due to workers spending less time getting to and from work.

    Companies who utilize telecommuting are also benefiting from cost savings through reduced use of office-related materials and resources and lower vehicle-related expenses. Nearly six out of ten respondents (59 percent) to the CompTIA telecommuting trends survey identified cost savings as a significant benefit.

    Telecommuting is also helping organizations find and keep qualified staff, and keep their employees healthier. According to the CompTIA survey, 39 percent of respondents said their companies have access to more qualified staff, especially those who may not otherwise be geographically accessible, because they offer telecommuting as an option. Another 37 percent of respondents said telecommuting helps their organization improve employee retention. One-quarter of survey respondents (25 percent) said telecommuting improves employee health, mainly though reduced stress levels associated with commuting to and from work.

    Other benefits of telecommuting, as revealed in the survey, include promotion of safety through reduced highway use (18 percent); and environmental benefits (17 percent).

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    Wednesday, October 8, 2008

    Facing Economic Uncertainty, 2009 IT Budget, Staffing Remain Strong

    Even when faced with a discouraging economic outlook, CEOs, CIOs and top enterprise managers projected increased budgets and staffing needs for 2009. That’s according to a survey commissioned by the Society for Information Management (SIM) that was completed in June.

    More than three-hundred respondents participated. The results showed that:

    • 44% project their 2009 budgets will increase from 2008
    • 43% estimate they will have a greater headcount in 2009 compared to 2008
    • 75% project IT staff salaries will increase in 2009
    • An average of 5.2% of IT budgets is anticipated to be spent on outsourcing (a 2%
    increase from 2008)

    While the survey was taken before the recent financial developments, SIM believes that the
    results overall are very positive for the IT industry.

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    Tuesday, October 7, 2008

    Study Reveals Consumer Expectations for Customer Care Continue to Soar Despite Economy

    According to RightNow’s third annual Customer Experience Impact Report conducted by Harris Interactive, consumer demand for positive customer experiences continues to rise despite a tight U.S. economy. In fact, 87 percent of consumers have stopped doing business with an organization after a bad customer experience, up from 80 percent in 2007 and 68 percent in 2006. The report also found that:

    --58 percent of U.S. consumers said that in a down economy, they will always or often pay more for a better customer experience.

    --When recommending a company, outstanding customer service is more important (58 percent) than low prices (44 percent) and top quality products/services (43 percent).

    Impact of Negative Customer Experiences

    While consumers are willing to recommend organizations and companies to others because of outstanding service, they are almost twice as likely to tell others about poor treatment.

    --84 percent of consumers indicated they would tell others about a bad experience – up from 74 percent in 2007 and 67 percent in 2006.

    --In addition, blogging about a negative customer experience is on the rise: 22 percent of consumers this year have posted negative feedback about a company, vs. only 13 percent in 2007.

    --However, in some ways, men and women react quite differently following a negative customer experience. While men are more likely to react angrily or physically by swearing or hitting something (5 percent of males vs. 1 percent of females), the female tendency is to react emotionally by crying (9 percent of females vs. 2 percent of males) or getting a headache (11 percent vs. 2 percent, respectively).

    Also interesting to note, even with the exploding popularity of social networking and mobile technology, when asked how companies can improve their customer experience to encourage consumer spending:

    --Only 5 percent of consumers said the “delivery of tailored information via mobile technology” would help.

    --Only 4 percent said they wanted organizations to “increase their presence on social networking sites like Facebook, etc.

    --Even those aged 18-34 didn’t demand this type of engagement with great frequency – opting instead for better access to agents. Tailored information via mobile technology, as well as presence on social networking sites were both selected by 9% of respondents in this age group, respectively.

    The survey also found that, when interacting with organizations online, 51 percent of consumers want the option of a live web chat session, a similar rate as in 2007.

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    Monday, October 6, 2008

    10 Ways to Spot a Potential IT Train Wreck, and How IT Modernization Can Help

    Many IT organizations are overly focused on which tactical step to take next and are missing the ever-worsening bigger picture with respect to IT modernization, according to Gartner Inc. Gartner foresees a confluence of trends that, if ignored, will leave many organizations unable to respond effectively to business demands.

    In order to help organizations recognize the signs of potential danger, Gartner has identified 10 key indicators:

    Sign No.1: Skills Shortage. Many organizations are investing huge budgets in hiring programmers to keep an old system running. Instead, companies need a strategy for supporting the business that fully exploits, for as long as possible, the investment in the old system, but which also recognizes that a replacement system strategy is also needed.

    Sign No. 2: Vendor/Product Consolidation/Support. As the number of vendors consolidates and products age, those products are retired by the acquiring company and taken off support status, with the result of increasing maintenance charges with little in the way of incremental functionality. However, companies often depend on these applications, and switching to a new application is both inconvenient and resource intensive. In some cases it requires resources that the IT group does not have and as a result, companies work harder to maintain more outdated but mission-critical applications.

    Sign No. 3: Agility Metrics Decay. Agility metrics for making a business changes decay as systems become more brittle and the "piling on effect" worsens. Consequently, the business cannot afford to change because the IT organization can’t support the changes. The result is a loss of business agility in an increasingly agile world.

    Sign No. 4: Operation Expenses Escalate. Operation expenses become a larger portion of the IT budget as the piling on effect worsens. As a result there are little resources — money, people or time — to work on anything new.

    Sign No. 5: Aging Technology Portfolio. The aging technology portfolio drifts further away from the desired "future state" architecture standards. The technology vision laid out by the enterprise architects becomes impossible to achieve. The result is an increasingly outdated set of systems and infrastructure that becomes the source of more problems.

    Sign No.6: Difficult to Access Information. Information becomes increasingly difficult to access and analyze as data structures age. Modern business users are highly information-dependent. As the data becomes more out of date, less accurate and more difficult to access, the business is increasingly forced to work without the information needed to make decisions.

    Sign No. 7: Legacy Capacity Risk. Legacy capacity needs increase as new interfaces, such as Web connections, drive up transaction volumes, resulting in greater spending on traditional processing and storage and so forth. Ironically, this legacy capacity is usually priced at a premium compared with newer technologies riding the consumerization curve.

    Sign No. 8: Regulatory Compliance Issues/Risks Increase. Compliance is an issue even in traditional lightly regulated industries, and legislation shows that any company may be at the mercy of outdated systems that can’t meet the needs of increased regulations.

    Sign No. 9: IT Costs Increase, Agility Decreases. Direct business purchasing of IT-related services drives up central IT costs and drives agility downward.Sign No.10: Green IT. Today’s CIOs are likely to have targets that will involve substantial infrastructure changes to achieve green IT objectives. These changes will almost inevitably carry implications for the application portfolio.

    To avoid the so called IT train wreck, Gartner advises that organizations put IT strategic planning, rather than tactical budgeting at the heart of the CIO management agenda.

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    Thursday, October 2, 2008

    Contact centers invest in CRM to improve customer retention

    Enterprises are to up investment in customer relationship management (CRM) and unified desktop solutions in a bid to improve customer retention. This is according to a new report by independent market analyst Datamonitor. It estimates the global market for contact center CRM licenses and services was almost $2 billion in 2007 and investment in CRM solutions in contact centers will increase at a compounded annual growth rate of 10% through 2013. Unified agent desktops - solutions that provide a complete view of the customer from one application, are expected to thrive.

    The sluggish economy and fears of a recession will inevitably cause lower consumer spending levels which will impact organizations. As a result, there will be a tightening of IT and marketing budgets within enterprises. Enterprises need to improve customer service in order to retain customers, particularly where products are commoditized and customer service is seen as a differentiator. Towards this end, CRM solutions in the contact center are being deployed to help provide customer services agents with more detailed information on customers and their historical transactions and information. This should help increase first call resolution rates and lead to cost reduction in contact centers.

    Moreover, enterprises are also keen to improve system usability and reduce agent turnover. Recruitment and training costs for new staff can be high and the notion that improved user interfaces and more accurate customer data will increase staff retention rates is becoming an important value proposition for the unified agent desktop. These factors are driving adoption of the unified agent desktop in contact centers.

    The report also highlights that the use of analytics with CRM is increasing at a brisk rate in contact centers as management are under constant pressure to optimize operations while uncovering trends within aggregated customer data. In addition, enterprises are using real-time analytics to predict the areas where cross-sell and up-sell opportunities exist and guide agents with the relevant prompts in real-time for each campaign. As customer analytics grows as a CRM tool, real-time predictive decisioning, which automatically guides agents to the next best action, will play a bigger role in contact centers.

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    Wednesday, October 1, 2008

    IT Software Spending In 2009 Could Be Worst Since 2001

    Enterprise software spending in 2009 could drop to the lowest level since 2001, JMP Securities software analyst Patrick Walravens asserted in a research note this morning. Walravens reached that conclusion from a JMP survey of 35 enterprise technology buyers on their IT spending plans for 2009.

    Walravens says 74% of those surveyed expect their software spending next year to be flat or down. The results are a bit better for on demand software providers, with half the respondents expecting to increase spending there. Walravens also notes that only 40% of the survey group expect to spend their entire 2008 software budget.

    Source: Barrons

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