Monday, March 29, 2010

Gartner Sees Shift in CEO Priorities as Organizations Focus on Customer Retention

There has been a major shift in CEO priorities from early in 2009 with top priorities switching from cutting costs to retaining customers and enhancing existing relationships, according to Gartner, Inc. Through 2015, a recession-era mentality among CEOs will ensure a policy of paying for future investments from the cost savings obtained from existing IT operations.

Gartner has identified five key issues that CEOs should be focusing on in 2010 and beyond as well as related advice for CIOs:

CEO Issue No. 1: Getting to the End of Restructuring
CEOs are in the midst of finishing off the work they started in 2009: streamlining their business operations, dumping nonperforming or nonstrategic assets, and working to ensure that they don't let their "break-even" point start to rise and thereby increase their exposure to another economic shock. While many CEOs have continued to invest in initiatives that will improve their cost structure or allow them to drive revenue as the economy recovers, they are "financing" this by taking a very hard look at not only their internal cost structures, but also the cost structures of the partners in their ecosystems.

In this environment, CIOs are advised not to expect an increase in budgets in 2010 but rather to expect to “finance” future IT projects from the cost savings obtained in other parts of operations.

CEO Issue No. 2: Integrity, Corruption and Fraud — Rebuilding Trust
The imperative for rebuilding trust is as much to regain the confidence of customers, which will allow economic growth, as it is to regain governmental trust, which translates into electoral decisions. Companies are still in the early stages of that rebuilding of trust, and while Gartner is optimistic that this can be "repaired" for many companies in 2010 and 2011, the general distrust of economic conditions seems to be slowing down the return of the consumer — a difficult factor in the U.S., for example, where consumer spending comprises as much as 75 percent of all spending.

Accordingly, CIOs should expect to see increased interest in capabilities and technologies that help provide transparency to internal operations of the sort that increases trust. More openness will surround the financial structure of the organization, and expenses will be examined to high levels of detail. Business intelligence will see strong interest in this time frame.

CEO Issue No. 3: Planning for a Return to Growth — Playing Defense, While Playing Offense
This year is about CEOs taking a firm stand on plans for increasing shareholder value. This may be through acquisitions that are less expensive in a time of lower equity pricing or lower capital costs. It may also be about investing in initiatives that achieve a strategic goal.

CIOs need to understand that organizations are of two minds. They are investing in the innovations that will build the future, while guarding against the possibility of another economic recession or crisis in the next 36 months. For CEOs, this is one of the most difficult maneuvers to execute in business, as it must accommodate impulses that are sometimes contradictory. To this end, CIOs must ensure that they are able to segment the activities of the organization so that each part of the team can focus on what is most important: One team takes care of cost optimization activities, while another is focused on the future.

CEO Issue No. 4: Government Is the New Partner at the Table
In many advanced economies, during the past 30 years, state control and intervention in industries have been gradually rolling back. However, the tumultuous economic effects of the banking crises of 2007 and 2008 have driven swift and large-scale government interventions to bail out and save companies, and more market interventionist and state control styles of government may arise from this situation.

The resulting new regulations will require compliance by any new systems. Several areas will see new regulatory actions in the coming 24 months, including the financial services, automotive and transportation sectors. CIOs need to keep scanning the landscape of regulatory actions in federal, state and local governments, as the pace is expected to pick up in 2011.

CEO Issue No. 5: The Future of Recession-Driven Changes
One of the key issues in the boardroom is to understand the future of the changes forced by this recession. Will the growth in all industries return to the levels that were enjoyed before the downturn? Will the drive to improve process efficiencies be long-lasting, or will there be a marked return to a top-line focus in the business?

Gartner believes that IT has a significant role to play here because it needs to deliver insights for the business to enable it to effectively navigate the changes ahead. That means IT must make investments in understanding customer intent, predicting the impact of business conditions and connecting strategy to outcomes.

More information on Customer Retention can be found at

Wednesday, March 24, 2010

Complaints to Better Business Bureau Up Nearly 10 percent in 2009

According to an annual report released today by Better Business Bureau, consumer complaints to the organization increased by 9.7 percent in 2009. Not only did BBB receive nearly 1 million complaints filed by disgruntled customers last year, consumers turned to the non-profit more than 65 million times for help researching businesses across North America.

The cell phone industry received the largest number of complaints in 2009 with 37,477, a 2.1 percent increase over last year. The cable & satellite TV industry ranked second with 32,616 complaints, an 8.7 percent increase over the previous year. Rounding out the top three, banks received 29,920 complaints, a 42.3 percent increase over the previous year.

While the cell phone industry, cable & satellite TV industry and banks received a high volume of complaints, two of the three industries saw improvements in their resolution rates over the previous year. Cell phone companies resolved 97.4 percent of complaints; the cable & satellite TV industry resolved 97.2 percent. The resolution rate by banks declined slightly to 95.2 percent.

More information on Customer Service and Support can be found at

Monday, March 22, 2010

IDC Survey Finds Broad Satisfaction with Software Support Services Offered by Large Enterprise Application Vendors

A recent International Data Corporation (IDC) survey of more than 1,000 IT professionals worldwide found a high level of satisfaction with the software support services offered by five of the largest enterprise application vendors. The small differences in the average satisfaction scores among these vendors indicate that software support services remains a highly competitive market.

Software support services play an important role in maximizing the performance and reliability of the mission-critical applications that most enterprises have come to rely on for their day-to-day operations. Yet organizations often underestimate the importance of support services when evaluating which applications to purchase and implement.

Most enterprise software vendors recognize that the customer support experience is a crucial element of client satisfaction and retention. To meet the varying needs of their customers, support providers typically offer at least three levels of support services – and some offer significantly more than that.

When the survey's average overall satisfaction scores were ranked, HP came out on top followed by Microsoft, Oracle, SAP and IBM. The vendors that ranked highest in overall satisfaction also received higher satisfaction scores for the individual features of their support services offering.

More information on Support Services can be found at

Thursday, March 18, 2010 Announces New Research Insight Report on First Contact Resolution, an online resource dedicated to enabling organizations to deliver world-class customer service and support, announced the results of a new Research Insight report on the topic of First Contact Resolution. surveyed its members - senior level service and support professionals - in March 2010 and nearly 100 people responded. Key findings include:

- 59.7% of support professionals responding indicated their company currently measures FCR.

- 38% of respondents reported that less than 20% of calls are escalated. Interestingly, nearly 27% reported they do not measure this at all.

- The survey asked respondents what the overall level of complexity was of the products they support, with over half (52.5%) citing their products as complex.

- When correlated to the level of incidents escalated to Level 2, the report found that 23.4% of those who support complex products have 20% or more of their contacts escalated to Level 2.

The full report is available for free to all members. Visitors can also view and excerpt of the data at

Wednesday, March 17, 2010

Survey Reveals Resurgence in Growth for Global Outsourcing Markets

Horses for Sources, a research advisory organization focused on global outsourcing strategies, launched its first major research report that analyzes the adoption intentions and experiences of 1,055 senior executives involved in the buying and selling of both IT and business process outsourcing services.

Key highlights discussed in the report, are centered on the following:

-- 2010 is primed to be a very strong year for outsourcing adoption

-- The key areas of increased outsourcing scope are expected to be in areas with heavy low-cost labor arbitrage support (nearshore and offshore) – software applications, call center, engineering management, finance & accounting, analytics and human resources. In some cases, half companies interviewed will be increasing outsourcing scope

-- The middle-market ($750m-$3000m annual revenues) is poised to be the most active

-- The principal drivers behind outsourcing are cost reduction, desire to globalize business operations and to transform/re-engineer business processes

-- The main Inhibitors are other priorities brought on by the economic crisis and internal politics/resistance to change

-- When evaluating vendors, global scale, financial stability and operational excellence are the tablestakes. Business transformation capabilities are the differentiators

-- Customer-willingness to evaluate cloud-based “business utility” offerings is strong as they increasingly look at hybrid IT/BPO solutions

More information on Outsourcing can be found at

Monday, March 15, 2010

Survey Shows 85 Percent of Organizations Anticipate Spending on External Service Providers Will Increase or Stay the Same When Economy Recovers

Signs of increased spending with external service providers (ESPs) when the economy recovers, point to a return to growth in the IT services market in 2010 and beyond, according to a recent survey by Gartner, Inc. The survey showed that when the economy recovers, 85 percent of organizations anticipate that their spending with ESPs will increase or stay the same.

Furthermore, in their business planning, 76 percent of organizations surveyed are optimistic about the economic recovery time frame, indicating that in their planning cycles, they are seeing that the recovery already began in 2009 or will occur in 2010.

Service providers that prioritize understanding the marketplace and monitoring the changes in their client and user environments will be best-prepared to capitalize on growth. The days of "low-hanging fruit" and sole-source decision making in IT services are largely over; however, through deep relationships, providers still rely on new opportunity leads and expansion of services from existing client relationships, often as sole-source opportunities.

According to Gartner, to be successful, highly disciplined service providers must focus on the following:

Balance: Service leadership will need to focus on balanced strategies of being aggressive/proactive to capture growth, but also highly attentive to monitoring changes in their client environments and the economies and vertical markets they serve to know how and when to react. Prioritizing market/client knowledge and insights to drive internal optimization of strategies, processes, delivery, skills, and reaching clients will separate the leaders from the followers.

Agility: Sales, marketing and service delivery teams must work closely to deliver on the promises made to win deals. Yet accounts are never static, and more than ever providers must be agile to respond to changes in the competitive market, in economic conditions, in vertical sectors, in the talent pool, and in technology. Failure to respond quickly will compromise relevance to their clients. Ensuring the right investments in their own internal operations to achieve this agility will be a task that providers will need to take seriously.

Cost-competitiveness: Pursuit teams must recognize that their clients want, need and expect cost-competitive answers to their IT needs. This does not negate the value and business insight that providers can and must bring — but without cost-competitive responses, providers will never begin to build trust and gain a position to communicate their value message. Pursuit teams must hone their skills to identify which deals are the right ones to pursue, and which are the ones to walk away from.

More information on the IT industry can be found at

Wednesday, March 10, 2010

CIOs Forecast Increase in Second-Quarter IT Hiring

Chief information officers (CIOs) expect an uptick in hiring in the second quarter, according to the latest Robert Half Technology IT Hiring Index and Skills Report. Nine percent of technology executives plan to hire additional IT staff and 4 percent anticipate personnel reductions. The net 5 percent increase is up two points from the first quarter's forecast and three points higher than the year-ago projection.

The IT Hiring Index and Skills Report is based on telephone interviews with more than 1,400 CIOs from companies across the United States with 100 or more employees. It was conducted by an independent research firm and developed by Robert Half Technology, a leading provider of IT professionals on a project and full-time basis.

Key Findings:

-- Nearly 80 percent of technology executives are confident in their companies' prospects for growth in the second quarter.

-- The net 5 percent increase in hiring activity that is forecast marks the second consecutive quarter in which hiring expectations have risen.

-- Recruitment and retention are emerging as concerns for IT executives.

-- CIOs in the nation's central regions - West South Central(1), West North Central(2) and East North Central(3) - forecast the strongest IT hiring activity.

More information on information technology (IT) can be found at

Tuesday, March 9, 2010

Demand for Pay-per-Use Software Pricing Will Force a Reassessment of the Industry's Value Framework

While customer interest in pay-per-use (PPU) pricing is not a new phenomenon, the expansion of software as a service (SaaS) offerings and the advent of cloud computing are accelerating this trend. A recent software pricing survey by International Data Corporation (IDC) shows that customers want software pricing models that allow them to pay only for what they use while maintaining an even distribution of costs over time. To achieve this, vendors and customers will have to work together to redefine the software value framework.

Software vendors must immerse themselves in the activities of their customers to determine what they are hoping to achieve with the software. Once the vendor understands how the customer is using its software, it will be easier to determine the metric that is most appropriate for per-use measurement. But the move toward greater granularity and flexibility in pricing presents vendors and customers with a series of challenges, including: increased complexity in the applications; the need for tools to measure use; concerns about revenue and cost impact; and the fate of the partner ecosystem based on traditional notions of value.

It is not yet clear what impact usage-based pricing models will have on the economics of the software industry as a whole. In the meantime, software vendors need to focus on a series of issues to prepare the way for PPU and utility licensing options:

-- Selecting resource utilization metrics that make sense in the context of software business value is one of the first challenges that a software vendor will face in moving to a PPU model. Vendors will need to work closely with their customers to determine what makes the most sense.

-- Vendors must also be able to provide complete and detailed billing summaries that eliminate the customer need to collect usage information. The ability to provide accurate and timely resource utilization information will be crucial to winning customer acceptance of any new pricing structure.

-- In addition to PPU pricing and tracking, the software architecture and delivery methodology must enable fast and flexible deployment of software resources to meet customers' changing business needs.

-- Because customer preferences vary, vendors need to be prepared to offer a portfolio of licensing and delivery approaches.

More information on Software as a Service can be found at

Thursday, March 4, 2010

IT Service Management Survey Reveals Top 5 IT Trends for 2010

This is the 5th year that Consulting-Portal, an IT Service Management (ITSM) consulting firm, has conducted the IT Service Management Industry Survey. This year results pointed to 5 trends that will prevail in 2010:

-- Organizational governance is still very weak

-- Software as a Service (SaaS) adoption is on the rise as an ITSM solution

-- Organizational support for ITSM is on the rise

-- There is a lot more focus on customer-facing processes like Service Level Management and Service Catalog Management

-- Auto-Discovery / Dependency Mapping is more popular than ever

For the second year in a row, as little as 29% of organizations surveyed have defined, implemented and enforced ITSM governance in place. Lack of governance makes it hard to comply with standards like Sarbanes-Oxley and Basel II, not to mention making it difficult to quantify the return on investment (ROI) from costly IT projects.

Software as a Service, Cloud Computing, Utility Computing - whichever name you prefer, the trend toward customers subscribing to hosted ITSM tools is definitely on the rise having grown from 0 to 17% in just 2 years.

More information on the service and support industry can be found at

Wednesday, March 3, 2010

US contact centers handled 6.6 billion complaints in 2009

New research published by ContactBabel, the contact center industry analysts, has found that US contact centers handled 6.6 billion complaints in 2009. Research for the report has found that the technology, media and telecoms sector receives the greatest proportion of complaints, with 27% of all calls received by this sector being from disgruntled customers.

However, the research has found the vast majority of complaints received by a contact centre are not about the contact centre itself (or its staff), but rather ‘failure demand’, caused by a breakdown of processes elsewhere in the organization, as the table above shows.

More information on the contact center industry can be found at

Monday, March 1, 2010

Survey: CEOs Prioritizing the People Agenda as a Means to Recover and Grow

Insight from the PricewaterhouseCoopers (PwC) 13th Annual CEO Survey, suggests that CEOs are prioritizing the people agenda as a means to recover and grow. The research found some areas of weakness have been highlighted by the recession and the vast majority (79%) of CEOs expect to overhaul the way their organizations manage people during change as a consequence of the economic crisis. Attending to staff morale was highlighted by three-quarters (75%) of CEOs as an area also in need of reform and increased investment. Some 59% said they will make changes to flexible working while 55% will revise global mobility arrangements such as staff travel.

Despite a massive majority seeing the existence of a talented, well-skilled and well-educated workforce as critical to future competitiveness, only one in five (20%) think their government has been effective in helping to create a skilled workforce.

Previously released findings showed that CEOs recognize the importance of having the right people in the right place - with over a third (39%) hoping to increase headcount over the next 12 months. That said, 48% stated they had reduced headcount over the last year. Perhaps in recognition of the new skills required of the emerging business environment, more than three-quarters (77%) plan to increase investment in training and development.

-- 79% of global CEOs expect to overhaul the way their organizations manage people though change

-- Prosperity depends on an increasingly-limited number of talented people producing wealth; only one in five (20%) think their government has been effective in helping to create a skilled workforce

-- Unanticipated rate and scale of people management changes required in the downturn brought some human capital failings to the surface

-- Over a third (39%) of CEOs hope to increase headcount over the next 12 months while more than three-quarters (77%) expect to increase investment in training and development

More information on contact centers can be found at