Customer Experience Enters Top 10 CIO Technology Priorities for 2012

CIOs ranked customer relationship management (CRM) as their No. 8 technology priority for 2012, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. CRM moved up from the No. 18-ranked technology in 2011.

Additionally, Gartner’s 2012 CEO Survey found that CEOs cited CRM as their most important area of investment to improve their business over the next five years. Gartner predicts that by 2014, refusing to communicate with customers via social channels will be as harmful to the relationship as ignoring their emails or phone calls is today.

Gartner said worldwide CRM software revenue reached $12 billion in 2011, a 13.5 percent increase from 2010, and it is forecast to grow 7 percent in 2012. Gartner analysts added that a growing percentage of this revenue is accrued through software as a service (SaaS) and cloud computing. In 2011, SaaS accounted for 32 percent of the CRM software market and is expected to grow 16 percent in 2012.

As competition intensifies, service providers will either have to grow their own CRM practice to incorporate cloud computing, social CRM, digital media and mobility -- or they will have to form partnerships with specialist vendors. Service providers that are still focusing on traditional on-premises CRM solutions today will gradually lose out to the competition during the next one to two years.

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CEO Survey Shows 2012 is the Year of Living Hesitantly

2012 is the year of living hesitantly, as 85 percent of CEOs surveyed said they believe their enterprises will be impacted by an economic downturn in 2012, according to Gartner, Inc.

The Gartner CEO and senior business executive survey of more than 220 CEOs in user organizations from more than 25 countries was conducted in November and December of 2011. Qualified organizations were those with annual revenue of $500 million or more. The survey results show that many CEOs believe that an economic downturn will impact their companies in 2012. Although concerns are less severe in Asia/Pacific and North America than in Europe and Africa, it is the dominant point of view within each of the three geographies.

While the economy is certainly a concern for chief executives, the survey results showed by a ratio of more than two to one that CEOs said they will increase IT investment in 2012, rather than cut it.

Gartner analysts said the difficulty with investing in newer technologies for strategic outcomes is that organizations need the right kinds of leadership and change management. Many business leaders learned the hard way in the 1990s and 2000s that simply buying and installing technology doesn’t deliver results if it’s not carefully directed and delivered in conjunction with coordinated changes to policies, processes, organization, roles and culture.

Ninety percent of CEOs can name a company they admire for its use of IT in gaining a competitive advantage, but when restricted to their own industry, a quarter cannot. Apple easily eclipsed everyone as the most admired company for its use of IT, as it accounted for 39 percent of the responses. Google was second with 11 percent share, followed by Amazon at 5.8 percent.  

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US Tech Market Will Grow By 7.5% In 2012, 8.3% In 2013

With the US economy showing signs of improvement, the US tech market has been rejuvenated, according to a new US tech market forecast from Forrester, which is forecasting US tech market growth of 7.5% in 2012. This is up from the 6.6% growth projected in November 2011. For 2013, Forrester is forecasting 8.3% growth. Including telecom services, business and government spending on information and communications technology (ICT) will increase by 7.1% in 2012 and 7.4% in 2013.

The lead tech growth category will shift from computer equipment in 2011 to software in 2012 and 2013. Software growth will occur across all categories, but software-as-a-service (SaaS) applications, general business intelligence products, and specialized analytical tools will have the strongest growth. These products will help push total software sales growth up to 11.4% in 2012 and 12% in 2013.

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Worldwide IT Spending Figures Show Mixed Results for 2012

Worldwide IT spending is forecast to total $3.7 trillion in 2012, a 2.5 percent increase from 2011, according to the latest outlook by Gartner, Inc. This is down from Gartner's previous forecast of 3.7 percent growth for 2012.

Gartner analysts said the lower growth rate has more to do with the U.S. currency than an actual decline in spending. The recent strengthening in the value of the U.S. dollar versus other currencies has resulted in the reduced growth rate. However, when looking at spending in constant U.S. dollars, Gartner analysts said IT spending is on pace to increase 5.2 percent in 2012, up from its previous projection of 4.6 percent.

Gartner analysts said IT spending in the government sector is expected to contract moderately on a global basis in 2012 and 2013, driven by austerity measures in the eurozone. While there has been much commentary about the need for government cuts since the sovereign debt crisis emerged in Europe, it is only now that the impact of government budget cutbacks is being felt on IT spending in the region. Similarly, we expect U.S. government spending to be essentially flat in 2012 before contracting in 2013.

In the small and midsize business market, which represents approximately a quarter of all enterprise IT spending, spending is forecast to reach $874 billion in 2012 and will grow to $1 trillion by 2016. Throughout the forecast period, midsized business IT spending outperforms other sectors in each of the next five years, driven by growth in spending on enterprise software.

The worldwide telecom equipment market is forecast to show the strongest growth with spending reaching $472 billion in 2012, a 6.9 percent increase from 2011. Gartner attributes this growth to the continued health of the mobile devices market as well as a more positive outlook for enterprise network equipment, which is being driven by spending on application acceleration equipment, network security, WLAN and Ethernet switches.

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Consumers' Love/Hate Relationship with Contact Centers

ForeSee released its February Contact Center Benchmark, which allows companies to determine how the contact center experience they provide compares to industry averages and customer expectations.

Nearly 11,000 customers expressed their opinions about contact centers to ForeSee in the month of February. ForeSee’s satisfaction benchmark for contact centers is at 70 on the company’s 100-point scale. This is an average score that contact centers can use as a yardstick against which to measure their own performance. Companies scoring significantly higher than 70 are outperforming the industry average. Companies scoring significantly below 70 have a lot of work to do, because their customers’ satisfaction has a direct impact on future actions, such as the likelihood to purchase from the company in the future.

Scores for individual companies included in the benchmark range from a low of 53 to a high of 86 – a fairly large range that has implications for the future of their customer relationships. Some companies are well-loved for the contact center experiences they provide, while others are strongly disliked. One clue to the disparity in satisfaction comes in the primary objective of the call center. When ForeSee isolated scores for service-focused call centers only, there was a benchmark of 67. This comes as no surprise since customers contacting a service-oriented center are likely calling with a problem and may already be frustrated.

As part of its benchmark research, ForeSee compared the likely future behaviors of highly-satisfied customers  with a satisfaction score of 80 or higher on ForeSee’s 100-point scale to those of less-satisfied customers (with satisfaction below 70). This comparison demonstrates the impact customer satisfaction with contact center experiences can have on a company’s future success. Based on likelihood scores, highly satisfied customers report being:

-- 174% more likely than less satisfied customers to make contact again, which means higher frequency of interaction, improved engagement, and increased share of mind and wallet.

-- 154% more likely to purchase next time, which means increased sales.

-- 238% more likely to recommend the company to a friend, family member or colleague, which means more business and increased loyalty.

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Emerging Markets Will Generate $1.22 Trillion in IT Spending in 2012

Emerging markets will generate $1.22 trillion in IT spending in 2012, representing more than 31 percent of the worldwide total, according to Gartner, Inc. The emerging regions of Asia/Pacific (which exclude the mature markets of Japan, Australia, New Zealand, Singapore, South Korea, Hong Kong and Taiwan), Latin America, the Middle East and Africa (minus mature Israel), and Central and Eastern Europe, continue to show positive IT momentum, despite economic deceleration and a high degree of financial uncertainty in mature markets.

From a regional perspective, Latin America will generate nearly $326 billion in IT spending in 2012, of which professional markets will represent 48.4 percent of the total IT market in reaching $157.7 billion in 2012. Consumer markets in Latin America will reach $168 billion in 2012.

IT spending in the Middle East and Africa is expected to reach $244 billion in 2012, with Saudi Arabia, Turkey and South Africa accounting for nearly 35 percent of this revenue. The Middle East and Africa professional markets represent 38 percent of the total IT market in the region, and will reach $93 billion in 2012.

Central and Eastern Europe are expected to generate nearly $158 billion in IT spending in 2012. Professional markets will represent 48.2 percent of this, totaling $76 billion, while the consumer market is predicted to reach $81.7 billion. Russia's share of IT spending in the region in 2012 is expected for be nearly 45 percent, followed by Poland with 11.8 percent, the Czech Republic with 7.7 percent and Hungary with 3.7 percent.

IT spending in emerging Asia/Pacific countries is expected to reach $496 billion in IT spending in 2012. Emerging Asia/Pacific professional markets will reach 42 percent of the total IT spending in the region, while consumer IT spending will reach $288 billion in 2012.

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