World-Class IT Orgs Dramatically Outperform Typical Companies at 15% Less Cost

World-class IT organizations achieve dramatically higher levels of effectiveness, meeting ROI expectations nearly twice as often, and support up to 80 percent higher levels of business process automation, all at 15 percent less cost than typical companies, according to new research from The Hackett Group, Inc.

The Hackett Group's research details how top-performing IT organizations focus on automation and complexity reduction as essential IT strategy elements. They are significantly more effective at providing IT enablement for key business operations, and operate with up to 80 percent less complexity. The research also spotlights four fundamental practices that differentiate world-class IT organizations from typical companies: alignment of IT metrics and formalized communication with the business; standardization of applications and IT processes; integration of end-to-end business processes; and the monitoring of business and IT outcomes.

The Hackett Group's research found that world-class IT organizations spend 15 percent less than typical companies per end-user, including 25 percent less on labor, 9 percent less on technology, and 8 percent less on outsourcing. Reduced complexity is a key element of how world-class IT organizations eliminate nonessential spending yet maximize staff productivity to drive down IT costs. Hackett Group's research found evidence of this across a wide array of IT metrics. World-class IT organizations carry 70 percent less complexity in their technology platforms. In addition, they rely on 40 percent fewer applications per 1,000 end-users. So as a result, hardware and software complexity levels are significantly reduced, with 30 percent lower software complexity and 60 percent lower hardware complexity.

At the same time, world-class IT organizations demonstrate dramatically higher levels of effectiveness. They meet ROI expectations nearly twice as often as typical, deliver against anticipated benefits nearly 80 percent more often, automate up to 80 percent more business processes, and deliver dramatically higher levels of self-service enablement.

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IT Spending Expected to Accelerate Next Year, After Emerging Markets Slowdown in 2013

According to the new International Data Corporation (IDC) Worldwide Black Book just released, worldwide IT spending is expected to accelerate next year after dipping to its slowest pace of growth since the financial crisis in 2013. Overall tech spending is on course to increase by 4% this year at constant currency, reaching $2.04 trillion, down from last year’s growth of 5% due mainly to the slowdown in key emerging markets including China and Russia. IDC forecasts that in 2014, a rebound in China and continued momentum in the US and Europe will see a return to overall industry growth of more than 5% (reaching $2.14 trillion).

Smartphones Still Driving Growth, but Infrastructure Set for Recovery

In fact, almost half of this year’s industry growth is due to continued strength in smartphone and tablet shipments. Excluding mobile phones, IT spending will increase by only 2.6% this year at constant currency (just 0.7% in US dollar terms, based on year-to-date exchange rates). Enterprise IT spending in many regions has been tepid since last year, with weaker spending on PCs, servers and storage than previously expected. Tentative signs of stability in commercial PC shipments during Q3, however, may foreshadow the gradual recovery in enterprise infrastructure investment which we expect to unfold in the next 12-18 months as a broad-based capital spending cycle kicks into gear. Spending on servers, storage and enterprise networks will increase by just 1% in 2013 before accelerating to growth of 4% next year.

US Market Is Resilient, Despite Politics

While the US is on course to post IT spending growth of 5% this year, this translates into just 3% excluding mobile phones. Enterprise spending in the US has been relatively resilient, given the ongoing political volatility, but spending on PCs and servers will decline this year while storage investment is flat. Both the storage and server markets in the US are expected to improve in 2014, but PC spending is likely to remain weak in spite of signs of stability in Q3 as tablet cannibalization continues at lower price points.

Europe and Japan Have Stabilized

Market conditions are gradually improving in Western Europe, where overall IT spending is on course for growth of 2% this year (1% excluding phones), and where economic momentum has taken a turn for the better in many countries. We assume that this gradual recovery will continue next year, translating into IT spending growth of 3% driven mainly by strengthening sales of commercial software. This year has also seen a moderate improvement in Japan, driven by the government’s short-term policy initiatives; while IT spending is on course to be flat in 2013 (0% growth), this marks an improvement from our previous forecast of a 1% decline.

China Will Rebound in 2014

IDC forecasts that IT demand will accelerate in China next year, in line with our expectation that macroeconomic growth and business confidence will improve. In China, overall IT spending is on course to increase by just 8% this year, the weakest pace of growth since 2008; next year, we forecast an acceleration of growth to 14% led by strengthening sales of PCs, servers, storage, software and IT services. Growth in India will remain broadly strong, driven mainly by smartphones and tablets, but we expect a slowdown in PC sales after state-level government initiatives helped to drive strong growth in 2013, while there are also signs of weakening growth in other sectors. A gradual deceleration in tech spending is also emerging in Brazil, while in Russia the economic slowdown has driven overall industry growth to just 1% this year (from 15% in 2012). We forecast a rebound in Russia to 10% growth next year, driven by smartphones, software and services.

More information on service, support and IT spending can be found at www.SupportIndustry.com

Survey: Big Changes Coming For Future Contact Centers

Dimension Data, the$5.8 billion global information and communications technology (ICT) servicesand solutions provider, announced the results of its 2013/2014 Global Contact Center Benchmarking Report, which uncovers significant challenges and emerging trends indicating that the contact center of the future requires a new caliber of technology and resources to keep clients engaged and employees happy.

To extract this information, Dimension Data surveyed 817 participants covering 11 business sectors in 79 countries across the Americas, Europe, Asia Pacific, Australia, and the Middle East & Africa. Participants of the survey revealed the following:

-- Customers are increasingly dissatisfied with their contact center experiences, especially Generation X and Y, who demand a choice of multiple interaction points beyond phone calls, including web chat, smartphone applications and social media.

-- As contact centers continue to transition their communications platforms, front-line customer service staff are leaving their positions at a growing rate.

-- Web chat communications systems may be the remedy for increasing end-user dissatisfaction, as customers increasingly expect seamless interaction transitions from one channel to the next.

Contact center workers, end users remain dissatisfied
Contact centers are on an evolutionary path to become highly responsive, cross-channel multimedia hubs. This transformation is creating increased complexity for contact center agents because they are not always hired or trained to communicate within these new channels. As a result, contact center agent absenteeism is three times higher than contact center management; agent attrition is up an alarming 26 percent over 2012 rates. The 2013/2014 Contact Center Benchmarking Report notes that organizations must revamp their operating models, starting with properly trained agents – or risk losing them.

Customer satisfaction is also down for the fourth year running. Contact resolution rates have dropped for a fourth consecutive year, leaving customers with a three-in-four chance of having their issue resolved when contacting a service provider.

Preparing for multichannel engagement starts with hanging up the telephone
The global report shows that for Generation Y – individuals born between 1980 and 2000 – the phone is now the third choice of engagement after electronic messaging and smartphone applications. In addition, the preference gaps for Generation X (individuals born between 1961 and 1989) between phone, messaging, and social media is also narrowing.

Almost one third (31.8%) of contact center advisers are now handling transactions across a variety of emerging channels, such as smartphone applications. Social media and/or web chat deployments are also on the rise: 50.6 percent of contact centers currently offer, or have plans to implement, a web chat solution. The number of planned deployments increased 27.2 percent over the past 12 months, with a further 13.7 percent of survey participants expecting to have a solution in place over the next two years.

The report shows that organizations are aiming to shift 32.6 percent of contacts typically handled by agents to self-service channels. However, organizations under pressure to meet multichannel demands have rushed the haphazard implementation of solutions that only address one channel. As a result, self-help options in the contact center are not catching on as expected, and isolated technology systems are hindering the multichannel consumer experience. Omnichannel is the way forward, and customers want to hop seamlessly across channels and experience true connectedness. Omnichannel interactions that start on one channel and then continue on another, such as web chat, are no longer a “nice to have” feature, but a necessity.

 

More information on service, support and contact centers can be found at www.SupportIndustry.com

 

New Study from CorvisaCloud Reveals Top Customer Service Complaints

A new study commissioned by cloud-based contact center provider, CorvisaCloud, confirms a direct correlation between customer service management and a company’s bottom line while offering insight on what components of a customer service program are most important to customer retention and acquisition.

In the survey of more than 1,000 U.S. consumers conducted by Zogby Analytics, CorvisaCloud shows that one in six customers would rather see their dentist than talk with a customer service agent. Why? One in five (20%) consumers say they’re most aggravated about having to repeat the same information to multiple customer service reps on the same call. And nearly a third (31%) of respondents will wait only five minutes before they hang up the phone, meaning that businesses without efficient customer support processes are looking at a considerable number of angry or lost customers.

Consumers are quick to voice their displeasure. The survey found that after a negative customer service experience one-third (34%) of consumers complain or ask for a manager, further elevating a company’s cost. A bigger concern for the business is that 16 percent of disgruntled consumers tell their friends and family and more than one in 10 (13%) go so far as to say they will never shop with that company again.

Conversely, the moment a customer contacts the company, the opportunity exists to create a solid ongoing relationship. Three in 10 (31%) customers who have a positive experience say they give positive feedback to the company and twenty-nine percent will continue to shop with them, perhaps even more frequently. And, a positive customer service might be the best form of marketing. Fourteen percent of respondents said they sing the praises of the company to friends and family after a positive experience.

More information on delivering exceptional customer service and support can be found at www.SupportIndustry.com