Research Indicates Only 12 Percent of Companies Have Adequate IT Governance

IT Governance Limited polled opinions of almost 100 technology and compliance professionals on a range of IT governance issues. Results found that only 12 percent of businesses take technology seriously enough to operate full board-level oversight of their IT resources. Despite increasing compliance pressures under Sarbanes-Oxley, the UK Combined Code, HIPAA and other regulatory regimes, boards still appear to be lagging badly in implementing appropriate IT governance measures. IT governance frameworks also appear to be used in less than 50 percent of organizations.

Despite the critical importance of technology to most organizations, only 12 percent said that IT governance was important in their organizations and that board-level IT oversight committees existed. While a further 16.5 percent reported that progress was being made towards achieving this, more than 50 percent indicated that this was far from the case.

Respondents were similarly skeptical about the grasp that board members have of technology’s importance. Less than 7 percent said that board members understood the risks posed to business operations by information and IT systems. In contrast, 49 percent said this was not the case, with over 22 percent stating this emphatically.

Over 57 percent said that directors and officers failed to understand the age and health of the current IT portfolio and the business implications of deferring maintenance. Meanwhile, less than 37 percent said that IT governance frameworks were integrated with their company’s enterprise risk management regime, with less than 7 percent saying that this was achieved fully.

Asked if their companies used standard IT governance frameworks, such as ITIL, CoBIT, ISO17799 or PMBOK, 9 percent said yes, and 19 percent said that good progress was being made towards this. However, over 21 percent said such frameworks were used only occasionally, and fully 30 percent indicated that they were not used at all.

Source: DMReview

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U.S. Growth Slips, But Worldwide PC Shipments Remain Healthy

Worldwide PC shipments grew by 14.6% to 69.5 million units in the first quarter of 2008 (1Q08), which was above previous estimates of 13.2%, according to IDC's Worldwide Quarterly PC Tracker. However, the U.S. market slipped to a meager 3.5% year-over-year growth rate as the general economic malaise currently affecting the U.S. economy has begun to impact the local PC market as well. The other international markets more than compensated for the U.S., with the EMEA and Asia/Pacific regions coming in more than 2 points above forecast due to continued strength in developing countries. As with previous quarters, much of the growth came from the notebook markets, and in particular the consumer notebook segment in retail environments.

Regional Outlook

The United States market showed symptoms of the economic slowdown, although growth remained positive at 3.5% for the quarter. Consumers and businesses showed some degree of belt tightening – a situation IDC expects to continue into the next quarter.

The EMEA market maintained solid double-digit growth in 1Q08, driven by continued notebook strength across the region. Demand for portable PCs remained strong in Western Europe as declining price points continued to assist SMB renewals and multi-PC per household purchases in the consumer market. The competitive environment also intensified in the CEMA region, where vendors are driving increasing volumes and accelerating portable adoption in CEE and MEA.

The Japan market continued its trend of modest 1-2% growth. The consumer market was negatively impacted by an inventory backlog in retail stores that had been created by early shipments of spring replacement models last quarter. However, this was offset by a healthy commercial market replacement cycle.

Asia/Pacific (excluding Japan) experienced better than expected growth for the quarter. China's total market slipped sequentially in accordance with seasonal trends (Lunar New Year slowdown), but the pain was eased substantially by a very strong consumer notebook market. Indonesia was another standout as vendors found ways to address the customs clearance issue that has plagued that market for many previous quarters.

Vendor Highlights

HP shipment growth rates outpaced the overall market, but were the lowest among the top 5 vendors this quarter at 17.4%. In the U.S., PC shipments were just barely above flat for the quarter as the company began to face renewed competition from Dell.

Dell enjoyed its strongest quarter in almost two years, as the impact of its new retail presence and its growing strength in the portable market propelled the company to a 21.6% improvement in year-over-year shipments. Dell enjoyed strong portable growth in all major regions except Canada.

Acer's worldwide growth continued to outpace the market, but the combined entity suffered a 20% drop in U.S. shipments for the quarter when compared to the Gateway consumer and total Acer shipments from the same period last year. Most of the decline was due to a weakening in Gateway-branded products.

Lenovo saw its shipments improve 21% for the quarter, driven by its dominant presence in the rapidly growing Asia/Pacific region. The company also experienced stronger than expected growth in EMEA portables, but a bit slower than expected growth in the U.S.

Toshiba continued to enjoy the overall transition to notebooks as the company saw its worldwide shipments top 3 million, a 20.6% improvement versus last year. The EMEA and A/P regions, in particular, featured stronger than expected growth as both consumers and businesses in those regions continued to allocate more of their purchase dollars to notebooks.

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Banks Set the Customer Satisfaction Standard for Online Financial Services

Customer satisfaction with online banking far surpasses other online financial services like credit cards and investment, according to a new study conducted by ForeSee Results and Forbes.com. According to the Online Financial Services Study, which employs the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI), online banking scores 82 on ACSI’s 100-point scale. Credit card websites and investment websites both score 75.

In banking, the online channel (up 12% from 2003) significantly outperforms overall retail banking in terms of customer satisfaction, which scored 78 when measured by ACSI in 2007. This is the first year the study surveyed credit card and investment website customers.

Credit cards struggle to move beyond commodity status, and the low score for credit card websites indicates that credit card companies are not maximizing the value of the online channel to overall business operations. Credit card companies do not tend to have strong relationships with their customers, but the study suggests that investments in improving website performance and the site experience would improve loyalty.

For investment websites, customers are more likely to use the online channel than any other channel, so it is imperative that the website meet customer needs. Highly satisfied customers are 37% more likely to increase online transactions and 51% more likely to purchase more services than dissatisfied customers, which clearly demonstrates the value of online customer satisfaction.

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Gartner Identifies Seven Grand Challenges Facing IT

Many of the emerging technologies that will be entering the market in 2033 are already known in some form in 2008, according to Gartner, Inc. Many of the innovations that will unfold during the next 25 years can be found today in research papers, patents, or are in a prototype in production.

These long-term innovations, taking place in five to 20 years, go beyond the range of the typical IT project portfolio planning cycle. These innovations are classified as “IT Grand Challenges”. Gartner defines an IT Grand Challenge as a fundamental issue to be overcome within the field of IT whose resolutions will have broad and extremely beneficial economic, scientific or societal effects on all aspects of our lives. Gartner has identified seven IT Grand Challenges. They include:

Never having to manually recharge devices: Today, the ubiquity of portable computing and communications devices powered by battery means that many people would find it highly desirable to either have their batteries charged remotely or their devices powered by a remote source, bypassing the use of batteries altogether. However, any commercial application of wireless powering still seems a long way off.

Parallel Programming: The challenge with parallel computing is to create applications that fully exploit a “multi-core” architecture by dividing a problem into smaller individual problems addressed by individual processors. To overcome this, key issues will need to be addressed, including effectively breaking up processes into specific sub-processes, determining which tasks can be handled simultaneously by multiple processes, scheduling tasks to be processed simultaneously and designing the architecture of the parallel processing environment.

Non Tactile, Natural Computing Interface: The idea of interacting with computers without any mechanical interface has long been a desirable goal in computing. Some of the many challenges that remain in this area include the ability to detect gestures, developing a gesture dictionary and the need for real-time processing. Another set of challenges relate to natural language processing, which include speech synthesis, speech recognition, natural language understanding, natural language generation, machine translation and translating one natural language into another.

Automated Speech Translation: Once the many hurdles of natural language processing are overcome to yield human-to-computer communications in one language, the complexity extends further when translation and output is required to a target language that is understandable to a human. Some rudimentary systems have already been created to accomplish basic speech translation, such as one-way and two-way translations.

Persistent and Reliable Long-Term Storage: Current technologies are hard-pressed to perfectly preserve Dr. Francine Berman’s 2006 estimate of 161 Exabytes (x10 to the 18th power) of digital information on digital media for more than 20 years. The barriers to long-term archiving (in excess of 100 years) that must be overcome include format, hardware, software, metadata, information retrieval, just to mention a few.

Increase Programmer Productivity 100-fold: As business and society's demand for software development increases, and the apparent decline of students pursuing software engineering and computer science degrees intensifies, removing uncertainty from meeting future demands will have to be met by increasing the output, or productivity, per programmer. While the exploration and development of tools to enhance productivity continues to capture attention, it would appear that effectively and efficiently exploiting reusable code is one of the most encouraging rays of hope to yield more output per programmer.

Identifying the Financial Consequences of IT Investing: One of the most perplexing challenges faced by IT leaders has been to convey the business value of IT in terms readily understandable by business executives. Unlike financial accounting measurements which are standard across public companies, the particular management accounting metrics could be different for each company. This Grand Challenge would be considered conquered when a request for an IT project was argued with the following certainty: "If you invest in our IT proposal, you will see an additional $0.03 earnings per share directly attributable to this project by the third quarter of next year."

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Green IT hits the CIO radar

A new report by independent market analyst Datamonitor, “2008 Trends to Watch: Green IT”, predicts a surge in CIO interest and vendor initiatives in the Green IT space. It reveals that tighter regulatory measures and advances in technology are feeding renewed interest in Green IT. In an independent survey conducted by Datamonitor, over 75% of respondent firms considered eco-friendly computing as an important element in their IT strategy while a further 15% rated it as their top IT priority.

IT organizations today face the dual challenge of shrinking budgets and sprawling infrastructure footprints. In addition, regulations around data privacy and electronic waste disposal are getting tighter by the year. It is against this backdrop that a majority of enterprises are beginning to realize the full potential of eco-friendly computing practices – significant cost savings, increased flexibility in managing IT resources, and compliance with environmental regulations.

Virtualization technologies have come to be regarded as being synonymous with green – offering both significant cost savings and reductions in enterprise carbon footprints. Server and storage virtualization technologies have matured over the last two to three years, to the extent that one in three companies with a Green IT strategy in place already makes use of these technologies.

Enterprises are embracing a lifecycle approach to retirement and disposal of IT hardware assets, leading to significant benefits in terms of cost savings and mitigated legal risks. Hardware refreshes are planned based on energy efficiency and components are disposed of in a safe manner - over two thirds of enterprises have a formal program in place to recycle their IT assets.

IT vendors are forging the path ahead for Green IT adoption, with all major players announcing corporate initiatives in eco-friendly computing. As a result, innovations across the design, manufacturing and service realms are beginning to impact the user world in a big way. Light Emitting Diode (LED) and Solid State Disk (SSD) technologies are already hitting the mainstream, and so is the Software-as-a-Service mode of application delivery, which exploits shared infrastructure.
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North American and European Executives Say Business Strategy Depends Largely on Innovation

Business strategy is driven largely by innovation, but corporate responsibility for the innovation process is highly fragmented, according to findings of a survey published by Accenture.

The survey of 601 senior executives in the United States, United Kingdom, Germany and Canada found that innovation is a top corporate priority, but it also indicates that more senior-level accountability, greater CEO involvement and improved speed-to-market execution can help companies deliver on their promise of innovation and boost their competitiveness.

While nearly two-thirds (62 percent) of respondents said that their organization’s business strategy is either totally or largely dependent on innovation, only 21 percent of respondents said their companies have a chief innovation executive, and even fewer — 11 percent — said there is a C-suite executive in charge of the process. Nearly half (48 percent) of respondents said that multiple executives are responsible for innovation in their companies.

The survey also found that companies that are successful with innovation are likely to have a chief innovation executive. Specifically, 40 percent of respondents who said their company's level of innovation is much stronger than that of their competitors also said that the person primarily in charge of innovation is a chief innovation executive.

The findings indicate that the challenge of innovation for organizations is not commitment and intent but rather execution against the innovation vision. While 59 percent of executives said that the level of support their CEO gives to innovation is greater than the level of support of CEOs at their closest industry competitors, a majority (57 percent) of respondents also said that their organization’s speed of innovation was slower than that of industry peers, and about the same number (55 percent) said that their frequency of innovation was less than that of their industry peers.

Respondents are concerned not only about their ability to generate new ideas, but also with their ability to consistently transform innovation into action. Only 15 percent of respondents said they are very satisfied with their company’s ability to convert ideas into service offerings, and only 13 percent said they can do it repeatedly. High on the list of innovation challenges cited by respondents are transforming ideas into marketable goods and services, cited by 29 percent of respondents, and creating a proper execution strategy, cited by 26 percent of respondents.

Respondents were asked how they would rate innovation in various regions, regardless of whether their organization has operations there or not. While respondents regard North America as the most innovative region – selected as “highly innovative” by 50 percent of respondents - they also consider Asia to be more innovative than Europe. Specifically, more than one-third (38 percent) of all respondents said that Asia is highly innovative, compared with just 22 percent who said that Western Europe is highly innovative. Interestingly, respondents in the United Kingdom and Germany share this view: Only 21 percent of UK respondents said that Western Europe was highly innovative, compared with 39 percent of UK respondents who said the same about the Asia Pacific region. Similarly, only 23 percent of German respondents said Western Europe was highly innovative, while 34 percent of them said Asia Pacific was highly innovative.

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IT Budget Growth Remains Broadly Stable, but One in Five CIOs Experience IT Budget Cuts

Despite economic concerns, global enterprise IT budget growth remains unchanged at 3.3 percent in 2008, according to a worldwide survey of 1,011 CIOs conducted in the first quarter of 2008 by Gartner, Inc.

While 62 percent of CIOs reported no change in their 2008 IT budgets, 23 percent indicated a decline in their budgets, and 15 percent of respondents reported an increase in their budgets. Of those respondents reporting a decline in budget, the decrease averaged at 10 percent in their committed 2008 budget. For those respondents that reported an increase in their budget, they said the increase was approximately 15 percent.

U.S. IT budget growth rates are softening. Overall U.S. IT budgets for 2008 are expected to grow, but the growth rate has slowed from 3.1 percent to an increase of 2.3 percent. One in four U.S. CIOs indicate that their IT budgets were reduced in the first quarter, 65 percent were unchanged and 10 percent reported budget increases in the first quarter.

CIOs reported budget changes that are in keeping with a general belt-tightening program rather than a restructuring of the IT budget or spending levels. Almost two-thirds, 72 percent of those reported a decline of 10 percent or less.

Geographically, IT budgets continue to exhibit growth with budget growth increasing in Europe (+3.86 percent) and Asia/Pacific (+5.98 percent). The strength of European and Asian CIOs in their economies is reflected anecdotally in their response to this study. On several occasions, CIOs in these geographies commented that they saw the current belt tightening as a U.S. only phenomenon indicating a level of independence from conditions in the U.S.

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