2008: The Year for Greener and Leaner IT

Even though the leaves have fallen and there is a feel of winter in the air, there seems to be a lot of green around -- and it is not just in the evergreen boughs on your mantle, but rather it is in the drumbeat of change for business and society. Concerns about the environment have not been at this fever pitch since the 1960's. Simply put, green has become red hot.

And with the steady demand for green action on the part of corporations as well as governments, it is no surprise that organizations turn to information technology (IT) providers, like EDS, to address many of the issues surrounding their need to "go green".

To help corporations and governments kick-off the new year right, the EDS Fellows have highlighted eight ways CIO's can extend the life of existing facilities and reduce the environmental impact of computing in 2008.

1. Virtualize Servers. The first option is to move from the "one application - one server" paradigm many organizations have fallen into. Server virtualization allows multiple applications to operate securely within the same physical server. Moving the current average server utilization from 15-20 percent to 80-90 percent allows fewer servers to do more work using the same energy profile.

2. Turn off Unused Servers. The easiest power to save is the power that isn't used. Servers and disk drives should be on only when they are needed, so sophisticated operating processes must be in place to bring servers back online whenever increased demands require them to do so.

3. Employ Power Saving Techniques. The third option is to employ power saving techniques now familiar to most laptop users. When demand allows it, organizations can run their servers at reduced speed which lessens their consumption of energy. In addition, an enterprise should always choose a server with the highest power supply efficiency available with the selected configuration.

4. Optimize Applications. The fourth option is to optimize applications being run in the data center. Bloated software, inefficient software, or even software that produces very little business value all need to be pruned, optimized and even discontinued to put a lesser load on servers.

5. Perform Rigorous Maintenance. The fifth option is more fundamental, but also very achievable. Data center managers can improve the efficiency of their facilities by rigorous maintenance to ensure all equipment is operating at the peak of efficiency as well as modifying layout and configuration of equipment to reduce cooling requirements. These and many more efficiency steps will increase overall data center efficiency and lower the carbon footprint.

6. Move to Higher Density, Multi-Core CPUs. The movement to newer, multi-core CPU designs will deliver significant efficiencies, because of their lower voltage requirements. Eight, 16, 24 and higher "processors on a chip" allow for fewer server blades in a rack driving up efficiencies and driving down electricity usage.

7. Pay More Attention to Operating the Infrastructure. We have become so accustomed to "cheap computing" that we have become lax in our process of procuring, deploying and operating the infrastructure upon which so much of our modern society depends. However, when an enterprise looks at total cost of ownership and electricity costs exceed the purchase price of a server, the equation shifts in favor of higher efficiency and rigor which is good for the bottom line as well as for the environment.

8. Cash in on Being Green. It is important to look for innovative applications of IT that makes real impacts for an enterprise and its customers. For example, an enterprise can use Dimmable Addressable Lighting Interface (DALI) in electronic ballasts networked to sophisticated lighting control software that reduces electrical usage by up to 40 percent, or use programmable thermostats and schedules to standardize the temperature, pressure, humidity and set points for occupied and unoccupied periods in all buildings. These technologies require integrated IT to function and provide a rapid return on investment. The world will see an explosion of IT being deployed as we move to a lower energy regime in new and existing buildings throughout society over the next several years. The business advantage of consuming less electricity reduces both the cost structure and carbon footprint of the enterprise, which is good for business and the planet.

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Customer Satisfaction with Web Holiday Shopping Stays Strong

Shopper satisfaction with retail websites remains strong this week, according to the latest release of the ForeSee Results Holiday Retail Benchmark. While aggregate customer satisfaction for the week between December 10 and December 16 slipped 0.7 percent from last week to a score of 77 on a 100-point scale, it remains 2 percent higher than customer satisfaction the same week last year.

The weekly ForeSee Results benchmark shows continued strong performance in key financial metrics regarding future behaviors that are influenced by customer satisfaction. In terms of purchase behavior, likelihood to buy from the retailer’s offline channels (84.8) is up 4.1 percent over last year, while likelihood to buy online (75.2) is up 3.3 percent over last year at this time.

The ForeSee Results Holiday Retail Benchmark is produced using the methodology of the University of Michigan’s American Customer Satisfaction Index (ACSI), a proven predictor of future sales (online and offline), word of mouth recommendation and financial performance.

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ISVs and Customers Will Reap Tremendous Benefits from Virtual Appliances

The Yankee Group announced that virtual appliances will enable the delivery of better-quality software and an improved user experience. The virtual appliance is an emerging new development for the software industry.

According to the recently published Yankee Group Report, Virtually Possible: Virtual Appliances Ready to Shake Up Application Delivery, IT infrastructure and its relationship with applications has dramatically changed with the rise of Anywhere computing enabled by server virtualization. ISVs now have a new way of delivering their software through virtual appliances -- a virtual machine that consists of an application and an integrated OS. A customer-created virtual machine would normally consist of an OS such as Windows or Linux on top of an installed application. But virtual appliances also escalate the war between Windows and Linux. Open source (primarily Linux) beats proprietary (Windows) in a virtual environment.

As virtualization progresses and the concept gains acceptance, virtual appliances may become the predominant and only platform for ISVs. Some of the benefits of virtual appliances for ISVs and customers are:

Lower support costs: Supporting a myriad of customer OSs, all with different versions, patch levels, and configurations is becoming a support nightmare.

Better quality software: By removing the variables of customer-installed and –configured operating systems, ISVs can have complete control of their software operating environment.

Easy scalability: Virtual appliances can easily be moved to a faster machine.

Quick deployment: Virtual appliances plug into existing virtual infrastructure and come pre-installed, pre-configured and ready to start.

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Phishing Attacks Escalated in 2007; More than $3 Billion Lost to These Attacks

Phishing attacks in the United States soared in 2007 as $3.2 billion was lost to these attacks, according to a survey by Gartner, Inc. The survey found that 3.6 million adults lost money in phishing attacks in the 12 months ending in August 2007, as compared with the 2.3 million who did so the year before.

According to a survey of more than 4,500 online U.S. adults in August 2007 (which was representative of the online U.S. adult population) the attacks were more successful in 2007 than they were in the previous two years. Of consumers who received phishing e-mails in 2007, 3.3 percent say they lost money because of the attack, compared with 2.3 percent who lost money in 2006, and 2.9 percent who did so in 2005, according to similar Gartner surveys during those years.

The average dollar loss per incident declined to $886 from $1,244 lost on average in 2006 (with a median loss of $200 in 2007), but because there were more victims, $3.2 billion was lost to phishing in 2007, according to surveyed consumers. There was a bit of relative good news, however; the amounts that consumers were able to recover also increased. Some 1.6 million adults recovered about 64 percent of their losses in 2007, up from the 54 percent that 1.5 million adults recovered in 2006.

PayPal and eBay continue to be the most-spoofed brands, but phishing attacks increasingly employ devious social engineering attacks, impersonating, for example, electronic greeting cards, charities and foreign businesses.

Thieves are increasingly stealing debit card and other bank account credentials to rob accounts -- targeting areas where fraud detection is weaker than it is with credit card accounts. According to the survey, of those consumers who lost money to phishing attacks, 47 percent said a debit or check card had been the payment method used when they lost money or had unauthorized charges made on their accounts. This was followed by 32 percent of respondents who listed a credit card as the payment method, and 24 percent who listed a bank account as the method (multiple responses were allowed).

Phishing and malware attacks will continue to increase through 2009 because it's still a lucrative business for the perpetrators, and advertising networks will be used to deliver up to 30 percent of malware that lands on consumer desktops.

Gartner sees no easy way out of this dilemma unless e-mail providers have incentives to invest in solutions to keep phishing e-mails from reaching consumers in the first place, and unless advertising networks and other "infection point" providers (which theoretically can be any legitimate Web site or service) have incentives to keep malware from being planted on their Web sites to reach unsuspecting consumers.

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IT Project Underperformance Accepted as the Norm by Global Business Management

One in 3 companies' IT projects fail to perform against expectations, research from Tata Consultancy Services (TCS), has revealed. Yet despite these worrying levels of failure to deliver, 43% of organizations say that their business managers and the Board accept problems as the norm. This attitude is especially common in Europe (44%) and AsiaPac (48%).

Despite the general poor performance of IT projects globally, such results do not evoke a sharp reaction from management. In fact, 69% of respondents said that their managers and the Board continued to provide the necessary financial support for these projects. Common problems cited included overrun on time (62%), budget (49%) and higher than expected maintenance costs (47%). In addition, 1 in 4 companies said that they find business users are reluctant to adopt the new systems once implemented.

As a result of the research, Tata Consultancy Services is urging businesses to re-think their IT services and outsourcing strategies. Organizations need to work with partners that can explain the value of their work at a Board level and provide Key Performance Indicators to show the benefit of the investments made.

In addition, they should work with businesses that can demonstrate a clear ability to execute on time, on budget and to plan.

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Contact Center Quality Monitoring/Liability Recording Market to Exceed $2.3 Billion in 2007

DMG Consulting has published its 4th annual Quality Monitoring/Liability Recording Product and Market Report, an authoritative guide to developments in the contact center QM/Liability Recording and Workforce Optimization (WFO) market. DMG forecasts more than $2.3 billion in sales of QM/Liability recording and WFO products by the end of 2007, a 10% increase over 2006. This counts sales from all vendors of quality monitoring, liability recording, coaching and eLearning, performance management, workforce management, surveying and speech analytics.

According to the report, Internet Protocol (IP) was also on the upswing in 2007. Sales of IP recording grew 40% in 2007, and that number should increase to between 50% and 55% in 2008.

Sustained robust growth is being driven by migration to IP recording, valuable new applications and significant refinements to established offerings. A new generation of mid-tier vendors is entering the market, many of whom are focusing on sales to small and mid-size businesses. This segment has historically been under-penetrated, and is likely to be a growth market in 2008 and beyond.

The QM/Liability Recording Product and Market Report, one of a series of reports published by DMG annually, covers more than 45 companies and provides in-depth profiles for 14 leading firms and contenders.

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Reportable and Multiple Privacy Breaches Rising at Alarming Rate

Personally identifiable information (PII) of customers and employees is being exposed -- frequently and repeatedly – potentially putting hundreds of thousands of individuals at risk and exposing organizations to increased liability, according to a new survey by Deloitte & Touche and the Ponemon Institute LLC.

A shocking 85 percent of privacy and security professionals in North America surveyed acknowledged having at least one reportable data breach of PII within their organizations during the last 12 months, according to the “Enterprise@Risk: 2007 Privacy & Data Protection Survey.” More alarming is the fact that 63 percent acknowledged multiple reportable data breaches occurred within their organizations during the same period. As a result, privacy and security professionals continue spending most of their privacy-focused time on incident response and relatively little time on more proactive activities, such as strategy, training and root cause analysis.

More than 800 North American privacy and security professionals responded to the online survey sponsored by Deloitte and the Ponemon Institute, which was conducted to better understand the emerging privacy function. The survey, now in its second year, analyzed the roles, activities and time allocation preferences of dedicated privacy and security professionals, as well as their organizational status and reporting relationships. Specifically, respondents were asked to describe actual versus “ideal” time spent on activities and requirements to effectively manage and protect personal data in the enterprise.

Additional key findings and analysis include:

- Only slightly more than 7 percent of a professional’s time is allocated to employee training and no more than 10 percent is allocated to establishing an incident response team, management reporting and conducting root cause analysis.

- Resource allocation associated with notification activities alone could be a significant hidden cost of privacy and data protection within the enterprise. The percentage of incidence-related time spent notifying stakeholders is the second highest among incident-related activities reported by survey respondents.

- While 61 percent indicated their organization has processes in place to identify and assess the impact of new regulations, only 23 percent reported a change management process in place to respond to developments impacting privacy.

- Due to the dichotomy between the management and protection of PII and the distributed nature of the privacy function itself, reporting structures varied greatly for privacy and security professionals. An analysis of primary reporting structures indicates privacy professionals report most often to the General Counsel (38 percent) or Compliance (21 percent). According to respondents, security professional’s reporting structure is concentrated at the CIO (76 percent).

- Despite significant technical advances, most organizations are still too dependent on standalone point solutions. For example, most enterprises (55 percent) are implementing some type of encryption; with 37 percent currently encrypting both data at rest and data in motion.

The survey pointed out a couple of realities. The privacy function is siloed between legal and compliance on one hand, and IT security on the other hand. The privacy program itself is still immature. And, there does not appear to be real integration with the risk function and business processes of the enterprise. Until that integration occurs, it is likely that privacy incidents and reportable data breaches will continue.

There is, however, some good news coming out of the survey, and that is the attitudes of security and privacy professionals are converging.

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Midsize Enterprises Will Increase ERP Budgets by 5.1% in 2008

AMR Research released the “Midsize ERP Spending Report, 2007-2008,” which found midsize enterprises will increase their ERP budgets by 5.1% on average in 2008.

Growth in ERP spending was fueled by several factors. As midsize organizations fight for market share against increasingly diverse global competition, increased profitability, revenue growth, and customer satisfaction become priorities. And, with globalization, the pool of potential customers is ever-growing, creating a need for streamlined processes to help meet demand.

The survey found an increased interest in pure software-as-a-service (SaaS) and on-demand purchasing models. 39% of larger midsize companies (500-999 employees) are planning to purchase SaaS or on-demand software in 2008. And the numbers are rising. AMR Research predicts that over the next three years these new purchasing models will become a mainstream purchasing method.

In addition, by 2010, 43% of companies would like to employ a single, global financial and shared services ERP system.

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Business Intelligence / Analytics Technology Drives 42% Improvement in Customer Retention in Best-in-Class Companies

A recently published study by Aberdeen, a Harte-Hanks company, found that leading field service organizations are adopting business intelligence and data analytics technology and best practices to enable better and faster decisions and reporting within post-sale service organizations. They are also beginning to deploy simulation modeling within their organizations to perform sophisticated “what-if” planning and forecasting.

Among the service organizations recently surveyed, companies that have implemented technology for reporting and decision support have improved:

• Service profitability by 17%

• Customer retention rates by an average of 29%

• Service Level Agreement (SLA) performance by 33% Best-in-Class organizations are showing greater improvements, with service profitability up 18%, customer retention increase of 42%, and a 44% improvement in SLA compliance.

Other service organization Best-in-Class characteristics include:

• 80% have enterprise-wide balanced scorecard initiatives in place

• 71% have a vice president or higher executive overseeing service functions

• 40% have established enterprise-wide standards and process to ensure data accuracy

Aberdeen recommends that service organizations consider the following strategies to drive efficiency and decision support within their service organization:

• Implement technology and process to ensure data accuracy within the service operation.

• Provide service organization with total visibility into parts, workforce and knowledge across the enterprise.

• Implement technology to enable “what-if” simulations.

• Focus attention on longer-term customer-facing metrics like retention as well as profit.

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Global Tech Spending Growth to Slow in 2008

Growth in global technology spending will slow next year, hurt by a U.S. economic downturn that could crimp spending on computer hardware, research firm IDC said in a report with predictions for 2008. IDC estimates worldwide technology spending growth to range between 5.5 percent and 6 percent in 2008, down from about 7 percent this year. U.S. spending growth will dip to 3 percent to 4 percent next year from 6.6 percent in 2007, IDC said.

Companies will target faster-growing emerging markets along with small and medium-sized businesses to offset slower U.S. spending growth, IDC predicted, and in some cases they will need to make acquisitions to launch into promising sectors. IDC sees tech spending in Brazil, Russia, India, China and nine other emerging countries, including Poland and Mexico, growing 16 percent in 2008.

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Don't Be Seduced by Consumer PC Bargains, Gartner Warns Business Users

Some organizations are incorrectly assuming that less-expensive, consumer-class PCs are suitable for business use. Gartner recently warned organizations that invest in consumer PCs and notebooks risk higher total cost of ownership (TCO) in terms of platform instability, less quality control and limited support.

Gartner acknowledged that given the current low cost of consumer hardware, IT managers might find themselves under pressure to justify the higher costs of enterprise PCs to senior management. Gartner urged them to fully explain the likely TCO implications of purchasing consumer PCs and notebooks for the workforce.

For corporate buyers standardization is essential because it affords less complexity and lower TCO. Even minor changes to a corporate system have the potential to create incompatibility and require additional testing and system support. For this reason, corporate buyers are less interested in the latest new features, focusing instead on the following attributes:

1. Platform stability (a base level of predictable functionality)
2. Longer product cycles (at least 18 months or longer)
3. System design and features
4. Quality assurance programs
5. Security and manageability
6. Consultative relationship with the sales channel
7. PC life cycle services

Since consumers usually purchase one system at a time, consumer-class PCs and notebooks have no investment in platform stability and no concern for standardized system image. Consumer systems also lack corporate features such as docking stations and often come with consumer versions of the Windows operating system and software applications. These systems have limited quality assurance programs, having undergone less rigorous testing than corporate hardware which can result in a 50 per cent higher failure rate incurring higher repair costs and user down time. Lastly, there is little support available from the retail channel when things do go wrong, with warranty support typically restricted to a much shorter time.

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Despite Agreement About IT’s Strategic Importance, Only One in Three CEOs are Champions of Technology

While 83 percent of business and technology executives predict IT will either increase competitive ferocity, enable new market entrants, or both, a mere third of CEOs champion technology and include CIOs in strategic planning, according to the “Diamond Digital IQ Study™,” released by Diamond Management & Technology Consultants, a business and technology consulting firm

For example, IT is still not integral to strategic planning. The Diamond study found that only 30 percent of C-level executives believe that their company CIO is involved in the strategic planning process.

In addition, both business and IT leaders underestimate the importance of some key management practices that are fundamental to getting value from every dollar spent on IT. About half of the respondents downplayed the importance of enterprise architecture (EA) planning and design, program management skills, and the governance required to convert business/IT alignment into high-value IT investments.

The Diamond Digital IQ study surveyed 456 C-level business and technology executives at large companies (90 percent of the companies represented had annual revenues greater than $1 billion) to measure attitudes about a variety of strategy, management and technology issues.
Attitudes about the role of technology in merger and acquisition activity underscore the finding that business/IT alignment doesn’t necessarily lead to demonstrable value. Fewer than six of 10 C-level respondents ranked their last post-M&A IT integration effort as effective. Similarly, only 61 percent agreed that their business integration efforts were effective.

Just 19 percent of the respondents “totally agree” that their company’s strategic planning process is highly effective. Only about one in four of the respondents “totally agree” that strategic planning helps them forecast the opportunities and threats to the business that information technology will introduce.

By analyzing the responses from 10 different industries across two dimensions – strategy and operations -- Diamond was able to calculate how different industries stack up in terms of their commitment to information technology. Healthcare and pharmaceutical companies tend to view IT of both strategic and operational importance and are confident in their ability to harness IT to power their companies. Financial services, insurance, and high tech firms also demonstrated a high Digital IQ. The average utility industry Digital IQ was lower than any other industry.

Sixty percent of IT respondents and 57 percent of business executives feel their systems are totally or somewhat flexible when it comes to adding features and functions. A deeper analysis of the responses found that high correlation between system flexibility and attitudes toward strategic planning. Companies that ranked high in flexibility were more likely to be effective strategic planners that take into account IT’s impact on the business, have an executive charged with integrating business and IT, and a CIO who is very involved in business strategy.

Data mining/data analysis is the tool most often cited (25 percent) as a means to transform the business. Approximately 40 percent of respondents believe that several technologies -- including data mining/analysis, search technologies, and service-oriented architecture are ripe for growing the business. Finally, biometric identification/identity management and virtual collaboration/presence technologies are more commonly viewed as technologies with the potential to help run the business more efficiently.

While only 9 percent of respondents say that greater than 50 percent of their company’s IT operations are outsourced, 21 percent expect that a majority of IT operations will be reassigned to a third party vendor by the end of the decade. Similarly, 22 percent of the respondents outsource somewhere between 26 percent and 50 percent today. By 2010, that number will be 28 percent. Further, the percentage of companies that outsource 25 percent or less of their IT operations will decline in both product and service companies.

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New Study Measures Customers’ Satisfaction with IT Support

HDI, a membership association for IT help desk and service management professionals, released the results of a landmark study measuring customers’ satisfaction with internal and external IT support. The study’s results are based on more than 257,000 customer satisfaction surveys collected from more than 200 help desks and support centers. Some key findings include:

Overall customer satisfaction ratings were quite high, averaging mid-to-high 4s on a scale of 1-5 (1 being “Very Dissatisfied” and 5 being “Very Satisfied”)

Participating support centers were asked to determine their “maturity level” – based on HDI’s Maturity Model – from “Reactive,” to “Proactive,” “Customer Centric,” and ultimately “Business Centric.” Not surprisingly, those support centers that classified themselves as “Business Centric” (the highest level of maturity) had the highest customer satisfaction ratings. However, somewhat more surprising and ironic was that those that considered their support centers to be “Customer Centric” had the lowest customer satisfaction ratings of the four groups.

The survey rated customer satisfaction on five different factors: courtesy of the analyst; technical skills/knowledge of the analyst; timeliness of the service provided; quality of the service provided and overall service experience. Customers consistently reported that their highest level of satisfaction was with the courtesy of the analyst, and their lowest level of satisfaction was with the timeliness of the service provided. These results suggest that while the frontline analysts may be polite to their customers, the incidents are not being resolved as quickly as the customers expect them to be.

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The Emerging Green Technology Consumer

Twelve percent of US adults — some 25 million Americans — are willing to pay extra for consumer electronics that use less energy or come from a company that is environmentally friendly according to a new survey by Forrester Research, Inc. These "bright greens" are the vanguard of an emerging consumer market segment that will be an attractive target for technology companies.

The Forrester survey identified three distinct segments of US technology consumers:

Bright greens are 12 percent of US adults. These consumers are concerned about the environment and strongly agree that they would pay more for consumer electronics products that save energy or come from a company that is environmentally responsible.

Green consumers are another 41 percent of US adults. These 90 million consumers share concerns about environmental issues, but do not strongly agree that they would pay more for environmentally friendly products.

Non-greens are the remaining 47 percent of US adults. The rest of the population, 96 million Americans, do not (yet) share the greens' concerns about the environment or global warming.

Among the major PC brands, Apple's customer base is the greenest, with 17 percent of its customers in the bright green consumer category. HP's Compaq brand ranks second, with 13 percent of its customers in the bright green category.

Many of the major consumer electronic manufacturers, including Apple, Dell, HP, Sony, and Toshiba, have taken early steps to green their operations and products. But moving forward, marketers and designers of consumer technology products and services will change product marketing and product design to embrace green principles like energy efficiency, lower-impact manufacturing, longer product life cycles, and recycleability.

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Mobile Service Providers Are Failing to Meet the Needs of Corporate Customers

Many mobile service providers are failing to capitalize on potentially lucrative corporate contracts because they don’t focus enough on client’s business needs, according to Gartner. Service providers that don’t update their sales strategies to provide tailored solutions to businesses risk losing valuable corporate customers and becoming chiefly consumer players, analysts warned.

Many mobile service providers would argue that they already have a dedicated corporate sales force that focuses on business requirements, but Gartner has found that for the most part, providers are not fulfilling these needs. Instead, the focus is on selling SIM cards with complex, non-transparent pricing schemes and giving discounts related to total spending, rather than delivering individual, tailored services.

According to Gartner, large organizations have four main priorities when buying mobile services: managing costs, managing services, dealing with increased mobile data services and centralizing resources. Only service providers that meet these demands by addressing the contractual, commercial, services and solutions needs of large companies will retain corporate contracts in the long-term.

Managing mobile services is becoming increasingly important to businesses that require different user profiles such as ‘international traveller’ or ‘domestic high data user’. Service level agreements (SLAs) with defined key performance indicators to measure the quality of help desks etc, as well as monitoring the performance of wireless email, are also growing in significance. Device management services are becoming more widespread with over-the-air disabling of lost or stolen handsets via a Web portal a key feature for corporate customers.

Organizations are also looking to service providers to deal with the increased use of mobile data services and provide solutions that extend remote access for mobile workers, such as the ones offered by Orange and iPass.

Gartner recommends that service providers focus on providing large organizations with a single point of contact for contract negotiations, management and solution issues, and recommends the use of Web-based procurement portals to include handset orders, installation and online order tracking, as well as multichannel support by phone, e-mail and fax.

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60% of IT Security Teams Spend at Least One Quarter of Resources on Compliance

In a recent survey of 103 IT security professionals, 60% percent stated that at least 25% of their team’s time is spent on compliance efforts. nCircle, a provider of agentless security risk and compliance management solutions, conducted the survey from August 16 through October 31, 2007.

The full poll results are:

What percentage of your security team’s time is devoted to supporting compliance efforts?

• Less than 25% - 40%
• 25 - 50% - 29%
• 51 - 75% - 16%
• 76 - 100% - 15%

Total Votes: 103

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Poor Communication by Senior Management About the Business Tops List of Workplace Frustrations

The American workforce finds a lack of communication from managers more annoying than dealing with nosy colleagues, says Opinion Research Corporation’s latest “Ouch Point” study. Seventeen percent of respondents cite senior managers who fail to communicate company news as their chief complaint, versus six percent who consider meddling co-workers to be their greatest source of aggravation in the workplace.

The study also indicates that the need for political correctness at work has become one of the biggest frustrations for nearly one in ten Americans. Interestingly, more males (11 percent) than females (6 percent) cite this as their greatest workplace irritant.

Despite buzz about corporations monitoring employees’ electronic activity, the majority of employees are not bothered by this lack of privacy. Only four percent of respondents list corporate monitoring of email and/or telephone calls as their greatest annoyance.

According to the survey, the top ten employee “Ouch Points” are:

1. Poor communication by senior management about the business 17%
2. General office politics 16%
3. Lack of teamwork 15%
4. Having to use politically correct language 9%
5. Nosy co-workers 6%
6. Poor relationships with an immediate supervisor 6%
7. Fear of backlash from reporting unethical behavior 4%
8. Corporate monitoring of email and/or telephone calls 4%

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IT Staff Love Their Jobs, Research Shows

IT staff members are over 3 times more likely to ‘feel appreciated’ than other corporate staff, according to a survey released today. The research, by business email provider Intermedia, also found IT staff 21% less likely to say ‘I am considering quitting my job’.

Despite a widespread perception that IT departments are dissatisfied and subjected to daily abuse, the poll of 500 corporate staff found that IT workers are verbally assaulted 20% less than other colleagues, as well as 10% less likely to take the heat – undeservedly – for a project delay.

The survey of staff at small and mid-sized businesses also reveals that:

• Only 3% of general office staff have recently ‘felt appreciated’, compared to 11% of IT staff
• Only 11% of IT staff members have considered quitting their jobs in the last month, compared to 14% of other workers

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Survey of International Information Technology Executives Highlights Urgency of Improved It-Business Alignment

IT executives around the world are seeking to do a better job of aligning IT investments with business goals, but only about half believe they are doing so -- according to a survey sponsored by CA, Inc.

The survey polled 300 CIOs and other top IT executives at companies with more than $250 million in annual revenue. It revealed that 74% of respondents believe that better prioritization of IT spending based on business needs to be a critical IT management goal. Respondents said that the primary drivers for alignment were a desire to avoid spending that yields a low ROI, and the need to ensure fulfillment of business-side demand.

Half of the respondents worldwide indicate their companies are effective in enabling IT to set priorities based on business goals. Respondents in the UK, Germany, Australia and Japan are significantly more likely than those in the U.S. to rate their organizations as successful in this area.

According to the survey, U.S. IT executives are also more likely to be dissatisfied with their organizations’ performance in improving service to end users, controlling costs, and other goals than their counterparts overseas. However, U.S. respondents are more likely than those in other regions to be satisfied with their deployment of automation and virtualization initiatives.

Worldwide, 53% of respondents claim that the biggest barrier to improved alignment is shortfalls in staff skills. In the UK and Germany, however, only 40% see skills as the primary obstacle—while 37% indicate that their most significant challenge is inadequate technology integration.

On the upside, 67% of respondents indicate that the number one success factor in IT-business alignment is standardization of policies and procedures. Respondents from Australia and Japan are most likely to specifically cite best practices frameworks such as ITIL as the top reason they have been able to achieve their goals, even though only 55% of them have adopted, or are planning to adopt, ITIL in the next 12 months—as opposed to 71% of respondents in the UK and Germany and 50% in the U.S.

The survey also found that respondents in the UK and Germany are significantly more likely than those in other regions to report their companies have deployed a CMDB (configuration management database).

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Software-licensing costs predicted to fall

Software-licensing costs are set to fall over the next decade, as IT industry trends converge to give buyers more bargaining power.

Research firm Gartner predicts that vendors will find themselves increasingly challenged as IT departments look to reduce software costs, as they have done with hardware and services.

Gartner has identified seven major trends converging to change software delivery models, reduce dependence on the giant application vendors, and force prices down.

These include business process outsourcing; software as a service; low-cost development environments, such as China and India, combined with modular architectures and service-oriented architectures; the emergence of third-party software maintenance and support; growing interest in open source; the rise of Chinese software companies; and the expansion of the Brazilian, Chinese, and Indian markets.

Although Gartner says open source won't topple the likes of IBM and Microsoft, the firm believes that it will put pressure on traditional software margin structures, particularly in areas such as servers, operating systems, development tools, and database technologies.

Gartner also predicts that a fourth of all new business software will be delivered by software as a service by 2011.

Source: CNET

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Telecom Industry's Efforts at Improving Customer Service Recognized by Employees, But Improvement Still Needed

Despite continually being rated as one of the poorest providers of customer service, telecom employees believe their companies are trying harder than others to please their customers.

Maritz recently conducted a poll of 1,006 full-time employees in the telecommunications industry. When compared to respondents in a similar poll taken of the workforce at large, telecommunication employees were significantly more likely to agree that their companies rewarded employees for providing excellent customer service, their companies set specific goals for improving customer service, and that they had sufficient authority to respond to customer concerns.

However, despite being an industry whose employees rate their companies as better than others, fewer than half (46 percent) agree or strongly agree that their telecommunications employers reward employees for providing excellent customer service. Just slightly more than half (54 percent) agree that their companies have effective formal employee incentive programs for improving customer service. One-out-of-three do not feel they have proper authority to respond promptly to customer problems and requests. Furthermore:

• Less than four in 10 (39 percent) of telecom employees surveyed agreed or strongly agreed that senior management at their company had frequent, direct interactions with customers.
• Only 55 percent of respondents say their company frequently seeks suggestions for improving customer satisfaction from employees who have regular contact with customers.
• Just over half (53 percent) say they consistently receive feedback on how their work benefits customers.
• Only half (50 percent) say their company's policies and procedures make it easy for them to satisfy customers.
• Only half (50 percent) say their company provides effective training to support excellent customer service.

According to employee engagement expert Rick Garlick, Ph.D., director of consulting and strategic implementation, Maritz Research, the employee responses indicate that telecom companies are talking about customer satisfaction, but they might not be connecting the dots between customer satisfaction and their employees' ability to impact the customer experience.

According to Garlick effective programs should be:

• Aligned with employees - reward and recognition efforts must convince employees to go through the pain of behavior change;
• Centralized - all parts of the organization that touch the customer need to work in tandem;
• Localized - targeted training and processes should meet the specific needs of each location; and
• Smarter - more complete customer and employee satisfaction insights are required to diagnose and enhance the customer experience.

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For future of enterprise computing, watch consumers

According to Intel’s Paul Otellini, speaking at Oracle’s OpenWorld event, the future of enterprise computing will draw from what is being developed on the consumer side. "Consumers today are the No. 1 users of semiconductors; they passed over IT and government in 2004. That's a big change; prior to that period, most people developing silicon in the industry were focused on the main market--the enterprise and IT. Today, most of us are focused on the consumer market as drivers,” Otellini said.

Not so long ago, if you were technology-oriented and wanted to do something innovative and cool that would make you rich, you wrote a new piece of enterprise software. Or you came up with a new design for a server. Or you figured out a way to link businesspeople with their offices while on the road. Of course, there are always exceptions, but enterprise computing, most believed, was where the real innovation occurred. Those innovations paved the way for the computing industry as we know it today.

However, keeping an enterprise's IT operation up and running is rapidly turning into the technology equivalent of plumbing, or maybe electricity: extremely vital pieces of infrastructure that no longer attract the type of young engineering enthusiasts who built Silicon Valley. Those people are now building Web 2.0 applications. They're designing social-networking communities or virtual worlds, not some new piece of enterprise-resource planning software that's going to set the world afire.

Consumer technology and the Web are going in the opposite direction. Sure, Google, Microsoft and Yahoo are snapping up anything and everything that seems remotely interesting. But consolidation? Hardly. For every 10 companies gobbled by Google, a new powerhouse like Facebook starts forming its own little tech ecosystem, with start-ups eagerly feeding into it. You don't see that sort of thing in enterprise computing much these days.

The major trends in enterprise computing are things like consolidation and virtualization: how to do more with the stuff you've already got, or how to pare down the electrical costs of running a modern data center. Overall enterprise technology spending is basically flat as businesses work with the assets they already have.

Look, enterprise computing isn't going anywhere. Billions of dollars will continue to be spent on software needed to run increasingly complex businesses and the hardware that will keep it snappy. And the consumer appetite for technology could start to diminish if people have to start choosing between a new PC or HDTV and paying the mortgage or filling up the car.

But just as technology transformed the way the world does business, it's about to have the same effect on individuals, who are mostly still running desktop PCs, calling friends and family on a landline, and driving a car with an analog set of gauges. This is where the talent and the dollars are flocking, improving how we as individuals interact with technology. Not building CRM modules for the midmarket.
Source: CNET

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Information Technology Budgets: Which Industry Spends the Most?

According to CIO Magazine’s State of the CIO study, at 10.5 percent, banks and financial services companies, by far, spend the biggest chunk of revenue on technology, but the government and education sectors also spend significantly. The question is, which industry is most efficient?

Judging by one measure—the number of users supported by each IT staffer—education rules, with 48.3. Schools and colleges have all those iPod-wearing, wireless network-demanding students running around. Wholesale and retail IT pros are a close second on that scale, with 47.5—supporting, as they do, lots of full- and part-time store clerks and salespeople.

More information can be found at http://www.supportindustry.com/.

Mobile Workforce Creates New Security Challenges

The increasingly mobile nature of the workforce is creating new security challenges for information technology (IT) staffs, research from the Computing Technology Industry Association (CompTIA) reveals.

Theft of data and confidential information is a greater concern for more firms, especially when it comes to the use of hand-held devices and laptop computers by remote and mobile workers, according to the CompTIA survey.

Sixty percent of the 1,070 organizations surveyed said security issues related to the use of handheld devices for data access and transfer have increased significantly or increased somewhat over the past 12 months.

When it comes to wireless networks, 55 percent of organizations said security issues have increased significantly or somewhat over the past 12 months.

Nearly 80 percent of the organizations allow data access by remote or mobile employees. But just 32 percent of organizations have implemented any security awareness training for these workers; and just 10 percent plans to implement such training in the next 12 months.

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IT Leaders Should Prepare Two IT Budgets for 2008

According to Gartner, Chief information officers (CIOs) should create two IT budgets for 2008. Analysts warned that due to the recent turmoil in credit markets around the world and continued uncertainty surrounding the future economic climate, companies need to plan for all eventualities.

Gartner advises CIOs to create two separate budgets; the first should reflect the guidance already provided by senior decision makers but this should be supplemented by a second ‘back-up’ budget that assumes the need to cut costs in response to the arrival of a business slowdown.

CIOs need to have a ‘recession budget’ and business plan ready for immediate implementation long before being asked to reduce costs. To be meaningful, Gartner recommends that such plans should target a decrease in IT spending of at least 10 per cent below the highest annualized IT spending run rate levels attained in 2007.

Gartner said that rather than viewing the possibility of a significant business slowdown or recession with trepidation, organizations should use it as an opportunity to create a solution that will enable the enterprise to react with speed and certainty if the worst economic concerns come to pass.

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Optimized Customer Service is Becoming a Key Priority to Improve the Customer Experience

Nearly three quarters of customer service organizations have begun adopting strategies to optimize the value of every customer interaction, but less than twenty five percent have fully implemented them in key areas, according to a new survey of customer service organizations. The business goals of creating and operating contact centers at maximum efficiency remain a top priority for a large number of businesses, especially in highly dynamic environments, but the goals of complete optimization remain largely unmet. The most critical areas for improvement are in such areas as the ability to effectively cross sell, prioritizing customers according to their status, and matching customers with the best agent.

The global survey, sponsored by Genesys Telecommunications Laboratories, included 1,390 contact center managers and customer service executives from 19 different industries and 76 different countries.

Key findings include:

An increasing number of organizations implement contact center management strategies that simultaneously address effectiveness and efficiency of customer interaction

28 percent of contact centers manage Average Handle Time by actively directing agents to spend longer on interactions during troughs and the reverse during peaks

Only 11 percent of contact centers actively manage cross-selling opportunities

17 percent of contact centers use voice call-back

26 percent expand the agents' roles to include managing interactions through other channels such as e-mail and SMS

Contact center management are integrating all available technology and business process to manage agent productivity, prioritize business objectives and respond to changes in customer demand

The most effective and successful contact centers seek to identify the customers at the first available opportunity - 78% of call centers are identifying customers before connecting them to agents

Contact centers are also assessing the value of the customer interaction, determining the level of service to provide and how to match the customer with the right agent

22 percent of contact centers still do not identify customers before matching them with the appropriate resource

Only 21 percent of contact centers use advanced analytics to prioritize incoming calls based on the value of the customer

Only 35% match their top-value customers to their best agents-instead using an isolated group of high-performing agents

More information can be found at www.SupportIndustry.com.

Survey shows call centers are not ready for the new consumer

According to new research from Rostrvm Solutions, customers are beginning to demand multimedia contact but most call centers are far from ready to meet expectations. The research shows that call center adoption of new media is under way, customer
contact mechanisms are changing, but not at the same pace as consumers.

The survey revealed strong investment in both ‘traditional’ call center technology and new media communication. But it also identified that the different media effectively operate as customer interaction islands, not as an integrated customer experience.

The overwhelming majority (98%) of call centers have an associated web presence. Despite general growth in internet activity it is still rare for businesses to complete the majority of transactions on the internet. Capturing customers and prospects with active links to the call center, such as call-me buttons, is not seen as a priority. Under 15% of call centers have a ‘Call Me’ presence on the web site growing to less than 25% over 3 years.

The vast majority of call centers have already embraced the email revolution. 97% of call centers already use email to communicate with customers (rising to 98% over the next 3 years). The newer, more immediate media have significantly less penetration; text messaging has been recognized as an important medium in some areas and already used in around 30% of call centers but this figure is not expected to rise above 50% over the coming years.

PC based communication - instant messaging such as Messenger and PC Telephony such as Skype – are not widely adopted or planned to have a large impact. Around 11% of call centers currently use Instant Messaging growing to around 24% in three years; less than 8% support PC Telephony building to around 20% over the next three years.

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Green IT a Natural Fit for Enterprise Executives

More than just a passing fad, Green IT is a growing, global business concern that is significantly impacting how IT executives will make technology buying decisions now and in the future. According to IDC's U.S. Green IT survey, 80% of executives say that Green IT is growing in importance for their organization, and 43% say they consider a vendor's "greenness" when selecting their suppliers.

Additional Survey Findings

One half of survey respondents claim that “reducing their organization's environmental impact” was important or very important to senior management

42% of respondents said that IT will play a lead role or an important role in their organizations' efforts to reduce environmental impact

One-third of respondents rated an IT supplier's "greenness" as important or very important

81% of respondents identify green products' ability to reduce operating costs as the most important reason for considering a supplier's greenness

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IT Leaders Must Consider Alternative Delivery Models or Risk Being Bypassed By the Business Units

Gartner, Inc. has identified 14 alternative delivery models that will completely transform the IT market in the next five years. Advancements in technical areas are presenting a scenario that offers new ways to deliver, package and procure IT, and these alternative delivery models have the potential to dramatically change how IT is accounted for. IT leaders must examine these models, or business units may implement these solutions without them.

At the highest level, alternative delivery models are approaches to acquire, package and deliver IT in nontraditional ways. Traditional methods of IT acquisition and delivery are wrapped in well-honed internal processes whereby IT develops or acquires technology (hardware or software), deploys it, supports it and retires it. Even when part of the IT service is outsourced or handled offshore, the provider runs the day-to-day service and may own part of the assets. The client IT function retains most of the risk and responsibility for the overall design and management of the technology life cycle.

The 14 alternative delivery models include: business process utilities (BPUs); infrastructure utilities (IUs); storage as a service; grid computing; communications as a service (CaaS); utility computing; capacity on demand; remote management services; SaaS; Web platforms; community source; software streaming; software-based “appliances” (SBAs); and user-owned devices.

More information can be found at www.SupportIndustry.com.

The Customer Service and Support Applications (CSS) Market Experienced Moderate Single Digit Growth in 2006

According to a new Frost & Sullivan report, the North American customer service and support (CSS) applications market, including the markets for customer and account management, case management, problem diagnostics and resolutions, offer management and service and customer analytics, continues the slow and steady positive growth trend of all of its constituent parts.

While there is no single technological trend that drives the growth in CSS applications sales, on the whole, growth is derived from an increasing enterprise focus on customer experience, as well as new products and sales tactics aimed at penetrating the underserved small and mid-sized business community. A long-standing drive to transform contact centers into profit generating entities is causing many existing CSS customers to re-evaluate their technology and to seek out adjunct products to help agent’s cross-sell and upsell.

Interestingly, the sales model of the two leading players in the CSS market – Oracle and SAP – has diverged from the rest of the pack. Since these two market leaders also have deep inroads into enterprise back office technology stacks (including financials, human resources, supply chain, and so on), they tend to sell their CSS applications, as well as other front-office applications, as part of a larger functional suite.

Quiet significantly, on-demand CSS applications accounted for approximately one-fifth of total market revenues in 2006. On-demand implementations, for the most part, were clustered in smaller agent seat count deployments as larger contact centers shunned the model citing concerns about stability and guaranteed uptime. However, Frost & Sullivan trusts that enterprises will increasingly turn to on-demand applications as traditional on-premise CRM applications have failed to provide a 360-degree view of every customer and every interaction.

Furthermore, CSS delivered as an on-premise implementation still faces numerous integration and customization problems, extremely high costs and a lack of extensibility. By the end of the forecast period, Frost & Sullivan expects the on-demand market to account for close to of one-third of all CSS revenues.

Overall, the CSS market experienced moderate single digit growth in 2006, generally in line with expectations. Due to the success of full suite CRM vendors tapping into their traditional large enterprise ERP base, the top end of the market is currently well saturated.

“This is not to say that opportunities do not exist in this space as the best-of-breed knowledge management and service resolution management specialists are moving into the space by positioning their technology as an adjunct to traditional CRM suites rather than tackling a full-on replacement game," says the Frost & Sullivan analyst. "Additionally, large enterprises are increasingly being pitched unified communications platforms by their telephony, contact center and networking infrastructure vendors." Enterprises that adopt such technologies will become sales opportunities for CSS vendors savvy enough to pitch their offerings as tools for knowledge workers and other non-contact center enterprise personnel.

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Study Finds Significant "Engagement Gap" Among Global Workforce

Employees do not believe their organizations or their senior management are doing enough to help them become fully engaged and contribute to their companies' success, according to a new global workforce study conducted by Towers Perrin, a global professional services firm.

Just 21% of the employees surveyed around the world are engaged in their work, meaning they're willing to go the extra mile to help their companies succeed. Fully 38% are partly to fully disengaged. The result is a gap -- which Towers Perrin has dubbed the "engagement gap" -- between the discretionary effort companies need and people actually want to invest and companies' effectiveness in channeling this effort to enhance performance. The study found that companies with the highest levels of employee engagement achieve better financial results and are more successful in retaining their most valued employees than companies with lower levels of engagement.

The most striking data about the linkage between employee engagement and financial performance come from a study of 40 global companies which involved a regression analysis of company financial results against engagement data. It found that firms with the highest percentage of engaged employees collectively increased operating income 19% and earnings per share 28% year to year. Those companies with the lowest percentage of engaged employees showed year-to-year declines of 33% in operating income and 11% in earnings per share.

In a related study over a longer time horizon (three years), the firms with the highest levels of employee engagement achieved a 3.7% increase in operating margins, while those with the lowest levels of engagement suffered a drop of 2%.

Engaged employees also are more likely to see a direct connection between what they do and company results, according to the study. More than 80% of engaged employees believe they can and do contribute to the quality of products and services, and to customer satisfaction. Only half as many of the disengaged share that view.

In addition, engagement has a direct impact on retaining employees. Half of the engaged employees had no plans to leave their company, compared with just 15% of the disengaged ¾ and roughly a third of the workforce overall. Less than 5% of engaged employees said they were actively looking for another job compared with more than one in four of the disengaged employees.

The Towers Perrin study also debunks a widely held view that engagement is an innate trait. Rather, it is the organization itself -- and most particularly, its senior leadership -- that has the biggest impact on engagement levels.
The study's findings point to three areas of focus for companies to increase engagement and tap the reservoir of employee discretionary effort.

1. Employees need their senior leaders to demonstrate inspiration, vision and commitment. Only 38% of employees surveyed felt senior management communicates openly and honestly, and just 44% agreed senior management tries to be visible and accessible. In addition, only 10% of employees agreed that "senior management treats us as if we're the most important part of the organization." More than half felt that senior management "treats us as just another part of the organization to be managed" or "as if we don't matter."

2. Employees want to give more to their companies and their jobs, but also want a clearer picture of what's in it for them. The study shows that employees are optimistic about their jobs and have a strong desire to learn and grow. More than three out of four employees love or like their job (86%) and their organization (77%). In addition, 83% "look for opportunities to develop new knowledge or skills," and 84% "enjoy challenging work that will allow them to learn new skills." But, as the engagement scores show, they are not delivering the full discretionary effort these views would suggest because they don't feel their companies and leaders are meeting these needs and creating the conditions that will sustain engagement. For instance, just 36% agreed they have excellent career opportunities at their organization, and more than two-thirds said they are sometimes or frequently frustrated by their organization's people-related decisions. And while 68% agreed their organization has a reputation for financial stability, only 54% agreed it had a reputation as a great place to work.

3. Employees want to work for a company that is seen as a leader. A big part of what's in it for employees is an organization's reputation. Employees worldwide show a desire to work for an organization that strives for excellence in the eyes of its employees, customers and the world at large. According to the survey, top drivers of higher engagement ¾ all within the organization's control ¾ include senior leadership behavior, a commitment to corporate social responsibility, the company's reputation, and sufficient opportunities for learning and development.

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Companies Worldwide Struggle to Attract, Retain Workers

A large majority of companies in the United States and around the world are struggling to attract and retain top-performing and critical-skill workers, according to a new study by Watson Wyatt Worldwide. Furthermore, many employers do not fully understand why workers join or leave an organization, an obstacle that greatly increases the challenge of finding and keeping good employees.

Two of three companies worldwide report difficulty attracting top-performing workers, while a full 70 percent have difficulty attracting critical-skill employees, according to the 2007/2008 Global Strategic Rewards study. These trends show remarkably little variance around the world. In addition, more than half of companies report difficulty retaining top-performing (52 percent) and critical-skill (56 percent) workers. The United States has the highest median voluntary turnover rate, at 11 percent, while Latin America has the lowest, at 5 percent. The study results are based on a survey of 946 companies and a complementary survey of 13,000 employees.

Efforts by companies to limit turnover appear to be hampered by an incomplete understanding of employee priorities. For example, workers rank stress as a top reason they would leave their company, but it is not even among the top five reasons that employers cited. Instead, employers cite insufficient pay and lack of career development and promotion opportunities.

The study found that when employees are satisfied with stress levels and work/life balance, 86 percent are more inclined to stay with their company (versus 64 percent when dissatisfied) and 88 percent are more likely to recommend it as a place to work (versus 55 percent when dissatisfied).

The study also found that to attract, retain and motivate the best employees, companies must clearly communicate expectations about rewards and then deliver as promised. More than two-thirds (69 percent) of employees who say their employers succeed at both promising and delivering rewards are committed to their company and motivated to help it succeed, versus about one-fourth of workers overall. These employees also are more likely to be top performers.

Other findings from the Global Rewards study:

Incentive compensation: Globally, companies are making more workers eligible to participate in incentive compensation programs, although nearly one-half of employers also raised the financial targets that must be met to earn those bonus rewards.

Performance management: Roughly one-half of companies say their managers do a good job at performance management. Managers at U.S. companies received the lowest ratings, while those in Asia-Pacific received the highest.

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Contact Center 'Empathy and Advocacy' Standards are Falling in Europe

According to the results of the 2007 Aspect Contact Center Satisfaction Index - Europe, the first and only published independent survey of consumer experience versus expectations of contact center interactions in Europe, customer satisfaction with contact center-delivered service fell between 2006 and 2007. European consumers rated satisfaction with their last contact center interaction as an E grade (64 percent). This compares with 67 percent, a D grade in 2006.

Among the countries surveyed, British, Italian, French and Spanish consumers all awarded contact centers an overall satisfaction grade of E (scores fell between 61 and 62 percent). Dutch consumer ratings were slightly higher at 65 percent (D grade). While German consumers were the happiest in Europe, rating their last interaction 72 percent out of 100, a C grade on the Aspect Index - Europe.

European consumers were particularly critical of contact center Empathy and Advocacy skills - rating their last interaction with a 65 percent score, 5 percent lower than in 2006. In three key Empathy and Advocacy areas highlighted previously as being important to European consumers - “Knowledgeable and Informed”, “Professional” and “Patient”, European consumers rated contact center performance 5 to 6 percent lower in 2007 than in 2006. In addition:

28 percent of consumers in Europe said that their last contact center interaction fell short of their expectations compared with 22 percent in 2006.

Consumers in the Netherlands have the highest expectations of contact center-delivered service at 6.9 out of 9 in 2007, and French consumers the lowest at only 5.9 out of 9.

On average, 2.7 interactions are required with a European contact center in order to resolve a consumer query. Additionally, European consumers wait an average of 4.5 minutes when trying to reach a person within the contact center.

44 percent of interactions with communications companies fell short of European consumer expectations compared to only 20 percent of retail company interactions and 21 percent of financial company interactions (35 percent, 17 percent and 16 percent respectively in 2006).

The 2007 Aspect Index – Europe study also examined the impact of good and bad customer experiences on future business, finding that one third of European consumers who were ‘satisfied’ with their last interaction would conduct more business with that company; with 8 percent of these saying they will do much more business. Conversely, nearly half of consumers who were ‘unsatisfied’ claimed they will conduct less business; half of these saying they will do much less business.

Two-fifths of European consumers that were asked to repeat information after being transferred from an automated system to a live agent said they will conduct less business with a company; and, overall, 20 percent European consumers said they were “likely to switch companies based on their latest (actual) interaction”.

More information can be found at www.SupportIndustry.com.

Huge Costs, Workflow Disruptions and Frustrations Caused by Fragmented Communications

The largest-ever survey of enterprise and contact center employees and their workflows reveals the silent but staggering true costs of fragmented communications: Enterprises of 1,000 persons could lose nearly $13 million a year in lost productivity and avoidable expenses. That's just one of many startling results from a recent, landmark in-depth poll of 517 communications end-users across North America and Europe conducted by independent Insignia Research and commissioned by Siemens Communications, Inc.

The survey report is the first to fully quantify the costs of the status quo -- including workflow disruptions, added costs and associated frustrations to enterprises lacking unified communications. It explores pain points at the individual, team and enterprise levels in terms of time and impact on serving customers as well as the frustration and anxiety to users and their teams. A solid majority of the respondents (62%) identified themselves as being in customer service and sales roles. The survey asked very specific questions about experiences with existing communication systems while involved in customer-facing and time-critical processes.

Highlights of the survey include:

Ninety-four percent of respondents reported waiting an average of 5.3 hours per week for information from others to complete tasks. In 1,000-employee enterprises, this can translate to more than $9 million yearly in lost productivity based on a $37 weighted hourly wage. Taking a process view of this nearly universal pain point, the negative impact of 5.3-hour delays in customer-facing activities has larger implications on customer sales, service and revenue realization.

Respondents reported an average productivity loss of 7.8 hours a month at offsite locations because they lack the communication tools they have in their main office. Nearly a full day each month is lost because they are not properly equipped with effective, remotely-accessible, collaborative communications systems. As workers continue to become increasingly mobile, the net effect of this may become more dramatic. Fully weighted, in a 1,000-person enterprise, these costs can exceed $3 million a year.

Enterprises are wasting at least $3,400 per person each year in unnecessary business travel expenses because of ineffective or non-existent collaboration with existing communications systems. Managers are forced to synchronize teams through expensive internal meetings requiring travel. In a 1,000-person enterprise, these costs can top $3.4 million a year.

More information can be found at www.SupportIndustry.com.

Outsourcing and Innovation Survey: Keep It at Home

According to a recent survey by CIO Magazine, outsourcers continue to market themselves as the IT department's partners in innovation. Yet with increased globalization and the resulting decrease in profit margins for many IT service providers, can they really deliver on that promise? CIO Magazine recently asked 290 IT executives to tell us what they think. The results show that for most IT leaders, outsourcing offers benefits in many areas. But when it comes to innovation, they prefer to keep those efforts closer to home.

Three quarters (76%) of technology executives who responded to the survey said that they believe in-house activities contribute the most to IT or IT-enabled innovation. Only 22% said that they believed offshore/captive activities contribute the most to IT or IT-enabled innovation.

Respondents' satisfaction levels with innovative products also proved higher when those projects stayed in-house or on-shore. According to the study, eighty-five percent (85%) of respondents were satisfied with the level of innovation provided by internal IT operations at their organization Projects outsourced to onshore providers, meanwhile, compared favorably, with 78% of IT executives surveyed saying they were satisfied with the level of innovation offered by those providers.

Offshored innovation didn't perform nearly as well. Just over half (52%) of the respondents reported that they were satisfied with the level of innovation provided by their offshore outsourcers/external providers--a significant difference from the other two options.

The reasons for the lack of satisfaction varied widely. More than half (54%) of the survey's respondents cited cultural or communication issues as one of the biggest barriers to increasing innovation by outsourcers, followed by lack of skills within the outsourcer (37%), internal resistance (32%) and internal budget restraints (30%).

In addition the survey also revealed the top reasons for outsourcing:
Labor Cost Savings – 58%
Focus on Core Business – 33%
Access to specific skills – 32%
To maximize resource availability – 29%

The top domestically outsourced activities were:
Application development -47%
Help desk/user support - 37%
Website development - 35%
Web services - 29%

More information can be found at www.SupportIndustry.com.

Five Major Trends Will Force IT Organizations to Change the Way They Support Workers

Five major discontinuities are combining and will force IT organizations to change long-standing practices for procuring and managing IT, according to Gartner, Inc. The intensity of these trends will grow through 2011, according to Gartner, Inc.

The five discontinuities include - Web 2.0, software as a service (SaaS), global-class computing, the consumerization of IT and open-source software. SaaS is already empowering business units to act independently of corporate IT strategies. Global-class systems, built on tera-architectures (as in Google Apps), threaten to upset the careful balance of power between IBM and Microsoft in messaging, and more importantly, they introduce entirely new ways to implement and scale applications. “Consumerization” and users’ clamor for IT organizations to be as responsive as Internet vendors are giving many IT departments headaches. Web 2.0 communities are bonding people in ways many people do not fully understand. Community members are doing business in ways that most enterprises had never even considered as they laid out their communications strategies. Open source is a hidden “secret” that enables many elements of the other four discontinuities to develop.

Gartner recommends five actions that can help IT managers take advantage of, rather than just react to, these five trends.

Question Core Assumptions about the Role of the IT Organization — Once upon a time, it was the only source of IT. Now that users can often buy “what they need” from the Web, business executives must re-evaluate IT-related operating principles, guidelines, policies, practices and governance.

Experiment with Free-form Environments — Create free-form searchable “personal Web pages” for users, along with folksonomies, tag clouds, navigation by tag or type of user, feeds, blogs and “wikis”. Companies need to provide free-form, open environments to facilitate productive social interactions and to allow patterns of behavior, interaction with the rest of the business ecosystem and new business models (and opportunities) to emerge and evolve over time.

Help Users Innovate — Innovation speeds economic development. IT managers should apply this general rule to the enterprise by helping selected users interact in an open environment and thereby innovate. Allow them to exploit Web-based tools and share their experiences with other users.

Segment Users — The IT organization needs to stop providing the same support to everyone. One size does not fit all. IT managers should segment users based on difference in roles, responsibilities, and information and application access requirements. The IT organization can increase workers’ effectiveness by giving them support that better fits their individual needs.

Stop Trying to Provide Everything — The IT organization should admit that it can no longer compete with the Web in providing many personal and social tools. The IT organization should define what it is really good at, and for other activities, play the role of advisor and facilitator. It should no longer assume responsibility for supporting and managing all IT systems that workers use. Users must take personal responsibility for experimenting with new software and communities.

More information can be found at www.SupportIndustry.com.

Attracting, retaining IT professionals key concern for nation's CIOs

Ensuring business-IT alignment is a top concern among the nation's leading CIOs, but for the first time in years, it's not the top concern, according to new research conducted by the Society for Information Management (CIO). The impending IT talent crunch has re-focused CIOs' attention on retaining and attracting IT professionals.

More than 130 CIO and IT executives from 112 different companies responded to this year's SIM membership survey, which polled members to determine the issues that are top of mind for them.

IT and business alignment is still a major concern among CIOs, finishing second on the list of top ten issues, followed by:

- Build Business Skills in IT
- Reduce the Cost of Doing business
- Improve IT Quality
- Security & Privacy
- Manage Change
- IT Strategic Planning
- Making Better use of Information
- Evolving CIO Leadership

Some other highlights from this year's report include:

- 78.6 percent of respondents expect to maintain or increase their IT budget in 2008

- 75.4 percent expect to maintain or increase their IT staff

- The CIO or top IT Executive has been in their position for an average of 4.1 years (compared to 3.6 in the 2006 survey)

- 31.4 percent of CIOs report to the CEO (compared to 45.2 percent in 2006); 29.3 percent report to the CFO (compared to 25.4 percent in 2006)

More information can be found at http://www.supportindustry.com/.

Service Level Management Acceptance on the Rise and Linked to Business Survival

A recent study by Enterprise Management Associates (EMA) reports that Service Level Management (SLM) acceptance continues to grow and that IT executives increasingly view SLM as a vital factor to business success. The 2007 comparative study shows that the number of surveyed organizations implementing Service Level Agreements (SLAs) has risen to 82% of respondents, a 26% increase since EMA’s 2003 findings.

Key findings that are detailed within the report include:

• 90 percent of end users perceived SLM as critical or important to their executives and directly tied to business survival
  
• 82 percent of organizations surveyed have implemented SLAs
  
• 79 percent of respondents cited ITIL as an adopted methodology
  
• Internal education is key to success and also one of the greatest challenges for organizations implementing SLM
  
• 56 percent of end-user respondents report having no sense of ROI either before or after employing best practices
  
• More users associate IT-business alignment with BSM than with SLM
  
• SLM and Configuration Management Database (CMDB) initiatives can coexist very nicely – as one survey respondent notes, “you can’t do sophisticated SLM without a CMDB”
  

EMA’s research reveals a marked correlation between enforcing standards and achieving results. SLM adoption, paired with the right mix of best practices, is continuing to provide positive outcomes. More than two-thirds of the respondents reported increased operational efficiency and customer satisfaction after rolling out their SLM initiatives.

More information can be found at www.SupportIndustry.com

CEOs – Putting Customers First

According to a recent article in 1to1 Media, after years spent dealing with issues revolving around governance and regulatory changes, CEOs at public companies are focusing more on a long-overlooked aspect of their business: customers.

That's one of the main conclusions drawn from the third annual "NYSE CEO Report," compiled for NYSE Magazine by Opinion Research Corp. The survey collects data from CEOs of 240 of the New York Stock Exchange's listing companies.

For example, CEOs are planning greater investment (both budget- and time-wise) on managing customer relationships than in the past. The importance of sales growth -- driven by customers -- as a performance measure has increased by 11 percent since the prior study. And on the strategic side, brand, reputation, and investments in corporate social responsibility -- all focused on winning customers -- are increasingly important. CEOs continue to recognize the costliness of losing customers.

What's more, they're putting money where their mouths are. Almost one third of CEOs plan to spend more time on customer relations in the coming year, while more than half expect to spend more money on customer contact. The report also found a 10 percent increase in the amount of time a CEO feels he should spend on customer relationships.

Most CEOs (81 percent) believe they take sufficient action to manage their companies' reputation, and going hand-in-hand with the issue is an increased focus on social responsibility, which is an important factor not just in customer relations and retention, but in employee retention as well. Social-responsibility initiatives are seen as having a greater impact on employee retention in companies with greater than $3 billion in market capitalization (where 46 percent of respondents tagged it as an important factor in employee retention), compared with companies with $1 billion to 3 billion in market cap (16 percent) and below $1 billion (29 percent). Such initiatives range from encouraging employees to volunteer at homeless shelters to instituting and enforcing environmentally friendly ideas like recycling and tree planting.

More information can be found at www.SupportIndustry.com.

Research Reveals 84% of Service Executives Expect Their Businesses to Grow Over The Next Year

According to a new survey by Service Strategies Corporation, a provider of standards, career development and strategic advisory services for the technology services market, 84% of service executives interviewed expect their businesses to grow over the next year, while 43% believe this growth will be more than 10% annually. Service has become a strong driver of growth and as a result, a strong contributor to corporate profits. The study indicates that service now contributes more than 30% of both corporate revenue and profit for many companies and is continuing to grow.

Seventy-five percent of participating service executives indicated that improving customer satisfaction, loyalty and retention are among their primary business objectives. While nearly half cited technical skill shortages as a major obstacle to growth in the coming years.

More information can be found at www.SupportIndustry.com.

Home-Based Contact Center Agents Rapidly Becoming Mainstream

The home is gaining new ground when it comes to call centers and stationing of customer services personnel. According to recent research published by Datamonitor, there will be significant growth in outsourced contact center agents based around the at-home model. Between now and 2012, Datamonitor expects the number of home-based customer service agents to grow at a compounded annual growth rate of 36.4%, one of the strongest expansion levels of any outsourcing market sub-segment.

Based on extensive research across the at-home outsourcing market, Datamonitor projects that the global size of the home-based third-party customer service agents working 20 hours a week or more, currently stands at approximately 47,000. However, based on expected growth projections from pure-play and bricks-and-mortar vendors, Datamonitor expects it to rise to almost 224,000 by 2012.

Currently, the majority of home-based customer care agents are overwhelmingly based in the U.S. The prime verticals for this service are technology, healthcare, tourism and travel & insurance. This is due to the fact that all these sectors are highly specialized and in many cases, it is hard to recruit customer service agents for actual contact centers.

A further driver for many firms to look to at-home agents is the alternative it provides to sending work to offshore or nearshore locations. With lower costs and less concern about the integrity of infrastructure and public security, investors are beginning to see the home agent model as a viable alternative to moving agent positions to multiple locations globally.

However the home agent model will not impact that of offshore outsourcing massively over time. At-home agents serve a growing but specialized niche, and the need for large numbers of agents offshore with multilingual capabilities will remain a priority for outsourcing clients.

With many investors still worried over the integrity of customer data, there remain worries in the minds of many prospects over how secure the at-home agent model is. However, Datamonitor’s research has shown providers of these services have been able to address these concerns by deploying thorough background checks on prospective employees, as well as by providing real-time monitoring analytics.

Despite certain concerns surrounding the at-home outsourcing market, Datamonitor feels that this business model is certain to gain significant traction from companies interested in lowering overall costs, while keeping their customer facing services onshore. In addition, the quality that can be derived from a typical home agent is reportedly very strong, which will be another driver for companies to gain from excellent end-user interactions.

More information can be found at www.SupportIndustry.com.

Spending on Knowledge Management Will Hit $73B in 2007

According to a new report released by AMR Research, U.S. companies will spend $73B on knowledge management software in 2007, and spending will grow nearly 16% to an average of $1,224 per employee in 2008. As a growing number of needs and initiatives are left unsupported by established enterprise applications, the demand for KM technologies has increased, leading to record-level activity in knowledge management; content management; navigation, search, and retrieval; and collaboration platforms.

Other highlights of the report include:

• Collaboration, digital asset management (DAM), and customer- and supplier-facing portals are the biggest areas of planned investment.
• The preferred KM purchasing models are shifting from traditional licensing to software-as-a-service (SaaS) and open source.

More information can be found at www.SupportIndustry.com

Worldwide IT Services Market On Track to Grow 9 Percent in 2007

Despite the slowing U.S. economy, growth in IT services is expected to remain solid as worldwide IT services end-user spending is forecast to exceed $730 billion in 2007, up 8.7 percent from 2006, according to Gartner, Inc.

Core outsourcing (IT management and process management) remains the highest growth area in the market. In 2007, core outsourcing services are on track to represent 41 percent of total worldwide IT services end-user spending. Process management services are typically funded outside of IT budgets and IT management services replace internal IT spending, so growth in these outsourcing segments often occurs even in the face of restricted growth in IT budgets.

The development and integration (D&I) segment continues to exhibit steady growth fueled by regulatory and compliance initiatives, and a continued push for improved business change management and agile architectures driven by merger and acquisition activities. The worldwide D&I segment is forecast to reach $225 billion in 2007, up 9 percent from $206 billion in 2006.

More information can be found at http://www.supportindustry.com/.

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Implementing Web Self-Service Merely to Reduce Call Volume Can Have Negative Consequences

Companies have implemented web self-service with a myopic focus on call avoidance and deflection, without paying attention to usability, ease of information retrieval, content performance management and customer experience. These issues continue to dog web self-service implementations, according to a 2006 Supportindustry.com survey of contact center, help desk and customer service managers and executives, sponsored by eGain Communications.

The biggest impediment to web self-service adoption is the fact that customers prefer to speak with a live phone agent. The aforementioned issues with web self-service are perhaps driving this preference. While phone channel preference ranked as the top impediment to web self-service adoption with 54% of respondents citing it as an issue, content maintenance ranked second at 37% and difficulty in accessing content ranked third at 36%.

Customers who encounter problems with a self-service session typically escalate their issues to an assisted interaction channel such as email, chat or phone. About half of respondents surveyed (47%) said less than 10% of their self-service sessions are escalated to assisted service, while 30% say between 10% and 25% of these sessions are escalated. At the high end of the scale, 4% are seeing more than 75% of self-service sessions result in escalation. While these escalation figures may seem acceptable, they do not capture customer abandonment of the web site due to bad self-service, which could lead to lost sales and reduced customer satisfaction.

Savvy companies realize that bad self-service is worse than no self-service. They are getting past “me too” customer self-service by delivering exceptional customer self-service experience through innovations such as chatbot self-service and flexible information access methods including guided help. They are reducing the cost of knowledgebase maintenance by leveraging automation for adaptive content management in the form of ongoing content performance monitoring, triggers, alerts and workflows that sustain content relevance and performance.

More information can be found at http://www.supportindustry.com/.