Wednesday, April 30, 2008

Worldwide CRM Software Market to Grow 14 Percent in 2008

Worldwide customer relationship management (CRM) software revenue is projected to surpass $8.9 billion in 2008, a 14.2 percent increase from preliminary 2007 revenue estimates of $7.8 billion, according to Gartner, Inc. The market is poised for healthy growth through 2012 when revenue is forecast to reach $13.3 billion.

North America is the largest market for CRM total software revenue, as it accounted for $4.3 billion of revenue in 2007, and it will total $7.6 billion in 2012. Europe is expected to exhibit steady, positive growth rising from $2.6 billion in 2007 to $3.9 billion in 2012.

Gartner expects the strongest growth in CRM spending to come from Asia/Pacific where revenue is forecast to grow from $410 million in 2007 to $840 million in 2012. Emerging regions such as Latin America, Eastern Europe and the Middle East and Africa will see positive upward trends in CRM spending, particularly in specific industries. Increasing penetration of CRM solutions in developing economies will make greater contributions to vendor revenue during the next few years, although Gartner analysts said that more-significant and less-taxing opportunities in other, more-familiar business environments will cause many vendors to concentrate in Western economies.

Gartner predicts that consolidation will continue in the CRM market as suite vendors look to extend their application portfolios, best of breed vendors seek to acquire solutions to complement their strengths and vertical industry players expand geographically. However, this consolidation will be offset by new, smaller entrants offering specialized functionality.

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Monday, April 28, 2008

Economic Slowdown in the US to Accelerate Offshoring of IT Services

In a recently published report, Gartner said that the current U.S. economic slowdown will lead buyers of IT services to consider increasing the percentage of their labor in offshore, lower-cost locations. India will remain the dominant location for IT offshore services for North American and European buyers as a result of its scale, quality of resources and strong presence of local and traditional service providers.

With concerns that the US economic slowdown could extend to other geographies, organizations are refocusing on IT cost reduction and taking steps to accelerate the use of offshore labor. Buyers of IT services will shift from cost containment goals to a greater focus on cost reduction and productivity increases in their sourcing decisions. This will lead to a steady increase in the adoption and expansion of offshore services - primarily from India, but increasingly from other countries as well.

Gartner sees two possible scenarios that will have an impact on offshore services adoption in the coming months: temporary economic downturn (best case scenario) or a more sustained recession (worst case scenario).

In the worst case scenario, if a more sustained economic slowdown leads to a prolonged recession in the US and possibly other global economies, Gartner expects a more-aggressive movement to cut IT budgets.

According to Gartner, while the recent appreciation of the Indian rupee and rising wage rates have made some of the long-held benefits of India’s offshore services’ cost competitiveness less predictable, the more sophisticated providers have made critical process investments, thus minimizing the impact of wage increases alone in their final price of services to buyers.

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Friday, April 25, 2008

New Study Indicates Consumers Use Social Media to Share Customer Care Experiences and Research Companies' Customer Service Reputations

As social media usage becomes more ubiquitous, affluent consumers are using social media channels to share their personal customer service experiences and learn about others' care experiences when making purchase decisions. This is among the initial findings of a new Society for New Communications Research study, "Exploring the Link Between Customer Care and Brand Reputation in the Age of Social Media”.

More than 300 consumers who are active Internet users participated in a survey focusing on how customer care influences brand reputation given the widespread adoption of social media. Top findings include:

-- 59.1% of respondents use social media to "vent" about a customer care experience

-- 72.2% of respondents research companies' customer care online prior to purchasing products and services at least sometimes

-- 84% of respondents consider the quality of customer care at least sometimes in their decision to do business with a company

-- 74% choose companies/brands based on others' customer care experiences shared online

--84% of respondents consider the quality of customer care in their decision to do business with a company at least sometimes

-- 81% believe that blogs, online rating systems and discussion forums can give consumers a greater voice regarding customer care, but less than 33% believe that businesses take customers' opinions seriously

-- Search engines are the most valuable online tools for this research, according to respondents. Those rated of no value include micro-blogging sites like Twitter or Pownce (39%), YouTube (27%) and social networking sites like Facebook and MySpace (22%)

Dell and Amazon were cited more often than any other company when asked which types of companies have done the best job in using social media to respond to customer care issues. In terms of industry segments, technology, retail, and travel companies were reported as doing the best job, while utilities, health care, and insurance were least likely to receive positive endorsements.
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Tuesday, April 22, 2008

Global Enterprise Web 2.0 Market To Reach $4.6 Billion By 2013

Despite a long-term future marked by commoditization, enterprise spending on Web 2.0 technologies will surge over the next five years, growing 43 percent each year to reach $4.6 billion globally by 2013, according to a new report by Forrester Research, Inc.. The five-year Forrester forecast includes a breakdown of future business spending on technologies such as social networking, RSS, blogs, wikis, mashups, podcasting, and widgets, as well as an analysis of enterprise Web 2.0 spending across North America, Europe, and Asia Pacific.

Forrester believes that Web 2.0 technologies represent a fundamentally new way to connect with customers and prospects and harness the collaborative power of employees. Large enterprises such as General Motors, McDonald’s, Northwestern Mutual Life Insurance, and Wells Fargo have all made heavy use of these tools, and 56 percent of North American and European enterprises consider Web 2.0 to be a priority in 2008 according to a recent Forrester survey.

The key question for software firms is who pays for Web 2.0 in the enterprise? Three challenges face vendors: IT shops are wary of what they perceive as insecure, consumer-grade technology; ad-supported Web 2.0 tools on the consumer side have set “free” as a starting point; and Web 2.0 technologies enter a crowded space dominated by legacy software investments.

Currently, large businesses are spending more on employee collaboration tools than customer-facing Web 2.0 technologies, but Forrester expects that trend to reverse by next year. By 2013, investment in customer-facing Web 2.0 technology will dwarf spending on internal collaboration software by nearly a billion dollars.

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Monday, April 21, 2008

Open Source Software Grows in Importance to End-User Organizations Providing Rising Services Opportunity for Quality Assurance and Testing

Based on findings from a recent survey, IDC foresees that open source software and related services will continue to expand in importance to end-user organizations. Additionally, almost 60% of the survey respondents said their company's spending on open source increased in 2007, in terms of relative percentage of IT spending. Quality assurance, testing, and certification of open source systems was rated as the fastest-growing services opportunity by respondents, who projected their spending on this service would grow 150% between 2007 and 2008.

IDC predicts more pure service providers will be driven to forge alliances or partnerships with leading open source technology vendors or development communities to stay top-of-mind with end-user organizations. This is because pure service providers ranked lower than IT product vendors in terms of respondents' plans to use external service providers, and because pure service providers generally ranked lower on the attribute of open source-related service innovation.

Other key findings from this study include:

--Cost savings remained the number one reason for respondents to adopt open source software.

--The service opportunity around open source remains with medium-sized and larger organizations. Respondents from companies with 1,000-9,999 employees reported the highest percentages in spending for 2007 across all services categories except support

--Respondents believe the biggest challenge vendors face in delivering open source-related services is integrating open source and proprietary software components.

--Technology vendors generally have a leg up when compared to pure service providers in terms of respondents' plans to acquire external services, and respondents’ perceptions of who provides the most innovative services related to open source software.

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Friday, April 18, 2008

Global Insurers' focus on the Customer propels growth of CRM Technology

Heightened competition along with more informed and demanding consumers is causing insurers worldwide to rethink their strategy. Insurers can no longer afford to provide poor customer service, nor can they continue failing to understand each policyholder, says a new report by independent market analyst Datamonitor. The report, “CRM In Global Insurance”, concludes that in order to remain competitive and to maintain profitability, life and non-life insurers globally must expand beyond their core competency of risk management and focus on customer management.

By focusing on the customer, Datamonitor points out insurers will be able to identify and grow their most profitable ones, while minimizing the resources spent on the less profitable customers. As a result of this one strategy, insurers will reduce customer acquisition costs and decrease customer churn, resulting in improved margins. Furthermore, insurers can enjoy better returns on marketing campaigns by closing the loop between the sales and marketing departments.

Datamonitor projects CRM software licenses and Software as a Service (SaaS) subscriptions to grow from a world-wide total in 2007 of $284 million to $440 million by 2012, representing an average annual increase of 9%. Non-life, or property & casualty, insurers spent and will continue to spend more than life insurers, though the split is fairly even.

The fastest growing region is tipped to be Central & Eastern Europe. The more mature markets of North America and Western Europe are expected to expand at rates lower than the overall global market.

Despite its promise, CRM is still regarded with some skepticism by insurers. At the height of the dotcom boom, CRM was sold as a technology panacea, rather than a business-wide strategy, which resulted in numerous suboptimal implementations. Today’s insurance IT decision-makers haven’t forgotten those times. Getting those decision-makers to look beyond the past and towards the future is a significant hurdle to full adoption.

In order to optimize the success of CRM within the insurance sector, insurers must approach CRM as a business strategy, and understand that technology is simply an enabler of that strategy.
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Thursday, April 17, 2008

Misrepresented Items, Lack of Customer Support Sabotage Online Shopping Experience

Nearly one quarter (24 percent) of respondents participating in the latest Ouch Point survey from Opinion Research Corporation (ORC), an infoUSA company, cited purchased items having no resemblance to their image on the Internet as their biggest online shopping frustration. Following close behind (23 percent) was the inability to speak to a customer service representative at an online store to address any purchasing questions or concerns.

Nearly nine in 10 of the 1,092 respondents surveyed indicated they shop online. On average, over one-fifth of these consumers buy over the Internet. This incidence is highest among the following populations: women, those 25-44 years old, residents in the Northeast and households with incomes of $75,000 or more.

While was named as the company offering the best online shopping experience by more than one-quarter (27 percent) of online shoppers, more than one-fifth (21 percent) could not identify a company that offers the best online shopping experience.

The list of online shopping frustrations ranked as follows:

--Receiving an item that doesn't look anything like it did on the Internet - 24%
--Not being able to speak to anyone to answer questions - 23%
--Learning that items are back-ordered or out of stock after they are in the cart - 19%
--Websites that malfunction as the payment is being processed - 14%
--An unclear return policy - 8%
--Unclear shipping information - 6%
--Not getting an acknowledgment after the order has been placed-6%

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Tuesday, April 15, 2008

Majority Uncomfortable with Websites Customizing Content Based Visitors Personal Profiles

A majority of U.S. adults are skeptical about the practice of websites using information about a person’s online activity to customize website content. However, after being introduced to four potential recommendations for improving websites privacy and security polices, U.S. adults become somewhat more comfortable with the websites use of personal information.

These are some of the results of a nationwide survey of 2,513 U.S. adults surveyed online between March 11 and 18, 2008 by Harris Interactive®. This survey was designed in collaboration with Dr. Alan F. Westin, Professor of Public Law and Government Emeritus at Columbia University, Principal of the Privacy Consulting Group, and a noted authority on privacy issues.

Specifically, the survey found:

--A six in ten majority (59%) are not comfortable when websites like Google, Yahoo! and Microsoft (MSN) use information about a person’s online activity to tailor advertisements or content based on a person’s hobbies or interests. A quarter (25%) is not at all comfortable and 34 percent are not very comfortable;

--The remaining 41 percent who say that are comfortable with websites tailoring content is split between 7 percent who are very comfortable and 34 percent who are somewhat comfortable.

After exploring the adult public’s level of comfort of websites directing content to website visitors’ hobbies and interests, we probed as to whether the U.S. adults would alter their views after seeing a series of potential policy and security policies. These were based on the Federal Trade Commission’s current publication about the adoption of possible self-regulatory principles for online behavioral advertising.

After four privacy/security policies were introduced, U.S. adults did change their opinions:

--By 55 to 45 percent, a majority of U.S. adults indicates that they would be more comfortable with companies using information about a person’s online activities to provide customized advertising or content;

--Interestingly, once the privacy/security policies were presented the percentages of those who are very comfortable increases only very slightly to 9 percent from 7 percent. The percentage who are somewhat comfortable given the privacy/security policies increases more significantly to 46 percent from 34 percent;

--Similarly, those who are not at all comfortable decline to 19 percent from 25 percent, and those who are not very comfortable decline to 26 percent from 34 percent.

By Generation

Analysis of these results more closely by age indicates a difference in views by generations. Those who are younger Echo Boomers (aged 18-31) and Gen Xers (aged 32-43) are initially more comfortable with the notion of websites customizing content than older Baby Boomers (aged 44-62) and Matures (aged 63 or older).

--After being presented with the privacy/security policies, all generations level of comfort increase. Echo Boomers increase to 62 percent from 49 percent. Gen X’ers increase to 56 percent from 45 percent. Baby Boomers’ comfort increases to a majority (52%) from 34 percent;

--Only Matures remain uncomfortable with the websites customizing advertising and content though the level of support rises to 46 percent from 31 percent.

This survey measured reaction to hypothetical policy recommendations with which the adult public is likely to not be familiar. Therefore, it may not be a surprise that the public’s indication that their level of comfort with websites would increase after being told that websites would introduce privacy and security policies designed to insure user trust. However, what may be surprising is that the level of comfort did not increase more.

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Monday, April 14, 2008

60 Percent of Online Consumers Consider Environmental Consciousness an Important Company Trait

DoubleClick Performics, the performance marketing division of DoubleClick Inc., announced the results of a survey gauging online consumer behavior and attitudes regarding “green” marketing.

In the survey of 1,087 adults, consumers indicated the most attractive type of environmentally-conscious marketing is that which focuses on such “specific user benefits” as saving money on bills or longer product lifespan. Consumers, when choosing between two similar products, prefer environmentally friendly products; 83 percent indicated they are extremely or very likely to choose the environmentally friendly option.

Additional data from the DoubleClick Performics’ “Green Marketing Study” revealed factors reported by consumers to influence their attitudes toward online buying:

--Of all online advertising sources, search engine results pages had the highest influence, with 32 percent of consumers reporting their impact on the purchase decision.

--Most consumers (65 percent) provide feedback about an online purchase at least some of the time.

--Approximately three fourths of those who make online purchases say a recommendation from a friend, family member or co-worker is valuable when purchasing online.

--Respondents ages 18 to 34 find recommendations to be particularly valuable compared to older respondents.

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Sunday, April 13, 2008

More Than 50% of U.S. Companies Want to Go Virtual in the Next Five Years

An increasingly large number of American companies are considering taking their business completely virtual in five years. A survey of C-level executives at U.S. companies reveals that more than half of these executives (53.4 percent) said they want to shift to a completely virtual company in the next five years.

Moreover, 80.8 percent of the executives said they were familiar with the advantages of e-commerce, and 30.1 percent said that if their business could afford the cost, they would be ready to go virtual right now. The survey was conducted by TIE Commerce, Inc., a provider of Business-to-Business eCommerce software, and The Mishra Group, a Waltham, Mass.-based marketing and public relations firm.

Given the major advancements in electronic business collaboration, it is now possible for a company’s internal operations, processes, and applications to remain current and connected with external trading partners. With each passing day, up-to-date, accurate company, customer and vendor information plays a greater role in the way they conduct business. Consumers demand instant results, and with a dedicated electronic framework, a business can boost sales, improve supply chain integration and exceed customers’ expectations, says TIE.

The survey also found that 83.6 percent of respondents cite their comfort level with technology as being a major factor in their willingness to go to a completely virtual business. According to TIE, major advancements in technologies such as Software as a Service (SaaS) alleviate the pressure of in-house software management, in turn making the transition to virtual business that much more obtainable.

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Thursday, April 10, 2008

Mobile SFA: Empowering the 24/7 Road Warrior

Empowering the sales force with tools to work remotely has evolved dramatically since the first wave of smart phones hit the streets nearly ten years ago. Sales reps have grown adept at basic applications such as email and web browsing, but often still wait for an end-of-day laptop session to access their CRM system. A recent study conducted on mobile SFA conducted by Aberdeen reveals that companies are increasingly turning to mobile SFA tools in order to boost sales force productivity, shorten customer response time, and increase executive insight in sales activities. Best-in-Class companies are 3.8 times more likely than Laggards to reduce the amount of downtime for field personnel through the use of mobile SFA devices.

The top pressure causing all organizations to focus resources on mobile SFA stems from the most fundamental sales goal: to increase sales productivity. Best-in-Class companies indicated that they currently perform on-the-spot customer demos (63%) and have access to centralized repository of accounts, history, contacts, tasks, inventory, and pipeline (53%).

The report demonstrates the value of collectively leveraging organizational practices in process, performance measurement, knowledge management and technology to provide a foundation for sales effectiveness. By utilizing mobile access to sales management tools and linking customer records with incoming correspondence, Best-in-Class companies are able to positively affect both sales productivity and customer satisfaction.

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Wednesday, April 9, 2008

Online Sales To Climb Despite Struggling Economy

According to The State of Retailing Online 2008, the 11th annual study conducted by Forrester Research, Inc. of 125 retailers, online retail will continue to be a bright spot in the industry with retail sales* rising 17 percent this year to $204 billion. Apparel ($26.6 billion), computers ($23.9 billion), and autos ($19.3 billion) will be the three largest sales categories.

As the number of people new to the Internet begins to wane, online retailers are constantly struggling between investing in strategies that retain current customers or those that attract new ones. According to the report, online retailers allocate 53 percent of their marketing budgets to online customer acquisition and 21 percent of marketing dollars to online customer retention. However, retailers are finding that traditional acquisition programs such as search engine or affiliate marketing may also serve as retention tools that attract existing customers as well as new shoppers.

According to the survey, retailers report that search engine marketing continues to be the most effective way to reach prospects, citing 35 percent of sales come from that initiative. As a result, nearly all online retailers surveyed (90 percent) use pay-for-performance search placement, and 79 percent said they will make this tactic an even greater priority this year. Companies are also using offline marketing tactics to drive customers to the Web, with catalogs and other direct mail pieces taking priority over methods like television and newspaper advertising.

Though free shipping offers have proven to get some consumers over the obstacle of shopping online in the past, the study revealed that retailers' are less interested in promoting free shipping options this year. While 85 percent of online retailers said they used some shipping with conditions promotions in the past, just 35 percent said that they would focus more on these types of promotions in 2008. Instead, retailers are eager to experiment with Social Computing initiatives to attract customers — 65 percent and 55 percent of retailers respectively said that social network advertisements and widgets would be categories of increased focus this year. However, Social Computing efforts to this point have been considered more effective for brand-building and less proven for driving revenue or sales conversion. Therefore, the report advises retailers to continue investments in proven techniques like email marketing and free shipping promotions to drive sales.

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Tuesday, April 8, 2008

IT Leaders Must Prepare for the Industrialization of IT

Many organizations are failing to exploit falling prices in products and services that should accompany the commoditization of IT, according to Gartner, Inc. In 2007, 25 percent of IT spending was on unnecessary and redundant customization and although this will decline, it will remain at least at 10 percent overspending through 2010.

The need to move ever faster and at a lower cost is driving a shift from ‘integration’ activities toward greater interoperability and interchangeability with the direct result that many IT product and services markets are becoming commoditized. Gartner likened this ‘industrialization of IT’ to the two earlier industrial revolutions (of mechanization and electrification) calling it the third industrial revolution: that of digital business in the cloud.

For most organizations, the shift from buying and building IT to accessing IT as a service is not new, but the trend is set to accelerate as traditional delivery models are augmented by a range of new, alternative delivery models that rely on a combination of technology and business advances to delineate and define the extent of the service. Increasingly, these are being used both internally and externally to deliver scalable IT software and hardware functions. These alternative delivery models often make irrelevant the governing principles that worked with the traditional models.

At the same time, the giants of the software and services industries are building the facilities to deliver these services. They are building the capacity for mass production: platforms for industrialization. These new mega data centers will form part of the new "mass production" capabilities companies need for IT.

To deliver these applications in a readily configurable and customizable manner, with the promised advantage of scale, will require Web platforms. In a Web platform ecosystem, a service provider uses the facilities of a Web platform provider to build, host or deliver the service. At a minimum, the service provider will use hosting services of the Web platform and may use additional platform services (compute, storage, security, application management, ecosystem management, information, component, application and business process) to build and deliver its services.

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Thursday, April 3, 2008

Cutting Back on Green PC Initiatives Leads to False Economies

Organizations that are tempted to cut back on green PC initiatives as part of wider IT cost-cutting efforts may find themselves out of pocket in the near- to mid-term, according to Gartner, Inc. For most companies, being green actually saves money and alleviates some of the pressure on IT budgets.

Companies should continue to move forward with green PC initiatives that began in 2007 and accelerate certain programs, particularly those that deliver power savings, so that organizational efficiencies can have an impact on the budget as soon as possible.

Gartner’s has identified four key areas where green PC initiatives can lead to cost savings:

1. Look for Eco-Friendly Labels on New PCs
Switching to a more eco-friendly model can reduce power consumption by 20 percent or more and usually carries only a very small premium (typically less than $20 per desktop). If an organization cuts back on new PC procurement, then switching the remaining new purchases to systems carrying these new eco-credentials will usually have no negative impact on operations but will lower energy costs.

2. Green Really Can Save Money
Putting machines into a low power state when not in use is a low risk, but a highly effective change to a PC fleet because it costs little or nothing (typically less than $10 a year) to implement and reduces energy costs from more than $75 a year to approximately $18 a year. Concerns about patch installation are easily addressed by modern power-state management tools.

3. There’s Gold in Old Machines
Good PC disposal programs become even more critical in the event of a business downturn. When properly disposed of, older equipment has value that can help pay for newer, more-efficient systems. System recycling is the preferable solution but even machines beyond refurbishment will have value based on parts and embedded recyclable materials.

4. Efficient Users Tend to Be Green Users
The most-efficient way of fulfilling a business process can often be the "greenest." Programs that encourage the reduction of travel and commuting may require a minor uplift in technology spending, but are also likely to improve workers’ productivity and attitudes. Reducing the printing and distribution of paper will not only reduce environmental waste but typically will speed up business processes.

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Tuesday, April 1, 2008

Report Reveals Consumer Awareness and Attitudes about Behavioral Targeting

A new report by consumer privacy organization TRUSTe indicates a high level of awareness that internet activities are being tracked for purposes of targeting advertising, and a high level of concern associated with that tracking, even when it isn’t associated with personally identifiable information.

Behavioral targeting has become a hot button issue recently, as industry enthusiasm for delivering customized experiences and improved marketing metrics runs up against consumer privacy concerns and calls for greater transparency around emerging tracking and targeting techniques. Based on the results of the survey, lack of transparency may factor into privacy concerns. 71 percent of online consumers are aware that their browsing information may be collected by a third party for advertising purposes, but only 40 percent are familiar with the term “behavioral targeting.” 57 percent of respondents say they are not comfortable with advertisers using that browsing history to serve relevant ads, even when that information cannot be tied to their names or any other personal information.

An overwhelming majority (91 percent) of respondents expressed willingness to take necessary steps to assure increased privacy online when presented with the tools to control their internet tracking and advertising experience, suggesting a need for added education, transparency and choices for behavioral targeting. Nearly two-thirds (64 percent) would choose to see online ads only from online stores and brands that they know and trust and 44 percent of respondents would click buttons or icons to make that happen.

To the contrary, a similar proportion of consumers (42 percent) say they would sign up for an online registry to ensure that advertisers are not able to track browsing behaviors, even if it meant that they would receive more ads that are less relevant to their interests. This division poses a serious dilemma for BT practitioners and industry privacy advocates, because consumers say they want more relevant advertising, but don’t want to be tracked in order to get it.

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