Business Productivity and Cost Reduction Top Concern for IT Executives

CIOs, CTOs, and senior IT executives cite business productivity and cost reduction as theirtop business concern, according to the 2009 IT Industry Trend Survey, commissioned by the Society for Information Management .

IT and business alignment, the number-one concern in 2008, fell to number-two on the survey, which annually provides important benchmark data in areas including spending, salaries, job scope of IT professionals, and technical/business trends.

Rounding out the top 10 concerns in SIM’s annual survey, the list includes:
3.) Business agility and speed to market
4.) Business process re-engineering
5.) IT cost reduction
6.) IT reliability and efficiency
7.) IT strategic planning
8.) Revenue generating IT innovations
9.) Security and privacy
10.) CIO leadership role

Respondents indicated the number-one application/technology of importance is Business Intelligence. It was followed by server virtualization, enterprise resource planning (ERP) systems, customer/corporate portals, enterprise application integration/management (EAI/EAM), and continuity planning/disaster recovery.

Two-thirds of Companies Not Fully Measuring IT Value, Neglecting Competitive Advantage

A nine-country survey of 1,217 IT professionals reveals that enterprises worldwide believe they are realizing value from their IT investments -- yet they cannot be sure, as fewer than half have a shared understanding of value across the enterprise, and two-thirds fail to fully measure it.

Conducted by ISACA, an association of 86,000 IT governance, security and assurance professionals, the survey found that half of the respondents believe they are realizing between 50-74 percent of expected value from their IT investments, and nearly a fifth believe they are realizing 75-100 percent. Yet, half measure the actual value only “to some extent,” while one in 10 does not measure it at all.

At the same time, half of the respondents reported that accountability for such value measurements is delegated to the IT function itself, instead of remaining with the business, where it belongs.

Additionally, despite the challenging economy, 30 percent of companies are increasing their investments in IT this year, while only 13 percent plan to reduce spending and 14 percent plan to freeze it at the current level. In the UK this average isn’t replicated, as just 19 percent of organizations intend to increase their investment while 20 percent plan to cut spending across the board.

Interestingly, among the benefits organizations receive from their IT-related investments, respondents cited “improved customer service” (35 percent) and “cost reduction” (24 percent) as the two most important. Somewhat surprisingly, only 16 percent named “new or improved products and services” as the top benefit. India stands out, with improved customer service as the top-ranked benefit, at 45 percent.

The survey identified some regional differences—specifically between established economies and fast-growing ones. Of the nine countries surveyed—Australia, Canada, France, Germany, Hong Kong, India, Mexico, the UK and the US—the India-based participants were the most advanced in adopting effective value management practices and assigning accountability for those investments to the business. Seventy percent of respondents’ organizations in India have a framework for selecting the IT-related investments that will result in the greatest value and 57 percent fully measure value. In addition, almost half of Indian organizations are increasing IT-related investment based on potential or expected contribution to business value, and 63 percent said there is a cross-departmental understanding of what constitutes value in IT investment—a figure significantly lower in the UK, at just 22 percent, and the US, at 34 percent. Top-down management responsibility for optimizing IT investment was also evident, with one-third of respondents indicating board or board chair level.

More information on CRM can be found at www.CRMindustry.com

Optimistic Forecasts for 2010 Drive Sales Force Staffing, Compensation Design

Corporate sales forces are anticipating better times ahead, as companies project higher revenues and sales goals for next year, according to a survey by Watson Wyatt, a global consulting firm. Additionally, the number of employers planning further sales force layoffs has declined sharply as the economy shows signs of improvement.

The survey found that the vast majority (83 percent) of companies project revenue growth in 2010, with 43 percent expecting revenues to increase by 6 percent or more. Also, slightly more than half (51 percent) expect higher sales goals and quotas for next year. Only 12 percent anticipate decreasing their sales staffing levels in the upcoming fiscal year (compared with 53 percent in February), and 16 percent actually anticipate increasing their sales force head count. Voluntary sales force turnover fell in 2009; 81 percent of respondents report less than 10 percent voluntary turnover, compared with 51 percent in February. Watson Wyatt’s survey was conducted in August 2009 and includes responses from sales executives at 129 large companies.

However, 60 percent think that sales force productivity and efficiency remains a significant concern, while 48 percent believe that sales force quota and goal setting is a concern. About one third (35 percent) also are concerned about sales force morale and motivation, while 40 percent are concerned with coaching and development. Less than half (47 percent) report being satisfied or very satisfied with their goal-setting processes.

Alterations companies plan to make to their sales incentive plans in the next fiscal year include changing performance measures (60 percent), changing performance measure weightings (50 percent) and changing incentive formulae or mechanics (49 percent). Twenty-eight percent also expect to change their pay mix.

Even in the current economy, the large majority of companies (86 percent) are able to identify their top performers, and 79 percent report that the top earners mirror the top performers, indicating a strong pay-for-performance orientation.

Other findings include:

*The look backwards reflects a difficult 2009. Compared to this time last year, 34 percent have decreased sales force goals and quotas. Despite this, 57 percent still reported decreased sales force performance relative to plan.

*Nearly two-thirds of companies (65 percent) are managing their compensation cost of sales to below 4 percent of total sales.

*Companies continue to manage sales compensation on a global basis with local customization. For the 64 percent of companies that have sales incentive plans in other countries, most determine program eligibility (59 percent) and design (60 percent) globally, but pay levels (79 percent), sales goals (73 percent) and pay mix (68 percent) on a local basis.

*Almost half (46 percent) offer stock-based compensation to their sales forces.

More information on Customer Relationship Management can be found at www.CRMindustry.com

Americans Continue To Adopt Digital Lifestyle

Americans of all ages continue to adopt a digital lifestyle according to the largest annual survey of consumers' technology adoption and attitudes by Forrester Research, Inc. "The State Of Consumers And Technology: Benchmark 2009, US" is a graphical analysis of Forrester's North American Technographics Benchmark Survey, 2009 (US, Canada) of nearly 48,000 respondents. Highlights of the report include:

Devices. High-definition televisions (HDTVs) and home networks were two of the fastest-growing consumer technologies in 2008. Over the next five years, nearly 39 million US households will get their first high-definition set and more than 30 million homes will add network connectivity. Forty-four percent of US households have a laptop, and the average American family owns two personal computers.

Media consumption. While media consumption among all Americans is split evenly between new and traditional media, on average, consumers younger than 40 spend almost 2 hours a week more with new media than they do with traditional media.

Mobile. Four in five US households now have a mobile phone; families with older children have nearly three mobile phones per household, the most of any age segment. Eight percent of consumers own a smartphone.

More information on CRM can be found at www.CRMindustry.com