More Organizations Are Using IT Outsourcing to Enhance Business Performance Rather Than to Just Cut Costs

According to a 2007 Gartner survey of 750 IT and outsourcing executives in North America, Asia/Pacific and Europe, 41 percent of organizations that were currently outsourcing IT said they use IT outsourcing (ITO) to enhance business outcomes and performance. Approximately 47 percent of organizations still identified controlling or reducing costs as the primary benefit expected from ITO. However, there is a shift taking place. In 2005, only 28 percent of respondents reported enhanced business outcomes and performance as the primary benefit of ITO.

In all major regions, buyers of ITO anticipate increasing their use of ITO in the coming 24 months. On a global basis, 88 percent of organizations that are currently outsourcing anticipate moderate or high levels of outsourcing compared with 67 percent in 2007. Over the next two years, 89 percent of North American organizations anticipate outsourcing at high or moderate levels, up from 67 percent in 2007. About 85 percent of Europe, the Middle East and Africa (EMEA) organizations and 90 percent of Asia/Pacific organizations expect to continue at the same level or increase their outsourcing during the next two years, up from 62 percent and 73 percent in 2007, respectively.

Both North America and Asia/Pacific respondents said data privacy/security was the top inhibitor to ITO, while EMEA organizations were more likely to be concerned about loss of control in outsourcing.

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

CRM solutions on brink of widespread adoption across the Higher Education Market

Higher education institutions are turning to customer relationship management (CRM) technology solutions to differentiate themselves in a bid to compete more aggressively with one another to recruit and retain the "right" students. The report, 'CRM in the Higher Education Market' by independent market analysts Datamonitor, predicts IT revenue from CRM solutions in the higher education markets of the US, UK, Germany, France and Australia will grow from $184.9 million in 2007 to $324.5 million in 2012. This growth will be driven both by the purchase of new solutions and the expansion of existing installations.

CRM enables institutions to create a 360 degree view of the student experience

Colleges and universities have historically targeted CRM to support specific processes, such as campaign management, in the admissions and development offices. Fueled by developments in the consumer market, student expectations for institutional services are rising fast and prompting institutions to extend their view of CRM to include a larger and more diverse set of processes and departments.

While corporate-sector CRM solutions are a good start, higher education has unique requirements that must be addressed

Translating a corporate sector CRM solution into one that meets the specific needs of higher education is a far more complicated task than simply changing references to customers and sales to students and admissions in the end-user interface.

The degree to which CRM vendors have successfully made these changes varies considerably and has given rise to a large and diverse competitive landscape. The current landscape, however, is likely to evolve.

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

Technology Populism Will Drive The Next Wave Of IT Adoption

The next wave of change within IT organizations will be fueled by the proliferation of consumer devices, social networking tools, and cloud-based collaboration services making their way into the enterprise, according to a new report by Forrester Research, Inc. What Forrester calls Technology Populism will force Information & Knowledge Management professionals to rethink how they currently evaluate, provision, and support collaborative software and services. This sea change will present IT departments with a number of opportunities and challenges that will upend the traditional way that technology is deployed.

Other drivers behind Technology Populism include:

--Cheap broadband at home and work. Nearly 50 percent of North American households have a broadband connection, and the Web continues to develop into the preferred platform for two-way communication and collaboration. According to Forrester, 15 percent of North American adults use social networking sites on at least a monthly basis and 34 percent communicate via instant message as frequently.

--A new generation of applications based on network interactions. Companies are learning how to exploit services such as LinkedIn, Facebook, and salesforce.com for business purposes to generate sales leads, recruit talent, and test and improve products.

--IT views Web 2.0 favorably. Despite popular opinion, IT leaders support Web 2.0 technologies in the workplace: A recent Forrester study shows 72 percent of IT departments are using some form of Web 2.0 technology.

Among the challenges posed by Technology Populism are how to govern Web 2.0 technologies, ensuring information integrity and avoiding information silos, a real issue as these new tools could create volumes of information microsilos that make it next to impossible to find information. In addition, IT departments are faced with current collaboration and Social Computing technologies becoming obsolete as Technology Populism grows.

More information on Customer Relationship Management can be found at http://www.crmindustry.com/

Technology Barriers to Mobile Commerce Are Coming Down, but Consumer Challenges Remain

Forthcoming improvements in mobile technology, such as better form factor and faster data speeds, are causing many retailers to think about adding a mobile commerce (m-commerce) channel in the next 12 to 24 months, according to Gartner Inc. However, in order to drive m-commerce revenues in the future, both retailers and m-commerce vendors must seriously consider how far consumers are willing to shop using their mobile phones.

Gartner recently undertook a survey of more than 2,000 consumers in the U.S. and the U.K. to assess the likelihood that they would undertake a variety of mobile shopping activities, from price checking and product browsing to ordering and paying for a product from a mobile phone.

Key survey findings:

--Consumers are more likely to shop rather than to buy from a mobile phone. In the U.S., consumers were twice as likely to check for prices of items as to buy items from their mobile phone (24 percent were likely to check price, and 12 percent were likely to buy on a mobile phone). U.K. consumers posted similar responses (18 percent check price and 11 percent buy).

--Checking item prices and finding stores are two shopping activities particularly suited to consumers on the go. These two activities were in the top three activities to be done on a mobile phone in both the U.S. and U.K.

--Openness to receiving promotions on a mobile phone ranked third in the U.S. and fourth in the U.K. Twenty percent of U.S. and 16 percent of U.K. respondents stated that they would be likely to want to receive promotions on their mobile phones.

--The younger the consumer, the more likely he or she is to use the mobile phone to conduct retail activities. In the U.S., the "digital native" respondents (ages 18 to 27) were, on average, 1.98 times more likely to do mobile shopping activities than the "boomer" generation respondents (ages 43 to 61). In the U.K., the digital natives were on average 2.63 times more likely to do mobile shopping activities than their boomer counterparts. This is consistent with the assumption that mobile use in the U.K. is considered more advanced than in the U.S.

--U.K. consumers were slightly more conservative in stating their likelihood to use the mobile phone to shop, but the relative ranking of the preferred activities was very similar to U.S. consumers. However, digital natives in the U.K. were slightly more aggressive (7 percent more) in stating their likelihood to do mobile shopping activities than U.S. digital natives.

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

E-Commerce Satisfaction Soars in American Customer Satisfaction Index

Customer satisfaction with the e-commerce sector hits an all-time high, according to the American Customer Satisfaction Index (ACSI), released by the University of Michigan with e-commerce partner ForeSee Results. E-commerce in aggregate rises to a score of 81.6 on the ACSI’s 100-point scale, a significant 2 percent jump from 2006. The e-commerce sector now outperforms all other service industries measured by ACSI.

The ACSI E-Commerce Report, which is a part of the ACSI’s fourth quarter report, measures customer satisfaction with online retail, online brokerage and online travel companies.

Online Retail: Amazon Ranks Second of 200+ Companies Measured

Online retail is the highest scoring industry in the fourth quarter, scoring 83 for a second consecutive year and surpassing the offline retail sector (74.2) by 12 percent. All of the measured companies in the e-retail industry are among the top 10 highest-scoring companies in all of ACSI.

E-retail stalwart Amazon.com ties its all-time high, up 1 point to 88, leading both the e-retail industry and the e-commerce sectors. The silver and bronze for online retail go to two new companies to the Index: Newegg debuts at 87 and Netflix at 84.

mazon has the second-highest score in the ACSI (trailing only Heinz) and surpasses other customer-pleasing companies such as Apple and Southwest Airlines. The company’s dedication to the customer experience is paying off in terms of customer satisfaction, as evidenced by its biggest fourth quarter revenues ever.

ACSI merged the auction category with online retail to reflect the increasing overlap and competition between the two. EBay moves up a point to 81, but it has been fairly stagnant over the last few years, failing to come up with the true business innovations that have catapulted Amazon up 5 percent since 2004.

Online Travel: Satisfaction Continues to Deteriorate

The online travel industry falls for a second straight year, dropping 1.3 percent to 75. The three major online travel sites all suffered drops in satisfaction. Expedia remains the highest-scoring company, but its score plummets 3.8 percent to 75. Travelocity and Orbitz both drop to 73, as the three companies continue to have difficulty differentiating their services.

Priceline employs a different model for its service and improves 1.4 percent to 73. But even the improvements in the "all others" category (+3.9 percent to 79) could not prevent the aggregate score from falling. The "all others" category includes airlines, hotels, and other travel search engines like Kayak.com. Travel suppliers like airlines and hotels are putting pressure on the three major travel sites. Airlines are now offering hotel and car rental options in addition to lowest-price guarantees and loyalty and rewards programs, and hotels encourage customers to book directly on their sites.

Online Brokerage: Fidelity Overtakes CharlesSchwab

After a big surge last year, customer satisfaction with online financial services continues to climb. Online brokerage is up for a third consecutive year (+1.3 percent to 79). Fidelity is the biggest gainer, increasing 5 percent to 84, setting a new high for the industry. CharlesSchwab (+2.5 percent to 82) and TD Ameritrade (+3.9 percent to 80) also improved, while E*TRADE’s score is down 1.3 percent to 73.

Survey Finds Current Converged Mobile Devices Fail to Compel Users

The conventional wisdom within the portable device industry is that consumers have a preference to use converged devices, meaning single devices that combine the functionality of previously separate devices, reports In-Stat. But the idea that there will be wholesale adoption of a device that simply combines multiple devices is unrealistic, the high-tech market research firm says. A recent In-Stat survey of US businesspeople shows that users tend to remain loyal to older technology, and employers are reluctant to force the issue.

Recent research by In-Stat found the following:

--One positive sign of progress in convergence is that 8% of road warriors, businesspeople who travel frequently, have given up a desk phone to rely solely on their mobile number.

--Before employers can insist that employees use fewer devices, manufacturers need to address battery life and ergonomics issues for portable devices.

--The survey shows that many more users prefer to carry redundant devices than chose to have a single telephone number and a single computing device.

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

Services Marketers Optimistic About 2008

Despite the dark clouds hanging over the economy and growing fears of a recession in 2008, services and solutions marketers are optimistic about the year ahead. In fact, according to new ITSMA research, their members are predicting robust revenue growth, bigger marketing budgets, and increased headcount in 2008.

ITSMA members reported services revenue growth of 19% in 2007. Survey respondents expect that growth to keep right on going, anticipating 18% services revenue growth for the year ahead.
Services marketing budgets are also expected to rise, with 61% of the respondents predicting an average increase of 18.9%, 15% of respondents predicting an average decrease of 9.9%, and 24% of respondents predicting that their services marketing budgets will stay the same.

In addition, 40% of survey respondents reported that they expect to increase headcount over the course of the year, 48% expect their staffs to stay the same size, and only 12% indicated that their departments will shrink.

Budget Allocations: Sales Enablement, Offering Management, and Marcom Are Key Categories for '08

Looking to increase marketing's impact on the business, 67% of the respondents say they will funnel more resources into sales enablement initiatives in 2008, with only 15% indicating that they will decrease spending in this area. Other budget categories that are expected to receive higher levels of investment in 2008 include:

• Strategy and market planning
• Offering management
• Marketing communications

In terms of the marcom budget breakdown, it's clear that the emphasis is on building relationships and engaging customers and prospects in dialogue. Look for increased investment in digital marketing, face-to-face events, and thought leadership in 2008.

More Marketers Recognize That Experimentation = Success

The best marketers are the ones who take risks, make mistakes, and learn along the way. Even though the economy looks a bit precarious, you can be sure that the best marketers aren't conservatively sitting on the sidelines. They're getting their hands dirty experimenting with new tools and approaches—especially digital ones.

This year, marketers are especially high on search, with 70% of the respondents reporting that they are increasing their investment in search engine marketing (both paid and organic). Between 50% and 60% of the respondents also indicated that they're increasing spending on:

• Online communities
• Microsites
• Intranets
• Webinars
• Blogs
• Podcasting

Wikis and virtual worlds like Second Life were less popular: Fewer than 30% of the respondents expect to increase spending in these areas in 2008.

Top Marketing Priorities

In 2008, marketing's priorities are more measurable than ever, demonstrating how important it is for marketers to be able to prove that their activities are having an impact on the business.

This year, the top five priorities for services marketers are:

• Differentiating the company or offerings
• Enabling the sales force
• Generating demand
• Improving customer satisfaction and loyalty
• Developing thought leadership

Although it didn't make it into marketers' top five priorities for 2008, increasing the use of digital tools and online marketing channels rose from number 16 on the list in 2007 to number 7 in 2008—a dramatic leap that ITSMA is happy to report, given that recent research showed that the best marketers are experimenting more with newer marketing techniques such as blogging, podcasting, and social networking.

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