Cloud and CRM Will Drive Enterprise Software Spending in 2013 and 2014

Greater adoption of on-premises and software as a service (SaaS) will drive a modest increase in worldwide software spending through 2014, according to a recent survey by Gartner, Inc. Gartner conducted the large-scale enterprise IT spending study through the third quarter of 2012 for analysis of enterprises' IT budget spending plans for 2013 and 2014.

Regions with higher IT maturity, such as North America and Western Europe, expect lower or no budget increases over the next two years, while developing countries with immature IT infrastructure, such as Eastern Europe, Latin America and Asia/Pacific, will experience the largest budget increases in software spending.

Survey results show new software licenses (on-premises, including applications) continue as an important priority in emerging regions, with 69 percent of respondents expecting new software license budgets to increase in 2014, compared with 47 percent from mature regions. The regional differences relate to the amount of mature systems with maintenance and technical support fees. Less mature regions, with little or no infrastructure, will typically spend more on new software licenses (on-premises, including applications), while more mature regions with mature infrastructure tend to spend more on software maintenance and support (including license updates and/or technical support). 

As economic pressures increase and other factors come into play, such as resource limits and skill shortages, organizations have expressed overwhelming interest in cloud computing and other options that externalize IT. In North America, interest in SaaS/public cloud is significantly higher than in other regions, with more than 60 percent of respondents increasing their budget in SaaS/public cloud within the next two years. Organizations in other regions show more interest in hosted applications (single tenant), with Asia/Pacific the highest, with 34 percent of respondents increasing their budget on hosted applications. 

The survey also revealed that customer relationship management (CRM) has edged past enterprise resource planning (ERP) as the top application software investment priority. This further validates a business focus on enhancing customer experience, with both mature and emerging regions emphasizing investments in CRM. Survey respondents indicate that their top three application software investment initiatives for 2013 are CRM, ERP, and office and personal productivity tools. 

Security software topped infrastructure software investment priorities, driven by the evolution of new threats, as well as by changes in working practices. While companies increasingly perceive the mobility of their workforce as a strategic advantage, there is growing awareness of the damage caused by security breaches. More and more organizations are accepting the need to have more-open connectivity with business third parties and assessing third-party security and defining how to securely communicate are becoming critical factors. 

Virtualization infrastructure software, ranked as the third-highest priority for increased spending, continues to grow, with most organizations moving toward 70 percent virtualization (especially in North America) within the next several years. However, virtualization is not among the top three priorities in Europe or Asia/Pacific, mainly due to the already high virtualization rates in those regions.

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

57% of Finance Executives Say their Companies Are ‘Fair’ or ‘Poor’ at Ensuring Big Data and Similar IT Projects Yield Expected Returns

At a time when Big Data and other cutting-edge information technology (IT) is being actively evaluated in boardrooms everywhere, 57% of senior finance executives at large and midsized North American companies say their companies are either “fair” or “poor” at ensuring that such “improve-the-business” IT projects are actually yielding expected financial returns.  And almost none (3%) rate their companies as “excellent.”  That’s according to a new survey of more than 150 senior finance executives by CFO Research in collaboration with AlixPartners, the global business-advisory firm.

The survey also finds that more than two-thirds of financial executives (66%) give their companies a “C” or “D” when it comes to measuring financial returns from discretionary IT projects, such as Big Data ones, designed to improve or add to a company’s business and profits.  (Only 5% gave their companies an “A.”)

Meanwhile, at the other end of the IT spectrum, the survey reveals that “keep-it-running” IT costs – non-discretionary support and maintenance systems – are cannibalizing funds available for business-improving IT. A plurality of respondents (49%) estimates that, over the past two years, their company has maintained approximately a 70-30 ratio of keep-it-running to improve-the-business IT spending, and of that amount, a solid majority – 63% – believes that their company’s spending is weighted too heavily toward keep-it-running IT services, and that a greater share should be directed to improve-the-business IT projects.

The survey also shows that, despite massive IT investments in recent years, companies aren’t getting enough of the kind of information they need to successfully run and grow their businesses.  In fact, no less than 71% of the executives polled say their companies should have access to more robust business information for the money spent on IT.  In addition to desiring more robust information on product profitability (cited by 42%) and customer profitability (41%), there was also strong interest in having better access to information about customer acquisition (33%), revenue (32%), price elasticity (31%), customer attrition (29%) and promotions effectiveness (25%).  

One big reason companies are over-spending on IT or spending on it in the wrong places, reports the survey, has to do with governance and discipline around IT programs.  For example, 72% of respondents said that factors other than a carefully considered business case (e.g., internal politics, personal persistence/willingness to be a “squeaky wheel”) influence the priority and funding of “improve-the-business” IT projects much more often than they should.  Meanwhile, when asked who in their company should have a greater voice in whether to fund such projects, 45% said sponsors from business or functional units and 28% said the finance function.  By contrast, when asked who today is primarily responsible for deciding funding, just 14% said business sponsors and only 7% said the finance function.  

By the same token, when it comes to “keep-it-running” IT spending, 62% of finance executives say that kind of spending is currently either kept at the corporate level (within the IT department) or only partially charged to business units, neither of which is necessarily optimal for controlling such costs.  Moreover, more than two-thirds of those surveyed (66%) say that keep-it-running and improve-the-business IT spending is budgeted together at their companies.

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

Survey Finds Top Priorities for IT Departments in 2013 Driven by Concerns Surrounding Mobile Commerce and Social Media

IT professionals will be expected to handle a growing list of functions with only average competency levels, according to a new survey about IT risk factors for 2013 published by global consulting firm Protiviti. The 2013 IT Priorities Survey found that IT executives are struggling to manage the wide variety of technology risk, regulatory compliance and performance challenges that now face them.

When asked to assess their competency in key areas of IT technical knowledge on a scale of one to five, with one being the lowest and five being the highest, nearly 200 CIOs, chief technology officers, chief security officers, and IT vice presidents/directors reported a 2.8 average rank for social media security, social media integration, mobile commerce security, mobile commerce integration, and mobile commerce policy.

Among 21 areas of technical knowledge, survey respondents identified social media security and mobile commerce security as the areas needing most improvement. CIOs and their staffs indicated that they intended to strengthen their cyber security capabilities in order to tackle the growing threat of breaches ‑ and potential incident response procedures ‑ as well as ensuring their compliance with the increasing number of state and federal information security requirements. 

Executive-level respondents also rated mobile commerce security, policy and integration among their top five priorities in the new survey's technical knowledge section, which contrasts strongly with the 2011 survey in which none of these areas made the top of the list. Interestingly, challenges related to virtualization and cloud computing receded in the rankings compared to 2011, suggesting IT departments have a higher level of confidence in managing these areas.

Survey results also highlighted the following findings related to IT processes and capabilities:

-- Managing and classifying enterprise data is the number one security and privacy area in need of improvement, and remains a major challenge for IT departments.

-- The IT function's top priorities are related to strategy and organization, reflecting a need to enhance the clarity and precision with which IT performance is measured, monitored and reported internally and externally, as needed to customers.

-- In terms of IT infrastructure, platform performance planning and storage management and planning are listed as top concerns, with respondents ranking their competency level in these categories at 2.8 on a scale of one to five.

-- Three primary priorities in the "ensuring continuity" category are developing and maintaining business resumption plans; developing and maintaining IT disaster and recovery plans; and developing and maintaining crisis management plans.

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

Poor Social Media Practices can Negatively Impact a Businesses' Bottom Line and Brand Image

Businesses can no longer adopt a trial-and-error approach to social media as all-new research finds a link between social media and business metrics such as consumers' likelihood to purchase or interact with companies through leading social channels, according to the J.D. Power and Associates 2013 Social MediaBenchmark Study.

The inaugural study is based on responses from more than 23,200 U.S. online consumers who have interacted with a company via the companies' social media channel. Fielded from November to December 2012, the study measures the overall consumer experience in engaging with companies through their social platforms for both marketing and servicing needs across more than 100 U.S. brands in six industries: airline, auto, banking, credit card, telecom and utility. The study establishes performance benchmarks and industry best practices that provide insights to companies to help them maximize their social media efforts.

Social Media Servicing vs. Social Media Marketing
The study focuses on two types of social media engagements, marketing and servicing, and provides best practices for each. Marketing engagements include connecting with consumers to build brand awareness and affinity, in addition to promoting coupons and deals. Servicing engagements include answering specific consumer questions or resolving problems.

The study finds that social marketing engagements vary by age group. Nearly one-third (39%) of consumers 30-49 years old and 38 percent of those 50 years and older interact with a company in a social marketing engagement context, while only 23 percent of consumers who are 18-29 years old interact with companies. In contrast, 43 percent of consumers who are 18-29 years old use social media for servicing interactions, while 39 percent of consumers who are 30-49 years old use social for servicing needs. Only 18 percent of consumers who are 50 years and older interact with a company via social for a service-related need.

Companies need to understand how their consumers use social media and then develop a strategy that addresses their usage patterns.

The study finds a correlation between overall satisfaction with a company's social marketing efforts and consumers' likelihood to purchase and their overall perception of the company. Among highly-satisfied consumers (satisfaction scores of 951 and higher on a 1,000-point scale), 87 percent indicate that the online social interaction with the company "positively impacted" their likelihood to purchase from that company. Conversely, among consumers who are less satisfied (scores less than 500), one in 10 consumers indicate that the interaction "negatively impacted" their likelihood to purchase from the company. 

The study also finds that some industries are more successful than others at implementing best practices into their social media engagement strategies than others. When looking across industries,  the auto industry performs particularly well in both marketing and servicing social media interactions, the only industry to do so. Other industries performing well are wireless in social servicing interactions and utility in social marketing interactions.

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

2013 Mobile Enterprise Survey Results

The 2013iPass/MobileIron Mobile Enterprise Report tells a story of the rise of BYOD, and with it increased frustration and loss of control by IT, and concern over rising mobile data costs. Results from our survey show that while Mobile IT brings with it a huge potential to improve workforce productivity, it also introduces significant new challenges for enterprise IT. We also found that Mobile IT means a new relationship between IT and the end-user. The end-user now has the ability to influence IT policy, demanding less IT control and more accommodation of employee owned devices in the workplace.

Highlights include:

-- IT departments are becoming more responsive to mobile employee demands. 68 percent of IT managers believed their mobility costs would go up over the next 12 months. The bulk of the increase was attributed to a rise in the number of mobile users and employees’ expanding use of multiple devices.

   -- 56 percent of enterprises changed their corporate guidelines within the past year to be more accommodating of employees’ personal devices.

   -- 81 percent of companies state they now accommodate personal devices in the office.

  -- 54 percent of companies have formalized bring your own device (BYOD) policies. North American companies are more likely than European companies to have formulated policies regarding BYOD. However, more organizations allow BYOD than have policies for it.

 

-- At the same time, BYOD is creating new challenges for IT. The top two sources of frustration (out of nine common IT issues) relate to onboarding and supporting personal devices. The fact that onboarding and supporting personal devices beat out even security concerns suggests the significance of the burden IT feels from BYOD.

 

-- In line with the overall BYOD trend, IT is increasingly losing control of mobility budgets and departments are assuming greater responsibility. The number of enterprises in which IT manages the mobility budget has dropped from 53 to 48 percent, while it is now managed by business units in 22 percent of companies, and by finance in 18 percent of firms.

 

-- 57 percent believe their mobile data costs will increase in the next year, with 8 percent saying they’ll rise more than 25 percent. Smartphones and 3G data plans were singled out as the main reasons for rising data costs. 44 percent of IT managers said broader smartphone usage was a factor, 41 percent suggested 3G (and 4G) data usage and 22 percent pointed to an increase in the number of mobile employees.

 

-- In 2012, Apple’s iPhone passed Research in Motion’s (RIM’s) BlackBerry to become the most popular smartphone in terms of corporate IT support. BlackBerry is still entrenched in the enterprise but it seems that it is being phased out.

 

-- Tablet adoption is growing increasingly mainstream within the enterprise. Between 2011 and 2012, tablet usage increased in all nonexecutive departments, especially legal, HR/ administration and finance/accounting. The iPad is the top choice, with support from 73 percent of companies.

- 55 percent of the companies surveyed reported some form of security issue over the past year, mostly in conjunction with lost or stolen phones.


-- More than half (55 percent) of IT managers are using Wi-Fi connectivity apps for work purposes. Wi Fi apps were the most widely used out of 10 different types of enterprise mobility apps.

More information on customer service, support and teh mobile enterprise can be found at www.CRMindustry.com

Half of New Retail Customer Identities Will Be Based on Social Network Identities by 2015

By the end of 2015, 50 percent of new retail customer identities will be based on social network identities, up from less than 5 percent today, according to Gartner,Inc. Along with federation technologies and mobile computing, social identity adoption will have a major impact on the practice of identity and access management (IAM) in 2013 and beyond.

Organizations also benefit from the use of social identities for authentication. It reduces the number of abandoned registrations and logins, and makes it easier for customers to browse and buy. Therefore, it also helps organizations attract and retain customers.

However, the lack of identity proofing and weak authentication for social network identities can expose merchants to more fraud. Service providers therefore have to defend themselves. They may allow social network registration, but augment the process with additional controls when a retail site provides access to sensitive data and monetary transactions. Alternatively, merchants may accept the increased risk without additional controls because of the potential increase in the number of customers and the volume of purchases; this approach "passes the buck" to payment card companies — but they already have robust fraud detection and management tools and processes in place. 

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

Global Survey Reveals That 83% of Consumers State a Need for Some Form of Support During Their Online Shopping Journey

LivePerson, Inc., a provider of intelligent engagement solutions, announced the release of the Connecting with Customers Report—a comprehensive global study examining the trends in online attitudes and behaviors of consumers in six different countries. The report revealed that 83% of consumers state that they need some form of support during their online journey, and 59% of consumers would like more options in how they connect with brands.

The report highlights key trends in online spending and online customer experience expectations. According to this study, 40% of consumers are now spending as much online as they do in store. Furthermore, 71% of online consumers expect to be able to access help when purchasing online within five minutes and 51% will give up immediately or after just one attempt to seek help before an online purchase is abandoned. In addition, the research underlying the report indicates that 93% see real-time help as beneficial when shopping online and 31% will take their business elsewhere unless help is accessible immediately.

Key findings from the Connecting with Customers Report include:

-- Speed of abandonment: 71% of visitors expect to be able to access help within five minutes when purchasing online, while 31% expect this help to be immediate. If this support wasn't forthcoming within their expected time frame, 48% state they would go elsewhere or abandon the purchase altogether – with the highest abandonment speed in the UK (58%) and lowest in Italy (39%).  

-- Online customer service expectations: Globally 83% of online users indicate that they need some form of support during their online journey, and 59% of global users would like to have more choice in how they contact online brands, expressing interest in real-time channels such as live chat (57%), click-to-call (34%), and live video chat (7%).  When asked what makes a great customer service experience, the top three factors identified by consumers were getting an issue resolved quickly (82%), getting an issue resolved in a single interaction (56%) and dealing with a friendly customer service representative (45%).

-- Real-time differentiator: 93% of consumers see real-time help as being beneficial during their online customer journey, whether it's before, during or after their purchase process. 51% stated that they were more likely to purchase from a website if they could get answers via live chat, with particular demand for this channel in Italy (60%), the US (56%) and Australia (52%).   Globally, 48% of consumers indicated that they are more likely to return to a website if live help is available.

More information on service, support and CRM can be found at www.CRMindustry.com