Posted by Mark Brousseau
High performing information technology (IT) departments at large companies have hit the ground running following the recent economic downturn, recalibrating their efforts to drive more business value from IT, and leaving their less adroit counterparts playing catch-up, according to new research from Accenture.
While many companies slipped into stagnation mode during the downturn, cutting budgets and focusing primarily on maintenance, high-performing organizations viewed IT as a growth engine for their business and the economic conditions as an opportunity to build capability.
Accenture defines high performers in IT as those that achieve excellence in IT execution, IT agility and IT innovation together, balancing the constant and sometimes opposing demands placed on today’s IT function.
High performers in IT not only manage IT like a business, but run IT for the business and with the business. CIOs at these organizations are engaged in their company’s business strategies and are able to truly map out how IT supports those strategies.
“Our survey found that chief information officers (CIOs) of high performance IT organizations are deeply involved in business outcomes and closely attuned to business needs – current and future – across the enterprise,” said Gary Curtis, Accenture’s chief technology strategist. “They are successfully retiring their legacy systems and embracing newer technologies. They are adept at managing the balance between optimizing costs and ensuring that they have the budget, skills, and resources to help fuel business growth.”
The research also found that high performers don’t just do a few things well; they excel across the board when compared to lower performing IT departments. Some examples:
... They have web-enabled 42 percent more of their customer interactions and 93 percent more of their suppliers’ interactions ;
... They are 44 percent more likely to recognize the strategic role IT plays in increasing customer satisfaction;
... They are eight times more likely to measure the benefits realized from IT initiatives;
... They spend 29 percent more annually on developing and implementing new applications rather than on maintaining existing ones; and
... They are twice as likely to view workforce performance as a priority by addressing challenges such as an aging workforce and collaboration, as well as developing technical and soft skills (business knowledge, relationship management)
“High performing IT departments are powerful drivers of value for their organizations – not simply keeping the lights on, but promoting technology initiatives that power innovation and enable the IT organization to function as a business,” said Curtis.
What do you think?
Showing posts with label IT spending. Show all posts
Showing posts with label IT spending. Show all posts
Monday, December 6, 2010
Cloud computing grows up
By R. Edwin Pearce
The next year will be big for cloud computing, with the technology transitioning from “early adopter status” into a mainstream platform for IT. That’s according to IDC, a leading research and advisory firm, which ranked the maturation of cloud computing among its top IT predictions for 2011.
IDC predicts that spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organizations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. midsize firms by year’s end.
“[Cloud computing] can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are rapidly becoming the market itself and must be addressed accordingly,” warns Frank Gens, senior vice president and chief analyst at Framingham, MA-based IDC.
Gens is exactly right. Organizations of all sizes are taking a hard look at cloud-based solutions as a way to avoid the hefty capital investments and ongoing maintenance and upgrade costs associated with traditional on-premise solutions, and to ensure their IT infrastructure remains up-to-date.
In addition to changing the way organizations access business applications, the growth of cloud computing also will bring mobile banking and payments one step closer to reality, IDC predicts. But this also is true of mobile applications in other industries, most notably healthcare and insurance.
What do you think?
R. Edwin Pearce is executive vice president of sales and corporate development at eGistics, Inc. (www.egisticsinc.com), a leading provider of hosted solutions for payments and document automation. He can be reached at 214-256-4607 or via e-mail at epearce@egisticsinc.com.
The next year will be big for cloud computing, with the technology transitioning from “early adopter status” into a mainstream platform for IT. That’s according to IDC, a leading research and advisory firm, which ranked the maturation of cloud computing among its top IT predictions for 2011.
IDC predicts that spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30 percent from 2010, as organizations move a wider range of business applications into the cloud. Small and medium-sized business cloud use will surge in 2011, with adoption of some cloud resources topping 33 percent among U.S. midsize firms by year’s end.
“[Cloud computing] can no longer be invested in, or managed, as sandbox efforts around the edges of the market. Instead, they are rapidly becoming the market itself and must be addressed accordingly,” warns Frank Gens, senior vice president and chief analyst at Framingham, MA-based IDC.
Gens is exactly right. Organizations of all sizes are taking a hard look at cloud-based solutions as a way to avoid the hefty capital investments and ongoing maintenance and upgrade costs associated with traditional on-premise solutions, and to ensure their IT infrastructure remains up-to-date.
In addition to changing the way organizations access business applications, the growth of cloud computing also will bring mobile banking and payments one step closer to reality, IDC predicts. But this also is true of mobile applications in other industries, most notably healthcare and insurance.
What do you think?
R. Edwin Pearce is executive vice president of sales and corporate development at eGistics, Inc. (www.egisticsinc.com), a leading provider of hosted solutions for payments and document automation. He can be reached at 214-256-4607 or via e-mail at epearce@egisticsinc.com.
Tuesday, April 6, 2010
Shifting CEO Priorities
Posted by Mark Brousseau
There has been a major shift in CEO priorities from early in 2009 with top priorities switching from cutting costs to retaining customers and enhancing existing relationships, according to Gartner, Inc. Through 2015, a recession-era mentality among CEOs will ensure a policy of paying for future investments from the cost savings obtained from existing IT operations.
“From the CEO’s perspective, growing confidence that is tempered by business caution will result in an aggressiveness to harvest the successes of the past through improved productivity,” said Jorge Lopez, vice president and distinguished analyst at Gartner. “At the same time, CEOs are taking those returns and investing them in building a future that can deliver high returns.
“CEOs are maintaining tight cost control to deliver better margins and more cash to cope with the continuing economic turbulence,” said Mark Raskino, vice president and Gartner fellow.
Gartner has identified five key issues that CEOs should be focusing on in 2010 and beyond as well as related advice for CIOs:
CEO Issue No. 1: Getting to the End of Restructuring
CEOs are in the midst of finishing off the work they started in 2009: streamlining their business operations, dumping nonperforming or nonstrategic assets, and working to ensure that they don't let their "break-even" point start to rise and thereby increase their exposure to another economic shock. While many CEOs have continued to invest in initiatives that will improve their cost structure or allow them to drive revenue as the economy recovers, they are "financing" this by taking a very hard look at not only their internal cost structures, but also the cost structures of the partners in their ecosystems.
In this environment, CIOs are advised not to expect an increase in budgets in 2010 but rather to expect to “finance” future IT projects from the cost savings obtained in other parts of operations.
CEO Issue No. 2: Integrity, Corruption and Fraud — Rebuilding Trust
The imperative for rebuilding trust is as much to regain the confidence of customers, which will allow economic growth, as it is to regain governmental trust, which translates into electoral decisions. Companies are still in the early stages of that rebuilding of trust, and while Gartner is optimistic that this can be "repaired" for many companies in 2010 and 2011, the general distrust of economic conditions seems to be slowing down the return of the consumer — a difficult factor in the U.S., for example, where consumer spending comprises as much as 75 percent of all spending.
Accordingly, CIOs should expect to see increased interest in capabilities and technologies that help provide transparency to internal operations of the sort that increases trust. More openness will surround the financial structure of the organization, and expenses will be examined to high levels of detail. Business intelligence will see strong interest in this time frame.
CEO Issue No. 3: Planning for a Return to Growth — Playing Defense, While Playing Offense
This year is about CEOs taking a firm stand on plans for increasing shareholder value. This may be through acquisitions that are less expensive in a time of lower equity pricing or lower capital costs. It may also be about investing in initiatives that achieve a strategic goal.
CIOs need to understand that organizations are of two minds. They are investing in the innovations that will build the future, while guarding against the possibility of another economic recession or crisis in the next 36 months. For CEOs, this is one of the most difficult maneuvers to execute in business, as it must accommodate impulses that are sometimes contradictory. To this end, CIOs must ensure that they are able to segment the activities of the organization so that each part of the team can focus on what is most important: One team takes care of cost optimization activities, while another is focused on the future.
CEO Issue No. 4: Government Is the New Partner at the Table
In many advanced economies, during the past 30 years, state control and intervention in industries have been gradually rolling back. However, the tumultuous economic effects of the banking crises of 2007 and 2008 have driven swift and large-scale government interventions to bail out and save companies, and more market interventionist and state control styles of government may arise from this situation.
The resulting new regulations will require compliance by any new systems. Several areas will see new regulatory actions in the coming 24 months, including the financial services, automotive and transportation sectors. CIOs need to keep scanning the landscape of regulatory actions in federal, state and local governments, as the pace is expected to pick up in 2011.
CEO Issue No. 5: The Future of Recession-Driven Changes
One of the key issues in the boardroom is to understand the future of the changes forced by this recession. Will the growth in all industries return to the levels that were enjoyed before the downturn? Will the drive to improve process efficiencies be long-lasting, or will there be a marked return to a top-line focus in the business?
Gartner believes that IT has a significant role to play here because it needs to deliver insights for the business to enable it to effectively navigate the changes ahead. That means IT must make investments in understanding customer intent, predicting the impact of business conditions and connecting strategy to outcomes.
“These long-lasting changes place quite an additional load on IT. The long-term focus on efficiencies to reduce exposure to another financial crisis will continue to force IT to make the business of the past more productive, while IT must invest in the future at a rate that does not grow IT costs faster than the business,” said Lopez.
“CIOs should build an IT culture of intolerance toward inefficiency and impatience for the gains from newer lighter-weight technologies such as social networking, virtualization and mobile device apps,” Raskino said.
What do you think?
There has been a major shift in CEO priorities from early in 2009 with top priorities switching from cutting costs to retaining customers and enhancing existing relationships, according to Gartner, Inc. Through 2015, a recession-era mentality among CEOs will ensure a policy of paying for future investments from the cost savings obtained from existing IT operations.
“From the CEO’s perspective, growing confidence that is tempered by business caution will result in an aggressiveness to harvest the successes of the past through improved productivity,” said Jorge Lopez, vice president and distinguished analyst at Gartner. “At the same time, CEOs are taking those returns and investing them in building a future that can deliver high returns.
“CEOs are maintaining tight cost control to deliver better margins and more cash to cope with the continuing economic turbulence,” said Mark Raskino, vice president and Gartner fellow.
Gartner has identified five key issues that CEOs should be focusing on in 2010 and beyond as well as related advice for CIOs:
CEO Issue No. 1: Getting to the End of Restructuring
CEOs are in the midst of finishing off the work they started in 2009: streamlining their business operations, dumping nonperforming or nonstrategic assets, and working to ensure that they don't let their "break-even" point start to rise and thereby increase their exposure to another economic shock. While many CEOs have continued to invest in initiatives that will improve their cost structure or allow them to drive revenue as the economy recovers, they are "financing" this by taking a very hard look at not only their internal cost structures, but also the cost structures of the partners in their ecosystems.
In this environment, CIOs are advised not to expect an increase in budgets in 2010 but rather to expect to “finance” future IT projects from the cost savings obtained in other parts of operations.
CEO Issue No. 2: Integrity, Corruption and Fraud — Rebuilding Trust
The imperative for rebuilding trust is as much to regain the confidence of customers, which will allow economic growth, as it is to regain governmental trust, which translates into electoral decisions. Companies are still in the early stages of that rebuilding of trust, and while Gartner is optimistic that this can be "repaired" for many companies in 2010 and 2011, the general distrust of economic conditions seems to be slowing down the return of the consumer — a difficult factor in the U.S., for example, where consumer spending comprises as much as 75 percent of all spending.
Accordingly, CIOs should expect to see increased interest in capabilities and technologies that help provide transparency to internal operations of the sort that increases trust. More openness will surround the financial structure of the organization, and expenses will be examined to high levels of detail. Business intelligence will see strong interest in this time frame.
CEO Issue No. 3: Planning for a Return to Growth — Playing Defense, While Playing Offense
This year is about CEOs taking a firm stand on plans for increasing shareholder value. This may be through acquisitions that are less expensive in a time of lower equity pricing or lower capital costs. It may also be about investing in initiatives that achieve a strategic goal.
CIOs need to understand that organizations are of two minds. They are investing in the innovations that will build the future, while guarding against the possibility of another economic recession or crisis in the next 36 months. For CEOs, this is one of the most difficult maneuvers to execute in business, as it must accommodate impulses that are sometimes contradictory. To this end, CIOs must ensure that they are able to segment the activities of the organization so that each part of the team can focus on what is most important: One team takes care of cost optimization activities, while another is focused on the future.
CEO Issue No. 4: Government Is the New Partner at the Table
In many advanced economies, during the past 30 years, state control and intervention in industries have been gradually rolling back. However, the tumultuous economic effects of the banking crises of 2007 and 2008 have driven swift and large-scale government interventions to bail out and save companies, and more market interventionist and state control styles of government may arise from this situation.
The resulting new regulations will require compliance by any new systems. Several areas will see new regulatory actions in the coming 24 months, including the financial services, automotive and transportation sectors. CIOs need to keep scanning the landscape of regulatory actions in federal, state and local governments, as the pace is expected to pick up in 2011.
CEO Issue No. 5: The Future of Recession-Driven Changes
One of the key issues in the boardroom is to understand the future of the changes forced by this recession. Will the growth in all industries return to the levels that were enjoyed before the downturn? Will the drive to improve process efficiencies be long-lasting, or will there be a marked return to a top-line focus in the business?
Gartner believes that IT has a significant role to play here because it needs to deliver insights for the business to enable it to effectively navigate the changes ahead. That means IT must make investments in understanding customer intent, predicting the impact of business conditions and connecting strategy to outcomes.
“These long-lasting changes place quite an additional load on IT. The long-term focus on efficiencies to reduce exposure to another financial crisis will continue to force IT to make the business of the past more productive, while IT must invest in the future at a rate that does not grow IT costs faster than the business,” said Lopez.
“CIOs should build an IT culture of intolerance toward inefficiency and impatience for the gains from newer lighter-weight technologies such as social networking, virtualization and mobile device apps,” Raskino said.
What do you think?
Saturday, January 2, 2010
5 IT Spending Tips
Posted by Mark Brousseau
With the new (budget) year upon us, Siamak Farah, CEO of InfoStreet (www.infostreet.com), offers his top 5 tips for getting a jump on IT spending for 2010:
1. The OS Is Irrelevant!
As the battle of operating systems (OS) wages on between Apple and Microsoft, many businesses feel caught in the middle, unclear of which system to choose. Once a side has been chosen, there is still the ever-present (and recurring) dilemma over which version to choose – not to mention the potential nightmare of migration! (e.g., Should we migrate from XP to Windows 7; What pitfalls, if any, might we encounter?, etc...). Consider, instead, going OS neutral. With the growing popularity of Web-delivered software (also referred to as Software as a Service – or SaaS), companies can relieve themselves of a tremendous headache by relying on experts who deliver always-up-to-date applications via a simple Web browser. This path allows employers to avoid worries over software updates, PLUS, you have the added benefit of being able to “take your desktop with you” (as you can login to your desktop from any computer in the world with a browser and Web access).
2. Ditch the Servers
Perhaps the most significant line item of any IT budget is the costs of hardware (servers); And the hidden cost associated with this occurs when the IT department is pressured to estimate the right size. Assuming a large growth path, many servers must be ordered in advanced to be ready to support the growth. Should downsizing be in the cards, then one needs to plan on decommissioning servers which are hard to dispose of, as they often are worth a fraction of their purchase price. SaaS takes the guesswork out of your budget. In the same fashion that one does not think about the cell phone infrastructure and just orders or decommissions cell phones based on the number of employees, IT managers, can always have the right amount of server power and be poised for growth with SaaS providers.
3. Give Your Employees a (Virtual) Key to the Office
The average American now works longer hours than even our overseas counterparts. If your company makes use of next-generation SaaS tools, your employees can have ANYTIME/ANYWHERE access to their desktop, allowing them to work remotely and during off-hours if that is what is necessary to get the job done. We’ve found that by making remote access to ALL aspects of the work environment easy for our employees, they have become infinitely more efficient – many log-in to check for urgent issues before starting their morning commute and check-in again in the evening – from home. This type of employee dedication can help propel a company from being just a player in their industry to being THE PLAYER.
4. To Thy Own Client Be True
Okay, perhaps that isn’t how the saying actually goes however the sentiment is valid. In this day of aggressive competition, it’s important to use every tool and advantage you can afford to keep in touch with your clients (and have a reliable means for including personal details and generating automated follow-up reminders). CRM (customer relationship management) software is not new, however the leaders in this industry charge more than a pretty penny for their tools. Consider one of the “optimally-sized” versions (such as StreetSmart's Web-based CRM) that can be literally a fraction the cost and which offer the core functionality you need. Don’t be left without such a valuable tool just because you’ve heard CRM software can be too price prohibitive.
5. Automate Your Protection
Every industry has its own set of compliance rules and best business practices. However, many companies overlook one of the most basic – yet most crucial – practices: email archiving. This simple step can offer tremendous piece of mind and protection. Investigate automatic email archiving software which has the potential to serve as the most affordable business insurance you have ever had. Such software works invisibly in the background to back-up ALL employee email, protecting your company from accidental or intentional email deletion.
What do you think?
With the new (budget) year upon us, Siamak Farah, CEO of InfoStreet (www.infostreet.com), offers his top 5 tips for getting a jump on IT spending for 2010:
1. The OS Is Irrelevant!
As the battle of operating systems (OS) wages on between Apple and Microsoft, many businesses feel caught in the middle, unclear of which system to choose. Once a side has been chosen, there is still the ever-present (and recurring) dilemma over which version to choose – not to mention the potential nightmare of migration! (e.g., Should we migrate from XP to Windows 7; What pitfalls, if any, might we encounter?, etc...). Consider, instead, going OS neutral. With the growing popularity of Web-delivered software (also referred to as Software as a Service – or SaaS), companies can relieve themselves of a tremendous headache by relying on experts who deliver always-up-to-date applications via a simple Web browser. This path allows employers to avoid worries over software updates, PLUS, you have the added benefit of being able to “take your desktop with you” (as you can login to your desktop from any computer in the world with a browser and Web access).
2. Ditch the Servers
Perhaps the most significant line item of any IT budget is the costs of hardware (servers); And the hidden cost associated with this occurs when the IT department is pressured to estimate the right size. Assuming a large growth path, many servers must be ordered in advanced to be ready to support the growth. Should downsizing be in the cards, then one needs to plan on decommissioning servers which are hard to dispose of, as they often are worth a fraction of their purchase price. SaaS takes the guesswork out of your budget. In the same fashion that one does not think about the cell phone infrastructure and just orders or decommissions cell phones based on the number of employees, IT managers, can always have the right amount of server power and be poised for growth with SaaS providers.
3. Give Your Employees a (Virtual) Key to the Office
The average American now works longer hours than even our overseas counterparts. If your company makes use of next-generation SaaS tools, your employees can have ANYTIME/ANYWHERE access to their desktop, allowing them to work remotely and during off-hours if that is what is necessary to get the job done. We’ve found that by making remote access to ALL aspects of the work environment easy for our employees, they have become infinitely more efficient – many log-in to check for urgent issues before starting their morning commute and check-in again in the evening – from home. This type of employee dedication can help propel a company from being just a player in their industry to being THE PLAYER.
4. To Thy Own Client Be True
Okay, perhaps that isn’t how the saying actually goes however the sentiment is valid. In this day of aggressive competition, it’s important to use every tool and advantage you can afford to keep in touch with your clients (and have a reliable means for including personal details and generating automated follow-up reminders). CRM (customer relationship management) software is not new, however the leaders in this industry charge more than a pretty penny for their tools. Consider one of the “optimally-sized” versions (such as StreetSmart's Web-based CRM) that can be literally a fraction the cost and which offer the core functionality you need. Don’t be left without such a valuable tool just because you’ve heard CRM software can be too price prohibitive.
5. Automate Your Protection
Every industry has its own set of compliance rules and best business practices. However, many companies overlook one of the most basic – yet most crucial – practices: email archiving. This simple step can offer tremendous piece of mind and protection. Investigate automatic email archiving software which has the potential to serve as the most affordable business insurance you have ever had. Such software works invisibly in the background to back-up ALL employee email, protecting your company from accidental or intentional email deletion.
What do you think?
Tuesday, November 24, 2009
2010 IT Spending: A Mixed Bag
Posted by Mark Brousseau
Responding to a still sluggish economy, IT executives in North America and Europe are taking a variety of measures to get more value for the money spent on IT services, according to the latest Enterprise IT Services Survey by Forrester Research, Inc. According to the survey results, IT contractors and consultants will see the deepest decreases in spending, while systems integration and outsourcing services will have the most increases.
Unlike during the last recession from 2001 to 2002, when outsourcing and offshoring experienced growth from firms seeking to reduce internal IT costs, the picture for IT services is much more mixed in terms of spending plans. When asked about changes they expect to see in their organization's total spending on IT services, 30 percent of executives surveyed said they plan to increase spending on systems integration and project work, 26 percent plan increases in applications outsourcing, and 25 percent expect to increase spending on infrastructure outsourcing. However, 41 percent of executives expect to reduce spending on contractors, and 34 percent foresee lower spending on IT consulting.
"As the global economic downturn puts pressure on IT services spending, firms are taking a range of actions to deal with the cuts," said John McCarthy, vice president and principal analyst at Forrester. "The pressure to reduce IT spending is going to continue well into 2010. The data shows no quick turnaround — it's going to be a tough year for services firms as clients increasingly ask them to justify the ROI for IT projects and provide more value for a lower price."
Other key highlights of the survey include:
... Infrastructure outsourcing priorities. When asked what infrastructure services their firm is currently outsourcing or plans to outsource to a third-party company in the next 12 months, survey respondents placed convergent telecommunication/network management services and data center management services at the top of the list.
... Application outsourcing priorities. Managed hosting services lead the list of application outsourcing priorities, with 44 percent of respondents currently outsourcing and six percent planning to use managed hosting services in the next 12 months. In addition, the outsourcing of packaged applications maintenance and support services increased from 27 percent in 2008 to 38 percent in 2009, and another seven percent of respondents are planning to do so in the next 12 months.
... Systems integration priorities. Integration work installing or upgrading packaged applications remains a top activity, with 42 percent of respondents saying they already have a project under way or will hire a consultant for this in the next 12 months. Custom application design and development follows, with 38 percent of firms doing a project or hiring a consultant to do so in the next 12 months.
... IT consulting priorities. Forty-three percent of respondents have a security assessment project either already under way or one that will commence in the next year. Infrastructure virtualization and automation programs follow, with 32 percent of respondents hiring a consultant in the next 12 months or already having a project under way.
What do you think?
Responding to a still sluggish economy, IT executives in North America and Europe are taking a variety of measures to get more value for the money spent on IT services, according to the latest Enterprise IT Services Survey by Forrester Research, Inc. According to the survey results, IT contractors and consultants will see the deepest decreases in spending, while systems integration and outsourcing services will have the most increases.
Unlike during the last recession from 2001 to 2002, when outsourcing and offshoring experienced growth from firms seeking to reduce internal IT costs, the picture for IT services is much more mixed in terms of spending plans. When asked about changes they expect to see in their organization's total spending on IT services, 30 percent of executives surveyed said they plan to increase spending on systems integration and project work, 26 percent plan increases in applications outsourcing, and 25 percent expect to increase spending on infrastructure outsourcing. However, 41 percent of executives expect to reduce spending on contractors, and 34 percent foresee lower spending on IT consulting.
"As the global economic downturn puts pressure on IT services spending, firms are taking a range of actions to deal with the cuts," said John McCarthy, vice president and principal analyst at Forrester. "The pressure to reduce IT spending is going to continue well into 2010. The data shows no quick turnaround — it's going to be a tough year for services firms as clients increasingly ask them to justify the ROI for IT projects and provide more value for a lower price."
Other key highlights of the survey include:
... Infrastructure outsourcing priorities. When asked what infrastructure services their firm is currently outsourcing or plans to outsource to a third-party company in the next 12 months, survey respondents placed convergent telecommunication/network management services and data center management services at the top of the list.
... Application outsourcing priorities. Managed hosting services lead the list of application outsourcing priorities, with 44 percent of respondents currently outsourcing and six percent planning to use managed hosting services in the next 12 months. In addition, the outsourcing of packaged applications maintenance and support services increased from 27 percent in 2008 to 38 percent in 2009, and another seven percent of respondents are planning to do so in the next 12 months.
... Systems integration priorities. Integration work installing or upgrading packaged applications remains a top activity, with 42 percent of respondents saying they already have a project under way or will hire a consultant for this in the next 12 months. Custom application design and development follows, with 38 percent of firms doing a project or hiring a consultant to do so in the next 12 months.
... IT consulting priorities. Forty-three percent of respondents have a security assessment project either already under way or one that will commence in the next year. Infrastructure virtualization and automation programs follow, with 32 percent of respondents hiring a consultant in the next 12 months or already having a project under way.
What do you think?
Monday, May 18, 2009
Economy is Delaying -- Not Cancelling -- IT Projects
Posted by Mark Brousseau
The financial crisis has had a significant impact on the client computing industry in 2009, as witnessed in a survey by Gartner, Inc. that showed far more PC projects are postponed or scaled back this year rather than cancelled outright because of tighter IT budgets. Only 12 percent of those surveyed indicated they have outright cancelled a planned project since October 2008. The survey was conducted from late February through early March of 2009.
"Enterprise belt-tightening has had a tremendous impact on the client computing technology segment with 43 percent of respondents expecting a decrease in spending on client computing hardware in 2009 compared with 2008," said Andrew Johnson, managing vice president at Gartner.
Gartner forecasts overall IT spending to decline 3.7 percent in 2009. Spending on IT hardware, including client computing (PCs), servers, storage and printing systems will bear the brunt of budget cuts with spending expected to decline 14.9 percent. Gartner forecasts overall IT spending to rebound with 2.4 percent growth in 2010, although IT hardware spending will continue to lag next year, growing just 0.8 percent.
Despite the bleak outlook, Johnson said that there are some brighter spots for the segment with certain applications getting increased spending and some countries and industries reporting more-optimistic plans. He said that more client computing projects will be postponed or reduced in 2009 than will be eliminated, and technology and service providers should ensure that they are ready for the recovery, when and where it happens.
The survey pinpointed some important differences in how companies in different countries are maintaining, delaying, reducing or canceling many ongoing client computing projects. Although 48 percent of all respondents indicated some of their PC projects would be deployed as planned in 2009, respondents in China (85 percent) and India (64 percent) were more optimistic and expected most of their projects to be deployed as planned. In contrast, only 29 percent of U.S. and 18 percent of French companies planned to continue their client computing projects as originally planned.
Significant vertical market variations were also revealed by the survey which found that the industries most on track with their client computing plans were insurance, media and consumer business services. Companies involved with telecommunications, wholesale, and agriculture, mining and construction are most likely to be planning to reduce spending. Postponements are more likely in retail, utilities and wholesale companies, and project cancellations were above average in discrete manufacturing. Only one out of 45 respondents in the financial services industry indicated PC purchase plans were cancelled, and in this sector, reduced, postponed, and as-planned responses came in near the averages.
What's happening at your organization? Post your comments below.
The financial crisis has had a significant impact on the client computing industry in 2009, as witnessed in a survey by Gartner, Inc. that showed far more PC projects are postponed or scaled back this year rather than cancelled outright because of tighter IT budgets. Only 12 percent of those surveyed indicated they have outright cancelled a planned project since October 2008. The survey was conducted from late February through early March of 2009.
"Enterprise belt-tightening has had a tremendous impact on the client computing technology segment with 43 percent of respondents expecting a decrease in spending on client computing hardware in 2009 compared with 2008," said Andrew Johnson, managing vice president at Gartner.
Gartner forecasts overall IT spending to decline 3.7 percent in 2009. Spending on IT hardware, including client computing (PCs), servers, storage and printing systems will bear the brunt of budget cuts with spending expected to decline 14.9 percent. Gartner forecasts overall IT spending to rebound with 2.4 percent growth in 2010, although IT hardware spending will continue to lag next year, growing just 0.8 percent.
Despite the bleak outlook, Johnson said that there are some brighter spots for the segment with certain applications getting increased spending and some countries and industries reporting more-optimistic plans. He said that more client computing projects will be postponed or reduced in 2009 than will be eliminated, and technology and service providers should ensure that they are ready for the recovery, when and where it happens.
The survey pinpointed some important differences in how companies in different countries are maintaining, delaying, reducing or canceling many ongoing client computing projects. Although 48 percent of all respondents indicated some of their PC projects would be deployed as planned in 2009, respondents in China (85 percent) and India (64 percent) were more optimistic and expected most of their projects to be deployed as planned. In contrast, only 29 percent of U.S. and 18 percent of French companies planned to continue their client computing projects as originally planned.
Significant vertical market variations were also revealed by the survey which found that the industries most on track with their client computing plans were insurance, media and consumer business services. Companies involved with telecommunications, wholesale, and agriculture, mining and construction are most likely to be planning to reduce spending. Postponements are more likely in retail, utilities and wholesale companies, and project cancellations were above average in discrete manufacturing. Only one out of 45 respondents in the financial services industry indicated PC purchase plans were cancelled, and in this sector, reduced, postponed, and as-planned responses came in near the averages.
What's happening at your organization? Post your comments below.
Wednesday, May 13, 2009
Confusion Over ARRA Funding
Posted by Mark Brousseau
A Dell survey of 662 public-sector IT professionals indicates a need for clearer, more customized information related to the flow and impact of American Recovery and Re-Investment Act (ARRA) funds. The survey results also suggest mounting IT challenges among public-sector healthcare and government organizations. Among the findings of the survey:
... 79% of public-sector IT professionals indicated they don’t have enough visibility or are only somewhat aware of the impact and flow of ARRA funds on their organizations.
... 78% said ARRA-related information is non-existent, too generic or not understandable and that tailored tools are needed to better navigate the recovery package.
... Higher education IT professionals rank resources as largest IT-related impediment to modernizing America’s educational institutions.
... Federal, state and local government IT professionals said a lack of standards, budgets and resources for IT deployment and management each has a “high impact” on infrastructure modernization.
... Healthcare IT professionals indicated that budgets, interoperability and disparate networks are the “largest IT impediments” to modernizing America’s healthcare system.
Frank Muehleman, vice president and general manager, Dell North America Public Business Group, noted that Dell sees three consistent themes from customers who want to use the ARRA to invest in IT: they want cost and energy efficiency, they demand transparency, and they are focused on IT that is simple to deploy and manage.
What do you think? Post your comments below.
A Dell survey of 662 public-sector IT professionals indicates a need for clearer, more customized information related to the flow and impact of American Recovery and Re-Investment Act (ARRA) funds. The survey results also suggest mounting IT challenges among public-sector healthcare and government organizations. Among the findings of the survey:
... 79% of public-sector IT professionals indicated they don’t have enough visibility or are only somewhat aware of the impact and flow of ARRA funds on their organizations.
... 78% said ARRA-related information is non-existent, too generic or not understandable and that tailored tools are needed to better navigate the recovery package.
... Higher education IT professionals rank resources as largest IT-related impediment to modernizing America’s educational institutions.
... Federal, state and local government IT professionals said a lack of standards, budgets and resources for IT deployment and management each has a “high impact” on infrastructure modernization.
... Healthcare IT professionals indicated that budgets, interoperability and disparate networks are the “largest IT impediments” to modernizing America’s healthcare system.
Frank Muehleman, vice president and general manager, Dell North America Public Business Group, noted that Dell sees three consistent themes from customers who want to use the ARRA to invest in IT: they want cost and energy efficiency, they demand transparency, and they are focused on IT that is simple to deploy and manage.
What do you think? Post your comments below.
Thursday, April 9, 2009
Falling Tech Demand
Posted by Mark Brousseau
Business outlays for IT equipment and software have slid as a share of the U.S. economy, according to statistics from the Bureau of Economic Analysis. U.S. companies' tech spending as a share of the gross domestic product (GDP) is now below that of the 2001-02 tech bust, the bureau says. The good news: the 75 technology companies in the S&P 500 held $138 billion in cash at the end of 2008, a drop of less than 2 percent from the fourth quarter of 2007, according to Capital IQ, BusinessWeek.
Business outlays for IT equipment and software have slid as a share of the U.S. economy, according to statistics from the Bureau of Economic Analysis. U.S. companies' tech spending as a share of the gross domestic product (GDP) is now below that of the 2001-02 tech bust, the bureau says. The good news: the 75 technology companies in the S&P 500 held $138 billion in cash at the end of 2008, a drop of less than 2 percent from the fourth quarter of 2007, according to Capital IQ, BusinessWeek.
Wednesday, April 1, 2009
Recovery in Sight for IT Spending?
Posted by Mark Brousseau
The U.S. recession keeps getting worse than Forrester and many economists had expected.
Instead of the 2 percent to 3 percent drop in real gross domestic product (GDP) that the United States experienced in the 1990s and 2001 to 2002 recessions, U.S. real GDP fell by more than 6 percent in the fourth quarter of 2008, and will fall by a similar amount in the first quarter of 2009, with more (although lesser) declines until the end of 2009, Forrester predicts.
The steep drop in economic growth in the fourth quarter both caused and reflected a similar fall in technology purchases, Forrester said. As a result, the research firm now expects U.S. business and government purchases of IT goods and services to decrease by 3.1 percent in 2009, compared with the 1.6 percent increase it had previously projected for the year.
Computer equipment purchases will continue to bear the brunt of cutbacks in technology investment, Forrester says, but purchases of network equipment, software licenses, and IT consulting services will also drop.
As the US economy starts to recover in late 2009, Forrester believes IT purchases will revive strongly, with strong growth projected for 2010.
What do you think? Post your comments below.
The U.S. recession keeps getting worse than Forrester and many economists had expected.
Instead of the 2 percent to 3 percent drop in real gross domestic product (GDP) that the United States experienced in the 1990s and 2001 to 2002 recessions, U.S. real GDP fell by more than 6 percent in the fourth quarter of 2008, and will fall by a similar amount in the first quarter of 2009, with more (although lesser) declines until the end of 2009, Forrester predicts.
The steep drop in economic growth in the fourth quarter both caused and reflected a similar fall in technology purchases, Forrester said. As a result, the research firm now expects U.S. business and government purchases of IT goods and services to decrease by 3.1 percent in 2009, compared with the 1.6 percent increase it had previously projected for the year.
Computer equipment purchases will continue to bear the brunt of cutbacks in technology investment, Forrester says, but purchases of network equipment, software licenses, and IT consulting services will also drop.
As the US economy starts to recover in late 2009, Forrester believes IT purchases will revive strongly, with strong growth projected for 2010.
What do you think? Post your comments below.
Wednesday, January 28, 2009
The Economy and Storage
By Mark Brousseau
The economic slowdown will be a reality through 2009, with overall IT spending growth falling from 5.1 percent growth in 2008 to 2.6 percent growth in 2009, according to IDC analysts who participated on a webinar today titled, “Worldwide Storage Top 10 Predictions.” IT spending will begin to slowly recover in 2010, with growth climbing to 4.5 percent, the analysts said, but a full recovery is not likely until 2011.
While the economy’s long-term impact on IT sectors will vary widely, all of them will struggle in the short run, the IDC analysts predicted. The worst hit will be the internal storage, tape, and high-end and mid-range server markets. The markets that will be least effected include security, systems software, and volume servers. IDC warns that some markets may never return to positive growth.
Against this backdrop, IDC believes users will demand greater storage efficiency, including:
… Block virtualization and thin provisioning (“must-haves,” according to IDC)
… Expanded use of data de-duplication
… Tiers for content with file virtualization
… “Greening” of storage
… Modularity/serverization for universal storage
… SAS as the standard interconnect used within external storage systems
Overall, IDC recommends that users “buckle up” as the industry is in the path of an economic hurricane. CIOs and line of business managers understand that money needs to be spent, IDC says, but are slowing purchases and need to do more with less budget. Controlling CAPEX expenditures will be a key requirement for our changing times, IDC says. For this reason, IDC predicts financing and leasing will emerge as a critical sales tool.
Similarly, storage promises to be a relatively stable segment during the economic downturn, but selling more efficient solutions will be critical. Showing quick return on investment is critical for selling solutions, and opens up additional services opportunities, IDC notes.
What do you think? Post your comment below.
The economic slowdown will be a reality through 2009, with overall IT spending growth falling from 5.1 percent growth in 2008 to 2.6 percent growth in 2009, according to IDC analysts who participated on a webinar today titled, “Worldwide Storage Top 10 Predictions.” IT spending will begin to slowly recover in 2010, with growth climbing to 4.5 percent, the analysts said, but a full recovery is not likely until 2011.
While the economy’s long-term impact on IT sectors will vary widely, all of them will struggle in the short run, the IDC analysts predicted. The worst hit will be the internal storage, tape, and high-end and mid-range server markets. The markets that will be least effected include security, systems software, and volume servers. IDC warns that some markets may never return to positive growth.
Against this backdrop, IDC believes users will demand greater storage efficiency, including:
… Block virtualization and thin provisioning (“must-haves,” according to IDC)
… Expanded use of data de-duplication
… Tiers for content with file virtualization
… “Greening” of storage
… Modularity/serverization for universal storage
… SAS as the standard interconnect used within external storage systems
Overall, IDC recommends that users “buckle up” as the industry is in the path of an economic hurricane. CIOs and line of business managers understand that money needs to be spent, IDC says, but are slowing purchases and need to do more with less budget. Controlling CAPEX expenditures will be a key requirement for our changing times, IDC says. For this reason, IDC predicts financing and leasing will emerge as a critical sales tool.
Similarly, storage promises to be a relatively stable segment during the economic downturn, but selling more efficient solutions will be critical. Showing quick return on investment is critical for selling solutions, and opens up additional services opportunities, IDC notes.
What do you think? Post your comment below.
Thursday, December 4, 2008
No Time for Inaction
By Mark Brousseau
While it’s vital to carefully manage investments, it’s an important time not to “hunker down.” That’s a key message that IDC will deliver this morning during a Webinar on the firm’s predictions for 2009. IDC says that while the recession is slowing down the entire market, it is accelerating the transformation of the IT industry.
IDC believes the disruptive vectors of the market will be among the highest-growth sectors in 2009, as their advantages are magnified in a down economy. Suppliers who slow-down their transformation will limit long-term viability and miss near-term growth, IDC predicts.
For instance, growth of cloud computing will slow in 2009, IDC says, but still expand its growth edge over traditional offerings. Additionally, online commerce, while experiencing slower growth, will break the $8 trillion mark, and take more market share from traditional commerce. The number of people online next year will exceed 1.5 billion – about ¼ of the entire population of the planet – IDC predicts.
What do you think? Post your comment below.
While it’s vital to carefully manage investments, it’s an important time not to “hunker down.” That’s a key message that IDC will deliver this morning during a Webinar on the firm’s predictions for 2009. IDC says that while the recession is slowing down the entire market, it is accelerating the transformation of the IT industry.
IDC believes the disruptive vectors of the market will be among the highest-growth sectors in 2009, as their advantages are magnified in a down economy. Suppliers who slow-down their transformation will limit long-term viability and miss near-term growth, IDC predicts.
For instance, growth of cloud computing will slow in 2009, IDC says, but still expand its growth edge over traditional offerings. Additionally, online commerce, while experiencing slower growth, will break the $8 trillion mark, and take more market share from traditional commerce. The number of people online next year will exceed 1.5 billion – about ¼ of the entire population of the planet – IDC predicts.
What do you think? Post your comment below.
Saturday, November 8, 2008
IT Spending Getting Squeezed
Posted by Mark Brousseau
An article in yesterday's Austin American-Statesman says the fourth quarter could be even more disappointing than technology vendors already had expected. Businesses are cutting back spending by putting off equipment purchases and upgrades and laying off workers. Even software, considered a safer bet because it helps companies automate costly steps, is also likely to take a hit, the Statesman noted.
"It's inevitable that all technology companies, with varying degrees, will be running into the same thing," Stephen Minton, an analyst for research firm IDC, told the newspaper. "The reaction of businesses to the economic crisis is to stop spending money."
Technology makes up a big chunk of corporate spending. Of the total amount of money that U.S. businesses spend on fixed investments, which includes offices and factories, about 28 percent goes to computer and communications equipment and software, according to Commerce Department data analyzed by Bartels.
IDC expects very little growth in overall tech spending for the rest of the year and through most of 2009. Spending in the U.S. and Europe probably will be roughly flat, while emerging markets should continue to grow.
"One thing we learned in 2001, a lot of people in software said the recession won't have an effect," Minton told the newspaper. They were wrong. "What businesses do when a recession starts is they stop spending altogether."
The bright spots in the sector: Information-technology services and outsourcing — helping companies manage their computing — tend to be the least affected in a downturn, he added.
It is clear that a recession will hurt the tech sector, but things don't figure to be as bad as they were during the dot-com bust, which helped spark the last recession. This time around, there is no tech bubble to burst. So although corporate customers are temporarily putting projects on hold and delaying upgrades to weather the economic storm, Minton said that overall, "businesses are still optimistic about technology."
What do you think? Post your comments below.
An article in yesterday's Austin American-Statesman says the fourth quarter could be even more disappointing than technology vendors already had expected. Businesses are cutting back spending by putting off equipment purchases and upgrades and laying off workers. Even software, considered a safer bet because it helps companies automate costly steps, is also likely to take a hit, the Statesman noted.
"It's inevitable that all technology companies, with varying degrees, will be running into the same thing," Stephen Minton, an analyst for research firm IDC, told the newspaper. "The reaction of businesses to the economic crisis is to stop spending money."
Technology makes up a big chunk of corporate spending. Of the total amount of money that U.S. businesses spend on fixed investments, which includes offices and factories, about 28 percent goes to computer and communications equipment and software, according to Commerce Department data analyzed by Bartels.
IDC expects very little growth in overall tech spending for the rest of the year and through most of 2009. Spending in the U.S. and Europe probably will be roughly flat, while emerging markets should continue to grow.
"One thing we learned in 2001, a lot of people in software said the recession won't have an effect," Minton told the newspaper. They were wrong. "What businesses do when a recession starts is they stop spending altogether."
The bright spots in the sector: Information-technology services and outsourcing — helping companies manage their computing — tend to be the least affected in a downturn, he added.
It is clear that a recession will hurt the tech sector, but things don't figure to be as bad as they were during the dot-com bust, which helped spark the last recession. This time around, there is no tech bubble to burst. So although corporate customers are temporarily putting projects on hold and delaying upgrades to weather the economic storm, Minton said that overall, "businesses are still optimistic about technology."
What do you think? Post your comments below.
Tuesday, October 14, 2008
The Economy and Insurance Industry IT Spending
Posted by Mark Brousseau
A tidal wave of bad news has swept Wall Street and Main Street, and debris is coming ashore across the globe. This crisis is sure to affect insurers the world over for years to come.
Celent LLC believes that the unprecedented breadth and intensity of issues currently facing the insurance industry will severely constrain future growth but also provide an opportunity for carriers that position themselves correctly.
“The world has changed, but not ended,” said Donald Light, senior analyst with Celent’s insurance practice and coauthor of the report. “Insurers, their technology groups, and technology vendors need to recognize this change and adapt to it.”
“Adapting includes an examination of implementation plans and budgets with an eye toward short-term, tactical payback,” said Mike Fitzgerald, senior analyst with Celent’s insurance practice and coauthor of the report.
How has the economic crisis affected your organization’s IT spending?
Post your comments below.
A tidal wave of bad news has swept Wall Street and Main Street, and debris is coming ashore across the globe. This crisis is sure to affect insurers the world over for years to come.
Celent LLC believes that the unprecedented breadth and intensity of issues currently facing the insurance industry will severely constrain future growth but also provide an opportunity for carriers that position themselves correctly.
“The world has changed, but not ended,” said Donald Light, senior analyst with Celent’s insurance practice and coauthor of the report. “Insurers, their technology groups, and technology vendors need to recognize this change and adapt to it.”
“Adapting includes an examination of implementation plans and budgets with an eye toward short-term, tactical payback,” said Mike Fitzgerald, senior analyst with Celent’s insurance practice and coauthor of the report.
How has the economic crisis affected your organization’s IT spending?
Post your comments below.
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