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Study: Cloud Computing Confidence Expected to Drive Economic Growth

The flexibility of cloud computing could help organizations recover from the current global economic downturn, according to 68 percent of IT and businesses decision makers who participated in an annual study commissioned by Savvis, Inc, a provider of cloud infrastructure and hosted IT solutions for enterprises.

A lack of access to IT capacity is clearly identified as a barrier to business progress, with 76 percent of business decision makers reporting they have been prevented from developing or piloting projects due to the cost or constraints within IT. For 55 percent of respondents, this remains an issue.

Global research highlights indicate that:

Confidence in cloud continues to grow – 96 percent of IT decision makers are as confident or more confident in cloud computing being enterprise ready now than they were in 2009.

70 percent of IT decision makers are using or plan to be using enterprise-class cloud within two years.

Singapore is leading the shift to cloud, with 76 percent of responding organizations using cloud computing. The U.S. follows with 66 percent, with the U.K. at 57 percent.

The ability to scale resources up and down in order to manage fluctuating business demand was the most cited benefit influencing cloud adoption in the U.S. (30 percent) and Singapore (42 percent). The top factor driving U.K. adoption is lower cost of total ownership (41 percent).

Security concerns remain a key barrier to cloud adoption, with 52 percent of respondents who do not use cloud citing security of sensitive data as a concern. Yet 73 percent of all respondents want cloud providers to fully manage security or to fully manage security while allowing configuration change requests from the client.

Seventy-nine percent of IT decision makers see cloud as a straightforward way to integrate with corporate systems.

[Full Article] Jul-25-2010

More than Half of Large, Downsized U.S. Businesses Plan to Rebuild their Workforces to Pre-Recession Levels by 2012

More than half (54 percent) of large U.S. businesses that reduced staff in the past 12 months plan to rebuild their workforces to pre-recession levels within two years, according to a study released today by Accenture.

The survey confirmed that companies are shifting their focus away from cost control and returning to growth. The percentage of U.S. companies focused primarily on cost control will decrease from 41 percent in mid-2009 to 18 percent in 2011, according to the study. And the percentage of U.S. companies focused primarily on investment in growth-oriented activities, such as hiring, will increase from 24 percent today to 37 percent within the next 12 months.

However, as companies focus on growth, a shortage of high-quality skills may be cause for concern for many businesses. 15 percent of U.S. executives surveyed described the overall skill level of their workforces as industry-leading.

Companies' sales and customer service workforces are the employee groups identified as most important by executives surveyed. However, many of the executives reported significant skills challenges in both of these critical areas. Among those executives who rated sales or customer service as one of their organization's most important workforces, only 23 percent reported that their sales forces perform at a high level and 34 percent said the same about their customer service workers.

Additional Findings:

Nearly one-half (47 percent) of executives do not anticipate changing the size of their workforce in the next 12 months.

Almost two-thirds (65 percent) have reduced the number of full-time employees in the past 12 months.

When asked what criteria they used to determine which employees to let go, the top reason cited by 53 percent of executives was low-performing employees. Following closely behind, 52 percent of executives said they let go of employees whose skills were not critical to the future direction of the business. Only 11 percent said high salaries were the determining factor.

Nearly three-quarters (72 percent) of companies added full-time equivalent employees in the past 12 months. When asked the reasons for adding employees during the downturn, 46 percent of executives cited specific needs for new staff to support the launch of new products or businesses or their entry into a new market; 45 percent cited the need for more/different skills to drive the business in the future; 45 percent said they wanted to strengthen the workforces that are most critical to the success of their businesses and 39 percent cited the opportunity to add high-quality talent who are difficult to find during more robust economic times.

Only 14 percent of companies indicated that their workforce is extremely well prepared to adapt to and manage change through periods of economic uncertainty.

About three in 10 companies said they either cut back or completely eliminated campus recruiting, recognition programs and incentive compensation in the past 12 months.

Only one-fourth of respondents strongly agree that their company has the leadership necessary to help the enterprise navigate periods of economic uncertainty and the leadership development programs to prepare the organization's future leaders.

[Full Article] Jul-25-2010

Americans will Spend 9% More with Companies that Provide Excellent Service

A majority of Americans report that quality customer service is more important to them in today's economic environment (61%) and will spend an average of 9% more when they believe a company provides excellent service. However, in a challenging economy where growth is harder to achieve, many businesses are missing out on this opportunity. Although only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service:

27% feel businesses have not changed their attitude toward customer service.

28% say that companies are now paying less attention to good service.

These findings were released in the American Express Global Customer Service Barometer, a survey conducted in the U.S. and eleven other countries exploring attitudes and preferences toward customer service.

Not surprisingly, nine in ten Americans (91%) consider the level of customer service important when deciding to do business with a company. But only one-quarter (24%) believe companies value their business and will go the extra mile to keep it. Most feel businesses can do more to retain their loyalty:

48% feel companies are helpful but don't do anything extra to keep their business.

Worse, 21% believe that companies take their business for granted.

Importantly, customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

Good service experiences also carry more weight than bad ones when Americans make future spending decisions. Consumers are far more likely to give a company repeat business after a good service experience (81%) than they are to never do business with a company again after a poor experience (52%).

In fact, consumers say the three most influential factors when deciding which companies they do business with include personal experience (98%), a company's reputation or brand (92%), and recommendations from friends and family (88%).

Nearly half (48%) of consumers report always or often using an online posting or blog to get others' opinions about a company's customer service reputation. But when consumers go online they're looking for "watch outs," saying they put greater credence in negative reviews on blogs and social networking sites than on positive ones (57% and 48%, respectively).

A negative service experience is an important factor for most Americans: 81% have decided never to do business with a company again because of poor customer service in the past. When asked how many poor experiences they allow, half of all Americans (50%) reported it takes two poor service experiences before they stop doing business with a company.

Importantly, consumers are far more forgiving if a company has earned their trust over time. Almost nine-in-ten consumers (86%) report they're willing to give a company a second chance after a bad experience if they've historically experienced great customer service with that company.

But companies who get it wrong should realize it's at a cost.

Half of consumers (52%) expect something in return after a poor customer service experience, beyond resolving the problem.

Most consumers (70%) want an apology or some form of reimbursement.

In most countries where the highest percentage of consumers feel that service is more important today, there is a corresponding belief that companies have increased their focus on providing good customer service:

65% of Indian, 49% of Japanese and 47% of Mexican consumers agree with this statement.

However, some consumers are not feeling the love. In Australia (71%), Germany (66%), and Canada and Italy (65% each), consumers say they feel companies haven't increased their focus on service or are paying less attention to it.

[Full Article] Jul-18-2010

Multi-Channel Service Delivery: The Path to Creating a Great Service Experience

The latest research report published by the Aberdeen Group, a Harte-Hanks Company, found that leading service companies were not only looking to utilize channels other than the contact center as a means to capture customer requests and deliver service, but also invest resources in ensuring the consistency and efficacy of information and the overall experience available on all delivery channels.

While the contact center, fax, and email have been the traditional channels available for customer service requests, channels such as live chat, customer-specific web portals, and others have seen increased support in the last three years. Looking ahead, organizations are actively looking to increase the availability of service information via live chat, social media platforms, messaging, and technical forums and discussion boards.

Research findings in the Multi-Channel Service Delivery report indicate that while all firms are looking to improve time to repair and first-call resolution, leading firms focus on increasing access to customer -- and service-specific information and knowledge across the organization. As such, these firms exhibited the following:

An 85% current performance in first-call resolution, in contrast to a 56% performance for all others

A 21% reduction in total support costs over the last 12 months, as opposed to a 1% reduction for all others

An 86% current performance in customer retention when compared to a 74% performance for all other organizations

[Full Article] Jul-18-2010

CIOs Should have a Plan in Place now to Tackle a Second Economic Downturn

In 2008, most CIOs were forgiven for being unprepared to deal with the global recession, but if another recession unfolds in the next 12 to 18 months, no CIO will be forgiven for being unprepared a second time, according to Gartner, Inc.

In May 2010, investor doubts about the health of the global economy returned to the world's capital markets with a vengeance. The possibility of nations defaulting on repaying massive loans, high unemployment rates, depressed housing prices, limited access to consumer and business credit, a growing belief that a sustained economic recovery may not be possible this year, and an array of other factors have all combined to shake investor confidence to its core.

As these and other factors were unfolding, many economists were still maintaining that 2010 and beyond would be a period of modest recovery and growth. Because so much uncertainty exists about the sustainability of the current recovery, CIOs should confront such uncertainty with clear and decisive action. They should augment current near-term plans by preparing for a second recession.

Gartner recommends that CIOs take the following key actions to ensure that their enterprises are best placed to weather any potential financial storms over the next 12 to 18 months:

Enlist C-Level Action Now -- As IT leaders learned from the recent recession, executives will once again have to make a multitude of decisions to minimize the effects of a second business downturn. Because most official national recession declarations are announced well after the actual start of a recession, IT leaders should suggest that their enterprise executives convene now, so that business downturn response guidelines may be established before capital markets, customers, suppliers, creditors, etc. panic in the wake of bad economic news.

Focus on the Current Fiscal Year -- To save money as quickly as possible in the event of another business downturn, CIOs should work with executives to determine which IT projects scheduled and approved under the current IT budget may be postponed and which may be entirely canceled. Likewise, once all projects for the next fiscal year are identified, CIOs should determine which of those projects may be postponed and which may be entirely canceled.

Focus on the Next Fiscal Year --Once all projects for 2011 are identified, simultaneously determine which of those 2011 projects are relatively expendable and, therefore, may be postponed and which may be canceled, should deteriorating business conditions warrant such steps. Of course, the decision process for determining which projects may be postponed or canceled must include an assessment of the contractual exposures that may exist or arise with IT vendors for hardware, software and services.

Use Zero-Based Budgeting for Projects -- As CIOs begin preparing for their 2011 budgets, they should adopt zero-based budgeting for projects in 2011. CIOs need to strongly suggest to C-level executives that all business unit executives sign documents affirming their understanding of:

The one-time costs that will be incurred to implement their 2011 projects

The annual recurring costs required to maintain those projects once they are completed

Use Zero-Based Budgeting for Existing Applications -- CIOs should compile an inventory of existing applications that are maintained by the IT staff and assign a reasonable estimate of the annual cost incurred to maintain each application. Once calculated, Gartner recommends having the business unit executives sign a document affirming their understanding of the estimated annual cost for overseeing and maintaining their applications.

[Full Article] Jul-11-2010

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