Worldwide IT Spending on Pace to Reach $3.7 Trillion in 2013
Worldwide IT spending is projected to total $3.7 trillion in 2013, a 2 percent increase from 2012 spending of $3.6 trillion, according to the latest forecast by Gartner, Inc. Last quarter, Gartner's forecast for 2013 IT spending growth in U.S. dollars was 4.1 percent. The 2.1 percentage point reduction mainly reflects the impact of recent fluctuations in U.S. dollar exchange rates; growth in constant currency is forecast at 3.5 percent for 2013, down only slightly from last quarter.
The forecast for spending on devices in 2013 has been revised down from 7.9 percent growth in Gartner's previous forecast to 2.8 percent. The decline in PC sales, recorded in the first quarter of 2013, continued into the second quarter with little recovery expected during the second half of 2013. While new devices are set to hit the market in the second half of 2013, they will fail to compensate for the underlying weakness of the traditional PC market. The outlook for tablet revenue for 2013 is for growth of 38.9 percent, while mobile phone revenue is projected to increase 9.3 percent this year.
Enterprise software spending is on pace to grow 6.4 percent in 2013. Growth expectations for customer relationship management (CRM) have been raised to reflect expanded coverage into e-commerce, social and mobile. Expectations for digital content creation and operating systems have been reduced as software as a service (SaaS) and changing device demands impact traditional models and markets.
Telecom services spending is forecast to grow 0.9 percent in 2013. Fixed broadband is showing slightly higher than anticipated growth. The impact of voice substitution is mixed as it is moving faster in the consumer sector, but slightly slower in the enterprise market.
While phone-based interactive voice response (IVR) systems are still the largest channel for customer interactions, self-service via the Web and mobile channels are quickly gaining ground, according to the findings of a new survey conducted by Unisphere Research, a division of Information Today, the parent company of CRM magazine, in partnership with IntelliResponse.
In fact, 31 percent of all customer interactions today are conducted via the Web, and an additional 9 percent are conducted via the mobile Web or mobile applications. Only 46 percent of all interactions are conducted via IVRs.
Close to half (48 percent) of the 520 CRM managers and professionals who responded to the survey said they have Web or mobile-based self-service capabilities. Seventy-nine percent claim to have had Web self-service capabilities for a number of years now, and six out of 10 are also moving into mobile.
The highest concentration of Web self-service capabilities right now is in the finance/insurance (52 percent) and government/education/nonprofit (50 percent) sectors. Customers are largely using these channels to research products and services or for routine inquiries, including order status and account balances.
While interest in Web and mobile is running high, most of these capabilities are limited to customer portals with FAQs, contact information, or the use of site search or a knowledgebase in a customer service environment.
The benefits of self-service are tangible. About half (45 percent) of executives with Web or mobile self-service capabilities report measurable reductions in phone inquiries and 39 percent report less email traffic. 47 percent have also seen increased sales through their customer self-service channels, and 54 percent also report increased Web traffic since launching online self-service on the Web or mobile.
Moving to greater self-service capabilities is not without its management challenges, according to the research. When moving to Web or mobile self-service, most executives are concerned with the rising complexity of their Web sites, as well as the need to integrate these systems and the associated data with existing customer service channels. Currently, 53 percent of these systems share the same technology and data with the customer service center.
The research also found that customer self-service is poised to begin expanding beyond simple FAQ pages. Features expected to be added during the next three years include interactive videos, social media channels for customer forums, and interactive, real-time chat options. There is also an overarching movement toward providing answers to natural language questions and doing so across a variety of online channels.
Gartner says at Least 60 Percent of Information Workers will Interact with Content Applications via a Mobile Device by 2015
The consumption of video on mobile devices for work-related purposes is on the rise, according to Gartner, Inc., bringing organizations under increasing pressure to support and manage it. Gartner predicts that by 2015, at least 60 percent of information workers will interact with content applications via a mobile device.
Gartner says that companies and governments must respond with strategies for supporting video on such equipment, whether it is owned by them or by their workers or customers.
Mobility means that business consumers may sometimes find themselves using different devices in different places, sometimes on weak networks. Enterprises must therefore plan for adaptive delivery that allows for variable bandwidth as well as allowing for time-shifted consumption, as users that rely on mobile devices will not always have sufficient access to network resources to consume video live.
Time-shifting video is an important benefit that many executives resist because they dislike the psychological dilution that arises when not all workers share the experience of watching a video together. Nevertheless, consumption of a given video stream increases significantly when its targets can choose their own time to consume the video, and that consumption rises even more when they can consume individual shorter segments with particular messages that are crisp and concise.
Gartner recommends selecting vendors that support all the video formats the organization requires. While it's true that the growth in OS centers on iOS and Android, other OSs are important to particular enterprises or viewer segments. Enterprises should analyze viewership to determine what devices consumers are using, which are growing in usage, and which are declining.
IT capital budgets are rising 4% at the median this year, providing a strong indication that large enterprises are beginning to invest in upgrades to systems and infrastructure, the annual Computer Economics IT Spending and Staffing Benchmarks study finds.
But the newly released study by the Irvine, Calif.-based IT research firm also cautions that IT job growth remains soft and IT operational spending growth is lackluster across all organizations.
"Until we see more strength among smaller companies, we have to conclude that this year will look much like the last two years: there will be a slow improvement coupled with a lack of sustained hiring," said Frank Scavo, president of Computer Economics. "We are in the midst of an IT spending recovery, but it will need to become broader and deeper before we see any acceleration."
On the positive side, the study provides evidence that IT organizations are stepping up investments in capital projects. IT organizations cited upgrading existing systems, becoming more cost-efficient, and developing new systems as their top three priorities. IT executives are also more confident that they will get to spend all of the money in their budgets this year. Only 20% were anticipating not being able spend all of the money in their plans this year, which is down from 31% last year, when the fiscal cliff and sovereign debt crisis prompted a more dour outlook.
Another positive sign is that large organizations are showing relatively strong improvement in IT operational spending. IT operational budgets are up 4.0% at the median for organizations that have IT operating budgets in excess of $20 million. Large organizations are starting hire IT workers in addition to making capital investments. In contrast, organizations with IT operational budgets of less than $5 million plan to boost IT operational spending by only 1.1% and are showing no growth in headcount.
Research Finds a Simple Smile Could be the Key to Business Success
A simple smile and a friendly greeting can make customers feel much more loyal towards small independent companies, according to new Kingston Business School research.
The study, which examined the retail behavior of 2,006 consumers and the business practices of 1,216 decision makers in small and medium-sized enterprises, revealed that a smile and a friendly hello was the most common reason why consumers felt loyal towards independent retailers. However, only just over half those sampled stated their small business employed this practice.
Three in five consumers were also willing to pay more for a product from a small independent shop rather than deal with a large corporate retailer, the study funded by Barclays Business Banking and carried out by Kingston's Small Business Research Centre suggested.
More than a third of loyal consumers said they were repeat customers because of excellent service and one in five said they valued businesses remembering their usual order. However, only around half of businesses involved in the study kept a record of customers' previous orders.
The research also discovered that less than a third of business respondents considered retaining or growing their current customer base to be their main priority to achieve growth during the next year. Only 50 per cent would encourage word of mouth recommendations by regular customers to grow or survive.