Tech Spending Still Strong Despite Economic Volatility and Cannibalization from Mobile Devices and the Cloud
According to the new International Data Corporation (IDC) Worldwide Black Book Query Tool just released, IT spending remained broadly strong throughout a difficult end to 2012 as business confidence waned in the shadow of the "fiscal cliff’," economic growth declined in much of Europe, and economies in Asia struggled to cope with reduced exports. In spite of these headwinds, worldwide IT spending recorded annual growth of 5.9 percent in 2012 in constant currency terms, keeping pace with the 5.8 percent growth recorded in 2011. Total IT spending on hardware, software and IT services reached $2 trillion, while ICT spending (including telecom services) increased by 4.8 percent to $3.6 trillion.
Last year was difficult for U.S.-based IT suppliers, however, which were adversely affected by the strength of the dollar throughout most of the year. In U.S.-dollar terms, worldwide IT spending grew by just 3.3 percent. This marked a significant slowdown from the U.S. dollar growth rate of 9.5 percent recorded in 2011. In 2013, IT spending is expected to increase by 5.5 percent as businesses and consumers continue to invest in mobile devices, storage, networks and software applications.
While overall IT spending remained stable, 2012 was another difficult year for the PC industry, which recorded a 2 percent decline in annual revenues. Revenue declines were also recorded in servers, PC monitors and feature phones as cannibalization from tablets and smartphones continued to reshape the IT industry landscape. For the first time, spending on smartphones in 2012 exceeded PCs, reaching almost $300 billion, while PC spending declined to $233 billion.
The global economy has been volatile through the past 12 months, and this sense of uncertainty persisted into the first quarter of 2013. IDC expects the U.S. economy to stabilize in the second half of the year, driving IT spending growth of 5.5 percent. 2013 will be another tough year for Europe, however, where tech spending is expected to increase by just 2 percent as the Eurozone and UK struggle to shrug off the lingering debt crisis. Excluding mobile devices, growth in Europe will be less than 1 percent. Japan has meanwhile lost most of the post-reconstruction momentum that drove IT spending to increase by 4 percent in 2012, and will record IT growth of 0 percent this year.
IDC's Worldwide Black Book provides quarterly forecasts for IT spending in 54 countries around the world.
New Study Finds that Emotion is at the Heart of Effective Customer Service
In a world of ever changing customer expectations, global companies seeking ways to provide a differentiated customer experience should focus on the power of emotion. According to a new study by AchieveGlobal, a global workforce development firm, the emotional aspect of customer service is most critical, as one in three global respondents preferred being treated well over having their issues immediately resolved.
The global study, "Why Your Customers Stay or Stray: Insight From Global Customer Experience Research," further reveals that the behaviors most irritating to customers stem from detached emotional awareness and connection. Almost half (46 percent) of global respondents noted that being rude, short, nasty, unhelpful and impatient was the greatest customer service mistake that they have experienced. Using a canned script in dealing with issues (17 percent) and saying “no” or “I don’t know” (16 percent) also ranked amongst the top customer experience failures.
A negative customer experience not only threatens that particular sale, but also the reputation of the brand. Given the rising power of social media as a tool for brand advocacy, nearly 40 percent of respondents worldwide admitted to posting a negative review online after a poor customer experience. With so many retail and brand options available, customers are also quick to defect once they have been wronged, with half of respondents noting that they would try out a competitor after one bad experience and 93 percent defecting after three or fewer poor customer service experiences. As such, it is vital that organizations institute a culture of service supported by effective employee development programs around customer experience.
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.
The job market for technology professionals has been a bright spot amid what economic-types typically have termed a modest recovery. That “bright spot” status should remain true into 2013, according to more than 1,000 technology-focused hiring managers and recruiters surveyed by Dice.
Nearly two-thirds (64%) of hiring managers and recruiters say that their companies or clients will likely add new technology workers in the first six months of the new year. In a comparable study of hiring managers and recruiters that recruit for many roles, just 47 percent anticipated adding staff to start 2013.
However, the brightness looks poised to dim a bit, at least in comparison to the technology job market of six months ago, when 73 percent of hiring managers expected to be adding tech workers during the second half of 2012. From a regional perspective the largest change over the past six months is from hiring pros headquartered in the West where six in 10 (64%) anticipate staff additions to start 2013, as compared to eight in 10 (81%) who felt that way about the second half of 2012.
Asked if the time to fill open technology positions had changed compared to last year, more than half the respondents (55%) said it had lengthened (including 16 percent who labeled the change “substantial”). Accounting for the slower hiring process, nearly half the hiring managers (47%) pointed to an inability to find qualified applicants, while another third (33%) cited a desire to wait for “the perfect match.”
Likewise, there is no haste by qualified technology professionals to move on in their careers. Seven out of 10 respondents said voluntary departures hadn’t risen at their company or with their clients during the past year. And asked about the pace of new job applications, more than half (54%) said they hadn’t seen a spike in new applicants as compared to six months ago.
Once a candidate is identified, 53 percent of hiring managers and recruiters said candidates are asking for more money, as compared to six months ago. And, more than one-third (39%) of technology hiring professionals said they are seeing more counteroffers than in the previous six months. Those factors combined appear to be impacting recruiting, with 28 percent of hiring professionals noting they’ve experienced an increase in technology professionals rejecting job offers in the last six months.
Survey Finds Companies with Strong Collaboration Between the C-suite and CIO are Four Times as likely to be Top Performers
The fifth annual Digital IQ survey released by PwC US finds that companies with strong, collaborative relationships between the CIO and other C-suite executives are four times as likely to be top performing companies as those with fragmented relationships.
According to PwC, a strong Digital IQ -- which is a measure of how well companies understand the value of technology and weave it into the fabric of their organization -- entails more than adopting the latest tools or having a large IT budget. It is about consistently linking IT investments to business strategy to improve speed, agility and competitive advantage. It is about integrating 'digital conversations' into every aspect of the business. Those with the strongest Digital IQ look to information technology for its power to alter business models and create new ones.
The survey findings show companies with strong, collaborative C-suite relationships act differently and think together from strategy through execution. These 'Strong Collaborators':
Have a single multi-year roadmap for the business strategy, and an explicit process to link the business strategy to the IT roadmap
Are more aggressive in IT capital spending to support strategic corporate initiatives, such as new geographic markets, new product and service development, M&A, joint ventures and strategic alliances
Have more aggressive investment in emerging technologies including: mobile, social, big data and cloud
More likely have everything on a mobile platform
Are more aggressive in leveraging mobile and social technologies for employees and customers
Often have more explicit approaches to organize, manage—and measure—innovation
Recognize differences in IT needs, e.g. among different generations of employees