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Worldwide Enterprise IT Spending is Forecast to Grow 2.5 Percent in 2013

Worldwide enterprise IT spending is forecast to total $2.679 trillion in 2013, a 2.5 percent increase of projected 2012 spending of $2.603 trillion, according to Gartner, Inc. Banking, communications, media and services (CMS) and manufacturing are expected to offer the largest volume of growth opportunities through 2016.

The manufacturing and natural resources sector will lead the vertical markets with total spending expected to reach $478 billion in 2013, up 2.3 percent from $467 billion in 2012. Manufacturers typically plan and manage a significant portion of their IT costs in expectation of changes in their sales. In addition, manufacturers worldwide have been steadily reducing their IT purchases as a percentage of their sales since the recession of 2008. The manufacturing industry's IT buying center has adopted tighter IT cost controls amid a myriad of mixed market signals. However, IT spending rates are expected will bottom out in 2013 and will be resilient over the long run, as business confidence is restored and the value proposition of a nexus of new technology forces social, mobile, big data and cloud is increasingly championed by senior leaders.

The banking and securities sector will have strong growth in 2013 and is expected to reach $460 billion in 2013, up 3.5 percent from $445 billion in 2012. Banking and securities is an IT-intensive industry, spending approximately three times as much on IT as a percentage of revenue than the average of all industries. This trend is expected to continue due to a significant amount of IT required to run activities such as lending, payments, trading and risk management.

The CMS sector is forecast to grow 3 percent in 2013 to $426 billion, up from $414 billion in 2012. Firms in the CMS sectors will typically spend approximately 5 percent of their revenue on IT on average over a five-year period, well above the median for all industries.

In the short term, transportation and insurance will also be high-growth sectors with both reaching more than 4 percent growth in 2013. IT spending in the transportation sector is expected to total $126 billion in 2013, up from $121 billion in 2012. IT spending in insurance will reach $187 billion in 2013, up from $179 billion in 2012.

In 2012, government IT spending is forecast to decline 2 percent and the decline is expected to continue through 2013. In 2013, government IT spending is forecast to total $445 billion, down from $447 billion in 2012.

Large industry market operating under fiscal pressure, such as government, can also provide market opportunities as IT departments must strive to modernize and increase service levels without increasing resources. The need for greater efficiency and productivity gains in industries operating under severe fiscal constraints can also create opportunities for disruptive IT innovation and for the displacement of incumbent IT market leaders.
[Full Article]   Nov-25-2012

 

Gartner Identifies Four Futures for IT and CIOs

The changing shape of IT is causing CIOs to question the role of IT in the organization and the part they will play in it, according to Gartner, Inc. As businesses confront global economic uncertainty, changing market dynamics and cultural discontinuities created by technological innovation, their different parts require different ways of interacting with IT.

Gartner has identified four dominant futures for IT in the organization. They are not mutually exclusive and may exist in combination:

  • IT as a Global Service Provider

  • In this scenario, the IT organization is an expanded and integrated shared-service unit that runs like a business, delivering IT services and enterprise business processes. It is virtually or fully centralized, focuses on business areas and business value, adopts a marketing perspective, capitalizes on its internal position and delivers competitive services.

  • IT as the Engine Room

  • In this scenario, IT capabilities are delivered rapidly at market-competitive prices. The IT organization succeeds by monitoring technology and market developments, and building expertise in IT asset optimization, sourcing and vendor management, and IT financial management. It delivers ongoing cost improvements, looks for new ways to deliver the same IT capabilities for less, and is highly responsive to changing business needs.

  • IT "is" the Business

  • In this scenario, information is the business's explicit product or at least is inseparable from its product. The business is structured around information flow (not process or function) and the IT organization innovates within the value chain, rather than just enabling the supporting services found in every business.

  • Everyone's IT

  • In this scenario, business leaders and individual contributors use information and technology aggressively to break through traditional business perimeters and drive ambitious collaboration. The focus is on information, rather than technology. Highly mature businesses embrace this divergent model for its collaborative and innovative potential. While traditionalists may see anarchy in this type of approach, others see liberated creativity. For this reason, this model works in non-traditional situations such as dynamic businesses, startups and R&D/entrepreneurial/community ventures.

    Gartner said that these new CIOs will play an important role in identifying the required future of the IT organization, and that they must ensure senior IT stakeholders are involved from the outset, so that their support is guaranteed. These CIOs will then be able to identify how their role will change and start planning a personal road map.
    [Full Article]   Nov-11-2012

     

    CIOs Project Modest IT Budget Growth In 2013

    New 2013 IT budget benchmarks from CEB, a member-based advisory company, indicate that CIOs expect total IT budgets to increase 1.8 percent, roughly 50 percent less than they did in 2012. Despite economic woes, European organizations are expecting a 2 percent increase in IT budgets. The primary driver of total budget growth comes from increases in operational expenditures of 2.5 percent. Capital expenditure budget growth has stalled.

    Two-thirds of CIOs expect to see increases in operating expenditures in 2013, while one-fifth plan to reduce them. CIOs expect to allocate funding increases to projects that improve employee productivity through better insights, collaboration and mobility, and to increase IT's delivery flexibility and efficiency.

    CEB's survey is based on more than 180 companies representing $52 billion in IT spending. Findings indicate that CIOs will double down on investments in mobile applications and information management to drive employee productivity in 2013.

  • Spending on mobile applications will grow 50 percent in 2013. CIOs will concentrate both on developing new mobile applications and making sure existing applications are ready for the mobile environment. This does not include funds spent to supply employees with mobile devices or marketing funds spend on mobility.


  • CIOs will continue shifting spending from process automation (30 percent) to information management (32 percent) projects. Information management projects are considered those that deal with business intelligence, collaboration or customer interface.


  • Additionally, CIOs are expected to increase spending to make IT delivery more flexible and efficient:

  • Spending on the cloud will increase to roughly 7 percent of total IT budgets. Software-as-a-Service (SaaS) will receive the largest share of spending, followed by Infrastructure-as-a-Service (IaaS).


  • Seventy-five percent of organizations that offer some form of end-to-end IT services plan to devote as much as 30 percent of their IT operating expenditure to this delivery model.

  • [Full Article]   Nov-11-2012

     

    Two-Thirds of Enterprises will Adopt a Mobile Device Management Solution for Corporate Liable Users Through 2017

    Over the next five years, 65 percent of enterprises will adopt a mobile device management (MDM) solution for their corporate liable users, according to Gartner, Inc. With the increased functionality of smartphones, and the increasing popularity of tablets, much of the network traffic and corporate data that was once the primary domain of enterprise PCs is now being shifted to mobile devices.

    Gartner predicts that through 2017, 90 percent of enterprises will have two or more mobile operating systems to support. In the past year, many companies have moved to Apple's iOS as their main mobile device platform, with others to follow over the next 12 to 18 months. As enterprises continue to offer multiplatform support, and new platforms -- such as Windows 8 --continue to emerge, MDM needs will continue to grow.

    As one of the fastest-growing enterprise devices in the past 18 months, tablets are a further driving force for enterprises adopting MDM. Most companies and users are supporting the tablet for limited usage, typically for email and personal information management (PIM) functions. However, users are pushing for more enterprise applications to be supported on the tablet, usually through either enterprise or application provider development. As more of these native apps become available, and as remote access technology improves, more enterprise content will be stored on these devices. Users are already synchronizing corporate content into public clouds for later retrieval on the devices.

    Gartner believes that mobile device proliferation is inevitable and the only way that IT staff can maintain control is by separating mobile computing devices into three distinct device classes: trusted standard devices provided by the company, tolerated devices and non-supported devices. In this scenario, users are given a predefined list of supported technologies in each class, along with a budget for the projected amount that each selection consumes. Users can optimize the technologies according to their requirements without exceeding the budget. Expense limits and spending caps by individuals bypass the need to rely on subjective interpretations of "reasonable use."
    [Full Article]   Nov-04-2012

     

    Dimension Data Announces Results of 2012 Global Contact Center Benchmarking Report

    Dimension Data, the global ICT solutions and services provider, announced the results of its 2012 Global Contact Center Benchmarking Report, which includes data collected from 637 contact centers in 72 countries across the Americas, Asia, Australia, Europe, and Middle East and Africa. This year's report found that rapid adoption of emerging communication channels much of which is enabled by new mobile and smartphone devices, wireless connectivity and social media is making a significant impact.

    As a result, organizations are now rushing to provide additional service channels as consumers demand varied types of collaboration when they engage with organizations. The telephone is no longer a consumer's primary point of contact with an organization, while at the same time, mobile and social media interactions are increasingly making the contact center's role more important than ever.

    One in five (19.2 percent) contact centers are already managing smartphone applications, while 33.1 percent of businesses are supporting social media nearly double the 18.6 percent reported in 2011. A further 14.4 percent expect to have a capability in place within the next 12 months, by which time 46.3 percent will be using Web chat to positively drive Internet traffic to a successful outcome. What's more, organizations are implementing these new contact center options mainly as a result of customer demand.

    Other key findings in this year's report include:

    Few businesses are gauging the customer experience of non-agent, self-help channels:

  • Self-service channels have become more prevalent in today's contact centers; however, organizations are not measuring the cost-to-serve of these channels and are not gauging their customers' experience of non-agent, self-help channels. This contradicts emerging practices that link customer satisfaction scores directly to profitability, such as the tracking of share price performance against the 'voice of the customer' a growing trend among forward-thinking organizations.


  • The subsequent absence of cost measurement activity on every channel outside of the telephone is staggering. Only 27.9 percent of Internet, 19.4 percent of Web chat, 9.9 percent of social media, and 6.1 percent of smartphone application contacts are being measured. Only 14.6 percent of participants have any plans to impose measurements. This indicates significant neglect by organizations as they struggle to adequately enable investment into new channels through proven business case validations.


  • Interactive voice response (IVR) self-service systems rank second only to Web usage as the most offered self-help path. However, 50.6 percent of contact centers don't schedule any regular reviews of their IVR systems and nearly three quarters (72.4 percent) are needlessly frustrating their customers by not passing information collected in the IVR through to agents.


  • Aging technology is a big challenge:

  • Many contact centers are wrestling with aging technology, which is expensive to maintain and upgrade. Due to the complexity of existing technology environments, integration, lack of flexibility and upgrades are the most common challenges being experienced.


  • In addition, there is a progressive move away from applying a dedicated contact center technology strategy to incorporate it into the wider enterprise customer management strategy (now at 66.8 percent). Investment for upgrades and enhancements are harder to authorize and are driving the need to consider alternative sourcing models for specific functionality that include cloud-based solutions on a pay-as-you-use operating expenditure model.


  • Cloud continues to play an important role:

  • Many organizations are beginning to recognize the benefits of cloud-based solutions. It has doubled in its importance from Dimension Data's 2011 Contact Center Benchmarking results. As organizations will need to find a way to use, re-use and upgrade existing technologies, the inevitable migration will likely be using a hybrid approach, with an appropriate ownership model selected for each application.


  • Contact center needs are being lost in overall technology strategy:

  • Already, 30.4 percent of contact centers report they have no, or limited, involvement in the design of business requirements for new technology solutions. Of these, 7.2 percent state that it's purely a contact center decision. For sourcing, it is 40.2 percent as the enterprise technology strategy takes hold. These results clearly highlight an industry transition point in terms of accountability and responsibility for contact center business requirements and the sourcing of technology.


  • Therefore, there's a real danger that the specific needs of contact center get lost. Just 59 percent of participants believe their current core infrastructure components (includes CRM, CTI, routing, self-service and workforce optimization) meets their current needs, while for future needs, this figure drops considerably to a mere 13.8 percent.


  • IP-based contact centers are a success:

  • The deployment of IP (Internet Protocol)-based contact centers has progressed and traditional IP-based contact center functionality has a high level of success in meeting current and future needs at 64.7 percent and 13.5 percent respectively. Flexibility and compliance with enterprise wide technologies are seen as the main benefits of IP-based solutions.

  • [Full Article]   Nov-04-2012

     

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