Small Businesses More Confident as They Begin 2014
An increased number of small business owners are planning to add more employees and boost compensation levels, signaling a slightly more positive economic outlook for 2014, according to the most recent Business Confidence Survey released by Insperity, Inc., a provider of human resources and business performance solutions for America's best businesses. A solid 50 percent of respondents plan to add employees, a significant increase over 26 percent in October and even up from 40 percent in the July survey; 47 percent are maintaining current staffing levels versus 68 percent last fall; and just over 3 percent are planning layoffs, down from 5 percent in October.
Insperity also announced compensation metrics from its base of 5,500 small and medium-sized Workforce Optimization(R) clients. Average compensation for the fourth quarter 2013 was up 2.9 percent, while bonuses were down 6.9 percent compared to the fourth quarter 2012. Average commissions received by worksite employees reflected an increase of 1.7 percent. Overtime pay was 10.3 percent of regular pay, above the 10 percent level that generally indicates a need for additional employees, and up slightly from 9.9 percent in the fourth quarter of 2012.
According to the survey, 92 percent of respondents expect to meet or exceed their 2013 performance, up significantly from 68 percent in October, while 8 percent expect to do worse in 2014. Concerning the timing of an economic rebound, 38 percent think one is currently in process versus 26 percent both in October and last July; 24 percent expect a rebound in the second quarter of 2014 or later, and 37 percent are unsure.
list of short-term concerns now points to government health care as the number one issue of 52 percent of survey respondents, followed closely by rising health care costs at 47 percent. The economy was third at 44 percent, down from 67 percent last October, and controlling overall operating costs was 43 percent. Long-term concerns were led by government expansion at 58 percent; the federal deficit tied with potential tax increases at 54 percent; and the economy dropped to 40 percent from last quarter's 63 percent, echoing its sharp decrease as a major short-term concern.
The survey results show that 46 percent plan to increase employee compensation, up significantly from 17 percent in October; 43 percent plan to maintain compensation at current levels, down from 71 percent last fall; 1 percent expect compensation decreases; and 10 percent are unsure.
Software Assets Will Determine Business Success Over The Next 10 Years
Software assets — not financial assets — will be most critical to your brand in the age of the customer, a 20-year business cycle in which the most successful companies will reinvent themselves to systematically understand and serve increasingly powerful customers, according to a recent Forrester report.
Mobile, big data, the Internet of Things, and digitization have changed the ways customers interact with brands: Customers expect to be able to interact with brands through software. Digital business in this era will be akin in scale and complexity to the ERP re-engineering that took place in the '90s to address Y2K issues. Why? In the age of customer, a good software experience can build trust, capture consumer attention, create unique customer experiences, and make a brand essential.
A bad software experience? "The next 10 years will see more change than any time since Great Depression in the makeup of the Fortune 1000 as some companies figure out the power of software and others do not. Increasing customer expectations fueled by an accelerated pace of technology will increase the delta between the haves and have-nots in term of overall financial performance," writes John McCarthy, author of the report.
According to George Colony, Forrester CEO, in the age of the customer, all companies will be software companies. Your most important assets will not be financial assets, they will be software assets. Software will allow brands to become customer-obsessed: to know what their customers want — and how, when, and where they can meet (and exceed) that expectation.
Emerging Markets Slowdown Continues to Inhibit IT Spending
According to the new International Data Corporation (IDC) Worldwide Black Book, IT spending will be inhibited by the economic slowdown in emerging markets in 2014, in addition to an inevitable deceleration in the growth of smartphones and tablets. IDC has lowered its forecasts for IT market growth in Asia Pacific (including China), Central and Eastern Europe, the Middle East and Africa, driving down its forecast for Worldwide IT spending growth to 4.6% this year in constant currency terms (down from the previous forecast of 5%). With currency devaluation and inflation likely to inhibit business confidence in many emerging economies in the first half of this year, and with the explosive growth of mobile devices having begun to inevitably cool from the breakneck pace of the past 2-3 years, overall industry growth will dip slightly from last year’s pace of 4.8%.
Infrastructure, Software and IT Services are Hot Spots
While overall industry growth has cooled, some areas of tech spending are heating up as businesses in mature economies including the US and Western Europe, begin to invest in overdue infrastructure upgrades and replacements. Spending on servers will increase by 3%, after last year’s decline of 4%, and storage spending will also grow by 3% this year (following a 0.5% decline in 2013). The PC market is showing tentative signs of stabilization, with improving commercial shipments in mature markets. The increased pace of hardware investment will have a positive effect on IT services revenue, which is forecasted to post growth of 4% this year (up from 3% in 2013). Enterprise software spending remains broadly strong, with growth still expected in the range of 6-7%. Excluding mobile phones, IT spending growth will actually accelerate in 2014 from 2.9% last year (excluding phones) to 3.4% this year.
Emerging Markets are Volatile
Exchange rate volatility is likely to exert a strong influence over IT revenues for global suppliers this year (in US dollar terms, the IT market grew by just 2.8% in 2013, compared to 4.8% in constant currency, due to the strength of the dollar). It’s too early to predict whether the dollar will remain strong throughout 2014, but the Fed’s decision to begin tapering its QE program will clearly exert a strong influence in the first half of the year. Not only will this create volatility for IT vendors during earnings season, but it may also create economic instability in key emerging markets.
Despite the pickup in mature economies, there are still significant inhibitors that will mean that IT spending growth remains moderate by historical standards. Cannibalization remains a broad trend, impacting everything from PCs (tablets) to software and services (Cloud) and ensuring major disruption for individual vendors. Price erosion and commoditization in hardware have spread to mobile devices. While showing signs of bottoming out, the PC market continues to post year-on-year declines in revenue terms, and telecom infrastructure investment remains tepid in many countries as carriers compete for a more mature customer base.
Underlying Fundamentals Have Improved
Nevertheless, in spite of this ongoing cannibalization and economic uncertainty, IT market fundamentals are more solid this year than 12 months ago. There is now significant pent-up demand for new servers, storage capacity and network equipment, and this is trickling through to increases in IT services revenue. Enterprise enthusiasm for new software built around the key 3rd platform solutions of Mobility, Cloud, Big Data and Social, remains strong. Consumer enthusiasm for mobile devices and applications remains positive, even though the market has inevitably cooled.
By 2015, 25% of Large Global Organizations Will Have Appointed Chief Data Officers
Organizations are creating, accessing and using more sources and types of information than ever before. This trend, combined with the increasing need to understand how data is being used within a company, is driving the need for chief data officers (CDOs). Gartner predicts that by 2015, 25 percent of large global organizations will have appointed CDOs.
Gartner has also found that 65 percent of CDOs are in the U.S. while 20 percent are in the U.K. There are, however, CDOs in over a dozen countries now. In addition, over 25 percent of CDOs are women, almost twice as high as for CIOs (13 percent). The position is most common in heavily regulated industries, media and government.
CIOs should view the CDO as a peer and partner who can manage data and who has the knowledge, background and skills to do so, which allows CIOs to focus on the more-than-full time job that they already have. CDOs are appearing more rapidly in some industries than in others. Banking, government and insurance are the first three industries to adopt the CDO role and in that order. However, we are now seeing other industries following. For example, we saw the first significant appointments in the advertising industry in 2013.
It is important to remember that the CDOs do not "own" the data. They may own key processes around the data and be "in charge" of some data - for example master data. The CDO owns a few things, but coordinates the use of data in other places. This is exactly like a CFO, who owns a few financial processes, like consolidation and treasury, but other than that coordinates the use of capital throughout the organization.
According to DMG Consulting, as the economy continues to improve in the US and around the world, 2014 is looking to be a good year for technology investments that are supported by a solid business case, and have quantifiable benefits and a rapid payback of one year or less. Enterprises and government agencies are expected to make investments to improve the customer or constituent experience. These investments will address the core infrastructure of contact centers and customer service organizations, many of which have not been updated in more than ten years. Other investments will be for management applications and analytics to help organizations make the most of every customer contact.
Investments will be driven by the top 8 contact center/servicing trends for 2014. These trends are:
Improving customer service – For years, executives have discussed the importance of delivering a great experience, but they have been unwilling to make the investments necessary to achieve this goal. But change is finally starting to happen. It may be because of the speed at which a small issue can go viral, or perhaps a growing appreciation that customer service is becoming the primary differentiator in a world of highly commoditized products and services.
Improving the customer journey – For the first time, organizations now have tools to measure every touch and action taken by prospects and customers, from the time they first access information about a company online to when they retire the use of a product.
Resolving inquires during the initial contact – Organizations have been talking about “one and done” or first contact resolution (FCR) for as long as call/contact centers have existed. But now, organizations are going proactive, realizing that the shortest route and best way to resolve an issue is to try to address everything a caller might need to know, not just what they are asking. Companies are striving to provide answers to anticipated issues in order to deliver an outstanding customer experience.
Reducing operating costs – Contact centers and customer service departments require staff, and people are expensive. Executives are more motivated than at any time in the past to deliver an outstanding customer experience, but the winning investments will be those that improve service while reducing operating expenses.
Complying with regulatory requirements – Whether it’s the new telephone consumer protection act (TCPA) regulations or other do-not-call (DNC) requirements in the US and in many other countries, governments are introducing laws to protect their citizens from bad business practices.
Avoiding social media firestorms – Companies are investing in social media to avoid bad public relations. Never in the history of business has there been a tool like social media that can impact the bottom line and stock price of a company due to the public airing of consumer opinions.
Retaining customers – This is a top goal in tough economic times, but is still important when people are more freely spending money, because it is always more expensive to acquire customers than to retain existing ones.
Increasing sales and collections – Companies are in business in order to make money. Inside and outside sales team need to pick up the pace of sales. Collections departments need best practices to increase their contribution to the bottom line. And executives want their contact centers to pick up the slack and become major players in generating revenue.