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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.

Cannibalization Continues

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.
[Full Article]   Feb-05-2014

 

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.
[Full Article]   Feb-05-2014

 

Top 8 Contact Center/Servicing Trends for 2014

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.

Read the full article:
[Full Article]   Jan-29-2014

 

Cloud Computing Adoption to Outpace Employee Skillsets in 2014

Fifty percent of organizations will spend more on IT in 2014, investing heavily in public and private cloud-enabling technologies like infrastructure and virtualization, according to a survey of 1,000 IT professionals. However, half of all respondents participating in cloud initiatives within their organizations need more education on the technology and note their current skillsets do not adequately prepare them to do their jobs well in the coming year.

The survey, conducted by next generation IT monitoring software provider ScienceLogic, found that lack of education is not the only headache employees will face in the coming year. While IT spend is increasing in 2014, survey results reveal a lack of industry investment in employees, with 40 percent of respondents confirming they would make the same or less money year-over-year in 2014.

Other key survey highlights include:

-- Overall IT spending in 2014 will increase by a net margin of 35 percent compared to 2013
-- Almost two thirds of respondents intend to increase their budgetary spend by 6-20 percent year-over-year
-- The ratio of respondents that will increase IT spend vs. reduce IT spend is 4:1
-- Organizations will spend the most IT dollars on network infrastructure, but there is a growing need to spend on additional storage, Big Data, and mobility-related infrastructure
[Full Article]   Jan-28-2014

 

IT Professionals Salaries Remain Flat

The 2014 Salary Survey, just released by Janco Associates and eJobDescription.com, is not good news for IT Professionals. The survey shows that hiring and salaries has not significantly improved for IT professionals in most North American metropolitan areas.

Salaries are up less than 1% for IT pros in the past 12 months and the only winners are the top level postions in mid-sized companies. Salaries for most IT pros have finally gotten back to the level they were at in 2007 and that is a very good sign.

The seven major findings of the survey are:

-- IT compensation for all IT Professionals has increased by 0.67% in the last 12 months.

-- CIOs compensation has stayed flat in larger companies and increased in smaller and mid-sized companies in the past 12 months.

-- Positions in highest demand are all associated with the quality control, BYOD implementation, and service level improvement.

-- Over the long term IT executives have fared better in mid-sized companies than large companies.

-- In 2013 the IT job market grew by 74,900 versus 62,500 in 2012 according to the Bureau of Labor Statistics (BLS) – better but not enough to employee the number of IT graduates from US universities or to increase demand.

-- Lay-offs seem to have tapered off, however some companies continue to cut the size of the IT organizations.

-- Cost control is still the rule of the day; however we have seen an increase in the number of "part-timers" and contractors who are focused on particular critical projects. This has resulted in few IT Pros getting health coverage

-- On shore outsourcing has peaked and companies are looking to bring IT operations back into their direct control and reduce operating costs.

-- Mandated requirements for records management systems and electronic medical records have increased the demand for quality control staff and custodians (librarians) of mechanized records.

-- Companies are continuing to refine the benefits provided to full time IT professionals. Though benefits such as health care are available to 80%, IT professionals are now paying a greater portion of that cost.
[Full Article]   Jan-23-2014

 

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