Did you know that the cost of not finding information is $3,300 per employee per year, according to IDC research? That’s crazy! IDC’s research credits ineffective searches; poor, inconsistent access tools; re-created content; reformats; and revisions as factors in causing employees to not find the information they need. So if you’re a midsized company with 500 employees, you’re talking $1,650,000 in productivity losses each year. In this economy, who can afford to take such a hit?
Many midmarket IT organizations are looking at collaboration tools like Microsoft’s SharePoint and social technology platforms to help centralize documents, manage people, tasks and time, and ultimately improve employee productivity. But can collaboration tools actually eliminate or lessen the $3,300 per-employee productivity loss companies are experiencing?
Increased productivity is one of the benefits of collaboration tools, because users travel less and spend less time searching for relevant information and expertise, said Rob Koplowitz, principal analyst at Forrester Research. But these benefits are rarely measured in terms of a formal ROI. Business owners really want to know “if I work with IT, will things work better?” he said.
But some midmarket companies are actually seeing measurable ROI from their investment in collaboration tools. One company is Los Angeles-based Equipois Inc., which manufactures a “zero gravity” mechanical arm technology for use in industrial and biomedical applications. Equipois uses Central Desktop for collaboration among three offices across the country for nearly all operational aspects of the business, from R&D to purchasing to customer project management.
“The cost of hardware, software and staffing to replicate this collaboration would be roughly 40 to 60 times our current annual expenditures, giving us an astronomical ROI,” said Eric Golden, Equipios’s CEO. Using these collaboration tools, “we’ve seen $40,000 to $70,000 in one-time cost savings and $65,000 savings in recurring costs.”
How does he know? Central Desktop’s SaaS social technology platform comes with an ROI calculator that computes weekly and annual savings in terms of system administrator hours reduced, estimated dollars spent on servers and number of hours employees saved not needing to rework documents and manage revisions. Based on feedback from customers, “many companies are seeing ROI savings of one to two hours per day, per employee, using our product,” said Isaac Garcia, CEO and co-founder of Central Desktop.
Golden didn’t say what he’s spending on Central Desktop, but the company’s pricing chart indicates you can have up to 100 users on it for, at most, about $25 a month each. That’s about $300 a year — less than 10% of that $3,300 number we cited earlier.
Central Desktop is just one of many collaboration tools out there, and none are a panacea for every productivity challenge. But as midmarket companies continue looking for ways to cut costs and remain productive in this tough economy, chipping away at that $1,650,000 is one way to boost IT’s contribution in today’s business environment.
Midmarket companies may think that putting processes around purchase orders, claims or employee onboarding and offboarding is akin to having a business process management (BPM) strategy, but in fact those projects are really just traditional workflow management.
At least according to Forrester Research, which defines BPM as designing, executing and optimizing cross-functional business activities that incorporate people, application systems and even business partners.
An example from Forrester analyst Ken Vollmer: automating a manual mortgage application processing process, incorporating steps like having the loan specialist check a credit report. “Or you could even have the client go in through a website to trigger a BPM process that automatically goes and captures all the related information in 10 minutes, versus three weeks,” Vollmer says.
Now that all sounds great – but in the midmarket, companies are taking a more departmental or niche approach. It’s what Janelle Hill, an analyst at Stamford, Conn.-based Gartner, calls workflow coordination as opposed to true BPM meant to redesign and transform business processes.
And in any case, midsized organizations aren’t turning to enterprise BPM, content management or repository technologies to do this work – tools like Documentum and FileNet, Lombardi Software and Savvion, webMethods and Oracle (each set aligned, respectively, with what Forrester calls document-centric, human-centric or process optimization BPM).
Instead, midmarket companies are relying mainly on Microsoft SharePoint to handle departmental and manual workflow processes such as approval processes for purchasing or travel, Hill says.
Vollmer agrees; he says Microsoft technologies were listed as one of the top choices for BPM by 164 architects surveyed last year. Now since Microsoft does not have a BPM package, the assumption is they are using SharePoint and BizTalk, Vollmer says.
On paper, Microsoft SharePoint, Windows Workflow services, InfoPath and BizTalk Server are appealing to the midmarket, but SharePoint was not built for BPM purposes. “People using SharePoint have to build a lot of the logic themselves, whereas a BPM tool has logic prebuilt,” Vollmer says.
Midmarket organizations may cite cost cutting and lack of skills and IT resources as the reason for not looking beyond Microsoft, but that’s not all. “Many [midmarket companies] are Microsoft-centric, and they follow and wait for Microsoft to do everything, whether it is new business applications or SharePoint,” Hill says. “The more they can consolidate and leverage Microsoft technology investments, the easier their lives become.”
In comparison with the features and functionality of, say, Documentum or FileNet, SharePoint is weak, Hill says. “There’s very much a mentality amongst midmarket companies that [SharePoint] is good enough; we don’t have to push the envelope or take a big risk and be the first to try things.”
Cost savings and cost cutting continue to be the No. 1 and No. 2 concerns for CIOs, so it’s no surprise given the economy that Microsoft technology, which is easily 20% to 30% less expensive than Java equivalents in the area of BPM and content management, wins out with midmarket organizations, she says.
Are you in that group of companies sticking with Microsoft for business process management? Do you have advice for peers for its usage, or regarding BPM in general? Is BPM a strategy that’s top of mind at your company this year, and do you agree with the analysts’ definition?
March Madness has officially started. Offices are buzzing with pick-to-win pools, friendly competition amongst peers and co-workers — and the network slowdown caused by streaming live videos of the game. Is your network up to snuff and prepared to handle the rush of the game as March Madness progresses?
The NCAA will be streaming live video of every game, from the round to the last – including a new high-quality option (requiring a Microsoft Silverlight download). CBS will also be providing the live games online, something it has been providing for free for the past four years. Just to provide some scope for how many people will be streaming this game online this year: In 2008, the online audience for the NCAA men’s tournament grew 165% over 2007 with 4.8 million viewers (way up from the 2006 number of 1.3 million people).
Streaming video, as opposed to another productivity buster like online shopping, affects the entire network. According to one calculation on the effect streaming video can have on the network, in a company of 10,000 employees, if 75 of them (on a 100-megabit network) were streaming video at the same time (on decent-quality video streams with other Internet apps going on), the network could be slowed down to a stop.
One company I talked to experienced a 2x increase in bandwidth utilization on Thursday; its normal average of 15MB increased to 30MB. This IT director told me there wasn’t a noticeable slowdown because the company is able to burst to 45MB, but if usage increased further, he was going to lower the priority of CBS SportsLine on the firewall to make the user experience poor and give more important applications better performance.
So that’s one approach to handling NCAA enthusiasts. What else can you do before or during non-work events likely to cause a network slowdown?
Strategically plan for the event with public viewing areas. Set up televisions within the office so employees can keep up with the live footage during breaks. The workplace can only go so far in accommodating employee interests during the day, but for some public interest events like the inauguration or national disaster updates, providing the televisions can help separate work from other things.
Limit the access with policies. Block video during the workday, providing only a limited window of opportunity for streaming or downloading (8-10 a.m. or 1-2 p.m., etc.). This may be away to provide a positive work experience while safeguarding the company from loss of productivity and network overload.
Block it. For many the hassles and risks are just not worth it, and blocking video on the network is a quick fix. The flip side of this? Some employees may try to access the video through less reputable sites, posing a security/virus risk.
The good news is, if you’re thinking about how to handle network slowdowns before it becomes a problem, you’re already strategically planning. Monitoring, preparing and understanding the risks are important when it comes to staying on top of your IT game.
As the national job market continues to founder, with total jobless claims reaching a record high of 5.5 million, IT professionals can take solace in a recent report from Forrester Research Inc. analyst Andrew Bartels. The report shows that there are IT job opportunities out there, with some skills more in demand than others. (CIO wasn’t on any of the lists.)
The Forrester report predicts that total jobs in IT will drop by only 1.2% this year. Indeed, compared with past recessions, the impact on IT “will be relatively mild” this time around. That’s largely due to the bloodletting IT has been going through since the 2001 tech recession. Most IT departments are already quite lean, Forrester notes.
After three consecutive years when IT jobs grew more than 2.5%, 2009 will be a down year. This is especially true for IT occupations at IT vendors, where jobs are expected to fall almost 3% in 2009. On the other hand, IT jobs in IT departments will decrease by only 0.7%. Still, both these numbers are substantially less than the 4+% job shrinkage after the dot-com bubble burst in 2001.
The good news is that a number of IT occupations will add jobs in 2009, according to the Forrester analysis of Labor Department figures. Some of the IT job opportunities are as follows:
- Systems analysts, the largest U.S. IT occupation, will grow from 580,000 jobs in 2008 to 600,000 in 2009.
- Network systems and data communications analyst jobs will increase from 230,000 in 2008 to 240,000 this year.
- Network and computer systems administrators, an occupation that has seen steady growth over the past decade (even during the tech bust) will increase “slightly” in 2009, due to continued growth in networks and systems that have to be managed.
Conversely, job opportunities in four areas will decline: software engineers for applications and for systems, computer research scientists, database administrators and help desks.
It’s the network, stupid
The job picture tells you a lot about what IT departments will look like in the future, according to Bartels.
The areas of growth and the areas of contraction reflect the changing face of IT. Network analysts are in high demand because of the rise in mobile technology and workers who are either based at home or on the road. Companies need IT experts who understand the security and communications requirements of a workforce that is becoming more and more extramural.
The part of IT that is contracting — computer programming, computer operations and research — tells you how much outside vendors (commercial software companies as well as outsourcing providers) have co-opted these responsibilities.
We are curious to know if your experience matches the job data described above. Is the recession hurting the IT job picture in your company? Have you been laid off?
Microsoft ERP software upgrades were, needless to say, a focus of this week’s Microsoft Convergence conference, where some 7,000 customers and partners converged on New Orleans for Redmond’s annual confab. Two of the four flavors of Microsoft’s ERP software – Dynamics AX, from the Microsoft Axapta acquisition, and Dynamics NAV, from the Navision acquisition – had significant upgrades released last year, as did Microsoft’s CRM product, which is also under the Dynamics label.
Of course, knowing that many IT capital budgets are history this year, I was curious as to how those upgrades are going. The Microsoft executive I had access to, Craig Dewar, responded that upgrades are included free in Microsoft’s software maintenance packages, so cost is restricted to services for the upgrade. (We didn’t discuss those maintenance packages, which are a whole other ball of wax.) He assured me that the company was “seeing a huge amount of interest in ERP now,” especially because the best time to upgrade core systems is when business is slower.
I don’t dispute that logic – many cyclical industries already have a discrete window of downtime each year in which to perform significant systems work, and it’s a reasonable assumption that is there some business “downtime” out there now. But I have a hard time believing that given how strapped I’m hearing many IT shops are, they’re adding ERP upgrades to their to-do lists.
So hear ye, Dynamics AX and NAV users: Are you upgrading to these latest versions, and if so, when? Is there functionality you found worth the time and expense to go after now, or is your upgrading a function of Microsoft’s release philosophy and the fact that you have the time do it now?
President Obama selected Vivek Kundra as his first federal CIO. Kundra, formerly chief technology officer for the District of Columbia, has been recognized among the top 25 CTOs in the country and as the 2008 IT Executive of the Year.
Is he an example of the next generation of CIOs?
Kundra, who refers to citizens as “co-creators,” has received a lot of attention in his 19 months of service with D.C. mayor Adrian M. Fenty – adopting the latest computing trends and introducing popular social media tools into his bureaucratic processes.
Keeping up with the ever-changing beat of technology, engaging citizens, lowering the cost of government operations and spearheading innovative projects are some of the many things that make Kundra stand out.
Young and change-oriented, Kundra uses YouTube to post the bidding process for city contracts and Twitter in the office, and he wants to let drivers pay parking tickets on Facebook. Imagine that: Accept a new friend request and pay your fine, all in one login.
For midcareer CIOs who don’t use social media and may not be making innovation and big change a priority, especially in this economy, Kundra and others like him may feel like a threat. CIOs get replaced because they become too comfortable in the way things are and are unable to see new opportunities for change and transformation, or are unable to make it happen.
Granted, Kundra’s big ideas and plans may be so forward thinking as to be naive, given his resources and the potential four-year shelf life of his position as federal CIO. But there is something to be said about a big-dreamer with fresh ideas who is able look beyond the tried and true. Kundra launched a contest in October called Apps for Democracy and got developers to submit 47 Web applications to provide residents with city data. According to The Washington Post, Kundra said he spent $50,000 for the contest, including prize money, but he estimates saving $2.6 million by not hiring contract developers.
Willing to take risks and able to visualize new ideas and situations, Kundra was able to engage citizens, save money and come up with a series of applications for the people in his last job. As he demonstrates similar gusto as the federal CIO, do you applaud his youthful energy and ideas as a welcome reprieve from everyday government, or foresee him having to learn hard lessons about change, resources and the politics of IT, as many of you have in the trenches of corporate America?
Even as CIOs face smaller IT budgets in a range of areas this year, one segment that still has traction is Software as a Service (SaaS). The subscription-based software delivery model provides an alternative to bulky, on-premise applications and is thriving in shops where CIOs need to deliver functionality quickly without a lot of up-front investment.
But buyer beware: The gold on the road to SaaS is often buried in the contract you negotiate, and some CIOs are left wishing they had done something differently soon after the ink has dried.
In a recent SearchCIO-Midmarket.com article, CIOs shared tips and advice for avoiding potential pitfalls in SaaS contracts, from contract duration to licensing fees and more. One CIO faced a requirement to buy a minimum number of licenses, which had to be maintained for the life of the contract. Adam Sokolic, vice president of product management at National Retirement Partners Inc. in San Juan Capistrano, Calif., lost 15 people in a layoff and was stuck paying for the licenses even though he didn’t need them anymore.
Such issues don’t seem to be crimping the popularity of some SaaS solutions, though. Research firm IDC has increased its SaaS growth projection for 2009 from 36% growth to 40.5% growth over 2008.
Service-now.com recently announced record growth of almost $20 million in recurring revenue by the end of 2008, bringing fiscal year revenue growth to 389% of 2007. Salesforce.com saw a 34% jump in quarterly revenue by the end of January, reaching a record quarterly revenue of $290 million. Subscription and support revenues were $266 million, an increase of 35% over last year, and professional services and other revenues were $23.5 million, an increase of 15% over 2007. In fact, as these results show, CRM and IT Service Management software seem to be among the more popular application categories for SaaS.
So while lobbying for desirable SaaS contract terms may require a practiced and skilled negotiator, the market growth shows that SaaS continues to gather steam in today’s corporate IT. And that can benefit everyone.
An article on our sister site, SearchCIO.com, this week highlighted the qualities of a good leader during a recession, culling advice from leadership experts and CIOs. The list includes qualities such as utilizing the ability to inspire those around you, having communication (and listening) skills, proving you can perform and drive results, being able to prioritize, and then — BAM! Avoiding layoffs at all costs. Something that seems almost impossible, as daily news headlines remind us.
In the article, Jason Jennings, an author, speaker and consultant who has studied more than 100,000 companies, said the most productive companies are completely opposed to layoffs. Why? As soon as layoffs begin, employees start to worry about themselves and their futures as opposed to their work.
But with expectations that unemployment will top 9% in 2009 and budgets that are painfully tight, aren’t layoffs necessary?
Oftentimes, they are. When demand for new cars virtually stops, carmakers need to pare back production, and that means job cuts. But when it comes to IT, there are some ways to prove value and cut costs without resorting to the proverbial ax. For example, some companies are relying on their project management offices to steer them through the recession – time-tracking and tying resources to specific projects. Doing so prevents redundant work on projects, speeds project completion (freeing up the time and the budget for more projects) and justifies positions. One IT executive in our recent article specifically attributed job preservation to his PMO.
And most recently, technology giant HP announced pay cuts for the entire workforce as a way of avoiding layoffs after a disappointing first quarter. Rather than scaling back the 100,000-person workforce by 20,000, CEO Mark Hurd preferred the pay cuts to trim the budget.
Jennings notes that besides the morale issues that layoffs cause, job cuts can be a short-term fix. When business picks up again, the recruitment and training for renewed growth will be a setback. No argument there. But if your management is calling for a headcount reduction and you have already made all the efficiency moves you can – what then? Have you found other creative approaches to avoid pink slips?
It took a lot of coaxing to get me to start using Twitter. It wasn’t that I didn’t want to join. It wasn’t because I didn’t understand it. I just didn’t get it. I didn’t see what the big deal was. To be frank, I didn’t think I could keep up with the twit-chat. I barely update my Facebook page. I still take notes in (gasp!) a notebook. My inboxes are overflowing with work and personal messages.
And I’m not alone. As more and more companies are showing an interest in using Twitter, from the CIO to the marketing department, the benefits of the social networking tool are being questioned and investigated. Is the time investment worth it, or is this another trend?
Recently on (ahem) Twitter, I came across a Tweet from someone in my following about companies using Twitter as a business tool. Thus, a business connection was born – Norman Birnbach (@NormanBirnbach), president of Birnbach Communications, a small agency that works with clients in both traditional and online media. Birnbach gave me some Twitter business insight into why everyone should be investigating it.
1. Twitter, shmitter – why bother?
According to Birnbach, you need to protect your brand. If you aren’t there, someone else will be. “It’s important to build up a following and credibility. In the tough economy, companies need to have an established spot to provide honest information and respond to Twitter reactions,” Birnbach said. Situations like employee layoffs will spur people to react via Twitter — without a spot on there, you lose your voice to respond. Keep a pulse on what your employees are thinking and join the dialogue when appropriate.
2. It’s not (always) about marketing.
Aside from creating a brand and name for yourself, Twitter can be used as a customer service tool. “@ComcastCares does a really good job listening to their customers and providing assistance and feedback,” Birnbach said.
Reaching out to your customers (whether it be external or internal IT customers) and providing another outlet for your services builds loyalty (refer to No. 1). “No one really cares about your product or service,” Birnbach adds. “All people care about is how you help them, and you can’t oversell being helpful.”
3. Keep an eye on what everyone is doing.
The constant posts on Twitter provide company transparency – you can share what you’re doing, and you get to see what your colleagues and competitors are up to. The ability to see in real time what peers are learning and doing, projects they are diving into and new trends as they develop turns Twitter into an online networking and learning tool. This type of knowledge share has been very beneficial, according to Birnbach. It provides a new way for companies to communicate internally and externally and learn from peers and colleagues.
4. Ready to join?
If you’re ready to start using Twitter, there are a few things you need to know:
Build a following. Look for people who are Tweeting on the topics that interest you and follow them. Search topic keywords or companies you want to know more about and start following. “Twitter is different from Facebook in this respect – you can just start following whoever you want without knowing them,” Birnbach said.
Banish Twitter-block. Birnbach said some people don’t join Twitter because they don’t want their tweets to sound foolish, boring or inappropriate – people are concerned about oversharing and privacy issues. “Don’t tell people that you’re having a sandwich for lunch. If you’re always going back and forth with obscure references, you’re not going to engage people. Figure out who you are trying to reach and what you are trying to achieve and post a mix of insight and conversation,” Birnbach suggested. Provide useful comments and remember – ABL (always be linking). Sharing news, timely information and important updates make you a credible source and an asset to your following.
Don’t overdo it. To ensure you and your employees are focusing on other priorities (like work), set a time limit for using Twitter and stick to it. “It’s important to at least look at Twitter. If you decide to go ahead with it, use it to extend what you’re already doing – as a complementary component,” Birnbach said.
I’ve been on Twitter for more than two weeks and … I love it. Used right – as a business tool to communicate with your CIO universe, your staff and/or your users – you will, too.
When a business slowdown creates employees with too much time on their hands – look out, help desk.
That was my take on a blog from our senior writer Linda Tucci, who found herself in a roomful of lawyers at a conference in New York this week. I burst out laughing when I read her story about a presentation on Excel that IT expected a bunch of associates to attend. Instead, the room filled up with partners. Talk about a tough crowd.
But as a side effect of the recession, highly paid employees finally getting around to using the tools on their desktop isn’t a bad thing. It’s actually an opportunity to increase the ROI on the tools you’ve deployed by increasing usage – and getting visibility for IT among the higher ranks. Just getting them on board as tech users can bode well for future projects, too.
Excel might not be the best example for ROI – but think of the reporting capabilities you’ve created that many more people could be using, once they found the time for some IT education and training. The CRM or sales systems that need updating with information from their latest client calls. The mobile applications you went to great lengths to create and that people now might have the time to tinker with on their BlackBerrys. Encouraging a culture of catch-up could be well timed and even appreciated by those looking to engage in a new project if business is slow.
While I had to laugh at the thought of big shot lawyers frenetically calling the help desk as they struggled through their learning curve (woe to those help desk folks), I saw real value in what they and the organization were doing. IT and the business will benefit in the long run. Offering IT education and training is a great way to make the most of the recession and emerge from it in fighting form.