Total ICT Spending to Increase by 5 percent in 2012

You may think that the worldwide economic downturn has negatively impacted most CIO's budgets, but so far that hasn't been the case. According to the latest market study by IDC, worldwide IT spending remains on course to grow by 6 percent this year in constant currency, that's only slightly down on last year's pace of 7 percent growth.

Strong performance in software, storage, enterprise network and mobile device markets has offset weaker trends in PCs, servers, peripherals and telecom provider equipment. However, the strength of the U.S. dollar in the first half of 2012 means that IT spending is on course for growth of just 4 percent this year.

Including telecom services, it's now estimated that total ICT spending will increase by 5 percent this year in constant currency to $3.6 trillion (that's growth of 2.5 percent in U.S. dollars).

"In spite of economic uncertainty, which continues to inhibit enterprise investment in some tech segments, the continuing demand for tablets, smartphones, storage capacity and network performance improvements actually outperformed expectations in the first half of the year," said Stephen Minton, Vice President, IDC Global Technology and Industry Research.

That being said, software spending has been very robust -- even in regions where economic trends have been weakest -- as businesses turn to software tools and cloud applications as a means of implementing their IT cost-reduction strategies.

Key Trends in the Worldwide IT Market include:

• American business spending on IT remains on course for weaker performance than 2011 with growth of 5.9% (down from 8.5% last year); the launch of Windows 8 in Q4 may help to drive a meaningful recovery in the PC market next year.
• While Western Europe remains weak overall due to the slow economy, software growth in Northern Europe was robust, and mobile device shipments (smartphones and tablets) have remained on course; excluding mobile devices, however, Europe is on course for just 1% growth in constant currency (a -4.5% decline in U.S. dollars).
• The recovery in Japan has lost some momentum, with IT growth in constant currency now on course for an increase of just 2% this year before flat lining again in 2013.
• Growth in emerging markets is still relatively strong,; in China, where the manufacturing sector has been impacted by slowing exports to Europe, IT spending is now on course for 14% growth this year in constant currency (down from 25% growth in 2011), with PC spending on course for growth of just 7% after a weaker-than-expected first half (down from 19% growth in 2011).
• Strong growth is still expected in India (14%), Brazil (14%), Russia (11%) and South Africa (8%).
• Overall Worldwide IT spending is now expected to grow by 6% in 2013 to $2.1 trillion (ICT spending including telecom services will increase by 5% next year to $3.8 trillion).

"In particular, the strength of software spending seems to prove that many enterprises have unlocked significant productivity and efficiency improvements. If the economy avoids downside scenarios in the second half of the year, a PC upgrade cycle in 2013 should help to maintain this momentum," said Minton.

IDC provides forecasts for IT spending in 54 countries around the world. These forecasts focus on 25 individual market segments across hardware, software, IT services, and telecom services for individual countries in all regions -- including North America, Latin America, Western Europe, Eastern Europe, Asia-Pacific, the Middle East, and Africa.

You have read this article budgeting / Chief Information Officer / Enterprise / ICT / IT investment / mobility / software with the title budgeting. You can bookmark this page URL https://apfurtado.blogspot.com/2012/10/total-ict-spending-to-increase-by-5.html. Thanks!

Demand for Cloud Services Among Government Agencies

While much of the market attention on cloud services adoption tends to be focused on private enterprise applications, government agencies potentially have a lot to gain from its widespread use.

The cost-savings and scalability advantages of the cloud have been clear to those savvy IT leaders that are informed, but government adoption has been hampered by some unique challenges -- and the absence of a compelling mandate. That is, progress was slow until the "Cloud First" initiative was launched.

IDC has released a status update that details the growing demand for cloud services and enterprise architecture resources among U.S. government agencies. Their latest market study focuses on the results of an IDC Government Insights survey, which measured the progress of cloud solutions at government agencies -- while also examining the related architecture needs.

The results of the comprehensive survey revealed that despite the growing demand for cloud services, many IT managers are unsure of their organization's overall cloud strategy and the resources available to purchase and implement cloud services.

The Strategic Imperative for Cloud Services

The IDC report of the market study findings also highlighted that government employees now realize cloud solutions are becoming important for IT strategy. However, apparently many decision makers are still evaluating what cloud solutions will specifically mean to them and their organization.

In addition, in spite of the fact that managed cloud service offerings have been made available to government agencies for some time now, more than a third of the survey respondents lacked knowledge of cloud services budgeting.

IDC Government Insights finds that extensive government employee outreach is necessary to boost the comprehension or understanding of cloud migration strategies and related budgetary requirements.

Other findings from the latest IDC report include:

• Across all levels of government 90 percent anticipate cloud services will have impact on computing infrastructure.
• Local government participants were the least optimistic about cloud, with 14.7 percent saying cloud wasn't at all important.
• Despite the fact that CFOs are often the people who drive their group's transition to cloud (due to potential cost savings) 60 percent of chief financial officers are only somewhat familiar with their organization's cloud strategy.
• Indicating the presence of some progressive thinking, 15.2 percent of respondents said they would dedicate between 1 and 10 percent of their agency's IT budget to cloud services.
• When it comes to cloud providers, there is a clear preference across all levels of government for large IT vendors versus smaller, specialty providers.

"Survey data indicates that significant progress already has been made for cloud services, but overall progress will only accelerate once several important issues have been addressed," said Shawn McCarthy, research director at IDC Government Insights.

IDC believes that these outstanding issues include lack of knowledge by some participants on the level of funding available to spend on cloud solutions -- as well as the needed IT architecture changes that can help agencies move more aggressively into cloud.

Furthermore, by focusing on greater outreach efforts to bring all IT employees in line with enterprise cloud plans, government agencies can begin to benefit from the readily available cloud computing services.

The IDC survey was conducted in the late spring of 2012 and measured the responses of more than 400 government information technology employees at various levels of the U.S. government. About half of the participants work for the federal government, with the remainder working in either state or local government.

You have read this article adoption / architecture / budgeting / cloud services / government / IT / strategic planning / training with the title budgeting. You can bookmark this page URL https://apfurtado.blogspot.com/2012/08/demand-for-cloud-services-among.html. Thanks!

Demand for Lean, Green Business Technology

According to a recent market study by Datamonitor, the current global economic recession may also prove to be a significant driver for Green Computing. Their market assessment raises lots of questions -- including, is it better for the world, and overall business profitability, if executives cut-back on their IT investments?

"The global economic recession has spurred a paradigm shift in the way organizations evaluate, budget for and deploy green IT," says Rhonda Ascierto, senior analyst at Datamonitor. "The downturn has also resulted in green IT trends for datacenters, client devices and asset lifecycle management, as well as re-shaped return on investment (ROI) models."

Datamonitor believes green IT that's intended to eliminate the need for capital expenditure -- such as datacenter virtualization, facility design and asset lifecycle management -- has become very important, especially as IT budgets are trimmed.

Lean and Green in 2009
Their research uncovered that lean IT budgets will likely be the norm in 2009, and that organizations will predominately seek green IT solutions because they're cost-effective. This represents a significant market trend, in their opinion.

Green ROI models are becoming compulsory and shorter. In order for green IT vendors to satisfy these new ROI requirements, they're being forced to develop more efficient solutions. However, when it comes to new IT equipment investments, if "less" is more, then "none" can be even better.

Business technology budget constraints force CIOs and IT managers to think beyond legacy approaches to a current problem. As a result, organizations that face critical datacenter limitations are already considering alternatives to building new datacenters or upgrading existing facilities.

Alternatives to IT Capital Investment
Those alternatives include IT leasing, managed services, virtualization software, cloud computing and software-as-a-service (SaaS). Datamonitor believes datacenter resources will increasingly be hosted in a cloud-based environment, which should -- at least theoretically, they say -- fall under the green IT banner.

Clearly, it really doesn't matter what you call your own concerted plan to reduce and contain operating expenses -- in contrast, what matters most is that you take appropriate action now.

Perhaps you're still wondering if the selective out-tasking of business technology is something that your executive team should act upon. If so, you might consider also reading the recent editorial in a mainstream business magazine entitled "The IT Companies Shouldn't Buy" and then ask yourself some of the same fundamental questions about your own business strategy.

You have read this article budgeting / build versus buy / cloud computing / cloud services / cost reduction / data center / financial analysis with the title budgeting. You can bookmark this page URL https://apfurtado.blogspot.com/2009/07/demand-for-lean-green-business.html. Thanks!

Non-Profit Gains Budget Relief for Telecom Needs

Non-profit organizations share many of the same communication challenges as other businesses. Their budgetary pressures can also create some unique situations, especially when you consider the scale of their ongoing outreach.

The Greater Illinois Chapter is one of over seventy Alzheimer's Association chapters serving communities across the United States. Currently, the Illinois chapter serves over half a million residents affected by the disease.

They're active in more than 60 counties in Illinois. Since 1980, the non-profit organization has provided information and support, as well as family services, for those affected by the disease. Staying connected to their numerous constituents, and the overall community, is essential.

Streamlining Communication Processes
As the chapter grew, they needed big business telecom functionality -- only on a non-profit budget. In the preparation to move into a new facility, the decision was made to replace their phone system. Managing six office sites, they needed a solution that would lessen the work load on their already strained small technical staff.

After evaluating several options for a voice and data network, the Alzheimer's Association selected Geckotech's SimpleVoIP phone service for its proven ability to deliver a reliable and highly flexible solution.

By utilizing a fully hosted service, the organization has gained additional functionality and operational efficiencies not available with their prior, and less capable, telephone system.

Communication Simplicity, by Design
By connecting all office locations over a common network, employees can use simplified four-digit dialing between locations. This inherent feature of the hosted solution has greatly reduced operating costs, by eliminating the expense of intra-company toll charges.

Geckotech's VoIP phones can be configured for hoteling (shared use), which is especially beneficial for volunteers who work in the office on a flexible schedule. Other features have enhanced ease of use -- such as an Automated Attendant that directs incoming callers to the correct department, call forwarding to mobile phones, and voicemail notification via email.

Resulting benefits from the changeover include a dedicated number and voicemail for the Special Events group, improved routing of incoming calls, free adds/moves/changes and access to a 24x7 technical support team at Geckotech.

Savvy Budgeting in a Tight Economy
These are trying times for non-profit organizations. However, meaningful budget relief -- and improved operational efficiency -- is possible for those organizations that make informed business technology decisions that are based upon a complete financial analysis of the alternatives.

The Alzheimer’s Association recognized a great return on investment with Geckotech's Hosted VoIP Phone service and their IT department has since enjoyed time spent on more pertinent projects, rather than babysitting the phone system.

You have read this article best practice / budgeting / case study / financial analysis / hosted phone systems / IT / managed services / non profit / out-task with the title budgeting. You can bookmark this page URL https://apfurtado.blogspot.com/2009/03/non-profit-gains-budget-relief-for.html. Thanks!

IT Financial Management - Now is the Time

I've heard many excuses, during my years as an ITIL consultant, as to why a client did not want to start IT Financial Management -- the business is not ready, we don't have the tools, we don't know where to start, etc.

However, in these troubling economic times, it is imperative that IT adopts IT Financial Management in order to respond to the increasing pressure to reduce costs.

IT can reduce costs through service-based cost transparency and charge-backs. This method does not mean IT is a profit-center; it just means that IT is educating the business on the cost to provide the services.

With this knowledge, the business can adjust their consumption to better manage their budget and ensure spending is aligned with the value of the service they are receiving. Contrast this with a nebulous IT overhead charge which does not incent the business to use scarce IT resources wisely.

A Roadmap to IT Financial Management
The secret to successfully starting IT Financial Management is to develop a roadmap with increasing levels of maturity.

For example, in Phase 1, pick four to five key services for consumption based costing, e.g. number of servers, storage consumed, network bandwidth consumed, etc., then allocate the remaining costs (i.e. Service Desk, data center operations, etc) as a surcharge against this base price. In Phase 2 and subsequent phases, continue to expand the number of services covered by consumption-based charge-backs.

Another dimension of maturity is the approach to charge-backs. In Phase 1, you may want to just publish costs (i.e. cost transparency with no dollars changing hands). In Phase 2, you may want to provide invoices that show consumption and a hypothetical charge-back amount but stop short of consummating the transaction.

Finally, in Phase 3, implement the actual charge-backs. This gradual approach will allow the business to adapt and prepare for a new way of interacting with IT.

By establishing and communicating a roadmap, you can start IT Financial Management today and be better positioned to manage the IT budget.

About the author: Reg Lo is the VP of Technology Solutions at Third Sky Inc. He has over 14 years of IT consulting experience in ITSM/ITIL consulting, research compliance and healthcare, and custom solutions. He is a frequent speaker at itSMF and HDI events and a contributor to "The Forum", the offical newsletter of itSMF USA.

You have read this article best practice / budgeting / business process / business technology / cost reduction / financial analysis / ITIL / ITSM with the title budgeting. You can bookmark this page URL https://apfurtado.blogspot.com/2008/10/it-financial-management-now-is-time.html. Thanks!