Conspectus Direct Newswire

Current Issue: Issue 5

1 April 2003

This issue is sponsored by:

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This issue agenda

1. Research Today: 'Provisioning' may be next IT hot topic
2. News Analysis: IT spending set to recover in 2004
3. Buyers' Analysis: What makes integration so special?
4. Services Update: Suppliers scramble for outsourcing market share
5. Market Opinion: CRM implementations disappoint
6. Further information - feedback/forward to a colleague/unsubscribe

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1.** RESEARCH TODAY **

Market analysis by Neil Ferguson, Director of PMP.

A leading candidate for the next hot IT topic is 'provisioning' - which covers solutions that automate the process of connecting and disconnecting staff, suppliers and customers to internal resources.

Provisioning - or directory-based identity and access management - solutions provide business agility and can automate the deployment of IT resources and services based on business requirements.

The use of provisioning and an enterprise-level directory has the potential to substantially lower costs, reduce errors and enable businesses to respond more quickly to change.

However, business managers' understanding of what directory-based identity and access management solutions constitute is currently assumptive rather than complete and attitudes towards these solutions remain parochial. There is, however, widespread use of the technology - in some form at least.

Few businesses have succeeded in integrating their disparate systems over a common layer driven by common business rules. And for the great majority, external integration remains light years away.

Directory-based identity and access management solutions are recognised as a means of consolidating disparate systems and achieving integrated security, among organisations contacted by PMP Research. The other main benefits also focus on achieving internal efficiencies and productivity.

But these solutions are at present deployed 'defensively' to address integration and security issues. Solution vendors will therefore need to produce a clear roadmap outlining how clients could achieve future benefits via external collaboration, having produced initial internal 'wins'.

Consultants can also play a role. For while the IT function may foresee no problems in implementing directory-based identity and access management solutions internally, they anticipate significant difficulties in handling data integrity and business process issues.

2. ** NEWS ANALYSIS **

By leading IT industry watcher Sarah Underwood.

European IT spending will grow marginally this year, before a more significant upturn takes place in 2004, driven by the need to replace ageing systems and adopt new technologies, according to a survey by technology analyst Gartner.

Some 75% of 420 European chief information officers questioned said they were keeping 2003 budgets on hold or increasing IT spending by a marginal amount. Discretionary spending is expected to be extremely low this year, with IT departments having to justify any new expenditure and budgets being absorbed by increasing maintenance costs.

It is these maintenance costs that Gartner believes will be one catalyst for increased IT spending next year, as companies pay more for maintenance than they would to replace systems. Industry consolidation - particularly in the software sector - will also stabilise prices, ending the price wars that have held both customer budgets and suppliers' revenues down.

In terms of technologies to watch in 2004, Gartner forecasts an uptake in wireless solutions and web services that will further increase spending. "The accelerating focus on mobility and enterprise efficiencies, plus a relentless push by vendors virtually giving away wireless technologies, are converging to create one of the most significant shifts in 2004," comments Peter Sondergaard, a vice president at Gartner.

3. ** BUYERS' ANALYSIS **

PMP continually tracks the buying intentions of thousands of UK companies. Telemarketing Manager Julie Welch highlights the key trends revealed.

A ubiquitous element on every IT director's wish-list in recent months has been integration. With nearly 50% of companies we have interviewed recently having been subject to a merger or acquisition in the last five years, the issues surrounding effective communication between systems are vast.

In a tight economy, accurate and relevant management reporting is paramount, to enable decision making. And to achieve this, enterprise systems need to be highly integrated. Speaking to consultants we are hearing the same story: this is the one key application area they are concentrating on for the next 12 months.

In a climate where budgets for the implementation of new software are being axed unless absolutely necessary, integration seems to be immune and to continue to be a 'live' project area.

Technology in this space is evolving away from older pre-packaged EAI software towards the use of web services and XML. In a business climate where most companies trade on an international basis, and many have satellite sites overseas, this kind of solution to integration problems is both easier to implement and more cost-effective. In fact, when asked what the effect of web services will be in the 'real' world, the majority of respondents replied that integration is a key application for this new technology.

4. ** SERVICE UPDATE **

Sarah Underwood focuses on events in the IT services marketplace.

IT services and solutions suppliers are continuing to push into the outsourcing market as they feel the effects of dwindling IT development budgets. Among those acknowledging the potential importance of the sector are

Accenture, Cap Gemini Ernst & Young (CGEY) and Atos Origin. Accenture has re-shuffled its management team to create the new position of CEO of business process outsourcing (BPO). The post will be filled by Jackson Wilson, formerly Accenture's corporate development officer, who will report to chairman and CEO Joe Forehand. The job responsibilities include delivering the company's strategy to increase BPO market share and overseeing existing outsourcing business.

At CGEY and Atos Origin, recent full-year financial results provided a platform to sing the praises of outsourcing. CGEY reported that outsourcing revenues accounted for 27% of its total 2002 group revenues of $7.6 billion, up from 21% of total revenues in 2001.

Atos Origin also noted a significant gain in revenues from managed operations, leading CEO Bernard Bourigeaud to comment: "We intend to expand our activities further within the main IT service markets of Europe, especially in the UK and Germany. At Atos KPMG Consulting in the UK, this will be achieved organically, with a focus on expanding our presence in outsourcing. In Germany, we are interested in creating partnerships with the IT departments of large industrial and commercial organisations."

5. ** MARKET OPINION **

Pat Sweet reports on the latest findings from Conspectus' monthly survey of UK IT end users.

Many CRM implementations continue to disappoint, according to the most recent Conspectus research on this topic. Just 8% of the organisations polled describe their CRM applications as 'very successful', with only a quarter (26%) saying this technology has delivered competitive advantage.

Although 70% have agreed criteria for measuring whether or not their CRM systems produce the expected benefits, only 38% are able to do so in practice. A third (32%) admit to problems in measuring outcomes, while 30% have failed to do so.

Despite this lack of success, around half (48%) of those surveyed plan to introduce an integrated CRM system within the next two years, while the same proportion are also looking to expand the reach of CRM systems to include employees, suppliers or partners.

End users are becoming more involved in such choices, with 74% of the sample reporting that non-IT personnel have a great deal of influence on development.

Improving customer satisfaction remains the key reason for introducing a new CRM system, and companies are pinning their hopes on new technologies to enhance the performance of CRM applications. These include portals and data mining techniques, both of which are identified as critical for future developments by 80%, as well as business process management software which is cited by 74%.

The Conspectus survey on CRM was based on interviews with 50 companies from a variety of industry sectors and with turnovers of between £5 million and £1 billion.

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