Pat Millar outlines highlights from our research and discusses some of the many challenges facing the IT community at large in the weeks and months ahead.

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Click here to see a full copy of the report online.

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You can also visit us at:  Clarion Consulting Europe | Clarion Resourcing

• Just one third of organisations with IT boardroom membership, unchanged from 2009
• Increasing perception of IT as a utility and not a strategic engine of business change
• Only 5 percent of organisations measure IT return on investment and 3 percent measure IT innovation
• More than half of all organisations have cut IT budgets in the past year

Dublin, Ireland, Friday, 3rd June 2011: Leading project management and IT consulting specialist, Clarion Consulting today released the results of its survey into the Evolving Role of the IT Function.  Now in its third iteration since 2007, the survey reveals that IT boardroom membership has firmly ground to a halt with one third of organisations confirming an IT presence at the highest levels of management, unchanged from 2009.

An increasing perception of IT as a utility service has also come to the fore with 44 percent of respondents believing that IT’s role is limited to simply supporting the business function.  57 percent cite it as strategically valuable, considerably down from the high of 72 percent recorded in 2009. In line with this, just 5 percent of organisations measure IT return on investment and 3 percent measure IT innovation.  More than half of all organisations have implemented some form of IT budget cut in the past year.

The survey was conducted online during the months of December 2010 and January 2011 and canvassed opinion from the public and private sectors across a wide range of industry verticals.

“It’s disappointing to see that IT boardroom membership has not increased since 2009,” says Pat Millar.  “We had seen some strong acceleration through 2007 and 2009 but this coupled with a significant drop in the number of respondents citing IT as strategically valuable to the organisation, is a negative development for the industry as a whole.  At a time, when many organisations are trying to re-assess and re-invent how they do business, they fail to understand that IT can serve as a dynamic driver of innovation and creativity.  We encourage IT professionals to be far more aggressive in communicating the message of IT as business enabler and one which deserves its place at the top table,” he adds.

IT Governance and Compliance

On the positive side, there have been some refreshing developments in the area of IT governance and compliance.  45 percent of organisations are now subjecting their IT strategy to independent review, up from just 20 percent in 2009.  There has been an overall increase of 8 percent in the number of organisations reporting the alignment of IT with business strategy as either “very tightly aligned” or “tightly aligned” up from 42 per cent in 2009 to 50 percent in 2011.  The number of organisations offering internal Service Level Agreements (SLAs) to its staff now stands at 79 percent, an increase of 11 percent on 2009.  There has also been an increase in the instance of organisations subjecting the IT function to formal performance metrics, up to 53 percent, representing an increase of 17 percent on the figure recorded in 2009.

“While we welcome these developments, there is clearly a failure by organisations to measure IT return on investment,” comments Millar.  “Significant financial investments are made without any attempt to actually measure if projects have delivered on objectives.  One has to wonder if future IT investment could be threatened by this lack of focus on what are basic operational metrics,” he adds.

IT Decision-Making

A more holistic and cross-departmental approach to project selection has emerged with 86 percent confirming that their decision-making forum includes representation from all business functions.  “It’s clear that projection selection processes have matured with a more collaborative and commercial approach being taken,” explains Millar.  “In the vast majority of cases, decision-making processes are based on consensus across all business functions, recognising the pervasive nature of IT and its ability to influence business operations.”

IT Budgets

More than half of all organisations confirm that IT budgets have been cut in the past year.  Looking forward this year, one quarter predict modest declines in IT budgets of up to 10 percent.  However, this is balanced by a similar number predicting modest increases.  Indeed, one in ten organisations see more aggressive budget increases of between 11 and 20 percent.  “Budgets are under pressure,” comments Millar.  “However, it is encouraging to see almost three-quarters of organisations add new IT services to their portfolio, despite obvious budgetary constraints.  This clearly demonstrates the need for the IT function to add value to the business and stay relevant in the current climate,” he adds.

IT Talent Management

One quarter of respondents are currently undergoing some form of training or accreditation within their respective organisations.  This could be interpreted as a low level of training given the ongoing investment required by IT professionals to keep abreast of changing developments.  However, on the positive side 89 percent of organisations are contributing either wholly or partially to the cost of that training.   Three quarters of training programs have business disciplines at their core.

“Training and education is an easy target for organisations implementing budget cuts,” says Millar.  “For companies with limited resources, our experience tells us that coaching programs are a cost-effective and practical approach to building skills.  They are far more targeted in nature and less expensive than formal training programs.  This lack of training also represents a shift of responsibility from the employer to the employee for their own career development.  We are not surprised by this finding and at a time when financial resources are limited and staff attrition is high,” he concludes.

Clarion Consulting has conducted an online webinar for end-users to discuss these results and their implications for Irish organisations.  To access the session together with copies of the report, “The Evolving Role of the IT Function”, please contact us at info@clarionconsulting.com.

Ends

To access a range of supporting materials including the full report, please click here.

Click here to register.

Join us at Clarion Consulting for an interactive Webinar which will exclusively release the results of our research into the Evolving Role of the IT Function in Ireland. Conducted earlier this year across the public and private sector, this research illustrates an IT function, which is declining in strategic importance and struggling to find its way in a new world, characterised by dwindling budgets and increased pressure to demonstrate business value.

Date: Wednesday, 1st June 2011
Time: 2.30 pm – 3.15 pm
After registering you will receive a confirmation email containing information about joining the Webinar.

Paul Hearns, editor of ComputerScope together with Pat Millar, managing director of Clarion Consulting will delve into the detail of the findings and probe the challenges and potential solutions to help position IT as a strategic engine of innovation and change within the business.

Click here to register.

Please note that this webinar is primarily targeted at end-users.  As places are limited, priority will be given to these organisations and spaces will be only allocated to others if they are available once registration has closed.

As businesses struggle to do more with less, the pressure falls on the IT function and the CIO to demonstrate the value add of IT or risk being seen as a cost centre to be cut. This pressure, to demonstrate the business value of IT will continue to increase and CIOs need to accept this and gear themselves up to deal with it. The flip side of this is that if they can demonstrate this value perhaps the much coveted seat at the board room table is within reach.

In the past, many CIOs have been focused on operational issues and have been stuck in reactive mode. Often those that do very good work either providing critical operational services or completing valuable projects do not take the time to ensure that their organisation in general and their colleagues in particular know what is being delivered by the IT organisation. IT functions can work very hard to bring projects in on time and within budget but once a project is delivered they move on to the next without making sure the business understands and acknowledges the value delivered. In short, many CIOs just do not get the need to market themselves and their departments.

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Dublin, Ireland & Amsterdam, Netherlands, Tuesday, 18th January 2011:  Leading project management and IT consulting specialist, Clarion Consulting today announced the extension of its business operations to Europe with the launch of its Amsterdam base.  The Dutch office, whose staff numbers are projected to grow to 10 in 2011, will primarily target large global and indigenous European organisations with a specialised marketing execution service.

The service will assist large, multi-national organisations in the execution of multi-tiered, marketing programs to internal staff, reseller channels, partners and the end-user community.  By outsourcing marketing execution to a specialist third party, organisations can ensure that their marketing messages and channel readiness are fully aligned, thereby creating scale, maximising effectiveness and ensuring a solid and measurable return on marketing investment.

Commenting on the launch, Pat Millar, managing director of the Clarion group said:  “The launch of a Dutch office gives us a strong platform to build our brand on a pan-European basis.  Our Irish and UK business is growing steadily and the addition of marketing execution to our service portfolio will allow us to  build on and leverage or existing multi-national customer base and access indigenous European organisations.”   Millar adds:   “In the current climate where headcount is being reduced, we see a huge opportunity to assist these companies in driving marketing operational excellence on an outsourced basis.”

The European operation is led by PJ Verhoef, an experienced consultant and entrepreneur.  Verhoef  has broad international experience in various marketing and management roles within the technology sector.  Throughout his career, Verhoef has been founder of a number of new business start-ups in an international context and has advised management of large corporations such as Microsoft, Yamaha Motor Europe, Royal Dutch Shell, KPN Telecom and ABN Amro Bank.
“Marketing execution can be a real barrier to innovation. Its effectiveness is critical for any go-to-market strategy,” comments Verhoef.  “Global organisations, whose products are based on long development cycles and complex partner eco-systems are very much dependent on the ability of marketing staff to deliver.  But very often, these marketing staff are rewarded on strategy or innovative marketing programs and not on tactical delivery.  We are offering a full service model, which focuses on aggregating the delivery of below the line marketing activities to the breadth of the channel, allowing a partner to enjoy assurance of execution with the benefits of economies of scale,” he adds.

Clarion Consulting offers a marketing execution experience supported by expertise, continuity and scalability.  Based on industry-proven methodologies and frameworks, the service allows organisations to “right-size” marketing deliverables to increase impact and effectiveness, thereby boosting operational efficiency, increasing speed to market and maximising sales goals.

With operations in Ireland, the UK and the Netherlands, Clarion Consulting is a business and information technology consultancy specialising in program management and IT consulting.  Clarion Resourcing, a specialist recruitment service operating under the Clarion brand, was recently spun out to address an increase in demand for contract business and IT professionals.  Established in 1998, the Clarion group has an impressive customer base including organisations such as Microsoft, BP, DHL, KBC Bank, eircom, Origin Enterprises and Valeo Foods.

Ends

Some of the headline finding from previous surveys include:

1.         61% of respondents indicated that the IT Function was seen as ‘Of Strategic Value to the Organisation’ this was a 15% increase on the previous survey.

2.         37% indicated that the IT function was coming under increasing pressure to demonstrate (provable) business value

3.         Less than 35% had a senior representation a Board or Director level

Please complete the survey, which will take approx. 10 minutes of your time at the following link:   http://www.surveymonkey.com/s/ITevolution

Hardware = convenience + fun

The first big change since that pitch, is that we are now in a post-iPhone era. With that I mean we now have mass-consumer access to location enabled and convenient smartphones. Back then, we were showcasing our buddy finder on a device that only professional gadget freaks would buy and still we had to connect our ‘GPS mouse’ over Bluetooth. A process I’m sure will be met with great laughter when I tell my grandchildren at H75, but wasn’t much fun at the time..

So while that hurdle may appear to be taken, I still see consumer and professional convenience as a major attention point to most app builders. If you make friending, checking-in and privacy controls easy or even fun, you may be holding the winning app (e.g. foursquare, scvngr).  If you make mobile campaign building convenient and fast, you may actually get business to try it out (e.g. geotoko).

Business agility = conditional to success

We demo’ed the T-Mobile manager a use case where a person was ‘pinged’ when one of his ‘friends’ was entering his pre-defined ‘geofenced’ private perimeter. Back then a true feat, now only one reason people check in.  To our surprise, his response was: “So how can I bill this app out per minute?”.  Shame on us for having thought only from the consumers’ perspective and not from the telco’s business model! Before there were any proven business models around data-plans or apps supported by advertising, managers actually had to go out on a limb to fit business models to customers and not the other way around. How risky and daring…

Of course with 20/20 hindsight we can see which entrepreneurs took that risk and got the return. But fundamentally nothing has changed with the inertia of international technology moguls. It still takes courage at every level of the organization to step out of the box and look at an innovation as a consumer, not a scorecard-managed employee. Even Apple, who seems defiant of the Law of the handicap of a head start, sometimes gets it wrong because of stubborn adherence to abstract business rules.

Imagination = everything

When it comes to innovation, you have to understand the points of view from the “T-Mobile manager” as well as the consumer. We failed to reach his imagination as he was stuck in his scorecarded ‘increase those call minutes’ bonus model. But of course, there are never enough arguments to convince those with lack of imagination. Everyone is stuck in a perspective in some way and if we are aiming to disperse innovation (e.g. because that is our job or scorecard), we have to bridge the mother of all gaps between consumer and producer.

So marketeering, as I argued before, is still the craft of using superior imagination to help companies use and produce new technologies to service a customer need in a better, more convenient and more enjoyable way.

From my perspective, this is why 2011 looks like a great year to be in marketing!

What convenience and fun is your hardware or app providing?

What idea or innovation is itching you and what business condition is holding you back?

In the world of software sales, many companies are capitalizing the knowledge needed to select the right license from a very complex set of possible configurations. Although this expertise will still be required in the future, cloud computing and related pricing models should reduce the complexity for end customers, if software vendors allow it to.

In order for a software vendor to pick the right pricing model for its product, it needs to balance three conflicting demands. The model needs to be simple enough to explain to customers (forget about your mom, she’s not the use case here). It also needs to be flexible enough to adapt to various business models (in a b2b setting) and functional use cases (in a b2c setting). Finally, it also needs to be predictable in the sense that it prices the expected benefit as well as remains consistent over time. On top of this, licensing and pricing groups within large software vendors are always under pressure to come up with the perfect between shareholder and customer value. Without exception this complexity results in lengthy legaleze documents, describing product use rights.

In comes the cloud

Most progressive enterprises today are moving away from device-centric computing to a user-centric application delivery through application virtualization and cloud computing solutions. Licensing has become a key factor in project cost modeling for these technical implementations. A clear understanding of the available pricing options, and how and where to apply them, are critical. However, while the different options in concurrent, per-user and subscription models are only the ingredients to a software dish served in the cloud, the menu has already been written. Heaven forbid, people may already be taking orders.

At the same time, legacy pricing models that are device- or hardware-centric, are still creating more of a barrier to cloud innovation. Pricing per server or processor(core) is becoming increasingly unrealistic for hosted virtual environments that are run like utilities. For most, its hard to document where in their virtualized and hardware-partitioned servers one private cloud ends and another one starts. It’s complexity like that, as well as the subsequent unclarity on compliance, that keeps some companies from even disclosing their exact architecture blueprints to their software vendors; let alone share thoughts on how to innovate in them.

Something has to give

One can walk 20 meters on a Microsoft conference from one booth to another and find that the cloud teams are offering the same product or functionality as the on-premise teams for vastly simpler pricing. Public cloud pricing revolves more around simple resource usage (e.g. storage, data transfer) and subscription models, where for on-premise you’re still stuck with reading their 138 page PUR. To make upgrading more flexible (but certainly not more simple or predictable), for some products a customer can actually switch between the two models a few times within the duration of their contract. The administrative nightmare that would occur if a company would actually be so inclined, is hard to overestimate. And you have to keep in mind that Microsoft, together with SAP, are actually considered best in classwhen it’s about creating workable licensing structures for virtualized (cloud-) environments.

Obviously, these models cannot simply co-exist and be treated as interchangeable. There is too much market history and international jurisprudence in licensing policies which links directly to specific customer- and broader market requirements. New models will be invented to deal with new ways of using software, which will not be allowed to cannibalize in a big way the profits that are still being made with existing contracts. The big question is “how long will vendors will allow for transition states between the two models”?

Silver lining

It is exactly this time that large license consultancies such as PC-Ware and Insight have to consider their strategic options for the future. Will they choose horizontal integration through a merger with or acquisition of a systems integrator? Or will they segment into carefully selected niches of licensing expertise? Either way the incoming cloud forces an issue here. What do you think?

Marketing has always been about influencing behavior, ensuring the desired action as a follow up of a carefully solicited desire. In many ways this influence is becoming more and more direct and local. But is it becoming more fun as well?

Search engine marketing made it possible to pinpoint the desired demographic almost to the individual. Social marketing can distill aspirational features from someones immediate circle of ‘friends’. Mobile and location based marketing promises the ability to target audiences across space & time and puts location into the center of the play.

With all this buzz around the technologies of marketing, one almost forgets that ‘all apps in the world not one new loyal customer make’. Advertising awards are rewarded to the most original and creative way a brand is positioned or an audience is moved. Apart from the technology savvy marketing hipsters (chances are: yourself), most people don’t remember how the message came to them, but what the message was and why it was so special. Creating a successful campaign to win (continued) loyalty, still takes the human mind and a lot of work.

In 2010 alot has been written on influencing behavior through social gaming as the new way forward for marketing. Some of that buzz is actually fueled by the success of some location based services, that are built on principles of game dynamics. People can get so excited about using the tool, that they think it may magically attract and hold new customers if their business is ‘on it‘ somehow.  It is not sufficient however, for a company to simply use a campaign platform and build a campaign around these services. The challenge is, how to use game mechanics to reward the behavior that you would like to change.

This is actually great news for everyone! Marketeers get to be truly creative again, proving their added value by inserting something supremely human into the technology-ridden advertising campaigns of today. The business owners get a fun way to interact, or play games, with their customers in which they are always managing the ‘bank’. All of us as customers will get to enjoy being influenced in more subtle, engaging and most of all: voluntary ways than we’ve ever experienced.

Many other sectors can use these new principles for their benefit, such as education, healthcare and even the environment. And who knows, perhaps Obama will re-invent himself yet again by trying to take the attention away from the depressing economy through social gaming in his 2012 campaign. After all, we need more than better ‘panemin’ this world, we need better ‘circenses‘!

2011 will be the year of the location platform ‘wars’; and some consolidation is to be expected. Standards are needed in the areas of location, campaign and transaction. Some platforms will reposition their offering to a functional niche and some will try to strengthen their user base in order to become the category default. We think the decision for consumers and business to jump in the bandwagon will revolve more around privacy and convenience. For the latter, Geotoko is a giant leap forward.

Geotoko is one central management application for all major LBM platforms.  The platform’s own tools are generally considered to be too user-centric, lacking the control, reporting and most importantly platform-agnosticism that a business owner is looking for. Multi-site, multi-platform campaigns are a breeze with Geotoko, although the prize module still needs some work. <edit> Geotoko announced a complete overhaul of the module in December, a.o. based on our recommendations.

Reporting is very elaborate with location heat maps, location stats, check-in times and weekday statistics. Further integration with influence statistics from klout.com are in the works. The auto-generated campaign landing page has an opt-in feature which feeds a campaign database that can be used to contact the more involved customers.

Nevertheless, anyone serious about using a combination of social position and location as a marketing tool, needs to be ready to listen and engage with their customers, before they act. Regardless of claims to the contrary, winning loyalty with your customers, still requires time and effort. More precisely: the time and effort of senior staff in the store/shop/restaurant. Although it is certainly possible to outsource the campaign creation and measurement, the dialogue between visitors (foursquare mayors, Geotoko pricewinners, etc.) and the ‘brand’ will always remain a core activity of any company in consumer retail and services.

So the truth is, with brand perception increasingly being created online by customers sharing presence and experience  around a location, any company with a shop front is already part of LBM whether they control it or not. Geotoko is the first multi-site, multi-platform LBM Tool out there and is likely to gather a large following from agencies, brands and small business owners.