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Forty percent of North American enterprises surveyed by Forrester say that they have already implemented server virtualization; server consolidation and increased flexibility and agility are drivers. Early challenges with obtaining software vendor support for virtualization platforms and friendly software licensing terms will rapidly dissipate, but firms seeking full exploitation will eventually have to make changes to IT practices.
Specifying a phone self-service system's intended behaviors with a persona helps ensure that interfaces convey appropriate personality traits and support the goals of the intended users. Voice system personas guide interaction design decisions, talent selection, and voice talent coaching. Get input and buy-in from relevant stakeholders and tap brand owners for information.
Companies using ERP software face difficult upgrade decisions and rising ownership costs as vendors promote enhancements to drive support agreement renewals. Technical architecture advancement based on SOA is gaining momentum through the aggressive development efforts of Microsoft, Oracle, and SAP. Other vendors, including Infor Global Solutions and Lawson Software, are making consolidation plays focused on stability rather than innovation. Adoption of next-generation products will be slow; the market will grow 6.3% through 2010 as vendors focus on industry specialization and customer retention ahead of the SOA adoption curve.
The information that vendors give to purchasing stakeholders -- IT, lines of business, and executive management -- often requires additional time and effort to translate to a form that allows them to understand it in terms of the business value that the solution should ultimately generate. If you must develop additional explanations, value propositions, and extra messaging in order to approve -- or reject -- a purchase, you're paying your vendor's cost of sales. Forrester has developed a version of its Total Economic Impact™ (TEI) methodology to explicitly align business needs with IT solutions. Using this alignment architecture will save time and effort in arriving at meaningful stakeholder-centric value propositions for IT solutions and services.
The ever-evolving techniques that crooks employ make online fraud and ID theft seem like intractable problems. Financial services firms must provide Internet services safely and securely while assuming that their consumers' computers are compromised. Classic security practices, such as defense-in-depth and risk analysis, point the way to a more far-reaching solution than defending against particular types of attacks like phishing, spyware, or Trojans. Begin by assessing the risks associated with particular activities. Those assessments will allow firms to determine which security measures provide the most effective balance between security and customer convenience for each particular circumstance.
Marketing technology has reached mainstream adoption. Marketing is now shifting focus from core infrastructure elements -- like the customer data mart and data mining technologies -- to technologies that support optimization of customer interactions and marketing processes. But there is much to do: More than three out of four marketers agree that marketing needs a more comprehensive and integrated application suite to improve its effectiveness, and those vendors that are converging on the vision of a comprehensive marketing suite -- like Aprimo, Oracle (Siebel), and Unica -- are still largely failing to deliver the breadth and depth that marketing requires.
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The Future Of Enterprise Software
The enterprise software industry of the next five years will descend to historically low growth rates, with declining prices, fewer large suppliers, greater technical adaptability, and baby steps toward the pricing flexibility most customers want but can't get today. The magnitude of growth and structural change will be determined by four forces of software commoditization:
- Service-oriented architecture (SOA).
These will be offset by forces of market inertia, including:
- Intellectual property rights.
The former forces are changing how enterprise applications are created, sold, implemented, and supported; the latter forces slow and limit these changes.
In this climate, efficient product delivery will be worth as much as technology innovation. Vendors that combine efficient and flexible distribution of IT features to customers with the right new features to support Digital Business Architecture (DBA) and SOA will be the winners. The ecosystems of IBM, Microsoft, Oracle, and SAP will span the range of software but will not dominate the universe. Their primary domain will be large enterprises. Only Microsoft will combine this position with strength among midsize enterprises, leaving lots of opportunities for others.
Combine IT And Telecom Service Delivery For Greater Business Flexibility
The inability of internal IT organizations and external service providers to provide a consolidated view across the different layers of IT and telecom functionality that support business processes has long been a barrier to optimizing operational resources to provide more flexible, coherent, and cost-efficient services. But technical innovations around service management technologies and new standardized processes will result in a new service delivery paradigm that will enable converged end-to-end management globally across these formerly distinct layers. This new paradigm -- which Forrester calls Converged Service Delivery -- will be instrumental in helping business leaders map service efficiencies end to end, based on meaningful business metrics.
Continuous IT operations and maintenance consume the lion's share of companies' current IT budgets; our data shows that average spending on operational services has actually increased from 76% in 2005 to 80% of overall IT budgets today. Furthermore, Forrester believes that the 80% budget share is not well spent in many companies. This research note includes a four-phase model for implementation, describing the intermediate practices, such as the IT infrastructure library (ITIL), and technologies, such as configuration management databases (CMDBs), and their sequencing to arrive at fully converged service delivery. Start your planning process by collaborating and communicating closely with other stakeholders on issues such as management, technologies, and road maps.
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Converged Service Delivery leverages the full benefits of new standardized elements to become:
- Global in scope (consumable regardless of location and time zones).
- Agnostic about traffic types (data, voice, or video).
- Agnostic about provider (IT or external service provider on an as-needed basis).
- Focused on effective and efficient business SLAs (tied to operational continuity and business success).
Client Security: A Framework For Protection
Firms' current approach to client security isn't working -- and they know it. Why? Because increasingly mobile users easily bypass the network perimeter, exposing the core to malicious code and information theft. Organizations must lock down their devices and data, but can't operate efficiently with computing environments that resemble data prisons. Shed the old processes that are based purely on protection from malicious code. By establishing risk profiles that focus on three aspects -- users, data, and devices -- you can take the guessing out of securing client systems.
(Editor's note: This research contains a series of scenarios and questionnaires to provide sample approaches to building your profiles.)
The State Of Telecom And Network Adoption
In two rich, data-intensive Business Technographics® studies, Forrester looks at enterprise and SMB telecom spending and plans. Three technologies command the attention of enterprises in 2006: mobility, security, and IP. More than 55% will increase spending over 2005 on both mobile voice and data services, and more than 65% will increase spending on security technologies.
On the SMB side, 30% say that setting mobile strategies and policies is a top priority in 2006. Forty-eight percent of SMBs use IP VPNs for site-to-site communications, and an additional 9% plan to migrate in the next 12 months. Our SMB study also uncovered interesting facts about who makes decisions: 70% of non-IT executive respondents are directly involved in vendor selection, 82% are directly involved in setting IT strategy, and 92% authorize purchases.
Business Technographics provides Forrester clients with a rich data asset to tap for action-oriented market intelligence. By looking under the hood of the data, technology strategists can receive answers to questions like:
- What are the industry-by-industry purchase plans for these offerings?
- Which segments have the highest propensity to buy from which competitors?
- How do firmographic variables, such as job role and company size, affect buying behavior?
All data is industry-coded and profiled by many additional variables, including company size and geography. To understand how your firm can access this data asset through our Technographics Data & Services offering, email businesstechnographics@forrester.com.
Thanks, as always, for reading First Look, and please send me any requests or comments.
Merv Adrian
Senior Vice President
mervadrian@forrester.com
Upcoming Forrester Teleconferences
Forrester teleconferences are live, interactive, hour-long teleconferences incorporating a simultaneous WebEx slide presentation by a Forrester analyst, followed by an open forum for questions and discussion.
The Future Of ERP
July 24, 2006, 11 a.m.-12 p.m. Eastern time
The Forrester Wave™: Web Conferencing, Q2 2006
July 24, 2006, 1-2 p.m. Eastern time
Overcoming Risk And Compliance Myopia
July 26, 2006, 1-2 p.m. Eastern time
Combating Online Fraud In Financial Services
July 27, 2006, 1-2 p.m. Eastern time
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