Key among them are projects that are “customer-facing or anything that saves dollars,” says Quinn. “Anything that involves process improvements and anything that can show a fairly fast ROI is also getting pushed to the front.”

On the expense side, PHI will continue to reduce costs by outsourcing “keep the lights on” operations, even farming out the maintenance of production databases. The company is also renegotiating its agreements with just about all of its IT and services providers, including those whose contracts haven’t yet expired.

IT shops in all industries are approaching 2011 the same way Quinn is: They plan to vigilantly manage flat budgets and further slash already significantly reduced costs. Indeed, IT executives who responded to Computerworld‘s 2011 Forecast survey ranked budget constraints and economic pressures as their No. 1 challenge in the year ahead. And six out of 10 respondents indicated that even though the economy appears to be improving, the cuts they made in the past 18 months or so will become permanent.

Even more notable is that the projects IT executives say rank highest on their 2011 priority lists are those designed to cut costs even more. Most of those projects fall into three broad categories: revamping and then automating various business processes; consolidating data centers and implementing technologies that help save money, such as virtualization and cloud services; and outsourcing or using software-as-a-service providers for routine tasks. The idea is that by automating and outsourcing the work that just keeps the lights on, IT departments can focus their valuable staff resources on innovative projects designed to grow the business.

But don’t expect a big run-up in IT job openings. For the most part, CIOs don’t expect to invest in additional full-time staff next year. Rather, the focus is on investing in new technologies that will automate operations and lower costs — and decrease the need for additional employees. The technologies that survey respondents said they are piloting or beta-testing are server virtualization, desktop virtualization, and mobile and wireless devices.

“We’re being very aggressive, going back to vendors to work multiyear deals in exchange for cost reductions today,” Quinn explains. “We’re seeing our customers do that to us, and we’re doing the same thing with our vendors.”

“Even in this downturn, we’re seeing a significant investment in technology,” says Adam Noble, CIO at GAF Materials Corp. So are his CIO peers, he says. “They’re not hiring, but their investments are going up.”

Energy company Southern Co.’s generation business is contemplating virtualizing all of its servers and desktops, says CIO Marie Mouchet. “It’s an option we’re considering systemwide. We have application virtualization and desktop virtualization pilots under way. We have had a lease program for our desktops, which we rotate every few years. As they expire, we’ll be evaluating moving to virtual desktops,” she says.

As for new IT jobs, “we are not looking to hire additional people to meet needs,” Mouchet says. Instead, the company plans to upsize and downsize using contractors.

But there are also organizations where investments in both technology and staff are at a standstill. Among them is the Tennessee Technology Center at Shelbyville, one of 27 such centers across the state that along with six universities and 44 community colleges make up Tennessee’s higher education system.

“One of the biggest problems is that there isn’t revenue flowing into the state, and one of the first places they look to cut is education. We’re doing without 20% of the IT budget we had last year, and last year we had 10% less than the year before,” says Steve Mallard, the center’s IT director.

He says he’s looking for any and all ways to keep costs down, including using more open-source software, bringing on student interns to work in IT, recycling hardware, and building 40% of the computers and virtually all of the servers in use at the center.

Push-button Processes

At the Wisconsin Department of Health Services, automating the state’s vital-records systems is the top project queued up for 2011. By making birth, marriage, death and divorce certificates and other documents available electronically, the state hopes to both cut costs and improve services to citizens, says CIO Bob Martin. The project comes on the heels of a recently completed $4 million statewide data center consolidation project.

But completing the vital-records project — as well as the dozens of smaller “cleanup” projects Martin has in the works for 2011 — will be difficult, since the agency doesn’t plan to fill the 10% to 15% of IT positions vacated through attrition in the past year or so.

Making matters even worse is that statewide, about 35% of government employees, including many in IT, are eligible to retire in the next three to five years.

“It’s a tough balancing act because at the same time that we’re being asked to automate more and more — which makes perfectly good sense — there is a shifting and shuffling of roles and responsibilities among existing staff,” Martin says.

“We can’t fill those positions, and they may be taken away for good as part of a statewide budget fix,” he adds.

Anoka, Minn.-based Rural Community Insurance Services, which provides crop insurance to the agricultural industry, is looking to revamp and streamline how customers interact with the company online. “Our customers have to do a lot of work and provide a lot of information, but we can actually prepopulate much of that information with data we already have from other agencies,” explains CIO Rick Greenwood.

By prepopulating crop data and codes and other information into applications, “we can complete 70% of information that customers would otherwise have to key in. After that, all they have to do is validate the information and provide a digital signature, which is a big efficiency,” he notes. “We’re looking for internal efficiencies, but we also have to look at how to make our customers more efficient.”

Similarly, Jeffrey Pattison, CIO at Inttra Inc., a Parsippany, N.J., company that provides e-commerce systems to the ocean freight industry, says, “We’re trying to keep service levels up and keep costs as low as possible.” One way to do that is to build more rules-based technology into customer-facing systems, which can then be customized by individual users to streamline their own operations.

“If we can run and grow more efficiently, we can free up more dollars to do R&D and innovative work,” Pattison says.

In the New York State Office of Temporary and Disability Assistance, CIO Daniel Chan’s biggest project for 2011 is called Functional Roadmap. The initiative involves working with an outside consulting firm to review just about all of the organization’s business processes and then re-engineer them, automating wherever possible.

“Right now, we have 27 different programs that our clients may be eligible for, and each program is administered very differently. We’re looking to consolidate to one or two processes from 27 different ways of doing things,” Chan says. “Ten [percent] to 20% improvement is not acceptable. We’re looking for multipliers of five or 10.”

Running for Cloud Cover

Chan is also looking outside of his IT organization for solutions. “I think we spend entirely too much time tinkering with hardware,” he says. “Over time, we can outsource most of our IT infrastructure. Instead of buying and building and managing servers, potentially we could engage a cloud provider and rent capacity. We are experimenting in-house with cloud, but there are still a lot of security-related concerns.”

Haggen Inc., a 32-store chain of supermarkets in the Pacific Northwest, has already extensively consolidated its data center operations by virtualizing servers. “Now we’re looking at storage rationalization and optimization,” says CIO Harrison Lewis. “Before, we might just acquire more storage, but now we’re looking at Tier 2 and Tier 3 data and moving it off to a private cloud.”

A recent internal study showed that 49% of data that Haggen had been storing hadn’t been accessed in two years. This has prompted a more rigorous review of all IT assets, with an eye toward distinguishing exactly what offers a competitive advantage and should be kept in-house and what should be outsourced.

“If it’s not an area where we need to do a great deal of customization, software-as-a-service makes sense,” Lewis says. In 2011, Haggen will be evaluating other SaaS options, including Google’s suite of productivity applications. “From everything I’ve seen so far, it can make sense for us,” notes Lewis.

The bottom line, says Forrester Research analyst Bobby Cameron, is that companies will focus on continuing to drive down costs throughout 2011.

“As the IT organization focuses more on process, they’re also consolidating IT, moving to shared services, and there is a huge acceleration in their ability to automate services,” he says. “The whole concept of preprovisioned environments — with cloud and virtualization — takes automation to the nth degree.

“All of these accelerants are going to continue to drive down the cost of delivering IT,” adds Cameron, not only in 2011, but for the foreseeable future.

Source

Managed IT Support Firm – Percento Technologies

Note: This article is also available as a PDF download.

1: The development of COBOL (1959)

There are many languages out there, but none has influenced as many others as COBOL has. What makes COBOL stand out is the fact that there are still machines chugging along, running COBOL apps. Yes, these apps could (and possibly should) be rewritten to a modern standard. But for many IT administrators, those who don’t have the time or resources to rewrite legacy apps, those programs can keep on keeping on.

2: The development of the ARPANET (1969)

It is an undeniable fact that the ARPANET was the predecessor of the modern Internet. The ARPANET began in a series of memos, written by J.C. R. Licklider and initially referred to as the “Intergalactic Computer Network.” Without the development of the ARPANET, the landscape of IT would be drastically different.

3: The creation of UNIX (1970)

Although many would argue that Windows is the most important operating system ever created, UNIX should hold that title. UNIX started as a project between MIT and AT&T Bell Labs. The biggest initial difference (and most important distinction) was that it was the first operating system to allow more than one user to log in at a time. Thus was born the multi-user environment. Note: 1970 marks the date the name “UNIX” was applied.

4: The first “clamshell” laptop (1979)

William Moggridge, working for GRID Systems Corporation, designed the Compass Computer, which finally entered the market in 1991. Tandy quickly purchased GRID (because of 20 significant patents it held) but then turned around and resold GRID to AST, retaining the rights to the patents.

5: The beginning of Linus Torvalds’ work on Linux (1991)

No matter where you stand on the Linux versus Windows debate, you can’t deny the importance of the flagship open source operating system. Linux brought the GPL and open source into the forefront and forced many companies (and legal systems) into seeing monopolistic practices as well as raising the bar for competition. Linux was also the first operating system that allowed students and small companies to think in much bigger ways than their budgets previously allowed them to think.

6: The advent of Windows 95 (1995)

Without a doubt, Windows 95 reshaped the way the desktop looked and felt. When Windows 95 hit the market the metaphor for the desktop became standardized with the toolbar, start menu, desktop icons, and notification area. All other operating systems would begin to mimic this new de facto standard desktop.

7: The 90s dot-com bubble (1990s)

The dot-com bubble of the 90s did one thing that nothing else had ever done: It showed that a great idea could get legs and become a reality. Companies like Amazon and Google not only survived the dot-com burst but grew to be megapowers that have significant influence over how business is run in the modern world. But the dot-com bubble did more than bring us companies — it showed us the significance of technology and how it can make daily life faster, better, and more powerful.

8: Steve Jobs rejoining Apple (1996)

Really, all I should need to say here is one word: iPod. Had Jobs not come back to Apple, the iPod most likely would never have been brought to life. Had the iPod not been brought to life, Apple would have withered away. Without Apple, OS X would never have seen the light of day. And without OS X, the operating system landscape would be limited to Windows and Linux.

9: The creation of Napster (1999)

File sharing. No matter where you stand on the legality of this issue, you can’t deny the importance of P2P file sharing. Without Napster, file sharing would have taken a much different shape. Napster (and the original P2P protocols) heavily influenced the creation of the BitTorrent protocol. Torrents now make up nearly one-third of all data traffic and make sharing of large files easy. Napster also led to the rethinking of digital rights (which to some has negative implications).

10: The start of Wikipedia (2000)

Wikipedia has become one of leading sources of information on the Internet and with good reason. It’s the single largest collaborative resource available to the public. Wikipedia has since become one of the most often cited sources on the planet. Although many schools refuse to accept Wiki resources (questioning the legitimacy of the sources) Wikipedia is, without a doubt, one of the largest and most accessible collections of information. It was even instrumental in the 2008 U.S. presidential election, when the candidates’ Wiki pages became the top hits for voters seeking information. These presidential Wiki pages became as important to the 2008 election as any advertisement.

Source

The strength of the relations between the U.S. and Egypt on a business level has never been better, and Egypt is primed to increase the volume of its IT/ITES exports to US$1.1 billion by 2010.

This was the message communicated by His Excellency Dr. Tarek Kamel, Egyptian Minister of Communications & Information Technology at a special luncheon hosted by the U.S. Chamber of Commerce, the Business Council for International Understanding (BCIU), and the American Chamber of Commerce in Egypt (AmCham Egypt), in Washington, DC. Also attending this luncheon were Mr. Aneesh Chopra, U.S. Chief Technology Officer, White House Office of Science and Technology Policy and Mr. Richard Patterson, Vice President of Global Delivery, IBM.

During the visit to New York and Washington, DC, Dr. Kamel and Information Technology Industry Development Agency (ITIDA) officials met with senior business executives from top Fortune 100 companies like Board Chairman and CEO of IBM Corp. Samuel J. Palmisano to discuss new business, technology innovation and future opportunities to collaborate in Egypt.

Egypt has been highly aggressive over the past decade in delivering on major infrastructure, bandwidth, educational and telecommunications projects to drive increased interest in companies looking to establish major global service delivery centers in the country.

“Egypt is now at the new crossroads for next stage in the IT revolution,” said Dr. Kamel. “With a long history of innovation, we are a young, energetic country with a population that grew up in the technology world, so we’ve keyed some of the specific goals as a nation around technology — being a hub for innovation and research, cyber security and cross-border collaboration.”

Egypt is located on the paths of most optical cables linking Africa and Asia with Europe and North America. Egypt has also developed fiber connectivity with its neighbors, which makes it a prime location for transient traffic to the region. With the only direct connection from the Indian Ocean to the Mediterranean Sea, Egypt is also strategically positioned to be a manufacturing, logistics and distribution hub for Europe and the Middle East.

“Many people do not realize that we are a multi-stakeholder country – English, French, German, Spanish, Italian, Portuguese, Dutch and Arabic are all common languages that are currently serviced out of Egypt. So many companies across Europe and the Middle East come to Egypt and are very comfortable with the language, culture and communications,” Dr. Kamel continued.

A.T. Kearney recently positioned Egypt as sixth on its 2009 Global Services Location Index, an improvement of seven ranks from 2007. Cairo was also ranked in the seventh position amongst top 50 emerging outsourcing cities across the globe in a study prepared by Global Services – Tholons. Currently, companies such as Microsoft, Vodafone, Teleperformance, Wipro, SQS, Valeo, and Alcatel all have offices in Egypt’s Smart Village, a 600-acre technology business park in Cairo. In May of this year, Delta Rasmala relocated its own Egypt headquarters to Smart Village.

“Global IT and telecommunications companies find that our Egyptian market provides real opportunity and advantages for investment including competitive operational costs, political stability, and highly qualified human resources,” Dr. Kamel stated.

Egypt continues to make progress in combating software piracy as highlighted by its reduced software piracy rating in the sixth annual Business Software Alliance (BSA), IDC Global Software Piracy Study. The report sees Egypt’s 2008 rating drop a further one percent on the previous year, with levels reducing to 59 percent, and a total fall of 10 percent since 2003. This is the fifth consecutive year that Egypt’s piracy rates have fallen and these rates are well below other countries such as Morocco, the Philippines, and Bulgaria.

Egypt is primed for business growth driven by tax, customs and financial sector reforms. Egypt was named as leading global economic reformer by the World Bank in its ‘Doing Business 2007′ report.

Earlier this month, Cisco and ITIDA announced that Cisco was going to be adding a brand new customer service and support center in Egypt as a means to serve its customers in Europe, the Middle East and Africa, with employees that could communicate in seven different languages.

“Egypt is now, more than ever, at the crossroads of where technology, culture, innovation and business meet. Through the appropriate legal and regulatory reforms which can accommodate deregulation and development of the telecommunications sector, the government of Egypt has helped put laws in place around e-commerce, intellectual property and investment to help incoming companies truly maximize their profitability,” said Dr. Kamel. “New tax and customs reforms were implemented by the government, according to which the highest personal tax rate was cut from 32 percent to 20 percent and the corporate tax rate cut went from 42 percent to 20 percent.”

“Much of Egypt is now connected by main roads, power generation has improved considerably and Egypt is enjoying a remarkable talent pool as investing in human capital is part and parcel of the government’s plan,” Dr. Kamel continued. “Egypt’s human resources have always been one of its greatest assets, with its almost 330,000 college graduates yearly – 31,000 alone focused on engineering or science – enjoying excellent multilingual capabilities.”

Egyptian leadership is also focused on collaborating with companies to advance the penetration of the Internet in Egypt and to get the nation on the forefront of technological developments, while at the same time focused on protecting and supporting its youth in using the Internet as a means of creativity and innovation.

“The dreams of our generations are great and so are the challenges, stretching hands of cooperation and collaboration is the only way to envisage a better world. It is high time to put differences and discrimination aside, to bridge all the gaps by exchanging expertise with openness and maturity needed to push the technology forward, build on what was achieved and innovate for the future. As change is the wave of the age, innovation and creation is the future, and our role is to secure it for the coming generations.”

Source: MarketWatch

“Four overarching trends are reshaping how IT is used in the workplace. Each of these megatrends or disrupters must be evaluated to determine if it will have an effect on the business,” said Yvonne Genovese, vice president and distinguished analyst at Gartner, at the Gartner Symposium/ITxpo in Orlando, Fla.

These software solutions are “changing to be user-centric, Web-centric, service-oriented and utilized through new delivery models, such as cloud and software as a service,” noted Genovese, in a press release from the event.

Here are the four major disruptions to the software industry that Genovese has identified:

Disrupter No. 1: Rise in New Technologies and Convergence of Existing Technologies. “The IT market has reached a period of accelerated change and innovation in how IT is applied and delivered to businesses and consumers,” states the release. “Technology changes that have been centered on SOA migration have now been augmented to include business process management, device portability and mashup-capable content.”

By 2010, for example, Genovese predicts that Web mashups will be the “dominant model” for the creation of composite enterprise applications. (To read about Oracle’s efforts on its next-gen applications, see “Oracle Fusion Applications: Is 2010 Delivery Too Little, Too Late, or Smart Strategy?”)
“Mashup popularity stems from the ease with which mashups can be created. Because mashup applications can be created on the fly, they open up possibilities for a new class of more short-term or disposable applications that could never meet the criteria for corporate investment,” says Genovese. “Another benefit is that users can easily personalize mashup content displays. Mashups can resolve issues such as content aggregation and the needs of business users to have the personal flexibility to do different things by combining data from within and outside the enterprise.”

Disrupter No. 2: Change in Software User and Support Demographics. Changes in how, where and when everyone works, as well as innovative methods in how companies obtain their software using the Internet, are fundamentally altering the structure of business. By 2015, Genovese says, no company will be able to build or sustain a competitive advantage unless “it capitalizes on the combined power of individualized behaviors, social dynamics and collaboration.”

“Most current software is focused on general enterprise needs rather than user-specific needs,” Genovese says. “The opportunity for business and IT leaders is to understand how the individualization of work will affect businesses, critical processes, innovation and inter-enterprise collaboration. End-user preferences will decide as much as half of all software, hardware and service acquisitions made by IT.” (See “P&G Flirts with Google Apps and Scares the Bejesus Out of Microsoft” for an inside account of why P&G users wanted to use Google Apps.)

Disrupter No. 3: Revolutionary Changes in Software and How it is Consumed. Genovese predicts that by 2010, SOA will be used, at least in part, in more than 80 percent of new, mission-critical applications and business processes. “The resulting future application environment will be more granular, inclusive and fluid to enable rapid composition, integration, orchestration and reuse,” according to Gartner.

During 2008 and 2009, Genovese states that businesses must “radically re-engineer their processes, governance and disciplines to initiate and manage this transition” as well as evaluate and manage external and off-premises delivery of applications.

“Market excitement over Web platforms, SaaS and other IT utility services will only intensify, and this will increase business buyers’ appetites for these new options and services,” says Genovese. “This period will see huge changes in all facets of the IT market including clients, providers, investors, business and IT professionals and consumers.”

Disrupter No. 4: Software Market Moves to Megavendors Supporting Large Ecosystems. Software megavendors (SAP and Oracle, for example) have proven their impact and influence over customer spending across a range of markets, Genovese notes. “Megavendors seek to dominate enterprise architecture and the terms of integration in multivendor portfolios,” she adds. However, focused vendors (a.k.a., best of breed) must coexist with other applications and with enterprise architecture.

“As the transformation to SOA for packaged applications and the exposing and manipulation of process metadata become minimum requirements for the next generation, it is megavendors that will have the resources, and focused vendors that will have the incentive,” Genovese added. Unfortunately, she stated that focused, best-of-breed vendors face a long time before a next generation of open, composite applications drives the market and opens it to a wider range of vendors.

“We see rapidly changing technology in an industry that seems to be maturing. Vendors are focusing more on the ‘business of software’ rather than solely on product competition,” Genovese says. “Users faced with increased vendor power and lower price flexibility are looking for alternatives, containment strategies and ways to lower vendor switch costs. How the vendors react to these changes and pressures will be the basis for changes in their competition over the next five years.”

Firm urges two IT budgets: one based on execs’ guidelines, another for growth should the economy improve

IT spending is faring better than the overall economy, and the sector “will avoid a recession in 2008,” according to Gartner Inc. But in a report sent to clients this week, the analyst firm said it believes IT budgets will show “very low year-over-year growth rates until business growth significantly improves.”

Gartner and Forrester Research Inc. do not see tech spending traveling into negative territory, but the word “slow” and “slowdown” is used often enough in their reports to get the message across about what’s ahead. Forrester released its forecast last week.

Gartner is nonetheless advising clients to hedge a little and not assume that the economy won’t improve next year. It’s recommending that IT managers prepare two budgets: one “based on guidelines and directions of senior executives,” and another “growth budget for 2009 in the event that healthier economic growth rates begin to return next year.”

Gartner said that overall U.S. economic growth and IT growth are moving at two different speeds and that the tech industry may be “even more resilient than we had originally imagined.”

In the Gartner report, analysts Ken McGee and Mark McDonald cite government data, results of a survey of about 1,000 CIOs, and recent quarterly reports from top vendors to reaffirm an assessment made earlier this year that IT spending won’t turn negative. Tech stocks have taken a beating on Wall Street but have recovered some this week.

Gartner noted in the report that after the last recession, U.S. IT budgets grew slowly. But it said that “executives should not blindly follow history and automatically cut IT costs in 2009 until they are certain that IT’s current counter economic-trend performance isn’t being contributed to, in part, by their competitors.”

In a Sept. 24 report, Forrester said technology purchases were stronger in the first half of 2008 than its projections, but that it was cautious nonetheless. “The U.S. recession and the resulting tech market slowdown have only been delayed, not cancelled,” the report said.

Forrester projects a slowdown in tech purchases in the remainder of this year and that the trend will carry into the first half of 2009. But it has now raised its forecast in 2008 growth in the purchases of IT goods and services by business and government to 5.4%, compared with its May forecast of 3.4%. But it has lowered its projected growth rate of 10% for next year to 6.1%. Forrester noted that software and outsourcing are two strong areas.

The Forrester report’s author, analyst Andrew Bartels, said with regard to financial firms, he expects 10% cuts at most in IT where firms have been acquired or merged. In the case of the bankrupt firms whose assets where purchased, the IT reductions could be as much as 20% to 30%, he said.

Source: Computer World

The Firefighters method is action by crisis, and is one of the least productive possibilities both for the IT department and the company as a whole. It refers to the practice of leaving things alone until they fail, and with the level at which technology is integrated in today’s business world causes major issues.

Percento, through our Proactive Support Agreements, utilizes our Outsourcing Division to develop routine system maintenance to help keep your IT systems running smoothly. Just as you shouldn’t wait until your check engine light is on to change your oil, your IT system maintenance shouldn’t wait until after problems have presented themselves.

The Percento proactive approach is easy to rationalize for clients who utilize our Outsourcing Division as their IT department; however, this is not the only way we can assist firms in utilizing a Proactive methodology.

Our Professional Services division teams are well versed in the methods and IT processes which lead to adopting a Firefighters method, which in turn allows our teams to know what to do before the Firefighters method becomes your only option. Our audits can help your IT department determine what is needed to stop managing by crisis, and even help identify if additional resources, even part-time resources, are necessary to process Proactive preventative system maintenance.

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