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  1. 1. Speakers’ Remarks from State of the IT Service and Support Industry Keynote Presentation at HDI 2007 Presented: May 1, 2007, Mandalay Bay, Las Vegas Speaker: Ron Muns, Founder & CEO, HDI Welcome! You are here because of your commitment to success, both personally and for your companies. Your are the driving force for support excellence This audience represents a broad spectrum of IT service and support centers. The most common attribute to all of you is that you are committed to your profession, committed to providing quality service and adding value to your company. Today, I have gathered some industry experts to talk about the state of the industry and trends that we all must face. For some of you, these trends may be affecting your current ability to meet service expectations - for other organizations, this may be your future. But for all of you, it is important for you to know that you are not alone - that HDI is your source for help. Over the past few months, I have worked closely with HDI's strategic advisory board to short-list a number of industry trends and changes that impact IT service and support. Today, we will address: - The future of the U.S. IT Workforce (brain drain, training, knowledge management and virtual workforce) - The growing need and impact of Self Service Tools - Social networking, media and new communication tools - such as web 2.0
  2. 2. - IT Business Alignment - Technology - support of new mobile & wireless devices, web-based solutions and open source software and migration/upgrade to Vista Please allow me to introduce Katherine Spencer Lee, who will speak about the IT hiring landscape. Speaker: Katherine Spencer Lee, HDI Strategic Advisory Board member and executive director, Robert Half Technology As we gear up for another outstanding HDI Annual Conference, I wanted to talk to you about one of the greatest issues facing the IT industry today and in the future – the talent crunch. Here are some facts for you: • The U. S. Department of Labor’s Bureau of Labor Statistics reports that employment of computer support specialists is expected to increase by 18 to 26 percent through 2014. Overall, this is good news because this growth is being driven by economic expansion. And it’s great news for those entering the I.T. job market. For those of you responsible for hiring IT support workers, however, it can be frustrating. Many of you in this room are currently having a difficult time finding and retaining qualified workers. Unfortunately for you, it looks like this dynamic is only going to get worse. • While high-paying jobs are available for those with the right skills, the reality is that U.S. Higher Education is currently not producing enough skilled professionals to meet the demand. Fewer college students are choosing to major in computer science, engineering and mathematics to refill the ranks. UCLA’s Higher Education Research Institute reported that the number of incoming freshmen who planned to major in computer science fell by 70 percent between 2000 and 2005. • Overall unemployment in the U.S. has been very stable for the past half-year. The jobless rate has remained within a narrow range -- 4.4 to 4.6 percent -- since September 2006, according to the Department of Labor. But unemployment levels for college graduates was under 2 percent as recently as March of this year, near historically low rates.
  3. 3. • This crunch for workers is not unique to the United States. In the coming years, China and India will be scrambling for IT professionals to meet their own technology demands, not just the needs of U.S. companies who seek outsourced talent. According to a report released this March by Japan's Health, Labor and Welfare Ministry, 45 percent of the foreign workers in Japan as of June, 2006 were from East Asia, 29 percent were from Latin America and 15 percent were from Southeast Asia. Japan has a truly global workforce. Sound like anywhere else you can think of? • But wait, I’m not done yet…This talent crunch will be further exacerbated as baby boomers face retirement. And studies are showing that U.S. businesses are simply not ready for a significant change in the workforce in the coming decade, as tens of millions of baby boomers retire and far fewer new employees arrive to take their place. Boston College's Center on Aging & Work recently surveyed 578 companies and other organizations, and found that: • Only 12 percent of US companies have planned in-depth and more than a quarter have failed to plan at all for the changing demographics projected to create a worker shortage. • Dramatic shortages will hit around 2012 and intensify afterward as Baby Boomers exit the labor force. • Only 37 percent of enterprises have crafted strategies to retain late-career workers past the traditional retirement age. So, is that enough statistics for you? Remember, though, what is causing all of this. The talent crunch is caused by continued business expansion, particularly within IT departments, so it isn’t all doom and gloom. If we look at this as a changing landscape and not a mountain of bad news, we see that it is going to create a completely different environment for the technical support operations that you manage and work for. One that creates an entire new set of operational circumstances and, you guessed it, new opportunities.
  4. 4. Those of you managing technical support centers are going to have to plan for this talent shortage. You’re going to have to think of creative new ways to: • Manage a workforce that is more multi-generational, multi-cultural and multi-national than ever before. • Rely on a much larger percentage of what we might call non-traditional workers, such as retirees, stay-at-home parents, part-time workers and remote workers. Not to mention dealing with all of the security, data recovery, intellectual property and other assorted risks associated with this new workforce. • Retain and motivate your staff when the unemployment for college grads is less than two percent. • Maintain knowledge management despite a very different workforce. A mature knowledge management model will keep costs down and keep service levels consistent as your technical support knowledge is built around processes, not just people. • Proactively get involved in training and educating the next generation of knowledge workers. And not just in traditional ways like colleges and universities, but with groups like AARP in order to secure a new type of staff worker. • Look at this new type of skilled IT professional as a way to bring different experiences and backgrounds into an organization and connect with end-users and customers in new ways. • Promote the continued growth and acceptance of automated support. Ten or even five years ago, we were used to phoning a company and speaking directly to a tech support expert. Now, even ardent Luddites know that they will be pre-entering a good deal of information up front, either by voice recognition or on their phone dial pad. Heck, those of you in Generation Y feel weird if you ever talk to a live person. Everything is IM, chat, web or text. The less talking to a real, live person the better. • Support for virtual workforces, in which workers could still be based in the U.S., but they’re working out of their home, full or part time. It results in cost savings due to lower overhead, lowers turnover, increases employee satisfaction and helps keep the personal touch many customers demand. According to a 2005 study by Booz Allen Hamilton, the annual turnover rate of home-based agents is 10 percent, compared of 50 percent per year for in-house counterparts. In addition, the study showed home agents were 25 percent more productive than those working in-house. According to another study, this one done by the International Telework Association and Council (ITAC), companies can save
  5. 5. approximately $25,000 for every home-based agent compared to employees working out of traditional brick-and-mortar offices. • This could be a key factor for US companies to keep the work within its borders. A virtual workforce also (due to the availability of shared people, roles, processes and tools) allows firms to provide support for service continuity regardless of the continuity issue, time zone and/or location. So it’s not all doom and gloom, is it? It’s about changing expectation, re-calibrating approaches and being open to this new landscape. I see this as an exciting time to be in I.T., an exciting time to be in technical support and a great time for growth. It’s also a great time to be involved with HDI… Speaker: Bob Barnes, chair of HDI’s Strategic Advisory Board and global vice president, JPMorgan Chase I would like to speak today about a few areas that I am very passionate about. Process Management , KCS (Knowledge Management) and self service. Process Measurement • We continue to see more organizations Business Centric. (Business Aligned) We are seeing over 67% of the respondents in the current 2006 Practices and Salary Survey accept the importance of the concept of business alignment such as goals in their organizational work. More and more support organizations are measuring all their support channels and reporting them up through executive management. It is impossible to manage what you do not measure. Process Management • As we become more Business Aligned we must document our processes in order to maintain consistent services and meet audit requirements. Documented processes allow us to become more productive by allowing us to identify areas that need improvement and modifications. It empowers your employees by informing them on what is expected by the customer and management. The more your organization matures the more you
  6. 6. will see how documented processes enable you to be more customer focus and business aligned. Knowledge Management • 48% of the respondents have integrated their Knowledge Management Tool into their Incident Tracking Tool. 64% of the organizations utilize Knowledge Management Software, while 48% have integrated it into the Incident tool. 62% of the organizations believe at a minimum an effective organization must have Knowledge Management Software. Tribal Knowledge is a risk a support center cannot afford to allow. We must continue to look for ways to capture knowledge and make it reusable by anyone anywhere. We must continue to work with product owners and support teams to grow our knowledge base and expand its capabilities. We must also continue to champion KCS not only through our teams but also through our companies. Self Service • Our industry is still struggling with finding an effective self service model. The most common tools are FAQs and access to open incidents and view status. We continue to build complex solutions that are not customer friendly and easy to use. In order to take the next step I believe we must take a step back and re-examine what we are trying to accomplish and what our users are willing to participate in. Multimedia support will continue to grow and expand along with self healing technologies. I believe we must look at building simple solutions at first and as acceptance grows you would look to expand the options and offerings. Remember more than 3 clicks is more than most customers are willing to do. The younger workforce will continue to look for faster ways to get service and they are usually more willing to try self service.
  7. 7. Speaker: Pete McGarahan, chair of the IT Infrastructure Management Association Strategic Advisory Board and president, McGarahan & Associates Good afternoon. Thank you Ron for inviting me here today to assist with the state of the industry address and technology trends. You know, it really is an amazing time for business, technology, service and support. I hope that in my five minutes with you, I can leave one or two impressions in your head that will inspire and motivate you to action when you return to “battle-front” supporting your customers and users. Permit to share with you some visionary statements about technology!  "Everything that can be invented has been invented." --Charles H. Duell, Commissioner, U.S. Office of Patents, 1899.  "Who in their right mind would ever need more than 640k of ram!?"-- Bill Gates, 1981  "Computers in the future may weigh no more than 1.5 tons." --Popular Mechanics, forecasting the relentless march of science, 1949  "I think there is a world market for maybe five computers." --Thomas Watson, chairman of IBM, 1943  "I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year." --The editor in charge of business books for Prentice Hall, 1957  "But what ... is it good for?" --Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip.  "There is no reason anyone would want a computer in their home." --Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977 The Lesson - Never underestimate the power or people and technology! In preparing for this technology address, the more I read, the more I was convinced of the numerous career possibilities and opportunities with each advancement in technology. In a recent article, there was a focus on how rapidly technology is changing. It noted, that for high school seniors entering college this year – that advances in engineering are happening so
  8. 8. quickly that many of the concepts that these students will learn over the next 4-5 years will actually be outdated by the time these kids are ready to enter the work force. By the time high school students enter the work force, there will be entirely new technologies and systems for them to learn, utilize, service and support. The train has left the station and it will continue to gain speed at a phenomenal rate, showing no signs of decelerating as we wonder where this amazing journey will take us. From a support perspective – we have to look at technology two ways; one is the technology you support and the second is the technology that supports you. Technology, mapped with best practices and operated by trained professionals makes you more efficient and effective in the providing your services to the business giving you the opportunity to continually broaden the scope of services you deliver. Become proficient at both; for they hold the keys to your future success. Today, I like to discuss a number of technology topics that are relevant to everyone in this room. These include: Wireless and Mobile devices, Self-service, collaboration, virtualization, Web 2.0 and social networks, open source, VoIP, and finally security. As Katherine mentioned earlier, companies will continue to control costs, especially with more CIOs now reporting directly to the Chief Financial Officer. According to the State of the CIO survey conducted by CIO magazine, CIOs that report to the CFO have ½ the budget of CIOs that report to the CEO. Don’t expect additional headcount anytime in the near future unless you can justify it with business impact. I encourage you to strategize ways to improve your service levels while continuing to look for new, value-add business. I think an important trend to notice is that customers (mostly the younger generation of workers) desire more control over what they want, when they want it, and how they want to receive it. The entire media/content industry is moving from one of push – to that of pull. Customers search and download their own music, they subscribe to e-newsletters that are relevant to them, they go online to ASK, WIKI, or GOOGLE. They are constantly searching for information they need now and is relevant to them. They watch their news online, chat online, text message, blog and even
  9. 9. create their own little worlds and videos on MySpace & YouTube. This generation has everything at their fingertips via their mobile device. They don’t even want a phone book – or any book for that matter! Wireless The Wall street Journal special section in What’s New in Wireless states that: • The cell phone is a multimedia powerhouse. Advances in battery, display and storage technology will continue to squeeze more features and functions into an even smaller handset. With integrated Wi-Fi hot spots, cellular networks and new high speed data networks – we will be able to seamlessly work anywhere, faster with consistent quality experience. Add Identity and credit card information capabilities to existing video, music, email, messaging and voice and you can see why business is starting to target the mobile device as a critical business tool for sales, service and support – why the entire healthcare industry is rapidly adopting integrating wireless and mobile devices into the health system to improve care and lower costs across the enterprise. • The smartcard – the effort to create the all in one which will store a digital photo, passwords, access control, biometrics, radio frequency antenna, electronic wallet, digital certificates and encryption. Self-Service This generation will define how we support the future business user. Self-service is finally gaining traction, acceptance and momentum, but is still inconsistent across industries and customer bases as to the experience, the results and the measurable impact on traditional methods of support. I conducted a quick search, and found more than 44 vendors providing self-service and self-help tools – many who are here with us in the Exhibit Hall. New technologies, such as step-by-step multi-media learning modules are also emerging as well as a more reliable and responsive interactive voice recognition tools (VRUs). As this new generation drives and defines a new set of requirements, we must look ahead to the impact of the retirement of the Baby Boomers will have on the workplace. The Bureau of Labor Statistics and Social Security project that 75 million people will be ready to leave the labor force
  10. 10. in the next 10 years. How will you work to capture their knowledge and deliver it to the next generation of workers to ensure their success? You certainly have to be aware of technology trends, but at the same time you need to understand business and social trends that will determine how you can best prepare to utilize technology to solve real problems impacting our lives as well as the way you do business. Collaboration A new world of work is emerging, as networks enable employees to collaborate in ad-hoc teams assembled for specific projects. New collaboration software enables information workers to read, edit and route documents as a team, not just as individuals. Collaborations can involve working together in real time over these networks as well as exchanging information. As soon as a specific project is over, team members can be detailed to another project, where they can work collaboratively with a different mix of colleagues. This is a long-term trend that will determine what computing is all about and is allowing workers to create repositories of knowledge. The idea is to use audio, video or e-mail to allow workers to communicate with each other in a way most relevant for them. Web 2.0 Forrester Research Inc. said that 106 of 119 CIOs from companies with more than 500 employees were using at least one of these Web 2.0 technologies: blogs, wikis, podcasts, RSS, social networking and content tagging. CIOs said that adoption is being driven by gains in worker efficiency and fear of competitive pressures. A social phenomenon embracing an approach to generating and distributing Web content itself, characterized by open communication, decentralization of authority, freedom to share and re-use, and "the market as a conversation" An interesting fact:  It's tough to succeed on the Web - around 2% of tech companies create close to 100% of the wealth.
  11. 11. VOIP Another technology that is not necessary new, but continues to change the way you do business by making the virtual organization a reality is Voice Over IP. VoIP has given companies the ability to communicate globally, cost-effectively while improving the quality of their voice/data networks. With these barriers eliminated, companies can chose to locate call centers, service and support centers and any high-volume transactional function - any place in the word. JetBlue established a Virtual Reservation Center with no physical call centers, only thousands of home- based agents always connected ready to assist you with your travel needs. Talk about built-in redundancy as well as very smart way to address Business Continuity! If I am VoIP connected, will I eventually be able to contract my support services out to multiple organizations receiving pay for both coverage and resolutions? Possibility! Virtualization Virtualization has become the hottest buzzword of the moment in enterprise computing. All enterprises are interested in saving money on hardware by increasing their server and storage utilization rates. In fact, in a survey published last month in CIO Insight, a sister publication to Baseline, the technology area that respondents said would get the highest percentage increase in spending in 2007 was virtualization of servers and storage. But the interesting thing about the trend toward virtualization is that it is rapidly expanding beyond the technologies we currently associate with either virtual operating systems, which allow us to run multiple application stacks on the same processor, or the storage tools that allow us to partition a storage array to support multiple applications. Within the next two years, we'll be looking not only at a fundamental change in the way we allocate hardware resources, but also at significant alterations to the fabric of enterprise computing that will change everything from the way we budget for hardware to the way we think about application deployment, security and disaster recovery. All of this can be significantly improved by a robust virtual computing environment. Self-service
  12. 12. Self-service web access is key for all companies but especially for global organizations. It makes business sense to invest in tools that can be used across multiple customers as well as multiple channels. We continue to make forward progress in increasing our customer’s comfort, confidence while and improving their experience in utilizing self-help tools. Self-help allows the customer to take more control of their experience – support on their terms – as they want it. They have better things to do with time than wait on-hold, but if you make them wait on-hold – you better be prepared to follow through with a resolution on first call – they also expect that! Your focus must be one of impacting the business! You must determine how you can best serve the business demand for your services – cost- effectively – while being EZ 2 DO business, providing valued services and increasing the productivity of our customers. You have to use technology mapped with best practice processes to enable root cause analysis – eliminate the repetitive problems while working to predict and add value in solving the business problems first. Open-Source Software Open-source software is built and enhanced through public collaboration. It is free and it gives the user unrestricted access to the source code. The source code shows how the software works in a language that programmers can understand. The most famous open-source is Linux - an operating system modeled after Unix that was written from scratch and whose source code is available for free. The Open-source drivers – Total Cost of Ownership and risk mitigation against hacker targeted Microsoft Operating Systems. The majority (64%) of companies surveyed are using open source, most frequently as a server operating system and for Web development. Concerns of support and accountability mostly stem from a lack of any detailed understanding by most senior IT execs. Another interesting point here. Traditionally – companies would issue standard hardware and support those devices. Now, the trend runs the opposite direction. Raise your hand it you have
  13. 13. an employee or customer drop a new mobile device that they have purchase completely on their own – say a Blackberry, TRIO, whatever - then place it on your desk and simply said… make it work? The expectations and the rules are changing folks. Customers want control. They want the freedom to CHOOSE which device they buy, maybe because they want one in pink – or one that plays music – whatever the reason, their expectation is that they get to CHOOSE, and you get to SUPPORT. Sounds a bit like marriage… my wife CHOOSES where we go on vacation, and I get SUPPORT her by paying for it! However, you need to monitor those choices carefully. These same mobile devices that allow them to communicate with most anyone, at any time, provide us with new security challenges. These days security is a vital part of our operations, not a luxury. Unfortunately, security and functionality are often conflicting goals, and they require a delicate balance. On average, most if not all our computers are "scanned" about three times a day, 7 days a week, from somewhere on the net. You need to know the specific risks faced by the company as the business and customers dictate more control over technology purchases. You need to develop an IT security strategy to meet your unique business and technology needs. You must also understand your company's own unique risk profile. As with so many other things in life, the key to effective information security is to work smarter, not harder. And in this case, working smarter means investing your valuable time, money and human resources on addressing the specific problems that are the most likely to cause the most damage. The math is really quite simple. But before you can do the sums, you have to identify the variables. Here are some of the questions you'll have to ask yourself: 1. What are the resources – Data, Information, Systems & Infrastructure - I'm actually interested in protecting? 2. What is the value of those resources, monetary or otherwise? 3. What are the all the possible threats that that those resources face? 4. What is the likelihood of those threats being realized? 5. What would be the impact of those threats on my business or personal life, if they were realized?
  14. 14. Computer Security is not something that we can accomplish alone. We depend on all of you, your users, to cooperate and help minimize the risk so your computer systems and business can be as secure as it can be - while being all that it can be. I wanted to leave you with one last thought! Always Invest in technology wisely – a bad technology decision has potential for negative impact on IT’s credibility, user productivity and the company’s financial performance. Thank you for your time today. Good luck and God Bless. Speaker: Ron Muns Thank you Katherine, Bob and Pete! Well, now you've seen the future, how do you prepare? One of the most exciting things about our industry, is that it does change - sometimes too quickly. But at least we never get bored. Now, how to we prepare for the future? I suggest you build a roadmap for success. 1. Run your support organization like a service organization within a business. Behave like an outsourcer. o This takes business skills to structure the support organization to deliver valued services in which true demand is measured against known utilization of resources given committed service levels. 2. Acquire business acumen, leadership skills and communication skills. o The majority of all CIOs are being promoted into the position from the business units. This is a huge opportunity - align the support organization with the business goals and objectives. o Create and sell the Support Story that speaks of business impact, delivering cost- effective valued services and improving employee productivity.
  15. 15. 3. Speak the language of business - so that senior management and business unit leaders will listen to their Support Story and invest in support. o While improving your image and perception and building better customer relationships, the Support leader should find new business. 4. Reduce targeted call volume by 10-15% yearly by leveraging Root Cause Analysis to identify call types for elimination and deflection. o The excess capacity should be used to take on new value-added services needed to shift resources to more challenging work. o All new funded projects should have a percentage of that funding allocated for support and training. o A costing model should be developed detailing resources necessary given calculated demand and SLAs and used in the ‘bidding’ process to win the new business. 5. Broaden the support role and services portfolio to have larger organizational impact. o Be more proactive in minimizing business impact and improving employee productivity o Eliminate repetitive incidents and problems with long-term resolutions, end-user training, self-service and knowledge management. 6. Create and articulate an aligned support strategy and a continuous improvement Roadmap that identifies what best practices/frameworks must be implemented to address the gaps to realize the strategy. 7. Challenge conventional wisdom and lead the cultural change – be ITIL advocates and play the ITIL card for better cooperation amongst the entrenched Silo IT teams. 8. Know ALL the details of your support operations – don’t assume or take another’s word for it. o Know the expected end-result and measure and manage to it always. o Follow-through on everything that you and your teams commit to.
  16. 16. o Be strategic yet deliver tactically - gain credibility in the organization as one that can execute and deliver. 9. Know your cost structure – what it costs to handle and resolve calls at all tiers of the support model and tiered-structure and what could be done to lower it. 10. Create and sell the business case for investing in the Service Desk. o Investing in tier-one is the only way to realize cost-savings, productivity gains and a scalable support model that tracks, handles and resolves the majority of the organizational issues, problems and requests cost-effectively and timely. o The total cost of support can be reduced without driving customers away or going underground or decentralized. Thank you!