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Today’s IT and Business Leaders on Market TrendsInfrastructuresfor InnovationA difficult economy is impacting IT investments,but advanced communications infrastructuresbring opportunities for innovation and cost savings.IT leaders undersTand The need To drIve busIness value by lever-aging voice, data and network infrastructures. They know that advanced communica-tions services are the backbone of effective customer experiences, providing business-es with quick, efficient and cost-effective ways to reach out and respond to clients and Voice and networkprospects. In that and many other respects, these services contribute to exactly whatthe business wants in these challenging economic times—lower operating costs, higherrevenue, and effective and rapid delivery of new offerings to the market. services can be Faced with declining funds to invest in these services in a down economy, CIOsmust provide their C-level peers with compelling arguments to build new “infrastruc- leveraged to drivetures for innovation.” Companies that are still investing see enabling convergence,increasing scalability, and expanding application and information access as efforts that innovation.are both vital to opening new frontiers for the business and doing away with the un-necessary costs of legacy environments.Where Opportunity LiesFortunately, both business and IT executives acknowledge that more sophisticatedinfrastructures bring opportunities for innovation, cost savings and productivityimprovements. In a recent survey conducted by IDG Research Services and FortuneCustom Publishing, nearly nine out of ten senior IT and business executives say thatdata, voice and network services can be leveraged to drive innovation, and they citefacilitating remote access to critical applications and speeding up customer serviceamong the top advances these services enable. Both sets of respondents believe that About CIO2CEO:companies that continue to invest in data, voice and network services during slow eco- This peer-based thought leader-nomic times will gain important benefits, such as improved efficiencies and reduced ship program analyzes quantitativecosts, and better collaboration. and/or qualitative research from But in the midst of a downturn, nuts-and-bolts considerations often trump hoped- actual CIOs and CEOs. The result-for advantages, especially when ROI may not be immediate or its overall impact is as ing insight is then disseminated viayet unclear to business executives. A majority of IT and business executives report that IDG Enterprise and Fortune Inc.’seconomic conditions have slowed or delayed their organization’s investments in data, various multimedia assets. To learnvoice and network services compared to 12 months ago. Nearly one-third of CIOs say more about the CIO2CEO program,the slowdown has been significant. With IT budgets shrinking, it’s not surprising that please contact Charles Lee atavailable resources tend to get directed to the most pressing needs. firstname.lastname@example.org C I O 2 C E O TOdAy’s IT And BusInEss LEAdErs On MArkET TrEnds
“There may be some other things that are screaming tivity; new IP voice technology to provide uninterruptedthat they are going to break if they aren’t fixed,” confirms service even during a crisis; integrated remote offices;Lynn Willenbring, CIO of the city of Minneapolis. In and cost savings as a result of leveraging the existing datathe city’s case, for example, some applications are in network and the new voice infrastructure investments.desperate need of an upgrade just to keep operating. Its Indeed, converged voice and data networks providebasic infrastructure, on the other hand, is in pretty good some of the most obvious and immediate TCO proofshape, and Willenbring can postpone investments for points for communications upgrades. They can generateadditional functionality as long as it can sustain current cost savings from day one by eliminating the expensesand near-future needs. The city is fortunate in that it is associated with maintaining separate voice lines andrealizing benefits from previous efforts it has under- internal calling among branch offices. “We have broughttaken. That includes being the anchor tenant of a Wi-Fi in VoIP, and that has reduced costs between offices,” saysnetwork for city staff usage that will lower costs by elimi- an IT support manager at one firm that runs its designnating cellular air cards for field workers and improve projects out of multiple offices. “Sending the calls overproductivity by enabling police officers to upload video the Internet means we can avoid paying for Centrexrecordings of their shifts from their cars in real time. lines and things like that,” he says. CIOs who see further untapped value in upgrad-ing their infrastructure, however, are pressing the issue Converged voice and data networks providearound the general acknowledgement that improvednetwork and data services are good for the business. some of the most obvious and immediate TCOThey’re providing very specific cases that illustrate how proof points for communications upgrades.improved and integrated access to data and businessprocesses for employees is critical to today’s speed of They can generate cost savings from daybusiness and seamless customer experiences. Making one by eliminating the expenses associatedthose cases is key to helping business executives grasphow advanced communications services can drive inno- with maintaining separate voice lines.vation and productivity in some critical ways. The surveyreveals, for example, that business leaders are less likely And that’s just the start of the advantages thatthan IT executives to see how advanced infrastructures companies can reap. According to the IDG Researchcan support the development of new products and Services survey, IT and business executives report that,services, or help the company rapidly scale up or down on average, nearly 50 percent of their investmentsto meet changing needs. in data, voice and network services over the past CIO Greg Davidson at Active Aero Group, which two years have resulted in immediate or short-termmanages freight transportation for Fortune 500 clients, cost or productivity savings. About one-third of theseknows how to build support for a planned strategic investments have laid the groundwork for future cost orinvestment in a new Voice over IP (VoIP) infrastructure. productivity savings, IT leaders say.He previously proved the value of a more advanced data Fanning Howey Associates Inc. (FHAI), an architec-infrastructure with the renegotiation of a network ser- tural design firm that specializes in school buildings,vices contract that cut costs by 40 percent and increased serves as an example of how IT can demonstrate to busi-bandwidth eightfold. That gave Active Aero a scalable ness leaders that communications services improvementssystem platform to increase transaction volumes as well bring with them the ability to better align workforces toas provide customers access to business intelligence support critical project collaborations and data exchang-from its SaaS-based transportation management system es. Putting in gigabyte connections to the desktop at FHAI(TMS). “The telecom investments in the past two years has cut down on the amount of time it takes to pass traffichave delivered a significant increase in customer satis- back and forth, and employees throughout its offices nowfaction that is directly tied to increasing their [custom- are able to open the very large files the company producesers’] productivity as well,” he says. in shorter periods of time, regional support manager Davidson lays out a number of ways in which the David Witte says. The ability to transfer data faster, alongplanned unified communications infrastructure deploy- with new software, pays off for the customer, too. “Thatment will keep the company on its growth path, includ- has enabled us to do more high-resolution imaging so theing providing more flexibility to expand the breadth of customer can see what the building is going to look likeits services. By linking its TMS and voice systems, service before it’s built,” Witte notes. As a result, clients are ablereps will have faster access to customer data, thereby to more quickly get board and community members tomaking the company’s call centers even more produc- make decisions about school designs.tive, Davidson says. Also on tap: improved voice tools Companies clearly won’t get the most out of distrib-that give its call centers better ways to measure produc- uted workforces unless they support them fully. But2 C I O 2 C E O TOdAy’s IT And BusInEss LEAdErs On MArkET TrEnds
not quite 50 percent of business leaders understand the organizational change around new initiatives basednegative impact of remote and mobile employees’ lim- upon an advanced communications infrastructure soited access to systems and data, compared to 63 percent that business users are able to fully utilize new services.of IT leaders. Clearly, business execs need to hear more It will be up to IT leaders to help remove the frictionsexamples like the success that the Oakland County gov- that exist—both culturally and instantiated in exist-ernment has seen. The county has improved efficiencies ing business processes—that hamper the technology’swith its deployment of a WAN fiber network —which it promise. One global bank, for example, sees opportuni-recently upgraded to 1 GB links—that connects it with 62 ties to use its telecom services to increase revenue bylocal governments in its community. The county is able helping customers identify and order the products andto share data among employees across its networks, be services they require. It has put in place a major servicemore collaborative and better leverage the Web-enabled quality initiative around standardizing processes so thatapplications it’s been building, says deputy county those customers can order what they need anywhereexecutive, CIO, Phil Bertolini. “We provide law enforce- in the world in the same way. “Utilizing voice and datament services, tax and assessment systems services. We services with security and software on top of that to behave all kinds of data that is going back and forth,” says able to provide our external customers with the abilityBertolini. “The connectivity has changed everything.” to view account information, to go online and to secure products or other services, or view statements withoutresponding to Concerns the intervention of an employee, that is a huge gain,” saysAs important as it is to point out the strong ROI that can the vice president of IT at the firm.arise from increased investment in new voice, data and Frictions are further reduced—with benefits tonetwork services, CIOs also need to address business us- customer service, technology costs and IT productivityers’ concerns about what might stand in the way of those — when security, administration, troubleshooting andreturns actually being realized. In the past, success has ticket management, and reporting for the applicationsnot always been assured. Only one-third of companies and data that run over the network are centrally man-report they have been highly effective at leveraging tech- aged. The IT leaders responding to the survey reported,nology to facilitate quick and efficient customer service, for example, that the ability to address security updates,and a similar percentage of companies report effective- patches and compliance from a central location makes itness in using new, interactive methods of communicat- easier to enforce security policies and delivers improveding with customers or integrating multiple communica- productivity for IT staff (66 percent each). More thantion channels to provide a consistent face to customers. half of them in each case confirmed that this also led to The CIO must be prepared to tackle some obstacles reduced costs, better service for internal users and anto ensure that expected gains will be delivered. To improved ability to produce evidence of compliance,that end, one of the tasks he or she will face is driving among other features. The most important advantages organizations could/will gain from continuing to invest in data, voice and network services during slow economic times. 70% Improving efficiencies/reducing costs 67% Ability to connect/collaborate 56% from anywhere 59% 51% Preparation for economic recovery 48% 46% Gaining a competitive edge 49% Keeping a level pace to business and 42% IT initiatives 38% CIO Ability to negotiate better/more 35% flexible pricing from vendors 30% Fortune Source: IDG Research, May 2009 C I O 2 C E O TOdAy’s IT And BusInEss LEAdErs On MArkET TrEnds 3
As much as possible, CIOs must lead the effortsthat will drive these gains from a strategic standpoint. Impact of investments on productivityLeaders do not have the personnel resources to delegate or cost savings.requirements around the tactics of communicationsnetworks. CIOs themselves cannot afford to get bogged 19% 25% No noticeable/ Immediatedown in these issues, given how corporate competitive- expected productivity productivity orness and success depend on their ability to focus on or cost savings cost savingsdelivering critical innovations on top of network infra-structures. Measures must be in place to deal with thetactics of maintaining network reliability and speed, andreducing the incidence of internal trouble tickets to sup-port strategic endeavors. After all, today all key businessprocesses run over the network, so applications mustseamlessly extend to branch offices and other remoteworkers, an increasing amount of storage must be provi-sioned to support the explosion of data and activity, and 33% 23%performance must be consistent, fast and secure. Laid the ground- Short-term work for future productivity or productivity or cost savingsHelp Is on the Way cost savingsFor many CIOs, the solution will revolve around takingadvantage of network, voice and data services provid- Source: IDG Research, May 2009ers. They require partners who can deliver the level ofperformance, support and security that frees them andtheir staffs from the daily headaches of keeping the net- Ideally, companies that make the leap to deployingwork up, ensuring that applications run safe and well, advanced services will accrue true business advantagesand managing trouble tickets. The CIO of the financial now and also be prepared to harness the next wave ofservices firm says the vendors he’ll trust with further network-driven innovations. With the right providerinvestments are those who “stand behind their products, and the right services, their future-proofed infrastruc-so that if something does go awry they do not abandon tures will support continuing gains, from leveragingyou as their customer, but instead they are engaged and interactive voice response-enabled contact centers toare jumping in to help.” enhanced business continuity capabilities for their Customers want to know their communications networks and data.providers will react rapidly and intelligently to their When CIOs know they have an infrastructureissues, agrees Barry Witonsky, Qwest Communications they can rely on for the next few years, it makes itSolutions Marketing group manager. Equally critical easier for them to take on strategic planning foris having a partner who can deliver forward-looking competitiveness. That’s exactly what Active Aero CIOinsight into how advanced voice, data and networking Davidson has achieved with the upgrades he’s made—services can significantly impact their business. Qwest and plans to make—to the company’s communicationsaims to deliver on all counts, offering a broad range of infrastructure.scalable, reliable and secure communications solu- Says Davidson, “Now that we have the right, scalabletions, superior support and consulting, and full-scale infrastructure in place, IT has positioned the companyoutsourcing services. well for the wave of growth we are now experiencing— Survey respondents cite access to expertise and even in this economy.”improved quality of service as among the top benefitsrealized when outsourcing these types of services. Theyconsider cost savings to be the number one benefit, as For more information on Qwest products and solutions,noted by 39 percent of CIOs and 44 percent of business visit qwest.com/business.leaders. In fact—and not surprisingly in today’s eco-nomic environment—cost considerations arise whetheror not customers are contemplating outsourcing data,voice and network services. “What [providers] need todemonstrate is some of the efficiencies or direct costsavings you’re going to have by putting in a new solu-tion, but it has got to be real,” says city of MinneapolisCIO Willenbring.4 C I O 2 C E O TOdAy’s IT And BusInEss LEAdErs On MArkET TrEnds