Making Investments in Innovation When the Economy is Soft


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It can be a tough one to sell the case for making technology investments when the economy is in the doldrums. The first reaction is to make cuts.

But we all know that innovation comes when the right investments are made.

In this article from Qwest Buiness, you will lean why IT managers and technology executives believe that investing in unified communications can make a significant difference for a company and postion it as a leader as the market strengthens and business picks up.

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Making Investments in Innovation When the Economy is Soft

  1. 1. Today’s Business and IT Leaders on Market Trends TheInnovation QuotientEven in tough times, smart investments intelecom and network services pay big dividendsby boosting corporate productivity.A 011101001010010010100010100011001010000110100 0111010010100100101000101000110 01110100101001001010001000011001100010000110011001010 t this time, when companies are cutting better prepared to compete when the economy recovered. And nearly half of expenses and reducing capital costs, the executives and managers said they making the case for an investment in could gain an advantage by investing communications technology can be difficult. while their competitors cut back.Yet a majority of IT and business managers believe that In the current climate, it is not sur- prising that spending on new tech-spending on voice, data, and network services in difficult nologies has slowed. Seventy-threetimes can help companies meet their business objectives percent of IT managers and 62% ofand gain an edge for future competition. financial executives surveyed said that their organizations had slowed or de- 0111010010100100101000101000110010100001101000001101100101011 layed investments in voice, data, and 01110100101001001 network services. To gain approval, A survey of senior-level executives and managers have to prove that any in- IT managers sponsored by Qwest Com- vestment will show results in a fairly 011101001010010010 munications, a provider of voice, data, short time. In the survey, more than and network services to business, shows half of the respondents said they had that both groups are strong believers realized productivity or cost savings that investments in communications tech- in the first 12 months following an in- nology can spur innovation and improve vestment in these services. Less than a the services their companies provide. quarter of the business executives and The survey was conducted for Qwest fewer than 20% of IT executives said by Fortune Custom Publishing and IDG they expected no productivity gain or Research Services during a seven-day cost savings from such investments. period ending May 6. Some 280 respon- For most of the last two decades, dents completed the survey. bringing technology investments in Almost 70% of executives and IT line with business objectives has been managers said they expected to im- a mantra of corporate management. In prove efficiencies and reduce costs by the survey, the senior-level executives investing in voice, data, and network and the IT managers were in close har- services. Half said they expected that mony when it came to listing their top such investments would leave them three business challenges: lowering
  2. 2. expenses, maintaining or increas- The unusual requirement for Te- ogy or don’t prepare their employees ing top-line revenues, and increasing leverde’s installation is the kind of glitch for the changes that will occur, says workforce productivity. that makes senior managers sweat over Steve Hilton, vice president of enter- They even agreed on the areas in new technology, although they firmly prise and small business research at the which they didn’t consider their orga- believe that voice, data, and network- Yankee Group, a Boston-based technol- nizations highly effective in using new ing technologies can increase productiv- ogy consulting firm. “Part of the imple- technologies. Only a quarter thought ity, cut costs, and lift the bottom line mentation process has to include some their companies “very good” at using for their businesses. plan for change management,” he says. new interactive methods of commu- “Part of change management is train- nications. Fewer than half considered Adopting Next-Generation ing.” Large companies are more likely themselves proficient in giving employ- Technology to have formal training processes than ees efficient access to information, Implementations often fail because small ones, says Hilton.1001010010010100010100011001010000110100 0111010010100100101000101000110 companies choose the wrong technol- Hilton says large companies should 011101001010010010100010000110010100001101000101100101010100111000010100101 and barely a third said they were carefully plan and manage technol- highly effective in developing new ogy projects. “It’s important to have * products and services to address a formal project management process changing business needs. in place,” he says. “There are a lot of When Televerde, a Phoenix contact- moving parts in a big project.” Qwest center operator, decided to upgrade its Managers who executive vice president Teresa A. Taylor communications technology last year, invest in new agrees. She says the communications there was an unusual complication. company depends heavily on project Technicians from Qwest Communica- technologies management to assure that technol- tions, the telecom services provider, had expect an ultimate ogy implementations work. “We try to to undergo background checks before payoff in higher 01110100101001001010001010001100101110100101001001010001010001100101110100101 011101001011101001010001100 they were allowed access to Televerde’s productivity, spend time with the customer on what equipment. The reason for the ad- the new system is capable of doing and ditional hurdle? Televerde’s contact better customer how it will work,” says Taylor. centers are located inside an Arizona service, and Qwest assigns a point person to work women’s prison. increased profits. with the customer to manage through 011101001010010010100010100011001011101001010010010100010 any difficulties and asks customers to * designate an equivalent counterpart. In A View from the Top A proprietary survey of top the not-uncommon situation where a managers reveals attitudes about IT investing during the recession. company’s IT staff and its line-of-busi- ness managers don’t see eye to eye on a Top Three Challenges for Business IT Execs Business Execs topic, Qwest steps in as a mediator. “We Lowering business expenses 69% 57% end up being the guidance counselor,” Maintaining/increasing top line revenues 46% 43% says Taylor. “It’s in our interest to make Increasing workforce productivity 42% 28% sure it all comes together.” Company culture can be one cause Where organizations are highly effective of snags when implementing technol- Leveraging technology for customer needs 35% 36% ogy. Is the technology right for the Developing new products/services 35% 33% business, and will employees embrace Utilizing new/interactive communications 25% 28% it? That’s not always obvious. Taylor describes a pharmaceutical chain that Can data, voice, and network services be Yes 87% 88% wanted Qwest to install an elaborate leveraged to drive innovation? No 13% 12% electronic system to manage prescrip- Source: Driving Innovation Through Telecom Investments Survey, IDG Research and Fortune Custom Projects tions. During Qwest’s routine assessment of the company’s existing technology, a
  3. 3. * Catalysts for Creativity Data, voice, and network services can drive innovation by ... Providing employees with access to critical business applications 73% from any location (remote mobile office) 72% Enabling us to serve customers faster 70% 74% Improving employee productivity by decreasing 65% process time/time spent waiting for information 72% Providing the infrastructure to support 64% development of new products/services 51% Integrating multiple communication channels to provide a unified 58% customer experience/present a “consistent face” to the customer 55% Facilitating new interactive methods of communication 52% with customers (customer forums/user groups) 54% Reducing human resources constraints by 56% simplifying IT management/support requirements 47% Providing the infrastructure to rapidly scale up or down 58% to meet changing business needs 41% Reducing capital and/or operating expenses to free up resources 48% for investment in R&D process improvement, etc. 44% Other 1% 1% Bases: respondents who believe data, voice, network services can be leveraged to drive innovation within the organizations; CIO Don’t know 5% Fortune CIO: 142 respondents; Fortune: 138 respondents 5%101001010010010100010100011001010000110100 011101001010010010100010100011 011100001100011010100010001 number of pharmacists declared bluntly in implementing that vendor solution.” all its services over to the Qwest system. that they had no interest in using any- Televerde asked Aaron Johnson, a “We had a chance to test it out, test the thing more than a fax machine. “You’re senior telephony engineer, to work with quality, and make sure everything was in a situation where someone at a cor- Qwest when it decided to consolidate working correctly,” says Johnson. porate level decides to spend millions several disparate phone systems into Televerde found savings by reduc- and the pharmacist says, ‘I’m not touch- 011101001010010010100010100011001011101001010010010100010 ing maintenance time and hardware 01110100101001001010001000011001010000110100010010010001 ing that,’” says Taylor. The reason for a single, modern VoIP network pro- overhead. Johnson says, “We went from the pushback: pharmacists wanted a vided by Qwest. The company’s goal nine servers and eight telephony cards, hard copy of the prescription and the was to replace a legacy voice network at $2,500 each, to three off-the shelf doctor’s signature. Qwest told the client that depended on expensive T1 lines HP servers with nothing special about they would be wasting their money to and specialized telephony equipment. them.” By reducing maintenance and put in the more elaborate technology. Televerde reduced 10 different phone worry about breakdowns, he says he is “I’d rather have that happen than have systems to just two. The consolidated able to focus more on system improve- us put in all the technology that would network enables Televerde to closely ments. Johnson estimates Televerde has never get used,” she says. monitor service quality—and security, cut its operating costs by around 50%, While large companies can draw assuring, for example, that some 200 or more than $100,000 a year, the kind on the broad knowledge available in inmate employees, who make an av- of numbers that cost-conscious manag- a sizeable technical staff, smaller com- erage of 25,000 calls a day, don’t use ers want to hear. panies with limited IT capabilities need the system for unauthorized calls. To 011101001010010010100010100011001011101001010010010100010100011001011101001 to make sure they bring in the right ex- minimize disruptions, Johnson brought Staying Ahead of the Curve pertise to install new technology, says the system on line in stages. First, the Even in slow economic times, more than Hilton. “On the small business side, I al- company brought on VoIP outbound two-thirds of business managers and ways recommend they need to engage a service in December of last year. After a IT executives firmly believe that con- channel partner extremely experienced two-week trial period, Televerde moved tinued investment in technology will
  4. 4. pay important benefits. The challenge helped IT managers prepare PowerPoint based Katun Corp., a global supplier of in the current climate is that they have presentations. “Whatever it takes to printer and copier products. He says new to prove it. “IT budgets in general are bring the two sides together—we’ll do communications technology has made starting to be given the same level of it,” she says. sharing information between far-flung scrutiny as every other expense item,” There is a positive aspect to the geographic regions and across multiple says John Greer, senior vice president greater scrutiny of technology imple- time zones a lot easier. In the past, he for human resources and development mentations. In the past, says Greer, a lot says, employees in North and South at Smart Financial Credit Union in Hous- of technology was installed without a America, Asia, and Europe depended ton. To gain support from management thorough analysis of costs and benefits. on phone calls and e-mails to plan new “There are a lot of good systems out products. “These products are so techni- there whose value might not be maxi- cal that everyone was missing digits and * mized because that analysis wasn’t done models and it was difficult.” The com- up front.” The new attention to ROI pany created a database accessible at raises expectations. “You need to show all its locations. “Now information can Company culture that this is going to make the company be translated and disseminated around can be one cause more efficient, reach customers better, the world as we need it,” says Ronquillo. of snags when 11101001010010010100010100011001010000110100101110100101001 “Absolutely, we can be more innovative.” 011101001010010010100010000110010100110100010101011 01110100101001001010001000011001010000110100010110010101010 011101001010010010100010000110010100000 provide better service to customers, give For companies battling through tough implementing the employees more tools to be more ef- times, innovation can be the most valu- technology. It fective, etc.,” says Greer. “You just can’t able payoff from technology. is not always say, ‘I need this because everybody else obvious what is is doing it.’” For more information on Qwest products and The close scrutiny of tech budgets solutions, visit the right fit for comes at a time when many companies the business, or see demand from both employees and if employees will customers for around-the-clock ac- embrace it. cess to information from any location. Nearly six in 10 managers in the survey 011101001010010010100010100011001010010 for spending on new technologies, says rated such capabilities an important Greer, “You need to be able to show a advantage for their companies—and a positive return on your investment.” reason to invest even in difficult eco- Providing hard projections of ben- nomic times. Managers who invest in efits from tech investments can be a new technologies expect an ultimate challenge. “Unfortunately, on the IT payoff in higher productivity, better side, that’s not what people do for a liv- customer service, and increased profits. ing,” says Greer. He suggests that tech In the survey, 73% of respondents said managers recruit help both from finan- that providing anytime/anywhere ac- cial people in their companies and ven- cess to critical business applications was dors to develop the numbers they need. key to improving workforce productiv-01110100101001001010001000011001010000110100010110010101010 01110100101 ity. And more than half said making Qwest’s Taylor says her staff will help such access to critical business applica- IT managers convince senior executives. tions would result in improved customer On some projects, Qwest has devel- service. oped brochures explaining a technology Laurencio Ronquillo is Latin America to senior management, and has even marketing director for Minneapolis-