Tuesday, August 30, 2005

Customer Satisfaction a Major Factor in Call Center Costs

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Aug. 30, 2005
Companies' rush to save call center dollars by shortening the length of time agents spend on calls is costing them big.
Also in this Issue
The State of Software Pricing
Gartner Highlights Key Emerging Technologies
Spreadsheet Heaven
 
Top Insights

Contact Center Today: Nearly half of companies that implement inbound marketing efforts — offering a customer a product or service when the customer initiates contact — see a 25 percent greater ROI than companies that do not use inbound marketing, according to research by Capgemini and CRM software maker Epiphany. Certain channels are more effective than others for specific types of marketing. "People" channels such as branch offices or call centers are better for retention offers, while electronic channels such as the Web are best for cross-selling.
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ADDITIONAL READING:
CIO.com: CRM Wake-Up Call
Billing World and OSS Today: Customer Care: Leveraging Technology and Process
Insurance Networking News: Rolling out the Red Carpet
Incoming Calls Management Institute: Queue Tips
DigiTimes: The temptation of $400 desktops is back — at least for a while. Some observers suggest that companies may accelerate their client hardware refresh cycles in light of Gartner's prediction last week of a PC price war. And laptops are cheap, too — Dell and HP are offering $500 portables, although the average cost is still about $1,600, twice that of the typical desktop. It might seem like the perfect time to buy, if not for the emergence of dual-core client systems, set to begin flooding the market in Q1 2006. Intel has projected that 70 percent of all desktop and mobile processors it ships in 2006 will be dual-core; expect a huge push behind the new and pricier technology, largely in connection with Microsoft's Vista release. This interesting report on Intel's 2006 desktop plans says the company will put its Yonah and Anchor Creek dual-core platforms at the heart of all six of its desktop market segments. None of these categories specifically target business; the mini-towers will include home entertainment features and share time with the emerging breed of mini-desktops, which are so small and portable (this article includes some cute photos) that they incorporate laptop innovations, such as fanless heat pipes. IDC predicts that by 2008 sales of traditional mini-tower PCs will drop to about half their historic high — more evidence that business is moving to mobile.
 
ADDITIONAL READING:
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Forbes: So you've heard that Really Simple Syndication is one of the technologies identified by Gartner in its latest Hype Cycle report. Need more proof it's hot? Microsoft will include RSS support in its next iteration of Internet Explorer and in its upcoming Vista OS. There is now a venture capital fund called RSS Investors. One of the fund's partners sees definite potential for RSS in the enterprise, where he says developers could use it to help employees collaborate on projects, or even to facilitate collaboration with partners and suppliers. A new RSS reader developed by sizzling San Francisco start-up Rojo Networks goes beyond simply tracking and reading RSS feeds to allow users to send articles to selected contacts and to tag articles so Rojo can better determine which content is relevant.
 
ADDITIONAL READING:
InformationWeek: Order from Chaos via RSS
Red Herring: RSS Goes Corporate
HoustonChronicle.com: What's Wrong with RSS?
SandHill.com: Here are two interesting blogs on software pricing, available with a single mouse click. The first blogger takes a number of industry types — Oracle, IBM, Accenture and Gartner, among others — to task for not developing products and business models that can help budget-minded CIOs migrate more of their necessary utility spending to investments in new technology. The second blogger says that vendors — with their sound-alike sales pitches — make it too tough to differentiate between the cost and actual value of enterprise software. He'd like to see a neutral ranking of the software stack, to help buyers determine the payoffs for different types of applications such as CRM, ERP, et al. He concedes this won't happen, as vendors have too much to lose — but he points out that with the increasing cynicism of CIOs, many of them will likely lose in the long run anyway.

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ZDNet: Determining ROI associated with service-oriented architecture projects will likely challenge companies because of SOA's usual linkage with wider business process improvement initiatives. The author opines that it will be difficult to separate the impact of one from the other — although this may not bother companies implementing SOA, as they are likely to be forward-thinking in all matters, including how ROI is determined. The takeaway: It's hard to argue with great results, even if you can't crunch the numbers to show that SOA is responsible.

Wired: Microsoft CEO Steve Ballmer said at a recent conference that he believes that companies will increasingly be able to purchase business applications off the shelf, rather than writing specific applications themselves or hiring developers to do so for them. Not surprisingly, Microsoft has enlisted more than 200 users such as doctors, bankers and plant managers to help it write software for specific vertical industries. It also will soon introduce a program called Small Business Accounting, designed to appeal to those currently using accounting programs like Intuit's QuickBooks. Microsoft's signaling of its intent to go after small and mid-sized businesses has some software developers — including current Microsoft partners — worried that Redmond will poach some of their customers. Others aren't convinced that Microsoft will be able to effectively target the micro needs of such users.

SearchCIO.com: In this Q&A, Bob Bickel, vice president of corporate strategy and development at JBoss, says that some of his company's customers, running 60 servers and 120 CPUs, have experienced an immediate savings of $1 million in license costs when switching from proprietary to open source software. Another benefit of open source licenses, he says, is that they make it easy for users to test new apps. He also says companies like his, which supply open source solutions, tend to place more emphasis on ongoing customer support since they make their living on support rather than license fees. It's important for those considering open source to partner with a company that offers strong support, Bickel says. While the tone of this piece is pretty promotional — the only downside to open source Bickel identifies is a lack of indemnification, which doesn't apply to JBoss since the company provides it — he makes some good points that are especially relevant for CIOs sitting on the open source fence.

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3 QUESTIONS:
Asset Management Not Just an IT Issue

With Scott Bils, vice president of marketing for Scalable Software, whose flagship product Survey enables users to track and measure asset usage in distributed computing environments. More than 170 enterprise and government customers use Survey to eliminate unnecessary spending, redeploy underutilized assets and ensure license compliance.

Question: Is asset management for hardware and software pretty similar? If not, what are some key differences?
Bils: The goals for asset management for hardware and software are the same — both can help companies save money on their technology investments. However, the details for managing hardware and software assets are quite different. In most companies, there are only a limited number of hardware types in the IT environment. Yet there can be hundreds or thousands of software applications installed, which can be much more difficult to track. In addition, the license issues around software are more complex. Software licensing is an ongoing process involving renegotiations, license renewal fees, etc. And because of software license requirements, inaccurate asset management may mean a hefty fine if a company is faced with a software license audit.

Question: How can asset management help companies achieve ROI from their technology investments?
Bils: Asset management is important for the IT ROI equation. Companies need to track quantities and locations of technology assets. However, to offer the best opportunity for ROI, asset management needs to be combined with usage management. This ensures that companies make sure they have only the technology they need — no more or no less. Companies can utilize this information to eliminate unused software and hardware applications from their systems or look for ways to consolidate technology use.
     This information can also be leveraged when companies renegotiate their software licenses. For example, if an IT department determines many employees are not using their installed Microsoft Access software, those users could then be downgraded to a version of Microsoft Office that doesn't include that application.

Question: Recent research sponsored by Microsoft showed that most companies leave asset management to their IT departments rather than involving the financial department. Would it make more sense to have the finance department handle asset management?
Bils: Asset management should be a shared function between several departments, including IT and finance. Just as an IT decision cannot be made without considering the dollars and cents, a finance department should not be making IT decisions independent of that department. Depending on the company, other departments like operations/facilities and procurement may also need to be involved to make sure that the asset management decisions are made with a full view of what the organization needs to accomplish.

 
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Voice & Data Convergence examines the strategic and tactical implications of emerging IP telephony technologies, from VoIP services to advanced CRM systems to security considerations. Find out what every IT decision maker should know. Click here to sign up!

By the Numbers

$200,000
Cost of a Mitrix on-demand supply chain management system serving seven to 10 users for the first year. The annual cost is $75,000 for subsequent years.
Source: Line56.com

89 percent
Consumers who repurchase a product if any problems with it are successfully resolved by a call center representative, vs. 32 percent of consumers who buy again after a bad call center experience, according to Purdue University research. Seventy-eight percent buy a product again if it works as advertised.
Source: CIO.com

11 percent
Computer users we hope not many of them corporate workers who defined spyware as "a gadget from the latest Star Wars movie," according to an NOP survey commissioned by Blue Coat Systems.
Source: bios

Breaking Headlines

Tekrati: Gartner has highlighted three emerging technologies that IT budget planners may want to watch in its latest and cynically titled Hype Cycle report. A Gartner analyst says companies can feel pressured to invest prematurely in a technology due to hype or conversely, to ignore a technology because of less-than-stellar results from early adopters. It's an interesting sentiment, coming from Gartner. Nonetheless, the three areas the firm taps are: collaboration, including podcasting, peer-to-peer VoIP, desktop search, RSS, corporate blogging and wikis; next-generation architecture, including Web services-enabled business models, Extensible Business Reporting Language and business process platforms; and real-world Web, including location-aware applications, passive RFID and mesh networks. How have past hype cycle technologies fared? Wireless, selected in 1995, obviously has exploded. Others including speech recognition, videoconferencing and handwriting recognition have yet to take off.

TechNewsWorld: One of the reasons VoIP appeals to both business and individual users is the ease and low cost of sending messages over IP networks. Unfortunately, spammers love it for those same reasons. Spammers can record one voicemail message and send it to hundreds of thousands of IP addresses, or even complete live calls if they wish. Because of the openness of the Internet, they can also spoof users' voicemail box addresses and then insert them into messages, so it looks like that's where a call originated. While spam assaults on VoIP systems are rare, they have the potential to do far more harm than e-mail spam. Unlike e-mail spam that takes up a tiny amount of storage space, users could receive unwanted voicemail messages that hog multiple megabytes of storage.

bios: Despite worrisome recent research that shows IT departments devoting increasing amounts of time and money to battle unauthorized applications in the workplace, surveys of IT chiefs in the UK indicate that most are just now beginning to get their arms around the trend. Many assume their internal networks are safe and aren't taking measures to protect them against employees downloading unapproved apps on laptops at home and then bringing them to the office. According to an NOP survey commissioned by Blue Coat Systems, just 36 percent of computer users understand what spyware is, with an unbelievable 11 percent defining it as "a gadget from the latest Star Wars movie." We hope not many of those respondents were corporate workers. The survey found that 22 percent of respondents run a spyware checker on home PCs, and 30 percent do so on office machines. In another survey, conducted by WatchGuard, more than two-thirds of IT execs cited spyware as the biggest security threat yet 73 percent of respondents said their users didn't know what spyware is.

Emerging Trends

Line56.com: On-demand software applications have emerged as a major way for companies to cut costs. Though their use has been largely confined to customer relationship management, a company called Mitrix recently began offering a similar solution for supply chain management. Like CRM, many companies hesitate to make the large upfront investment required for complex SCM systems. Mitrix, priced at about $200,000 for the first year and $75,000 for subsequent years for a system serving seven to 10 users, is a viable alternative, especially for small to mid-sized businesses whose current SCM efforts may be based largely on e-mail and Microsoft's Excel and Access. Mitrix's CEO concedes the technology may not be for everyone, as it includes strictly core functionalities of inventory, analysis and buy- and sell-side collaboration. Mitrix hopes to add forecasting, advanced supply chain planning, and profit optimization in the future.

Network World: Recent rulings by the Federal Communications Commission and the Supreme Court that DSL and cable modem services are exempt from telecommunications regulation could drive up connectivity costs for companies using broadband to link their remote workers to corporate VPNs, or even require a change in service provider or underlying access technology. There is a silver lining, however. While the rulings could cause some ISPs to abandon DSL or cable connections or raise their access fees, the rulings might also encourage them to explore last-mile bypass alternatives, such as wireless and broadband over power line, to serve their customers. Facilities-based DSL providers such as Covad will also likely enter into more partnerships with ISPs; a four-market trial with EarthLink is designed to provide "an affordable alternative" to the local phone companies for voice and broadband Internet access, according to the article.

CFO.com: In the "can't beat 'em, might as well join 'em" category, business performance management software vendors like Cognos and Business Objects, which for years have tried to convince their customers of the inherent unsuitability of Microsoft's Excel for BPM applications, are integrating Excel into their products. SAS Institute, for instance, now uses Excel as the primary interface for data entry and reporting in its budgeting software. Users are enthused about keeping their beloved Excel and being able to apply it to more industrial-strength tasks. A vice president at a $251 million-a-year telco using Cognos software that utilizes an Excel interface says that when all employees can perform analysis, modeling and planning without having to know anything other than Excel, "that completely changes the game of true, enterprise-wide planning."

IT Business Edge: Maximizing IT Investments
Issue 35, Vol. 3
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About the Editor

Ann All covered a variety of business topics as a newspaper reporter before switching to automated teller machines — which, unbelievably, are just beginning to migrate to a Windows-based platform and more modern networking technologies like TCP/IP — as the editor of online trade publication ATMmarketplace.com.
She can be reached at investments@itbusinessedge.com.
   
 
   

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