Business Value, Not Technology Hype Will Drive Enterprises In 2011

Enterprises worldwide have been wading through a maze of hype around latest and disruptive technology innovations. However, the year 2011 is likely to bring back some rationality as enterprises are expected to cut through this maze.

According to Constellation Research’s Outlook for 2011, enterprises are expected to adopt business value as the common operating principle, and will seek pragmatic, creative and disruptive solutions that achieve both profitability and market differentiation.

Challenges in Store for 2011

Based on this key finding, the research report cites three key challenges that enterprises will need to overcome in 2011. These include:

• Assessing the right disruptive technologies for the organisation; requiring to link back to business strategy; and to reinvest in research budgets and internal processes that inform,
  disseminate, and prepare the organisation for an increasing pace in technology adoption.
• Identifying where these disruptive technologies can create differentiation through new business models, grow new profit pools via new experiences, and deliver market efficiencies that save money and time.
• With budgets expected to remain from flat to incremental growth in 2011, and with new projects in the pipeline, supporting new business models and disruptive technologies will require organisations to find ways to optimise existing investments. This will mean reducing the cost of existing investments and leveraging the existing infrastructure to achieve higher business value.

Trends to Look Out for

The findings of the report reveal broad trends around growing enterprise adoption of disruptive technologies as a host of mobile, social, cloud, analytics, and unified communication technologies from the consumer tech world continue to enter the enterprise, but with some roadblocks along the way; better synergy between business and technology within next generation business models; and increasing pressure on legacy costs.

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So, what does this mean and translate into for enterprises and technology buyers in 2011? According to the report, here is what they can expect:

• IT will be supporting at least two devices per person as organisations see employees using different devices, like tablets, smartphones, laptops, etc. for different apps.
• Despite announcements by major vendors, the cost model for replacing on-premise based voice equipment will not justify moving voice communications to the cloud in 2011.
• 2011 will be the year when SaaS providers find the issue of security turning from a perceived weakness of their offerings to a perceived strength as enterprises realise that their in-house IT team is unable to match the level of security offered by SaaS providers.
• Forecasts in cloud security breaches will call for partly cloudy cloud adoption. Despite the woes in on-premise security and move to the cloud, cyber attacks will force companies to move from public clouds to private clouds in 2011. Hybrid models for apps in the public cloud and data in the private cloud emerge as users migrate from on-premise models.
• Android will become more enterprise friendly by fixing major manageability issues.
• The social media landscape will undergo an interesting transformation as it ushers in a genre of information commerce and the 3C’s of social content– creation, curation, and consumption. 2011 heralds the year of information curation and the dawn of the curator. Curators introduce a new role into the pyramid of Information Commerce.
• On the technology front, expect a lot of noise and confusion on the social and collaborative front when it comes to customer, employee and partner collaboration.
• Tools, networks and services that cater to the role of the curator will emerge. Storify, Curated.by, Pearltrees, and Paper.li break through as the coveted services of choice amongst curators as they not only enable the repackaging and dissemination of information, but also deliver in captivating and engaging formats.
• Social analytics will evolve from ad hoc experiments into refined information services. Organisations will continue to experiment in listening services that filter out noise from the social sphere, identify trends that deliver insight, and create models that support prediction.
• “The Cloud” will become the new Social Media. The recent announcements from Oracle, SAP, Microsoft, Salesforce and many smaller vendors in the enterprise applications world has placed “The Cloud” as the center of controversy for 2011 and into 2013-2014. Buyers will still have to wait until 2015+ to see what happens, as most vendors have just begun developing their strategies and organisations have not yet adopted the model in sufficient numbers to justify faster R&D from vendors (with few exceptions).
• Citizen engagement platforms will get more open despite the emphasis on security.
• Organisations will get serious about mobilising apps and embrace the platforms to support mobility. In 2011, firms will deploy enterprise mobility management tools to support multiple device types and operating systems.
• The distinction between BPO and ITO will blur as integrated offerings from service providers with broad capability gain market share.
• P2P will displace the old notions of B2B and B2C in social business. B2B and B2C will cease to exist in 2011. Organisations will conduct social business through peer-to-peer (P2P) relationships.
• Corporate IT spending will barely keep up with dollar inflation. Corporate IT spending in the US and Canada will increase a small 2.0% at the median, after two years of flat budgets.
• Technology refresh cycles will accelerate through 2011– especially in customer service departments leading to large-scale adoption of both new technology related to social media as well as new technology that was scheduled for later adoption.
• Organisations will cautiously recommit to BPO. BPO uptake will creep back throughout 2011, as the recovery stutters and buyers pull the trigger on sourcing initiatives.
• As organisations consider their legacy optimisation strategies, successful teams will bring enterprise architects, IT leaders, procurement teams, and business units together to identify waste to pay for innovation.
• Organisations faced with market pressures to create strategic differentiation amidst the burden of legacy systems will need to find a way to pay for innovation. Software maintenance fees will come under attack as user groups and leading organisations will spearhead efforts to renegotiate existing enterprise software vendor contracts.