Inside the Midmarket: A 2011 Perspective

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1 Exclusively for midsize businesses Inside the Midmarket: A 2011 Perspective Nordic Report

2 Global Overview: Survey of 2,112 midmarket leaders, with 160 from the Nordics, reveals how business priorities influence IT investment decisions around the world Shifting Mindsets The strategic mindset has dramatically shifted during 2010 from operational efficiency and cost reduction to a greater emphasis on growth, customers, and innovation. Investing in Today and Tomorrow Firms are no longer clamping down on IT expenditures. They now are striking a balance between short-term cost containment and solutions that can drive revenue growth and foster stronger customer relationships. For example, 70% are actively pursuing analytics solutions to improve decision making and operational efficiency. And, 66% are adopting or planning to adopt cloud solutions to optimize costs and redundancy while increasing uptime and scalability. These and other IT priorities are supported by a strong IT budget growth outlook, with more than half expecting a budget increase in 2011 versus only 20% in Partnering for Growth To advance these priorities, more than 70% are seeking a consultative, versus transactional, relationship with their primary IT provider. 2

3 Strategic mindset for midsize businesses across the Nordics reveals emphasis on customers Strategic Mindset Percentage Operational efficiency and cost reduction 21% Revenue Growth 28% Customer Focus 31% Innovation 20% 0% 20% 40% 60% Note: Question in 2009 asked differently than Percents pulled directly from 2009 WW Comprehensive Report 3

4 Midsize businesses in the Nordics focus on cost reduction, improved efficiencies, increased employee productivity, and enhanced customer service 2011 Most Critical Business Priorities Cost reduction / improved efficiencies Increased employee productivity 48% 45% Improved customer svc. 45% New ways to reach customers 43% Dealing with regulations 39% Optimization of supply chain 39% Optimizing key business processes Increased flexibility / nimble enterprise 39% 39% (Scale 0-10 top 8,9,10 combined) 4

5 Nordic firms are implementing a wide range of projects for infrastructure improvement, knowledge management, collaboration, and SaaS Current Stage Of IT Focus Areas Implementation Infrastructure-related Collaborative Business Oriented IT Infrastructure Improvements 83% Know. Mgmt / Human Cap. Mgmt 78% Collaboration 76% Software as a Service (SaaS) 75% Information Management 74% Supply Chain Management 72% ERP (Enterprise Resource Planning) 71% Virtualization 71% Business Analytics / Intelligence 70% Disaster Recovery / Bus. Continuity 70% Mobility / Unified Communications 70% Bus. Performance Mgmt (BPM) 69% Customer Relationship Mgmt (CRM) 67% Cloud Computing 66% Security Management 66% Web 2.0 / Social Media 64% Green IT 62% Regulatory Compliance 60% Financial Mgmt / Finance Ops 54% 5 Started But Not Completed Planned But Not Started

6 Business Analytics: 70% of Nordic firms look to improve efficiency and be smarter about their customers through analytics and predictive technologies A deep-dive into business analytics and intelligence shows the current stage of implementation With the primary* benefit areas identified as Expansion Strategies 16% Customer Targeting 21% Efficiencies 33% Customer Information 14% Investment Decisions 16% * BA/BI drivers and consistent across all countries worldwide 6

7 Cloud Computing: 66% of Nordic firms aim to reduce costs, enable remote access, and meet corporate objectives with cloud solutions Top business benefits of implementing cloud computing Adoption barriers to cloud computing Remote access 42% Cost reduction 41% Corporate objective 40% Uptime / availability 39% Resource scalability 37% No space requirements 36% Rapid provisioning 35% Cost and manageability 35% Security / privacy of data Loss of control / accountability Difficulty budgeting given variable pricing Insufficient / slow network response Availability / uptime 39% 37% 34% 33% 33% 7

8 Midsize businesses in the Nordics look to cloud solutions for remote access capabilities, cost reduction, and to meet corporate objectives Cloud Computing Drivers: By Country Canada Resource scalability US Rapid provisioning UK Remote access BeNeLux Corporate objective France Resource scalability Uptime / availability Nordic Remote access Corporate objective Germany Resource scalability Poland Rapid provisioning Redundancy Czech Republic Flexible pricing Russia Flexible pricing Rapid provisioning China Uptime / availability Corporate objective Mexico Uptime / availability Rapid provisioning Brazil Virtualization No space requirements Redundancy Spain Virtualization Corporate objective Italy Remote access Uptime / availability India Virtualization Redundancy Flexible pricing Singapore Resource scalability Rapid provisioning Korea Uptime / availability Flexible pricing Japan Redundancy Blue = IT focus areas not in the Worldwide top 5 South Africa Flexible pricing Remote access Australia Redundancy Uptime / availability Remote access New Zealand Redundancy Resource scalability 8

9 31% of midsize firms in the Nordics expect an increase in their IT budget for 2011, allowing for increased investment in key areas 31% Expect Budget Increases In 2011 Decreased/ Unsure 29% IT Focus Areas Expecting Greatest Investment Over Next Months IT Infrastructure Improvements Information Management ERP 1-10% increase 17% 10% + increase 14% Unchanged 40% CRM Security Management Regulatory Compliance Know. Mgmt / Human Cap. Mgmt Collaboration (Scale 0-10 top 8,9,10 combined) 9

10 In addition to the common global priority of security management, midsize businesses in the Nordics are focused on regulatory compliance and collaboration Canada Business Analytics / Intel. BeNeLux Virtualization Mobility / Unified Comms. UK Business Analytics / Intel. Bus. Performance Mgmt Nordic Regulatory Compliance Collaboration Germany Mobility / Unified Commun. Virtualization Czech Republic Cloud Computing Regulatory Compliance Russia Dis. Recovery / Bus. Cont. Information Mgmt US Business Analytics / Intel. France Poland Business Analytics / Intel. China Information Mgmt Business Analytics / Intel. Bus. Performance Mgmt Mexico Dis. Recovery / Bus. Cont. Brazil Financial Mgmt Virtualization Spain Information Mgmt Collaboration Italy Collaboration Business Analytics / Intel. India Business Analytics / Intel. Singapore Dis. Recovery / Bus. Cont. Information Mgmt Japan Regulatory Compliance Korea Ent. Resource Planning Information Mgmt Bus. Performance Mgmt Blue = IT focus areas not in the Worldwide top 5 South Africa Financial Mgmt Australia Business Analytics / Intel. Regulatory Compliance New Zealand Dis. Recovery / Bus. Cont. Financial Mgmt 10

11 Nordic countries are behind the global average, with 31% reporting significant growth in 2011 IT budget investment 2011 IT Budget Expectations: By Country Canada 60% / 15% BeNeLux 43% / 24% UK 62% / 19% Nordics 31% / 29% Germany 51% / 11% Poland 56% / 11% Czech Republic 38% / 30% Russia 70% / 10% China 80% / 3% US 59% / 14% Mexico 49% / 18% France 41% / 18% Spain 51% / 16% Italy 57% / 13% Korea 74% / 13% Japan 29% / 18% Brazil 81% / 6% India 84% / 6% Change in 2011 IT Budget WW Mature Growth Increase (+) 53% 51% 69% South Africa 48% / 30% Singapore 74% / 9% Decrease / unsure (-) 16% 16% 12% Unchanged 31% 33% 19% Percent citing increase in IT spending Percent citing decrease in IT spending (or are unsure) Australia 58% / 21% New Zealand 51% / 12% 11

12 Midsize firms in the Nordics seek a more consultative relationship with their IT providers, seeking partners with competitive prices and quality products Perceptions of Relationship with External, Primary IT Provider (Prompted Single Response) Top Reasons for Working with Primary IT Vendor (Top 10) Tech Advisor 31% Transactional 32% IT Consultant 23% IT and Business Consultant 14% IT product reliability / perf. Competitive pricing Customer service Easy to do business with Ability to deliver services IT impl. / consultative skills Knowledge of products Positive past experience Innovative Multi-platform solutions 12

13 Many of midsize companies across the Nordics believe they are part of the first or second wave of IT adoption Company s View Regarding IT Adoption Leads / first to adopt new technologies 16% Part of second wave of adoption 36% Moves / adopts along with the masses 35% Waits until technology is widely available / proven 11% Last to adopt new technologies 2% 13

14 Midsize firms in the Nordics must address issues related to cost, skills, and ROI before IT priorities can be fully realized Barriers To Achieving IT Priorities Global Nordic Difference (Nordic WW) Cost 58% 44% -14pts Difficulty in acquiring /implementing solution Inability to implement technology with existing resources / infrastructure 44% 37% -7pts 43% 46% 3pts Lack of skills / resources 39% 48% 9pts Access to financing 36% 45% 9pts Inability to demonstrate ROI 31% 38% 7pts Legislation/regulation obstacles 21% 25% 4pts 14

15 Looking forward Do we have a clear view of how our top business and IT priorities align? In light of this report, will those focus areas help us stay ahead of the competition? Investing in Today 1 Shifting Mindsets 2 3 and Tomorrow Partnering for Growth Does our company have a clear path to growth? How will we engage customers in new ways that increase interest and loyalty to generate new demand and revenue sources? Do we have an effective means of fostering innovation to advance our goals and stay ahead of competition? Are we using predictive analytics to anticipate and respond to customer needs? Are we able to mine data to improve decision making? Do we have effective collaboration tools in place with our customers, supply chain and employees? Do we have a highly available, flexible and secure IT infrastructure that uses virtualization and cloud-based technologies? Are we sharing the right information with our IT provider so they can play more of a consultative role in our relationship? Are we demanding the right support from our IT provider so they can provide the insights and cutting edge technical advice we need to be competitive? 15