Anatomy of Agile Enterprise

Post do blog http://www.ebizq.net!

==============
Anatomy of Agile Enterprise
Janne J. Korhonen

From Fragile to Agile: Enterprise Architecture Reform through BPM and SOA

By Janne J. Korhonen on February 7, 2010 8:26 AM

Companies have invested vast amounts of money and effort in information systems. In the course of time, these systems have been integrated with idiosyncratic point-to-point solutions to address larger business transactions. While this has appeared as simple and practical on the outset, over time the increasing complexity has resulted in “integration spaghetti” that is prohibitively difficult and expensive to manage and maintain. The problem is aggravated by the increasing need for business agility that cannot be achieved with cast-in-concrete integration solutions.

 

While this deeply ingrained “technology mess” is too overwhelming to be dismantled and replaced, the truth is out there and can be disentangled. By mapping physical data to logical information objects and technical functions to business activities, a canonical information and operational model can be elicited. To this end, a business has to define its own, consistent ontology, which may partly be adopted from the normative nomenclature of its respective industry vertical. The data in the underlying information systems can be mapped to these canonical concepts using appropriate integration technologies and exposed as data centric SOA services. By analyzing the functional requirements of business processes, a set of logic centric services can also be identified.

In Service-Oriented Architecture (SOA), the intricacies of applications and technology infrastructure are encapsulated behind well-defined, self-describing service interfaces that expose the contained information and functionality as reusable, context-independent services. The underlying implementation of a service can be changed as long as the service contract is maintained. SOA services provide modular building blocks that can be composed to higher level constructs, e.g. orchestrations or composite applications. This coarse-grained modularity reduces the inherent complexity of the enterprise architecture and improves business agility. The service abstraction insulates business changes from IT development and thereby synchronizes the business and IT life-cycles.

In the following, I will attempt to outline how a “fragile” architecture, characterized by “technology mess” and “integration spaghetti”, could be reformed towards a more agile architecture through a concerted effort by business and IT, in which the business-driven top-down BPM (Business Process Management) meets the IT-driven bottom-up SOA. The stages can also be considered as architectural maturity levels.

1. BPM: Review and specify the organization’s strategy. Describe the external context (position in the overall value configuration) and create a process map. Identify key business processes and specify their high-level key performance indicators (KPIs) and critical success factors (CSFs). This ensures that the global process performance is in line with the strategic objectives and provides the basis for more specific, accurate and correctly aligned objectives. SOA: Start the architecture reform within a pilot domain by replacing integration spaghetti with lasagna: route the idiosyncratic point-to-point integrations through Enterprise Application Integration (EAI) middleware. EAI approach simplifies application integration by providing a common integration backbone with routing and transformation capabilities. 
2. BPM: Devise the process architecture that provides the foundation for the initial BPM initiative and all subsequent process management projects. Outline the process roles and sub-processes in the key processes. Choose one of these sub-processes in the same domain as the integration pilot and model the process in line with the process architecture guidelines. SOA: With the lessons learned from the pilot, expand EAI approach to the rest of the organization. Within the pilot domain, implement the first basic SOA services. The EAI tool can be used as the initial SOA platform. 
3. BPM: Re-engineer the pilot process in sync with the SOA undertaking and start modeling other processes leveraging the experiences from the pilot exercise. SOA: Start implementing basic services in other domains. Automate selected parts of the pilot process by orchestrating implemented services to executable process flows. Also implement pertinent context-sensitive portal views to the workflow. As a result of this stage, one business process has been described and implemented top-down and bottom up, meeting in the middle, where services are bound to processes. 
4. BPM: Once the business process is modeled and automated for relevant parts, it can be readily measured and continuously improved. Channel the business benefits of the pilot initiative to fund re-engineering other business processes in a similar vein. SOA: Expand service orchestration to new business process initiatives as needed. Build full-scale SOA infrastructure including Enterprise Service Bus (ESB), Registry and Repository, and SOA Management faculties. 
5. BPM: When several domain-specific business processes have been subjected to Business Process Management, the “white space” between these processes can be considered. Whereas orchestration describes the control logic within a single process flow, choreography describes the coordination between these processes in the overall cross-domain end-to-end process. Deploy a full-fledged Business Process Management System (BPMS) to manage the choreography of collaborative, event-driven processes. SOA: Provide the improved capabilities to external partners as enterprise services and contract external services as needed.

It is important to think big, but start small; maintain a long-term grand vision, but realize it sustainably in incremental steps, learning from spearhead pilots, the success of which brings about confidence. Set the target level of maturity based on your business needs. Do not invest in top-notch infrastructure until you have reached the maturity level at which the technology is required. And do not try to jump over maturity levels. Slower is faster.

Capitalism Created the Middle Class and They Still Have it Pretty Good

Post do blog do Prof. Mark Perry (http://mjperry.blogspot.com) , do dia 03/02/2010!

Enquanto no Brasil se fala muito de uma “nova classe média”, seria interessante uma comparação com a dos EUA, identificada no post abaixo!

===============

Capitalism Created the Middle Class and They Still Have it Pretty Good

“In the run-up to the release of his new budget, President Obama painted a dire picture of the middle class. It has, he said, ‘been under assault for a long time … ‘

It’s certainly true that the past two years have been tough for many middle-class Americans. Many of them have lost jobs and homes, seen their investments decline and, more broadly, faced new uncertainties about incomes.

Families are suffering in every community – but the entire middle class under assault? Don’t believe it. No hard evidence points to a general decline in living standards for the average American family. Perhaps, having it so good for so long has created expectations, some of them a bit unreasonable. Consider:

•America’s middle class lives in bigger and better-equipped homes than ever before, with appliances of all kinds, air conditioning, big-screen televisions, computers, DVD players, digital cameras and so much more (see chart above, “The Spread of Products into U.S. Households”).

•Nine in 10 households own a car – better equipped, more durable and more fuel efficient than any in history.

•Cell phones once cost $4,200, but they’re now less than $100. Nearly every pocket and purse holds a cell phone, many now with Internet access.

•In real terms, the average family’s net worth has tripled since 1970, even after the past two years of declines in housing prices and stocks.

•Tap water’s free, but Americans still buy 8.6 billion gallons of bottled water a year.

•Obesity has replaced hunger as the most pressing dietary concern.

Innovation and trade continually drive down the real cost of goods and services and increase the productivity of each hour of work. As this capitalist engine churns onward, the scarcity that plagued mankind for millennia has given way to the abundance that’s the foundation of today’s vast middle class.

The capitalist system literally created the middle class, and the best way to maintain and improve our living standards lies in keeping it functioning at peak efficiency. Government largesse, no matter how high-minded or well-intended, isn’t going to do much for the majority of middle-class families. They have to pay their own way – as always.”

~From Dallas Fed Economist W. Michael Cox’s article, “The Middle Class Still Has It Pretty Good.”

MP: In the graph above, notice how it took almost an entire century for the telephone to become commonplace and reach 90% of all households, compared to the cell phone, which took about a decade to reach 90% ownership.

Do Patents Slow Down Innovation?

Peguei hoje na revista Technology Review, do MIT!

===========

By Brad Feld

Saturday, January 30, 2010

I had a very interesting meeting yesterday with an MIT Professor who I’ve known for a long time.  He is anti-software patent, as am I.  However, he suggested something I hadn’t really spent much time thinking about, namely that patents slow down innovation.  Some very credible folks have been talking about this for a little while, including James Bessen and Michael Meurer in their excellent book Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk. 

In my conversation Friday, I heard a very interesting example.  Regularly, patent advocates tell me how important patents are for the biotech and life science industries.  However, there apparently is academic research in the works that shows that patents actually slow down innovation in biotech.  The specific example we discussed was that there is increasing evidence that when a professor or company gets a patent in the field of genetics research, other researchers simply stop doing work in that specific area.  As a result, the number of researchers on a particular topic decreases, especially if the patent is broad.  It’s not hard to theorize that this results in less innovation around this area over time.

I’m just starting to read some papers about this stuff, including those by MIT Professor Fiona Murray.  If you are interested, Stuart Macdonald’s paper When means become ends: considering the impact of patent strategy on innovation frames the discussion nicely.  And Stephan Kinsella’s excellent essay Reducing the Cost of IP Law absolutely nails this.

I’m still obsessed with my mission to “abolish software patents” especially after receiving yet another email from a new startup that claims to be a “Patent Insurance Company.”  A number of these have popped up recently in the past few years, including several that are funded by VCs.  Their pitch is that you pay them an annual fee, license any patents you have to them, and they will “protect you” against any patent litigation.  Whenever I hear this pitch, all I can think about is Al Capone walking the streets of Chicago going door to door offering “protection” to all of the local businessmen if they will pay his vig every week.

* Brad Feld has been an early stage investor and entrepreneur for over 20 years. He is co-founder of Foundry Group and currently serves on the board of directors of Gnip, Oblong, and Zynga Game Network for Foundry Group. The posts published here originally appeared on www.feld.com.

Competindo em Analítica

“Pense além de ERP, CRM, BI, SCM, HRM, BPM, SOA, e outras tantas siglas!  Esta pode parecer uma frase muito forte.  Mas hoje é virtualmente impossível você se diferenciar baseado apenas em produtos como estes, que estas iniciais representam.  Além do mais, o que você está fazendo com todos os dados e informações que você está gerando?

Se você é um software vendor, seus rivais estão vendendo quase os mesmos produtos que você.  E graças ao fenômeno do cheap offshore labor (contratação de trabalho internacional barato, tendo a China e a Índia como modelos), você está altamente pressionado a bater seus concorrentes em custo de produção.

 Logo, como sair desta situação?  Torne-se um Analytics Competitor, ou seja, um Competidor Analítico. ”

Este é o início da nova newsletter da Creativante, que você pode acessar aqui!

SaaS vs. On Premise ERP Software: Understanding Fact and Fiction

Matéria recebida hoje da empresa Panorama (http://panorama-consulting.com), especializada em avaliação de ERPs!

==========

SaaS vs. On Premise ERP Software: Understanding Fact and Fiction

There is much hype in the ERP marketplace regarding the strengths of SaaS (Software as a Service) relative to traditional on premise ERP software solutions. To be sure, several SaaS and cloud computing vendors are growing quickly and giving traditional ERP vendors a run for their money. Salesforce, Workday, and Netsuite are some of the SaaS vendors receiving much attention and business success in recent years.

However, as with any enterprise software option, SaaS has its pros, cons, and tradeoffs. While software as a service vendors would have you believe that their offerings are superior to traditional ERP in all instances, there are also distinct disadvantages and challenges to consider.

For example, choosing between SaaS and traditional ERP solutions often depends on the following variables:

• Complexity of your business
• Size of company and number of employees
• Stability of your business model and processes
• Your business growth level
• Scope of your enterprise software needs
• Need or desire for flexibility to change software to accommodate your business needs
• Level of integration required with third-party enterprise software applications
• Sophistication of your internal IT skills and infrastructure
• Your need or want to control your IT systems in-house
• Sensitivity to initial capital outlays vs. ongoing operational costs

We often find that SaaS solutions are very viable for our smaller to mid-size clients (SMBs). On the other hand, our larger clients generally find that SaaS does not adequately accommodate their enterprise software needs. Moreover, the SaaS delivery model is often more suited for vanilla and narrowly defined business functions, such as customer relationship management (CRM), human resource management (HRM), or supply chain management (SCM); broader or more differentiated functions can be more difficult to accommodate.

Choosing between SaaS and traditional ERP isn’t always cut and dry. Many of the traditional software vendors are providing hybrid options that combine the best of both worlds by offering customers a single instance with the flexibility of traditional ERP, but hosting those solutions externally to accommodate the desire to outsource their ERP infrastructure.

Finally, any ERP implementation is challenging.  Whether it is SaaS, on premise, or something in between, implementing the software is the easy part.  The hard part is defining your new business processes, ensuring the system is aligned with your operations, training employees, and defining roles and responsibilities in the new system.  Even the simplest technology won’t eliminate the need to address these areas.

In short, software as a service can provide a very compelling solution for many organizations. In fact, our 2010 ERP study (to be published later this month) shows that 13% of companies under $100M in revenue are choosing SaaS options, which is a marked increase over previous years.

However, SaaS or cloud ERP software isn’t for everyone. It is important to carefully consider your spectrum of ERP software options, as there are countless possibilities. View our YouTube presentation below to better understand the tradeoffs of SaaS vs. on premise ERP software solutions.

CRM: Software as a Service versus On-premise – benefits and drawbacks

Uma interessante tese, escrita a quatro mãos (achei estranho, mas é verdade!) por dois estudantes do Departamento de Informática da Universidade de Lund, na Suécia.  A tese, cujo resumo segue abaixo, pode baixada em http://biblioteket.ehl.lu.se/olle/papers/0003441.pdf!

É um estudo sobre os benefícios e problemas de um CRM num modelo SaaS ou num modelo tradicional, dentro das próprias organizações que o implementam.  Vale a pena ler!

==============
CRM: Software as a Service versus On-premise – benefits and drawbacks

University essay from Lunds universitet/Institutionen för informatik

Author: Thanawin Ratametha; Manasa Veeragandham; [2009]

Keywords: CRM as a Service; Customer Relationship Management; CRM on-demand; Cloud computing; Software as a Service; On-demand software; SaaS’s benefits and drawbacks; CRM as a Service’s benefits and drawbacks; Informatics; systems theory; Informatik; systemteori; Mathematics and Statistics;

Abstract:

Nowadays, most of organizations try to find the best solution to improve their business processes by using advantage of technologies, which are always developing to replace the mistake of traditional version, one of the most critical evolutions in technology system is Customer relationship management (CRM). CRM stakeholders who implementing CRM system or plan to implement CRM system had faced a lot of uncertainty in new technology, in this case, our focus is on CRM as a Service solution. CRM as a Service is CRM system that applied software as a service (SaaS) technology as a concept of cloud computing. It is a web-based application that hosted CRM application in provider’s side, where clients can access to one copy of application by web browser through internet. To investigate the improvement of CRM, we tried to evaluate SaaS’s benefits and drawbacks that assume to affect CRM as a Service solution. During this process, we had adopted interview as our research methodology and to observe the improvement of CRM system certain to conduct a survey questionnaire. Our research model will be oriented towards investigation of CRM as a Service system based on SaaS’s benefits and drawbacks. In this thesis, we are trying to acquire a better understand in benefits and drawbacks of CRM as a Service which applying the SaaS platform to improve CRM performance, it is helpful to evaluate the CRM as a Service in SaaS’s benefits and drawbacks aspects by considering the CRM experts perspective, it help the IT investors in organization, who plan or approach to on-demand service, to gain more knowledge in CRM on-demand service, and in long run to make right decision in CRM solution to their companies.

Book Review and Innovation Summary – “The Design of Business”

Livro novo na praça e uma revisão do Braden Kelly (em http://www.stumbleupon.com/su/1YyvNw/www.business-strategy-innovation.com/2010/01/book-review-and-innovation-summary.html)!

===============

Tuesday, January 19, 2010

Book Review and Innovation Summary – “The Design of Business”

A few weeks ago I received “The Design of Business” by Roger Martin in the mail. “The Design of Business” is a relatively short, easy, and pleasant read.

The main premise of the book is that our organizations, and the business schools that fill out their top leadership ranks, are too focused on analytical thinking at the expense of intuitive thinking. This focus creates too much emphasis on reliability at the expense of validity.

“The most successful businesses in the years to come will balance analytical mastery and intuitive originality in a dynamic interplay that I call design thinking.” – Roger Martin

One of the key concepts of the book is the introduction of the Knowledge Funnel – a visual element that shows how knowledge progresses from mysteries to heuristics to algorithms. It all begins with a question at the top of the funnel, and at each stage transition, knowledge and execution can typically be transferred to lower cost labor (and possibly handled by a computer when they reach the algorithm level).

At the same time, there are other tensions in our organizations that managers in the era of the creative economy will have to become attuned to, and these include managing an appropriate balance between exploitation and exploration and not falling victim to the false certainty of the past when making business development decisions.

Ultimately, the exploration of the mysteries at the top of the knowledge funnel and exploitation of the algrithms at the bottom of the funnel are equally important. Companies that focus too much on one, at the expense of the other, risk their very future.

Creating a design thinking organization is not easy, and several pages are devoted to describing the struggles of A.G. Lafley and Claudia Kotchka in transforming P&G’s organizational culture to be more design-centric.

In addition to other examples of organizations pushing themselves more towards design thinking, there is also a great deal of focus in the book on the transformation of mysteries into heuristics and heuristics into algorithms.

Overall, the book is another way of looking at the challenge facing innovators everywhere who are looking to embed design or innovation (or both) into their organization.

So, are you ready to tackle the challenge of achieving a balance of analytical thinking with intuitive thinking in your organization?

My interview with “The Design of Business” author Roger Martin can be found here.

---

Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Big Slide for Big 3 Market Share: From 90% to 45%

Dados interessantes sobre o mercado automobilístico americano (do dia 18/01/2010, no blog do Prof. Mark Perry:http://mjperry.blogspot.com/)!

Mostra duas coisas: a) O mercado americano está se tornando realmente aberto ao mundo; e, b) A tecnologia do automóvel no mundo não é mais americana!

======================

Big Slide for Big 3 Market Share: From 90% to 45%

According to data from Ward’s Automotive, the Big Three’s (GM + Ford + Chrysler) market share for the U.S. went from above 90% in 1965 to below 45% in 2009. Also from Ward’s, below are the top 10 best selling cars in the U.S. for 2009 (trucks not included), and then the top 20 cars and trucks for 2009.

“All processes are services”, says new book on BPM

Posto de hoje do blog http://www.ebizq.net/!

===========

“All processes are services”, says new book on BPM

Michael Poulin

By Michael Poulin on January 18, 2010 7:37 AM

The new book “Improving Enterprise Business Process Management Systems“, authored by Alexander Samarin, addresses the architectural and development framework covering different aspects of BPM starting with the BPM discipline and going via BMP software suites into BPM System solutions.

The author believes into strong coupling between BPM and SOA, and, when defining term ‘process’, adds:
“some operations of a service can be implemented as a process, and a process includes services in its implementation.”
So, when you read about processes in this book, you may mean services.

One of the exceptional features of this book is an extended vocabulary defining basic terms. This gives the reader ability to agree with the author’s terminology or establish appropriate translations instead of guessing what’s what. This does not mean that you must agree with everything. For example, I do not share the definition of SOA as “an architectural approach for constructing software-intensive systems” or definition of an operation as a “distinct function” in all cases.

The book meticulously describes modern view on step-by-step approach and realisation of BPM systems. The latter is explained as a “portfolio of the business processes as well as practices and tools for governing the design, execution and evolution of this portfolio”. Along this way, Alexander has constructed a nice symbolic language describing opinions of the stakeholders on the BPM system from the strategic, business and IT viewpoints. For example, if the stakeholders agree with the BPM architect on enterprise architecture, line management, business users, solution architecture and development while they allow the BPM architect to do whatever he/she wants in the area of management just to make the managers’ life easier and the solution does not require to do anything extra in operational support, “there is the synergy between the business and IT“. However, if the top management says it dos not know how to improve the BPM system and opinions of the stakeholders in all other areas – strategy, business and IT – are unknown, this situation is qualified as an opportunity for the BPM architect.

Another interesting topic discussed in the book is flexibility of BPM systems. Considering that a business process is inflexible by definition, i.e. it tends to maximise robustness and minimise changes because a change in the process’ business logic results in another process, flexibility of process management is about flexibility in the management of the process supplies. To find how this problem is resolved, you need to read the book. Actually, it is not huge and very illustrative having 135 figures for 189 pages.

At the end, I would like to outline that the author has shared his rich experience in the BPM area and described 24 BPM patterns with recommendations when they may to be useful. I think the book worth reading, at least, for this information alone.

Gartner Highlights Key Predictions for IT Organizations and Users in 2010 and Beyond

 Previsões (para 2010) do Gartner para organizações de TI!

=============

Gartner Highlights Key Predictions for IT Organizations and Users in 2010 and Beyond
This Year’s Predictions Span 56 Markets, Topics and Industry Areas

STAMFORD, Conn., January 13, 2010 —  Gartner, Inc. has highlighted the key predictions that herald long-term changes in approach for IT organizations and the people they serve for 2010 and beyond. Gartner’s top predictions for 2010 showcase the trends and events that will change the nature of business today and beyond.

These predictions were selected from across Gartner’s research areas as the most compelling and critical predictions. The trends and topics they address this year speak to the changing balance of power and focus in IT. Gartner analysts said last year’s themes of shifting ownership and revenue flows continue, becoming more pronounced and more sharply focused. As the macro-economic environment adjusts to a new balance between supply, consumer demand and regulation, the focus of this year’s top predictions has expanded to encompass shifts in the way that users interact with IT.

“As organizations make plans to navigate the economic recovery and prepare for the return to growth, our predictions for 2010 focus on the impact of critical changes in the balance of control and power in IT,” said Brian Gammage, vice president and research fellow at Gartner. “With greater financial and regulatory oversight for all IT investment decisions, few organizations will be unaffected.”

“For many organizations, the economic and budgetary challenges of 2009 drove important changes in the general governance of IT investment decisions, accelerating the trend toward greater accountability and transparency,” said Daryl Plummer, managing vice president and chief Gartner fellow. “With a strong emphasis on business-case justifications, chief financial officers (CFOs) assumed a more active role. Although most organizations enter 2010 preparing for a return to growth, this financial oversight is unlikely to be lifted anytime soon. For IT leaders, greater fluency in the language of business has become a requirement.”

Gartner’s top predictions are intended to compel readers to action and to position themselves to take advantage of coming changes, not to be damaged by them. Gartner’s top predictions for 2010 and beyond include:

By 2012, 20 percent of businesses will own no IT assets. Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks.

The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry. For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

By 2012, India-centric IT services companies will represent 20 percent of the leading cloud aggregators in the market (through cloud service offerings). Gartner is seeing India-centric IT services companies leveraging established market positions and levels of trust to explore nonlinear revenue growth models (which are not directly correlated to labor-based growth) and working on interesting research and development (R&D) efforts, especially in the area of cloud computing. The collective work from India-centric vendors represents an important segment of the market’s cloud aggregators, which will offer cloud-enabled outsourcing options (also known as cloud services).

By 2012, Facebook will become the hub for social network integration and Web socialization. Through Facebook Connect and other similar mechanisms, Facebook will support and take a leading role in developing the distributed, interoperable social Web. As Facebook continues to grow and outnumber other social networks, this interoperability will become critical to the success and survival of other social networks, communication channels and media sites.

Other social networks (including Twitter) will continue to develop, seeking further adoption and specializations with communication or content areas, but Facebook will represent a common denominator for all of them.

By 2014, most IT business cases will include carbon remediation costs. Today, server vitalization and desktop power management demonstrate substantial savings in energy costs, and those savings can help justify projects. Incorporating carbon costs into business cases provides a further measure of savings, and prepares the organization for increased scrutiny of its carbon impact.

Economic and political pressure to demonstrate responsibility for carbon dioxide emissions will force more businesses to quantify carbon costs in business cases. Vendors will have to provide carbon life cycle statistics for their products or face market share erosion. Incorporating carbon costs in business cases will only slightly accelerate replacement cycles. A reasonable estimate for the cost of carbon in typical IT operations is an incremental one or two percentage points of overall costs. Therefore, carbon accounting will more likely shift market share than market size.

In 2012, 60 percent of a new PC’s total life greenhouse gas emissions will have occurred before the user first turns the machine on. Progress toward reducing the power needed to build a PC has been slow. Over the course of its entire lifetime, a typical PC consumes 10 times its own weight in fossil fuels, but around 80 percent of a PC’s total energy usage still happens during production and transportation.

Greater awareness among buyers and those that influence buying, greater pressure from eco-labels, increasing cost pressures and social pressure have awoken the IT industry to the problem of greenhouse gas emissions. Requests for proposal (RFPs) now frequently look for environment-related criteria of both product and vendor. Environmental awareness and legislative tightening will increase recognition of production as well as usage-related carbon dioxide emissions. Technology providers should expect that they will be required to provide carbon dioxide emission data to a growing number of customers.

Internet marketing will be regulated by 2015, controlling more than $250 billion in Internet marketing spending worldwide. Despite international efforts to eliminate “spam,” marketing “clutter” is abundant in every marketing channel. Pressure for greater accountability means the backlash from annoyed consumers will eventually drive legislation to regulate Internet marketing. Companies that focus primarily on the Internet for marketing purposes could find themselves unable to market effectively to customers, putting themselves at a competitive disadvantage when new regulations take effect. Although experiencing high growth, vendors who focus solely on, and sell predominately to, Internet marketing solutions could find themselves faced with a declining market, as companies shift marketing funds to other channels to compensate.

By 2014, over 3 billion of the world’s adult population will be able to transact electronically via mobile or Internet technology. Emerging economies will see rapidly rising mobile and Internet adoption through 2014. At the same time, advances in mobile payment, commerce and banking are making it easier to electronically transact via mobile or PC Internet. Combining these two trends creates a situation in which a significant majority of the world’s adult population will be able to electronically transact by 2014.

Gartner research predicts that by 2014, there will be a 90% mobile penetration rate and 6.5 billion mobile connections. Penetration will not be uniform, as continents like Asia (excluding Japan) will see a 68% penetration and Africa will see a 56% mobile penetration. Although not every individual with a mobile phone or Internet access will transact electronically, each will have the ability to do so. Cash transactions will remain dominant in emerging markets by 2014, but the foundation for electronic transactions will be well under way for much of the adult world.

By 2015, context will be as influential to mobile consumer services and relationships as search engines are to the Web. Whereas search provides the “key” to organizing information and services for the Web, context will provide the “key” to delivering hyperpersonalized experiences across smartphones and any session or experience an end user has with information technology. Search centered on creating content that drew attention and could be analyzed. Context will center on observing patterns, particularly location, presence and social interactions. Furthermore, whereas search was based on a “pull” of information from the Web, context-enriched services will, in many cases, prepopulate or push information to users.

The most powerful position in the context business model will be a context provider. Web, device, social platforms, telecom service providers, enterprise software vendors and communication infrastructure vendors will compete to become significant context providers during the next three years. Any Web vendor that does not become a context provider risks handing over effective customer ownership to a context provider, which would impact the vendor’s mobile and classic Web businesses.

By 2013, mobile phones will overtake PCs as the most common Web access device worldwide. According to Gartner’s PC installed base forecast, the total number of PCs in use will reach 1.78 billion units in 2013. By 2013, the combined installed base of smartphones and browser-equipped enhanced phones will exceed 1.82 billion units and will be greater than the installed base for PCs thereafter.

Mobile Web users are typically prepared to make fewer clicks on a website than users accessing sites from a PC. Although a growing number of websites and Web-based applications offer support for small-form-factor mobile devices, many still do not. Websites not optimized for the smaller-screen formats will become a market barrier for their owners — much content and many sites will need to be reformatted/rebuilt.

Additional information is in the Gartner report “Gartner’s Top Predictions for IT Organizations and Users, 2010 and Beyond: A New Balance.” The report examines the impact these long-term changes will have in combination with the ongoing trend toward the democratization of IT capabilities. The report is available on Gartner’s website at http://www.gartner.com/resId=1268513.

Mr. Gammage and Mr. Plummer will be hosting upcoming webinars “Gartner Top Predictions for 2010: Coping with the New Balance of Power” on January 14 and January 27. They will discuss how these predictions are changing the balance of power and focus in IT. To register for one of these webinars, please go to www.gartner.com/predicts.

Gartner’s 2010 predictions span 56 market, topic and industry areas, with around 250 predictions in total. These predictions highlight the changing outlook for business, industries and IT providers, as analysts looked toward the aftermath of the economic downturn and recession. Whether preparing for a return to growth in 2010 or still dealing with the impact of the downturn, these predictions will guide the decisions IT and business leaders need to make about IT investments and broader aspects of business strategy during the year ahead. The 2010 Predicts reports can be found on the Gartner Predicts website at www.gartner.com/predicts. These reports are broken out by topic, industries, and markets.

Contacts:

Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com

Holly Stevens
Gartner
+44 0 1784 267412
holly.stevens@gartner.com

About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.