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Three technologies that will shape the new year

Real-time communication and the Internet link people, processes and things with unprecedented speed and frequency. The age of the globally integrated economy and society has officially arrived.

An increasingly connected world, however, comes with its own sets of hurdles. A recent IBM study interviewed over 1,700 chief marketing officers and found that the majority are underprepared to manage the events that have made this an exciting time — the explosion of data, increased use of social media, the proliferation of channels and devices, and shifting consumer demographics.

As a result, there will be a fundamental shift in how companies approach their IT spend in the coming year. Technologies that drive innovation and deliver customer value will be the trendsetters for 2012. As Heidi Dethloff, IBM Vice President of North American Business Partner and Midmarket Marketing explains, "We're seeing a strategic shift in mindset of our midmarket clients from a focus on operational efficiency and cost reduction, to a greater emphasis on growth, customer service and innovation."

Dethloff continues, "Midsize companies sense and respond to the changing marketplace, and embrace new technologies and innovations to help them drive growth. They want speed and flexibility, yet creativity to make better decisions. This is why they are adopting business analytics (BA), customer relationship management (CRM) applications, and cloud solutions to make them smarter in the way they work and interact with their customers." Here, we explore these technologies and how they will impact forward-thinking companies in 2012.

Reaching for a hybrid cloud

Cloud computing has undoubtedly generated much excitement – and headlines – over the past few years. While some have claimed cloud technology to be over hyped, there is no doubt that cloud has helped businesses become more agile and accelerated the pace of innovation.

The popularity of cloud is unmistakable. "As IBM's Inside the Midmarket study revealed, 66 percent of midsize customers are actively pursuing cloud computing to improve costs, manageability or redundancy," says Dethloff. The emergence of cloud technologies has certainly helped midsize companies rethink how their IT is deployed.

Deciding on the right path to cloud computing, however, has been less clear-cut. "Our clients and business partners are really trying to figure out the right cloud deployment strategy based on the individual company and its unique value proposition to the marketplace," says Dethloff.

Typically there have been two types of cloud models that are available to companies – private cloud and public cloud. A private cloud holds computing capacity behind the safety of a firewall on a virtual private network. In contrast, the public cloud stores resources on hardware located at an off-site, cloud provider's facilities, accessed on a self-service basis over the Internet.

In 2012, a third model will likely gain popularity with midsize companies. "A hybrid cloud deployment," explains Dethloff, "is the most cost effective model and gives the best balance of security, reliability and flexibility from a midmarket perspective." Because midsize companies tend to have limited resources, a hybrid cloud model can provide the best of both worlds. Blending elements of both private and public cloud models, the hybrid cloud allows companies to manage some resources in-house via a private cloud model. As companies scale up, they can tap into a public cloud as the need arises and then scale back down when additional bandwidth is no longer necessary.

"Midsize companies embrace new technologies and innovations to help them drive growth."

Gaining new insights through business analytics

Many successful companies have used business analytics (BA) to uncover new insights from existing data, and drive smarter business results and actions. However, there is a common misconception that BA solutions are expensive or complicated. The truth is that midsize companies that take a methodical approach to implementing BA, one of small, discrete steps, can quickly accomplish tangible, cost-effective results.

Statistics show that midmarket companies have in fact recognized the value and benefits of business analytics. In IBM's 2011 study, "Inside the Midmarket," 70 percent of midsize firms are looking to business analytics solutions to improve operational efficiency and gain insights about their customers. Dethloff confirms, "CIOs we interviewed have prioritized business analytics as one of the top IT priorities that they're going to address in their IT budgets in order for them to remain competitive." And with CMOs under-prepared for the explosion of data and shifting customer demographics, Dethloff anticipates "greater pressure on IT executives to address these challenges and drive new executive level decisions over the next year."

All signs point to companies increasing their investment in business analytics in 2012. The most successful ones will use it to make smarter, more informed decisions, build customer relationships and gain a competitive edge. "Business analytics will continue to be a driver of IT growth well beyond 2012," says Dethloff. "In fact, IBM estimates that business analytics will encompass nine percent of all 2012 North America IT spending, and probably will grow twice as fast as the overall market. Absolutely, the adoption rate is going to continue."

CRM is new again

Midsize companies have been implementing CRM for years. But in 2012, companies will radically rethink their approach to CRM. Traditional, non-integrated CRM has been viewed as expensive, complex, static. CRM will evolve into a more integrated, dynamic solution. Dethloff predicts that in the coming year "mature midsize companies will optimize a more end-to-end customer-facing business process and approach whereby they integrate solutions such as billing and order management, into their total CRM solution."

Integrated CRM will be highly dependent upon data management and business analytics capabilities in order to gain new insights, better predict client needs, and make more informed and timely decisions.
The proliferation of social media will impact CRM adoption as well. Dethloff sees that collaboration in social networking capabilities will also increase adoption, and become more integrated into customer relationship improvement efforts.

And how organizations access CRM will also shift in 2012. Businesses today are looking for solutions that make them more agile and responsive to customers' changing needs. The confluence of CRM and cloud technology will help to provide that solution. "In 2012, many midsize companies will leverage CRM applications via cloud technologies or software as a service," says Dethloff. "Midsize companies realize they need to take advantage of virtualized, shared architectures in order to get the biggest return on their IT investment, but at the same time give them some flexibility to deploy IT resources to their employees, their end users, and customers, when they need it the most."

Ready for a smarter planet

"Midsize companies are the engines of a smarter planet." says Dethloff. Globally, the potential influence of the midmarket is astounding. Midsize and smaller firms represent more than 90 percent of all businesses and employ over 90 percent of the world's workforce.

With fierce global competition ahead, these midsize companies are learning to respond quickly to external changes, capitalize on business opportunities and accelerate growth. Their innate agility will help them to seize new opportunities faster which will undoubtedly increase their influence on the larger global economy. And investing in the right technologies can help them get there – and emerge stronger than ever.

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