At the beginning of a project, the CTO is excited that the business is going to invest in technology and is all too eager to please.

Let’s say a new CRM system is being implemented. Each department wants a specific function and the requests stream in: Can we get a mobile app for the sales staff? Can we integrate the real-time inventory into the Available To Promise functions? Can we, can we, can we? Like the suits in an ad agency, CTOs do not want to upset the client by telling them there are limits to what can be done with the resources available.

Then comes the crushing reality, often called “Death March” projects. The CTO cannot deliver on all the promises in the time available with the resources he has. Often, this is not clear at the beginning of the project, but at some point a project manager looks at the progress being made and informs the CTO that all is lost.

If you think this is just too stupid to be true, think again.

The big ERP vendors have been sued by multibillion- dollar companies over deals worth hundreds of millions that went awry because they were oversold.

I recently came across a book that can help CTOs who are stretched to the limit. In Selling to Zebras, the father-son team of Jeff and Chad Koser explain how sales professionals can escape the trap of being busy all the time and instead learn how to focus on the clients that are most likely to close. A Zebra is their metaphor for the perfect client, one that really wants your product and can benefit from it. The book shows how to create a Zebra score that indicates if the client is compatible with the solution being sold. The higher the score, the more likely the client will be a good match. The book then goes on to outline a process of how to partner with the client to prove how much value the solution will provide. The model is sophisticated in that it recognizes that the value provided by existing processes must be taken into account. The value claimed is based only on improving existing operations.

Creating a defensible model of value is the key to avoid being beaten down in price. A salesperson can say to a client, “Look, we can reduce the price only by reducing the value you are going to receive. Which part of the benefit do you want to do without?”

CTOs need to create their own Zebra scores so they can set expectations accordingly. But most of all, CTOs need to evaluate each request in terms of the business value provided (See “How to Run IT as a Business“).  Then, when people ask for more value, instead of just saying yes, you can happily say, “I would love to provide that for you, but how do we make the case for the value provided to fund the needed investment.”

The key is being able to map the value of IT to business value. The suits have a tough time doing this, but CTOs should be able to if they can become less eager to please, develop the needed skills and take the time to do the analysis.

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The benefits of doing things “as-a-Service” (aaS) and leveraging cloud-based technologies are well-known and documented, such as a low barrier to entry, reduced capital outlay and infrastructure, easy scalability, and device/location independence. Many companies also appreciate the reliability of service and the ability to leverage specialized domain knowledge expertise from an experienced aaS provider.

However, there is still a great deal of confusion about the many different types of aaS and questions remain over how much companies should rely on the cloud. Specifically, when is the right time to turn to aaS rather than build and manage in-house and what are some of the pitfalls that can be avoided when moving to an aaS-based solution?

Leveraging the cloud and delivered as a service, each type of aaS has the ability to help you do things faster, better, cheaper. The most attractive characteristic of the aaS movement is a flexibility that allows for an incremental or selective approach to deployments. You don’t need to do it all at once, and you can mix and match.

Here’s a quick cheat sheet of three most common aaSes:

1. IaaS – stands for both Integration-as-a-Service and Infrastructure-as-a-Service
2. SaaS – Software-as-a-Service
3. PaaS – Platform-as-a-Service

While each aaS company should do its own research and find solutions and vendors that best meet its specific requirements and budget, there are some universal, key points to keep in mind:

1. Start Small

2. Watch out for aaS pitfalls
3. Beware of hidden costs
4. Look for best practices
5. Choose the right third-party vendor
6. Ensure the highest level of security

The benefits of cloud and “aaS” are real and quantifiable. With the right research, plan and vendor, your company can reduce costs, improve operational efficiencies, become more agile, achieve business and IT alignment, and increase levels of customer and partner satisfaction.

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1. The cloud adoption trend will continue, and vendors without real software-as-a-service strategies will be even more challenged to compete.

2. Cloud platforms will allow ISVs to develop, market, and monetize cloud applications at a dramatically faster rate than traditional ISV development.

3. Analytics go mainstream, as the user population expands beyond the traditional base to include marketers, risk managers and call center staff.

4. Structural unemployment cuts of 2009 will not be reversed in 2010 because organizations that have automated processes will not return to manual ones.

5. CRM investment continues in 2010 to help organizations identify and retain profitable customers.

6. More organizations will restrict Facebook and social networking sites that negatively affect productivity while more professional sites, such as LinkedIn, will grow. Twitter falters.

7. As SAP pushes its customers to SAP ERP 6.0 or to pay higher maintenance fees, it opens the door for on-demand ERP solutions and drives a faster decline in SAP revenues.

8. Mobility strategies and budgets will be reviewed in 2010 with netbooks, Blackberries and iPhone apps driving new billing and upgrade models.

9. IT spending is expected to increase slightly in the next year with only moderate upgrades from XP or Vista to Windows 7. Incremental investment will be significant with existing technologies from CRM, ERP and PLM vendors.

10. Despite efforts to monetize online content, consumers will push back on online subscriptions, denying that revenue stream.

Bonus: Google moves toward a monopoly, causing skeptics to wonder why neither the EU nor US governments have taken a closer look.

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What I find interesting is that the 5 issues discussed below are critical for any CRM implementation as well.  Unfortunately, over the years many organizations have tried to implement CRM without considering these issues, (and have had problems), even though the importance of addressing these things has been talked about for years.  I don’t expect that Enterprise 2.0 will be any different. Unless of course, executive management “steps up to the plate” and makes sure that each of these issues are addressed before any implementation. Personally, I’m not holding my breath.  I anticipate that many organizations will charge ahead with Enterprise 2.0 because “we have to keep up with the competition,” or because “our customer base expects this from us,” without addressing the issues discussed below.  I expect a lot of Enterprise 2.0 failures; especially at larger organizations where IT is still operating under outdated rules:

From the outside looking in, it is easy to think that implementing Enterprise 2.0 will be clear sailing for IT departments – after all, once outside solutions are brought in that foster collaboration (wikis, blogs, etc.) and re-usability (mashups), it would be logical to assume that IT is off the hook for a lot of ‘heavy lifting’ that has historically been at the heart of how they spend their time.

However there remain a number of issues that if left unresolved can lead to problems.

Clarity of purpose – It is essential that Enterprise 2.0 projects have a very clear business purpose that is jointly understood by both the business and IT folks. Without clarity of purpose decision making can become a challenge.

Enterprise architecture – Without a well defined enterprise architecture and some knowledgeable people it is going to be hard to make technical trade-off decisions. Also key are technically literate people who also understand the business architecture and can assess technical decisions in that light.

Operational tempo – Perhaps the biggest change that is starting to hit IT departments is the change in operational tempo. Previously we worked on timescales of months and years to deliver business value through technology. Now with web and Enterprise 2.0 tools we are being asked to deliver in change cycles of hours and days. This requires a completely different mindset and operational capability. It also calls for sound stage containment so as not to risk core systems to innovation.

ROI & success metrics – Without demonstrable value IT departments will struggle for funding. This means getting better at designing metrics in at the start of projects and seeing that measurement is implemented. Also ROI can be difficult to define with regards to some web 2.0 type of applications – this needs to be very clear to management early on.

Strategic vision & alignment – Unless the Enterprise 2.0 technology direction is aligned to the overall strategic vision there are real risks of unhappy outcomes. This links back to clarity of vision above, but is also about broader organizational alignment. It is likely that Enterprise 2.0 implementations will have change management implications, they may also effect job design and even organization charts. It is important to consider these broader issues as part of an Enterprise 2.0 initiative.

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New research by Really Simple Systems, a UK-based hosted CRM vendor, has revealed that small- and medium-sized enterprises (SMEs) are increasingly embracing hosted applications.

The survey consulted 678 respondents, the majority from organizations with less than 50 employees. Over half (58%) reported increased confidence in hosted applications over the course of 2008, while 83% agreed that hosted applications require less internal IT support and maintenance than in-house systems.

Users also said that they have as much confidence in other issues such as reliability, speed, data safety, and functionality of SaaS applications as they do in in-house platforms.

Hosted CRM applications proved to be the most popular with respondents – 60% claimed to be pleased with the concept of hosted CRM, and 36% were actively using a hosted CRM application. Only 8% of respondents said they were using a hosted ERP platform, while 35% said they had confidence in the concept.

John Paterson, CEO of Really Simple Systems noted that the current economic climate was likely to push more businesses towards hosted applications.

“The affordability and pricing structure of SaaS is extremely competitive and the current economy has been a significant force in changing perceptions. The added advantage of SaaS is that business-critical information is readily available at all times, from any computer with Internet connectivity, allowing more flexible working,” he said.

He also predicted that SaaS CRM applications would overtake in-house offerings in the next twelve months, with 36% of respondents now using hosted applications as opposed to 47% using in-house CRM.

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In 2009, these technologies can provide companies with a competitive advantage in what is expected to be a very tough year on the bottom lines of IT budgets, IT management and IT vendors. However, even in an economic downturn those companies that invest, develop and capitalize on technologies that save money while improving the efficiency and effectiveness of business have an opportunity to grab significant market and mind share with new and existing customers.

Here are Samuel Greengard’s Top 10 Trends in IT for 2009…

1. Software as a Service (SaaS) – A few years ago, the idea of running software remotely seemed preposterous. Bandwidth limitations, performance obstacles and IT administration issues made hosted software impractical. But times change. Today, software as a service (SaaS) is growing at an annual rate exceeding 40 percent. In fact, it is expected to command a 23 percent share of the $120 billion U.S. software market by 2010, according to RBC Capital Markets.

2. Virtualization – This technology has already made its mark on the data center. According to various industry estimates, between 50 percent and 60 percent of all servers are now virtualized. The goal, of course, is to reduce server sprawl-and the inefficiencies and higher costs associated with it.

3. Enterprise Mobility – Over the last few years, wireless technology-including 3G cellular data networks and widespread Wi-Fi-has opened the door to an anytime, anywhere business model.

4. Energy-Efficient Data Centers – Chip and PC manufacturers are moving toward more energy-efficient components-including improved memory and resource management-but the big action in 2009 will be in the areas of virtualization and storage, Daniel Starz, author of “Greening Your Business,” predicts. “Virtualization eliminates energy costs, maintenance outlays, cooling expenses and data center costs by as much as 90 percent,” he notes. “The payback is enormous, and it’s something organizations can no longer afford to ignore.”

5. Security, Risk and Compliance – Anthony Noble, vice president of IT Audit, at Viacom in New York City, and others in the IT industry believe that automation is essential-particularly on the risk and security compliance side of things. This includes everything from intrusion detection to authentication; from patch management to analytics used for security. A growing number of organizations are turning to self-encrypting hard drives, two-factor authentication (to replace simple passwords) and security suites that provide central control panels. This trend will continue into 2009, as continuous-monitoring tools become standard in the enterprise.

6. Social Networking – LinkedIn, Facebook, MySpace and a spate of similar sites have transformed social networking from a buzzword into a business buzz saw. Companies as diverse as American Express, Del Monte and Cisco Systems have unleashed powerful social networking tools, including wikis, blogs, discussion groups, collaborative filtering, and even applets and games. The concept is allowing these companies to tap into the power of human connections and knowledge in ways that were unimaginable only a few years ago.

7. Web 2.0 - The evolution of the Web has been nothing short of amazing. Though each generation of tools creates new opportunities, the current and emerging array of Web 2.0 applications is completely revolutionizing the enterprise. The growing use of interactive maps, blogs, wikis, mashups, social bookmarking, enhanced search engines, RSS feeds and social networking is only the start. Web 2.0 tools are also making it easier to manage data, tasks and business processes.

8. Document Management and E-Discovery – Although vendors are adding more sophisticated capabilities to their applications-including the ability to track text messages, IMs and other types of unstructured data-the main challenge is figuring out how to develop systems that retain, manage, and retrieve documents and data quickly and seamlessly. here’s some good news for enterprises looking to put solutions in place: “It is likely to be a buyer’s market in 2009,” Kyle McNabb, principal analyst and research director for Forrester Research concludes. “Vendors entering the market are introducing products and solutions at a much lower price point than they were in the past.”

9. Project Management and Project Portfolio Management – In today’s time-sensitive and budget-conscious world, getting projects finished on time is paramount. Not surprisingly, more and more organizations are turning to structured systems and software to track all the details. Consequently, project management (PM) and project portfolio management (PPM) have moved into the spotlight.

10. Web and Video Collaboration – Today, collaboration tools are poised to go mainstream and further change the way business is conducted. According to the Boston-based research firm Aberdeen Group, 63 percent of companies say they will be using videoconferencing and so-called telepresence systems (essentially, a form of videoconferencing with high-quality images and audio) by the end of 2010. Only 18 percent say they have no plans to adopt these systems.

Also be sure to check out Paul Greenberg’sCRM 2009 Forecast.

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