1. The State of Business TechWeb October 2008

6. Majority Say IT Leadership Role Has Become More Strategic How has the role of enterprise IT leadership changed in the last 12 months? Multiple responses allowed The position has become more strategic The position has become more globally focused The position has become more operational The position remains largely unchanged Other 55.9% 29.7% 23.7% 19.4% 1.0% An unintended consequence of the global economic problems is that they may further elevate the strategic role of IT in organizations, as the business looks to its technology platforms and processes to help drive efficiencies that save money and accelerate business activities that can affect customer loyalty.

7. More CIOs Report to CEOs vs. 12 Months Ago Twelve months ago, to which title did the IT leadership, including the CIO, at your company report? Today, to whom does your IT leadership, including the CIO, report? Multiple responses allowed Backing up the assertion of over half the respondents, who said that the role of IT leader has become more strategic to their organizations in the last 12 months, is this finding: There is a slight increase from 2007 to 2008 in the number of CIOs that report directly to the CEOs, rather than through COOs or CFOs. CEO COO CFO Other 48.6% 22.1% 20.1% 19.2% 9.2% 50.3% 21.0% 9.5% 12 months ago Today

8. Consumers, Globalization Shape Shifting Business Priorities Do you agree or disagree with these statements? Looking ahead to 2009, our business will be more influenced by consumers/customers. Looking ahead to 2009, our business will be more global. The priorities of our business have shifted significantly in the last 12 months. 77% 58% 56% 19% 38% 42% 4% 4% 2% The elevation in the status of IT leadership coincided with shifting priorities at the corporate level. Three-quarters of companies say their businesses are being influenced by changes taking place with their customers, and nearly 60 percent say they are becoming more global. Agree Disagree Don’t know

9. Nearly 70% See IT Becoming More Centralized in the Coming Year Looking ahead to 2009, which of the following statements best describes how your organization will be? Single response allowed Growing globalization is one of the most important factors responsible for organizations revisiting the organizational structures that are currently in place. Centralization was deemed by respondents as the best way to manage the complexity of running far-flung operations. 34.4% 33.3% 25.5% 6.8% Highly centralized - All major decisions are determined by a headquarters with very little regional or departmental autonomy Somewhat centralized - Most major decisions are determined by a headquarters with some regional or departmental input Somewhat decentralized - Significant strategic and operational direction is set at headquarters, but there is significant regional/departmental input into how to execute initiatives Highly decentralized - Basic standards are set at headquarters, but regional and/or departmental offices have significant autonomy over implementation and program execution

10. Improving Customer Responsiveness and Reducing Costs Are of High Importance – But Risk Management Matters Too How important are each of the following business imperatives in terms of priorities that your IT organization must support? 64% 30% 6% 63% 32% 5% 57% 33% 10% 54% 36% 10% 50% 40% 10% 48% 44% 8% 45% 48% 7% 41% 36% 23% 38% 27% 35% 24% 40% 36% The fact that 45 percent of respondents indicate that corporate risk management is a business imperative of “high importance” is interesting, given the backdrop of the financial crisis and the role lax risk management seems to have played there. This finding also clearly shows that issues like governance, compliance, security and other issues that address risk, are coming under the growing influence – if not control – of IT leadership. Improving customer responsiveness Reducing costs/improving TCO Speeding product delivery/time to market Ability to deploy/support employees anytime/anywhere Improving the execution of business processes Ensuring IT resource/budget for strategic business initiatives Corporate risk management More agile, streamlined integrated supply chains Global/international expansion Business integration due to M&A High importance Medium importance Low importance

11. Top Three Business Imperatives Center on Customer Responsiveness, Saving Money and Improving Business Processes Of the items detailed in the previous question, which are your top three most important business imperatives in terms of priorities your IT organization must support? Three responses allowed – top three overall responses shown on this chart Improving customer responsiveness Reducing costs/improving TCO Improving the execution of business processes 35.2% 35.0% 29.8% A focus on customer responsiveness and reducing costs makes it clear that companies have been considering the impact on their business of a recession that may lead to growing unemployment and less disposable income. In such circumstances, the need for their companies to reduce costs as much as they can and grow share as much as they can is critical.

12. Two-Thirds Rate IT-Enabled Transformation as Important Please rate the importance of IT-enabled transformation in your organization on a scale of 1 to 5, with 1 indicating “ low importance” and 5 indicating “high importance.” Nearly 70 percent of respondents rate IT-enabled transformation as being of high importance to their organization. They scored it at 4 or 5 on a 5-point scale. 1 - Low importance 0.9% 2 4.6% 3 26.6% 4 45.4% 5 - High importance 22.5% 68% said “4” or “5”

13. Most Important Imperatives to Enable Transformation Center on Improving Business Processes, Customer Responsiveness and TCO Of the items discussed earlier, please select the three most important business imperatives in which IT must not only support transformation, but also ENABLE TRANSFORMATION . Three responses allowed – top three overall responses shown on this chart Improving customer responsiveness Reducing costs/improving TCO Improving the execution of business processes 34.2% 33.9% 31.9% These findings about business process execution indicate that there is increasing IT representation during initial discussions of business process design. Technology departments are not being asked to automate procedures that were developed without their input.

14. IT Investments Point to a Connected World In which of the following technologies and services is your IT organization planning to invest in 2009 to support your business priorities and enable transformation? Multiple responses allowed Looking ahead to next year, collaboration and mobile technology take top places on the business agenda. That’s not surprising. With businesses being more globalized, tools to enhance teamwork and enable an anytime-anywhere workplace take on new importance. Collaboration technologies Mobile devices CRM technologies Remote network access technologies Unified communications Regulatory compliance technologies & services SOA implementation services Business service mgmt. technologies & services Business compliance technologies & services Business process outsourcing services Supply chain management New WAN service providers RFID 45.1% 43.4% 37.6% 32.6% 30.6% 27.3% 26.6% 22.9% 22.7% 20.5% 18.7% 15.6% 6.6%

15. Innovation Named Highly Important How important is innovation to your organization on a scale of 1 to 5, with 1 indicating “low importance” and 5 indicating “high importance”? A majority of respondents reported that executives will invest more resources in 2009 than in 2008 to fund innovation initiatives that do as much to contribute to the top line as to the bottom line. 1 - Low importance 1.9% 2 7.1% 3 24.5% 4 35.7% 5 - High importance 30.8% 67% said “4” or “5”

16. Majority Allotted Less Than 20% of IT Budget to Innovation In 2008, what percentage of your IT budget was dedicated to innovation (as opposed to maintenance of existing operations)? Single response allowed In 2008 more than half the respondents dedicated 20 percent or less of their budgets to innovation initiatives. Less than 1% 3.7% 1% to 5% 13.7% 6% to 10% 18.7% 11% to 15% 13.5% 16% to 20% 13.7% 21% to 25% 10.2% 26% to 30% 5.8% More than 30% 8.5% Don’t know 12.1%

17. Most Say % of IT Budget Dedicated to Innovation Will Increase In 2009, how will the percentage of your IT budget that was dedicated to innovation change, compared to 2008? Single response allowed While respondents expect more focus on innovation this coming year than in 2008, they are cognizant that new economic realities could create unexpected cost-cutting conditions. Increase by a little (by 1% to 5%) 27.9% Increase moderately (by 6% to 10%) 26.2% Increase substantially (by 11% to 15%) 8.1% Increase explosively (by 16% or more) 5.1% Decrease 7.6% Will not change 25.1%

18. Most Important Innovation Imperative Centers on Business Processes On which of the following areas will your innovation initiatives focus? Multiple responses allowed IT will be held accountable to the business outcomes of re-engineered processes. For a growing number of IT professionals, the ability to demonstrate operational cost reductions and fresh revenue generation, as well as deliver differen-tiating capabilities are emerging as the new yardsticks of measure-ment. Business Process Mgmt. Cross-Departmental Collaboration CRM Streamlined Project Mgmt. Financial Mgmt. Compliance Mgmt. Supply Chain Mgmt. Sourcing Governance Global Reserve Mgmt. 43.8% 42.5% 40.9% 32.2% 25.4% 23.0% 19.5% 16.6% 15.3% 6.5%

19. Most Agree IT Is Under More Cost Pressure Than a Year Ago Please tell us whether you agree or disagree with this statement: Our IT operation is/will be under more cost pressure than it was 12 months ago. Have you targeted savings because of cost pressure? Single response allowed When the survey was fielded in the summer, no one could anticipate the sudden and dramatic shift in the fortunes of the global financial sector. But many business-technology leaders are not unprepared for the challenge. The generally shaky economic conditions of the past year led many executives early on to give cautious thought about their goals and how they would achieve them while saving costs during an economic slowdown. Strongly disagree - 2.2% Disagree - 11.3% Strongly agree - 33.4% Agree - 53.1% Yes 68.5% No 20.9% Don’t know 10.6%

20. Reducing Costs Is Biggest Challenge for IT to Meet Its Objectives in ‘09 Please rate each of the following challenges for IT to meet its objectives through 2009. Single response per item Big challenge Moderate challenge Not much of a challenge at all Reducing costs 52.6% 41.5% 5.9% Achieving strategic advantage 48.9% 42.1% 9.0% Optimizing business processes 47.8% 47.7% 4.5% Maintaining a competitive edge 43.0% 44.6% 12.4% Freeing-up resources for innovation initiatives 40.5% 45.2% 14.3% Managing risk 26.6% 59.7% 13.7% Optimizing asset utilization 26.0% 57.7% 16.3% Supporting globalization 24.9% 34.1% 41.0% Supporting mobility 19.3% 55.3% 25.4% The fact that almost half of those surveyed (49 percent) consider “achieving strategic advantage,” and 43 percent consider “maintaining a competitive edge,” a big challenge to their IT departments, illustrates how much enterprises now depend upon their business technologists to conceive and enable the core strategies within their organizations..

21. BP/IT Outsourcing Critical to Reducing Costs Business process/IT outsourcing at our company will be critical over the next few months for … Multiple responses allowed 20.5% Supporting mobility While cost reduction is a key argument for BP/IT outsourcing, nearly 40 percent see an opportunity to free up resources for innovation, as well as consider it an important tool in enabling business process optimization. Reducing costs Freeing up resources for innovation initiatives Optimizing business processes Maintaining a competitive edge Achieving strategic advantage Managing risk Optimizing asset utilization Supporting globalization None 54.9% 37.9% 36.4% 27.5% 27.1% 21.0% 20.8% 15.7% 1.3%

22. More Business-Savvy IT Workers are Required Have changing business imperatives in your organization created new types of IT skill-set requirements? Yes, we need more business-savvy workers 34.7% Yes, we need both more business- savvy workers, and IT employees with more cutting-edge programming skills 33.4% No 19.2% Yes, we need IT employees with more cutting- edge programming skills 12.7% Single response allowed Nearly 70 percent of respondents see a need for more business acumen among IT staff.

23. Majority Say IT Staff Budget Will Remain the Same; One-Quarter Report It Will Grow In 2009, how will budget for your IT staff change? Remain the same 53.0% Grow 25.8% Shrink 21.2% Single response allowed While most respondents didn’t expect to have to make cuts around staffing at the time the survey was fielded, it is reasonable to assume that if credit markets do not work themselves out in a timely fashion, the respondents may experience some negative ramifications on overall IT spending plans — including spending on IT’s biggest cost, labor.

25. Which of the following best describes your job function? Respondent Demographics:Job Function IT staff 4.5% Other 3.8% Don’t know 38% IT management 28.9% Consultant 5.0% Executive IT management (CIO, VP of IT) 18.8% Executive corporate management (CEO, president, corp. VP) 12.7% General corporate mgmt. 17.0% Project manager 5.4% General corporate staff 3.4%

26. Respondent Demographics: Company Size How many employees are in your organization in total? Less than 100 15.4% 100 to 499 9.8% 500 to 999 6.8% 1,000 to 4,999 25.5% 5,000 or more 42.5%

27. Respondent Demographics: Industry Health care and medical 10.4% Consulting and business services 8.8% Education 8.8% Financial services/Banking 8.8% Manufacturing and industrial (noncomputer) 7.2% IT vendors 7.0% Other 5.2% Financial services/Securities and investments 4.5% Government 4.3% Telecommunications and ISPs 3.9% Insurance and HMOs 3.6% Electronics 3.4% Media and entertainment 3.4% Financial services/Other 2.9% Financial services/Insurance 2.7% Retail and E-commerce 2.5% Logistics and transportation 2.2% Hospitality and travel 1.6% Construction and engineering 1.4% Automotive 1.1% Distribution 1.1% Food and beverage 1.1% Metals and natural resources 0.9% Real estate 0.9% Biotech, biomedical, and pharmaceutical 0.7% Nonprofit 0.7% Consumer goods 0.4% E-marketplace (portals or auction) 0.4% Energy and utilities 0.2% Utilities 0.2%