I shall return with more blogs in the New Year, unless I feel the urge to drag myself away from the festivities because some massive news breaks in the world of IT and I update it before then. In IT, I've learned never to say never.

Jason

Cutter Consortium’s Council Fellow Tom DeMarco advised in the report: "Take a deep breath and… reduce salaries. There is an unwritten law in companies that salaries can go up but can never go down. Repeal it.”

The explanation? “If you're faced with a mandate to cut personnel costs by, say, 10%, you could do that by laying off 10% of staff. That way all of the pain is absorbed by 10% of the people while the others carry on as before,” said DeMarco. “Alternately, you could trim everybody's salary by 10%. The pain is evenly distributed. As a social matter, this makes good sense: discomfort for all instead of catastrophe for a few. But there's a much more important reason to take this approach.”

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All of this seems eminently reasonable, if it were not for the sneaking suspicion that many companies are carrying staff demonstrably less productive than other employees. Cutting everyone’s salary, including those of the hardest working and highest achieving staff, will surely do little for the morale of those staff or indeed the ambition of all staff to beat their expectations. Work your ass off all year and you still face a salary cut – are you going to work as hard the year after?

I can see both sides of the coin though. At some companies, rounds of redundancy inevitably include staff that you would rather retain if you had the choice. Often companies ask middle managers to find savings of a specific amount -- £500,000 per annum, perhaps.

Sometimes getting rid of two senior people (with their somewhat higher salaries) appears to make more sense than losing far more people on lower salaries. But if those senior people will be sorely missed, asking everyone to take a pay cut in order to avoid any forced redundancy might seem an attractive prospect.

On balance though, the desire to retain, and continue to motivate, the best staff will always make most managers lose a few bodies before they make everyone suffer a salary reduction. The risk of losing the best people to competitors who are still paying top dollar for the right candidates is too great.

But what do you think? Could across-the-board salary cuts be better than a round of redundancies? Hit the comment button below if you would like to have your say.

The Finextra50 Financial Technology Index tracks vendors of software for banking and payments, risk and security, data and compliance, process and messaging, and insurance, as well as information providers to the sector, financial payments hardware manufacturers, and outsourcing service providers.

A weighted index of leading suppliers to the financial services sector is currently standing at around 54, after starting the year with a value of 91.

Revenue growth at Pegasystems has continued to be strong, although its quarterly profits in the latter half tailed off and missed analyst expectations.

Among the many companies to see big drops in share value this year, five fell more than 75%, Finextra noted.

The losers list is dominated by Indian suppliers, which have lost more than two-thirds of their value.

UK insurance specialist The Innovation Group is in the unenviable position of biggest loser, down 88% for the year so far. Integration costs from its purchase of Nobilas had contributed to the decline, analysts have said.

Inclusion in the index is limited to publicly-listed IT product and services companies that earn at least 40% of their revenue from serving financial services markets.

Share prices started to decline dramatically in September as markets tumbled after the collapse of Lehman Brothers and Merrill Lynch.

Sandwiched between the credit crunch and the threat of deepening recession, the consultants placed regulation and compliance as a key operational and strategic risk for next year.

In Navigating the Crisis, the consultants note that the current economic crisis has exposed inherent weaknesses in risk management, forcing banks to improve their governance processes, increase the collaboration between the risk and finance functions, and make instilling a risk culture a true priority.

It is a theme that is echoed in another study announced today from data governance services provider DataMotion Inc, which says that the CIO will need to work to improve internal security measures, and appoint a technology tzar to modernize IT resources. “Be prepared to respond quickly when called upon to provide instant transparency for every process,” the company warns.

While the technology to secure company assets is more prevalent than ever, so are the number of risks, vulnerabilities and dangers to which it is susceptible. With approximately 4.7 terabytes of e-mail data for every 1,000 employees in an organization, that data poses a danger if not properly locked down.

The company also suggests that CIOs need begin 2009 by preparing for additional regulation and legislation to be put into effect with the new administration in the US.

Here are Ernst & Young’s top ten risks for 2009, with the 2008 rankings for comparison:

1. The credit crunch (number 2 in the 2008 report)
2. Regulation and compliance (number 1 last year)
3. Deepening recession (new entrant this year)
4. Radical greening (9)
5. Non-traditional entrants (16)
6. Cost cutting (8)
7. Managing talent (11)
8. Executing alliances and transactions (7)
9. Business model redundancy (new entrant this year)
10. Reputation risks (22)

Cyber-security experts have flagged them as incredibly powerful virus platforms, and an obvious breeding ground for internet crime.

Just two of many reasons why the enterprise-wide implementation of social networking is unlikely for now.

For now, it says in its Predicts 2009: Social Software and Collaboration report, most organizations are content with piecemeal deployments of specific capabilities.

It will take time before enterprises settle on the best approaches for capturing user input and for organizing and filtering that input.

Another challenge is in building a good understanding of the road maps of social software and how these relate to established enterprise collaboration systems.

This could prove particularly troublesome over the next couple of years, as the market occupied by niche social networking vendors could well consolidate rapidly, as startups fold and the big name enterprise software vendors establish a presence of their own in the space.

Call it enterprise performance management (EPM), corporate performance management (CPM) or business performance management (BPM), an appetite is building for BI software that can provide the CIO with vital insights into business cost drivers and their impact on profitability.

In a recent market assessment by Apptio, one of a new pack of on-demand IT cost optimisation service providers, some 60% of business executives complained that they did not have sufficient visibility into their organization's IT budget.

Apptio’s study demonstrates how a lack of cost transparency is making it difficult for CIOs and other business executives to understand the ROI of technology investments.

The enterprise performance management software segment has consistently outperformed the overall software market in revenue growth and in 2009 analysts expect to see increasing numbers of businesses turn to tools from the likes of SAP-Business Objects, IBM and Oracle, spawned by Cognos, Hyperion, and MicroStrategy.

Cost analysis systems are understandably in vogue, and EPM systems particularly so because they help executives retrieve the information they need to conduct better cost analysis to pinpoint where an organisation is profiting and where it is losing money.

It is a theme Stephanie Buscemi, VP at Business Objects confirmed this week. “During times of economic downturn, it is even more critical to adopt solutions that are laser-focused on improving their company’s ability to succeed. Critical to that is finding the right balance between containing costs and ensuring that cost-cutting measures do not compromise an organization’s ability to maintain service levels and pursue fruitful business strategies.”

In other words, turning on EPM to exploit better sources of data will mean fewer knee-jerk cost cuts, and more well-informed business decisions.

The weight of the US Securities and Exchange Commission is already behind proposals to push adoption of the eXtensible Business Reporting Language as a means of standardizing the way companies make financial disclosures.

From 2009 around 500 of the world’s largest companies will have to start filing fiscal reports containing certain elements of interactive XBRL data. The required tagged disclosures would include companies' primary financial statements, notes, and financial statement schedules.

This week IBM went further with the idea that XBRL could play more than a pivotal role in financial reporting. It mooted the standard could in fact provide businesses with a set of consistent tools needed for measuring aggregate risk in the financial world.

Steve Adler, chairman of the IBM Data Governance Council, noted that some Basel II reports on risk capitalization are already processed in XBRL in Europe. IBM is proposing a natural extension of these to include specific kinds of operational, credit, and market incidents, events, losses and other risk information.

Development of an ‘XBRL taxonomy of risk’ is being proposed which would then serve as a fundamental building block for standardizing risk measurement and management practices worldwide.

The current credit crisis illustrates the urgent and desperate need for a consistent, transparent and rigorous approach to risk reporting.

Despite the regularity and steepness of decline in the cost per megabyte, administrators are routinely tasked to do more with less storage.

It is an aspect Symantec Corp has addressed in the upgrade of its storage optimization and capacity management suite, which should now be capable of squeezing better rates of utilization from an organization’s existing storage assets.

It is being claimed some sites have saved as much as 10% of their IT capital budget by improving storage utilization levels by up to 40%.

The other side of the enterprise storage balancing act for 2009 is in data retrieval, and the problems large organizations can run into with e-discovery cases.

If they archive email in a data storage environment that is in any way fractured, they will struggle to produce evidential-quality email evidence.

A new British Standard that has just been published offers some useful guidelines that will ensure any electronic information required as evidence of a business transaction is afforded the maximum evidential weight.

The Evidential BS 10008 standard sets out the requirements for data management in companies to ensure the integrity of information, to maximise the evidential weight of electronic information.

It addresses a full spectrum of issues from electronic identity verification, electronic signatures and electronic copyright systems, as well as the linking of electronic identity to particular electronic documents.

That is the outcome of new research released by market researcher Vanson Bourne for datacommunications firm Viatel, which found unreliable call quality a top concern for almost 70% of IT decision-makers at 200 SMBs surveyed.

Nearly 50% of pollsters also had issues over the high price of leased lines needed to ensure reliability. The survey concluded that just over half of SMBs had not deployed VoIP, but that 95% of them would like to.

Most SMBs will be familiar with Skype or Vonage, but many remain confused about the different options for implementing VoIP, which can include premise-based IP PBX, managed IP PBX, hosted VoIP, broadband VoIP, or peer-to-peer alternatives. SMBs view VoIP as calling for telecoms expertise, and the challenge for service vendors is to make VoIP deployment as easy as using an on-board wizard to install a latest office productivity suite.

There are obvious cost benefits in VoIP, and Viatel argues that the SMB sector needs to be educated that business-grade VoIP need not be prohibitively expensive.

Arguably most of the business advantage is in the way VoIP integrates with other office systems. Unified communications is the next iteration of VoIP, and brings with it unified messaging, single number access, collaboration and mobility features that only adds to the business value of standard VoIP.

If economic conditions start to drive a rethink among SMBs of 2009 IT and telecoms plans, then they may well rethink voice over IP.

These back office professionals are becoming increasingly influential in the on-going negotiations that are needed to maximise value from the third-party service and sourcing agreements that keep most organisations going.

Aberdeen Group reckons there could be good reason for investing in such software support, saying it has found that over 60% of enterprises are less than satisfied with their ability to measure supplier performance.

As many as a third of organizations have indicated that at least 10% of contract value is lost through inconsistent or ineffective application of supplier management strategies.

Sun expects to be able to drive savings through enhanced visibility and contract compliance, and improved performance and collaboration. The vendor management process can’t be improved unless the cost, service and performance of vendors is evaluated and tracked on a regular basis and something like Hiperos looks a good starting point.

An expected global slowdown in software sales to the financial services industry, which today is said to account for nearly 20% of business software revenues, will produce one of the strongest drags on sales.

The business case for many application and infrastructure initiatives are now aligning to cost reduction and risk management as opposed to fostering revenue growth, it said.

The economic downturn will cause cancellations and delays of service-oriented architecture projects in the short term. Sales of business process management, data integration and corporate performance management software will fare better, Gartner suggests, as organizations continue to streamline processes and push operational efficiency.

The analyst house has cut its forecasts for software, which it now expects will increase by 6.6% next year, down from its previous forecast of 9.5% growth in a market estimated at $253.1 billion.

The UK, which accounts for 25% of Europe’s largest software companies, could be hit harder than others in the region according to a new report co-sponsored by Microsoft, Intellect and the British Computer Society.

In ‘Developing the Future’ the organisations describe how the UK’s share of European VC investment has been in decline in recent years, as focused initiatives in countries like Germany and Israel have been driving faster growth than in the UK.

In addition the bodies maintain that the UK tax system makes it less attractive for software start-ups, which also face a perceived talent shortage. Numbers of UK students taking on computer and physical sciences, technology, engineering and mathematics are falling year after year.

Lost and stolen laptops have become a big issue and Intel and Ericsson today became the latest vendors to meet what must be a latent demand for laptop loss threat protection.

If and when the notebook is recovered, an unlock message can be sent that makes the data accessible again.

The system can also be programmed to respond to repeated login failures and expiration of a timer that requires regularly scheduled connection to a central server.

Fujitsu Siemens Computers and Lenovo count among notebook vendors mooting similar schemes.

Fujitsu has lately produced software called DataProtect and SystemTrack which would allow IT administrators to lock down data and possibly trace a lost or stolen notebook once it reconnects to the web after it goes missing. Lenovo takes a different tack, and has partnered with Absolute Software for its Computrace system and added hardware-based security to its ThinkPad T400 business notebooks. It means that the laptop locks automatically if it does not hook into the corporate network before a time that’s set by an IT administrator.

There are other systems that can be fitted to any make of laptop. Awareness Technologies provides comparable laptop protection to that of Fujitsu and Lenovo, and which will retrieve files from a missing notebook, remotely wipe files and even geo-locate the position of missing device. All for $50.

There appears to be a need for such systems because the data on laptops is still so seldomly protected using encryption.

There is a misconception that encryption automatically impacts the performance of computing systems, and that it's complex to use and expensive. It’s pretty transparent of course, and encryption programs like TrueCrypt are easily available and free! A small price to pay for security.

Those numbers could rocket further if plans announced this week by Citrix to deliver desktop virtualization to the iPhone and other mobile devices really start to take hold in the market.

The Citrix app receiver will run on any device and has plug-in functionality for acceleration, virtualization, monitoring, collaboration, communication, user support and will be open for all manner of third-party plug-ins.

The beauty of desktop application virtualisation is the way the endpoint device, which increasingly will be a smartphone, can be partitioned into different ‘enterprise’ and ‘personal’ sections.

Enterprise applications and access to corporate databases can be sandboxed in one area, while in another sits a user’s personal data files, preferred web mail, Facebook and other ‘off-limits’ online access channels.

With more organizations giving their employees freedom to self-provision and expense back the cost of their preferred notebook or smartphone, this sort of technology becomes highly strategic.

It also addresses the security concerns associated with Generation Y employees who are simply not aware of the dangers associated with downloading applications, or are IT literate enough to find a way around the cordons of enterprise security.

A new study from the Chartered Management Institute shows that IT workers who have added professional qualifications to their CV stand to gain in excess of £150,000 in additional earnings over the course of their career.

Staff that are able to put letters behind their name see an average 37% wage premium over peers without professional qualifications.

The research has another startling stat. People with professional qualifications have a 9% increase in the probability of being employed because of the transferable skills they offer.

The research carried out for mobile content management provider, e-Spirit found only 35% of the IT executives interviewed had prepped their sites for mobile access.

It is a damning statistic. Not only does it signal inefficiency at a time when businesses ought to be doing everything they can to attract, win and retain customers today, but it signals a lack of preparedness for tomorrow.

As e-Spirit so rightly observes, “Companies are hampering their own success by not maximizing their website’s potential.” There are plenty of proven technologies that allow companies to deliver mobile-specific content rendered in a format that delivers a satisfactory customer experience for users interfacing with a business website via a Blackberry or i-Phone. Though that is only a start.

Analysts hint that the web-mobile interface will become an area of intense competition during the next couple of years. Mobile manufacturers are doing all they can to develop novel user interfaces to differentiate their handsets, and CIOs have to expect these emerging consumer user interfaces will drive new expectations of application behaviour and performance.

Touch screens have arrived, and accelerometers and orientation sensors will start to appear on a wider range of devices. Gartner says the ramifications for CIOs are clear. “New and more-diverse UIs will complicate the development and support of business-to-consumer applications. They may need to be re-engineered. Better interfaces will make the mobile web more accessible on small devices, and will be a better channel to customers.”