IT Marketing and Communication in the New Age of “Transparency” SPIN-NY March 8, 2005 Dr. Howard...

IT Marketing and Communication in the New Age of “Transparency”

SPIN-NY March 8, 2005

IT Marketing and Communication in the New Age of “Transparency”

SPIN-NY March 8, 2005

Dr. Howard A. RubinSenior Vice [email protected] 420 8568

mailto:[email protected]

2© 2005 META Group, Inc., Stamford, CT-USA, +1 (203) 973-6700, metagroup.com

Topics

Background Context: Results of the 2005 Worldwide IT

Trends and Benchmark Project A Communication and Marketing Maturity Model Communication, Marketing, and Transparency

Mechansims Measurement Scorecards/Dashboards Integrated Benchmarking Portfolio Management Catalogs

What you should do NOW!


Background

IT marketing and communication is a relatively new area for IT management attention Internal and External marketing and

communication are equally important There are evident consequences of the to

market and communicate IT services


Consequences: External View

For more than 30 years IT organizations have been focusing on “How not to been seen”


Consequences: External View

At the same time IT organizations have often been viewed as hard to “deal with”


Consequences: Internal View

Failure to market and communicate internally can lead to anomalous behaviors

IT Marketing and Communication:

The Basics

IT Marketing and Communication:

The Basics


Survey Results:Do You Have a Formal IT Marketing and Communications Program?

A formal IT marketing program is evidenced by allocated personnel, funding, recurring communication sessions, and artifacts (newsletters, Web presence, etc.). “Formality” is

assessed as being at Maturity Levels 3 through 5 on the chart on the page that follows.

Formal Marketing and Communication

Program

17%

No Marketing

and Communi-

cation Program

83%

60%23%

10%5% 2%

Level 1 Level 2 Level 3 Level 4 Level 5


Communication and Marketing Maturity Organizations can be classified as to where

they are on a continuum of capabilities

Maturity Level Capability Stage Focus Processes Products Role of IT in Enterprise

1 Ad-Hoc

No specific focus defined. Marketing and communcations are produced based on occasion usually emanating from projects or reactive reporting needs; inward communication that is reactive

Reactive Status Reports, Briefings

Factory/Commodity

2 Demand

Driven

Occassional production of status reports based on recurring demand for status information on IT projects or overall performance; inward communication that is reactive

Reactive and Tactical

Project level scorecards

Factory/Commodity

3 Process Based

Regular production of status documents at portfolio level and overall performance; inward communication that is reactive

Recurring reactive Newsletters, Recurring planning meetings

Preferred Partner

4 Customer Proactive

Interaction with customer through regular communication meetings and documentation that addresses current and future performance; Active inward communication to IT community

Proactive Quarterly Business Reviews, Newsletters, Scorecards

Preferred Partner

5 Enterprise and

IT Proactive

Interaction with entire customer community overall and individual customers. External and inward communication

Proactive with strategic linkage

Board of Director Structure for IT with regular reporting; Use of scorecards with lagging and leading indicators, IT "news" and information available in real time

Strategic Partner

Form

al M

ark

eti

ng

an

d

Com

mu

nic

ati

on

Pro

gra

m


Program Elements: Internal and External

IT marketing and communication are essential Internal and external programs

A complete and integrated program with clear messaging is essential Town halls Newsletters Intranet Scorecards Quarterly business reviews (internal and external) External recognition programs Product and service catalogs Internal recognition programs Special events

Let’s explore these capabilities in the context of IT today


Context:What Is the Business Asking About IT?

Where is the IT spending really going? Could we do better and get more value by

going outside the company? Can we do more for less? How can we get the most out of our

investment in IT? Why do things take so long and cost so

much?


Context: What Are The Business’ Expectations of IT

Responsiveness to rapidly changing needs

Efficient and effective economics Ability to leverage technology to

produce business value Absolute transparency Judicious innovation/leadership Superior service delivery No surprises Responsibility and accountability “Run IT like a business”

It’s not about where IT is — it’s about how fast IT can change


Top 10 Findings for 2005 – A High Level View

1. The IT Spending “Ice Age” Is Over2. Some Sectors Are Approaching Double Digit Spending

Increases For The First Time In Years3. The Rising Investments Will Be Made In

Business/Customer/Process Technology4. There Are Numerous Spending Hot Spots5. The Nature Of The New Spending Is Forward Looking And

Long Term6. Companies Are Willing To Do More And More With External

Resources7. The New Infrastructure Economics Allows More Spending On

Applications8. There Is An Up Turn In Development Staffing And Activity9. IT Costs Are Now A Visible Component Of Business Process

Expense10. There Is A New Dynamic And Need For IT Agility


1. The IT Spending“Ice Age” is Over

IT Spending as % of Revenue

Organizational “investments” in IT are on the upswing

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

19941995

19961997

19981999

20002001

20022003

20042005

20062007

2008

Represents organizations with over $1B Revenue

Age Irrational IT Exuberance

IT Spending Ice Age

Age of Recovery,

Growth, and Integration


2. Some Sectors Are Approaching Double Digit IT Spending Increases

-15%-13%

0%0%0%

1%2%

3%3%4%4%4%

5%5%

6%6%

7%7%

3%

-2%

-2%-3%-3%

-3%

-20.00% -15.00% -10.00% -5.00% 0.00% 5.00% 10.00%

ChemicalsFood & Beverage Processing

Professional ServicesEducation

GovernmentMedia

UtilitiesEnergy

Hospitality & TravelPharmaceuticals

TelecommunicationsConsumer Products

BankingInformation Technology

Metal/ Natural ResourcesHealth Care

InsuranceElectronics

RetailFinancial Services

Construction & EngineeringManufacturingTransportation

Database Average

-10%-4%

1%2%

2%3%3%3%3%

4%5%

5%6%6%

7%7%

8%9%

11%4%

-1%

-1%

-2%-3%

-15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00%

Construction & EngineeringUtilities

TransportationConsumer Products

Metal/ Natural ResourcesRetail

Hospitality & TravelTelecommunications

EnergyPharmaceuticals

ChemicalsManufacturing

MediaFood & Beverage Processing

GovernmentElectronics

BankingProfessional Services

Information TechnologyFinancial Services

Health CareInsuranceEducation

Database Average

IT Spending Change 2003-2004 IT Spending Change 2004-2005

The majority of sectors are increasing their spending!


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

VideoVoice

Advisory ServicesOutsourcing

EAIOperating Systems

DAMSCM

Sys IntApp MgmtConsulting

Network MgmtRich Content

HostingWAN

App Dev Non WebInfrastructure

NetworkDatabaseHardware

eProcurementWeb Content

PortalCRM

eCommerceERP

Biz IntelligenceInternetWirelessStorageSecurity

App Dev (web)

Less Same More

3. The Rising Investments Will Be Made In Business/Customer/Process Technology

Application Development is #1 and that requires quality more than ever.


App D

ev (

web)

App D

ev N

on W

eb

App M

gm

tB

iz I

nte

llig

ence

Consult

ing

Hard

ware

CR

MD

ata

base

DA

MeC

om

merc

eeP

rocure

ment

ER

PH

osti

ng

Advis

ory

Serv

ices

Outs

ourc

ing

Infr

astr

uctu

reIn

tern

et

EA

IN

etw

ork

Mgm

tN

etw

ork

Opera

ting S

yste

ms

Port

al

Ric

h C

onte

nt

Securi

tyS

tora

ge

SC

MS

ys I

nt

Vid

eo

Voic

eW

eb C

onte

nt

WA

NW

irele

ss

Banking

Construction & Engineering

Education

Energy

Food & Beverage Processing

Health Care

Information Technology

Manufacturing

Metal/ Natural Resources

Professional Services

State & Local

Transportation

Colored areas represent where over 50% of population is increasing spend in tech area

4. There Are Numerous Spending Hot Spots

Process focused disciplines are the

newest sweet spots.


Run Grow Transform

Change in IT Spend to Run, Grow, and Transform the Business:2002-2005

57%68% 64%

57%

21%

20% 21%25%

22%12% 15% 18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 Planned

5. The Nature Of The New Spending Focus Is Forward Looking And Long Term

Because of their inability to increase spending, companies initially reduced their investments in projects and now are

optimizing their “run the business” functions and reinvesting those “saves” in “Grow and Transform” projects.

The greatest growth is in technologies that transform the business and lead to BIG change.


Distribution of IT Spending: 2002-2005

Represents organizations with over $1B Revenue

6. Companies Are Willing To Do More and More With External Resources

15% 15% 15% 20%

17% 17% 16%15%

11% 15% 20%25%

42% 37% 36%31%

15% 15% 16% 11%

0%10%20%30%40%50%60%70%80%90%

100%

2002 2003 2004 2005

Hardware Software Outsourcing Personnel Other

There is less resistance to externalizing IT and Business Process


17% 16% 18%

14% 11%

7%6% 7%

8%8% 7%

8%5% 6%

15%20% 18%

16% 19%17%

4%3%

7%5%

5%

6% 3% 9%

16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004

Data Center Desktop/ LAN ServerVoice Network Data NetworkHelp Desk Application DevelopmentApplication Maintenance Application, OtherFinance and Administration Other

Percentage of Total IT Spend

7. New Infrastructure Economies Are Enabling And Application Focus

38% of spending is in the “apps” while infrastructure spend shrinks.


10% 11% 9%

14%11%

4% 4%7%

8% 6% 5%

14% 7%6%

21%22%

19%

22%22%

25%

4%2%

5% 6%6%

4% 4% 9%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004

Data Center Desktop/ LAN ServerVoice Network Data NetworkHelp Desk Application DevelopmentApplication Maintenance Application, OtherFinance and Administration Other

Percentage of Total IT Staff

8. There Is An Upturn In Development Staffing And Activity

Development related processes are becoming more critical


0%

5%

10%

15%

20%

25%

30%

35%

2002 14% 14% 10% 10% 29% 16% 12% 9%

2003 14% 14% 10% 11% 29% 17% 12% 10%

2004 13% 12% 6% 9% 24% 12% 8% 10%

Customer Service

FinanceInventory

MgmtMarketing Production R&D HR

Sales Support

IT Spend as % of Business Function Expense

9. IT Costs Are A Visible Component of Business Function Expense

On average, more than 15% of core business process costs are IT related.

Process focused disciplines are the new sweet spots.


-50%

0%

50%

-50% 0% 50%

IT

Sp

end

Revenue

Organization increases cost as revenue declines: Strategy or Doom?

IT spending in tune with downward revenue

changes:Downward Compressibility

Organization able to control IT cost while

revenue grows: Upward Scalability

BankingChemicalsEducationElectronicsEnergyFinancial ServicesFood & Beverage ProcessingHealth Care

Hospitality & TravelInformation TechnologyInsuranceManufacturingMediaPharmaceuticalsProfessional ServicesTelecommunications

Construction & Engineering

Metals & Natural Resources RetailUtilities, Transportation,

Consumer Products

IT spending in tune with upward revenue changes:

Upward Expandability

The majority of sectors are agility focused.

10. There Is A New Dynamic For IT Economics: Agility

Marketing and Communicating IT Services

Product and Service CatalogsTransparency Models

Marketing and Communicating IT Services

Product and Service CatalogsTransparency Models


Catalog Breakthroughs:Promote Transparency

Product and service catalogs are the new basis for the business of IT — they are the foundation for transparency, IT marketing, and communication

Service Description Service Hours EST

Service Availability

Outage Time Not To Exceed

Price Benchmark Price Fixed vs Variable Pricing Available

IT CORE SERVICES

Here you will find the core IT services that provide computing and connectivity solutions to support business functions. They comprise five areas: Mainframe, Network , Midrange, Distributed Services, and Cross-Functional. High Availability AS/400 Infrastructure Service Monday through Sunday

from 00:00 until 24:00264 minutes in any given month

or 686 minutes during a consecutive 3 month period.

$4225 per Server Month F

MQSeries Service allow s applications to use message queuing to participate in message-driven processing.

Monday through Sunday from 00:00 until 24:00

264 minutes in any given month or 686 minutes during a

consecutive 3 month period.

$115 per Month V

Premium SAP Infrastructure Service Monday through Sunday from 00:00 until 24:00



$6010 per Server Month V

Standard SAP Infrastructure Service Monday through Sunday from 00:00 until 24:00



$4900 per Server Month F


Catalog Breakthroughs: Product = Service + Service Level

For each service family, the customer has visibility into the services that are offered (e.g., medium size/high complexity distributed platform for billing) and the service levels (e.g., 365x24xnon-stop) available so that they may procure/assemble a product that meets their needs with clear visibility into costs and cost drivers

Service

Service Level

Service Family

+

Cu

sto

mer-

Alig

ned

Pro

du

ct Fixed vs.

Variable

Capital versus Expensed or

Allocated

With or without specific help desk services


Catalog Breakthroughs: The Structure Aids the Buyer

Customer determine the service families and services they need.

Customers then can assess tradeoffs in cost and performance based on the service levels they select.

Customers can essentially create and procure the products they need “on demand.”

Help desk services are available too in support of the service families.

The catalog itself identified capital versus expensed items. The next level of detail will indicate fixed versus variable costs.

Service Levels Service Level Options: (e.g.Internal Delivery or Contractor Delivery or

Outsourced to meet cycle time, cost, and

functionality needs), Help Desk Access, etc.

Growth Options

Service Level Options: (e.g.Internal Delivery

or Contractor Delivery or Outsourced to meet cycle time, cost, and functionality needs), Help Desk Access, etc. Growth Options

Service Delivery Service Level Options defined as: Hours of

Operation, Availability, Disaster Reciovery, Level of

Security and Integrity, Reliability, Help Desk

Access, etc. Growth Options

Network and Communications

Service Level Optioms defined as: Availability,

Reliability, Level of Security, Disaster

Recovery, Help Desk Access, etc.Growth

Options

Personal Productivity Service Level Options defined as: Hours of

Availability of Service, Type of Service (e.g. Deskside, Drop off, Phone), Help Desk

Access, etc. Growth Options

Service Level Options: (e.g.Internal Delivery

or Contractor Delivery or Outsourced to meet cycle time,

cost, and functionality needs)

Customer Service Desk Customer Service Desk

Customer Service Desk Customer Service Desk Customer Service Desk

Note 1: Services offered will be listed by Application, platform size, and complexity

Cablevision IT Product and Services Catalog Service Families

Solutions Development Solutions Maintenance &

Support

Operations and Processing Services

End User Services Technology Consulting

Network and Communications

Personal Productivity

Services

Capital Application Construction and Implementation

Services

Voice and Data Services Procurement and Installation (e.g

phones)

Deskstop, Laptop, Peripheral, and Wireless Device Procurement and Installation (e.g.

cellphones)

Capital Application Enhancement and Implementation

Services File and Print ServersCapital Infrastructure Construction

and Implementation Services [May involve End

User Network and Communications and/or Personal Productivity

Services; May involve user requested upgrades]

Non-Discretionary Upgrades

Connectivity Products: Circuits/Routers Etc

Capital Infrastructure Enhancement Services [May involve End User

Network and Communications and/or Personal Productivity

Services; May involve user requested upgrades]

Expense Application Optimization Services

Solution Repair (Break/Fix) Services

Processing Services: Solutions Operation and Management including

application and platform operations, platform maintenance, data

adminstration, data refresh, systems monitoring and

management, scheduling, tape management, etc. [See

Note 1 below]

Voice and Data Services Operation and

Support

Deskstop, Laptop, Peripheral, and Wireless Device

Operation and Support

Product and Technology

Evaluation Services

Expense Application Optimization Services

Hosting Services M A C Support Services

Business Process Redesign Services

Expense Quality Assurance Quality Assurance Quality Assurance Quality Assurance Quality Assurance R & D ServicesExpense Email Training ServicesExpense

Internet ConnectivityMove and Relocation

Support ServicesExpense Project Management

AllocatedInternal IT Business Operations

Infrastructure Upgrade and Replacement Driven by IT Decisions

Technology Finance, Risk Management, Asset Management,

Program Management, Change Management, Project Management,

Realtionship Management, Reporting, Marketing, and Communications

Services

Architecture, Governance, and Strategy ServicesR & D Services

Training ServicesProcurement, Contract Management,

Vendor ManagementQuality Assurance

Internal IT Help Desk

Measurement Aspects of IT Marketing and Communication

Measurement Aspects of IT Marketing and Communication


Measures must codify business expectations

Economic agility Technology agility

Infrastructure Architecture Application portfolio

Human resource agility Operational agility Process agility Strategic agility Organizational,

innovational, and learning agility

Agility Attributes of the Adaptive Organization

HumanResource

Agility

TechnologyAgility

EconomicAgility

StrategicAgility

ProcessAgility

AdaptiveIT

Organ-ization

OrganizationInnovativeLearningAgility

OperationalAgility


Lagging and Leading IndicatorsPosition, Direction, Velocity, and Benchmarks Are Key!

Measures of Change of IT Spend vs. Business

Performance; Measures of Value and Yield; Measures

of Fixed vs. Variable Costs; Market Baskets; Tech. Cost

of Goods (TCOGS)

Measures of Strategic Project Performance: On

Time; On Budget; On Scope; On Value; Measures

of Alignment

Measures of Innovation Rate (Patents?); Measures of

Development

Measures of Service Delivery and Satisfaction; Measures of the Product and Service Catalog; Measures of Resiliency

Measures of Resource Distribution; Measures of Ability to Change Resource Mix

Measures of Portfolio Mix and Change Rate: Infrastructure, Applications, Adoption Rates, Time to Market, Etc.

HumanResource

Agility

TechnologyAgility

EconomicAgility

StrategicAgility

AdaptiveIT

Organ-ization

OrganizationInnovativeLearningAgility

OperationalAgility

Measures of Process Maturity and Integrity (CMM, ISO, Six Sigma)

ProcessAgility

Measures must be aligned with business expectations


Communicating with Measurement: What Is the Business “Value” of IT?

One view of the business value of IT considers IT impact in the four areas of the balanced business scorecard Financial impact Customer impact Business process

impact Learning and

growth impact

“To succeedfinancially, how should we appear to our shareholders?”

Objectives

Measures

Targets

initiatives

Financial

Visionand

StrategyObjectives

Measures

Targets

initiatives

Customer

“To achieve our vision, how should we appear to our customers?”

Customer

Learning andGrowth

“To achieve our vision, how will we sustain our ability to change and improve?”

Objectives

Measures

Targets

initiatives

Internal BusinessProcess“To satisfy our shareholders & customers, what business processes must we excel at?”

Objectives

Measures

Targets

initiatives


Measurement of Value in a clear business language

Some companies assess the value of IT in the context of key business strategy focus areas: Increase revenue Reduce costs Avoid costs Regulatory

compliance…

Investing in IT for Value Creation

PROJECT TITLE:

COMPANY NAME COMPANY # DATE SUBMITTED

IM PORTFOLIO MANAGEMENT

Functional & Process View

Infrastructure Applications / Business SolutionsSystem

Technology

System

Management

Individual

Tasks

Business

Function

Business

Process Value Chain

COGS

Distribution

Selling

Marketing

R&D

Finance

HR

Other

Business Impact View

Infrastructure Applications / Business SolutionsSystem

Technology

System

Management

Individual

Tasks

Business

Function

Business

Process Value Chain

Increase Revenue

Reduce Costs

Protect Revenue

Cost Avoidance

Regulatory

Discussion/Comments

Functional &

Process View

Business

Impact

Indicated in the indicated cells the Primary (P) and Secondary (S) Functions, Processes and Business Impacts which will result

from the implementation of the indicated project. Multiple Secondary impacts may be indicated, with appropriate commentary pro

Port

folio M

an

ag

em

en

t C

om

pon

en

t

Fu

ncti

on

al,

Pro

cess,

&

Bu

sin

ess I

mp

act

Vie

ws

Scorecards and Dashboards for Communication, Marketing, and

Competitive Calibration

Scorecards and Dashboards for Communication, Marketing, and

Competitive Calibration


Scorecard and Communication:The Balanced Scorecard Is Being Replaced

Balanced Scorecard

Financial

Employee

Customer

Process

• EBITDA• ROI• Growth• Market share

• Cycle time• Quality• Satisfaction• Price/value

• Rate of change• Innovation• Turnover• Morale

• Cycle time• Defects• Productivity• Reuse IT Effectively Manages its Technology Investments

IT Provides Superior, Cost Effective Solutions (Efficiency)IT is a Strategic Partner that Creates Value for the Enterprise

IT Creates Value for the EnterpriseIT is Recognized Internally & Externally as Satisfied, High Performing Team

Thematic Scorecard

IT has Satisfied Customers and Employees

The balanced business scorecard is being replaced by strategic/thematic scorecards

Measures are drawn from the balanced business scorecard and aligned by strategic theme


Scorecards for Communicating Competitive Calibration: Integrated Benchmarks

Strategic Themes

Key Measures of Agility and Performance

Position, Direction, Velocity, Rating

Integrated Benchmarking With Monthly or Quarterly Data “Feeds” From WWB

Lagging and Leading Indicators

M e tricT a rg e t Q 4

20 03A ctu a l Q 4

2 003

% C h a n g e -

( ? = b e tte r)O ve ra l l S ta tu s P o o r A v e ra g e C o m p e ti tive

H ig h ly C o m p e ti ti ve

D riv e R e su lts T h ro u g h S tro n g P a r tn e r sh ip W ith th e B u s in e ss

1 . G

2 . A

3 . G4 . G5 .

6 . GP ro v id e E xc e lle n t S o lu tio n s W ith G r e a te s t E ffic ie n c y

7 . A

8 . R9 .

1 0 .

O pe ra te 1 1 . G1 2. G1 3. A1 4. G1 5. A1 6. A1 7. A1 8. G1 9. A2 0. G2 1.

D e v e lo p an d R e ta in C o re C ap a b ilit ie s E m ploy e e

S a t is fa c t ion2 2 . G2 3. G2 4. G2 5. G

D ivers ity 2 6 . RB e a L e ar n in g O r g a n iz a tio n an d In n o v ate

In nova t io n 2 7 .

B us in es s C o nt inu it y

P ort fo l io M ix

C u s to m e r S a t is fa c t ion

E x pe ns e M an ag em e nt

P ro jec t D e live ry

In fra s t ruc t u re

P e rfo rm a n c e C a te g o ry

R e ten t io n

R es ourc e M ix

In fo rm at io n R is k

SynthesisBreakthrough Performance and

Transparency

What should you do NOW!

SynthesisBreakthrough Performance and

Transparency

What should you do NOW!


Synthesis:What Should You Do NOW? Assess what you are measuring today

Do you have both leading and lagging indicators? Are you measuring agility?

Assess your scorecards/dashboards If you don’t have one, put one in place Look at “Dashboard in a Box” Go “thematic,” not balanced

Assess how you benchmark If it’s not integrated, it’s not effective Look at market basket and TCOGS measures Identify the data feeds you need

Assess your product and service catalog If you don’t have one, you need one to be competitive; you

need one to make transparency happen Assess your IT communication program

IT communication is essential to create value from IT


Synthesis: Why You Must Do It NOW!

It’s all about: Balance and agility Value to the business Continuous business alignment

— Charles Darwin

It is not the strongest of the species that survives, nor the most intelligent, but the one that is most responsive to change

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IT Marketing and Communication in the New Age of “Transparency” SPIN-NY March 8, 2005 Dr. Howard...

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