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Monday, August 29, 2005

Marketing IT like a business

For many years, companies have been encouraging their CIOs to "manage IT like a business." By this, they usually mean that the CIO should exercise financial discipline, focusing on the bottom line in terms of costs and benefits of technology, not just on the technology itself. This, of course, is all well and good.

But running a business involves more than just financial management. If we really want to run IT like a business, we need a whole set of business functions and disciplines that we normally do not think of as part of IT.

For example, one of the most important factors in business success is marketing. Few companies can grow and prosper without a well-developed marketing function. Yet, how many IT departments really invest in "marketing" to their customers, their users? Too many IT groups seem to have the attitude of, "if we build it, they will come." Then they wonder why the sales force doesn't use the CRM system, material planners don't use the supply chain management system, or executives don't use the executive information system. These may be excellent systems that meet all the requirements of the business, but the problem is often that they have not been sufficiently marketed.

So, what do we mean by marketing IT like a business?

For sake of this discussion, let's consider marketing as three main activities: understanding the market's needs, developing products to meet those needs, and communicating with the market to stimulate demand for sales of those products. There are many other activities that could be mentioned, such as defining the market, choosing a market position, formulating a market strategy, and so forth, but for the sake of this discussion, let's keep it simple.

Understanding market needs and developing solutions
Many IT professionals think they understand the needs of their users. They interview users, gather requirements, and get sign-off on requirements documentation. But do they really understand the user?

One of the problems is proximity. Many IT groups are located far from the users they serve. They've never done the user's job, and they do not interact with users on an on-going basis. When it comes time to develop a new system, they hop on a plane, interview some users, and develop a requirements specification. But they do not have the background, or the time, to really understand the user's business.

I recall an early experience in my career as a systems analyst in an oil services firm. One day, I was tasked with developing the requirements specification for a system to track the performance of our company's products in the field. Even though, coincidentally, I had a degree in geology, I was not confident that I really understood the business. So, I signed up for a week-long boot camp for new sales people. It took quite a bit of effort to explain to my IT director why I was taking a week out of the office to attend training on various down-hole drilling techniques. Eventually, I moved out of the IT department and physically planted myself in the primary user department for whom we were developing the new system. At the time, I would have called these efforts requirements gathering. Today, I would simply call them understanding my market.

As a best practice, IT business analysts should be physically located in the departments or business units that they serve. They can still report up to IT, but they should be physically close to their users and even have a dotted line relationship to user management. They should shadow users in their daily activities and even perform some of those activities on a trial basis from time to time. The analysts that support the sales force should ride along on some sales calls, or they should help develop a sales quote. The analysts that support engineering should sit in on some product design sessions or new product introduction meetings. Business analysts should identify closely with their users and become advocates for those users within IT. Only then will IT really understand the needs of those users and be able to develop systems to meet those needs.

Marcom for IT
In business, the marketing function is responsible for planning and executing marketing campaigns with two related objectives: creating general awareness of the company and its products and generating leads for sales of those products. Market groups use general advertising, tradeshows, public speaking, press and analyst relations, direct mail, email marketing, and other forms of communication to accomplish these objectives.

Likewise, a well-managed IT organization should use a variety of means to market its services to its user community. Developing good systems is only half of the job. For systems to be actually adopted and used, they need to be advertised and regularly promoted to users.

Two clients of mine illustrate this point. The first, which I have written about previously, had spent quite a bit of money--too much in fact--to develop a B2B e-commerce site. Users had told me of their frustration with the system, but when I got an actual demo of the site, I was surprised to find that the IT group had recently introduced some enhancements that could offer real value to the organization. Circling back to the users, I found that few realized the good work that the IT project team had recently done to improve the system.

Here's the point: when I told the CIO that he needed to put a little more effort into public relations, his reply was that he didn't feel it was his job to blow his own horn. I pointed out that it wasn't a matter of praise or blame but ensuring that the company actually used the system that it had paid for.

Advertising IT to users
The second company, which I visited recently, is a positive example of marketing IT like a business. We are starting an IT strategy project with this client, so I asked to see any documentation they had on their existing systems. They handed me a 25 page document, just now being published, called the "IT Catalog."

The IT catalog looks just like a typical product catalog, describing a company's products. Only in this case, the audience is the IT user community throughout the world, and the products are the systems that the IT group offers to those users. Each page describes a company system, with editorial copy, crisp graphics, and screen shots, that outline the features and benefits of that system. Each page includes a picture of the system's primary IT analyst with contact details for more information.

This catalog will be soon distributed to all of the company's employees and will be given to new employees as they join. The same information will be posted to the firm's intranet. Essentially, it is an advertising campaign to build user awareness of the firm's IT systems and to promote adoption.

When a CIO understands the need to market IT like a business, all sorts of marketing communication methods become apparent. For example, the IT group might create a newsletter or contribute articles to the corporate newsletter. It might use email to distribute tips and techniques for certain systems, allowing users to opt-out if they found the information not useful. It might conduct periodic surveys to give users the provide feedback concerning use or non-use of various systems.

No more IT monopoly
The need is increasing for CIOs to market IT like a business because users are not the captive audience that they used to be. If the IT group is not satisfying the needs of its users, users can often go elsewhere to get what they need. For needs that do not require a great deal of integration across the enterprise, users can and do buy their own departmental systems, or they can sign up for a hosted solution on-demand, such as Salesforce.com, or they can hire their own consultants and develop their own departmental systems. Entire user departments and even whole business units can escape the orbit of the corporate information systems function in this way.

But some IT groups act as if they have a monopoly on IT services. When you are a monopoly, how much effort do you need to put into marketing? For example, prior to the break up of the Bell system, AT&T had a monopoly on telephone service in the U.S., and consequently it didn't even have a corporate marketing department. But after the AT&T divestiture, AT&T as well as the Baby Bells suddenly found that they needed to develop a whole set of marketing skills that they previously had not required.

In the same way, IT departments can no longer count on a monopoly position to keep users as customers. They must develop a true marketing function within IT. For smaller organizations, this job might fall directly on the shoulders of the CIO or his direct reports. For larger organizations, it might make sense to have one or more IT managers dedicated to marketing.

Either way, the job needs to get done.

Related posts
Putting a little public relations into IT

by Frank Scavo, 8/29/2005 02:09:00 PM | permalink | e-mail this!

 Reader Comments:

Excellent point and great recommendations.

As a software vendor, we also suffer significantly due to this disconnectedness. For example, if our market study says that users want X, but if IT thinks that users want Y, then we get stuck. Further, even if the solution is deployed, but it is not properly marketed to the users, the promised ROI never gets achieved.

There is a reverse problem as well. The users also do not typically communicate their requirements to the IT dept, except perhaps voting with their checkbooks, or by just not using the new technology. For example, IT may want to deploy the latest wiz-bnag technology, but the users just want to use Excel. Fortunately, now many companies are beginning to realize this and offer straight/direct support in Excel to get enterprise data.

"Marketing" may end up opening up the communication channels both-ways, and this may be good for everyone: users, IT, and even software vendors.
Interesting subject.
I would add just one item: know thyself. Meaning that an internal positioning assessment must be performed by the IT dept to really understand how it is perceived by its "clients".
I used to build with clients an "IT Credibility/ Dependency" matrix by interviewing internal end users and appreciating how much they felt the IT dept was "credible" in terms of value provided, as well as how much their business decisions were "dependent" upon IT solutions.
The outcome was then charted on a matrix, from which we decided strategies to improve the marketing policy of the IT dept.
Both VS and Enrico make good points. VS is right that marketing is not a one-way communication--two way communication is required to develop an understanding of the "market" (users).

Enrico points out that the first step of a solid IT marketing program should be an assessment--understanding where the IT group stands in terms of credibility with users. Unfortunately, in many companies, IT thinks it has more credibility than it really does, and if it goes off an advertises itself based on its perceived credibility, much of the effort will be wasted. Users just won't find it believable.
Thank you, very interesting!
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