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. CEOs also expect IT leaders to understand the firmâs business strategy, and to implement systems that help the organization to compete more effectively in the marketplace.
However, running a business involves more than just financial management and a good understanding of the business plan. To really run IT like a business, the CIO needs to apply a whole set of business functions and disciplines that are normally not considered as part of IT. This article focuses on one of those primary business functions: marketing.
Clearly, a well-developed marketing function is essential for the growth and prosperity of the business. Therefore, if we want to manage IT like a business we must market IT like a business. 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 their lack of acceptance may often be the result of a poor marketing strategy.
So, what do we mean by marketing IT like a business? For the sake of this discussion, let us consider marketing as three main activities:
- Understanding the market’s needs
- Developing products to meet those needs
- 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 User 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 adopted and extensively used, they need to be advertised and regularly promoted to users. Such communication should not be in one direction only. The most effective IT marketing program is one where the IT group reaches out to the user community to communicate and also to listen.
Two clients of mine illustrate this point. The first spent quite a bit of moneyâtoo much in factâto 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 of them had been informed of the recent improvements to 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. Our consulting group is 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, which they call 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. Additionally, the catalog outlines the features and benefits of each 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.
For the CIO that has chosen to market IT like a business, a variety of marketing communication methods will soon 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 find the information is not pertinent for their use. 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, they 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.
Start With an Assessment
In some companies, the IT marketing function has been neglected for so long that users will likely react with cynicism to any change of heart by the IT group. Unfortunately, in many companies, IT thinks it has more credibility than it really does. The CIO that jumps into an advertising program without understanding its users current attitude toward IT, may find that his team has wasted a lot of time and effort.
Therefore, the first step of an IT marketing program should be an assessment of where the IT group stands in terms of credibility with users. Whether conducted internally, or by an outside consultant, the assessment should focus on how dependent the organization isâin realityâupon IT, and how credible IT is in meeting the needs of the organization. Then the CIO can take specific actions to address short term problems, improve credibility, and establish the basis for an effective IT marketing function.