boosting it’s role in the enterprise laurie m. orlov vp and research director forrester research
TRANSCRIPT
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Boosting IT’s Role in the Enterprise
Laurie M. Orlov
VP and Research Director
Forrester Research
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Agenda
• Making the most of IT’s Innovation Capacity
» What are the current IT spending patterns across industries?
» How much is spent on new initiatives versus ongoing maintenance and operations — what Forrester calls IT’s innovation capacity?
» What is IT Innovation?
• Marketing IT
» How good is IT at communicating with the business?
» What are the core elements of marketing IT?
» How is marketing of IT related to IT’s role in business transformation and innovation?
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Typical CIO’s View Of IT Spend
Valuable investment in
promising blue skies technologies
Patchy detail on the 75% of IT budget
spent on ongoing IT operations
Problem contracts & projects pushed into
the background
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Typical CEO’s View Of IT Spend
Cloud of IT cost hanging over the business
Hard-to-spot risk that IT projects
will fail
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Typical CFO’s View Of IT Spend
Inability to shed light on project ROI or IT ROA
No visibility into cost attribution by project
or service
Bad news on the way
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IT’s role in the enterprise has changed…
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IT Spending As A Percentage Of Revenues, 2005 Benchmark
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
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Why The Overall Ratio Of IT Spending To Revenues Is A Bad Benchmark
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
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2005 IT Spending On Ongoing IT Operations As A Percentage Of Revenues
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
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IT’s innovation capacity:
► The amount of available funds that IT can spend on new initiatives in any given year — typically total IT spending minus IT spending on ongoing operations and maintenance.
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With total IT spend constant, Innovation Capacity can still grow
Innovation capacity
Operations & maintenance
2.6%
0.6% 0.7% 0.8%
2.5% 2.4%
Year 1 Year 2 Year 3
IT spend as a percentage of total revenue
3.2%
Year of IT spend
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How vital is the IT organization to the success of the following efforts at your company?
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How satisfied are you with the level of support that the IT organization provides to each of the following
efforts?
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IT Assets Are Key Ingredients For Business Innovation
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What is IT-enabled business innovation?
►Transforming a business process, market offering, or business model to boost value and impact for the enterprise, customers, or partners
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Characteristics Of IT Innovation
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Examples Of IT-Driven Innovation By Type
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12 Steps To Recovering IT’s Role In Business Innovation
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Agenda
• Marketing IT
» How good is IT at communicating with the business?
» What are the core elements of marketing IT?
» How is marketing of IT related to IT’s role in business transformation and innovation?
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Theme
Marketing helps IT take charge of its own destiny
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Yet lack of marketing keeps IT as a cost center, with:
• Invisible contributions
• Regrettable projects
• Interminable rollout cycles
• Underused applications
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IT and marketing – like a fish and a bicycle
• Why should we market? We have too much work!
• Marketing is not a fit with our personalities!
• Marketing is the wrong word – it’s communications!
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But if it’s communications, they’re mediocre: Not enough business focus…
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IT doesn’t talk much, waits to be called, depends on e-mail…
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…And is close-mouthed about what else it’s working on
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Does a tree fall in the forest?
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Theme
Marketing helps IT take charge of its own destiny
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What is the marketing of IT?
The business activity of presenting IT’s products, services, and capabilities to constituents
in such a way that makes them eager to fund and utilize
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Marketing moves IT up the enterprise value chain
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IT’s Marketing Plan — The 4 P’s applied to an IT organization
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Planning IT marketing campaigns
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Boost IT brand equity
• Use brand to create awareness
» Genesys Health’s PDA123 written up in local press
• Use brand to build lasting trust
» JM Family’s transaction dashboard
• Use brand to attract interest
» 7-11’s technology scholarship
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Tactics that are part of IT’s value campaign
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Theme
Marketing helps IT take charge of its own destiny
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The marketing of IT is a journey – not a miracle
• Market to organizations; sell to individuals
• Get the marketing skills
• Hire a VP of IT marketing – for big shops
• Go public with the “M” word
• Label yourself before the business labels you…
• Be wary of over-marketing
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What kind of IT organizations get this first?
• High exposure with end customers
• A need to convince constituents to engage
• Already armed with process discipline
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Laurie M. Orlov
617-613-6086
www.forrester.com
Thank you
Entire contents © 2005 Forrester Research, Inc. All rights reserved.