Boosting IT’s Role in the Enterprise
Laurie M. Orlov
VP and Research Director
Forrester Research
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?
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
Typical CEO’s View Of IT Spend
Cloud of IT cost
hanging over
the business
Hard-to-spot
risk that IT
projects will fail
Typical CFO’s View Of IT Spend
No visibility into cost
attribution by project
or service
Bad news
on the way
Inability to shed
light on project
ROI or IT ROA
IT’s role in the enterprise has
changed…
IT Spending As A Percentage Of
Revenues, 2005 Benchmark
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
Why The Overall Ratio Of IT Spending
To Revenues Is A Bad Benchmark
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
2005 IT Spending On Ongoing IT
Operations As A Percentage Of Revenues
May 2005, Best Practices “US IT Spending Benchmarks For 2005”
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.
With total IT spend constant, Innovation Capacity
can still grow
3.2%
IT spend as a
percentage of
total revenue
0.6%
0.7%
0.8%
2.6%
2.5%
2.4%
Year 1
Year 2
Year 3
Year of IT spend
Innovation capacity
Operations & maintenance
How vital is the IT organization to the success of the
following efforts at your company?
How satisfied are you with the level of support that
the IT organization provides to each of the following
efforts?
IT Assets Are Key Ingredients For Business
Innovation
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
Characteristics Of IT Innovation
Examples Of IT-Driven Innovation By Type
12 Steps To Recovering IT’s Role In Business
Innovation
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?
Theme
Marketing helps IT take
charge of its own destiny
Yet lack of marketing keeps IT as a cost center, with:
• Invisible contributions
• Regrettable projects
• Interminable rollout cycles
• Underused applications
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!
But if it’s communications, they’re
mediocre: Not enough business focus…
IT doesn’t talk much, waits to be called,
depends on e-mail…
…And is close-mouthed about what else
it’s working on
Does a tree fall in the forest?
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
Marketing moves IT up the enterprise
value chain
IT’s Marketing Plan — The 4 P’s
applied to an IT organization
Planning IT marketing campaigns
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
Tactics that are part of IT’s value
campaign
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
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
Thank you
Laurie M. Orlov
lorlov@forrester.com
617-613-6086
www.forrester.com
Entire contents © 2005 Forrester Research, Inc. All rights reserved.