Creating business impact with market insights at IBM
Interviewed for this case was Kathy McGettrick, VP North America Market Insights at IBM, who shares some of her experiences about creating business impact through market insights.
The best market intelligence programs exist to create true impact on business and help companies generate revenue. The degree of business impact greatly depends on how well market intelligence is embedded into the decision-making processes and what is the level of collaboration with key stakeholders.
Over the years, the IBM Market Insights program has developed into a function that, McGettrick describes, has a “maniacal focus on business impact”. The word “insight” is used very deliberately by the team; the deliverables should always be something meaningful and actionable for the IBM organization.
Align to Business Priorities
For a successful market intelligence program, it all starts from aligning the program with the business priorities. For IBM, seeking for growth is the one over-arching business priority that, especially after the recession in 2008-2009, drives the activities in the company, market intelligence included. Kathy McGettrick underlines that if the intelligence team cannot articulate the main business priorities of the company they serve even if woken up in the middle of the night, the intelligence program simply cannot be of much use to the company. Hence IBM fosters an intelligence culture that’s strongly oriented around the company’s business priorities at any given time.
Running a business within business
Kathy McGettrick says that the IBM Market Insights team is essentially run like a business for IBM; The team wants to continue to thrive and be viable, therefore using its services needs to make business sense for the company. To stay tuned to the nuances in the business priorities and to ensure the actionability of the work that the intelligence team does, McGettrick regularly brings in experts to her team such as business unit CFO’s, chief economists, or external speakers to share and discuss their insights about IBM’s business priorities and their development in context of the overall market developments.
Market intelligence strategy: Partner with business leaders
“Without partnership with business leaders, there’s no impact on business. And without an understanding of business priorities, there’s no partnership with leaders”, Kathy McGettrick introduces the logic behind having partnership with business leaders is at the heart of IBM’s market intelligence strategy. “The true power of an market intelligence organization is reached at the nexus of understanding the business context and matching it with the MI-specific skills and capabilities that the rest of the organization do not possess”, she continues.
In practice, the partnership at IBM between the market intelligence team and the business leaders results from three types of activities that the market intelligence team constantly does:
- Building Relationships with leaders through investing time and effort in understanding each one’s business priorities
- Taking Action, i.e. proactively leading issue-based engagements with the leaders and ensuring that there is buy-in and expected business impact to everything that the team does
- Developing and Maintaining Expertise that is specific to the market intelligence profession, for example primary and secondary information sources, research techniques, analysis methods and so forth
Organize the Team to Drive Impact
The IBM model of organizing the intelligence team is one of specialization: McGettrick says from IBM’s experience that it just seems to drive business impact if the team is able to specialize. In practice, IBM has a global, centralized market intelligence team where there are Segment Analysts, individuals that serve specific IBM businesses such as Hardware, Software or Services and are “the tip of the arrow” when the market intelligence team partners with business leaders. Segment Analysts will essentially need to know their own business segments even better than the leaders that they serve, as they will have to be able to add value through their insights to the market environment Functional Teams, specialists in the realm of Market Intelligence.
- Segment Analysis: Develop a comprehensive view of segment (i.e country, product area to provide a quantitative and qualitative view of the segment to drive strategic decisions and future investments
- Knowledge Services: Gain awareness of IT analysts perspectives on the market and industry trends.
- Practice Areas: Internal consulting teams that provide IBM with the tools aimed at improving resource allocation and business performance.
- Competitor Assessment: Assess competitors’ strategies and threats, anticipate competitors’ movements and deploy counter measures.
- Client Research: Understand, through primary research efforts, customer behavior and interactions and how IBM’s offerings and solutions address pain points.
- Market Analysis: Understand how trends influence the marketplace and identify potential growth opportunities including emerging technologies, geographic expansion, new clients and adjacent markets.
One thing that further characterizes the IBM Market Insights team is that they spend time on understanding IBM’s own internal data in addition to the external market data. This approach adds a lot of value, as knowing for example when certain clients have last bought something and what is their installed base puts the analyses conducted on the external market environment into IBM’s own context and helps the Market Insights team make recommendations based on their work.
Contributing to the Bottom Line: Case examples
At IBM, the Market Insights team strives to impact the bottom line by focusing their efforts around four types of engagements:
- Proactively identifying pockets of growth
- Uncovering inhibitors to growth
- Providing foundation to key growth initiatives
- Supporting sales team in revenue growth
Based on their work on the topics above, the Market Insights team delivers to the IBM organization by recommending how to expand beyond core base of clients, alter current strategies, capitalize on trends in the market, or take out competition. In the following, Kathy McGettrick gives two concrete examples of how the IBM Market Insights team has delivered results that have had a direct impact on business in the form of savings and new business opportunities.
Capitalizing on Trends in the Market
When the US Federal Government released $787B in funding to promote growth in all parts of the economy, IBM wanted to understand the priorities of this program and align resources to identify new opportunities as a result.
Market intelligence Team’s Approach
- Developed a detailed pro-forma opportunity model identifying key industry focus areas, associated timing and the agencies aligned to economic stimulus funding
- Co-created go-to market strategies with cross-brand solution and industry subject matter experts
- Collaborated with marketing and sales to prioritize key states and industries
- Aligned IBM resources and develop an end to end marketing and sales plan focused on US Economic Stimulus focus areas
Business Impact: Economic Stimulus
- Identified over $25B in addressable opportunity for IBM
- Prioritized 14 key states and assigned an executive focal point for each responsible for aligning marketing and sales resources
- Prioritized industries for additional resource allocation and sales plays
- Business results include over $2.6B in pipeline identified to date
Expanding beyond Core Base of Clients
The bulk of IBM’s revenue was concentrated in a core set of clients that had high marketing and sales investments focused on it. To grow IBM’s revenue beyond this core base, Sales and M&C had to systematically un-stack resources from these base clients and align them to high opportunity accounts.
Market intelligence Team’s Approach
- Market intelligence architected a targeted segmentation to orchestrate incremental shifts of IBM marketing investments away from base clients (which was already heavily covered by sales teams) in favor of marketing touches to high potential new clients
- Marketing and market intelligence collaborated to create cross-sell and up-sell programs and tactics to drive cross-brand growth in clients outside of the base
- Market intelligence worked with Marketing to interlock with IBM Sales model to create an integrated management system
Business Impact: Expansion Beyond the Base
- Growing the revenue contribution of clients outside the “base” was critical to reducing risk exposure and dependency on IBM’s core clients during a time of economic turmoil
- Marketing leadership directed 60% of proactive touches to prioritized client segments that were outside the “base” and exceeded marketing revenue objectives
- A Germany-specific program alone generated $41M in revenue