CIOs and marketing in the same breath? If this seems like a novel idea, think again. As a member of the organization’s leadership group, it’s crucial that today’s CIO be a successful marketer of IT products and services. And the four “Ps” (product, price, place and promotion) can help. Let’s look at each “P” separately.
“Product” refers to the products and services delivered by IT. These need to be presented in business terms, demonstrating how IT supports the various initiatives. The following paragraphs contain a couple of suggestions on how to accomplish this.
First, most companies have balanced scorecards (or other similar models) setting forth business goals and deliverables, enabling organizations to clarify their vision and strategy and to translate them into actions. This tool needs to be adapted by the CIO to reflect IT’s products and services. The IT version of the Balanced Scorecard will provide feedback around both internal business processes and external outcomes. IT products and services need to be presented in terms of the balanced scorecard details, integrating a variety of corporate programs such as re-engineering, process redesign, and customer service, where IT plays a role.
Second, to understand the value of the various applications and projects and how they contribute to the business, a portfolio management process can be used. Value will be determined through collaborative discussions with the business using a number of criteria. The value determination may come from such factors as contribution to revenue; making business processes faster, more reliable and timelier; providing better service to internal and external customers; providing an information base to make better-informed decisions and to allow the company greater flexibility in its decision-making.
“Price” refers to the cost of IT products and services. Pricing for services and charging clients for usage are important in maximizing the business value of technology. Thinking in terms of pricing as opposed to cost is a fundamental change for the IT organization, altering the basic view of how IT operates.
Many organizations use a charge-back mechanism to the business to assign a price for technology services, based on the concept that anything that’s free is not appreciated. Often companies opt for a proportional allocation, depending on the revenue generated by each department. Others consider IT an overhead cost and are not concerned with the competitiveness of the price of their IT services. Still another approach is to charge back the infrastructure component at an annual rate, while projects are priced individually. Regardless of which pricing model is used, the CIO needs to show that the infrastructure costs are competitive to industry standard and that these improve yearly. Pricing models need to be established in terms of level of quality or service delivery. While the infrastructure costing can be established by IT, the overall costing or pricing model can’t be determined by the CIO alone, but needs to be decided upon jointly with the business.
“Place” refers to how the various IT services will be distributed. This includes criteria such as sourcing and service delivery.
Sourcing strategies create several options for how CIOs can acquire IT services externally. Recently there’s been a lot of hype in favor of outsourcing various IT functions, much of it promising superior service-level improvement while cutting costs. But reality is often a different story from the hype. CIOs need to realize that whatever benefits outsourcing offers, it does not automatically make the outsourced function successful or more cost-effective. Outsourced arrangements need careful management by the CIO.
Service delivery includes decisions on where and how technology services will be delivered. The “where” of the delivery presents a number of choices, such as: on the Web, in the call center, or through mobile technology on the road. The “how” refers to how much of it should be self-service. Options such as customer self-service through the Web ensure easy accessibility to information that can provide better service to the customers while possibly reducing the number of phone calls (thereby cost) to the call center.
And finally we come to “promotion”, probably the most ignored of the “Ps”. This refers to promotion of IT products and services. The dictum, “If you build it, they will come”, isn’t always true. If people don’t know about a product or service provided by IT, they’ll neither use it nor find alternative ways to acquire it.
Promoting IT products and services throughout the organization is one of the CIO’s most important tasks. The CIO must be able to explain what IT is doing, why it’s doing it, the department’s value to the company, and why that value should be maintained. Part of promoting IT involves making executives aware of how technology can support their business. In today’s business world, technology knowledge is as important as financial knowledge. You don’t hear executives going around saying, “Those financial terms are meaningless to me; I won’t ever be able to understand them.” Yet that’s just what they say about technology.
To promote technology products and services among the company’s management staff, CIOs need to provide business leaders with opportunities for improving their general knowledge of technology. This can be done through internal networking and meeting with executives one-on-one or by bringing interesting conferences or external presentations to their attention. In addition to promoting IT services and products within the organization, CIOs need to promote them externally as well by networking with other CIOs and with non-IT related organizations.
Okay, so we’ve got the four “Ps” figured out: product, price, place and promotion. Now, the next step is to recognize that while they may look like four separate tasks, they definitely are not. It’s up to the CIO to coordinate all elements so that the organization is not being sent mixed messages that could easily cause confusion. CIOs need to ensure that all of the elements contain the same message: The CIO is a business leader and IT needs to be run as a business, not an overhead.
CIOs and marketing in the same breath? Absolutely! Any organization that doesn’t market its products and services will eventually become irrelevant and go out of business. If you as CIO don’t want this to happen to your department, make sure you take the four “Ps” of marketing seriously. You’re the CIO – the sales guru of IT.
–Dr. Catherine Aczel Boivie is Senior Vice President of Information Technology at Pacific Blue Cross. In 2003 Gartner Inc. named Dr. Boivie the Mid-sized Enterprise IT Executive of the Year for North America. She is the founding chair and President of the CIO Association of Canada, the Western Chair of the Couchiching Institute of Public Affairs and, perhaps the role she enjoys most, a Big Sister.