The Case for Marketing Resource Management
As global companies continue to expand their brands and marketing requirements, the instances of miscommunication, poor execution, and misspent marketing funds can increase many times. Most marketers would lose a lot of sleep as they considered the marketing problems of any large company — say, a Procter & Gamble, which has approximately 250 brands in 130 countries. If the U.S. managers for a P&G brand develop a creative way to launch a new product, their counterparts in Asia may have no easy way to get the necessary marketing information. In fact, they may end up reinventing the wheel in their local territories. Marketing teams are frequently involved in such wasteful efforts and often, because of time pressures, approve marketing programs without proper due diligence.
Moreover, Global 1000 companies are finding that their marketing expenses seem to know no limits. All told, these companies devoted $910 billion in 2001 to marketing spend, allocating an additional $268 billion to producing and managing the marketing output. By 2003, that output is expected to surpass $1 trillion. Why so much money? Why is the marketing spend ever on the increase? The answers lie predominantly in the rapidly changing global marketplace and the rise of technology.
For one thing, customers have grown a lot more sophisticated, thanks in large part to technology, and their loyalty to particular brands or companies can no longer be taken for granted. Fierce competition continues to drive companies to earmark more resources to their marketing efforts, despite a decline in marketing productivity. This equation forces marketing organizations to demonstrate greater financial accountability, become more creative in setting strategy, exercise greater flexibility, and provide a more rapid response to changes in the marketing arena. They are pressured to better integrate the message and the medium in every marketing effort, however local or global it may be.
The most promising solution to marketing's problems appears in the form of marketing resource management (MRM). Nowadays it can be called by any number of names, including enterprise resource management (ERM) and marketing process management (MPM), but whatever name is used, the objective is still the same. Simply defined, marketing resource management seeks to integrate all aspects of marketing across the diverse spectrum of activities — from planning, developing, and executing to assessing every marketing campaign, team member, communication, and tangible result. By means of this integration, managers take the chaos out of marketing, which has heretofore been excused from accountability because the process has been deemed to be creative and subjective. What used to be the province of finance and supply-chain areas has now been extended to the very people who have traditionally prided themselves on their creativity and their exclusion from answering to the same requirements to be financially responsible.
MRM can keep tight reins on runaway expenditures and make sure that everyone who participates in the marketing effort, whether internal or external to the organization, has access to the data and knowledge she needs, whenever or wherever it is needed. Furthermore, MRM insists that managers take full responsibility for the financial management of the entire marketing portfolio, that they ensure the execution is timely and profitable, and that they set rigorous measures for performance.
Searching for a "Deep" Solution
Researchers at Accenture's Institute for Strategic Change interviewed numerous chief marketing officers across a variety of industries and business units to uncover the primary obstacles to improving marketing effectiveness and efficiency. The survey revealed four key problem areas:
- Inefficiency — Recent environmental changes have left marketing managers with little time or resources to focus on building clarity and consistency of marketing efforts across the enterprise. Pilots conducted among consumer goods and consumer electronics companies demonstrate that $30 million to $70 million in annual benefits could be realized by enhancing the productivity of marketing teams, eliminating redundancy across various internal and external participants, and increasing the speed to market of new initiatives.
- Non-collaboration — Creating and executing an effective program requires that marketers work and communicate with thousands of geographically dispersed internal and external participants. Collaboration efforts suffer significantly from wasted time and unnecessary duplication. Accenture's survey of one set of companies experiences focused on a revamped platform in trade marketing to improve communication with 725 sales representatives and 25 customer service representatives across three major business units. This system, we found, increased selling time, sales revenues, and promotions effectiveness, while providing $10 million to $12 million in identified cost savings. Similar savings can be realized by addressing collaboration opportunities in developing new products and offerings, advertising, promotions, events management, campaign management, and the like.
- Inaccessibility — Marketing organizations spend millions each year creating huge repositories of information and data such as direct-mail copy, photos, point-of-sale materials, videos, and music. Although they may count as tangible assets, these data banks collect dust and remain largely inaccessible to the people who could make the best use of them. Marketing teams simply do not have access to the tools they need to locate, share, and direct those assets to achieve the maximum benefits. Most are not able to manage knowledge effectively and standardize best processes. Thus, they spend considerable time and money reinventing the wheel. By developing a repository of marketing knowledge and digital assets, integrating these assets with the marketing execution workflow, and collaboratively sharing these assets, however, a manager can offer significant benefits to marketers. Large expenditures in these areas by automotive companies and other consumer goods companies clearly show the benefits of this opportunity.
- High turnover rate of employees — For any number of reasons, the high number of departing employees inhibits marketing groups from effectively leveraging past marketing lessons. As a result, they have to spend scarce resources on training. But even that money, we found, is being wasted. Accenture's research shows that many companies have created knowledge intranets that are not being used frequently because they lack context and integration with the work being performed by marketing teams. Thus, considerable time and money is wasted in relearning, retraining, and reinvention.
Recognizing the magnitude of these problems and sensing the potential for value in being able to solve them, many organizations have, in the past, relied on custom-developed solutions. Marketers today, for example, frequently resort to email, spreadsheets, online calendars, team spaces, and even basic project management software to help them do their jobs more efficiently. They use software designed to handle specific activities — campaign management, email marketing,digital asset management, and customer data analysis. These solutions, however, have had limited success, chiefly because they address problems only on the superficial level. Most efforts have dealt with the problems of a single marketing channel (Web, retail, etc.) or function (direct marketing, promotions, etc.). They do not offer solutions that go to the depths of the problem. Lacking integration across disparate systems, they are not usually tied to other supporting systems, such as marketing data warehouses and lead management. Providing a limited application of technology solutions, these initiatives have redesigned some key processes but failed to install supporting technology to cement improvements. They are not sophisticated enough, in fact, to address deeper problems in the company such as organizational structure, career pathing, compensation, performance management, training, or leadership development to support new marketing processes.
It is no wonder, then, that many Global 1000 companies acknowledge that these complications must be overcome, and are searching for a "deep" solution.
Creating Order Out of Chaos
The benefits of streamlining the marketing effort can be felt almost immediately. In many industries — for example, consumer goods companies, electronics, pharmaceuticals, and financial and credit card organizations — we find that more than 80 percent of marketers time is spent managing the various activities associated with executing a marketing program or campaign. Most of these people are firefighters, working to control the conflagrations that flare up continually in marketing activities. This leaves them little time for doing the critically strategic work, such as brand architecting, portfolio management, and new product development. As a result, the quality of their output and the success rate of their marketing activities suffer.
To improve efficiency and effectiveness, MRM solutions have begun to emerge, thanks in part to highly sophisticated technology. Typically this support improves marketing performance through enhancing the collaboration among participants, both internal and external to the marketing program per se. It accelerates and coordinates in real time the scheduling of activities, management of marketing financials, approval processes, and execution of marketing projects. Furthermore, it provides effective, online leveraging of marketing knowledge and assets integrated across all activities. In short, MRM initiatives can generate both revenue enhancement and cost-reduction benefits.
The Business Case
Based on our experience in pilot programs with many companies, we have identified major benefits associated with MRM solutions, as presented in figure 1.
Figure 1 — Marketing Value Creation Framework
Efficiencies in marketing execution can result in large cost savings for organizations. For example, eliminating nonvalue-added activities from marketing processes reduces the costs those organizations incur to create and implement programs. Companies can either use this to reduce costs or leverage the increased capacity to drive growth through new products. Shared knowledge and best practices reduce marketing costs by preventing the reinvention-of-the-wheel syndrome and minimizing the cost of learning. Tasks are performed more proficiently, thus increasing speed to market and throughput capacity. The marketing organization produces more programs with higher success rates. When organizations are more effective and efficient in program development and management, nonworking marketing spend also declines.
Improvements in marketing effectiveness affect program success, increasing revenue and profits. For instance, a redesign and automation of critical marketing processes can help increase capacity, thereby allowing companies to conduct not just more campaigns but better targeted ones. Targeting improves campaign success rates, increasing customer acquisition (market share) and retention levels (lifetime value). Further, targeting allows for more refined pricing strategies, much as Gap has done with its Old Navy stores, which aim at a young clientele interested in lower-priced fashions. A company often can increase prices without negatively affecting acquisition or retention rates.
Additionally, the use of knowledge management and best practices facilitates more effective decision-making, driving greater revenue and profitability. Organizations are able to redirect spend and reallocate assets to achieve the greatest profit.
Accenture's research of global marketing companies shows that $35 million to $70 million in annual benefits can be achieved from a typical $1 billion brand by addressing marketing efficiency and effectiveness. The specific components of this benefit case are set forth in figure 2.
Figure 2 — Marketing Transformation Benefits
Our experience with clients suggests that efforts to enhance enterprise marketing execution management can provide a return ranging from six to 12 times the investments made in technology applications, technology hardware, and related professional services.
The MRM Solution
An effective MRM solution must include three essential elements: the "marketing workbench," a design for and the implementation of an integrated marketing technology platform; a transformation of the marketing process, specifically one that redefines the way work is done by redesigning the core marketing processes and leveraging the appropriate technology tools; and a realignment of the organization to support the new way of working, including the sharing of knowledge across the entire marketing effort.
Figure 3 — Marketing Workbench Vision
Marketing Workbench Vision
Unlike single-channel or point solutions, the Marketing Workbench provides an integrated platform for marketing execution (Figure 3). It incorporates three components:
Marketing Process Workspace
This component focuses on providing a place where the marketers come to create, develop, and implement specific marketing campaigns and programs ranging from developing advertising strategy and creating direct mail pieces to managing the implementation of promotions and analyzing the effectiveness of sales leads. Marketing process workspace solutions assist organizations with all stages of a program from data gathering and program creation to execution, analysis, and procurement. Typically the marketing process workspace comprises multiple technology or software programs, each of which is dedicated to a single aspect of the marketing mix — for instance, media planning and buying, mass media campaign management, targeted campaign management, sales channel communication, promotions, point-of-sale, market research, and lead management. The workbench solution provides templates for critical marketing activities, allowing marketing teams to select the right project from pulldown menus and to see instantly the recommended steps for completing the project. Each step includes a suggested time frame, resource requirements, and templates for content creation, best-in-class examples, and required digital assets. With minimal effort, a marketing team can customize these suggestions to fit its particular needs and create a real-time work environment that can be shared with both internal and external participants.
Robust solutions provide marketers with the know-how (principles, tools, case studies, best practices, and the like) necessary to maximize program success. New marketing knowledge and assets are added to the solution in real time so it is always current. Additionally, they are flexible and can be easily customized to each organization's specific circumstances and needs.
Approaching the Ideal Solution |
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Today, MRM vendors fit primarily into one of three categories: integrated marketing application suite providers; point-solution providers; and customer relationship management system or analytic suite providers. Unfortunately, no MRM vendor at present offers a complete technology solution. Those technology solutions that are commercially available to marketers, however, are likely to be more complete than most in-house solutions. Although still relatively small but starting to gain momentum, integrated marketing application suite providers such as Aprimo are expanding the breadth and depth of their solutions. They take a holistic vision of MRM, and their solutions integrate many of the components of marketing process workspace and enabling technology tools. A second group to address MRM concerns comprises the point-solution providers such as Assetlink, Artesia, Documentum, and Webware, which offer solutions for managing projects, digital assets, and collaborative work environments. Many of these players have started to expand the depth and breadth of their solutions through targeted acquisitions. Others providers such as Siebel or Kana are CRM-focused, whereas still others such as E.piphany or SPSS provide analytic suites. While these vendors previously have been focused on consolidating their positions in the CRM/analytic space, they have now started to expand their current solutions to include MRM solutions. |
Enabling Technology Tools
Solutions in this area provide a foundation for work across the marketing organization to be streamlined. They assist marketers in managing and coordinating work across functions and channels. Unlike marketing process workspace solutions, these technologies can be used by all functional areas in marketing. Key tools include:
- Digital Asset Management — Marketing assets can exist in a variety of digitized forms such as video, audio, graphics, and documents. To use them effectively, the team has to be able to search extensively and retrieve items, often converting or reformatting them from one form to another. Using this robust technology, a marketing team can access those assets in its process workspace and collaborate with internal and external participants. It can establish online working sessions in which participants check in to share their ideas and refine assets in real time.
- Collaboration — Marketing teams have to be able to interact with geographically dispersed internal and external participants on a real-time basis. Nothing is so infuriating to a collaborator as the discovery that the item she has been working on for the past four hours is actually an old document, already revised many times by her colleagues. To prevent such wasted effort and frustration, a robust collaboration software has to provide collaborators with a means to check in and check out the digital assets. This can include an automatic email notification for all changes to a document. Team members are immediately made aware of project assignments or changes in status. The technology can include built-in approval and review tools for online meetings, as well as the ability to collaborate around a work in process to make sure it is executed accurately and efficiently.
- Project and Workflow Management — This is an easy-to-use tool that manages the workflow of many users. Team members can create and leverage best-in-class project templates, achieve a close integration of projects, and determine which items are actionable and which document repositories can be accessed. In addition, users can define a portfolio of projects, customize their associated calendars, and manage the project's budget and allocation of monetary assets. This solution tool sets milestones and measures progress across project portfolios, assigns roles and activities across internal and external participants, tracks financials across those projects, establishes a project calendar, and dynamically manages the project's execution.
- Knowledge Management — It goes without saying that an online repository of marketing knowledge and intellectual property — for example, marketing plans or best-practice templates — can provide marketers with key information and insights in real time. From the marketer's perspective, a robust knowledge management system must push the right knowledge at the right point in the marketing activity to the correct user. It must allow the marketing teams to access online how-to guides, performance simulation training tools, and the online classroom-training environment. In addition, it must be customizable, allowing organizations to tailor templates, guides, simulation tools, and training materials as needed.
Enterprise Integration
Powerful MRM solutions are worthless if they are not user-friendly and allow for the import and export of critical information from enterprise systems — what might be called the organization's data warehouse. That is why the simplicity of the MRM user interface is more important than any single marketing process workspace or enabling capability tool. If it cannot access the legacy systems an organization has in place, it obviously cannot integrate their contents and programs.
Marketing teams often need sales and financial information from internal systems, scanner data, information from major retail customers, competitive intelligence information — in short, all the enterprise resources. The ability to share information with these systems, to access the information easily from the marketing data marts, and to import or export the desired information, is critical. Because so many solutions today cannot provide that capability, they must depend on system integrators working with them to create this customized solution for their clients.
Emerging analytical tools and dynamic access to customer information require that marketing teams evaluate their marketing programs frequently. They must have access to those tools so that they can manage the changes to their marketing process workspace on a real-time basis. In addition, the MRM solutions must provide the flexibility to integrate with the existing corporate portals, including the Internet and intranets.
Finally, the effective solution must consider customer relationship management and sales force effectiveness (SFE) systems if it is to provide true integration of marketing, sales, and service functions. Enterprise marketing requires tight integration of those functions. During the past few years, strong CRM systems have been implemented to manage the 360-degree view of the customer and integration of messages across channels. Integrating these systems with the MRM solution will provide for end-to-end integration of marketing activities in an enterprise.
As marketing teams are being pressured for increased financial accountability, they are increasingly concerned not only with managing the marketing activities but also with tracking the financial performance of those activities. This dual responsibility requires them to integrate financials with the projects and keep tight integration with the enterprise financial systems.
While creating a technology platform, the redesign of key processes and the realignment of the organization are not new dimensions of a process transformation effort. Indeed, they are more difficult to implement successfully in the marketing space. Changing marketing teams who thrive on flexible ways to do the work is not easy and often meets with resistance from the teams. However, companies have begun to realize the potential for value adding. They are all experimenting with new ways to make marketing execution more rigorous.
Conclusion
As we have seen, today's marketing environment — the demand for financial accountability, speed of execution and decision-making, globally integrated marketing activities and messages — make it imperative that companies streamline the execution of their marketing activities. They must search for the creative solutions that can transform their marketing execution and management processes. Typically these solutions are technology-enabled, integrating applications such as digital asset management, project management, collaboration, and e-learning. When combined with the marketing activities and enterprise data sources, those solutions can provide a comprehensive marketing workbench to enhance efficiency and effectiveness of marketing. Only by developing the integrated marketing workbench — and redefining the way marketing processes are executed while aligning the organization and its culture — can companies generate the benefits and drive their competitive advantage.
