Tuesday, July 17, 2012

Update on Tech Market Intelligence: The Role; Budgets; and Trends

As with almost all functions within a large and complex marketing organization, the Market Intelligence (MI) organization is under pressure to transform. In our recent discussions with top MI executives, three transformational trends stand out as "guidance" for this profession.

1. Transform the MI organizational model and team to be more proactive. MI staffs tend to be spread thin and rarely have the bandwidth to move out of "response" mode. IDC believes that the MI function needs to increase the self-service capability for the majority of its internal clients. Better information portals, and the tools and training to access these resources are key to this effort. In doing so, MI should then be able to place more active attention to the second guidance area which is:

2. Increase executive support. This implies higher level insights and better "packaging" of externally-sourced MI content, so that it looks and feels palatable to an executive audience.

3. Be more efficient and visible in the delivery of measurable value. Establishing the ROI of MI is not a hard science; but MI execs should not give up the pursuit of tying their contribution to revenue.

What about the total resource committed to MI? We do know from our latest budget research that thirteen percent of ICT vendors will decrease MI spend in 2012; twenty-five percent will increase spend, and the rest will keep spending flat. But more importantly, revenue growth will likely outpace MI budget growth and this would mean a declining "MI Budget Ratio": the percentage of revenue spent on MI. This could be a caution light that indicates that the organization's need for MI outstrips its resources. Viewed another way, the percentage of the marketing programs budget that is spent on market intelligence programs ranges from an average of 5.8% (companies with a strong proportion of direct sales) to an average of 3.7% (companies with a strong proportion of indirect sales). These data point are for ICT vendors billion-dollar plus revenue ranges.

MI staff accounts for 3.8% of marketing positions and this allocation tends to be fairly stable. Regarding organizational changes: IDC sees that the majority of MI teams continue to sit within marketing, while others are being moved into corporate strategy or sales … or from these organizations back into marketing! Some organizations maintain independent market intelligence, competitive intelligence, and analyst relationship teams, while others blend either CI or AR with MI.