Marketing Operations in the Silicon Valley: Addressing CMO Challenges

By Adrian Carol Ott

CMOs of large Silicon Valley companies are confronted with significant challenges including:

• Globalization: Synchonizing messaging and market activity across continents.

• ROI: Faced with a maturing technology industry, CEO's are demanding greater ROI on their marketing invesments.

• New Marketing Technology: The advent of new technologies has enabled unprecedented interactive dialogs with customers. New technologies must be implemented.

• Stakeholder Agreement: Coordination with regional marketing groups, and stakeholders in product business units and sales constitutes a major task.

Marketing Operations Emerges

As a result of these demands and others, many Silicon Valley CMOs have commissioned a marketing operations organization to tackle these challenges. Originally designated to create metrics and dashboards for accountability, leading companies are increasingly treating marketing operations as a key foundation to the marketing function.

"Marketing operations ensures marketing is run as a business," states a VP of Marketing Operations at a major Silicon Valley firm, "We strive to enable the marketing organization to be streamlined in day-to-day processes so they have time to think, focus on the customer and to innovate."(1)

In many business-to-business focused firms in the Silicon Valley, marketing operations is combined with the sales operation function to promote integration of the two groups. Although organizationally integrated, the purpose of marketing operations as we will describe in this article remains the same.

Introducing the 5Ts of Marketing Operations™

Based on our work with clients, and in our research, we have found that marketing operations is an emerging dimension to the marketing mix. Enabled by new processes and technology, it goes beyond the 4Ps (i.e. Product, Price, Place, Promotion), and 3Cs (i.e. Customers, Competitors, Corporation (2)), to fully round out the marketing mix. The 5Ts of Marketing Operations™ are:

• Total Strategy
• Techniques & Processes
• Tracking & Predictive Modeling
• Technology
• Talent

By approaching marketing operations across these dimensions, CMOs have an integrated approach to enable marketing worldwide. Let’s describe the 5Ts in more detail:

Total Strategy: This area involves strategy development in the product portfolio. It is not uncommon for large high-tech companies to have seventy-five or more products in their portfolios, some have hundreds. Managing investments and priorities across the portfolio is paramount.

Techniques & Processes: How should information flow most effectively across the marketing organization worldwide? How do we make decisions? What are our governance processes? What is our roadmap for marketing processes next year? in 3 years?

Tracking and Predictive Modeling: How do we make marketing more accountable? How do we measure campaigns and ensure better predictability of outcomes?

Technology: How do we implement technology across the globe to enable effective customer dialog, demand generation and measurement? What are the business requirements for IT? How does technology support the marketing and sales process roadmap for the next 3 years?

Talent: How do we ensure our marketing personnel are trained and enabled to work with new marketing technologies and processes? How can we enable them to make the right decisions based on analytics and campaign scorecards?

The Future of Marketing and the 5Ts

The 5Ts have a deep and significant impact on customer relationships. For example, by implementing integrated technology for demand generation and customer database access, regional marketing personnel can now build innovative campaigns on top of a marketing operations infrastructure. By tracking the success of a campaign, companies will realize better customer targeting and ROI; they learn from prior successes and failures.

The 5Ts add a critical foundation to the marketing function enabling marketing operations to support Silicon Valley CMOs to tackling contemporary challenges and to integrate with sales operations. It is dramatically transforming the marketing function and is changing how marketing will be conducted in the future.

© 2007 Exponential Edge Inc., All Rights Reserved


The Author: Adrian Carol Ott is CEO of Exponential Edge Inc, http://www.exponentialedge.com/ a strategy consultancy that assists global corporations to grow and innovate through market assessment, go-to-market planning, and strategic partnering. She also serves as Chair of the Harvard Business School N. California Alumni Marketing and Sales Roundtable. The Roundtable is a forum that explores issues and trends faced by senior executives in the Silicon Valley and Bay Area Business Community.

(1) HBS N. CA Marketing & Sales Roundtable, "Marketing Operations: How It Will Transform Marketing Forever", Panel Discussion with VP's of Marketing Operations from Symantec, Cisco, BEA, and a consumer packaged goods expert, June 20, 2006
(2) It is recognized that the 3Cs have been used in other forms and described in different ways. For example, we have heard "Communication" used as a "C". Our description is what appears to be most consistent in literature based on the author's research. Other forms could be substituted for the 3C's and have the same effect. The goal is to avoid debate on this element in this article as it would take it away from the central topic.

Making “Solutions” into More than Marketing Spiel

Technology vendors are promoting solutions, rather than products, to their enterprise customers. Most do so as a reaction to commoditization and falling margins. A few, as a proactive step to differentiate and increase the value they deliver. Of course, other industries and consumer-oriented companies are turning to solutions too. (Just look at Wells Fargo’s new Home Improvement Program, designed to combat the commoditization of equity financing.) Many principles of successful solutions are common across industries, but we’ll address the problem children first: Most technology-based “solutions” are no more than re-positioned products with a services pitch tacked on. Many others start with lofty ideas, then fall down in execution.

What’s a Solution?

Sales and marketing people frequently use the words “solution” and “product” interchangeably, obscuring (intentionally?) a very real distinction. Products supply a specific set of functionality. Solutions address customers’ broader objectives – ones that often have a direct impact on business success. That means solutions are more complex, and require a larger investment and broader skill-set to take to market, deploy, and operate.

	Product	Solution
Composition	One or more products or services	Integrated blend of products, services, and expertise
Type of Need Addressed	Specific requirement - the need to perform a particular task	Strategic imperative – the driver that causes the customer to allocate budget
Success Factors to Achieving Benefits	- Rich feature set - Reliable performance - Rapid deployment - Simple, low-cost maintenance	- Integration (not joint marketing) among components - Clearly defined roles among solution participants - Adaptability of solution to evolving needs - Broad changes in buyer organizations’ behavior

Differentiating between products and solutions

Roles in the Solution Stack

To assess realistically the required investment and likely returns of offering a solution, companies must first determine what role they would play within a solution ecosystem. A company's role within the solution stack determines key decisions about product development, sales capabilities, and alliance strategy. The participants in a complete solution are:

• Orchestrators: Experts in the customers’ most critical needs, they determine what comprises the solution. Often, orchestrators own the core intellectual property or expertise to meet the customers’ needs. Orchestrators also typically lead the customer relationship.
• Completers: Offer niche products that are critical to the success of the overall solution.
• Complementors: Enhance the effectiveness, efficiency, or attractiveness of the solution, but are not critical to delivering on its core promise.
• Delivery experts: Make the solution easier to adopt and more usable for end-customers.

The orchestration role is the most alluring. To execute it successfully, however, requires significant investment and a broad set of competencies, so its also the riskiest. While its common for a single company to play more than one role, solutions invariably involve inter-company collaboration.

Achieving Success with Solutions

When an organization decides to orchestrate a solution, it must be ready to commit resources from multiple disciplines. Ignoring any one area almost certainly means the solution will fail to reach its full potential for revenue and account penetration.

1. Select the right use-case and decision-makers. Existing customers are an indispensable source of input at this stage.
2. Determine which capabilities are critical, and how to make the solution most readily adoptable by customers
3. Form the required alliances, starting with Completers, then Delivery Experts, and finally Complementors.
4. Determine and articulate the concrete value of the complete solution. Quantify it!
5. Assess and, if necessary, enhance sales channel skills to execute a solution selling approach
6. Go to market in phases to balance investment and return
7. Expect a learning curve and actively manage the solution’s evolution

Solutions are not a panacea for invigorating revenue growth or raising margins. Nonetheless, organizations that are able to identify the right role within a solution and effectively execute on each stage of solution development can create significant benefits and opportunities for their business:

• Attention of new, often more powerful, buyers and decision-makers within customer accounts
• Entree into new accounts, including expansion into larger enterprises with higher budgets
• Ability to command higher average sale price and deal size
• Higher services revenues associated with the product, and increased interest from delivery partners who expand market reach
• Position as a "trusted partner" to customers

About the Author:
Lilia Shirman is the Managing Principal of The Shirman Group, which helps technology companies identify and pursue new sources of revenue and growth. Shirman Group clients are multi-billion dollar companies including BEA Systems and Computer Associates, mid-size vendors like Borland and Intervoice, and some early-stage ventures. Lilia's mission is to help clients broaden their reach to new industries, buyers, alliances, and geographies, and to foster collaborative execution within each client’s organization. "The Shirman Group provided us with expertise and craftsmanship of work that's hard to match," said Vadim Rosenberg, Director of Telecommunications Marketing at Wily. "I would readily recommend Lilia's services to anyone looking to strengthen strategic alliances or improve marketing effectiveness," said Mercedes Ellison, VP of global partner sales at Hyperion. You can find us on-line at www.shirman.com

Where is the Marketing Leadership?

We sit here in Silicon Valley in the hotbed of innovation and technology. The same fertile environment that in previous years spawned Fairchild semiconductors, Sun workstations and the Netscape browser has in its most recent incarnation given us iPods, Google, YouTube, Facebook, and Second Life, among others.

New markets and technologies create new marketing possibilities: viral and word of mouth marketing, banner ads and adwords, online communities and mass collaboration.

In terms of new marketing vehicles and innovative ways to apply marketing, compared to many parts of the US and the world, we in Silicon Valley are in no small measure leaders. But when it comes to looking at marketing as a science, a discipline, and a profession, where are we? When it comes time to train and develop marketing professionals at all stages of their careers, where are we? When the questions of corporate and social responsibility or ethics arise, where are we?

Many of us as individuals or in specific organizations are addressing some of these points on a day-to-day basis. What is not yet happening is the consolidation of our individual efforts into a collective, unified force that can drive positive change in the marketing and business community on a macro level. We are still driven by technology and reactive rather than proactive. New technologies appear first, marketing comes along as an afterthought and adapts to the new world.

We are not yet driving the process of setting goals and standards for marketing as a profession. We are not yet demonstrating to the world what it takes to be marketing leaders in the 21^st century—the skills, the acumen, the responsibility.

I believe we have not only a vested interest in this effort, but a natural responsibility to be the drivers and the leaders. In Silicon Valley, we understand the power of the network, the promise of social networking, the potential of mass collaboration. We reinvent the world almost on a daily basis. We are at the bleeding edge of new marketing innovation. Now we need to take our rightful place as leaders of the marketing profession as well.