Questions to Ask Yourself before Investing in a New IT or Marketing System

Don Green

"The four most dangerous words in investing are:

'this time it's different.'"

Sir John Templeton

Gartner predicts that by 2015, IT will lose control of 35% of the IT spending. Meaning that people that really don't have a background in IT systems will make IT purchasing decisions.

            Gartner’s Top Predictions for 2012

            March 14th 2012

            Andrew Rowsell-Jones 

What questions should Executive Management ask before investing in new IT or marketing technology?

Organizations no longer have the luxury of not investing in new systems technology. They must invest just to keep current market share. 

Executive Management doesn't have many places to look for help.  Consultants don't know your business, or, even worse, want to sell you "their" solution. 

If Garner is right, then Executive Management faces even more issues regarding major system investments.

Many departments, like marketing haven’t looked at the new technology except in tactically – what can it do for me today and tomorrow, not what can it do for the company in the next five or ten years.

And while de-centralization brings benefits:

1) More flexible

2) More mission oriented

3) More focused to specific organizational needs

It also brings more potential issues to deal with:

1) Creates organizational silos

2) Systems are developed independently and not necessarily to meet the overall organization's strategy

3) It can drive up cost due to inefficiency and lack of alignment

The question for Executive Management should ask:  How do we decide what to invest in given the requirements of today's marketplace?

CASE STUDY  DATABASE MARKETING

British Telecom

BT held a monopoly on telephone service for over a century, with over a 95% market share. With deregulation in the 1990s, market share slipped, and slipped quickly, falling nearly 35 points in less than 10 years.

BT initially reacted slowly. Soon, it realized it had to respond, and respond effectively , or face being marginalized. It developed a promotional program including a highly targeted direct mail piece. Using it databases, it customized and personalized piece based on the information in the customer’s database record. The personalized piece was able to use the data in the database to make sure that every one of the million pieces mailed every week was different from every other piece. If the customers were already members of Friends and Family, the message would tell them what savings they were making. If they were not, it would encourage them to join. One page dealt with discount plans for which the customer was eligible. The page would tell the customer how much she could save per quarter by switching to a discount plan, based on her existing phone usage history. If the quarterly savings were too low, the text shifts to annual savings. If even that was too low, there would be no mention of the discount plan at all.

The targeted piece generates a response rate between 14% to 32%.

Database Marketing is considered "old technology" now. But surveys show less than 40% of F500 companies actually use it to create one on one marketing campaigns. And when used to created that one on one "relationship", it generates a high return on investment.

Database Marketing Institute, 2013