CIO Priorities for 2013 from 2,053 Industry Leaders

By Bill Freedman

Every year a Gartner survey summarizes global CIO priorities, and every year I take a very close look at the findings.

The most recent survey was conducted in the fourth quarter in 2012 and included 2,053 CIOs. These individuals span 41 countries and 36 industries. I like this annual survey because it is a well designed study into the priorities driving US$3.7 trillion of spending on information technology and personnel.

CIO Priorities: the Findings

Top 10 Business Priorities

Ranking

Top 10 Technology Priorities

Ranking
Increasing enterprise growth

1

 Analytics and business intelligence

1

Delivering operational results

2

Mobile technologies

2
Reducing enterprise costs

3

Cloud computing (SaaS, IaaS, PaaS)

3
Attracting and retaining new customers

4

Collaboration technologies (workflow)

4

Improving IT applications and infrastructure

5

Legacy modernization

5

Creating new products and services (innovation)

6

IT management

6

Improving efficiency

7

CRM

7

Attracting and retaining the workforce

8

Virtualization

8

Implementing analytics and big data

9

Security

9

Expanding into new markets and geographies

10

ERP Applications

10

One of my favorite parts of this survey is that the technology executives are asked about business priorities first. They may be propeller heads at their core, but they understand their primary task is to find ways to align technology with business initiatives and drive strategic results. As a result, top line growth, business expansion, cost control and personnel issues are clearly present in the business priorities. The only item that I’m surprised isn’t explicit ed stated in the business priorities is accelerating product cycles and decision-making.

The technology list is dominated by newer technology that has enough of a track record of delivering disruptive results. The heightened priority suggests that these investments are moving from lab experiments to broad deployment. Cloud and mobile are the talk of Silicon Valley; it’s also found, in my estimation, in 6 of the 10 priorities. Multiyear initiatives where the necessity has out-paced results are also on the list: Analytics, Security, Virtualization and ERP.

Large budget items like desktop hardware, software and support, which in many cases are the largest portions of annual budgets are not strategic topics in this years survey. Likewise, vendor relationships and outsourcing aren’t a priority this year as they’ve been in the past.

Takeaways

  • Its going to be a good year for technology in general as top line growth leads the list of priorities
  • Its not just that CIOs are spending on cloud and mobile, their organizations are benefiting from these technologies
  • Enabling agility from the bottom-up is a big opportunity. From mobile and cloud, to analytics and virtualization, and ERP and CRM, technologies that provide productivity leverage across the organization will be easiest to justify
  • Infrastructure investments won’t be slighted. Organizations will strive to move quickly, but with a strong foundation. Security, scalability and maintainability will be built into to major initiatives. This is a correction to previous years where organization were burned by having to spend on remediation and refactoring to fix mistakes of moving too fast.

What do you think? Comments welcome.

Analytical Rigor Trumps Big Data

By Bill Freedman

The Silicon Valley brain trust, from VCs to entrepreneurs to business executives, are all agog with the relatively new phenomenon of big data. It’s clearly an important technology trend at the intersection of internet’s ability to generate massive amounts of data and cost efficiencies involving the storage and processing large data sets.

Big Data

Image by Rachel Jones of Wink Design Studio using: Tagxedo.com.

Funds are flowing into many big data start-ups which are creating powerful systems and tools for enabling new types of decisions aided by big data collection, analysis, workflow and communication. Established tech companies are building connectors to big data systems. And, not to be left out, mainstream businesses are launching internal big data analysis projects.

The big data excitement is clearly a new phenomenon. Its roots come from applied mathematics, forecasting and econometrics. Statistical analysis has looked as data samples, built models, tested hypotheses and simulated outcomes for many years. Businesses have tested everything from pricing proposals to demographics to feature lists with applied math. Weather forecasts and evaluating baseball talent routinely use applied mathematics. Google’s successful business strategy is a triumphant use of applied mathematics.

What’s changing is that technology makes it efficient to collect the entire universe rather than samples. Size has its advantages. Analysis of larger samples improves accuracy. Collecting large samples quickly speeds decision-making.

But this is where we need to be careful. I believe that, in most cases, more value is created through rigorous analysis rather than collecting larger samples. While the cost of data collection is lower than ever, the labor pool capable of rigorous analysis remains fixed in size. Yes, these brains are increasingly working with larger data samples or the full universe.  Their tools and intellect are data size independent.

Invest in Analytical Rigor

Before jumping head-long into big data, I recommend investing in the brain power needed to do rigorous analysis. Analytical rigor is hard…and it takes a major investment of time, personnel and leadership to accomplish. This is a very different effort that making capital investments in computer hardware, software and processes. Creating a culture of analytical decision-making has paid off for Google and the Democratic National Committee.

Anyone can buy big data tools (heck, anyone can download Hadoop, R and many other big data management and analysis tools for free) and tell their investors they’re using big data. The missing piece that is the commitment to rigorous analysis, to building a team that has the brain power needed to collect the right data, to building valid predictive models that enable profitable decisions.

Once your organization excels at analytical decision-making, expanding into big data is a no-brainer. If you choose to invest in big data without having a foundation analytical rigor, results will likely be illusive.

Connect With Customers Through News: Instagram & Google Drive

By Bill Freedman

The news cycle from April 2012 is nearly over but two tech stories are capturing headlines and my imagination:

It’s pretty clear why these items are newsworthy with the mainstream press: large companies, large markets, large valuations. The press and public alike care about Facebook and Google, and these announcements demonstrate their industry power and offer guidance to future strategy.

My interest in these stories are a bit different. For me, these news stories provide an opportunity to connect with customers through current events. Bill Freedman’s Soon to be a Major Trend doesn’t pick winners, cover breaking news or expound on industry trends, but we do talk about persuasion, marketing and growing audiences. The Instagram and Google Drive news tie into principles that are near and dear to my efforts: focus and agility.

Instagram Succeeds With Focus

Instagram Succeeds with Focus

Instagram Succeeds With Focus

I have Instagram on my iPhone. I like the interface and have used it take many photos and to share a few photos with my social networks.

Instagram has a good product and an even better strategy. They focused on mobile photography sharing process for iOS. They innovated with simple-to-apply filters, social sharing and free distribution. They didn’t rush into obvious and difficult areas such as Android and video. Their iPhone app first shipped in October 2010, but they waited until April 2012 to ship on Android. They haven’t released a video app. May be they will in the future…I don’t know.

Focus didn’t mean they did only a little. It means what they did, they did very, vey well. Most will agree that their mobile app works well and the cloud component of their solution scaled well as they added more than 130,000 users per week.

Focus is a great strategy, especially when combined with a large market and product innovation. Focus takes significant management discipline. In a startup, the hard thing isn’t killing bad ideas. It’s killing all the good ideas you shouldn’t do right now. For Instagram the results are indisputable: their small team scored big!

Google Late to the Cloud Storage Party

Others More Agile than Google Drive

Others More Agile Than Google Drive

I’m a big fan and heavy user of Google products. They are a company that has done more to sieze the Internet opportunity and capitalize on the digital revolution than virtually any company on Earth.

Google Drive is a nice product. It delivers Dropbox-like cloud file storage and Box.net-like cloud content collaboration. I’ve used Google Drive sporadically for the past week. It works as expected and nicely integrates with Google Docs and Chrome.

I’m quite happy that I chose to work with the nimble Dropbox solution and didn’t wait for Google Drive. I first heard about Google Drive around 2007. Shortly thereafter a working product became available from Dropbox, which I started using for free. Dropbox succeeded quickly with a freemium cloud solution before most of us had heard of “freemium” or the cloud. My cloud sharing workflow is humming nicely with Dropbox and I see few advantages to selecting a new supplier for this service.

Kudos to Dropbox and Box.net for being agile, innovating, investing and executing with the “cloud of Google” hovering over their marketplace. An additional shout out goes to Synology DiskStation NAS and Apple Time Machine for enabling set-it-and-forget-it back up/restore for our home computers.

Their is an optimistic lesson that every start-up entrepreneur can learn from Google Drive. Chirs Sacca put it best in a tweet: In the end, my lesson learned again and again? Never count on a big company beating a startup. Never.

Measuring Sales Funnel Conversions

By Bill Freedman

Conversions in business-to-business marketing and sales processes are always exciting things. Amid the excitement, its important that the entire team shares a consistent understanding of how to measure sales funnel conversions.

This article lays out the three key performance metrics for conversions and why they are important. Along the way, you’ll learn the best practices to increase the leads of your businesses that many lead generation b2b companies implement.

Conversions

Measuring sales funnel conversions

Credit: Eyeview

Simply put, a conversion is where an individual progresses from a less engaged state to a more engaged state. Increasing levels of engagement correlate to some degree with relevance, trust and purchase intent–all good things.

The total number of conversions is important because they give a sense of the magnitude of activity in the sales process. And size does matter. Each member of the sales team needs a steady flow of conversions in their territory to stay productive and hit their numbers.

Conversion Events

Conversions events come at many different stages in the funnel and mark the moment that a conversion becomes measurable. Conversions happen in the mind of the prospect first, and the vendor learns of the change from direct communication or through behavior measured on the web site. Examples of conversion events include:

  • A customer sends a purchase order, converting a forecasted opportunity into a closed deal
  • A sales accepted lead (SAL) qualifies into an opportunity
  • A website visitor becoming an inquirya prospective customer visits a trade show booth
  • A prospective customer requests a product demonstration
  • A name in the marketing database, through automated scoring crosses the Marketing Qualified Lead (MQL) threshold, is passed to sales

The counts for each conversion event are important because they helps to identify bottlenecks and opportunities within the process. You need to know if you have enough lead development personnel in place to qualify incoming leads before they grow cold. Likewise, you need to make sure their is sufficient flow of MQLs for the number of quota-carrying sales staff. Not all conversion events are equally important to the sales process. Each organization needs to decide which conversion events are worth tracking and how various conversions events impact the sales funnel.

Conversion Rate

For each conversion event in your sales process, there is an an associated conversion rate.

Conversion rate =
# of Conversion Events
# of Conversion Event Attempts

The conversion rate for each conversion event is important as a measure of process efficiency. It takes a bit of experience with your lead generation techniques and sales processes to establish the “natural” conversion rates for various events. But once you have a benchmark, the next step is to look for ways to improve the conversion rates along the way.

Conversion rate improvements play a major role in profitability. If a particular ad campaign yields 10% more results, it drove more opportunities for the same budget. Likewise, if the same sales team is able to close 15% of MQLs instead of 10%, a nice percentage of the increased revenue flows down to the bottom line.

Getting  Sales Funnel Conversions Right

We’ve done a bit of math today but don’t forget that the real job is creating conversions. Conversions happen in buyers’ heads and are only counted when they hit the funnel. Defining the value proposition, making repeated offers, executing through the sales process is how you earn sales funnel conversions. The bulk of you investment needs to be focused on reaching out to new audiences and providing conversion-worthy content, products and experiences.

Tracking sales funnel conversions is very important because they often involve hand-offs from one person or organization to another. Hand-offs are an area where there is a heightened risk that something goes wrong. Best practices for hand-offs involve rules (either manual or automated) that ensure 100% of handoffs occur on a timely basis. What’s more, its not sufficient to hand-off a lead to sales to a “sales team;” it needs to be assigned to a specific person, typically based on a territory assignment. Another best practice is to measure the sales rep against a response-time SLA for newly assigned leads, as many kinds of leads get cold very quickly.

Both sales and marketing professionals still need to prioritize creation of new customers. Understanding the mathematics of sales funnel conversions helps you understand how the funnel comes together and where you can generate the most leverage for your business.

What is it Like to be Your own Customer?

By Bill Freedman

Häagen-Dazs strawberry ice cream. Ecco shoes. The New York Times. WordPress blogging software. We all have our favorite companies, products and services. Products that deliver exceptional value, services that are reliably great, and companies that are easy to business with.

haagen dazs strawerry ice cream

Photo credit: Haagen Dazs

Now look in the mirror: is your business as consistently excellent as your favorites? If you’re not sure, then you probably have work to do. After only a brief glance in the mirror, I buckled down and got to work.

Benchmarking Customer Experience

I started by taking stock of what I deliver, my uniqueness and the promise I offer. This was the easy part, because I get to define the playing field. Just as you can’t play tennis without lines and a net, you can’t benchmark your business without a measure of capabilities.

The next step was also easy. I examined my “first impression” touch points: my email footer, my voicemail greeting and my home page. Did they match the benchmark I set for my business? I made a few small adjustments to be more consistent, clear and customer-aware.

Finally I talked to customers, prospects and partners. I asked two direct questions:

  • How did our project improve your business?
  • Would you recommend my company to others?

I listened. I wanted to hear about numerical results. Was there more revenue, more leads, repeatable campaigns? I wanted to hear about problems that are now behind them and a clear path toward their exceeding their goals. And finally, I wanted to hear that they’d recommend me to colleagues and friends.

I got exactly the answers I wanted to hear. Honest answers about what we’d accomplished together. In addition to the good things I wanted to hear, I learned about rough spots and frustrations. In other words, I learned that the core value is solid, but there is room for improvement in multiple areas, as there are many popular business areas now a days like casino games, as sites like woo casino 2 specialize in this.

For me, the greatest take-away from this exercise is that I learned I need to be consistent at everything, not just at my core advantage. My customers want excellence everywhere, from an initial proposal to a final invoice, and from a second campaign to ad hoc phone advice. This makes a lot of sense. My favorite companies have a level of consistency and quality across multiple processes and multiple employees. My goals are not just helping customers succeed, but improving my business across all dimensions.

Walking the Walk

Let me be clear. I’m not advocating for perfect products or over-the-top money-losing service levels. I’m merely suggesting that it’s worth benchmarking customer experience and see if it meets your standards. Creating value is the core of what I do very well. By upping my game, I make my business one that my customers respect, rely on and recommend to others.

How Efficient is Your Marketing?

By Bill Freedman

The famed retail pioneer from the late 19th century (and fellow Philadelphian) John Wanamaker reportedly said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Marketers of all stripes wrung their hands while reluctantly accepting Wanamaker’s findings for nearly a century after his rise to success.

Marketing has come a long way since Wanamaker. With online advertising such as Google AdWords, all sorts of advanced bidding strategies and closed-loop click tracking, the new mantra is “43.745% of my advertising is wasted; but tomorrow’s experiment will give me the insight to improve conversion rates and reduce spend.”

So the question on my mind today is: are today’s marketing expenditures more efficient than a century ago?

The ability to measure digital advertising and customer behavior provides marketers with an extensive array of data on customer behavior and advertising effectiveness. But let’s not kid ourselves: having data is different than using the data to improve outcomes, and few marketers have the combination of quantitative skills to analyze results and creative skills to devise new online experiments that improve outcomes.

Advertising and promotion budgets continue to be a significant business expense. Heck, businesses may even be spending more today than in Wanamaker’s day–but I’ll leave that question to my colleagues in academia.

The paradox is clear. Newly available data enables more efficient promotional spends. But promotional spending continues to rise.

Marketing in the Age of Experimentation

Here are a few ways you can improve your marketing efficiency in the age of experimentation:

  • Data Trumps Gut. Are you really sure you picked the optimal ad copy, keywords and subject line? I used to think I was smarter and more creative than the average marketer. Now I don’t think that at all. I trust the data to tell me, not how smart I am, but which campaign will yield the best outcomes. Gut, or should I say experience, helps your craft experiments. Data helps you make decisions.
  • Fail Fast. Experiments should last just long enough to provide you with a large enough sample to make valid decisions. What is amazing is that a test could be completed by running an AdWords campaign for a few days and costing only a few hundred dollars. This represents a dramatic shift from the the old “reach and frequency” methods of designing ad campaigns.
  • Focus on Outcomes. In Wanamaker’s time, advertising generated awareness, brand preference and (occasionally) immediate revenue. Measuring the revenue contribution from advertising was difficult. In the age of experimentation, advertising generates clicks and conversions. These clicks and and conversions can be tracked all the way to revenue. When you can find a campaign that consistently produces more revenue than it costs to create a customer, you are simply printing money!

Data is a marketer’s friend, but it has limits. Before you start replacing the copywriters and entrepreneurs in your marketing department with mathematicians, remember that translating product features into customer focused benefits, creating messages that resonate with customers and producing images that inspire action are powerful skills. John Wanamaker, if he were alive today, would probably hire the same marketing professionals he did in the past…as long as they traded in their egos for calculators.