InfoTech Marketing

1. Shailesh Vyas InfoTech Marketing

2. Course Outline • Objectives • To give the participants an insight into the marketing of information technology products and solutions • Scope • This course will give a perspective on the sales and marketing of hardware products, software products, communication products and services. The emphasis will be on the marketing of solutions. • Pre-requisites • Marketing I (Concepts & Environment) • Marketing II (Mix, Planning & Strategy) • IS For Management (Trim I) • Enterprise Planning Systems (Trim III) • Prescribed Text • Marketing High Technology by William Davidow • Internet References • Website of leading IT vendors • Websites of IT industry associations

3. Schedule

4. Assessment Pattern

5. Group Project Presentation

6. Contact Details

7. Spend Data Management solutions

8. Table of contents • Spend Data Management • What is it ? • Block Diagram of Solution components • The Need • The Benefits • The evolution of spend data management • Strengths & weakness of players involved • Future trend • Aspects of Marketing strategy for an SDM Player • Segmentation, Targeting, Positioning • The 4 P’s

9. Spend Data Management (SDM) – What is it ? The process of aggregating, classifying, and leveraging spend data for reducing costs and improving operational performance.

10. SDM - Block Diagram of Solution Components Robust Spend Data Management (SDM) Infrastructure – Adds Value to spend data Typical Spend analysis infrastructure

11. Cat. Code Category 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing 31171504 Ball Bearing Spend Data Management (SDM) – What is it ? • Accurate, Consistent and Granular Classification • Multilingual classification capabilities • Handles cryptic, abbreviated, mis-spelt descriptions • Does not rely on material groups for classification • Poorly structured Data (inconsistent or missing material definitions) • Incomplete data (cryptic, abbreviations, mis-spelt words) • Multilingual descriptions These issues make spend analysis a “Garbage in and Garbage out” exercise…. Turns the garbage into actionable information…

12. SDM - The Need • Accesses to timely & accurate, spend data offers invaluable intelligence on spending patterns which is critical for • Tracking spending • Firms can monitor employee and corporate spending and identify maverick purchases not made in compliance to existing contracts • Compliance • Aid in compliance with Sarbanes-Oxley by capturing and consolidating information on corporate spending for review and analysis. • Identification of potential savings • Identify savings by negotiation of volume discounts with a smaller number of preferred suppliers. Aberdeen estimates that industry is losing $260 billions each year due to an inability to organize and analyze spend data.

13. SDM – The Benefits ..1

14. SDM – The Benefits ..2 Category-wise drill down by supplier report … IT HW Spectrum

15. Non-automated • Spiraling cost • Inordinate time • Not repeatable • Inconsistent Classification Automated • Volume independent cost • Faster time to value • Repeatable • Consistent Classification SDM – The evolution ..1 Non-automated Cost Automated Critical volume Volume

16. Perceived Value Decision support system for: • Global category management • Measuring realized savings and compliance • Identifying hidden savings opportunities • Setting supply management discipline Perceived Value • Capture low hanging fruits in top categories • “test drive” Spend Analysis SDM – The evolution ..2 Spend Analysis: Evolution of systems and processes Approach high • Robust Data Warehouse infrastructure for repeatable analysis. • Efforts to move beyond elementary data cleansing Approach Enterprise Value • Consultant lead process • Localized effort • spend aggregation based on suppliers low Functionalities low high

17. Strengths & weakness of players involved

18. SDM – Future Trend • Estimated total vendor revenues • $43 million in 2003 • $80 million in 2004. • Revenues will grow rapidly in 2005 and 2006 then start to slow in 2007 and 2008 as competition drives down prices and the large enterprise market gets penetrated. Source : Forrester Research • Forrester Research estimates that 75 to 80 companies bought automated spend analysis products in 2003, and that the client base will double to around 150 in 2004. • That’s still a small portion of the Global 2000 market of large enterprises, so there’s still room for each vendor to grow without running into others. • By 2005 and 2006, market penetration will start to reach the point that growth will slow, prices will come down, and a vendor shakeout will occur. • One source of differentiation will be offering automated spend analysis as a low-cost, hosted service. This would facilitate adoption below the Global 2000.

19. Aspects of Marketing strategy for an SDM Player • Whom to talk (Target audience) • Purchase mangers of target companies • How to find them • Cold calls after researching websites for articles, interviews etc where in sourcing mangers talk about their SCM initiatives. • Various conferences , webcasts in purchasing / SCM space • What to tell them – The Value • We can help meet your savings target in sourcing initiatives. • How to tell them – Communicate the Value • Onsite visit with a customized solution presentation • Email white papers, recent developments / client wins of your company in SDM space • Reference calls with existing customers • customized business cases for prospects using a small slice of their spend data • Host conferences / webcasts for prospects

20. Marketing Strategy options for an SDM player ..1

21. Marketing Strategy options for an SDM player ..2

22. Thank You

23. Bibliography • Cecere, L. (2005). The Procurement and Sourcing Applications Report, 2004–2009. AMR Research Market Analytix Report: Market Sizing Series. • Leverage Spend Data for increased ROI from Spend Management applications. Retrieved from http://www.zycus.com. • A Step by Step Guide to Planning your Visibility Program. Spend Management Visibility 101. • AberdeenGroup. (2004). Best Practices in Spending Analysis. • Maiti, S. Spend Data Warehouse “on steroids”. Retrieved from http://www.zycus.com. • Bartels, A., Orlov, L. M., & Lambert, N. (2004). Spend Analysis: Key App, Few Vendors. • Web site: http://www.zycus.com • Web site : http://www.ariba.com/ • Web site :http://www.ketera.com/ • Web site :http://www.emptoris.com/ • Web site :http://www.verticalnet.com/home.asp

24. The Spend Data Management best practices approach Source: Aberdeen Group

25. DSV Solution Overview Classifies spend data and provides clarity on spend information

26. ID Description Supplier Name Category 5091 Kopierpapier weiß DIN A4/100g Kabuco Bürocentrum Printer or copier paper 9000 Kopierpapier weiß DIN A4/100g Kabuco Bürocentrum Desk supplies 2613 Agency Fee -AF--1 () FRANKLYN IDEAS Advertising agency services 2615 Agency Fee -AF--1 () FRANKLYN IDEAS Sales and business promotion activities 45X8 ID Redundant power supply unit per server node Description HEWLETT PACKARD COMPANY Supplier Name Notebook for lease Category 1589 HP - Hard drive - 36.4 GB - hot-swap - 3.5" - Ultra320 SCSI HEWLETT PACKARD COMPANY Notebook for lease 786 HP - Hard drive - 36.4 GB - hot-swap - 3.5" - Ultra320 SCSI HEWLETT PACKARD COMPANY Peripherals Category % Spend Bearings 40 A7896 Redundant power supply unit per server node COMARK CORP SALES INC Workstations or desktop computers Category % Spend Ball Bearings 30 . MRO Equipment 65% Roller Bearings 10 IT Equipment & Services 20% Valve 25 Ball Valve 20 Butterfly Valve 5 The Spend Data Issues 1.Classification Inconsistency - Fragmented spend view 2. Low Classification Accuracy – Erroneous spend view 3. Low Classification Granularity – Only Address low hanging fruits

27. With Whom? How much? On what? With Whom How much? On what? Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Spend Spend Spend Spend Spend Spend Spend Spend Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Buckets Spend Spend Spend Spend Spend Spend Spend Spend Spend Grainger 253.33 ?? Grainger 253.33 hand tools IBM IBM IBM IBM IBM IBM IBM IBM IBM $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ IBM IBM IBM IBM IBM IBM IBM IBM IBM $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Grainger Co. Grainger Co. Power tools Grainger Grainger Test Instruments Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies Office Suppies $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ IBM 19.25 ?? IBM 19.25 Hardware MRO MRO MRO MRO MRO MRO MRO MRO MRO $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ MRO MRO MRO MRO MRO MRO MRO MRO MRO $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ IBM Corp IBM Corp Consulting Intl Business M/C Production Production Production Production Production Production Production Production Production $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Intl Business M/C Production Production Production Production Production Production Production Production Production $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Software AT&T 22.68 ?? AT&T 22.68 Equipments Sales Sales Sales Sales Sales Sales Sales Sales Sales $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Sales Sales Sales Sales Sales Sales Sales Sales Sales $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ ATT ATT Networking AT&T AT&T Consulting Marketing Marketing Marketing Marketing Marketing Marketing Marketing Marketing Marketing $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Marketing Marketing Marketing Marketing Marketing Marketing Marketing Marketing Marketing $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ Oracle 33.62 ?? Oracle 33.62 Consulting Oracle Corp Oracle Corp Software Oracle Oracle Professional Services Category Management: A Perspective

28. End of Presentation