sales, marketing and technology

A report from the Economist Intelligence Unit

Sponsored by

SAlES, mARkEtIng and tEcHnology: tackling the digital challenge

Sales, marketing and technology: Tackling the digital challenge

1 The Economist Intelligence Unit Limited 2014

Contents

About the research 2

Executive summary 3

Running to stand still 4

More influence, more control 7

Where and when is IT needed? 9

A new understanding 11

Conclusion 13

Appendix 14



the survey, the EIU conducted three in-depth interviews with sales and marketing experts, as well as substantial desk research.

We would like to thank the following interviewees for their comments and insight:

Kirsty Andrew, head of sales, Cosworth

Matteo Battaini, vice president of global marketing, Pirelli

Thomas Brown, associate director of research and insights, Chartered Institute of Marketing

The report was written by Jessica Twentyman and edited by Pete Swabey.

About the research

Sales, marketing and technology: Tackling the digital challenge is an Economist Intelligence Unit (EIU) report, sponsored by Oracle, which examines the use of technology by sales and marketing professionals and their level of autonomy in IT decision-making.

The report is one of a series based on a survey of 272 senior, Europe-based executives and senior managers by the EIU, and it examines the answers of 50 survey respondents with responsibility for sales and 34 respondents with responsibility for marketing. More than half (61%) of sales and marketing respondents work for companies with annual incomes over US$500m, and 54% are of C-level or greater seniority. In addition to



Executive summary

In the age of the digital customer, empowered with technology such as smartphones and social media, sales and marketing departments are under pressure to adapt to a new way of doing business. As a result, they are taking greater control over technology decisions that affect them. At the same time, however, they seek closer collaboration with their counterparts in the IT department and look to them to take charge when it comes to solving deeper technical challenges of data security, data quality and data integration.

This report examines the use of technology by sales and marketing professionals and their level of autonomy in IT decision-making. In particular, it looks at the evolving relationship between the sales and marketing functions and the IT department. It is based on a Europe-wide survey of senior sales and marketing executives, desk research and in-depth interviews.

The key findings are as follows.

l As digital channels change the way in which every organisation interacts with its customers, sales and marketing need a new level of understanding of technology and how best to exploit it. Roughly half of sales and marketing leaders believe that their business

processes are now more reliant on technology than those in other areas of the business.

l Mobile technology, social media and digital marketing are seen as the technology trends driving most change in the way these functions work. Each of these technologies provides new channels through which to engage with customers.

l Sales and marketing leaders are relatively confident of their departments ability to manage technology, and they expect to have more of a say in technology decision-making in future. This, they hope, will lead to technology that more closely meets their needs.

l At the same time, they look to the IT department to take the lead on complex issues such as data integration. Sales and marketing executives are broadly content with the service they receive from their IT departments.

l That said, improving collaboration with the IT department will prove vital if businesses are to capture the digital opportunity strategies that remove divisional barriers are recommended.



Running to stand still1Sales and marketing were once seen as primarily intuitive pursuits. But as digital technology has permeated our personal and commercial lives, the customer relationship is now mediated by all manner of gadgets, systems and information services. Those business leaders who are charged with managing that relationship have a lot to take on boardand they can no longer rely on intuition alone.

Social media, for example, is a transformational medium that is replacing broadcast media as the primary way in which customers learn about products and services. It allows customers to share their views with their peers, changing the dynamics of market sentiment. Mobile technology, meanwhile, provides them with an

immediate link to brands, which they carry with them wherever they go. And the insight needed to promote products and services comes not from traditional surveys and focus groups, but from deep analysis of their behaviour across digital channels.

Simply put, when it comes to marketing and selling to the digital customer, businesses are running just to stand still.

Its no surprise, then, that in a survey of senior executives in sales and marketing, conducted by The Economist Intelligence Unit, 50% of marketing executives and 46% of sales executives say that they believe their business processes are more reliant on technology than those of most other departments in their organisation .

(The view from the IT department is more mixed. When asked which business unit they consider to be the most reliant on technology, 26% of IT executives and senior managers cite marketing above all others. However, sales come much further down the list with just 8% of the vote, above only HR.)

The pace of technological change has proved extremely disruptive to most sales and marketing organisations, according to Thomas Brown, associate director of research and insights at the UK-based Chartered Institute of Marketing (CIM). Greater proximity to the customer sounds great on paper, but it demands a level of attentiveness and responsiveness that theyve never had to demonstrate before. Theres no point in starting a conversation if you then walk away and are not there to respond when a customer comes back

How important is technology to your business units processes? (% of respondents)

Chart 1

Source: The Economist Intelligence Unit.

46%46%

8%

Sales Marketing

Our business processesare more reliant ontechnology than thoseof most otherdepartments in theorganisation

Our business processesare no more or lessreliant on technologythan those of most otherdepartments

Our business processesare less reliant ontechnology than thoseof most otherdepartments in theorganisation

50%36%

14%



to you with a comment, an enquiry, an issue or a criticism.

This is just as true for business-to-business (B2B) sales and marketing as it is for business-to-consumer (B2C) activities, Mr Brown adds. I find it tiresome when businesses say that social, for example, has no place in B2B. Thats a load of nonsense: the reality is that B2B is still built on human interactions. We may not be talking about the same mass markets of the B2C world, where Unilever, for example, is speaking with an audience of millions. A B2B organisation might have only 100 buyers, but theyre not absent from these new digital channels.

Kirsty Andrew, the recently appointed head of sales at Cosworth, a UK-based engineering company, agrees. We may sell our products through distributors, and the model we follow may be different to organisations that sell direct to customers, but our aims are the same: to

develop appealing campaigns and promotions, to improve our service to customers, to have the products they want in stock when they want to buy them, to keep them coming back to us, she says.

Were putting more and more effort into ensuring that our interactions with customers on Twitter and Facebook are more actively managed as part of the sales and marketing process. First, its about responsiveness, and second, its about being cognisant of the fact that a dissatisfied customer can have a big impact. You never want unhappy customers, clearly, but theres an extra dimension now, when they have an instant way to express their dissatisfaction, publicly and widely.

So which technologies are having the most impact on the way sales and marketing executives work? Mobile technology takes centre stage, topping the list with 61% of executives in both

Sales Marketing

Which of the following technologies, if any, are changing the way your business unit works? (% of all respondents)

Chart 2

Big data


Cloud computing

Digital marketing

E-commerce

Internet of things

Mobile technology

Social media

Software as a service

Web publishing

55%

33%

20%

61%

51%

35%

33%

36%

42%

28%

61%

50%

33%

31%

42%33%

33%49%



sales and marketing pointing to it. For sales executives, digital marketing comes next, cited by 55% of respondents. Interestingly, it scores poorly with the marketing executives surveyed, with only 36% saying digital marketing is changing the way their business unit works. This may be because marketing professionals may associate the term with email campaigns and

websitestechnologies they have long had to deal with.

Executives from both sales and marketing agree, however, on the impact the social media are having: they are cited by 51% of sales executives and 50% of marketing executives as a driver of change in the way they work.



Given their growing reliance on technology, it makes sense that sales and marketing executives expect to have more of a say in technology-related decisions in future. In this regard, though, sales and marketing are not in harmony.

More than four out of five respondents from the sales function (81%) believe they will have either slightly or significantly more influence over technology-related decisions in the next two to three years. By contrast, just 54% of marketers believe the same. This is a surprising finding, given recent IT analyst predictions that marketing departments may soon be spending more on technology than the IT department itself.

Sales and marketing are in closer alignment when it comes to confidence in their departments ability to manage technology78% of sales

More influence, more control2respondents describe themselves as very or somewhat confident, as do 75% of marketing respondents.

How will greater autonomy affect the way in which sales and marketing professionals use technology? For sales leaders, the most commonly cited benefits are faster access to technology and a greater chance that the technology they implement will meet their needs, both ticked by 46% of respondents. For marketers, improved return on technology investments is the number one benefit, with 50% of the sample.

But there could be downsides to increased levels of influence and control: for sales executives, the threat of increased workload is the primary concern, cited by 48%. The marketing leaders, by contrast, are more concerned with the

Sales Marketing

How do you expect the way in which technology decisions that affect your business unitare made will change in the next two to three years? (% of all respondents)

Chart 3

My business unit will havesignificantly more influence


My business unit will haveslightly more influence

There will be no change

The IT department will haveslightly more influence

The IT department will havesignificantly more influence

10%

6%

2%

31%

3%

11%

23%29%

31%52%



drawbacks that threaten the information they handle, perhaps reflecting the increasingly data-driven nature of their work. Poor integration of departmental applications with existing systems, deterioration of data quality and information security risk are each cited by 45% of marketing leaders in the survey.

These concerns, in particular, shed light on what it is that departmental heads will look to the IT department to provide in future.

How confident are you in your business units ability tomanage technology? (% of respondents)

Chart 4


Sales Marketing

48% 39%

36%30%22%18%

4% 3%

Veryconfident

Somewhatconfident

Neutral Somewhatunconfident



In particular, she says, they are swift to provide assistance in matters relating to data. If were looking at analysing data in a particular way, for example, to help us look more closely at customers, or margins, or the success of some promotion weve run, then theyre very good at supporting us by writing the programmes to produce reports in a format we can use.

Indeed, data integration is one area in which Ms Andrew expects IT to provide leadership. At a time when everyone in sales wants to work smarter, not harder, we look to IT to provide us with the integration we need because, when it comes to providing us with a joined-up view of customers and sales and products and channels, IT has to be the guardian of the bigger picture.

While they may have more of a say when it comes to customer-facing technologies, sales leaders like Ms Andrew have no interest in getting involved in the back-end plumbing. I dont want to be worrying about infrastructure requirements, she says. I want to be selling.

Matteo Battaini, vice president of global marketing at Italian tyre manufacturer Pirelli, has a similar view, namely, that the IT departments role in providing a data platform that supports the organisation is irreplaceable.

Without integration and standards, youve got a big problem, he says. You want everyone to know where to find data and to know that its the same data as their colleagues can seebut well leave the deeper technical analysis of how that can be achieved to our colleagues in the IT department.

As sales and marketing take more control over technology decision-making, their relationship with the IT department will inevitably change.

Both departments are relatively satisfied with the service they receive from the IT department. When asked to what extent they agree with the statement that the IT department is able to provide my business unit with the technology it needs, in sales, 48% agree and 22% strongly agree. In marketing, 44% agree and 25% strongly agree.

Ms Andrew is one sales leader who is happy with what the IT department can provide: Here at Cosworth our IT department is very responsive to our needs.

Where and when is IT needed?3

To what extent to you agree with the statement The ITdepartment is able to provide my business unit with thetechnology it needs? (% of respondents)

Chart 5


Sales Marketing

Stronglyagree

Agree Neutral Disagree Stronglydisagree

48% 44%

26%22%20% 18%

12%8%2%



functions and their counterparts in IT are incredibly unproductive. The reality with digital is that it isnt a marketing problem, or an IT problem, or a corporate strategy problemits all of those things.

Smart organisations that we talk to recognise that its about convening the right people around the table, from whatever part of the business theyre from, in working groups in which marketers play a leading role.

This suggests that collaboration between sales, marketing and IT is the real success factor when it comes to engaging the digital customer.

He also looks to the IT function to provide insight into where technology is leading. Understanding the speed of evolution in the technology market is their job, he says. IT has a lot of skills and competence when it comes to tracking the development of new products and capabilities. If they dont know whats available out there, then the whole company cant stay up-to-date.

In truth, of course, the challenge of exploiting technology to grow sales is not going to fall neatly into the purview of one department or another. As Mr Brown of the CIM explains, discussions about the ownership of various responsibilities between sales and marketing



Respondents from sales and marketing functions diverge on whether collaboration with IT is improving: 81% of marketing leaders agree that it is, a higher proportion than any other business unit, but only 68% of sales leaders believe so.

At Pirelli, Mr Battaini has no complaints with the level of collaboration he enjoys with the companys chief information officer, Alessandra Banfi. After all, he says, the two have been working together since 1996, during which time theyve jointly steered the implementations of a major enterprise resource planning (ERP) suite, various decision-support systems and a range of business intelligence and data warehousing initiatives. Its been a very productive partnership over many years, says Mr Battaini.

Mr Battaini is keen to see this level of partnership

A new understanding4replicated throughout the sales and marketing function. To that end, he has established specialist project management teams that bring together representatives from sales and marketing and IT to work together on technology projects. A rich mixture of expertise is needed to create an organisation that can really get the most out of newer sales and marketing technologies, he explains.

Its the kind of approach that the Mr Brown heartily endorses. Indeed, he would advise sales and marketing heads to go even further down this path.

Id be putting in place a buddy scheme, where job-shadowing takes place between individual members of the marketing and IT staff, so that they meet up regularly, attend each others meetings, share ideas. Id consider secondments, where a significant investment in digital marketing also involved someone from IT being embedded within the marketing function for the duration of the project. Id be cross-training between the two functions. Its all about raising the understanding on both sides, he says.

Others, particularly sales respondents, would seem to agree with that course of action [Q9]. In the survey, 56% of sales executives say that appointing technology specialists within their own business unit would enable them to manage IT better, which is notably higher than the survey average of 46%. This is considered more important by sales respondents than staff training (cited by 52%) or devising a departmental technology strategy (50%).

To what extent do you agree with the statement Collaborationbetween my business unit and the IT department is improving? (% of respondents)

Chart 6


Sales Marketing

Stronglyagree

Agree Neutral Disagree Stronglydisagree

59%44%

24%24%22%

15%8% 3%2%



For Ms Andrew at Cosworth, however, what is most important is that sales and marketing and IT work on building up a common language with which to communicate. As sales professionals, theres an onus on us to speak the language of the customer in order to make a saleso we inevitably get frustrated if, when speaking to someone from the IT department in our own organisation, the same kind of effort isnt made.

She has seen that situation before at previous employers, and it is not one she is keen to

Sales Marketing

Which of the following do you think would help your business unit manage technology better?Tick all that apply (% of all respondents)

Chart 7


Staff training

Appointing technologyspecialists within thebusiness unit

Devising a departmentaltechnology strategy

Giving responsibility fortechnology back to theIT departmentHiring people withtechnology experiencefor non-specialist roles

Improving collaborationwith the IT department

42%

40%

42%

52%

19%

28%

53%

44%

39%56%

42%50%

encounter again. Its totally avoidable. We just have to interact intelligently between our departments to get the outcomes that the whole company needs.

The digital challenge is huge for everyone, Ms Andrew adds. This is our best chance of success.



Conclusion

New digital technologies are fundamentally changing the way in which the sales and marketing departments function. This is forcing these departments to become more involved in technology, and as a result they expect to have a greater say in future.

However, they also believe that close collaboration with the IT department is a

necessary part of being able to interact with customers through new channels.

While there are some functions, such as data integration, that will always fall to the technology specialists, strategies that seek to remove the organisational barriers between departments are most likely to deliver success in the digital age.



Belgium

Denmark

Finland

France

Germany

Gibraltar

Ireland

Italy

Latvia

Lithuania

Netherlands

Poland

Portugal

Spain

Sweden

Switzerland

United Kingdom

20

412

20

2618

03

2018

23

20

43

49

03

20

1612

20

03

60

818

Sales Marketing(% of respondents)In which country are you personally located?

Appendix: Survey results



Agriculture

Automotive

Construction & civil engineering

Telecommunications

Financial services

Government (ex health and education)

Education

Healthcare and pharma

IT

Media

Manufacturing

Mining

NGO

Retail

Services

Transport, logistics and distribution

Power & utilities

Real estate

Oil & Gas

Technology

Biotechnology

Consumer ex retail

00

40

83

23

169

00

26

26

06

00

20

26

00

812

615

43

818

143

40

00

123

69

Sales Marketing(% of respondents)In which of the following sectors do you work?



1

2 to 5

6 to 10

11 to 25

More than 25

1835

2629

146

83

3426

(% of respondents)In how many countries does your company operate, including the country of headquarters?

Sales Marketing

Less than $5m

$5m to $10m

$10m to $50m

$50m to $100m

$100m to $250m

$250m to $500m

$500m to $1bn

$1bn to $5bn

$5bn to $10bn

$10bn or more

412

03

23

03

1618

812

2027

2612

63

186

(% of respondents)What is the approximate global turnover (sectoral budget if public sector) of your organisation?

Sales Marketing



Board member

Senior partner

CEO or equivalent

CFO or equivalent

CRO or equivalent

CIO or equivalent

CMO or equivalent

Other C-suite

Senior director, VP or equivalent

Director or equivalent

Head of business unit

Head of department

Manager

Consultant

Student

Not currently employed

Self-employed

Retired

29

20

212

00

00

00

00

00

00

450

286

109

289

00

206

40

00

00

(% of respondents)How would you describe your current job level?

Sales Marketing



Our business processes are more reliant on technology than those of most other departments in the organisation

Our business processes are no more or less reliant on technology than those of most other departments

Our business processes are less reliant on technology than those of most other departments in the organisation

4650

4636

814

(% of respondents)How important is technology to your business units processes?

Sales Marketing

Strongly Agree Agree Neutral Disagree Strongly Disagree

It is easier for my business unit to buy technology directly from suppliers than through the IT department

Consumer technology provides better functionality than the IT department can provide

Younger employees are demanding greater control over technology

My business unit has experienced difficulty as a result of taking greater control of technology

Collaboration between my business unit and the IT department is improving

The IT department is able to provide my business unit with the technology it needs

The technology expertise among staff in my business unit is growing

620

2

2

61630

2

2

1830

283016

3218

8343818

8

8

22

426

44

2048

24

22

8145820

(% respondents)

Sales: How do you expect the way in which technology decisions that affect your business unit are made will change in thenext two to three years?

The IT department is able to provide my business unit with the technology it needs

Collaboration between my business unit and the IT department is improving

My business unit has experienced difficulty as a result of taking greater control of technology

It is easier for my business unit to buy technology directly from suppliers than through the IT department

Consumer technology provides better functionality than the IT department can provide

The technology expertise among staff in my business unit is growing

Younger employees are demanding greater control over technology

121844

31559

26

24

29352412

62635266

621243218

665929

312352921

Strongly Agree Agree Neutral Disagree Strongly Disagree(% respondents)

Marketing: How do you expect the way in which technology decisions that affect your business unit are made will change inthe next two to three years?



Communications service selection

Data analysis

Data management

Device selection

Information security

Software development

Software selection

Technology project management

Technology support

Web content management

4941

5147

5547

3338

3332

3726

3341

2729

3129

4129

(% respondents)

Which of the following capabilities do you believe your business unit needs internally? And which does it currently have?My unit needs internally:

Sales Marketing

Communications service selection

Data analysis

Data management

Device selection

Information security

Software development

Software selection

Technology project management

Technology support

Web content management

2831

4049

3849

4026

3837

4346

3846

3837

2829

4751

(% respondents)

Which of the following capabilities do you believe your business unit needs internally? And which does it currently have?My unit currently has:

Sales Marketing



Better return on technology investments

Create a better working environment

Faster access to technology

Improved ability to grasp technology-related opportunities

Improved control of technology cost

Improved departmental performance

Reduced pressure on IT department

Technology more likely to meet our needs

3650

2828

4625

3636

2025

3442

3425

4644

(% of respondents)What, if any, do you believe are the benefits of your business unit having more control over technology?

Sales Marketing

Deterioration of data quality

Higher risk of technology failure

Higher technology cost

Increased workload

Inferior technology services

Information security put at risk

Poor integration of departmental applications with existing systems

Worse return on technology investments

3845

3818

3527

4839

4024

3845

4045

2118

(% of respondents)What, if any, are the downsides to your business unit having greater control of technology?

Sales Marketing



Very confident

Somewhat confident

Neutral

Somewhat unconfident

Not at all confident

3036

4839

1822

43

00

(% of respondents)How confident are you in your business units ability to manage technology?

Sales Marketing

Appointing technology specialists within the business unit

Devising a departmental technology strategy

Giving responsibility for technology back to the IT department

Hiring people with technology experience for non-specialist roles

Improving collaboration with the IT department

Staff training

5639

5042

4219

4028

4253

5244

(% of respondents)Which of the following do you think would help your business unit manage technology better? Tick all that apply

Sales Marketing



My business unit will have significantly more influence

My business unit will have slightly more influence

There will be no change

The IT department will have slightly more influence

The IT department will have significantly more influence

2923

5231

1031

63

211

(% respondents)

How do you expect the way in which technology decisions that affect your business unit are made will change in the next twoto three years?

Sales Marketing

Big data

Cloud computing

Digital marketing

E-commerce

Internet of things

Mobile technology

Social media

Software as a service

Web publishing

3342

4933

5536

3342

2028

6161

5150

3533

3331

(% of respondents)Which of the following technologies, if any, are changing the way your business unit works? Tick all that apply

Sales Marketing

While every effort has been taken to verify the accuracy of this information, the economist intelligence Unit ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.

lOndOn20 cabot Squarelondone14 4QWUnited kingdomtel: (44.20) 7576 8000Fax: (44.20) 7576 8500e-mail: [email protected]

neW YORk750 third avenue5th Floornew York, nY 10017United Statestel: (1.212) 554 0600Fax: (1.212) 586 1181/2e-mail: [email protected]

hOng kOng6001, central Plaza18 harbour RoadWanchai hong kongtel: (852) 2585 3888Fax: (852) 2802 7638e-mail: [email protected]

geneVaRue de lathne 321206 genevaSwitzerlandtel: (41) 22 566 2470Fax: (41) 22 346 93 47e-mail: [email protected]