ITSMA Budget Study 2011 Abbreviated Summary

Services Marketing Budgets and Benchmarks:2011 Budget Allocations and TrendsJanuary 2011Abbreviated SummaryPrepared by:Julie SchwartzSenior Vice PresidentResearch and Thought LeadershipITSMAB022SS

Table of Contents Slide Key Trends 3 Survey Methodology and Demographics 4 Survey Highlights 9 Appendix: Table of Contents for Services Marketing Budgets and 23 Benchmarks: 2011 Budget Allocations and Trends, January 2011 Appendix: Definitions Used in This Report 24ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 2

Key Trends ITSMA members are projecting  Marketers are investing in double-digit services revenue online and social media growth marketing, which are critical to Services marketing budgets, improving relevancy after reaching an all time low as  Despite client desire for greater a percentage of revenue, are intimacy, marketers are returning to historical levels: spending less aggressively on between 1% and 2% of revenue programs at the later stages of Half the survey respondents the buying process also anticipate marketing staff  To achieve better buyer increases relevancy and client intimacy, Although growing in marketers need to re-examine importance, social media is still marketing spending allocation a small percentage of the and invest in talent and marketing budget systems to support an expanded marketing focusITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 3

Methodology Online Web-based survey Survey invitations were emailed during December 2010 and January 2011 to ITSMA member and select non-member companies 46 representatives from 45 companies responded Number of Companies Number of Companies Response Invited to Participate Responded Rate 101 45 45%Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 6

ITSMA 2011 Budget Allocations and Trends StudyQuality Control Participation by invitation only One response per marketing organization All respondents screened for: – ITSMA member marketing community relevance – Budget authority Rigorous post-data collection cleaning – Validate responses – Check for consistency – Remove outliersITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 7

Study Participants46 respondents from 45 companiesAlcatel-Lucent KPMGAtos Origin Which of these categories best describes LenovoAvanade, Inc. your industry subsector? Microsoft CorporationAvaya % of Respondents (N=46) Nokia SiemensAviat Networks NetworksBlack & Veatch Northrop GrummanBT OracleCA Technologies Other* (11%) PatniCapco Philips Healthcare Network systems and Rimini Street, Inc.CapgeminiCGI solution provider (7%) SAPCisco SBS GroupCognizant Telecommunications Professional Siemens EnterpriseCompuCom services provider (9%) services CommunicationsCSC firm (52%) SITA Computer systems SteriaEMCEvent 360 and solutions SymantecFujitsu provider (9%) Talent PartnersGeehan Group Tata ConsultancyHewlett-Packard Software solutions ServicesIBM Global Business Services provider (13%) The TriZetto Group Wipro TechnologiesInfosys Technologies Wood MackenzieInfotech XeroxKPIT Cummins Infosystems Ltd.*Office equipment, industrial automation, test and measurement, etc.Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 8

ITSMA members are projecting growthWhat was the percentage growth rate of your company or division revenue?Mean % of Growth FY2010/2009 FY2011/2010 (est.) 15.7 13.7 12.2 12.4 10.5 9.5 9.5 8.0 Worldwide North America EMEA Asia/Pacific Growth Rate Growth Rate Growth Rate Growth Rate (N=29) (N=16) (N=15) (N=13)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 10

With marketing budgets also projected to grow, marketerscan increase focus on relevancy and intimacy whilemaintaining investments in lead generation and managementIn FY2011, do youexpect your 15%marketing budget Averageto increase, decrease: 8%decrease,or stay the same 59%when compared toFY2010?% of Respondents Average 26% increase: 15%(N=46)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 11

Services marketing budgets, after reaching an all time lowas a percentage of revenue, are returning to historicallevels: between 1% and 2% of revenueWhat was the size of your annual marketing budget as a percentage ofrevenue? Mean % of Revenue FY2010/2009 FY2011/2010 (est.) 1.6 1.6 1.4 1.3 1.3 0.9 1.0 0.8 Worldwide North America EMEA Asia/Pacific (N=33) (N=21) (N=19) (N=16)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 12

Marketing staff is also expected to growWhat changes doyou anticipate in 11%your marketing Averagestaff in FY2011? decrease: 6%Will the number ofFTEs (full-time 53%equivalents)increase, decrease,or stay the same? Average 36% increase: 8%% of Respondents(N=45)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 13

Marketers are increasing their spend on demandgeneration, sales enablement and contentgenerationWhat are your spending plans in FY2011 for the following budget categories?% of Respondents (N~44) Demand generation and lead management 64 4 31 Sales (channel) enablement and support 58 2 40 Content development 52 7 41 Brand and communications 49 18 33 Offering management 47 9 44 Business partners/alliances 45 3 53 Strategy and market planning 40 4 56 Market intelligence/competitive intelligence 34 7 59 Customer satisfaction/relationship management and monitoring 33 12 56 Marketing operations 20 15 65 Other 20 25 55 Increase Decrease Stay the SameSource: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 14

Marketing still needs to feed the pipeline, but we arestarting to see a shift in priorities to also encompassclient intimacy Rank 2011 2010 2009 2008 1 2 4 3 Generating demand 2 1 1 2 Enabling the sales force 3 5 2 1 Differentiating/re-positioning the company, brand, or offerings 4 3 7 5 Developing thought leadership content that drives business 5 7 9 11 Measuring marketing’s impact on the business Increasing focused marketing programs for vertical/industry 6 6 6 10 markets 7 16 11 8 Increasing use of Account-Based Marketing Deepening customer insight to improve segmentation and increase 8 17 17 12 personalization Building or enhancing a more effective lead management and 9 27 – – nurturing model Increasing cross-divisional marketing programs and messaging 10 – – – (minimizing marketing silos)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2007, 2008, 2009, 2010, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 15

Marketers intuitively recognize the need toincrease relevancy and intimacyWhich of the following marketing skills do you believe are essential to yourorganization’s future success? % of Respondents (N=45) Client focus 71 Vertical market/industry expertise 64 47 Business development/sales-driven 44 Digital media 42 Collaboration 38 Strategic planning 36 Analytical 29 Cross-silo systems thinking 27 Creativity | Project management 20 Writing 18 Research | Ability to experiment and adjust course 4 Technology | OtherNote: Up to 5 responses allowed.Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 16

Marketers are investing in online and social mediamarketing, which are critical to improving relevancyHow do you anticipate the components of the marketing mix changing inFY2011? Will spending increase, decrease, or stay the same?% of Respondents (N~40) Online marketing 82 5 14 Social media 81 5 14 Direct marketing 48 28 25 Collateral 36 27 36 Industry analyst relations 35 65 Private events, seminars, and conferences 35 14 51 Public/press/media/community relations 30 8 63 Advertising 21 21 59 Public trade shows 12 54 35 Sponsorships 6 41 53 Other 26 15 59 Increase Decrease Stay the SameSource: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 17

…But online and social media marketing are still asmall percentage of the total marketing budget 4.3% Interactive/Online/Digital Marketing How was your Interactive/Online/Digital Marketing spend allocated across the following categories?Total Marketing Mean % Interactive/Digital Marketing Budget (N=30) Budget 22 23 Other 7 11 8 Mobile marketing and apps 8 8 Social media 7 9 9 Client extranets or Microsites 9 13 Intranet and internal collaboration 18 14 Webinars Search engine optimization (SEO)/paid search/online advertising 37 33 Email, electronic newsletters Corporate Website FY2010 FY2011 (est.)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 18

Despite client desire for greater intimacy, marketersare spending less aggressively on programs at thelater stages of the buying processWhat are your spending plans in FY2011 for the following budget categories?% of Respondents Increasing Spending (N~41) Demand generation and lead management 67 Sales (channel) enablement and support 57 Brand and communications 50 Content development 49 Offering management 45 Business partners/alliances 43 Strategy and market planning 43 Market intelligence/competitive intelligence 34 Customer satisfaction/relationship management and monitoring 30 Loyalty programs, senior client Marketing Operations 19 engagement programs, service quality and client satisfaction Other 21 monitoring, reference management, customer councils, user group or community management Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 19

Nevertheless, budget is flowing in the right directionHow is your marketing budget (including staff) allocated among these activities?Mean % (N=31) 23 27 Retention, loyalty, and growth 29 28 Pipeline progression 48 45 Lead generation FY2010 FY2011 (est.)Source: ITSMA, Budget Allocations and Trends: Key Metrics Survey, 2011ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 20

In 2011, services and solutions marketers must seize the opportunity to increase buyer relevancy and client intimacy to achieve trusted advisor status Stage 1. EPIPHANY Stage 2. AWARENESSRelationship Stage 1. Stage 2. Stage 3. Stage 4. Stage 5. Stage 6. Stages EPIPHANY AWARENESS INTEREST CONFIDENCE LOYALTY TRUST Need Search Alternative Selection and Post-Purchase Partnership Buying Recognition Evaluation Purchase Evaluation Process Clarify Explore Explore the Finalize the Select the Evaluate possibilities objectives short list provider satisfaction mutually and solution beneficial Identify a specifications Solicit Negotiate Measure initiatives need or proposals the contract value opportunity Identify delivered Provide Evaluate Ultimate alternatives (short list) alternatives sign-off references and advocacy Stage 3. INTEREST Stage 4. CONFIDENCE ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 21

To achieve better buyer relevancy and clientintimacy, marketers need to:  Re-examine marketing spending allocation  Expand marketing focus to: – Build greater relevancy – Create intimacy  Invest in talent and systems to support the expanded marketing focusITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 22

Appendix: Table of Contents for Services MarketingBudgets and Benchmarks: 2011 Budget Allocations andTrends, January 2011 Slide Survey Highlights 3 Survey Methodology and Demographics 28 Size of the Marketing Budget 52 Services Revenue Growth 60 Marketing Staffing 64 Services Marketing Budget Allocation 93 The Marketing Mix 123 Marketing Operations and Automation 144 Marketing Priorities 159 Appendix: Definitions Used in This Report 170ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 23

Appendix: Definitions Used in This Report FY: Fiscal Year Size of the Marketing Budget: Calculate marketing spend as a % of revenue. Include staff expenses. When calculating a specific marketing budget, use the corresponding revenue. For example, use total revenue in EMEA to calculate the size of the marketing budget in EMEA. Major Categories of the Marketing Budget – Strategy and Market Planning: Market segmentation, opportunity analysis, core competency identification, brand and positioning – Market Intelligence/Market Research: Competitive analysis, voice of the customer, market research—syndicated or custom, for tracking and analyzing industry and competitor trends – Offering Management: Develop and oversee service products and programs, including voice of the customer and offering related market research, new offer development, lifecycle management, portfolio management, pricing, go-to- market strategy, value proposition development – Content Development: Development of marketing content, including thought leadership, case studies, and reference materials; identifying, evaluating, researching ideas – Brand and Communications: Marketing program development and execution to communicate who you are and what you do: brand communications, advertising, PR, analyst and influencer relations, Website, SEO, Intranet, social media, word of mouth, sponsorships – Demand Generation and Lead Management: For specific offerings/industries: marketing program/campaign creation and execution, including events (on- and off-line), direct marketing, telemarketing, database marketing, lead nurturing/pipeline progression – Sales (Channel) Enablement and Support: Account-Based Marketing programs, bid and proposal support, tools, training, other support, guidance, and management for the sale of services via a corporate sales force, partners, channel firms, etc. Do NOT include direct sales expense here (commissions, salaries, travel expense, etc.) – Customer Satisfaction/Relationship Management and Monitoring: Loyalty programs, service quality and client satisfaction monitoring, reference management, customer councils, user group or community management – Marketing Operations: Marketing staff training and professional development, marketing management, marketing software and tools, metrics, and analytics – Business Partners/Alliances: Partner strategies and programs, relationship management, and partner communications – Other: Could include travel and entertainment, corporate allocation, administration, or anything else that did not fit in the above buckets but is part of the marketing budgetITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 24

To Purchase the Study For More Information Julie SchwartzMember price: $595 Senior Vice President Research and Thought LeadershipNon-Member price: $995 ITSMA Email: jschwartz@itsma.comThis report is available free to companies that provided Phone: +1-781-862-8500, Ext. 112detailed data in the study.Alcatel-Lucent EMC Patni If your company is on this list you areAtos Origin Event 360 Philips Healthcare entitled to receive the report for free,Avanade, Inc. Fujitsu Rimini Street, Inc. please send us an email (using yourAvaya Geehan Group SAP company email) and request your freeAviat Networks Hewlett-Packard SBS Group report. Orders will be processed theBlack & Veatch IBM Global Business Siemens Enterprise next business day.BT Services Communications For non-participating companies, thisCA Technologies Infosys Technologies SITA report is available for sale at memberCapco Infotech Steria and nonmember prices. To order, clickCapgemini KPIT Cummins Symantec the “Buy” button at the top of thisCGI Infosystems Ltd. Talent Partners page.Cisco KPMG Tata Consultancy See if your company is an ITSMACognizant Lenovo Services memberCompuCom Microsoft Corporation The TriZetto GroupCSC Nokia Siemens Networks Wipro Technologies Download the datasheet (including Northrop Grumman Wood Mackenzie order form) PDF (272 KB) Oracle Xerox Email ITSMA for more informationFor more ITSMA research, visit ITSMA’s Online Library at http://www.itsma.com/research/online-library/ITSMA Key Metrics Survey | 2011 Budgets and Benchmarks | Abbreviated Summary | B022SS © 2011 ITSMA. All Rights Reserved. 25

ITSMA Budget Study 2011 Abbreviated Summary

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