Running an Information-Services Business Within a Large Global Corporation: Mark Pandick

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Running an Information-Services Business Within a Large Global Corporation

Mark Pandick, Manager, Knowledge Services, IBM Market Insights

The focus of this session was on how IBM’s Knowledge Services team operates an information-services business internally within a large global corporation. The session started from the premise that the organization does not have a budget per se, but is rather a self-funding model. This session discussed how to determine what types of services to offer; what kinds of IBM colleagues to serve; what value measurements to use; what funding mechanisms to use for content, people and IT resources. The session finished with key considerations and lessons learned for those who might try to implement something similar.

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Running an Information-Services Business Within a Large Global Corporation: Mark Pandick

  1. 1. Running an information-services business within a large corporation March 2011
  2. 2. Our job is to help IBM grow. <ul><li>We start by aligning our work with the company’s priorities. </li></ul><ul><li>We build new assets and expertise where needed. </li></ul><ul><li>We prioritize and execute our work as one team. </li></ul><ul><li>Our unique insight and tools give business leaders the confidence to take the actions required to drive growth for IBM . </li></ul>
  3. 3. Our Knowledge Services team serves a large portion of IBM employees worldwide. Competitive how-to-win Company information Lead generation tools Product comparisons Technical journals Computer science Physics Engineering Market sizing & forecasts Global news & research Brokerage research IT analyst services Industry sources Emerging markets Three main targets: Marketing Sales Scientists & engineers Sales Scientific & engineering Marketing IBM Knowledge Services
  4. 4. Knowledge Services – how do we deliver these insights to IBM? <ul><li>Self-Help Tools – find the information yourself 24 x 7 </li></ul><ul><li>MI Knowledge Center – send your information requests to our Knowledge Center analysts </li></ul>
  5. 5. MI Self-Help Tools for 24X7 Service <ul><li>bluemine provides a single entry point to conduct a high-level search across multiple internal and external sources </li></ul><ul><li>COMP is IBM's premier competitive resource – access valuable toolkits to beat IBM’s competition </li></ul><ul><li>KnowledgeGate brings together external sources (news, scientific & technical, and market research) where users can conduct in-depth searches across these sources </li></ul><ul><li>Market Insights website can be used to browse research produced by IBM's MI organization and to learn more about the MI discipline </li></ul>
  6. 6. <ul><li>MI Knowledge Center supports over 20,000 individual requests a year </li></ul><ul><li>Knowledge Center Relationship Managers are aligned by MI client teams and have in-depth knowledge of the IBM business needs and secondary research sources. </li></ul>MI Knowledge Center for synthesized client, industry, and competitive-related research
  7. 7. How Do We Measure Value? <ul><ul><li>Growth in page hits and downloads </li></ul></ul><ul><ul><li>Growth in unique users </li></ul></ul><ul><ul><li>Expansion into new geographic regions </li></ul></ul><ul><ul><li>Embedding content into different workflows </li></ul></ul><ul><ul><li>Usage by business units </li></ul></ul><ul><ul><li>Cost savings delivered through centralized purchases </li></ul></ul><ul><ul><li>Improved efficiency to find information </li></ul></ul><ul><ul><li>Customer satisfaction </li></ul></ul><ul><ul><li>Successful Self-Funding Model </li></ul></ul>
  8. 8. Our Self-Funding Model Is the Basis for All Services We Deliver <ul><li>Every year we start from the premise that we have no budget </li></ul><ul><li>The self-funding model includes: </li></ul><ul><ul><li>Research requests to our Knowledge Center </li></ul></ul><ul><ul><li>Document delivery (mostly for scientific-engineering content) </li></ul></ul><ul><ul><li>Search costs on internal systems where we deliver external content </li></ul></ul><ul><li>The self-funding model is designed to fully recover costs of: </li></ul><ul><ul><li>Content </li></ul></ul><ul><ul><li>IT systems, maintenance and development </li></ul></ul><ul><ul><li>People </li></ul></ul>
  9. 9. How do we build our budget*? * Budget numbers are illustrative Electronic delivery COMP Knowledge Gate Knowledge Center 2011 Total Microbilling funding 1,000 12,000 5,000 1,500 19,500 Client flow-through funding 15,000 0 1,700 300 17,000 Total funds 16,000 12,000 6,700 1,800 36,500 Funding YTY +10% +8% -3% -20% -5% Total projected content program spend 15,000 11,000 6,100 900 33,000 Spending YTY +6% +20 -4% -8 +5% Net Surplus (Deficit) 0 1,000 600 900 3,500 Infrastructure and IT - - - - 3,200 2011 Net Surplus (Deficit) - - - - 300
  10. 10. How Do We Price Services? <ul><li>Pricing methodology is based on some key principles: </li></ul><ul><li>accurate forecast of demand and recovery (based on historical usage and trends, and customer demand) </li></ul><ul><li>product prices that aim for breakeven point </li></ul><ul><li>flexibility to manage as a portfolio of services as needed </li></ul><ul><li>Pricing options we use: </li></ul><ul><li>price per each research request </li></ul><ul><li>subscription cost for single-user seats to expensive IT analyst research </li></ul><ul><li>annual subscription cost for use of an application with enterprise access to content </li></ul><ul><li>single search/session costs for sci-tech content, i.e. IEEE </li></ul><ul><li>‘ free’ access to enterprise services and/or reports purchased elsewhere in IBM </li></ul><ul><li>pass-through expenses from internal clients for vendors with which we have relationship </li></ul>
  11. 11. How do we bill? <ul><li>Collect and verify usage/billing data from each of the applications/services </li></ul><ul><li>Assemble into billing tables </li></ul><ul><li>Pass verified billing data with individual charges rolled up to departmental billing codes via US and international financial systems. </li></ul><ul><li>To accomplish this we have our own Financial Control Desk that manages these processes and transactions </li></ul><ul><li>We have passed rigorous financial process and certification requirements to allow us to operate and enter financial data that affects IBM’s bottom line </li></ul>
  12. 12. Key Considerations for Implementing a Self-Funding Model <ul><li>Keep it simple. </li></ul><ul><li>If users value the services, let them vote with their dollars and be willing to pay a fair price for what they use. </li></ul><ul><li>A microbilling model can minimize large budget targets and direct expenses to where they are consumed. </li></ul><ul><li>If starting from scratch, it will take a substantial effort to get line Management, Finance, and IT behind you. </li></ul><ul><li>You’ll need resources to build, run, and maintain an accurate billing and financial system. </li></ul><ul><li>In IBM there were significant financial certification hurdles to allow us to pass data to our corporate ledger. </li></ul><ul><li>The model has been very beneficial, as our proof point, to continue to deliver our value services to IBM in such a cost-driven environment. </li></ul>

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