This document discusses IBM's Market Insights knowledge services which provides research and information to IBM employees. It operates on a self-funding model where services are priced and billed based on usage to cover costs. Services include a knowledge center for research requests, self-help tools for searching internal and external sources, and subscriptions. Usage is tracked across applications and services to assemble billing data which is passed to IBM's financial systems. The self-funding model aims to accurately forecast demand and price services at breakeven to sustainably fund the program.

1. © 2011 IBM Corporation
Running an information-services business within a
large corporation
March 2011

2. © 2011 IBM Corporation
IBM Market Insights
Our job is to help IBM grow.
 We start by aligning our work with the company’s priorities.
 We build new assets and expertise where needed.
 We prioritize and execute our work as one team.
 Our unique insight and tools give business leaders the confidence to take the
actions required to drive growth for IBM.

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Our Knowledge Services team serves a large portion of IBM
employees worldwide.
Sales Scientific & engineering
Marketing
IBM Knowledge Services
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

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Knowledge Services – how do we deliver these
insights to IBM?
 Self-Help Tools – find the information yourself 24 x 7
 MI Knowledge Center – send your information requests to our
Knowledge Center analysts

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MI Self-Help Tools for 24X7 Service
 bluemine provides a single entry point to
conduct a high-level search across multiple
internal and external sources
 COMP is IBM's premier competitive resource –
access valuable toolkits to beat IBM’s competition
 KnowledgeGate brings together external sources
(news, scientific & technical, and market research)
where users can conduct in-depth searches across
these sources
 Market Insights website can be used to browse
research produced by IBM's MI organization and to
learn more about the MI discipline

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 MI Knowledge Center supports over 20,000 individual requests a year
 Knowledge Center Relationship Managers are aligned by MI client teams and have in-
depth knowledge of the IBM business needs and secondary research sources.
MI Knowledge Center for synthesized client, industry,
and competitive-related research

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How Do We Measure Value?
Growth in page hits and downloads
Growth in unique users
Expansion into new geographic regions
Embedding content into different workflows
Usage by business units
Cost savings delivered through centralized purchases
Improved efficiency to find information
Customer satisfaction
Successful Self-Funding Model

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Our Self-Funding Model Is the Basis for All Services We Deliver
Every year we start from the premise that we have no budget
The self-funding model includes:
Research requests to our Knowledge Center
Document delivery (mostly for scientific-engineering content)
Search costs on internal systems where we deliver external content
The self-funding model is designed to fully recover costs of:
Content
IT systems, maintenance and development
People

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How do we build our budget*?
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
* Budget numbers are illustrative

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How Do We Price Services?
Pricing methodology is based on some key principles:
 accurate forecast of demand and recovery (based on
historical usage and trends, and customer demand)
 product prices that aim for breakeven point
 flexibility to manage as a portfolio of services as needed
Pricing options we use:
 price per each research request
 subscription cost for single-user seats to expensive IT
analyst research
 annual subscription cost for use of an application with
enterprise access to content
single search/session costs for sci-tech content, i.e. IEEE
 ‘free’ access to enterprise services and/or reports purchased
elsewhere in IBM
 pass-through expenses from internal clients for vendors with
which we have relationship

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How do we bill?
 Collect and verify usage/billing data from each of the
applications/services
 Assemble into billing tables
 Pass verified billing data with individual charges rolled up to
departmental billing codes via US and international financial
systems.
 To accomplish this we have our own Financial Control Desk
that manages these processes and transactions
 We have passed rigorous financial process and
certification requirements to allow us to operate and enter
financial data that affects IBM’s bottom line

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Key Considerations for Implementing a Self-Funding Model
1. Keep it simple.
2. If users value the services, let them vote with their dollars and be willing to pay a fair
price for what they use.
3. A microbilling model can minimize large budget targets and direct expenses to where
they are consumed.
4. If starting from scratch, it will take a substantial effort to get line Management,
Finance, and IT behind you.
5. You’ll need resources to build, run, and maintain an accurate billing and financial
system.
6. In IBM there were significant financial certification hurdles to allow us to pass data to
our corporate ledger.
7. 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.