© 2011 IBM Corporation
Running an information-services business within a large corporation
March 2011
© 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 CenterDocument 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:ContentIT systems, maintenance and developmentPeople
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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
© 2011 IBM Corporation
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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.