The New Procurement Advantage: How Business Networks Generate Multi-Party Ecosystem Solutions

Transcript of a discussion on how ecosystems built from business networks like the SAP Ariba Network incubate innovative third-party collaboration solutions that benefit both buyers and sellers.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP Ariba.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect. Our next intelligent enterprise discussion explores new opportunities for innovation and value creation inside of business-to-business (B2B) ecosystems.

Gardner

We’ll explore how business and technology platforms have evolved and why third-party businesses and modern analytics solutions are joining forces to create new breeds of digital commerce benefits.

To explain more on how business ecosystems are becoming incubators for value-added services for both business buyers and sellers, we are joined by Sean Thompson, Senior Vice President and Global Head of Business Development and Ecosystem at SAP Ariba. Welcome to BriefingsDirect, Sean.

Sean Thompson: Good morning, Dana. Thank you very much for having me.

Gardner: Why is now the right time to highlight collaboration inside of business ecosystems?

Thompson: It’s a fascinating time to be alive when you look at the largest companies on this planet, the five most valuable companies: Apple, Amazon, Google, Microsoft, and Facebook -- they all share something in common, and that is that they have built and hosted very rich ecosystems.

Ecosystems enrich the economy

These platforms represent wonderful economics for the companies themselves. But the members of the ecosystems also enjoy a very profitable place to do business. This includes the end-users profiting from the network effect that Facebook provides in terms of keeping in touch with friends, etc., as well as the advertisers who get value from the specific targeting of Facebook users based on end-user interests and values.

Thompson

So, it’s an interesting time to look at where these companies have taken us in the overall economy. It’s also an indication for other parts of the technology world that ecosystems in the cloud era are becoming more important. In the cloud era, you have multitenancy where you have the hosts of these applications, like SAP Ariba, using multitenant platforms. No longer are these applications delivered on-premise.

Now, it’s a cloud application enjoyed by more than 3.5 million organizations around the world. It’s hosted by SAP Ariba in the cloud. As a result, you have a wonderful ecosystem that evolved around a particular audience to which you can provide new value. For us, at SAP Ariba, the opportunity is to have an open mindset, much like the companies that I mentioned.

It is a very interesting time because business ecosystems now matter more than ever in the technology world, and it’s mainly due to cloud computing.

Gardner: These platforms create escalating value. Everybody involved is a winner, and the more they play, the more winnings there are for all. The participation grows the pie, builds a virtuous adoption cycle.

Is that how you view business ecosystems, as an ongoing value-added creation mechanism? How do you define a business ecosystem, and how is that different from five years ago?

Thompson: I say this to folks that I work with everyday -- not only inside of SAP Ariba, but also to members of our partner community, our ecosystem – “We are privileged in that not every company can talk about an ecosystem, mainly because you have to have relevance in order for such an ecosystem to develop.”

I wrote an article recently wherein I was reminded of growing up in Montana. I’m a big fly fisherman. I grew up with a fly rod in my hand. It didn’t dawn on me until later in my professional life that I used to talk about ecosystems as a kid. We used to talk about the various bug hatches that would happen and how that would make the trout go crazy.

I was taught by my dad about the certain ecosystems that supported different bugs and the different life that the trout feed on. In order to have an ecosystem -- whether it was fly-fishing as a kid in the natural environment or business ecosystems built today in the cloud -- it starts with relevance. Do you have relevance, much like Microsoft had relevance back in the personal computer (PC) era?

Power of relevance 

Apple created the PC era, but Microsoft decided to license the PC operating system (OS) to many and thus became relevant to all the third-party app developers. The Mac was closed. The strategy that Apple had in the beginning was to control this closed environment. That led to a wonderful user experience. But it didn’t lead to a place where third-party developers could build applications and get them sold.

Windows and a Windows-compatible PC environment created a profitable place that had relevance. More PC manufacturers used Windows as a standard, third-party app developers could build and sell the applications through a much broader distribution network, and that then was Microsoft’s relevance in the early days of the PC.

Other ecosystems have to have relevance, too. There have to be the right conditions for third parties to be attracted, and ultimately -- in the business world -- it’s all about, if you will, profit. Can I enjoy a profitable existence by joining the ecosystem?

You have to have the right conditions for third parties to be attracted. In the business world, it's all about profit. Can I enjoy a profitable existence by joining the ecosystem?

At SAP Ariba, I always say, we are privileged because we do have relevance.

Salesforce.com also had relevance in its early days when it distributed its customer resource management (CRM) app widely and efficiently. They pioneered the notion of only needing a username, a password, and credit card to distribute and consume a CRM app. Once that Sales Force Automation app was widely distributed, all of a sudden you had an ecosystem that began to pay attention because of the relevancy that Salesforce had. It was able to turn the relevancy of the app into an ecosystem that was based on a platform, and they introduced Force.com and the AppExchange for the third parties to extend the value of the applications and the platform.

It’s very similar to what we have here at SAP Ariba. The relevance in the ecosystem is supported by market relevance from the network. So it’s a fascinating time.

Gardner: What exactly is the relevance with the SAP Ariba platform? You’re in an auspicious place -- between buyers and sellers at the massive scale that the cloud allows. And increasingly the currency now is data, analytics, and insights.

Global ERP efficiency

Thompson: It’s very simple. I first got to know Ariba professionally back in the 1990s. I was at Deloitte, where I was one of those classic re-engineering consultants in the mid-90s. Then during the Y2K era, companies were getting rid of the old mainframes because they thought the code would fail when the calendar turned over to the year 2000. That was a wonderful perfect storm in the industry and led to the first major wave of consuming enterprise resource planning (ERP) technology and software.

Ariba was born out of that same era, with an eye toward procurement and helping the procurement organization within companies better manage spend.

ERP was about making spend more efficient, too, and making the organization more efficient overall. It was not just about reducing waste inherent within the silos of an organization. It was also about the waste in how companies spent money, managed suppliers, and managed spend against contracts that they had with those suppliers.

And so, Ariba -- not unlike Salesforce and other business applications that became relevant -- was the first to focus on the buyer, in particular the buyer within the procurement organization. The focus was on using a software application to help companies make better decisions around who they are sourcing from, their supply chain, and driving end-users to buy based on contracts that can be negotiated. It became an end-to-end way of thinking about your source-to-settle process. That was very much an application-led approach that SAP Ariba has had for the better part of 20 years.

When SAP bought Ariba in 2012, it included Ariba naturally within the portfolio of the largest ERP provider, SAP. But instead of thinking of it as a separate application, now Ariba is within SAP, enabling what we call the intelligent enterprise. The focus remains on making the enterprise more intelligent.

Pioneers in the cloud

SAP Ariba was also one of the first to pioneer moving from an on-premises world into the cloud. And by doing so, Ariba created a business network. It was very early in pioneering the concept of a network where -- by delighting the buyer and the procurement organization – that organization also brought in their suppliers with them.

Ariba early on had the concept of, “Let’s create a network where it’s not just one-to-one between a buyer and a supplier. Rather let’s think about it as a network -- as a marketplace -- where suppliers can make connections with many buyers.”

And so, very early on, SAP Ariba created a business network. That network today is made up 3.5 million buyers and sellers doing $2.2 trillion annually in commerce through the Ariba Network.

Now, as you pointed out, the currency is all about data. Because we are in the cloud, a network, and multitenant, our data model is structured in such a way that is far better than in an on-premises world. We now live within a cloud environment with a consistent data structure. Everybody is operating within the same environment, with the same code base. So now the data we have within SAP Ariba -- within that digital commerce data set -- becomes incredibly valuable to third parties. They can think about how they can enhance that value.

Because we are in a cloud, a network, and multitenant, our data model is structured in a way that's far better than in an on-premises world. We now live in a cloud environment with a consistent data structure.

As an example, we are working with banks today that are very interested in using data to inform new underwriting models. A supplier will soon be able to log-in to the SAP Ariba Network and see that there are banks offering them loans based on data available in the network. It informs about new loans at better rates because of the data value that the SAP Ariba Network provides. The notion of an ecosystem is now extending to very interesting places like banking, with financial service providers being part of a business network and ecosystem.

We are going beyond the traditional old applications -- what we used to call independent software vendors (ISVs). We’re now bringing in service providers and data services providers. It’s very interesting to see the variety of different business models joining today’s ecosystems.

Gardner: Another catalyst to the power and value of the network and the platform is that many of these third parties are digital organizations. They’re sharing their value and adding value as pure services so that the integration pain points have been slashed. It’s much easier for a collaborative solution to come together.

Can you provide any other examples, Sean, of how third parties enter into a platform-network ecosystem and add value through digital transformation and innovation?

Relationships rule

Thompson: Yes. When you look back at my career, 25 years ago, I met SAP for the first time when I was with Deloitte. And Deloitte is still a very strong partner of SAP, a very strong player within the technology industry as a systems integrator (SI) and consulting organization.

We have enjoyed relationships with Deloitte, Accenture, IBM, Capgemini, and many other organizations. Today they play a role -- as they did in the past -- of delivering value to the end customer by providing expertise, human capital, and intellectual property that is inherent in their many methodologies -- change management methodologies, business process change methodologies. And there’s still a valuable role for these professional services organizations, consultants, and SIs today.

But their role has evolved, and it’s a fascinating evolution. It’s no longer customizing on-premises software. Back in the day, when I was at Deloitte, we made a lot of money by helping companies adopt an application like an SAP or an Oracle ERP and customizing it. But you ended up customizing for one and building a single-family home, if you will, that was isolated. You ended up forking the code, if you will, so that you had a very difficult time upgrading because you customized the code so much that you then fell behind.

Now, on cloud, the SI is no longer customizing on-premises, it’s now configuring cloud environments. That configuring of cloud environments allows for not only the customer to never be left behind -- a wonderful value for the industry in general -- but it also allows the SI to play a new role.

That role is now a hybrid of both consulting and of helping companies to understand how to adopt and change their multicloud processes to become more efficient. The SIs are also becoming [cloud service providers] themselves because – what they used to do in customizing on-premises -- they’re now building extensions to clouds and among clouds.

They can create extensions of a solution like SAP Ariba for certain industries, like oil and gas, for example. You will see SAP continue to evolve its relationships with these service providers so that those services companies begin to look more like hybrid business models -- where they enjoy some intellectual property and extensions to cloud environments, as well as monetizing their methodologies as they have in the past.

This is a fascinating evolution that’s profitable for those companies because they go from a transactional business model -- where they have to sell one client at a time and one implementation at a time -- to monetizing based on a subscription model, much like we in the ISV world have done.

There are many other examples of new and interesting ways within the SAP Ariba ecosystem and network of buyers and suppliers where third-party ecosystem participants gather additional data about suppliers -- and sometimes about buyers. For example, in helping both suppliers and buyers manage their risk better in terms of financial risk, for supply chain disruption, and if you want to ensure there isn’t slave labor in your supply chain, or if there is sufficient diversity in your supply chain.

The supplier risk category for us is very important. It requires an ecosystem of provider data that enriches the supplier profile. And that can then become an enhancement to the overall value of the business network.

We are now able to reach out and offer ways in which third parties can contribute their intellectual property -- be it a methodology, data, analytics, or financial services. And that’s why it’s a really exciting time to be in the environment we are today.

Gardner: This network effect certainly relates to solution sets like financial services and risk management. You mentioned also that it pertains to such vertical industries like oil and gas, pharmaceutical, life sciences, and finance. Does it also extend to geographies and a localization-solution benefit? Does it also pertain to going downstream for small- to medium-sized businesses (SMBs) that might not have been able to afford or accommodate this high-level collaboration?

Reach around the world

Thompson: Absolutely, and it’s a great question. I remember the first wave of ERP and it marked a major consumption of technology to improve business. And that led to a tremendous amount of productivity gains that we’ve enjoyed through the growth of the world economy. Business productivity through technology investment has led to a tremendous amount of growth in the economy.

Now, you ask, “Does this extend?” And that’s what’s so fascinating about cloud and when you combine cloud with the concept of ecosystem -- because everybody enjoys a benefit from that.

As an example, you mentioned localization. Within SAP Ariba, we are all about intelligent business commerce, and how can we make business commerce more efficient all around the world. That’s what we are about.

In some countries, business commerce involves the good old-fashioned invoicing, orders, and taxation tasks. At Ariba, we don’t want to solve all of that so-called last mile of the tax data and process needed in for invoices in, say, Mexico.

And that's what's so fascinating about cloud and when you combine cloud with the concept of ecosystem -- because everybody enjoys a benefit.

We want to work with members of the ecosystem that do that. An example is Thomson Reuters, whose business is in part about managing a database of local tax data that is relevant to what’s needed in these different geographies.

By having one relationship with a large provider of that data and being able to distribute that data to the end users -- which are companies in places like Mexico and Korea that need a solution – means they are going to be compliant with the local authorities and regulations thanks to up-to-date tax data.

That’s an example of an extremely efficient way for us to distribute to the globe based on cloud and an ecosystem from within which Thomson Reuters provides that localized and accurate tax data.

Support for all sizes

You also asked about SMBs. Prior to being at SAP Ariba, I was part of an SMB support organization with the portfolio of Business ByDesign and Business One, which are smaller ERP applications designed for SMBs. And one of them, Business ByDesign, is a cloud-based offering.

In the past, the things that large companies were able to do were often too expensive for SMBs. That’s because they required on-premises data centers, with servers, software consultants, and all of the things that large enterprises could afford to drive innovation in the pre-cloud world. This was all just too expensive for SMBs.

Now the distribution model is represented by cloud and the multitenant nature of these solutions that allow for configuration -- as opposed to costly and brittle customization. They now have an easy upgrade path and all the wonderful benefits of the cloud model. And when you combine that with a business solutions ecosystem then you can fully support SMBs.

For example, within SAP Ariba, we have an SMB consulting organization focused on helping midsize companies adopt solutions in an agile way, so that it’s not a big bang. It’s not an expensive consulting service, instead it’s prescriptive in terms of how you should begin small and grow in terms of adopting cloud solutions.

Such an SMB mindset has enabled us to take the same SAP Ariba advantage of no code, to just preconfigure it, and start small. As we like to say at SAP Ariba, it’s a T-shirt size implementation: small, medium, and large.

That’s an example of how the SMB business segment really benefits from this era of cloud and ecosystem that drives efficiency for all of us.

Gardner: Given that the value of any business network and ecosystem increases with the number of participants – including buyers, sellers, and third-party service providers -- what should they be thinking to get in the best position to take advantage of these new trends, Sean? What should you be thinking in order to begin leveraging and exploiting this overall ecosystem approach and its benefits?

Thompson: I’m about to get on an airplane to go to South Korea. In some of these geographies where we do business, the majority of businesses are SMBs.

And I am still shocked that some of these companies have not prioritized technology adoption. I’m still surprised that there are a lot of industries, and a lot of companies in different segments, that are still very much analog. They are doing business the way they’ve been doing business for many years, and they have been resistant to change because their cottage industry has allowed them to maintain, if you will, Excel spreadsheet approaches to business and process.

I spent a decade of my life at Microsoft, and when we looked at the different ways Excel was used we were fascinated by the fact that Excel in many ways was used as a business system. Oftentimes, that was very precarious because you can’t manage a business on Excel. But I still see that within companies today.

The number one thing that every business owner needs to understand is that we are in an exponential time of transformation. What was linear in terms of how we expect transformation is now in an exponential phase. Disruption of industries is happening in real time and rapidly. If you’re not prioritizing and investing in technology -- and not thinking of your business as a technology business -- then you will get left behind.

Never underestimate the impact that technology can have to drive topline growth. But technology also preserves the option value for your company in the future because disruption is happening. It’s exponential and cloud is driving that.

Get professional advice 

You also have to appreciate the value of getting good advice. There are good companies that are looking to help. We have many of those within our ecosystem, such as providers of assistance like the large SIs as well as midsize companies focused on helping SMBs.

As I mentioned before, I grew up fly fishing. But anybody that comes to me and says, “Hey, I’d love to go learn how to fly fish.” I say, “Start with hiring a professional guide. Spend a day on a river with a professional guide because they will show you how to do things.” I honestly think that that same advice applies to the professional guide who can help you understand how to consume cloud software services.

And that professional guide fee is not going to be as much as it was in the past. So I would say get professional help to start.

Gardner: I’d like to close out with a look to the future. It seems that for third-party organizations that want to find a home in an ecosystem that there’s never been a better time for them to innovate, and find new business models, new ways of collaborating.

You mentioned risk management and financial improvements and efficiency. What are some of the other areas for new business models within ecosystems? Where are we going to see some new and innovative business models cropping up, especially within the SAP Ariba network ecosystem?

Thompson: You mentioned it earlier in the conversation. The future is about data. The future is about insights that we gather from the data.

We're still early in a very interesting future. We're still understanding how to gather insights from data. At SAP Ariba we have a treasure trove of data from $2.1 trillion in commerce among 3.5 million members in the Ariba Network.

I started a company in the natural language processing world. I spent five years of my life understanding how to drive a new type of user experience by using voice. It’s about natural language and understanding how to drive domain-specific knowledge of what people want through a natural user interface.

I’ve played on the edge of where we are in terms of artificial intelligence (AI) within that natural language processing. But we’re still fiddling in many respects. We still fiddle in the business software arena, talking about chatbots, talking about natural user interfaces.

We’re still early in a very interesting future. We’re still very early in understanding how to gather insights from data. At SAP Ariba we have a treasure trove of data from $2.1 trillion in commerce among 3.5 million members in the Ariba Network.

The future is data driven 

There are so many data insights available on contracts and supplier profiles alone. So the future is about being able to harvest insights from that data. It’s now very exciting to be able to leverage the right infrastructure like the S/4 HANA data platform.

But we have a lot of work to do still to clean data and ensure the structure, privacy, and security of the data. The future certainly is bright. It will be magical in how we will be able to be proactive in making recommendations based on understanding all the data.

Buyers will be proactively alerted that something is going on in the supply chain. We will be able to predict and be a prescriptive in the way the business operates. So it is a fascinating future that we have ahead of us. It’s very exciting to be a part of it.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect discussion on new opportunities for innovation and value creation among business ecosystem participants. And we’ve learned how business ecosystems are incubating new levels of buyer and seller value-added services.

So a big thank you to our guest, Sean Thompson, Senior Vice President and Global Head of Business Development and Ecosystem at SAP Ariba. Thank you, sir.

Thompson: Thanks, Dana.

Gardner: And thank you as well to our audience for joining this BriefingsDirect digital business innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of SAP Ariba-sponsored BriefingsDirect discussions. Thanks again for listening, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP Ariba.

Transcript of a discussion on how ecosystems built from business networks like the SAP Ariba Network incubate innovative third-party collaboration solutions that benefit both buyers and sellers. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

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How Content in Context Within Apps and Process Strengthens Marketing Muscle

Transcript of a BriefingsDirect discussion on the changing nature of content as people and companies move to a greater use of apps, big data and context-aware processes.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS. Download the transcript.

Dana Gardner: Welcome to the next BriefingsDirect podcast as we explore the changing role and impact of content marketing, using the IT industry as an example. Just as companies now communicate with their consumers and prospects in much different ways, with higher emphasis on social interactions, user feedback, big data analysis, and even more content to drive conversations, so too the IT industry has abruptly changed.

Gardner

There's more movement to cloud models, to mobile applications, to leveraging data at every chance -- and they are also facing lower-margin subscription business models. The margin for error is shrinking in the IT industry. If any industry is the poster child for how to deal with rapid change on all fronts, it is surely the global information technology market.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this forward-looking discussion on how the nature of marketing is changing.

To explore how we can expect the IT industry to adjust and how the nature of marketing is impacting it, we're joined by Lora Kratchounova, the Founder and Principal at Scratch Marketing and Media in Cambridge, Mass.

Welcome, Lora.

Lora Kratchounova: Thanks for having me, Dana.

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Gardner: Lora, you and I have been talking about marketing for years now. We're in an interesting field, and it’s been such a dynamic time. I have some interesting ideas about where technology is going and where marketing is intercepting, and how they are both changing.

So, let’s start at a high level. Content marketing has proven to be very successful, and you and I have had a hand in this. Creating compelling stories, narratives about what’s going on, and how people can learn from peers as they go through problems and solve them, has become a mainstay in marketing. From your perspective, why is content marketing so important? Why has it been so successful?

Kratchounova: There are couple of reasons for that. The pace of change is tremendous now. People are trying to get their bearings on what’s going on in their markets, and a lot of times, they need to get educated. What has changed with social media now, information is a lot more immediate and transparent, and you can get it from many more sources than the just online presence of a company, for example.

Kratchounova

The top-down modeling in the marketing is changing. We used to rely on companies to tell us how to think about the world, and now we can form our own opinions. As we realize that the customer is in the driver’s seat, they educate themselves, and they make the right decisions about how to go about change, companies are realizing that they need to feed into that flow and be part of that discussion. So content marketing has been so successful, because you become an educator, not just selling to people, and especially in IT.

Gardner: And I think people have become much more accustomed to conversations, rather than just a one-direction information flow. "We're the seller and we're going to tell you what it is." Now, people want to relate. They want to hear what others have to think. It’s much more of an actual conversation.

Ongoing conversation

Kratchounova: Exactly. Look at any IT domain. It’s interesting when we look at who is influencing and who the main voices in it are, who the voices that people consider experts are. You pretty much consistently see reporters, journalists, and the analysts folks like you, but then we see that there are a lot of C-level executives from IT companies who are becoming that kind of a voice as well.

That just points to the need for that ongoing conversation, the need for sharing at all levels of the buyer funnel. Once people have bought into a selection, they need to make sure of adoption, and they are maximizing the investment.

So the conversation is very important, and the immediacy of having access to folks and having the ability to exchange a few thoughts on Twitter or LinkedIn has changed the dynamic completely. So it’s absolutely about conversations and storytelling, but it's still mapped to the buyer’s funnel.

People are still educating and still looking at options for a change or for replacement, one or the other, until they select the people they want to work with. And it’s usually people in brands. It's not just that they want to work with this company, but the people behind it. We're moving more to a people economy.

Gardner: As you point out, you can get to the real source of the knowledge nowadays. Publishing is available to anybody whether they're tweeting, blogging, posting on Facebook, or putting something up on their company website. Anybody who has something to say can say it. It can get indexed and it can be made available to anybody who wants to hear about that particular topic.

The ability to publish is great, and it democratizes the means of how we communicate with each other and educate each other, but yet you still have to earn it.

Most people now don’t just sit back and wait for information to reach them. They're proactive. They go out, they start to search, they do hashtag searches on Twitter, and they can do Google or Bing on web.

It’s much more of, "I know something; I'm putting it out there." And there's another case of someone saying, "I need to know something; I am seeking it." They come together on their own. The content makes that possible. The better the content, the better the likelihood that those in a need to know and those in a need to tell come together.

Kratchounova: Exactly, but I think you hit on something very important. Everybody can publish, and a lot of people are publishing. Yet, we're interested in a love for your people, falling in love for your people, and what they have to say.

The ability to publish is great, and it democratizes the means of how we communicate with each other and educate each other, but yet you still have to earn it. This is very important. People who really are influential are usually domain experts and they're there to help other people. That’s the other aspect of it that both companies and their marketing teams and their executives need to think about. You have to actively participate and show your expertise, it doesn’t come for granted.

Important of curation

Gardner: And there's another aspect to greasing the skids between the knowledge and the acquirer of the knowledge, and that is content curation. There are people who point at things, give it credence, and say that it's a good thing, you should read it; or that’s a bad thing, don’t waste your time -- and that helps refine this.

Kratchounova: It’s pretty exciting.

Gardner: There are machines doing the same thing. There are algorithms, there's indexing, there's both human and machine aspects of winnowing down the good stuff and providing it to people in a need to know, and that’s when we are going to get more powerful.

Kratchounova: Great. I'm sure you know about Narrative Science. I've had a professional crush on this company for few years now. They take data, turn it into storytelling, and they think this is phenomenal. Obviously, that’s not going to replace some of the human storytelling that needs to happen, but some of the data storytelling will come from technology. This is one particular application where marketing and technology come together to bring something completely new into life.

Gardner: So we can get knowledge through expertise or we can get knowledge through experience, someone who has gone through it already and is willing to share that with you. If you're acquiring IT, it’s super important to avail yourself of everything, because it changes so rapidly and the costs are high.

IT depends on the IT buyer, because we can’t necessarily lump them together and ask how the IT buyer goes about it. There are people with different needs, and it depends on their role.

If you make a big mistake in how you're designing a data center, you're out millions of dollars, your products don’t work, and your front office are going to come screaming down on you. You have to make the big decisions and you have to make them correctly in IT. It’s not just a service to the business; it is the business.

So, let’s think about the IT industry in particular, and then think about how content marketing as we’ve discussed is powerful. How do IT people acquire content marketing? Do they get it through websites, emails, or tweets? Is it delivered to them at a webinar that they opt into? How does content marketing reach somebody who's an IT buyer?

Kratchounova: IT depends on the IT buyer, because we can’t necessarily lump them together and ask how the IT buyer goes about it. There are people with different needs, and it depends on their role. If you're CIO or CTO, there is a different mix of channels and sources you use. If you're on the dev or on the ops side and looking for specific solutions, you're going into completely different channels.

For example, if you're a DevOps professional, you're maybe on Stack Overflow and you might be seeking advice from other folks. You might be on GitHub and sharing open-source code and getting feedback on that.

If you're a CIO or CTO, what we have found working with number of different companies, be that global companies or maybe companies that are growing, is that they do seek their peers to validate what the peers are going through. One of the best things that companies can do, when they try to talk to the C-level, is expose some of those connections that they already have from their customers. Make sure that the customers are part of the discussion, and they can chime in.

Another important source of information for the C level in IT would be folks like you, analysts, and strategic system integrators like Accenture and Deloitte, because these folks are exposed to the kinds of challenges that a CIO or CTO would go through. So they have a lot to bring to the table in terms of risk mitigation, optimal deployment, and maximization of the investment in IT. Making those connections and sharing those experiences we have seen work really, really well.

Let me just throw this in as well. The other thing we have seen is that the C level is still going on Google. They're still doing the searches. We have compelling data, across the board, that in any B2B complex enterprise environment folks are self-educating as well. So it’s not a question of either/or; it’s what’s the right mix for each company depending on channels, depending on where people sit.

Spectrum of content

Gardner: So there is a spectrum of content, some highly technical and defined, on places like GitHub that are germane to a technologist. Then, there is that spectrum up from there to a higher level toward peer review of products and peer review of solutions. Then, there are more business topics about what is strategic, what’s the forward direction, how do I understand at an architectural-level decision processes, and where can I go for more information to find out what’s coming down the pike and then put it in place.

Kratchounova: Think about Spiceworks. They're probably at five million IT professionals at this point, and the community is there for a reason. So again, with each particular, there isn’t one size fits all. One thing that we always recommend to folks is that if you’re looking to develop an influential strategy and approach IT, it really depends on what domains you span.

You find that even if you're doing mobile application development, the folks who were really influential and set the standards of that stage are somewhat different from the folks who are concerned with security in mobile app development. So there isn’t necessarily one pool of influencers that you need to go then to develop a relationship and understand what’s in their mind. It really depends on your domain.

Gardner: So if you're a marketer and you recognize that quality content is super important, you need to have a spectrum of content. It needs to be some content that would be germane to a technologist that’s highly detailed, a how-to type. You need to have peer review and stories, case studies, testimonial type content where the customer is telling what they’ve done, why it benefited them, and what you can learn from that.

You also need to have higher-level discussions with experts to help people chart the next course, the strategic level. So content needs to come across a spectrum, and we recognize that the way in which people get that content might be through search. It might be through web, e-mail, webinars, webcasts, reading certain online sites, listening to certain Twitter feeds or groups, or having a select group of people that you follow. All of that happens.

But what’s interesting to me, Lora, is that all has to do with the web. But what we're seeing in IT is a rapid movement toward mobile apps, rather than just the web. And in many cases, they're starting to overtake the web as to where people spend their time. I'm sure you're using a smartphone and you have mobile apps. You're not going on the web to find a cab; you’re going to the Uber app to find a cab.

If you're looking for a restaurant review, you’re not necessarily going on the web and doing a search. You’re going into a specific app on Yelp, OpenTable, or somewhere else to find out where your restaurants are and you’re going into Google Maps to find out how to get there.

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So more-and-more, we're seeing, on the consumer side, people using mobile apps for more of their processes, for their inquiry, for their actual productivity. Then, on the enterprise side, the business-to-employee (B2E) side, we're seeing people using cloud services.

We're moving more toward mobile applications, cloud services, an API-driven world that leverages big data and analytics in order to put context into process. It's all about user experiences, and mobile delivers the best. How then does content continue to reach people? Do we lose the ability to deliver content when they are in apps?

Different perspective

Kratchounova: I have a different perspective on what you're describing. I don’t know that we are moving to a mobile app experience necessarily. When we think about the apps and the examples you gave -- Yelp or Uber -- yes, they're best-of-breed applications that we use because these are the most frequently used applications.

But what you're seeing is actually a digital transformation. Digital no longer means the web, as we know it, going online through your computer. You're actually navigating on a mobile device. So it’s this digital transformation that’s happening, and the trend that we're seeing is aggregation.

It’s not about one individual app, but it’s more about what is the Flipboard within the enterprise. You're seeing that sort of aggregation bubbling up to the top because information overload is a huge problem. People can’t prioritize anymore. They can’t toggle among those different applications and companies.

For example, one of our clients, not to necessarily add a plug for them, actually is very germane to the discussion. Harmon.ie does exactly that.

Once you understand, then you understand what a partner is trying to do. Why are they are here, what’s the context, what’s the most logical next step or the optimal next step?

In those kinds of environments, what we're finding and where I totally agree with you, is the ability to read and understand context, so that you can support the user, be that an employee with internal work experience, or external customers, to support them to get the job done.


The role of content is actually merging with big data, because big data is helping us to understand context and say, "What do we serve this person here?" On the marketing side, and the lingo side it’s more about ongoing customer journeys. Think about the same thing on the employee side, ongoing employee journeys or partner journeys.

Once you understand, then you understand what a partner is trying to do. Why are they are here, what’s the context, what’s the most logical next step or the optimal next step? Now, content becomes both an ability for people to find something, but also for marketers or product development folks. I think those functions are emerging as well to deliver the right content in the right format so that the user can get the job done. That’s my perspective on that.

Gardner: There's no disagreement from me on this issue of context to process, context to location, context to need for knowledge all being much more granular and powerful going forward. What I am concerned about is that, when I talk to developers, the vast majority of them are much more interested in a mobile-first, cloud-first world.

They're not much interested in building what we used to think of as big honking applications in the enterprise. They're much more interested in how to bring services -- and microservices -- together in context to provide a better productive outcome and how to leverage low-cost services in APIs and from any cloud.

Discovering inference

So, to me, it becomes, on one hand, all the more important to have the ability to deliver content contextually into these processes, but at the same time these processes are becoming fragmented. They're going across hybrid-cloud environments, they include both what we call cloud and SaaS, and I'm not sure where the marketer now can get enough inference to support the injection of content appropriately.

The ways that it’s been done now is usually through the web where we have links, and we have code, and we can do cookies. It’s sort of like, it’s Web 1.0 mechanisms by which marketers are injecting content, but we are moving not only pass Web 2.0, we're into Web 3.0  cloud platform. To me this is a big question mark.

Kratchounova: It is a question mark. I don’t know that there is going to be one mode of delivering what we're talking about or one approach or one framework. I'll give you one example. Look at how web content management has changed. It used to be about managing pages and updating content. Now, web content management is becoming the Marketing Command Center, if you look at a web content management system like Sitefinity, for example.

Now, marketers can deal with the customer through his own mobile and on the web, so they can inject the content that needs to happen there. The reason they can do this now is because there is this ability, the analytics that come from all of these customer interactions of you, actually creating cohorts of people as they're going through your web experience or online experience. You know why they're there and what’s the optimal path for them to get where they need to be.

You're seeing this ability to distribute content to post content to people, but in a much more contextual way. So, there is going to be a pull and push, but the push is getting a lot smarter and very contextual.

So, you're seeing this ability to distribute content to post content to people, but in a much more contextual way. So, there is going to be a pull and push, but the push is getting a lot smarter and very contextual.

Gardner: So it’s incumbent upon us who are examining this marketing evolution in the context of the IT industry to create that spectrum of content to make it valuable, to make it appropriate and not too commercial or crass, but useful. And at the same time now, think about how to get this in front of right people at the right time.

It seems to me that if I'm an IT company, and more and more of my services, whether it’s a B2B, B2C, B2E, or all of the above, I need to be thinking about ways that I'm going to communicate with my existing universe or market and move them toward new products and services as they need them in context of their process.

Think about this in a B2C environment in retail, where I am walking through Wal-Mart. I have my smartphone and, as I turn the corner, they know that now I am interested in home goods, and they are going to start to incentivize me to buy something. That’s kind of an understood mechanism by which my location and the fact that I turned a corner and made a decision provides an inference that then they can react to with content or information.

But take that now to the B2B environment where I'm in a business setting. I'm in procurement, I'm in product development, or I'm looking for a supply chain efficiency. I want to move into a new geographic location and I need to find the means to do that. All of those things are also like turning a corner in a Wal-Mart, except you're in a business application using cloud services, using a mobile device and apps.

If I'm an IT vendor, I'm going to want to have content or information that I can bring to that situation, perhaps even through an example of what other people have done when they face that same process crossroads. So the content can be more important and more germane. These are multi-million-dollar decisions in some cases.

Don’t you think that big companies should be starting to make content with the idea that it’s going to become part of their application services, part of their cloud delivery services, and that they need to use big data and analytics to know when to inject it?

Understanding context

Kratchounova: I absolutely agree. I think that difference between the example you just gave for Wal-Mart and a B2B environment is that, in Wal-Mart, you don’t need to understand so much about who the person is, what their role is, whether they work at an accounting firm or whether they are a physician, for example.

In a B2B environment you do need to understand context, and context is the location or the point where they are in their journey, whatever that journey maybe, and their role as well, because different people do have different decisions to make.

It’s a little bit more complex to bring context in a B2B environment, but it’s absolutely essential. You used the word inference. We always get enamored by the concept of the big data and guess what, once the machines are there, they're going to analyze everything and it's going to be this perfect world of marketing where everyone is aligned. 

Just look at the history of marketing. We don’t know ourselves as people. We individually don’t know ourselves as well, let alone someone else getting to know us that well. Inference is very important, but it’s going to be a balance between inferring what the person needs and allowing the person to customize this experience as well. So it’s going to come both ways.

Some people still believe that it’s a relationship-based world and, therefore, there's no need for a digital experience for their customers or for their potential buyers, which is actually never the case.

Some people going to one extreme or the other. Some people still believe that it’s a relationship-based world and, therefore, there's no need for a digital experience for their customers or for their potential buyers, which is actually never the case. Other people believe that it’s all digital; therefore they don’t need to touch them in any other way, which is rarely the case, especially in IT. 

Gardner: I also suggest to you that the data is more readily available, because I, as an employer, as a corporation, control what’s going on. I know what that employee is doing. I know what apps they're using. I know what data they're seeking. 

They're going to provide a feed of data back to you about what’s going on, on those apps from your very own employees.
What I'm suggesting then, as we begin to think about closing out this fascinating conversation, is that you need to have content, stories, and customers lined up, so that you can uncover their path to truth, their path to value, and have that content context-ready. Not only you are going to be using it in webinars, webcasts, podcasts, blogs, but pretty soon, if my hypothesis is correct, you're going to be using that content in the context of process and inside of applications in cloud services and on mobile devices.

Way of the future

Kratchounova: Maybe this is an opportunity, because it is the way of the future, and some people are more mature and others are less mature, but maybe we can bring other people into the discussion and see what other folks in the field think about where the content is going, how to contextualize and how to deliver it. One of the biggest question is how do we scale this. You can still do a meaningful experience or create a meaningful experience one-on-one, but it’s hard to recreate that even if your customers are 200, 500, or even 5,000 within the IT space. 

Gardner: You also have to remember that people's connections to apps, cloud services and context-aware processes are only going to increase. The Internet of Things and new classes of devices like the Apple Watch are expanding the end points and ways to connect to them. One of the things that’s important with the Apple Watch functionally is that it’s very good at alerts and notifications. It can also detect a lot of context of what you're doing physically and your location, and it can relate, because it integrates to your phone, with what you're doing with applications and cloud services.

Wouldn’t it be interesting if you're wearing an Apple Watch or equivalent, you're in a business setting, and you come up against a problem that you might not even know yet, but all of these services working together are going to say, "That person is going to be facing a problem; they are going to need to make a decision. Let’s put some information, content, and use cases together for them that will help them as they face that situation to make a better decision." That’s the kind of role I think we're heading toward. 

Before we sign off, Lora, tell me more about Scratch Marketing and Media, what you do and why that’s related to this discussion we have had today.

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Kratchounova: Scratch Marketing and Media is an integrated marketing agency. We help B2B technology companies with market growth. Sometimes that means helping the sales folks within IT companies and sometimes it means working with the marketing folks on things like content marketing programs, PR, and all its relations, and influence their relations in social media.

Gardner: And how could they find out more information about Scratch Marketing Media?

Kratchounova: You can go online at www.scratchmm.com.

Gardner: I'm afraid we will have to leave it there. We've been discussing the change in role and impact of content marketing using the IT industry and the great changes happening there as an example. We've seen how the nature of marketing with customer sharing and big data and the rapidly evolving technology industry coming together, perhaps gives us a bellwether that it will happen among many other industries. So, with that I want to thank our guest, Lora Kratchounova, the Founder and Principal at Scratch Marketing and Media in Cambridge, Mass. Thanks so much, Lora. 

Kratchounova: You're welcome, Dana.

Gardner: And a big thank you to our audience for joining this special BriefingsDirect discussion on the changing impact of content marketing.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host. Don’t forget to come back next time to BriefingsDirect. We've certainly enjoyed having the time to be with you, and we hope that you found this valuable, too.

Listen to the podcast. Find it on iTunes. Get the mobile app for iOS. Download the transcript.

Transcript of a BriefingsDirect discussion on the changing nature of content as people and companies move to a greater use of apps, big data and context-aware processes. Copyright Interarbor Solutions, LLC, 2005-2015. All rights reserved.

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