Case Studies

Case Interview - Market Intelligence for Marketing & Sales

Running Intelligence as a Service Center at T-Systems

Interviewed for this case was Henning Heinrich, Vice President of Market Intelligence at T-Systems. T-Systems is Deutsche Telekom’s corporate customer arm. Using a global infrastructure of data centers and networks, T-Systems operates information and communication technology (ICT) systems for multinational corporations and public sector institutions.

Background on T-Systems

With offices in over 20 countries and global delivery capabilities, T-Systems serves companies in all industries – from the automotive industry to telecommunications, the financial sector, retail, services, media, energy and the manufacturing industry all the way to government agencies and the healthcare sector. Approximately 47,600 employees worldwide use their industry expertise and ICT know-how to provide top-quality service. T-Systems generated revenue of around EUR 9.1 billion in the 2010 financial year.

Q: Running an intelligence program as a service center essentially means that you’re running a business within business. It’s not exactly the most typical approach to organizing market intelligence. How did you end up with such an organizational model for market intelligence?

“At the time of establishing market intelligence like this in 2004, we had reached the conclusion that market intelligence as we knew it was necessary; however it was simply inefficiently organized. There were redundancies, overhead costs were high, synergies were not utilized, collaboration was limited and last but not least, the quality of market intelligence processes and deliverables was not top notch either.

In addition, as there are great differences in the internal clients’ budgets for market intelligence – for example, sales is a large buyer while financial services is way smaller - we felt that the service center model would be the most justified approach to serving different customers with reasonable intensity. This is also a very demand-driven way of organizing market intelligence: Sales tend to have the most pressing demands for market intelligence support, hence they also consume (and pay for) most of our time.”

Q: So how does the service center organization look like?

“We initially established a service center with six full time market intelligence professionals. By now, the model has proven its viability by surviving two or three organizational restructurings, and our headcount has also increased to 15 full timers. Our little “company” has two teams, one that runs regular, standardized deliverables and populates the portals where we store and disseminate our deliverables. Then there’s a Business Analysis team that is working mainly on special hot topics, one project at a time. My own primary role is to be the sales person internally, meeting internal clients and also seeing that our resourcing works smoothly."

Q: You’re running a business within T-Systems. Aren’t there also administrative activities involved in addition to providing high quality market intelligence for your clients?

“That’s right, and this organizational model in market intelligence is therefore not for very small companies. We’ll need to write proposals, keep track of project progress with various professional project management tools, invoice clients, run client surveys, and so forth. We also need resources for purchasing and partner management, as we’re complementing our own capabilities and easing out peak workloads with the help of external consultants, information sources and freelancer networks. Obviously we are reselling these services to our internal clients, adding our own service fee on top of the purchase price. One could consider actively managing our deliverables portfolio as administrative work.”

Q: Sounds like you’re running a dynamic team and business. How does the future look like for your “market intelligence company”?

“We’ll need to remain competitive of course, seeking the “win-win” opportunities with our clients. We are constantly on the same line with external market intelligence vendors, hence we’ll need to prove ourselves each time we engage in a new project. Our business analysts aim to be on top of new market intelligence initiatives, which requires that we concentrate on our core consultative approaches with our internal clients and outsource non-core activities to the extent that’s possible and meaningful.

As for revenue, our parent company, Deutsche Telekom, represents a huge growth potential for us, which we plan to address step by step.”

Q: Any key success factors or challenges that you’d like to mention?

“This is something that all market intelligence professionals would agree on: In order to ensure smoothly running intelligence assignments with as few surprises as possible, one cannot overemphasize the importance of clarifying the needs and project goals. This is especially true when we’re running a business within a business. Poor needs analysis, project specifications and expectations management at our end may well result in the project making a loss for us.

To optimize our own efforts, we use the same client segmentation principles as any business would do, and we also try to balance our pre-sales efforts so as not to do too much unpaid work up front. We like to push frameworks and agreements with regular clients and also push standardization of deliverables where it makes sense. For the benefit of both our clients and our own marketing, we try to especially focus on projects that drive direct and measurable business impact.

In brief, we are trying to run a professional and successful business that will generate return on the market intelligence investment for our clients.”

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