The Business Case for Digital Investment report, produced by Econsultancy in partnership with Sitecore, looks at the extent to which companies are objectively assessing the potential impact of marketing and customer experience (CX) technology in terms of both increased revenues and reduced costs.
The research is based on a survey of 241 marketers and digital professionals who are involved in trying to secure budget for digital marketing or CX technology investment.
The key findings of the research include:
- Almost half of companies are failing to take a scientific approach to technology investment
While a slim majority (55%) of companies claim to make marketing and CX technology investment decisions based on an objective business case and the expected return on investment, a significant proportion of organisations are failing to do this. A fifth (20%) of respondents said their organisations only invest in technology when legacy systems fail, while 18% decide on investment based on the ‘person who shouts the loudest’.
- The absence of a business case is a key reason for lack of investment in digital strategy, along with poor boardroom understanding and the perception of digital as tactical
The lack of a clear longer-term business case and ROI, an absence of board-level understanding and sponsorship, and the perception of digital marcoms as tactical rather than strategic are all viewed as significant challenges to securing the right levels of investment for a digital strategy by at least three-quarters of responding companies.
- CMOs are widely responsible for building the business case for technology investment
Chief marketing officers are far more likely to be primarily responsible for creating the case for digital marketing and CX investment within businesses than any other senior executive, though a collaborative approach involving chief information officers (CIOs) and other C-suite executives is required for success.
- Companies can do more to quantify the benefits of a better customer experience
Many businesses have yet to fully get to grips with the challenges of quantifying customer-facing technology benefits, and in many cases are only viewing half the picture because they are not factoring in the impact on the bottom line (i.e. reduced costs) as well as the top line (increased revenues).
- Poor understanding of external and internal costs
In order to build the most scientific business cases, companies need to have a strong grasp of both internal and external costs. Fewer than a quarter of those surveyed report a good grasp of external costs for data management for segmentation and single customer view (24%), personalisation (24%) and connecting disparate systems, such as analytics, campaign management and email tools (22%).
Meanwhile, more than four in ten respondents describe their understanding of internal costs as ‘poor’ in relation to producing a single customer view (53%), enabling personalisation (48%), systems data integration (45%) and data management for segmentation and single customer view (41%).