Monday, April 27, 2015

Evolving Organizational Structures for Intelligence: Where Does Market Research Fit?

By: Bill MacElroy

As we begin to emerge from years of recession, the Market Research industry appears to be recovering some degree of growth in revenue.  However, the growth in the market for survey research remains very low relative to other business service industries.

When we consider the causes of low growth, several scenarios may be at play. First, the industry may have met a natural cap: we may have reached a zero-sum level of production that meets all the needs for information that client companies have.  If this is the case, then the only way to grow is to take business from someone else; leaving the total market size relatively unchanged.  In this scenario, competition is defined as "direct competition;" we're fighting against competitors who are doing the exact same thing that we are and seek points of differentiation based on doing what we've been doing, only better or cheaper.

A second possibility is that new, disruptive technologies or methods are becoming substitutes for traditional research and that the demand for information in client companies is being met through alternative channels.  This is "indirect competition," wherein we are fighting for budget against substitutes that are producing similar benefits, but in very different ways.

Having seen the growth in Big Data operations and the budgets allocated to that infrastructure, I'm of the opinion that the second scenario may be becoming more relevant.

For a number of years, enterprise-level businesses have been building new organizational units for the collection and processing of transactional data and other forms of “big data.”  Market research is seen as an established information gathering function, but the two methods operate very differently in terms of speed, cost of infrastructure, complexity and perceived reliability.

Many firms have been considering how these parallel analytical processes can be integrated into their overall “market sensing” activities.  There is some evidence that the big data group may be poised to swallow a great deal of budget that used to be earmarked for market research.

In order to ascertain the degree to which big data is becoming an indirect/financial competitor to established research budgets, Socratic fielded a study including 200 enterprise-level strategic decision-makers who employ information systems to support the corporation's choices.  We will be presenting the findings of this study at IIR's InsighTech. This presentation will feature the results from this research-on-research study, which will reveal how senior business decision-makers foresee their organizations’ future structure and where Market Research fits into the overall scheme of business intelligence.

Key Takeaways:

·         How does the emergence of business analytics and big data fit into future intelligence plans?
·         How/Does market research integrate with these functions?
·         What will the reporting structure look like for research and data analytics?  Do they both report to the same function?
·         What will the leadership hierarchy of intelligence look like?  What functions produce the most value?
·         What will be the budgeting mix between big data and market research activities?
·         To what extent is senior management supportive of each function?  Are there credibility barriers that must be addressed?
·         What will determine “success” for each of these functions in the future?

About the Author: Bill brings more than 35 years of marketing management and research experience to Socratic Technologies.  His career has included both agency and client-side managerial positions with Corning Glass Works, Memorex, Unisys Corp., Cheskin, MACRO, and Autodesk. Bill holds a doctorate in Management & Technology from Golden Gate University, San Francisco; an M.B.A. with a concentration in Marketing and a Master's Certificate in Applied Statistics from Pennsylvania State University; and a B.A. in Economics from the State University of New York.  He also spent an undergraduate term at the Universit├Ąt W├╝rzburg in Germany.Dr. MacElroy has taught New Product Development and Marketing Research for UC Berkeley Extension, San Francisco.  He has been a guest lecturer at MIT, UC Berkeley, The Pennsylvania State University, University of San Francisco and the Notre Dame-AMA School of Marketing Research.

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