I hate to use the word, “hate”.  Rarely is a situation in such dire circumstances that it demands a word as commanding as “hate”.  But, I hate Operations.  I realize as a MBA student, I should probably learn to enjoy all aspects of business.  But truly, Operations is the bane of my existence.  I guess it’s because inside, I thought I was above it.  Operations is simply the art of defining common sense.  For example, increasing the capacity of your bottleneck will increase the capacity of your entire operations.  I do not need a PhD to understand that principle.  I have common sense; why should I take responsibility for those who don’t?  Plus, I figure that if I am ever fortunate enough to become a CEO, I will just hire a good operations manager.  My interests lie in Marketing and Finance; why would I ever need to worry about Operations?

Enter the real world.  Two weeks ago I was asked to take on a project in marketing operations.  My job is to help define the processes that exist in our marketing department in order to make our department operate more smoothly. Two weeks later, and my notebook looks like a labyrinth of arrows, boxes, and processes with no start or end.  Nothing ever humbles you like working on a problem you do not know how to solve.  Perhaps I’m the one with no common sense!  Excuse me while I go register for an operations course in the fall! 
 

September 30. Month end and quarter end. How is 2009 already 75% behind us? A second ago I was ringing in the new year on the ski slopes. Summer is officially over, too. Soon it will be dark when I wake up and dark when I get home. Minimal sunlight, as if I need another reason to be depressed while I endure a cold midwest winter.

Today, finance and marketing finance professionals everywhere will be busier than busy. It's time to close the books. How much did we spend this month? How much did we make? Are you sure? What about the quarter as a whole? And don't think tomorrow they'll wake up to a stress-free day. It's not all wrapped up by the time the clock strikes October.

Hopefully, marketing finance operations are a piece of cake for those marketing finance folks because they are using a marketing financial management software like Aprimo's to manage their budgets all month long. When forecasts are laid out, commitments entered and invoices approved against those commitments, you know exactly where your dinero went, when and why. Done and done.

Personally, there's nothing hitting me over the head when another month or quarter comes to an end. Most of the time, I don't even think about it, unless a sales manager is explaining that they didn't call me back right away because contracts this and signatures that. It doesn't bother me that Q3 is over. But summer... I'll be pouting about that until Easter.
 

About two years ago, my wife and I entered another phase of life - empty nest.  Just to clarify, our second of two headed off to college and wasn't looking back.  Our first was entering his senior year with grad school in his sights.  So, we were staring a very quiet house in the face.  Now, I don't want to say that my wife and I were celebrating this event.  in fact, we really enjoy the company of our sons and were lamenting this loss. 

Fastforward two years....during the first year and part of the second year we ended up welcoming a friend into our household that was going through some tough personal problems (a divorce).  This was good for us and helped transition us to the actual quiet time.  During the first summer, our sons returned home and we added two cats to the mix. During the second year, we experienced a fair amount of the empty nest so our jobs consumed much of the empty space. Now we have gone through another summer and one son stayed at school and the other graduated from an intense one-year business degree focused on Financial Management.  Needless to say, the job market is decimated, so he is still with us and studying for actuarial exams. 

So, what's my point (you should be asking)?  Marketing is just like our life...hard to predict and full of unexpected surprises (some good and some not).  For this reason, you need to be constantly tracking your marketing finances from an overall perspective so you know what money is spent, what is promised and what is forecast.  How else can you know how to react to new opportunities (Social Media Marketing), new competitive moves (product launches), needs for the sales pipeline or economic changes?   It's hard to find automation
that will help you deal with life's unexpected changes, but marketing automation software can definitely help a marketing operation stay swift on its feet.

ROI in Marketing. Perpetual Motion Machines. The Fountain of Youth. All seem to be very elusive concepts. I don't have much to say about the second two items (despite my engineering degree), but I can make some comments on the first - ROI in Marketing. Aprimo's Marketing Automation software, like a Marketing department, is based on activities.  It's a simple concept...but it is a unique aspect of our product that makes the difference in allowing us to measure the effectiveness of a marketing activity.  In case you're wondering, a marketing activity could be writing a white paper, developing a microsite, writing a blog, managing paid search or coordinating a major trade show.  When it comes to managing marketing finance operations, the key is that marketing looks at the world from the perspective of these activities.  We manage our plans in groups of related activities, we assess the value of various types of activities (should we do less trade show events and more online marketing?).

By allowing the money to be tracked within these activities, we allow you to manage your marketing spend the way you manage your marketing. I've seen many estimates of ROI in Marketing that only take into account the execution costs (placement for web advertising) and forget about the design and development costs that can be significant depending on the activity.  The return on an activity can be somewhat elusive as well. There will always be an argument that multiple activities lead to a closed deal or the lift in product revenue. This will continue to be the realm of estimation and analytics.  However, accurate tracking of the entire investment will bring more accuracy to the process. 

Well, I've dwelled only on Marketing Finance Operations for my early posts.  I'm ready to talk about another passion of mine -- process (yeah, I'm a blast a parties :)).  Stay tuned!

I mentioned getting Marketing Finance Operations under control in my last post.  We operated as a typical marketing organization with distributed authority for approving expenses and no real good central mechanism to track expected expenses.  The complexity with managing marketing financial software is the various stages of marketing spending. 

First, there is a forecast for a program (e.g. an online marketing campaign)  that is planned in the future.  This "earmarks" money from the budget somewhere out in time.  Second, there is the point where you actually start to commit spending money for the online marketing campaign through a verbal or written contract (e.g. a PPC advertising campaign).  Finally, there is the actual invoice when cash flow is impacted. These all need to be managed on three dimensions - a budget, an activity and alignment with your General Ledger accounts.  Visibility to all these aspects allows me to react to budget increases (yes, it can happen), budget cuts (okay, this is more common) and the desire to change plans to react to market dynamics.  The association with the General Ledger provides an alignment point between Marketing Operations and the company accounting system.

In the past, we would get invoices that we didn't realize we had not yet paid and be forced to adjust our future spend when it was almost too late.  A good proportion of marketing spend is committed well in advance. When we had to adjust within a quarter, our options were limited on finding places to cut.  Also, without the visibility of what was committed and what wasn't, we didn't really know what activities carried a large amount of sunk cost.  The other side of the equation, measurement, is equally as important. Without knowing the cost of an activity (the Investment), it's pretty difficult to assess the Return on Investment or ROI in Marketing.  But, that's a topic for my next post.  Until then, may the marketing process be with you!