Sony Electronics Hits the Mark

In the consumer goods industry, measuring the return on marketing investments can be compared to trying to find a needle in a haystack, especially when visibility is poor. Yet, in a time when return on investment is perhaps more important than ever, companies must ensure that every dollar spent is on target to deliver results. Leaders in the industry are taking a proactive approach during the recession and reevaluating front office operations to achieve better visibility and transparency into company-wide marketing activities.

Take Sony Electronics Inc. (www.sony.com) for example. Headquartered in San Diego, Calif., it is a leading provider of audio/video electronics and information technology products for the consumer and professional markets. The Sony brand is recognized worldwide for producing innovative products of exceptional quality and value, like the Walkman personal stereo and the PlayStation game system.

Yet, a siloed organization made it challenging for Sony Electronics to develop an integrated marketing plan that optimizes spend across the many channels that sell its innovative products. The company is comprised of multiple business units with disparate processes that target sales in the consumer, consumer systems and applications, commercial IT, corporate, education and A/V reseller channels.

"Individual groups had their own ways of developing plans and going to market, and we had no way to leverage the success of one group's efforts across the organization," says Barbara Ross Miller, vice president, customer experience marketing, Sony Electronics Inc.

Until recently, marketing executives noted:

• Limited visibility into end-to-end processes of marketing projects
• Partial ability to track marketing spend and incomplete visibility into budgets
• Lack of a central location for client creative files, materials, etc.
• Lack of a centralized calendar to plan campaigns across products

As part of a multi-channel strategy, Sony Electronics recently embarked on a marketing resource management (MRM) project to address these issues -- without prompting from its customers.

"Included in this approach was a need to create better transparency of our marketing activity spend and to build better cross-functional business planning utilizing our internal data," says Ross Miller.

Making MRM Work

By definition MRM provides the software infrastructure to support marketing operations management, which is the alignment of people, process and technology to support marketing activities.

To achieve this, Sony Electronics conducted initial strategy planning with IBM (www.ibm.com) and developed a roadmap to reengineer key marketing processes. It later used internal resources to evaluate software solutions to specifically address project deliverables.

The company then chose to implement Microsoft Enterprise Project Management (EPM) (www.microsoft.com) using Hitachi Consulting (www.hitachiconsulting.com) as its integration partner.

"Being able to expand EPM as an enterprise solution with customizations specific to our MRM effort met the company's criteria to optimize our technology investments," says Ross Miller.

The tool offered a single point of entry for fiscal year budget line items; an auto calendar capability of proposed market activity; a report of planned spend for fiscal year buckets; and a consolidated online view of proposals. However, Ross Miller notes that the MRM solution does not provide analytics for making marketing decisions -- that task lies in the hands of the system users.

Phase one of the project, which involved 25 initial users, process documentation and reengineering, was completed in early 2009. The MRM system currently allows for marketing activity planning across business divisions to be centralized in a consistent interface with consistent terminology and data attributes.

Data is distributed to senior leadership in the form of an electronic report so that they have a cross-category, full-house view of activity. The tool is web-based, so an auto calendar report can show which activities are in market when, enabling users to be aware of what's coming and adjust plans as needed.

While adoption of the system is still in the early stages, Ross Miller notes that a heightened level of consistency allows for consolidated activity reporting, providing senior leadership with the ability to optimize activities at a macro level in addition to the micro levels that happened in the past. 

Plus, Sony Electronics can now better manage resources and minimize duplication of marketing materials. These operational efficiencies have the potential to help eliminate 2.5 percent of ineffective marketing spend across all P&L divisions.

In October 2009, after evaluating user feedback, Sony Electronics expanded the system's user base to approximately 60 employees with the launch of a second phase.

"We are now looking to plan activities with our business partners/customers, making sure that we are in sync from a timing and market perspective," says Ross Miller.

When fully operational, phase two of the project will also allow Sony Electronics to conduct accurate financial reporting, which will enable users to look at return on investment of specific marketing activities and improve the ability to reallocate funds and resources to higher performing campaigns and channels.

The next step is to build specific project initiation and process management tools into the system, allowing users to measure and improve the execution time for marketing activities.  

Managing Change

Despite MRM's obvious advantages, user pushback comes with the territory of any major organizational process or technology change.

"The difficulty lies in convincing individuals to give up their antiquated manual charts and reports," says Ross Miller, who points out that Microsoft EPM, because of its familiar user interface, made change management less of a challenge.

Process validation was obtained before system design, and design validation was obtained before implementation. Sony Electronics even conducted a three-week test period during which users could identify any issues before go live. Problems that couldn't be addressed immediately were documented so they can be fixed in the future.

Targeted Marketing

In closing, Ross Miller clearly notes the importance of MRM for Sony Electronics : "MRM at its purest form is about visibility and transparency of activities across the organization. Having that vantage point allows for better decision making and the system can provide the data to support those decisions."

5 things you didn't know about Sony

1. Sony's first product was a rice cooker.

2. Sony established its first major overseas operation in New York City in 1960 with a capital investment of $500,000.

3. Sony was the first Japanese company in the United States to make a public offering of 2 million shares of common stock in the form of American Depository Receipts in 1961.

4. In 1986, Walkman was included in the Oxford English Dictionary.

5. Before the Walkman personal stereo became a worldwide brand name, it was introduced under a variety of names, including the Soundabout in the United States, the Stowaway in the UK and the Freestyle in Australia.