Mitalio Software Case Analysis Case Study

Case Facts

• Mitalio Software inc. was a key player in the business process management software industry with operations in North America, Europe and Asia. Its offices were located in United States, France, Germany, Spain, United Kingdom and Hong Kong.
• The major product categories were divided according to the customers served and involved corporations in telecom, manufacturing, banking, financial services, healthcare and insurance.
• A core product family was ProcessEdge which comprised multiple products that helped create new software platform, acted as a bridge between multiple platforms, and packaged business applications for specific industries.
• These software involved many permutations and combinations of possible solutions, hence hard to implement.
• Part of the revenue came from services as the sales people had to undertake extensive customer education and consultative selling.
• Direct selling was the major determinant of Mitalio’s market performance.
• Products were licensed and services sold through a direct organization in most parts of the world.
• Selling through resellers was just a supportive sales force.
• The direct selling was accomplished through sales professionals and sales support consultants who provided pre-sale technical support to prospective customers.
• Mitalio Software put a special emphasis on marketing activities.
• Market spending was about 7% as compared to the industry average which was between 2% and 5%.
• Printing advertising in business magazine, industry events and tradeshows, and market services topped the list in the amount spent.
• Online/Web-based marketing was bottom in the list with only 5% of the total spending.
• Marketing productivity per employee was lower compared to peers and competitors.
• The marketing focus was on educating potential customers, generating new sales opportunities and improving awareness of various products.
• The marketing objective was lead generation or generating qualified leads that the direct force could pursue.
• Lead generation was a great disadvantage to Mitalio.
• Competitors had increasingly rolled out rapid fire promotion strategies.
• Instead of enticing people to buy products, Mitalio continued to target an almost fixed set of customers.
• In order to enhance brand loyalty, Mitalio was establishing thought leadership by increasing the time the sales people spent with customers.
• Electronic marketing becoming more common over conventional forms of marketing, thought leadership faced a great challenge.
• BEA acquisition was a great threat to Mitalio’s business.
• BEA had been a long time competitor and the acquisition was an added advantage to the firm’s strength.
• BEA had swiftly engaged in electronic marketing to advertise the acquisition.
• People had begun to respond to the competitor’s call and traffic had increased significantly.
• Mitalio had about 140 cases worldwide in the proposal stage and 60 pilot projects around the world which were directly threatened by the new wave created by competitors.
• Mitalio’s marketing organizational structure: Director of product marketing (Carlos Pintera), director marketing manager (Susan Marakos) and then an MBA intern (Oscar Smith).
• Director of product marketing
• Carlos was a very observant person and was known for his quick response to issues that affected the marketing department.
• One of his jobs was to oversee the development of marketing strategies.
• Director marketing manager
• Susan had been with the company almost since its inception.
• Her responsibilities were to communicate, mentor and support the development of marketing initiatives.
• The MBA intern
• Oscar had great experience in hi-tech marketing with CPG.
• He was to spearhead the team in developing a comprehensive e-marketing strategy.

Problems/Dilemmas and Recommendations

Problems

• Competition in the global market was intensifying as firms like BEA increasingly became stronger through acquisition and timely response to the changing marketing environment. The competitors were swift in adopting marketing strategies that aligned with the needs of customers and technology advancement.
• Mitalio marketing management was still pursuing thought leadership which did not support or was in opposition to the current trend of e-marketing. Thought leadership was a way of creating brand loyalty by aiming to shape customer perceptions through long term service. Arguably, this could not compete effectively in the present environment where customers sort for speed, interactivity and efficiency.
• The nature of Mitalio’s business did not allow for product diversification and most of the industry players offered similar product. This left the firm with no other choice but to maximize on marketing strategies in order to enhance brand loyalty and create a competitive advantage.
• A wave of uncertainty about the success of the many deals Mitalio had with global customers was emerging as a result of intense competition. Many global customers were being taken by e-marketing which the company was yet to implement.
• The BEA acquisitions might also take effect earlier than the six months Oscar claimed and surprise Mitalio. Indeed, the online communication of the acquisition was a surprise to Carlos and this could still happen for the implementation.
• Carlos is already discouraged by the level of Mitalio’s e-marketing activity, yet he is expecting the marketing team to come up with a comprehensive e-marketing strategy. As a leader, he should be in the frontline to motivate his followers rather than leaving the effort to them.
• The budget allocated to online marketing is the least and becomes a big obstacle to the success of the e-marketing strategy. The budget is just 5% of the total marketing budget.
• Mitalio’s executives are not active in online activities since no blogs from senior company executives could be found. This is also an indication that the rest of the organization is not aware of the significance of enhancing e-marketing strategies and might oppose the proposal from the marketing team.
• Susan is not ready to listen to Oscar suggestion that e-marketing is better than lead generation in term of expanding the customer base. As copartners in the development of an e-marketing strategy, this conflict of interest could have some negative impacts on the outcomes.
• The number of marketing employees is also large and Carlos might not want to lose them as it is expected once the e-marketing strategy is adopted. Also, there might be a need to reorganize the whole department which might certainly face rebellions from employees.
• Mitalio wanted to be a key player in the enterprise software industry, but did not make the necessary strategic changes on time such as revising and funding its marketing strategies appropriately. Also, competitors were more sensitive when developing marketing initiatives, forcing Mitalio to reconsider adopting e-marketing strategy.

Alternative paths of action

• The marketing team implements an e-marketing strategy

Pros

• Help Mitalio to lower the threat emerging from the BEA acquisition and the new wave of online communication. As Carlo noted, the present and a great concern was the increasing involvement of BEA in online activities.
• Eliminate the risk of losing the 140 cases worldwide in the proposal stage and 60 pilot projects around the world which were directly threatened by the new wave from BEA acquisition. This risk results from the lack of involvement in online activities by the marketing team and the firm as a whole.
• Increase the productivity per employee which is lower than the competitors as a result of ineffective marketing strategies. A change in the marketing strategies that responds to the situational needs might increase productivity as a measure of revenue.
• Increase the speed of sending the marketing messages which Oscar thinks is too slow at present. The higher speed means that more customers could be enticed to make transactions with the company.
• Addressing deeper, underlying problems at Mitalio that are probably the real reason as to why the marketing department is not doing well overall, such as employees productivity being lower that the competitors.
• Reduce marketing spending especially because some of the marketing strategies will be dropped as well as a reduction in the marketing workforce.

Cons

• Some sales people especially those doing consultative task will lose their jobs due to adoption of information technology. Also, e-marketing will eliminate some marketing strategies such as advertising through magazines forcing the company to reduce the workforce.
• Extra spending will occur in outsourcing expertise, employee training and installation of the IT systems to enable online integration throughout the firm. This is because an integrated e-marketing strategy will require input from various departments to ensure that the customers get the confirmation on the marketing message.
• Demanding restructuring of the marketing department: the e-marketing strategy will define new roles and eliminate others, hence the need to restructure the department to accommodate the change. Also, this will not definitely be accepted by the affected employees and might in turn affect their motivation.
• The marketing team continues to focus on lead generation

Pros

• Some employees will not have to lose their jobs neither will a restructuring of the department be required.
• Expertise and experience will be maintained as the sales people will continue with their jobs. Mitalio has always performed better than competitors largely because of the expertise of the marketing team.
• Avoid the risk of losing their competitive advantage which is embedded on the marketing strategies in place as defined by the marketing objective.

Cons

• Allow competition to swell in as competitors achieve elevated competitive advantages. This will also lead to a loss of revenue as the competitors dominate the market.
• The firm will lose brand loyalty as consumers become more and more sensitive to technological changes which increase speed, interactivity and efficiencies.

Recommendation

• Tony must oversee the implementation of a comprehensive e-marketing strategy and develop it to be more effective. Also, the marketing team should use web techniques such as search engine optimization and other tools to increase the effectiveness of the e-marketing strategy. This way, the marketing team is not putting the business at the risk of losing brand loyalty.
• Tony is the EVP of marketing and should increase his involvement in the strategy development. He should be there to motivate talented and experienced persons like Oscar to maximize their input towards the success of this strategy. Oscar is an IT expert and can help in reducing the cost of outsourcing expertise during the implementation process. Tony is also strategically positioned to link the marketing team with the top executives in order for them to support the strategy and its development.

Three concepts from “Mastering the Three Worlds of Information Technology”

• Companies need to adopt information technology in the current information era in an effort to enhance efficiencies and speed in operations. This means that information technology has a central role in all functions of an organization and managers must take the responsibility of its implementation.
• This is something with which Mitalio marketing team is struggling to achieve. The marketing department seems much focused on its success, partly due to the changing business environment and the emerging wave of its competitors.
• The company could devise a way to adopt the necessary IT in order to succeed in the e-marketing strategy projected. It will be very important to involve all departments in the implementation process as a way of enhancing IT integration.
• Leaders have special responsibility in terms of IT adoption and should not distance themselves from abandoning a vital role. Tony and other leaders should not leave the responsibility of strategy development solely to team members.
• Leaders must help in selecting technologies, fostering their adoption and make sure their exploitation. They should not look at hi-tech marketing project as a system and consider it as an opportunity for organizational change that they are responsible to supervise.
• Network IT is the most pertinent category of IT in hi-tech marketing. This class will offer a way by which Mitalio stakeholders can interact with each other. The major reason is that the class supports internet activities such as e-mail, instant messaging, blogs and popups. This technology will give the stakeholders freedom to experiment with the company. It will come with supplements, but allow customers and employees to execute and change them over time. Mitalio top leaders will also have the opportunity to write blogs.
• Network IT will facilitate collaboration. It will allow employees to work together without defining what projects should be worked on or the teams that will be involved. Teamwork will be encouraged whereby the marketing teams will employ wikis to carry out assignments without directives from the supervisors.
• Network IT will permit expression of decision as it employs unrestricted technologies that permit people to present opinions. Mitalio will be able to understand customer needs and communicate the strategies adopted to meet those needs.
• Network IT fosters emergence or the manifestation of high level patterns because of low level interactions. Mitalio managers will be able to compare how marketing functions are done with how they are supposed to be done. Similarly, sales people can easily search and navigate Mitalio’s blogs and wikis for information without supervision.
• The e-marketing strategy will require systematic management of information technology involved. Mitalio marketing managers should first select the IT applications that are pertinent to the hi-tech marketing strategy.
• The company should invest in the internet marketing because others such as BEA are succeeding in it.
• Second, the managers should put the technologies they have selected into productive use. The major role of the managers will be to assist in the creation of the supplements that will maximize the value of the technologies.
• Finally, Mitalio’s managers should seek to extract the maximum benefit from internet marketing technologies. They should exploit technologies like blogs and wikis in order to help in sustaining and increasing the use of supplements to make the new technology continually more effective.