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  • Third of marketing budgets spent on operational excellence, but results inconsistent

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    Thirty-one per cent of marketing budgets are spent on the pursuit of operational excellence, despite having inconsistent impact on overall organisational performance.

    Gartner surveyed over 400 marketing operations (MarOps) leaders between August and October 2022 to find that 94% of marketing organisations are formally pursuing operational excellence (e.g., improving processes, building new capabilities). This indicates an acceleration of investment since 2020, when only 49% of marketing organizations surveyed had a dedicated MarOps leader.

    However, the survey found that 72% of operational excellence pursuits don’t actually demonstrate characteristics that align with success, putting enterprise growth and marketing transformation at risk.

    “CMOs are under pressure to make every dollar count,” said Michael McCune, Senior Director, Advisory in the Gartner Marketing practice. “However, their teams are spending a large proportion of their budgets pursuing change and improvements in ways that aren’t effective.

    “‘Business-as-usual’ marketing activities do have to change, but CMOs shouldn’t divert funds away from activities such as advertising and trade shows that could have a more significant impact on marketing’s overall remit to drive growth.”

    Strong pursuits of operational excellence complement the day-to-day management of marketing’s work and are associated with characteristics such as automated workflows, effective use of Agile methods and persistent effort over multiple years.

    Organizations with strong pursuits were 43% more likely to report exceeding their operational performance goals compared to organizations without strong pursuits, but at a greater cost: They spend 45% more than average and dedicate 18% of their staff to achieve MarOps excellence, compared to the average 5% of staff dedicated to all other pursuits.

    “Marketing organisations can’t blindly or ineffectively invest in improvement at the expense of business as usual unless it shows results, given the tight economic and labor markets,” said McCune. “They need to lay a better foundation for that investment and can look to strong pursuits for guidance.”

    In order to maximize the impact of future MarOps investments, Gartner says marketing leaders should:

    • Communicate to stakeholders that pursuits of operational excellence will not have a persistently high cost. A new pursuit likely has many opportunities to drive improvements, but it should not be a cost dragged on marketing over the long term. As improvement occurs, resource requirements for continuous improvement should diminish.
    • Seek resolution of known critical gaps. CMOs often know about systemic problems, but lack resources to address them at the start of operational excellence efforts. Make sure to have a dedicated team working to resolve one or some of the known critical gaps so that investment in the pursuit has early payoffs.
    • Ensure that MarOps efforts don’t duplicate enterprise initiatives. Alignment with operational excellence pursuits in sales and service functions is always a good idea, but CMOs should avoid neglecting the enterprise-wide efforts of other functions such as finance and HR that may lighten marketing’s lift over time.

    Stuart O'Brien

    All stories by: Stuart O'Brien