CMO

Why you should bother with the CIO

Gartner's Andy Roswell-Jones underlines the reasons why stronger CMO/CIO relationships can be mutually beneficial

Gartner’s report on the decline of the CIO and rise of the marketer as the key technology buyer made plenty of waves last year. According to the analyst group, 35 per cent of enterprise IT expenditure by 2015 will be out of the CIO’s hands, with CMOs responsible for the majority of technology purchasing by 2017.

The reasons are there for all to see: digitisation of content and interaction, social media and mobility proliferation, the need to better understand and individualise the customer, and the rise of affordable cloud-based solutions for data processing and management are just a few.

What’s less obvious is how CMOs and CIOs deal with such a paradigm shift in their own organisation. Not only does this change raise questions about the role and skillsets required by CIOs and CMOs, it also highlights a need for the two sides to collaborate to ensure technology spending and adoption truly benefits their business. But given marketing and IT people are as distinct as chalk and cheese, forming long-lasting relationships across the two functions is easier said than done.

In an effort to help, Gartner CIO research analyst Andy Rowsell-Jones and his colleagues co-authored a report entitled: Unlocking the power of a great marketing/IT relationship. Their aim was to investigate the current status of the CMO and CIO relationship, identify reasons why both should seek out a relationship with each other, and then figure out how to find common ground.

Even though the IT organisation is viewed by most as a haven of conservative, risk-adverse number crunchers, the good news is more and more marketers recognise they aren’t just a necessary evil, Rowsell-Jones told CMO. The problem is those very traits that make IT good at what they do are at odds with the real-time pressures and customer complexities a CMO faces today. You have, in fact, a clash of culture.

One of the biggest drivers for marketers to purchase technology externally is the important quest for social analytics and engaging customers in conversation, Rowsell-Jones said.

“Things like user experience in app and website design is also recognised as critical and that’s all well and good, but once we start looking at product innovation, competitive information and so on, the supply chain becomes more complicated,” he claimed.

“IT service providers are selling directly to marketers at a time when they need to conduct more strategic business and are accessing data processing services such as social analytics, communications advice and disaster management. But marketers are not strong in vendor management or integration and this leads to gaps and broader company issues.”

Roswell-Jones pointed to an example where one Australian retailer’s brand manager chose to run a weekend promotional competition but failed to account for the impact it would have on the company’s IT infrastructure. By 9am Friday night, the retailer’s website had collapsed and the CMO was faced with the daunting task of explaining to the CEO why such a highly publicised competition backfired.

“This is a typical problem for CMOs – brand managers come up with a good idea and execute it, but no one is stress-testing the IT infrastructure or looking at the fulfilment of prospective orders. They’re just focused on the brand promotion,” he said. “In this situation, it’s helpful to use the internal IT [team] as a sounding board or as a risk mitigation component.”

Mutually beneficial

Like every executive relationship, there are mutual benefits and a need for reciprocation on either side of the CMO/CIO divide, Rowsell-Jones said. To help, Gartner identified five key areas where a powerful CMO/CIO relationship creates economic and strategic value.

The first is customer engagement. “Marketers are increasingly relying on achieving a view of the customer through social media channels, but by working closely with IT you also get a view of your actual customers through internal departments such as the contact centre,” Rowsell-Jones explained. “This gives marketers a broader engagement model that covers the entire value chain and customer streams. You gain much wider reach and can look both externally and internally to get a true customer view.”

Page Break

Product innovation is another area which can be fuelled by stronger marketing and IT alignment. “If you only have an external view, you miss opportunities and ideas for product development,” Rowsell-Jones claimed. “Gaining a more business processed-based position adds to your product innovation strengths.”

The combination of IT and marketing knowledge also leads to more integrated business processes, which can only better how companies sell, promote, and fulfil customer requirements. “Linking these aspects together tends to be managed by the process-based IT department and is a resource marketers can get a lot more out of,” he said.

A powerful CMO/CIO relationship also leads to stronger market/customer/competitive intelligence. Finally, where you have integrated control of marketing channels, you have general purpose communication platforms that the entire business can use to its advantage, whatever the timescale.

“For example when Westfield’s car park partially collapsed last July in Eastgardens, NSW, the company was able to use social media channels to communicate to customers in real-time,” Rowsell-Jones said. “This was possible because IT and marketing worked hand-in-hand.”

Ultimately, a successful relationship with your CIO comes down to recognition of mutual value. The challenge is getting past the obvious difference to find common ground.

“Many CMOs are not particularly strategic when it comes to timescales as they have to work quickly and creatively on a specific opportunity or result. On the other hand, IT by its very nature is focused on big infrastructure and is slow to change with more protracted timescales,” Rowsell-Jones pointed out. “The value system instituted in company culture today and across these different functions rewards these behaviours all the way up the tree, as well as the traits that go with these values, and you have different metrics of performance on both sides. It’s not surprising the barriers to collaborating are so high.

“What I’d advise both sides to do is seek out and identify mutual value and recognise things can’t be done without the other side, whether it’s information processing requirements [CMOs] or losing budget [CIO].”

The good news is the shift is starting to happen. CIOs are recognising they can’t ignore the need to improve their relationship with marketing, Roswell-Jones said, and are driven by prioritisation, privacy, security and maximising the use of IT resources. With marketing, it’s a question of sourcing the best and most cost-effective IT services to meet their needs. He predicted marketers will continue using external agencies to gain some customer insights, but stressed the importance of in-house IT for data analytics, fulfilment and end-to-end intelligence.

“Marketers should recognise IT is where the resources lie to achieve the next stage of engagement with the consumer,” he added. “You have to have something to prioritise marketing’s demands and that’s IT.”

Whatever mark you give your own relationship with your IT department, what’s clear is that keeping customers happy and your company’s brand message consistent are going to inevitably increase marketing’s reliance on technology processes and platforms.

“Online has gone from being a billboard to a fulfilment vehicle and that raises the complexity for both IT and marketing,” Rowsell-Jones concluded. “For CMOs and CIOs to work together, it will come down to understanding that one team doesn’t have all the answers.

“As one wise man said, none of us are as smart as all of us.”

Five stages towards true CMO/CIO partnership
Gartner has identified five classifications of CMO/CIO relationship maintained across Australian businesses today. Which one matches your company best?

Conflicting: Both sides detest each other and the engineering versus ‘artsy’ culture is highly apparent. There’s no leadership to force the two sides together. Unfortunately, this relationship type exists in lots of different companies and both sides play off against each other to the detriment of the business.

Coping: A step up from conflict, where IT and marketing are beginning to recognise mutual dependency and have stopped being destructive to each other. They are working together in carefully proscribed areas such as reporting, infrastructure for the website or development of an app.

Co-mingling: Marketing and IT are starting to co-create initiatives and pool ideas. Often, however, no structural changes have occurred in IT to better its relationship with the marketing department.

Collaboration: Mixed teams where you have both IT-savvy marketers and marketing-savvy IT personnel. There’s a high degree of consultation and the importance of one side to the other is baked into the culture of the organisation. Both are equally involved in all planning meetings.

Co-creating: Marketing and IT are interchangeable. You have marketing-oriented IT workers and vice versa, and there’s consistent co-creation around plans and ideas. This is where the CIO and CMO functions are entwined. Ultimately, the success of this model comes down to who the CIO is.

Follow CMO on Twitter: @CMOAustralia.