A new reality between the CMO and CIO

A new reality between the CMO and CIO

Summary: Today's rapidly shifting marketplace is pushing business innovation and agility to new levels, while the rising primacy of digital engagement and all data related to it undergoes a tug of war between the CMO and CIO. How will businesses recalibrate these strategic roles for this new reality?

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By now, you've probably heard the prediction floating around that by 2017 or so, the CMO will have a larger operating budget than the CIO. By itself, it's not particularly surprising, as marketing has long had a focus on major media and broad market engagement, both expensive propositions in today's ever-more fragmented media world. Furthermore, with most large companies becoming global, the urgency to better connect with all corners of the marketplace and drive regional business growth has steadily pushed up CMO budgets in recent years.

In contrast, IT is still looked at largely as an overhead expense, something to be contained and reduced, even as digital business has finally experienced a modest renaissance in the last few years as a direct driver of revenue and competitive advantage. Nevertheless, IT spending will be up globally by 4.2 percent in 2013, as companies tackle tablets, big data, enterprise software upgrades, and improved networks.

If you think these look mostly like infrastructure investments, however, then you'd be right. The reality is that the strategic use of information technology for growing and transforming the business is frequently not led by IT today. In fact, that's what the CMO budget growth data point purports to show: That marketing has now become a top consumer of IT in most large organizations.

The Balance of CMO and CIO Responsibilities in a Social, Mobile, and Data-Driven World of Engagement

What's more, beyond the increasingly rapid cycle times of today's online world, and the broad demographic shift of consumers to mobile and social channels, the cloud has become a principle enabler of IT liberation by unleashing a tsunami of on-demand services that can be quickly spun up by non-experts to meet business demand. These are new online services that manage customer relationships, deliver cross-channel marketing experiences, orchestrate digital advertising, and help business users react to the volumes of data that result from these activities to drive operations and support executive decision making.

This is creating a distinct sense of overlap and a blur of corporate responsibility as CMOs evaluate, acquire, and field extensive new IT capabilities for digital advertising, customer experience management, CRM, and other related functions across a growing set of touch points, which now include at a bare minimum traditional media, online media, social media, and mobile devices. A decade ago, much of the service delivery for these functions would be delegated under the CIO, who would support the marketing department and other groups in their IT endeavors as needed (although largely on IT's schedule). Now, as my ZDNet colleague Paul Greenberg recently observed, "marketing is at the forefront of strategic technology investment".

But as I noted just over a year ago in my analysis of the five big IT trends for the next half decade, CIOs themselves are largely not trying to get ahead of this curve. In fact, they are on a largely evolutionary technology road map, and frequently eschew the pursuit of breakthroughs that will give their companies major advantage. Why? Because their traditional role of developing infrastructure and keeping it operating (and manageable and secure) tends to make them risk adverse and focused on business continuity.

Taken as a whole, this inclination to avoid risk, combined with: 1) the growth of application backlogs created by years of constrained budget; 2) a parochial vision of IT as a central function; and 3) compelling new business solutions pouring into organizations from mobile app stores and cloud/SaaS, has resulted in a tremendous volume of pent-up IT demand that simply can't be met through a traditional IT approach.

These tensions have led inexorably to widespread consumeration. Bring your own devices (BYOD) and bring your own apps (BYOA) are the norm today, as business users take the technology reigns into their own hands. This also means that as we enter the era of deep engagement, the marketing department is uniquely positioned to be the internal business leader in managing the technologies on the boundary between our companies and the rest of the world. The CMO thus has both the mandate and the urgent requirement to enable digital engagement in a way that no other group does, and the ready capability to do it without much help from IT.

How will CMOs and CIOs reconcile today's shifting responsibilities?

I've attempted to describe the realignment and overlap in the work that CMOs and CIOs now both do in the visual shown above. It's clear from this that each function has some strengths over the other in certain areas: IT is better at operations, cost efficiency, and managing exceptions. Marketing is much better at customer experience, using data for business decisions, and moving quickly to seize a perceived market advantage. Some might quibble at whether IT is really better at innovation, but each function clearly has abilities in all of the areas listed, and the edge still goes to IT departments in my opinion. When they want to, anyway.

What's disturbing, however, is that it's clear from this view how much overlap there truly is today between the CMO and CIO. Another key indicator: I've noted previously that I've encountered a growing number of people with the title of CIO of marketing in recent months, showing how marketing departments are staffing up on their own senior IT executives in a quest to better execute on their mandate.

From these trends and others, I predict a couple of significant shifts in many organizations in the next few years to better respond to the evident blurring and overlap of who is in charge of leading technology within the business:

  1. Many CIOs will become the chief infrastructure officer. They will be responsible for networks, data storage, devices, and security. They will not be as directly in charge of digital business or technology innovation in the line of business. They will largely not be leading digital innovation.

  2. Strategic IT innovation will come from technology-savvy digital natives in the lines of business. These largely seem to be up-and-comers willing to take risks and upset the status quo. They have less to lose and more ability to think outside the box of the local IT bureaucracy. These will build next-generation digital business products and services, transformative new customer experiences, well-integrated cross-channel data-driven marketing solutions, and more that makes the fundamental assumption that agility, innovation, actionable data science, and deep customer engagement are an imperative to grow the business and outmanoeuvre competitors. They will be directly aided and abetted by on-demand cloud solutions in all their forms.

These two shifts won't always be the case in every organization, but I currently believe both of them will represent the broad trend as IT appears ready to separate into centralized infrastructure and decentralized innovation. This will be good for our businesses, good for IT (which is frequently lambasted for slow business leadership), and will overcome what my friend and colleague Michael Krigsman calls the primary "conflicting goals" of IT leadership today.

I'd note that we've also seen this conflict in enterprise architecture and elsewhere in recent years as a combined innovation and infrastructure mandate appear to have hampered the healthy growth and evolution of our organizations.

I believe that we can already see this shift happening today and CMO and CIOs will largely be better off, if they can agree on workable basic rules of engagement. This is likely to look like IT making what the marketing department does secure, safe, and governed, while the CMO tries out the latest new idea quickly and inexpensively. It's a brave new world that seems to be happening because of the pervasiveness of the cloud. It will be a vital set of changes for all of us to watch closely.

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Topics: CXO, Big Data, Consumerization, Enterprise Software, IT Priorities, Tech Industry, NextGen CIO, Business Intelligence, IT Policies

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15 comments
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  • Interesting but....

    factor in overlapping roles of COO, Chief Sales Officer, Chief Innovation Officer, & who is power broker for CEO?
    sardire
  • Killing the goose that lays golden eggs

    The purpose of IT is to make the whole company more productive, but that seems to be easier to accomplish if the techies actually communicate with the people they serve and have a good idea of what they need.

    The tendency to treat IT as overhead instead of a productivity booster is a good example of why accountants shouldn't be in charge of non-accounting firms.
    John L. Ries
    • Yes, though IT often treats itself like overhead as well

      As I noted in the piece, there's a large case that can be made today that technology is not just the conduit of new business possibilities, but the enabler. By not leading a digital business agenda, IT is relegating itself to a non-strategic, niche role as plumbing provider.

      This lack of business leadership just adds IT to the list of folks that can't lead the company (including accountants, although I should note the CFO is often one of the most powerful person in many firms.)
      dionhinchcliffe
  • The CIO can be outsourced, not the CMO

    Pretty good article. Reality is that the CMO can accomplish his job with SaaS tools that require a fraction of help from the CIO vs. what it used to be.

    So many marketing automation, productivity, analytics, etc. exist now. Contrast with IT infrastructure & legacy Apps which can be all outsourced to the cloud or to an outside firm.

    Indeed, the CMO is the new CIO.
    wmougayar
    • Isn't that what ad agencies are for?

      Vendors have been partially outsourcing their marketing efforts for generations.
      John L. Ries
  • Evolving roles are more leaning towards CIO/CTO becoming CMO

    Yes, SaaS and cloud technologies may make it look easy, but just because Home Depots exists, not everyone can build a house.

    What this article does not cover are project failures due to this notion of deploying technology using vendors due to promise of speed and cost, because internal IT seems to not be able to meet the business needs. Half baked solutions do present seemingly immediate benefits but, invariably inhibits from future growth. What the current environment brings is the notion of lack of partnership and respect to internal IT. Vendors deliver to the SOW and internal IT to the strategy.

    http://www.aligningit.com/ea/show-me-the-vendor/

    It is surely a very detailed discussion, but quick to market is just that, quick to market. Sustainability and building on deployed solutions for efforts like customer retention etc, do not come about with 'Quick to market solutions'.


    CIOs want to bring about transformation, but most of the time are reduced to operational duties and system upkeep. The problem is amplified significantly when business throws in rapid solutions that are not compatible to internal technology and thus increases the operational instability and heavy processes.

    This is an interesting discussion, but think every technology/business that changed or impacted our lives. These mostly are born of technologist, geeks and engineers. Google, Apple, Facebook, etc are examples of engineers building technology that is more impact full to customers and their lives.

    Do you think that an individual who is trained in marketing is more suited to make a differentiator 'selecting' technology or an individual trained in technology is more apt for the job. A modern day marketing operations is but managing marketing technologies. I believe a
    CIO/CTO is a better CMO.
    GuruShikhsa
    • I would actually expect most CIOs/CTOs to make poor marketers

      With today's increasingly consumerized and packaged on-demand enterprise solutions, it's easier than ever before for the CMO to strategically wield technology. But I don't think CIOs/CTOs can transition nearly as easily to a marketing role.

      That's not to say decentralized won't bring back the concerns of standardization and economies of scale we used to have with fragmented tech, but these issues are also easier to deal with now.

      Great comment overall however, and I do think is a long-term role for IT in the future as the steward of infrastructure and security.
      dionhinchcliffe
  • Caveat Emptor

    I'm biased, I work in IT currently.... but have actually lived on the "vendor side" as well so I can see both sides. In most outsourced (SAAS) environment there is "tiering" if you are not a top tier client, you don't get the "best" customer service. So unless you are a "larger" company that has purhased all the bells and whistles of that service, or just because you are a big name company with lot of clout, you don't get the best service response times.

    For smaller to mid sized companies sticking with an internal system or using a hybrid solution that may be the best bet. By hybrid I mean all the bare bones basics are housed internally, and any extra nice to have add on services are outsourced. This of course is an over generalization, but it is based on what I have seen on the ground.

    All that being said, Markenting SAAS is, believe it or not, also "marketed" to its customers. Its just the way it is, money talks. The salesperson most likely wont tell, or will through political savvy brush this off as the service is so great the SLA is just a minor detail. ys as it doesn't ahem..."Market" well...read the fine print).

    This where the SIO or IT has a HUGE role in my opinion. IT folks are, for better in this instance...pessimists at heart and know this "thing" is going to not live up to expectations.

    IT should be involved in any outside software ventures to ferret out any holes in the story from the salesperson, and manage the relationship with the Service going forward to make sure the vendor lives up to technical expectations. Marketing folks dont live in a world of SLA's.

    Its just the nature of outsourcing anything. The sense of urgency of the outside service provider is automatically cut in half for AN INDIVIDUAL smaller customer. Sure, it behooves the vendor to get things up and running ASAP, but again, "stuff" rolls downhill. For the vendor, it is make the big guys happy first.
    Jay__C
  • oops

    This where the CIO or IT has a HUGE role in my opinion. (not SIO)
    Jay__C
  • RE: Caveat Emptor

    Another thought... The CIO manages the IT service needs of all other departments, not just marketing. So while Marketing may spend more money, there is the finance dept, legal, HR, buyers, sales, et. al to consider.. These dept's also spend on IT out of their budgets. IT is responsible for the uptime or relationships with their SAAS vendors as well.

    IT in fact, may have their own SAAS vendors as well. We are not averse to SAAS if it cuts cost , or allows our resources to be allocated elsewhere.

    IT is literally a tool for the business to use, it is a cost center. But still a necessary one for a long time to come. If the "IT" tool is left in the toolbox and marketing decides to "hammer a screw" then good luck to them, eventually IT will have to fix their mistake.
    Jay__C
  • Forget CMO and CIO and just get a CPO

    The reason this is becoming increasingly hard is that many businesses not only use technology but it has now become the driver of their offering to the market. Therefore a board level role is required that focusses on the effectiveness of the offering in the market. Someone that is well versed in IT and marketing and is responsible for maximising the impact of the product in the market. A Chief Product Officer.
    alexgcharles
    • Right, functional leader roles are moving to relationship/experience roles

      CIO, CMO, COO --> Chief Customer Officer, Chief Community Officer, Chief Supply Chain Officer, Chief Product Officer, etc.
      dionhinchcliffe
  • The Real Solution is Learning to Share Accountability at the Top

    Interesting article and it does tee up a decision that many organizations will need to consider. However, rather than looking at it as an either or proposition, the organization would be better served to examine this decision from a shared accountability perspective. As service functions, both IT and Marketing will be constantly faced with situations like this one. The implications involving staffing and funding are at the core of driving the desire for silo clarity but is that really the best way to address the issue? If the organization solves the core issue of how the CIO and CMO can share accountability for the desired outcomes without creating shadow organizations, they will not only solve the problem for this instance but also establish a framework for how to handle this issue when it arises between other functions. Defining how shared accountability works at the top of an organization can be a powerful enabler for cross-functional effectiveness throughout an organization.
    leppsjr
  • The WorldWide Work Web makes the CIO valuable again!

    http://babblewareinc.com
    We have developed the Worldwide Work Web so that legacy systems can be shielded from change, innovation can be applied to the Workers and revenue and profit can increase for every department, division or entire company.

    Apps would be the wrong way to go as they increase IT support costs and lack the enterprise security and scalability essential. Leveraging our WorldWide Work Web keeps corporate assets protected and the needs to change how work is done in harmony with requirements.
    BabblewareInc
  • Nicholas Carr

    Is that you?
    ploco@...