As line of business teams increasingly fund everything from CRM systems to social media apps, CIOS are caught between competing business units.
By Michael Vizard
As is often the case, CFOs will rightly insist that ERP applications are the official systems of record. But from a practical perspective much of daily business is now being managed via CRM and social media applications. The CEO and the board of directors, of course, wants all these systems reconciled, which unfairly puts CIOs squarely in the crossfire between different business leaders that often have conflicting business priorities and objectives.
“We see this issue all the time. It’s definitely a tough time to be a CIO,” says Paul Allen, worldwide service line leader for finance & analytics for Hewlett-Packard. “But it also creates a mandate for the CIO to solve the problem.”
Savvy CIOs see this conflict as an opportunity to leverage some creative tension to finally address a range of application integration and data management issues across the enterprise. In fact, new big data and in-memory computing technologies may finally give CIOs control over data in a way that has eluded them since the days when mainframes reigned supreme over all of IT.
Unfortunately, it usually takes a major event of one type or another to get organizations to focus on the core problem.
Over a decade ago when DirectTV wanted to launch NFL Sunday Ticket, a service that lets subscribers watch every NFL game being televised on any given Sunday, the company had multiple systems of record in place that made it difficult to share revenues with the various networks televising the games. To solve the problem, the senior management team simply declared one application would be the company’s official system of record.
“The senior management team recognized the need to address this issue back when we had nine different systems,” says Mike Benson, CIO of DirectTV and a member of the Technology Business Management Council, a nonprofit organization of IT executives.
Unfortunately for CIOs, with the growing usage of CRM systems there is now more tension than ever between sales and finance.
“We’re seeing CRM systems increasingly becoming the system the business relies on more simply because that’s where they get the most visibility into what’s really happening in the company on a daily basis,” says Eric Berridge, CEO of Bluewolf, an IT services firm.
Brandon Brown, CIO of Trident Marketing, a direct response marketing firm, says this issue is more pronounced in some vertical industries than others. In manufacturing industries where transactions still tend to take place on a quarterly basis, the ERP system still dominates. But in a lot of business-to-consumer transactions, Brown says there tends to be a lot small, high-volume transactions that are happening in real time. That kind of business environment tends to shift the focus of the action within the company to the CRM system.
“It now really depends on the nature of the industry as whether the business is going to be driven by a CRM or ERP system,” says Brown.
Brown also notes that with advances in analytics platforms from vendors such as IBM it’s becoming easier to unify disparate business processes and applications.