Marketing is driving profound changes in the way organizations approach and consume IT resources. Savvy CIOs are taking note and adapting to a new technology order.
By Samuel Greengard
It has always been the role of the CIO to orchestrate applications and technologies across the enterprise. Finance, operations, supply chain, human resources, sales and other systems have presented both opportunities and challenges. But as the digital age unfolds and an array of sophisticated technologies intersects—including mobility, clouds, social media and big data—the stakes have grown exponentially. And nowhere is the impact more apparent than in the marketing arena.
Over the last few years, marketing has emerged as the epicenter for next-generation tools and capabilities. "Digital marketing is consuming a growing percentage of IT spending within the enterprise," observes Yvonne Genovese, managing vice president at Gartner, Inc. In fact, Gartner estimates that digital marketing has reached an average of 10 percent of revenue and it's continuing to rise. Gartner also predicts that by 2017, CMOs will outspend CIOs on the technology front. "The environment is changing rapidly and in significant ways," Genovese adds.
For CIOs, this new normal creates different priorities, practicalities and business requirements. It also redefines roles, boundaries and expectations in radical ways. Yet, amid all the upheaval, it's clear that a new level of collaboration is imperative, particularly as marketing departments build and buy specialized systems and cloud services. In the end, data, information and knowledge must flow through the enterprise with strong security, privacy and other protections in place. As Accenture's Big Data Practice Leader Vincent Dell'anno puts it, "A different type of communication is required than in times past."
It wouldn't be far-fetched to describe the emerging situation as an enterprise digital divide. While CIOs have long devoted attention to managing and operating IT systems as efficiently and cost effectively as possible, CMOs have increasingly looked to harness data, analytics and marketing tools to build better and stronger customer relationships. Over the last few years, marked advances in technology have made it possible to understand customer segments and engage in more personal and relevant forms of marketing. In some cases, the process is taking place in real-time as businesses connect to consumers online and on mobile devices.
All of this is unleashing enormous changes. "In recent years, marketing departments have become huge consumers of information technology. CMOs are now looking to break down the silos and put technology to work to better serve their goals. They don't want to be shackled with ancient and unwieldy technology," says Bob Goodman, senior vice chairman at Arnold Worldwide, a Boston-based advertising agency that represents Del Monte, Pepsi, Progressive, Volvo and numerous other brands. As a result, "CIOs and CMOs must find ways to work together to serve marketing goals," says Goodman.
But it's easier said than done. According to a recent Accenture report, The CIO-CMO Disconnect, only one of every 10 marketing and IT executives surveyed believe CMO and CIO collaboration is at the right level. Overall, 77 percent of CIOs dub marketing and technology alignment as important, compared to only 56 percent of CMOs. Moreover, half of IT leaders say that marketers often introduce technologies without considering IT standards. Four in 10 CMOs, on the other hand, argue that IT development processes do not keep up with the speed of digital marketing.
With growing frequency, CMOs are declaring their independence. In some instances, the disconnect is leading to shadow IT, particularly cloud-based tools, that a marketing executive can procure in seconds with a credit card. "IT is waking up to a new reality," Genovese says. "They are seeing a lot of activity occur outside the bounds of traditional IT." In best-case situations, executives are coming together to work in a strategic manner. In worst-case scenarios, CIOs and CMOs wind up in a tug of war. "A lot of times things fall somewhere in the middle," Genovese says. "Companies wind up doing some things well and other things not so well."