Being More Collaborative With Your CMOBy Samuel Greengard | Posted 11-06-2013
Being More Collaborative With Your CMO
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."
Being More Collaborative With Your CMO
Glen Hartman, global managing director for Digital Consulting at Accenture Interactive says that misunderstandings and disconnects typically revolve around two key areas: motivational issues and collaboration. The former incorporates different needs, requirements and approaches, particularly surrounding issues such as security and privacy. For example, "securing customer data is a large part of the CIO's technological agenda," says Hartman. "However, CMOs might feel that protecting the data keeps them at a disadvantage."
Not surprisingly, collaboration problems frequently result from mixed signals and mistrust. While both CIOs and CMOs recognize the importance of working with each other, Hartman says, the weighting isn't necessarily equal. "CMOs put CIOs at the top of their C-Suite collaboration wish-list, but CIOs rank CMOs in fourth place," says Hartman. "Even more telling is that, overall, CMOs actually believe that CIOs will place them at the bottom of their collaboration priority list, showing a sense of wariness and misaligned priorities within the company."
Navigating this new frontier is not a simple task. Hartman believes that CIOs and CMOs must focus together on the need for data-driven experiences that meet consumer demands. The emphasis must be on "providing a superior and consistent end-to-end customer experience," he notes. What's more, "the two executives must work as strategic partners by concentrating on execution and delivery, there must be broader and deeper mix of skills, and they must establish common goals and work to build confidence and trust in one another," he points out.
All Systems Go
One company that has adopted a collaborative approach is Shop.CA, Canada's largest e-commerce marketplace. The Toronto-based firm competes with Amazon.com as well as a slew of other American and Canadian retailers. Information technology is at the center of its business. There's a need to aggregate data feeds from hundreds of merchants, handle pricing and data about products and operate online systems efficiently. "The idea is to present a seamless, single shopping cart experience," says Gary Black, the firm's CIO.
IBM's Web Sphere, a DB2 database and Smarter Commerce analytics software helps Shop.CA understand how consumers behave and interact with the website. The analytics tool tracks searches and buy histories in order to serve up contextually relevant products and engage with shoppers in a personalized way. Black says the IT infrastructure, which runs on about two dozen virtualized servers, is at the core of the business. However, there's also a desire to run the business in a marketing-centric way. As CMO Mark Deprato says, "The devil is in the details. We have to track inventory and full product availability and then leverage data to align against browsing history and different types of segmentation opportunities. We layer e-mails and promotional opportunities on top of that."
How does the pair approach the situation? For one thing, they work together to develop a strategic plan and discuss how they will mesh technology with business processes at every step of the way. For another, they conduct a brief technology meeting with key personnel every day. "Whenever we think about how we're going to approach a new product promotion, we're thinking about how the consumer fits in and what marketing opportunity exists," Deprato says. By starting with a business goal and working backward on how best to apply technology and implement the plan it's possible to maximize the results while staying entirely in sync. "Our teams work in lockstep," Black says.
While differences of opinion or approach occur, the pair strives to stay focused on business objectives, metrics and key performance indicators (KPIs) that benefit the organization rather than an individual department. "There's no reason for turf battles to occur because we feel as though we're constantly working toward the same objectives," Black says. Whether the company uses an on-premises IT system or SaaS-based solution in the cloud, "we ultimately have the same goals and priorities. We share all information and it flows across teams and permeates the organization," Deprato adds.
Being More Collaborative With Your CMO
Gartner's Genovese says organizations must adopt a more flexible business and IT framework that recognizes the need to move faster and less formally than in the past. It's no longer possible to demand a business case for every initiative, particularly those focusing on marketing. "IT needs to understand that today's business environment changes incredibly quickly and a lot of the technology that marketing departments use is disposable. Maintaining too tight of a leash undermines the business," she explains.
A good starting point is to take on smaller projects and, in the process, develop a framework for collaboration, Genovese says. That can include greater transparency and new ways of working together, including shared office space. It's also worth rethinking job descriptions or creating new organizational roles, such as chief digital officer or chief marketing technologist. In addition, businesses must review metrics and KPIs to ensure that they are aligned across departmental boundaries. "When everyone wins, it's possible to build much greater synergy," says Genovese. She suggests that CIOs reject the notion that shadow IT is automatically evil and find ways to institutionalize adoption of new, different and sometimes rogue technologies.
One thing is certain. In an era that demands rapid change and innovation, CIOs must think differently about IT, including how to deploy and integrate marketing systems. Touch points and channels are changing, and the way consumers interact with businesses is undergoing a radical transformation. "CIOs and IT departments must move beyond protectionism," says Genovese. "Marketing executives must attempt to understand key IT issues and how they affect the enterprise. The end goal must be to create greater engagement and a vision that reaches across both functions."