Getting the CMO and CIO to Work as Partners
To turn new technologies into profits and growth, marketing and IT will need to change how they work—and how they work together.
August 27, 2014
A global company recently decided to do what many companies are doing: figure out how to turn big data into big profits. It put together a preliminary budget and a request for proposal that in effect asked vendors to take the data the company had and identify opportunities.
Vendors were thrilled with what was essentially a free pass to collect and analyze everything (with due regard for customer privacy concerns, of course). Two months later, the bids were coming in 400 percent over budget. The obvious solution was to narrow the scope, but no one was sure what to cut and what to keep because the chief marketing officer (CMO) hadn’t specifically defined the most important data requirements, and the CIO hadn’t reviewed the request for proposal or intervened to prevent the inevitable above-budget bids. Months of wasted time and spending later, the company is no closer to a big data plan.
Variations of this big data storyline are playing out in executive offices around the world, with CMOs and CIOs in the thick of it. CMOs, who are responsible for promoting growth, need the CIOs’ help to turn the surfeit of customer data their companies are accumulating into increased revenue. CIOs, obliged to turn new technology into revenue, need the CMOs to help them with better functional and technical requirements for big data initiatives.
The situation reflects a central truth in today’s big data world: both the CMO and CIO are on the hook for turning all that data into growth together. It may be a marriage of convenience, but it’s one that CMOs and CIOs need to make workespecially as worldwide volume of data is growing at least 40 percent a year, with ever-increasing variety and velocity. That’s why many CMOs are waking up to the fact that IT can’t be treated like a back-office function anymore; rather, the CIO is becoming a strategic partner who is crucial to developing and executing marketing strategy.
Companies that are more data driven are 5 percent more productive and 6 percent more profitable than other companies. Given the $50 billion that marketers already spend on big data and analytics capabilities annually, the pressure is on to show significant above-market returns for that investment.
The big data and advanced analytics systems needed to capture that return don’t follow the traditional sequential path of requirements gathering, building, testing, and deployment. They involve new architectures for data aggregation, coupled with rapid experimentation, iteration, and evolution of functionality. They demand a new way of working that is likely unfamiliar to both CMOs and CIOs.
More and more, CMOs and CIOs are seeing that they are natural partners: CMOs have an unprecedented amount of customer data, from which they need to extract insights to increase revenue and profits. The CIO has the expertise in the development of IT architectures and the execution of large programs needed to create the company’s big data backbone and generate the necessary insights.
Historically, though, the relationship has often been a fractious one. CMOs have traditionally acted as stewards of the brand and have focused on large creative campaigns that generate excitement for the company’s products or services. The CIO, on the other hand, has primarily focused on a combination of business-process improvement (for example, in order-to-cash work flows) and “keeping the lights on” by managing core transaction systems, ensuring cybersecurity, supporting end users, and reducing costs.
The digital explosion has forced CMOs and CIOs to work more closely together (see sidebar, “How a technology company benefited from cooperation”). But that hasn’t always made them work better together. As the mix of IT spending shifts from the back office and supply-chain management (for those industries that have a supply chain) to the front office and customer engagement, tensions may arise about the CMO’s and CIO’s decision rights and budget authority. These tensions are reflected in research suggesting that most CMOs today see marketing as the natural leader of big data efforts, while most CIOs see IT in that role.
The demands of speed and agility are an important operational source of friction. As changes in customer behavior, technology, and the business environment accelerate, marketers need fast-adapting systems. But for IT, the need for speed can be a massive shift, often requiring the function to retool its operating model in order to quickly deliver analytic systems that drive better decision making.
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