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CIOs - Play nice with marketing because they have budget

Editor's Note: Alisa Maclin will be a speaker at the 2012 Fusion CEO-CIO Symposium on March 7, 2012. The session is "The Evolving Role of the CMO - Implications for the CIO".

Chief Marketing Officers (CMOs) are overwhelmed by the amount of data they have available, but rather than look to the CIO for help, they are much more likely to turn to outside resources such as ad agencies, said Alisa Maclin, vice president of marketing for IBM's Smarter Commerce Initiative.

Alisa Maclin
Maclin is presenting “The Evolving Role of the CMO - Implications for the CIO,” at the pre-conference of the Fusion 2012 CEO-CIO Symposium, produced by WTN Media. Relying on ad agencies is not good for CIOs or their companies, because CMOs command growing budgets that would benefit IT, and the company, if the funds were invested internally rather than with ad agencies.

“A lot of buying power is shifting to CMOs,” said Maclin. “Their budgets are experiencing a 7-8 percent growth, 3x more growth than IT is getting.”

Marketing officers are under increasing pressure to produce results, so their natural inclination is to seek help from sources they already know. And when it comes to understanding data and analytics, they often don't know what their own IT groups can do, or even how to talk to them.

“CMOs are saying they have increased responsibility. They have increased accountability and increased budgets, but we are not seeing more of a focus on partnering with CIOs,” explained Maclin. “We are talking to CIOs about how they can help the CMO, how to ensure the focus is on long-term strategies for the organization and to support these efforts for the business overall.”
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Dr. Kay Plantes, Ph.D., a business strategist with an economics degree plus extensive work in marketing, said, “CIOs have traditionally focused on internal efficiency improvements. Now they will have to persist in driving economies in operations but also expand their outlook beyond the four walls of a company.“

Marketing, which has always been focused beyond the four walls, needs their expertise and support.

Social media is a whole new way of communicating with customers and segmenting them for marketing using powerful new analytics tools. Inside the company, social media will allow faster collaboration, make companies more agile, and as IBM notes in its Global Technology Outlook, improve the way firms select teams for new projects.

For a chief marketing officer, this social media push can be a bit much after a world that revolved around print, direct mail and perhaps TV or radio. Maclin said CMOs face a proliferation of data and acceleration of mobile devices and channel proliferation.

“Over 85 percent of customers use multiple channels and CMOs see technologies as a way to anticipate their needs and deliver.”

“Now some companies are hiring or creating specialized skills around marketing within IT, “ added Maclin. “They ring-fence those people to focus on marketing. “

This can represent a shift for the IT leadership.

“The traditional CIO role of gatekeeper where everything goes through them may not be the way of the future,” said Plantes

The need for CIO-CMO communication had great impact so far. Maclin said that in a recent presentation she asked an audience of 100 CMOs, how many of them were collaborating with CIOs; it was about 25 percent, similar to the 30 percent Forrester reported.

This is a challenge for CEOs, CIOs and CMOs. Several consultants say it is important for companies to develop teams of business analysts in-house. They should include people with skills in marketing, applied math, statistics, computer science, and perhaps behavioral science. A Bain consultant working with a cruise line said he found most of the analysts necessary already working within the company, but scattered in different departments. The company simply needed some direction on approach and had to hire a skilled leader for the group.

Working with data and analytics is only going to become more important to marketing functions in companies and beyond. Sears Holdings, for instance, is using big data not just in marketing but also in areas like supply chain optimization as well, according to Dr. Phil Shelley Ph.D., the company's CTO, who will deliver a keynote address on Big Data at Fusion 2012. For CIOs, the choice may be to ally with marketing or risk being bypassed.

Several of the speakers at Fusion 2012 will discuss how easy it is for lines of business to set up pilot projects by renting server time on Amazon EC2, or signing contracts with outside cloud providers like salesforce.com without ever consulting IT.

Bill Brennan, the CTO of Forsythe Technologies, talked about the importance of the CIO staying current with industry trends at Fusion last year.

With mobile devices, including smartphones and iPads, users swamped or bypassed many IT organizations that tried to adhere to the old “Just Say No” policies. The new terminology tells the story -- the consumerization of IT, “Bring Your Own Device” (BYOD). IT is no longer the wizard hidden behind the curtain intimidating users. Starting five or 10 years ago, many employees recognized they had better technology at home than at work. For IT that was the beginning of the end of dictating what people used for work.

As Plantes said, “instead of asking how to fit these new technologies into the way we do things, they [CIOs] have to ask what is the best way to work with the new technologies to unlock the full potential of the company.”

“The typical CIO is starting at a disadvantage,” said Rick Davidson, former VP and Global CIO at Manpower and now president and CEO of Cimphoni, a consultancy. “Since 2007 or 2008, their primary job has been squeezing pennies of out their budgets.”

“We took a detour in terms of innovation,” said Davidson. “Most CIOs were focused on trying to survive with a much reduced budget. Hardware and software players were also struggling a little bit. It's hard to know what we missed. Big data, mobile computing and social media might have taken off a little earlier. Now they are going full guns, and it's nice to see this whole technology space is starting to get moving again. If companies aren't already looking into these areas, they need to.”

Social media didn't exactly come out of nowhere, but CIOs who were just trying to make the necessary system upgrades might be forgiven if they missed its importance until fairly recently.

Maclin suggested that the first step for CIOs and CMOs to work together might be taking a staged approach -- pick a project where IT can contribute to a strategic marketing initiative built around data.

“It can be overwhelming for CMOs and hard to have a conversation with IT in broad general terms, but if they can focus on an area like `how are our customers are using mobile today and what value can we bring them', then they can have a more constructive conversation with IT.” She has found progress in collaboration at some companies.

“We are seeing this convergence and blurring of the lines between the CIO and CMO function when it comes to understanding customer behavior and being able to apply that insight to your whole value chain. What we are seeing with organizations as a whole, is that they are responding to the explosion of information from mobile and social and digital.”

Some firms have established joint steering committees with IT and marketing.

Work remains to be done. When Forrester asked CMOs where they needed to forge stronger ties in the C-suite, only 30 percent mentioned the CIO.

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