By now you’ve probably heard the prediction floating around that by 2017 or so the CMO will have a larger operating budget than the CIO. By itself, it’s not particularly surprising as marketing has long had a focus on major media and broad market engagement, both expensive propositions in today’s ever-more fragmented media world. Furthermore, with most large companies becoming global, the urgency to better connect with all corners of the marketplace and drive regional business growth has steadily pushed up CMO budgets in recent years.
In contrast, IT is still looked at largely as an overhead expense, something to be contained and reduced, even as digital business has finally experienced a modest renaissance in the last few years as a direct driver of revenue and competitive advantage. Nevertheless, IT spending will be up globally by 4.2% in 2013, as companies tackle tablets, big data, enterprise software upgrades, and improved networks.
If you think these look mostly like infrastructure investments, however, then you’d be right. The reality is the strategic use of information technology for growing and transforming the business is frequently not led by IT today. In fact, that’s what the CMO budget growth data point purports to show: That marketing has now become a top consumer of IT in most large organizations.
What’s more, beyond the increasingly rapid cycle times of today’s online world, and the broad demographic shift of consumers to mobile and social channels, the cloud has become a principle enabler of IT liberation by unleashing a tsunami of on-demand services that can be quickly spun up by non-experts to meet business demand. These are new online services that manage customer relationships, deliver cross-channel marketing experiences, orchestrate digital advertising, and help business users react to the volumes of data that result from these activities to drive operations and support executive decision making.
This is creating a distinct sense of overlap and a blur of corporate responsibility as CMOs evaluate, acquire, and field extensive new IT capabilities for digital advertising, customer experience management, CRM, and other related functions across a growing set of touchpoints, which now include at a bare minimum traditional media, online media, social media, and mobile devices. A decade ago, much of the service delivery for these functions would be delegated under the CIO, who would support the marketing department and other groups in their IT endeavors as needed (although largely on IT’s schedule.) Now, as my ZDNet colleague Paul Greenberg recently observed, “marketing is at the forefront of strategic technology investment.”
But as I noted just over a year ago in my analysis of the five big IT trends for the next half decade, CIOs themselves are largely not trying to get ahead of this curve. In fact, they are on a largely evolutionary technology roadmap, and frequently eschew the pursuit of breakthroughts that will give their companeis major advantage. Why? Because their traditional role of developing infrastructure and keeping it operating (and manageable and secure) tends to make them risk adverse and focused on business continuity.
Taken as a whole, this inclination to avoid risk, combined with 1) the growth of application backlogs created by years of constrained budget, 2) a parochical vision of IT as a central function, and 3) compelling new business solutions pouring into organizations from mobile app stores and cloud/SaaS, has resulted in a tremendous volume of pent-up IT demand that simply can’t be met through a traditional IT approach.
These tensions have led inexporably to widespread consumeration. Bring-your-own-devices (BYOD) and bring-your-own-apps (BYOA) are the norm today as business users take the technology reigns into their own hands. This also means that as we enter the era of deep engagement the marketing department is uniquely positioned to be the internal business leader in managing the technologies on the boundary between our companies and the rest of the world. The CMO thus has both the mandate and the urgent requirement to enable digital engagement in a way that no other group does, and the ready capability to do it without much help from IT.
How will CMOs and CIOs reconcile today’s shifting responsibilities?
I’ve attempted to describe the realignment and overlap in the work that CMOs and CIOs now both do in the visual shown above. It’s clear from this that each function has some strengths over the other in certain areas: IT is better at operations, cost efficiency, and managing exceptions. Marketing is much better at customer experience, using data for business decisions, and moving quickly to seize a perceived market advantage. Some might quibble at whether IT is really better at innovation, but each function clealry has abilities in all of the areas listed, and the edge still goes to IT departments in my opinion. When they want to, anyway.
What’s disturbing however is that it’s clear from this view how much overlap there truly is today between the CMO and CIO. Another key indicator: I’ve noted previously that I’ve encountered a growing number of people with the title of CIO of Marketing in recent months, showing how marketing departments are staffing up on their own senior IT executives in a quest to better execute on their mandate.
From these trends and others I predict a couple of significant shifts in many organizations in the next few years to better respond to the evident blurring and overlap of who is in charge of leading technology within the business:
- Many CIOs will become the chief infrastructure officer. They will be responsibile for networks, data storage, devices, and security. They will not be as directly in charge of digital business or technology innovation in the line of business. They will largely not be leading digital innovation.
- Strategic IT innovation will come from technology-savvy digital natives in the lines of business. These largely seem to be up-and-comers willing to take risks and upset the status quo. They have less to lose and more ability to think outside the box of the local IT bureaucracy. These will build next-generation digital business products & services, transformative new customer experiences, well-integrated cross-channel data-driven marketing solutions, and more that makes the fundamental assumption that agility, innovation, actionable data science, and deep customer enagement are an imperative to grow the business and outmanuever competitors. They will be directly aided and abetted by on-demand cloud solutions in all their forms.
These two shifts won’t always be the case in every organization, but I currently believe both of them will represent the broad trend as IT appears ready to separate into centralized infrastructure and decentralized innovation. This will be good for our businesses, good for IT (which is frequently lambasted for slow business leadership), and will overcome what my friend and colleague Michael Krigsman calls the primary “conflicting goals” of IT leadership today.
I’d note that we’ve also seen this conflict in enterprise architecture and elsewhere in recent years as a combined innovation and infrastructure mandate appear to have hampered the healthy growth and evolution of our organizations.
I believe that we can already see this shift happening today and CMO and CIOs will largely be better off, if they can agree on workable basic rules of engagement. This is likely to look like IT making what the marketing department does secure, safe, and governed, while the CMO tries out the latest new idea quickly and inexpensively. It’s a brave new world that seems to be happening because of the pervasiveness of the cloud. It will be a vital set of changes for all of us to watch closely.
(Cross-posted @ ZDNet | Enterprise Web 2.0 Blog)