There was shock and awe at the Gilbane Conference earlier this week when the crowd learned that Marriott’s Chief Information Officer (CIO) reports to the company’s Chief Marketing Officer (CMO). Some saw it as the beginning of a trend.
“Not a good idea, other groups have needs,” Laurence Hart, content management strategist with Alfresco, tweeted after hearing of the news.
His point is well-taken; after all, from a rather primitive perspective, corporate IT exists for four reasons -- to automate business processes, to help the enterprise make money, save money and keep the CEO out of jail.
Marketing, by its very definition, has a very different objective; it doesn’t include providing services to corporate finance, accounting, human resources, supply chain, legal, compliance, research and development, and so on … it’s difficult to imagine why the CMO would want to take that load on. (Unless being responsible for the whole gamut is the only way Marketing can get its IT needs met.)
Should the Biggest Spender Own IT?
Gartner predicts that by 2017, the CMO will spend more on IT than the CIO. Does this mean that the CIO should report to the CMO?
We’ve been down a similar road in the past: Let’s indulge a bit of backstory.
Though few are old enough to have lived through this, IT used to be called Data Processing and the function used to report into Finance. The reason for this was fairly simple; CFOs brought computing into the enterprise to automate laborious, manual processes like accounts receivable, accounts payable and general ledger and to help him manage the organization’s money better. The primary driver here was savings.
As time passed, companies found other reasons to automate manual processes -- like managing documents, inventory, order processing, sales, marketing and the supply chain. Executives in these areas -- who didn’t report to the CFO -- began to question why Finance (which controlled IT) got to set IT’s priorities and to control its purse strings.
When some frustrated department heads couldn’t get what they wanted/needed from corporate IT, they went renegade and bought their own software, built their own applications and hired their own IT personnel for support (hello silos!). This not only failed to make business sense, but it also resulted in disconnected information between departments. CEOs saw this as a huge waste of strategic organizational assets.
They wrestled IT away from Finance in short order by creating the role of Chief Information Officer; the executive inhabiting the position would have his own budget, be on equal footing with other C-level executives, and provide solutions, systems, security and support to the entire organization.
The Dawn of DIY IT?
This went very well for a while; but during the last decade it has changed a bit. With the advent of outsourcing, downsized IT departments, the consumerization of IT, Software as a Service (SaaS) and the cloud, managers no longer feel as if they need to rely as heavily on corporate IT. In this day and age, some departments and department heads procure and manage their own solutions and some marketers, according to Teradata Applications' Chief Marketing Officer, Lisa Arthur, even hide servers under their desks (which IT then has to fix when they break down).
Though IT has often gone along (sometimes begrudgingly) with user choices, they have voiced concerns around data silos, enabling collaboration between departments and business units, compliance, sub-optimal use of corporate information assets, and so on.
Marketing Spends the Most on Technology, Should It Own IT?
Marketing as a discipline has changed tremendously over the last five years. While it used to be a mostly “fuzzy” function where “mad men” created sexy messages and sprayed them across media channels hoping that they’d stick, the onslaught of big data (gleaned from click streams, social media, mobile devices, the Internet of Things and so on) has created an unprecedented opportunity to get to know the customer, the customer journey and experience. Software providers like Tableau can effectively help marketers target individual customers with specific, targeted messages with such precision that Jim Walker of Hortonworks says that his clients often tone it down a bit, so that they don’t scare people.
Needless to say ”knowing the customer” well enough to drive what Teradata calls “truly relevant 1:1 engagement” is every company’s dream.
But is making the CIO subservient to the CMO the best way to achieve it?
A Different Solution
Probably not the best way, says Arthur in her book "Big Data Marketing."
While we’ve already made a historical, “been there, done that” argument for why this set-up doesn’t serve the organization over the long haul, Arthur says that even in an era “where marketing is the business,” a cultural shift in which Marketing and IT understand each other well enough to work to together in concert is a better solution. That is the subject of tomorrow’s post.