So much has been written about the CMO outspending the CIO in the recent months, I do not even recall who started the whole conversation (Gartner I think?). Doesn’t matter anymore at this point as it has taken off beyond expectations with not only the enterprise software vendors selling to CMOs – but all the journalists, analyst, pundits etc. blog and talk about it.
The whole rationale has baffled me for the longest time – since the CIO has always been spending (or watching over) other departments budgets to automate the enterprise. Real pure CIO spend is maybe on tools to run IT better (ALM etc.) or the tools to build – should the enterprise choose in house– custom apps. Otherwise the CIO has been spending other department’s money all the time. So where is the news?
The only CIO vs LOB connection I can make out in the history of IT is, that the first automation happened in Finance – so no wonder so many CIOs report to the CFO. And surely the CIOs never moved around with their reporting structure following the enterprise spend – so they did not move from Finance to Manufacturing, to HR etc. And agreed it helps, that the CFO is one of the few neutral executives in the enterprise, looking for the enterprise as a whole, not a slice of the organization. One more reasons CIOs have and will keep reporting to CFOs.
The news certainly is, that with the rise of social, a subset of the overall enterprise relationships have become digital and with that they can become part of software. But they are only a subset of the relationships that matter to the enterprise – just look how many sales people climb in airplanes and cars every day to see customers face to face. How many service technicians ride their vans to repair / maintain something. And so on.
And rightfully those digital relationships should be monitored, planned and run where they have been monitored ,planned and run the whole time – in marketing. And equally rightfully the CMO is the chief decision maker and designer of enterprise relationships. So if the news is, that the CMO is owning, influencing a large part of the enterprise IT spend in the teenage years of the 21st century, then we all agree.
But for delivering on the promise of the digital relationship for the enterprise – the CMO will have to make sure that these relationships are known, lived and updated across all touch points of the enterprise. And that’s where the CMO needs the CIO, not just a little bit, but the CMO needs the CIO a lot - badly. What other chance does a CMO have to make sure relationships are handled in accordance to the fine tuned customer segments and their related digital interaction patterns?
And this matters – as historically – next to sales people – the marketing people have been voluntary users. .Which means nobody will force them to use any software as long as they do a great job. Their usage of installed enterprise software is… voluntary. Ever heard of the top sales people being fired because they did not use the forecast methodology required – as long as they save the quarter every 3 months? Likewise the marketer who excels at promoting an enterprises brand and provides higher quality leads every quarter – will never have a tough conversation on staying with the enterprise because he / she is not using a certain system.
So it’s good news, that the CMO gets more of the IT spend, the real looser is not the CIO – who the CMO needs as an ally and enabler of company wide marketing segments and their related resource commitments, but the leaders of the other lines of business. Enterprises do not magically increase their IT spend because now there are tools for marketing to sense what is happening in the social world, to run electronic campaigns, to plan digital interaction patters etc. So the CFO, CSO, COOs are the losers in the equation.
But ultimately they aren’t either for two reasons: Firstly, it’s good if their enterprise rethinks
customer relationships in the digital age – and better sooner than later. And secondly investment will shift to them. Once the CMOs and their teams know what is going on with the digital relationships of the enterprise and can plan to shape and execute them to their desire – then the consistency of these digital relationships becomes more important, all along the enterprises’ value chain.
So the news is really that we see a seasonality in IT spending, due to the advent of the digitization of the enterprise relationships. Rightfully that process starts with marketing, but as soon as that is mastered in the enterprise, and the wave of making digital relationships actionable, measurable and consistent to relationship patterns will next hit sales, the manufacturing and then service.
Will there be news in a few years that the CSO spends more than the CIO (and the CMO)? I doubt it. By then everyone will have understood and accepted the seasonality of IT expenditure. And through the whole time the CIO will have managed and invested the enterprises’ IT budget – on behalf of the enterprise priorities.
The CIO vs CMO debate is silly, as the CIO has always served other enterprise function budgets. As technology evolves – those investment areas shift. But instead of potentially alienating CMOs and CIOs – it’s more important to reflect what the CMO really needs and wants from the other CxOs – the adoption and execution of the digital relationship patterns the enterprise is supposed to have – as crafted by the CMOs and their teams, executed with highly desired consistency across the other CxO’s teams and implemented, operated and overseen – by the … CIO. So please stop debating and get back to business – shape the business model transformation that is enabled by the technology at hand right now. Totally fine (and reasonable) to start in marketing.