CMOs are slated to spend more than CIOs by the year 2017, reports Gartner. Nearly 33% of marketing budget now goes to technology. (Source: “CMO Survey 2015 – 2016: Digital Marketing Comes of Age, Gartner) and one-third of all technology spend goes towards what is known as ‘edge-technologies’ We hear similar buzz in the industry. What’s the impact you ask? This brings up new challenges for both, the CMOs and the CIOs which needs to be managed sooner than later.
How Did We Land in This Mess?
Let’s take a step back and look at traditional roles and responsibilities of each. CMOs were measured on, and hence focused on, revenue generation. CIOs on the other hand were measured on how best to spread the budget at hand, and hence focused on cost savings. This, amongst other things, gave rise to the practice of outsourcing/offshoring IT resources to lower cost centers. The CIOs controlled and managed the technology resources, and the resources were thus ‘plugged’ into existing IT teams and processes. The CMOs never directly interacted with or controlled the offshore resources and hence never embraced lower cost center resources for any technology that affected their marketing strategy.
Lack of Collaboration and Conflicting Experience
Since, the non-IT teams, including marketing, strategy, creative and to some extent project management, had no direct influence or contact with the IT offshore teams, they could not influence or manage priorities, expectations, or quality of deliverables except complain or avoid them. On the other hand, the offshore technology teams never interacted with these ‘end stakeholders’ and did not understand clearly what was expected of them or how their decisions impacted the marketing, strategy and creative goals. The result – define strategy and creative without IT input and then throw it over the ‘wall’ for it to be implemented by a team that had no feasibility input on the initial idea to begin with.
With every new marketing technology project, often existing IT teams were required to re-train or bring new resources, adding time to project timelines. This did not add to the confidence level of marketing departments on their IT peers. Marketing departments again looked to high cost outside vendors to come in and take over marketing projects.
Since the technology assets and resources were under the purview of the CIOs, and CMOs depended on the CIOs for all their technology needs, the CIOs or the IT department dictated the priorities of the CMOs technology need which was blended in with other corporate technology projects.
The CMOs lost all confidence in this low-cost model. Not concerned about cost savings and frustrated with being dictated by the CIOs for all their technology needs, the CMOs started engaging their own technology vendors and resources. This resulted in multiple problems.
1) The technology resources and assets controlled and managed were now back in-house or on-site and at higher cost.
2) The technology solutions directly deployed by CMOs were often not in compliance with overall corporate technology policies in regards to security, network, and management.
3) The technology best practices which the CIOs had acquired over years of experience, were overlooked by ‘Martech’ vendors and resources that only pleased the CMOs and pushed their solution.
4) The CIOs never understood or sympathized with marketing priorities, their strategy, the need to react to market quickly or the overall marketing plan that depended upon the technical solutions.
Let’s face the facts. Technology budgets are moving towards CMO and the marketing department. The focus of cost savings on technology implementation will also move to the CMO. The CMO needs to work closer with CIO and together make decisions on vendors and resources that are both savvy in marketing as well as technology. The important thing is smart-alignment:
1) There needs to be an operations process re-evaluation different from pure technology process and a pure marketing process.
2) We need to right-size the low-cost resources from a pure technology pool to a Martech pool.
3) Re-align the onshore process and operations and the offshore teams will deliver on quality, expectations, and cost-benefit. It’s not the offshore teams that aren’t working well. It’s the onshore process that hasn’t been able to shift with changing stakeholders.
Martech is not just technology working for marketing or marketing utilizing technology. It needs a paradigm shift in collaboration, operations, process redefinition and skillset re-alignment. A priorities process that is more balanced with revenue generation also incentivizes marketers to being more mindful upfront of requirements and knowledge of iterative processes.