The rise and fall of CIO influence is real.
Operational business leaders have now become the de-facto decision-makers regarding IT spend. In the spirit of full disclosure, I am now one of those operational business leaders–a CMO–and during the last fiscal year, I was also simultaneously the Acting CIO at my organization. I currently “own” more than 80 percent my company’s IT budget.
"I believe the real driver in all of this is the fact that the CMO is simply more adept at making a business case for technology"
The words “own 80 percent of the IT budget” could be more accurately stated as “cause”. I cause more than 80 percent of our company’s IT budget. I suspect that this is above the norm, but is it way off from where the trend is going regarding the CMO’s influence over IT spend? I CAUSE more than 80 percent of our company’s IT budget.
The CMO has emerged as the driver and key decision-maker behind the purchase of critical applications like CRM and Marketing Automation tools. And in order to properly understand the use of these tools requires that the CMO have a deep knowledge of information management. In my experience as a CMO, I feel like I should now more accurately be titled the “CIMO” – the Chief Information Marketing Officer. Some organizations have identified this as the “CDO– the Chief Digital Officer”. Whatever the title, the fact remains that there has been a major shift in who “owns” and controls many of the most important corporate information assets.
There is a lot of research supporting the shift in IT spend influence. For example:
• Gartner Group predicts: “By 2017 the CMO will spend more on IT than the CIO.”
• IDC reports: “By 2016, line of business executives will control 40 percent of IT spending.”
And there is also some considerable contention. A CIO Research report from 2014 finds some very interesting perceptions existing among CMOs and CIOs in particular. The report states:
• “More than One in Four CIOs View their CMO as a Rogue Player”
• “CMOs most frequently view their CIO as a strategic advisor who proactively identifies business needs or opportunity”
To Gartner’s prediction–as a CMO, I was outspending the CIO as early as 2007, so this is not a surprising statistic from my perspective. At this point, I am now managing the budget for much of the IT spend that used to be line items in the CIO’s traditional budget. Things like “CRM/Marketing automation licenses, service and support”; and “Web site CMS” which now runs on a cloud-based/ hosted infrastructure.
The reason for this is that it has really become about “ownership of the data”, not the tools or the infrastructure that supports them. This is one of the things that SaaS and Cloud-based strategies have brought to the fore. The pace of business decision-making that drives technology strategy is helping to fuel the argument for a cloud-based strategy, and this is shifting the weighting of importance in favor of the data, and commoditizing the value of the software and virtual or on-premise hardware architecture.
To IDC’s report – I think this has already happened, and at a lot faster pace and more deeply than predicted. For example, who in your organization controls the budget for financial accounting software, the CIO or the CFO? How long has that been the case?
To the CIO Research findings – here is the real rub! CIOs and CMOs are viewing the changing roles and resulting working environment differently! Why is this happening? How can we come to grip with this shift in control of IT spend?
During the rise of the CIO’s role and influence in the 1990’s, operational leaders were content to be advised, and in many cases told what their IT strategy would be. The CIO held sway-the knowledge regarding how business applications and infrastructure fit into an overall IT strategy was arcane and accessible only to those with advanced experience and technical educations.
Things have changed considerably. The shift of influence started when traditional client-server ERP and CRM strategies failed. These business applications were characterized as being cumbersome, expensive and high-maintenance in nature. They were also known to be too complex for existing IT teams and business users to properly learn and utilize. This required specialized expertise to be hired; remember the big consulting firm ERP practices? And thus added to the already extremely high overhead needed to make effective use of these technologies.
The solution came in the form of Software-as-a-Service (SaaS). Solution providers realized that, if they were going to penetrate their target enterprise market, and expand into the attractive SMB market, they would need to shift the onus of implementing and deploying these solutions back onto their own plates. The most successful example of this is Salesforce.com, and more recently, the growth of the “marketing automation platform” (MAP), such as Eloqua, Marketo, Pardot and the like.
These very successful SaaS products enabled the CMO to regain control over the data. And as we all have learned many times, starting with Bill Gates’ “The Road Ahead” prediction, Content is King. In the world of business, the client account and contact information is the business equivalent of the content Gates was referring to-the lifeblood of any business.
But it was not just self-preservation among solution providers that has driven this shift. I believe the real driver in all of this is the fact that the CMO is simply more adept at making a business case for technology. CIOs typically come from a technology management background, and are not as skilled in developing the business cases required to effectively substantiate a technology purchase. Moreover, CIOs may have a blind-spot when it comes to the overwhelming case that can be made for SaaS or any hybrid web-hosted model.
There are other viewpoints than my own. What are your thoughts? Reach out to me and let’s debate where we think this trend will go.