Are chief marketing officers taking over IT departments?

marketing technology word cloudA few years ago, Chief Marketing Officers would not have envisaged how fundamentally technology would change not only their profession but also the skills required to do the job.  Marketing departments have always had to marry creativity with a keen analytical mind, but the enabling technology was very much the domain of the IT departments.  Traditionally, there was always a clear distinction between the IT department and the end-users of IT in almost every organisation.  Apart from running odd complex database queries to create target lists, there was really no need for most marketeers to understand how technology platforms worked.

Like most other functions in an organisation, marketing teams made do with the systems and processes already in place. For example, CRM or ERP packages were standard and their workflows were adequate for the marketeers’ needs.  As an accepted rule, no-one really needed to go beyond entering opportunities, tracking segments, creating lists for campaigns or running reports. CMOs never understood or challenged the boundaries of technology – there was no need to.  It was almost always used in the office and users were trained how to adapt to specific work processes. That was then.

Now, the consumerisation of technology has changed everything.  Technology has become far less daunting and has wormed its way into every aspect of our daily ‘physical’ life. For example, regular use of applications such as Skype, Facebook and Whatsapp (to name but three) have now become so commonplace that they do not even feel like ‘technology’ anymore. It is a far more intuitive and customised experience thanks to the nerdy algorithm running in the backend.  IT has decisively broken through demographic and economic barriers; in other words, the consumer can be reached and influenced in any number of ways, from anywhere and at any time.

As a result, the DNA of marketing organisations is changing. Social media and digital marketing have become the focus areas for technology spend. Newer digital channels, the millennial mindset and the ubiquitous delivery models across global markets are driving the need for intrinsic technology integration into marketing. This means CMOs now have to learn aspects of technology that they perhaps never did in the past.  In fact, recent research from Gartner shows that in most large organisations, half of the capital budget for marketing software and one third of that for infrastructure are now owned by marketing.

Although we have been in the “information age” for some time, we are entering a new phase in which information is no longer simply a bolt-on to existing competitive assets but THE competitive asset. Marketing departments are scrambling everywhere to identify ways of using this information for creating targeted marketing approaches.

Due to this, CMOs spend as much, if not more, time nowadays understanding the impact of social media and digital marketing as they do undertaking their traditional functions – marketing research, creating innovative and effective campaigns, and generating sales leads. Gartner reports that chief marketing technologists and digital marketing executives are driving rapid acquisitions of supporting technology and consolidating marketing operations, either through shared services or with external partners.

Cognizant recently conducted a study across 240 process owners (Cognizant Business Process Evolution Study 2013) to look at the use of technology and analytics across various functions and business drivers behind such implementation.  Interestingly, the study revealed that a large number of organisations are looking at technologies to support more strategic, forward-looking business goals, such as pursuing new markets, improving business agility and flexibility, and finding new channels to market. Typically, these are all functions that marketing departments support.  Most organisations we talked to were running with dual mandates of reducing overall operational costs to make their businesses run better (through automation and process efficiency) and increasing revenue through running the organisations differently via business transformation and innovation. Technology was the underlying driver to support both mandates in order to succeed.

However, just as with everything in IT, what really matters is not the tools that CMOs are planning to roll out but what they want to achieve with their implementation. The survey showed that the priorities allocated to SMAC (Social, Mobile, Analytics and Cloud) technologies are directly linked to the marketing function. This reflects the growing interest in and ownership of technology outside the IT department and, more specifically, amongst the sales and marketing teams. Most respondents were keen to work together with their customers and drive better (and more tailored) marketing of products and services using digital and social tools.

Similarly, users of analytics are moving from purely predictive analysis and trends, to more revenue and customer-driven attributes such as pricing, cross selling, market opportunities and segmentation. This reflects a wider change across business functions, with IT no longer being a tactical tool, but a driver of strategic business objectives.

The role of the CMO has always covered innovation, revenue generation and customer experience, but new technology means that this is now done in a faster, more flexible manner. CMOs are spending between 15 and 20 per cent of their operating budgets on marketing technology and technology-related services. In addition, they are hiring more technically skilled staff – chief marketing technologists, user interface experts and their very own quantitative analysts.

CMOs now wield more influence than ever before and are increasingly taking risks to get ahead. With digital marketing in a phase of rapid growth, it is arguably a case of nothing ventured nothing gained. The most successful CMOs are those who embrace this brave new world whole heartedly and experiment continuously.

Vipul Khanna is Senior Vice President of Cognizant BPS.