CMOs may soon outpace CIOs in technology spending
Woods-Moss, one among the 25 chief marketing officers (CMOs) to attend the programme, did so, she says, because “without having a profound knowledge of technology, it will be hard for CMOs to get along with the IT (information technology) team”. Analysts are not surprised. They explain that while a CMO’s role used to primarily be restricted to advertising, sales and brand building in the past, the rapid growth in the number of Internet, smartphone and tablet users is changing how users interact with and choose, even buy, brands, forcing marketers to explore new ways to engage with the new digitally-empowered, always-on consumer.
The result, they say, is increasing technology spending by the marketing department—in other words, technology spending controlled by CMOs. By the end of 2017, CMOs will buy more technology than chief information officers (CIOs), both threatening and complementing the role of the latter, according to a 27 March report by software lobby body Nasscom and research firm Offshore Insights Research and Solutions Pvt. Ltd.
CMOs of leading Fortune 500 companies, the report added, are embracing technologies such as Big Data analytics, personalization, behaviour analysis, prediction of purchase intent, and measurement of online brand sentiment. Microsoft Corp. and Procter and Gamble Co. (P&G), for instance, get people to test their products and host online chats to understand their customers’ viewpoint, according to the Nasscom report. P&G, the report added, even has an online portal “Connect+Develop” to solicit ideas for new products and processes.
Dell Inc.’s IdeaStorm.com enables crowd-sourced ideas and allows customers to collaborate and prioritize product enhancements. “Lego introduced products (like the 500 piece Star Wars product) inspired by customer idea sourcing,” said the Nasscom report.
Judging from Woods-Moss’s experience, this trend is catching on in India too, although many CMOs in the country may not be ready for it. A 16 April Forrester report estimates that 30-40% of CMOs in India “have no working relationship with their CIOs”.
CMOs, the report added, perceive that the tech management organization is too busy running internal operations and that marketing requests do not get the attention they deserve, hence “about 40% of marketing leaders are gravitating toward establishing a technology department within marketing...hiring tech management staff such as marketing technologists, web developers, database administrators, application developers, and user experience professionals...to become self-sufficient” Manish Bahl, vice-president and country manager at Forrester Research, acknowledged in the report that rising customer expectations and a tough economic climate have put pressure on CMOs to boost business growth but added that while CMOs are responding by driving their own tech agenda, “they lack technical depth”.
The result: they start relying heavily on certain tech vendors. Some CIOs and CMOs are aware of the conflict. According to Anil Khatri, head (South Asia), global IT-client technology and Field IT, SAP India Pvt. Ltd, “CIOs’ roles are changing as much as CMOs”.
“Earlier we didn’t need to collaborate with the marketing teams, but now we work with them closely on most things,” Khatri said. According to Vivek Chandel, executive director, marketing, at Xerox India Ltd, “with social media, people are engaged; they are always on and always connected”.
Acknowledging that IT has now has become a fundamental part of marketing efforts, he pointed out that product and purchase cycles have become shorter and companies need to capture customers’ response much faster because of which CMOs today need to have a strong IT focus. Chandel admits that there could be conflicts between CIOs and CMOs at times, but insists that “conflict is a positive thing mostly and it enables each of them to push one another for overall growth”.
Woods-Moss said that “at the moment...marketing is getting into what has been traditionally the domain of IT, which sometimes may seem threatening to CIOs no matter how you handle (the issue)”. In such cases, she believes that the chief executive officer (CEO) should play “a role in aligning objectives and helping build the relation between the two”.
CIOs, Bahl said, must create a data management and integration strategy to address the challenges that marketers generally face. He suggests that CIOs should start by attending sales meetings to understand what a company’s external customers want and need. Nasscom believes that this change in the role of CMOs is good for business. The “continuous evolution of the digital world has resulted in the creation of a phenomenal opportunity worth $37 billion for the global technology industry”, it said in its report.
The software lobby group said that to take advantage of this market opportunity, Indian IT companies need “to take a holistic view and think outside the ‘technology box’. The creative space involves specialized skills, which to a certain degree, require advanced design and creative knowledge, technical skills and decision making.”