TCS marketing chief John Lenzen quits
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Bengaluru: Tata Consultancy Services Ltd’s chief marketing officer (CMO) John Lenzen has quit, a development that comes at a time when India’s largest software firm, along with home-grown technology peers, is competing with global outsourcing companies to win a larger share of Fortune 100 clients’ spend in new areas like building mobility platforms.
Lenzen, who was based out of Chicago, joined TCS in 2004, and was a member of the Tata Group Brand Advisory Council. He has already updated his LinkedIn profile and lists his current designation as CMO at CareerBuilder, a Chicago-based recruitment software firm.
Emails sent to TCS and Lenzen seeking comments went unanswered.
The role of CMOs in the country’s $150 billion outsourcing sector is gaining importance in tandem with the change in the traditional business model. Home-grown technology firms generate much of their revenue from managing IT infrastructure or from software engineers writing code for applications that help their clients run their business.
Global companies, from retail behemoth Wal-Mart Stores Inc. to banking giant Citigroup Inc. are now looking at their technology vendors to not only manage their technology infrastructure more efficiently but also to help them better engage with their customers.
For this reason, most IT vendors are looking to strengthen their solutions in analytics or mobility platforms or artificial intelligence-led automation platforms—together called SMAC, or Digital. This essentially is to help clients run their business better.
Finally, many large clients are also moving their ad dollars from traditional media, such as print, to the web, pushing more IT firms to chase the opportunity in the digital world. Most IT firms are looking to strengthen the office of CMO and even appoint a chief digital officer or have both a CMO and a head for Digital.
During the last few years, the role of a chief marketing officer has seen a change from the traditional approach of B2B (business-to-business) marketing to something akin to B2C (business-to-consumer) marketing, and a CMO is required to showcase a company’s new service offerings to clients.
“We believe that marketing has been one of the fastest growing segments within the broader digital transformation landscape, and IT services market segments,” Keith Bachman, analyst with BMO Capital Markets, wrote in a note dated 3 August.
“We think that IBM and Accenture are leaders within the market and are taking share from both traditional and other digital agencies. We think digital marketing is among the high growth segments for both companies, which we estimate at ~25% and ~30% of IBM’s and ACN’s (Accenture) digital portfolio, respectively. While we think that IBM’s creative capabilities provide differentiation, we think ACN will bolster its capabilities over time to be more competitive,” Bachman said.
Infosys Ltd in February appointed Scott Sorokin, the former chief strategy officer of digital ad firm Razorfish (part of French advertising firm Publicis Groupe SA), to head its digital business.
However, defining digital remains fuzzy for now as many experts remain unsure how IT vendors will go about the exercise. For example, analysts like Viju George of JPMorgan Chase and Co. question if merely having some elements of data analytics in traditional application maintenance work make an IT vendor label all revenue from the entire outsourcing contract as Digital business.
Hence, there are two groups in technology consulting and outsourcing firms. One includes companies like IBM, Infosys, and Nasdaq-listed Cognizant Technology Solutions Corp. which decline to classify business generated from merely moving applications over to cloud computing platforms or building a mobility platform as Digital revenue. These firms do not disclose any digital revenue.
At the other end of the spectrum are companies like Accenture, TCS and Wipro Ltd, which do split the business from digital technologies. Mumbai-based TCS said its digital arm accounted for 15.9% of its $4.36 billion revenue (or $693 million) in the April-June period of the current financial year. Wipro claimed that $345 million or 17.9% of its $1.93 billion revenue was from digital technologies.