Mumbai: Social, mobility, analytics and cloud—the so-called SMAC technologies—are not only changing business models, but are also altering the roles of chief information officers (CIOs) and chief marketing officers (CMOs), since clients are spending on technologies that come under the purview of the latter. Hence, while CIOs need to get more business savvy, CMOs need to understand information technology (IT) better so that they can keep pace with tech-savvy buyers and jointly present their case for IT spending to chief financial officers, International Data Corporation (IDC) analysts Richard Vancil and Sandra Ng said in an interview last week. Edited excerpts:
A lot of digital spending appears to be moving from the CIO to the CMO due to spread of SMAC technologies.
Vancil: At IDC alone, there are about 90 different categories of technologies for marketing and hundreds of vendors, which makes it very complex for a CMO to make a decision on how much and where to spend the money. We believe strongly that the CMO and CIO should work as a team when making such decisions. The marketing spends of large IT vendors on these technologies (SMAC) currently, on average, amount to 10% of their discretionary budgets. Early-stage vendors execute close to 100% on digital media since they do not have any legacy.
What kind of technologies are marketing executives interested in?
Vancil: It would include tools for marketing, planning and management, marketing resource management solutions and systems for campaign or email execution, and tools to tie marketing with customer relationship management software on the sales side to get names and leads that can be used to track return on investment. Also, executives are interested in tools for analytics—social listening tools or sentiment analysis and it’s interesting to see very dynamic social listening taking over more traditional research (such as brand research) that would happen once in six months or so.
The biggest challenge my clients, the CMOs, have is to understand the new buyer, who is sophisticated and self-educated, regardless of whether his company is consumer-facing (business-to-consumer) or selling to businesses (business-to-business). The new buyer does his research online and connects with peers much before he talks to vendors. The CMO needs to understand how much the buyer knows, where has he or she come from and where will he or she go next (next move). The challenge is also that these buyers are faster in understanding and adopting digital technologies than the marketers (CMOs) are in providing such self-education. It’s critical that marketers deploy such technologies to understand where the customers are, so that they can catch up with them.
Is the experience any different in the Asia-Pacific region?
Ng: Social was the first impact point but, then, at least in Asia-Pacific where mobility came into play in a big way, CMOs do not have a complete understanding and hence need CIOs to help them out. Cloud is where the barrier has come down significantly and analytics is the more complex technology where the CIO and CMO need to come together. But it’s here that skills sets are slowing things down. In Asia, unlike in the West, CMOs tend to be more tactical and many outsource the work to agencies. They are also more campaign-based as opposed to strategy-based. They, thus, depend on the knowledge of agencies about such digital technologies.
So are CIO and CMO roles merging?
Ng: The roles are not necessarily merging. But there’s an EICT market where E in the ICT (information and communications technology) represents e-commerce and entertainment solutions, among other things. The fact is that technology is converging with industry such as 3D and robotics coming together, and every vertical will be impacted. Hence, every role would be technology-educated and tech savvy. Yet, we still believe that you need an entity within the organization that needs to set policy, governance and architecture for each role.
Vancil: Marketers are known to be more creative than technical or operational. What has happened over the last six years is that the best CMOs (some 5-10% of marketers) have begun to bring more skills sets with roles such as marketing operations and work on technology evaluation deployment, process improvement, measurement capabilities, etc. CIOs we speak with tell us that in 2014, all marketing hires will be from technical or operational backgrounds. But they still have a long way to go.
Give us some examples where this has worked?
Vancil: Dell Computers would be a good example of the CIO and CMO working on an integrated partnership.
Ng: Look at healthcare, where medical doctors have become CIOs for healthcare institutions in Malaysia and Singapore. They are the ones pushing for mobility, for instance.