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Summary:

It makes sense for the CMO to help pick which technology marketing uses — but marketing is just one of many departments of a company. In this age of BYOD, all that autonomy will lead to more “rogue” IT. That’s not always a good thing.

Every time I hear that more IT spending will flow through the marketing department than through CIOs in the future, I get visions of expensive PowerPoint-toting suits designating their server of choice. It’s an odd picture.

On Tuesday, the Gartner projection that in five years, the CMO will spend more on IT than the CIO, cropped up several times at Salesforce.com’s Dreamforce show. No wonder,  the company launched its new Social Marketing Cloud based on its Buddy and Radian6 acquisitions. But those mentions prompted an impromptu Twitter poll about whether it’s a good idea to have CMOs buying IT. The results were mixed.

Several respondents pushed a collaborative approach.  A better — and harder — way to attack overall corporate IT is to get all the departments working together, said GigaOM Pro analyst Jo Maitland. Clearly an optimist.

Others said situation will vary by company. Dana Gardner, principal analyst at InterArbor Solutions, expects that IT buying power will still be somewhat centralized but in some cases the IT person will learn more about marketing to help drive those decisions. In others, the marketing guys will get more IT-savvy. “It all depends who’s in the driver’s seat,” he said.

Marketing IT is not CIO IT

As always, a lot depends on definitions. If “IT” means the servers, storage, routers and databases that sit in a company’s data center, then no CMO makes that call. But the truth is, more spending is devoted to off-premises “cloud” services, including software as a service (SaaS). And in that case, it makes sense for the manager of a given department to help choose which services are used. And that, clearly, is what SaaS vendors like Salesforce.com are banking on.

“I see many CMOs using cloud-based services for marketing automation, response analytics, reputation management, content management, social media marketing and even application development,” said Andi Mann, a former analyst who is now VP of strategic solutions for CA.

The thought is, marketing departments should use the tools that help them market and not bog IT down in those decisions.

BYOD raises its head. Again.

But that decentralization of IT spending by departments can lead to problems and perhaps an over-proliferation of SaaS services bought by different departments that should be consolidated to save money.

The whole BYOD wave is also making itself felt as sales and marketing departments allocate money for iPads or other tablet and smartphones of the employee’s choice.

The problem, as has been widely reported, is providing secure  network  and data access to those myriad devices. That’s where old-school, unsung central IT comes in.  It’s fine that marketing organizations want to give their people the best tools — what gets complicated is when those tools impact the overall company infrastructure.

At that point, it still seems to me that one central authority –the CIO? CFO? CEO? — needs to rationalize all that.

As Mann points out:

Bottom line – for most orgs, marketing is just another business unit, and like all business units it is spending its own budget in part on directly acquiring technology. Just like finance, production, executive, operations, and others are. Gartner and IDC numbers both show technology spending outpacing IT departmental budgets, so that ‘extra’ technology budget must be going somewhere. I think it is going into ‘rogue IT’ spend by these business units — marketing included.

And that thought should give everyone pause.

Photo courtesy of Shutterstock user Helder Almeida

  1. Bruce D'Ambrosio Thursday, September 20, 2012

    The problem is that in mosts organizations “CIO” is increasingly focused on internal infrastructure support, meaning lans, setting up employee computational environment, etc. They have becoming increasingly out of touch with the still rapidly evolving external world of the internet, social, mobile, and the emerging internet-centered consumer culture. Marketing knows this is increasingly the core of the company’s business, and is frustrated by IT’s slowness to accept change and lack of awareness, let alone expertise, on emerging technologies and online trends. Centralization and rationalization of decision making is nice, but not at the expense of top line.

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    1. i hear you bruce– IT is too slow, line of business orgs need faster response. I guess my concern isthat just as too much centralization means a snail’s pace, too little means that duplicative services get bought among depts etc. It’s a hard problem

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    2. This is so yesterday’s game. The theory of CMO spending more than CIO seems to be rooted in the notion that the CIO is static & still living in the old world you describe. I reject that outright. If the CIO fails to transform her/himself & the org to be business partners solving business problems with the tools of IT, s/he deserves to be displaced by the CMO or any other leader that steps up. This means they need to focus on delivering business outcomes & staying on top of the industry to use the newest capabilities to deliver results with agility, scale, & flexibility.

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  2. Very good point, Barb. While traditional IT has a lot of catching up to do, there is still a big role. A strong IT department represents interests of the company that span business units (e.g., data integration and analytics) and help balance risk versus short-term business goals (e.g., security, compliance, etc.) IT’s death has been prognosticated for some time but in some ways, it just needs to be reborn in a new form.

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  3. In successful companies, Marketing always drives IT work. Put the CMO in charge of IT? No, but the CMO should be IT’s best customer.

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    1. Lynne states very succinctly & well what I believe is the right approach.

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  4. Great article Barb, thanks for quoting me. Interesting comments thread too!

    These have spurred me to post a rejoinder – or perhaps an extension – of this topic in a new blog today titled “The CMO doesn’t want to be in charge of IT either!” (you can view it at my personal blog, http://pleasediscuss.com/andimann/20120925/the-cmo-doesnt-want-to-be-in-charge-of-it-either/, or at CA Technologies Perspectives blog, http://community.ca.com/blogs/perspectives/archive/2012/09/25/the-cmo-doesn-t-want-to-be-in-charge-of-it-either.aspx).

    The above comments especially resonate with me. As I talk about in my post, this is happening (at least in part) because many IT leaders are not stepping up and taking the lead, driving the technology innovation – or even adopting new technologies like SaaS, mobile, cloud, etc. So into that gap steps the CMO (and other business leaders).

    But in reality, business leaders do not want to own IT budgets. They will soon find out that owning IT systems gets in the way of their core goals, and will gladly hand it all back to the CIO, as long as the CIO is prepared to step up.

    This is what has typically happened in the IT cycle (think open systems, servers, desktops), and this is exactly what forward-looking CIOs are already doing.

    Thanks again for the interesting discussion, I hope you will take the time to read my blog on this topic.

    Andi Mann
    CA Technologies.

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  5. I like this discussion. But budget is just one lever of control.

    Some questions to consider:
    – Do IT staff ever get promoted for solving business problems?
    – Does part of IT variable compensation come from business results? (e.g. number of loan applications processed).
    – Does IT fund business education for IT staff? (beyond 4 hours of generic new employee training)
    – Does IT staff have time set aside to interact with line of business managers?
    – Does IT understand what drives your business?
    – Most importantly – do business executives know how an incremental dollar of IT spend will impact the top or bottom line? I guarantee they do know what funding another marketing campaign, or hiring additional sales rep will do for them.
    The good news – all these factors are in scope of control of IT executives.
    Incidentally, I conducted a study of IT business alignment and found that in organizations with the tightest IT/business integration, the line of business managers controlled more IT budget than in organizations that had low integration scores. Net – more business control of IT budget strongly correlates with better IT/business integration.

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