CMO vs. CIO – a tale of two firms

CMOs will need IT back sooner or later.

Is the CMO the new CIO when it comes to IT purchasing decisions? Let’s take a look at two businesses (real examples that I’ve worked with) in the same industry. Both businesses have experienced massive digital disruption. Both were able to quickly adopt successful digital strategies that enhanced their offerings and sales channels, turning them into web-driven businesses without compromising on the quality of their traditional, physical products.

The main difference? One had the CIO lead its digital strategy. In the other, the role of CIO no longer exists.

In the first business, the CIO recognised that digital was going to supersede old IT models whether she liked it or not. She pre-empted the wave of change by devising a digital strategy that combined her technical expertise with best practices in e-commerce, online marketing, and data that she and her team had to teach themselves. Her strategy acknowledged and defined the impact that IT could have on business outcomes, rather than framing IT as a cost centre like most CIOs inadvertently do. As a result of her taking the first leap, the business gave her full command over implementing that digital strategy as part of her overall IT portfolio.

In the second business, the CIO didn’t act as fast. Digital quickly became the portfolio of the CMO, who’s in charge of a Chief Digital Officer (or CDO), who’s in charge of…the IT manager. In other words, IT has become a subset of marketing. And CMOs are expected to only account for 10% of IT spending this year: IT may soon find itself also a subset of finance, sales, HR, and all manner of other lines of business.

What’s wrong this picture? Nothing…for now. I’ve seen CMOs increasingly hiring IT people to staff their marketing teams because they recognise the need for deep technical skills to make digital work. And for the most part, they’re succeeding in developing and executing great campaigns that (unlike traditional IT) directly map to value generation and KPIs for the business. But history suggests these CMOs, and other line-of-business heads taking responsibility for IT spend, could be in for a bumpy ride.


The infinite loop of history

When I was starting out in the IT industry, the majority of enterprises were reliant on mainframes for their processing power. These got disrupted when line-of-business users started buying applications – with their own mini-servers – to achieve things faster and cheaper (they believed) than IT would let them do. Boardrooms and the press were rife with comments like “IT doesn’t have the skills to stay relevant” and “the mainframe is dead”. Sounds familiar?

For a while, these businesses managed just fine, keeping customers happy and costs down. But after around two or so years, many of them threw up their hands and declared the whole exercise – of managing operations, upgrades, fixes, and service levels – simply too hard. Then they threw it back to IT…whom having been left by the wayside, had neither the relevant skills nor talent in place.

I suspect the same thing will happen with the current mass migration to SaaS by marketing and other lines of business. When it does, IT will struggle even more because SaaS – unlike mini-servers – lacks the heuristics (from diagnostic consoles to physical cables) that can help you spot and troubleshoot potential issues. If CIOs aren’t careful, they’ll see their teams forced to focus on “break-fixing” with minimal insight into how those breaks occurred in the first place.

What can CIOs do? The timeframe for doing like the first business and proactively leading a digital strategy is more or less over. Most Australian enterprises already have a digital strategy; in Asia, where enterprise digital adoption is typically slower, CIOs may have a few months’ window to take the lead. The best thing that CIOs can do now is to start building up the right ROI focus and skillsets to deal with SaaS – and put in place replacement solutions, like hybrid cloud – for when their technical abilities come back in vogue.

About the Author: Robert Crutchley