CMOs With Big IT Budgets: Canny or Crazy?
Not many CMOs get the opportunity to modernize a 100+ year-old company. It’s a meaty challenge, to be sure – one that not every marketing chief is up for. This prospect is equally, if not more, daunting on the technology side. Modernizing an organization’s IT is no simple matter. As if plugging in new tools, upgrading existing ones and rolling out training programs weren’t enough, there’s also the herculean task of revamping company culture – a shared task, but intimidating nonetheless.
But Wayne Sadin is no ordinary IT executive. Just look at the man’s Twitter feed. I mean, how many CIOs initiate a real-time conversation about the implications of the Internet of Things and sensory data for CMOs? (That’s exactly what Sadin did with me, but that’s another blog.) Over the span of his career, Sadin has held diverse roles as a CIO, CTO, Chief Digital Officer and a board director. He’s a lifelong learner, a crystalline communicator and a change evangelist. In short, he lives up to every line in his “transformational CIO” LinkedIn bio.
Personally, I like to think of him as the turnaround king.
Case in point: In 2007, when he heard that Loomis armored car company was looking for a CIO to bring its 160-year-old business into the 21st century, Sadin couldn’t resist. Discovering that his consulting firm was in the same building as Loomis’s headquarters, Sadin rode up the elevator and dropped off a handwritten introduction to Loomis U.S. President and COO, Cal Murri. The two men hit it off. Soon afterward, Sadin came on board as CIO. Under Sadin’s leadership, it took the IT team only two years to re-architect the company’s infrastructure and co-design a “Smart Safe” product (with marketing) that ultimately changed the economics of retail and restaurant cash handling.
And this is just one of many Sadin success stories. Clearly, he has a special flair for transformation. When it comes to strategic change on a large scale, perspective gives him a leg up.
“People say the only executive who sees everything in a company is the CFO. But the CFO sees only the flow of numbers,” says Sadin. “CIOs see the flow of data, which gives them insight into every process, whether it’s the sales funnel movement, product manufacturing progress or supply chain activity.”
On to the question I’ve been eager to ask a modern, progressive CIO…I posed it to Sadin: What do you think of CMOs with big IT budgets?
“I think it’s crazy,” Sadin says. So much for softening the beaches.
Uttered by a “traditional” CIO, this response would hardly be worth noting. But coming from Sadin, it didn’t make sense. Where was the turnaround king when you needed him?
But then, as Sadin unpacked his reasoning, I quickly realized he hadn’t lost an ounce of his transformational gumption. His objection to CMOs’ big IT budgets wasn’t rooted in a turf war, as we might expect, but rather in a desire to partner with CMOs to move the business forward strategically and securely.
Not every marketer reading this will agree with Sadin’s opinion, but I find his points compelling – and deserving of serious thought.
The Danger of Shadow Buying
The buy-your-own-technology trend has gained traction among marketers who believe IT is too slow. On average, 28% of IT spend today occurs outside the IT department. In fact, 79% of CMOs have their own technology budget. Gartner’s 2011 prediction of the CMO spending more on IT than the CIO by 2017 still looms large. This scenario inevitably leads to disaster, says Sadin.
“By going around IT to buy technology directly, CMOs create ‘island-of-marketing’ databases outside of the organization’s overall infrastructure architecture and governance rules,” says Sadin.
The result? Obviously, a missed opportunity for CMO-CIO collaboration, but also potential noncompliance and exposure to hacking and other forms of cyber risk.
“CMOs buy tools they believe will improve how marketing functions. They think, 'We’ll get a junior techie to install them,’ but it’s more complex than that,” Sadin says. “What attracts CMOs to these tools is the ability to smoothly calculate and depict marketing results in a tidy dashboard. What they don’t realize are all of the corporate systems churning underneath that the tool’s slick interface doesn’t tap into – like the huge reservoir of company process and data.”
Sadin’s words summon an image of a swimming mallard in my head. If I were a CMO, I would see the duck cutting smoothly through the water. But CIOs see beneath the silky waterline surface, where the duck’s feet are paddling furiously. With all of this thrashing about, one can imagine the havoc “rogue” marketing technologies wrecking within IT’s back-up, change control and security rules. If only all marketing technologies were selected and installed using IT’s big picture guidance, they would most likely operate swimmingly within the extant environment, and all that paddling might not be necessary.
What marketers often don’t realize is that shadow IT projects can destroy value as effortlessly as they create it. IT has rules, and there are good reasons for them, whether it’s keeping data secure, complying with regulations or keeping systems running. An enterprise’s technology infrastructure is incredibly complex and interdependent. Downloading a simple marketing application can potentially disrupt the delicate balance IT has achieved, resulting in costly dysfunction and new data vulnerabilities. Within this context, a new application’s promise of a 3% gain in marketing efficiency looks pretty small compared to the risks.
Paving the Way to Agile Collaboration
Sadin admits marketing’s impatience with IT isn’t entirely misplaced; IT organizations haven’t been the fastest on their feet. Part of this stems from the daily challenge of balancing enterprise needs vs. the needs of individuals and their lines of business. Another contributor to IT’s perceived sluggishness is getting funding approval for projects, which is conspicuously slow-moving, compared to marketing requisitions.
“When marketers ask for more money, they make a business case and show how the purchase will drive revenue,” Sadin says. “Doing this isn’t exactly easy, but it hardly compares to working with a steering committee, which most IT teams are required to do. When they request more funds, they’re expected to show that committee how they’ll get 10 pounds out of a five-pound sack.”
But Sadin says rising above IT’s slow-moving repute to partner nimbly with CMOs is pretty simple – with the right CIO. (Sadin notes these CIOs are rare; in his experience, many aren’t willing partners.) Both chiefs must be willing to work together and leverage each other’s strengths. Sadin advises CMOs to concentrate on describing the “what” so CIOs can deliver the “how.”
“CMOs need to stop apologizing for not being techies. They aren’t in a contest with the CIO,” says Sadin. “They know enough about what they want or need, and that’s more than enough for a good CIO to work with.”
After the CIO and CMO have jointly defined the need in easily understandable terms, project scoping starts.
“Everything boils down to a trade-off among time, cost, features and quality,” Sadin says. “For example, if a CMO prioritizes time over quality, a prototype might make the most sense. Not everything you build needs to be a space shuttle – especially if the opportunity window is short.”
These trade-off conversations are better if the IT and marketing teams are accustomed to interacting with – and learning from – each other. Sadin regularly advises CMOs to invite their tech support people to sit among their marketing team members. Sadin has used this tactic several times in the past, with great success.
“It’s time for IT to emerge from the back office and show they understand the business,” says Sadin, who started his career working in a lab coat, surrounded by huge mainframes behind a locked door with glass walls.
IT: In Step With Marketing
Sadin may have started out physically separated from the business, but he clearly left that behind long ago. When he talks IT’s evolution – and its need to move up the value chain – his description is clearly in step with any “customer-first,” data-inspired marketing organization.
“IT used to build systems of record – giant, integrated monolithic systems responsible for ERP, payroll and billing. Ten or 15 years later, IT switched to systems of engagement for employees and end-users, which required faster speed of implementation,” Sadin says. “Now, IT should be focused on systems of insight.”
These systems of insight are focused on moving data into core systems of record so it can be mined and analyzed to empower marketers to make better decisions faster – and in real time – to ultimately build valuable, lasting customer relationships. For IT to progress in this strategic direction, CIOs need to deliver intelligent services to marketing. After all, isn’t intelligent service delivery at the heart of CMOs’ all-encompassing goal – i.e., creating an excellent customer experience?
It seems to me the wise way to tackle the parallel, interdependent goals of marketing and IT would be to do it together, in a partnership cadence. The same goes for managing and spending technology budgets. Alan Kay once said, “Point of view is worth 80 IQ points.” Just think how much smarter CMOs and CIOs would be if they shared their perspectives with each other. The result would be…well, transformational.
I know what the turnaround king would do.