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CMOs flex IT purchasing muscle, but is that a good thing?
As IT spending power increasingly shifts to CMOs, columnist Michael Shearer explains why marketing and IT need to come together to select the right tools and services to stay competitive.
There’s been a lot of buzz about the rapidly expanding IT spending power of marketing departments, and specifically, chief marketing officers. Much of this comes from an increasingly prophetic Gartner prediction that by 2017, the CMO will be spending more on IT than the chief information officer.
This has caused much hand-wringing and debate about the role and relevance of the CIO in a fast-paced digital world where cloud applications can be implemented without the assistance or even the knowledge of IT.
With $3.5 trillion in IT spending predicted for 2015, much is at stake.
Observers talk about a shift in roles and the necessity for IT to become more relevant in creating value. Backstopping this discussion is the reality that most technology acquisitions underperform — costing billions in wasted cash and opportunity.
There’s no evidence suggesting that CMOs are making better IT decisions — they’re just making them more quickly.
The business technology landscape is daunting — confusing even the most tech-savvy professionals. Marketing technology alone accounts for 3,000 vendors, and this number is swelling with 200 to 500 new players annually.
This growth is highlighted almost annually in Scott Brinker’s Marketing Technology Landscape.
The way organizations evaluate and select technology does not adequately address the size and complexity of the market or keep up with expectations for speed to benefit. It’s not working.
The shift in spending power to CMOs risks exacerbating the pain resulting from poor technology decisions because there’s more opportunity to bypass IT services and expertise that help ensure a cohesive and secure IT infrastructure.
The CMO will have to learn all the lessons about security that the CIO has learned, or risk falling into the same traps that Target, Home Depot, Sony and others fell into.
And with the proliferation of cloud technologies, the problem only gets more complex. Because cloud implementation is so much faster, people pay even less attention to requirements.
“It looks good, let’s give it a try” is a hasty decision that’s often fatal for the organization. Leaning on cloud service providers’ security and reliability is a newer reality to businesses, one with both major benefits but also new threats.
Nevertheless, cloud technologies are here to stay and are another area where IT can easily be bypassed by CMOs and other marketing executives and technologists looking for fast solutions to pressing business challenges. Compliance becomes a huge problem, as marketing executives often have little idea of the complexities here.
Before you know it, you customer data is in the cloud, hacked, and you have a huge PR and legal problem on your hands. It is an absolute minefield for the uninitiated.
To handle this newfound marketing technology budget, marketing and IT must still come together on their technology selection projects. This can be done through software selection methodologies, outsourcing to evaluation consultants or a number of different software selection tools.
Software selection methodologies and tools
The mistake organizations usually make when selecting enterprise software is inadequate requirements analysis. Any enterprise software, including marketing technology, should aim to meet all organizational requirements across sales, marketing, finance, operations and IT.
Formal software requirements gathering should be a necessary step in the buying process, but it’s often overlooked. As Chris Doig, CEO of Wayferry, wrote in CIO:
Requirements are to software selection as foundations are to a building. We all know what eventually happens when foundations are inadequate.
If this seems like a daunting task, outsourcing to software evaluation consultants is a viable option.
Decision makers sometimes try traditional project management software to manage their software selection projects. They try to use tools like Excel or Blueprint to manage requirements, but they are not so useful for buying software, as they often lack things like the ability to create scorecards against requirements.
Many progressive IT organizations are now turning to fully featured software selection management platforms to collaborate with business leaders and provide value and business benefits more quickly. These platforms in this space provide requirements templates across major software categories, a database of the various platforms available in each category, scorecards, RFP/RFI management/outreach and more.
Software buyers can either use isolated components of these platforms (e.g., requirements gathering or scorecards) or harness the built-in front-to-back software selection workflow. Ultimately, these systems pull together priorities from all stakeholders and help rationalize technology spending with the checks and balances that IT and Finance need to ensure security, compliance, cost justification and a better predicted outcome for the software implementation.
CMOs do not want to take responsibility for IT. They are doing it now because traditional technology selection methods can’t keep up with business demands.
On one hand, CIOs have been too focused on “keeping the lights on” rather than on delivering value to the business. On the other, businesses have been slow to demand this kind of leadership.
Improved technology selection management frees CMOs to play the role that brings the most value to their organizations while getting the tools and services they need to stay ahead of the competition.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.