Cash Register

Why Is The CMO Spending So Much On IT?

Cash RegisterDo you believe the recent spate of articles in magazines such as Forbes that state that within five years CMOs will spend more on IT than CIOs do?  Having run network organizations at two Fortune 500 companies, the thought that CMOs will spend more on IT than CIOs do makes the hair on my head stand up straight.  Ok… since I am bald, I’ll admit that last sentence is purely a metaphor to express my feelings: that concept just seems wrong.  But is it wrong?  What’s behind this?

A number of years ago, Nicholas Carr wrote an article in the Harvard Business Review, entitled IT Doesn’t Matter, that focused on one of the key dimensions of the tension that often exists between CMOs and CIOs: the distinction between IT being important and IT being strategic.  The title of Carr’s article is misleading, as he was quite clear in the article that IT does matter.  To Carr, IT is like just any other utility; i.e., water or electricity.  According to Carr, these utilities are important because you cannot run your business without them, but they aren’t strategic because they don’t have a significant impact on your ability to compete in the marketplace.  To Carr, the role of the CIO is to reduce the cost of IT to the maximum degree possible while ensuring the availability and security of IT services.

No CMO wants to get involved in tactical IT initiatives such as flattening the data center LAN or reducing the number of corporate data centers, and they certainly don’t want to fund initiatives such as these.  The tension between the CMO and CIO tends to show up on initiatives that CMOs think are strategic to the company in general, and to their organization in particular.  Mobility can be such an initiative, but it is important to realize that there are two types of mobility initiatives.  One type focuses on supporting a company’s mobile workers, which can be quite technically challenging, particularly when there has been a broad adoption of BYOD.  Few CMOs want to get involved with technical challenges such as how to effectively render information to the user devices independent of factors such as the choice of operating system or browser.

The type of mobile initiatives that interest CMOs involve mobile commerce.  While it is debatable whether supporting a company’s mobile workers is important or strategic, there is no debate about mobile commerce — it is clearly strategic.  For example, according to BI Intelligence in January 2013, 29% of mobile users have now made a purchase with their phones. In addition, Bank of America predicts that $67.1 billion in purchases will be made from mobile devices by European and U.S. shoppers in 2015.  Tapping into this emerging market is critical for a wide range of companies.

Most IT organizations that I talk to are struggling to implement initiatives to support their company’s mobile worker.  Few of them are taking a leading role in implementing mobile commerce initiatives.  Those initiatives are left to the CMO who might involve the IT organization, or who might bring in outside consultants and either largely or totally bypass the IT organization.

Mobile commerce is just one example of where CMOs are driving and funding technical solutions.  Big data is another example.  This is a gut check time for CIOs.  CIOs absolutely must create a strategy that enables their organization to take a leadership role in strategic initiatives such as mobile commerce and big data.  If they don’t, Carr is correct:  IT doesn’t matter.  And if IT doesn’t matter, maybe it makes sense for the CMO to spend more on IT than the CIO does and for the CIO to worry about little other than availability and security.

Image credit: Steve Snodgrass (flickr)

About the author
Jim Metzler
Jim has a broad background in the IT industry. This includes serving as a software engineer, an engineering manager for high-speed data services for a major network service provider, a product manager for network hardware, a network manager at two Fortune 500 companies, and the principal of a consulting organization. In addition, Jim has created software tools for designing customer networks for a major network service provider and directed and performed market research at a major industry analyst firm. Jim’s current interests include both cloud networking and application and service delivery. Jim has a Ph.D. in Mathematics from Boston University.