Mixing with marketing: The CIO-CMO partnership
- 22 April, 2013 09:27
There’s a new synergy happening in the boardroom, and while some CIOs are left floundering by fast-shifting demands for them to become more agile, customer-responsive and creative, most are finding that they have more in common with their new best mate, the chief marketing officer, than they ever suspected.
Laura McLellan, a research analyst at Gartner Inc, lobbed a grenade into the CIO trenches last year when she claimed that by 2017, the average CMO would control more of the IT spend than would the average CIO.
That’s not an empty promise; at its core, marketing is about communicating. And in today’s hyper-connected world, communicating is about technology.
As commerce becomes e-commerce and direct mail becomes direct email, marketing gains a more central role in organisations. But in a space where customer interaction is increasingly digital and where key technologies are increasingly in the hands of the customer, both the CMO and CIO are working outside their comfort zones.
It only makes sense that they buddy up.
“The CMO lives in the world of art, the CIO lives in the world of science, and today’s market is about a blending of art and science,” says Brock Douglas, who heads IBM Australia’s Smarter Commerce division.
“They each need to develop new skills, and they do that by working across the organisation.”
Data delivery – would you like Pizza with that?
One IT executive who has been doing just that is Domino’s CIO Wayne McMahon. McMahon says Facebook, a growing staple of business marketing, plays an integral part of the company’s fast-growing digital revenue base, with pizza orders flowing in through that medium even faster than the inevitable customer complaints and queries that flood the company’s “page” daily.
With more than 800,000 people clicking ‘like’ on their page, Domino’s CEO Don Meij recently announced that the company is now the fifth largest Facebook brand in Australia.
“We see ourselves now as primarily a digital business,” says McMahon. “Our product involves digital access to our quick-service restaurant facilities.
“Well over 50 per cent of our revenue is now coming via our digital solutions and we hope that over the next two to three years that will go to 75 per cent of our business.”
Though he’s sitting in the CIO chair, McMahon talks a little like a marketing executive, insisting that the pizza chain delivers “convenience food” rather than “fast food”.
He admits that the marketing jargon might have rubbed off on him a bit. “Here at Domino’s, marketing and IT work hand in hand together to design and deliver our digital solutions. I have a far closer relationship with marketing in this business than I’ve had in any other business I’ve worked in before.”
IT and marketing occupy the same floor of the building and McMahon says that he works more closely with CMO Allan Collins than he does with his direct report, the company’s CFO.
The business structure within the company is also conducive to a marketing mindset.
“At Domino’s, IT runs as a profit centre,” McMahon says. “And because I am the CIO of such an IT department, I have some challenges that are similar to the COO of a digital business.”
McMahon made a splash when he joined the company about two years ago and in a 10-week period shifted to an infrastructure-as-a-service model with no downtime in the process.
“We are completely cloud based now; all of our front-end and back-end systems are in the Telstra cloud,” he says. “It was done for very specific reasons around ability, and that means supportability, flexibility and scalability.”
Outsourcing not just the data centre but also all of the transactional operations of the business was very much a customer-focused decision, he says.
“We are taking a real marketing approach and didn’t want to be held down by limitations imposed by vendors and supply chains. Procurement, maintenance, patching, support and other costly legacy infrastructure activities – the whole concept of utility computing is to avoid that. I have a whole lot less infrastructure people, and instead I have more developers on the team.”
That means a very different role for the CIO; he’s not dealing with the more mundane cost-centre activities, freeing him up to mix it with the marketing people.
“Less than half our business now comes from walk-in or phone-in orders. Our digital offerings include Web and mobile, plus specific apps for iPads, Android and other smartphones, and we are now increasing the number of orders we take through Facebook.”
Working closer to customers means sharing the downsides such as the recent customer backlash over Domino’s ‘game-changer’ social media campaign, widely viewed as a fizzer. McMahon says that he wouldn’t go back.
“I have got to admit this is the most exciting CIO role I’ve ever done.”
From pizza to people
At the Australian offices of Deloitte, CIO Tim Fleming and CMO David Redhill are also getting close, and that means a change in mindset, says Fleming.
“From a technology perspective, the world has embraced Web, cloud, software-as-a-service and social media – all things that are outside the traditional ‘command and control’ empire of the CIO,” he says.
“CIOs need to understand the world has changed and marketing is one of the big beneficiaries of this. I’m not always going to be able to control what David does any more and it’s important that we are able to work together.”
Redhill – as befits a marketing guy – is more lyrical about their relationship. “We wrap around the ingredients of success with a heady brew of personalities and skill sets, some of them diametrically opposite.”
As a professional services firm, Deloitte’s product is less tangible than Domino’s.
“Our people are our product. We need to ensure that our people are not only equipped with skills but also aligned with the brand. Whether we are talking about harnessing the collective wisdom or developing white papers or creative content, it’s all technology-based,” Redhill says. “So, increasingly, IT and marketing are in each other’s pockets.”
“When there is less direct control, strategy and architecture become ever more important”, says Fleming. “We need to have a tech platform that enables us to move quickly and change quickly.” A recent collaboration between IT and marketing delivered a complete overhaul of the company’s intranet.
“Project Reconnect was a large scale total rebuild of the firm’s intranet allowing far better internal collaboration. It was inwardly focused marketing which has paid off on our aspiration to become a really well-connected organisation, by building strong connections between our people.”
At any one time, up to 30 per cent of Deloitte’s 6000 Australian staff work off-site, so the ability to tap into the firm’s collective consciousness is seen as critical.
“We put our people at the apex of our organisational pyramid,” says Redhill. “We think great client delivery is an outcome of an engaged and informed workforce. We get great results by enabling our people through social media.
“This wouldn’t have happened without Tim’s team being all over the tools. There is a robust delivery stretching from hardware to middleware to software which enabled marketing to have the knowledge to do great things because the technical issues were taken care of. We understand and see each other’s objectives.”
Redhill says that Deloitte boasts the largest data analytics team in Australia, delivering real-time data visualisations, heat maps and analyses to clients.
“One of our clients is a big bank and we can track in real time on the Web their key 20 or 30 influences on social media.”
Redhill says the company’s reputation is enhanced when it is able to deliver a professional service that crosses the gamut of traditional accounting, knowledge-based consulting and strong digital analysis. And that, he says, is down to a strong mix of marketing and IT.
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“We are seeing a shift around how organisations work with their customers from the point of first interaction all the way down the supply chain,” says IBM’s Douglas.
He adds that this shift is a result of the world becoming “more instrumented”.
Devices like smartphones and tablets are expanding already high technology engagement by consumers and as technologies like RFID and social media become more widespread, marketers are in a position to extract a mine of information about their customers.
A lot of the information being gathered about customers is unstructured, and neither CMOs nor, in many cases, CIOs are quite sure what to do with it all, and that’s a vexing issue that is driving the new CIO-CMO partnership.
As part of a CIO-CMO leadership program run by IBM, around a hundred Australian CIOs and their CMO counterparts attended a Sydney briefing with IBM global head honcho Ginni Rometty.
Rometty’s keynote highlighted the explosion of data that was changing the nature of business worldwide by making it possible for tech-savvy companies to deal with their customers at an individual level.
“I think this will change the relationship you have with your customers fundamentally, no matter what industry,” Rometty said. “And it will change the relationship between the CMO and CIO.”
The opportunity to combine transactional data with masses of information mined from social media could deliver unprecedented customer insights, she said.
Douglas explains that there’s been an evolution in the CIO’s focus to get to today’s big challenge of managing that data explosion.
“The traditional CIO has worked very much in a structured world,” he says. “In the ’90s, they focused on financial systems. By 2000 that focus on financial systems was all around Y2K. Then, following the GFC, the focus has been all about cost saving.”
The new mantra for business is ‘top line growth’, he says. “The demands on the CIO have moved away from a need to cut costs to a need to get growth.”
The explosion in data gives CIOs an opportunity to make that happen – once they work out how.
“The transactional systems are still there, but now we also have new data that the CIO has never had to deal with before … unstructured data from things like Facebook and Twitter. How do they tap into that?”
There’s a change in customer expectations too, he says, with customers expecting to be given a more personalised experience. Customers understand the potential of today’s technology and their expectations are high.
For the CIO to be able to operate effectively, they need to get inside the customers’ heads, and that’s where the CMO comes in.
“The CIO can go to the CMO to understand what the business’s end customers do, what they look like, and what information needs to be captured when we interact with these customers within our walls.”
A retailer or a call centre or a website can gather transactional information about customers during their direct interaction with them, but they will also interact with the organisation outside their walls, primarily on Twitter and Facebook, Douglas says.
The CMO and CIO need to work together to understand how they can capture that data, he adds.
“A lot of companies are quite shocked to find they have all these followers on their Facebook page and they just don’t know what to do with them – they have never had anything like this before. It is almost a dream come true, people come to them to make comments on their products and services, but they just don’t know how to use it.”
Maybe that’s an opportunity for the CIO-CMO partnership to make the benefits of properly managed social media that much clearer.
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