A thought-provoking title to an article appeared in Forbes last week, and it got me to thinking once again about newer IT consumption patterns, and how they differ from more familiar ones.
The author used a spate of recent tech acquisitions to make the case that the Chief Marketing Officer (CMO) is now driving more than their fair share of IT spend.
Do I think that CMOs are becoming CIOs? No -- I believe the required skill set is very different.
But I can make a strong case that smart CIOs might want to start to think of the CMO as their new best friend ...
What's Happening Here?
IT organizations have been around for many decades.
From a historical perspective, their primary mission has usually been quite simple to understand: to automate processes that are well understood in the physical world to reduce costs, improve efficiency, etc.
Here's something we used to do with paper and people; let's use technology to do more with less of each.
Since many such "automatable business processes" have been owned by finance, most IT organizations have traditionally reported to the Chief Financial Officer, or CFO as a shared service for the rest of the organization.
Personally, I think this historical CFO alignment is ultimately responsible for much of the ethos one usually finds in traditional IT settings: the need to continually reduce expenses, the importance of justifying every investment in terms of ROI and payback period, and so on.
That's the sort of stuff the CIO's boss cares about, so that's what IT ends up caring about.
But what happens when the focus shifts to using IT to generating revenue vs. increasing operational efficiency?
Welcome To The Split IT Function
Within several industries, you'll usually find two distinct IT groups: one focused on operational efficiency, and a completely separate one focused on revenue generation activities.
If you're familiar with oil & gas, you'll recognize the pattern. There's a "downstream" IT group that runs the email, the ERP and the business systems -- and a completely separate "upstream" IT group that supports the team that's helping the geophysicists to find new revenue sources.
The same pattern can be found in pharma and biotech as well: a traditional IT group running the normal business functions, and a complete separate IT group supporting the researchers who are trying to find the next drug or therapy.
Historically at EMC -- like most tech companies -- we had two distinct classes of IT functions: a centralized function that supported the general business operations, and a constellation of engineering-focused IT functions that supported the people creating the new EMC products. Thanks to our in-house ITaaS approach, that chasm has been largely bridged, but you can understand the motivations.
There are more examples if you go looking, but the point is clear: when revenue-generating activities required a different form of IT, the propensity was to split away from the CFO-centric style of IT, and build something for the task at hand.
We can debate the pros and cons of this divide-and-conquer from a historical perspective, but -- more importantly -- what will the future likely bring?
Enter The Digital Business Model
I make no apologies for being an adherent of Dr. Peter Weill at MIT. He makes the powerful assertion that most businesses will need to invest in a "digital business model" going forward, or suffer at the hands of their competitors who do.
According to Dr. Weill, a digital business model has three essential components: an engaging experience for consumers, rich content to interact with, and a platform that supports it all.
If you think about it, building and leveraging a digital business model is rather straightforward for the high-profile web-based businesses that were "born digital": Google, eBay, Facebook, LinkedIn, Amazon, et. al.
Their corporate culture understands at a fundamental level the digital nature of their business.
Is it any surprise that we get a continual stream of interesting technology stories from this group?
Or that valuing their worth becomes difficult because we have no tools at hand to easily quantify the worth of their digital assets?
Collectively, they're pushing the bounds of what's possible in the digital world: new customer experiences, digital marketing, big data analytics and more. And I think there's an uneasy suspicion that their somewhat unique reality today will be the rest of our collective reality tomorrow.
Unfortunately, 99% of our existing business models were born in the physical world, and not the digital one.
Apple, in particular, is a fascinating example of a company that made a wildly successful transition from success in the physical world (e.g building computers and other devices) by painstakingly crafting a unique digital business model around experience, content and platform. The results speak for themselves.
But for businesses that don't have a Steve Jobs-like character at the helm, this means that the IT function ends up with two primary (and somewhat conflicting) roles: providing operational IT support for the existing business model, while providing strategic support and leadership for the next (digital) one.
The funding models are different. The skill sets are different. The technology priorities are different. Is it any surprise that you rarely find an IT organization doing a good job at both?
Which leaves us with an interesting question: who will be the executive business leader who realizes that their task might be to create the new digital business model from the ashes of the physical one?
The job may likely fall to the CMO -- the Chief Marketing Officer.
Being A CMO In The Digital Age
The best CMOs I meet are passionate about creating an engaging and differentiated experience for customers, partners and employees alike. They care greatly about building rich, engaging experiences for all -- preferably on a mobile device. They care about a having a wealth of rich content -- some created by the company, but with more being created by the community itself.
And they desperately want the notion of a 'single platform' (or even a reasonable collection of isolated platforms) to help create the experiences, manage and monetize the content, drive key workflows -- and no shortage of powerful analytics that help them detect and predict future opportunities.
They want the proverbial "digital business platform" (although they may not use those exact words) -- and are prepared to invest substantial amounts of resources to achieve it.
These same business leaders look to their traditional IT functions, and maybe aren't finding much in place that can help them do this today.
So, like any business leader whose needs are unmet by IT, they go shopping for applications, vendors and service providers who help them build what they most desperately need.
Maybe these new capabilities are brokered by IT. Maybe not. Maybe all the workloads go to a handful of external service providers. Maybe not. Maybe the CMO ends up creating a substantial and powerful revenue-oriented IT function completely separate and independent from the established one. Maybe not.
It all boils down to the magnitude of the mismatch between the aspirations of the CMO (or other executive similarly empowered), and the engagement with the traditional in-house IT organization.
Will CMOs Be The New CIOs?
The newer breed of CMOs appear to be hell-bent on constructing their new digital business models in an increasingly competitive world. Time is not their friend; a sense of urgency pervades.
They want to use IT, and not necessarily own or run it. Only as a last resort would they consider building their own IT function, but many may be forced to do something along those lines.
I think the opportunity (or challenge) squarely lies with IT leadership: do they recognize the strategic power shift that is becoming evermore evident? Is there a clear understanding of the differences between using IT to save money -- and using IT to make money?
And are they prepared to invest in the latter?
By Chuck Hollis
