In 2003, Nicholas Carr sparked a heated debate in his Harvard Business Review article “IT Doesn’t Matter”. He argued eloquently that it was more important for IT to be good enough and cheap than to be first to market and unique. Fast forward just 8 years—Marc Andreesen penned his famous article in the Wall Street Journal—Why Software is Eating the World. The contrast could not be starker—Software and Technology has moved from a back office function that makes the sausage factory more efficient to being the primary medium of customer dialog. Which begs the question: Have CIOs embraced their new mandate?
Unfortunately, recent survey data paints a troubling picture. Gartner Research found that four in five large organizations have a Chief Marketing Technologist. This role rarely reports into IT. In fact, our 2016 survey of more than 250 Marketing Technologists showed that only five percent of them report to the CIO or CTO, as compared to nine percent in 2014. Further, only 13 percent of those surveyed said that the executive most commonly responsible for Digital Business Transformation (DBT) oversight is the CIO/CTO. In contrast, 26 percent cited CMOs as accountable for DBT.
"Many CIOs have adopted a two speed IT strategy—segmenting systems into core enterprise systems with slow release cycles and customer experience channels with faster rates of change"
That is a problem not just for IT, but for the enterprise as a whole. With their wealth of experience in driving enterprise wide technology led change, CIOs must be in this conversation. Indeed, they are uniquely positioned to lead the transformation to more customer-centric, digital-led businesses and brands. What do new breed CIOs do differently?
Changing the Department of “No” to the Department of “Go”:
Gartner analyst Laura McLellan predicted in 2012 that within the next five years, CMOs would spend more on technology than CIOs—an idea that her fellow Gartner analyst Jake Sorofman recently confirmed as fact. One cause is marketers “going rogue” and implementing technology off the CIO’s radar. When CMOs spend without the CIO’s participation, it creates a number of business risks, from wasteful spending to system siloes to inconsistent customer data all the way to serious security breaches.
If CIOs do not guide marketing to the right solutions, they will be put in a position of the gatekeeper, repeatedly saying no and driving a wedge between Marketing and IT, shifting the ownership of DBT further away from the CIO (and, in turn, the customer).
To change the game, IT must play a mentor and stewardship role in this dialog, taking a holistic view of the business’ customers and operations alike. It is insufficient for IT to wait for requirements. Instead, CIO’s must demonstrate what the future of customer experience could feel like. At a basic level, leveraging low cost investments like IT-led hackathons, CIOs can bring a smorgasbord of ideas to the table. This inspires trust because IT knows what will best integrate with existing systems, and how to ensure each idea is a step toward larger-scale business transformation. Leading CIOs go far beyond that, allocating discretionary budgets proactively to service design and prototyping capabilities to envision the future, and inspiring business leaders to invest.
Moving from SLAs to Customer Obsession:
IT is held accountable for critical SLA’s, such as systems uptime, unit costs and response times. Yet, these metrics are incomplete. Customers care about their holistic experience with a brand—across the sum total of their interactions from marketing communications to commerce, social media, and service.
Marketing technologists do not score much better in our survey. When asked which KPIs or business metrics they were accountable for, they were significantly more likely to be accountable for traditional marketing metrics, such as marketing Return on Investment (ROI) and inbound leads than marketing technology budgets or time to market. Even more troubling is that longer-term, customer-focused metrics such as customer Lifetime Value (LTV) and Net Promoter Score (NPS) featured extremely low on the marketing technologist’s agenda—just above 10 percent.
This represents a problem that CIO’s can solve: connected martech systems, built in thoughtfully organized layers, are replacing stand-alone products as enablers of competitive advantage. By mining and connecting customer and enterprise data locked away in IT systems for actionable insights—CIOs can lead the dialog to reveal the health of the customer and the alignment of enterprise processes. By doing so, IT steer the conversation toward a customer-focused approach to measurement—tracking KPIs across the customer journey from how to attract, acquire, and retain customers.
Why Two Speed is not Enough—the Rise of the Enterprise Startup:
Most CEOs say that we are in the age of the customer. Customer expectations shift constantly, and businesses must be poised to get ahead—or at least keep up.
Google boasts putting thousands of software changes into production every day. Continuous deployment— the ability to deploy software changes rapidly through automation—is important not because it is technically nifty, but because today’s customer demands to be served in ever changing ways. The truth is, DevOps and Agile are post facto responses to the shift in the meaning and role of IT within the enterprise. A code deployment is nothing but the delivery of value from idea all the way to production—where it can improve the customer experience.
This poses a daunting challenge for most IT departments, which are used to enterprise release cycles measured in months or years rather than days or minutes. Many CIOs have adopted a two speed IT strategy—segmenting systems into core enterprise systems with slow release cycles and customer experience channels with faster rates of change. Unfortunately, this first order response is akin to a hare riding on the back of a turtle, because changing customer experience often requires significant changes to core systems as well. Leading CIOs take a “customer-in” view of the systems landscape, changing IT culture, architecture and processes to align with customer journeys as opposed to having IT constraints limit the speed of change. IT must behave like an enterprise startup—embrace lean thinking, customer centricity and a culture of experimentation.
The truth is, there is never been a more exciting time to be a technology leader. Cloud computing, mobility, IoT, Machine Learning, and Cognitive Technology, Augmented and Virtual Reality afford possibilities to completely reinvent the business and customer value proposition. CIO’s have a choice: drive the change agenda, or wait for it to come to them. IT alone has the perspective and reach to bring its knowledge of enterprise processes and systems to digital business transformation. Blending scrappy and innovation with appreciation of scale and complexity is not a small feat, but one that is up to tomorrow’s IT leader to embrace.