The CMO is not replacing the CIO and here’s why

Three years ago, Gartner predicted that by 2017, the CMO (chief marketing officer) would spend more on IT than the CIO. This one prediction spurned a number of follow-up predictions pointing toward the end of the CIO. The bottom line that everyone wants to know: Is the CIO role indeed going away? Is another c-level function replacing the CIO? And if so, who will take over the IT function?

Changes affect the entire IT ecosystem

It is not just the CIO and IT organization that are affected by a potential realignment of the IT function. Any change would have significant ramifications from people to vendors to architectures. No aspect of IT would be spared.

If IT were to go away or otherwise move to a different organization (or organizations), it would have a significant impact on how we think, operate and support the IT ecosystem. The focus would move to the immediate problem being solved for. However, the CIO and IT as a whole carry a broader responsibility that spans the entire enterprise.

The $64,000 question: What happens to the CIO & IT?

Before answering those looming questions, it is important to see the trends that drove these predictions. Looking back, there is absolutely a decline in IT demand. Specifically, demand for Traditional IT is in decline.

At the same time, the demand from marketing is stronger than ever. So, it makes sense that some of the waning demand may be transferred to marketing.

 

CIO CMO Short Term

Unfortunately, this only tells part of the story. If the story were to stop here, it would be easy to understand the logic behind the CMO taking over IT. As demand for the traditional CIO wanes, the CMO picks up and carries the function forward. The reality is this is only a very small part of the overall movement underway.

Transformational CIO on the upswing

The transformational CIO, unlike the traditional CIO, is in high-demand. In many cases, organizations do not understand what this means or what a transformational CIO looks like let along what they are capable of. A transformational CIO, unlike traditional CIO, is far more aligned with the business of the company. They are in-tune with how the company makes and spends money. They also look for opportunities around customer engagement and business growth. Transformational CIOs are more about business and data than they are about technology. In many ways, the transformational CIO is a business leader (first) that happens to have responsibility for IT.

Mapping the transformational CIO along with the traditional CIO and CMO brings the true picture into focus.

 

CIO CMO Transforming IT

One of the biggest challenges for transformation to take place requires all three components come together: The CIO, the IT organization and the rest of the company in terms of how they look at, leverage and engage IT. This evolution is referred to as the CIO’s Three-Legged Race.

One unfortunate point to make is that few traditional CIOs will have the mettle to truly transform into transformational CIOs. It can be done, but requires a level of intestinal fortitude well beyond that of many CIOs today.

Reporting structure for the CIO

Much of the change will come from the reporting structure of the CIO. Traditional IT organizations are often seen as a cost center and therefore report into the CFO. Transformational CIOs typically report directly to the CEO signaling the importance of IT (and the CIO) in leading the company. Consequently, a CIO reporting to the CMO may make sense temporarily, but not long term. The CIO’s prevue needs to be both broader and more strategic than any one function.

Every CMO I spoke with is not interested in taking on the IT responsibility. They are today, because they have, not because they want to.

The CIO is just getting started

Taking all of this into account, the role of the CIO is only starting to expand in ways it rarely has before. The same goes for IT. Sure, it may leverage a strong relationship with the CMO today. That is a very good thing! But it will evolve into a more impactful role that truly fills the qualifications for a seat at the CEO’s table.

 

CIO CMO Full Picture

The organizational challenge of disruptive technologies

As firms grapple with implementing the mobile, cloud, and big data technologies that are transforming their businesses, getting the organizational process and procedures right for managing those implementations is often the greatest challenge.

Computerworld this week covers an IBM survey on the mobile strategies of 600 enterprises, finding in effect that only half of the companies surveyed currently have an effective mobile strategy. No more than 50% of the participants reported that their mobile strategy is aligned with the overall business strategy, that the organization has a clear funding mechanism for mobile initiatives, that there is executive-level oversight for mobile initiatives, or that there is an established governance structure for mobile initiatives. Although only 20% of the firms believe they have a superior or leading mobile strategy today, 44% anticipate pulling ahead of their peers in the next three years.

Among the other tidbits: The subset of those firms reporting the best and most pervasive use and management of mobile technology reports both greater plans to increase mobile funding next year and a greater mobile strategy role for the chief marketing executive. Overall, the CIO is seen to have the most influence, as would be expected, with the CFO number two when it comes to funding, the line of business number two for generating ideas and setting or managing priorities, and the chief technology officer number two in providing governance.

The role of governance is critical in a firm’s ability to manage rapid innovation. One banking industry participant is quoted as stating, “Our governance structure—which includes representatives from finance, risk, operations, customer service, product and application development, project management, technology, marketing and strategy—has been immensely effective in terms of increasing the precision and speed with which we deploy mobile solutions.”

And banks shall lead them

Banking has always been an early adopter of new technology. Bank of America offered a glimpse of how it is juggling the innovation of technology with the requirements of the bank, as reported by American Banker. Hari Gopalkrishnan, the bank’s eCommerce, architecture and segments technology executive described an application process whereby the bank’s best programmers are first brought together to create functional code. The bank’s compliance officers follow immediately thereafter, to assure that requisite encryption, opt in/out, geo caching and other standards are incorporated into the application.

Bank of America took first place honors for user experience, accessibility, and alerting platforms in Javelin Strategy & Research’s annual mobile banking survey, as also reported this week by American Banker. As evidence of the rapid adoption of mobile bankers, the survey found 45% of consumers had used mobile banking in the past 90 days, up from 26% in 2012.

As seen in the IBM survey, executives in other industries are expecting mobile’s importance to grow as rapidly—but they don’t believe their companies are organizationally ready to handle it.

Verizon iPhone sales hit 4.2 million during holiday quarter

Verizon sold 4.2 million iPhone during the fourth quarter of 2011, CFO Fran Shammo said at a conference on Wednesday. That’s more than twice as many iPhone devices as it sold during the previous quarter, an increase do doubt spurred by the iPhone 4S.

Yelp gets serious with IPO-savvy CFO

Yelp has hired Rob Krolik to serve as its chief financial officer. Krolik’s resume includes time as the CFO of Shopping.com where he led the company through its IPO. Yelp CEO and co-founder Jeremy Stoppelman said Krolik’s public market savvy was key in his hiring.

Facebook Taps Ex-Genentech Exec Ebersman As CFO

david-ebersman-facebookFacebook said today that former Genentech executive vice president and CFO David Ebersman will join the social network site as its new CFO in September, succeeding Gordon Yiu, whose departure was announced at the end of March. Ebersman will direct Facebook’s strategy, planning and operations and report to founder Mark Zuckerberg, who was quoted as saying:

“We received a lot of interest in the CFO position and had the opportunity to meet with many impressive candidates. We quickly recognized that David was the right person for Facebook. He was Genentech’s CFO while revenue tripled, and his success in scaling the finance organization of a fast growing company will be important to Facebook.”

Ebersman spent 15 years at Genentech; he left in April, after the biotech giant was bought out by Roche. Though buzz continues to grow about an impending Facebook IPO, Zuckerberg has said the company has no plans to go public. The company recently took a $200 million investment that valued it at $10 billion.

Image courtesy of Inside Facebook