For many years, corporate marketing has relied upon enterprise IT for a number of important business tasks such as customer database management, email marketing campaigns and web site hosting. Yet, despite their long history, research has consistently shown that enterprise IT’s relationship with marketing has been considerably more strained than with other major parts of the firm.
In far too many corporations the IT organisation is considered the "land of slow and no" while marketing are the "unguided missiles".
Today, this socially awkward legacy is under unprecedented pressure. Mobile technologies, social media and the cloud provide businesses with entirely new ways of identifying, targeting and serving their customers. As information and analytics become the heart of the modern corporation, marketing is rapidly shifting away from its relatively low-tech roots and becoming a high-tech, digital profession. Consequently, the lines between the traditional marketing and information systems organisations are blurring in a process we refer to as co-evolution. The two groups face many mutual challenges, opportunities and uncertainties.
Over the last six months, I have had the opportunity to interview more than 40 senior marketing and IT leaders in large consumer and business-to-business firms in Europe, North America and Asia.
The resounding theme from these interviews was that while the optimal organisation of the future will take many different forms, technology-based marketing has established itself as a key business pillar, and marketing and IT ignore this fact at their peril. It’s time for both groups to grow out of their "socially awkward" phase and address the many mutual opportunities, challenges and uncertainties of the coming years.
Our findings show the following factors have emerged in forward-thinking enterprises as useful building blocks in developing a more robust and productive marketing/IT relationship.
Speed and agility
Marketing executives say they need a culture of experimentation that embraces constructive failure and is able to adjust rapidly to real-world outcomes. This "fail fast" mentality will increasingly be based on instantaneous market analytics. IT must accept that it will have to adjust its systems and applications in minutes or hours, rather than weeks or even months.
To this point, many IT executives find themselves totally disoriented with the wide array of new marketing metrics that are used to judge success and failure of social and digital media programmes. Since so few IT executives have an intimate relationship with these platforms, the ability to understand the underlying analytics becomes virtually impossible. As a result, marketing increasingly establish "shadow" IT organisations that are more responsive to the speed of their business.
Our findings reinforce that those IT organisations possessing a deep culture of digital and social media have the greatest likelihood of retaining a meaningful involvement with their marketing counterparts.
Shared risk, shared reward
As mentioned earlier, the "land of slow and no" has evolved as the embodiment of risk avoidance mechanism in IT organisations. Simply stated, IT has rarely been rewarded for going out on a limb.
Adding to the frustration is that when risks are taken, marketing gets the awards and recognition when things go well, while IT only gets the blame when things don’t. Relatively few companies have really cracked this incentive dilemma. In many cases, the key performance indicator (KPI) model is so embedded in the IT organisation that shared risk/reward models are resisted.
However, we have seen clear signs that corporate HQ management is recognising the need to inspire and reward risk taking in the IT organisation and, in many cases, establishing new marketing technology innovation centres that thrive on such risk-taking.
Our findings show that when IT and marketing both have budgetary "skin in the game", investment and risk-taking increase significantly. We refer to this phenomenon as the "spotter effect", a term borrowed from weightlifting and gymnastics, where a human assistant or spotter provides a safety net to encourage experimentation and provide protection if something goes wrong.
Joint vendor management
As a result of a spate of mergers and acquisitions in the social and mobile media segment, marketing and IT are often being courted by the same set of global vendors as virtually all of today’s largest IT hardware, software and services suppliers see marketing technology as a critical extension of their core business offerings.
As one could imagine, there is increasing pressure from finance to leverage these relationships for increased savings and decreased deployment duplication. However, the dispersion of contacts and contracts across IT and marketing has created enormous expense consolidation challenges.
Our interviews consistently confirmed that those corporations with the healthiest IT and marketing relationships were consistently able to show as a primary driver for change, significant return on investment from vendor leverage and decreased duplication around the world. These firms also had a greater ability to identify best and worst practices given a more transparent internal communications structure.
Whether highly skilled workers are located in marketing, IT or a separate group, is a key determinant of overall organisational and cultural dynamics. Regardless of the centre of gravity between marketing and IT, the fact remains that the demand for talent possessing deep IT and marketing skills is at an all-time high. We have seen that marketing is much more proficient in backfilling their organisations with IT talent than is IT supplementing with marketing professionals. Ergo, another case of shadow IT within marketing.
This is coupled with dramatic shortages of employees who possess analytic or "quant" skills that enable deeper corporate marketing strategies related to predictive behaviour. The rapidly growing trend of "Mad Men meet Math Men" carries over to the resourcing of IT and marketing organisations and raises further questions of whether the quants are culturally more IT, marketing or in an organisational land of their own.
Emerging organisational models
The diagram above presents what the Leading Edge Forum has observed to be the five most prevalent organisational models. Continuing our earlier analogy of a dysfunctional family, each of these models is similar to a familiar family situation. In each case, marketing technology (MT) is the centre of attention – the child – with marketing and IT playing the various parent roles. Each approach is described below:
- Parental control – IT maintains strong control over MT, with minimal authority in the marketing organisation.
- Friends with benefits – Marketing and IT are basically separate, but there is a close MT relationship with IT where convenient.
- Joint custody – IT and marketing manage MT equally, with no clear ownership of key areas.
- Limited visiting rights – Marketing has control of MT, with IT held at arm’s length or totally isolated.
- Runaway child – In perhaps the fastest growing model, MT operates as an independent innovation unit separate from both IT and the traditional marketing organisation. MT typically reports directly to senior corporate management.
To get a sense of which model is right for you, we suggest you apply our Marketing-IT harmony assessment survey.
In short, as information technology moves to the front of the modern firm, the traditional marketing and IT functions are facing times that are both exciting and precarious. Nothing will shape the future of both groups more than how they relate to one another. Inside many firms, it is now the indispensable business/IT relationship.
Frank Cutitta is a research associate for CSC’s Leading Edge Forum, a global research and advisory service for CIOs and their teams. To learn more on this topic, download the executive summary.